Petition for Rehearing — Grant v. AB Leach & Co.

Supreme Court brief1930

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FILE COPY CHARS EuORE

IN THE

Supreme Court of the United States

OCTOBER TERM, 1929.

No. 9

HUGH W. GRANT, Receiver of the Struthers Furnace Company,

Petitioner,

vs.

A. B. LEACH & CO., INC.,

Respondent.

RESPONDENT’S PETITION FOR REHEARING.

EDWARD R. JOHNSTON,

FLOYD E. THOMPSON,

HENRY JACKSON DARBY,

Attorneys for Respondent.

GUNTHORP-WARREN PRINTING COMPANY, CHICAGO.

SUBJECT INDEX.

Summary of reasons why rehearing should be granted......

ARGUMENT.

Point I.

The Court inadvertently construed against the respond-

ent its contract with The Struthers Furnace Company

for the purchase of the bond issue................

Point II.

The Court’s holding that the Common Pleas Court had

jurisdiction of the Petitions for the appointment of a

receiver in the suits of the mortgage Trustee and pre-

ferred stockholder, and that, therefore, the orders sub-

sequently made by it could not be collaterally attacked,

is demonstrably erroneous.................22.000-

Criterion adopted by the Court. Its vices........

Cases showing that Criterion adopted by the court

in case at bar is fallacious....................

The Criterion that is applicable to the facts herein. .

The double limitation upon the authority of a court

in a cause whereof it has general jurisdiction. . .

Another fallacious Criterion adopted by the court

eS Es iho ds buds Cavnrerectiand ace

vod wi sci seake Odea kao es ceae awe

Point ITI.

This Court departed from the issues joined in the Cir-

cuit Court of Appeals, and failed to give effect to the

stipulation of the parties in that court............

——

Point IV.

The Court of Common Pleas was without jurisdiction of

the subject-matter of the stockholder’s suit, which was

solely for the appointment of a receiver, and the order

appointing a receiver therein was coram non judice

EE ksi nt R Sb once ae a eteis wassccccces

This Court’s decision herein is based upon a misconcep-

tion of what constitutes jurisdiction, an inadvertent

misstatement of Respondent’s contention, and cases

that have practically been overruled. It is contrary

to the Ohio decisions, numerous decisions by this Court

and the overwhelming weight of authority.......... 23-30

Inadvertent misstatement of Respondent’s contention 23

Jurisdiction defined .................0e ee eeeee 24

There is no class of cases to which the stockholder’s

EE habbo Ge Ah Sekwhe cn euss Rives > 24-26

Cases holding that all orders in the stockholder’s

suit were void, and consequently subject to Col-

EE i <n dias vine babe we sees oe 26-30

Point V.

The Court’s decision that the receiver in the case at bar

did not sue in a foreign jurisdiction is demonstrably

iii

TABLE OF CASES.

Banking House, etc. v. Dukes, 70 Neb. 648, 97 N. W. 805...

Barbour v. National Exchange Bank, 45 Ohio State, 133....

Beckett v. Selaver, 7 Cal. 215, 242..................005.

Bibby v. Dieter, 15 Cal. App. 45, 113 Pac. 874............

Blanchard Bros. & Lane v. The S. G. Gay Co., 289 Ill. 413..

Boswell v. Dickerson, 4 McLean, 262....................

Bullard v. Eames, (Mass.) 106 N. E. 584, 586............

Burnes v. Burnes, (C. C. A. 8th Cir.) 137 Fed. 781, 800....

Central Ohio Natural Gas & F. Co. v. Capital City Dairy Co.

fo FS. errr errr Tiree errr eee

Charles v. White, 214 Mo. 187, 112 S. W. 545, 549.........

Coe v. Armour Fertilizer Works, 237 U. S. 413, 59 L. ed.

oe ES eT TT eee

Coe v. Erb, 59 Ohio St. 250, 268....................005-

Cook v. Leona Mills Lbr. Co., 106 Ore. 521........ ite dives

Corwithe v. Griffing, 21 Bart. (N. Y.) 9.................-.

Se ee Sy a neve en csciesencsecsads

Dickerman v. Northern Trust Co., 176 U. S. 181, 202.......

Duncan v. Stewart, 25 Ala. 408............... cee eeeees

Eames v. Northumberland, 44 N. H. 67...................

Edinburg Irr. Co. v. Ledbetter, (Tex.) 247 S. W. 335.......

Falls v. Wright, 55 Ark. 562, 29 Am. St. Rep. 74, 18 S. W.

BP at ctaeee en hene seeders ed besie WS ere een ews

Glasgow v. Baker, 128 U. S. 560, 577-8..................

Glenn v. Leggett, 135 U. S. 533, 34 L. ed. 262, 10 Sup. Ct.

BN Ge si covinctecvesdenerviversousereveeseerecdss

Harkin v. Brundage, 276 U.S. 36............0 cece eens

Hawkins v. Glenn, 131 U. S. 319, 33 L. ed. 184, 9 Sup. Ct.

AURAL aS boW abe chbeersnesedndaweess 12905

MOO G. Ts We Be GR ince es seesescesscenssess f

Heirs of Bishop v. Hampton, 15 Ala. 761, 766............ f

Hoe v. Wilson, 9 Wall. 501, 503......................., d

Hurr v. Davis, 155 Minn. 456, 193 N. W. 943, 194 N. W. 379,

Petition for Certiorari denied, 263 U. S. 709, Writ of

Error dismissed, 267 U. 8. 572............ 0c cece eeuee rT

Jochumsen v. Suffolk Savings Bank, 3 Alien (Mass.) 87.... f

Jones v. Bank of Leadville, 10 Colo. 464, 17 Pac. 272...... Qi

Jones v. Randolph, 104 U. S. 108, 110.................... é

Jones v. Schaff Bros. Co., 187 Mo. App. 597, 1748. W.177.. 2

Kindell v. Titus, 56 Tenn. (9 Baxter) 727, 739............

Knopf v. Morel, 111 Ind. 570, 13 N. E. 51.............. 1

Lafayette Bank v. Buckingham, 12 Ohio St. 419.......... 1

Lange, Ex parte, 18 Wall. 168.....................000-, '

Lewis v. Shaw, (Cal.) 246 Pac. 86...................... 2

Meccano, Ltd. v. Wanamaker, 253 U. S. 136, 141-2........

Memphis & Little Rock R. R. Co. v. Dow, 120 U. S. 287....

