Simplex Paper Corp. v. Standard Corrugated Box Co., 23591.

CourtCourt of Appeal of Missouri (US)
Citation97 S.W.2d 862
Docket NumberNo. 23591.,23591.
PartiesSIMPLEX PAPER CORPORATION, RESPONDENT. v. STANDARD CORRUGATED BOX COMPANY, DEFENDANT; THE HINDE AND DAUCH PAPER COMPANY, APPELLANT.
Decision Date10 November 1936
97 S.W.2d 862
SIMPLEX PAPER CORPORATION, RESPONDENT.
v.
STANDARD CORRUGATED BOX COMPANY, DEFENDANT; THE HINDE AND DAUCH PAPER COMPANY, APPELLANT.
No. 23591.
St. Louis Court of Appeals. Missouri.
Opinion filed November 10, 1936.
Motion for Rehearing Overruled November 24, 1936.

[97 S.W.2d 863]

Appeal from Circuit Court of City of St. Louis. — Hon. M. Hartmann, Judge.

REVERSED.

Boyle & Priest, George T. Priest and Robert E. Moloney for appellant.

King, Flynn & Frohman of counsel.

(1) Plaintiff's petition shows on its face that plaintiff had an adequate remedy at law and therefore a court of equity was without jurisdiction to appoint receivers. State ex rel. v. Calhoun, 207 Mo. App. 149, l.c. 158, and authorities cited; Coleman v. Hagey, 252 Mo. 102; Gabbert v. Gas & Traction Co., 140 Mo. App. 6; Humphreys v. Atlantic Milling Co., 98 Mo. 542; Implement Co. v. Jones, 143 Mo., l.c. 278; Davidson v. Dockery, 179 Mo. 687; Mullen v. Hewitt, 103 Mo. 639. (2) Before a creditor can maintain a creditor's bill he must reduce his claim to judgment and show a nulla bona return. Daggs v. McDermott, 327 Mo. 73, l.c. 81; Coleman v. Hagey, 252 Mo. 102; Humphreys v. Milling Co., 98 Mo. 542; Crim v. Walker, 79 Mo. 335; Fisher v. Tallman, 74 Mo. 39; Mullen v. Hewitt, 103 Mo. 639; Ready v. Smith, 170 Mo. 163. (3) The appointment of receivers of a corporation under a bill which confers no jurisdiction upon the court is void absolutely. Jones v. Schaff Bros., 187 Mo. App. 597; Conrades v. Pearcy, 259 S.W. 98; Finneran v. Burton, 291 Fed. 37. Jurisdiction of the subject-matter cannot be conferred upon any court by consent of the parties. In State ex rel. v. Nixon, 133 S.W. 340, l.c. 343, this court said: "Parties cannot, by their consent, give a court jurisdiction of the subject. This proposition is so well established that citation of authorities to support it are unnecessary." See, also: Both v. Chicago, 248 Mo. 36. And the rule in Missouri is that a judgment in an action where the court has no jurisdiction is void ab initio and may be attacked by anybody at any time. State ex rel. v. Calhoun, 207 Mo. App., l.c. 155. See, also: State ex rel. v. Trimble, 269 S.W. 617, l.c. 622, par. 3; Jones v. Schaff Bros., 187 Mo. App., l.c. 604. The federal courts recognize that the rule laid down in First National Bank v. Stewart Fruit Co., 17 Fed. (2d) 621, is not the rule in Missouri (Zechiel v. Firemen's Fund Ins. Co., 61 Fed. (2d) 27, l.c. 28.) See, also, Elliott v. Superior Court, 145 Pac. 101, wherein the court holds that a corporation cannot by consenting to the appointment of a receiver give the court jurisdiction over the subject-matter, and that the appointment is open to attack by one not a party to the action.

Cullen, Fauntleroy & Edwards for respondent.

Green, Henry & Remmers for the receivers, of counsel.

