Smith v. Hopkins

• Decision Date: 10 November 1894
• Citation: 10 Wash. 77,38 P. 854
• Court: Washington Supreme Court
• Parties: SMITH v. HOPKINS ET AL.

38 P. 854

10 Wash. 77

SMITH v. HOPKINS ET AL.

Supreme Court of Washington

November 10, 1894

Appeal from superior court, Spokane county; Norman Buck, Judge.

Action by M. D. Smith, receiver of the Washington Farmers' Insurance Company, against James Hopkins and others. From a judgment for plaintiff, defendants J. B. Flynn and others appeal. Affirmed.

Fitzgerald & Hopkins and Jones, Voorhees &amp Stephens, for appellants.

Jones Belt & Quinn, for respondent.

HOYT J.

This action was brought by respondent to recover from the defendants certain notes and property, which it was alleged were a part of the assets of the Farmers' Insurance Company, of which the respondent, as receiver, was entitled to the possession; and to enjoin said defendants, and each of them, from in any manner disposing of the same. Answers were put in by all of the defendants who were served with process and upon the issues thus made the cause was tried, and findings of fact and law filed, and judgment rendered against the defendants substantially as prayed for in the complaint. Nearly all the errors assigned grow out of the findings of fact. It is claimed on the part of the appellants, and elaborately argued by their counsel, that nearly all of such findings were unwarranted by the proofs. Only one legal proposition is presented which could have had any influence upon the court in the determination of the facts, and that is founded upon the claim that the proceedings by which the affairs of the insurance company were placed in the hands of a receiver for the purpose of being wound up were insufficient for that purpose. This contention was based upon two grounds,-one that the court erred in its conclusion that the company was insolvent, or in such a condition as to warrant the placing of its affairs in the hands of a receiver; the other that the suit for that purpose should have been prosecuted in the name of the state and not in the name of the insurance commissioner. This latter proposition is too technical to receive any consideration at our hands. Under our liberal system it is results that are sought, and it is sufficient in any proceeding if the parties are fairly informed of the nature thereof, and of the facts relied upon as the grounds for the relief asked. It could make no difference to the defendants whether the suit was brought in the name of the state or in that of the insurance commissioner, or whether it was entitled at all. The facts set out in the complaint were what they were called upon to answer, and unless the question of misnomer of the plaintiff was specially raised by a plea or otherwise, at the earliest possible moment, it could not thereafter be made available. We see no reason, however, for holding that the suit should be brought in the name of the state rather than that of the insurance commissioner. But it is not necessary to decide as to that, as the question is immaterial. The other objection is not available to the defendants in this action. The court found the necessary facts, and made its order placing the company in the hands of a receiver; and its action in so doing, however erroneous, could not be attacked in this proceeding. If the court had jurisdiction, its judgment, unappealed from, is final as between the parties, however erroneous it may have been. The court therefore did not determine the facts in this case upon any erroneous opinion as to the law, and its determination in regard thereto will not be set aside unless an examination of the proofs satisfies us that his conclusions derived therefrom were clearly erroneous. From such an examination we are not only not satisfied that the facts were wrongly found, but, on the contrary, are of the opinion that such proofs are sufficient to support every finding of fact made by the lower court.

The principal question remaining is as to the rightfulness of the court's conclusions of law from the facts found. It is strongly urged on the part of the appellants that, the property having been delivered to them in payment of claims which they had against the corporation, they became bona fide owners thereof, and that it was no longer a part of its assets. In support of this proposition numerous authorities have been cited, and three or four cases decided by this court are relied upon; but, in our opinion, none of the cases go to the extent of sustaining transfers made in payment of the debts of a corporation under the circumstances disclosed by this record. Under the findings of fact the company had been insolvent for a long time, and had been a subject of special examinations on the part of the insurance department, and was no longer, in any proper sense of the term, a going concern; for while it is true that it appeared from the proofs that it was still receiving an occasional application for insurance, this circumstance could have little weight in view of the nature of an insurance company's business, and the fact that its condition might not be known in all localities where it had agents. Not only was the company thus insolvent, and practically out of business, at the time of its attempted transfer of a portion of its assets to these defendants, but the circumstances surrounding the...