Kilpatrick v. Horton

• Citation: 89 P. 1035,15 Wyo. 501
• Parties: KILPATRICK ET AL. v. HORTON, RECEIVER
• Decision Date: 07 May 1907
• Court: Wyoming Supreme Court

89 P. 1035

15 Wyo. 501

KILPATRICK ET AL. v. HORTON, RECEIVER

Supreme Court of Wyoming

May 7, 1907

ERROR to the District Court, Weston County, HON. CARROLL H PARMELEE, Judge.

The material facts are stated in the opinion.

Motion granted and petition in error dismissed.

N. K Griggs and W. S. Metz, for plaintiffs in error.

The ex parte order allowing compensation to the receiver was without jurisdiction. The stockholders of the insolvent corporation were entitled to notice of the receiver's application. (Alderson on Receivers, 859; Bank v. Crysler, 67 F 388; Bank v. Frankenthal, 55 Ill.App. 400; Hayden v. Trust Co., 55 id., 241; Joralman v McPhee, 76 P. 922.) No exception was necessary, since the proceeding was unauthorized, and the parties were without notice. (R. R. Co. v. Wier, 135 Mo. 230; Strong v. Allen, 44 Ill. 428; Mfg. Co. v. Bank (Utah), 51 P. 151; In re Pelican Co. (La.), 19 So. 686.) The allowance was improper because in violation of the express waiver of the receiver of more than nominal compensation. (Bassett v. Miller, 8 Md., 548; Steele v. Holliday, 18 Ore. 517 (25 P. 77); Polk v. Johnson (Ind.), 65 N.E. 536; McCaw v. Blewitt, 2 McCord Eq., 90.) The receiver being a stockholder, his appointment was illegal without the consent of all persons interested, and the allowance of compensation consequently illegal and void. (Polk v. Johnson, supra; R. S. 1899, Sec. 4055.) The allowance was grossly excessive. (Swartz v. Oil Co., 25 A. 1019.) The attorney fees allowed were also excessive. It was improper to allow compensation for the entire services of the receiver before the close of the receivership. (Maxwell v. Mfg. Co., 82 F. 214.) The allowance was made improperly without evidence or the presence of necessary parties or any intelligent investigation. This court should reduce the allowance to a nominal amount. (In re Angel (Mich.), 91 N.W. 611.) The receiver is not entitled to compensation for the collection of money by one previously in charge and merely turned over to him. (Atty. Gen. v. Ins. Co., 32 Hun, 223.) The order allowing compensation was a final order and reviewable. (R. S. 1899, Sec. 4247; Grant v. Court, 106 Cal. 325; Trustees v. Greenough, 105 U.S. 527; Thompson v. Lumber Co., 5 Wash. 530.) The following additional authorities support the right of the appellants to notice before the allowance of the receiver's compensation: George v. Middough, 62 Mo. 551; Pratt v. Rice, 7 Nev. 123; Chaddie v. Wolfe, 28 Ky. 670; Murray v. Tardy, 19 Ala. 713; Sturgis v. Echols, 46 Ala. 61; McLendon v. Jones, 8 Ala. 298; Doswell v. Stewart, 11 Ala. 629; Benedict v. Cozzens, 4 Cal. 381.

Stotts & Blume and M. B. Camplin, for defendant in error.

An ex parte order is not appealable. (State v. District Court, 52 Minn. 283; Aldinger v. Pugh, 57 Hun, 181; Gibson v. Martin, 8 Paige, 481; Skidmore v. Davis, 10 Paige, 316; In re Johnson's Est., 27 Hun, 538; In re Dunn, 59 Hun, 626; In re Dunn, 37 N.Y. 802; Hyslop v. Powers, 9 Paige, 322; Savage v. Relyea, 3 How. Pr., 276; Lindsey v. Sherman, 5 How. Pr., 308; People v. Common Council, 30 Hun, 636; Ramsour v. Young, 26 N. C., 133.) The proper procedure in such case is a motion to vacate, and an appeal from the ruling on the motion. (Sheck v. Ingraham, 4 Hun, 67; 5 Hun, 397; Farmers L. & T. Co. v. R. R. Co., 1 McCrary, 352; Wooster v. Bateman, 24 N.Y.S. 113; Bean v. Tonnelle, 24 Hun, 353.) A receiver's compensation is a part of the costs, and taxable as such. (High on Receivers (2d Ed.), 796.) If notice was essential to jurisdiction, the subsequent appearance of the complaining parties cured the defect of want of notice. (Life Assn. v. Lempe (Kan.), 19 P. 337; Mayer v. Mayer (Ore.), 39 P. 1002; York v. York (N. D.), 55 N.W. 1095; Leake v. Gallogly (Neb.), 52 N.W. 825; Marsden v. Soper, 11 Ohio St. 503.) The compensation of receiver is within the discretion of the court. (State v. Bank (Neb.), 85 N.W. 391; Bank v. Badget (Wis.), 79 N.W. 21; 23 Ency. L. (2d Ed.), 1103; 2 Ency. Pl. & Pr., 92.) The discretion will not be reviewed unless it is shown to have been abused. It cannot be reviewed in the absence of the evidence. (Imp. Co. v. Bradley, 6 Wyo. 171; Schloredt v. Boyden, 9 Wyo. 392.) Notice is not jurisdictional in the allowance of a receiver's compensation. The matter having been subsequently heard on application of the complaining parties, there is no prejudice in the original order. (Thomas v. College Co. (Cal.), 43 P. 965; Rivers v. Olmstead, 66 Iowa 186.) The plaintiffs in error are bound by the order refusing to vacate until reversed. (Fear v. Heichert (Minn.), 24 N.W. 319; Warren v. Dick (Neb.), 22 N.W. 462; 2 Ency. Pl. & Pr., 655, 656.) No prejudicial error being shown the court will not reverse. (State v. Board, 7 Wyo. 161; Foote v. Smith, 8 Wyo. 510.)

