United Cemeteries Co. v. Strother

• Decision Date: 06 September 1938
• Docket Number: 33497
• Parties: The United Cemeteries Company v. John D. Strother, Trustee, and John Russell, Defendants, and Louis A. Harbin, Appellant. the Schooley Stationery & Printing Company v. The United Cemeteries Company, Respondent, and Louis A. Harbin, Appellant
• Court: Missouri Supreme Court

119 S.W.2d 762

342 Mo. 1155

The United Cemeteries Company v. John D. Strother, Trustee, and John Russell, Defendants, and Louis A. Harbin, Appellant. the Schooley Stationery & Printing Company v. The United Cemeteries Company, Respondent, and Louis A. Harbin, Appellant

No. 33497

Supreme Court of Missouri

September 6, 1938

Appeal from Jackson Circuit Court; Hon. Darius A. Brown Judge; Opinion filed at May Term, 1938, August 8, 1938 motion for rehearing filed; motion overruled at September Term, September 6, 1938.

Reversed and remanded (with directions).

Gossett Ellis, Dietrich & Tyler, John D. Strother, Duvaul P Strother, Rufus Burrus and Lucian Lane for appellant.

(1) The expenses of the receivership, the costs of litigation and allowances to the receiver and receiver's attorneys cannot displace the mortgage lien of appellant for the reason that the petition, the so-called creditor's bill in equity, did not state facts sufficient to confer upon the court jurisdiction to appoint a receiver. The appointment of the receiver was unnecessary and wrongful and being made without jurisdiction of the court was void. No costs or allowances in favor of the receiver or his attorneys to be paid out of the property involved can be made as a consequence of such void appointment. (a) There is no such action as one merely for the appointment of a receiver. Launeier v. Sun Ray Products Co., 330 Mo. 542, 50 S.W. (2) 640; State ex rel. Kopke v. Mulloy, 329 Mo. 1, 43 S.W.2d 806; Price v. Bankers Trust Co., 178 S.W. 745; State ex rel. Calhoun v. Reynolds, 289 Mo. 506, 233 S.W. 483; State ex rel. v. Ross, 122 Mo. 435; Cantwell v. Lead Co., 199 Mo. 1; Pullis v. Pullis Iron Co., 157 Mo. 565. (b) A simple unsecured contract creditor cannot confer jurisdiction upon the court to appoint a receiver. Miller v. Perkins, 154 Mo. 629, 55 S.W. 874; Pusey & Jones Co. v. Hanssen, 261 U.S. 491, 67 L.Ed. 763; Lion Bonding & Surety Co. v. Karatz, 262 U.S. 77, 67 L.Ed. 871. (c) All of the essential facts for the appointment of a receiver were lacking in the so-called creditor's bill. Bushman v. Bushman, 311 Mo. 551; Blades v. Mercantile Co., 154 Mo.App. 350. (d) An appointment of a receiver in excess of the jurisdiction of the court is void ab initio. Miller v. Perkins, 154 Mo. 629, 55 S.W. 874; Laumeier v. Sun Ray Products Co., 330 Mo. 542, 50 S.W.2d 640; State ex rel. v. Dearing, 187 Mo. 647; Rees v. Andrews, 169 Mo. 197; State ex rel. Calhoun v. Reynolds, 207 Mo.App. 149, 289 Mo. 586, 233 S.W. 483. (e) No allowances can be made to a receiver or his attorneys as a consequence of a void appointment. Bushman v. Barlow, 328 Mo. 90, 40 S.W.2d 637; Miller v. Perkins, 154 Mo. 629; St. Louis, etc., Railroad v. Wear, 135 Mo. 230; Lion Bonding & Surety Co. v. Karatz, 262 U.S. 640, 67 L.Ed. 1151; Finneran v. Burton, 291 F. 37; Noxon Chemical Products v. Leckie, 39 F.2d 318; Fulp v. McCray, 21 F.2d 951. (f) The receivership will be declared void at the instance of this appellant, a mortgage lien-holder, though a stranger to the original suit when filed, since his rights are materially affected. Miller v. Perkins, 154 Mo. 629, 55 S.W. 874; State ex rel. Calhoun v. Reynolds, 207 Mo.App. 149. (2) The vested contract mortgage lien of the appellant Harbin, recognized and established by this court in the first appeal, is prior and superior to claims for allowances of the receiver and receiver's attorneys, and to the receiver's expenses and costs, and cannot be displaced or destroyed by subordinating it to the allowances made to receiver and his attorneys and the general costs incurred by the receiver in the operation of the business or the conduct of litigation. Commonwealth Finance Corp. v. Mo. Motor Bus Co., 252 S.W. 372; Bradford v. Cooledge, 103 Ga. 753, 30 S.E. 579; Buckworth v. Whipple, 115 Ga. 484, 41 S.E. 1010; Walter v. Peninsula Cut Stone Co., 9 Del. Ch. 374, 82 A. 961; Ferris v. Chic-Mint Gum Co., 14 Del. 232, 124 A. 577; Lane v. Washington Hotel Co., 42 A. 697; Link Belt Machinery Co. v. Hughes, 174 Ill. 155, 51 N.E. 179; Moore v. Lincoln Park, 196 Pa. 519, 46 A. 857; Frick v. Fritz, 124 Iowa 525, 100 N.W. 513; Ephraim v. Pacific Bank, 129 Cal. 589, 62 P. 177; Ritter v. Arizona Cattle Co., 34 Ariz. 278, 271 P. 25; Hilmes v. Moon, 168 Wash. 222, 11 P.2d 253; Thomsen v. Cullen, 196 Wis. 581, 219 N.W. 439; Craver v. Greer, 107 Tex. 356, 179 S.W. 862; 1 Tardy-Smith on Receivers (2 Ed.), sec. 258, p. 613; 1 Clark on Receivers (2 Ed.), sec. 641, p. 886; Am. Engineering Co. v. Met. By-Products Co., 280 F. 677; MacGregor v. Johnson-Cowdin-Emmerich, Inc., 31 F.2d 270.

