Case Name: State ex rel. Algiers Brewing Company vs. Fred. D. King, Judge Division B, Civil District Court
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1894-01
Citations: 46 La. Ann. 100
Docket Number: No. 11,327
Parties: State ex rel. Algiers Brewing Company vs. Fred. D. King, Judge Division B, Civil District Court.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 46
Pages: 100–109

Head Matter:
No. 11,327.
State ex rel. Algiers Brewing Company vs. Fred. D. King, Judge Division B, Civil District Court.
The only issue is whether the relator is entitled to a suspensive appeal from an order appointing a receiver.
Tire court of the first instance having acted upon the resolution of the company consenting to the appointment of a receiver, a suspensive appeal will not lie from the decree of appointment without proof that the resolution was ultra vires, or that it was, in other respects, illegal and improper.
The remedy to correct the alleged illegality in the appointment of a receiver is by rule to s et aside and vacate the order of appointment, and, if the rule be denied, to appeal from the decision.
Whether the company consented legally is a question of proof to be considered on the trial of a rule.
y^PPLICATION for Mandamus and Prohibition.
Henry P. Dart and P. B, Thomas for the' Helator:
1. On this application the only issue is whether the relator is entitled to a suspensive appeal from the ex pw'te order appointing a receiver — the correctness of the judgment will be passed upon when the record is brought up regularly for review. Ex pcvrte Emanuel, 4 An. 424; Street’s Case, 85 An. 516; Ingram’s Case, 20 An'. 530; Cain’s Case, 20 An. 574; Geddes’ Case, 36 An. 302, 210.
2. An affidavit by a third person, showing the nature and extent of his interest and the irreparable injury to be suffered, is according to the received practice; if the interest is controverted below, testimony may be taken on the issue thus raised: if the question is raised here for the first time the case will beremanded to discuss that issue with proper reservation of relator’s rights, unless on the face of the record the interest is apparent. Bonnet’s Case, 29 An. 397; Succession of Henderson, 2 Rob. 391; Street’s Case, 35 An. 516; Ober vs. Excelsior Co., 44 An. 573.
3. A stockholder of the corporation thus placed in charge of a receiver has the right to suspensively appeal from the judgment. Morey’s Case, 31 An. S25.
4. Where the sole issue presented by the demand is the appointment of a receiver, a judgment making such appointment is a final judgment, responsive to the allegations and settling all the issues between the parties.
If held to be interlocutory it causes irreparable injury, for having been immediately executed it dispossesses defendant of its property, suspends its cor porate functions and immediately fastens upon it the condition of an insolvent concern in process of liquidation; there remans nothing to do toward that end save to close out judicially its assets. C. P. 566, 580; Carey vs. Richardson, 85 An. 505.
5. Unless the denial of a suspensive appeal in such case rests upon the exceptions contained in C. P. 580, the appeal must be granted, as the designation of certain.judgments has been interpreted as intentional omission of all others. Ingram’s Case, 20 An. 529; Cain’s Case, 20 An. 576, 577; G-eddes’ Case, 36 An. 301.
6. An ex parte order appointing a receiver is an absolute nullity, and will be reversed for that cause on appeal. Ober vs. Excelsior Co., 44 An. 571; State ex rel. Britten, 43 An. 832; Turgeau vs. Brady, 24 An. 348; Martin vs. Blanchin, 16 An. 237; High on Receivers, Sees. Ill, 112, 346; State ex rel. Morey, 31 An. 823, 836; Reder vs. Maas, 34 An. 130.
There is no authority requiring the taking of a rule to rescind such judgment, leaving the assets in control of the receiver; “a judgment rendered in his favor after years of litigation restoring to him his property would come too late to afford a remedy. The injury might be irreparable,” DeBaillon vs. Ponsony, 5 N. S. 42; State ex rel. Taylor, 26 An, 65; Street’s Case, 35 An. 516, 517; Analogous cases, 12 An. 455; 35 An. 745; 2 Rob. 342; 23 An. 50-52.
7. Whether defendant (under the peculiar allegations of plaintiff’s petition) con sented is a question of proof to be considered when th e record is regularlyhere on appeal.
