Moore Bros. v. Cowan

• Decision Date: 16 June 1911
• Citation: 173 Ala. 536,55 So. 903
• Parties: MOORE BROS. ET AL. v. COWAN.
• Court: Alabama Supreme Court

55 So. 903

173 Ala. 536

MOORE BROS. ET AL. v. COWAN.

Supreme Court of Alabama

June 16, 1911

Appeal from City Court of Birmingham; H. A. Sharpe, Judge.

Action by A. S. Cowan, as trustee in bankruptcy of the firm of Moore Bros., against the individuals composing such firm, and the American Bonding Company, for breach of a forthcoming bond. Judgment for plaintiff, and defendants appeal. Affirmed.

The complaint alleged breach of a bond made by Moore Bros. in a proceeding in bankruptcy wherein it was sought to have the firm adjudged a bankrupt, and an order issued to the receiver to take possession of their property, under which the property was released to said Moore Bros. on the condition that, if the firm was adjudged bankrupt, they should turn such property over, or pay the value thereof in money to the trustee. The complaint alleges a demand for the property, the failure to deliver or to pay the value thereof, and the fact that Moore Bros. have been declared bankrupts.

The following are the pleas referred to:

"(1) Respondents say that this court ought not to maintain jurisdiction of this suit for this reason: That since the adjudication of H. C. Moore and Moore Bros. as bankrupts a writ of error has been sued out in said proceeding to the Circuit Court of Appeals of the United States for the Fifth Circuit, which said writ of error has been duly allowed and upon said writ of error the said District Court has ordered the bond for a supersedeas of said decree of adjudication to be fixed at $6,500, and said bond has been filed in said cause and approved by the court or judge thereof, and such supersedeas issued. The said writ of error was issued on the 21st day of November, 1908, and filed in said cause on said date, and the said supersedeas bond was executed on the 28th day of December, 1908, and approved and supersedeas issued thereon on said date. And these respondents aver that said decree of adjudication has been superseded by writ of error, and they pray that the suit may abate and be dismissed, at the cost of the plaintiff herein.

"(2) Come the defendants in this cause, and specially appearing for the purpose of filing and presenting this plea, and for answer to the complaint on said special appearance, they say that since the adjudication of the said H. C. Moore, T A. Moore, and Moore Bros., bankrupts, a writ of error has been sued out, on, to wit, the 21st day of November, 1908 and said proceedings sent to the Circuit Court of Appeals of the United States for the Fifth Circuit, which said writ of error was duly allowed and filed, and the cause of H. C. Moore and T. A. Moore and Moore Bros., in bankruptcy, is pending in the said Circuit Court of Appeals. That on, to wit, the 28th day of September, 1908, on the order of Hon. Oscar R. Hundley, judge of said court, a supersedeas bond was executed by said defendants in bankruptcy in said cause pending in said court, in the sum of $6,500, which said bond was duly filed in said cause in the District Court of the United States for the Northern District of Alabama, and was approved by the clerk, and a supersedeas issued in said cause of bankruptcy, and the said adjudication in bankruptcy has been superseded and suspended since the execution of said bond. The defendants aver that the Circuit Court of Appeals of the United States for the Fifth Circuit has assumed jurisdiction of said cause, and that the same is now pending therein. And the defendants aver that for the reasons set out in the foregoing plea this court ought not to maintain jurisdiction of this cause, but that the same should be evaded for the causes assigned." This plea is verified.

Plea 3 sets up the same state of facts, and on them alleges that the adjudication was suspended and superseded from the filing and allowance of said writ of error until the judgment of affirmance by the Circuit Court of Appeals, and, pending said appeal and the jurisdiction of the Circuit Court of Appeals, this cause was prematurely filed. This plea is not sworn to.

The complaint was afterwards amended so as to show the entire proceeding in the bankrupt court from the beginning thereof, and including the filing of the supersedeas bond referred to.

Plea A is as follows: "Plaintiff ought not to have and recover, for that, after the making of the bond sued on, the principal obligors therein returned the assets reclaimed by the making of said bond to the said A. S. Cowan, as receiver of the assets of T. A. Moore and A. C. Moore and Moore Bros., bankrupts, and said Cowan accepted the same." The above plea was filed by the American Bonding Company alone.

Plea Y is as follows: "Plaintiffs ought not to have and recover, for that the said Cowan and Shelfer were never lawfully named as receivers of the estate of said Moore Bros., bankrupts, nor were they, as receivers, ever lawfully authorized or empowered to seize the assets of Moore Bros or any part thereof. At a time prior to the making of the forthcoming bond sued upon said Cowan and Shelfer had wrongfully possessed themselves of certain merchandise belonging to said Moore Bros. At the time of said seizure they pretended to act as such receivers, under what purported to be an order of appointment signed by one Alex C. Burch, the referee in bankruptcy at Birmingham, and had no authority or power to make such seizure emanating from any such court or officer, having jurisdiction to appoint a receiver. Said Burch at the time of making said order had no jurisdiction to make the same, for that the proceedings in the course of which said alleged order was made were begun upon to wit, December 20, 1906, by certain creditors of Moore Bros. filing against them an involuntary petition in bankruptcy in the United States District Court for the Southern Division of the Northern District of Alabama. Upon the same day upon which said petition was filed, and in the absence of any reference of said bankruptcy proceedings to him, the said Burch assumed to exercise jurisdiction to appoint receivers of the assets of said Moore Bros. In such unwarranted assumption of authority he signed a certain paper or papers, wherein he designated himself as referee, which purported to be an order or orders appointing said Cowan and Shelfer receivers of the assets of said Moore Bros. This alleged order of appointment was made wholly without notice to said Moore Bros., and directed or attempted to direct the said Cowan and Shelfer to take into their custody as receivers all property of every kind belonging to Moore Bros., or in their possession. Acting in pretended compliance of such order of appointment, said so-called receivers by open trespass made seizures of certain merchandise belonging to Moore Bros., and were holding the same in their possession, claiming to be the receiver thereof under appointment from the court of...