19 Wash. 165 | Wash. | 1898
The opinion of the court was delivered by
The respondents moved to strike the brief of appellant from the files on the ground that the pages of the record were not referred to therein for verification, as required by Rule VIII. of this court. But, as the record did not appear to be very extensive and the errors assigned were largely predicated upon the alleged fact that the trial court’s conclusions of law were not supported by the findings as made, we, following Froelich v. Morse, 15 Wash. 636 (47 Pac. 22), denied the motion at the hearing, although appellant had not complied with the rule even substantially. We deem this rule eminently reasonable, as it is but a matter of simple justice to the court and opposite counsel to designate in the brief just where any fact or proposition discussed therein may be found in the record. A failure to comply with the requirements of the rule might, in certain instances, impose great and unnecessary labor upon this court; and we again take occasion to suggest that it is not only the better, but the safer, practice for counsel to observe the rule in all cases.
The respondents, Washington Mill Company and the Sprague Lumber Company, are corporations organized and existing under and by virtue of the laws of the state of
The claim that the court erred in finding that the note in question was signed by Bassett and Hayes as sureties for Hygard is, in our judgment, without any substantial foundation. Mr. Bassett himself testified explicitly that he and Mr. Hayes both signed the first note as sureties for Uygard; and the very nature of the transaction clearly shows that such was the fact. Hygard alone owed the debt for which the note was given, and if the other parties to the note were not his sureties it is difficult, to say the least, to understand what their relations to him were. The fact, if it be a fact, as claimed by appellant, that they did not intend to be bound individually when they signed the note, and that they supposed they were creating an obligation against the corporation, cannot change their status as shown by the note itself, as well as by the evidence with reference to it. The second note was but a renewal of the first, and the relations of the parties thereto to each other remained the same. The finding of the court that the note in controversy was executed on September 29, 1893, was erroneous, it in fact having been made on December 29, 1893. But this error was in nowise prejudicial to the appellant, as the respondents are not claiming that the lapse of time between the execution of the note and the mortgages constitutes any evidence of bad faith on the part of the makers or the Lumber Company or the bank. That the note deliv
“ It is claimed that no action could have been maintained by the trustee, representing the trust combination, against the Brush Electric Light Company, to recover the purchase price of the carbons, for the reason that the illegality of the combination would have constituted a good defense. Assuming this predicate, it is asserted that the receiver stands in the same position, and that his title is subject to the same infirmity as that of the combination which he represents. Without considering the assumption upon which this proposition is based, it is a sufficient answer to the proposition asserted, that the receiver unites in himself the right of the trust combination, and also the right of creditors, and that he may assert a claim as the representative of creditors, which he might be unable to assert as a representative of the combination merely. The general rule is well established that a receiver takes the title of the corporation or individual whose receiver he is, and that any defense which would have been good against the former, may be asserted against the latter. But there is a recognized exception, which permits a receiver of an insolvent individual or corporation, in the interest of creditors, to disaffirm dealings of the debtor in fraud of their rights. (Gillet v. Moody, 3 N. Y. 479; Porter v. Williams, 9 id. 142; Curtis v. Leavitt, 15 id. 9, 108.) Assuming that the trustee could not have recovered of the Brush Electric Light Company for the reasons suggested, it would be a very strange application of the doctrine that no right of action can spring from an illegal transaction, which should deny to innocent creditors of the combination, or to the receiver who represents them, the right to have the debt collected and applied in satisfaction of their claim. The just rule of the common law, that courts will not lend their aid to enforce illegal transactions at the instance of a party to the illegality, would be*172 misapplied if permitted to be used to prevent the application of the fund in question to the payment of creditors of the combination.”
While it is perhaps unnecessary to add anything to what was there said by the learned court, it may be proper to observe that the application of the doctrine contended for by the appellant to this case would place the creditors of the Lumber Company completely at the mercy of the officers and stockholders of the corporation.
The next question to be considered is whether the mortgages under consideration are void as to the respondent Mill Company, or any of the creditors represented by the receiver. The appellant insists that their validity cannot be questioned by the Washington Mill Company for the reason that its claim accrued subsequently to the time of their execution, citing Roy & Co. v. Scott, Hartley & Co., 11 Wash. 399 (39 Pac. 679), in support of its position. The evidence on that point is not clear, but we are inclined to the opinion that the most, if not all, of the Mill Company’s debt did accrue after the mortgages were made, and that said company must therefore be held to be a subsequent creditor. But, assuming that to be true, it does not necessarily follow that the judgment must be reversed. The court below found, and the proof shows, that at the time the mortgages were executed there were various creditors of the Lumber Company whose claims have never been paid. These creditors were represented by the receiver, and if the mortgages were void as to them, or any of them, the court was right in setting them aside. Bump, Fraudulent Conveyances (4th ed.), § 34. And we are of the opinion that they were void as to existing creditors at least, and all bona fide creditors are therefore entitled to participate in whatever funds the receiver may procure as the proceeds of the property of the corporation. Wait, Fraudulent Convey
We have carefully examined all of the errors assigned by appellant, and, perceiving no substantial error in the record, the judgment is affirmed.
Scott, C. J., and Gordon, Dunbar and Reavis, JJ., concur.