McKenzie v. Bismarck Water Co.

• Decision Date: 16 April 1897
• Citation: 6 N.D. 361,71 N.W. 608
• Parties: McKENZIE et al. v. BISMARCK WATER CO. (CENTRAL TRUST CO. OF NEW YORK et al., Interveners).
• Court: North Dakota Supreme Court

6 N.D. 361

71 N.W. 608

McKENZIE et al.

v.BISMARCK WATER CO. (CENTRAL TRUST CO. OF NEW YORK et al., Interveners).

Supreme Court of North Dakota.

April 16, 1897.

Syllabus by the Court.

1. An order of the district court herein, granting a new trial, and vacating a judgment entered in that court in favor of the intervener, was made on October 10, 1896, and the same was served the same day upon counsel who appeared to oppose the motion for a new trial, such counsel not being the attorney of record for the intervener, and not being shown to have any authority to accept or receive service of papers for the attorney of record of the intervener. More than 60 days after such service of the order an appeal to this court was perfected by the intervener. A motion to dismiss the appeal, made in this court on the ground that it was taken too late, denied, and, held, that such service of the order as was shown in this case did not operate to limit the time within which an appeal could be taken. The service should have been made upon the attorney of record. The right of appeal is a highly valuable right, and where a party seeks to limit such right he is held to strict and technical exactness in practice.

2. The action was tried in the district court without a jury, section 5630, Rev. Codes, being then in force. The district court, upon findings of fact and law duly filed, entered judgment in favor of the intervener. No statement of the case was settled. Plaintiffs' counsel moved for a new trial, and assigned “error in law occurring at the trial, and excepted to,” etc., as the legal basis of the motion. The only error claimed was set out in the notice of intention, and was, in substance, that the trial court erred in one of its conclusions of law embraced in its findings on file. On such motion the district court made its order vacating the findings and judgment, and granting a new trial of the action, which order was appealed from by the intervener. Held, that there was no legal basis for the motion for a new trial, inasmuch as an erroneous conclusion of law deduced from findings of fact is not an “error in law occurring at the trial,” within the meaning of subdivision 7 of section 5472, Rev. Codes. “Errors in law,” within the meaning of said statute, are rulings, instructions, and the like which occur before the rendition of a verdict or decision.

3. Held, further, that under section 5630 a motion for a new trial based on “errors in law occurring at the trial” will not lie for the reason that for such errors at least said section itself provides for a trial “anew” in another tribunal than the district court. The order granting a new trial and vacating the judgment being made without any legal basis, and in the teeth of the statute, was void ab initio, and hence did not operate to grant a new trial, nor vacate the judgment. Such order is reversed. A district court cannot vacate a judgment otherwise than in pursuance of statutory authority so to do. In this case the court below did not act pursuant to any statutory authority.

4. Said judgment was appealed from to this court. In this court counsel moved to dismiss the appeal on the ground that prior to such appeal the judgment had been vacated by said order of the district court. The motion is denied on the ground that, said order being void from the beginning, it did not operate to vacate the judgment.

5. After a mortgage to secure an indebtedness was made by the Bismarck Water Company, and duly recorded, judgments were obtained against said company by the plaintiffs, and an action was instituted in the district court by said judgment creditors in the nature of a creditors' bill, in which the Central Trust Company, as representing the mortgagees, was allowed to intervene as a party. In said action, and before the intervener became a party thereto, a receiver was appointed at the instance of the plaintiffs, and said receiver, in February, 1894, pursuant to the terms of his appointment, took possession of the plant of the water company, and ever since then said receiver has had the exclusive control and management of said company and its business, and has collected and received all of the rents, profits, and earnings of said company. Said mortgage, in terms, in addition to other property, pledged the earnings and rents of the company to secure the payment pf the debt, and was prior in time and superior in equity to the claims of the plaintiffs. Held, that all earnings and rents collected or received by the receiver are held subject to the superior lien of the mortgage, and the same must be paid over, after deducting the expenses of the receivership, to satisfy any deficiency which may exist after a sale of the property is made pursuant to the foreclosure judgment.

