Stockmen's National Bank of Casper v. Calloway Shops

• Decision Date: 18 February 1930
• Docket Number: 1571
• Citation: 285 P. 146,41 Wyo. 232
• Parties: STOCKMEN'S NATIONAL BANK OF CASPER v. CALLOWAY SHOPS [*]
• Court: Wyoming Supreme Court

285 P. 146

41 Wyo. 232

STOCKMEN'S NATIONAL BANK OF CASPER v. CALLOWAY SHOPS ^[*]

No. 1571

Supreme Court of Wyoming

February 18, 1930

APPEAL from the District Court, Natrona County; BRYANT S. CROMER Judge.

Action by the Stockmen's National Bank of Casper, a corporation against The Calloway Shops, upon a promissory note and for appointment of receiver. A receiver was appointed and judgment given for plaintiff. From an order refusing to vacate judgment and receivership proceedings, defendant appeals.

Affirmed.

For the appellant, there was a brief by Curran & Cobb of Casper Wyoming.

The trial court was without jurisdiction, no proper service having been made upon defendant; where service is made upon an inferior class, the return must affirmatively show that service upon the superior class, could not be had in order to be binding upon a defendant corporation. 32 Cyc. 549; 5631 C S.; Boston Co. v. Clawson, 240 P. 166; Ky. Co. v. Com. 199 S.W. 808; State v. Myers, 104 S.W. 1146; Kieley v. Co., 42 N.E. 260; Mfg. Co. v. Marder, Luse & Co., 69 N.W. 774; Investment Co. v. Ins. Co., 87 So. 636; Barnard v. Traction Co., 113 N.E. 89; Robbins v. Clemmens, 41 Oh. St. 285; Harrison v. Timber Co., 14 Wyo. 246. The trial court erred in holding that appellants motion to vacate proceedings and judgment, was a general appearance. 2 R. C. L. 332; Godfrey v. Valentine, 40 N.W. 163; Moore v. Watkins, 1 Ark. 268; Ry. Co. v. McClelland, 163 N.W. 676; Orchard Co. v. Taft Co., (Ida.) 202 P. 1062. A receiver cannot be appointed without notice unless showing is made that delay will cause irreparable loss. Ward v. Co., Ann. Cas. 1913A pp. 607 and 609; Rwy. Co. v. Jewett, 37 Oh. St. 649, and cases cited. The petition did not state facts sufficient to constitute a cause of action for appointment of a receiver. Cattle Co. v. Johnston, (N. D.) 27 Ann Cas. 631. Plaintiff was a simple contract creditor. Blum v. Rowe, (Wash.) 168 P. 781; High on Receivers, 406. The receiver was appointed without notice. Cortleyou v. Hathaway, 64 Am. Dec. 482; Dry Goods Co. v. Hecht, 120 F. 760. A receiver cannot be appointed without notice unless delay will cause irreparable loss. State v. Dist. Court, 50 P. 852, and cases cited. Collusion in the appointment is apparent, and the person appointed was a creditor. Link Belt Co. v. Hughes, 63 N.E. 186, 59 L. R. A. 673; Manhattan Co. v. Iron Co., 48 P. 333; McDaniel v. Hoblit, (Wyo.) 245 P. 295.

For the respondent, there was a brief by Robert N. Ogden, Jr., of Casper, Wyoming.

Several of appellant's specifications of error contain two or more assignments in violation of the statute. 6408 C. S., 2 R. C. L. 162. The only specification referring to the order appealed from is numbered 10, questioning the court's jurisdiction to make the order of Dec. 7, 1928. The eleventh specification is insufficient for review. Posvar v. Pearce, 37 Wyo. 509. There is a distinction between sufficient service and a sufficient return thereof; the officer's amended return shows sufficient service in fact upon defendant corporation. 14 C. J. 51; 5631 C. S., and such service is also shown elsewhere in the record. Levy v. Bank, (Okla.) 176 P. 512. An officer's return is amendable. 18 Ency. Pl. & Pr. 957. Jurisdiction depends on fact of service, not on the proof. White v. Hinton, 3 Wyo. 753. The case of Harrison v. Timber Co., 14 Wyo. 246, is foreign to the facts here. Defendants waived objections by general appearance. Grieve v. Huber, 38 Wyo. 223; Kilpatrick v. Horton, 15 Wyo. 508; Lumber Co. v. Walter, (Fla.) 34 So. 244. Defendant made no showing of a meritorious defense. 5929 C. S.; James v. Strauss Co., 32 Wyo. 377; Kelly v. Eidam, 32 Wyo. 271; Bank v. Ranch Co., 5 Wyo. 50. Our motion to strike was well taken. Savings Assn. v. Clause, 13 Wyo. 166. Mrs. Wyman was managing agent of defendant company, Atlantic Co. v. Reisner, 18 Kan. 458; Min. Co. v. Smelting Co., 26 P. 326; Kansas City v. Cullinan, (Kas.) 68 P. 1099. Defendants showing for vacation was insufficient. James v. Strauss & Co., supra. There was no abuse of judicial discretion shown. R. R. Co. v. Heath, (Ind.) 62 N.E. 107; People v. R. R. Co., 29 N.Y. 418; 14a C. J. 957; Maloney v. Meres; 109 So. 677; 21 C. J. 162. Defendant corporation was properly served with notice. A creditor or interested person is not disqualified for appointment as receiver. Mrs. Wyman had been long in sole charge of the business of defendant corporation. She was its managing agent within the meaning of the statute and the only person upon whom service of process and the citation of showing cause can be served in this action.