Borders, Borders & Warrick for respondent.

(1) Since the appellant, Louis A. Harbin, filed no supersedeas bond to stay the order and judgment of the court, then the sale made under said order and judgment to H. H. Halvorson cannot be upset. Sec. 1022, R. S. 1929; 35 C. J., p. 82; Rorer on Judicial Sales (2 Ed.), pp. 63, 241, secs. 132, 576; Burgess v. O'Donoghue, 90 Mo. 299, 2 S.W. 303; Shields v. Powers, 29 Mo. 315; Castleman v. Relfe, 50 Mo. 583; Vogler v. Montgomery, 54 Mo. 577; Sidwell v. Kaster, 232 S.W. 1005; Evans v. Kahr, 60 Kan. 719, 57 P. 950; Canal Steel Works v. One Drag Line Dredge, 48 F.2d 212; State ex rel. Winkleman v. Westhues, 269 S.W. 379; Mills v. Green, 159 U.S. 651, 40 L.Ed. 293; Fugel v. Becker, 2 S.W.2d 743. (2) All of the questions raised by appellant have been decided by this court in a prior appeal, therefore this court will not on this appeal again consider those matters. Mullins v. Mt. Saint Mary's Cemetery Assn., 259 Mo. 142, 168 S.W. 685; Baker v. K. C. Ft. S. Ry. Co., 147 Mo. 140, 48 S.W. 838; Chapman v. K. C. Ry. Co., 146 Mo. 481, 48 S.W. 646; Scott v. Parkview Realty Co., 255 Mo. 76, 164 S.W. 532; Hickman v. Link, 116 Mo. 123, 22 S.W. 472. (3) The question of the validity of the appointment of the receiver cannot now be raised by appellant in this court. Rumsey v. Peoples Ry. Co., 144 Mo. 175, 154 Mo. 215; Greeley v. Provident Savs. Bank, 103 Mo. 212; State ex rel. Conners v. Shelton, 238 Mo. 281. (4) The appointment of the receiver was valid and the court had full jurisdiction to appoint said receiver. (a) The petition of complainant, the answer of the defendant, The United Cemeteries Company, and its consent to the appointment of a receiver, were sufficient to give the court jurisdiction and the appointment of the receiver was valid. Bushman v. Bushman, 279 S.W. 122, 311 Mo. 551; Leahy v. Mercantile Trust Co., 247 S.W. 396, 296 Mo. 561; Jefferson City Bridge & Transit Co. v. Blaser, 300 S.W. 778, 318 Mo. 373; Potter v. Whitten, 142 S.W. 453, 161 Mo.App. 118; State ex rel. Ballew v. Woodson, 161 Mo. 444; Guilbert v. Kessinger, 173 Mo.App. 680; Neun v. Blackstone B. & L. Assn., 149 Mo. 74; Mellen v. Moline Malleable Iron Works, 131 U.S. 352, 33 L.Ed. 178; Grand Trunk Co. v. Central Ry. Co., 85 F. 87; Olmstead v. Distilling Co., 73 F. 44; Powell v. Natl. Bank of Commerce, 74 P. 536; Murphy v. Fid. Mut. Ins. Co., 69 Neb. 489, 95 N.W. 1022. (b) Even if the bill in equity for the appointment of a receiver was insufficient, yet the intervening petition of appellant and the subsequent consolidation of the receivership suit with the injunction