Yakima Hardware Co. v. Strickler, 22046.

• Decision Date: 15 April 1930
• Docket Number: 22046.
• Parties: YAKIMA HARDWARE CO. v. STRICKLER.
• Court: Washington Supreme Court

286 P. 853

156 Wash. 369

YAKIMA HARDWARE CO. v. STRICKLER.

No. 22046.

Supreme Court of Washington

April 15, 1930

Department 1.

Appeal from Superior Court, Franklin County; John Truax, Judge.

Action by the Yakima Hardware Company against Emma M. Strickler. From a judgment dismissing the action, plaintiff appeals.

Reversed with directions.

Rigg &amp Brown and C. W. Halverson, all of Yakima, for appellant.

M. M Moulton, of Kennewick, and Charles L. Powell, of Seattle, for respondent.

BEALS J.

Plaintiff in its complaint alleged that Kennewick Hardware Company executed in plaintiff's favor a promissory note in the following form:

'$5200.00

Yakima, Wash., Oct. 8, 1925

'We promise to pay to the order of Yakima Hardware Company, at North Yakima, Washington, Five thousand two hundred and no/100 Dollars, payable in Gold Coin of the United States of America, with interest thereon in like coin, from date until paid, at the rate of 8 per cent. per annum. Said sums to be paid as follows: 300.00 Nov. 10th, 1925, 300.00 Jan. 10, 1926 and 300.00 on the 10th of each month thereafter until full amount and interest is paid. We further agree that if suit be brought to collect the same to pay the holder 10 per cent. on above named sum as an attorney's fee in said cause. The maker and all indorsers hereof severally waive presentation for payment, protest and notice of protest of nonpayment of this note.

'In case this note, being due, is put in an attorney's hands for collection, and is paid before suit is brought, we agree to pay _____ Dollars as the collection fee thereon. And the maker and indorsers of this note severally waive and renounce any and all homestead or exemption rights and all appraisement or stay rights privileges or benefits to which either of them may be entitled under the constitution and laws of the State of Washington, now existing or hereafter passed, as against this note and any renewals thereof or any process, judgment or execution entered or issued to collect the same.

'[Signed] Kennewick Hardware Co.

'W. H. Strickler, Pres.'

and that defendant, being one of the stockholders of the maker of the note, indorsed the same in writing and guaranteed payment thereof. Plaintiff further alleged that certain payments had been made on the note and that at the date of the verification of plaintiff's complaint, May 27, 1928, there was a balance due thereon in the sum of $1,892.04, payment of which had been demanded and for which amount plaintiff prayed for judgment against defendant. By her answer defendant admitted that she had indorsed the note and that payments had been made thereon, but denied that any demand for payment of the note had been made upon the maker thereof and by it refused. In her answer she affirmatively pleaded that she owned two shares of the capital stock of the Kennewick Hardware Company and that she indorsed the note solely for the accommodation of that corporation, which fact was known to plaintiff at the time. That on May 2, 1927, Kennewick Hardware Company became involved in financial difficulties, and that on that date it entered into an agreement in writing with its creditors, the material portions of which are as follows:

'Kennewick, Washington.

'Agreement entered into this 2nd day of May, 1927 between The Kennewick Hardware Company of Kennewick, Washington, and its several merchandise creditors, whereas the Kennewick Hardware Co. is at this time unable to meet its obligations, and it being to the advantage of all interested that the business should be continued as a going concern until such time as a sale of the merchandise stock and fixtures can be made, it is hereby agreed and understood between said Kennewick Hardware Company and its several creditors as shown by list included in this agreement, that on and after this date, the business of said Kennewick Hardware Company shall be operated as follows:

'The business is to continue under the present management of W. H. Strickler.

'From the cash proceeds of the business there shall be paid in order as follows:

'1. All salaries and expenses of previous month.

'2. All purchases of previous month shall be discounted on or before 15th of month.

'3. Payment of at least 5% on the total of all claims listed as of April 1, 1927, shall be made on or before the 30th of each month beginning May 30, 1927--it being agreed and understood that all present claims of $25.00 or less and all labor claims shall be paid in full as soon as possible.

'It is further agreed and understood that the expenses of the business shall be held down to the lowest possible outlay. Also that the total purchases of merchandise including freight shall be limited each month to an amount not exceeding 50% of the previous month's cash receipts; that a weekly statement giving correctly the following information shall be furnished by the manager to W. A. Bell of the Yakima Hardware Company:

'1. Showing amount of sales for the previous week.

'2. Showing amount of total cash receipts for the previous week.

'3. Showing amount of merchandise purchases.

'4. Showing amounts paid out and to whom, during the previous week.

'It is also agreed that no payments of any nature or any amount shall be made other than those specified above without consent of W. A. Bell of the Yakima Hardware Company, acting for the creditors.

'It is further agreed and understood that should the Kennewick Hardware Company fail to perform any of the above conditions or fail to make any of the payments as called for in this agreement, that they will upon request of creditors representing 50% of their total indebtedness, as of April 1, 1927, give a bill of sale or assignment of all their assets for the benefit of all of the creditors as shown by this agreement, to such person as the said 50% of creditors may designate.

'It is also understood that all purchases of merchandise made during the life of this agreement shall be made only from the firms participating in this agreement and that no other purchases or indebtedness of any kind shall be incurred.

'It is also agreed that as long as the Kennewick Hardware Company shall faithfully respect all of the conditions of this agreement and shall make all payments as agreed each month, that the creditors signing this agreement will not start any action or require payments other than as shown by this agreement.

'The creditors participating in this agreement and their respective amounts due as of April 1st are as follows: * * *

'Yakima Hardware Company Yakima $6390.18 * * *

'All amounts listed above are to bear interest at the rate of eight percent (8%) per annum, after April 1, 1927.

'Kennewick Hardware Company

'

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