Trowbridge v. Hamilton

• Decision Date: 23 February 1898
• Parties: TROWBRIDGE v. HAMILTON ET AL.
• Court: Washington Supreme Court

52 P. 328

18 Wash. 686

TROWBRIDGE v. HAMILTON ET AL.

Supreme Court of Washington

February 23, 1898

Appeal from superior court, Skagit county; J. P. Houser, Judge.

Action by H. H. Trowbridge against William Hamilton and others to foreclose a mortgage. From a judgment overruling a demurrer to the complaint, defendant Frank Quinby, as assignee of William Hamilton, insolvent, appeals. Reversed.

Frank Quinby, for appellant.

D. M Woodbury (James McNaught, of counsel), for respondent.

DUNBAR J.

This action was brought by the respondent to foreclose a mortgage given to secure a certain promissory note executed by the defendants to the Washington National Building Loan &amp Investment Association, of Seattle. The note has been assigned to the respondent, and respondent now claims to be the owner and holder thereof by virtue of the assignment. After the execution of this note and mortgage, but prior to the assignment thereof, the defendant Hamilton made an assignment for the benefit of creditors; and the appellant is now, and was at all times since the commencement of this action, the duly-appointed, qualified, and acting assignee of said insolvent estate. It was alleged affirmatively in the complaint that the notice required by law was duly given by the assignee of the said insolvent estate for creditors to file claims, but that the then legal owner and holder of the note and mortgage sued upon neglected and failed to file its claim for indebtedness represented by said note and mortgage with said assignee within the time provided by law, and never did file the same with said assignee. This action to foreclose was brought by leave of the court upon petition presented by the respondent. A demurrer was interposed to the complaint, on the ground-First, that there was a defect of parties plaintiff second, that plaintiff had no legal capacity to sue; third that the complaint did not state facts sufficient to constitute a cause of action against this defendant. The demurrer was overruled, and appellant elected to stand thereon. Judgment was given against him on the proceedings, and from that judgment appellant now appeals.

There are but two questions submitted for the consideration of this court. First, that the plaintiff has no legal capacity to sue; and, second, that the complaint does not state facts sufficient to constitute a cause of action against this defendant.

On the first proposition it is contended that the complaint shows that the note and mortgage sued upon were given by a stockholder in the building and loan association, organized under the laws of the state of Washington, to the association, and that such a claim, under our statute, is not only nonnegotiable, but also nonassignable. The contention is that under the provision of chapter 4 of the Laws of 1889-90, relating to the building, loan, and savings association, the mortgages belonging to such company shall be deposited and kept with the state auditor, or with the duly-chartered trust company of the state, approved by the state auditor, in trust for all its members and creditors, and that there are only two methods provided by which these securities can be taken out of the possession of the state auditor or trust company, namely, as provided in section 7 of said act, upon proof that the same has been paid, or by filing affidavit that the payor is in fault, and that the same should be drawn for the purpose of foreclosure by the association. On this proposition, we think, the appellant's contention must be sustained.

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