Association Collectors, Inc. v. Hardman , 2 Wash. 2d 414 ( 1940 )

Whatever may be the rule in the majority of states with respect to the limitations upon the rights of assignees to sue upon nonnegotiable contracts, this court has held, without exception, that, in an action upon an account assigned by a corporation, it is not a necessary prerequisite to prove either the corporate existence of the assignor or the payment by the assignor of its annual corporate license fee. Pacific Drug Co. v. Hamilton,71 Wash. 469, 128 P. 1069; Marshall v. Pike, 145 Wash. 348,260 P. 531. The majority opinion concedes that in each of those cases the assignee was allowed to maintain an action which could not have been maintained by the assignor corporation because of its failure to pay its annual license fee in compliance with Rem. Rev. Stat., § 3842.

The majority opinion, however, distinguishes the cases just cited from the case at bar, on the ground that, in the former, there were involved domestic corporations which, though failing to pay their annual license fees, had complied with all the laws relating to their corporate status, while, in the present case, the assignor had failed in both respects. Conceding that there is such a distinction, in point of fact, between those cases and this, it does not seem to me that the distinction should make any difference in the result.

In the Pacific Drug Co. case, supra, we said:

"That concern [the assignor corporation], whatever its legal status, is not suing in this action, and we think that, in view of the prima facie showing of the assignment of its interest in the account to the respondent [plaintiff], the question of its corporate existence becomes of no further consequence here."

Since, in the case at bar, the corporation has assigned its interest in the account, its corporate existence, whether foreign or domestic, is, likewise, of no further consequence in this action.

It must be remembered, too, that in this state an assignment for the purpose of collection is regarded as an assignment for a valuable consideration. McDaniel v. Pressler, 3 Wash. 636,29 P. 209; Washington State Bar Ass'n v. Merchants Rating Adj.Co., 183 Wash. 611, 49 P.2d 26.

The reason given for the rule laid down in the majority opinion is that the rights of an assignee are coextensive with those of the party from whom he takes, but no greater; or, as it is sometimes expressed, "the assignee of a chose in action stands exactly in the shoes of his assignor." The same reason, however, would be equally controlling of the assignee's right to recover in an action, such as this, where the assignor had not paid its annual license fee. Since the reason for the rule as above expressed has a universal application, the point at which the rule itself ceases to be applied should likewise be constant. According to the cases above cited, the point at which the rule loses its application is when the corporation assigns its account, whether for collection or for some substantial money consideration; beyond that point, the status of the assignor and the inhibitions upon it are of no further consequence.

Since the cases announcing the rule in this state have not been overruled in the majority opinion, I think that they should be followed in this case. I therefore dissent.

ROBINSON, SIMPSON, and JEFFERS, JJ., concur with STEINERT, J.