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Zechiel v. Firemen's Fund Ins. Co.

July 15, 1932

ZECHIEL ET AL.
v.
FIREMEN'S FUND INS. CO.



Appeal from the District Court of the United States for the Southern District of Indiana, Indianapolis Division; Robert C. Baltzell, Judge.

Author: Evans

Before ALSCHULER and EVANS, Circuit Judges, and WILKERSON, District Judge.

EVANS, Circuit Judge.

The two questions determinative of the appeal are:

(1) Does the complaint state the facts upon which appellee relies for its attack upon the order appointing the receiver?

(2) May a defendant in an action brought against him by a receiver of a copartnership, upon leave of the court which appointed the receiver in another action at the instance of a contract creditor, challenge the validity of the receiver's appointment?

Both of these questions we answer in the negative.

(1) The complaint in the instant case does not disclose the facts upon which appellee relies to support its demurrer. The court can not assume from the statement that "he was appointed as receiver * * * in an action by Lewis Meier & Company, a corporate creditor, against said Edward Traugott and Harry Sussman, * * *" that Lewis Meier & Company was a simple contract creditor rather than a lien or judgment creditor. For in construing the above allegation, we are required to look also to the first clause of the sentence which reads that he "is the duly qualified and acting receiver of the partnership assets of Edward Traugott & Company, * * *." Reading the two clauses together, the court must, as against a demurrer, construe them to mean that Lewis Meier & Company was such a creditor as could institute the receivership proceedings against the partnership. Among the numerous decisions which have passed upon and construed language similar to that before us, is the case of Spinney v. Hall et al., 49 Ind. App. 502, 97 N.E. 571, 572. There the court said:

"It appears from the complaint that the Newton circuit court appointed appellees * * * as receivers of the Goodland Bank. It was a court of general jurisdiction, and, in the absence of a showing to the contrary, we must indulge the presumption that the proceedings were regular; that it had jurisdiction of the subject-matter, and of the parties in interest. Roberts v. Leutzke, 39 Ind. App. 577, 78 N.E. 635; American, etc., Ins. Co. v. Mason, 159 Ind. 15, 64 N.E. 525; Runner v. Scott, 150 Ind. 441, 50 N.E. 479; Boyer v. Robertson, 149 Ind. 74, 48 N.E. 7; Davis v. Taylor, 140 Ind. 439, 39 N.E. 551; Nichols v. State, 127 Ind. 406, 26 N.E. 839. This presumption in favor of the order of the court appointing said receivers, and it further appearing that they duly qualified and as such receivers commenced this action, was a sufficient showing that all the proceedings in that case leading up to their appointment were regular."

Other decisions to the same effect are: Robertson v. Perkins, 129 U.S. 233, 9 S. Ct. 279, 280, 32 L. Ed. 686; Commonwealth v. Chase, 127 Mass. 7, 13; Lethbridge v. City of New York, 59 N.Y. Super. Ct. 486, 15 N.Y.S. 562; Rockwell v. Merwin, 45 N.Y. 166, 167; Bowden v. Jacksonville Electric Co., 51 Fla. 152, 41 So. 400, 7 Ann. Cas. 859; Edwardson v. Garnhart, 56 Mo. at page 86; Albright v. Baltimore & O.R. Co., 22 F.2d 832 (D.C.); 19 Corpus Juris, at page 833.

In Robertson v. Perkins, supra, the rule is stated thus:

"The allegation of the complaint in this case is, that the plaintiff 'duly made and filed due and timely protest in writing,' and 'duly appealed to the secretary of the treasury,' and 'that ninety days have not elapsed since the decision of the secretary of the treasury on the aforesaid appeal.' * * * In Lorillard v. Clyde, 86 N.Y. 384, the complaint alleged that, in pursuance of a certain agreement, a corporation 'was duly organized under the laws of this state.' It was contended, on a demurrer to the complaint, that the agreement was illegal, because * * *. But the court held that the allegation that a corporation was 'duly organized under the laws of this state,' pursuant to the agreement, imported that the requisite number of persons united for that purpose; that it must be assumed that the corporation was regularly organized; and that it was unnecessary for the plaintiff to show in his complaint the precise steps taken to accomplish that result. The word 'duly' means 'in a proper way, or regularly, or according to law.'"

(2) Inasmuch as counsel for appellant have conceded, or at least written their briefs on the assumption, that the Lewis Meier & Company was a simple contract creditor which brought its action to obtain a judgment and which, before judgment, secured the appointment of appellant as receiver of the partnership, it is deemed advisable to also dispose of the second question. By so doing we may avoid the possibility of a second appeal.

In disposing of this question, it becomes necessary to examine the Indiana Statute (Burns' Ind. Stats. 1926, ยง 1300) and the decisions of the appellate courts of Indiana thereon. The parties agree that the Marion Superior Court was a court of general equity jurisdiction -- a court whose ...


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