Jackson v. Finance Corporation of Washington
| Decision Date | 10 April 1930 |
| Docket Number | 5080.,No. 4905,4905 |
| Citation | 59 App. DC 309,41 F.2d 103 |
| Parties | JACKSON v. FINANCE CORPORATION OF WASHINGTON et al. SAME v. KAUFMAN et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
E. Hilton Jackson, F. B. Rhodes, W. E. Richardson, and W. W. Millan, all of Washington, D. C., for appellant.
Morris Simon, Lawrence Koenigsberger, Eugene Young, and Selig C. Brez, all of Washington, D. C., for appellees.
Before MARTIN, Chief Justice, VAN ORSDEL, Associate Justice, and GORDON, Associate Justice of the Supreme Court of the District of Columbia.
The appeal in No. 4905 is from a decree of the Supreme Court of the District of Columbia, dismissing an amended bill in equity filed by the appellant, plaintiff below, as receiver of certain real estate.
It appears from the facts set out in the bill, and which must be accepted as true, that the plaintiff was appointed receiver on October 15, 1928, in a law case, pending in the Supreme Court of the District, of certain real estate belonging to the defendant Finance Corporation. A writ of attachment had been issued by the court in that case, and levied on the real estate described in the bill, comprising 242 subdivided lots, a large tract of acreage property, and 98 lots, included as a part of said acreage which had been subdivided and platted, and from which certain of the lots had been sold.
At the time of the appointment of plaintiff as receiver, the real estate on which the attachment had been levied was advertised for sale under a deed of trust, securing notes aggregating $100,000, which represented the deferred purchase price of the land in question. The deed of trust contained a provision for the release of the unsubdivided acreage; and the lots, upon the payment of specified amounts, derived from the sale thereof towards the satisfaction of the notes secured by the trust.
The defendant Finance Corporation then sold 154 lots to individual purchasers at an average of approximately $1,250 per lot, on which the corporation was paid under the release clause, on certain of the lots sold, a sufficient amount to reduce the notes secured by the trust to $96,000. In the sale of the lots to the individual purchasers, a deed of trust, securing the purchase notes, was taken in each case, containing a covenant requiring the defendant corporation to release the property from the original trust when the individual purchaser had paid one-half the purchase price of the lot.
The defendants Kaufman, Baum, and Goldenburg purchased the outstanding notes, secured by deeds of trust, on the lots that had been sold, it is alleged, at a price which would enable them on payment of the notes so purchased to repay the moneys advanced by them, and also to secure the release of the lots from the original deed of trust. Thereafter Kaufman and his associates purchased the notes, secured by the original deed of trust, on which there remained due and unpaid the sum of $96,000, and caused the trustees under the deed of trust to release from the obligation of said trust the 154 lots, thereby making the purchase-money notes for the lots which were secured by deeds of trust thereon first trust liens against the respective lots. Thereupon Kaufman and his associates caused the trustees to advertise all the remaining property, excepting the lots which had been released, for sale, to satisfy the original trust of $96,000.
It was to restrain the sale of this property that the bill in the present case was filed by the receiver, acting on behalf of the attaching creditors. A temporary restraining order was issued by the court pending the determination of the case on its merits. When the court dismissed the bill on motion of defendants, it entered a decree dismissing the bill; and reserving jurisdiction of the case "for the purpose of hereafter ascertaining and fixing the liability of the plaintiff and of the surety on his several undertakings filed herein, for the damages and costs sustained by said defendants, or any of them, by reason of the issuance of the Restraining Order herein issued on the 15th day of October, 1928, and the damages and costs sustained by said defendants, or any of them, by reason of the issuance of the Temporary Injunction herein issued on the 25th day of October, 1928."
When plaintiff gave notice of an appeal from the foregoing decree, the court entered an order fixing the cost bond, and further ordered "that the Temporary Injunction heretofore issued herein, on October 25, 1928, be, and it is hereby continued during the pendency of said appeal, provided, however, that the plaintiff file herein his undertaking under seal, with surety to be approved by the Court, in the maximum penalty of Six Thousand Dollars ($6,000) conditioned to pay such costs and damages as may be incurred by any party who may be found to have been wrongfully enjoined or restrained thereby; and provided further, that this order is without prejudice to the rights of said defendants, or any of them, hereafter to move to modify or vacate said Temporary Injunction, or to move to require additional or substitute security as a condition of the further continuance of said Temporary Injunction."
After the appeal in this case had been perfected and the record filed and printed in this court, the court below, on petition of the defendants, entered an order requiring the plaintiff to give a further undertaking on the temporary injunction in the sum of $6,000, and ordered that, unless the same be given within twenty days, the injunction would stand vacated and the order continuing it terminated.
Plaintiff thereupon filed a motion to set aside the order requiring additional security, and challenging the jurisdiction of the court to enter such order in a case pending on appeal to this court. From the order denying this motion, the appeal in case No. 5080 was taken. The court below, on petition of the defendants, then entered an order permitting them to instruct the trustees to proceed and sell the property under the original deed of trust for the satisfaction of the notes secured thereby. The portion of the property not embraced within the lots which had theretofore been released by order of the defendants from the obligations of the original trust was sold, bringing a price at the sale sufficient to pay the notes secured by the original trust.
The authority of the receiver to bring the present action for injunction to restrain the sale of the property in question is challenged. Section 458 of the District Code provides as follows: ...
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