Ex Parte Wilkinson , 220 Ala. 529 ( 1929 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The writ of prohibition is supervisory in character — one employed to effectuate the supervisory power vested in this court by the Constitution over inferior jurisdictions. Const. 1901, § 140. It is not granted except for usurpation or abuse of power.

Usurpation involves the attempted exercise of power not possessed by the inferior officer, or what is the same thing, going beyond or exceeding the power vested in him.

If the proceeding sought to be prohibited is not within itself a usurpation or abuse of power, the writ will not issue on a mere assumption that abuse may intervene in course of the proceeding.

If abused in fact, the more appropriate writ is one to review and supervise such action when made to appear. Ex parte Johnson, 203 Ala. 579, 84 So. 803; Goodwin v. McConnell,187 Ala. 431, 65 So. 788; Ex parte Hamilton, 51 Ala. 62; Epperson v. Rice, 102 Ala. 668, 15 So. 434.

The petition for writ of prohibition to prevent hearing and considering a contempt proceeding arising from alleged interference with the possession of a receiver, so far as it challenges the appointment of the receiver, is a collateral attack. The regularity or propriety of his appointment is not involved. To question his appointment collaterally, it must appear the order appointing him was void, a nullity.

The question of first moment is whether the bill in equity confers jurisdiction of the res, the policies of insurance, the subject-matter of the receivership.

Where the husband and father insures his life for the benefit of his wife and children and pays the premiums thereon, upon his death the proceeds are exempt from the payment of the debts of his estate, if the annual premiums do not exceed $1,000; "or if such premiums exceed one thousand dollars, then to the extent of the insurance which an annual premium of one thousand dollars would purchase as an ordinary life policy in a standard life insurance company." Code 1923, § 8277.

The surplus, if any, is subject to the payment of the debts of decedent. Policies payable to the estate of the insured and passing to wife and children by way of voluntary gift are subject to the law of fraudulent conveyances, and the proceeds subject to pre-existing debts of the husband free from the statutory exemption.

In either event, if the estate of the decedent is otherwise insolvent, a creditor's bill is the proper remedy to reach and subject such fund as equitable assets in so far as claims of creditors are concerned. Kimball v. Cunningham Hdwe. Co.,197 Ala. 631, 73 So. 323; Kimball v. Cunningham Hdwe. Co., 192 Ala. 223,68 So. 309; Fearn v. Ward, 80 Ala. 555, 2 So. 114; Pope v. Carter, 210 Ala. 533, 98 So. 726.

The general equity of the bill here involved, giving the court jurisdiction of the res, the policies of insurance on the life of A. W. Bell, deceased, is manifest.

The ground on which the jurisdiction is challenged and most stressed in argument is that complainant, A. C. Goodwin Co., is not shown to be a creditor of the estate of decedent. The basis of this attack is that the claim is not alleged to have been presented to the administrator before suit filed. Passing by all question as to revivor of the suit at law begun during decedent's life, it is sufficient to say the suit in equity wherein jurisdiction is challenged is one for the collection of such indebtedness. The administrator, as he should be, is made a party to the suit. The existence of such debt is one of the primary issues to be adjudicated. The record shows the bill was filed within twelve months after grant of administration.

From our early decisions until now, it has been settled that bringing suit upon a demand before the statute of nonclaim has perfected a bar suspends the running of the statute. If such suit is duly prosecuted, no further presentation is required. Hunley v. Shuford, 11 Ala. 203; McDougald v. Dawson, 30 Ala. 553; Malone v. Hundley, 52 Ala. 147; Weller Sons v. Rensford,185 Ala. 333, 64 So. 366.

This is not a case of merely filing a claim in a chancery court or other court, but of a suit on the claim.

The rule above stated has been long recognized by statute providing for taxing plaintiff with any unnecessary costs incurred. Costs which would have been avoided by presentment and payment. Code 1923, § 5820.

As to construction of this statute and proceedings thereunder, see Mitchell v. Lea, 57 Ala. 46; Wallace v. Nelson,28 Ala. 282.

Whether the bill is subject to demurrer upon other grounds, we need not decide.

