Peterson v. Morris

• Decision Date: 28 March 1922
• Docket Number: 16580.
• Court: Washington Supreme Court
• Parties: PETERSON et al. v. MORRIS et al.

205 P. 408

119 Wash. 335

PETERSON et al. v. MORRIS et al.

No. 16580.

Supreme Court of Washington, En Banc.

March 28, 1922

Appeal from Superior Court, King County; J. T. Ronald, Judge.

Action by G. E. Peterson and another, doing business under the firm name and style of the Moon Motor Sales Company, against J. C C. Morris and Rachel Morris, in which, after the death of the defendant Rachel Morris, James P. Weter, as her administrator, was substituted as defendant. Judgment for the defendants after plaintiffs elected not to plead further on the overruling of demurrers to the second and third affirmative defenses, and plaintiffs appeal. Reversed and remanded.

See also, 104 Wash. 507, 177 P. 320.

Bates &amp Peterson and E. N. Eisenhower, both of Tacoma, for appellants.

Weter & Roberts, of Seattle, for respondents.

PARKER C.J.

The plaintiffs Peterson and Malim commenced this action in the superior court for King county seeking recovery of a money judgment against the defendants Morris and wife in the sum of $772. Their claim for recovery set forth in two causes of action grew out of a contract entered into by them in their firm name of 'Moon Motor Sales Company' with the defendant Morris on September 28, 1915; in which contract they agreed to purchase a certain number of Moon automobiles from Morris and he agreed to give them the exclusive right of sale and distribution of Moon automobiles within Pierce county in this state. This is an appeal from a judgment of the superior court rendered upon the overruling of the plaintiffs' demurrers to the defendants' second and third affirmative defenses and the election of the plaintiffs to not plead further.

The plaintiffs allege in their complaint that at all times in question they were doing business under the firm name and style of Moon Motor Sales Company and have duly filed their certificate of partnership with the county clerk of Pierce county. The defendants' denials in their answer include a denial of the allegation of the filing of the partnership certificate by the plaintiffs, in so far as such filing was timely. The denials of the answer were followed by three affirmative defenses, the first of which we need not here notice.

In their second affirmative defense the defendants allege:

'That although all matters sued on in the complaint herein arose, as therein alleged, in connection with the contract of September 28, 1915, and within one year thereafter, yet the plaintiffs wholly neglected and omitted to file in the county in which they were doing business under an assumed name any certificate of any sort in reference to the persons interested in said business and conducting the same, except that on February 13, 1919--the day on which this present action was instituted, and long after the plaintiffs had ceased to be in partnership or carry on any business in Pierce county, Wash., as Moon Motor Sales Co.--they filed in the clerk's office of Pierce county, Wash., a certificate in the words following.'

This is followed by a copy of the partnership certificate, showing its execution and filing in the office of the county clerk of Pierce county on February 13, 1919, the day of the commencement of this action. The sufficiency of the execution and filing of this certificate is challenged only as not being timely filed.

The defendants' third affirmative defense is that of res judicata by a judgment rendered in a former action. In this affirmative defense there is set out the record of that case, which may be summarized as follows: These plaintiffs sought in that action, in the superior court for King county, to recover from these defendants a money judgment in the sum of $3,331, which for present purposes we may assume included the same causes of action upon which recovery is sought in this action. In that action, by appropriate allegations and denials, there was put in issue the fact as to whether or not the plaintiffs had duly filed their partnership certificate as required by law, entitling them to maintain an action in the courts. In that action, by appropriate denials, there were also put in issue the facts alleged in the complaint touching the merits of the plaintiffs' claim for recovery. In that action the defendants also set up and pleaded both as an affirmative defense and as a counterclaim, their claim against the plaintiffs in the sum of $4,000, praying that the plaintiffs take nothing and that they (defendants) recover from the plaintiffs judgment in the sum of $4,000. The allegations of that affirmative defense and cross-complaint were put in issue by appropriate denials made in the plaintiffs' reply thereto. That action came on for trial before the superior court sitting without a jury and resulted in findings of fact, conclusions of law, and judgment, awarding to the plaintiffs, doing business under the firm name of Moon Motor Sales Company, and against the defendants, recovery in the sum of $735.89. The superior court found, as a basis for that judgment, that the plaintiffs were entitled to recover from the defendants $772, apart from the defendants' counterclaim; but that the defendants were entitled to set off the sum of $36.11 upon their counterclaim, as against the plaintiffs' larger claim. The court thereby arrived at the sum of $735.89 as the net amount the plaintiffs were entitled to recover from the defendants in that action, and rendered judgment accordingly. The defendants appealed from that judgment to this court, and their appeal was disposed of by our decision reported in 104 Wash. 507, 177 P. 320; which decision is embodied in and made a part of the defendants' third affirmative defense of res judicata in this case. In that decision this court held, in substance, that the plaintiffs had not the capacity to maintain that action, as plaintiffs, in the superior court; because the fact of the filing of their partnership certificate as required by law was denied and put in issue therein, and no evidence was offered upon that question. In other words, this court held that the plaintiffs were not entitled to maintain that action, in the sense that they could be awarded any affirmative relief therein, because they had no capacity to sue upon the partnership claims upon which they sought recovery; but held that the finding in favor of the plaintiffs in the sum of $772, viewed merely as a defense to the defendants' cross-complaint, upon which they were awarded only $36.11, had the effect, in any event, of being a complete set-off to and cancellation of the $36.11 obligation of the plaintiffs to the defendants. This court so held upon the theory that, while the plaintiffs had no capacity to sue and obtain any affirmative relief, they did have capacity to make any proper defense, affirmative as well as negative, to the defendants' counterclaim, looking to preventing the defendants from recovering an affirmative judgment against them; citing our decision in North Star Trading Co. v. Alaska-Yukon-Pacific Exposition, 68 Wash. 457, 123 P. 605.

These second and third affirmative defenses so alleged in the defendants' answer in this case were demurred to by the plaintiffs, upon the ground that neither constituted a defense to this action, which demurrers were by the superior court overruled; the court holding in effect that each of them stated a complete defense to the plaintiffs' causes of action as alleged in the complaint. Thereupon the plaintiffs electing to not plead further and stand upon their demurrers, judgment was accordingly rendered against them dismissing the action. From this disposition of the case the plaintiffs have appealed to this court.

We first inquire as to whether or not the facts alleged in the second affirmative defense show that the plaintiffs are not entitled to maintain this action because of their failure to timely file their certificate evidencing their partnership, doing business in the firm name of Moon Motor Sales Company. The sufficiency of the allegation in the plaintiffs' complaint of the filing of their partnership certificate is not challenged, and the denial thereof found in the negative portion of the defendants' answer is only a qualified denial; that is, the denial is in general terms followed by the words, 'except in so far as such filing may be admitted in the second affirmative defense hereinafter set out.' So the question becomes one as to whether the facts alleged in the second affirmative defense show that the plaintiffs have or have not timely filed their certificate of partnership. We say timely because the only contention here made by counsel for the defendants touching the filing of that certificate is that it was not timely filed, since it was filed as they allege, 'long after the plaintiffs had ceased to be in partnership or carry on any business in Pierce county, Wash., as Moon Motor Sales Company,' but admitting that the certificate was filed on the day of the commencement of this action.

Now it has become the settled law of this state that a partnership the name of which is such as to call for the filing of a partnership certificate under sections 8369-8373, Rem. Code, may acquire the right and capacity to maintain an action the cause for which arises out of some partnership transaction or contract, by the filing of its partnership certificate in the office of the county clerk after as well as before the occurring of such...