Moseby v. Burrow

• Decision Date: 10 January 1880
• Citation: 52 Tex. 396
• Parties: SAMUEL MOSEBY v. N. B. BURROW AND WIFE.
• Court: Texas Supreme Court

52 Tex. 396

SAMUEL MOSEBY

v.N. B. BURROW AND WIFE.

Supreme Court of Texas.

Jan. 10, 1880.

ERROR from De Witt. Tried below before the Hon. D. D. Claiborne.

Suit brought by the defendants in error, N. B. Burrow and wife, against the Gayoso Savings Institution, a banking corporation created under the laws of the State of Tennessee, and to recover the value of $7,000 in United States bonds deposited by Mrs. Burrow with said bank as a special deposit, which, by the corporation, was converted to its own use.

An attachment was levied upon certain lands which had been bought by the bank, paid for with its funds, and the title thereto taken in the name of E. M. Avery as its cashier.

Samuel Moseby was made a defendant to the suit, and claimed the land attached.

Moseby claimed title to the land attached through a deed made to him by E. M. Avery, and claimed to hold the same as a receiver appointed by a Chancery Court in Memphis, Tennessee, in a proceeding then pending, in which the bank was interested, but to which neither the defendants in error nor E. M. Avery were parties.

The deed to Avery showed that he held the land attached in trust for the bank and as its cashier.

The deed from Avery to Moseby showed that the land was, upon the motion of Avery, without any direction from the directors of the bank, conveyed to Moseby, to be held by him upon the same trust under which Avery had held it.

The defendants in error, at the time the deposit was made with the bank, and at all times since, have been residents of the State of Arkansas.

The Gayoso Savings Institution made no defense, but W. R. Friend, an attorney of the court, and the attorney for Moseby, as amicus curiæ, filed pleadings, in which he attempted to set up issues of fact, which, upon exception, were stricken out.

The defendant Moseby pleaded a general denial, and set up claim to the land attached as the receiver of the effects of the Gayoso Savings Institution, appointed by a Chancery Court in the State of Tennessee. Exceptions were sustained to all of Moseby's defenses, except his general denial.

No creditor of the bank, except the defendants in error, set up any claim for payment of debts due by it to them.

The attorney for Moseby did not answer for the bank, but, as amicus curiœ, sought to make such defenses as would have been open to the bank.

The Gayoso Savings Institution having failed to answer within the time prescribed by law, a judgment by default, with a writ of inquiry, was taken against it, and the cause continued by Moseby. At a succeeding term the writ of inquiry was executed and the cause tried upon the facts, Moseby being represented.

The motion to set aside the judgment by default was made by the amicus curiæ, upon the ground that he had, prior to the time the judgment by default was taken, made and filed a suggestion of facts which, in his opinion, was sufficient to authorize the court to refuse such a judgment; and because the amicus curiæ was absent from the court, in attendance as a member of the Texas Legislature, at the time the judgment by default against the bank was taken. The suggestion referred to by the amicus curiæ in his motion to set aside the judgment by default against the bank, stated, in substance, that it was not true that the Gayoso Savings Institution was a body corporate doing business and having an office in the city of Memphis, State of Tennessee, at the time this suit was instituted; and that before the institution of this suit the bank had closed its doors, was insolvent, and had ceased to exercise its corporate franchises. It further stated that, upon the petition of the president of the bank, a court of chancery for the State of Tennessee, sitting in the city of Memphis, had appointed Samuel Moseby, the plaintiff in error, the receiver of the effects of said bank, and had caused the sheriff to put him in possession thereof, and that Moseby qualified and assumed the management of the effects of said bank in Tennessee and in Texas. It further alleged that, by reason of the facts above stated, the bank had ceased to have any corporate existence. The amicus curiæ avoided placing himself in the position of attorney for the bank. Final judgment was rendered for plaintiff.

Lackey & Stayton, for defendants in error.

I. An amicus curiæ cannot be said, in any sense, to represent a party to a suit, nor will a pleading or motion filed by a party thus claiming to act be regarded as the act of a party to the suit. (23 Tex., 459.)

Such person can only suggest some reason apparent upon the record why the court should not act, or should act, in any given manner.

Such person cannot make an issue of fact and invoke the action of the court thereon. That can only be done by the parties to the suit.

II. There is no averment in any of the pleadings, either by the friend of the court or by Moseby, that there had been a decree of forfeiture by any court whatever. Non-use and even misuse of the franchise was alleged, but that was not sufficient. In such cases there must be a decree, by a court of competent jurisdiction, declaring the forfeiture of the charter, after the corporation has been called upon to answer. (2 Kent's Comm., 377; Slee v. Bloom, 5 Johns. Chan., 366; Brandon Iron Company v. Gleson, 24 Vt., 228;Maryland v. Bank of Maryland, 6 Gill & J., 205;Smith v. Gower, 2 Duvall, 17;Bohannon v. Binns, 31 Miss., 355;10 Ind., 49;33 Mo., 132.)

