National City Bank of Seattle v. International Trading Co. of America, Inc.

• Decision Date: 22 March 1932
• Docket Number: 23545.
• Citation: 167 Wash. 311,9 P.2d 81
• Parties: NATIONAL CITY BANK OF SEATTLE v. INTERNATIONAL TRADING CO. OF AMERICA, Inc., et al.
• Court: Washington Supreme Court

9 P.2d 81

167 Wash. 311

NATIONAL CITY BANK OF SEATTLE v. INTERNATIONAL TRADING CO. OF AMERICA, Inc., et al.

No. 23545.

Supreme Court of Washington

March 22, 1932

Department 1.

Appeal from Superior Court, King County; John A. Frater, Judge.

Action by the National City Bank of Seattle against the International Trading Company of America, Inc., Oliver Hulback, receiver, and others, in which defendants filed counterclaim. From an order of dismissal, defendants appeal.

Reversed with directions.

Frederick R. Burch, of Seattle, for appellants.

Almon Ray Smith, of Seattle, for respondent.

TOLMAN C.J.

In this action, by a complaint verified October 5, 1920, but not filed until May 23, 1922, the plaintiff sought recovery upon a promissory note for the principal sum of $500, together with interest, attorneys's fees, and costs. By answer filed July 21, 1923, the defendants, through failure to deny, admitted the essential allegations of the complaint, and affirmatively pleaded a counterclaim. They prayed for judgment in their favor on the counterclaim in the sum of $10,672.26, with interest from July 22, 1920, less any amount which might be due on the promissory note described in the complaint.

The transcript of the record discloses no other move in the case until March 28, 1931, when the plaintiff filed a motion to dismiss the complaint and the counterclaim set up in the affirmative answer for want of diligence in prosecuting both the original cause of action and the counterclaim. This motion was supported by an affidavit showing that the summons and complaint were served on the defendants in October, 1920 that a demurrer had been interposed which was never brought on for hearing; that the original attorneys for the defendants had withdrawn and others had been substituted that an answer and counterclaim had been filed as already mentioned; that a reply thereto, denying all material allegations, had been promptly served (but not filed); and that the issues had been fully made up and the cause was ready for trial on August 7, 1923, and at all times thereafter, but that no further action had been taken by any one in the cause; that the corporate defendant had at all times mentioned been insolvent; and that the individual defendants who were alleged to be closely associated with the corporate defendant had made no demand for payment of the sums sought to be recovered by the counterclaim, and that the counterclaim had been abandoned.

This motion to dismiss was brought on for hearing on April 6, 1931, resulting in an order entered April 10, 1931, which in effect passed the motion without prejudice to the judge to whom the case might be assigned for trial.

An amended reply to the affirmative answer and cross-complaint was thereafter filed. The defendants filed a reply thereto. A stipulation was entered into between the parties for the taking of certain depositions, and it was further stipulated that certain documentary evidence might be introduced at the trial.

The cause came regularly on for trial on November 9, 1931, and the motion to dismiss was promptly renewed and argued to the court. The trial court tentatively denied the motion, impaneled a jury to try the case, and then heard the parties on the motion at length, and considered the affidavits presented pro and con; whereupon the motion was granted and the complaint and the cross-complaint were both dismissed without costs to either party. From this order of dismissal, the defendants have appealed.

In addition to the record as already outlined, it is necessary to consider as briefly as we may the facts presented to the trial court by the affidavits on behalf of each of the parties which are brought here by statement of facts.

The affidavits, considered as a whole, rather satisfactorily show that the matters set up in the counterclaim grew out of transactions in which were involved, in addition to the parties here, the Seattle National Bank and a well-known wholesale house in Chicago; and, if either of these could be held liable for the loss, the cause for differences between the parties to this action would immediately cease.

It appears that the plaintiff here, when the situation culminated, promptly brought suit against the Seattle National Bank, in which suit the appellants co-operated and assisted, seeking to throw the loss upon that bank. That action came to this court ( National City Bank v. Seattle National Bank, 121 Wash. 476, 209 P. 705, 30 A. L. R. 347), and was decided against the interests of both parties to this action. After such adverse judgment, the International Trading Company began an action in the Federal court at Chicago against the wholesale house involved, and that case went to the Circuit Court of Appeals and was there finally decided, against the interests of both parties here, in 1928.

It is asserted that the Chicago litigation was entered into and prosecuted throughout with the consent, approval, and advice of the respondent bank. The delay on the part of the appellants since the termination of the Chicago litigation is asserted to have been caused by the financial condition of the International Trading Company, which was largely occasioned by the expensive and unsuccessful litigation just mentioned. That and its original loss of the amount involved in the counterclaim are presented as the reasons for its inability to finance the prosecution of its demands against the respondent bank.

Stress is laid upon the activities of the appellants since the motion to dismiss was first served upon them, and, as witnessed by the stipulation already referred to, they seem to have been diligent in preparing for trial since put in motion by the attempt to dismiss the action.

Viewing the record as a whole, it would seem that, if there is fault here, the parties must be held to be equally at fault; and it is apparently the general rule that, where parties are equally at fault, neither can successfully assert laches against the other. Kimberly-Clark Co. v. Patten Paper Co., 153 Wis. 69, 140 N.W. 1066; Welch v. McCoy, 40 S.D. 273, 167 N. W. 159; Jacot v. Marks, 26 Misc. 670, 57 N.Y.S. 904.

The facts in none of these cases are...