Assets Realization Co. v. Defrees, Brace & Ritter

Mr. Justice Freeman

delivered the "opinion of the court.

It is insisted in behalf of plaintiff in error that upon the appointment of receivers for the Mechanics and Traders Savings, Loan and Building Association, and the issuing of the injunction inhibiting its officers from carrying on business, the title to its assets became vested in the receivers, the powers and functions of the corporation ceased and all contracts and proceedings afterwards made by its officers were illegal and void. This is in effect claiming that the appointment of a temporary receiver deprived the association of all power to incur any liability for its own defense. Granting that the intention of the statute is to give the auditor of public accounts supervisory power over homestead loan associations, and that he may arbitrarily appoint a custodian and impound the assets, such procedure could not, nor could the appointment by court of a temporary receiver, nor issuance of a temporary injunction restraining the conduct of its business, prevent the corporation from employing counsel for its own defense. The auditor exercises his power subject to the control of the courts, and the Constitution forbids that any person shall be deprived of life, liberty or property without due process of law.

It is argued that the defendants were not employed by the association in its corporate capacity, but by a committee claiming to represent a faction of the stockholders. This statement we do not regard as warranted by the evidence. The defendants were appointed by a board of directors apparently having authority so to do. After the final decree of dissolution, which provided for the filing of claims against the association, the claim of defendants in error was duly filed with the receivers, and has been allowed by the Circuit Court. At the time when the services in controversy were rendered plaintiff in error had no interest in the proceedings nor in the assets of the association. Its purchase of assets was made afterwards. The liability of the association to defendants in error had already accrued. By the bid made by the latter, in accordance with the terms of which it purchased the assets, it agreed “ to pay in full the.general creditors of the estate such claims against the estate as may be allowed by the court.” We discover no sufficient reason why plaintiff in error should not be held to comply with the terms of its own bid under which it acquired all the assets of the debtor association, and pay this claim as well as others so allowed by the court. There is evidence apparently uncontradicted tending to show that the amount allowed was reasonable compensation for the services rendered.

It is said that the amount allowed exceeds that claimed in the petition. There was evidence tending to show that defendants in error had disbursed $120 more than is shown in their original petition-. There seems to have been no objection to the introduction of this evidence, and it is too late to raise the objection here for the first time. Had it been made in apt time, it might have been obviated by amendment.

Finding no error in the record, the judgment of the Circuit Court will be affirmed.

Affirmed.