Grand Beach Co. v. Gardner

• Decision Date: 08 October 1929
• Docket Number: No. 5282.,5282.
• Citation: 34 F.2d 836
• Parties: GRAND BEACH CO. et al. v. GARDNER et al.
• Court: U.S. Court of Appeals — Sixth Circuit

34 F.2d 836 (1929)

GRAND BEACH CO. et al. v. GARDNER et al.

No. 5282.

Circuit Court of Appeals, Sixth Circuit.

October 8, 1929.

Allan Campbell and C. S. Abbott, both of Detroit, Mich. (Campbell, Dewey, Stanton & Bushnell, of Detroit, Mich., on the brief), for appellants.

E. W. Froehlich, of Chicago, Ill. (Travis, Merrick, Johnson & Judd, of Grand Rapids, Mich., and A. S. & E. W. Froehlich and Everett M. Swain, all of Chicago, Ill., on the brief), for appellee.

M. M. Uhl, of Grand Rapids, Mich. (Knappen, Uhl & Bryant, of Grand Rapids, Mich., on the brief), for receiver.

Before MOORMAN, MACK, and HICKS, Circuit Judges.

MACK, Circuit Judge.

Bill to foreclose a mortgage deed of trust of the Grand Beach Company, given to secure an issue of its bonds, was filed in March, 1926, by Gardner, as trustee thereunder. The bill recited that in addition to the mortgaged hotel property the mortgagor had pledged to the trustee its 880 shares of stock in Land Owners' Association as further security for the bonds. Defendant Charles S. Abbott is alleged to be president both of the company and of the association, and as such president, by virtue of the company's ownership of the pledged association stock, to control the policies of both companies. The bill prayed for a receiver of both the company and the association and an injunction against Abbott. Answers were filed by the three defendants, and a cross-bill by the company and Abbott.

After full argument, a motion for a receiver was denied in July, 1926, without prejudice, however, to a renewal thereof in certain contingencies. The motion was renewed and fully heard on evidence in September and October, 1926. Decision was reserved to final hearing in November, 1926. Then again voluminous evidence was taken, arguments had, and briefs filed. Finally in March, 1927, the court found for plaintiff on all issues except that of usury. As the court found the company insolvent, the shares of the association impaired, and the necessity of keeping the assets of both corporations intact, a decree was entered April 9, 1927, with full findings, dismissing the cross-bill and appointing the Grand Rapids Trust Company receiver of both corporations. As we held in 29 F.(2d) 481, dismissing plaintiff's appeal, this decree is clearly interlocutory, so far as it relates to the bill. We expressed and express no opinion as to the finality of the dismissal of the cross-bill, as that question was not, and is not now, before us. No defendant, however, appealed at any time from so much of the decree as ordered the appointment of the receiver, or enjoined both corporations and all persons from interfering with the receiver's possession and management.

In May, 1927, the receiver filed a petition to have defendant Abbott and Fred M. Abbott enjoined from interfering with its management of the properties. The Abbotts answered specially, denying the jurisdiction of the court. The injunction as prayed for was granted June, 1927, but expressly without determination of title and lien claims that the Abbotts might have. No appeal was taken from this order.

In May, 1928, each corporation, by Charles S. Abbott, its president, moved to modify the decree of April, 1927, to the extent of "vacating and setting aside such portion thereof as orders and directs the appointment of the Grand Rapids Trust Company as receiver and an order winding up the said receivership administration, and for a further order vacating and dissolving the injunctions heretofore issued against" the Abbotts, and any injunctions against the officers and agents of the association "or in any way incident to said receivership for the following reasons." There follow reasons attacking both the original order on the merits and the administration of the receivership, both as extravagant and as hindering the corporation in its financing plans. On June 1, 1928, an order was entered denying the motions. The order, however, recites "the motion of defendants" as one to wind up the receivership administration and to dissolve the injunctions. It does not recite the prayer to vacate.

1. Not only the decree of April, 1927, as we have heretofore held, but also the order of June, 1927, is clearly interlocutory. Indeed, the injunction order is but incidental to the receivership decree. As neither of these orders was appealed from by defendants at any time, they must at present be deemed valid.

2. The order of June 1, 1928, is likewise interlocutory. Defendants, however, have appealed therefrom within the 30 days. That appeal must be considered, if the order is the kind of interlocutory order from which an appeal may be taken, under 28 USCA § 227, identical with section 129 of the Judicial Code as amended by the act of February 13, 1925, c. 229, § 1 (43 Stat. 937). That section provides for an appeal "where, upon a hearing, * * * an...