Jensen v. Kohler

159 P. 978, 93 Wash. 8, 1916 Wash. LEXIS 826
Washington Supreme Court·Decided September 8, 1916·No. No. 13074·Published·Cited by 2 cases

Opinion

Ellis, J.

Plaintiff, as trustee of the Rodgers & Kohler Company, a corporation, brought this action to recover a balance of a collection made by defendant, Isaac J. Kohler, as attorney, claimed as an asset of the corporation, and to enforce the surrender of the stock of defendants in the corpo-. ration preparatory to a final settlement of the trusteeship, which arose as follows:

Charles W. Rodgers and wife and defendants, Isaac J. Kohler and his son, Ineson J. Kohler, and wife, owned all the stock of the corporation. In the summer of 1911, irreconcilable differences having arisen between the Rodgers and Kohler interests, Rodgers brought a suit in the superior court of King county for the appointment of a receiver to wind up the affairs of the corporation. A receiver was appointed, but before he had qualified, all the parties and their attorneys signed a stipulation that all of the books and assets of the corporation be transferred and assigned to C. R. Jensen, as trustee, to divide among the parties the physical assets as specified in the stipulation, collect all accounts not assigned to Rodgers in satisfaction of a claim of $1,479.72 held by him against the corporation, and divide the proceeds among the parties share and share alike, all stock certificates [10] to be delivered to the trustee for cancellation, the trustee to receive for his services $25 a week to be paid from the assets.

On August 16, 1911, pursuant to this stipulation, the Rodgers & Kohler Company, by its president and secretary, executed to C. R. Jensen, plaintiff herein, a transfer in the nature of an assignment in trust, conveying all the right, title and interest of the corporation “to all stock in trade, goods, merchandise, machinery, tools, books, leasehold premises and effects; also all its right, title and interest in and to all debts and sums of money now due and owing to said corporation, whether the same be by bond, bill, note or account or otherwise,” to be held for the benefit of the stockholders and disposed of according to the above mentioned stipulation. Jensen accepted the trust and the receivership action brought by Rodgers was dismissed. Jensen at once proceeded to collect the accounts, and had distributed the proceeds and other assets pursuant to the stipulation, except the proceeds of the Rounds & Company claim hereinafter mentioned.

In November, 1911, the Kohlers began an action against the trustee and Rodgers to restrain the trustee from further action and for an accounting. Defendants in that action demurred to the complaint, and the matter so stood until in January, 1913, when the Kohlers, through their attorney, dismissed that action without prejudice.

Prior to the transfer of the assets to the trustee, the corporation had placed in the hands of Kohler, Sr., who is an attorney, a claim of $717.38 due to it from E. J. Rounds & Company, a bankrupt concern, for collection, paying him a retainer of $50. On taking over the assets, Jensen permitted him to retain this claim for collection. Proceeding in the Federal court in which the bankrupt matter was pending, Kohler, Sr., shortly before the dismissal of the above mentioned injunction suit, succeeded in collecting from the bankrupt and its bondsmen the face of this claim. Deducting $200 as his fee for the collection and $22.50 for expenses, he paid [11] to himself, and to Ineson J. and Pearl Kohler, as stockholders of the Rodgers & Kohler Company, $338.82, and sent Jensen a check for $161.06 as Rodgers’ share. Jensen demanded that the full amount of the collection be turned over to him as trustee, and demanded that the Kohlers deliver to him their certificates of corporate stock. Both demands were refused. Jensen, about a month after the dismissal of the injunction suit, cashed the check, and in July, 1913, commenced this action to collect the balance of $556.32 from the Kohlers and to secure a surrender of their stock certificates. In this cause of action all the foregoing matters were alleged. For a second cause of action, the trustee charged that the Kohlers had instituted the injunction suit in November, 1911, maliciously and to embarrass the trustee in the performance of his duties, compelling him to incur a liability of $150 for attorney’s fees, which sum he asked as damages.

Defendants jointly demurred to the complaint on grounds, among others, that the complaint stated no cause of action and that the two alleged causes of action were improperly united. The court overruled the demurrer except as to the last mentioned ground, whereupon plaintiff asked and was granted leave to abandon and strike out the second cause of action.

Defendants jointly answered, denying that plaintiff had divided the assets, except the proceeds of the Rounds claim, in accordance with the trust agreement, denying that defendants had converted the proceeds of the Rounds claim, denying that they had refused to surrender their stock certificates, and alleging as a first affirmative defense that, at the time of the collection of the Rounds claim, the affairs of the Rodgers & Kohler Company had been wound up, that plaintiff for a long time had been employed by Rodgers and had been working in the interest of Rodgers and against the interests of the trusteeship, and that he had paid to himself from the trust funds $250 to which he was not entitled. As a second affirmative defense, defendants alleged that, on the [12] dismissal of their suit for an injunction and an accounting, it was stipulated between the parties by their attorneys in that case that Rodgers and the trustee, in consideration of such dismissal, would release any and' all claim to the proceeds of the Rounds claim sued for in the present action. Defendants’ prayer was simply for a dismissal of the present action.

The court found the facts substantially as alleged in the complaint and concluded, as matters of law, that plaintiff, having received $161.06 of the proceeds of the Rounds collection, was entitled to have turned over to him as trustee $533.82, being the balance of that collection less $22.50 costs and expenses of the collection proceedings; that $333.82 of this sum was withheld by and should be turned over by Isaac J., Ineson J., and Pearl Kohler, and $200 was withheld by and should be turned over by Isaac J. Kohler individually; that all of defendants should be required to surrender their certificates of stock in the corporation. Decree went accordingly. Defendants appeal.

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Jensen v. Kohler, 159 P. 978, 93 Wash. 8, 1916 Wash. LEXIS 826 (Wash. 1916).

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