Ledoux v. La Bee

• Decision Date: 30 November 1897
• Docket Number: 174.
• Citation: 83 F. 761
• Parties: LEDOUX et al. v. LE BEE, County Treasurer.
• Court: U.S. District Court — District of South Dakota

83 F. 761

LEDOUX et al. v. LE BEE, County Treasurer.

No. 174.

United States Circuit Court, D. South Dakota, Western Division.

November 30, 1897

Edwin Van Cise, for complainants.

Edmund Smith and Wood & Buell, for defendant.

CARLAND District Judge.

This is an action brought by complainants for the purpose of enjoining the sale of certain personal property described in the bill of complaint by the defendant William H. La Bee, acting as county treasurer of Pennington county S.D. The bill was filed in this court on the 29th day of September, 1897, and on said day, upon an examination of said bill, an order to show cause was granted by the court requiring the defendant to show cause on a date therein named why a temporary injunction should not issue during the pendency of this action. On the date named in the order to show cause, defendant appeared, filed his sworn answer, and numerous affidavits were submitted, both on the part of the defendant and complainants. The facts upon which relief is sought by complainants having been fully developed on the hearing, it will be proper to consider the merits of the action to a greater extent than is usually the case on motion for temporary injunction.

The bill alleges: That the Harney Peak Tin Mining, Milling &amp Manufacturing Company is a corporation organized and existing under and by virtue of the laws of the state of New York. That Charles Fletcher, Henry Landon Maud, Charles Edward Denny, Edward Maynard Denny, and John Scudmore Sellon are citizens of the kingdom of Great Britain and Ireland. That Albert R. Ledoux is a citizen of the state of New York, and that said Ledoux was, on the 28th day of June, 1894, duly appointed receiver of all the property of whatever kind and description of the Harney Peak Tin Mining, Milling & Manufacturing Company (hereafter called 'Harney Peak Company'), by the circuit court of the United States for the Southern district of New York, and thereupon duly qualified and took possession of all the property of said Harney Peak Company within the last-named jurisdiction. That on July 16, 1894, an ancillary suit was commenced in the United States circuit court for the district of South Dakota, wherein the same complainants that commenced the suit in the Southern district of New York in which said Ledoux was appointed receiver filed a duplicate of the bill of complaint filed by them in the Southern district of New York, and thereupon the circuit court for the district of South Dakota appointed said Ledoux receiver of all the assets and property of every kind and description of the said Harney Peak Company situated within the district of South Dakota; the circuit court for the district of South Dakota not requiring any other bond or qualification on the part of said receiver than had already been had and given in the court of primary jurisdiction except that the circuit court of the district of South Dakota required Ledoux, as receiver, to appoint a resident agent within the district of South Dakota. So far as this court is concerned, it knows nothing of what has been done by said receiver in regard to the assets of said Harney Peak Company within this jurisdiction. No report has ever been made to this court by said receiver, and the present presiding judge of this court did not know of such receivership until the commencement of this action. No complaint was made at the hearing of the joinder with the receiver of the Henry Peak Company, and stockholders therein, with the receiver as complainants, but both sides treated the action as one brought by the receiver alone. The court will also treat it as such, for the reason that, if a receiver was willing to bring the action, it was improper to join the other complainants with him.

From the pleadings and affidavits submitted by both parties on the hearing of the order to show cause, the following additional facts appear: Upon the appointment of said Ledoux as receiver in this jurisdiction in 1894, said receiver took possession of all the assets and property of whatever kind and description belonging to the Harney Peak Company situated within the district of South Dakota, and continued to hold possession of all of the same until the 22d day of September, 1897, when the defendant, acting as the county treasurer of Pennington county, S.D., seized and took into his possession the personal property mentioned and described in complainants' bill of complaint, and which consists of so many different articles as to render it impracticable to describe them in this opinion. That at the time the order to show cause was issued in this action, which contained a restraining clause, said defendant had advertised said personal property for sale on the 1st day of October, 1897, in order to satisfy the delinquent taxes of the Harney Peak Company due the state of South Dakota and the county of Pennington for the years 1893, 1894, 1895, and 1896, which said taxes, delinquent as aforesaid, amounted in the aggregate to $10,806. As a general rule, the fact that the property seized and advertised for sale is personal property would be sufficient to defeat the complainants in this action, as the remedy at law would be adequate; but this court, having possession of the property and assets of the Harney Peak Company through its receiver, has jurisdiction to inquire into the legality of any claim sought to be enforced against it, or the legality and lawfulness of any invasion of said possession, independent of any grounds of equitable jurisdiction, which must exist in other cases. As said in the case of In re Tyler, 149 U.S. 181, 13 Sup.Ct. 789:

'The property in question was in the custody of the circuit court in a cause within its jurisdiction, and protected by injunction. The power exercised was the power to protect the property in the custody of the court from invasion, and, in order to sustain the receiver's application, the ordinary grounds of equity interposition were not required to be set forth. Whether inadequacy of remedy at law in respect of the disputed taxes, or the requisite jurisdictional amount or diverse citizenship were shown to exist, was not, and could not be, matter of inquiry.'

Again, in Ex parte Chamberlain, 55 F. 706, it is said:

'There can be no doubt that property in the hands of a receiver of any court, either of a state or of the United States, is as much bound for the payment of taxes, state, county, or municipal, as any other property. Persons cannot, by coming into this court, and, for the promotion of their interests, applying for and obtaining the appointment of receivers, obtain exemption from the paramount duty of a citizen. For this reason receivers in this district pay all just and lawful taxes without asking or needing the sanction of the court, and in their accounts such payments are passed without question. But, on the other hand, receivers are not bound to pay a tax, in their judgment unlawful, without the order of the court; and when they consider the legality of the tax questionable, it is their right-- their manifest duty-- to apply to the court either for instruction or protection. Especially is this the case when the question arises between the receiver and persons in the state, county, and municipal government as to the proper construction to be given to the law upon which individuals may well differ, and it is his right and manifest duty to go to the court whose creature he is for instruction. ' Davis v. Gray, 16 Wall. 203; Georgia v. Atlantic & G.R. Co., 3 Woods, 434, Fed.Cas.No. 5,351; Yuba Co. v. Adams, 7 Cal. 37; County Com'rs v. Clarke, 36 Md. 206; Greeley v. Bank, 98 Mo. 458, 11 S.W. 980; Central Trust Co. v. New York C. & N.R. Co., 110 N.Y. 250, 18 N.E. 92.

This action, brought by the receiver, is therefore properly instituted, and in such form as to allow the legality of the claim for taxes for the payment of which...