22 Wash. 372 | Wash. | 1900
The opinion of the court was delivered by
The appellant, Elavius S. Cole, and the respondent, Ernest W. Price, were formerly partners, doing business under the firm name of Oole & Price. As such partners they were the owners of certain shares of
It seems to have been the view of the court below, and the respondent urges in this court, that no title to partnership property passes to a receiver of such property appointed in a suit brought for a dissolution of the partnership, and that, for this reason, a receiver of partnership property is not a necessary party to a suit brought to foreclose a lien thereon. On the question of the receiver’s title the authorities are not uniform, but there is respectable authority holding that he takes, by virtue of his appointment, both the legal and equitable title. In High on Receivers (3d ed.), § 539, the rule is laid down as follows:
“A receiver of the effects of a partnership, appointed in an action for the settlement of the firm business, is regarded as vested with the whole equitable title to the partnership property, without any assignment for that pui’
So, in Beach on Receivers (Alderson’s ed.), § 585, it is said:
“Upon the appointment of a receiver, the entire legal and equitable title to the tangible property of the firm, as well as to its rights and remedies, vest in him. And real property, held by the members of a firm as tenants in common, but used for partnership purposes and built on with partnership funds, will be treated as partnership property, and will pass to the receiver.”
The rule is also supported by the following cases: Ryan v, Kingsbery, 88 Ga. 361 (14 S. E. 596); Tillinghast v. Champlin, 4 R. I. 173 (67 Am. Dec. 510); Pearce v. Gamble, 72 Ala. 341; Winslow v. Wallace, 116 Ind. 317 (17 N. E. 923); Wallace v. Yeager, 4 Phil. 251.
And in Hardin v. Sweeney, 14 Wash. 129 (44 Pac. 138), we held that a receiver of the property of an insolvent corporation was a quasi assignee of the property, and vested with sufficient title to maintain an action in his own name in relation thereto. By the Code (§ 5455, Ballin
" When a court has taken property into its own charge and custody, for the purpose of administration and disposition, in accordance with the rights of the parties to the litigation, it is in custodia legis. The title of the property for the time being, and for the purpose of such administration, may, in a sense, be said to be in the court. The proceedings by receivership is quasi in rem, so far as it involves a sequestration of assets. The receiver is appointed for the benefit of all concerned. He is the representative of the court, and of all the parties interested in the litigation wherein he is appointed. He is the right arm of the court in exercising the jurisdiction invoked in such cases of administering the property.”
And in that case it was held that the receiver had such a special interest in the property as to make him the real party in interest within the meaning of a statute which provided that every action should be prosecuted in the name of the real party in interest. In the case of Kirkpatrick v. McElroy, 41 N. J. Eq. 539 (7 Atl. 647), it was held that on the apjmintment of a receiver for the settlement of a partnership, the surviving partner was superseded in the possession and control of the partnership effects, and in the authority to settle up the partnership
In the case at bar, notwithstanding the pledge of the stock in question by Oole & Price as security for their indebtedness, they still retained an interest therein; namely, their right to pay the debt and redeem the stock from the lien of the pledge. They could not have been barred of this right by a decree of foreclosure in which they were not made parties and served with process. The receiver, having succeeded to their rights in this respect, was also a necessary party to the foreclosure proceedings, and the failure to make him a party rendered the decree of foreclosure nugatory. Bal. Code, § 4833; Bacon v. O'Keefe, 13 Wash. 655 (43 Pac. 886).
The judgment of foreclosure is reversed and the cause remanded, without prejudice to the right of the respond
Gordon, C. J., and Dunbar and Reavis, JJ., concur.