De Mattos v. Camp & Hinton Co.
| Citation | 55 So. 832,129 La. 251 |
| Decision Date | 08 May 1911 |
| Docket Number | 18,320 |
| Parties | DE MATTOS v. CAMP & HINTON CO. (ILLINOIS CENT. R.R. et al. Garnishees) |
| Court | Supreme Court of Louisiana |
Rehearing Denied June 17, 1911.
Appeal from Civil District Court, Parish of Orleans; Fred D. King Judge.
Action by Max Teixeira de Mattos against the Camp & Hinton Company defendant, and the Illinois Central Railroad and others garnishees. From a judgment for defendants and garnishees, plaintiff appeals. Affirmed.
Thomas E. Furlow and Lewis R. Graham, for appellant.
Meyer S. Dreifus and T. M. & J. D. Miller, for appellees.
Plaintiff, domiciled in Louisiana, sued the defendant, a foreign corporation, for a large amount. He at the same time obtained an attachment.
The court appointed a curator ad hoc to represent the corporation, an absentee, in the attachment proceedings.
The railway companies, according to plaintiff, debtors to defendants, were made parties garnishees, and certain alleged debts of the railway companies, garnishees, to defendant, plaintiff urged, were seised and garnished.
The plaintiff propounded interrogatories to the garnishees.
They were answered a few days after plaintiff had filed his suit.
These interrogatories were traversed by the pleadings, but the issue thus raised never was tried.
Counsel for the garnishees and Camp & Hinton Company submit in defense that a receiver was appointed in the state of Mississippi in November, 1907, by the chancery court of Lamar county, Miss., to administer the affairs of the firm of Camp & Hinton Company, who made a surrender.
This appointment of a receiver was made in accordance with the bill in chancery of J. P. Jones, a large creditor of the firm of Camp & Hinton Company.
The Hibernia Bank & Trust Company and C. M. Robinson were appointed receivers with full power to go into possession of the property and administer its affairs.
This the receivers did.
The property was assigned by the debtor in the bankruptcy proceedings.
In May, 1909, all parties -- receivers and the committee -- agreed to obtain from the chancellor of the county court of Mississippi authority to compromise with the railroad companies, the Illinois Central and others, by accepting 67 cents on the dollar.
This rate, we are informed, was acceptable to nearly all of the creditors. Only a few declined to accept.
These few did not include the Marine Oil Company, Limited. It joined the majority.
In the April preceding defendant Camp & Hinton Company, duly authorized by the chancellor, assigned to the Hibernia Bank & Trust Company and C. M. Robinson all their claims for over charges by said railroad. They were assigned for the purpose of settling and paying the debts of the firm.
To the end of properly administering the affairs of Camp & Hinton Company, which were in the hands of the receivers, on the application of these receivers, the court authorized them in the insolvency proceedings to borrow a large amount -- some $ 148,500 -- on receivers' certificates, secured in accordance with the order of court, by priority, upon the assets of Camp & Hinton Company.
There were claims for labor also amounting to the sum of $ 17,000.
These also were taken into account and certificates issued.
The Marine Oil Company proved up its claim in the bankruptcy proceedings, and gave thereby full sanction to the county court's administration.
The property surrendered by Camp & Hinton Company was sold at public auction to a committee of creditors, one of whom was the president of the Marine Oil Company, original holder of the claims assigned to De Mattos by the last-named company.
The committee, that is, the adjudicatees before referred to -- are still in charge and have the property bought for account of creditors. It removes timber and makes payment of debts in accordance with the agreement of these creditors, including the creditor, the Marine Oil Company, the transferror to plaintiff, De Mattos.
The issues are before us, by exception, filed by defendant on a number of grounds, among them that the garnishees did not take any property by the garnishment process, that the court had no jurisdiction because plaintiff proceeded by attachment, and there was no amount to which plaintiff was entitled.
The exception was filed after the interrogatories propounded by plaintiff to the railroad companies had been answered by the latter, as before stated.
As a result of the filing of this exception, the motion to traverse was never tried.
Whatever amount had been collected by the receivers was for the account of the receivers, and not for the plaintiff, attaching creditor.
The defense is further, by exception, that, while it is true that defendant Camp & Hinton Company prior to November, 1907, had claims against the railroads sued as garnishees growing out of over charges of these railroads on lumber shipped from April, 1903, to July, 1907, as decided by the courts of inferior jurisdiction, and lastly by the Supreme Court of the United States, for which suit had been brought originally in a court of competent jurisdiction, these claims, though allowed by these courts, had not been collected, and one of the purposes of the receivership was to collect all the amounts due and realize all the cash possible and pay the debts.
The exception recites that the assets unsold have remained in the hands of the receivers, and are administered by them in accordance with the direction of the Mississippi court; that, in accordance with the agreement and the orders of that court, the receivers are to take charge of all amounts, including those claimed by plaintiff in the garnishment process.
Defendants, invoking all the different steps taken in the matter, with the consent of parties, alleged in their exception that plaintiff is not entitled to the amount, and cannot ignore the court of original jurisdiction in proceedings in which all concerned at the time were parties.
The funds being held by the court in Mississippi, it is contended by the defendants that the garnishees are now without right to take them from that court, as they are held to settle with all the creditors on similar terms in accordance with the agreement among all the parties and in accordance with the requirement of law.
The averments in the exception are substantially correct. There is no difference between the pleadings and the agreed statement of facts before us.
It is in evidence that the chancery court of Mississippi has full jurisdiction to appoint receivers and to carry on proceedings such as those that were conducted in the present case.
The court heard the testimony at the trial of this exception and rendered judgment sustaining it, and dismissing the suit.
Plaintiff, assignee of the Marine Oil Company, seeks to exercise the right that his debtors, Camp & Hinton Company, had against the railroad companies.
Plaintiff's recourse is limited to the amount due by these railroad companies, and plaintiff's right is not greater than when Camp & Hinton Company were the creditors of these railroads prior to their surrender in bankruptcy.
This claim of Camp & Hinton Company had entirely passed out of their hands, and had been surrendered in bankruptcy with the full knowledge of the Marine Oil Company, its creditor.
If the assignor, the said Marine Oil Company, placed any condition or made any agreement with the receivers in regard to its claim against Camp & Hinton Company before it was transferred to plaintiff, the claim remained subject to the condition or agreement under the circumstances of this case.
It was not possible for the Marine Oil Company to accept benefits to itself as a creditor growing out of a prior agreement, and afterward repudiate the agreement. There is a suggestive maxim: "It is equity that he should make satisfaction who received the benefit."
By the compromise which the Marine Oil Company entered into, it consented to the 67 cents on the dollar as the amount to be paid by the railroad companies.
This compromise and consent confirmed all that had previously been done by it.
The contention of the plaintiff is that the receivers cannot take charge of the amount, that local creditors are entitled to the sum, and that it should not be transferred to the receivers.
In answer, we will state that plaintiff is not in a position to successfully invoke the rule that local creditors are entitled to a preference in view of the fact that previous to acquiring the right from the Marine Oil Company it had assigned its claim to the receiver, who holds not only as receiver but as assignee as well.
The Marine Oil Company novated its claim and accepted another debtor than its original debtor, Camp & Hinton Company, the insolvent corporation.
The property having been assigned to the receiver with full right to sue to recover the amount from the railroad companies and to do all necessary to collect the claim, it is not possible after this has been done for the creditor, the Marine Oil Company, to take an active part in the proceedings to assign its...
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