SCOTT, JUSTICE. POTTER, C. J., and BEARD, J., concur.

OPINION

SCOTT, JUSTICE.

The Bank of Newcastle was a corporation duly created, organized and doing business under the laws of the state at the City of Newcastle, Weston County, Wyoming, and had been so engaged for many years prior to December 5, 1903. On said last mentioned day it failed and in pursuance of the statute in such case made and provided it was taken in charge by the State Examiner, and remained in his charge until March 17, 1904, when, upon petition of the Attorney General and due proceedings thereon, it was adjudged to be insolvent, and Fred Horton was appointed as receiver to take charge of all its property and to wind up its affairs upon his subscribing to and filing the oath, and the filing and approval of an undertaking in a fixed amount as prescribed by law. Horton qualified as such receiver and entered upon the discharge of his trust. He was a stockholder in the bank and before qualifying he filed a written waiver of statutory fees, in which he bound himself to abide such order as the court should make with reference to allowance of compensation for his services as such receiver. There was no objection filed with the court to his appointment at the time it was made.

Two orders were made by the court relating to the receiver's compensation: First, an order on September 5, 1904 allowing the receiver, upon his petition and application therefor, the sum of $ 1,500 as compensation. Second, an order made December 30, 1904, approving his report, which was filed on that day, and allowing the receiver the sum of $ 7,716 "as his full compensation as provided by law for services as said receiver, the court being of the opinion that said sum is equitable and just." The report showed the disbursement of the $ 1,500 allowed by the order of September 5, 1904, and the order approving the report was in effect a re-affirmance of that order. Other orders were made allowing attorney's fees aggregating $ 1,200. It appears by the record that subsequent to the expiration of the term at which those orders were made and on August 7, 1905, Michael Riordan, a stockholder of the defunct bank, having been granted permission by the court to do so, commenced a suit against the bank and its receiver to vacate the orders fixing and allowing compensation to the receiver on the ground that they were ex parte, granted without notice or an opportunity to be heard, without jurisdiction, obtained by fraud, and were illegal, unjust, wrongful and grossly excessive, and prayed that he be given an opportunity to be heard upon the question of the amount if any allowance to which the receiver may be entitled. On September 5, 1905, Kilpatrick Bros., who also held stock in the bank, upon leave of the court to intervene, filed their petition in intervention, in which they alleged that they refrained from objecting to the appointment of Horton as receiver by reason of his written waiver of the statutory fee and his agreement to receive as full compensation such allowance for his services as should be fixed by the court. They attacked the validity of the orders of the court allowing compensation to the receiver and attorneys' fees on the same ground as does Riordan, and prayed that the orders be vacated and for an opportunity to be heard in regard to any compensation allowed to the receiver for his services. On September 8, 1905, the receiver filed his report, which showed the disbursements under the orders complained of. On November 4, 1905, the plaintiff and intervenors filed a joint motion to strike certain parts of the report and also their joint exceptions to various items, particularly the items for compensation and attorneys' fees, for the same reason and upon the same grounds alleged in their respective petitions to vacate and set them aside. The cases and the exceptions came on for trial on November 9, 1905, and by consent of the parties the court ordered that they be consolidated and tried together in so far as they involved the objections to the report of the receiver of the bank and the application of the said parties to vacate and set aside certain orders of the court fixing and allowing the receiver certain amounts for his own compensation and for the attorneys' fees; and that such judgment and order as the court might make after due consideration should be entered and considered in both proceedings so far as the same should be applicable to the issues of each case, and that all issues not comprehended in the exceptions to the report and the application to vacate and set aside said court orders should be reserved and separately heard. Upon such hearing the court found that the exceptions to the report were not sustained by sufficient evidence; that the orders were made regularly and within the discretion of the court; that there was no sufficient reason shown for setting aside, vacating or modifying them, and that there was no understanding and agreement by the receiver that he...