Fowler v. Osgood

141 F. 20, 4 L.R.A.N.S. 824, 1905 U.S. App. LEXIS 3988
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 20, 1905
DocketNo. 2,088
StatusPublished
Cited by25 cases

This text of 141 F. 20 (Fowler v. Osgood) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fowler v. Osgood, 141 F. 20, 4 L.R.A.N.S. 824, 1905 U.S. App. LEXIS 3988 (8th Cir. 1905).

Opinion

PHILIPS, District Judge.

On January 23, 1900, the Atlantic Trust Company, a New York corporation, recovered judgment in the Circuit [21]*21Court of the United States for the Northern District of Illinois against the Iowa & Illinois Coal Company, an Iowa corporation, in the sum of $341,838.22. On the 10th day of February, 1900, said trust company recovered judgment against said coal company for a like sum in the Circuit Court of the United States for the Southern District of Iowa. Executions were issued on said judgments, and returns of nulla bona were made prior to the 4th day of August, 1900, on which latter date the said trust company filed a creditors’ bill in the Circuit Court of the United States for the Southern District of Iowa against said coal company, alleging the rendition of said judgments and the issuance and return of said executions, the insolvency of said coal company, and that it had assets not subject to levy and sale on execution, consisting of choses in action, claims of an equitable character, which in equity should be sequestered by the court to enforce the satisfaction of said judgments. The complainant asked that the business affairs of the coal company be administered and wound up; that its assets, when collected, be applied upon said judgments; and for the appointment of a receiver to take possession and custody of its books and records, and to collect its assets. In this suit, on the 24th day of January, 1901, the said Circuit Court for the Southern District of Iowa appointed the complainant, Isaac W. Fowler, receiver of said coal company, investing him with the usual powers of a receiver in chancery. On the 14th day of January, 1902, the said Iowa Circuit Court made an order authorizing the receiver to institute and prosecute, outside of the Southern District of Iowa in other courts of competent jurisdiction, such action or actions at law or suit or suits in equity as in the judgment of said receiver might be necessary or expedient to institute and prosecute in order to collect and-reduce to his possession all such rights, debts, equitable interests, property, and assets* of said corporation, so that the proceeds of the same might be applied to the payment of the debts of said corporation. Thereafter said receiver, upon leave granted by the local court, instituted the present suit in equity in the United States Circuit Court for the District of Colorado, whereby he sought to recover from the defendant, Osgood, a large sum of money alleged to be in his hands in trust for the benefit of said corporation, and which in equity is liable to sequestration at the suit of the said receiver. To this suit the defendant appeared and demurred, on the ground, among others, that it appears on the face of the bill that the complainant is a foreign receiver, and as such has no power to sue in the jurisdiction of said Colorado court. The demurrer was sustained, and the bill dismissed. To reverse this decree, the complainant prosecutes this appeal.

The question to be decided is, could the receiver appointed by the court of the state- of Iowa maintain this suit in a court of the state of Colorado ? This question was presented to the Supreme Court of the United States in 1854, in Booth v. Clark, 17 How. 322, 15 L. Ed. 164. After thorough discussion, it was ruled that a receiver in chancery appointed by a court of one jurisdiction has no authority to sue in a jurisdiction foreign to that appointing him for the recovery of property or assets of the debtor. This for the reason that such receiver is the [22]*22mere right arm of the court appointing him, to obey its orders in matters of administration within its jurisdiction, and as such is entirely subject to its control. He executes bond for the faithful performance of his duties, to account alone to the court appointing him; and the funds coming to his hands as such receiver are in custodia legis, held by him for distribution and application by the court whose commission he holds.

Adverting to the exception where, under statutes of the state of the domicile of the corporation, on its insolvency or dissolution the assignee in law becomes vested with the title to the property, with all the powers conferred by the charter or statute, becomes, pro hsec, the .corporation, and can therefore recover its property wherever situate, the learned justice said that none of these alter the relation of a mere receiver in chancery to the court appointing him, empowering him to sue in his own name officially in another jurisdiction for the property or choses in action of a judgment debtor.

“Indeed, whatever may be the receiver’s rights under a creditors’ bill, to the possession of the property of the debtor in the state of New York (the jurisdiction where the receiver was appointed), or the permissions which may be given to him to sue for such property, we understand the decision of that state as confining his action to the state of New York.”

The doctrine of this case has been uniformly followed and steadfastly adhered to bythe Supreme Court. In Quincy M. & P. R. Co. v. Humphreys, 145 U. S. 82, 12 Sup. Ct. 787, 36 L. Ed. 632, where the powers of such receiver were under consideration, the court quoted with ap- ' proval the following language:

“The ordinary chancery receiver, such as we have in this case, is clothed with no estate in the property, 'but is a mere custodian of it for the court, and by special authority may become an officer of the court to effect a sale of the property, if that be deemed necessary for the benefit of the parties concerned.”

In Hale v. Allinson, 188 U. S. 56-64, 23 Sup. Ct. 244, 47 L. Ed. 380, Mr. Justice Peckham, speaking for the court, said:

“We do not think anything has been said or decided in this court which destroys or limits the controlling authority of that case.”

And quoted with approval the following:

“He [the receiver] has no extraterritorial.power of official action; none which the court appointing him can confer, with authority to enable him to go into a foreign jurisdiction to take possession of the debtor’s property; none which can give him, upon the principle of comity, a privilege to sue in a 'breign court or another jurisdiction, as the judgment creditor himself might have done, where his debtor may be amenable to the tribunal which the credit- or may seek.”

Because of the suggestion made in the discussion by Mr. Justice Swayne, in Booth v. Clark, that to permit a foreign receiver to recover the assets of the debtor situate in another jurisdiction would contravene the rule of comity, which forbids that the assets of the debtor having a situs in the forum should thus be withdrawn from its more convenient access by the local creditors, the courts of many of the states have conceived that if leave be first obtained from the local court to institute suit by the foreign receiver, and especially where it [23]*23is averred, as in the bill here under review, that there are no local creditors, the reason of the rule denying the right of action by the foreign receiver should not apply. But the discussion in full by Mr. Justice Swayne clearly enough indicates that such was not the view of the Supreme Court. Arguendo he said:

“We

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Cite This Page — Counsel Stack

Bluebook (online)
141 F. 20, 4 L.R.A.N.S. 824, 1905 U.S. App. LEXIS 3988, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fowler-v-osgood-ca8-1905.