Cusack v. Prudential Ins. Co. of America

1943 OK 52, 134 P.2d 984, 192 Okla. 218, 1943 Okla. LEXIS 116
CourtSupreme Court of Oklahoma
DecidedFebruary 23, 1943
DocketNo. 29321.
StatusPublished
Cited by7 cases

This text of 1943 OK 52 (Cusack v. Prudential Ins. Co. of America) 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
Cusack v. Prudential Ins. Co. of America, 1943 OK 52, 134 P.2d 984, 192 Okla. 218, 1943 Okla. LEXIS 116 (Okla. 1943).

Opinion

DAVISON, J.

This is a proceeding by E. R. Bryant, a receiver having charge of real estate in connection with mortgage foreclosure actions, to recover products of and receipts from products of the land from F. E. Cusack, as administrator of the estate of Perry K. Morton, deceased, and others.

The cause was tried to the court without the intervention of a jury and resulted in a judgment in favor of the receiver. F. E. Cusack, administrator, has appealed, appearing herein as plaintiff in error. The Prudential Insurance Company of America and E. R. Bryant, receiver, are defendants in error.

The particular litigation here involved is incident to and connected with other litigation previously instituted. A resume of that litigation is an essential part of our statement.

On December 2, 1936, the Prudential Insurance Company of America recovered a judgment against Perry K. Morton in a mortgage foreclosure action docketed in the district court of Ok-mulgee county as cause No. 20345. On July 7, 1937, the same company as plaintiff recovered another judgment against Morton in the same court but in another action. That action was docketed as No. 20742.

In cause No. 20345 Perry K. Morton, defendant therein, was appointed receiver on May 21, 1936, and on February 26, 1937, he was also appointed receiver of the property involved in cause No. 20742, except the homestead of the said defendant. Morton qualified as receiver but did not file any report.

On July 10, 1937, Morton filed a petition in bankruptcy in the United States District Court for the Eastern District of Oklahoma. The proceeding was instituted under section 75 of the Bankruptcy Act, 11 U. S. C. A. § 203 (Frazier-Lempke Act). The petition was “approved as properly filed” and the matter was referred to a Conciliation Commissioner sitting at Okmulgee. On November 1, 1937, Morton was adjudged a bankrupt. Neither of the orders contained any specific inhibition against further proceedings in the foreclosure actions.

On September 19, 1938, the bankruptcy proceeding was dismissed on motion of the Prudential Insurance Company. The life of the proceeding was slightly in excess of 14 months. On September 30, 1938, Morton died. On October 6, 1938, F. E. Cusack was appointed administrator of his estate. On November 2, 1938, E. R. Bryant was appointed substitute receiver in cause No. 20345 and a separate order of the same purport was entered in cause No. 20742.

On November 26th both actions (Nos. 20345 and 20742) were revived in the name of the administrator by separate proceedings.

On November 14, 1938, the substitute receiver filed in each of the actions a *220 petition charging in substance that the administrator, F. E. Cusack, had collected various sums of money as rents from the lands involved in said foreclosure proceedings, an.d that the administrator had also taken charge of some corn, hay, posts, and other personal property which were not assets of the estate but which should go to the receiver. He likewise alleged that other persons were indebted to him as receiver. He sought recovery of such moneys and articles of personal property.

To each of the petitions the administrator filed a response denying in substance that the receiver was entitled to the property and moneys, asserting certain legal objections to the manner in which the receiver was proceeding, and further asserting that the power of the receiver to receive and collect proceeds from the property was nonexistent during the pendency of the bankruptcy proceedings and that moneys and properties passing into the hands of Perry K. Morton during that time were his personal property even though he would have been accountable for them as receiver if the bankruptcy proceeding had not been pending.

The two proceedings were consolidated and tried as one. Findings of fact and conclusions of law were made by the trial court. Based thereon judgment in favor of the substitute receiver was rendered.

In this appeal plaintiff in error presents 39 assignments of error, which have been grouped under seven propositions, which are:

“I. The state district court was divested of jurisdiction from the date of the filing of bankruptcy proceedings.
“II. Failure of the trial court to make a finding on a material issue is reversible error.
“III. An administrator is entitled to the exclusive possession of personalty from the date of the death of the deceased until it is disposed of in the course of administration.
“IV. The findings are not supported by any evidence whatsoever.
“V. E. R. Bryant, receiver, had no right or authority to institute these proceedings against the administrator for possession of the property involved.
“VI. No legal process was served on the plaintiff in error.
“VII. Wagon or platform scales is personalty and not included in real estate mortgage.”

The fifth and sixth propositions, which relate primarily to the propriety of the remedy pursued by the receiver, will be considered first.

The remedy chosen was summary in character. At its institution a notice was prepared and served on the parties sought to be charged in each of the proceedings, including in each instance plaintiff in error.

Each notice ran in the name of the state and was accompanied by a copy of the receiver’s petition, thus advising the nature of the claims which were being asserted. However, in many respects the notices did not satisfy the requirements of formal summonses. They were sufficient to satisfy the requirements of the law in a summary proceeding but insufficient to meet legal standards in connection with the commencement of a civil action-. This for the reason that in the former it is unnecessary to pursue with exactitude the requirements of the law as normally observed in a civil action between litigants. Clark on Receivers (2d Ed.) p. 796.

The administrator challenged the sufficiency of the notice by motion to quash on the theory that he could not be subjected to the jurisdiction of the court by such notices or in an informal and summary proceeding, and thereafter throughout the proceeding he continued to preserve and assert his objection to the manner of proceeding. Thus the determining question on this phase of the case is whether a summary proceeding is an appropriate method for substitute receiver to recover assets of the receivership which have passed into the hands of the administrator of a deceased former receiver.

*221 There is no question that the more formal remedy of an independent civil action was available. Clark on Receivers C2d Ed.) p. 824; Preston v. American Surety Co. of New York, 104 Md. 40, 64 Atl. 292. While the question of whether a summary proceeding is appropriate and available is debatable, we have concluded that it may be approved in this case.

Neither of the parties have called our attention to any case precisely in point. The plaintiff in error in support of his objection to the form of proceeding relies upon: Nellis v. Justices’ Court of Los Angeles, 20 Cal. App. 394, 129 P. 472; Ford v. Smead, 109 Vt.

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Bluebook (online)
1943 OK 52, 134 P.2d 984, 192 Okla. 218, 1943 Okla. LEXIS 116, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cusack-v-prudential-ins-co-of-america-okla-1943.