Riffle v. Sioux City and Rock Springs Coal Mining Co.

• Decision Date: 01 July 1912
• Docket Number: 672
• Parties: RIFFLE v. SIOUX CITY AND ROCK SPRINGS COAL MINING CO., ET AL
• Court: Wyoming Supreme Court

124 P. 508

20 Wyo. 442

RIFFLE v. SIOUX CITY AND ROCK SPRINGS COAL MINING CO., ET AL

No. 672

Supreme Court of Wyoming

July 1, 1912

ERROR to the District Court, Sweetwater County; HON. DAVID H CRAIG, Judge.

Action by A. T. Riffle against the Sioux City and Rock Springs Coal Mining Company, a corporation, and others, including A. B Beall and B. F. Bogenrief, who were sued in their capacity as receivers of the corporate property. After a sale of the property of the corporation, which occurred upon the application of the receivers for the purpose of paying expenses, and the refusal of the court to vacate the sale upon the motion of the plaintiff in the action, the plaintiff brought the case to the Supreme Court on error, assigning as error want of jurisdiction to appoint the receivers, and to order a sale of the property of the corporation, and irregularity in the making of several other incidental orders. The proceeding in error was apparently taken from the order denying the motion to vacate the sale. On behalf of some of the defendants in error motions were filed to strike the bill of exceptions from the record, and to dismiss the proceeding in error. The cause was heard upon said motions and also upon the merits without a waiver of the motions. The other material facts are stated in the opinion.

Reversed.

W. B Dunton and F. T. Johnson, for plaintiff in error.

Upon the facts, as shown by the record, the district court was without jurisdiction to appoint a receiver, and plaintiff in error is not estopped to question the want of such authority at this time. A receiver should not be appointed where an injunction will serve as well to protect the rights of the parties. (High on Receivers, (2nd Ed.) pp. 2, 11, and secs. 288, 289; State v. Court, (Mont.) 50 P. 852; Mason v. Court, (Md.) 39 Am. St. 433; Port Huron v. Judge &c., 31 Mich. 456; Wallace v. Pub. Co., (Ia.) 63 Am. St. 389; Secord v. Mining Co., 53 Wash. 620; Neale v. Hill, 16 Cal. 146; French v. Bank, 53 Cal. 495; Nowell v. Trust Co., 169 F. 497; Cohn v. Wahn, 117 N.Y.S. 633; Joseph v. Herzig, 115 N.Y.S. 330; Bellamy v. Tel. Co., 25 L. R. A. (n. s.) 412 and note; High on Receivers, (2nd Ed.) secs. 563, 615; Hall v. Nieukirk, 118 Am. St. 198 and note; Cortelyou v. Hathway, 64 Am. Dec. 485.) The district court should have rectified its mistake in appointing a receiver by discharging him at the request of the defendants upon filing their answers, and a failure to do so was improvident and an abuse of judicial discretion. (High on Receivers, (2nd Ed.) secs. 24, 820.) No opportunity was given to the plaintiff to except to the approval or allowance of the reports and accounts of the receiver. The proper practice requires that notice should have been given and that the parties be given an opportunity to object. (Hayden v. Title and Trust Co., 55 Ill.App. 241; Standish v. Musgrove, (Ill.) 79 N.E. 161; Rice v. McJohn, (Ill.) 91 N.E. 448; Strauss v. Supply Co., (N. J.) 60 A. 402; Gutterson v. Iron and Steel Co., 151 F. 72; High on Receivers (2nd Ed.) sec. 798.) The receivers' certificates were improperly issued, had no validity in fact, and should not have been considered in making the order for the sale of the property in the hands of the receiver. (Standley v. Mfg. Co., 27 Colo. 331; Trust Co. v. Coal Co., 27 Colo. 246.) It appears that the receivers were the only persons demanding the sale, and on the face of the application sufficient facts were not stated to authorize a sale of practically all of the property of the corporation. (High on Receivers, (2nd Ed.) sec. 197.) The sale practically put an end to the company by depriving it of all its assets; the purchaser was one of the shareholders representing the faction that plaintiff had charged in her petition with attempting to wreck the company. And before she was able to have the merits of her case determined the court caused the sale of all of the property of the company in this state. This was a great injury to the plaintiff and wholly unwarranted by the facts. The plaintiff's motion for a vacation of the sale should have been sustained. (High on Receivers, (2nd Ed.) sec. 191; Gutterson v. Iron and Steel Co., supra.)

Edwin J. Stason, for defendants in error, Marriott, Kloster, O'Harrow, Scott, Meyer, Atkinson and Bogenreif.

