Strother v. McCord

• Decision Date: 22 January 1931
• Docket Number: 3 Div. 938.
• Citation: 222 Ala. 450,132 So. 717
• Parties: STROTHER ET AL. v. MCCORD, CIRCUIT JUDGE.
• Court: Alabama Supreme Court

132 So. 717

222 Ala. 450

STROTHER ET AL. v. MCCORD, CIRCUIT JUDGE.

3 Div. 938.

Supreme Court of Alabama

January 22, 1931

Rehearing Denied March 12, 1931.

Original petition of W. R. Strother and others for writ of prohibition to Hon. Leon McCord, as Judge of the Circuit Court of Montgomery County.

Writ awarded.

Altman & Koenig, of Birmingham, and Inzer, Inzer & Davis, of Gadsden, for petitioners.

Fort Beddow & Ray and G. Ernest Jones, all of Birmingham, and Hill, Hill, Whiting, Thomas & Rives, of Montgomery, for respondent.

FOSTER J.

This is an original petition addressed to this court, praying for a writ of prohibition to the circuit court of Montgomery county restraining it from entertaining a suit for the appointment of a receiver of the Grand Lodge, Knights of Pythias of Alabama, an Alabama corporation. The basis of petitioners' claim is that the Montgomery circuit court has no jurisdiction or power to entertain the suit, and that the appointment of a receiver by it is a usurpation of authority, because at the time of the institution of such suit the circuit court of Jefferson county, Ala., with full power and jurisdiction, had entertained such a suit and had appointed a receiver on the complaint of other interested parties occupying the same relation to the Grand Lodge as the complainants in the suit in Montgomery county, and that an appeal was then pending from such appointment and the order of appointment was suspended during the pendency of the appeal. The Jefferson county case has been to this court before, as reported in Grand Lodge, K. P., v Shorter, 219 Ala. 293, 122 So. 36. See, also, 132 So 617. Reference is made to the report of that case for a statement of its nature and purpose. To justify the suit in Montgomery county, it is alleged that during the pendency of that suit the complainants in the Jefferson county case inspired others to cause an injunction to issue against the performance of their functions by the officers of the Grand Lodge, who had been parties defendant in the Jefferson county case, because of impeachment proceedings pending and undetermined, and it is further alleged in the Montgomery county case that the impeachment proceedings were against all the officers who had the power to hear those against the others, and therefore thereby the order could not function, and by force of necessity a receiver must be appointed to carry on the affairs until such deadlock could be relieved. Such allegations are claimed to be sufficient to justify the appointment of a receiver though the corporation be solvent. Grand Lodge v. Shorter, 219 Ala. 293 (9), 122 So. 36; Jasper Land Co. v. Walls, 123 Ala. 652, 26 So. 659; 1 Tardy's Smith on Receivers, § 303; Howze v. Harrison, 165 Ala. 150, 51 So. 614.

The gist of this inquiry therefore hinges upon the question of whether the Montgomery court was deprived of this power by reason of the status of the proceedings in the Jefferson court; otherwise expressed, whether by reason of the Jefferson county case, the court of Montgomery county attempted the exercise of a power which it did not possess, and that such attempt was in effect a usurpation of jurisdiction. If such be found to be the fact, prohibition may issue without the necessity of a review by appeal, assuming that an appeal will lie. Ex parte Wilkinson, 220 Ala. 529, 126 So. 102; Sullivan v. Reynolds, 209 Mo. 161, 107 S.W. 487, 15 L. R. A. (N. S.) 963, 123 Am. St. Rep. 468, 14 Ann. Cas. 198. Such writ does not however, serve to review the sufficiency of the showing made to justify the receivership. That may only be done by appeal. But to justify this writ it must appear that the court did not have the power to make the appointment. Ex parte Wilkinson, supra.

We observe that in the Jefferson county case the court entered an order appointing a fiscal agent, so named, in effect a receiver, but provided in the order that his authority as such should not become vested until complainants had executed a bond, and the receiver had also executed bond, all as provided by law. Before such bonds were executed, and after the order was made, defendants superseded its effect on appeal which they sued out to this court.

It is contended that, because of the provisions of section 10115, Code, such an order is not one appointing a receiver, because that section makes it mandatory that the complainants' bond shall be executed before making the appointment. This requirement is of course mandatory. Dreyspring v. Loeb, 113 Ala. 263, 21 So. 73; David v. Levy, 119 Ala. 241, 24 So. 589. But does it mean that the court may not appoint a receiver, and in the same order provide that he shall not function as such until complainant executes the required bond? We think that such nature of order is appropriate under the statute, and, when made, it is the appointment of a receiver. 34 Cyc. 137, 139, 140; High on Receivers, §§ 121, 121a.

