Bacon v. Gardner, 31434

• Decision Date: 22 March 1951
• Docket Number: No. 31434,31434
• Citation: 38 Wn.2d 299,229 P.2d 523
• Court: Washington Supreme Court
• Parties: BACON et al. v. GARDNER et al.

Page 299

38 Wn.2d 299

229 P.2d 523

BACON et al. v. GARDNER et al.

No. 31434.

Supreme Court of Washington, Department 2.

March 22, 1951.

Rehearing Denied April 28, 1951.

Arthur H. Hutchinson, Richard Kent Stacer, Seattle, for appellants.

J. Elwood Peterson, Lewis M. Dawson and Max R. Nicolai, all of Seattle, for respondents.

HAMLEY, Justice.

The primary question framed by the pleadings is this: Which of two religious organizations was the owner of a certain parcel of Seattle real estate on July 29, 1947?

On that date the city of Seattle began a condemnation proceeding involving that parcel. A condemnation award in the amount of $7,192.74 was thereafter entered, payable to the rightful owner of the property as of July 29, 1947. This sum was deposited with the county clerk of King county until such owner could be determined.

As the case reaches this court, there are only two parties contesting for these funds. One of them is the plaintiff, J. M. Bacon. She now foregoes any claim to the funds in her individual capacity, but asserts such claim as trustee for Christ's Temple Church, a religious association, herein referred to as 'Christ's Temple.' The other contesting party is the defendant Kyles African Methodist Episcopal Zion Church, a corporation, herein referred to as 'Kyles Corporation.' Both claims are dependent upon ownership on July 29, 1947, of the following described real property: Lot One (1), Block Sixteen (16), Hill Tract Addition to the City of Seattle, Supplemental Plat, (volume 2 of Plats, page 51 of the King County Auditor's office) Seattle, King County, Washington, (being known as the church property at 1245 Main Street, Seattle, Washington).

Plaintiff's assertion of ownership, as developed in the amended complaint, is grounded upon a warranty deed, dated September 13, 1939, in which plaintiff is named grantee, and 'Niles A. M. E. Zion Church, an association,' herein referred to as 'Niles Association,' is named grantor. Plaintiff alleged that this was really the deed of Kyles Corporation, but that, through a mistake by the scrivener, the grantor was misnamed. Plaintiff asked that the deed be reformed to show Kyles Corporation as the grantor, and to correct an error in the description whereby the words 'addition' and 'supplemental plat' had been omitted. Plaintiff also asked that, as trustee, she be decreed to be the owner of the moneys on deposit with the county clerk.

Defendant denied the principal allegations of the amended complaint. By way of affirmative defense and counterclaim, defendant alleged that the persons who signed the deed of September 13, 1939, did so without authority from Kyles Corporation, and that the transaction was fraudulent and resulted from a conspiracy between those who signed the deed, the plaintiff, and the scrivener. Defendant asserted ownership of the property, and asked that the funds on deposit be turned over to it.

Plaintiff replied, denying most of the allegations of the answer, and affirmatively alleging that Kyles Corporation was only one of several names used by the church organization which owned the property in question prior to execution and delivery of the deed; that Allen J. Buttler and W. Paterno, who signed the deed, were the duly constituted officers of this same organization operating under another name; that by reason of its acceptance of the benefits of the sale, defendant is estopped to deny the validity of the deed; that after execution and delivery of the deed, defendant ratified the action of those who acted on its behalf; and that plaintiff, in any event, acquired title by adverse possession under both the seven- and ten-year statutes of limitation.

The cause went to trial on the issues developed by these pleadings.

The decree thereafter entered by the trial court recites that the deed of September 13, 1939, was executed under a mutual mistake as to the name of the grantor, the name intended being Kyles African Methodist Episcopal Zion Church of Seattle, a corporation. It is also recited that there was a mutual mistake in the description contained in the deed, in that the words 'addition' and 'supplemental plat' were inadvertently omitted. The decree further recites that, for more than seven years prior to the commencement of the action, plaintiff has occupied the premises actually, openly, notoriously, under color of title and in good faith, and has paid all taxes legally assessed against the same, and that Kyles Corporation and the other defendants were thereby barred by the seven-year statute of limitations from having or claiming any interest in the real estate. The decree also recites facts on the basis of which it is declared that the claim of Kyles Corporation is barred by the ten-year statute of limitations; that Kyles Corporation is estopped to deny the authority of Buttler and Paterno to execute and deliver the deed; that Kyles Corporation has been guilty of laches in asserting its claim; and that it has, by its acts and failure to act, ratified the action of Buttler and Paterno.