(1) Plaintiff's petition states facts constituting a cause of action in equity and the order of the court appointing receivers was properly made thereon. There was no adequate remedy at law. The allegations of the petition show plaintiff entitled to equitable relief. 14-A C.J. 895, Corporations, Sec. 3072; Louisville Tr. Co. v. Louisville etc. Ry., 174 U.S. 674, 43 L. Ed. 1134; Northern Pacific Ry. v. Boyd, 228 U.S. 482, 57 L. Ed. 931; Burnham, Munger & Co. v. Smith, 82 Mo. App. 35; A.G. Edwards & Son Brokerage Co. v. Rosenheim, 74 Mo. App. 621; DeField v. Harding Dredge Co., 180 Mo. App. 563, 167 S.W. 593; Lyons v. Murray, 95 Mo. 23; Pendleton v. Perkins, 49 Mo. 565; State ex rel. Sullivan v. Reynolds, 209 Mo. 161, l.c. 176, 107 S.W. 487, 15 L.R.A. (N.S.) 963, 123 Am. St. Rep. 468, 14 Ann. Cas. 198; 14-A C.J., pp. 889-890 (Sec. 3068); Johnson v. United Ry. Co., 281 Mo. 90, 219 S.W. 38; Home Powder Co. v. Lively, 182 Mo. App. 130, 168 S.W. 351; Nelson v. Betts, 21 Mo. App. 219; Steward v. Caldwell, 54 Mo. 536. (2) The petition properly alleges facts constituting a creditor's bill in equity for under the facts therein stated even a simple contract creditor has a right to maintain such a bill: (a) Because plaintiff's petition alleges fraud upon plaintiff and other creditors and fraud is the peculiar subject-matter of equitable relief. Burnham, Munger & Co. v. Smith, 82 Mo. App. 35; Pomeroy, Equity Jurisprudence (4 Ed.), Secs. 1044, 1047, pp. 2370-74; 2377-79; Nelson v. Betts, 21 Mo. App. 219; Steward v. Caldwell, 54 Mo. 536. (b) Because plaintiff's petition seeks to impress a trust upon assets and prevent unlawful diversion thereof, which is the peculiar function of a court of equity. Clark on Receivers (2 Ed.), Chap. V, Sec. 187, p. 222; Louisville Tr. Co. v. Louisville etc. Ry., 174 U.S. 674, 43 L. Ed. 1134; Northern Pacific Ry. v. Boyd, 228 U.S. 482, 57 L. Ed. 931; Burnham, Munger & Co. v. Smith, 82 Mo. App. 35; Batchelder v. Altheimer, 10 Mo. App. 181; Kankakee Woolen Mill Co. v. Kampe, 38 Mo. App. 229; State ex rel. Sullivan v. Reynolds, 209 Mo. 161, l.c. 176, 107 S.W. 487; 15 L.R.A. (N.S.) 963, 123 Am. St. Rep. 468, 14 Ann. Cas. 198; 14A C.J., pp. 889-890 (Sec. 3068); Johnson v. United Ry. Co., 281 Mo. 90, 219 S.W. 38; Home Powder Co. v. Lively, 182 Mo. App. 130, 168 S.W. 351; Terry v. Anderson, 95 U.S. 628, l.c. 636 (c) Because the petition alleges the insolvency of the Standard Corrugated Box Company. Moreover, solvency would not in all cases prevent a receivership. Clark on Receivers (2 Ed.), Ch. V, Sec. 187, pp. 210ff, 214, Sec. 191, pp. 238-239; Sellman v. German Mut. F.I. Co., 184 Fed. 977; Carson v. Allegany Window Glass Co., 189 Fed. 791; Burnham, Munger & Co. v. Smith, 82 Mo. App. 35; Batchelder v. Altheimer, 10 Mo. App. 181; Kankakee Woolen Mill Co. v. Kampe, 38 Mo. App. 229. (d) Because of modern procedure under the Code permitting trial of equitable and legal causes of action in the same court and the uniting of them in the same petition. R.S. 1929, Sec. 765; Clark on Receivers (2 Ed.), Ch. V, Sec. 187, p. 218; First Nat. Bank v. McDonough, 19 Ariz. 223, 168 Pac. 635; Dawson Bank v. Harris, 84 N.C. 206; Vail v. Hammond, 60 Conn. 374 (383), 25 Am. St. Rep. 330, 22 Atl. 954; Burnham, Munger & Co. v. Smith, 82 Mo. App. 35; A.G. Edwards & Son Brokerage Co. v. Rosenheim, 74 Mo. App. 621; DeField v. Harding Dredge Co., 180 Mo. App. 563, 167 S.W. 593. (e) Because defendant Standard Corrugated Box Company, in effect, consented to the appointment of a receiver and did not object at the outset of the case. Hence, appellant cannot complain. 1 Clark on Receivers (2 Ed.), Ch. V, Sec. 188, p. 224ff; Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371, 37 L. Ed. 1113, 14 Sup. Ct. 127; Metropolitan Railway Receivership, 208 U.S. 90, 52 L. Ed. 403, 28 Sup. Ct. 219; American Brake S. & F. Co. v. Pere Marquette R. Co., 205 Fed. 14; Horn v. Pere Marquette R. Co., 151 Fed. 626; First Nat. Bank v. Stewart Fruit Co., 17 Fed. (2d) 621; Harkin v. Brundage, 13 Fed. 617; R.S., Mo. 1929, Sec. 800; Stein v. Rainey, 315 Mo. 535, 286 S.W. 53. (3) Even if the petition did not state a cause of action for equitable relief, the appellant cannot be heard to complain or question the jurisdiction of the court to appoint receivers, because it is a stranger to the record, because it has no interest in the corporation for which the receivers were appointed either as stockholder or creditor, and especially because it failed to complain, save exceptions or appeal when its demurrer upon the same grounds as contained in the motion to dismiss was overruled, and when its previous motion to dismiss on the same grounds was overruled, in each case, permitting terms of court to elapse without appeal, so that the action of the court on the demurrer and on its previous motion to dismiss is res adjudicata. Hence, the Circuit Court could not do otherwise than overrule the appellant's second motion to set aside the appointment of the receivers, from which order this appeal is taken. City of St. Louis v. Charles F. Querl Lbr. Co., 277 Mo. 167, 210 S.W. 21; Coleman v. Dalton, 71 Mo. App. 14; State ex rel. Logan v. Ellison, 267 Mo. 321, l.c. 327, 184 S.W. 963; State ex rel. Sullivan v. Reynolds, 209 Mo. 161, l.c. 176, 107 S.W. 487, 15 L.R.A. (N.S.) 963, 123 Am. St. Rep. 468, 14 Ann. Cas. 198.

