Rea v. Eslick

• Decision Date: 31 August 1915
• Docket Number: 12544.
• Citation: 87 Wash. 125,151 P. 256
• Parties: REA v. ESLICK.
• Court: Washington Supreme Court

151 P. 256

87 Wash. 125

REA v. ESLICK.

No. 12544.

Supreme Court of Washington

August 31, 1915

Department 2. Appeal from Superior Court, Spokane County; Jos. Sessions Judge.

Action by J. V. Rea, as receiver of the Spokane Petrolithic Pavement Company, against S. A. Eslick. Judgment for plaintiff, and defendant appeals. Reversed and remanded for dismissal without prejudice.

Geo. W. Belt, of Spokane, for appellant.

E. H Belden and W. R. Sampson, both of Spokane (Chas. P. Harris of Spokane, of counsel), for respondent.

ELLIS J.

This is an action by the receiver of a corporation to collect the full amount due upon a stock subscription. It is alleged in the complaint that one October 28, 1908, the defendant subscribed for the purchase of 50 shares of the capital stock of the Petrolithic Pavement Company, a corporation, agreeing to pay therefor the sum of $100 a share. It is then alleged:

'(3) That prior hereto, and in pursuance of an order of the above-entitled court issued on the 5th day of December, 1913, the said receiver caused to be served upon the said Eslick a notice in writing requesting the payment of the purchase price of said stock within 10 days after the service of said notice, and stating also that if said notice was not complied with an action would be instituted to collect said purchase money; that more than 10 days have elapsed since the service of said notice without a compliance therewith.

'(4) That there is due and unpaid upon said stock subscription the sum of $5,000.'

The prayer is for judgment in the sum of $5,000 and costs. Attached to and made a part of the complaint as an exhibit is a stock subscription list, aggregating 500 shares of stock, subscribed by various persons, among whom the defendant appears as subscriber for 50 shares.

The defendant demurred to the complaint on the ground that it did not state a cause of action. There is nothing in the transcript showing that this demurrer was ever argued or passed upon. The defendant answered, admitting that he signed the stock subscription agreement attached to the complaint, admitting the allegations of paragraph 3 of the complaint, denying the allegations of paragraph 4 of the complaint, and setting up four affirmative defenses. To the first of these we shall presently advert. In the third it is averred that the amount of indebtedness against the pavement company has never been determined by the court in this or any other proceeding, and that the company has property and assets which, if sold, would more than discharge all debts of the company. As to the second and fourth of these affirmative defenses no question is presented for our consideration.

The plaintiff demurred to the four affirmative defenses, on the ground that none of them stated a defense. The court sustained the demurrer as to the first and second affirmative defenses, but overruled the demurrer as to the third and fourth. The plaintiff then filed a reply, traversing the third and fourth affirmative defenses. The cause was tried to the court without a jury.

The court found, in substance, that the defendant subscribed for 50 shares of the capital stock, amounting to $5,000, as alleged; that on December 5, 1913, the superior court of Spokane county in an action entitled 'Untion Iron Works, a Corporation v. Spokane Petrolithic Pavement Company, a Corporation,' entered an order determining the amount of indebtedness of the pavement company to be $6,013.46, plus such other sums as might be incurred as expenses in the receivership proceedings in that case; that the receiver by that order was authorized to call upon each subscriber to the capital stock of the pavement company for the full amount unpaid upon his subscription, and give notice to the respective stockholders demanding payment of the amounts due from each on his subscription, and if such stockholders fail to pay the amounts due from them, respectively, as shown by the books of the corporation, the receiver bring suit for the collection of such amounts; that the receiver, prior to the commencement of this action, called upon the defendant for the sum of $5,000, the amount of his subscription, and the defendant refused to pay the same. The findings conclude:

'(5) The court further finds that by the terms of said order, entered by our said superior court on the 5th day of December, 1913, the court did not make a determination of the particular amount or pro rata share of the indebtedness of said corporation that each respective subscriber to the capital stock should be required to pay, and that it is necessary that some further court proceeding be had in the said receivership matter to determine the respective amounts which each subscriber to the capital stock of said Spokane Petrolithic Pavement Company shall be required to pay in order to discharge the indebtedness of said corporation and the expenses of the receivership proceedings herein, and that execution on any judgment that the court may render herein against the defendant, S. A. Eslick, shall be stayed until such time as this court by proper order in said receivership proceedings shall determine the amount due to said receiver from said S. A. Eslick.'

Based on these findings and appropriate conclusions, the court entered a judgment against the defendant, which, omitting the formal parts, is as follows:

'It is ordered, adjudged, and decreed that plaintiff do have and recover judgment against said defendant, S. A. Eslick, for the full sum of $5,000 and for plaintiff's costs and disbursements herein. It is further ordered that execution on said judgment be and the same is hereby stayed until such time as a further and proper order of this court can be made and entered in the receivership proceedings herein, determining the pro rata share or amount to be assessed against said S. A. Eslick as his pro rata share of the amount necessary to pay the indebtedness of said Spokane Petrolithic Pavement Company and the expenses of receivership proceedings herein, and that when such order is made, and a certified copy thereof filed in this cause, execution for the amount therein determined upon the above judgment be issued against said S. A. Eslick, defendant herein.'

The defendant appeals, assigning as error: (1) The overruling of his demurrer to the complaint. (2) The sustaining of the plaintiff's demurrer to the first affirmative defense in the answer. (3) The making of the conclusions of law. (4) The making and entering of the judgment. No statement of facts has been brought to this court. Aside from the questions raised by the two demurrers, the sole question presented is: Are the findings of fact sufficient to sustain the judgment?

As we have already noted, there is nothing in the record to show that the demurrer to the complaint was passed upon by the court. While the objection that a complaint fails to state a cause of action may be raised at any time (Rem. & Bal. Code § 263), we have often held that it may be waived by answering, going to trial, and treating the complaint as stating a cause af action. In such a case the complaint, though vulnerable to the general demurrer, will be deemed amended so as to state the cause actually tried. The aground upon which it is now urged that the demurrer...