Schaefer v. Milner

• Decision Date: 08 May 1943
• Docket Number: 35846.
• Citation: 156 Kan. 768,137 P.2d 156
• Parties: SCHAEFER v. MILNER et al. (HACKSTAFF, Intervener).
• Court: Kansas Supreme Court

137 P.2d 156

156 Kan. 768

SCHAEFER v. MILNER et al. (HACKSTAFF, Intervener).

No. 35846.

Supreme Court of Kansas

May 8, 1943

Syllabus by the Court.

Where a court of competent jurisdiction acquires jurisdiction of the subject matter and of the parties, its authority continues until the matter is finally disposed of, and no court of co-ordinate authority should interfere with its action.

The rule that the court first acquiring jurisdiction shall proceed without interference from a court of concurrent jurisdiction rests upon "comity", and the necessity of avoiding conflicts in the execution of judgments by independent courts.

The rule that the court first acquiring jurisdiction shall proceed without interference from a court of concurrent jurisdiction is applicable not only as between courts within the same state, but between federal courts and state courts and between state courts of different states.

The rule that the court which first acquired jurisdiction should dispose of the whole matter is applicable to suits wherein the appointment of a receiver is sought.

Where suit has been filed in a court of competent jurisdiction for appointment of a receiver, jurisdiction of that court begins at the filing of the petition, and from that time on no other court has jurisdiction over the parties and the property to entertain application for the appointment of receivers for any other purpose.

The right of a Colorado receiver to appointment of ancillary receiver in Kansas would not be denied on ground that Colorado denies comity to receivers appointed by foreign jurisdictions, where it was not shown that Colorado did not recognize comity.

Where receiver for partnership property was appointed in a Colorado action in which all partners appeared, the appointment of primary receiver for partnership property in Kansas on ex parte order in action subsequently brought in Kansas by one of partners and refusal to appoint ancillary receiver in Kansas on application of Colorado receiver was error, since Colorado court first acquired jurisdiction even though the Kansas receiver was first appointed, and the rule of "comity" applied. Gen.St. 1935, 60-308, 60-1208.

1. The general rule is that when a court of competent jurisdiction acquires jurisdiction of the subject matter and of the parties, its jurisdiction continues as to all matters therein involved until the issues are finally disposed of, and no court of co-ordinate jurisdiction should interfere with its action.

2. The rule above stated is generally observed not only as between courts of the same state but between courts of different states.

3. Where similar actions for dissolution of a partnership accounting and the appointment of a receiver to wind up the affairs of the partnership are brought in different courts of co-ordinate jurisdiction, the right of primary receivership ordinarily exists in the court which first acquired jurisdiction of the subject matter and of the parties.

4. In situations referred to in paragraph 3, above, where receivers are appointed by different courts, the question of whether a receiver should be primary or ancillary is determined--in the absence of special facts and circumstances requiring otherwise--by the priority in time when the actions were commenced and not by that of the dates when the receivers were actually appointed.

5. One of three partners brought an action in Colorado for dissolution, accounting and appointment of a receiver and the other partners were personally served with summons, entered appearances, and a receiver was later appointed. In a similar action filed in this state subsequent to the commencement of the Colorado action one of the other partners secured an ex parte order appointing a primary receiver to take charge of certain partnership properties in the county where the action was brought.

Held that under the facts more fully set out in the opinion the trial court erred in finding that the case was not one in which the doctrine of comity should be applied, in refusing to set aside the ex parte order, and in refusing to name a suitable person as an ancillary receiver.

Appeal from District Court, Sedgwick County, Division 4; Isaac N Williams, Judge.

Action by Sam H. Schaefer against A. Milner and W. M. Lewis for dissolution of a partnership, an accounting and appointment of a receiver to take charge of certain partnership properties in Kansas, wherein Cyrus Hackstaff, receiver appointed by Colorado court in prior action, intervened, seeking appointment of ancillary receiver in Kansas. From an order approving the appointment of a primary receiver, and denying intervener's petition for appointment of ancillary receiver, the defendant Milner and the receiver Hackstaff appeal.

Reversed with directions.

Mark H. Adams, of Wichita, for appellants.

