Fred V. Gentsch, Inc. v. Burnett
| Decision Date | 25 May 1962 |
| Docket Number | No. 35095,35095 |
| Citation | 173 Neb. 820,115 N.W.2d 446 |
| Parties | FRED V. GENTSCH, INC., a corporation, Appellee, v. Earle M. BURNETT, Jr., et al., Appellees, Impleaded with Earle M. Burnett, Sr., Appellant, Richard A. Vestecka, Receiver, Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. The power of appointment of a receiver is controlled by statute, which power may not properly be exercised in the absence of the actual commencement of an action and until after at least 5 days' notice to all parties to be affected thereby.
2. The filing of a petition in and of itself does not, within the meaning of statute, constitute an actual controversy between contending suitors in court, and accordingly furnishes no foundation for the exercise of the jurisdiction of the court to appoint a receiver.
3. In case of failure to comply with the essential requirements for the valid appointment of a receiver everything done is a nullity.
4. To the extent that the opinion in Murphy v. Fidelity Mutual Fire Ins. Co., 69 Neb. 489, 95 N.W. 1022, conflicts with the conclusion and decision arrived at herein, it is overruled.
John R. Doyle, Lincoln, for appellant.
Richard A. Vestecka, W. M. Elmen, G. A. Youngs, Lincoln, for appellee.
Heard before CARTER, MESSMORE, YEAGER, BOSLAUGH, and BROWER, JJ.
This is an action at law by Fred V. Gentsch, Inc., a corporation, plaintiff and appellee, against Earle M. Burnett, Jr.; Earle M. Burnett, Sr.; Earle M. Burnett, Sr., and Earle M. Burnett, Jr., doing business as Tad's Home Trailer Sales, Tad's Trailer Sales, and Burnett's Home Trailer Sales; Tad's Enterprises, Inc., a corporation; and Drive-In Realty Company, a corporation, defendants. Earle M. Burnett, Sr., is the only appellant.
By the petition on which this case was presented, filed September 3, 1959, the plaintiff declared its corporate status and the status of the defendants, and declared that it had sold to the defendants on open account described furniture of the value of $5,587 and that it had received in part payment $1,675 which left due and unpaid $3,912. The prayer was for judgment in this amount of $3,912. The transcript fails to show that any of the defendants ever filed any kind or character of responsive pleading.
On or about January 15, 1960, the plaintiff filed an application which stated in substance that it sought to preserve property owned by Tad's Enterprises, Inc., for the payment of plaintiff's claim and those of other unnamed claimants; that the defendants were all insolvent; that Earle M. Burnett, Jr., and Earle M. Burnett, Sr., were doing business as Tad's Home Trailer Sales, Tad's Trailer Sales, and Burnett's Home Trailer Sales; that these parties had in their possession property belonging to Tad's Enterprises, Inc.; that Drive-In Realty Company had in its possession property belonging to Tad's Enterprises, Inc.; that Earle M. Burnett, Jr., and Earle M. Burnett, Sr., are the sole and only owners and stockholders of Drive-In Realty Company and of Tad's Enterprises, Inc.; that Richard A. Vestecka was serving as trustee in possession of certain assets belonging to Tad's Enterprises, Inc., and Lewis Pierce was cotrustee; that the assets of Tad's Enterprises, Inc., consisted of certain real estate, balance due on contracts, notes and accounts receivable, and interest in personal property; and that on account of time delays for payment of the various obligations a receiver should be appointed to make collections and to apply the money and cash received under orders of the court.
There was a prayer for the appointment of a receiver to protect the assets of Tad's Enterprises, Inc., and Drive-In Realty Company and to collect 'the debts and property due and belonging to said corporation', with power to prosecute and defend in the name of the corporations. Richard A. Vestecka was nominated for receiver.
On February 2, 1960, after notice to the defendants and persons named in the application, Vestecka was appointed receiver of the assets of Tad's Enterprises, Inc., and Drive-In Realty Company.
