W.T. Rawleigh Co. v. Harper

• Decision Date: 03 June 1933
• Docket Number: 24456.
• Citation: 22 P.2d 665,173 Wash. 233
• Parties: W. T. RAWLEIGH CO. v. HARPER et al.
• Court: Washington Supreme Court

22 P.2d 665

173 Wash. 233

W. T. RAWLEIGH CO. v. HARPER et al.

No. 24456.

Supreme Court of Washington

June 3, 1933

Department 1.

Appeal from Superior Court, Lewis County; W. A. Reynolds, Judge.

Action by the W. T. Rawleigh Company against Edwin Harper and others. From a judgment of dismissal, plaintiff appeals.

Reversed and remanded, with directions.

J Dorman Searle, of Chehalis, for appellant.

HOLCOMB Justice.

This action was brought against these three parties upon the primary liability of Edwin Harper and the other two defendants as guarantors to recover an indebtedness incurred by and on the part of Edwin Harper, in the amount of $1,337.62, under a contract made with appellant. Edwin Harper made no appearance in the action, although he was produced as a witness by respondents, and the cause proceeded against the two guarantors.

The contract was entered into between the parties on about January 2, 1926, to expire December 31, 1926, unless sooner terminated by either party upon notice as specified in the contract. An instrument of guaranty was signed by Maul and C C. Harper in consideration of $1 and in consideration of the seller extending credit to Edwin Harper, as buyer, jointly and severally guaranteeing and unconditionally agreeing to pay the seller for any and all goods, wares, and merchandise sold to Edwin Harper, expressly consenting and agreeing to all the terms, conditions, and provisions of the contract between appellant and Edwin Harper and waiving all notice of any nature whatsoever. They further agreed that it should not be necessary for the seller first to exhaust its remedies against the buyer Before proceeding to collect from them, and that the contract is conclusive and binding upon the party or parties who signed it, and that any statement or representations made to any of the sureties by any persons either as to who or how many parties should sign the surety agreement or as to any other matters not fully expressed in the guaranty agreement shall not affect the rights of the seller. There are other agreements in the guaranty contract of no particular materiality, as they simply further detail the duties of the buyer and the sureties to the seller.

The principal contract recites that appellant is an Illinois corporation, hereinafter called the seller, who agrees to sell and deliver to Edwin Harper, as buyer, f o. b. cars Oakland, Cal., or at any other point agreed upon such of its products as the buyer may order, on time, at current wholesale prices. Another material portion of the contract is that it is stipulated that, if the business relations be terminated for any reason, the seller agrees to purchase from the buyer at wholesale prices current when the goods are received any merchantable products the buyer may have on hand, etc. The contract further provides: 'It is mutually understood and agreed that this is a contract of buyer and seller, and that the buyer is not the agent or representative of the company for any purpose whatsoever, but is the sole owner and manager of his business, and that he expressly reserves the exclusive right to determine the price, terms and conditions upon which, and the place where, he will sell the merchandise he buys from the seller, it being mutually understood and agreed that when the seller delivers the merchandise f. o. b cars to buyer at point of shipment, the merchandise becomes the property of the buyer and the seller retains no right, title, interest or control over said merchandise.'

There is another provision immediately following, that it is mutually and fully understood that the buyer is in business for himself, and that the seller does not undertake in any way to control the buyer in the conduct of his business. Then follows the stipulation: 'With the express understanding that it shall impose no legal restrictions whatsoever and that it shall not alter or modify the written terms or conditions of this contract, nor be considered as orders, directions, or instructions, or binding in any way upon the buyer and that it shall be considered only as advice and suggestions intended only to aid the buyer in improving his sales, collections, and service to his customers, (which advice or suggestions he may follow or not as he may choose) the seller will furnish buyer from time to time with Rawleigh Sales Service and collection methods, consisting of Rawleigh Weekly, Rawleigh methods, and other books, bulletins, service, sales or collection letters, and other letters and literature; it being intended and mutually agreed that this contract shall be the sole and only binding agreement between the parties hereto, and that it shall not be changed or modified in any way or by any person except such change or modification shall be first reduced to writing,' etc.

In their answer respondents admit executing the contract in question, admit that they have not paid the $1,337.62 alleged by plaintiff to be due, and deny other allegations in the amended complaint of appellant. As a first affirmative defense, they then allege that appellant is a foreign corporation engaged in the transaction of business in Washington, and, having failed to comply with the laws of Washington relative to foreign corporations, is without capacity to wage this action. As a second affirmative defense, respondents allege that Edwin Harper and appellant conspired together to defraud respondents, in that they represented that the relationship of appellant to Edwin Harper was that of buyer to seller, whereas they knew the relationship to be that of principal and...