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a large portion of the argument has been the claim of any other creditor, if the receivmade to this court by counsel for respond- er should fail or refuse to do so, in a propents. But, in the view here taken of what er case. In a word, this was a fund in is decisive of the cause and the rights of court, the beneficiaries of which should rethe parties before us, many of the questions ceive their respective shares as expeditiously which are argued upon the pleadings are im- as the nature of the property would permit, material. It would have been only fair to and the principles governing the proceedings Grace & Co., in view of the various substi- are substantially those enacted into statutes tutions that were made between the trial of insolvency in the states, and into bankand the decision of the cause, and par- ruptcy acts by the United States." ticularly in view of the fact that the First 2. At the time the Clapp mortgage for $5,National Bank of Port Townsend disap- | 000 was executed, the mortgagee had knowlpeared from the case, and its interests were edge of the execution of the two other mortthereafter represented by the First National gages on the same day, and of the intention Bank of Athena, an adverse party in inter- of the officers of the Port Townsend Steel est to Grace & Co., that the latter should Wire & Sail Company to prefer his note. have been permitted to file the proposed The knowledge of his attorney, Mr. Coleamendment. But we do not deem such man, must be imputed to him. The mortamendment was necessary at that stage of gage itself was clearly a preference by an the cause. Grace & Co. had been allowed to insolvent corporation of one of its credappear and join with the First National itors. It was executed as security for an Bank of Port Townsend. The issues were antecedent debt. Such a preference cannot made between that bank and the plaintiff be maintained. It was said in Thompson v. and the other parties to the cause, and had Lumber Co., supra, at page 604, 4 Wash., and been heard and determined, and the court page 712, 30 Pac.: "But we cannot lose evidently considered Grace & Co. as parties sight of the settled rule concerning the propstanding in the same relation which they erty of insolvent corporations, viz. that it is assumed at the beginning until the conclu- a trust fund for creditors, wherein there is a sion of the case. Therefore Grace & Co. difference between property of a corporation were not injured by the refusal of their pro
and that of a natural person. Without enposed amendment. The defendant corpora- larging upon a discussion of the subject, we tion, the Port Townsend Steel Wire & Nail note a remarkably clear and forcible case Company, was insolvent. Under the proper in Rouse v. Bank, 46 Ohio St. 493, 22 V. E. order of the court, all its property was in the 293, which sustains the position we take. custody of the receiver. All creditors of There is an additional reason, however, in the corporation were authorized to appear this state, viz. that our courts are expressly and prove their claims, and share alike in authorized by statute to appoint receivers . the proceeds of the property of the insolvent of corporations which are insolvent or are in corporation. Hence all the refinement in- imminent danger of insolvency. Code Proc. dulged in by counsel upon the proper plead- § 326, subd. 5. The purpose in thus placing ing and the nature of the pleadings in a fore- insolvent corporations in the possession of closure suit is inapplicable. Any sufficient the courts can only be that their assets may statement of the nature and amount of the be distributed ratably to creditors. A gendebt due to Grace & Co. from the insolvent eral assignment without preference does not corporation was good. It is the duty of the defeat this purpose, but, if the estate of a court, under the circumstances of this case, corporation comes into the court or into the when it has found the insolvency of the cor- hands of the assignee burdened with preferporation, of its own motion to direct that all ences, there is an end of equal distribution creditors come in and prove their claims and the object of the law is defeated." against the corporation. In Thompson v. Again, in Conover v. Hull, 10 Wash. 673, 39 Lumber Co., 4 Wash. 600, 30 Pac. 741, and Pac. 166, the question of a preference by an 31 Pac. 25, it was said at page 607, 4 Wash., insolvent corporation of its creditors came and page 743, 30 Pac.: “The receiver, having before the court, and was carefully considbeen thus appointed, represented the cor- ered and elaborately discussed. The court poration and all of its creditors. He was a says at page 675, 10 Wash., and page 167, 39 trustee for both. It was his duty, under Pac., referring to Thompson v. Lumber Co., the orders of the court, to take proof of all supra: “We, however, held, on the legal claims presented to him; to recommend the proposition, that a voluntary preference by allowance of those which he deemed just, an insolvent corporation was void, and that and the disallowance of such as were im- principle is the essentially distinguishing proper. It was not necessary that any feature between the responsibilities and claim thus presented should be in the form rights of a corporation and a private individof a judgment, or that there should be tech- ual. A further investigation of the subject nical interventions. If claims were disputed and of the authorities contents us with the by the receiver, the court had full power to rule announced in that case; and we are satdecide the points at issue; calling in a jury, isfied that it can be amply sustained, not if necessary. Any creditor, having proved only by authority, but by the clearest prinbis claim, would have the right to contest ciples of right reasoning. To begin with,
out statute law recognizes a distinction be- paragraphs 5 and 6, and to wholly disregard tween the remedies of creditors, as applied the same, and announced that no testimony to their dealings with corporations, by pro- would be introduced in support of said paraviding for the appointment of receivers to graphs because of the decision in Jolliffe v. take charge of the property of corporations, Brown, supra.
