Standard Oil Co. v. Sugar Products Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Plaintiff company has appealed from a judgment sustaining an exception of no cause of action and dismissing its suit.

Accepting as true the facts well pleaded in the petition, for the purpose of disposing of the exception, we have before us a state of facts substantially as follows:

On September 15, 1919, the defendant, the Sugar Products Company, entered into a written contract with the West India Oil Company for the sale by said company and the purchase by the Sugar Products Company of fuel oil to bunker certain steamships belonging to defendant.

Under this contract, the Sugar Products Company had the right to have its ships bunkered at the price of 85 cents per barrel in the port of New Orleans, at $1.50 per barrel at all Cuban ports, and at $1.20 per barrel at New York, Baltimore, and Norfolk.

Plaintiff company, the Standard Oil Company, entered into a contract with the West India Oil Company whereby it obligated itself to said company to furnish the defendant, the Sugar Products Company, such bunker oil as said company had the right to demand of the West India Oil Company by virtue of the contract entered into between the latter company and the Sugar Products Company.

Defendant company, the Sugar Products Company, called upon plaintiff company for oil for bunkering its vessels in the port of New Orleans, and received from the Standard Oil Company, at various times, a total of 25,768.74 barrels, but used for bunkering purposes only 3,100 barrels. The remaining 22,668.74 barrels were used by defendant company as cargo oil; the difference between the contract price of 85 cents per barrel and the market price being $18,161.30.

Plaintiff company, the Standard Oil Company, has instituted the present suit to recover this amount, on the ground that the delivery of the oil was made by it in error, induced by the representations of defendant company, the Sugar Products Company, that said oil was to be used as fuel by its vessels under the contract between the parties.

We are of the opinion that the petition of plaintiff company, alleging this state of facts, discloses a cause of action.

It is clear that, under the contract between the West India Oil Company and the Sugar Products Company, as well as under the contract between the West India Company and the Standard Oil Company, defendant company could demand and legally receive oilfor fuel purposes only, at a fixed price of 85 cents per barrel.

It is also equally clear that plaintiff company, the Standard Oil, could collect from the West India Oil Company only 85 cents per barrel, under its contract with said company, for all oil furnished by plaintiff company to defendant, the Sugar Products Company, if the latter company failed or refused to pay for the oil delivered.

When defendant company ordered oil from plaintiff company in excess of the needs of its ships for bunkering purposes, it obtained such oil, not by virtue of its written contract with the West India Oil Company, but by a fraud practiced upon plaintiff company, which had undertaken to fulfill the obligation of the West India Oil Company to defendant, the Sugar Products Company.

Plaintiff company, in delivering this oil through error and misrepresentation to defendant company, manifestly was not acting as the agent of the West India Oil Company, but was acting for itself, as plaintiff company had gone beyond the terms of its contract of agency in making such delivery. On the other hand, defendant company, in accepting delivery of this oil, secured it, not by any right to claim the oil under the contract, but through error and by misrepresentation, and was clearly obligated to return it to plaintiff company, which had agreed, by no means, to set up defendant company in the oil business, as a competitor in the open market.

"He who receives what is not due him, whether he receives it through error or knowingly, obliges himself to restore it to him from whom he has unduly received it." R.C.C. art. 2301; C.P. art. 18; R.C.C. arts. 2293, 2294.

It sufficiently appears from the allegations of the petition that the property of plaintiff company was tortiously taken as cargo oil, and converted into money by defendant company. Steamship Co. v. Stewart, 44 So. 138, 119 La. 392.

We conclude, therefore, that the petition of plaintiff company sets forth a cause of action, and that the exception of no cause of action tendered by defendant company should have been overruled by the trial judge.

2. The appeal from the judgment of the lower court sustaining the exception of no cause of action was taken on June 19, 1922.

It is suggested by amici curiæ:

"That later, in the federal court for the state of New York, the Sugar Products Company was placed in the hands of a receiver, and Mr. Robert Szold was duly appointed and qualified as receiver of said Sugar Products Company by the federal court for the Southern district for the state of New York.

"That thereafter in the suit entitled ``Inter-ocean Oil Company v. Sugar Products Company,' and numbered 16939 of the docket of the United States District Court for the Eastern District of Louisiana, New Orleans Division, by an order of court signed April 12, 1922, by Hon. Rufus E. Foster, judge of the said court, Mr. Robert Szold, the said receiver appointed by the United States District Court for the Southern District for the state of New York, was appointed ancillary receiver of the Sugar Products Company, duly qualified as such, and, after rendering his account, was discharged as ancillary receiver of Sugar Products Company by an order signed by the said Hon. Rufus E. Foster on April13, 1923, as evidenced by a certified copy of the said order annexed hereto and made part hereof."

"That on the ____ day of October, 1925, Messrs. Merrick Schwartz, who had represented Sugar Products Company, defendant appellee herein, in the proceedings in the civil district court withdrew as attorneys of record, and there is now no one representing defendant appellee herein.

"Appearers further inform the court that said receiver has never been made a party to this suit either in the civil district court or in the Supreme Court."

The present suit was filed October 31, 1921, in the civil district court for the parish of Orleans, and on November 10, 1921, the Sugar Products Company, a nonresident corporation of the state of New Jersey, executed a bond with the United States Fidelity Guaranty Company as surety for the release of various properties seized and taken into custody by the sheriff in this case, under the writ of attachment and garnishment process issued herein against defendant company.

It is clear, from the record and the information furnished by the amici curiæ, that the property of defendant had been attached by plaintiff in the civil district court for the parish of Orleans, prior to the appointment of both the original receiver in the state of New York and the ancillary receiver in this state.

None of the assets of defendant company are in the custody of the civil district court for the parish of Orleans. It must be presumed that all of the property of said company in this state passed into the hands of the ancillary receiver and has been administered by him, as he was finally discharged April 13, 1923.

It must be presumed also that the ancillary receiver was aware of the pendency of this suit in the civil district court for the parish of Orleans.

As the ancillary receiver appointed by the federal court for the Eastern district of Louisiana is the same person appointed receiver of defendant company by the federal court for the Southern district of New York, it must be presumed also that the original or present receiver of said company had notice of this suit.

As the federal receiver has not seen fit to make a voluntary appearance in the civil district court for the parish of Orleans for the purpose of defending this suit, and as plaintiff company has not obtained the consent of the federal court of New York to sue its receiver in the state court, it is not within our judicial power to make the original or present receiver a party defendant to this suit.

Receivers appointed by a federal court cannot be sued in a state court without the consent of the federal court, and want of leave thereof is jurisdictional.

Judicial Code, § 66 (U.S. Comp. St. § 1048), authorizing suits against receivers appointed by federal courts, in respect of their acts in carrying on the business, without leave of court, is inapplicable to a cause of action arising before receivers were appointed. Godchaux v. Texas Pac. Ry. Co. et al. 92 So. 398, 151 La. 955.

Plaintiff company has not levied upon assets in the hands of a foreign receiver, who is within the jurisdiction of the civil district court of the parish of Orleans.

The property of defendant company was attached in a state court prior to the appointment of the foreign receiver. The attaching creditor is domiciled in this state. Our courts will protect its own citizens, where there is a controversy between a foreign receiver and an attaching creditor who resides in the state, and such proceedings may be instituted subsequently to and notwithstanding the foreign appointment.

The recognition by state courts of foreign receivers is by comity only, and is not extended to the detriment of citizens of the state, or to the prejudice of resident creditors. 34 Cyc. VIII, Foreign and Ancillary Receivers, pp. 484, 491.

The ancillary receivership passed out of existence with the final discharge of the receiver by the federal court for the Eastern district of Louisiana in the year 1923.

Upon the face of the record, defendant company, a nonresident corporation, has made a voluntary appearance in this case, sufficient to justify a personal judgment against it. In our opinion, the proper defendant is now before the court.

It is therefore ordered that the judgment appealed from be annulled and reversed. It is now ordered that this case be remanded to the lower court, reinstated upon the docket of said court, and proceeded with according to law.

ROGERS, J., recused.