Missouri River, Ft. Scott & Gulf R. R. Co. v. Commissioners,

Ff SS SS ee er ee nr

Montezuma Canal Co. v. Smithville Canal Co., 218 U. S. 371,

54 L. ed. 1074, 31 Sup. Ct. Rep. 67.................... 1

Morley v. Cleveland Hippodrome Co., 23 Ohio C. C. (N. 8S.)

ME ci sak ck aves Ris CANN he RA AOS enn aeK a enn 6 1

McKee v. Title Ins. & Trust Co. (Cal.) 113 Pac. 140....... }

McNary v. Bush, 35 Ore. 114, distinguished.............. 29, 3

eS es. A. OU OE cv cavccsnseptcenesc’s |

Petition of Furness, 62 Cal. App. 753, 218 Pac. 61......... 1

People v. Weigley, 155 Ill. 491, affirming 51 Ill. App. 51.... 2

Pittsburg F. B. & T. Co. v. Amer. Clay Machy. Co. (Ohio)

PA 6 i nS h ek arenes eaeb eb omeaek eden > oN and

Reed, Ex parte, 100 U. S. 13, 23, and cases cited..........

Remington v. Superior Court, 69 Cal. 633, 11 Pac. 252...... 1

Reynolds v. Stockton, 140 U. S. 254, 35 L. ed. 464, 11 Sup.

st. Louis, Vandalia and T. H. R. R. Co. v. Terre Haute and

Indianapolis R. RB. Co., 145 U. S. 393...........-.-00- oy

Sanger v. Upton, Assignee, 91 U. S. 56, 58, distinguished... 16

Seamster v. Blackstock, 83 Va. 232, 5 Am. St. Rep. 2S. E. 36 8

Sennott’s Case, 146 Mass. 489..........-.-.-eeeeeeeeees 7

Shields v. Coleman, 157 U. S. 168...........--0+eeeeeeee 31

Shriver’s Lessee v. Lynn, 2 How. 43, 11 L. ed. 172.......... 8

Shull v. Fidelity & Guaranty Co. 81 W. Va. 184.......... 32

Siebold, Ex parte, 100 U. S. 371............ eee e eee eeee 7

Snow, In re, 120 U. S. 274......... cece cece e eee eeeees 7

Spoors v. Cowen, 44 Ohio State 497, 9 N. E. 132, 135..... 8, 10, 26

State ex rel. McManus v. Muench, 217 Mo. 124, 117 S. W.

QB, 2D nce cc cc ccc cececcccccccceccccccnseceececess 10, 24

State ex rel. Merriam v. Ross, 122 Mo. 435, 25S. W. 947... 28

State v. Molly, 18 Iowa, 525...........- eee cece cece cence 10

State v. Union Nat. Bank, 145 Ind. 537, 44 N. E. 585, 588.. 30

Sterrett, etc. v. Second Nat’l Bank of Cincinnati, 248 U. S.

FB, BD nc ivcccnsencsgeccccevecseesscussnscccssccencs 7

Stewart v. Stewart Hotel Co. (Cal.) 164 Pac. 620.......... 3

Strobe v. Downer, 18 Wis. 10............. eee ee ee eeeee 10

Taylor v. Exnicious, 197 Cal. 443, 241 Pac. 397............ 27

Texas, etc. R. R. Co. v. Gay, 86 Tex. 604, 26 S. W. 599..... 28, 31

Townsend v. Gordon, 19 Cal. 188.............. eee eens 8

Vance v. Mfg. Co., 82 Fed. 251............. cece eee eeees 22

Verry v. McClellan, 6 Gray (Mass.) 535, 66 Am. Dec, 423... 8

Waterman v. Lawrence, 19 Cal. App. 753, 218 Pac. 61...... 10

Whitney v. Hanover Nat’l Bank, 71 Miss. 1009, 15 So. 23... 28

Williams v. Childress, 25 Miss. 78.............-00eeeeee 10

Williamson v. Berry, 8 How. 495, 543.................--- 13

Wilmot v. Cole, 10 0. D. 77, 23 B. 339................4.- 31

Windsor v. McVeigh, 93 U. S. 274, 282...............45. 9

Withers v. Patterson, 27 Tex. 491..............0eeeeeeee 6

Wood v. Stanberry, 21 Ohio State 142................-4. 8, 13

Wright v. Edwards, 10 Ore. 208............0eceeeeeeees 8

TEXTBOOKS.

2 Austin’s Jurisprudence, p. 658 (Lecture 39)............ 4

BD GRE FUR, B. GER ewe cc wwvcceveccesuctvcveesevees 4

1 Freeman on Judgments (5th ed.) § 318, p. 633.......... 19

1 Tardy’s Smith on Receivers (2d. ed.) § 14, p. 51...... 25

= 4

§ 338, p. 845...... ll

STATUTES.

Ce CE cr anccwesene san asrecvesesesc esses 12, 13

MS chGANb On 0040040 VeneVes es nee ness 12

Throckmorton’s Ohio Code (1929), Sec. 1532.............. 31

Revised Statutes, United States, §§ 4972, 5044, 5046, 5047.. 18

IN THE

Supreme Court of the United States

OCTOBER TERM, 1929.

No. 9

HUGH W. GRANT, Receiver of the Struthers Furnace Company,

Petitioner,

vs.

A. B. LEACH & CO., INC.,

Respondent.

RESPONDENT’S PETITION FOR REHEARING.

May IT PLEASE THE CouRT:

The respondent respectfully asks that a rehearing be

granted in this cause for the following reasons:

1, The Court inadvertently construed against the

respondent its contract with The Struthers Furnace

Company for the purchase of the bond issue. The

construction of this contract obviously concerns the

merits, which were not properly before this Court.

The Court’s construction is, we believe, erroneous.

Whether it is or not, this Court should not, in pass-

ing upon purely jurisdictional questions, express its

views on the merits.

2. The Court’s holding that the Common Pleas

Court had jurisdiction of the petitions for the ap-

pointment of a receiver in the suits of the mort-

gage trustee and preferred stockholder, and that,

therefore, the orders subsequently made by it could

not be collaterally attacked, is, we respectfully sub.

mit, contrary to settled law.

3. The Court departed from the issues joined in

the Circuit Court of Appeals, and failed to give ef.

fect to the stipulation of the parties in that court.

4. The Court (in one instance) inadvertently mis.

stated the contentions of respondent.

5. A re-examination of the record will, it is be.

lieved, show that the Court has inadvertently failed

to pass upon the respondent’s contentions, and that

the decision rendered is unsound.

