Haase v. Chapman

• Decision Date: 29 August 1969
• Docket Number: 17118-3.,Civ. A. No. 15907-3
• Citation: 308 F. Supp. 399
• Parties: Robert D. HAASE, Plaintiff, v. Richard E. CHAPMAN et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

308 F. Supp. 399

Robert D. HAASE, Plaintiff, v. Richard E. CHAPMAN et al., Defendants.

Civ. A. Nos. 15907-3, 17118-3.

United States District Court W. D. Missouri, W. D.

August 29, 1969.

COPYRIGHT MATERIAL OMITTED

Douglas Stripp, Landon H. Rowland, Clifford S. Brown, Kansas City, Mo., for Watson, Ess, Marshall & Enggas, for plaintiff.

Roy P. Swanson, for Swanson, Midgley, Jones, Eager & Gangwere, Kansas City, Mo., for defendant Baltimore Bank & Trust Co.

S. Preston Williams, for Williams, Norton & Pollard, North Kansas City, Mo., for defendants Chapman, Richard E. Chapman and Richard E. Chapman, Inc.

Clyde G. Meise, for Mitchell & Meise, Kansas City, Mo., for defendant Eastin.

Fred Bellemere, Jr., for Bellemere, Manford & Bellemere, Kansas City, Mo., for defendant DeVault.

BECKER, Chief Judge.

ORDER DENYING APPLICATION FOR ENTRY OF DEFAULT AGAINST DEFENDANT A. H. CHAPMAN, DEFERRING RULING ON PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT RICHARD E. CHAPMAN, INC., GRANTING PLAINTIFF'S MOTION FOR PRODUCTION, AND GRANTING PLAINTIFF'S MOTION FOR THE APPOINTMENT OF A RECEIVER

In Civil Action No. 17118-3, instituted as a supplemental action in equity in plaintiff's attempt to collect a judgment of $118,000, costs, and interest, obtained by him against defendant Richard E. Chapman, the plaintiff has alleged that a bearer note in the amount of $108,919.52, was given defendant Richard E. Chapman by garnishee Jack V. Eastin as consideration for conveyances of real estate. It is alleged that these conveyances and note were made after a finding of liability and before entry of judgment in Civil Action No. 15907-3; that the whereabouts of which note are unknown to plaintiff; that "said note is in the possession of defendant Richard E. Chapman, or in the alternative has been assigned to A. H. Chapman without adequate consideration and with knowledge of plaintiff's judgment in an attempt to defraud, hinder and delay plaintiff as judgment creditor"; and that defendant Richard E. Chapman "alleged assignment thereof to defendant A. H. Chapman in Brazil on March 25, 1968" (this allegation is admitted in defendant Richard E. Chapman's answer). On March 31, 1969, plaintiff's motion for "order to supposed vendee defendant A. H. Chapman to appear" and deliver the note into Court was denied because it was not shown that the Court had either personal jurisdiction over that defendant or over the res (the note) of which plaintiff requested delivery.

Now, plaintiff has filed three motions: (1) a motion for an order pursuant to Rule 69(a), F.R.Civ.P., and Rule 90.27, Mo.R.Civ.P., V.A.M.R., directing defendant Richard E. Chapman to deliver the note allegedly executed by Eastin into court; (2) a motion for production of documents and things for inspection, copying or photographing under Rule 34, F.R.Civ.P., to include the following records of Richard E. Chapman, Inc.:

"Shareholder lists, accounts receivable ledger, accounts payable ledger, cancelled checks, bank statements, duplicate deposit slips, payroll records, and vouchers in support of disbursements, all inventory records, all audit reports, all working papers of accountants, bookkeepers or other persons employed by said defendant relating to corporate transactions, records of fixed assets, all correspondence and other miscellaneous papers concerning or relating to said corporate business, all documents relating to the purchase, use and disposition of assets and materials, all deeds, assignments or other documents evidencing the assignment of fixed assets of the corporation, all income or other federal or state tax returns prepared or filed for or on behalf of said corporation, and any and all other records, papers, documents or other legible evidence relating or pertaining to transactions and engagements of the said corporate business";

and (3) a motion for appointment of a receiver. In addition, a motion for default judgment against defendant Richard E. Chapman, Inc., for failure to answer interrogatories pends from March 11, 1969; and there has been an application for entry of default against defendant A. H. Chapman for failure to answer summons.

