Fowler v. Osgood
| Decision Date | 20 October 1905 |
| Docket Number | 2,088. |
| Citation | 141 F. 20 |
| Parties | FOWLER v. OSGOOD. |
| Court | U.S. Court of Appeals — Eighth Circuit |
(Syllabus by the Court.)
A receiver in chancery of an insolvent corporation, appointed by the United States Circuit Court for the Southern District of Iowa, being authorized thereto by the court appointing him, brought suit in equity in the United States Circuit Court for the District of Colorado for the recovery of a fund, from a resident of the latter state, alleged to be held in trust for the benefit of creditors of the estate. Held that such receiver had no legal status to maintain such suit in a jurisdiction foreign to that appointing him, even though leave to institute such suit was granted by the Colorado court, and although the bill alleged that there were no creditors of the insolvent corporation in the state of Colorado.
Where a demurrer to the bill is general, and special for the want of jurisdiction, the judgment sustaining the demurrer solely on the ground of want of jurisdiction should be limited accordingly, as a decree of dismissal of the bill concludes the defendant on the merits.
N. T Guernsey and J. C. Helm (John R. Dixon, on the brief), for appellant.
Cass E Herrington and D. C. Beaman, for appellee.
Before SANBORN, Circuit Judge, and PHILIPS and CARLAND, District judges.
On January 23, 1900, the Atlantic Trust Company, a New York corporation, recovered judgment in the Circuit Court of the United States for the Northern District of Illinois against the Iowa & Illinois Coal Company, an Iowa corporation, in the sum of $341,838.22. On the 10th day of February, 1900, said trust company recovered judgment against said coal company for a like sum in the Circuit Court of the United States for the Southern District of Iowa. Executions were issued on said judgments, and returns of nulla bona were made prior to the 4th day of August, 1900, on which latter date the said trust company filed a creditors' bill in the Circuit Court of the United States for the Southern District of Iowa against said coal company, alleging the rendition of said judgments and the issuance and return of said executions, the insolvency of said coal company, and that it had assets not subject to levy and sale on execution, consisting of choses in action, claims of an equitable character, which in equity should be sequestered by the court to enforce the satisfaction of said judgments. The complainant asked that the business affairs of the coal company be administered and wound up; that its assets, when collected, be applied upon said judgments; and for the appointment of a receiver to take possession and custody of its books and records, and to collect its assets. In this suit, on the 24th day of January, 1901, the said Circuit Court for the Southern District of Iowa appointed the complainant, Isaac W. Fowler, receiver of said coal company, investing him with the usual powers of a receiver in chancery. On the 14th day of January, 1902, the said Iowa Circuit Court made an order authorizing the receiver to institute and prosecute, outside of the Southern District of Iowa in other courts of competent jurisdiction, such action or actions at law or suit or suits in equity as in the judgment of said receiver might be necessary or expedient to institute and prosecute in order to collect and reduce to his possession all such rights, debts, equitable interests, property, and assets of said corporation, so that the proceeds of the same might be applied to the payment of the debts of said corporation. Thereafter said receiver, upon leave granted by the local court, instituted the present suit in equity in the United States Circuit Court for the District of Colorado, whereby he sought to recover from the defendant, Osgood, a large sum of money alleged to be in his hands in trust for the benefit of said corporation, and which in equity is liable to sequestration at the suit of the said receiver. To this suit the defendant appeared and demurred, on the ground, among others, that it appears on the face of the bill that the complainant is a foreign receiver, and as such has no power to sue in the jurisdiction of said Colorado court. The demurrer was sustained, and the bill dismissed. To reverse this decree, the complainant prosecutes this appeal.
The question to be decided is, could the receiver appointed by the court of the state of Iowa maintain this suit in a court of the state of Colorado? This question was presented to the Supreme Court of the United States in 1854, in Booth v. Clark, 17 How. 322, 15 L.Ed. 164. After thorough discussion, it was ruled that a receiver in chancery appointed by a court of one jurisdiction has no authority to sue in a jurisdiction foreign to that appointing him for the recovery of property or assets of the debtor. This for the reason that such receiver is the mere right arm of the court appointing him, to obey its orders in matters of administration within its jurisdiction, and as such is entirely subject to its control. He executes bond for the faithful performance of his duties, to account alone to the court appointing him; and the funds coming to his hands as such receiver are in custodia legis, held by him for distribution and application by the court whose commission he holds.
Adverting to the exception where, under statutes of the state of the domicile of the corporation, on its insolvency or dissolution the assignee in law becomes vested with the title to the property, with all the powers conferred by the charter or statute, becomes, pro haec, the corporation, and can therefore recover its property wherever situate, the learned justice said that none of these alter the relation of a mere receiver in chancery to the court appointing him, empowering him to sue in his own name officially in another jurisdiction for the property or choses in action of a judgment debtor.
'Indeed, whatever may be the receiver's rights under a creditors' bill, to the possession of the property of the debtor in the state of New York (the jurisdiction where the receiver was appointed), or the permission which may be given to him to sue for such property, we understand the decision of that state as confining his action to the state of New York.'
The doctrine of this case has been uniformly followed and steadfastly adhered to by the Supreme Court. In Quincy M & P.R. Co. v. Humphreys, 145 U.S. 82, 12 Sup.Ct. 787, 36 L.Ed. 632, where the powers of such receiver were under consideration, the court quoted with approval the...
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...defendant companies in the Western District of Missouri. Hale v. Allinson, 188 U.S. 56, 64, 23 Sup.Ct. 244, 47 L.Ed. 380; Fowler v. Osgood, 72 C.C.A. 276, 141 F. 20. answers to the questions presented by the Attorney General and his associates and the reasons for the answers have now been g......
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...and renders the issues in the case res adjudicata (Indian Land & Trust Co. v. Shoenfelt et al. C. C. A. 135 F. 484; Fowler v. Osgood C. C. A. 141 F. 20, 4 L. R. A. N. S. 824; Hickey v. Johnson et al. C. C. A. 9 F.2d 498; Baker v. Cummings, 181 U. S. 117, 21 S. Ct. 578, 45 L. Ed. This court ......
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