6. The Court’s decision that Grant, as receiver,

could sue in the District Court is based upon a mis-

apprehension of the facts, and, we respectfully sub-

mit, is erroneous.

This honorable court inadvertently construed against the respond-

ent its contract with the Struthers Furnace Company for the

purchase of the bond issue.

On page 2 of the Court’s opinion it is said:

**1. The bonds in question were part of an issue

of eight per cent bonds of the Furnace Company,

secured by a mortgage upon certain real and per-

sonal property. In 1922 Leach & Co. purchased from

the Furnace Company a large number of these bonds,

at 903 and accrued interest, in exchange for 3,000

shares of the seven per cent preferred stock of the

Furnace Company, at 85 and accrued dividends."’

(Italics ours.)

The contract for the purchase of the bonds gave Leach

& Co. the option to purchase at 90} the whole or any

part of an issue of $1,500,000. par value. (R. 22.) It

also provided that in the event the option was exercised.

Leach & Co. should pay cash for all bonds purchased up

to $800,000. par value. If bonds in excess of $800,000.

—_—

par value were purchased, then Leach & Co. were to

pay for bonds of the par value of $450,000. partly in

cash and partly in preferred stock. The remaining bonds,

of the par value of $250,000., if taken, were to be paid

for in cash. (R. 23.)

Leach & Co. made one election to take the entire issue

of bonds, (R. 135), and thereafter did so. When Grant,

as receiver, sought to rescind this executed contract, he

did not tender the preferred stock and the more than

$1,000,000. in cash that had been paid thereunder, but

only the preferred stock. The respondent contended that

partial rescission of an executed contract was unknown

to the law; that it had never agreed to pay all cash for

all the bonds, and that the court could not make a new

or better contract for the company, especiaily some three

years afterwards when conditions had changed. The

respondent also contended that Grant, as receiver, could

not separate that part of the contract that permitted re-

spondent to pay partly in cash and partly in preferred

stock from the other parts of the contract, in view of the

single election made by respondent, and that in any event

no bonds had been paid for wholly in preferred stock.

The District Court held that Grant could at the same

time ‘‘both approbate and reprobate,’’ and that there

was no other consideration for part of the bonds than

3,000 shares of preferred stock. (R. 205, 213.)

According to the authorities the learned court was

wholly wrong.’ However, that question is not now

1, Stewart v. Stewart Hotel Co., (Cal.) 164 Pag. 620.

Memphis & Little Rock R. R. Co. v. Dow, 120 U. S. 287.

McKee v. Title Ins. & Trust Co., (Cal.) 113 Pac. 140.

Missouri River, Ft. Scott & Gulf R. R. Co. v. Commis-

sioners, 12 Kans. 482—Brewer, J.

Dickerman v. Northern Trust Co., 176 U. 8. 181, 202.

—

before this Court, nor was it argued on the hearing.

What this Court does by means of the excerpt above

quoted is not to state the facts, but to construe the con-

tract, apply the law, and announce legal conclusions,

This cannot fail to prejudice the respondent in any fn-

ture hearing on the merits. Since the Court merely un-

dertook to determine jurisdictional questions, we respect-

fully submit that any intimation of its views on the merits

is improper.

Jones v. Randolph, 104 U. S. 108, 110.

Meccano, Ltd. v. Wanamaker, 253 U.S. 136.

Glasgow v. Baker, 128 U. S. 560, 577-8.

2 Austin’s Jurisprudence, p. 658 (Lecture 39.)

Hoe vy. Wilson, 9 Wall. 501, 502.

We respectfully ask that the foregoing excerpt from

the opinion herein be changed to state the facts, rather

than legal conclusions.

II.

The court’s holding that the common pleas court had jurisdiction

of the petitions for the appointment of a receiver in the suits |

of the mortgage trustee and preferred stockholders, and that,

therefore, the orders subsequently made by it could not be col-

laterally attacked is, we submit, demonstrably erroneous.

On page 5 of the opinion it is said: |

‘‘The Common Pleas Court had jurisdiction of

Burnes v. Burnes, (C. C. A. 8th Cir.) 137 Fed. 781, 800.

St. Louis, Vandalia and T, H. BR. R. Co. v. Terre Haute

and Indianapolis R. R. Co., 145 U. 8. 393.

Bullard v. Eames, (Mass.) 106 N. E. 584, 586.

Pittsburgh F. B. & T. v. American Clay Machy. Co.,

(Ohio) 106 N. E. 33.

Central Ohio Natural Gas & F. Co. v. Capital City Dairy

Co., (Ohio) 53 N. E. 711.

—

the petitions for the appointment of a receiver in

the suits of the mortgage trustee and preferred

stockholder; and the power to determine whether,

under the allegations of the petitions, it was author-

ized to appoint a receiver of the Company's prop-

erty; to what extent and for what purposes; and

what authority should be vested in him as such re-

ceiver.’’

This is the first ground upon which the Court rested

its decision, and the principle above stated is applied on

pages 5 and 6 of the opinion. It is there held that neither

the orders appointing the receiver, nor the order direct-

ing him to sue, even if they were so erroneous that they

would have been set aside on appeal, can be collaterally

attacked, because the court had jurisdiction of the peti-

tions and was authorized to determine what action it

should take.

We respectfully submit that the vice of this Court’s

decision lies in—

(a) the erroneous assumption that the power of a

court to determine whether or not it is authorized

to act renders any action taken by it invulnerable

to collateral attack;

(b) the equally erroneous assumption that where

jurisdiction of a cause is once obtained no order

thereafter made therein can be collaterally attacked;

diction, and

(d) the erroneous conclusion that the Common

Pleas Court had jurisdiction to make the orders in

question.

In every case that is, or can be, brought before it a

court has the power to determine whether or not it is

authorized to grant the relief prayed for, and whether

or not it should do so. But that is far from determining

jurisdiction,

—

Take, for example, the case where an application for

letters testamentary or of administration is made to a

probate court. The court has power to grant these let-

ters in a proper case. Certainly it has power to de-

termine whether or not it is authorized to grant the let-

ters. But even if the proceedings are in all respects

regular, if it should appear after the estate has been

closed that the supposed decedent was in fact still alive,

the entire proceedings would be void, and any sale of

real estate or other property would be subject to collat-

eral attack.2, Or take the case where a person has been

convicted of an offense under an unconstitutional act,

or where a single offense has been split up into several

causes and the offender pursued twice or more. In each

of these cases the court would have the power to de-

termine the questions presented to it for decision. And

yet, in case of conviction the judgment would be void.