The orders in this case complained of by the plaintiff in error are not reviewable, since they are not orders affecting her substantial rights, or, in effect, determining the action and preventing a judgment. (Rev. Stat., sec. 4247; 2 Ency. Pl. & Pr. 72, 80; Nelson v. Brown, 59 Vt. 601; Harmon v. Barhydt, 20 Neb. 630; Bank v. Christ, 82 Ia. 56.) The proceeding in error should be dismissed because the summons in error was not issued and served, or publication made upon all of the parties, entitled to and required to be served. The plaintiff in error voluntarily accepted the performance of the orders complained of, and the benefits thereof, and received part of the proceeds of the sale. She cannot now complain of any irregularity in the proceedings. (R. Co. v. Byington, 14 Ia. 572; Hooper v. Beecher, 109 N.Y. 609; Green v. Blackwell, 32 N. J. Eq., 768; Carr v. Miner, 40 Ill. 33; Bank v. Bremer Co., 42 Ia. 394; Sturtevant Co. v. Bohn, 59 Neb. 82; Cowherd v. Kitchen, 57 Neb. 426; Bragg v. Bewett, 99 Wis. 348; Storke v. Storke, (Cal.) 44 P. 173; Clallam Co. v. Clump, (Wash.) 47 P. 13; 2 Ency. Pl. & Pr., 174, 175, and cases cited; Miller v. Wright, 14 N.Y.S. 468; Root v. Heil, 78 Ia. 436; Bruce v. Smith, 44 Ind. 1.) For lack of proper or necessary parties the proceeding in error should be dismissed. (2 Ency. Pl. & Pr., 764 and cases cited.) A purchaser at a judicial sale is a proper and necessary party to an appellate proceeding relating to the property sold, or to the validity of the proceedings under which the sale was held. (2 Ency. Pl. & Pr. 776, note 32 and cases cited; Kells v. Nelson-Tenny L. Co. (Minn.) 76 N.W. 790.) All parties to the record who appear to have an interest in the order or judgment challenged must be given an opportunity to be heard on the appeal, and a receiver, as well as creditors whose claims are affected by a decree declaring priorities, are necessary parties to an appeal from the decree. (Bank v. Packing Co., (Ia.) 75 N.W. 503; Bank v. Kilbourne, 76 F. 883.) The plaintiff's exceptions were not preserved in the manner provided by the statute, nor at the time so provided.

The court had jurisdiction to appoint the receiver. (Rev. Stat., secs. 4054, 4057; State v. Court, (Mont.) 39 P. 316; Mill Co. v. Mikesell, (Neb.) 75 N.W. 46; Cameron v. Imp. Co., (Wash.) 54 P. 1128; Trust Co. v. R. Co., 117 U.S. 434; 34 Ency. Pl. & Pr. 86 and cases cited; Miner v. Ice Co., 93 Mich. 97; R. Co. v. Adams, (Tex.) 32 S.W. 733; Greenawalt v. Wilson, 52 Kan. 109.) The appointment of the receiver was within the discretion of the court, and that discretion will not be interfered with on appeal except in case of abuse. (O'Donnell v. Bank, (Wyo.) 64 P. 337; High on Receivers, (4th Ed.) sec. 7 and cases cited; 34 Cyc., 149; McGilliard v. Donaldsonville Foundry, (La.) 29 So. 254; Rogers v. Rogers, (Tenn.) 42 S.W. 70; 17 Ency. Pl. & Pr., 863 and cases cited; Bank v. Claflin, (Ia.) 79 N.W. 279.)

The plaintiff cannot complain of the appointment of the receiver without notice, for the reason that she made the application herself. It is true that she applied for the appointment of another person, who resigned. But if there was any reason for the appointment of that person there was just as valid a reason for the appointment of a successor. An appeal does not lie from receivership orders unless they affect substantial rights. (High on Receivers, (4th Ed.) sec. 27; Brown v. Ring, 77 Mich. 159; Hall v. Cir. Judge, 111 Mich. 395; Mardian v. Cir. Judge, 118 Mich. 353.) If anyone had the right of appeal it was the defendant corporation. (High on Receivers, (4th Ed.) sec. 25 and cases cited.) The plaintiff is not now in a position to complain as to the appointment of a receiver: (1) Because she filed a petition asking for equitable relief, and incidentally that a receiver be appointed. (2) Because she acquiesced for three years in the receivership. (3) Because if the orders are appealable no proper objections or exceptions were taken. (Trust Co. v. Coal Co., 16 Wash. 499; Ellis v. Ice Co., 86 Tex. 109; Ins. Co. v. Davis, 94 Va. 427; Underwood v. Sutcliffe, 10 Hun, 454; Little Rock W. Co. v. Barrett, 103 U.S. 516; Bell v. Ins. Co., 3 F. Cas. 1261; Jones v. Fish Co., 42 Wash. 332; Pagett v. Brooks, (Ala.) 37 So. 263; Greeley v. Bank, (Mo.) 15 S.W. 429; Post v. Dorr, 4 Edw. (N. Y.) 412; Saunders v. Kemper, (Tex.) 32 S.W. 585; Neeves v. Boos, 86 Wis. 313; 32 Cyc., 162 and cases cited in notes; High on Receivers, (4th Ed.) sec. 37; State v. New Orleans, (La.) 31 So. 55; 34 Cyc., 159; R. Co. v. McBeth, 149 Ind. 78; Gray v. Ongston, 146 Ind. 285; Rankin v. Rothschild, 78 Mich. 10; Ecklund v. Willis, 42 Neb. 737; Crobin v. Berry, 83 N.C. 27; Wabash R. Co. v. Dykeman, 133 Ind. 56.) The appeal must be taken from the order within the time, and in the manner, fixed by statute. It will not do to wait till the case is disposed of. (Chase v. Driver, 92 F. 780; McKinnon v. Wolenden, (Wis.) 47 N.W. 436.)

No proper objections were made or exceptions preserved, and no exception taken to the action of the court with reference to the receivers' certificates. They were issued largely to pay expenses which the plaintiff had caused by the action brought by her, and of the receivership which she had instituted. Moreover, she acquiesced for more than a year in the payment of the certificates, before attempting to appeal from the orders authorizing them. The certificates were properly issued, and, if not, the plaintiff in error cannot now...