Pottlitzer v. Citizens Trust Company, 8,521

Citation108 N.E. 36, 60 Ind.App. 45
Case DateMarch 05, 1915
CourtCourt of Appeals of Indiana

Rehearing denied June 22, 1915. Transfer denied November 5 1915.

From Superior Court of Allen County; John Morris, Special Judge.

Action by Samuel S. Messing against the Fort Wayne National Furniture Company for the appointment of a receiver, in which, subsequent to the distribution made by the receiver therein appointed, Hannah Pottlitzer and others sought to file intervening petitions. From the judgment rendered, the petitioners appeal.


M. S Meyberg and Robert B. Dreibelbiss, for appellants.

Benj. F. Heaton, Frank S. Roby, Elias D. Salsbury, Ward H. Watson and Sol. H. Esarey, for appellees.



The questions which appellants attempt to present by this appeal relate to certain rulings made by the trial court in a suit brought January 10, 1910, by Samuel S. Messing, as a stockholder, against the Fort Wayne National Furniture Company, hereinafter referred to as the furniture company, for the appointment of a receiver, to which suit appellants were not made parties. It will be necessary to an intelligent presentation of such questions to indicate the various steps taken in said suit. The furniture company, by its attorney, Mitchel S. Meyberg, and its president, Abraham L. Messing, appeared to such suit and admitted that notice thereof had been served on it and that the averments in the application were true. The cause was submitted to the court for trial, with the result that the Fidelity Trust Company of Indianapolis was appointed receiver and duly accepted and qualified as such. On January 18, 1910, the trust company filed its petition to continue the business of the corporation until such time as its property could be fully and finally disposed of, and the court having heard the evidence on the petition, made an order containing the following provision: "It is therefore ordered by the court * * * that said property shall be sold free from liens of every character, and that all liens and claims whatsoever shall be transferred to the fund received from the sale of said merchandise, and the collection of the outstanding accounts * * * . That the receiver is ordered to notify all creditors of the * * * furniture company to file their claims with him on or before the first day of March, 1910." (Our italics throughout.) On May 3, 1910, the trust company filed its report and resignation as receiver. The court found the report correct, made allowances for the receiver and its attorney, Mitchel S. Meyberg, and accepted such resignation. The parties agreed to and requested the court to appoint the Citizens Trust Company of Fort Wayne as receiver, to succeed the Fidelity Trust Company. The regular judge disqualified himself and appointed Samuel L. Morris as special judge in such cause. On the same day the special judge duly qualified and assumed jurisdiction of the cause and appointed the Citizens Trust Company, hereinafter referred to as appellee, as receiver, and it accepted the appointment. On May 31, 1910, the Fidelity Trust Company filed the receipt of appellee for the property of the furniture company and it was thereupon finally discharged as such receiver. On the same day the Hamilton National Bank of Fort Wayne, hereinafter referred to as the bank, filed its claim with the court alleging that the furniture company was indebted to it in the sum of $ 6,088.90, evidenced by five promissory notes, past due and unpaid; that as collateral security for said loan it had received from the furniture company twelve bonds of $ 500 each, a part of forty bonds to be issued and secured without priority or preference by a mortgage on the personal property of such company, which mortgage is a first lien on all the property now owned or held by the receiver. This claim also disclosed that thirty-three of such bonds were issued and that the appellants were the holders of the bonds not held by the bank, as collateral. The bank asked that an accounting be had as to the amount due, and also asked for a foreclosure of the collateral security, and, in the event the property be sold free from liens, that the amount of its indebtedness be declared a first lien on the proceeds.

