Kindy v. Koenke, 15063.

• Decision Date: 19 November 1954
• Docket Number: No. 15063.,15063.
• Citation: 216 F.2d 907
• Parties: Phillips KINDY, Laurence M. Nelson and Livingston Garden Apartments, Inc., Appellants, v. First Lieutenant Bernard G. KOENKE, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

216 F.2d 907 (1954)

Phillips KINDY, Laurence M. Nelson and Livingston Garden Apartments, Inc., Appellants, v. First Lieutenant Bernard G. KOENKE, Appellee.

No. 15063.

United States Court of Appeals Eighth Circuit.

November 19, 1954.

Lewis L. Anderson, St. Paul, Minn., for appellants.

O'Toole & Miller, St. Paul, Minn., submitted motion of appellee to dismiss.

Before SANBORN, JOHNSEN, and COLLET, Circuit Judges.

COLLET, Circuit Judge.

Bernard G. Koenke, a citizen of Minnesota and a reserve officer in the United States Air Force, was recalled for active duty, reporting on June 8, 1951. At that time he had almost completed the construction of a number of housing units under contract with the owner corporation, Livingston Garden Apartments, Inc. The contract provided for a lump sum payment to Koenke of approximately $91,000. The total costs had been estimated at over $100,000. The "owner" corporation had been incorporated by Koenke and Phillips Kindy for the purpose of erecting the buildings. All of its stock was to be owned by Koenke and Kindy in equal amounts. A loan to the corporation was arranged for, that money to be used to pay Koenke, as the contractor, and some additional costs. It appears¹ that Koenke and Kindy agreed to furnish in equal amounts such additional money as might be needed to complete the project. Upon completion, by their equal ownership of the stock of the owner corporation, they were to share equally in the ownership of the apartments. Shortly before Koenke was called for active service, costs having mounted above what was originally anticipated, Koenke, Kindy, and Laurence M. Nelson, the attorney who had incorporated the Livingston Garden Apartments, Inc., held a conference as a result of which a written agreement was entered into between Koenke and Kindy, dated April 27, 1951, which appears to have authorized Nelson to sell some properties privately owned by Koenke and apply the proceeds of such sales to Koenke's one-half of the additional capital needed to complete the Livingston Garden Apartments. It further appears that the April 27, 1951, agreement made a provision for the forfeiture to Kindy of Koenke's interest in the corporation if Koenke's part of the needed additional capital was not produced before August 1, 1951.

On July 24, 1951, while Koenke was on active duty, he filed a petition in the United States District Court of Minnesota stating in substance the foregoing facts and praying for an injunction against Kindy, Nelson and the Livingston Garden Apartments, Inc., under the Soldiers' and Sailors' Act of 1940, 50 U.S.C.A.Appendix, §§ 501-548, 560-590, restraining them for the duration of Koenke's military service and for three months thereafter, "or for such additional time as may seem just to the Court," from filing any actions against him, from instigating or causing any to be filed or taken against him, "with respect to any of the building matters, notes, liens, or other obligations whatsoever except after hearing of this case." The petition further prayed that a receiver be appointed by the court, that Nelson be required to turn over to the receiver the title and possession of all of Koenke's private property, that the receiver take charge of that property and liquidate it for the purpose of raising Koenke's part of the required additional capital to complete the Livingston Garden Apartments, that the receiver take charge of the income from the apartment property, and for other related relief. An order to show cause was issued, directed to the defendants, and pending the hearing thereon a temporary restraining order was issued. The order named a receiver. An answer was filed, which among other things prayed for the dissolution of the restraining order. A hearing was held. After hearing, a preliminary injunction was issued substantially as prayed for. The receiver was empowered to sell the private property of Koenke and apply the proceeds to the latter's obligations incident to the completion of the apartments. The receiver was authorized and directed to take complete charge of the apartment building project. That order was entered September 28, 1951. It was amended in unimportant details November 1, 1951.

On October 15, 1953, the defendants filed a motion praying for the dissolution of the injunction, that the receiver be required to make a final accounting and be discharged, and that the receiver return the assets of the receivership "to the persons from whom they were received." The motion stated that the need for the injunction and the receivership no longer existed because Koenke was released and discharged from military service more than six months prior thereto. It was subsequently admitted that he was discharged November 1, 1952. The motion was denied March 4, 1954, and the case placed on the trial docket. The defendants have appealed from the order denying their motion.

There is some indefiniteness concerning what specific issues Plaintiff Koenke proposes to present to and have determined by the District Court. He contents himself on this appeal with filing a motion to dismiss the appeal on the ground that the order of the District Court denying the motion to terminate the receivership and dissolve the injunction is not an appealable order.

In support of the motion to dismiss the appeal, several cases to the effect that an appeal may be taken only from final judgments are cited. Those authorities are not controlling here. Appeals from interlocutory orders of District Courts "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court", and "Interlocutory orders appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof, such as directing sales or other disposals of property", are by the language just quoted made appealable by Section 1292, Title 28, U.S.C.A. The motion to dismiss the appeal is therefore denied.

The question presented on the appeal can only be answered in general terms. Appellants insist that the injunction should be dissolved and the receiver discharged. We do not observe from the record before us that the District Court disagrees with that position. The troublesome question is when, and what must and should be done before that final action is taken. The latter question will be answered by determining what the District Court has...