Farmers State Bank v. Gray
Farmers State Bank v. Gray
Opinion of the Court
The purpose of this action was to recover upon two promissory notes.
The defendants were Harry Grey and wife, and M. C. Gray and wife. Judgment went against Harry Grey and wife by default. The jury returned a verdict against M. C. Gray, but in favor of Cora E. Gray, his wife. From the judgment entered upon this verdict, M. C. Gray appeals. One of the notes was in words and figures as follows:
“Pullman, Wash., Oct. 22nd. 1913.
($1,500 (No. 1659
“On the 22nd day of December, 1913, for value received, I promise to pay to the order of the Fanners State Bank at Farmers State Bank, Pullman, Washington, Fifteen Hundred Dollars with interest from date until paid, at the rate of 8 per cent per annum, payable annually.
“The makers, signers and endorsers of this note agree to an extension of same from time to time, until fully paid, waiving demand, protest or notice of protest. It is also agreed that any collateral of any kind or description whatever, which is now or may be held hereafter by said payee shall be held as security on this note as well as any demands against any of the makers, signers or endorsers of this note, due or not due. And if not paid at maturity, both interest and principal shall become immediately due and collectible at the option of the holder of this note. Harry Grey
“P. 0.......... M. C. Gray”
The other note only differed from this one in the date, time when due, and the amount. Upon the trial, the respondent introduced in evidence the two notes and rested. The appellant thereupon moved for a directed verdict. This motion
At the conclusion of the respondent’s case in chief, there was no proof of consideration. The appellant, however, did not stand upon his motion. At the conclusion of all the evidence, there was proof that the consideration for the notes was a loan to Harry Grey. The appellant not having stood upon his motion, the case will thereafter be reviewed upon the entire testimony. Ryan v. Lambert, 49 Wash. 649, 96 Pac. 232; Parker v. Washington Tug & Barge Co., 85 Wash. 575, 148 Pac. 896.
It is contended that, if the notes are nonnegotiable, M. C. Gray was only a surety, and that the evidence not showing that he received any of the consideration, an action as to him must fail; but the rule is, in case of a surety, that the consideration which moves to the principal is sufficient to sustain the obligation of the surety. Pingrey, Suretyship and Guaranty (2d ed.), § 35; Brandt, Suretyship and Guaranty (3d ed.), § 2.
The appellant seeks to avoid liability on the notes, because, as he claims, (a) the respondent, through its cashier, entered into a conspiracy relative to certain collateral, which was detrimental to his interests; (b) the attorney for the bank assured him that the notes would be paid out of the proceeds of collateral mentioned, on a day certain, and relying upon this assurance, he did not institute an action for
Harry Grey, some time prior to the transaction here in controversy, transferred to one Charles M. Chamberlain- certain notes and mortgages, referred to in the evidence as securities, to the amount of approximately sixteen thousand dollars. Chamberlain, after receiving these, hypothecated them with a bank in Spokane. M. S. Jamar was the attorney for Harry Grey, and also one of the attorneys for the respondent in this action. After the securities had been transferred to Chamberlain, Grey took the position that he had been overreached, and Chamberlain agreed that, if Grey would pay' something like four thousand dollars to the bank in which the securities were deposited, he would return them to him. Among the securities was a note for nine thousand two hundred dollars, secured by a mortgage upon a section or more of land in Alberta, Canada. This note was the obligation of one S. L. Lee, who resided in Canada. Chamberlain being willing to return the securities if the sum mentioned was paid to him, he turned them over to the cashier of the respondent bank, who, with one or two others, went to Canada for the purpose of seeing Lee and realizing upon the note and mortgage, the thought being to secure enough money from Lee to pay the demand of Chamberlain, and also sufficient to meet Harry Grey’s obligation to the respondent bank. When the parties reached Canada and interviewed Lee, they were immediately told by him that he repudiated the obligation and already had instituted an action for the purpose of cancelling the note and mortgage, because they had been secured from him by fraud. The parties returned to the state of Washington, and the note and mortgage, together with the other securities, were returned to Chamberlain.
The judgment will be affirmed.
Morris, Parker, and Holcomb, JJ., concur.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.