Ex parte Consolidated Graphite Corporation

• Decision Date: 19 June 1930
• Docket Number: 7 Div. 960.
• Citation: 221 Ala. 394,129 So. 262
• Parties: EX PARTE CONSOLIDATED GRAPHITE CORPORATION.
• Court: Alabama Supreme Court

129 So. 262

221 Ala. 394

EX PARTE CONSOLIDATED GRAPHITE CORPORATION.

7 Div. 960.

Supreme Court of Alabama

June 19, 1930

Petition by the Consolidated Graphite Corporation for writs of mandamus and prohibition to E. P. Gay, as Judge of the Eighteenth Judicial Circuit.

Writs awarded.

Cabaniss Johnston, Cocke & Cabaniss, of Birmingham, for petitioner.

Pruet &amp Glass, of Ashland, for respondent.

SAYRE J.

The record of the proceedings in the circuit court (eighteenth circuit of Alabama) and in the District Court of the United States, Northern District, Eastern Division, is confused and not as complete as it might be; but no objection is heard on that account, and it is considered that the court here is in position fairly and justly to adjudicate the question presented for decision.

Consolidated Graphite Corporation, chartered under the law of Delaware claiming to be the owner of a delinquent first mortgage on lands purchased from one Shumate, mortgagor, by Alabama Quenelda Graphite Company, also a Delaware corporation, advertised the lands for sale under power contained in the mortgage. Thereupon one Kelly, proceeding in his own name as stockholder and officer of the Quenelda Company, as we understand, filed his bill on the equity side of the circuit court of Clay county praying an injunction against the foreclosure on the ground that the debt secured by the mortgage had been satisfied. Respondent in this proceeding, judge of the Eighteenth circuit, by decree granted a temporary injunction against the proposed sale. Petitioner in this proceeding then sought a removal of the cause to the federal court, respondent signing the order. Thereafter the cause proceeded in the federal court to a final decree of foreclosure, all proper parties being present, in favor of Consolidated Graphite Corporation on its cross-bill. The decree of foreclosure, dated January 4, 1930, provided among other things, for the sale of the personal property described in paragraph 7 of Exhibit A, attached to the decree, first in order, and, in the event the amount realized therefrom was insufficient to satisfy the decree, then for the sale of the real property described in the mortgage, and then further:

"It is further adjudged, ordered and decreed that unless on or before February 1st, 1930, M. P. Kelly, as receiver, or plaintiff in that certain cause pending in the Circuit Court of Clay County, Alabama, under the name and style of M. P. Kelly, complainant vs. Alabama Quenelda Graphite Company, a corporation, respondent, case No. 31, in which the said M. P. Kelly was by decree of said court dated October 19th, 1929, after the institution of this cause, appointed receiver for Alabama Quenelda Graphite Company shall obtain from said state court a decree or decretal order to the effect that the appointment of receiver in said cause was not intended and shall not be construed as authorizing the receiver to dispose of any of the property hereby decreed to be subject to said first mortgage or to impose any liens, claims or charges against the same, or to interfere in any respect with the enforcement of this decree or the possession of the real or personal property hereby decreed to be subject to the lien of said first mortgage, and authorized to be sold as provided herein or with the custody or possession thereof by any purchaser at the sale hereby ordered, then said Consolidated Graphite Corporation is authorized in its own name or its counsel are authorized to appear specially in said cause by motion or petition to the judges of said court, without thereby subjecting Consolidated Graphite Corporation to process therein or to the jurisdiction of said court, for the purpose of requesting that such court out of comity relinquish and withdraw from the exercise of any jurisdiction in the premises contrary to or in conflict with this decree or the execution thereof, and unless on such application such action is obtained the said Consolidated Graphite Corporation is hereby ordered to report the matter to this court not less than thirty days before the date fixed for any sale of the property pursuant to the decree herein."

But, October 21, 1929, Kelly, in pursuance of his petition to that end, had been appointed receiver and had been authorized to take possession of the property and business of the Quenelda Company, and, by decree of the Circuit Court of Clay, dated November 3, 1929, Kelly, on his petition as receiver, was authorized to intervene in the cause then pending in the federal court. That court, in its decree from which we have quoted, denied the relief prayed by Kelly, dismissed his petition on its merits, and ordered a foreclosure of the Quenelda Company's mortgage in the interest of the Consolidated Company, incorporating in its decree the provision quoted above. That decree operated upon the title to the real and personal property of the Quenelda Company, the possession and control of which, as between the circuit court of this state and the District Court of the United States, is now in dispute.

The decree of the federal court to the contrary notwithstanding the circuit court (March 22, 1930) ordered, adjudged, and decreed that "the said M. P. Kelly, receiver of the Alabama Quenelda Graphite Company, appointed as such receiver by this court, be and he is hereby authorized and directed to retain possession and control of the property set out and described in the decree of said federal court rendered on the 4th day of January, 1930, and set out in Exhibit 'A' of said petition, together with any and all other property and assets of whatever kind or character, owned by the Alabama Quenelda Graphite Company, and be it further ordered, adjudged and decreed by the court that in the event said property described in Exhibit 'A' of said petition be sold by said Consolidated Graphite Corporation under the terms and provisions of said federal court decree, the said M. P. Kelly, receiver of the Alabama Quenelda Graphite Company shall retain possession and control of said property hereinabove described as against any purchase at said sale, and in the event the said defendant Consolidated Graphite Corporation or any purchaser at any sale authorized by said federal court decree shall attempt to interfere with the possession and control of said receiver herein of said property or any part thereof, or shall by virtue of such purchase seek to eject said receiver or in any manner or way to take charge of and control said property, the said M. P. Kelly, receiver shall report such attempts to take charge of said property or any interference on the part of said defendant or purchaser under said decree to this court until such other and further orders may be made herein in relation...