Miller Brothers v. Perkins
| Decision Date | 05 March 1900 |
| Citation | 55 S.W. 874,154 Mo. 629 |
| Parties | MILLER BROTHERS et al., v. PERKINS, Judge |
| Court | Missouri Supreme Court |
Writ awarded.
Tucker & Moore and Thurman, Wray & Timmonds for relators.
(1) It has been settled by the repeated decisions of this court as well as the Act of 1895, that the remedy by prohibition is available for the purpose of keeping a court within the compass of its legitimate judicial action as defined by law and a proper remedy to prevent a court from asserting or assuming jurisdiction in any case where, under the facts, the law does not authorize the exercise of such jurisdiction. State ex rel. v. Ross, 122 Mo. 461; Railroad v Wear, 135 Mo. 256; State ex rel. v. Hirzell, 137 Mo. 447; Laws 1895, p. 95. (2) The jurisdiction of circuit courts to appoint receivers for corporations, is limited by law, and when such limitation is exceeded, the action of the court is void and subject to collateral attack. State ex rel. v. Ross, 122 Mo. 461; Smith on Receivers, pp. 10, 14; Beach on Receivers, sec. 63. (3) The jurisdiction of a court of law to appoint a receiver is limited to two classes of cases, provided for by our statutes. The first is the provision made by the Practice Act, where money or property is the proper subject of tender or where it is necessary to preserve property or any business pending litigation in relation to such property or business. Sec. 2193, R. S. 1889; State ex rel v. Gambs, 68 Mo 297. The second is where some officer of a corporation has been guilty of misconduct in the management of the affairs of the corporation. Secs. 2790, 2791, 2792, R. S. 1889; Glover v. Bond Inv. Co., 138 Mo. 416. (4) The fact that a corporation is insolvent, and that a judgment and execution, when procured, would be ineffective in obtaining or requiring the payment of the debt, will not authorize the appointment of a receiver. Estees v. Wilcox, 67 N.Y. 264; Abee v. Bigler, 81 N.Y. 349; Matter of B. G. E. Co., 143 N.Y. 261; Pond v. Railroad, 130 Mass. 194.
W. Cloud & Davis and Cole & Burnett for respondent.
(1) Judge Stratton had the power to act, under the statute and also at equity, upon the general and abstract question of the appointment of receivers. The only limitation on the power of the circuit court or judge thereof in vacation is that a suit shall be pending in the court. Sec. 2193, R. S. 1889; 109 Mo. 222; 107 Mo. 585; 68 Mo. 289; 92 Mo. 318; 86 Mo. 505. And having that power, the power to determine and adjudge whether the particular facts presented to him called for the exercises of the abstract power, it can not be called in question in this character of a proceeding. State ex rel. v. Scarritt, 128 Mo. 331. (2) While it is a general rule that a receiver will not be appointed at the instance of a general creditor, there is, however, an exception to the rule. If the corporation acknowledges the debt, and it is clear that the corporation is insolvent, and that the obtaining of a judgment and the return of an execution unsatisfied will be a useless formality, the court has power to appoint at the instance of a simple creditor. 3 Cook on Corps., sec. 863; 5 Thompson on Corps., secs. 6037, 6840, 6841; Thompkins Co. v. Catawba Mills, 82 F. 780. (3) Whatever may have been the errors committed by the court in appointing a receiver on the original petition, yet the court having acted without exception or objection and upon amended petition, the receivership being fully affirmed, all prior errors are cured, and the original defendants could not have afterwards been heard to object, much less these who voluntarily come in after errors complained of had been cured. Fields v. Maloney, 78 Mo. 172; Hughes v. McDivitt, 102 Mo. 84.
OPINION
In Banc.
Prohibition.
-- This is an original proceeding in this court for a writ of prohibition against defendant as judge of the circuit court of Jasper county.