The averments of the bill support the decree removing the administration of the estate to the court of equity. Kimball v. Cunningham Hdwe. Co., supra.

This is not to say the equity of the bill and appointment of the receiver depends on averments calling for such removal. A creditor's bill to reach property conveyed in fraud of creditors of a decedent, equitable assets subject to claims of creditors, but not to claims of heirs or distributees, is not dependent on a removal of the administration to the court of equity.

Having acquired jurisdiction of the res, whether it should be taken into the custody of the court pendente lite through a receiver was a question of propriety, not of jurisdiction.

Petitioner's clients, under the averments of the bill, hold the potential fund subject to a trust imposed by law. Should such property remain in the hands of trustees in invitum, antagonistic to the claims of complainant and other creditors in like position, or does preventive justice demand that the court conserve the fund through a trustee of its own appointment? This was for the determination of the lower court, subject to review by this court on appeal, not on collateral attack.

Jurisdiction of the proceeding for contempt is further challenged on the ground that petitioner is not a party to the suit wherein the receiver was appointed. Courts do not favor summary proceedings to place a receiver in possession against third persons holding possession under bona fide claim of title in themselves.

In such event, two methods of procedure are favored. If the party is entitled to trial by jury to test his title and right of possession, the court will leave the receiver to his action at law, and make the necessary order to that end. If his claim is equitable in character, the court will require the complainant to make him a party to the suit, thus bringing him and his claim within the jurisdiction of the court. This is a prompt and easy method. It removes all doubt as to the right to deal with the party by summary proceedings, if need be. This practice has been approved by this court, and we now commend it. Musgrove v. Gray, 123 Ala. 367, 26 So. 643, 82 Am. St. Rep. 124; Steele v. Walker, 115 Ala. 485, 21 So. 942, 67 Am. St. Rep. 62.

But the court having jurisdiction of the res, a receiver appointed to take it into possession as the agent of the court has the right to do so. There are cases wherein an order is made in general terms to take into possession all the property of a respondent. If the receiver goes out and takes possession of other persons' property, he may be left to take the consequences. But if the order directs him to take possession of specific property identified in the decree, he has the right to take possession peaceably no matter in whose hands it is found. His demand of possession is the demand of the court.

The appointment is not a nullity as to third person, not parties to the suit. Steele v. Walker, supra.

From this status, it results, and is generally declared, that not all persons who may have possession of the res, or some part of it, must be made parties in order to subject them to summary proceedings to obtain possession.

Agents or other persons holding for and under parties to the suit should promptly surrender the property to the receiver on demand after knowledge of his appointment.

Petitioner holds possession of the insurance policies as attorney for parties to the suit, and claims a lien on same for attorney's fees incurred by them before the receivership.

Without any discussion of the question of lien vel non under the facts averred, we are of opinion it does not in any way affect the right of this receiver to possession.

A right of possession as against his clients does not give petitioner a right of possession against third persons, nor against a receiver appointed to conserve their rights. As against the receiver, his right of possession is no higher than that of his clients. He can assert no right except in their right. The receivership in no way affects his lien. It may be asserted in due course in the receivership case. Neither our attorney's lien statute, nor the common-law lien of an attorney, must be construed to destroy or hamper the remedial powers of a court of equity in the protection of all parties in interest.

Under the facts averred by petitioner, this receiver is entitled to possession of these policies. We would make this plain.

It follows we find no such usurpation or abuse of power in the summary proceedings seeking to obtain such possession as would warrant a writ of prohibition. 23 R. C. L. p. 61, § 67; High on Receivers, § 144; Tinsley v. Anderson, 171 U.S. 101,18 S.Ct. 805, 43 L.Ed. 91, 97; note 47 L.R.A. (N.S.) 746, 754; Miles v. New South Building Loan Ass'n (C. C.) 95 F. 919.

The appeal from the decree appointing the receiver, without supersedeas, did not suspend the power of the court to conserve the property through its receiver, taking steps to that end the same as if no appeal was taken. Petchey v. Allendale Land Co.,216 Ala. 167, 112 So. 818.

Writ denied.

ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.

On Rehearing.