The decree accordingly provides for a reformation of the deed to show the correct description and to name Kyles Corporation as the grantor; declares plaintiff, as trustee for Christ's Temple, the owner of the deposited funds; and orders the clerk of the court to pay over to plaintiff, as trustee, or to her attorney of record, the $7,192.74 on deposit. Kyles Corporation has appealed.

Appellant assigns as error the overruling of appellant's demurrer to the amended complaint, made on the ground that respondent had no legal capacity to sue. The original complaint named J. M. Bacon as the sole plaintiff. The amended complaint, filed pursuant to an order of court previously obtained, joined J. M. Bacon 'as Trustee for Christ's Temple Church, a religious association,' as an additional party plaintiff. There is no allegation that J. M. Bacon or any other person had filed with the office of the county clerk a certificate of assumed name, as provided in Rem.Rev.Stat. § 9976 et seq. Appellant therefore argues that, under the provisions of Rem.Rev.Stat. § 9980, Christ's Temple is not entitled to maintain this action.

Rem.Rev.Stat. § 9976, requires such a certificate to be filed by any person or persons who carry on, conduct, or transact 'business' in this state under an assumed name. This statute is directed principally against concealed partnerships. Bowman v. Harrison, 59 Wash. 56, 109 P. 192; Yarbrough v. Pugh, 63 Wash. 140, 114 P. 918, 33 L.R.A.,N.S., 351. Its purpose is to advise anyone extending credit to a business operating under an assumed name, as to who are the real persons conducting the business. Union Trust Co. of Spokane v. Quigley, 145 Wash. 176, 259 P. 28. In view of these statutory objectives, the term 'business,' as used in the statute, refers to an occupation or employment engaged in for the purpose of a livelihood or profit.

Christ's Temple is not engaged in 'business,' as so defined. It is an unincorporated association devoted exclusively to the teaching and practice of religious beliefs. It his no profit motive, and carries on no commercial enterprise. While the purchase of the real estate in question is a 'business' transaction, statutes of this character are not directed against isolated transactions, but against a continuing commercial activity. Hoagland v. Segur, 38 N.J.L. 230, 237, 9 Vroom 230, 237; Johnson v. Cass & Emerson, 91 Vt. 103, 99 A. 633; Pratt v. York, 197 Ky. 846, 248 S.W. 492. It is likewise clear that the bringing of an action is not 'carrying on, conducting or transacting business,' within the meaning of this statute. Singmaster v. Hall, 98 Wash. 134, 167 P. 136.

The demurrer relating to respondent's capacity to sue was therefore properly overruled.

Appellant assigns as error the overruling of appellant's demurrer to the reply, made on the ground that the reply departs from the cause of action relied upon in the amended complaint, by pleading the seven-and ten-year statutes of limitation. The reply was served upon counsel for appellant, and filed, on August 1, 1949. Appellant filed no written demurrer, but presented its demurrer orally at the outset of the trial on January 4, 1950. The trial court reserved ruling on the demurrer at that time, and overruled it later in the trial. On January 5, 1950, while the trial was in progress, respondent served and filed a written motion to amend the amended complaint for the purpose of adding allegations relative to the seven- and ten-year statutes of limitation. The motion was argued the next day, and granted by the court at the same time the demurrer was overruled.

Appellant does not specifically assign error as to the granting of this motion. However, the assignment of error relating to the overruling of the demurrer will be considered broad enough to challenge the court's action regarding the motion. Rule 6(2), Rules of Pleading, Practice, and Procedure, 34A Wash.2d 71, authorizes the trial court to permit amendments of any pleading 'at any stage of an action'. The rule provides, however, that such leave shall be refused if it appear to the court that the purpose of the motion was to delay the action; or that the motion was occasioned by lack of diligence and will result in unduly delaying the action or embarrassing any other party; or that, for any other reason, the granting of the motion would be unjust.

Great latitude is vested in the trial court with respect to the granting of leave to amend pleadings pursuant to rule 6, to the end that the real matter in dispute may be determined. Walker v. Sieg, 23 Wash.2d 552, 558, 161 P.2d 542. The mere fact that an amendment may introduce a new issue is not of itself sufficient ground for denying it. In re Campbell, 19 Wash.2d 300, 307, 142 P.2d 492. The true test, as stated in Bowers v. Good, 52 Wash. 384, 100 P. 848, is whether the opposing party is prepared to meet the new issue.

We are not convinced, from...