King v. West Coast Grocery Co.

• Decision Date: 13 February 1913
• Citation: 72 Wash. 132,129 P. 1081
• Parties: KING v. WEST COAST GROCERY CO.
• Court: Washington Supreme Court

129 P. 1081

72 Wash. 132

KING v. WEST COAST GROCERY CO.

Supreme Court of Washington

February 13, 1913

Department 2. Appeal from Superior Court, Pierce County; E. M Easterday, Judge.

Action by J. W. King against the West Coast Grocery Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Hayden & Langhorne, of Tacoma, for appellant.

Jas. R Chambers, of Seattle, for respondent.

ELLIS J.

This is an action to recover the purchase price of certain jellies and jams sold and delivered to the defendant, West Coast Grocery Company. The sale was by a written contract between the defendant and Vashon Island Preserving Company, a corporation, dated May 17, 1910, which contract, it is claimed, was sold and assigned to the plaintiff, King, on June 11, 1910. It is admitted by both parties to this action that, at about that time, the officers and trustees of the Vashon Island Preserving Company leased its plant to the plaintiff, with the understanding that all of its existing contracts should be assigned to him, and that the lease and the assignment of the contract here in question were parts of one and the same transaction. The evidence shows, without contradiction, that thereafter the plaintiff personally, and at his own cost, manufactured the goods and shipped them to the defendant; that the cases and jars were marked, 'Vashon Island Preserving Company J. W. King, Lessee'; and that the invoices sent to the defendant were in the name of J. W. King, lessee. It is admitted that the defendant accepted and retained the goods; and there is no claim that they were not of the kind and quality contracted for, or that they were not of the full value agreed to be paid for them. The defendant admitted the execution of the contract, admitted the receipt and retention of the goods, but denied the assignment of the contract, and interposed, as a set-off or counterclaim, damages claimed against the Vashon Island Preserving Company on account of its breach of warranty in furnishing inferior goods to the defendant under a contract of the year before. The evidence shows that the goods sold under this last-mentioned contract had been received and paid for by the defendant some time prior to the making of the contract of May 17, 1910. The cause was tried to the court without a jury, and judgment was rendered in plaintiff's favor for $818.59. The counterclaim was refused. The defendant prosecuted this appeal.

The court, in order to avoid a retrial in the event of this court holding that the counterclaim should have been allowed, took evidence on the defendant's claim and made a finding thereon that the goods funished by the Vashon Island Preserving Company, under the contract of the year before, were defective and damaged to the value of $162; that the plaintiff on and after June 7, 1910, knew that defendant claimed the goods furnished under this first contract were unsalable, but had no knowledge of the extent of such claim of damage; that the defendant, at the time of its reception of the goods delivered to it by the plaintiff under the assignment of the second contract, well knew that they belonged to the plaintiff, but prior thereto had no knowledge of the assignment of the contract.

1. The appellant first contends that neither the lease of the preserving plant nor the assignment of the contract of May 17, 1910, was validly executed by the Vashon Island Preserving Company to the respondent. It is urged that both of these acts were void, because there was no formal resolution of the board of trustees of the corporation authorizing either of them. There was no direct evidence that any formal resolution was ever passed; but both the president and secretary testified that both the lease and the assignment were authorized by the trustees. There was, however, direct evidence that no record was ever made of any such resolution, if any was ever passed. The company had three trustees, of whom the respondent was one. He was also president of the company. The lease, which is in evidence, was executed in the name of Vashon Island Preserving Company, by the respondent as its president, and also as trustee, and by its secretary, and was attested by the corporate seal. It was also signed by the other two trustees. It was acknowledged by the president and secretary in the statutory form for corporate acknowledgments; the certificate reciting that both officers stated, under oath, 'that they were authorized to execute said instrument, and that the seal affixed thereto is the corporate seal of said corporation.' The lease itself recited that the corporation had caused its execution.

In the absence of any evidence to the contrary, the evidence adduced must be held sufficient to establish prima facie the validity of the lease. Gardner v. Port Blakely Mill Co., 8 Wash. 1, 35 P. 402; Milton v. Crawford, 65 Wash. 145, 118 P. 32; 4 Thompson, Corp. (1st Ed.) § 5029. The assignment of the contract was made by the secretary, who testified that he was authorized to make it. It is admitted that the lease and the assignment were parts of one and the same transaction. The prima facie establishment of the authorization of the lease was therefore some evidence that the transfer of the contract was also authorized.