Counsel also stated that “the under certain circumstances and conditions; only recovery sought in the action is the value and, of course, after the receiver is appoint of the stock alleged to have been killed, and ed, the property is in the custody of the claimed in the sum of $135, and asked that court, and the funds will be equitably dis- "the prayer of said complaint be so modified tributed among the creditors."
as to correspond with the value of said stock, tion may now be considered as settled in this to wit, the sum of $135.” Paragraphs 5 and state, and does not require further discus- 6 of the complaint contained allegations enti. sion here. The cause is reversed, because tling plaintiff to double damages and attorof the preference awarded to plaintiff's mort- ney's fees, under sections 3 and 4 of the act gage, and remanded to the superior court for already referred to. In charging the jury, the further proceedings in conformity to this opin- court expressly told them that plaintiff's reion.
covery could not exceed $135.
The respondent has moved to dismiss this SCOTT, C. J., and ANDERS, DUNBAR, | appeal, upon the ground that the amount in and GORDON, JJ., concur.
controversy does not exceed the sum of $200, and the action does not involve the legality of
a tax, impost, assessment, toll, municipal fine, (17 Wash. 4)
or the validity of a statute. In opposition to HUBER V. BROWN et al.
the motion, appellants insist that plaintiff's
suit is based upon a statute for the recovery (Supreme Court of Washington. April 6, 1897.)
of a penalty; that the complaint was incapaSUPREME COURT-JURISDICTION-CONSTRUCTION
ble of amendment; and that plaintiff, having OF STATUTES.
“declared upon the statute, must recover, if Certain paragraphs of a complaint against
at all, by virtue of the statute.” The motion a railroad company for the killing of live stock were drafted under Laws 1893, c. 128, 88 3, 4,
to dismiss must be granted. With paragraphs providing for a recovery of double damages and 5 and 6 stricken from the complaint, the reof attorney's fees. Those sections having been maining paragraphs contain all the allegaheld unconstitutional by the supreme court,
tions essential to the recovery of the value of plaintiff moved to dismiss said paragraphs, and announced that no evidence would be given the stock killed, and this is sufficient under thereunder, and asked that the prayer be modi- the Code (2 Hill's Code, $ 185). No objection fied so as to demand only the actual value of the
was made by appellants to plaintiff's motion stock, all of which was done without objection, and the trial proceeded accordingly. Held that,
striking these paragraphs from the complaint, the actual value of the stock not being within or amending the prayer for judgment, and the jurisdictional amount of the supreme court, upon the trial no objection was made to plainthat court had no jurisdiction of an appeal on
tiff's evidence in support of an action to rethe ground that the suit involved the validity of a statute, within Const, art. 4, 8 4.
cover the actual damages sustained. It is
apparent, therefore, that the amount in controAppeal from superior court, Whatcom coun
versy does not exceed the sum of $200, within ty; John R. Winn, Judge.
