Motor Contract Co. v. Van Der Volgen, 23163.

Decision Date04 May 1931
Docket Number23163.
Citation298 P. 705,162 Wash. 449
PartiesMOTOR CONTRACT CO. v. VAN DER VOLGEN.
CourtWashington Supreme Court

Department 2.

Appeal from Superior Court, King County; J. T. Ronald, Judge.

Action by Motor Contract Company against W. M. Van Der Volgen. From an adverse judgment, defendant appeals.

Reversed with directions.

Warren Hardy, of Seattle, for appellant.

Henry Clay Agnew, of Seattle, for respondent.

MILLARD J.

Alleging the defendant refused to pay two overdue installments on an automobile, and that the plaintiff elected to declare all amounts paid thereon forfeited, the plaintiff finance company commenced this action to obtain possession of the automobile and to recover the costs of the action and the sum of $100 as a reasonable attorney's fee. It appears from the allegations of the complaint that the plaintiff, a finance company doing business in the state of Washington purchased for value from the vendor the conditional sales contract on which the Guaranteed Used Car Company sold an automobile to the defendant; that the contract is in the usual form, except for two additional provisions therein reading as follows:

'It is agreed by the purchaser herein that the extension of credit by this contract is only made possible by making this contract a negotiable contract, so that it may be sold by the vendor upon the market, and in consideration of the extension of credit herein, the purchaser hereby waives all counterclaims or claims for recoupment or any and other claims of any kind not appearing upon the face of this contract, or for misrepresentation or otherwise, as against any assignee for value, and the purchaser further agrees that as against any assignee for value this contract shall be construed as a negotiable instrument, and as an absolute and unconditional promise to pay the sums above specified and all defenses not appearing on the face of the instrument are waived as against the vendor herein.
'The purchaser further agrees that in event any action is brought against the purchaser herein to replevin the automobile mentioned in this contract, because of the refusal of the purchaser to deliver the possession upon legal demand being made, that in any such action the holder of this contract shall recover in addition to the costs and disbursements of the same, a reasonable attorney's fee to be fixed by the court.'

The defendant admitted the contract, that it was purchased for value by the plaintiff, and that he failed to make the payments due on the automobile, but set up two counterclaims. As a first counterclaim the defendant alleged that the agreed purchase price of the automobile was $300, 'and that the sum of $120.00 was added to said contract as interest, and constituted usury to said amount.' As a second counterclaim the defendant alleged that the vendor misrepresented that the car was in a first-class mechanical condition; that the condition of the car was such as to necessitate repairs costing the defendant $200.

Plaintiff's demurrer to the counterclaim was sustained, and, the defendant refusing to plead further, the plaintiff was adjudged entitled to possession of the automobile, and to recover costs and an attorney's fee of $100. From that judgment the defendant has appealed.

Appellant contends that the agreement contravenes public policy, as it allows a vendor to contract for the payment of usury or employ fraudulent practices, and to sell his illegal contract free of these defenses; that, although admitting in this replevin action $100 is a reasonable attorney's fee, the court had no right to impose any fee; that the respondent, having canceled the contract and forfeited all of the rights of the appellant thereunder, is precluded, as the contract no longer exists, from resorting to any provision of that contract to derive any benefit therefrom.

In the absence of the above-quoted provisions, the contract in question would not be a negotiable instrument, and under the provisions of section 266, Rem. Comp. Stat., reading as follows, the appellant could have set off his demands against the respondent, and the demurrer to his counterclaims should not have been sustained:

'The defendant in a civil action upon a contract expressed or implied, may set off any demand of a like nature against the plaintiff in interest, which existed and belonged to him at the time of the commencement of the suit. And in all such actions, other than upon a negotiable promissory note or bill of exchange, negotiated in good faith and without notice before due, which has been assigned to the plaintiff, he may also set off a demand of a like nature existing against the person to whom he was originally liable, or any assignee prior to the plaintiff, of such contract, provided such demand existed at the time of the assignment thereof, and belonging to the defendant in good faith, before notice of such assignment, and was such a demand as might have been set off against such person to whom he was originally liable, or such assignee while the contract belonged to him.'