On June 22, 1910, Samuel L. Morris refused to act further as special judge and resigned. By agreement of the parties, the regular judge appointed John Morris as special judge in said cause and he qualified as such and assumed jurisdiction. On the same day the receiver filed an answer to the bank's claim. The claim was then submitted to the court and it found that there was due the bank, $ 6,241.15; that the bank held as collateral security for the payment of said sum, twelve bonds of par value of $ 500, each; that in addition to the bonds so held by said bank there were outstanding twenty-one additional bonds of $ 500, each, all of which were of the same issue; that "all of said bonds which were lawfully issued" were by the furniture company secured by chattel mortgage or trust deed upon all the assets of such company then in the possession of the receiver; "that each of said bonds which may have been lawfully issued is an equal and first lien, excepting taxes and costs of administration of this estate," on all assets in the hands of the receiver, and entitled to share pro rata in the distribution.

On July 11, 1910, the court rendered judgment for the bank for that amount and adjudged and decreed that it lawfully held the twelve bonds as collateral to secure the payment of such sum, the payment of which bonds was secured by chattel mortgage upon all the assets of the furniture company in the hands of the receiver, "which bonds so held by (the) * * * bank * * * together with twenty-one additional bonds of like amount which are outstanding, and which have been lawfully issued (no attempt being hereby made to adjudicate the validity of the issuance of said twenty-one additional bonds) and said deed of trust or chattel mortgage securing the same, constitute and are a first lien on all of the assets of the defendant company." The court further adjudged that the bank, as holder of the twelve bonds, was entitled to receive from the receiver its pro rata share, or 36.36 per cent of the money in the custody of the receiver, and the receiver was directed to pay that amount to the bank from the funds in its hands and in like proportion until the bank was paid, but in no event to exceed $ 6,241.15, etc.

At the November election, 1910, the Honorable Carl Yaple was elected judge of the Superior Court of Allen County, and shortly thereafter qualified and entered on the duties of his office. Under the entry of the proceedings had in said cause on December 14, 1910, the following appears: "Comes now Josie Harding, Dora Meyberg, Emma Messing, Sarah Stern, Essie Rice, Mayer Messing, Hannah Pottlitzer and Della Pottlitzer Messing (which parties have been and will hereafter be referred to in this opinion as appellants), and each file intervening petitions herein, which petitions are in these words: "The record here sets out the several petitions and such proceedings are signed by "Carl Yaple, Judge."

The petitions are lengthy and are all substantially the same except as to the name of the petitioner and the number of the bond or bonds on which the petitioner bases his claim. Each petitioner sets out a copy of the bond or bonds held by him or her and avers all the facts connected with the issuance of said bonds and the execution of the mortgage or trust deed given to secure them, substantially, as alleged in the bank's petition. The facts alleged in each of such petitions show an indebtedness in favor of the petitioner on account of the bonds held by him or her and that such bond or bonds are a part of the same issue as those held by the bank and are secured by the same mortgage which was a first lien on all the property of the furniture company, and a first lien on all the assets of such company in the hands of the receiver.

On January 9, 1911, the receiver filed a petition for partial allowance for its services and for services of its attorneys which petition was granted and it was further ordered by the court "that said receiver give notice to creditors to file verified claims with the receiver or in court on or before January 30, 1911." On February 16, 1911, the receiver filed an additional inventory and appraisement and also filed proof of publication of notice to creditors to file claims and a current report of receipts and disbursements and a report of claims filed with it, together with its recommendation as to allowance thereof, and prayed for "such order as the court deems proper relative to the allowance of the claims of the several creditors hereinbefore mentioned and the payment of a dividend thereon." The court, upon this showing ordered the receiver "to pay a dividend of 65 per cent, on the amounts of said claims * * * from money in its hands," as shown by its report.

On March 22, 1911, the following entry appears: "Samuel M. Messing vs. Fort Wayne National Furniture Company. Comes now the parties and the order herein of date of December 14, 1910, relating to the filing of the intervening petitions by (here follows the name of each appellant) was made at the request of the clerk of court by the regular judge thereof, said entry was made through inadvertence and by mistake, as the regular judge of this court had no jurisdiction of this cause. Read and signed in open court, Carl Yaple, Judge."

On June 12, 1911, the appellants appeared and filed their petition before the Honorable John Morris, Special Judge, asking that the court's order of distribution of 65 per cent, made February 16, 1911,...

To continue reading

Request your trial
2 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT