Lamont v. Lamont Crystallized Egg Co.

• Decision Date: 20 January 1904
• Parties: C. FRED LAMONT, Plaintiff, v. LAMONT CRYSTALLIZED EGG COMPANY, Appellant; SPRINGFIELD CRYSTALLIZED EGG COMPANY, Intervenor, Respondent
• Court: Kansas Court of Appeals

81 S.W. 1269

109 Mo.App. 46

C. FRED LAMONT, Plaintiff, v. LAMONT CRYSTALLIZED EGG COMPANY, Appellant;

SPRINGFIELD CRYSTALLIZED EGG COMPANY, Intervenor, Respondent

Court of Appeals of Missouri, Kansas City

January 20, 1904

Appeal from Polk Circuit Court.--Hon. Argus Cox, Judge.

Cause affirmed and remanded. (with directions).

Sherwood Young & Lyon and V. O. Coltrane for appellant.

(1) A receiver should not have been appointed. There was no foundation laid for such appointment in the allegation of the petition, nor in the subject-matter of the action nor in the facts adduced in the evidence. Chemical Works v Nemnich, 169 Mo. 397. (2) There was no res which was the subject-matter of litigation between plaintiff, Lamont, and the defendant company. Plaintiff's action was for the recovery of a moneyed demand and the other loose allegations of the petition do not change the essential nature of the suit nor confer a res on the court so as to authorize the appointment of a receiver, and his appointment was therefore coram non judice. Miller Bros. v. Perkins, 154 Mo 629. (3) The intervention of the Springfield Crystallized Egg Company was wholly unauthorized by either law or precedent. The distinction between suits in rem and those in personam as to permitting intervention in the former case and denying it in the latter consists in this, that the person by his interest in the res has interest in a legal sense in the subject-matter of the controversy, but in a suit in personam a person not a party to the suit can have no interest in a legal sense in a personal claim made in the suit against a defendant therein. Coleman v. Martin, 6 Blatchf. 119; Horn v. Water Co., 13 Cal. 162; Coffee v. Greenfield, 62 Cal. 602; Smith v. Gale, 144 U.S. 509; Tuck v. Manning, 150 Mass. 211; In re Printup, 87 Ala. 148; Ex Parte Breedlove, 118 Ala. 172; Ex Parte Shoe Co., 50 So. Car. 140. (4) Equity will not entertain jurisdiction where there is an adequate remedy at law. Russell v. Clarke, 7 Cranch. 69; Watson v. Sutherland, 5 Wall. 74; Brown v. City, 56 N.H. 375; Sturges v. City, 86 Ill. 441. A remedy in a court of law ousts the jurisdiction of a court of equity. Webb v. Ridgley, 38 Md. 364. (5) The trial court had no authority to render a person and moneyed judgment for $ 4,000 in favor of the intervenor and against defendant. Such judgment was not within the issues joined in the cause. Daugherty v. Adkins, 81 Mo. 411. In such a case, the defendants, as to the damages, were entitled to an opportunity to claim a trial by jury on that ground of action. Wheelock v. Lee, 74 N.Y. 495. (6) No authority existed in the lower court to enter judgment in favor of intervenor and against defendant without disposing of the other issues joined in the cause between the plaintiff and the defendant. R. S. 1899, sec. 766; McCord's Adm'r v. McCord, 77 Mo. 166.

Barbour & McDavid and Edgar P. Mann for respondent.

