Respondents Brief — Texas & Pacific R. Co. v. Pottorff

Supreme Court brief1934

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. Bea WILLIARD,W. W.

a S

# pr See

(OL ae! te LLNS

pe SUBJECT INDEX.

¥ < Pase

Nature of the Cause i. : |

é Further Statement of the Case ae 2

Point I Remedial Law of Montana controls ae

Point Il . Respondent interpose no plea inabatement = 3

“Point IL ‘Respondents did not give Distriet Court ;

; Kighth District jurisdiction over them it

Point IV Arguments on the merits | a

Point V Legislature may impose any restrictions de-

sired on insurance corporations 10

Point VI There need be no substitution of parties = 2

Point VIL Doctrine of Relfe v. Randle limited one 14

Point VIII Montana has not said that Federal Surety

Company is alive acing

Point IX Nothing, inhere ntly incongrous in such stat-

’ utes Be fi

Point X lowa Court authorizes, Receiver to make

please in abatement - 19

Point X1 Am alysis of Petitioner’s authorities 20

Point M4 Siatute of Iowa did not vest title in Receiver 26

Point XIII Only one judgment of Iowa Court. fcessd “

Paint XIV Petitioner seeks to ride down valid Montana

AD cceee0 as iiscetadaad ed derdcskokebcobsuians aan

Point XV Effect of the Judgment in Iowa ae ie Neaease

Point XVI Devolution of Title ............... oat Sa a 38

INDEX. :

CASES CITED.

, Paxe

Andisinn v. ‘Andrews, 188 U.S. 14; A7 L. Ed. ee: 19:

Bacon v. Howard, 20 How. 25; 15 L. Ed. "Sa tatestane ue 8

Big Sespe Oil Co. v. Codliven, 276 Fed. 216. ne . eee oe 13

Booth v. Clark, 17 How. 322; 16 L. Ed. 164............. carasenetro GO

Borton ¢. Brines-Chase Co., 175 Pa.'209; 34 Atl. 597.00... 36

Castle v. Acrogen Coal Co., 145: Ky. 591; 140 S. W. 1034....18-36

Clark v. Sup. Council, 146 Cal. 598 ;°80 Pac. 931........000000000..... 86

(. M. Co. v. Mep. Co., 27 Mont. 152; 69 Pac. | nantes 33

Combs v. Mil. & M. Ry. Co., 89 Wis. 297; 62 N. W. 89. Leask 25

_ Converse v. Hamilton, 224 U.S. 248.0.00000000.00...... Feteneanst 14-26

: Dixie Mfg. Co. v. Ricks, 153 Ga. 364; 1128. ‘B. ee ort: 14

““Dueat v. Chicago, 10 Wall. 410; 19 L. Ed. 972... sadboste asl . 10

Farmers M. Ins. Co. v. Harrah, 47 Ind. 236........ i aie aN ey |

Felts v. Natl. Life Ass’n, 130 Ala. 413;.30 So. 374... 23

ieee & T. Stone Co. v. Hutchinson, ‘176 Ill. 48;.51 Ne E. s

-” Fink v. Natl. Union Fife Ins. Co., 90 S. C. 544; 74 S. E. 33

Ann, os 7) eee rape teenie Greases hin iiws Tt:

First Natl. Bank of Selma v. Colby, 21 Wall. 609: "22 L. Ed.

RDN a ciccnsdcdeadbadiecherdicuortesc cece comm eice nein Celia adidas ceeadacenoniekas niacin 24

Great West. Min. & Mfg. Co. v. Hares, 198 U. S. 561; 49

Bea Hj SARA ae Sean eRe 28

C:ulledge Bros. L. Co. v. Wenatchee Land Co., 115 Minn.

* MR BENE BGs I hairs rxascisteeanachagccnreinies ceorusthensRbcyareticiambers 23

Hale v. Allinson, 188 U.S. 56; 47 L. BI BIB ss eivcsecevernesens 28-30

Hancock Natl. Bank v. Farnum, 176 U. 8S. 640; 44 L. Ed.

I icececesece: RE LEIA RET ELLIS SI MS PO, OEY PEE EO POE 26

Hauker v. Entornetionnl Trad. Co., 184 Ky. 794; 214 S. W.

NIPEE scsenesatiniass cosShereRdeeneineveneasssscasnensacaceuvevhersesesusseasetnsorecovenesensves 18.

Hiatal v. ark, 204 Fed. 440... scccicsecsccecrecescene 13

- Herbring .v. Lee, 126 Ore. 588; 269 Pac. 236 ; 60 A. L. R.

_ > INDEX.

CASES CITED,

Page

BREN E ARBRE ER Se eS RRS eal OAR a

Home hie. Co. v. Augusta, 93 U.S. 116; 23 L. Ed. 825 OSs cae

’ Houston v. Utah Lake Etc. Co., 55 Utah 393; ay Pac. 174;

2 4 Se eee e ees eet 12

Keatley v..Furey, 226 U. S. 399; 57 L. Ed. 78... ‘Tei 28-31

Kinsler v. Cas. Co., 103 Nebr. 382; 172 N. W. 33 .\...0.....0... 21

Kipp v. Miller, 47 Colo: 598; 108 Pac. 164...0..0..0.\o.0. 18

-Laekmann v.Sup. Council, 142 Cal. 22; 75 Pac. 583 \\............ ‘36

Life Ass’n v. Fassett, 102 111..315............. Loicadasogties peru Sd ot 19

List v. Com., 118 Pa. 322; 12 Atl. 277............... Sy. Maen 11

Liverpool L. & L. & F. Ins. Co. . Mass., 10 Wall. 566; 19

jp IRE CIT ed CE SE SI EOL ESE Se Tn ee 10

Lucifer Coal Co. v. Buster, 64 Colo. 179; RR WU Oi cracesenns ‘13

McGoon 'v. Scales, 9 Wall. 23; 19 L. Ed. 545 20000000... 1.-18

McRae v. Kan. Piano Co., 69 Kan. 457; 77 Pac. 94..0000000......... 24

~ “+Marian Phos. Go. v. a ene 23

Met. Rub. Co. v. Place, 147 Fed. RENE ESaDe BOUT RRR a! NS ON 9

Morgan v. N. Y. Natl. Bldg. & Loan Ass’ n, 73 Conn. 151; 46.

RRA. LGR ALERT Bite EP ORE AS ei eoesereeeenes 24

Muma v. Potomac Co., 8 Pet. 284; 8 L. Ed. 945.. nines aan 25

Mutl. Life Ins. Co. v. Cohen, 179 U. S. 262; 45 L. Ed. 181... 17

Oklahoma Nat. Gas. Co. v. Okla., 273 U. S. 257 ; 71 L. Ed.

WE scssscssscarcarncecbeanscoheeiouses ttesembenckeseadattcanie cuadete 23

Olds v. City Trust ete.:Co., 185 Mass. 500; 70 N. E. 1022:

ae he RL eee 19

O’Sullivan v. Douglas, 124 Ky. 243; 98 S. W. 990 ................ &

Paul v. Virginia, 8 Wall. 168; 19 L. Ed. 357... ie adict ae

Pendleton v. Russell, 144 U. S. 640; 36.L. Ed. 574... . 25

*. People v. Thurber, 13 W544 o.o--ccscccccccccesssssssesesecsesecessssssessees 10

‘

B -

: INDEX

: CASES CITED.

re Page

Reife v. Rufdle, L038 UL S. 222 | L4-2 1-28

Remington Vv. Samana Bay Go., | 40 Mass. 494; 5 N. Ie. 299 “oy

Richards v. Ackerman, 24 1. R.A. 208 11

Ridell v. Rochester Ger. Ins. Co.,.33.R. 1.45; 85 AtL 273) | 2

Roche v. MeDonald, 275 USS. 449; 72-1. dl. 865 : pas

Rowers v. Adriatic Fire lis. Co., ‘148 N.Y. B41: 42-N. Ef.

Ld ee . 1619

Sec. Sav. Ete. Co. ve Rogers, 6 Idaho 626; 57 Pa. 316 9

Schloss v. Met. Sur. Co., 149 la. 3882 ; 36

Singer v. Hutchinewn, 83 Ul App. 675; 183 HL 606; 75 Am.

St. Rep. 183; 56 NEL 388 18-19

os Singer ve T. Stone & Hutchinson, 176 uf A851 NE. 622 34

i Smith v. Winchester, 96 Me. 480; 52 Atl 1017; 90 Am, St.

Rep. 414 )

State vi Phipps, 50 Kan. G09; 18 LR. AL 657234 Am. St

Rep. 12; 4 Inters, Com. Rep. 2997 31 Pac. 1097 lI

State v. Kid. Loan Co., 113 Ta. 439; N. W. 2

State v. Dudley, 106 So, 364; 159 La. 872 38

iain v. Colman, 11 Col. App. 495755 Pae. 293 13

Sterrett v. Second Natl. Bank, 248 U.S. 73:68 I. Ed. 135. 28

Stetson v. New Orleans City Bank, 2 Ohio St. 167: : a ) Ohio

St. 577 ; " 18

° Townsend v. Delaware Glue Co., 12 Del. Ch. 25; 108 Atl.

ae eee slasecshgcinade'seasiaids eoelien anaes bail 13

Venable v. Granite Co., 185 Ga. ‘508: 69 §. FE. 822; 32 L R.-

pe SR De ape rte s . 2

o w= Williams v. Gaylord, 186 U.S. 157; 46 L. Ed. 1102 15

— “Williams v. Gold Hill Min. Co., 96 Fed. 454 34

593 27

Zacher v. Fed. Tr. & Safety etc. Co., 106 Fed.

INDEX. .

3 :

Sec, 8402 Towa Code

Sec. 8613 C1 lowa Code

Sec. $964 lowa Code

. Sec. 6212 Revised Codes of Montana 1921... _..

STATUTES CITED.

..22-27-32-35

ee Pe OB PON YEE

Page

. 2’

)

t-- gree

. 34

INDEX.