HOSTETTER, P.J.


The Simplex Paper Corporation, plaintiff-respondent, is a corporation organized under the laws of Michigan; the Standard Corrugated Box Company, defendant, is a corporation organized under the laws of Missouri, and the Hinde & Dauch Paper Company, appellant, is a corporation organized under the laws of Ohio and both of the said foreign corporations were duly authorized to do business in Missouri.

The Simplex Paper Corporation will be referred to hereinafter as plaintiff and the Standard Corrugated Box Company will be referred to hereinafter as Box Company and the Hinde & Dauch Paper Company will be referred to hereinafter as Paper Company.

This action was begun in the Circuit Court of the City of St. Louis on the 26th

97 S.W.2d 864

day of February, 1929, for the recovery of the sum of $1778.89 on account for goods sold and delivered by plaintiff to the Box Company and also for the appointment of a receiver for said Box Company. As the action was originally brought the Paper Company and twenty-six stockholders of the Box Company were made parties defendant.

Upon the filing of the petition, the plaintiff filed an application for the appointment of a receiver for the Box Company, notice being served on that corporation. On March 7, 1929, the court heard the application and, acting upon it, appointed John E. Witthaus and William E. Feutterer as receivers for the Box Company.

The Paper Company, as one of the defendants, filed its separate demurrer to the petition, and, on June 7, 1929, filed its amended demurrer.

On December 9, 1929, the amended demurrer filed by the Paper Company was overruled, and, on December 31, 1929, the Paper Company filed its answer to plaintiff's petition.

The Box Company, though duly served, filed no answer.

The...

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