If considered now the alleged consent must be taken in its entirety — a consent to a judgment in favor of another plaintiff to be rendered and executed in an., other forum, looking to the appointment of a receiver acceptable to stockholders, mortgage bondholders and creditors, can not be construed into a consent to the proceedings here complained of.
The consent can not be divided.
If taken as a whole, the judgment rendered in this cause is in flat derogation of its terms and contrary to the principles established in similar cases. In re Savings Bank, 35 An. 200; In re Herdic Coach Company, 35 An. 246.
Where a judgment rendered on the written consent of parties does not conform to that consent, either may appeal to correct the error. Sprowl vs. Stewart, 19 An. 433; Police Jury vs. McDonogh, 8 An. 342.
8. The acquiescence by the board of directors of a corporation in a judgment appointing a receiver must be accepted as a whole. If on conditions which are not permitted by the court it is no acquiescence. In any event these officers can not consent to the appointment of a receiver; such an act is ultra vires. State vs. Atchafalaya Railroad, 5 R. 68; Curein vs. Santini, 16 An. 27; State vs. Bank, 31 An. 831; Morawstz on Corporations, Secs. 512, 513.
The acquiescence must furthermore be absolute C. P. 567; Jackson vs. Michie, 33 An. 727; Succession of Lamm, 40 An. 312; Meyer vs. Schurbruck, 37 An. 373, Buntin vs. Johnson, 27 An. 625.
Third persons can not be prejudiced by defendant’s acquiescence. State ex rel. etc., 29 An. 146; Lawson vs Bruenn, 29 An. 868.
Horace E. Upton and Lazarus, Moore & Luce contra:
No appeal lies from the orders of the lower court, on an ex parte application of a third person, without proof, contradictorily taken in the lower court, of the interest of said third person and the irreparability of the injury to be sustaine 34 An. 3; 32 An. 1192; 33 An. 108; 24 An. 426 ; 7 N. 8. 345.
Tile remedy to correct the improvident and irregular appointment o£ a receiver is by rule to set aside and vacate the order of appointment, and if that rule be denied, to appeal from the decision. 43 An. 123; 43 An. 829; 8 Paige (N. Y.j 481.
Relators having acquiesced in and approved of the appointment of a receiver, are precluded and estopped from appealing therefrom.
An interlocutory order declaring the necessity for the appointment oí a receiver, and appointing the same, can not work irreparable injury, inasmuch as it is not a definitive judgment which can acquire the force of res judicata. Coats vs. Cunningham, 80 111. 467, and authorities; Adams Eq., 6 Am. Ed. 684, 688, 689; 3 Stockton,126; 6 Howard (U. 8.), 204; 4 Scan. 326; 5 Glim. 35; 21 111. 207; 13 111. 31; 15 111 228.
In no event can a suspensive appeal be taken from an order appointing a receiver, same being one of that class of orders which are executed provisionally, notwithstanding an appeal. C. P. 580, See. 2.

Opinion:
The opinion of the court was delivered by
Breaux, J.
The relator is engaged in the business of brewing and selling beer and is the owner of a brewery.
On 28th August, 1898, the Lafayette Bank of Missouri, claiming to be a creditor, instituted suit and applied for the appointment of a receiver.
A receiver was appointed; he qualified and took possession of the property.
The relator moved the court to grant it a suspensive appeal from the judgment appointing a receiver, as well as from all other orders granted under the order of appointment.
The court declined to grant the motion.
The writs applied for from this court are for the purpose of compelling the district judge to grant the order of appeal for which an application was made.
The relator in the petition for writs of mandamus and prohibition substantially alleges that it is true that after the appointment of the receiver the board of directors of relator were induced to hold a meeting and were misled into passing a resolution framed as follows:
"New Orleans, August 31, 1893.
" The board met to-day with the following members present: Dr. E. Y. Ames, J. J. Clarke, William Gaiser, H. Y. Boubade, J. M. Lotz and F. A. Godefroy.