TEXTS CITED. - “

“to © iat ~ Page

IEE © sediliecomsecevepcaiioces) ecccadaaiuties vintepeavonintesl piguninccean ae Ye

° AT A.L. R. 1564 ......... FCT BEATER Pi NADIR AMIS Ne APL ON to 13-16 |

7 Cal. Jur. 217, Sec. 701 ..... PNA ARB SDD ROSE ET Spas era oat ...2. 36°

ee, Oe Oe es ans eee ere 11

so ce eo eh EL Me RT Ae 17

= A TP UN MI, I se csc eicensiaciestneveressoeevesniticn haat 18

17 Fletchers Enc. Corp. Sec. 8318) .................... aes: “Cie i

Freeman on Judgments, (5th Ed.), Vol. 1, Sec. 141 _.... y eee aan

SR 14

_ WSR.C. L. 618 Sec. 58 ............. poh esse earomieaaeasaaiemnnines 4

I ria heceecrccnruiaes Pee as mticetces 12

I oo Pon Seer foe asec i aS te REN Be 4-13

RS BTR aeesnect one renee MAR ta Icon Forts teraani I 4

Be IE MID oepeicveconccerncateetderends Soar ENN aR SCONE "16

Wn ee DO Me 16

¢ 14C. J. G1, See.3 ............. eh saiseaad atianseteiasetsana SECU

rhe See Bu Vc DPSS SP AUT OR e EROS et 34

IMIR cic casicc tears cors oT Nar EN Ea ROR AR ASE ok 19

e.2. 10 «.......... Fis cee eoOM cs Wintec SOP once 72s Pate "4

(AE AG TERRIA Lt AARON SPN SRA RRA SETS > Peer SRO 33

le I BE os as. cones paspubasunwenteanenooebaderdaunicneions diem alaris 4

ee, ne eisai Cn ee 4

BT pce cece anaahen Pec ORAM 9 hPL D PI IC NA ASRS pede 5

Se ee he i I oe cecesaccies snnicnccceneieciacenni _ Sollidtanp rasta bow bs tees oes 5

$40. 5.526 .........:. PREMIED Asahi CENT crate Li nl oS A Metacies 6

S00 ee oe RST Met dole | Brae. iS 4

eens tie I Ns: UNO Sc cases cxcocscpccmeosnneecsscasvelenpeepenmeees Sere ae a

a ae A ILCs BO SMe LORE aS

ek A A Palle Ee niece Re CALE REST Shee 37

mn aE sland ia clleuisosubeyuaipedaaeeainenuieneanie o7

ie aes I os csctedes ae esoitia adeiniistgieneneaiee 36

1 Clark on Reeéiyers (2d Ed.), 463 __...... Nijehinadicaairatanemenne 26

1 Clark on Receivers, MEE. xnccanassoneninnees ESCO 26

1 Clark on Receivers, Sec. 346° .......... Uy... RRR eee eee ees 27

1 Clark on Receivers (2nd Ed.) 181, Eee 27

1 Clark on Receivers (2nd Ed. = ¢ (2) 5) een mee 27

2 Charis cay Heceivens, Bet. GGT 2. asicercchercensengereccwrvctvenee ayant ae

SUPREME COURT

be OF THE

» UNITED STATES

| Case No.-449

; October Term, 1933

E.W.CLARK, ( r

as Receiver, ‘ Pe

. Petitioner,

versus

. HARRY O. WILLIARD, W: W. WHEATON,

and C. H. HAY, as Trustees of Gordon

Campbell-Kevin Syndicate, a Common-Law Trust,

and GORDON CAMPBELL- KEVIN SYNDICATE,

a Common Law Trust, ’

“roe 4 . Respondents.

Supplemental Brief of Respondents

NATURE OF THE CAUSE.

As we view the question before this Court, there is in-

volv ed an essentially. different legal situation than ig stated by

petitioner in his iste: Sepa

Heretofore respondents filed their brief in ‘opposition to the

granting of the writ of certiorari herein, based, as they viewed

the matter, upon the questigns of jurisdiction of this court. .

The questions of jurisdiction. were so intimately interwoven

”» ld .

= 3 ad

with questions Which would arise on the merits, that undoubt

edly the Court felt constrained to hear the case upon its merits

Which would not necessarily preclude a rezexamination of. th:

jurisdictional questions, 7 - |

FURTHER STATEMENT OF THE CASE.

To correctly éinderstand the precise situation of the arties,

it is impoitant at this juncture to direct specifically to tin

attention of the Court, that the action in which, Respondents

judgment ‘was recovered, Was an action entirely distinct from

the proceeding of Mieyr versus Federal Surety Company (2.48

to 63.inclusive), all as appears set forth in the judgment roll

® the latter proceeding.

‘The: record before this: Court GR. 59) shows that the

amended Compilajnt CR. 49 to 59 inclusive), was filed January

31, 1928,~ : ahs Tole

The Answer ¥tseil Was filed F@beuary 29, 1928 (2.60). ‘Fie

obvious fact is that the action was instituted sometime prior to

January 31, ievs8. The defendant,— then admittediy : SUL JUL

by its general appearance and answer (R. 5Y) vested tie Dis-

trict Court of the Tenth Judiejal District for Fergus County,

with jurisdiction. If that court ever lost jurisdiction of the

caee, it lost it because of the subsequent dissolution of ‘the de-

° %, < ' " . P ‘

fendant, Federal Surety Company, therein. That it did not lose

jurisdiction is clear from a consileration of the following piop-

ositions of law: | .

; : cic : e oe

THE REMEDIAL LAW DOF MONTANA CONTROLLED

THE PROCFEDINGS IN THE DISTRICT COURT OF THE

TENTH DISTRICT. FROM THE TIME JU RISDICTION was

OBTAINED UNTIL JUDGMENT WAS ENTERE]).

‘This Court has held that questions of procedure and prac-

Qo .

bt-

tice are questions to be determined by the Court of-the forum.

There is ng clause in the Constitution which restrains the

right in each state to legislate upon the remedy in suits on -

judgments of other states exclusive of all interference with

their merits. Bacon v. Howard, 20 How. 25, 15 L. Ed.-811.

‘We shall very seriously controvert the contentions of peti-

tioner that the corporation occupied the status of a deceased

person in Montana. °.

‘But for the purpose of this argument, let: it be assumed

~ that the corporation was dead in Iowa.

\ II.

THERE WAS NO PLEA IN ABATEMENT NOR ANY

SUGGESTION OF A REASON FOR ABATEMENT OF THE

ACTION WHICH RESULTED IN RESPONDENTS OBTAIN- .

ING THEIR JUDGMENT AGAINST FEDERAL SURETY

COMPANY. '

The suggestion of that alleged fact was never made to the

District C gurt of the Tenth Judicial District for Fer gus County,

Montana. No attempt was made by the Federal: Surety ‘Com-

‘ pany or its Counsel in that action to direct attention of the Dis-

trict Court to ever the fact that Federal Surety Company was

involved in 2 proceeding for the appointment of a Receiver and

«<lissolution (R. 49). ; -

On the day when the judgment was entered (R. 60),

Messrs. Ayers & Ayers appearing as Counsel for Federal .

Surety Company, did not apprise the Court of the alleged dis-

solution, or alleged want of. capacity of Federal Surety ;Com-

pany, but simply informed the Court that they were not ready

for trial; a matter addressed to the discretion of the court

under proper ‘rules oF law. Under those circumstances the judg-

‘ment entered was a valid judgment.

It is settled by the great weight of authority that:

“The jreneral rule is that, where jurisdiction of the

parties to an aetion, has duly attached, the faet that one

of them died before the rendition of the judement, thet

fact not appearing: of record, doos not mike the judgment

absolutely void, so as to permit its impeachment ina eol-

lateral proe coding.” :

34. J. ih:

aid See also 3-40. 1. 292, See. 507,

“32% ‘:

Ins A107, it is said:

“Bat the great preponderance of authority is to the

elect that where the Court has acquired jurisdiction of

the subject matter, and the person during the lifetime of

the party, a judgment rendered for or acainst him, after

his death, although erroneous and li: ible to be set a: side, is’

not void or open to collateral attack.’

See also:

1h. C. L. 618, See. 58,

In PCLT. 187, it is said:

“The question of continuing or reviviner: aetions Dy or

against a corporation, after its dissolution, deperds upon

the laws of the state in whieh the aetion is poadiic, and :

‘foreign statute rointing thereto is of no avail.”

In PO. d. 187, 138, it is said:

"As a ru’e, defects andlebjections as to the aetion or

proceeding or as to parties which do not bar the same, but

good merely in abatement, as shown in the proceeding soc

tions, to be available, must be pleaded or otherwise prop-

erly presented to the Court, or they will be waived.”

The general rule, which is supported by cases from Price

tically all jurisdictions, is well stated in 34 C.J. 520, See; 5 ead

“A direct attack of a a is an attempt to avoid:

or correct it, in some niann:r provided by law, in a pro-

ceeding instituted for that an purpose, is the same

action and in the same court, and the f: v that other inci-

dental relief is also asked is immiaterial. Sach is a motion

or other proceeding to vacate. annul, cancel or set aside

the judgment. A direct action to impeach and avoid the

judgment, a motion in arrest of judgment, for a rehear-

ing or for a new trial, or any proceeding to review it in an:

appellate ccurt, whether by appeal, error,.or certiorari,

n wie

rar i.

-action te review, bill of review or writ of. review. * * *

Where the element of fraud or mistake is involved in the .

issue, it is the general rule that the attack is direct.

A collateral attack is an attempt to impeach the judg-

ment, by matters dehors the record, in an action other

than in which it is rendered; an attempt to avoid, defeat

or evade it, or deny its foree and effect in some incide ntal

proceeding not provided by law for the express purpose

of attacking it; any proceeding which is not instituted for

the express purpose of annulling, correcting or modifying

such deeree.”

III.

WHEN RESPONDENTS PETITIONED THE DISTRICT

COURT OF THE MIGHTH DISTRICT FOR.LEAVE TO LEVY

IT Ww AS ONLY. IN AID OF EXECUTION. THIS PROCEED-

ING IN BEHALF OF THis MOTION SHOWS THIS WAS

DONK AS A PRECAUTIONARY MEASURE, AND WITH

THE SUGGESTION OF TH BELIEF THAT. THE KIGHTH

DISTRICT COURT HAD NO JURISDICTION “IN THE AC-

TION TO APPOINT A RECEIVER (R. 13).