'Further the defense here offered is, more strictly speaking, what is known to the common law as recoupment, which means the keeping back or stopping something which is otherwise due because the other party to the contract has violated some duty devolving upon him in the same transaction. See 24 R. C. L. 793. Since what was assigned was a chose in action only, and not in any sense protected by the Negotiable Instrument Law (Rem. Comp. Stat. § 3392 et seq.), the assignee stands in the shoes of his assignor.' Nelson Co....

To continue reading

Request your trial
26 cases
  • Bell v. Idaho Finance Co.
    • United States
    • Idaho Supreme Court
    • 1 Abril 1953
    ...35 Idaho 161, 204 P. 1068, 28 A.L.R. 695; Kimpton v. Studebaker Bros. Co., 14 Idaho 552, 94 P. 1039; Motor Contract Co. v. Van der Volgen, 162 Wash. 449, 298 P. 705, 79 A.L.R. 29; moreover, the assignee of a non-negotiable instrument takes it subject to all the defenses available against th......
  • Dix v. Ict Group, Inc.
    • United States
    • Washington Supreme Court
    • 12 Julio 2007
    ...See Ang v. Martin, 154 Wash.2d 477, 481, ¶ 9, 114 P.3d 637 (2005) (questions of law are reviewed de novo); Motor Contract Co. v. Van Der Volgen, 162 Wash. 449, 454, 298 P. 705 (1931) (question whether a contract is against public policy is a question of law). ¶ 15 Forum selection clauses ar......
  • Quality Finance Co. v. Hurley
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 6 Marzo 1958
    ...v. Whalen, 43 Idaho 15, 19, 248 P. 444; Industrial Loan Co. v. Grisham, Mo.App., 115 S.W.2d 214, 216; Motor Contract Co. v. Van Der Volgen, 162 Wash. 449, 452-455, 298 P. 705, 79 A.L.R. 29. See also Equipment Acceptance Corp. v. Arwood Can Manuf. Co., 6 Cir., 117 F.2d 442, 446. 3 Other case......
  • First Acceptance Corp. v. Kennedy
    • United States
    • U.S. District Court — Northern District of Iowa
    • 26 Febrero 1951
    ...had been induced by fraudulent representations on the part of the conditional vendor. In the case of Motor Contract Co. v. Van Der Volgen, 1931, 162 Wash. 449, 298 P. 705, 79 A.L.R. 29, it was held that a similar provision would not prevent the conditional vendee from setting up the defense......
  • Request a trial to view additional results
2 books & journal articles
  • Corporate Governance, Bankruptcy Waivers, and Consolidation in Bankruptcy
    • United States
    • Emory University School of Law Emory Bankruptcy Developments Journal No. 36-1, March 2020
    • Invalid date
    ...(N.Y. 1980).104. See, e.g., Indus. Loan Co. v. Grisham, 115 S.W.2d 214, 217 (Mo. Ct. App. 1938); Motor Contract Co. v. van der Volgen, 162 Wash. 449, 451 (Wash. 1931). 105. 15 Corbin on Contracts § 88.7 (Rev. Ed. 2019).106. HSBC Bank USA v. Branch (In re Bank of New Engl. Corp.), 364 F.3d 3......
  • The Residential Tenant's Right to Freedom of Political Expression
    • United States
    • Seattle University School of Law Seattle University Law Review No. 10-01, September 1986
    • Invalid date
    ...in lease provided that premises were to be used "for purposes of conducting a bakery"). 241. Motor Contract Co. v. Van Der Volgen, 162 Wash. 449, 454, 298 P. 705, 707 (1931) (quoting 13 C.J. 366, at 427 242. Id; Whitaker v. Spiegel Inc., 95 Wash. 2d 408, 623 P.2d 1147, (1981), modified, 95 ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT