Zeitinger v. Hargadine-McKittrick Dry Goods Company

• Decision Date: 03 July 1925
• Docket Number: 23962
• Citation: 274 S.W. 789,309 Mo. 433
• Parties: CHRISTIAN J. ZEITINGER et al., Appellants; v. HARGADINE-McKITTRICK DRY GOODS COMPANY THOMAS F. MOYLAN et al., Interveners, Appellants,
• Court: Missouri Supreme Court

274 S.W. 789

309 Mo. 433

CHRISTIAN J. ZEITINGER et al., Appellants;

THOMAS F. MOYLAN et al., Interveners, Appellants, v. HARGADINE-McKITTRICK DRY GOODS COMPANY

No. 23962

Supreme Court of Missouri

July 3, 1925

Appeal from St. Louis City Circuit Court; Hon. Vital W Garesche, Judge.

Affirmed.

Christian F. Schneider, Edward W. Foristel and Walter M Hezel for appellants.

(1) The judgment of the Supreme Court on the stipulations was outside of the limit of its appellate jurisdiction, coram non judice and void, and therefore the circuit court had no authority in law to act on said mandate. Tuttle v Blow, 163 Mo. 643; Elliot's App. Pro. secs. 97, 100. (a) The attorneys in agreeing to a compromise of the claim were without authority of their clients and the compromise and payment thereunder would be no bar. Davidson v. Rozier, 23 Mo. 387; Spears v. Ladergerber, 56 Mo. 465; Walden v. Graham, 55 Mo. 405. (b) If the judgment of the Supreme Court was void for want of jurisdiction, it never became good, and was open to collateral attack as well as to direct attack. Church v. McIlhenney, 61 Mo. 543. (2) The circuit court erred in making its order sustaining the motion of the Hargadine-McKittrick Dry Goods Company praying for an order to show cause in this, that the proof failed to show that the stipulations on which the judgment of the Supreme Court was rendered and its mandate issued were lawful and valid stipulations, or that the same had been authorized in writing or ratified by the plaintiffs or the interveners or either of them. (3) The circuit court erred in making its order sustaining the motion of the Hargadine-McKittrick Dry Goods Company praying for an order to show cause, in this, that the conditions of the stipulations were not complied with.

Charles P. Williams and Nagel & Kirby for respondent.

(1) The judgment and mandate of the Supreme Court, issued in this Zettinger receivership suit on February 5, 1919, were within the jurisdiction of this court, and constituted valid authority to the circuit court to carry out the directions of said mandate. (a) The same contention that this court had no such jurisdiction has been urged upon this court twice before in other branches of this litigation, without finding favor. See the briefs in State ex rel. Hargadine-McKittrick Co. v. Garesche, 227 S.W. 830; Kaufman v. Annuity Realty Co., 256 S.W. 796. (b) This Zeitinger suit for a receiver was a "class" suit. Kaufman v. Annuity Realty Co., 256 S.W. 797. (c) In a representative or class suit like this Zeitinger case, the litigating stockholders as the representatives or agents of all the stockholders, have power to control and compromise the claims sued upon. 3 Cook on Corps. (7 Ed.) sec. 748, p. 2738; Willoughsby v. Chic. J. Ry., 50 N.J.Eq. 666; Innes v. Lansing, 7 Paige (N. Y.) 585; 15 Encyc. Pl. & Pr. 627, 635, 637; Brinkerhoff v. Bostwick, 99 N.Y. 194. The compromise of such a suit, negotiated and concluded by the suing stockholders, and sanctioned by the court, as in the case at bar, is binding on all of the stockholders, whether they are parties to the suit or not, and whether they consent or not. Johnson v. Miller, 96 F. 274; Bernheim v. Wallace, 217 S.W. 921; Belmont Nail Co. v. Columbia Co., 46 F. 338; Fay v. Erie Bank, Harr. Eq. (Mich.) 194. (d) The appeal to this court from the judgment of the circuit court appointing a receiver, brought into consideration the merits of all of the alleged claims of the company against the various defendants and thus drew into consideration all of the subject-matters that were compromised by the stipulations of settlement; therefore this court did not go outside the subject-matter of its jurisdiction in approving the settlement. (2) The circuit court did not err in making its order of February 20, 1922, by which it held that all of the stockholders were bound by the settlement. The only stockholders before this court on this appeal are the plaintiffs, the two Zeitingers. They are bound by the settlement because the findings of the circuit court are supported by the substantial weight of the evidence showing: (a) That they authorized the settlement to be made; (b) That they expressly ratified the settlement in writing, after it had been made; (c) That they and all other stockholders are estopped by their laches, acquiescence and conduct, from denying that they are bound by the settlement. State ex rel. v. Garesche, 227 S.W. 830; Dana v. Morgan, 219 F. 316. (3) The final judgment of this court entered on February 5, 1919, reversing and remanding the cause with directions to the circuit court to carry out the stipulations of settlement and then to dismiss the cause, is not open to attack in this proceeding on the ground that this court was induced by fraud to enter said judgment: (a) Because appellants learned on February 7, 1919, of the facts on which they now base their attack on said judgment, but they neglected their opportunity during the rest of the said October term, 1918, of this court, to make a direct attack in this court on the judgment. (b) Because the circuit court had no jurisdiction in this proceeding under the mandate, to entertain an attack on the integrity of a judgment and mandate of the Supreme Court. The jurisdiction of the circuit court was limited to carrying out the directions of the mandate. Rees v. McDaniel, 131 Mo. 682; Powell v. Bowen, 240 S.W. 1087; Stump v. Hornback, 109 Mo. 277. (c) Because the attack here attempted is in effect a collateral attack.

