Court Opinion

ID: 8014974
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:03:18.557519+00
Date Added: 2024-06-11T16:36:16.518171
License: Public Domain

MAESHALL, J.
This is an action of assumpsit to recover ten thousand dollars attorneys ’ fees, for services rendered by the plaintiffs to the defendant, between April 1, 1899, and April 1, 1900. The petition alleges that the services were rendered in connection with the scheme of reorganization of the defendant company, and the paring down and funding of its debts, bonds and stocks and the payment of its floating obligations, and the consolidation of the defendant company with other connecting and terminal companies so as to form a continuous line from Kansas City, Missouri, to Port Arthur, Texas. The answer is a general denial, with special pleas of prior action pending and of payment. The reply is a general denial. ' The plaintiffs recovered judgment for ten thousand dollars, with interest from the institution of this suit, and the defendant appealed.
*582It is not necessary for the determination of this ease to make any detailed or extended statement of the nature or character of the services that the plaintiffs rendered the defendant, nor to follow the elaborate scheme that was devised and carried out for the reorganization and consolidation of the defendant company with the other connecting and terminal companies. It is enough to say that the defendant company was in bad shape, had a large floating debt, had defaulted in the payment of interest on its bonded debt, and that its creditors were at outs with respect to what should be done, and that all differences were adjusted, the practical consolidation effected, the obligations pared down and adjusted, the stockholders saved a large part of their investments, the floating debt was paid or provided for, and a fund of several million dollars created to pay expenses and betterments. This was effected mainly through receiverships, first in the State courts, and afterwards in the Federal courts, which brought the conflicting interests together and resulted in a foreclosure sale of the property and assets of the defendant company and the purchase of the same by a company, the Kansas City Southern Railway Company, organized for the purpose.
The plaintiffs filed an intervening petition in the case in the Federal court, on March 20, 1900, for services rendered the defendant, asking five thousand dollars for their services, and that it be paid out of the assets in the hands of the receiver. Thereafter on April 18,1900, the Federal court made an order that all persons who held claims or demands against the defendants and who desired to participate in the distribution of the assets in the hands of the receiver, resulting from the foreclosure sale and other money that came into the hands of the receiver, should present them for allowance to that court or sue upon them in some other court of competent jurisdiction within six months of the date of the publication of such order, or be forever barred *583from participation in such assets. Thereafter on September 19, 1900, the plaintiffs began this action in the circuit court of Jackson county. And afterwards on October 29, 1900, they filed a supplemental intervening-petition in the Federal court, -in which they recited the filing of the first intervening- petition for a portion of their services, and stated that they filed the supplemental intervening petition so as to cover all their claims and so as to show suits pending therefor, and recited that they had instituted this suit in the circuit court of Jackson county as aforesaid. And the plaintiffs claimed that said demand was preferential and should be allowed and paid out of the assets in the hands of the receiver. Nothing further had been done therewith in the Federal court at the date of the trial of this case. It did appear, however, that the plaintiffs and Frank Hagerman, Esq., had been appointed attorneys for the receiver by the Federal court, and that they had rendered him all necessary legal services and had been paid therefor, but it did not appear that the services involved in this case were included in such payments.
I.
The defendant’s first contention is that the plaintiffs had a prior action pending in the Federal court for the same subject-matter that is involved in this case, and, therefore, this action should be abated, or at any rate that all proceedings herein should be stayed until the termination of the case in the Federal court.
The general rule is thus tersely stated in 1 Ency. Pl. & Pr., p. 764: "The doctrine is well settled that an action in personam in a foreign jurisdiction can not be pleaded in abatement of another action commenced in a domestic forum, even if there be identity of parties, of subject-matter, and of the relief sought. In the application of this rule the States of the Union are regarded as foreign to one another, as are also the courts *584of a State and a Federal court held in another State or district. Whether the pendency of a suit in a State or Federal court in the same district may be successfully pleaded to the prosecution of a like suit in the other court is a question upon which the authorities axe conflicting. ’ ’
In addition to the great number of cases cited in the notes to the text, the counsel in this case have collected what appears to be all the authorities bearing upon the proposition, and as those cases will be collated by the reporter in connection with this opinion, it is not necessary to set them out here, especially as the decision of the case does not require a discussion or adjudication in this jurisdiction of the principles there discussed.