In 34. J. 522, See. 828, it is said:

“A proceeding to enforce a judgment is collateral to

the judgment, and therefore’tid’ inquiry into its regularity

or validity can be permitted in such a proceeding, whether

it is a direct action on the judgment, * * * or proceeding

supplementary to execution, or bill in equity in aid of

execution, or to enforce the lien of the judgment. *,* *”

Agrain, it is said, in 34 C. J. 523, Sec. 829:

“According to some decisions, a suit in equity to en-

join or set aside a judgment constitutes a direct,attack

upon it; according to others, such a proceeding is col-

lateral, unless fraud,is alleged; while still others hold to

neither the one or the other, but is properly designated an

indirect atfack. * * * If an injunction only is sought, the-

suit is a collateral attack, but’ if Plaintiff - seeks also to-

have the judgment set t aside, and the case retried on the:

merits, it is.a direct attack * + . An application for a writ

of prohibition to forbid the Court to enforce its judgment

is a collateral attack. * * * A motion to quash an execution

is a collateral attack upon the judgment on which it is

. 7

. . Ye

based, unless the ground of attack is that the judgmen

was obtained by fraud. * * * The validity or correctness c

a judgment cannot be impeached in a subsequent actior

brought by the former Defendant against the forme

Plaintiff, involving the same issues, or in an action to r¢

cover back the- money paid, under the judgment, or fo

fraud and conspiracy in obtaining the judgment.”

Also, in 34 C. J. 525, it is said:

“The rule forbidding the collateral impeachment o

» judgments applies to all persons who were parties to th

action in which the judgment was rendered, and. to a

. those who are in priv ity with them.” .

On the subject of what constitutes privity, 34 C. J: 101¢

See. 1432, is supported by ad] authority:

_ “Privity means a mutual or successive relationship t

the same rights of preperty, and within the rules relatin,

to the conclusiveness of judgments, all persons are privie

to a judgment whose succession to the rights’ were de

rived through or under one or the other of the parties t

the action, and accrued pussaquent to the -commencemen

of that suit.”

_ If petitioner Clark is not in privity. with Federal Surety;

- Company it would be difficult to define his status. ©

0’ Sullivan V. Douglas, 124 Ky. 243; 98 Ss. W. 996

At the time the judgment (R. 61-62) was’ rendered i in favo

of respondents, there was pending in another District Court i

~- Montana, to-wit, in the District Court of the Eighth Judicia

District in and for the County of Cascade, the action of Miey

versus. Federal Surety Company of Davenport, and E. W

Clark, as Receiver of Federal Surety Company of Davenport

Jowa, for the appointment of a receiver. That action so entitled

was instituted on or about the 25th day of March, 1932 (R: 8

9). IT DID NOT INCLUDE THESE RESPONDENTS AS

PARTIES. Since the writ of certiorari has issued herein, ant

the record has been brought into this court, it will be seen tha

the action brought by Mieyr in the Eighth District and whict

_ the Supreme Court of Montana held was a nullity (Mieyr v

, 990.

favor -

art in

dicial

Mieyr |

).. W.

nport,

titled,

(R: 8-

n, and

n that

which

ieyr V.

Federal Surety Co., 23 Pac. (2d) 959), did not involve these .

respondents. These respondents, after securing their judgment,

in no wise subject to collateral attack, as we,have seen, peti-

tioned the District Court of the Eighth District for leave to

levy (R. 11-12). -

The minutes of the Eighth District Court (R. 13) declare:

“No evidence was submitted other than as contained in

the petition for Leave to Levy filed by Petitioners, but it

was stated to the Gourt that the judgment obtained by the

‘ Petitioners against Federal Surety Company on the 20th.

day of May, 1932, was made without knowledge of the re-

ceivership proceedings in Iowa; that ‘so far as the local

Reeeiver was concerned, D. A. Crichton, they felt that no -

jurisdiction had been obtained whereby: he could make

any claim to the money sought to be levied upon and more-

over that he had not, as yet, done so; that the action in

making levy was valid and unimpeachable but that in

order to save any argument, concerning the matter, it was

_ desired to have the-leave of Court requested. 7

It can plainly be seen that respondents entered that court

as a matter of respect and to avoid the possibility of a claim of

contempt. They did not become’ parties to the action. Their a

position as set forth in the minutes, was fully justified by the

later decision of the Montana court. That portion of the Mon- -

tana Court’s opinion declaring that Mieyr’s complaint_did, not

give the Court jurisdiction, is not attacked by petitioner heye,

nor, we submit, is it subject to attack. AT THAT-TIME,

_ TIME RESPONDENT'S -JUDGMENT WAS ENTERED, PE-

TITIONER, CLARK, AS ONE OF THE DEFENDANTS IN

THE ACTION INSTITUTED BY. MIEYR, WAS OPPOSING

MIEYR’S APPLICATION FOR THE APPOINTMENT OF A |

RECEIVER ‘(R.'10). ; °

Concurrently with the granting of Leave to Levy, the Court

overruled Clark’s resistance *(R. 11). Thereupon Clark evi-

nel tla oe a

i meen One Ee

8 . .

dently determined to assert his claims by answer. (R 15-21).

On July 25th, 1932, notice was served upon respondents

that Mieyr would move the Court on August 3rd for an annul-

ment of the Order Granting Leave to Levy (R. 14-15), and the°

Fighth Distr ict Court then entered its deazgee in accordance

with the pray er of Clatk’s answ er (R. 34- 39).

Thereupon these respondents because the court in its (le-

cree revoked the order granting leave to levy (R. Par. 12, pp:

-_ 38-39), ‘again entered the case with a motion to vacate the —

order and decree, asserting inter alia (R. 40):

“2. That the Court w as without jurisdiction to appoint

a receiver in said action.”

And in support of s said motion, filed an affidavit (R. 44- 4gyi

and set up the judgment obtained in the .Tenth District, by

copy of the judgment rol (R. 49-62). On appeal by respon-

dents to the Supreme Court of Montana, their contentiori that

Phe proceeding in the District Court of the ‘Eighth District

WAS W ITHOUT JURISDICTIONAL FOUNDATION, WAS

UPHELD. “Hoy, ‘under tows circumstances, any foundation.

was laid for the claim that a question ar ose which could invoke

the jurisdiction of this court, is bey ond comprehension. The

judgment of respondents w was -not directly attacked, nor was its

validity or effect even indirectly challenged (R. 14-15).

The record speaks that Counsel for respondents in the

| Eighth District Court, at the time the Motion to Set Aside the ,

Order Granting Leave to Lev vy, was heard, asked to be enlight-

ened as to the ground ‘of the motion and were told by opposing ~ .

coufisel that the order of May 24th above set forth granting »

the right nas to levy executions, was void (R. 15).

It is true that petitioner asserted.in his answer, as against

his adversary Mieyr, the rights claimed under the-constitution -

° ts ; aS

of the United StatesM@ut, in a proceeding where no jurisdic-

~ tion was reposed, as was’ ultimately determined by the Supreme

Court of* Montana, That the full faith and credit clause of the

Constitution can be asserted only i in accordance with local rules

of procedure, is settled beyond controversy. a

84 C. J. 1107, reading:

“An. action founded on a judgment of. a sister state

must be governed by the rules of pleading and practice

prevailing where such action is brought, subject: to the

qualification that the procedure obtaining in the latter

state cannot impair the efficacy of a judgment of-a sister

state, or deny an adequate remedy for the enforcement.”

‘The Supreme Court of Montana did not deny full faith and

credit to the Iowa decrees and statutes, nor were those rights

ever, except abortively, asserted. Their assertion in a proceed-

ing that failed to give the Court jurisdiction, was merely

academic. - o

It must be borne in mind that the respondents were trus-

‘tees of a Montana Common Law Trust (R. 49). They made no

appearance in the Iowa Court, nor was.the judgment therein

binding upon them or the Trust. é

32 C. J, 917.

Security Sav. Etc. Co. v: Rogers, 6 Idaho 526; 57

Pac. 316.

Smith v. Winchester, 96 Me. 480; 52 Atl. 1017; 90

Am. St. Rep. 414.

Met. RubsCo. v.. Place, 147 Fed. 90."

When they applied (R. 11-12) as a matter of caution (R.

13) to the District Court of the Eighth District for leave to

levy, they did not enter a proceeding by Clark to enforce his

that the Eighth District Court in Montana had no jurisdiction

(R. 10). That motion had been submitted and was denied con-

en with the granting of leave to levy (R. 10).

judgment. At that time, he, like r4epondents, was contending ~

The Supreme Court“held that there was no jurisdiction to

appopint a receiver given by Mieyr’s complaint. )

‘Respondents occupy the position of simply protecting their

rights, all in an orderly and proper manner, out of respect for

the courts. The analogies of the cases digsted in note 33 (b),

.32.C.J3. 916, ean be easily applied here:

. . IV.

ARGUMENT ON THE MERITS.

Up to this point in our argument we have presented im-

portant and we think coritrolling, matters for the considera-

tion of this Court. We think the record .in the case precludes

the examination of the question of graver import presented in

the brief of petitioner. Nevertheless, to meet the contentions

of petitioner, as we believe they can be met on the merits, we

shail present those principles and authorities which we believe

correctly resolve the question to be derived from the assumed

facts of the situation set forth in petitioner's brief.

as ee

THE RULE THAT LEGISLATURES MAY IMPOSE ANY _

RESTRICTIONS THEY MAY SEE FIT ON ADMITTING

CORPORATIONS TO DO BUSINESS WITHIN THE STATE,

EINDS ITS MOST LIBERAL EXTENSION IN. CASES OF

FOREIGN INSURANCE COMPANIES. .

Ani insurance corporation is not engaged in sateratate com-

merce.

Paul v. Virginia, 8 Wall. 168; 19 L. Ed. 357.

Ducat v. Chicago, 10 Wall. 410; 19 L. Ed. 972;

Liverpool & L. Life & F. Ins.-Co. v. Mass. -(Liver-

pool & L. Life & F. Ins. Co. v. Oliver), 10 Wall.

566; 19 L. Ed. 1029.

Home Ins. Co. v. Augusta, 93 U. S. 116; 23 L. Ed.

825.

People v. Chicane 13 Ill. 544.

. 11

Farmers & M. Ins. Co. v. Harrah, 47 Ind. 236.

List v. Com., 118 Pa. 322; I Inters. Com. Rep. 784;

12 Atl. 277.

State v. Phipps, 50 Kan. 609; 18 L. R. A. 657; 34

Am. St. Rep. 152; 4 Inters. Com. Rep. 299; 81

Pac. 1097.

