Pullis v. Pullis Brothers Iron Company
| Citation | 57 S.W. 1095,157 Mo. 565 |
| Parties | PULLIS et al., Respondents, v. PULLIS BROTHERS IRON COMPANY et al., Appellants |
| Decision Date | 30 June 1900 |
| Court | United States State Supreme Court of Missouri |
Appeal from St. Louis City Circuit Court. -- Hon. James E. Withrow Judge.
Reversed and Remanded (with directions).
F. J McMaster, Chas. W. Bates and Sam'l H. West for appellants.
(1) On appeal from an order of the trial court in refusing to revoke the appointment of a receiver, this court will review the entire record, and determine therefrom whether there was any ground upon which the receiver should have been appointed or upon which the court should have refused to revoke the appointment, as the case may be. Merriam v Railroad, 136 Mo. 145; Glover v. Investment Co., 138 Mo. 408. (2) "It is fundamental that, to authorize a receiver, the plaintiff must show that he has a right either to the property itself, or that he has some lien upon it, or that it constitutes a special fund to which he has a right to resort for satisfaction of his claim." Merriam v. Railroad, 136 Mo. 145; Smith on Receiverships, pp. 43 and 552, note 2; O'Mahoney v. Belmont, 62 N.Y. 143; Ashurst v. Lehman, 86 Ala. 370. A receiver should not be appointed pending a suit to determine the title to the property claimed by defendant, unless on the showing made the court is reasonably satisfied that plaintiffs will recover at the final hearing. Smith on Receiverships, pp. 14, 38, 39; 20 Am. & Eng. Ency. of Law (1 Ed.), pp. 321-322; Vanse v. Woods, 46 Miss. 120; Rollins v. Henry, 77 N.C. 467; Rider v. Baker, 93 F. 16; Emerson & Wall's Appeal, 95 Pa. St. 258. Nor, where the property is in the possession of defendant claiming title, should a receiver be appointed pending the trial, unless in case of urgent necessity and in order to protect the property from imminent loss. Merriam v. Railroad, 136 Mo. 145; Smith on Receiverships, p. 14, note 2; p. 44, par. (f); 20 Am. & Eng. Ency. of Law (1 Ed.), p. 46, par. (3); Shelecht's Appeal, 60 Pa. St. 172; Dozier v. Logan, 101 Ga. 173; Rollins v. Henry, 77 N.C. 467; Rider v. Baker, 93 F. 16; Elwood v. Bank, 41 Kan. 475; Ogden v. Waterworks, 16 Utah 440; Brundage v. Ass'n, 11 Wash. 277. No receiver should be appointed where plaintiff's interests are protected by lis pendens notice. Gregory v. Gregory, 33 N.Y.S. 34; Clay v. Clay, 86 Ga. 359. (3) The deed of trust of the Pullis Brothers Iron Company was made by authority of the board of directors. It was authorized by the stockholders, and has been knowingly acquiesced in by them ever since, and was thus ratified by them and binds them, the directors and the corporation. Chouteau v. Allen, 70 Mo. 290. The property conveyed by the Pullis Brothers Iron Company by its deed of trust was honestly applied to the payment of bona fide debts, and even though there were defects in the execution of the deed, the corporation and its stockholders acquiescing in the conveyance, no one else can question it. Refining Co. v. Elevator Co., 101 Mo. 209. The board of directors of a corporation may use the corporate property to pay or secure the debts of the corporation, although thereby the corporation is disabled from carrying on its business. Bank v. Iron Co., 97 Mo. 38. The board of directors may prefer such creditors of the corporation as they may deem best, the same as an individual may. So the directors may prefer themselves, but in such case must assume the burden of proving the bona fides of their debts. Schufeldt v. Smith, 131 Mo. 280; Butler v. Land & Mining Co., 139 Mo. 467. A debtor may prefer his wife. Riley v. Vaughan, 116 Mo. 116. (4) A corporation may act and make contracts without a seal, and is bound by its contracts though its seal is not attached. R. S. 1889, sec. 2511; R. S. 1899, sec. 974; Preston v. Mo. Co., 51 Mo. 43; Campbell v. Pope, 96 Mo. 468; Taylor on Corp. (2 Ed.), sec. 248. The scroll will be deemed the seal of the corporation where it has no other. Railroad v. Hooper, 160 U.S. 514; Kansas City v. Railroad, 77 Mo. 180. Authority given officers of a corporation to make a conveyance is authority to adopt a seal for the corporation for that transaction, if the corporation has no seal and one is by law required. Mo. Works v. Ellison, 30 Mo.App. 67; Grashwiler v. Willis, 33 Cal. 11; s. c., 91 Am. Dec. 607; Johnson v. Crowley, 25 Ga. 316; s. c., 71 Am. Dec. 173; Foundry v. Hovey, 21 Pick. 417; Tenney v. Lumber Co., 43 N.H. 343; Thayer v. Mill Co., 51 P. 203; 2 Cook on Corp. (4 Ed.), sec. 722 and citations. (5) Even if it could be held that a seal were required and that this deed was not sealed, it still conveyed the equitable title. The equitable title is good as a defense in an action at law under our code system, which permits equitable titles to be pleaded in actions at law. It is always good in equity. Harrington v. Fortner, 58 Mo. 468; McClurg v. Phillips, 57 Mo. 214; Precious Blood