The application for entry of default should now be denied. For the reasons stated in the order of March 31, 1969, and under the allegations of the pleadings, this Court does not have any jurisdiction of defendant A. H. Chapman, either personal or otherwise, to support such an entry of a default judgment. In such circumstances, the entry of any default judgment would be erroneous and subject to direct and collateral attack. See 6 Moore's Federal Practice ¶¶ 55.09, 55.10, p. 1828, n. 13 (1968 ed.).

Ruling on the motion for default judgment against Richard E. Chapman, Inc., should be deferred. The corporate defendant denies having received the interrogatories filed herein on October 22, 1968. The burden is on the movant to show proper service. There is no certificate that the interrogatories were served on said defendant. Plaintiff attaches a registered receipt of some article of mail on October 22, 1968. Within 10 days on behalf of plaintiff an affidavit should be filed and served concerning the material contained in the registered mail received as evidenced by the receipt. Within 10 days thereafter defendant Richard E. Chapman, Inc., should show cause in writing why the default judgment should not be entered.

Plaintiff's motion to require defendant Richard E. Chapman to deliver the bearer note into Court under Missouri Civil Rule 90.27 (as made applicable in this proceeding by Federal Rule 69(a)) must also be denied in view of the lack of an affirmative allegation and proof that defendant Richard E. Chapman possesses the note, and the presence of an affirmative allegation by defendant (and the unsworn claim by defendant Richard E. Chapman) that the bearer note has been transferred to defendant A. H. Chapman in Brazil. Rule 90.27 authorizes an order requiring a defendant to deliver such a note of which a garnishee is maker into court, or if the defendant states as a reason for nondelivery that he has transferred the note to a third party, the court may (if it possesses jurisdiction of the person) require the appearance of that party with the note. It is implied that jurisdiction to order the appearance of the third party exists. When, however, it is already clear that defendant Richard E. Chapman claims a transfer of the note to defendant A. H. Chapman, a resident of Brazil, over whom no personal jurisdiction exists, it is clearly beyond the power of the court to make or enforce an order that A. H. Chapman personally appear with the note. Plaintiff has already been denied the only relief that he might expect to obtain under Missouri Rule 90.27 by the order of this Court entered on March 31, 1969.

Plaintiff, in his supplemental suggestions, insists that there has in fact been an affirmative allegation of defendant Richard E. Chapman's possession of the note here sought to be delivered into court. Rule 90.27, however, authorizes an order requiring a defendant to deliver such a note (of which a garnishee is maker) into court, or if the defendant states as a reason for nondelivery that he has transferred the note to a third party, the court may require the appearance of that party with the note. In the absence of proof that Richard E. Chapman is able to produce the note, it is clear from defendant Richard E. Chapman's denial of the allegation that he has the note and his admission of plaintiff's alternative allegation that he has "alleged assignment thereof to defendant A. H. Chapman on March 25, 1968" that there is no proof that Richard E. Chapman possesses and can produce the note. The remaining alternative of ordering defendant A. H. Chapman to produce the note has already been determined adversely to plaintiff by the order of March 31, 1969, because the Court is without power to give such relief in the present state of the record.

Plaintiff relies upon the following emphasized portion of Rule 90.27 to show his right to an order for defendant Richard E. Chapman to deliver the note into court:

"* * * and if the defendant, in showing cause for the nondelivery thereof, allege an endorsement or delivery thereof to some other person before the order of the court came to his knowledge, the fact of such transfer and the consideration and good faith thereof may be inquired into and determined by the court; and in order thereto, the alleged endorsee or transferee and the defendant may be examined, on oath, in open court * *." (Emphasis plaintiff's.)

However, the relief persistently asked for by the plaintiff in its supplemental suggestions is the delivery of the note into court. Where plaintiff agrees in his complaint that defendant Richard E. Chapman alleges "assignment thereof to defendant A. H. Chapman on March 25, 1968" the order for such delivery would be a useless act. Neither law nor equity authorizes this in the absence of jurisdiction to compel compliance. Plaintiff's remedy in this regard would have been to have asked for an order for examination of the judgment debtor (under Missouri Civil Rule 76.64 and Section 513.380, RSMo, 1959, V.A.M.S.) to inquire directly into the circumstances surrounding the transfer without requiring the court to issue as a condition precedent to the inquiry an order requiring production of a bearer note not alleged or proved to be within its jurisdiction.

The motion for defendant Richard E. Chapman, Inc., to produce documents and things as above specified is very broadly drawn, asking for all documents of the specified categories which pertain to the corporate business of that defendant, when the complaint herein seeks equitable relief only in regard to the bearer note with which the above motion is concerned. Nevertheless, the record in this case indicates that the defendant may have been engaged in fraudulent transactions involving Richard E. Chapman, Inc., calculated to...