Ambrose v. Brown
Ambrose v. Brown
Opinion of the Court
delivered the opinion of the court:
The foregoing statement of the substance of the pleadings and evidence is sufficient to show the foundation of the errors that have been assigned.
It is conceded that the cause of action is not of the character on which action may be brought,- without leave, by the provisions of sec. 3 of the act of March 3, 1887 (24 Stat. at L. 554, chap. 373, U. S. Comp. Stat. 1901, p. 582). The contention is that without leave previously granted the court had no jurisdiction of the suit; and reliance therefor is upon Barton v. Barbour, 104 U. S. 126, 131, 26 L. ed. 672, 675. In that case the railway company, a Virginia corporation, was operated by a receiver appointed by a court of that State.
The plaintiff, for an injury received on said railway in Virginia, brought her action against the receiver in the supreme court of the District to recover damages. The receiver filed a plea to the jurisdiction, alleging the order appointing him receiver in the State of Virginia, which authorized him to de
Another case cited by the appellant is Comer v. Felton, 10 C. C. A. 28, 22 U. S. App. 313, 61 Fed. 731, 737. This was a controversy between two receivers involving the right of possession of property. One ground of the defense rested upon the judgment of a justice of the peace rendered in an action of unlawful detainer. This action had been brought against one Erwin, an employee of receiver Comer; the latter was not made a party. The judgment for defendant was held not to be conclusive. In the course of the opinion it was said: “Defendant, Comer, had been put in possession of the premises involved by a decree of the circuit court, and a suit instituted in a court of law, without leave of the court appointing him, was a gross contempt. * * * While the justice’s judgment is a general finding for the defendant, yet it is probable that he took this view of his jurisdiction, and therefore found for the defendant. But whether this be so or not is immaterial. Any judgment in another court in a suit affecting the receiver’s right
In the first of those cases' there was a plea to the jurisdiction, showing that the subject-matter of the action was an injury received on a railway in the State of Virginia operated by a receiver appointed by an equity court of that State, the effect of a judgment in which would be to establish a claim against the property in the possession and under the administration of another court. In the second case, an action had been brought in a justice’s court to recover the possession of property in the custody of an equity court. While the judgment was for the defendant, upon what ground it does not appear, a judgment for the plaintiff would have had the effect to devest the title of the property the possession of which was in the equity court through its officer, the receiver.
The facts of the present case are quite different. There was no interference with the property and no claim of possession. The suit was brought in the same court which had appointed the receiver, and, through him, was administering the affairs of the insolvent corporation. The great weight of State authority supports the proposition that the failure to obtain leave to sue the receiver does not affect the jurisdiction of the court, as to subject-matter, and the jurisdiction of the person of the receiver may be waived; save under the exceptional conditions shown in Barton v. Barbour, 104 U. S. 126, 131, 26 L. ed. 672, 675, and Comer v. Felton, 10 C. C. A. 28, 28 U. S. App. 313, 61 Fed. 731, 737. High, Receivers, 4th ed. sec. 254a; Lyman v. Central Vermont R. Co. 59 Vt. 167, 180, 10 Atl. 346; Tobias v. Tobias, 51 Ohio St. 519, 38 N. E. 317; Manker v. Phoenix Loan Asso. 124 Iowa, 341, 343, 100 N. W. 38; Murray v. Etchepare, 132 Cal. 286, 288, 64 Pac. 282; Mulcahey v. Strauss, 151 Ill. 70, 80, 37 N. E. 702; American Steel & Wire Co. v. Bearse, 194 Mass. 596, 600, 80 N. E. 623; Wilson v. Rankin, 129 N. C. 447, 449, 40 S. E. 310; Payson v. Jacobs, 38 Wash. 203, 206, 80 Pac. 429.
Particularly is this the case where the suit is in the same
The same doctrine, substantially, has the sanction of the Supreme Court of the United States, Jerome v. McCarter, 94 U. S. 734, 737, 24 L. ed. 136, 137. It was there said: “A further objection insisted upon is that -while the property was in the charge of a receiver appointed in the suit brought by Sutherland to foreclose the first mortgage, and therefore, as it is said, was in custodia legis, this bill was filed without leave of the court. If there could, under any circumstances, be any force in this objection, there is none now. Both suits were brought in the same court; these appellants appeared, answered, and cross-examined witnesses, and made no allegation that the suit had been brought without leave until about a year and a half afterwards. It was then too late. They must be held to have acquiesced; and, if not, leave of the court to commence and prosecute the suit must be presumed after the orders made to facilitate its progress.”