Society v. Elsythe (Tenn.), 50 S.W. 759; Miller v. Railroad, 36 Vt. 452; Todd v. Eighmie, 73 N.Y. 671; Township v. Stebbens, 109 U.S. 349. After default, the possession of the real estate by the mortgagee in an unsealed mortgage (or the possession of those claiming under him) cannot be divested without payment of the debt secured by the mortgage. Harrington v. Fortner, 58 Mo. 468. So a plaintiff holding the legal title can not recover in ejectment against a defendant who holds a valid contract to purchase what, in equity, is deemed the equitable title. Harris v. Vinyard, 42 Mo. 568. (6) The original sole plaintiff in this suit, Mrs. Cora B. Pullis, a beneficiary in the deed of trust, having accepted said deed, is estopped from maintaining this suit. She elected to accept the deed, and defendant has expended money on the faith of the validity of the deed. Nat. Bank v. Cleveland Co., 71 N.Y. 57; Fox v. Windes, 127 Mo. 511; Bobb v. Bobb, 99 Mo. 578; Phillips v. Wooster, 3 Abbott Pr. Rep. N. S. 475; Groves v. Rice, 148 N.Y. 227; Frierson v. Branch, 30 Ark. 453; Ewing v. Cook, 85 Tenn. 332. (7) Other creditors joining in a creditor's bill take the case as they find it, and can not give to the suit a vitality it did not have when begun. If the suit could not be maintained without their joinder, it can not be maintained by virtue of their joinder. (8) Laches on the part of all the creditors under the circumstances shown by the evidence is a bar to the maintenance of this suit. Kline v. Vogel, 90 Mo. 239; Murdock v. Lewis, 26 Mo.App. 234; Landrum v. Bank, 63 Mo. 48; Bliss v. Prichard, 67 Mo. 181. (9) The execution and sale under the justice of the peace judgments carried the title, and is a bar to plaintiffs in this case. On dismissal of the appeal in the circuit court, the justice's judgment appealed from is valid and binding, and the transcript thereof filed in the circuit clerk's office supports the execution, levy and sale of the real estate. McAnow v. Matthis, 129 Mo. 142; Sachse v. Clingingsmith, 97 Mo. 406; Waddell v. Williams, 50 Mo. 216; Huhn v. Lang, 122 Mo. 600.
Thomas B. Harlan and Johnson, Houts, Marlatt & Hawes for respondents.
(1) The court has decided in the case of Merriam v Railroad, 136 Mo. 145, that in an appeal from an order of the trial court in refusing to revoke the appointment, the record will be reviewed. According to the great weight of authority that review should be directed to discovering whether the lower court has been guilty of an abuse of discretion, an "abuse of power" in making the appointment. If it has not, the appellate court will not interfere with the appointment. Alderson's Beach on Receivers, 112, 118; Pouder v. Tate, 96 Ind. 330; Naylor v. Sidener, 106 Ind. 179; Wolfe v. Chaflin, 81 Ga. 64; Journey v. Brown, 2 Dutch. 111; Beaumont v. Beaumont, 166 Pa. St. 615; Crittenden v. Coleman, 70 Ga. 293; Sanders v. Slaughter, 89 Ga. 34; Nunocks v. Shingle Co., 110 N.C. 230; Flecker v. Railroad, 48 Kan. 577; Cemetery Co. v. Drew, 36 S.W. 802; Jacobs v. Gibson, 9 Neb. 380; 20 Am. & Eng. Ency. of Law (1 Ed.), 19; 2 Story Eq. Jur. (12 Ed.), 831. The same rule applies in the matter of granting injunctions; in the absence of "manifest abuse" the discretion of the lower court will not be interfered with. On these two subjects, viz., appointment of receivers and granting injunctions, the discretion of the trial court is deferred to much more than in other equity proceedings. Council v. U.S. 57 F. 85; Thompson v. Nelson, 71 F. 339; Cosby v. Weaver, 99 Ga. 143; Road Co. v. Frazer, 98 Mich. 140. (2) The court's action in appointing a temporary receiver was amply justified. This was not a final hearing on the cause, nor does the record contain plaintiffs' whole case, but only a prima facie showing of it; if, therefore, the trial court was reasonably satisfied that there was a strong probability that plaintiffs would prevail in the end, and in the meantime the property was subject to loss or damage, it was his duty to make the appointment. Smith on Receivers, 39; 20 Am. & Eng. Ency. of Law (1 Ed.), 21; Lenox v. Notrebe, Hempstead (U.S.), 226. The defendants not being the undisputed owners of the property, the insurance thereon was vitiated and the valuable buildings and machinery liable to be entirely lost to the estate. It was the duty of the court to prevent the possibility of such loss. The property might have been sold at any time under tax suits pending. Where realty, the subject of a suit is about to be sold for the non-payment of taxes, a receiver may be appointed. Durasmont v. Patten, 4 Lea (Tenn.), 597. (3) The deed of trust to Pullis, as trustee, was and is void, because there is no common corporate seal attached thereto. R. S. 1889, sec. 2399; R. S. 1899, sec. 904; R. S. 1889, sec. 2314; R. S. 1899, sec. 982; Perry v. Ruggles, 1 Mo. 460; Garrett v. Land Company (Tenn.), 29 S.W. 726; Caldwell v. Mfg. Co. (N. C.), 28 S.E. 475; ...
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