2. Griffith v. Frazier, 8 Cranch 9, 3 L. ed. 471.

Duncan v. Stewart, 25 Ala. 408.

Beckett v. Selaver, 7 Cal. 215, 242.

Jochumsen v. Suffolk Savings Bank, 3 Allen (Mass.) 87.

Withers v. Patterson, 27 Tex. 491.

According to the Court’s opinion herein, even if it appeared

on the face of an application for letters testamentary upon the

estate of a person that the person in question was alive and compos

mentis, no order granting the application or ordering the sale of

real estate would be subject to collateral attack. We say this for

the reason that an action solely for the appointment of a receiver,

at the instance of a stockholder, who charges no breach of duty

or other wrongful act, is as unknown to the law as an application

for letters of administration or testamentary upon the estate of a

living person. And yet this Court held that because the Court of

Common Pleas had “jurisdiction” of the petition and power to

determine whether it was authorized to appoint a receiver, the

orders entered by it could not be collaterally attacked even by

one not a party to the proceeding when some one else claimed the

benefit of them.

No appeal would be necessary. The defendant would

be released on habeas corpus.®

It follows, therefore, that the eriterion adopted and

applied by the Court in the case at bar would seem to

have no foundation in either logic or law.

The reasons given in the cases cited are conclusive of

the proposition that a court may obtain jurisdiction of a

cause and yet make an order therein that is void, and,

therefore, subject to collateral attack. As above nointed

out (b) the Court’s opinion herein rests upon the con-

trary assumption.

Take, for example, the case where an offense is duly

and regularly charged, and the defendant has been duly

and regularly tried and found guilty in a court having

jurisdiction of the cause. There can be no doubt of the

authority of the court to hear the cause. And yet, if

the offense is punishable only by fine and not by impris-

onment, and the latter penalty is imposed, the judgment

would be void just as if jurisdiction of the cause had

never existed.*

Another example: Take the case of Sterrett v. Second

National Bank, 248 U. S. 73, 76, as well as the other

cases cited on p. 37 of our original brief in opposition

to the petition for certiorari herein, where a local court

with undoubted jurisdiction of the cause entered an or-

der directing its receiver to bring suit in a foreign juris-

3. Hans Nielsen, 131 U. S. 176, 182.

Ex parte Siebold, 100 U. S. 371.

Ex parte Lange, 18 Wall. 163.

In re Snow, 120 U. S. 274.

In re Coy, 127 U. 8S. 731, 758.

Sennott’s Case, 146 Mass. 489.

4. Ex Parte Reed, 100 U. S. 13, 23, and cases cited.

diction. Unquestionably it had the power to determine

whether it was authorized to grant the application for

leave to sue. Yet the order was a nullity.

Or take the case of proceedings to foreclose a mort-

gage where service is obtained by publication of sum-

mons and a personal judgment is rendered against the

defendant ;° or the case of an assignment of dower where

it includes lands not embraced in the petition for assign-

ment®; or orders authorizing or confirming the sale of

lands by administrators or trustees where the land in

controversy was not included in the petition to sell’; or

the case where land is ordered sold by an administrator

but without any showing that a sale is necessary to pay

debts*; or the case where in an action on a (mortgage)

note for a money judgment only, a judgment of fore-

closure is entered.® In each of these cases the judgment

would be wholly void, and consequently subject to col-

lateral attack, despite the fact that it was made in a

cause whereof the court had (general) jurisdiction.

Wood v. Stanberry, 21 Ohio State 142.

6. Falls v. Wright, 55 Ark. 562, 29 Am. St. Rep. 74, 18

S. W. 1044.

Corwithe v. Griffing, 21 Bart. (N. Y.) 9.

Seamster v. Blackstock, 83 Va. 232, 5 Am. St. Rep,

28. E. 36.

7. Shriver’s Lessee v. Lynn, 2 How. 43, 11 L. ed. 172.

Verry v. McClellan, 6 Gray (Mass.) 535, 66 Am. Dec. 423.

Townsend v. Gordon, 19 Cal. 188.

8. Heirs of Bishop v. Hampton, 15 Ala. 761, 766.

Wright v. Edwards, 10 Ore. 298.

Hays v. McNealy, 16 Fla. 409.

Kindell v. Titus, 56 Tenn. (9 Baxter) 727, 739.

9. Spoors v. Cowen, 44 Ohio State 497, 9 N. E. 132, 135.

—

This is true for several reasons. One of these is that

courts cannot ex mero motu set themselves in motion,

nor have they power to decide any questions except those

presented by the parties in their pleadings. What is de-

cided within the issues is coram judice; anything beyond

them is void. In other words, general jurisdiction of a

controversy is not alone sufficient. It does not give the

court a universal license to enter such orders as it

pleases. And particular matters that may be determined

by a court in a cause whereof it has general jurisdiction

are doubly limited. Firstly, by the general nature of

the controversy’, and, secondly, by the issues presented

by the pleadings.

Now let us apply the foregoing principles to the case

at bar."

10. As pointed out by Mr. Justice Field in Windsor v. McVeigh,

93 U. S. 274, 282:

“If, for instance, the action be upon a money demand, the

court, notwithstanding its complete jurisdiction over the sub-

ject and parties, has no power to pass judgment of imprison-

ment in the penitentiary upon the defendant. If the action

be for a libel or personal tort, the court cannot order in the

case a specific performance of a contract. If the action be

for the possession of real property, the court is powerless to

admit in the case the probate of a will. Instances of this

kind show that the general doctrine stated by counsel is sub-

ject to many qualifications. The judgments mentioned, given

in the cases supposed, would not be merely erroneous; they

would be absolutely void; because the court in rendering them

would transcend the limits of its authority in those cases.”

11. The two petitions filed in the Court of Common Pleas are

so essentially different that lumping them together, as this Court

did in its opinion herein, cannot fail to result in confusion. We

shall take up each petition separately.

Of course, the Court of Common Pleas had general

jurisdiction of the controversy presented by the petition

of the trustee to foreclose the mortgage. This fact is

important, but by no means conclusive. The question is,

what controversy was presented to the court for de-

cision? As demonstrated in our former briefs herein,

the petition showed on its face that the mortgage did

not cover all the property of The Struthers Furnace

Company, and whether a receiver should be appointed

for property not so covered was not presented to the

court for decision. It was not an issue that could be

determined by the court. And its order appointing a

receiver for property not covered by the mortgage was,

pro tanto, not responsive to the pleadings, but coram

non judice and void.'*

The court has failed to pass upon this point directly,

or to state all the facts. In its statement the Court says

12, Reynolds v. Stockton, 140 U. S. 254, 35 L. ed. 464, 11

Sup. Ct. Rep. 773.

