Court Opinion

ID: 7053620
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:03:31.603425+00
Date Added: 2024-06-11T16:11:52.137128
License: Public Domain

McCabe, J.
The appellee, as receiver, sued to collect a note, and to foreclose a mortgage given by appellants to said association to secure the payment of said note. The issues made were tried by the court, resulting in a special finding of facts, on which the court stated conclusions of law leading to judgment in favor of the plaintiff.
The assignment of errors calls in question the sufficiency of the complaint, the action of the court in overruling appellants’ demurrer thereto; in overruling appellants’ motion in *282arrest of judgment; in overruling appellant James M. Hatfield’s demurrer to the second paragraph of appellee’s reply to the joint answer of said Hatfield and the Huntington City Building, Loan, etc., Company; in overruling the demurrer of Thursy J. Hatfield to the second paragraph of reply to the second paragraph of her separate answer; in its conclusions of law; and in overruling appellants’ motion for a new trial.
This is the second time this case has been in this court. Hatfield v. Cummings, Rec., 142 Ind. 350. After the return of the cause to the Huntington Circuit Court, the venue was changed to the "Wabash Circuit Court. On the former appeal the judgment was reversed because the complaint failed sufficiently to allege that the receiver had been authorized to sue. The cause was remanded with leave to amend the complaint; and the principal objection to the complaint now is that the amendment did not obviate the defect pointed out on the former appeal. The allegation in the amended complaint as to the authority of the receiver to sue is “that said Luther Cummings was duly appointed and qualified as receiver of said association, and, among other things, was then and there, by said court, duly empowered, ordered, and directed to collect by suit, if necessary, all the claims due said association.” This made the complaint sufficient in that respect. Hatfield v. Cummings, Rec., 140 Ind. 547; Hatfield v. Cummings, Rec., 142 Ind. 350.
Another objection to the complaint is that it does not show that the association is in debt, or that any claims have been allowed, or judgments rendered, making the foreclosure of the mortgage for the collection of the note sued on necessary. A number of cases are cited where stockholders of insolvent banking corporations, and the like, were sued by a receiver to collect the stock subscribed, and in some instances beyond the amount of such stock; and in such cases it was held that the receiver’s complaint was bad, because it failed to show that the payment of the debts and liabilities of the insolvent concern made it necessary to force such collections. But this *283is a very different sort of a case. The receiver here was appointed under the statute because of the expiration of the charter of the corporation, and not because it was insolvent. It is rather a flimsy and unconscionable excuse for the maker of a note and mortgage for borrowed money to give, — why it should not be paid, — that the lender does not need it to pay debts with. There was no error in holding the complaint good.
Both James M. Hatfield and Thursy J. Hatfield are appellants, and have joined in the assignment of error on the separate demurrer of said James M. and the separate demurrer of Thursy J. to certain replies. Neither of these appellants were interested in, or injured by, the ruling on each other’s separate demurrers to such replies. It is well established that a ruling not available as to all parties complaining of it, cannot be successfully assigned as error jointly by them. Earhart v. Farmers Creamery, 148 Ind. 79, and cases there cited. Therefore, we need not further notice the sufficiency of said replies.
It is next objected that the finding of facts does not show an order of court authorizing the receiver to sue. The special finding upon this point states that “the court then and there, upon said hearing, appointed Luther Cummings, the plaintiff herein, as such receiver of and for said Lime City Building, Loan and Savings Association, and empowered, ordered, and directed said receiver to take charge of its books, papers, and property, and to collect all claims due to said association by suit or otherwise.” Hnder the authority of the cases cited above, the finding of the receiver’s authority is sufficient.
The conclusion of law objected to by appellant.is the first, which is as follows: “That the defendants Hatfield, being members and stockholders in the said Lime City Building, Loan and Savings Association at the time the order appointing the plaintiff receiver of said association was entered, and at the time of rendering final judgment in said action so commenced and prosecuted by said Harvey C. Black, are bound *284thereby as if they had each been, and continued until its final determination to be, parties defendant in that suit.” This conclusion of law has reference to the facts found under the issues upon the answer of appellants assailing the validity of the appointment of appellee as receiver in the suit of Black against the Lime City Building, etc., Association, and appellee’s replies to said answer. All the facts are found about that litigation, in which it is shown that the same objections are urged to the validity of the appointment in this case that were put in issue and adjudicated in that case, adjudging that the appointment so made was valid, and upheld by the judgment of the court. And that judgment was affirmed on appeal to this court in Lime City, etc., Assn. v. Black, 136 Ind. 544.
It is true, the finding shows that, though the Hatfields were parties to that cause, yet they were dropped out of the case by a dismissal as to them before the final judgment. But the finding shows that they were at all times, during that litigation and adjudication resulting in the appointment of a receiver for such association, both stockholders in said association and members thereof.
