Olson v. Bank of Tacoma

• Decision Date: 11 July 1896
• Citation: 45 P. 734,15 Wash. 148
• Parties: OLSON v. BANK OF TACOMA ET AL.
• Court: Washington Supreme Court

45 P. 734

15 Wash. 148

OLSON v. BANK OF TACOMA ET AL.

Supreme Court of Washington

July 11, 1896

Appeal from superior court, Pierce county; John C. Stallcup, Judge.

Bill by Isaac Olson against the Bank of Tacoma and others. There was a decree for plaintiff, and defendants appeal. Affirmed.

Richard Saxe Jones, for appellant Bank of Tacoma.

Crowley Sullivan & Grosscup, for other appellants.

A. N Jordan and J. S. Whitehouse, for respondent.

HOYT C.J.

The Tacoma Trust & Savings Bank was a corporation doing business in the city of Tacoma. On the 25th day of May, 1894, it transferred, assigned, and delivered to the Bank of Tacoma, a corporation organized under the laws of the state of Washington, and doing business in said city, all of its assets, of whatever kind and description; and said Bank of Tacoma, in consideration of said transfer, assumed and agreed to pay all the debts and liabilities of said Tacoma Trust &amp Savings Bank. On the 17th day of August, 1895 said Bank of Tacoma executed a general assignment whereby it attempted to convey all of its property and assets to the defendant Edward S. Alexander as assignee for the benefit of creditors. Thereafter the plaintiff and respondent, Isaac Olson, commenced this action, by which he sought to have a receiver appointed to take charge of the assets of these banks for the purpose of having them reduced to money, and ratably applied in discharge of the liabilities of said banks. One of the alleged grounds for the appointment of such receiver was the insolvency of the corporations. There were other grounds, growing out of the alleged fact that the assignment to said Alexander was fraudulent and void for various reasons connected with its execution, and the object for which it was executed. Upon the first ground it was claimed by the plaintiff that under our statute it was the duty of the court, at the instance of any creditor of a corporation, to appoint a receiver, whenever it was made to appear that such corporation was insolvent. On the other, it was claimed that the assignment to Alexander, having been made in fraud of the rights of creditors, could be set aside at the suit of any of such creditors, and that, on account of the fraudulent transfer of all of the assets of the banks, it was the duty of the court to appoint a receiver to close up their business in the interest of their creditors. The principal part of the argument has been devoted to questions growing out of the second claim above referred to. Counsel for appellants seem to have assumed as a basis of their arguments, the fact that under the decisions of this court an insolvent corporation could make a common-law assignment, and the further fact that, such an assignment having been made, it could not be set aside, and the rights of the assignee thereunder affected, excepting for some fraud in its execution, to which the assignee was a party, or by reason of the unfitness of such assignee, or some misbehavior on his part. If these claims of the appellants are sustained, it will become necessary for us to enter into a discussion of the questions elaborately argued by counsel for appellants, to the effect that the assignment was not made for the purpose of defrauding creditors, that the assignee was a proper person to close up the affairs of the bank, and that he had been guilty of no misconduct which would authorize the court to remove him. If, on the contrary, it be held either that an insolvent corporation cannot make a common-law assignment, or that such an assignment does not oust a court of equity of jurisdiction to close up the affairs of the corporation through the agency of a receiver, a discussion of the questions presented by these elaborate arguments will be unnecessary. That an insolvent corporation can make an assignment of all of its property, which might well be called a "common-law assignment," and which will have the effect of transferring to the assignee title to the property for certain purposes, has been repeatedly held by this court. See Nyman v. Berry, 3 Wash. 734, 29 P. 557; Thompson v. Lumber Co., 4 Wash. 600, 30 P. 741, and 31 P. 25; McKay v. Elwood, 12 Wash. 579, 41 P. 919. But in none of these cases was the question presented as to the effect of such an assignment upon the powers of a court of equity to set it aside and appoint a receiver to take possession of all of the property of such corporation and close up its affairs. The most that can be said to have been decided by these cases is that such an assignment conveys the legal title of the property to the assignee, and that such title cannot be successfully attacked in an action at law, and can be asserted against any one claiming adversely thereto, but nothing was said therein as to the effect of such an assignment upon the powers of a court of equity to take charge of the affairs of the corporation which had made such assignment. An examination of such cases will show that, while the right of an insolvent corporation to make what is called a "common-law assignment" is recognized, it was not the intention of the court to hold that such an assignment had all the force and effect of an assignment at common law. On the contrary, it clearly appears from what was said in one or all of these cases that the...