Charles E. Jones and J. Ashford Manka, both of Wichita, and Frederick E. Dickerson, Thomas J. Morrissey, Charles D. Bromley, and Anthony F. Zarlengo, all of Denver, Colo., on the brief for appellant Cyrus Hackstaff.

C. H. Brooks, Howard T. Fleeson, Wayne Coulson, and Paul R. Kitch, all of Wichita, and Paul W. Lee, George H. Shaw, Donald C. McCreery, and William A. Bryans, III, all of Denver, Colo., on the brief for appellant A. Milner.

Henry E. Martz and Austin M. Cowan, both of Wichita, for appellees.

Fred W. Aley, of Wichita, on brief for appellee Sam H. Schaefer.

C. A. McCorkle, W. A. Kahrs, Robert H. Nelson, and Henry L. Butler, all of Wichita, on the brief for appellee W. M. Lewis.

HOCH Justice.

This was an action for dissolution of a partnership, an accounting and appointment of a receiver. A receiver was appointed to take charge of certain partnership properties in Kansas. The appellant contends--and this contention raises the primary issue presented--that under the law and in recognition of comity the Kansas receivership should have been made ancillary to that of the receiver appointed in an action previously instituted in Colorado.

Milner, Schaefer and Lewis, all non-residents of Kansas, were partners engaged in a real estate business in Colorado, Kansas, and several other states, under the firm name of The Milner Company, or the Milner-Schaefer Company. On May 28, 1942, Milner filed an action in Colorado asking for an accounting, a dissolution of the partnership, and for the appointment of a receiver. The action was broad in character relating to partnership property wherever located. Personal service was had upon Schaefer and Lewis, the other two partners, and they entered appearances on July 25 and July 28, respectively.

On August 28, 1942, Schaefer began an action in Sedgwick County, Kansas, asking for an accounting, dissolution, the appointment of a receiver pendente lite and that "the interests of the partners be partitioned". Appellant asserts that this was just four days after Milner had filed a second and separate application for the appointment of a receiver in the Colorado action. The record here, however, does not show this separate application and we predicate nothing upon it. In any event it is not denied that the appointment of a receiver had been prayed for in the original petition filed in Colorado in May, 1942. In the instant petition, filed by Schaefer on August 28, no reference was made to the action then pending in Colorado and there was no reference to any property belonging to the partnership except that in Sedgwick County. On the same day, August 28, upon motion by the plaintiff Tom Kornhaus was named receiver "to manage the properties owned by the partners in Sedgwick county, Kansas and to collect the rents". His bond was fixed at $2,000. The proceedings were ex parte, there being no praecipe for summons, no summons, no entry of appearance by the other parties, and no affidavit then filed to obtain service by publication.

On September 2, 1942, the Colorado court, acting upon the application then pending, appointed Cyrus Hackstaff as receiver for all the partnership properties. All partners were represented by counsel and the record does not disclose that any of them objected to the appointment or to any of the provisions of the order of appointment.

The order clothed the receiver with broad powers, pertinent provisions being as follows:

"1. That Cyrus A. Hackstaff is hereby appointed Receiver and invested with all the powers of a receiver in equity of all the property, records and effects, including cash, mortgages and other securities, bills receivable, real property and choses in action of The Milner Company, a co-partnership, wherever the same may be situated, and is hereby directed forthwith to take possession thereof and preserve, manage, operate and use the same and to conduct the business of the said co-partnership according to law and in accordance with the principles, rules and practice in cases of this character. He is authorized and directed ' to collect all monies due and all monies to become due to said co-partnership, to institute and prosecute such suits in his own name, as Receiver, or in the name of the said co-partners, as may be necessary and proper, and to defend suits as may be brought against him as such Receiver, which affect or may affect the property of which he is now or may become Receiver.' He is further authorized to collect and receipt for installment payments from purchasers of real estate under contract with said co-partnership and to transfer assets of whatever kind or nature of said partnership located within or without the State of Colorado necessary in the usual course of business and agreeable to the laws of the State of Colorado, and of such other assets where any property of said co-partnership may be located."

"2. It is hereby ordered that all persons, firms and

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