An eminent author says: “For instance, a stockholder in a corporation against which a judgment has been recovered, and out of whose estate the execution issued thereon has been satisfied, is so far a privy in law that he may bring error to reverse it, but for that very reason he cannot attack the judgment collaterally for any defect such as an irregularity in the service of process.” 1 Black on Judg., section 260; Freeman on Judg., (2nd ed.) section 177. So it has been held by this court in two cases that: “Whether the action of the court in appointing a receiver was according to law, we need not decide. If the appointment was erroneous, it was not void, and cannot, in a collateral proceeding, be assailed, even by the parties thereto, and certainly not by strangers in the attitude of appellant.” Pressley v. Lamb, 105 Ind. 171, 190; Cook v. Citizens Nat. Bank, 73 Ind. 256.
Kerr on Bee., page 166, says: “It is immaterial that the *285order appointing a receiver may have been improper or erroneous. It is not competent for any one to interfere with the possession of a receiver on the ground that the order appointing him ought not to have been made. It is enough that it be a subsisting order.” This authority is cited and quoted with approval in both of the cases first above cited, and in Smith v. Harris, 135 Ind. 621. So it results from the foregoing that the Hatfields, even if they were strangers to the adjudication appointing the receiver, cannot attack the same collaterally; and also, being in privity with the association, by their membership therein and their relation thereto as stockholders therein, they are equally bound by that judgment. Whittlesey v. Frantz, 74 N. Y. 456; Bangs v. Duckenfield, 18 N. Y. 592; 2 Black on Judg., section 583.
The substance of appellants’ contention that the circuit court erred in overruling their motion for a new trial is that the evidence shows clearly that their answers in confession and avoidance were proved without any conflict in the evidence. The substance of those answers is that the receiver ought not to be allowed to foreclose the mortgage for the collection of the note secured thereby, because the application for his appointment as such was not made until the 23rd day of July, 1890, and that the time in which the statute allowed such a receiver to be appointed expired on May 5, 1890,— previous to such appointment. The evidence and record show that the suit by Black against the association, in which the appellee was appointed as receiver, was commenced on April 12, 1890, which was before the expiration of the three years allowed by the statute for closing up the affairs of the association after the expiration of the chartered life thereof. As was held by us on appeal from the judgment in that case, the appointment might be validly made-under the provisions of the statute, after the expiration of the three years, if the ap-' plication therefor was made before the expiration of such three years. In that appeal it was attempted to be shown that the application was not made until after the ex*286piration of such three years in this way, namely: By showing that the complaint in that case contained no application for the appointment of a receiver when filed, and up until July 23, 1890, which was after the expiration of such three years, such application was brought into that complaint by amendment. "Whether that required such application to be deemed made and filed at that date, or at the date of the filing of the complaint, was sought to be presented to us in that appeal. But the date of bringing into the complaint the application was not shown in the record in that case. Hence, the complaint containing the application for the appointment of a receiver appearing to have been filed in time, we affirmed the judgment. In that case and in that appeal was the time, and that was the place, to question the legality, the regularity, and the validity of the appointment of the appellee here as receiver; and the court having jurisdiction of the subject-matter and parties, all objectors must forever after hold their peace. All objections to such appointment after the affirmance of that judgment, in the nature of a collateral attack come from whomsoever, or from whatever quarter they might, are collateral impeachments of the judgment of a court of competent jurisdiction. And such attacks, we have seen, cannot be successfully made, even though the court, in making such appointment, erred and misconstrued the law. In case no appeal had been taken, the effect of the judgment appointing the receiver is the same.
It may be conceded that the appellants proved their answers as to the allegation that the amendment to the complaint in the Black case, made July 23, 1890, brought into the complaint in that case for the first time the application for a receiver. That was proved by oral evidence. But the judgment of appointment was in evidence, which was affirmed in this court in Lime City, etc., Assn. v. Black, 136 Ind. 544. That judgment was conclusive as to the appointment of the receiver and it was competent evidence regard*287less of the replies. The truth is, the circuit court ought to have sustained, instead of overruling, appellee’s demurrers to such answers. Those answers admitted appellee’s appointment as receiver, but sought to avoid it by setting forth facts by which it is claimed that the inference arises that the appointment was erroneous. That was nothing more nor less than a collateral attack upon a judgment of a court of competent jurisdiction, which the law forbids, as already said. The answers being insufficient the ruling upon the replies was wholly immaterial and could not and did not harm appellants even if erroneous.
This conclusion is not in harmony with what was decided as to the sufficiency of the third paragraph of the answer in Hatfield v. Cummings, Rec., 140 Ind. 547. In that case, however, the question as to the right to collaterally attack the judgment of appointment of a receiver was not suggested by counsel, or noticed by the court. That case, as to that point, is modified to conform to this opinion.
Judgment affirmed.