Vancouver Nat. Bank v. Starr

• Decision Date: 05 January 1923
• Docket Number: 17420.
• Citation: 123 Wash. 58,211 P. 746
• Court: Washington Supreme Court
• Parties: VANCOUVER NAT. BANK v. STARR.

211 P. 746

123 Wash. 58

VANCOUVER NAT. BANK v. STARR.

No. 17420.

Supreme Court of Washington

January 5, 1923

Department 1.

Appeal from Superior Court, Clarke County; Geo. B. Simpson, Judge.

Action by the Vancouver National Bank against Lewis P. Starr. Judgment for the plaintiff, and defendant appeals. Reversed with directions to render a judgment for defendant.

Will H. Masters, of Portland, Ore., and Back, Hall & McMullen, all of Vancouver, for appellant.

McMaster Hall & Schaefer, of Vancouver, for respondent.

MITCHELL J.

Lewis P. Starr of Clarke county, Wash., purchased a Stutz automobile in Portland, Or., from the Pepp Motor Car Company for which he signed and delivered his written contract to pay $3,350 in monthly installments of $125 each, with interest at 8 per cent. per annum. Within a few days thereafter the Pepp Motor Car Company assigned and delivered the contract to the Vancouver National Bank. Starr paid to the bank on the contract the first three installments of the principal and all the interest due for the first three months. About that time he drove the automobile to Portland where it was seized on behalf of a creditor, who held a duly executed and recorded chattel mortgage on it antedating the sale and delivery to Starr. The mortgage was foreclosed, and the car was sold for an amount insufficient to pay the judgment. Starr refused to make any further payments on his contract, whereupon this suit was instituted by the bank to recover the balance claimed to be due. The complaint declared upon the instrument, without setting it out, as though it were a plain promissory note payable by installments. The answer contained a general denial of the alleged cause of action and also a cross-complaint setting up the fraud practiced on the defendant by the Pepp Motor Car Company in selling the automobile to him while it was covered by a mortgage of which he had no knowledge; that it had been lost to him by the foreclosure of the mortgage; and that he had paid to the bank $375 and certain interest for which, together with interest on each payment, he demanded judgment against the bank. Upon the trial of the case there were findings, conclusions and judgment for plaintiff, as demanded in its complaint. The defendant has appealed.

It does not appear that either of the parties to this action knew that there was a prior outstanding mortgage on the automobile until after the payments by the appellant to the bank.

At the trial the bank, in its case in chief, introduced the written instrument in evidence. Almost immediately upon commencing the proof on behalf of the defense, upon an objection on behalf of the bank to certain questions, counsel for the appellant stated:

'In this connection, there is no question that the case turns on the question of the negotiability of the note. * * * The case stands or falls on the negotiability of the note. We, of course, have no hesitancy in saying the note is not negotiable.'

Thereafter, at the conclusion of the testimony on behalf of the appellant, showing among other things the fraud practiced on him by the Pepp Motor Car Company and that the mortgage foreclosure sale failed to produce enough to satisfy the judgment, counsel for the respondent bank announced:

'We have no rebuttal. The case depends, as Mr. Masters says, upon the question of the negotiability of this note. If it was negotiable, then the defendant has no available defense. If it was not a negotiable instrument, then any equities that existed between the original maker and the payee would be available in this case.'

So that here is a case that was tried and submitted upon a theory of which there was or is no dispute. Each party had the same theory. It practically amounted to a stipulation. The informal remarks of the trial judge in deciding the case, which have been preserved in the record, show that that was the only question in the case, and, in the formal written findings entered, that idea is carried out. Neither party presented or requested any written finding inconsistent with or qualifying that view.

With this hypothesis we must, of course, examine and discuss the instrument. It is too lengthy to be fully set out herein. It is signed only by the appellant, Lewis P. Starr. His signature appears thereon at the bottom of the whole instrument. The first part of the instrument is in the usual form of a promissory note with interest, payable on the plan of installments designated. Immediately following, it reads in effect, that the instrument is given in consideration that the Pepp Motor Car Company, the second party, upon receipt of the payments, and the carrying out of the other agreements specified, agrees...