Hardy v. North Butte Mining Co.
| Decision Date | 17 October 1927 |
| Docket Number | No. 5272.,5272. |
| Citation | 22 F.2d 62 |
| Parties | HARDY v. NORTH BUTTE MINING CO. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Warren E. Greene, of Duluth, Minn., Carey & Kerr and Chas. A. Hart, both of Portland, Or., and P. E. Geagan, of Butte, Mont., for appellant.
Charles R. Leonard and J. A. Poore, both of Butte, Mont., amici curiæ.
Before HUNT, RUDKIN, and DIETRICH, Circuit Judges.
This is an appeal from a decree dismissing a complaint in equity and discharging receivers theretofore appointed. The appellant commenced suit in the District Court of the United States for the District of Minnesota, Fifth division, against the appellee, for the recovery of $6,500 and interest due on a promissory note executed by the appellee, and for the appointment of a receiver or receivers. Speaking generally, the grounds for the receivership were as follows:
The complaint averred that the property of the appellee consisted of mines, mining claims, and mining property of the value of $8,500,000, and of personal property, including cash in banks and bills receivable, of the value of $50,000, all in the state of Montana, and of personal property, consisting largely of the capital stock of other corporations, of the value of $100,000, in the state of Minnesota; that the total indebtedness of the appellee was between $600,000 and $700,000, represented by outstanding bonds, promissory notes, and pay rolls; that a considerable part of this indebtedness was secured by mortgages and deeds of trust on the properties of the appellee; that the appellee was indebted to employees for wages in the sum of $76,000; that it was without funds to meet its obligations, due and to become due, and was unable to borrow money for that purpose; that it had endeavored to sell unsold mortgage bonds to raise money, but without success; that many of its creditors were pressing for the payment of their claims and threatening suits and other proceedings; that unless the assets of the appellee were taken into judicial custody actions at law would be instituted by creditors, and through such actions such creditors would obtain judgments and executions, and that an inequitable preference over the appellant and other creditors would result; that irreparable injury would be done to the appellant and to other creditors and stockholders, and that the good will of the appellee would be lost, its ability to proceed with its mining operations destroyed, and the value of its property irreparably impaired. An answer was filed, admitting the allegations of the complaint, accompanied by a formal consent to the appointment of receivers, signed by the appellee through its secretary. On this record two receivers were appointed, with the usual powers.
Thereafter a similar complaint was filed in the United States District Court for the District of Montana, with an additional averment as to the appointment of the receivers in the Minnesota district, accompanied by a prayer for the appointment of ancillary receivers. An answer admitting the allegations of this complaint was also filed, accompanied by a similar consent to the appointment of receivers. Upon this record ancillary receivers were appointed in the district of Montana, the order being similar in all respects to the order theretofore made in the district of Minnesota. Later the receivers presented a report to the court in the Minnesota district and petitioned for an order confirming certain of their acts and doings as such receivers. An order of confirmation was made accordingly. Later a similar report, accompanied by a similar petition, was presented to the court in the Montana district, but upon the presentation of the report that court, presided over by a different judge, made an order on its own motion requiring the parties to show cause six days later why the order theretofore made appointing the receivers should not be vacated, on the ground that it was mistakenly and improvidently made, and why the receivership should not end and the suit be dismissed forthwith. On the return to the show cause order, the court made a final order discharging the receivers and dismissing the suit. The latter order gave rise to the present appeal.
The sole question presented for decision is this: If an order appointing receivers is made in a suit within the jurisdiction of the court making the order, and in the exercise of judicial discretion, may another judge sitting in the same court, on the same record, of his own motion or otherwise, vacate the order of appointment because, in his opinion, the order was mistakenly or improvidently made. On both principle and authority this...
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