Hurr v. Davis, 155 Minn. 456, 193 N. W. 943, 194 N. W.

379, petition for certiorari denied, 263 U. S. 709, writ

of error dismissed, 267 U. S. 572.

Spoors v. Cowen, 44 Ohio State 497, 9 N. E. 132.

Remington v. Superior Court, 69 Cal. 633, 11 Pac. 252.

Waterman v. Lawrence, 19 Cal. App. 753, 218 Pac. 61.

Knopf v. Morel, 111 Ind. 570, 13 N. E. 51.

Williams v. Childress, 25 Miss. 78.

State ex rel. McManus, 217 Mo. 124, 117 S. W. 25.

Banking House, etc. v. Dukes, 70 Neb. 648, 97 N. W. 805.

Edinburg Irr. Co. v. Ledbetter, (Tex.) 247 S. W. 335.

Strobe v. Downer, 13 Wis. 10.

State v. Molly, 18 Iowa, 525.

Eames v. Northumberland, 44 N. H. 67.

that the trustee prayed that a receiver be appointed to

take charge of the ‘‘property of the defendant,’’ (p. 2),

and apparently some reliance is placed upon the prayer

of the trustee. However, in our supplemental brief (p.

16) we cited decisions by the Supreme Court of Ohio in

support of the universal rule that a prayer is no part of

the issues to be tried, and cannot authorize relief not

warranted by the facts pleaded.'* Manifestly, this point

should not be ignored by the Court, and, clearly, to say

that the Common Pleas Court has jurisdiction of the

petition is to stop short of the crucial point in the case.

It had (general) jurisdiction, yes, but not jurisdiction

to appoint a receiver for property not covered by the

mortgage. That question was not presented by the

pleadings.

Since the order appointing Grant receiver for prop-

erty not covered by the mortgage was, pro tanto, void, it

necessarily follows that Grant cannot sue Leach & Co.

even though he was ordered to do so by the Court of

Common Pleas. The claim asserted by the receiver

against Leach & Co. ‘‘was a chose in action of the Fur-

nace Company,’’ (Opinion, p. 5), which was not, of

course, covered by the mortgage, neither was it ever

assigned by the Struthers Company to the receiver, who

does not take title even to property of which he is law-

fully appointed receiver.'* If the order appointing him

13. To which may be added:

Petition of Furness, 62 Cal. App. 753, 218 Pac. 61.

14. Lafayette Bank v. Buckingham, 12 Ohio St. 419.

Morley v. Cleveland Hippodrome Co., 23 Ohio C. C. (N.

S.) 295, 297.

1 Tardy’s Smith on Receivers (2nd ed.) § 338, p. 845.

receiver of this chose in action was void, then, of course,

neither the Court nor the receiver could thereafter take

any lawful action concerning it, particularly so far as

its enforcement is concerned.

This Court says that section 11897 of the General Code

of Ohio provides that the court may authorize a re-

ceiver to sue, ete., and that

‘‘under this provision the Common Pleas Court had

jurisdiction to determine what actions the receiver

might bring.’’ (P. 6.)

Manifestly, the authority granted by section 11897 is

limited, not only by the general nature of the proceed-

ings in which the receiver is appointed, but to cases con-

cerning property of which he had lawfully been appointed

receiver. It certainly would not include power to author-

ize the enforcement of a chose in action in a case where

the pleadings did not authorize the court to appoint a

receiver of it." A court always has jurisdiction for cer-

15. In simple foreclosure proceedings against a corporation,

§ 11897 would hardly justify an order directing the receiver to

sue the corporation defendant on a claim held against it by a

simple-contract creditor. An order directing the receiver to bring

suit to enforce a purely personal claim of a bondholder against

Leach & Co. would likewise be void. Also in foreclosure proceed-

ings against a person, an order directing the receiver to institute

proceedings for separate maintenance in behalf of the defendant's

wife, would be a nullity. The order directing the receiver to sue

Leach & Co. on a chose in action not covered by the mortgage, and

of which Grant was never lawfully appointed receiver, is equally

void.

tain purposes only.’® And this is particularly true of

simple foreclosure proceedings.

And here it should be pointed out that Section 11894

of the Ohio Code (Appendix, p. 34, infra) provides for

the appointment of receivers in a great many other cases

than mortgage foreclosure proceedings. Consequently

the power granted the court (by Cection 11897, p. 35,

infra) to authorize the institution of suits by receivers

is necessarily limited by the nature of the proceedings

in which the receiver was appointed, no less than by the

issues presented for decision.

The power of the Common Pleas Court was limited,

then, by the general nature of the proceedings, which

were instituted solely for the purpose of foreclosing a

mortgage. Insolvency was not alleged; a winding up of

The Struthers Furnace Company was not sought. In-

deed,—and this important fact was not stated by this

court,—the petition expressly alleged that all the bonds

were duly issued for a valuable consideration in accord-

ance with the terms of the mortgage; that all bonds were

then outstanding wm the hands of various persons and

corporations, who were the owners and holders thereof

for value, ‘and that all the bonds were in all respects

valid and outstanding obligations of the defendant.

(R. 238.)

16. Wood v. Stanberry, 21 Ohio State 142.

Boswell v. Dickerson, 4 McLean 262.

Fithian v. Monks, 43 Mo. 502.

As said in Williamson v. Berry, 8 How. 495, 543:

“Though there may be jurisdiction for certain purposes

in a cause, that jurisdiction may be exceeded in the judg-

ment.”

——ay

The very action in which an erring court appointed

this knight-errant receiver was predicated upon the valid

issuance of all the bonds. The very purpose of the suit

was to procure the payment of all the bonds. Unlike a

receiver appointed in many other cases, a receiver ap-

pointed in simple foreclosure proceedings is an indif-

ferent stakeholder, who merely conserves and manages

the mortgaged property and the fruits thereof. Neither

he nor the court is concerned with anything else. The

court’s power is limited to ascertaining the amount due

under the mortgage, preserving the mortgaged assets,

selling them if necessary, and applying the proceeds.

That is all that it has the power to do. Its power to en-

ter orders in the case is necessarily limited not only to

the issues presented by the pleadings, but by the nature

and purpose of the proceedings. In a winding-up pro-

ceeding, where insolvency, fraud, etc., were alleged, of

course, the court could order its receiver to institute suits

where the rights of creditors or others had been in-

fringed.

