Herr v. Schwager

• Decision Date: 26 March 1925
• Docket Number: 18752.
• Citation: 234 P. 446,133 Wash. 568
• Court: Washington Supreme Court
• Parties: HERR v. SCHWAGER et al.

234 P. 446

133 Wash. 568

HERR v. SCHWAGER et al.

No. 18752.

Supreme Court of Washington

March 26, 1925

Department 2.

Action from Superior Court, King County; Ronald, Judge.

Action by W. B. Herr, as receiver of Schwager & Nettleton Incorporated, against Lewis Schwager and another. From an order granting plaintiff's motion to dismiss action without prejudice, defendants appeal. Affirmed.

Kerr McCord & Ivey, of Seattle, for appellants.

Guie &amp Halverstadt, of Seattle, for respondent.

FULLERTON J.

On March 4, 1922, the National Steel Car Corporation, Limited recovered a judgment in the superior court of King county against Schwager & Nettleton, Incorporated, in the sum of $13,404.69, as for a breach of a contract to deliver lumber. On this judgment an execution was issued which was returned by the sheriff wholly unsatisfied. Thereafter and on August 14, 1922, the respondent, Herr, was appointed receiver for the judgment debtor. On December 30, 1922, the receiver instituted the present action against Lewis Schwager and Walter B. Nettleton individually to recover in the amount of the judgment, alleging:

'That from August 20, 1918, to December 31, 1919, the defendants above named were the sole stockholders of Schwager & Nettleton, Incorporated, and each were trustees thereof; that during said period the said Lewis Schwager on open account withdrew from the assets, property and capital of said Schwager & Nettleton, Incorporated, the sum of $23,024.79, no part of which was due or owing to him, but was simply a taking of the assets and property of said company, and the same exhausted all of the assets and property of the company. That no part of the same was declared in the form of dividends, nor was there any meeting of the trustees of said corporation, or of the stockholders thereof during said period. That said sums were taken with the knowledge and consent and with the agreement of the defendant W. B. Nettleton, and were done for the purpose of placing the assets of said corporation beyond the reach of its creditors, and for the purpose of making it impossible for the creditors of said corporation to collect sums due and owing. That the same was done with the knowledge on the part of said Schwager and said Nettleton, of an outstanding claim against the said corporation, and with the purpose of making it impossible for said claimant to collect the amount which was due to it from said Schwager & Nettleton, Incorporated.'

The defendant Nettleton alone answered. In his answer he denied the allegations of the complaint thought to charge him with liability, and set up two affirmative defenses. In the first, he alleged that the judgment against the corporation of Schwager & Nettleton had been reduced, on an appeal to the Supreme Court, to the sum of $3,982.20, with interest at the rate of 6 per cent. per annum from April 1, 1920. In the second, he set up the statute of limitations.

On September 11, 1923, the receiver moved to dismiss the action without prejudice. It seems that the action had been begun without first obtaining leave of court, and before the receiver had given notice to creditors to file their claims, and before any such claims had been actually filed with him. The defendant opposed the motion to dismiss, filing written objections thereto. In these, he offered to waive any objection that might be made to the right of the receiver to maintain the action because of the matters above recited, and alleged that a dismissal of the action would deprive him of a substantial right, 'namely, that of availing himself of the statute of limitations that was prescribed at the time of the institution of the * * * action.' The objections were supported by the affidavit of his counsel. The affidavit recited that since the institution of the action the Legislature had undertaken to amend the section of the statute of limitation applicable to the cause of action, so as to render it doubtful whether the plea of the statute would be available as a bar to a new action based on the same cause of action. The trial court granted the motion, dismissing the action without prejudice to the institution of another for the same cause of action, and this appeal is from the order of dismissal.

The statute relating to the dismissal of actions, and judgments of nonsuit, is found at section 408 of the Code (Rem. Comp. Stat.). It provides:

'An action may be dismissed, or a judgment of nonsuit entered, in the following cases:

'(1) By the plaintiff himself, at any time before the jury retire to consider their verdict, unless set-off be interposed as a defense, or unless the defendant sets up a counterclaim to the specific property or thing which is the subject matter of the action. * * *'

In construing this statute, we have held that it left no discretion with the trial court; that it vested an absolute right in the plaintiff to dismiss his action which the trial court was not at liberty to ignore, where the specified statutory exceptions did not intervene. Lowman v. West, 7 Wash. 407, 35 P. 130; Washington Natl. Bldg., etc., Ass'n v. Saunders, 24 Wash. 321, 64 P. 546; McKee v. McKee, 32 Wash. 247, 73 P. 358; Gray v. Granger, 48 Wash. 442, 93 P. 912; Fisk v. Tacoma Smelting Co., 49 Wash. 514, 95 P. 1082; McPherson v. Seattle Electric Co., 53 Wash. 358, 101 P. 1084; Williams v. Spokane, 64 Wash. 484, 117 P. 251; Kosinski v. Hines, 110 Wash. 25, 187 P. 712.

We have also held that the rule was applicable to a cause tried by the court without the intervention of a jury. In McPherson v Seattle Electric Co., supra, the...