III. The appointment of a receiver does not dissolve a corporation. (6 Paige, 102.)

IV. Avery holding as a naked trustee, Moseby, even if he had been a purchaser for value with notice of the trust, which is fully given on the face of the deeds from Wimbish to Avery and from Avery to Moseby, would hold the land just as Avery held it, subject to the payment of any debt due by the bank to any person, and from which liability it cannot escape so long as the equitable title of the bank attaches to it.

V. A receiver is but an officer of the court that appoints him; can act only as he is directed by the court; has no power to institute or defend a suit, unless directed so to do. He has no official character or authority outside of the territory over which the sovereignty to which the court that appointed him belongs. (Edw. on Receivers, 3; Booth v. Clark, 17 How., (U. S.,) 331, in which all this branch of the subject is fully discussed.)

VI. A receiver can only sell property under an order of the court which appointed him, make a report of such sale, and have the confirmation thereof. Such a sale is strictly a judicial sale, and is, in effect, a sale by the court. (Rorer on Jud. Sales, secs. 1, 2, 3, 12, 26, 29, 122-124, and authorities cited in notes to the several sections.)

VII. A seizure by the court and placing in the hands of a receiver, is nothing less than an equitable execution or sequestration. (Story's Eq., 829; Edw. on Receivers, 6, 98.)

VIII. A legal seizure of real estate situated in this State cannot be made by a foreign court, nor by its process or officials. (Whart. Confl. of Laws, sec. 288.)

IX. A decree made by a foreign court cannot affect title to land situated here. (Whart. Confl. of Laws, secs. 274, 275, 288, 290, 808, 809, 843; Story's Confl. of Laws, secs. 411, 543; Freem. on Judg., sec. 572; Page v. McKee, 3 Bush, 135;2 Pet., 655;6 Pet., 400;16 Pet., 57;Ogden v. Saunders, 12 Wheat., 213;Harrison v. Sterry, 5 Cranch, 298; Rorer on Jud. Sales, sec. 69.)

X. A decree of a foreign court directing or compelling an individual or a corporation to convey to a receiver appointed by it lands situated in another State, that the same may be administered in such foreign court, through its receiver, acting under its orders, is void for want of jurisdiction. (White v. White, 7 Gill & J., 208;Glen v. Gibson, 9 Barb., 634; Morris v. Remington, 1 Pars. Eq., 387; 1 Story's Eq. Jur., 744 aWhart. Confl. of Laws, secs. 274, 275, 288, 290, 808, 809; Rorer on Jud. Sales, 69; Freem. on Judg., 572.)

W. R. Friend, for plaintiffs in error.--The proceedings in this case are substantially the same as in the case between the same parties reported in 37 Tex., 88. In that case, Moseby, the receiver, intervened, and his petition was stricken out upon plaintiffs' exceptions. This was held to be error by the Supreme Court. In the case at bar, plaintiffs make Moseby a party. He appears and files an answer similar to the one pronounced by the Supreme Court sufficient to entitle him to prevail. This again, upon exception of the plaintiffs, was stricken out.

I. It is believed that all the rights of Moseby have been settled by the decision in 37 Tex., 88, for it is there said that the land attached had passed to the receiver. It was no longer the property of the Gayoso Savings Institution, and the levy of the attachment was void.

Moseby's answer sets up all the facts which place him within the rule there laid down, and which enable him to defeat plaintiffs' attachment.

II. The suit of plaintiffs against a defunct corporation is believed to be a nullity, and a suit against it should no more be sustained than a suit against a dead man. (Nevitt v. Bank of Port Gibson, 6 S. & M., 571; 2 Kent's Comm., p. 305; Lea v. Hernandez, 10 Tex., 137;City of Olney v. Harvey, 50 Ill., 453.)

III. The receiver's possession cannot be disturbed. (Story's Eq. Jur., secs. 833, 891; Parker v. Browning, 8 Paige, 388;Mackay v. Blackett, 9 Paige, 437;Albany Bank v. Schermerhorn, 9 Paige, 372.) The Memphis Court of Chancery, while parties were within its jurisdiction, could control real estate beyond its territorial limits. (Story's Eq. Plead., sec. 489; Story's Eq. Jur., secs. 743, 744; Penn v. Lord Baltimore, 2 Lead. Cas. in Eq., part 2, p. 323; Paschal v. Acklin, 27 Tex., 192.) From a consideration of these authorities, it is apparent that the receiver had rights of which, by the ruling of the court, he has been deprived.

IV. The court should have sustained the objections of Moseby to the introduction of “An act to...