But here, the petition does not show that there were

any creditors other than bondholders. Insolvency was

not alleged. The valid issuance of all bonds was the bed-

rock upon which the. court’s jurisdiction was predicated.

The invalidity of not one bond was an issue in the case.

And how could the court have jurisdiction to order this

mere stakeholder to attack the contract pursuant to

which all the bonds had been issued? The order entered

by the court was entirely beyond the scope and purpose

of the proceeding and wholly void. It was contrary to

the jurisdiction conferred upon the court by the allega-

tions of the petition, by which all subsequent action was

limited, as is shown by the cases cited on pages 9-12,

supra.

On page 6 of the opinion herein it is said:

“This action against Leach & Co.,—involving in

effect the claim of an illegal taking of a large

amount of the Company’s bonds, which if recovered

would reduce the amount of the mortgage lien—

came, we think, fairly within the terms of the stat-

ute as an act respecting property in the custody of

the court in the trustee’s suit.’’

We respectfully submit that whether or not the action,

if successful, would reduce the amount of the mortgage

lien, is irrelevant. Speculation in the stock market with

the proceeds of mortgaged assets would also, if success-

ful, reduce the amount of the mortgage lien. Obviously,

the test suggested by the court is a fallacious one. It is

a question of lawful authority, not of results. And the

order entered by the Court of Common Pleas is con-

demned by the law, just as conversion of trust funds is

condemned by ethics regardless of its enrichment of the

wrongdoer.

Moreover, this Court’s very statement of the test

above quoted conclusively shows that the action is hors

the scope of the petition to foreclose. Indeed, the for-

mer is squarely opposed to the latter, since the petition

expressly alleged that all the bonds had been lawfully

issued and were valid claims against the corporate de-

fendant. The petition was never amended, and, so far as

the record shows, the corporate defendant never, either

by answer or by proof, disputed or attempted to contro-

vert the allegations of the petition.

Furthermore, we submit with great respect, this

Court’s statement of the test will not bear analysis. The

only property in custody of the Court of Common Pleas

was the property covered by the mortgage. The action

against Leach & Co. was on a chose in action that was

not covered by the mortgage. Consequently the action

could not be ‘‘an act respecting property in the custody

of the court.’’ Surely, this Court does not mean to

imply that the bonds were in the custody of the Court of

Common Pleas. And certainly not the mortgage lien,

In support of its conclusion that the order directing

the receiver to sue is not subject to collateral attack the

Court cites

Sanger v. Upton, Assignee, 91 U. S. 56, 58.

We respectfully submit that the case is readily distin-

guishable. That case concerned the power of an assignee

in bankruptcy to collect the balance due on a subscrip-

tion to the capital stock of the corporate bankrupt. The

bankruptcy court had entered an order directing the as-

signee to sue all stockholders who refused to pay. Plain-

tiff in error contended that she was not bound by the

order since at the time it was entered ‘‘she was not be-

fore the court.’’ (P. 57.) This Court pointed out that

‘*in view of the law she was before the court in all

the proceedings touching the body of which she was

a member.’’ (P. 59.)

This Court also pointed out that

‘*by the deed of assignment, all the property and

effects of every kind, which belonged to the com-

pany when the petition to have it declared bankrupt

was filed, passed to the assignee. Bump on Bank-

ruptey, 473, 478; Rev. Stat. sect. 5044. * * The

statute in terms gave him the same right in any liti-

gation he might institute which the bankrupt would

have had ‘if the decree in bankruptcy had not been

rendered, and no assignment had been made.’ Id.

sect. 5047; Bump on Bank. 528. The liability of the

plaintiff in error, and the right and title of the com-

ny, were legal in their character. If the company

d sued, it might have sued at law. The rights of

the company passed to the assignee, and he also could

—

enforce them by a legal remedy. The assignee was

subrogated to all the rights, legal and equitable, of

the bankrupt corporation. This suit was, therefore,

well brought in the form adopted. Hall v. U. S. Ins.

Co., 5 Gill. 484.’’

The differences between bankruptcy proceedings and a

simple foreclosure suit are both numerous and vital.

In the former the rights of creditors of all kinds, stock-

holders, ete., are involved in proceedings where all ques-

tions are open either to adjudication or investigation.

The assignee had title in that case, and the order direct-

ing him to sue was wholly supererogatory. The stock-

holders, creditors, and all other persons were bound to

take notice of bankruptcy proceedings, and what would

bind the corporation would of course bind its privies, the

stockholders. Moreover, the stockholder in that case

‘‘might have applied to the District Court to revoke or

modify the order. Had she done so, she would have been

entitled to be heard; but it does not appear that any such

application was made.’’ (P. 59.)

So far as the claim against Leach & Co. is concerned

there was no privity between The Struthers Furnace

Company and Leach & Co. Leach & Co. was not a party

to the proceedings, had no notice of them, and would

have had no standing in the Court of Common Pleas to

move that the order directing suit be modified or re-

voked. The receiver in the case at bar had no title even

to the assets lawfully seized by him. The rights of gen-

eral creditors were not before the court. It was not

alleged that the corporation was insolvent, neither was

the court asked to wind it up. Necessarily the jurisdic-

tion of the Court of Common Pleas, in view of the nature

of the foreclosure proceedings, was much more restricted

than the jurisdiction of the bankruptcy court in the case

above mentioned.

Therefore, we respectfully submit not only that the

ease cited by this Court is not in point, but that the ex-

cerpt from it, appearing in this Court’s opinion in the

case at bar, does not give an accurate idea of what the

case really holds.’ The omitted matter which is indi-

cated by the points suspensifs in the excerpt set forth

in the margin is a reference to Revised Statutes, § 4972.

This section and §§ 5046-47 are set forth in the Appen-

dix, pp. 33-4, infra.

So that the case is distinguishable not only because of

the greatly circumscribed jurisdiction of the Court of

Common Pleas, but because the stockholder in that case

was, if not a party, at least privy to the judgment,"

17. “The order was conclusive as to the right of the assignee

to bring the suit. Jurisdiction was given to the District Court by

the Bankrupt Act . . . to make it. It was not necessary that

the stockholders should be before the court when it was made, any

more than that they should have been there when the decree of

bankruptcy was pronounced. That decree gave the jurisdiction

and authority to make the order. The plaintiff in error could not,

in this action, question the validity of the decree; and for the

same reasons, she could not draw into question the validity of

the order. She could not be heard to question either, except by a

separate and direct proceeding had for that purpose.”