Small, C. Lindsay, C., concurs.

OPINION

SMALL

Appeal from the Circuit Court of the City of St. Louis.

This suit in equity was instituted in 1915 by the plaintiffs, Christian J. and George E. Zeitinger, and Gus Ralph, as plaintiffs for themselves and in behalf of all other stockholders of the defendant corporation, Hargadine-McKittrick Dry Goods Company, then in liquidation, to have a receiver appointed for said corporation, on the ground that the officers of said company had unlawfully invested a large amount of its assets in the Railway Exchange Building Company of said city and otherwise mismanaged its affairs. On the application of plaintiffs, by an interlocutory decree, the court made an order appointing a receiver, and refusing to modify said decree the defendant Dry Goods Company appealed to this court.

The cause came before Division Two and in pursuance of stipulations of the then parties to the suit, the interlocutory order appealed from was reversed and the cause remanded with directions to dismiss said cause on certain terms and conditions as provided by such stipulations. Our mandate was issued and dated February 5, 1919, and was filed in the circuit court on the same day. Said mandate was as follows:

"Now, at this day, come the said parties, by their respective attorneys, and, pursuant to their stipulations heretofore filed herein on the 31st day of January, 1919, and on the 5th day of February, 1919, it is considered, ordered and adjudged by the court as follows: (1) That the interlocutory decree of the said circuit court, rendered herein on the 8th day of January, 1917, be, and the same is hereby, reversed, with all costs against said appellant; (2) That this cause be, and the same is hereby, remanded to the said Circuit Court of the City of St. Louis, with directions to said circuit court to tax against the appellant the costs, including reasonable compensation to the receiver for his administration of the estate of the said appellant, together with all reasonable attorneys' fees and other costs or expenses which the said receiver has incurred in the administration of the estate, and also the compensation due plaintiffs' (respondents') attorneys for their services, with disbursements, and the compensation due the referee and the attorneys for the appellant for their services, with disbursements, and to order all costs paid as and when allowed out of the corpus of the estate now in the hands of the receiver, and to make such further orders and entries as may be necessary to dispose of the litigation and estate in the said circuit court, in accordance with said stipulations of the parties filed in this court and those heretofore executed and to be filed in said circuit court, and thereupon to dismiss the plaintiffs' (respondents') petition herein in accordance with the said stipulations."

We are satisfied from the evidence that two stipulations were on file in this court at the time its decree was made, one dated February 3, 1919, and the other February 5, 1919, the date of the decree in this court. Three other stipulations, all dated January 30, 1919, were exhibited to the judges of Division Two, and considered by them in making said decree, but not left with the clerk or the court, but were filed in said circuit court as contemplated by said decree. These original stipulations were lost and could not be produced at the trial now before us, but copies thereof were produced and put in evidence. These stipulations purported to authorize this court to make the decree of reversal, with directions shown by said mandate. Said stipulations were not signed by the plaintiffs Christian J. and George E Zeitinger, personally, but their names were signed thereto by their attorney, Julian Laughlin. All the other then parties to the suit signed said stipulations in person or by their attorneys. As a part of said settlement, one of said stipulations, dated January 30, 1919, executed by Julian Laughlin as attorney for plaintiffs and Robert McK. Jones and Matt Reynolds as a committee representing the holders of certain securities and bonds made by the Railway Exchange Building Company, provided that the settlement should have the effect of dismissing a certain equity suit which the receiver had brought against...