And i in State ex rel Richards v. Achoreans, 24 L. R. A. 298,

after citing these authorities the Court said:

“Therefore, to insurance companies the general doc-

trine fully applies, that a state may exclude a foreign cor-

poratiegs Or impose upon it, as-a condition of doing busi-

ness, any burdens or restrictions that it chooses, reason-

able or unreasonable.” '

See also Herbring v. Lee, 126 Or. 588; 269 Pac. 236,;- 60

A. L. R. 1165-70. 7

A State as a general rule may admit a corporation upon

any condition it may see fit to impose.

In 6 Ene. U.S. Sup. Ct. Dec. 308, it is said:

‘“‘A corporation created by one state cannot, with some

exceptions, do business in another state without the lat-

ter’s. consent, express.or implied, with certain limited ex-

ceptions, namely, federal corporations or agencies, and

corporations en ngaged in interstate or foreign commerce.

And it may discriminate between its own corporations and

those of other states, or foreign countries.”

While the decisions, including those of this court, have

spoken broadly upon this subject; and this and other Courts,

narrowing the question, have spoken specifically on the ques-

tion at hand, petitioner still debates whether the imposition of

conditions can go so far as to affect the situation after dissolu-

tion of the corporation in the State of its domicile.

In'17 Fletcher Cyc. Corp., Sec. 8318, it said:

- “Generally speaking, a corporation does not take with

it into a sister state, either ‘the general legislation or the

judicial decisions of the state of its creation, and such laws

and decisions have no extraterritorial operation or force.”

At an early day this Court, in McGoon vs. Scales, 9. Wall.

23; 19 L. Ed. 545-548, in discussing an act of the State of Wis-

oC toed

. . — * , |

consin which sanctioned a proceeding against a corporation

dissolved in Illinois, the s State of its domicile, said:

“The-constitutionality of this act is denied; but no pro-

wision ef the Constitution of Wisconsin or of the United

States is pointed out Which is opposed to such legislation.

It would, on the contrary, be a strange defect in the leyis- )

lative powers ‘if, under such circumstances, a state could —

not frame laws which would enable her-citizens to subject

the lands of a corporation whose charter had expired, to

the debts which it owed to her citizens.” .

After all, it isa matter of lo “al procedure, and law. Viewed

: P ose —_ » 3° . ar oe

from any scientific standpoint, it would Seem obvious: that it is

Wthin the province of a state to determine what getions shall

cabal or be reviv ed, ahd the manner of abatement or revival.

The decisions of the Montana Court, in the-case sought to

be' reviewed, settles the question as to what does or does not

abate in cases of this character. Generally speaking; a Legis-

‘lature has the power to authorize: the continuance of suits by .

or agi inst a corporation after its di§solution. st

. ‘1C.J. 136. y

In most of the states, if not in-all, the common law rule

that pending actions by .or against a corporation are abated

by its dissolution, is. now avoided by statutes either continuing:

the existence of a corporation for a certain time after dissolu-

‘tion by expiration of its charter or otherwise, or by providing

for the continuance of pending actions either as‘ origitiatty in-

stituted, or through substitut’ 1 of other pare ws. This eal

ject is fully treated in.the.annotations to “ |

ey Utah Dake, Land, Water & Power Co., an Fe

«a 55 Ut®h 393,187 Pac. 174; 47 A. L. R. 1288. .

The annotations to the last cited case succintly set forth }

the law of the various statés and are embraced in p. 1288 to ,

1569. |

In some instances statutes enacted for the regulation of.

*> 18

domestic corporations have. been held insufficiently explicit to

embrace foreign corporations. Thus, the annotator derives the

law from all American cases on the subject.

AT A. L. R. 1564.

“Statutes which, operate so ‘as to. prolong corporate

_ existence, have, in several states, heen held inapplicable

to foreign corporations; but the Kentucky enactment has .

béen declared to be applicable to foreign corporations hav- |

_ing their principal place of business in that state.”

“The Onio enactment preventing the abatement of ac-

tions has been treated as controlling with regard to: for-

eign corporations. The scope of an enactment may, of

course, be extended to. foreign corporations by explicit

words, contained ecitherin-the enactment itself, or in some

other statute. Whether such an etxension should be predi-

cated, isaa matter to be determined from the language

used’ by the Legislature.”

In 1 Cc. J. 147, it is said:

“The question of continuing or reviving actions by or

against a corporation after its dissolution depends upon

the laws of the state in which the action is pending, and

‘a foreign statute relating thereto is of no avail.”

Vi.

If THE STATUTE PERMITS ACTIONS .TO BE CON- °

“TINUED FOR OR AGAINST THE CORPORATION BY

NAME, THERE NEED BE NO SUBSTITUTION OF PAR-

- TIES.

requires substitution. Clearly it is within the — of a

legislature to so declare. 2

Kipp v: Miller, 47 Colo. 598, 108 Pac. 164:

' Steinhauer v. Colmar, 11 Colo. App. 495, 55 Pac.

293 ;

Lucifer Coal Co, v. mueey, 64 Colo. 179, 171 Pac.

oo 61; §

Hazard v. Park, 294 Fed. 40;

Townsend v. Delaware Glue Co.; 12 Del. Ch. 25, 103

Atl. 577; }

Big Sespe Oil Co. v. Cochran, 276 Fed. 216;

There need be no substitution of parties, unless the statute

- specific facts in this ease, and thereby show a clear differentia-

14 } fy hs Op See sf ped

. . :

Iixie Mfg. Co. v. Ricks, 153 Ga: 364, 112 S. E. 870:

Finger & T. Stone Co. v. Hutchinson, 176 Ill. 48,

5l N. IK. 622

12K. CLL. vi

. VIL i 3

* DOCTRINE OF REL FE V. RUNDLE IS A CAREFULLY’ 4

LIMITED ONE. FOR OBVIOUS. REASONS, IT HAS NOT.

BEEN EXTENDED IN ITS AP PL ICATION TO CASES NOT }

FALLING CLEARLY WITHIN THE RULE. WHAT ARE .

THE LIMITATIONS TO ITS APPLICATION?

Petitioner has cited and insists upon the application of the '

rule of Relfe Vs. Rundle, 103 U.S. 222; and of Converse vs.

Hamilton, 224 U.S . 243; and like cases. Those cases apply only

where there is (a), a statutory receiver; (b), appointed by—-—-——

a -—S¥ . “ ; 5

law; (¢), deriving title through a statute; and (d), not through

a chancery decree ; and (e), where the: dissolved corporation S. ‘

Was not restrained or controlled px a statute of the foreign

state Where it applied for admission and was admitted. To that

end we shall endeavor to work out the rule applicable to the

tion between those cases so cited, and the ease at bar. More-’

over, we shall show the Court the true ‘rule w hich this and

other courts have ipplied to similiar, if not identical cases.

Relfe v. Rundle’states an undeniable doctrine where there

are no statutory limitations, that:

. “Every corporation necessarily carries its charter _

wherever it goes, for that is the law of-its existence. It )

may be restricted in the use of some of its powers while

. doing business away from its corporate home; but every

“person who deals with it everywhere it bound to take

notice of the provisions which have been made in its char-

2 ter for the. noe 2 and control of its affairs both in

life and after dissolution.” !

That this statement is general and ‘would apply and was

' ‘invokes only a rule of expediency.

“1s

there applied to a case involving a set of facts unaffected by

other important-principles will be obvious upon the most super-

ficial examination. a | .

For instance,.no constitutional ri~ht would be violated by

the exercise of visitorial power in a foreign state; the rule

rests upon expediency. we

Williams vs. Gaylord, 186 U.S. 157: 46 L. Ed. 1102.

_ Likewise the “death” of a-corporation, in its legal aspect,

Montana, or any other state may, as a condition upon a whieh

a forei gn corporation is admitted to do business, declare that

causes of action, maintainable against the corporation. by name,

—-shall survive dissolution. By such statute the corporate life, a:

mere fi¢tion, is not legislated upon.

_ VIII.

MONTANA HAS NOT. UNDE RTAKEN TO SAY THAT

A DISSOLVED FOREIGN CORPORATION Is ALIVE IN-

MONTANA. IT HAS ONLY SAID THAT IT REMAINS

SUABLE.’ . |

In the sense. . that it is inherently impossible to breathe

again the breath of life into a dead person or a dissolved ¢or- :

por ation, an attempt to so do by legislation would appear in- -

congrous’ Nevertheless, it is neither incongrous, nor does it

involve any constitutional right to declare that rights and

-remedies shall survive and be unaffected by either the death of

a natural person or the dissolution (death) of a corporation.

In Rogers v. Adriatic Fire Insurance Co., 148.N. Y. 34; 42

N. B. 515, the Court of Appeals of New York said:

“That the foreign corporation, dissolved and dead in

the domicile of its origin, should be deemed alive in the

foreign state so far as to save the remedies of its own

citizens against property within its own jurisdiction, is

entirely possible and not at all unreasonable.”

16 °

This is true, upon the death of a. non-resident defendant.

1 C. J. 230, Sec. 480. .

This is true upon the dissolution of a foreign corporation

(A7 A. L. R. pp. 1557 te 1565, partly inclusive).

The general rule, applieable in the United States, is well

stated in 12-C. J. 464, which reads: . >”

“Where, however, the pl: ice of domicile ond of the act

or contract are not. the same, there has been some -diver-

gence in the authorities as to the proper law to govern.

‘The continental writers. incline to the view that the per-

sonal status ef an. individual, includizg his capacity to act

ar to contract, accompanies him wherever he may go, and °

that the law-of his domicile will control no matter where

che may be; and there are English and American authori-

; ties *w hich, have followed this rule, but the weight. of the

common-law authorities is to the effect. that, in case of a

contlict between the lex-domicilii and lex loci contractus

aut actus, the latter will prevail. In the United States”

practical necessity, arising from the great freedom of com-

mercial intercourse ketween-the several states of the

Union, would, in the absence <f all other reasons, seem to

. prevent a general adoption of the continental rule. In or-

der to avoid the apparent anomaly resulting from the ©

courts of a state giving validity to, the act of a party dont

abroad, where they would refuse to enforee such act if it

was-done within the state, it has been suggested that the

enforcement of the foreign law might readily be restricted

by a positive prohibition of statute.”