On Petition for Rehearing.

The court below, by its foreclosure judgment, directed that the entire plant of the Bismarck Water Company embraced within the mortgage, and consisting of real, personal, and mixed property, should be sold in its entirety, without separation, and sold without the right of redemption from such sale; and further directed that immediately upon such sale a deed of all of said property should be delivered to the purchaser, which deed would entitle the purchaser forthwith to take and keep possession of all of said property as absolute owner. Held, that this feature of the judgment entered below was entirely proper.

(Syllabus by the Court.)

Appeal from district court, Burleigh county.

Action by Alexander McKenzie, for himself and others similarly situated against the Bismarck Water Company, in the nature of a creditors' bill. George A. Hughes and Eber H. Bly, and the Central Trust Company of New York as trustee in a mortgage, intervened. There was a judgment declaring the mortgage superior lien, and an order granting a new trial, and the trustee appeals. Order reversed. Judgment modified.

S. L. Glaspell and S. E. Ellsworth (J. S. T. Waters, of counsel), for appellant. Newton & Patterson and Ball, Watson & Maclay, for respondents.

WALLIN, J.

In the view we have taken of this case as disclosed by the record, we shall refer only to certain features of the case which, in our opinion, are decisive of the result in this court. The action was brought by Alexander McKenzie, a judgment creditor, for himself and others who might come in as co-plaintiffs later, to subject the assets of the Bismarck Water Company, including its franchises and earnings, to the payment of such judgments, and, incidentally, to have a receiver appointed of such assets, franchises, and earnings, and for the purpose of conducting the business of said Bismarck Water Company pending the litigation, and with the ulterior purpose of subjecting the assets, property, and earnings of said company to the payment of said judgments. Upon the summons and complaint, and upon motion of plaintiffs' attorneys, an order to show cause why such receiver should not be appointed was served on the defendant, the Bismarck Water Company, on the 7th day of February, 1894, and said order was made returnable on the next day, and upon said return day said defendant made appearance by its attorneys in response to said order to show cause, whereupon the court, on the 8th day of February, 1894, appointed one Clarence B. Little, president and manager of the defendant, as receiver of the assets, franchises, earnings, and property of the defendant, and in its order of appointment clothed the said receiver with full power and authority to take possession of all of the defendant's property, earnings, and franchises; and said receiver did, under such order, take such possession, and has ever since been in such possession, and has in all respects carried on and administered the business and received the rents and earnings of the said defendant, and said defendant has, under the control of said receiver, ever since such appointment, been engaged in its business of furnishing a water supply to the city of Bismarck and its inhabitants. Subsequently, and before the trial of said action, George A. Hughes and Eber H. Bly, who had obtained judgments against the Bismarck Water Company, were permitted to come in as interveners upon complaints setting out substantially the same facts as those contained in the complaint of Alexander McKenzie. It further appears that long prior to the commencement of this action, and prior to the rendition of any of said judgments against the Bismarck Water Company, and on or about the 1st day of August, 1887, said company executed and delivered its mortgage to the Central Trust Company of New York upon its said premises, property, franchises, and earnings to secure the payment of 150 bonds of $1,000 each of even date with said mortgage, bearing interest at the rate of 6 per cent. per annum, and payable semiannually on the 1st days of February and August of each year for 20 years, and to become due on the 1st day of August, 1907, or upon default in the payment of any installment of interest for six months, or in the payment of taxes; that 115 of said bonds have been executed and delivered; that said Central Trust Company accepted said trust, and duly qualified as trustee, and has ever since been acting as such. The mortgage was properly filed for record, and recorded in the office of register of deeds of Burleigh county on the 14th day of June, 1887. It further appears that on petition to the district court leave was granted to the Central Trust Company to come into said action as a party, and on the 2d day of March, 1894, said Central Trust Company filed its complaint in intervention. Upon the issues joined in the action a trial thereof was had in the month of April, 1896, in the district court, Judge William B. McConnell presiding at said trial, he having been called in to try the case by W. H. Winchester, the judge of the district court in which said action was pending. At the conclusion of said trial the district court ...