Moreover, it was shown that the trustees had at all times full knowledge of the transaction, knew that the contract was being performed by the respondent, and on two or three occasions thereafter held regular meetings, and did not in any manner question or disaffirm the transaction, but knowingly received its benefits in the rental paid by the respondent. These things were ample to prevent the Vashon Island Preserving Company from ever in any way questioning the authorization of either assignment or lease. Dexter, Horton & Co. v. Long, 2 Wash. 435, 27 P. 271, 26 Am. St. Rep. 867; Carrigan v. Improvement Co., 6 Wash. 590, 34 P. 148; Glover v. Rochester-German Ins. Co., 11 Wash. 143, 39 P. 380; Roberts v. Wash. Nat. Bank, 11 Wash. 550, 40 P. 225; Anderson v. Wallace Lumber & Mfg. Co., 30 Wash. 147, 70 P. 247; Rowland v. Carroll Loan & Inv. Co., 44 Wash. 413, 87 P. 482; McKinley v. Mineral Hill Consol. Min. Co., 46 Wash. 162, 89 P. 495; Russell v. Schade Brewing Co., 49 Wash. 362, 95 P. 327; Livieratos v. Commonwealth Security Co., 57 Wash. 376, 106 P. 1125; National Bank of Com. v. Puget Sound Biscuit Co., 61 Wash. 192, 112 P. 265; Starwich v. Wash. Cut Glass Co., 64 Wash. 42, 116 P. 459; Sesnon v. Lindeberg, 66 Wash. 1, 118 P. 900.

While these decisions, as pointed out by the appellant, rest largely upon the principle of estoppel, as between the immediate parties to the transaction, still, if the contract here in question was assignable at all, evidence of any assignment sufficient to pass the title as between the parties to the assignment is all that can be required. It is merely a matter of proving title. Kull v. Thompson, 38 Mich. 685.

2. But the appellant contends that the contract was not assignable without its consent. There can be no question as to the general rule that, in the absence of prohibition by statute or stipulation by contract, rights arising out of executory contracts are assignable whenever they would survive to the personal representative of the assignor. 2 Am. & Eng. Ency. Law (2d Ed.) 1017, 1035; Slauson v. Schwabacher Bros. & Co., 4 Wash. 783, 31 P. 329, 31 Am. St. Rep. 948; Conaway v. Co-Operative Home Builders, 65 Wash. 39, 117 P. 716 .

The exceptions to this general rule are also well established. It is often broadly stated, in varying forms of expression, that if the rights are coupled with liabilities, or if they involve a relation of personal confidence or a personal service, they cannot be assigned. 4 Cyc. p. 22. The difficulty is not one of mere definition. It lies in the application of these general principles to the given case. Strictly speaking, almost every right arising under an executory contract has its corresponding liability. To give to the language of the first branch of the exception an absolute sense would be to declare every executory contract nonassignable.

As applied to sales of personal property for future delivery, the liability, coupled with the right, must be dependent upon some future dealing with the property sold as between the parties, in order to render the contract of sale nonassignable. 'When the contract is executory in its nature, and an assignee or personal representative can fairly and sufficiently execute all that the original contractor could have done, the assignee or representative may do so and have the benefit of the contract.' Devlin v. Mayor, 63 N.Y. 8, 17; In re Niagara Co. (D. C.) 164 F. 102.

The question in each case must turn upon the intention of the parties. In order to determine whether a given contract falls within either branch of the exception, it is necessary to consider the nature and purpose of the contract, and its terms and provisions. The contract here in question was as follows:

'Seattle, May 17, 1910.

'Sold to West Coast Grocery Company, Tacoma, Wash., for account and subject to approval of Vashon Island Preserving Company: 350 Cases #3 Jelly, 4 doz. to case, per dozen, 90¢. 150 Cases #3 Jam, 4 doz. to case, per dozen, 90¢. Less 15% discount, pack of 1910, October delivery. Terms: F. o. b. Tacoma, less 2% cash discount 10 days from date of invoice. The sellers guarantee all goods sold under this contract to comply with the pure food law approved by Congress June 30th, 1906.

'Accepted. West Coast Grocery Co. Buyer, by S. A. Nourse, Treas. Bennington Burton, Broker. Vashon Island Preserving Co., Seller, by J. W. King.'

This is simply a sale of personal property for future delivery. There is no undertaking that the goods shall be manufactured by any...