18. Coe v. Armour Fertilizer Works, 237 U. S. 413, 59 L. ed.

1074, 31 Sup. Ct. Rep. 625.

Glenn v. Leggett, 135 U. S. 533, 34 L. ed. 262, 10 Sup. Ct.

Rep. 867.

Hawkins v. Glenn, 131 U. 8. 319, 33 L. ed. 184, 9 Sup. Ct.

Rep. 739.

Montezuma Canal Co. v. Smithville Canal Co., 218 U. 8.

371, 54 L. ed. 1074, 31 Sup. Ct. Rep. 67.

whereas, Leach & Co. was neither party nor privy to the

proceedings in the Court of Common Pleas. As stated

in 1 Freeman on Judgments (5th ed.), § 318, p. 633:

‘While parties and privies may attack a judg-

ment for lack of jurisdiction, this right, in most

states, is restricted to cases where the judgment is

void on its face. But strangers are not bound by

this limitation and may offer evidence to show the

absence of jurisdiction. A decree awarding relief

entirely beyond the scope and subject matter of the

complaint, being void, may be collaterally impeached

by a stranger whose rights are affected.”’

This is the law in Ohio. (Coe. v. Erb, 59 Ohio St. 259,

268.)

Of course, the cases cited on p. 6 of this Court’s opin-

ion in support of the proposition that where a court has

jerisdiction to appoint a receiver the validity of the

appointment cannot be inquired into in collateral pro-

ceedings, do not meet the respondent’s contentions. Con-

sequently these cases need not be noticed, except to re-

mark that, obviously, there is nothing sacrosanct about

the appointment of a receiver. Like any other order or

judgment, an order appointing a receiver may be col-

laterally attacked when the court lacks jurisdiction.

We respectfully submit that the Court of Common

Pleas was without power to seize property not covered

by the mortgage, and thet the order directing the re-

ceiver to sue Leach & Co. was wholly void.

Before discussing the jurisdiction of the Court of

Common Please in the stockholder’s suit, let us first no-

tice another very important matter.

Lil.

We respectfully submit that this court departed from the issues

joined in the Circuit Court of Appeals, and failed to give effect

to the stipulation of the parties in that court.

Concerning the appointment of the receiver this Court

says that

“its validity was not challenged in any respect by

the answer of Leach & Co. in the District Court,

which admitted that Grant had been ‘duly appointed’

receiver of all the Company’s property.’’ (P. 6.)

Now consider the position of Leach & Co. when the Cir-

cuit Court of Appeals notified the parties that it would be

inclined to remand the cause, and invited counsel to con-

sider whether the rights of their clients might properly

be preserved by means of a stipulation for the filing of a

transcript of the record in the Court of Common Pleas

and the argument of the specific questions stated by the

Court. (R. 266-7.)

Surely, it will not be asserted that in case of remand-

ment Leach & Co. could not have obtained leave to amend

its answer. But, clearly, in view of the statement con-

tained in the Court’s letter,’® there was no need of insist-

19. “The further argument desired will be devoted to the ques-

tion whether authority to bring this suit either was or could be

conferred upon the receiver, and be rightly based upon the plead-

ings, in connection with the controlling statutes and equitable

principles, and whether such authority would or would not be

rightly incidental to and consistent with the nature and purposes

of his possession of those assets which passed to the receiver.”

(R. 267.)

_ <—

ing upon remandment. All parties understood that the

validity of the proceedings in the Court of Common

Pleas, regardless of the record made in the District

Court, would be considered by the Circuit Court of Ap-

peals in the event that the parties entered into a stipu-

lation and filed a transcript of those proceedings. We

respectfully submit that the Court’s letter is not subject

to any other construction.

Morvover, both parties entered into the suggested stip-

ulation and filed briefs addressed to whether or not the

orders entered by the Court of Common Pleas were valid.

Our position has been consistent from the first, as is

evidenced from the matter set forth in the margin,?°

20 Iv.

In simple foreclosure proceedings the power of a court to appoint

a receiver is necessarily limited to the appointment of a receiver

for the mortgaged property.

The alleged claim of The Struthers Furnace Company against Leach

& Company under the contract of April 5, 1922, pursuant to

which the bonds secured by the mortgage sought to be foreclosed

were sold, necessarily was not a part of the mortgaged property.

The State Court was therefore without jurisdiction to direct the

receiver to sue Leach & Company on the alleged claim.

Vv.

The rights of neither creditors nor stockholders were involved or

could be involved in the foreclosure suit, consequently the prose-

cution of any suit against Leach & Company is wholly foreign

to and inconsistent with not only the foreclosure suit, but the

Receiver’s possession of the mortgaged assets. A receivership

in foreclosure proceedings is entirely different from a receiver-

ship for winding up a corporation or in other suits which require

a liquidation of a corporation’s assets.

oo,

which, on our honor as members of this bar, we cer.

tify is a copy of certain points that appear in Leach &

Co.’s brief filed in the Cireuit Court of Appeals after

the stipulation was entered into.

We respectfully submit, therefore, that this Court

should confine itself to the record made in the Circuit

Court of Appeals, and that its failure to do so violates

the spirit of the rule so well stated by a member of this

Court when a member of another court:

‘The receiver agreed with the sheriff that his tak-

ing possession should not affect the validity of any

lien which might have been created by the sheriff’s

levy and continued in force until the receiver’s tak-

ing possession. The arrangement made by the sher-

iff and the temporary-receiver is to be commended.

It was a judicious compromise to avoid a conflict

between jurisdictions, and certainly this court will

not permit the commendable spirit of confidence

which the sheriff showed in the justice and equity

of this court to be made a ground for de-

priving him or those whom he represented of the

rights in the property which had been acquired and

maintained by lawful levy and subsequent official

eustody.’’ Vance v. Manufacturing Co., 82 Fed.

251.)

Moreover, Leach & Co. in the District Court, had put

in issue the power of the receiver to sue. (Opinion, p. 4.)

Surely, this Court will not say that the issue in the Cir-

cuit Court of Appeals after the stipulation was limited

to whether the Court of Common Pleas had actually en-

tered an order authorizing the suit against Leach & Co.

We stipulated that the order had been entered. And how

can the validity of the order be determined if we are to

be told that the validity of Grant’s appointment as re-

ceiver was not challenged in the District Court and that

we there admitted that Grant had been duly appointed

receiver of all the Company’s property? Obviously, that

is not to determine the validity of the order directing

Grant to sue, but to decide that its validity is not an

issue. It is to disregard the letter of the Circuit Court

of Appeals, or else to convert it into mere jugglery of

words, after our reliance on it. It is to pass upon issues

here other than those joined in the Circuit Court of Ap-

peals.