On or about June 17, 1960, a claim was filed on behalf of Earle M. Burnett, Sr., against the receiver in which he asserted entire right, title, and interest to each and every promissory note in the possession of the receiver under the names of Burnett's Home Trailer Sales, Tad's Home Trailer Sales, Tad's Trailer Sales, Earle M. Burnett, Sr., Earle M. Burnett, Jr., and Drive-In Realty Company that were executed by various individuals, companies, partnerships, and other entities, and turned over to Tad's Enterprises, Inc., under an alleged agreement of April 24, 1959, by and between Earle M. Burnett, Sr., Earle M. Burnett, Jr., Drive-In Realty Company, parties of the first part; Tad's Enterprises, Inc., party of the second part; and Michigan National Bank, a corporation, party of the third part. No formal response to this claim appears in the transcript. The transcript contains no record of the filing of other claims.
On October 19, 1960, L. R. Rickets was appointed 'Special Master for trial of the various issues in this cause in this proceedings * * *.' He was designated special master but he was within the meaning of the statute a referee. See §§ 25-1129 to 25-1137, R.R.S.1943.
It is pointed out here that the question of the validity of appellant's claim is the only issue which is presented by this appeal. The special master was by the terms of his appointment purportedly granted the power to and did perform other functions not pertinent to any pleadings appearing in the transcript, on which matters he made findings and recommended adjudications.
It shall be understood however that the disposition herein shall not be regarded as an adjudication of or determination upon any rights of or interests in property except those which flow from the claim of the appellant.
The matter submitted came on for hearing before the special master on December 19, 1960. Hearing was had and evidence was taken, and on February 24, 1961, he made his report in which he prayed that judgment be rendered on his findings.
To the extent necessary to state here, it was found that on or about April 24, 1959, Earle M. Burnett, Sr., Earle M. Burnett, Jr., and Drive-In Realty Company were doing business under various names of Burnett's Home Trailer Sales, Tad's Home Trailer Sales, and Tad's Trailer Sales, and on that date Earle M. Burnett, Sr., Earle M. Burnett, Jr., and Drive-In Realty Comapny, for a valuable consideration, assigned, transferred, and set over unto Tad's Enterprises, Inc., all property, both real and personal, of every kind and description used in connection with the mobile home business, including all property rights, tangible and intangible, accrued in connection therewith, the purpose of which was to permit Tad's Enterprises, Inc., to collect all of the assets of the Burnetts and Drive-In Realty Company; that on the basis of this the Michigan National Bank, a creditor of the Burnetts and Drive-In Realty Company, agreed to hold harmless the Burnetts and Drive-In Realty Company from any and all obligations due it which had been incurred by them; that about September 1959, Earle M. Burnett, Jr., as president of Tad's Enterprises, Inc., assigned the assets of Tad's Enterprises, Inc., to trustees for the purposes of collection; and that on or about February 1, 1960, on the application of the plaintiff herein, the court appointed a receiver to take charge of the assets of Tad's Enterprises, Inc.
The report finds that 'all parties including creditors are before the court and the court has jurisdiction to determine all issues raised by the pleadings and the reports filed herein.'
The findings of the report show also that the special master proceeded to try and to determine matters and rights, both personal and real, which if the transcript is to be regarded as complete, of parties who are in no sense parties to this action.
Objections were filed to the report by Earle M. Burnett, Sr., and Earle M. Burnett, Jr., on March 17, 1961.
The objections of Burnett, Sr., were overruled and judgment was rendered on March 27, 1961, in all things approving and adopting the report of the special master. Thereafter a motion for new trial was filed by Earle M. Burnett, Sr., and Earle M. Burnett, Jr., which motion was overruled.
The foregoing is a resume of what is of pertinence which is authentically in the transcript which has come to this court. From this it appears that...
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...v. Roberts, 225 Ind. 1, 72 N.E.2d 223 (1947); Hamilton v. Hood, 138 N.J.Eq. 485, 48 A.2d 819 (1946); Contra, Fred V. Gentsch, Inc. v. Burnett, 173 Neb. 820, 115 N.W.2d 446 (1962). This lack of a constitutional due process requirement is also recognized in Rule 66(a), Rules of Civil Procedur......
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...1995). "No receiver shall be appointed except in a suit actually commenced and pending...." Id. See, also, Gentsch, Inc. v. Burnett, 173 Neb. 820, 115 N.W.2d 446 (1962). In Gentsch, Inc., the appointment of a receiver was reversed on appeal because "[c]onditions of consequence here are that......
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