As an. artifici al being it may have and or ie only. those

rights and powers conferred — it by the gener al law of its

- creator. j

14 C. J. 51, Sec. 3. |

When this artificial creature migrates, in the only w ray it

can migrate, into another state, it does so Anéor the rules of

private international law, is subject to those’ ‘rules of procedure

"prescribed by the rules of Conflict of Laws, just as is a‘natural

person. Moreover, where there is an express statute of the

’

state into w hich it _Migrates imposing conditions under which’.

it shall operate and ‘do business, it falls under restrictions

which might not be valid if applied to natural persons.

‘No constitutional provision would be involved or violated

should any Legislature enact a provisjon fixing the status of a

: natural person, or declaring the effect of his death, or survivor-

ii ship. When such statute is found; not. only pertaining to a for-

eign-cor poration, but expressly assented’ to by it, there -is an

A PRIORI reason behind the — of the Montana Consti-

tution and Act?

See’ Kink v- National Union Fire ine. Co., 90 S. C.°

- §44; 74S. E. 33; Ann. Cas. 1913 D. 221...

In 6 Enc. U.S. Sup. Ct. Dec. 313 it is Said:

' “A state may impose upon a foreign corporation, as a

condition to coming into or doing business within its vg

ritory, any terms, conditions and restrictions, which it

may think proger, that are not repugnant to the constitu-

tion or laws’of the United States. For the absolute power

of exclusion inclydes . the right to allow a conditional and

restricted ‘exercise of its. corporate powers. within the

state. And its right is subject to the condition of obeying

the lawful regukations of the state, of which all persons

fate with the corporation are - presumed to have con-

tructive notice.”

While the facts in. Relf Vs. Rundle are. easily distitguish-

able from the case at bar, the doctrine therein announced has

been refused application in other cases where the law of the.

forum was diffé¥ent. .

Mutual Life Ins. Co. v. Cohert, 179 U.S. 262: 45 L.

_ Ed. 181.

THERE IS NOTHING INHERENTLY INCONGROUS IN

A STATE PROVIDING: BY STATUTE THAT A FOREIGN

- - COL.PORATION SHALL REMAIN ‘SUBJECT TO SUIT IN-

DEFINITELY UNTIL ITS €ONTRACTS HAVE BEEN PER-.

FORMED. THE MONTANA STATUTE IS VALID. |

The text writers who have examined the entire subject find

18.

nothing inconsistent.in the holdings of the various courts to

the effect that a state may Jawfully consfder that a corpora-

tion may still be proceeded against and its property subjected ~

to the claim of creditors even though dissolved in the state of

its domicile.

In Fletchers Enc.-.of Corp., Vol. 8, p. 9720, it is said:

“The legislature of a state may provide that a foreign

corporation which has been. dissolved, but which owns

property and owes debts in such state, may be sued and ©

the property subjected to the payment of such debts. Such.

legislation was held to be constitutional by the Supreme

Court of the United States, which said: ‘The constitu-:

tionality of this act is denied; but no provision of the Con-

_ stitution of Wisconsin or of the United States is pointed

out which is opposed to such legislation. It would, on the

contrary, be a strange defect in the legislative power. if, .~

under such circumstances, a state could not frame laws

_whicty would enable Her citizens to subject the lands-of a

corporation whose charter had expired to the debts which

it owed to her citizens.’ Under a constitutional provision

that no foreign corporation shall be allowed to transact’

business within the state on more favorable conditions ~

~ than are prescribed by law to similar domestic corpora- -

tions, it is held that a foreign corporation, when it comes

into the state for_the transaction of busiress, subjects.

itself to all of the laws of.the state applicable to domestic

‘corporations, and this same rule of equality continues, -

with the same rights and liabilities that attach to a domes-

tic corporation, not only during the life of the foreign cor- -.

poration transacting business in the state, but until its

affairs have been settled upon its dissolution,’ citing

‘McGoon v. Scales, 9 Wall. 23, 19 Is. Ed. 545.

The following courts have expressed themselves in like

manner r upon the subject:

Stetson v. New Orleans City Bank, 2 Ohic St. 167;

12 Ohio St. 577;

Hauger v. International Trading Co., 184 Ky. 794;

- 2148. W. 436;

Singer v. Hutchinson, 83 Il. Ape. 675; 183 Ill. 606;

75 Am. St. Rep. 133: 56 N. E. 388;

nie Acrogen Coal Co., us Ky. 591; 140 S. W.

Olds v. City Trust. etc. Co., 185 Mass. 500; 70 N. E.

+ + 1022; 102 Am. St. Rep. 355; -

Rogers v. Adriatic Fire. Ins. Co., 148 N. Y. 34; 42

N. E. 515;

Life Ass’n v. Fassett, 102 Ill. 315;

Singer v. Hutchinson, 83 Ill. App. 675 (affirmed 183°

Ill. 606, 56 N. E. 388; 75 A.S. R. 133).

- The « «rine of Relf v. Rundle, and all related cases has no

application where, as here, the Receiver is a mere chancery” .

receiver. . ; r

On the score of the full faith and credit clause, the case

admits of the clearest analysis. . L ws

Let us assume for the purpose of argument that the, Iowa

statutes authorize and the Iowa decree decides that the cor-

- poration is dead, and that Clark properly appeared in the d

action pending in Fergus County and properly invoked the full

faith and credit clause,—conditions not present in this case,

and to that plea the Montana Constitution and Montana Stat-

“ute, as construed by the Court, were invoked. This is stating

the case strong enough; yet, still the Iowa Statutes and the

Iowa’ decree will not be permitted to ride down the Montana

law.

It would be a strange application of ethics ‘to permit a cor-

poration to come into the state;assent to such constitutional -

and statutory provisions and then insist upon the paramount

‘authority of the foreign decree and statute.

me Andrews v. Andrews, 188 U. S. 14; 47 L. Ed. 366:

> a

THE IOWA COURT, AT THE TIME OF PRONOUNCING

JUDGMENT ‘RECOGNIZED THAT JUDGMENTS MIGHT

_ BE ENTERED WHICH WOULD NOT BE SUBJECT TO

COLLATERAL ATTACK, UNLESS SUITABLE PLEAS IN

ABATEMENT BE FILED. .

Clark was not precluded by the Iowa judgment,—at least

Sse se eee Sot

ACCORDING TO THE EX*PARTH ORDER OF DECEMBER.

; au, 1931,-—(R. 26- 31), from appearing and pr esenting to the —

Tenth Distriet Court of Fergus € ‘ounty, a plea, in abateme nt,

for he was therein told (R. 30) “That KE. W. Clark, Receiver,

x. 9 be, and he is hereby given leave in his discretion to ap-

> pear, specially, or as may be necessary, i any action wherein

Federal Surety is named as defendant, for the purpose of pre-

senting a plea in abatement, motion to dismiss, or motion to

?. : ) \,

quash,” ete: '

The lowa ¢ ‘ourt thereby RECOGNIZED THAT SUCH P Ro-

CEDURE MIGHT BE NECESSARY, Had Clark appeared with .

a plea in abate ment in that action, he would have been me t, as

far as Montana is eoncer ned, successfully with the contention

that when Federal Surety Company eame into’ Montana, it |

agreed that it would be bound by Montana law both substan-

tive and adjective; and that the action must proceed to a judy. .

ment as instituted. Having been appointed in September, 1931

(R. 21) he could not have been ignorant of the pendency of the

action. Due notice of the setting of the case for trial in May,

1982, was given. Counsel.originally employed were permitted

~ to be-retained therein, and it is not a rank presumption to in-

dulge that Clark had actual notice of the pending trial. No sub-

_ stitution Was necessary. Had his plea in abatement been pre-

sented therein, and he had been aggrieved by the. decision

against him, then he at least could have had standing to pre-

sent the constitutional question,—which he now has, we sub-

nit, no foundation for presenting to‘this Court.

XI.

AN ANALYSIS OF PETITIONERS’ AUTHORITIES,

SHOWING THEIR IN APPLICABILITY TO THE FACTS IN

THIS RECORD. ; .

s ae | 21

We shall now analyze petitioners’ authorities with. the ob-

jeet of showing that they are not i in point. ws

Relfe v. Rundle, 103 U.S7222; 26 L. Ed. 337.

The outstanding: features of this case are: — :

1. Life Association of America Was incorporated under the

: laws of and domiciled in finsouriA large judgment was ‘or-

dered against it, giving occasion for Relf, the, Insurance Com-

‘missioner of ‘Missouri, to invoke the dissolution provisions of

the Missouri statutes: .

(a) Providing for the institution by him of an action for

dissolution and the appointme nt of the Insurance Commis-.

sioner as statutory agent; and \

(b) It was provided by statute that upon judgment of: dis-

solution —.° . Y.

“All assets * * * shall vest in fee sidenie and absolutely,

in the Superintendent of the Insurance Department * * *.-

who shall hold: and dispose of the same for the use and *

benefit of the, creditors,” etc.

. Proc eSs_ in the action in Louisiana out of which the. de-

ni. ‘arose, WAS SERVED AFT ER the dissolution proceed-

gfe ‘ings were begun in the Missouri Court. —

3. There was no law of Louisiana, such as obtains in Mon-

tuna, with respect to the right to sue the corporate entity after

dissolution. — Ra,

4. This court carefully recognized that the. rule which it

‘applicd, the correctness of. which cantiot pe was unaf-.

fected by any statutory limitations in Louisiana, for it was

said:

“No state need allow the corporations of other ‘states

_ to do business within its jurisdiction unless it chooses * *;

_but if it does, without limitations express or implied, the

corporation comes in as it has been created—”

Kinsler v. Casualty Company, 103 Nebr. 382; 172 |

N. W. 33.

This is easily distinguishable from the case at bar. There.

“was no Nebraska statute we by the court which imposed any °

limitation on the Corporatio when it came into the State; and,

‘on coming in, |

“It expressly reserved the right to have its affairs and all

property interests adjudicated with reference to the iIn-

surance Commissioner, of New York.” —

By statute i in-New York, upon dissolution the property. wis

vested in the Insurance Commissioner. Statytes of Iowa cited:

Section 8402 (R. 27) contains this peculiar provision con-

cerning a dissolution suit:

“Re erving, however, to the stockholders one creditors

all rights now possessed by them.”