the meaning of section 4 of article 4 of the Action by J. Huber against Thomas R.
constitution of this state. Gabriel V. RailBrown and John H. Brayant, as receivers of
way Co., 7 Wash. 515, 35 Pac, 410; Henry v. the Seattle, Lake Shore & Eastern Railway
Railway Co. (decided Feb. 5, 1897) 47 Pac. Company. From a judgment for plaintiff, de
895. The appeal is dismissed. fendants appeal. Dismissed.
Kerr & McCord, Carr & Preston, and W. R. ANDERS, REAVIS, and DUNBAR, JJ., Bell, for appellants. Jeremiah Neterer, for concur. respondent.
(16 Wash. 625) GORDON, J. Respondent brought this ac
CITY OF SEATTLE v. O'CONNELL et al. tion to recover the value of certain stock killed by an engine and cars of the appellants' rail
(Supreme Court of Washington. March 19, road. The complaint alleges the value of the
1897.) stock killed to have been $135. The prayer
-LIMITATIONS. was for $270 and attorney's fees.
1. Laws 1893, p. 407, providing that civil acplaint was evidently drafted under chapter
tions in the superior courts shall be commenced 128 of the Laws of 1893, section 3 of which by the service of a summons, and repealing the provides for the recovery of double damages, old law of procedure, did not deprive a court of and section 4 for attorney's fees. These sec
the jurisdiction it had theretofore acquired
over the subject-matter of an action by the filtions of the act were held unconstitutional in ing of a complaint, so as to prevent a subseJolliffe v. Brown, 14 Wash. 155, 44 Pac. 149. quent voluntary appearance by defendant from At the trial of the cause below, and while the
giving jurisdiction of his person. Laws 1893,
p. 412, § 15. jury was being impaneled, plaintiff's counsel
2. A right of action to foreclose an moved the court to dismiss from the complaint ment lien accrues to the city at the expiration of the time fixed by ordinance for its payment, the office of the city treasurer. All taxes and not at the time the lien attaches.
not paid within forty days of the first pubGordon, J., dissenting.
lication of this notice will be declared deAppeal from superior court, King county; linquent, a penalty of five per cent. added, J. W. Langley, Judge.
and interest at the rate of ten per cent. Action by the city of Seattle against Cath- charged. H. W. Miller, City Clerk. First puberine O'Connell and another to foreclose an
lication of this notice, December 16th, 1890." assessment lien. From a judgment sus
Thus, it was claimed by the answer that the taining a demurrer to her answer, defend
action was not commenced within the peant O'Connell appeals. Affirmed.
riod of two years after the cause of action
set forth in the complaint had accrued, and Dore & Cross and Bausman, Kelleher &
that the cause of action was thereby barred Emory, for appellant. John W. Pratt, C.
by the statute of limitations. To this anA. Riddle, and John K. Brown, for respond
swer respondent interposed a demurrer, ent.
