Pitcairn v. Fisher, 10262.

• Decision Date: 22 July 1935
• Docket Number: No. 10262.,10262.
• Citation: 78 F.2d 649
• Parties: PITCAIRN et al. v. FISHER.
• Court: U.S. Court of Appeals — Eighth Circuit

78 F.2d 649 (1935)

PITCAIRN et al. v. FISHER.

No. 10262.

Circuit Court of Appeals, Eighth Circuit.

July 22, 1935.

John N. Hughes, Jr., and Willis J. O'Brien, both of Des Moines, Iowa (N. S. Brown and Homer Hall, both of St. Louis, Mo., and Hughes, O'Brien & Hughes, of Des Moines, Iowa, on the brief), for appellants.

Donald D. Holdoegel, of Des Moines, Iowa (Allen Rolston, of Queen City, Mo., and Stipp, Perry, Bannister & Starzinger, of Des Moines, Iowa, on the brief), for appellee.

Before STONE and FARIS, Circuit Judges, and RAGON, District Judge.

FARIS, Circuit Judge.

This is an appeal by Pitcairn and Nicodemus, as receivers of the Wabash Railway Company, from an order of the United States District Court for the Southern District of Iowa, directing them as ancillary receivers, appointed by that court, to pay as an operating expense out of operating revenue, a judgment in favor of appellee in the sum of $3,000, plus interest and costs.

This judgment arose thus: Some 50 days before appellants were appointed receivers of the above railway company (hereinafter called Railway) by the District Court of the United States for the Eastern District of Missouri, the husband of appellee, then an employee of the Railway, was killed by the negligence thereof. After the appointment, on December 1, 1931, of appellants as receivers, by the court of primary jurisdiction, and on January 16, 1933, appellee obtained a judgment against the Railway alone, for the said sum of $3,000, plus costs in a state court of Iowa.

Thereafter, and on January 21, 1933, appellee filed a claim in the court nisi, wherein she prayed that an order be entered against the receivers for the payment of her judgment out of any operating income in the hands of the appellants as receivers, or out of any property of the Railway in the state of Iowa. She based her right to such payment on sections 11606 and 11607 of the Code of Iowa, 1931.

Thereafter, and on December 24, 1934, appellee filed an amended or supplemental claim, wherein she set up an additional reason or ground for her demand for payment out of the assets in appellants' hands, to wit, that her judgment constituted an operating expense accruing less than six months prior to the receivership and, as such, was a preferred claim, which warranted and authorized payment to her prior to any and all liens on such assets.

The appellants, styling themselves simply "receivers," appeared and filed a pleading called a resistance to the making of the order prayed for by appellee. In this resistance appellants set up (1) that the Railway at the time of the rendition of the judgment in favor of appellee no longer owned the property against which appellee's motion for payment is directed, but by reason of the appointment of receivers long prior thereto such ownership had passed to and was then vested in appellants; (2) that the primary court, to wit, the United States District Court for the Eastern District of Missouri, alone has jurisdiction to order payment of all claims; and (3) that sections 11606 and 11607 of the Code of Iowa of 1931, have no application here, because said statutes create no lien prior to judgment, and the properties of the Railway had passed to appellants as receivers long prior to the judgment.

The trial court did not rule on the question, whether sections 11606 and 11607 of the statutes of Iowa applied; but, holding that the judgment in appellee's favor constituted an operating expense and was a preferred claim, ordered and directed the ancillary receivers to pay said judgment, costs, and interest forthwith out of operating revenue. Thereupon this appeal was taken by appellants, designating themselves merely as receivers and not ancillary receivers. The identical persons were in this case appointed receivers both by the court of primary jurisdiction and by the District Court of the United States for the Southern District of Iowa. Hence, there is much confusion in the record as to terminology, to which both appellants and appellee have largely contributed, in that the pleadings leading up to the making of the order complained of interchangeably refer to the appellants as receivers and ancillary receivers. This, as forecast, occurs repeatedly in the application or motion for the order here in controversy.

So, in limine, it is contended by appellee that this court has no jurisdiction to hear and entertain this appeal, because the order now up for judgment was entered against the ancillary receivers merely.

We are of the opinion that this contention of appellee should be disallowed. First, because appellee in her application, as also in her amended or supplemental application for the order, repeatedly designates appellants as receivers simply, and, second, because appellants, so far as concerns the Southern District of Iowa, were the only receivers interested in that jurisdiction, and so the simple term receivers applies as well to them as ancillary receivers as it does to them as primary receivers.

It is rather obvious that since appellee repeatedly refers to appellants as receivers simply in making this contention she is guilty of inconsistency and in effect breaks down the bridge on which she herself must cross. She ought not to be heard to complain of the inexactitude of mere terminology when she herself in her application for the order complained of, and as admitted by her counsel in argument, first brought into the case the alleged error of which she now complains. Moreover, unless the word receivers shall be held to mean the receivers of the properties of the Railway situate in the Southern District of Iowa, appellee is placed in the anomalous position of praying for an order against the receivers simply, and here relying on an order made against the ancillary receivers. She should not be permitted to take advantage of an error, if it should be one, which she herself induced.

The errors relied on by appellants are five in number. These may readily be reduced to two, or three at most. These are: (a) That the trial court erred in holding, that jurisdiction was vested in it, and not in the District Court for the Eastern District of Missouri, to order the payment of claims against the Railway; (b) that the court erred in refusing to say that sections 11606 and 11607, Code of Iowa, 1931, are not applicable to this case, and to rule that said sections do not serve to create a lien against the properties in the hands of the appellants; and (c) that the court erred in holding that the judgment of appellee is an operating expense, and that it is a preferred claim superior to the lien of recorded mortgages, and therefore presently payable in full, with interest and costs.

As to the contention of appellants that the court erred in refusing to hold that sections 11606 and 11607, supra, do not apply to the situation at bar, it is doubtful whether this question is before this court. No finding was made on it in any way, so it can hardly be held to be an error of the trial court. Touching it the court nisi simply said that it "is not determined at this time." Counsel referred to it in argument, but they have not briefed it. The simple situation was that the court nisi rested his decision in the case on the single question whether the judgment claim of appellee is a preferred claim, for that it is an operating expense of the receivers. Since his conclusion on the latter point disposed of the case and warranted, as he deemed, the order of payment appealed from, he declined to pass in any wise on the effect, if any, of the above statutes.

Therefore, it seems plain to us that the case may be fully disposed of here by a consideration of the one question, whether the judgment rendered in favor of appellee constituted a preferred claim, for that the casualty on which it was bottomed occurred within six months of the receivership. It was urged in argument that there is no evidence in the record of the existence of debts secured by mortgages, because no evidence was heard. The latter fact is true, but in making the contention counsel for appellee overlook the fact that the record which was before the trial court shows these mortgages, and of this record the trial court takes judicial notice. St. Louis, etc., Ry. Co. v. Byrnes (C. C. A.) 24 F.(2d) 66; Franz v. Buder (C. C. A.) 34 F.(2d) 353; The Golden Gate (C. C. A.) 286 F. 105; Freshman v. Atkins, 269 U. S. 121, 46 S. Ct. 41, 70 L. Ed. 193.

It must be conceded, of course, that if appellee's claim is a preferred one, for that it is an operating expense, the properties were taken over by appellants saddled with such lien as a preferred claim entails. So, the single...