Section 8964 (R. 27-28) provides that the Court, undergger-

‘tain circumstances, “SHALL DECREE A DISSOLUTION OF

SAID COMPANY AND A DISTRIBUTION OF ITS EFFECTS, |

AND APPOINT A RECEIVER THEREFOR.”

Sec. 8613, C. 1 (R. 28) which was enacted in 1929, provides

that ‘the Commissioner of Insurance “henceforth ~ 2 be the .

receiver and/or Ifquidating officer fot any insurance company,”

etc. We reserve a nore extended discussion of this statute for

a‘later place in this Brief. ao. .

Further analyzing the deciSions cited, it appears in:

* State v. Fidelity Loan Co., 113. lows 439 ; 85.N. W.

638; Bi

that the sections of the Code 1040 and 4113 there construed by

the court do -ffat-seem to be those obtaining at the time of the . ‘

decree now in question. However, further than stating the

common-law rule as to the effect of dissolution, which everyone |

snbeben it has no bearing on this case.

-* ~ Remington v. Samona _ Co., 140 Mass. 49475.

.N. E, 292,

is clearly not’ in point.

No statute of Massachusetts was brought into controversy

purporting to extend corporate life, OR DECLARING, that not-

withstanding dissolution, the corporation was still suable.

: Mariofi Phosphate Co. v. Perry, 74 Fed. 425.

The decision was rested upon the very obvious fact that

_ the Florida statutes extending corporate lifd were not aimed

"at, cand did not apply to foreign corporations, the Court saying:

. “These. last quoted sections jndicate that there was no

purpose in the act to in anywise treat foreign corporations

doing business in the state as Florida corporations.”

, In Felts v. Natl. Life Ass’ n, 130 Ala, 413; 30 S. 374,

The Court ‘simply holds that. the statute of survivorship

was enacted solely to govern domestic corruiations, and does

j not apply to foreign corporations.

Okla. Natural Gas Co. v. Okla., 273, U.S. 257; 71

_ L. Ed. 634,

is in no sense, authority for the petitioner. The court simply

held that under the.record it could not be ascertained whether

liquidating Trustees had been appotnted as contemplated by

"statute. The Court sfemed to recognize that the statute would

_if the facts permittedits application, extend the corporate life.

No foreign statute was involved. A domestic corporation was

under consideration.

Ridell v. Rochester German Ins. Co., 35 R. I. 5;

14 > * 85 Atl. 273.

This case simply holds in line with several other American

courts that the statute of Rhode Island was tt ae to denial

to domestic and.not foreign corporations. .

Gu edge Bros. L. Co. v. Wenatchee’ Land Co., 15

Minn. 488 ; 132 N. W. 992. |

This. case is very simple. A dissolved Washington corpora-

tion undertook to maintain an action in Minnesota. IT WAS

MET BY A PLEA IN ABATEMENT.

; sional

Conceding ‘the truth of the ptea, plaintiff applied for and

had appointed, a receiver, and then asked that he be substi- _

tufed as plaintiff. The right of substitution was denied because,

; og = gee : : .

upon dissolution, under Washington Statutes, title to the cor-

porate property vests in the Trustees. The Court held:

“Such being the situation and status of the corporate

property, no right to any part thereof became vested in

the receivers appointed by the Court below, and they can

have no right to be substituted as parties to the action.”

Consistent with ether cases, the Cagurt held that the Minne-

sota statute extending corporate life was enacted solely to reg-

ulate domestic corporations, and, of course would not apply to

a foreign corporation. |

The text of Thompson on Corporations, >. based upon

these decisions (3rd Kd. 40), like a stream, ean rise no higher

than its soured. | |

Morgan vo N.Y. N: itl. Bldg. & Loan Assn., 73 Conn,

151: 46 Atl. 877, aor

is, We submit, not in point.

MeRae v. Kansas City Piano Co., 69 Kan. 457; 77

Pac. 4; ”

‘simply holds that in the absence of a statute continuing the

corporate entity for the purpose of suit, dissolution abates

action. The Court said: .

“itis only in virtue of some statute authorizing it * * *

that these results may be avoided, or pending proceedings

may be further roe uted, or judgments already ren-

dered, enforced.”

a “Both the Kansas and Missouri statutes (Missouri being the

state of domicile and Kansas the, foreign), were examined to

find an applicable survival statute.

In First National Bank of Selma v. Colby, 21. Wall.

609; 22 L. Ed. 687,

suit. was brought ‘against a dissolv ed National Bank. ON A

“y

PLEA IN ABATEMENT, the. Court held that the artenn

abated because there’was no survivorship statute, saying:

oer

This is the.rule with regard to all corporations whose

chartered existence has come to an-end * * * unless, by

statute, pending suits be allowed to proceed ‘to judgment

notwithstanding such dissolution.”

That the. Court seriously consideéted the law of the forum

as applicable, is apparent from the use of this language: “No

such enactment is found in the Act of Congress * * * NOR IS

THERE ANY PROVISION KLSEWHERE.”

Combes v. Milwaukee & M. Ry Co., 89° Wis.: 297;

62 N. W. 89,

the Court considered the case as presenting a common law

question. No survivor statute was involved nor any mention

made of one. | i. i

Mua v: Potomac Co., 8 Pet. 284; 8 L. Bd. 945.

A PLEA IN ABATEMENT was ve ry prope rly ‘sustained

‘ because of the dissoltition . of the defendant corporation. No

survival statutes mS involved:

Venable v. Granite Co., 185 Ga. 508; 69 S. E.-822;

32 L. Rew (NS) 446. | | ;

. « No saving statute was involved, and the corimon law rule

prevailed. The Court makes special mention of the probable

effect of a saving statute, in these words:

“It has been held in many cases that, if a corporation

becomes extinct pending a suit to which it is a party, the

- suit thereby abates*as to such-corporation, and any judg-

ment thereafter rendered against it is,a nullity, unless -

some provision is made for the further prosecution of the

suit by the laws of the state in whicit the suit is pending.”

' In Pendleton v. Russell; 144 U. S. 640; 36 L. Ed.

574. 2

‘‘/ survival statute was involved. The Court very. properly

applied the common law rule.

‘Roche v. McDonald, 275 U. . 449; 72 L. Ed. 365,

25.

ail

concerns the full faith and credit clause. It announces no new ~

nor any applicable principle. Neither does

Converse v. Hamilton, 224 U. S. 243; BC L. Ed. 7 49.

The Court in that case said:

“True, the full faith and eredit clause of the Consti-

tution is not without well recognized exceptions, as is

pointed out in Huntington,v. Attrill, 146 U.S. 657; 36 L.

nd. 11283; Andrews v. Andrews, 188 U.S. 14: 47 L. Ed.

366; and Natl. Ex. Bank v. Wiley, 195 U.S O57 ; 49 L.°Ed.

184.” “

In Hancock ‘N@tl. Bank Vv. Farnum, 176 U: s. 640;

' 44 L. Bd: 619,

‘the Court held that a stockholder was a privy of a bank, ‘end .

| pia en

__that-a judgment against the bank was a judgment against and

binding upon a stoe kholder, to which full faith and credit ~~

‘ be giv en. We fail to find any Sppncatien of its principles. to the ;

case at bar. oo .

XII.

THE STATUTE al 1OW A DID NOT VEST FITLE -

‘2

CLARK.

In Vol. 1, Clark on Receivers (2nd Ed.) p. 463, the learned

author says; .

“The statutes of: many states specifically euthedion the

appointment of a receiver of corporations * * *. These

statutes frequently provide that when a receiver is ap-

pointed under such statutes, such receiver obtains not only

possession of the property, and: (but) legal title to the

same, and, having this legal title, such receiver is thereby

able to go into a foreign jurisdiction and sue in the courts

of such foreign jurisdiction * * *. Some statutes go farther

* and provide thaf, an ordinary equitable receiver of. a cor- -

.. poration, or of Yndividuals or of a eb iat shall be

_vested with title to the pr operty.”

Again inVol. 1, Clark on Receiv ers (2nd eg Sec. 341, it

is said:

“A receiver has no title tothe fund, but simply acts as ,

the arm of the court. In:the absence of some conveyance

(or) a statute vesting the property of the debtor in him,

he cannot sue in the courts,cf a foreign jurisdiction.”

| | 27

See also Vol. 1, Clark on Receivers (2nd Ed.), Sec. 346.

Upon an examination of these authorities it will be ascer-

tained that thé statute must specifically and not wt tite

grant the title. .- y —,

An examination of the Legislative Act. found in. the a

Code as Sec. 8613, C-1- as set forth i petitioners brief, .dis-

closes that it pecame effective an $ 9, 1929. The title to that

-act reads:

“An act making “The Insurance Commissioner of the

- State of Iowa the Receiver or Liquidating Officer for In-

surance Companies, Associations or Insurance Carriers.”

Since the title of the act would not indicate any intent to

vest. the receiver with title, the argument that ‘there is an im-

plication falls without force.

In Clark on Receivers (2nd Ed.) Vol. 1, p. 181, Sec. 146, it

is said: .

“Statutes which abrogate or abridge chancery courts

generally are to be strictly construed, and if the restric-

‘tive purpose is not clear it will not be extended by con- |

striction.”

For an application | of all of these principles see

Zacher v: Fed. Trust & Safety Valve Co., 106 Fed.

598... ~

Therein was involved the Cannecticut statute.

clared that inthe absence of a statute vesting title, the re- |

ceiver became a mere equity receiver. :

See also Clark on Revalvers (2nd Ed.), Vol. 1, pp.- 811- 12- 13.

The question may be asked as to where title is reposed.

In Vol. 1 Clark‘on Receivers, ~~ 347 (2nd Ed.) the learned

author suggests that it may be a ‘Hittle difficult to determine

exactly where title reppses, but it is suggested that the court

has dominion over the property, and can order its disposition.

. 28

' It would seem immaterial as to just where the title is reposed.

Of course it must be understood that the court may by its de-

cree, invest an equity receiver with title, but unless that is

pursuant to a statute, the receiver does - thereby obtain

extraterritorial authority. oe

| Cases distinguishing Relfe v. Rundlagyo3 U U.S. 225. 26 L.

