Powell v. National Bank of Commerce in Denver

• Decision Date: 13 April 1903
• Citation: 19 Colo.App. 57,74 P. 536
• Parties: POWELL v. NATIONAL BANK OF COMMERCE IN DENVER. [*]
• Court: Colorado Court of Appeals

74 P. 536

19 Colo.App. 57

POWELL v. NATIONAL BANK OF COMMERCE IN DENVER. ^[*]

Court of Appeals of Colorado

April 13, 1903

Appeal from District Court, Arapahoe County.

Replevin by the National Bank of Commerce in Denver against a sheriff in which Arthur W. Powell, as receiver of the Arapahoe Paper Company, intervened. From a judgment dismissing the petition of intervention, intervener appeals. Reversed.

A.J. Rising and Bicksler, McLean & Bennett, for appellant.

Rogers Cuthbert & Ellis (Henry T. Rogers and Daniel W. Tears, of counsel), for appellee.

GUNTER J.

August 21, 1895, a complaint (Carpenter Paper Company, plaintiff the Arapahoe Paper Company, defendant) was filed in the district court of Arapahoe county, alleging two causes of action (one upon an accepted draft; the other upon an account). The facts so stated were sufficient, if proven, to entitle the plaintiff to a money judgment. The complaint further alleged the admitted insolvency of defendant corporation, the wasting of its assets by the corporate officers, that it was about to discontinue business, and other facts, for the purpose of securing the appointment of a receiver. A receiver of all of the assets of defendant was asked. The complaint, in presenting the causes of action upon the draft and account, was defective in omitting a prayer for a money judgment. An affidavit was also filed containing further allegations in aid of the prayer for a receiver. Upon these pleadings, and ex parte, the court, August 21st, determined that a receiver should be granted, and appointed one, ordering him to take charge of the business and assets of defendant. The following morning, August 22d, counsel for the respective parties met at the chambers of the judge who had made the order, and one of counsel for defendant handed to plaintiff's counsel a copy of an answer to the complaint, stating that the original would be filed. This answer denied that the indebtedness set out in one cause of action of the complaint was due, denied all allegations pertinent to the appointment of a receiver, and concluded with a prayer for leave to file an additional answer, and for such other relief as might seem to the court proper. The answer was availed of by counsel for defendant in presenting the motion then taken up for the discharge of the receiver. This was a general appearance by the defendant, and it is immaterial whether the original answer was filed or not. "Other methods of acquiring jurisdiction authorized by law are equivalent to the personal service of process. Thus lis pendens will commence, without the issuance or service of process, from the entry in the cause of the voluntary appearance of the defendant. ***" 21 Am. & Eng.Ency. of Law, p. 611. Immediately before the argument of the motion to discharge the receiver, while counsel for defendant was present, plaintiff asked leave to file, and filed, an amended complaint, differing from its complaint of August 21st in containing a prayer for judgment in the sum therein sought to be recovered. The filing of the amended complaint and the argument of the motion to discharge the receiver were during the morning of August 22d. Counsel representing defendant were present, and also counsel representing the appellee herein. We say counsel representing appellee was present, because Mr. Rogers, of Rogers, Cuthbert & Ellis, participated in the hearing, and, when asked by counsel for plaintiff whom he represented, stated that he was there in behalf of the National Bank of Commerce, appellee herein. The court sustained the motion to discharge the receiver. On the announcement of this ruling, counsel for plaintiff was permitted to file an amended petition for the appointment of a receiver, differing in no particular material to this ruling from the petition filed August 21st, and had the same set for hearing August 26th. On the night of August 22d the Arapahoe Paper Company gave a chattel mortgage to W.B. Morrison to secure an indebtedness of $9,500 to appellee; the mortgage covering substantially all of the assets of the mortgagor. The indebtedness was evidenced by a note payable to Morrison, later assigned to appellee. August 22d, before the giving of the chattel mortgage, a resolution was prepared by Mr. Ellis, of Rogers, Cuthbert & Ellis, as counsel for appellee, for passage by the board of directors of the Arapahoe Paper Company, authorizing the giving of the chattel mortgage, in which petition the pendency of the action for the appointment of a receiver is recited. Mr. Rogers represented the interest of appellee when present at the argument to discharge the receiver, August 22d. Mr. Ellis represented appellee in drawing the above resolution. Among the recitals of this resolution appears: "Whereas, upon the application of the Carpenter Paper Company a receiver was on the 21st of August A.D.1895, appointed by the district court of Arapahoe County, Colorado, to take charge of the property and assets of this company. ***" From these facts, it is clear that appellee had actual notice of the pendency of the action in which the appointment of a receiver was sought when the chattel mortgage was given. August 24th plaintiff in the action commenced August 21st sued out a writ of attachment, and had the same levied upon the property covered by the chattel mortgage. The petition for the appointment of a receiver set for August 26th was heard August 29th, and the ruling of August 22d vacating the order of August 21st appointing a receiver was set aside, and the order of August 21st was reinstated, modified only as to the name of the receiver and the penalty of the bond. September 5, 1895, appellee brought replevin for the property covered by its chattel mortgage against the sheriff, who had levied thereon under the writ of attachment. September 27th appellant, as receiver of the Arapahoe Paper Company, intervened in the replevin suit, claiming the possession of the property involved under the order of August 29th designating him as receiver. The court below dismissed his petition of intervention. He appeals. The order of August 29th appointing a receiver is still in force. This intervention is by appellant, as receiver, against appellee, the owner of the chattel mortgage, to recover possession of the property covered thereby. Its determination depends upon whether the order of August 29th appointing a receiver relates back, as against the chattel mortgage, to an hour prior to the giving of that instrument; that is, prior to 11 p.m., August 22d. If the order so relates, the judgment below should have been for intervener.

