State ex rel. Union Bank & Trust Co. v. District Court of First Judicial Dist. in and for Lewis and Clark County

• Decision Date: 22 March 1939
• Docket Number: 7933.
• Citation: 91 P.2d 403,108 Mont. 151
• Parties: STATE ex rel. UNION BANK & TRUST CO. v. DISTRICT COURT OF FIRST JUDICIAL DIST. IN AND FOR LEWIS AND CLARK COUNTY et al.
• Court: Montana Supreme Court

91 P.2d 403

108 Mont. 151

STATE ex rel. UNION BANK & TRUST CO. v. DISTRICT COURT OF FIRST JUDICIAL DIST. IN AND FOR LEWIS AND CLARK COUNTY et al.

No. 7933.

Supreme Court of Montana

March 22, 1939

Rehearing Denied June 12, 1939.

Original proceeding on writ of certiorari, by the State of Montana, on the relation of the Union Bank & Trust Company, against the District Court of the First Judicial District of the State of Montana, in and for the County of Lewis and Clark, and George W. Padbury, Jr., a Judge thereof, to review order entered by respondents, in which respondents filed a motion to quash.

Motion denied, and order annulled.

Gunn Rasch, Hall & Gunn, of Helena, for relator.

Robert L. Word, Sr., of Helena, for respondents.

ALBERT BESANCON, District Judge (sitting in place of Chief Justice JOHNSON, disqualified).

The charter of the Beaverhead Ranch Company, a Montana corporation, expired by limitation on September 24, 1927, and its then directors, Lewis Penwell, C. B. Witter, H. H Pigott, Mathias Staff and R. Lee Word, by operation of law became trustees of its assets for the benefit of its creditors and stockholders. From the above date to January 1934, such trustees in the operation of the properties became rather heavily indebted to the Union Bank and Trust Company a corporation, and on January 19, 1934, such trust company, under the liquidating statutes of the state, began an action in the district court of the First Judicial District, county of Lewis and Clark, against the five trustees by filing a complaint and issuance of summons, and all such trustees, defendants, appeared in the action and answered, and the case at issue was heard, and after hearing, with the consent of four of such trustees, trustee R. Lee Word objecting, H. H. Pigott was appointed receiver of such defunct company, with the powers and duties prescribed in the order of his appointment. The receiver qualified and then entered upon the discharge of such duties.

On January 17, 1938, R. Lee Word, one of the trustees and defendants in the action, filed a motion therein to abrogate the order appointing Pigott receiver, on the grounds and for the reasons stated in the motion, a copy of the motion being attached to the petition in these proceedings. On February 9, 1938, the court granted leave to submit such motion on briefs, and all of counsel were allowed time to submit their briefs. In the minutes of the court of May 23, 1938, appears the following entry: "In this action the motion of R. Lee Word to abrogate the order appointing H. H. Pigott receiver is hereby denied."

On January 12, 1939, without any notice to the plaintiff in such action, the relator herein, nor to the receiver, the judge of such court, apparently on its own motion, made the following order: "In this action the order of May 23, 1938, denying the motion of R. Lee Word to abrogate the order appointing H. H. Pigott receiver, having been inadvertently made, it is ordered that said order of May 23, 1938, be and the same is hereby expunged from the record." This last order was duly entered in the minutes, which were later approved by the court.

Writ of certiorari was issued by this court, and return made thereto. This proceeding is to review the action of the district court of Lewis and Clark county, and George W. Padbury, Jr., one of its judges, in making the order last quoted.

No contention is here made that relator has a right of appeal from such order, or any plain, speedy and adequate remedy other than certiorari, and it seems proper to assume that it has not. State ex rel. Hahn v. District Court, 83 Mont. 400, 272 P. 525. Whether or not the trial court exceeded its jurisdiction in making the order of January 12, 1939, is the question for decision here. State ex rel. Johnston v. District Court, 93 Mont. 439, 444, 19 P.2d 220.

Summarized, the reason assigned in the motion to quash interposed by respondents and urged in their brief, is that the application for the writ is not made upon affidavit by, nor in behalf of, "a party beneficially interested," as required by section 9838, Revised Codes of 1935. The petition for the writ is verified positively by the president of relator bank, which meets the requirements of section 9838, and was so determined by this court before the issuance of the writ. State ex rel. First Trust & Savings Bank v. District Court, 50 Mont. 259, 146 P. 539. Whether the bank, relator herein, is a "party beneficially interested," should be determined from the duly certified record, the return made. Id.; Shaffroth v. Lamere, 104 Mont. 175, 65 P.2d 610.

It appears from the return, and not controverted, that the bank, relator herein, was the plaintiff in an action against the trustees of a defunct corporation, wherein an application was made by it and a receiver duly appointed. The proceedings originate from an order made in such action. The relator was a party to such action and could make the application. 11 C. H. 135. State ex rel. Examining & Trial Board v. Jackson, 58 Mont. 90, 190 P. 295, cited by respondents, is a case where the application for the writ was made by others than a party to the original case. State ex rel. Allen v. Napton, 24 Mont. 450, 62 P. 686, does not support the respondents' contention; while State ex rel. Johnston v. District Court, supra, in the last paragraph on page 443, 19 P.2d page 220, seems to concede that a party to the action or proceeding in which it is alleged that the court acted without jurisdiction, is a party beneficially interested, and proceeds to announce the rule "deducible from the authorities," wherein others may qualify as such applicants. Authorities from Wisconsin, California, New York and North Dakota are cited.

Respondents in a well prepared and extensive brief, contend that the order appointing Pigott receiver is void. Such order was made on May 12, 1934. It was an appealable order. Sec. 9731, Rev. Codes. In due time trustee Word filed notice of appeal, and proceeded to perfect an appeal to this court on behalf of himself and of other trustees. Motion was filed on behalf of the plaintiff bank, this relator, to require Mr. Word to produce his authority to appear as an attorney for all such appellants. In this he failed, and this court ordered a dismissal of the appeal. Union Bank & Trust Co. v. Penwell, 99 Mont. 255, 42 P.2d 457. No other appeal was taken or perfected from the order appointing the receiver, and the receivership went on. On January 17, 1938, almost three years and eight months after the date of the order, the motion to abrogate the same was filed, and apparently after rather careful and lengthy consideration, this motion was denied on May 23, 1938. The validity of such order appointing the receiver is not before this court in these proceedings, and the contentions of respondents in this...