This is strictly a proceeding in personam. The main ease in the Federal court is essentially a proceeding in rem, as are also the intervening petitions. In this case, nothing but a personal judgment is asked. In the Federal court the primary object of the main ease was to seize and administer upon the assets belonging to the defendant. No order of dissolution of the corporation was asked or granted in that court and no personal judgment over was asked in that court in respect to any claim presented. If the object or purpose or effect of this action was to interfere, in the slightest degree, with the assets or property in the hands of the Federal court, this action would, not be tolerated for a moment. ,[Neun v. Blackstone B. & L. Assn., 149 Mo. 74; State Trust Company v. Railroad, 110 Fed. 10.] But such is not the case here. The plaintiffs claim that the defendant owes them this debt, and there is no case pending in the Federal court or in any other forum to try that question. The judgment in this case can only settle the question of indebtedness. The Federal court by its order of April 18, 1900, expressly authorized the plaintiffs to present their claim for allowance to that court or “to sue thereon in some other court of com*585peten! jurisdiction. ’ ’ The plaintiffs elected to take the latter course. Whether the judgment that is obtained in this case shall he allowed as a preferential claim and he paid out of the assets in the hands of the receiver, is a question that can only he decided by the Federal court. The plaintiffs do not ask that the question of their right to participate in the assets in the hands of the receiver he settled in this case, and the trial court did not attempt to do so. Therefore, the subject-matter involved in this suit is not the same as that involved in the plaintiffs’ intervening petition in the Federal court, and hence the plea of prior action pending is not tenable.
It is true that it appears that on March 20, 1900, the plaintiffs filed an intervening petition in the Federal court, asking an allowance of five thousand dollars, and that it be paid out of the assets in the hands of the receiver, and if this was all that appeared as to the proceedings in the Federal court in plaintiff’s behalf, the question of prior action pending, and whether the doctrine applied to cases pénding in a State court and in a Federal court in the same State and district, might possibly arise and have to be adjusted. But this is not all that so appears. On the contrary it appears that after the Federal court made the order of April 18, 1900, and within the time limited thereby, the plaintiffs began this suit, and thereafter they filed a supplemental intervening petition in the Federal court in which they recited that they had instituted this suit in the State court, they claimed that the judgment to be rendered in this case would be a preferential claim and should he paid out of the assets in the hands of the receiver. This action of the plaintiffs is a clear abandonment of the first intervening petition, and a substitution of a suit in the State court to settle the question of indebtedness, and an intervening petition in the Federal court to have the* judgment recovered in the State court allowed by the Federal court as a preferential claim and *586paid out of the assets. Under this state of the matter, the Federal court is no longer ashed to adjudicate whether or not the defendant owes the plaintiff anything. If the State court adjudges that the plaintiffs have no claim against the defendant, that will end the whole matter, for there will he nothing for the Federal court to allow or disallow as a preferential claim. If the State court renders a judgment in favor of the plaintiffs, that will not settle the question of whether it shall he allowed as a preferential claim, and the Federal court might or might not so allow it. Therefore, the question of indebtedness can only be tried once, and that in the State court, and the question of whether the indebtedness, if found to exist, shall be allowed as a preferential claim, can only be tried once, and that in the Federal court. If the State court decides that the defendant owes the plaintiffs the debt, that question can not afterwards be litigated in the Federal court, but that court will treat the judgment of the State court as conclusive on that question, for it expressly allowed such a proceeding to test the question of indebtedness by its order of April 18, 1900.
Therefore, there can never be any conflict of jurisdiction between the State and Federal courts in this case, and as the reason of the rule underlying the doctrine of prior action pending is, that the defendant shall not be called upon to defend two suits involving the same subject-matter, at the same time, in two different forums, the rule doeg not apply in this case.
If after a judgment is rendered in' plaintiff’s favor in this case, the Federal court refuses to'allow the judgment as a preferential claim, that action will have no effect upon the validity of the judgment, but will affect only the question of the satisfaction of the judgment. The plaintiffs would still be entitled to enforce the judgment in any way except possibly as it might affect the title to. property devolved by the judgment of foreclosure of the Federal court. However, these are ques*587tions not arising upon this record and as to which it would be improper to express any opinion in this case.
It follows that the contention that there was a prior action pending in the Federal court must be resolved against the defendant.
II.
The plea of payment is likewise untenable. What the plaintiffs received as attorneys for the receivers manifestly could not cover the services involved in this case. That compensation was for services rendered to the receiver after the res was taken away from the defendant, and placed in the hands of the receiver. The services here involved were services rendered to the defendant, and in view of the results attained, they were well worth the amount claimed and have not been paid for.
III.
Lastly, it is contended that the plaintiffs are not entitled to interest from the date of the institution of this suit, because the demand is unliquidated. The general rule is as claimed by defendant. [16 Am. and Eng. Ency. Law (2 Ed.), p. 1015.] But under the statute of this State (sec. 3705, R. S. 1899) interest is allowed “on accounts after they become due and demand of payment is made,” and the institution of a suit is a sufficient demand. [Brown v. Brown, 124 Mo. 79; Dempsey v. Schawacker, 140 Mo. l. c. 690.]
Interest is allowable under the statute on unliquidated claims from the date of demand. [Ryans v. Hospes, 167 Mo. 342.] In that case the claim was for services rendered as a nurse and interest was allowed from the date of the demand made upon the administrator. [See, also, Evans v. Brass Mfg. Co., 118 Mo. 548.]
*588No error appearing in the record, the judgment of the circuit court is affirmed.
All concur.