suit conferred jurisdiction and validated the appointment. Dabney v. Gordon Petroleum Co., 258 S.W. 837; Cooper v. Otero, 29 P.2d 341; Autenrith v. Wilder, 155 Ill.App. 545; Newell Contracting Co. v. Elkins, 257 S.W. 54; Hansel v. Purnell, 1 F.2d 266; Original Consolidated Min. Co. v. Abbott, 167 F. 681; 21 C. J., 171. (5) The appellant, Louis A. Harbin, has waived all objections to the validity of the appointment and is now estopped from contending the appointment and proceedings were void. (a) Appellant's objection that the court had no jurisdiction to appoint a receiver has been waived by appellant's failure to make it until this appeal. Early v. Smallwood, 302 Mo. 92, 256 S.W. 1053; Hollins v. Brierfield Coal Co., 150 U.S. 371, 14 S.Ct. 127, 37 L.Ed. 1113. (b) Appellant's intervention and participation in the receivership proceedings constituted a waiver. Rumsey v. Peoples Ry. Co., 144 Mo. 175, 154 Mo. 215; Greeley v. Provident Savs. Bank, 103 Mo. 212; State ex rel. Conners v. Shelton, 238 Mo. 281; Grand Rapids Electrotype Co. v. Powers-Tyson Corp., 224 N.W. 609, 239 N.W. 323, certiorari denied, 286 U.S. 545, 76 L.Ed. 1282; Manhattan Trust Co. v. Seattle Coal & Iron Co., 16 Wash. 499, 48 P. 333; Burgess v. Lashby, 24 P.2d 147; Cooper v. Otero, 29 P.2d 341; Kreitzer v. Cement Co., 92 Kan. 835; Vieth v. Ress, 82 N.W. 116, 60 Neb. 52; Commercial Natl. Bank v. Burch, 141 Ill. 519; Russell v. Chicago Trust & Savs. Bank, 40 Ill.App. 385; Ellis v. Vernon Ice, L. & W. Co., 23 Tex. 856. (c) The appellant, having failed to properly present the question of the validity of the appointment of the receiver on his prior appeal, he is by the decision of the court in that appeal foreclosed from questioning the validity of that appointment, and that matter is no longer open to further inquiry. Grand Rapids Electrotype Co. v. Powers-Tyson Corp., 224 N.W. 609, 239 N.W. 323, certiorari denied, 286 U.S. 545, 76 L.Ed. 1282; Pitkin v. Shacklett, 117 Mo. 547; Stump v. Hornback, 109 Mo. 277; Schroeder v. Edwards, 205 S.W. 47. (6) The court did not err in ordering a sale of all of the property without segregating the property upon which appellant had a mortgage. Fleming v. Fleming Hotel Co., 17 N.J.Eq. 509, 61 A. 739; Natl. Bank of Kentucky v. Kentucky Coal Corp., 20 S.W.2d 724; Parker v. Bluffton Car Wheel Co., 18 So. 938, 108 Ala. 140; First Natl. Bank v. Colonial Trust Co., 167 P. 985, 66 Okla. 106; Harvey v. Kinston Knitting Co., 140 S.E. 746, 194 N.C. 734; Jones v. Page, 26 N.M. 440, 194 P. 883.

Tipton J. All concur, except Douglas, J., not sitting, because not a member of the...