which was sustained by the trial court, and
appellant, electing to stand upon her answer, DUNBAR, J. This suit was brought by has appealed to this court. the city of Seattle against the appellant to It is conceded that the action was propforeclose an assessment lien. Action was erly commenced by filing the complaint on commenced by filing a complaint on the 25th January 25, 1893. It is also conceded that day of January, 1893. No summons was then no summons was issued until December 16, issued. On December 16, 1893, attorneys for 1893, when summons was issued by the plainrespondent had served upon appellant a sum- tiff's attorney in the manner and form premons which they personally issued. The scribed by the law now in force. On March complaint of the respondent set forth, 15, 1893, however, an act of the legislature among other things, that between the 18th
was approved by the governor, entitled "An day of April, 1890, and the 20th day of Jan- act to provide for the manner of commencing uary, 1891, by virtue of Ordinance No. 1339, civil actions in the superior courts and bringpassed by said city of Seattle, it did im- ing the same to trial." Laws 1893, p. 407. prove, grade, and construct a sidewalk de- This law provides that "civil actions in the scribed; that, by virtue of the provisions of several superior courts of this state shall the said ordinance, appellant's property was be commenced by the service of a summons, assessed for said improvements in the sum as hereinafter provided.” This act took efof $156. To this cause of action the appel- fect June 7, 1893, more than four months lant pleaded the statute of limitatiors, by after the filing of the complaint herein; and way of affirmative defense, in the following it is the contention of the appellant that the words: “That said improvements mention- passage of the act of 1893 and the repeal of ed in said complaint were completed and ac- the prior act thereby, both being in their cepted by said city of Seattle prior to the nature remedial, not only took away the 16th day of December, 1890; that, by virtue right to proceed further under the prior law, and in pursuance of the provisions of the but rendered the filing of the complaint said ordinances mentioned in the complaint, thereunder null and inoperative, inasmuch the above lot was duly assessed prior to the as no jurisdiction had been or could be ac16th day of December, 1890; the amount quired over the persons of the defendants charged on its proportion of said improve- by compliance with its provisions. There is ments was found to be, and was prior to said some conflict of authority in relation to this December 16th assessed in, the sum of one question, some courts holding that the rehundred and fifty-six ($156) dollars; and peal of the statute prescribing the particular prior to said December 16, 1890, by ordinance mode of trial will not operate to annul prodated and enacted by said city of Seattle ceedings had under the statute in cases pendprior to said date, said assessment was made ing at the time of the repeal, while other and levied on said lot in the sum of one hun- courts have corstrued the statutes more dred and fifty-six dollars ($156), as appears by strictly, holding that the subsequent act, if the assessment roll duly approved and filed it was remedial in its nature, took away the in the office of the city treasurer of said right to proceed further under the prior law, city; and that said assessment was complet- and in some cases, it was held, rendered the ed prior to said December 16, 1890." The filing of the complaint inoperative, especialanswer also alleged, in substance, that said ly where no jurisdiction had been or could assessment became payable on December 16, be acquired over the persons of the defend1890, and became delinquent on January 25, ants by compliance with the provisions of 1891. The notice under publication of which the new statute. After discussing this propthe tax levied became payable was as follows: osition somewhat at length, Mr. Endlich, in "Terrace Street Tax Notice. The tax levied bis work on the Interpretation of Statutes by the city council in the district created by (section 482), says: "The doctrine, indeed, Ordinance No. 1339, to provide for the grad- of the destruction of imperfect rights and ing of Terrace street from Yesler avenue to actions depending on statutes, by their reBroadway streetand constructing side peal, must not be carried beyond its proper walks thereon, is now due and payable at scope. It has been said that an act repealing or in any wise modifying the remedy from commencing an action is added to the of a party by action or suit should not be time expressed by the statute, or, in other construed to affect actions or suits brought words, the statute does not run during such before the repeal or modification. (Citing time. It is true that these provisions are Newsom v. Greenwood, 4 Or. 119.] Whilst ordinarily specific provisions of the statute, this statement is probably too broad, it is but the rule is based on reason and fair dealnevertheless true that where the effect of ing, and, if any other rule obtained, statutes the new legislation is not to take away the of limitations would become statutes in aid jurisdiction or right previously existing, nor of the prevention of justice, and we are into deny a remedy for its enforcement sub- clined to give the same construction to this stantially like the one previously allowed, ordinance. It is evident that under this orbut merely to change the remedy, the right dinance suit could not have been instituted and the jurisdiction continue under the form for the collection of this assessment, and directed by the new