IV.

The court of common pleas was without jurisdiction of the subject-

matter of the stockholder’s suit, which was solely for the appoint-

ment of a receiver, and the order appointing a receiver therein

was coram non judice and void.

This court’s decision herein, we submit with great respect, is based

upon a misconception of what constitutes jurisdiction, an in-

advertent misstatement of respondent's contention, and cases that

have practically been overruled. It is contrary to the Ohio

decisions, numerous decisions by this court, and the overwhelm-

ing weight of authority.

On pages 5-6 of the opinion herein the Court states that

“‘it is asserted that under the petition of the pre-

ferred stockholder, in which no other relief was

prayed, the appointment was erroneous, under the

decisions of the Ohio courts. But, however, this

may be, the court had jurisdiction and the power to

determine these questions.’’ (Italics ours.)

As a reference to p. 17, et seq., of our original brief

in opposition to the petition for certiorari herein will

show, the Court has inadvertently misstated the conten.

tion of respondent, and in such a way that it constitutes

a reflection upon either their good faith or professional

ability. No lawyer would contend that a merely erro.

neous judgment is subject to collateral attack. The ex.

cerpt from page 20 of our original brief?! clearly indi-

cates our position.

This Court in Reynolds v. Stockton, 140 U. S. 254, ap-

proved the following definition of jurisdiction:

‘¢ Jurisdiction may be defined as the right to ad-

judicate concerning the subject-matter in the given

case. To constitute this there are three essentials:

First, the court must have cognizance of the class of

cases to which the one to be adjudged belongs;

second, the proper parties must be present; and

third, the point decided must be, in substance and

effect, within the issue.’’ (Italics ours.)*?

Now, we ask, to what class of cases does the stock-

21. “The Court was wholly without jurisdiction of the subject

matter and all that it did in said so-called suit was coram non

judice and void.

15 Corpus Juris, p. 853.

Where there is an absence of jurisdiction, not even the consent

of all parties in interest can confer it.

1 Tardy’s Smith on Receivers (2nd. ed.), p. 63.”

22. See also:

Charles v. White, 214 Mo. 187, 112 S. W. 545, 549.

State ex rel. McManus v. Muench, 217 Mo. 124, 117 8. W.

25, 29.

and the other cases cited in our Supplemental brief, p. 23 et seq.

bee eh oe lien ge aes

holder’s suit belong? The answer is that a suit solely

for the appointment of a receiver is unknown to the law.

The answer is that where a court is without power to

grant the ultimate relief sought, it has no power to ap-

point a receiver, and that, if it does, its order is abso-

lutely void and, therefore, subject to collateral attack

whenever it is thereafter relied on for any purpose. The

cases leave no room for doubt on this point, as we shall

soon demonstrate.

In 1 Tardy’s Smith on Receivers, § 14, p. 51, it is said:

‘‘The nending action must be one for such relief

as can be litigated between the parties even if the

application for the appointment be denied. Hence

if the sole object of the suit is the appointment of

a receiver, the court will not take jurisdiction in the

absence of statutory provisions allowing such suits.

The court must have jurisdiction to entertain the

cause of action to which the appointment of the re-

ceiver would be ancillary and have power to grant

the relief demanded in the action, for if the court

has no jurisdiction over the subject matter it has

no authority to appoint a receiver, since it is funda-

mental that there is no such proceeding in equity as

a plain receivership action, in which the appoint-

ment of a receiver is the only desideratum. The ac-

tion must, of course, be one which comes within the

equitable jurisdiction of the court and the relief

prayed for must be of such a character as to be ger-

mane to the cause of action set up.

In order to constitute a suit as pending within the

above rule it is necessary that the complaint or bill

shall state a cause of action against the defendant,’’

(Italics ours.)

In this Court’s opinion herein it is said that section

11894 provides that the Common Pleas Court may ap-

point a receiver ‘‘in causes pending therein in certain

designated cases, and ‘6. In all other cases in which re-

ceivers heretofore have been appointed by the usages of

equity.’’’ (P. 5.)

But the appointment of a receiver is purely ancillary,

The usages of equity have never sanctioned the appoint-

ment of a receiver where that is the ultimate and only

relief sought. And the Ohio decisions cited in our orig-

inal brief in opposition to the petition for certiorari

herein demonstrate that this universal rule is followed in

Ohio. There is, therefore, no class of cases to which this

stockholder’s suit belongs. The Court of Common Pleas

did not have ‘‘cognizance of the class of cases to which

the one to be adjudged belongs.’’

Moreover, there was no cause pending in the Court of

Common Pleas, as provided by section 11894 of the Ohio

Code. The plaintiff alleged no breach of duty or other

wrongful act; and, so far as the record shows, his peti-

tion was never thereafter amended. Indeed, there was

nothing to amend by. As said by the Supreme Court of

Ohio in Spoors v. Cowen, 44 Ohio State 497, 9 N. E. 132,

135:

‘*But, in order that a party may be permitted to

amend, there must be something to amend by

(Shamokin Bank v. Street, 16 Ohio St. 10); so, un-

less a case is presented that could be amended, there

is no case upon which a judgment can be rendered.

A judgment rendered, where no case has been stated,

is as much a judgment upon a case coram non judice,

whatever may be the jurisdiction of the court ren-

dering it, as a judgment upon a case, however per-

fectly stated, before a court not clothed with juris-

diction to hear and determine it.’’

Blanchard Bro. & Lane v. The S. G. Gay Co.,

289 Ill. 413,

a stockholder of a corporation filed a bill for the ap-

EEE RT LRT Tare Tey wore

pointment of a receiver. No fraud or mismanagement

was alleged. A receiver was appointed, and in a collat-

eral attack the appointment was held absolutely void.

The Supreme Court said:

‘“‘The court clearly had no jurisdiction by reason

of the allegations of the bill, all of which are above

set forth to appoint a receiver to take charge of and

distribute the assets. * * * The court having no

jurisdiction to entertain the bill and to appoint a

receiver with the powers aforesaid, the decree was

void and the receiver acquired no title to any of the

property and therefore could convey no title.

(Fitch v. Wetherbee, 110 Ill. 475.) The decree being

absolutely void was open to collateral attack. (Peo-

ple v. Weigley, supra.) In any judicial sale by the

receiver the rule of caveat emptor must be applied.

Hutson v. Wood, 263 Ill. 376; Manternach v. Studt,

240 id. 464.’’