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Goddard v. Electric Shovel Coal Corporation.

May 24, 1938

GODDARD
v.
ELECTRIC SHOVEL COAL CORPORATION.



Appeal from the District Court of the United States for the Eastern District of Illinois; Walter C. Lindley, Judge.

Author: Treanor

Before SPARKS, MAJOR, and TREANOR, Circuit Judges.

TREANOR, Circuit Judge.

This is an appeal from an order and judgment of the District Court vacating a previous order of the same court. The previous order allowed a claim of the Mississippi Coal Corporation which had been filed in a receivership cause entitled Illinois Printing Company et al. v. Electric Shovel Coal Corporation, D.C., 20 F.Supp. 181.

The claim in question had been filed in May, 1932, and was based upon a note for $56,217.50 and two open accounts of $40,000 and $18,000 respectively. The claim was in the usual form and verified by the treasurer, but the note was not attached. One of the sworn statements was that the claim "is now owing the claimant and there has been no assignment of it and no person other than claimant has any interest in it." Upon objection to the claim by the receiver it was referred to a Special Master in Chancery. The Master reported that no one appeared in behalf of the claimant and that the claim apparently had been abandoned. His recommendation was that the claim be not allowed. In his report, respecting this claim, the Master stated that the evidence submitted by counsel for the receiver in support of the objections to the claim disclosed that the Electric Shovel Coal Corporation had counterclaims against the Mississippi Coal Corporation that would cancel the entire indebtedness claimed by the Mississippi Coal corporation in its proof of claim, except as to a balance of $8,755.50. The report of the Master concluded as follows:

"As the claim of Mississippi Coal Corporation was not proven and appears to be abandoned, and in view of the fact that the set-off on behalf of the Receivers does not exceed the amount of the claim and therefore no judgment is asked against Mississippi Coal Corporation, I am not making more specific findidngs."

Under date of April 24, 1933, the following entry appears in the record of the receivership proceedings:

"Now on this 24th day of april, A.D. 1933, It Is Ordered by the Court that the Report of William H. Haight, Special Master in Chancery, on the claim of the Missippi Coal Corporation against Electric Shovel Coal Corporation, a corporation, is hereby confirmed.

"It is further Order that the Claim of the Mississippi Coal Corporation is allowed in the sum of $8,755.50 and disallowed as to all of the remainder."

In the meantime one goddard, interpleader-appellant here, had commenced suit against the Mississippi Coal Corporation, and on May 3, 1934, supplemental to his suit, he obtained a writ of attachment, or garnishment, against the receiver of the Electric Shovel Coal Corporation; and in answer to interrogatories the receiver stated that he held in his hands money due the Mississippi Coal Corporation in the sum of $8,755.50. Goddard obtained a judgment against the Mississippi Coal Corporation in the sum of $8,880.85 on June 13, 1934, and the District Court later enjoined Goddard from proceeding further in his garnishment suit against the receiver of the Electric Shovel Coal Corporation. As a result of activities of other creditors of the Mississippi Coal Corporation, the receiver of the Electric Shovel Coal Corporation filed a petition in the receivership2*756 Mississippi Coal Corporation in the sum of $8,755.50 and prayed that the court order the several claimants to the fund to answer his petition and present their claims to the fund. On December 6, 1935, the District Court directed the receiver to pay the money owing to the Mississippi Coal Corporation to the clerk of the District Court, "subject to any order which may be made by the Court upon said claim or upon any other claim that may be filed in said interpleader suit * * * ."

Subsequently, all claims against the Electric Shovel Coal Corporation having been paid, the receivership was terminated and the receiver was ordered and directed to deliver to the Electric Shovel Coal Corporation all property of any kind and character received by him from the corporation as receiver, or acquired by him as such receiver for and on behalf of the corporation.

An order terminating the receivership was entered on the 25th day of June, 1936, but the order left unchanged the status of the fund which, by the order of December 6, 1935, the receiver had been directed to pay to the Clerk of the district Court, "subject to any order which may be made by the court upon said claim * * * ."

On the 23rd day of March, 1937, the Electric Shovel Coal Corporation, by leave of court, filed what it denominated "its intervening petition," in which the corporation set up a claim of ownership to the fund which the receiver had deposited with the Clerk of the Court under the order of December 6, 1935.

The motion of Goddard to dismiss the intervening petition was overruled, and the movant was ruled to plead to the petition. After a hearing upon the petition and answer thereto, the District Court found that the entry of April 24, 1933, which allowed the claim of the Mississippi Coal Corporation in the sum of $8,755.50 was the result of inadvertence and mistake; and the court stated as a conclusion of law that the order should be vacated and that all subsequent orders of the court which were based thereon should be vacated. From the ...


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