Union Bank v. Kruger

• Decision Date: 29 December 1969
• Docket Number: No. 9--40022,9--40022
• Citation: 1 Wn.App. 622,463 P.2d 273
• Court: Washington Court of Appeals
• Parties: UNION BANK, Appellant, v. Leonard C. KRUGER and Betty Kruger, husband and wife, and the marital community composed thereof, Defendants, Buddy Kirihara and Betty Ann Kirihara, husband and wife, and the marital community composed thereof, Respondents.

Page 622

1 Wn.App. 622

463 P.2d 273

UNION BANK, Appellant, v.Leonard C. KRUGER and Betty Kruger, husband and wife, and the marital community composed thereof, DefendantsBuddy Kirihara and Betty Ann Kirihara, husband and wife, and the marital community composed thereof, Respondents.

No. 9--40022.

Court of Appeals of Washington, Division 3.

Dec. 29, 1969.

Rehearing Denied Jan. 21, 1970.

R. G. Schimanski, Spokane, for appellant.

William A. Franke and William F. Nielsen, Spokane, for respondents.

MUNSON, Judge.

Appellant, Union Bank, a California corporation, appeals from a judgment dismissing its action on a note against codefendants-respondents Buddy and Betty Ann Kirihara as continuing guarantors.The defendants Kruger are the parents of Betty Ann Kirihara.A default judgment was entered against the Krugers and they are not parties to this appeal.

On October 30, 1964, the Krugers, as lessors, entered into a lease with the Kiriharas, as lessees, to lease a certain drive-in restaurant and equipment located in Spokane, Washington.On November 13, 1964, Kruger assigned this lease and all payments due thereunder to the appellant as security for a loan he was negotiating.On the same day, at the Dishman Branch of the Seattle-First National Bank, Buddy Kirihara signed an 'approval and acceptance' clause contained in a notice of assignment of the Kruger-Kirihara lease to the appellant.At the same time, the Kiriharas also executed a 'continuing guaranty' in favor of the appellant for credits to be given Kruger in the future, not to exceed $20,000.Subsequently, the Kiriharas made their monthly lease payments of $400 to appellant.

After receiving the continuing guaranty, lease assignment, and Kruger's financial statement, appellant loaned Kruger $15,000 on a note dated January 4, 1965 which, including principal and precomputed interest, totaled $16,488.20.It was payable by January 20, 1966 in 11 monthly payments of $500 each and one installment of $10,988.20.The note contained a clause which provided for a late charge of 5 per cent per month on any delinquent payment.However, under the terms of the continuing guaranty the Kiriharas were liable only for the amount owing on the principal obligation at the time of default and not the late charges.

In early 1966, Kruger and the Kiriharas desired to terminate their business relationship.In January 1966, the Kiriharas' attorney informed appellant by letter and telephone that: (1) The business ties between Kruger and the Kiriharas would be terminated in the near future; (2) the lease of October 30, 1964 would be canceled; and (3) the Kiriharas wanted copies of all instruments executed by them in favor of the appellant so they could evaluate the Kirihara business relationship with Kruger and appellant.

The amount due January 20, 1966 was $6,069.83, including interest to that date.Kruger was unable to pay.He attempted to refinance the obligation but failed to satisfy the appellant's requirements.For several months appellant continued to receive $400 a month--the monthly sum due under the lease assignment.Appellant was unaware that Kruger was the source of the payments.The lease was canceled by the Krugers and the Kiriharas in February 1966, and the Kiriharas assumed the Krugers' contract to purchase the drive-in without any provisions for possible future liability under the continuing guaranty.Kruger stopped making payments to appellant to August 1966.However, it was not until October 1966 that appellant learned of the cancellation of the lease and subsequently brought this action.

Respondents first raise a question of procedure which deserves an answer.Appellant assigns error to the trial court's refusal to accept its proposed findings of fact, which are set forth verbatim in its brief.Appellant proceeds to argue against the findings signed by the trial court, but they are not set forth in its brief.Respondents claim this manner of proceeding does not conform with CAROA 42(g)(1)(iii) and CAROA 43 which state, in part: (CAROA 42(g)(1)(iii))

Whenever error is assigned to any finding or findings of fact, so much of the finding or findings made or refused as is claimed to be erroneous, shall be set out verbatim in the brief and reference made thereto by number in the 'assignments of error.'No assignment of error is required when a petitioner is seeking a writ involving the original jurisdiction of this court.

(CAROA 43)

No alleged error of the superior court will be considered, unless the same be definitely pointed out in the 'assignments of error' in appellant's brief.In appeals from all actions at law or in equity tried to the court without a jury, the findings of fact made by the court will be accepted as the established facts in the case unless error is assigned thereto.No error assigned to any finding or findings of fact made or refused will be considered unless so much of the finding or findings as is claimed to be erroneous shall be set out verbatim in the brief.

The purpose of CAROA 42(g)(1)(iii) and CAROA 43 is to enable each judge on appeal to be informed as to precisely what finding is before the court and whether there was substantial evidence to support it without searching the entire record.Martin v. Clinton, 67 Wash.2d 608, 408 P.2d 895(1965).

These two rules contemplate that the findings which the court made, and to which the appellant assigns error, must be set forth verbatim.Caffrey v. Chem-Ionics Corp., 69 Wash.2d 641, 644, 419 P.2d 809(1966);Nystrand v. O'Malley, 60 Wash.2d 792, 794, 375 P.2d 863(1962);Iverson v. Graham, 59 Wash.2d 96, 366 P.2d 213(1961);Hill v. Tacoma, 40 Wash.2d 718, 246 P.2d 458(1952).Unless the findings of fact which the court made are directly challenged, by setting them forth verbatim, and an assignment of error made directly to such finding or findings, they shall not be reviewed on appeal.The language of the rules, relating to finding or findings refused, means those proposed findings submitted by a party and rejected by the court for which there is no contradictory finding made.No error having been assigned to any of the findings of fact made by the trial court in the instant case, they shall be treated as verities.Weiss v. Weiss, 75 Wash.Dec.2d 609, 452 P.2d 748(1969).

We must then determine whether the findings made by the court support the conclusions of law and judgment.The trial court held the continuing guaranty given by the Kiriharas, prior to the granting of the loan, must be supported by independent consideration.We disagree.The law in Washington is well established.A benefit moving to the principal alone, contemporaneous with or subsequent to the execution of the guaranty, is sufficient consideration to support the guarantor's promise.Universal C.I.T. Credit Corp. v. De Lisle, 47 Wash.2d 318, 287 P.2d 302(1955);Pacific Nat'l Bank v. Aetna Indem. Co., 33 Wash. 428, 74 P. 590(1903).In the case at hand, the continuing guaranty was executed by the Kiriharas prior to the loan.The signed guaranty and the lease assignment were in the possession of the appellant, unrevoked at the time the loan was granted, and appellant had the right to rely thereon in making the loan.

The trial court also held the note executed by Kruger to appellan...