(1) The original suit upon which this intervening petition is engrafted is a suit in equity, and the circuit court had inherent jurisdiction to appoint a receiver in such case. Cox v. Volkhart, 86 Mo. 505; Miller v. Perkins, 154 Mo. 637, l. c.; Seafield v. Bohne, 169 Mo. 546; Thompson v. Greeley, 107 Mo. 585. (2) The allegations of the petition are amply sufficient to justify the appointment of a receiver. Tuttle v. Blow, 163 Mo. 625. (3) It is not conceded that the allegations in the petition are insufficient to warrant the appointment of a receiver, yet, were this true, the intervenor could not take the hazard or risk the result of a suit. Block v. Estes, 92 Mo. 318-324; Thompson v. Greeley, 107 Mo. 577; Keokuk Line v. Davidson, 13 Mo.App. 561; State ex rel. v. Ross, 118 Mo. 23; High on Receivers, sec. 203, 238; Greeley v. Bank, 103 Mo. 222, l. c. (4) It was entirely proper to allow the Springfield Crystallized Egg Company to intervene in this cause. It owned a part of the property in controversy. The courts view with favor the making of all who have any interest in the suit parties thereto, that all rights may be adjusted. Traven v. Dawson, 65 Mo.App. 93; Carter v. Mills, 30 Mo. 432; Hilton v. City, 99 Mo. 207; Rosenburg v. Soloman, 38 N.E. 982; Wood v. Water Co., 38 P. 239; Henry v. Ins. Co., 26 P. 318; Story's Eq. Pldg., sec. 208; Shipman's Eq. Pldg., sec. 127; Daniel's Chan. (2 Am. Ed.), pp. 1263, 1270; Smith on Receiverships, sec. 404; Thompson v. McCleary, 159 Pa. 189; Mahony v. Belmont, 62 N.Y. 133; Boot Co. v. Goyler, 115 Mass. 67. (5) Intervention was clearly permissible. Ames v. Trustee, 20 Beav. 353; Keokuk Line v. Division, 13 Mo.App. 561, 565, 566. (6) The judgment rendered is a proper one, clearly within the issues raised by the petition, answer and evidence. Courts of equity are bound by no strict rule as to the form of judgment, and may render a money judgment whenever it is necessary to do so in order that full justice may be done. Paquin v. Milliken, 163 Mo. 79; Alexander v. Relfe, 74 Mo. 520; Story's Equity Jurisprudence, sec. 439; Real Estate, etc., v. Collonious, 63 Mo. 290, 295; Baile v. Ins. Co., 73 Mo. 371; Boland v. Ross, 120 Mo. 216, and cases cited; Dudley v. 3rd Order of St. Francis, 138 N.Y. 457; Valentine v. Richards, 126 N.Y. 274; McGean v. Railroad, 133 N.Y. 16; Ins. Co. v. Beard, 80 F. 66; Perry on Trusts, secs. 217, 223; Van Rennselaer v. Van Rennselaer, 113 N.Y. 213; Rodgers v. Land Co., 134 N.Y. 218; Murtha v. Curley, 90 N.Y. 372; Gormerly v. Clark, 134 U.S. 338; Lynch v. Railroad, 15 L.R.A. 287.

OPINION

BROADDUS, J.

This suit was begun in the Greene county circuit court. A change of venue was taken to the Polk county circuit court where it was tried, finding and judgment being against defendant in favor of the intervenor, from which defendant appealed. After the cause reached the circuit court of Polk county, plaintiff amended his petition; but as the amendment introduces no new matter materially affecting the merits of the case, it will only be necessary to refer to the amended petition, although defendant contends that the original petition as filed in Greene county did not state a cause of action, hence the circuit court of Polk county got no jurisdiction by reason of the amended one.

According to the petition, the plaintiff was the owner of certain formulas, recipes, trade-marks and processes appertaining to the manufacture and sale or processing of the product known as crystallized egg and other food products, and in the desiccation of eggs, etc.; that in July, 1902, he entered into a writing with one George H. McCann by which he agreed to transfer all the said formulas, recipes, etc., to the said McCann, as trustee for the defendant company afterwards to be formed, which was to be taken by defendant as payment in full for plaintiff's subscription to the stock of said company; that thereafter, in a short time, defendant corporation was legally formed with a capital stock of $ 30,000, divided into three hundred shares of the par value of one hundred dollars each; that plaintiff subscribed one hundred shares; that the board of directors of defendant, when organized, consisted of three directors, to-wit: George H. McCann, Fred A. Wishart and plaintiff; that said McCann was elected president, Wishart secretary and treasurer, and plaintiff general manager of the concern; and that the remainder of said stock was to be paid for in lawful money by the said McCann.

Plaintiff claims that the defendant is indebted to him in the sum of $ 1,000 he advanced for the purchase of machinery, and for his salary from the fourth day of August, 1892, at the agreed sum of $ 300 per month; that the balance of said stock has not been paid into the treasurer of defendant by said McCann; that the defendant is insolvent and indebted to numerous other persons besides plaintiff; and that defendant was selling its assets but not buying products, and that it has ceased to be a "going concern." And, further, that without the payment of said subscription of stock the defendant is wholly insolvent.

The petition further alleges that if defendant had complied with the terms of its articles of incorporation it "would now be doing a prosperous business, but to the contrary the said McCann and Wishart have failed to pay their subscriptions to the capital stock of defendant as they subscribed and contracted to do, and defendant being controlled by said George H. McCann and Fred A. Wishart as its officers, and being a majority of the board of directors of said corporation, failed and refused to institute proceedings against themselves, said McCann and Wishart, to compel them to pay their subscriptions. That the failure to pay said subscriptions caused indebtedness to accrue against defendant and said indebtedness still remains unpaid, and defendant was not at the time of the institution of this suit, nor now making any efforts to collect its outstanding assets to pay its debts; and without the payment of said subscriptions the defendant is wholly insolvent and cannot resume business."

Plaintiff alleges that he has "no remedy by the strict rules of the common law to reach said association and effects of defendant and that the only way he can protect his rights in defendant is by the process and decree of a court of equity." Plaintiff prayed for the appointment of a receiver and for an order for him, as such receiver, to collect all subscriptions owing to the capital stock, and that the court ascertain and determine the rights of all interested parties and have the property of defendant sold, etc.

After a receiver had been appointed, as prayed for in the original petition, defendant filed a motion asking that the order appointing such receiver be vacated. This motion was overruled. No appeal was taken from the action of the court appointing the...