The fact that the same court having control of the property in the hands of a receiver entertains the suit would seem to be equivalent to leave to bring it. At any rate as the question had been raised by demurrer, the court, after requiring the receiver to answer, undertook to settle all doubt by granting the leave nunc pro tunc. The technical rules relating to such orders, invoked by the appellant, do not apply. The order was not to supply a former one that had been omitted in entering the minutes, but one expressly intended to relate back to the beginning of the suit so as to give sanction thereto, now for then, as the court had the right to do. Hirshfeld v. Kalischer, 81 Hun, 606, 607, 30 N. Y. Supp. 1027.
It may be remarked that a strict application of the doctrine relied on by the receiver would prevent the court taking juris
The original proceeding was to conserve the assets of the insolvent association and distribute the proceeds among the shareholding members. Section 4 of article IX. gave an express lien upon the assets of the association “before distribution to stockholders,” and this suit was brought to establish a claim of the kind declared entitled to such lien.
The assets were in the custody of the court of equity'for distribution to stockholders, and the same court had jurisdiction of the claim of the holders of the prior lien. Case v. Beauregard (Case v. New Orleans & C. R. Co.) 101 U. S. 688, 691, 25 L. ed. 1004, 1005.
Our statute of limitations provides that no action shall be brought upon an obligation of the kind sued on “after three years from the time when the right to maintain any such action shall have accrued.” Code, sec. 1265 [31 Stat. at L. 1389, chap. 854].
The note sued on fell due July 20, 1908; suit was begun July 21, 1911.
In an early case in this District a note was due July 5, 1879, and action thereon was begun July 6, 1882. The statute then in force required action to be brought “within three years ensuing the cause of action, and not after.” Held that the action was brought in time. It was said: “If the day on which the cause of action accrued, which in this case was July 6, 1879, is to be included, the action was begun one day too
The maker of the note had all the day of July 20th to pay the note, and the right of action did not accrue until July 21. The suit, as in Baker v. Ramsburg, supra, was not brought after three years from the time the right of action accrued. That decision, apparently unquestioned until the argument of this case, laid down a rule for the guidance of litigants in all subsequent cases, and it would be unjust to overrule it, even were we disposed to question its soundness.
The suit not being barred by the statute, there are no conditions in the case making the equitable doctrine of laches applicable.
The note was given to take up other notes, some of which, but how many does not distinctly appear, had been executed before the amendment.
Moreover, the express power conferred by amendment of the constitution^ a year prior to the execution of the note sued on, was an express ratification of the previous loans.
Perceiving no error in the record of the trial, the decree is affirmed, with costs. Affirmed.
Reference
- Full Case Name
- AMBROSE v. BROWN
- Status
- Published
- Syllabus
- Equity; Receivebs; Joint-Stock Associations; Limitation of Actions; Bills and Notes; Computation of Time; Stake Decisis; Promissory Notes. 1. Jurisdiction of the subject-matter of a suit against a receiver for an insolvent joint-stock association who was appointed by the same court as that in which the suit was brought is not affected by the fact that the plaintiff did not obtain leave to sue; especially where, upon demurrer to the bill, the court entered a nunc pro tuno order giving leave to sue as of the date of the original bill. 2. Equity may take jurisdiction of a suit to enjoin the receiver of an insolvent joint-stock association from distributing the assets of the stockholders, or applying them to other purposes than payment of the plaintiff’s debt, which is evidenced by a note given by the association under a provision in its constitution authorizing its directors to obtain loans and making them a first lien on the assets before distribution to stockholders. 3. The day upon which a note fell due is to be excluded in computing the time allowed by see. 1265, D. C. Code [31 Slat, at L. 1389, chap. 854], providing that no action shall be brought upon such an obligation after three years from the time when the right to maintain any such action shall have accrued. 4. Where in 1879 the then appellate court of this District laid down a rule for the computation of time in determining whether an action on a promissory note was barred by the statute of limitations, and that rule remained unquestioned until attacked in this court in 1914, this court held that it would be unjust to overrule it, even if the court were disposed to question its soundness. 5. A joint-stock association’s note cannot be avoided upon the theory that it was executed without authority by its directors for money borrowed by them to redeem stock, where such redemption was one of the association’s express objects, and the directors, before being given express authority to do so, had borrowed money for such purpose, giving notes therefor and reporting the same at the annual meetings of members, who made no objection, and had, by an amendment to the association’s constitution, been given express power to make loans for that purpose before the execution of the note in suit, which was given in part to take up notes executed before the amendment.