Merchants' Bank & Trust Co. v. Pflug

Seventh Circuit

Merchants' Bank & Trust Co. v. Pflug

6 F.2d 385, 1925 U.S. App. LEXIS 2021

CourtCourt of Appeals for the Seventh Circuit

DecidedMay 6, 1925

DocketNo. 3512

StatusPublished

This text of 6 F.2d 385 (Merchants' Bank & Trust Co. v. Pflug) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Merchants' Bank & Trust Co. v. Pflug, 6 F.2d 385, 1925 U.S. App. LEXIS 2021 (7th Cir. 1925).

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Opinion

PAGE, Circuit Judge.

On a bill by a simple contract creditor and answer by appellee, the defendant, admitting the allegations and that plaintiff was entitled to the relief prayed, the District Court appointed receivers and granted a general restraining order. The latter order was modified to permit appellant, not a party to the bill, to [386]*386prosecute a suit then pending in the state court. A further modification to permit the institution of another suit was refused. Hence this appeal.

The only question, if any, presented by the record is, Was the court without jurisdiction to enter any order? In support of its claim that a court may not appoint a receiver at the suit of a simple contract creditor, appellant cites In re Metropolitan Ry. Receivership, 208 U. S. 90, 107, 28 S. Ct. 219, 52 L. Ed. 403; and Pusey & Jones Co. v. Hanssen, 261 U. S. 491, 43 S. Ct. 454, 67 L. Ed. 763, but admits that those cases recognize an exception where an answer is made, consenting to the receivership. Conceding such an answer was made in this case, appellant seeks to avoid its effect by saying thht it was signed by an attorney and was unverified. Inasmuch as neither the appellant nor any creditor has, during the three years which the answer has been on file,, questioned its sufficiency, it must be presumed that the signature was authorized. Moreover, after a lapse of nearly three years,, appellant here raises the question collaterally and for the first time. That may not be done.

The appellee averred an indebtedness of $4,500, to be due and unpaid. It also averred diversity of citizenship and made the usual allegation that the amount in controversy, exclusive of interest and costs, exceeded $3,000. It did not aver a demand for and refusal to pay the amount. Neither did the bill state what the indebtedness was for. Eor these reasons, principally, it is urged that no “controversy” is shown by the pleadings. The answer admits the debt and the right to the relief prayed. There are allegations from which it appears, not only that frequent demands had probably been made, but also, and very conclusively, that a demand would have availed nothing. The averments were sufficient to show a “controversy.” In re Metropolitan Ry. Receivership, 208 U. S. 90, 107, 28 S. Ct. 219, 223, 52 L. Ed. 403.

The order of the District Court is affirmed.

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PAGE, Circuit Judge.

On a bill by a simple contract creditor and answer by appellee, the defendant, admitting the allegations and that plaintiff was entitled to the relief prayed, the District Court appointed receivers and granted a general restraining order. The latter order was modified to permit appellant, not a party to the bill, to [386]*386prosecute a suit then pending in the state court. A further modification to permit the institution of another suit was refused. Hence this appeal.

The only question, if any, presented by the record is, Was the court without jurisdiction to enter any order? In support of its claim that a court may not appoint a receiver at the suit of a simple contract creditor, appellant cites In re Metropolitan Ry. Receivership, 208 U. S. 90, 107, 28 S. Ct. 219, 52 L. Ed. 403; and Pusey & Jones Co. v. Hanssen, 261 U. S. 491, 43 S. Ct. 454, 67 L. Ed. 763, but admits that those cases recognize an exception where an answer is made, consenting to the receivership. Conceding such an answer was made in this case, appellant seeks to avoid its effect by saying thht it was signed by an attorney and was unverified. Inasmuch as neither the appellant nor any creditor has, during the three years which the answer has been on file,, questioned its sufficiency, it must be presumed that the signature was authorized. Moreover, after a lapse of nearly three years,, appellant here raises the question collaterally and for the first time. That may not be done.

The appellee averred an indebtedness of $4,500, to be due and unpaid. It also averred diversity of citizenship and made the usual allegation that the amount in controversy, exclusive of interest and costs, exceeded $3,000. It did not aver a demand for and refusal to pay the amount. Neither did the bill state what the indebtedness was for. Eor these reasons, principally, it is urged that no “controversy” is shown by the pleadings. The answer admits the debt and the right to the relief prayed. There are allegations from which it appears, not only that frequent demands had probably been made, but also, and very conclusively, that a demand would have availed nothing. The averments were sufficient to show a “controversy.” In re Metropolitan Ry. Receivership, 208 U. S. 90, 107, 28 S. Ct. 219, 223, 52 L. Ed. 403.

The order of the District Court is affirmed.

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6 F.2d 385, 1925 U.S. App. LEXIS 2021, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merchants-bank-trust-co-v-pflug-ca7-1925.

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