State ex rel. Allman v. Superior Court for Grant County

• Decision Date: 27 February 1939
• Docket Number: 27169.
• Citation: 19 N.E.2d 467,215 Ind. 249
• Parties: STATE ex rel. ALLMAN v. SUPERIOR COURT FOR GRANT COUNTY.
• Court: Indiana Supreme Court

19 N.E.2d 467

215 Ind. 249

STATE ex rel. ALLMAN v. SUPERIOR COURT FOR GRANT COUNTY.

No. 27169.

Supreme Court of Indiana

February 27, 1939

Lesh, Lesh & Lesh, of Indianapolis, and Lesh & Lesh, of Huntington, for relator.

Thompson & Rabb, of Indianapolis, and Condo, Van Atta &amp Batton, of Marion, for respondent.

FANSLER Judge.

This is an original action by which the relator, a preferred stockholder in The Hotel LaFontaine Company, an Indiana corporation, which owns a hotel building in Huntington County, seeks a writ prohibiting the Superior Court of Grant County from proceeding further with a proposed sale of the property by its receiver, and from exercising 'further jurisdiction over the property and business of said The LaFontaine Hotel Company.'

On December 14, 1937, the Department of Financial Institutions of the state of Indiana, in charge of the liquidation of the Citizens State Bank of Marion, brought an action in the Superior Court of Grant County against the hotel corporation seeking a judgment upon a debt evidenced by certain promissory notes and asking, as ancillary relief, the appointment of a receiver upon the ground that the corporation was insolvent and that its assets were highly encumbered and in danger of being lost. The corporation appeared to the action and answered in general denial. The cause was submitted and a judgment entered appointing the First National Bank of Marion as receiver for the property of the corporation. The receiver went into possession of the hotel building in Huntington County. It appears that the real estate was encumbered by a mortgage, which was in default, and the lien of several thousand dollars of delinquent taxes. Thereafter certain preferred shareholders in the hotel company, acting for themselves and other preferred shareholders, sought to intervene for the purpose of filing a motion to set aside all of the proceedings. They were permitted to intervene, but the motion to set aside the proceedings was stricken out, and there was no appeal. Thereafter, upon authority of court, the receiver borrowed $16,000 upon receiver's certificates, and used the money for the purpose of paying taxes and other paramount liens. Afterwards the receiver was ordered to sell the property.

In November, 1938, the relator in this cause filed an action against the corporation in the Huntington Circuit Court asking the appointment of a receiver upon the ground, among others, of danger of insolvency. The receiver in possession was permitted to intervene, and filed a verified answer in abatement setting up the proceedings in the Superior Court of Grant County. There was a demurrer for want of facts to the plea in abatement of the receiver, and, pending a ruling on the demurrer, this original action was begun.

It is the contention of the relator that actions affecting real estate are local in character and not transitory, and that jurisdiction of such actions lies only in the courts in the counties where the real estate is situated; that, since in the action in question here, a receiver was appointed for the real estate, the action was one affecting real estate; that the only courts having jurisdiction are the courts of Huntington County; that the jurisdictional question cannot be waived; that the Superior Court of Grant County therefore had no jurisdiction to appoint a receiver for the real estate in Huntington County; and that its judgment appointing the receiver is void.

It must be remembered that this is a collateral attack upon the judgment of the Superior Court of Grant County, and that the proceeding for the appointment of the receiver was ancillary to the principal action which sought a personal judgment, and was therefore transitory, and that the defendant corporation appeared and answered.

The Superior Court of Grant County is a court of general jurisdiction, and as such has jurisdiction to entertain personal actions and to appoint receivers for corporations. It acquired jurisdiction of the person of the defendant. The only question then was whether it had jurisdiction to appoint a receiver under the facts of the particular case. This was a question of fact, which the trial court had jurisdiction to determine. It is provided by section 2-1007, Burns' Ann.St.1933, Section 111, Baldwin's Ind.St.1934, that:

'The defendant may demur to the complaint when it appears upon the face thereof, either:

'First. That the court has no jurisdiction of the person of the defendant or the subject-matter of the action * * *.'

Section 2-1011, Burns' Ann.St.1933, section 115 Baldwin's Ind.St.1934, provides that: 'Where any of the matters enumerated in section 85 (§ 2-1007) do not appear upon the face of the complaint, the objection * * * may be taken by answer. If no such objection is taken, either by demurrer or answer, the defendant shall be deemed to have waived the same, except only the objection to the jurisdiction of the court over the subject of the action:...