American Surety Co. v. Sandberg

GILBERT, Circuit Judge

(after stating the facts as above).

[1] We find no ground to disturb the findings of fact of the court below. The fact that at the time of signing the agreement of indemnity Peter Sandberg was himself indemnified against loss does not affect the nature of his suretyship, or change its character from that of a voluntary act of accommodation for the benefit of the Construction Company.

The law of Washington (Remington’s Codes and Statutes, §§ 5915, 5916) recognizes the separate property of husband and wife. In the case of the husband it is that which he owned before marriage and that which he acquired afterward by gift, bequest, devise, or descent, with the rents, issues, and profits thereof. In the case of the wife it is that which she owned at the time of the marriage or afterward, acquired by gift, devise, or Inheritance, with the rents, issues, and profits thereof. Section 5917 provides that:

“Property, not acquired or owned as prescribed in the next two preceding sections, acquired after marriage by either husband or wife, or both, is community property, but the husband shall have the management and control of the community personal property, with a like power of disposition as he was of his separate personal property, except that he shall not devise by will more than one-half thereof.”

Section 5918 provides that:

“The husband liar, the management and control of the community real property, but he shall not sell, convey, or incumber the community real estate, unless the wife join with him in executing the deed or other instrument of conveyance.”

The Supreme Court of Washington has held that any liability incurred by the husband in the prosecution of any business is prima facie a charge against the community, but that the presumption is overthrown by proof that the liability was not incurred, in a business of which the community would have had the benefit if profit had been realized therefrom (McDonough v. Craig, 10 Wash. 239, 38 Pac. 1034); that a guaranty by the husband for the payment of goods to be furnished a corporation of which he is a stockholder, being merely a contract of suretyship, creates a separate and not a community debt (Spinning v. Allen, 10 Wash. 570, 39 Pac. 151), yet, if the husband is an officer and stockholder of the corporation and becomes surety to protect the property and business of the corporation, and if, under the circumstance, it is to be presumed that he is acting for the community and the benefits of his act might have belonged to the community, the property of the community will be held liable (Horton v. Donohoe Kelly Banking Co., 15 Wash. 399, 46 Pac. 409, 47 Pac. 435). Again, it is held that the execution of a note as an accommodation to a bank does not bind the community where neither the husband nor the wife had any interest in the bank. Shuey v. Holmes, 20 Wash. 13, 54 Pac. 540. But it is otherwise if it is to be presumed that a benefit growing out of the husband’s connection with the bank will inure to the community. Shuey v. Holmes, 22 Wash. 193, 60 Pac. 402. So, in Way v. Lyric Theater Co., 79 Wash. 275, 140 Pac. 320, it was held that notes given by a corporation, and married men who were stockholders, for the purchase of an automobile to be used as, a prize for the benefit of the corporate business,- are presumptively for the benefit of the communities, but that the presumption might be rebutted by proof. In Threshing Machine Co. v. Wiley, 89 Wash. 301, 154 Pac. 437, where a husband signed a note as surety only, and received no consideration, it was held that the debt was not a community debt. Such being the law of Washington as construed by the highest court of the state, it is clear that the community property of the defendants is not bound for the payment of Peter Sandberg’s debt to the plaintiff.

The plaintiff contends that Sandberg’s execution of the indemnity agreement resulted in benefit to the community property in this, that the construction company thereby was enabled to obtain the contract with the paper company, and thus to make money to repay to Sandberg his advances on the Kentucky building contract. But the contention is not sustained by the facts. There is no evidence that such was the purpose of Sandberg’s act,- or that he expected or derived any benefit to the community therefrom, and the fact was, as found by the court below, that at the time when Sandberg signed the indemnity agreement, the Kentucky building was substantially completed and paid for,-and the construction company was then in good financial standing.

It is contended that the judgment rendered in British Columbia on behalf of the paper company is conclusive upon the defendants herein, for the reason that they were notified and had an opportunity to defend that action. But such is not the record. Peter Sandberg had notice of the action, but Mrs. Sandberg had not, nor was she a party to the action, and the court below found that she had no knowledge of it.

[2] Upon the facts as found by the court below, and the law as it is established in the state of Washington, we find no error in the decree which is appealed from.

The decree is affirmed.