Fox River Paper Co. v. Western Envelope Co.

Mr. Presiding Justice Bigelow

delivered the opinion of the court.

The seven demurrers to the amended bill were interposed by appellees as follows:

1. By Kurt, Glore and Meyer, jointly.

2. By Western Envelope Company.

3. By Davis and Brigham, receivers, jointly.

4. By Benjamin P. Crane.

5. By Bryant Paper Company.

6. By F. Buchler.

7. By Everard, Milham, MacMurray and Swett, jointly.

Since the demurrers are separate they should be separately considered.

As to the first demurrer, since neither of the appellees who joined in it has furnished us any brief, the decree dismissing the bill as to them is reversed under rule 29 of this court.

The second demurrer, by appellee Western Envelope Company, seems to us anomalous, and as we get no light on the matter from counsel on either side, and since the envelope company is a necessary party to the suit until its final termination, we must hold that the court erred in sustaining the demurrer and dismissing the bill as to it.

The third demurrer to the bill is by appellees Davis and Brigham, receivers of the Western Envelope Company. The main contention of appellant, both in its bill and in the argument of its counsel, is, that the receivers wrongfully took possession of a large amount of tangible personal property belonging to the envelope company, besides moneys, securities, notes, accounts and choses in action, amounting in all to many thousands of dollars in value, which was not covered by the trust deed, which was foreclosed, and that the property, or sufficient thereof to satisfy appellant’s judgments against the envelope company, should be applied to that purpose.

Two grounds are relied upon by the receivers why the action of the court is correct so far as they are concerned; First, the bill contains no averment that the court appointing the receivers gave leave to appellant to file its creditor’s bill against them and therefore the bill is demurrable; citing High on Receivers, Sec. 254; see, also, St. L. A. & S. R. R. Co. v. Hamilton, 158 Ill. 366; and, second, that it is within the discretion of the court whether to grant leave to bring an independent action against the receivers or to grant leave to file an intervening petition in the receivership, and that at all events the latter was the only proper procedure; citing High on Receivers, Sec; 254b; Roseboom v. Whittaker, 132 Ill. 81; School Directors v. School Directors, 135 Ill. 464; Pool v. Docker, 92 Ill. 501; Haas v. Chicago Building Society, 89 Ill. 498, and Bonney v. Sellers, 99 Ill. App. 444.

The absence of an averment in pleading that leave of court appointing the receivers has been obtained, has led to different conclusions by different courts. Under the decisions of our Supreme Court, the absence of the allegation is not under any and all circumstances fatal to the pleading. If the action brought does not contemplate interfering with the possession of the receivers over the property entrusted to their charge, no leave need be obtained, and the absence of leave and absence of an averment to that effect is a matter which does not go to the jurisdiction of the court; it is a mere matter of contempt and not of jurisdiction, and the receivers waive all questions of that kind by appearance, and after such appearance the court will not entertain a motion to dismiss on the grounds suggested. Mulcahey v. Strauss, 151 Ill. 70.

The original bill was brought against the receivers as such; when the court sustained demurrers to that bill and allowed appellant to amend its bill, it was necessarily determined that appellant should, have leave to prosecute its suit. The receivers having been appointed by the same court which granted leave to file the amended bill, that court would not need by either pleading or evidence, to be informed of what the record already spoke, that leave had been granted to file the bill.

In the Hamilton case, supra, it is inferable from the statement of facts, that the ejectment suit against the receiver was brought in another court from the one appointing him; the character of the action was an attempted interference with the possession of the receiver in another court.

The court where the ejectment was brought, not being itself the appointing power, stood in need of both pleading and evidence; that leave had been granted by the court controlling the receiver, for- the land sought to be taken from the possession of the receiver was part of a receivership controlled by another jurisdiction.

