Case Name: STEWART v. LABEREE
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1911-02-06
Citations: 3 Alaska Fed. 558
Docket Number: No. 1,874
Parties: STEWART v. LABEREE.
Judges: Before GILBERT and ROSS, Circuit Judges, and HAN-FORD, District Judge.
Reporter: Alaska Federal Reports
Volume: 3
Pages: 558–563

Head Matter:
185 F. 471
STEWART v. LABEREE.
No. 1,874.
Circuit Court of Appeals, Ninth Circuit.
Feb. 6, 1911.
Fernand De Journel, Brown & Lyons, and T. C. West, for plaintiff in error.
Edmund Smith, for defendant in error.
Before GILBERT and ROSS, Circuit Judges, and HAN-FORD, District Judge.

Opinion:
GILBERT, Circuit Judge
(after stating the facts as above).
The writ of error presents the question of law whether, upon the facts proven under the issues, it is shown that the indebtedness of the plaintiff in error to the Construction Company had been paid or satisfied. There is no evidence of an agreement between the parties that the notes were received as payment of the debt. In the absence of such an agreement, the common-law rule prevails in nearly all of the states and is adopted in the federal courts that the original demand is not paid or extinguished by the note. Peter v. Beverly, 10 Pet. 532, 9 L.Ed. 522; U. S. Bank v. Daniel, 12 Pet. 32, 9 L.Ed. 989; Lyman v. Bank of the United States, 12 How. 225, 13 L.Ed. 965; Downey v. Hicks, 14 How. 240, 14 L.Ed. 404; Atlas S. S. Co. v. Columbian Land Co., 102 F. 358, 42 C.C.A. 398. Nor is there any evidence other than the recital in said resolution of the trustees that the notes which were produced in evidence were ever delivered to the Construction Company. They purport to have been executed at Montreal; but it is evident that the maker could not have been at Montreal, Canada, at the time of their execution. The bill of exceptions describes Frost as the president of the Railway Company, and managing agent of the Construction Company on March 25, 1909, and we may assume that he bore such relations to both corporations at the time when the notes were marked canceled. But there is no evidence that he was authorized to act for or represent either corporation in compromising the debt of the plaintiff in error, or in receiving accord and satisfaction thereof. Evidently the books of the Construction Company contain no entry that notes had been given for the indebtedness of the plaintiff in er ror, for otherwise the action would probably not have been brought as it was upon the original entries. There is no evidence other than the recital in said minutes of the board of trustees that $6,000, or any sum, was ever paid by the plaintiff in error in satisfaction of the notes. At the time of the meeting of the board of trustees of the Construction Company, at which they appear to have ratified the alleged settlement between Frost and the plaintiff in 'error, th,e trustees had no authority to adjust said account or to receive or acknowledge receipt of money in settlement of the same. All of the assets of both corporations had been placed by the order of the court in the hands of the receiver, and, although the Construction Company was a corporation organized under the laws of Washington, all of its business was transacted in Alaska, and all its property was there, and it all belonged to the Railway Company for which, it was but an agent, as the trustees of the Construction Company well knew, and as the plaintiff in error admits. It was an act done in violation of the rights of the Railway Company and the rights of its creditors as well as in violation of the order of the court appointing receivers and of the injunction therein contained. The two corporations and Frost were parties to the suit in which the receiver was- appointed and were bound by the order so made.
The plaintiff in error cites authorities to the proposition that the appointment of a receiver does not in itself convey title to personalty or choses in action located outside of the court's jurisdiction, and that therefore the obligation of the plaintiff in error could lawfully be paid to the Construction Company at Seattle. Those authorities are not pertinent' here, for the doctrine to which they are applicable is not involved. There is no question here of the power of a corporation to dispose of its property located outside of the district in which the receiver was appointed or of the right of' a creditor to subject such assets to the satisfaction of his claim. By the order appointing the receiver, he was given the right of possession of all the assets of the Construction Company and the Railway Company, including the book accounts, notes, and debts due those corporations. The debt on which the present action was brought was a debt incurred in Alaska. There is nothing to show that notes had been given for that debt at the time when the receiver was appointed except the minutes of the meeting of the trustees held long afterward and the fact that notes were produced in evidence which bore the date of December 21, 1907, and there is nothing to show that, if the notes were outstanding wh,en the receiver was appointed, they were not in Alaska. But, whether or not the receiver obtained the possession of the notes by the order of his appointment, the officers of the Construction Company, being represented in court at the time when the order was made, were thereby obligated to surrender the notes to the receiver. The Construction Company was amenable to the orders of the court. The order amounted to an injunction to all parties within the jurisdiction of the court against dealing with the property mentioned in the order in any way to impede the receiver in administering the same. A court may control by its receivership property beyond its territorial jurisdiction when it has jurisdiction of the parties, and it may restrain them from interfering with the receiver's possession of such property. 34 Cyc. 214; Chesapeake & O. Ry. Co. v. Swayze, 60 N.J.Eq. 417, 47 A. 28; Vermont & Canada R. R. Co. v. Vermont Central R. R. Co., 46 Vt. 792; Sercomb v. Catlin, 128 Ill. 556, 21 N.E. 606, 15 Am.St.Rep. 147; Chafee v. Quidnick Co., 13 R.I. 442; Schindelholz v. Cullum, 55 F. 885, 5 C.C.A. 293.
The plaintiff in error contends that the court below erred in finding the settlement void on the ground of fraud and collusion between the parties who made it, for the reason that no such ground for impeaching it had been pleaded by the defendant in error. But there was no opportunity to plead such fraud and collusion, nor was there necessity therefor. The action was brought upon the indebtedness as it appeared upon the books of the Construction Company. Th.e plaintiff in error answered alleging, not that there had been accord and satisfaction, but that notes had been given for the debt, and that the notes had been paid and canceled. It was proper to show, as the defendant in error did from the minutes of the board of trustees, not only that the execution and cancellation of the notes were fraudulent and collusive, but that the whole transaction was prohibited.
The judgment is affirmed.