act, where it applies, or the fact that the lien attached upon the land else under the old law." It seems to us that at the time of the issuance of the notice is a liberal and sensible construction of this no proof or indication that the right of acstatute will lead to the conclusion that it tion to foreclose the lien had accrued to the was not the intention of the legislature to in- city, because liens under the law attach in terfere with or destroy actions which had many instances before the right of action already been commenced, to the extent, at accrues to foreclose. It was urged by the least, of depriving the court of the jurisdic- learned counsel for the appellant in his tion of the subject-matter of the action. In oral argument that it was not within the this case, the, the court having jurisdiction power of the city to extend the statute of of the subject-matter, the jurisdiction of the limitations, for the reason that a lien was a person of the appellant was obtained by her cloud upon the title, and that a defendant appearance in the case; and, while it is true had a right to have the cloud removed withthat the defense of the statute of limita- in the statutory period of limitations. As a tions was properly pleaded by answer, yet matter of justice, the cloud could only be rethe question of service should have been de- moved by the payment of the assessment if termined prior to the filing of the answer the assessment was legally made; and, if and the raising of the issue of the statute of the assessment was not legally made, the limitations, by a motion challenging the ju- defendant would not be without remedy to risdiction of the court over the person of the have the assessment annulled and the cloud appellant. Section 13 of the Laws of 1893 removed, and under no circumstances does (page 412) provides that, "from the time of the fact that a debt may be paid at a certain the service of the summons in a civil action, time imply that a right of action has accrued the court is deemed to have acquired juris- to sue on that debt. The instance that is diction, and to have control of all the subse- given by the respondent is in point, namely, quent proceedings. A voluntary appearance that a promissory note may be made payof a defendant is equivalent to a personal able on or before 40 days, and that, while service of the summons upon him." And it is payable at any time after its execution, section 16 provides that “a defendant ap- yet it does not mature, so that the right of acpears in an action when he answers, demurs, tion against it accrues, until after the period makes any application for an order therein, of 10 days las expired. There seems to be or gives the plaintiff written notice of his very little authority cited on this particular appearance." The court, then, having juris- point, although there is some that is directdiction by the filing of the complaint of the ly in point. The following rule is laid down subject-matter of the action, and having ju- by Wood Limitations (section 164): risdiction of the parties by their voluntary “Where an assessment or tax is laid, and, by appearance in the case, it would seem that ordinance or statute, a certain time is fixed the first contention of appellant is untenable. within which it may be paid, the person
A more troublesome question, to our mind, against whom it is laid has the whole of is the second contention, namely, that the such period within which to pay it, and the statute of limitations had expired prior to statute does not begin to run thereon until the commencement of the action. If the stat- such time has expired.” And in Reynolds ute commenced to run from the date that the v. Green, 27 Ohio St. 416, this identical ques. lien attached, as shown by the ordinance, tion was decided. There, by ordinance of the then the plaintiff is barred, for the action city council, the assessment for an improvewas not commenced until 2 years and 10 ment was made November 20, 1861; and it days after such publication; but it is con- was provided in the ordinance that the ownceded that, if the statute did not commence ers of the lots on which the assessments to run until the time the assessment became were made should pay the amounts severaldelinquent, the action was brought in time. ly due within 20 days from the date of the Then the pertinent question is, did the or- ordinance, or be subject to the interest and dinance extend the statute of limitations be. penalty allowed thereon by law; and it was yond the two years provided by the stat- held that defendants could not be regarded ute? As a general rule, the time during as in default until the expiration of 20 days which a plaintiff is legally incapacitated thereafter, and that the right of action there
for to enforce the assessment did not accrue tion further on. The defendant corporation, until December 10, 1861, which was 20 the Adamant Plaster Manufacturing Comdays after the notice. We think the conten- pany, was organized in April, 1889, with a tion of the appellant that she can be in any capital stock of $100,000, divided into 1,000 way injured by the adoption of this rule is shares of $100 each. $15,000 of stock was more fanciful that real; that the right of ac- subscribed by one Holbrook, and was paid tion did not accrue until the 40 days express- for by him by turning over to the comed by the ordinance had expired; and that pany a certain contract for patent rights for the statute of limitations did not commence the manufacture of adamant. The defendto run until that time. The demurrer was ants in this action, the other stockholders, properly sustained. The judgment will be subscribed for the other $55,000 worth of affirmed.