1. The complaint filed August 21st stated facts constituting two causes of action, and these facts, if proven, would entitle plaintiff to a money judgment. The complaint was defective only in the absence of a prayer for judgment in favor of plaintiff, and against defendant for the indebtedness stated. The court, if asked, should have permitted an amendment containing a prayer for judgment. This amendment was made the morning of August 22d, when the amended complaint was filed. "The relief demanded does not limit the plaintiff in respect to the remedy which he may have. The court will disregard the prayer, and rely upon the facts alleged and proved as the basis of its remedial action." Pomeroy's Remedies & Remedial Rights, §§ 71, 83, 580, and cases cited; Nevin v. Lulu & White S.M. Co., 10 Colo. 357, 364, 15 P. 611. "If the facts put in issue and established by the evidence entitle the party to any relief in the power of the court to give, although not that demanded, it is the duty of the court to give it, and its power to do so is not conditioned upon the form of the prayer." Bliss on Code Pleading, § 161; Kayser v. Maugham, 8 Colo. 232, 251, 6 P. 803. "Under our present Code the form of the prayer seems to be immaterial." Waterbury v. Fisher, 5 Colo.App. 362, 371, 38 P. 846; Id. (Colo.Sup.) 47 P. 277. "Civil actions shall be commenced by the filing of a complaint with the clerk of the court in which the action is brought. ***" Mills' Ann.Code, § 32. "From the time of the filing of the complaint, or the service of the summons in a civil action, the court shall be deemed to have acquired jurisdiction, and to have control of all subsequent proceedings." Id. § 44. As a complaint was filed August 21st stating facts which, if proven, would authorize the court to enter a judgment in favor of the plaintiff and against defendant for the indebtedness claimed, an action was pending on such date, and on such date the court had acquired jurisdiction thereof. As we have stated, the defendant appeared by answer on the morning of August 22d. So at the time of the argument of the motion to discharge the receiver the parties were in court by complaint and answer, and the court had jurisdiction of the subject-matter and of the parties.

2. The case is reduced to this: August 21st plaintiff instituted an action to collect an indebtedness of defendant corporation and, in aid of the action, asked the appointment of a receiver of the assets of the insolvent defendant. The order for a receiver was granted. August 22d the order was vacated. August 29th the order of August 21st was reinstated. All of these orders were of the same term. By answer, defendant was before the court August 22d. Appellee had actual notice of the pendency of the action at the hearing of August 22d. While the defendant was personally before the court, and while appellee had actual notice of the pendency of the application for the appointment of a receiver, could the defendant give, and the appellee take, a mortgage on practically all of the assets of the defendant corporation to secure a past-due indebtedness, and thereby defeat the justice of the court in the suit pending? "As a...