" The president called the meeting to order- and stated that the purpose was to explain the situation now existing with reference to the pending suit of the Lafayette Bank, of St. Louis against the Algiers Brewing Company, in which application has been made for the appointment of a receiver, and John H. O'Connor has been appointed a receiver. The necessity for the appointment being recognized and the appointment having met with the approval of the board after discussion, it was moved by Mr. Lotz, seconded by Mr. Godefroy, that Dr. E. Y. Ames be suggested and recommended to the court for and in behalf of this corporation to act- as co-receiver in the suit of the Lafayette Bank of St. Louis vs. Algiers Brewing Company, with John H. O! Connor receiver herein, said suit being now pending in the Civil District Court for the parish of Orleans.
11 It was further resolved that a copy of this resolution be presented to the Hon. E. D. King, judge of said court, accompanied by a petition containing proper averments asking for the immediate appointment of Dr. Ames as co-receiver in the interest of the stockholders of the company."
The relator alleges that the board subsequently rescinded the foregoing resolution as ultra vires, null and void, and instructed their attorney to take immediate steps to revoke the appointment of J. H. O'Connor as receiver and to restore the property of the brewery to its previous condition; that the rescinding resolution was presented to the Civil District Court and permission asked to have it spread upon the records of the court, which permission was refused.
The respondent judge returns that the Algiers Brewing Company having, by resolution, approved the appointment by the court of a receiver, he declined to allow a resolution purporting to rescind the action ex parte to bb spread on the minutes; the court considering that if there is any error in the order appointing a receiver, that the proper mode of procedure is that pointed out in Whitaker vs. Ash-bey, 43 An. 123, and State ex rel. Brittin vs. New Orleans, Id. 829, to move for the rescinding of the appointment ordering a receiver.
That he was not advised as to the truth or falsity of the allegations of the relator, that the resolution consenting to and approving the appointment of a receiver was the result of surprise, deception and misinformation as alleged; that if they are true and it constitutes in law cause for the annulment of the orders made by him, such orders could have been rescinded, on motion to that effect, after trial contradictorily with all parties in interest; that he suggested and invited from the bench such action, and assured counsel that he would make such rule returnable within the shortest possible delay
He denies that the action of the board of directors in approving and consenting to the appointment of a receiver is ultra vires.
That whether ultra vires or not depends upon the terms of the charter of the Algiers Brewing Company and the action of the stockholders. That these facts can be determined only by evidence taken contradictorily with all the parties in interest in the court of the first instance.
That if a rule had been taken out as suggested by him, investigation and inquiry could have been had and decision thereon rendered, but relator failed and neglected to adopt such a course, clearly pointed out by law.
The relator on the face of the papers having acquiesced in the appointment and voluntarily ratified the decree of appointment, the Supreme Court will not set aside the order granted and thus ratified without evidence showing the necessity for rescinding the decree appointing the receiver.
The order of the court of the first instance was based upon the consent of the board of directors.
We will not assume, without any evidence before us, that the court erred in thus placing confidence in the first resolution adopted by the Algiers Brewing Company approving the appointment of a receiver.
If, as alleged, there was deception practised which influenced the board, and if the action was ultra vires, and if other grounds of nullity pleaded are cause sufficient to set aside the order appointing a receiver, they should be brought up, after hearing, contradictorily with the parties in interest.
The court will not assume that the grave charges made are true and proceed to a hearing upon that hypothesis with the view of rescinding the order of appointment.
The granting of a suspensive appeal upon those grounds would have the effect of temporarily sanctioning the charges, as if proven.
Upon unproven averments the Algiers Brewing Company, would suspend the execution of an order to which it consented.
Such would be the effect of a suspensive appeal. Parties can not sustain contradictory positions.
It would be encouraging proceedings to no purpose to grant a suspensive appeal.
Therefore we will not grant the writs applied for by the relator, and we relegate them to the District Court of original jurisdiction or any remedy to which it may be entitled.
Whether the company consented legally is a question of proof, which must come to this court, as proof in other cases is brought up, on an appeal.
It is ordered, adjudged and decreed that the restraining order be rescinded and relator's demand rejected.