shares, and an agreement was entered into
between themselves that this stock should SCOTT, C. J., and ANDERS and REAVIS, be issued to them as paid-up stock, upon JJ., concur. GORDON, J., dissents.
their building a factory and equipping it for the manufacture of adamant, upon their
paying in to the corporation $5,000 as (16 Wash. 614)
working capital, and upon the purchase of ADAMANT MANUF'G CO. OF AMERICA
certain real estate in Tacoma as a site for v. WALLACE et al.
the factory, and the stock was so issued. Supreme Court of Washington. March 18, It is the contention of the appellant that the 1897.)
property turned over to the corporation in CORPORATIONS-STOCKHOLDERS-ENFORCEMENT OF
consideration of these shares was not worth LIABILITY-PLEADING-STOCK-TRUST
the face value of the shares, and that a FUND-ESTOPPEL.
fraud was thereby perpetrated upon the 1. In a suit by a judgment creditor against a
creditors, one of whom is the plaintiff in eorporation and certain stockholders, on the
this action. zround that the stock subscribed by them has
It might be well to state here not been fully paid, it need not be alleged that that the plaintiff corporation had obtained its capital stock has been fully subscribed, judgment against the defendant corporation, when it is alleged that defendant has been a
execution had issued, and a writ of nulla duly-organized and existing corporation during all the time referred to in the complaint.
bona returned, which return was the basis 2. Nor need the complaint allege a demand by of this action against the stockholders to the corporation upon its stockholders for the
compel them to pay in to the corporation mums respectively subscribed by them, and alleged by the complaint not to have been paid.
sufficient to liquidate its debt. The defend3. Where the capital stock of a corporation is
ants demurred to the plaintiff's complaint issued as fully paid up, but has in fact been on the ground that it did not state facts paid in property below the par value of the
sufficient to constitute a cause of action, stock, equity will compel a payment by the
which demurrer, we think, was properly stockholder, to the face value of the stock, for the benefit of a creditor who dealt with the cor- overruled. poration relying upon the asserted value of its The first ground of objection to the comassets, but not for the benefit of one who dealt
plaint is that it shows on its face that the with the corporation knowing that the stock had been paid for in property of less value than
capital stock of the defendant corporation the face value of the stock.
consisted of 1,000 shares, but it nowhere 4. It is no defense to the creditor's claim that
appears in the complaint that all of said the stock was not fact worth more than the
shares were subscribed. In support of the property accepted in payment of it.
contention that this is a necessary averment, Appeal from superior court, Pierce county; | appellant cites Hotel Co. v. Schram, 6 Wash. John C. Stallcup, Judge.
134, 32 Pac. 1002. This case is easily disSuit by the Adamant Manufacturing Com
tinguished from that one. In that case the pany of America against Thomas B. Wallace
action was brought by the corporation itself, and others and the Adamant Plaster Manu
while in the case at bar the action is brought facturing Company. From a judgment in
by a creditor, and another rule prevails. favor of defendants, plaintiff appeals. Af
However, this question was squarely decidfirmed.
ed by this court in opposition to respondent's Bausman, Kelleher & Emory, for appellant. contention in McKay v. Elwood, 12 Wash. Campbell & Powell, for respondents.
579, 41 Pac. 919, where it was held that, in
an action by a corporation upon an unpaid DUNBAR, J. This is a suit in equity stock subscription, the complaint was not brought by a judgment creditor of an insol- demurrable on the ground that it failed to vent corporation to obtain payment for its allege that the capital stock of the corporadebt from certain of the stockholders, upon tion had been subscribed, when the comthe ground that the stock subscribed by plaint otherwise alleged that plaintiff was them had not been fully paid. We say an and had been a duly-organized and existing "insolvent" corporation, although this is one corporation during all the time referred to of the questions in controversy; but we are in the complaint. satisfied from an investigation of the record The next objection was that there was no that the corporation was insolvent, so that allegation in the complaint that any demand it will not be necessary to discuss that ques- or call was ever made by the trustees of the