RINER, Justice. BLUME, C. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

This cause is before the court upon direct appeal from an order of the District Court of Natrona County refusing to vacate both a judgment previously entered against appellant and receivership proceedings in the case antecedent to the judgment. The parties will be referred to hereinafter simply as plaintiff and defendant.

The action was, on August 24, 1927, instituted by the plaintiff, a national banking corporation, upon an alleged promissory note, past due and unpaid, executed and delivered by the defendant, a Wyoming corporation, to the plaintiff, in the sum of $ 475. The petition, after setting out the usual averments in stating a cause of action upon said note, in addition thereto contained allegations made for the purpose evidently of bringing the case within the provisions of Section 6184, Compiled Statutes of Wyoming 1920, which indicates when the District Court is authorized to appoint a receiver. The prayer of the pleading was, briefly, that a citation be issued calling upon the defendant to show cause why a receiver should not be appointed to take charge of its assets for the benefit of creditors, that plaintiff's claim be adjudged, and for such other relief as might be lawful. This prayer was followed by a positive verification of the pleading on the part of plaintiff's cashier.

The petition was, on the date last mentioned, presented to the court and an order, as prayed for, was issued, setting the hearing on the matter of an appointment of a receiver for August 27, 1927. This citation, together with the summons and petition in the action, was, on August 24, 1927, served on the defendant by a deputy sheriff of Natrona county, by, as stated in his several returns, delivering true copies thereof "to The Calloway Shop--Mrs. Wyman." On the day thus fixed, a hearing was had by the court and by order one Mrs. George Wyman was appointed receiver of all of the defendant's property, the order reciting, among other things, that it appeared to the court from the sheriff's return that the defendant had been duly served with process, including service of the order to show cause, and that the court found from plaintiff's verified petition the evidence adduced by plaintiff and its witnesses on the hearing that a receiver should be appointed to administer, conserve and manage defendant's business.

The person thus appointed as receiver shortly thereafter qualified, and as such officer took over and for sometime thereafter managed defendant's affairs, it having been engaged in retailing ladies' ready to wear clothing, and its place of business being located in the balcony of a drug store in the city of Casper, Wyoming.

On the 9th day of September, 1927, the receiver filed a report advising the court that from August 15, 1927, to the date of her appointment as such officer, by the necessity of the situation, she, previously employed as a sales lady by defendant, was obliged to act as its manager and general agent; that the assets of the defendant in her charge consisted of very seasonable merchandise, to-wit: summer dresses designed and suitable only for the summer season of 1927, together with a small number of women's light weight and sport coats; that the stock had not been replenished since the 15th of August, 1927, and should be sold in order to prevent loss; that competitive bids for the property had been obtained and the highest bid was accordingly reported to the court for its acceptance. Several of the largest creditors of defendant joined in a request that this bid be accepted, as did also Mrs. Wyman in her capacity as managing agent of the defendant, she at that time representing to the court that defendant's officers and managing agents had abandoned and deserted its assets and affairs, leaving her in sole charge thereof. An order of sale was forthwith made, accepting the reported bid and directing the execution by the receiver of the necessary instrument of transfer.

Thereafter and on November 23, 1927, the court entered its "judgment and decree" in the cause, wherein it was recited in part that the court, having examined the files in the case, found that "the defendant has been duly and regularly served with process herein," that plaintiff's petition stated a cause of action, and that the court had jurisdiction in the premises. The failure of the defendant to appear or plead to the plaintiff's petition was also noted, and the default of the defendant entered. The judgment then recited the taking of evidence and testimony in support of plaintiff's petition, upon which the court found that the matters set out in said petition were true. The decree further set out that the testimony established that the defendant was a Wyoming corporation that it had obligations exceeding its assets; that it had been deserted and abandoned by its stockholders and directors; that the court found that the appointment of a receiver was proper, and that the receivership should continue until the defendant's obligations had been paid, so far as its assets should permit, and its affairs closed, and that any overplus...