Rea v. O'Bannon

• Decision Date: 21 January 1935
• Docket Number: 31534
• Parties: REA v. O'BANNON
• Court: Mississippi Supreme Court

158 So. 916

171 Miss. 824

REA v. O'BANNON

No. 31534

Supreme Court of Mississippi

January 21, 1935

Division A

1 INJUNCTION.

Mortgage Moratorium Act held not to give equity court power to restrain an action at law, brought by receiver pursuant to court order, to collect mortgage note before judgment on note has been obtained (Laws 1934, chapter 247).

2. ELECTION OF REMEDIES.

Before an estoppel by election of remedies can apply, two or more inconsistent remedies for the assertion of a right arising from the same state of facts must have been available to the party who must have actually elected between them.

3. ELECTION OF REMEDIES.

Mortgagee's receiver, who brought action on mortgage note and who later answered mortgagor's petition for injunction to restrain action on the note, held not to have elected to collect debt by foreclosure alone, since there is no inconsistency between the mortgagee's legal and equitable remedies in case of breach, and resort to one is not a waiver of the other.

4 RECEIVERS.

Receiver appointed by judicial authority, in the absence of statute to the contrary, cannot be sued without leave of court which appointed him.

HON. J L. WILLIAMS, Chancellor.

APPEAL from the chancery court of Washington county HON. J. L. WILLIAMS, Chancellor.

Action by W. O. Rea, receiver, against Julia O'Bannon, in which defendant filed supplemental bill to restrain plaintiff from prosecuting action. From decree in supplemental suit in favor of Julia O'Bannon, plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Sullivan & Sullivan, of Hattiesburg, for appellant.

The receiver in filing the suit in the circuit court of Washington county, to collect the balance due on said indebtedness, was obeying the mandate of the chancery court of the first judicial district of Hinds county, Mississippi, to collect the assets of said association in receivership and as such receiver was acting as an officer of the court appointing him, and, of course, any order restraining the receiver in the exercise of his functions as receiver, should come from the court appointing him.

53 C. J. 331, par. 544; Tenth National Bank v. Smith Construction Company, 136 American State Reports, 890; Perfection Garment Company v. Crosby Stores, 158 A. 380; 23 R. C. L. 124.

We have examined chapter 247 of the General Laws of the state of Mississippi, of 1934, commonly known as the moratorium bill, to the best of our ability, and, nowhere in said act, do we find any authority for a suit at law to be enjoined without bond.

The filing of a suit at law to collect the indebtedness owing is not an attempt to foreclose this property but is an attempt to reduce the indebtedness to judgment form.

Zelma W. Price and W. S. Watson, both of Greenville, for appellee.

We submit that W. O. Rea, receiver, by his answer to the original bill of complaint in this cause, coupled with his motion to dissolve the injunction, submitted to the jurisdiction of the Washington county chancery court, regardless of whether permission to bring the suit was necessary or not, and when the chancery court of Washington county had assumed jurisdiction of the cause and the receiver had participated in the procedure to the above mentioned extent, court then had jurisdiction of appellants for all purposes.

House Bill No. 270 of the Acts of 1934, known as the moratorium bill, is applicable to the suit at bar in that appellants were seeking, through their suit on the note in question, in the law court, to, in effect, work a foreclosure of the property of appellee, through judgment and execution, after the chancery court of Washington county had enjoined them from foreclosing the trust deed, thereby attempting to, do indirectly what they had been forbidden to do directly.

No bond was necessary for such injunction.

OPINION

McGowen, J.

W. O. Rea, receiver of the Building & Loan Association of Jackson, Mississippi, filed his declaration in the circuit court of 'Washington county against Miss Julia O'Bannon, wherein he sought judgment at law against the defendant therein for the balance due on a note, the principal of which was two thousand seven hundred fifty dollars, and the amount alleged to, be then due was one thousand seven hundred fifty-six dollars and forty-three cents, with interest and attorney fees. The note, a copy of which was attached to the declaration, showed that it was to be paid in installments of not less than fifty-five dollars a month, and it was dated September 5, 1930; it also showed that it was secured by a deed of trust. This suit at law was filed on May 19, 1934, returnable to the June, 1934, term of that court.

On June 16, 1934, Miss O'Bannon, the appellee, filed what is termed a supplemental bill in the chancery court of that county seeking an injunction, without bond, against the prosecution of the suit at law against her, and, upon the fiat of the chancellor to the effect, the injunction was issued and served upon Rea, receiver, the appellant.

The supplemental bill alleges that on January 6, 1934, Miss O'Bannon filed an original bill in the chancery court seeking injunctive relief against the defendant's proceeding to foreclose the deed of trust on real estate which was given by her as security for the note, and making it appear that injunction had issued upon the original bill, restraining the prosecution of the foreclosure in pais under the contract. The bill alleges the filing of the suit at law, and that, unless Rea is restrained from the prosecution thereof, judgment would be taken at the June term and execution upon said judgment levied against the property covered by the deed of trust before the chancery court injunction proceeding could be disposed of on its merits at the October, 1934, term of the chancery court, and that the prosecution of the suit at law is in violation of the injunction and of the Mississippi moratorium statute, and she would thereby be deprived of her equity in the real property described in the trust deed under her right to repay the indebtedness. The bill further alleges that the property is her homestead, and that she had an application pending with the Home Owners' Loan Corporation for a loan with which to refinance all indebtedness owing by her to Rea, receiver, and that she believed she would obtain the loan. The supplemental bill further alleges that the property covered by the deed of trust is worth as much as five thousand five hundred dollars, and that, if Rea be restrained from the prosecution of the suit at law, there will be no impairment of his security or loss to him thereby, that the case is one of extreme emergency, due to financial depression and inability to literally perform her said contract, and that no harm can be done by holding the subject-matter in abeyance until the final hearing on the original chancery court proceeding, but that irreparable damage and injury will be done to her if the relief prayed for be not granted.

The prayer of the bill was for process on the defendant, returnable at the October, 1934, term of the court. It further prayed for an injunction commanding the defendants, their attorneys, agents, and representatives, from further proceeding with the action at law on the promissory note until further order of the court, and that without bond, and that the injunction be made perpetual for the length of time provided by said moratorium statute.

Rea and the trustee in the deed of trust appeared and answered. They denied that it would necessarily follow that an execution would be levied on the identical property covered by the deed of trust; denied that Miss O'Bannon had made application for a loan as alleged, and averred that the property covered in the deed of trust was tenant property and not eligible for a loan; denied that the property was of the value alleged and denied that Miss O'Bannon would suffer irreparable injury and damage; but alleged that they would suffer irreparable damage if forced to abandon the suit at law, and averred that she had not paid taxes or insurance on the...