The questions to be decided arise upon a demurrer to the return of the defendant to the preliminary rule to show cause; from which it appears: That the First National Bank of Lamar is a banking corporation located at Lamar, Missouri. The Lamar Water & Electric Light Company is a corporation located at the same place and engaged in operating a water and electric light plant in said city. The First National Bank on the 14th day of October, 1898, filed suit in the Barton county circuit court, against the Lamar Water & Electric Light Company, J. Guinney, E. Bennett and J. D. Porter, on a promissory note for $ 1,500, executed by said parties to the bank. The petition is in ordinary form and no relief is prayed except judgment on said note for the debt, interest and costs. Summons was issued against the defendants in said suit, and served on all of them in due time for the January term, 1898, of the Barton county circuit court. On October 15, 1898, an application or petition was presented to the Hon. D. P. Stratton by the plaintiff in the suit on the note, and entitled as in said suit, praying the court to appoint a receiver to take charge of the property of the Lamar Water & Electric Light Company, alleging that the plaintiff in said application had brought said suit on the note as hereinbefore set forth, and that the Lamar Water & Electric Light Company owned certain property, real and personal, describing it, and that the other defendants were insolvent; that the plaintiffs herein, Miller Brothers, H. B. Allen and others had obtained judgments against the Lamar Water & Electric Light Company, and that Thurman & Wray were seeking to obtain judgment against said company, and that there were many other current debts unpaid; that those having judgments were seeking to enforce the same by executions, and that defendant, Lamar Water & Electric Light Company, had mortgaged its property to secure bonded indebtedness aggregating a large sum of money; that the company was "involved by reason of the premises," and that unless a receiver was appointed, plaintiff and other creditors would be defeated in the collection of their claims, even if judgment was rendered in their favor, and the property of the defendant would be sacrificed and lost without benefit to creditors, and concluded with a prayer for a receiver to be appointed with authority to take charge of the property of the defendant corporation. The application for the appointment of a receiver was verified by affidavit, notice of its presentation to Judge Stratton was accepted by the president and general manager of the defendant corporation, who was present and appeared for said corporation at the appointment of the receiver by Judge Stratton, in vacation. The order appointing the receiver in vacation by Judge Stratton, found the allegations in the petition were true, and appointed M. T. Davis, of Aurora, Lawrence county, Missouri, receiver, with authority to take possession of the property of the defendant corporation, etc. The petition and order appointing M. T. Davis receiver, was, on the 17th day of October, 1898, filed in the office of the clerk of the circuit court of Barton county, and Davis duly qualified and filed a bond in the sum of twenty thousand dollars, which was approved. At the January term of the circuit court of Barton county, commencing on the 2d day of January, 1899, and on the first day of the term, one of the plaintiffs herein, H. B. Allen, filed a motion to vacate the order appointing Davis receiver, in which motion he set forth his interest in the property of the Lamar Water & Electric Light Company, as a judgment creditor, the reasons for vacating the order appointing the receiver and for discharging him, being set out in the motion, the principal one of which is that the court had no jurisdiction to appoint a receiver, under the facts stated in the petition, as shown by the record. Pending the motion the defendant, Lamar Water & Electric Light Company, by its general manager, J. Guinney, filed its affidavit for a change of venue on the ground of the prejudice of the judge; Allen filed his motion for leave of the court to levy his execution, which was withdrawn, and the venue in said cause was, on stipulation, signed by the president of the bank and the president of the water company, changed to Jasper county, Missouri, without the motion of plaintiff Allen to revoke the appointment having been passed on.
In the circuit court of Jasper county on the day of March, 1899 plaintiff filed in said court what is designated as an "amended and additional petition." This petition was not verified, and made the persons alleged to be holders of the bonds of said company defendants, alleging that there were other creditors, whose names and amounts of their claims were unknown, and left out the names of Guinney, Bennett and Porter, which were in the original petition. On the 22d day of April, 1899, the plaintiff, the First National Bank, filed its motion to strike out the motion of H. B. Allen to revoke the order appointing the receiver, pending which motion, the plaintiffs herein, Miller Brothers and Thurman & Wray, filed their separate applications to be made parties defendants, which application set forth their interest as judgment creditors, having a lien upon the property of the Lamar Water & Electric Light Company, and that their interests and rights were being interfered with in said cause, which application was verified by affidavit, and states that the answer accompanies the...
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