Burrus Mill & Elevator Co. v. Kingfisher College

1938 OK 92, 76 P.2d 906, 182 Okla. 220, 1938 Okla. LEXIS 114
CourtSupreme Court of Oklahoma
DecidedFebruary 15, 1938
DocketNo. 27664.
StatusPublished
Cited by4 cases

This text of 1938 OK 92 (Burrus Mill & Elevator Co. v. Kingfisher College) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burrus Mill & Elevator Co. v. Kingfisher College, 1938 OK 92, 76 P.2d 906, 182 Okla. 220, 1938 Okla. LEXIS 114 (Okla. 1938).

Opinion

HURST, J.

This action involves the validity of a garnishment proceeding growing out of the following facts: In 1923, the Oklahoma Mill Oompany executed certain promissory notes in the approximate sum of $200,000 secured by a real estate mortgage. The notes and mortgage were subsequently assigned to W. B. Newsome, plaintiff. In 1927, the Oklahoma Mill Oompany executed notes for approximately $100,000 to Kingfisher College and others, and secured the same by a second mortgage. In 192S, plaintiff commenced an action to foreclose his notes .and mortgage. The second mortgagees and other parties asserting various interests were made' party defendants. At the instance of the second mortgagees, a receiver was appointed to collect rent from the lessees in possession of the mill, and was further “directed to investigate into the affairs of the Oklahoma Mill Company to ascertain if there are any other assets besides the above which can be made subject to the payment of the debts of said Oklahoma Mill Company in this cause, and to report the same to this court.” Judgment was rendered in favor of plaintiff against the Oklahoma Mill Company on the promissory notes, and such judgment was decreed a first and prior lien on the mortgaged property and foreclosure ordered. Kingfisher College, under a cross-petition, was also granted a money judgment against Oklahoma Mill Company and foreclosure of its second mortgage. Order of sale was issued and the premises were sold to plaintiff under the decree of foreclosure, leaving a deficiency judgment in favor of plaintiff in excess of $10,000. The money judgment in favor of Kingfisher College was partially satisfied by applying on it certain money collected by the receiver, but there remained unpaid approximately $80,000. The receiver was never discharged, but he did nothing more. Thereafter the plaintiff assigned his deficiency judgment to the Bob White Flour Mills, Inc., and conveyed title to the property which he had purchased at the foreclosure sale. Subsequently, on December 17, 1931, after execution had been issued and returned “no property found,” Kingfisher College filed its affidavit in garnishment alleging that the Chicago, Rock Island & Pacific Railway Company was indebted to the Oklahoma Mill Company and asking that the railway company answer certain interrogatories attached to the affidavit. An order was issued accordingly, and the railway company answered, in substance, that as a result of an order of the Interstate Commerce Commission reducing certain freight rates, the Oklahoma Mill Company had been charged excessive rates to the extent of about $8,000 or $9,000 on shipments made by it over the railway lines. Kingfisher College filed notice that it took issue with the garnishee on certain of its answers to the interrogatories, but before a hearing was had, the Bob White Flour Mills, Inc., filed a motion to quash and vacate the garnishment proceedings. This motion was overruled, and the Bob White Flour Mill, Inc., appealed to this court, whore the appeal was dismissed on the ground that the order appealed from was interlocutory (Bob White Flour Mills v. Kingfisher College, 175 Okla. 330, 52 P.2d 728). Another garnishment affidavit was filed on February 4, 1933. and a second order was issued. While the appeal was pending, the Bob White Flour Mills, Inc., assigned all of its interest to the Burrus Mill & Elevator Company, which was, by stipulation, substituted in the action in place of its predecessor.

It appears that from 1923 to 192S the Oklahoma Mill Company was a member of the Oklahoma Millers’ League, and its successor, the Oklahoma Millers’ Association, and in 1923 the league commenced a proceeding before the Interstate Commerce Commission to secure a reduction in freight rates. From 1928 to 1933, the Bob White Flour Mills was a member of the association. A retroactive reduction in rates was awarded, and on June 30, 1930, an order was made by the commission finding that the Oklahoma Mills Company was damaged in the amount of the difference between the charges paid and those which would have accrued under the order of the commission, and that they were entitled to reparations, with interest, for the years 1924, 1925, 1926 and 1927. The specific amount of the award, however, was not at that time determined. But on February 8, 1932, pending the appeal from the garnishment proceedings, the Interstate Commerce Commission entered an order, later amended by a nunc pro tunc order, awarding $8,873.57 to the Oklahoma Mills Company, and directing that it be paid by the Rock Island Railway Company and other named carriers. On March 16, 1933, by stipulation, the sum then amounting to $12,224.06, by reason of interest, was paid into court and the railway companies involved were released. This is the fund involved in the present appeal. Subsequently, *222 the mandate of the Supreme Court was spread of record. Issues were made up between Kingfisher College and the Burrus Mill & Elevator Company in the garnishment proceeding, and the court sustained the garnishment and ordered the clerk to pay over to Kingfisher College the entire amount paid into court by the railway companies. From this order the Burrus Mill & Elevator Company brings this appeal, setting out 14 assignments of error which it presents under 18 propositions.

The first three propositions are in substance as follows: (1) That the Burrus Mill & Elevator Company is entitled to the fund as a reward for the industry, efforts, and expense of the Bob White Flour Mills in making the fund available; (2) that Kingfisher College having done nothing to make the fund available, it is not equitable to permit it to appropriate the fund by garnishment; (3) that the Bob White Flour Mills having relied on the statement of the judge of the trial court to the effect that the fund would be handled through the' receiver, and having refused to discharge the receiver for that reason, it would be inequitable to permit Kingfisher College to appropriate the fund by garnishment. They rely upon Sullivan v. Rosson (N. Y.) 119 N. E. 405, 4 A. L. R. 1400, to the effect that where a junior mortgagee secures the appointment of a receiver for rents and profits, he is entitled to priority over a senior lienholder as to such rents and profits, as a reward for his diligence. They rely upon other cases holding that the enforcement of a lien is an equitable function, and announcing the following principle:

“Courts of equity will never interfere when the law has given one class of creditors preference, but will recognize and enforce antecedent liens on the property according to their priorities, but, upon clear affirmative evidence, they may prevent judgment creditors from retaining an advantage secured through misrepresentations or other unconscientious device.” Citing Holbrook v. Phelan (Cal. App., Supp.) 6 P.2d 356; Casserleigh v. Spar Consol. Mining Co. (Colo. App.) 128 P. 863, 864.

The college does not question the soundness of these authorities,. but contends that the propositions for which they are cited are not supported by the facts in the in stant case. With this contention we agree. It is argued that the Bob White Flour Mills contributed to the payment of the attorney who prosecuted the claims before the Interstate Commerce Commission, while the college contributed nothing. But it appears from a stipulation contained in the record that the attorney presenting the claims before the commission was representing the Oklahoma Millers’ League, and, as it was afterwards known, the Oklahoma Millers’ Association.

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Bluebook (online)
1938 OK 92, 76 P.2d 906, 182 Okla. 220, 1938 Okla. LEXIS 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burrus-mill-elevator-co-v-kingfisher-college-okla-1938.