Ed. 357; \

*In Sterrett v. Second Nat'l Bank, 248 U.S. 73; 63

: L. Ed. 135,

the Court analyzes many of the decisions handed dows by this

‘Court up to that date, and declares that the doctrine of the

Sterrett case-has been the doctrine of this Court since*the de-

cision in Booth v. Clark, 17 How. 822; 16 L. Ed. 164.

Other decisions of this Court on the subject are:

Hale v. Allinson, 188 U. S. 56; 47 L. Ed. 380;

Great Western Minn. & Mfg. Co. v. Harris, 198 U.S.

_ 561; 49 L. Ed. 1163;

Keatley v. Furey, 226 U. S. 399; 57 L. Fd. 273.

: In Sterrett ¢. Second National Bank, 248 U. S. 73; 63 L. Ed.

135, the Court had under cohsideration a statute of Alabama

in order to ascertain therefrom whether or not that statute

would cast the case under the-doctrine of Booth v. Clark, 17 ;

How. 322; 15 L. Ed. 164, or under the doctrine of Rélfe v.

_ Rundle, 103 U. S. 222; 26 L. Ed. 357, and quoted therefor in

the discussion of the Alabama statiife. We submit that the de-

cision is conclusive of this case.‘ 2

~ Let us compare the Iowa Code provisions relied upon, with

those of Alabama so constriied by the Court. The Iowa Codé

provides that if certain conditions prerequisite are presented:

“It, of he (the Court or Judge) shall decree a dissolution of

- said Company and a distribution of its.effects, and appoint a

‘receiver therefor.”

PY thie - a : vy 7 at 29 é

See. 8964, Iowa Code set forth (R. 4). .

' The Alabama statute under consideration in the Sterrett |

ase reads:

“Shall appoint a receiver of all the books, sail

and_assets of the ‘corporation * * * (who) shall, under the

’ direction of the Court, collect all debts due the corporation

and selP all the property, real and persanal, of the corpora-

tion, pay the debts thereof ratable or in full, as the funds™

realized may admit, and divide the residue after the debts

and costs: are paid,” etc. &

The next section of the Alabama Code — by the

Court reads:

¢ «* * * The Court * * * may appoint a receiver - of all the

property and assets of the corporation (who) under the

direction of the Court must ‘exercise the same powérs and 4

perform the same duties as are required of réceivers:‘in -,

the next preceding section, and otherwise manage the af- ‘

: fairs of the corporation pending final settlement thereof,

ay as the Court shall direct.” 7

Of the two acts, the Alabama act would more nearly accom-

plish the result contended for by petitioner, than the Iowa act;

and this Court said that the, ¢ conclusion was not warranted

es m “that title is vested in the receiver as assignee or as statutory

. - suecessor of the insolvent corporation in such wise as to au-

thorize the action to recdver in ‘a foreign jurisdiction. 7.2.3

The statutes do not undertake to vest in the receiver, an estate

. ' in the property to be administered for the benefit of creditors.”

9 That the Iowa District Court has not given this statute the: °

breadth corttendeg for, is apparent from a reading of the de- .

1 cree (R. 21-26). ;

e The Court must approve and control the.discretion of the

receiver (Par. 10, R. 2425). No sale is valid until the receiver

, report such sale to the Court and have the same confirmed

a | (Par. 12, R. 25).

The alleged decree of December 22nd, 1931 (R. 26-31)

30 ° ; |

which petitioner dignifies as a decree, but which the Court

itself declares is Gn “order as to suits and contracts in which

Federal Surety Company was or is alleged to be‘a patty,” was

; “entered without notice and ex parte, on the 22nd day of Decem-

ber, 1931, and can have no force whatever.

In Booth-v. Clark, 17 How. 322, 15 L. Ed. 164,

the very limitations made. by the Iowa decree of September »

(R. 21-26), as we have called them to the attention of the

Court supra, were sufficient for this Court to declare that the

receiver there under consideration was a mére e equity receiver. .

. The Court said:

“Whatever may be the operation of the decree in re-

spect to the receiver’s powers over the property of the

debtor within the state of New York, ard his. right to sue

for them there, we do not find anything in the cases in the

New York reports showing the receiver’s right to. repre-

sent the creditor or creditors of the debtor in a a

- jarisdiction.”

°.

Commenting upon his — authority the Court further

gays:

“He is a ssliinaiiiities of the Court, and may by its

direction, take into his possession every kind of property

* * *- but it is not considered: in every case that the right

to the possession is transferred by his. appointment "2,

When appointed, very little.discretion is allowed to: ‘him,

for he must apply to the Court for liberty to bring or de-

fend ‘acti to let the estate, and in most cases, to let out

moneys “7 °™

In Hale v. Allinson, 188 U.S, 56; ATL! Bd. 380,

the Court had under consideration whether or not.a ‘Minnesota

receiver was vested with title under the statute authorizing :

the Court to “appoint a receiver of the same,” and held that it

did not operate to vest him with title. Commenting upon the |

statute and of the decisions of Minnesot&, the Court said: :

“This language would seem to indicate that there is

nothing in the statuté which prevents a receiver from

maintaining an action in a foreign state. There is po hold-

ing that the statute.itself provides in terms for such an

action, or empowers a receiver to maintain it, or that-it

. transfers any title in the fund to him.”

| Again the Court says:

“It seems also entirely clear that the receiver povided

for in Section 5906 of above quoted statute, while*not.the

receiver mentioned in Section 5897, is yet simply one to -

be, appointed in aid of the court * * * if the court chooses

to appoint him.”

In Keatly v. Furey, 226 U. S. 399; 57 L. Ed. 273,

the Court had under consideration a statute of West Virginia

providing for the receiver taking, “charge of,” and administer-

ing the assets, and for the bringing of suit and the conveyance

of property in the corporate name thereafter. ~

The Court, in commenting on it said:

“It seems, to be sure, that in September and October,

the local West Virginia Cturt purported to authorize and .

confirm a deed by a special commissioner ‘to the receiver,

but if the statute gid not in‘itself constitute the receiver

the universal successor of the corporation (See Chipman

v. Mfg. Nat]. Bank, 156 Mass. 147-149, 30 N. E. 610), it

~ may be doubted whether the déed had extraterritorial ef-

- fect. See Fall v. Eastin, 215 U. S. 1; 54 L. Ed. 65; 23 L. R.

‘A. (NS) 924 * * *. The argument is strong to support the

judgment of the court below, if no title passed.” '

Learned Counsel for petitioner {n their brief, page 45, after .

indicating that there may be a doubt as to the effect of this “/

decree declare “to imply a transfer of the title to the Iowa

Commissioner essential to carrying out, the trust imposed on

him by the statute, is but the application of an axiom: well

known to the law of trusts.” )

The decisions of this Court would seem to be a complete

answer to that suggestion. The statute itself, contemplates a

mere equity receiver.

The judgment which petitioner has under attack, appears

in the judgment roll regular in every respect (Tr., 49-64). As

. “~y

“

31 °°

320

opposed to that judgment there is a record which fails. to dis- |

‘close wherein any Court having jurisdiction, ever passed upon:

the points made the basis of petitioner’s contention at this

time. |

. XIII.

ONLY ONE JUDGMENT OF THE IOWA COURT:

Learned Counsel seemed to find it important to dignify both

_ the decree of the Iowa Court entered on the 25th day of Sep-

tember, 1931 (R. 21-26), and the “order as to suits and’ con-

tracts to: which Federal Sur ety Company was or is alleged to

be a party,”

made on the’ 2ind day of December, 1931, as

DECREES

The latter is in no sense a decreé and does not rise to any

dignity whatever further than in harmony with the label

' placed upon it. It would not be indulgirig too strong a presump-

tionsto say that it was quite“apparent to Receiver Clark and

his Counsel from a consideration of the two sections of the—

Iowa ‘Code (R. 27-28), that clearly See tion B64. of the ‘Jowa '

Code of 1927, ‘did: not rise, to a dignity sufficient ‘to permit the

application of the doctrine of Relfe versus Rindle, and that it

Was necessary to spreqd something upom the record which

would make it appear that the Court had acted under, not only

that section, but under Section 8613, C 1, and in a manner dif-

ferent than the plain phrasing of the decree of September 25th,,.

1931, would warrant. It must have been perceived that the pro-

visions of the latter section, being in the alternative, should

have been judicially exercised in order that a contention ‘such

as is made here, could be plausibly presented. se

We must strenuous} object to the classification of this

ex parte order made without process,. being dignified as a judg-

ment or decree to which any faith or credit whatsoever must

: 33

be given. a

While the Court might have power ta amend 2 ‘j@Gfement i if

suitalle steps, including due notice were shown to have been

taken, the judgment would not even be amendable to include

something which the Court might have had jurisdiction to in-

‘sert therein, but failed so to do. It will be seen that under any -

eonstructién of the Iowa statute, the Court would not have had

‘authority to insert what is embodied’ in the ex parte order of

December 22nd, 1931, | |

- Freeman on Judgments (5th Ed.) Vol. 1, Sec. 141 says:

“The general power to correct clerical errors. and omis-

sions does not authorjze the Court to répair its own in-

action, to make the récord and judgment say what -the

Court did not adjudge, although it had a clear right to do

_ so. The Court cannot, under the guise of correcting its rec-

ord, put upon, it an ‘order or ‘judgment it never made or

‘re sndered, or add something to either which was not orig-

- 2 inally included, although it might or’should have ordered

or adjudged in the first instance, It cannot thus repair its,

own lapses or Omissions. to do what it could legally ‘and

pruperly have done at the right time.”

We do not concede that had the Court in its decree desig-

nated Clark as Liquidating Officer, it would have made any

difference in view of what we shall preschtly present. It is suf-

“ficient to say that when carefully analyzed, this later ex parte

order r affords the only color for petitioner’ s argument. y

, The following authorities will bear upon a consideration of

a proper construction of both the decree and this ex parte or-

der. The decree ig not phrased in words of the present tense.

This is one of the requisites of a valid judgment.

C. M. Co. v: M. O. P, Co., 27 Mont. 152; 69 Pac. 714.

It is contrafy to all approved forms of judgment.

¢ 33. J. 1192). | =. 4

“The only authority of the Iowa statute was to require the

Federal Surety Company, “to_ show cause why its business

34.

shall not be dissolved.”

