Lillard v. Lonergan

Citation72 F.2d 865
Decision Date14 August 1934
Docket NumberNo. 1027.,1027.
PartiesLILLARD et al. v. LONERGAN et al.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

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T. M. Lillard, of Topeka, Kan., and W. D. Jochems, of Wichita, Kan. (Roland Boynton, Atty. Gen. of State of Kansas, on the brief), for appellants.

John F. Rhodes, of Kansas City, Mo. (Thomas P. Fenlon, Justin D. Bowersock, and Robert B. Fizzell, all of Kansas City, Mo., on the brief), for appellees Thomas Lonergan and A. Unrein.

Fred Robertson, of Kansas City, Kan. (Edw. M. Boddington and J. O. Emerson, both of Kansas City, Kan., on the brief), for appellees John S. Bird and C. B. White.

Before LEWIS, PHILLIPS, and BRATTON, Circuit Judges.

LEWIS, Circuit Judge (after stating the facts as above).

The state court receivers and the Attorney General filed their written application for possession of the physical property of The Wheat Farming Company in the original cause brought by Thomas Lonergan and A. Unrein against The Wheat Farming Company, entitling the same in said cause. That application and exhibits thereto attached set forth the procedure, orders and final judgment of the state Supreme Court in the quo warranto case before it, instituted in April, 1931, including the appointment of Lillard and Jochems on July 8, 1933, as its receivers and their qualifications to act as such. The record on their appeal was filed here January 25, 1934. Citation signed by the District Judge was duly issued to the parties in the original cause, Lonergan, Unrein and The Wheat Farming Company, and service was accepted by their counsel. At our April term, 1934, Lonergan and Unrein moved to dismiss the appeal on the ground that Bird and White receivers appointed by the Federal Court, were indispensable parties. We denied that motion and sustained a counter motion of appellants that Bird and White be brought in as appellees as proper parties. Thereupon their counsel waived the issuance and service of an alias citation on Bird and White as receivers and entered their appearance in this cause. At final hearing on the merits Lonergan and Unrein petitioned for rehearing of said motion, and it was again argued by their counsel and submitted for further consideration. Bird and White were not parties to the bill in equity in the Federal Court. They were not made parties to appellants' application when they applied to the District Court for an order terminating the proceedings in that court against The Wheat Farming Company and ordering Bird and White to deliver possession to them. They had no interest to be protected as against that application, nor any right to be adjudicated in connection therewith. As equity receivers they merely represented the court in executing its orders and were not legally interested in whether that receivership should continue or be terminated. We therefore conclude that they were not necessary or indispensable parties to this appeal. Their appearance as appellees here might well have been denied. It was at their request and by grace we let them come in. In or out our jurisdiction of the cause would not be affected. It is a matter of procedure of which Lonergan and Unrein have no cause to complain. Had the District Court sustained the application of appellants for possession, Bird and White certainly could not have appealed therefrom. Indiana Southern R. Co. v. Liverpool, L. & G. Ins. Co. (Guion v. Liv., Lon & Globe Ins. Co.), 109 U. S. 173, 3 S. Ct. 108, 27 L. Ed. 895; In re Cockcroft, 104 U. S. 578, 26 L. Ed. 856; Hinckley v. Gilman, etc., R. Co., 94 U.S. 467, 24 L. Ed. 166; Hovey v. McDonald, 109 U. S. 150, 3 S. Ct. 136, 27 L. Ed. 888; Williams v. Morgan, 111 U.S. 684, 4 S. Ct. 638, 28 L. Ed. 559; Payne et al. v. Niles et al., 20 How. 219, 15 L. Ed. 895; Pierce v. Cox, 9 Wall. 786, 19 L.Ed. 786; Youtsey v. Hoffman (C. C.) 108 F. 699. In Egyptian Novaculite Co. v. Stevenson (C. C. A.) 8 F.(2d) 576, 580, it is said:

"Indispensable parties have been defined as `persons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience.'"

Again, our September term was pending when the appeal was allowed. When that term closed on January 4, 1934, the January term came on. It was closed on April 5, 1934, and the April term, 1934, came on, and it was at that term that Bird and White entered their appearance as appellees and waived the issuance and service of an alias citation. These facts are analogous to those in Hunn v. Lewis (C. C. A.) 25 F.(2d) 271, in which certiorari was denied. 278 U. S. 631, 49 S. Ct. 30, 73 L. Ed. 549. It was there contended that, as no citation was issued and served during the term of the Circuit Court of Appeals which was pending at the time the appeal was perfected or during the next ensuing term and not until during the following term, the appeal had become inoperative and no citation could then issue. The appellee was a party to the cause. He had entered his appearance on appeal and accepted service, but the citation to him was not issued until the second term of the court of appeals had opened after the appeal was taken. His motion to dismiss the appeal was denied.

Moreover, after Bird and White had entered their appearances and waived issuance and service of the citation to them during our April term, 1934, they later filed in this court in this cause an additional transcript of the record below covering more than 90 printed pages for our consideration. It deals entirely with administrative orders of the District Judge and discloses the actions of Bird and White as receivers in connection therewith and in execution thereof. On the title page of their additional record they are named as appellees with Lonergan, Unrein and The Wheat Farming Company. They filed no motion to dismiss the appeal or to withdraw as parties, but say in their brief they were indispensable parties and therefore join Lonergan and Unrein in their argument on their motion to dismiss. Their attitude is inconsistent. They voluntarily came in as appellees, bring here an additional record for our consideration, argue the merits, and then join other appellees in their contention that the appeal should be dismissed. We adhere to our ruling that the motion of Unrein and Lonergan to dismiss the appeal was not well taken.

Some contention is made that the Supreme Court of Kansas had no authority to appoint receivers in the proceedings in quo warranto. The Constitution of that state (article 3, § 3) gives that court original jurisdiction in proceedings in quo warranto. In Revised Statutes of Kansas, 1923, under chapter 60 on Civil Procedure, article 16, entitled "Quo Warranto," we find this in section 60 — 1602:

"Such action (quo warranto) may be brought in the supreme court or in the district court in the following cases: * * *

"Fourth, When any corporation does or omits acts which amount to a surrender or a forfeiture of their rights and privileges as a corporation, or when any corporation abuses its power or exercises powers not conferred by law."

In section 60 — 1608:

"If judgment be rendered against any corporation, or against any persons claiming to be a corporation, the court may cause the costs to be collected by execution against the persons claiming to be a corporation, or by attachment against the directors or other officers of the corporation, and may restrain any disposition of the effects of the corporation, appoint a receiver of its property and effects, take an account, and make a distribution thereof among the creditors and persons entitled."

Another section of the state statutes, 17 — 808, provides that on dissolution of any corporation its directors or managers at the time of its dissolution shall be trustees of...

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    ...the federal government has no power, through any agency, to decree the dissolution of a state-created corporation. Lillard v. Lonergan, 10 Cir., 1934, 72 F.2d 865, 870, certiorari denied, 1934, 293 U.S. 615, 55 S.Ct. 147, 79 L.Ed. 704. But the orders in question do not purport of their own ......
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    ...exclusively to the state. State v. Robinson, Tex.Civ.App., 42 S.W. 2d 457, 458, application for writ of error refused; Lillard v. Longergan, 10 Cir., 72 F.2d 865, 870 (certiorari denied 293 U.S. 615, 55 S.Ct. 147, 79 L.Ed. 704); 13 Am. Jur. pp. 1159, 1160, Sec. 1288. Whether the franchise o......
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