The rule is established to prevent collision of different jurisdictions and not as an unbending prerequisite to all pleadings against receivers. And we must also hold that the Circuit Court of Marion County, by granting leave to file an amended bill, determined that the proper procedure was by means of an independent suit by way of a credit or’s bill, even if the law is that an intervening petition is in strictness of practice the proper remedy, in matter which, in view of the lower court’s action, it will not be 'necessary to pass upon. The discretion of the court in allowing an independent suit, rather than an intervening petition, having been exercised in favor of appellant’s bill, it would seem that such matter of discretion could not be made the ground of review in this court without some showing of oppression or embarrassment to the various litigants in permitting the bill to be filed; and it is to be noted that by the allegations of the bill, the receivership in the foreclosure case was limited to property which was mentioned in the trust deed; it is nowhere alleged that any order made in the foreclosure case, or that the decree itself invested the receivers with title to the credits, accounts, bills receivable,, or other intangible property of the Western Envelope Company, a fact which readily distinguished the receivership in the present matter from those in theWhittaker & Bonnev cases, where the receiver-ships controlled all the property in the litigation.

It is alleged in the bill that the receivers have in their possession credits and intangible property which is not covered by the trust deed and that they are receivers “ of the property described in and covered by the said deed of trust so sought to be foreclosed.” By an inspection of the deed, we hold the former averment to be true as to that instrument. When the receivers filed a general demurrer to the bill, such act constituted a general appearance on their part; they made no motion to have appellant attached for contempt in having filed its bill without leave, nor did they make a motion to dismiss the bill because such leave had not been granted. It is not suggested why the bill is demurrable in other respects and a careful study of it discloses no vulnerable ground. Their demurrer admitted that they had in their hands credits and intangible property of the Western Envelope Company to a large amount, and in view of the averment quoted from the bill, it would seem that their demurrer admitted also that such property was not held by them in the character of receivers. At any rate the bill was sufficient to call upon the receivers for an answer, and the court erred in sustaining the demurrer and dismissing the bill as to the receivers.

As to the fourth, fifth and sixth demurrers, the parties interposing them seem to be creditors of the envelope company, but have filed no briefs or arguments in this court, and therefore we will not discuss the relations involved, and will hold proforma that their demurrers were improperly sustained.

The seventh demurrer, interposed by appellees Everard, Milham, MacMurray and Swett, rests upon far different grounds than the other demurrers are based upon.

The proceedings to foreclose the trust deed, which seem to have been accompanied with various intervening petitions of bond, and possibly of other creditors, of the Western Envelope Company, cannot be successfully attacked by a creditor’s bill, or in any other collateral manner, no matter how erroneous such proceedings may seem to be. Though in the same court that the creditor’s bill is in, the suit brought to foreclose the trust deed is a separate and independent judicial proceeding from that of the creditor’s bill, at least so far as appellees Everard, Milham, Mac-Murray and Swett are concerned. The purchasers of the property ordered to be sold and which was sold by the master in chancery must be presumed to be invested with a good title to it, as the bill and other pleadings, including the intervening petitions in the foreclosure case, are not brought here so that we may know what questions and matters were litigated and determined in that case.

The presumption then is that the decree directing the master to sell certain property of the envelope company was fully authorized by the court, and the appellant in this case can not be heard to say that the court in construing the trust deed committed an error in directing the master to sell property not specifically described in the trust deed, as the decree of sale was entered some months before appellant had recovered its judgments against the envelope company, and a longer time before it had filed its original or amended bill in this case.

The court did not err in sustaining the joint demurrer of appellees Everard, Milham, MacMurray and Swett.

The decree sustaining the demurrers of appellees Western Envelope Company, B. O. Brigham and W. E. Davis, receivers of Western Envelope Company, Benjamin P. Crane, Bryant Paper Company, F. Buchler, C. A. Gflore, George Meyer and C. B. Kurth, and dismissing the bill is reversed, and the cause is remanded.

The decree sustaining the demurrer of Herbert H. Everard, Frank H. Milham, James E. MacMurray and Arthur H. Swett is affirmed.