No harsh consequences should result from such a conclusion, for, if complainants and the receiver fail to comply with the order of the court in a reasonable time and injury is likely to follow such delay, any interested person may make a showing to the court and cause such modification or further condition made as the equities of the situation may require. But such condition in the order as long as there is no default, or failure to make the bonds within such time as may be required, has the effect merely to suspend the exercise by the receiver of his functions as such. But by such order the court has effectively appointed a receiver, and such order continues until there is a vacation of it either expressly or by the failure to comply with its conditions within such time as may be specified by the court. High on Receivers, supra.

The fact that an appeal is prosecuted and thereby the appointment is suspended pending the appeal does not vacate the appointment. Its effect is merely to suspend, pending such appeal, the authority of the receiver to function as such, and of course suspends the authority and duty of complainant and the receiver to execute the bonds as provided in the order of appointment. Texas v. Palmer (C. C. A.) 158 F. 705, 22 L. R. A. (N. S.) 316; Palmer v. Texas, 212 U.S. 118, 29 S.Ct. 230, 53 L.Ed. 435; Wabash R. Co. v. Adelbert College, 208 U.S. 38, 28 S.Ct. 182, 52 L.Ed. 379; Stanton v. Heard, 100 Ala. 515, 14 So. 359.

This is entirely different from the jurisdiction of a court over a cause of action because such cause is pending in another court and in a different suit. Its pendency does not destroy the jurisdiction of that court subsequently receiving the suit, but only furnishes occasion for an abatement of such subsequent suit. But, until abated, the subsequent suit may proceed to final judgment, even before the former comes on for trial, and may then be res judicata of the former.

But a different situation exists when property has come in gremio legis, by the appointment of a receiver, or otherwise. For then another court has no power or jurisdiction to seize it. Stanton v. Heard, supra; State ex rel. Sullivan v. Reynolds, 209 Mo. 161, 107 S.W. 487, 15 L. R. A. (N. S.) 963, 123 Am. St. Rep. 468, 14 Ann. Cas. 198; Texas v. Palmer, 158 F. 705, 22 L. R. A. (N. S.) 316 (C. C. A.); Palmer v. Texas, 212 U.S. 118, 29 S.Ct. 230, 233, 53 L.Ed. 435; Wabash R. Co. v. Adelbert College, 208 U.S. 38, 28 S.Ct. 182, 188, 52 L.Ed. 379; Waters-Pierce Oil Co. v. Texas, 107 Tex. 1, 106 S.W. 326; High on Receivers, § 48; Empire Trust Co. v. Brooks (C. C. A.) 232 F. 641; 2 Tardy's Smith on Receivers, § 702; 7 R. C. L. 1068.

There seems to be no conflict of authority as to the foregoing proposition. In the case of Empire Trust Co. v. Brooks, supra, the Circuit Court of Appeals refers to the distinction which we have herein pointed out, to the effect that the pendency of a suit which may lead to the appointment of a receiver, but in which no receiver has been appointed, does not necessarily deprive another court of concurrent jurisdiction from appointing a receiver in a suit subsequently filed. The other court there was a federal court, and the pendency of the former suit in a state court was not even matter of plea in abatement of the latter. But he shows a distinction between the concurrent exercise of jurisdiction in two courts of the same subject-matter, and the power of one court to seize property which another court of co-ordinate jurisdiction has already seized. The exercise of jurisdiction may or may not be subject of a plea in abatement, and, though it is such, may or not be in fact pleaded in abatement. Until this is done, both courts have jurisdiction to proceed. But, whether it is the subject of such plea or not, and, if so, whether pleaded or not, the courts without exception so far as we know hold that, after one court has seized property actually or constructively, and still maintains its jurisdiction over it, another court is without power to make another seizure of it. When this is undertaken, there is an excess of jurisdiction thereby attempted, and prohibition is the proper process to stop it. State ex rel. Sullivan v. Reynolds, supra; Ex parte Wilkinson, supra.

Other and different questions arise when the issue is merely an abatement of the second suit, because of the pendency of the first. This can work no hardship, for "the parties aggrieved should seek relief in the court which is already in possession of the property through its receiver." High on Receivers, supra. Such "court during the continuance of its possession has, as incident thereto and as ancillary to the suit in which the possession was acquired jurisdiction to hear and determine all questions respecting the title, the possession, or the control of the property" (Wabash R. Co. v. Adelbert College, supra...