We are obliged to give strained construction to this statute

to work out from it any warrant “of authority to dissolve ‘the.

corporation,, and appoint any other than a Chancery Receiver,

whether either of the statutes relied upon by petitioner is con-

sidered. The dissolution of a business would appear to-be some-

thing quite different from the dissolution of -the“ corporation

- itself. See 14-a C. J. 1120. The giving of full faith and ‘credit is

“not a one sided requirement. Petitioner Clark assumes the

’ -ytght to ask this Court to ride down the Montana Constitution

and statutes quoted in the opinion of the Montana Court.

~ Section 6212 Revised Codes of Montana, 1921, after requir-

ing a foreign insurance company to make an appointment of a

- service agent in Montana byspower of attorney, declares:

“Said power of attorney shall stipulate and agree on

athe part of the company, corporation, or assocmmtion that

any lawful process against the same which is served on

said attorney shall be of the same legal force and talidity —

as if served on the company, corporation or association,

and that. the authority shall continue in force so long as

the certificate of membership, policy, or liability remains,

outstanding against the company, corporation or associa--

tion in this State.” ‘ -

Singer & Talcott Stone Co. v. Hutchinson, 176 fil.

48:51 N. E. 622. é

Illinois, it seems has two statutes; one lida corporate |

capacity of a dissolved corporation for two years, “for the’sole

‘purpose only of collecting the debts due to sdtd corporation,

and selling and conveying the property and effects thereof. ”

There is then a statute akin ‘to See. $212 Montania ad

. 1921, and reading: i

-“The dissolution, for any cause whatexer of : any cor-

poration created as aforesaid. shall notstake away or im-

‘ pair any remedy given against such corporation; its stock-

holders or officers, for any liabilities incurred pr evious to

its dissolution.”

» ; ~—

. ‘ins .

i wo o's

(= — -_ OF tw

, i 35

The Montana Court quotes Section 6013 Revised Codes of

1921, and construes ‘it in harmony ‘with similar constructions .

by ocher sti ate courts. These: statutory provisions should have

no faith nor credit in the eyes of the petitioner. ;

ma | XIV.

WHILE THE IOWA COURT DID NOT EXERCISE THE

AUTHORITY OF SEC. 8613, C 1 (R. 28), THERE IS AN IM-

PORTANT MATTER IN CONNECTION WITH THAT SEC-

TION FOR THE CONSIDERATION OF THIS GourT.

That was a part of the acts of the Forty-third General!

“sissembly of Iowa which was in session from January to April, |

1929. If Federal Surety Company imported its general statutes

to Montana at some tame prior to 1925, at which time it was

doing business in Montana, and furnished the bond: which oc-

casioned the liability “(Re 56), IT DID NOT IMPORT THIS

STATUTE.

| : XV.

PETITIONER DEMANDS THAT HIS JUDGMENT AND

.THE TOWA STATUTES SHOULD HAVE SUPREMACY

OVER VALID MONTANA STATUTES. HE EVEN INSISTS

‘THAT A STATUTE OF IOWA ENACTED LONG AFTER THE

ENTRANCE OF FEDERAL SURETYCOMPANY INTO MON.. ~

TANA, SHOULD CONTROL STATUTES OF MONTANA.

etitioner must take this position therefore, “that having

agree ‘d to be bound by the Montana statutes, Federal Surety

Company, although not having any limitations in its cha irter

for the-appointment of a liquidating officer such as he claims

were afforded by later Iowa enactment and the application of

the doctrine of Relfe vs. Rundle thereto, that he can bring in

“+ all later Iowa enactments to his aid. To permit him to do so

would impair rights accéiled to Montana creditors by virtue of

a valid law of, Montana. |

$6. er :

It is elementary law that the general public policy of a

‘state, when it violates no principle of constitdtional law, is -

controlling. | .

- Inat least two other. states besides Montana, viz: Kentucky

and California,,a constitutional provision ‘similar to Article

XV See. 11 of the Montana C onstitution, is found. This ( ‘onsti-

tutional provision is found in Article XII See. 15 of the Cali-

fornia Constitution.

Cal. Jur..217, See. 701,

~The Kentucky case of Castle y. Acrogen Coal Co., 145. Ky.

SOL; 1 10S. W. 1084, also applies the Kentucky ¢ ‘onstitution,

The Federal ( Court in Williams v. Gold Hill Min. Co., 96 Fed.

e 15-4, has held the California C onstitution to declare the public

S e ce

tes

policy of the state with regard to foreign cor porations, and

applied it in harmony with the: California declaration on the -

subject.

We direct

‘cane of Clark: \v. Supreme r ‘ouneil C.-F. 146 Cal. 598; 80 Pac.

particulariy to the jattention of the Court, the

“931g refusing to permit a foreign receiver such as Clark, to

appoint an ane ilary receiver in the state, and take away assets

levied upon by local creditor s in accordance with valid Call-

fornia laws. =

See also Lackman v. Supreme Council,42 Cal.22; 75 Pac.

383 ; Borten v. Brines-Chase Co., 175 Pa. 209; 34 Atl. 597; 53

C. J. 406° +: .

THE. IOWA VIEW OF THE EFFECT OF JUDGMENTS

SUCH AS THE ONE AT BAR, IS IN HARMONY WITH THE

CONTENTIONS OF RESPONDENTS.

- In Schloss v. Met. Surety Co., 149 Ia. 382, 128 N. W

' $384,

is found a complete analysis of this very situation. The now

Court differentiates Relfe vs. Rundle. We commend the read-

ing of this case with a view of ascertaining the public policy

" . in Iowa, and the construction which lowa places upon judg-

ments of like character to the one sought to be enforced in this

case. We consider the expressions of the Iowa Court in this

case practically conelusive on facts so similar as to be almost

‘identical. In.other words, if the judgment at bar is to be given

the force and effect that it would be given in Iowa, then what —

effect the Iowa Court declares it would give toa similar judg-

ment coming to it from elsewhere, is conclusive. .

The later act of the Forty-third General Assembly (which

was in. session from January to April, 1929); declaring, “The

Yommissioner of Insurance henceforth shall be the receiver

. and/ or liquidating officer for an insurance company,” etc., does

not indicate any enlargement of his powers or suggestion of a

trust. He was not sejected as acne officer by the decree

of September 25th. i

The word “liquidating” from which the words “liquidation”

' or-“liquidator” are derived, means, according to 37 C. J. 1263:

. “to adjust; to ascertain or reduce to precision in amount; to

ascertain‘the balance due; to whom due, and to whom payable;

"to clear away, to lessen a debt; to clear from obscurity ; to

clear up; to determine by agreement the precise amount of in- |

debtedness.; to extinguish ap indebtedness ; to pay: to pay and

settle; to reduce to precision in amount; to satisfy; to settle.”

It will be seen that in no sense is there any implication of

the passing of title. The words of nearest analogy to “liquid-

ating officer,” are “liquidating partner,” 37 C. J. 1264. He is

declared to be “the partner who, upon the dissolution or in-

solvency of the firm, is appointed to settle its accounts, collect

38 Cit

assets, adj ust claims and pay debts.”

W hatever may have been the en intent in the use

‘ot “receiver and/or liquidating officer,” it is clear that it meant

that the ourt might appoint the Commissioner as receiver,

.and use its discretion with regard to whether or not he should

be appointed as liquidating officer; whether that phrase has

greater or jess significance than that of receiver,

_ The entire decree will be searched in vain for the use of any

other word or phrase in that connection, than “receiver.”

The use of this phrase (and/or) in contracts seems to be en-—

tirely permissible, and: is said to be equivalent to a direction

that it be construed SOAs to best axecord with the equity of the

“situation, using g either conjunction, but such usage cannot : ap-

ply to statutes, since the Legislature, in making its laws, must

exercise ifs own law and leave nothing to the mere will and

caprice of the courts. .

| State v. Dudley, 1068S. 364; 169 La. 872.

In any event if it were a matter of discretion in the court,

the decree of September 25th indicates no exercise of the

Court's discretion. It is very important that under the guise of -

instructions and without binding effect, Clark: who was inter-

ested in the enlargement of the scope of the decree presented

for signature, the ex parte order of December 21st.

| | XVIL. ? ;

DEVOLUTION OF TITLE DISC USSED IN. FORMER BRIEF.

We have, in our original brief, discussed the question of

devolution of title. We shall not again burden the Court with a

— Ye-citation of the authorities, nor with the discussion pertain-

taken therein.

ing thereto as found in that brief. ,

We do not abandon our position or any “position we have

Pte ore

ies

os emitentions,

RESUME.

The Respondents: respectfully quiet, this resume of. ‘their

There has been no attempt on the part of the Montana

( ‘ourt to'refuse full faith and credit to the lowa judgment and

decree. |

2.."Phe judgment, the effect of which petitioner would like

Lo dispel, is a valid, enforceable and unattgcked judgment.

3. There was no altempt made by ie ae to appe ar in

that- independent case and dssert a plea in abatement. Clark is

indirectly attacking a judgment valid upon its face.

4. ‘Respondents are asserting rights which-grew—ap-ainder——

ri nat tute existing at the time Federal Surety Company entered

“the state, -and to which Clark owes the duty of giving full faith

and credit: under the same constitutional provision that he

invokes. .

*- retitione ‘rr seeks to ride down the Montana Constitution

and ind lvy virtue of a statute enacted in 1929, years after

the enactment of the Montana statute, and years. after Federal

Surety Company ° entered Montana, the accruing of respond-

ents’ cause of action, the. initiation of their suit, and the vest-

ing of. their rights under the remedial provisions of the Mon- .

tana statute. : :

. The lows Judgment construed with the utmost liber-

“ins in conjunction with statutory justification, ‘casts the

rights of Clark into the category of. cases determined-in Booth

vs. C lark, supra, and is clearly distinguishable from the cases

asserting the doctrine of Relfe vs. Rundle, supra.

7. The Montana statute is’ a remedial statute and binding

2s to all matters of procedure upon those asserting judgments

from sister states. | A |

es,

The, judgment assetted by (Jark as affording right:

viii for, was asserted, “not in an agtion instituted by him

but in-an aetion instituted by another, whie h action was o!

such character as to fail to give the Court in which the judg:

. Ment was asserted, jurisdiction.

We respectfully submit that the judgment of the Montan:

Court should. be affirmed.

Respectfully submitted.

Ws AL LEONARD DeKALB.

ighits

him,

in of

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tana

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.