Seattle Ass'n of Credit Men v. Green, 32762

• Citation: 45 Wn.2d 139,273 P.2d 513
• Decision Date: 05 August 1954
• Docket Number: No. 32762,32762
• Court: United States State Supreme Court of Washington
• Parties: SEATTLE ASS'N OF CREDIT MEN, v. GREEN et ux.

Page 139

45 Wn.2d 139

273 P.2d 513

SEATTLE ASS'N OF CREDIT MEN, v. GREEN et ux.

No. 32762.

Supreme Court of Washington, Department 1.

Aug. 5, 1954.

Gale P. Hilyer, Jr., Seattle, for appellants.

Lundin, Barto & Goucher, Seattle, for respondent.

McMicken, Rupp & Schweppe, Little, LeSourd, Palmer, Scott & Slemmons, Seattle, amici curiae.

OLSON, Justice.

The principal question on this appeal is whether or not a corporation can do business under an assumed name in the state of Washington. The trial court answered the question in the affirmative, and entered judgment for the recovery of a preferential payment received by defendants from an insolvent corporation. Defendants have appealed.

They assert that certain findings of fact made by the trial court are erroneous. The rule is that, if they are to prevail on these claims of error, they must show that the evidence preponderates against the questioned findings. MacKenzie-Richardson, Inc., v. Allert, Wash., 272 P.2d 146, and case cited. They have not done so and, consequently, we take the factual background of this controversy from the findings.

At all times material to this case, Steel Enders, Inc., was a corporation organized and existing under the laws of this state. Since its incorporation in 1945, it has been doing business in King county under its corporate name. In September, 1950, it assumed the name of Goddard Marine Electric Company, and, in April, 1952, it adopted the name of Interstate Marine Electric Company. It filed certificates of each of these assumed business names in the office of the county clerk, October 17, 1950, and May 29, 1952, respectively. The former assumed name is the one under which the corporation dealt with defendants, and obtained goods on credit from them. It conducted business in its corporate name and under its assumed names to designate its different activities.

November 6, 1952, the corporation executed a common law assignment to plaintiff for the benefit of its creditors. Within four months of the assignment, and at a time when the corporation was insolvent, funds of the corporation were paid to defendants. This enabled them, as creditors of the corporation, to obtain a greater proportion of their debt than any other creditor of the same class. The assignee commenced this action timely, that is, within six months of the assignment, to recover the amounts so paid as preferences. RCW 23.48.020, cf. Rem.Supp.1941, § 5831-5.

Defendants have not shown that credit was obtained from them by deliberate concealment, false statements, or positive act by the officers of the corporation regarding the name under which its business was conducted. The corporation did not obscure its identify under an assumed name deceitfully. It entered into certain contracts, obtained certain licenses from the city of Seattle, conducted its banking business, and obtained its insurance under its own name and under the assumed names.

But defendants do contend that they had no actual notice of the facts, and that the result of the conduct of the corporate officers was to obscure the identity of the corporation to the damage of defendants and of its other creditors. They argue that the corporation had no right to use an assumed name, and that, by doing so, it abandoned its corporate status. They further argue that its officers and directors became liable as partners by estoppel, citing RCW 25.04.160, cf. Rem.Supp.1945, § 9975-55. Since a preference is not recoverable by the common law assignee of a partnership, they contend that plaintiff's action must fail.

We have stated that the general rule is that corporation may contract and do business under an assumed name as well as can an individual, and be bound thereby in its corporate capacity. Brotherhood State Bank of Spokane v. Chapman, 1927, 145 Wash. 214, 219, 259 P. 391, 56 A.L.R. 447, and case cited. Annotation, 56 A.L.R. 450; Colorado milling & Elevator Co. v. Proctor, 1938, 58 Idaho 578, 76 P.2d 438; 6 Fletcher, Cyclopedia of Corporations (Perm.Ed., 1950 Rev.Vol.), 138, § 2442; Ballantine on Corporations (1946 Rev.Ed.), 286, § 117, and cases cited. Our question is not one of a change of corporate name, but involves the assumption of an additional name. We find nothing in the uniform business corporation act, adopted in 1933, RCW, Title 23, to require a change in this rule.

We are not persuaded by defendants' argument that because, by their terms, our statutes regarding the filing of a certificate of assumed name do not apply to corporations, such a filing by a corporation is ineffective for any purpose. Rem.Rev.Stat. §§ 9976-9980 (codified in RCW, chapter 19.80, but so changed in the wording that the citation is made only for reference.) The purpose of the statutes is to advise anyone extending credit to a business operating under an assumed name, who the real persons conducting the business are. Bacon v. Gardner, 1951, 38 Wash.2d 299, 303, 229 P.2d 523, and case cited. Filing...