Rees v. Andrews

69 S.W. 4, 169 Mo. 177, 1902 Mo. LEXIS 263

• Court: Supreme Court of Missouri
• Decided: June 18, 1902
• Status: Published

Opinion

MARSHALL, J.

— Appeal under section 806, Revised Statutes 1899, from an order of the circuit court of Jackson county, refusing to revoke an interlocutory order appointing a receiver.

Edward Butler is the owner of the property on the northwest comer of Twelfth and Central streets in Kansas City, together with the improvements situate thereon, which consist of a theater building, formerly called the Standard Theater Building, but now called the Century Theater, and a hotel building, called the Century Hotel. At the times hereinafter stated the hotel was leased to one Warrick, and by the terms of the lease the lessor was obligated to furnish steam, hot water and heat to the hotel, and the barbershop, bathroom and saloon located therein, under a penalty of forfeiture of the lease. On the nineteenth of March, 1901, Butler leased the theater building to one Bowles, for a term of five years, and in addition to the cash rental the lessee agreed to furnish the steam, hot water and heat to the hotel, barbershop, bathroom and saloon that Butler was under obligation, as stated, to furnish. The cash rental was fully paid up to December 31, 1901. The lease to Bowles prohibited any assignment or subletting without Butler’s consent. On July 29, 1901, Bowles, with Butler’s consent, assigned the lease to the Andrews Opera Company, a co-partnership composed at that time of George Andrews, Edward M. Andrews, and C. W. King. Afterwards .by agreement dated August 2, 1901, the co-partnership was formed between Mrs. Lydia E. Rees, the plaintiff, and George Andrews, Edward M. Andrews and C. W. King, under the name of the “Andrews. Opera Company,” and by the articles of co-partnership it was recited that the lease was owned by said parties jointly, that is, that Mrs. Rees owned one-half thereof and the Andrews Opera Company owned the other half. It does not appear, however, that Butler ever consented to an assignment of any part of the lease to Mrs. Rees, nor that he ever knew that she was a member of the co-partnership' of the Andrews Opera Company. On the contrary, it does expressly appear from the record that before the assignment to the Andrews Opera Company, and while Bowles was the lessee, Mrs-.. Eees applied to Butler’s agent for Butler’s consent to an assignment by Bowles to Mrs. Eees of a half interest in the lease, and that such consent was refused, on the ground that Butler would not rent the building to any woman, or consent to any woman having any interest in the lease. . It also appears that Mrs. Eees was not a member of the co-partnership of the Andrews Opera Company, on July 29, 1901, when Butler consented to the assignment of the Bowles lease to the Andrews Opera Company, and did not become a member of that firm until August 2, 1901, and it does not appear that Butler ever knew of her becoming a member of that firm at that time or until the troubles herein spoken of arose, nor that he ever consented that the firm of Andrews- Opera Company, as reorganized on August 2, 1901, should be the assignees of the lease.

The Andrews Opera Company entered upon the business of1 giving performances in the theater, and continued so to do until October 2, 1901, when it became financially embarrassed. On that date Butler notified the Andrews Opera Company that he would forfeit the lease if they failed to furnish steam, heat and hot water to the hotel. The opera company gave no performances thereafter, but continued to furnish steam, heat and hot water to the hotel until October 7, when the wages of the engineer being in arrears, the water license being due and unpaid, and the coal and other bills being unpaid, the engineer quit work, and George Andrews notified Butler’s agent that the Andrews Opera Company could not longer comply with the terms of the lease. Thereupon Butler’s agent went to the theater and met the two Andrews, King, and the plaintiff, and informed them that he would forfeit the lease. The plaintiff offered to guarantee the payment of the debts and bills aforesaid, but Butler’s agent told her that would not do. Thereupon she gave the engineer a cheek for his wages and arrange4 with the city about the water license, and it being after the close of the bank for the day, the engineer resumed work. On the next day the check for the engineer’s wages was presented at the bank for payment and payment refused, and thereupon the engineer again quit and left the place. Butler’s agent immediately went to' the premises and in the presence of the plaintiff declared the lease forfeited,.and George Andrews, who was the general manager of the Andrews Opera Company, surrendered the possession of the premises to Butler’s agent, and notified him that the Andrews Opera Company was unable to carry out the terms of the lease. At that time the actors and players were unpaid, and there had been no performance given in the theater since the second of October because Browning, King & Co., having that day begun an attachment suit against the Andrews Opera Company, seized the money in the box office and took possession of all the property of the company, and thus rendered it impossible for the company to further carry on its business.

• It is due to Mrs. Kees to say that although she had no money in bank with which to meet her check to the engineer, she had a cashier’s check for a larger amount than the sum of the check she gave the engineer, which she intended depositing the next day to meet her check, but which she was prevented from doing before her check was dishonored, by reason of what she claims to have been a trick played on her by George Andrews, in this, that a man she charges (but does not show) was a tool of said Andrews called at her house just as she .was about to start to the bank to make the deposit, and told her to wait at home to see a man who was coming to the house to buy her furniture, and that by waiting for the supposed purchaser, who never arrived, she did not reach the bank until after her check was dishonored.

Erom October 2d, to October 8th, the theater was closed, but the Andrews and King and Mrs. Eees were endeavoring to arrange their matters in some way. The only thing of value, outside of the property that had been seized under the attachment, that the company had, was the lease1.. This they tried to realize something from. It was proposed to incorporate a company and continue the business, but George Andrews would not consent. It was proposed to assign the lease to O. D. Woodward, so that performances could be given and money raised to pay the actors and the creditors, and Butler consented to this, but George Andrews refused.

In this emergency, Butler, from day 'to1 day, beginning on October 9th and continuing until October 22d, 1901, granted to George Andrews, separate, daily licenses to give performances in the theater in consideration of the payment of fifteen dollars a night, and upon the express condition that it was to be a mere license and not a lease. Under this arrangement George Andrews continued to give daily performances until restrained by the court in this case on October 22, 1901.

On October 19, 1901, Mrs. Eees instituted this action, making George Andrews, Edward M. Andrews and O. W. King, defendants. The petition alleges a partnership between plaintiff and defendants entered into, on August 2, 1901, for the purpose of giving performances at the Century Theater; and that such performances were given from September 9th to October 2d, 1901; that by the terms of the co-partnership agreement plaintiff was' entitled to the exclusive use of the living rooms in the upper story of the building, but that in violation of that agreement the defendants took and retained possession thereof; that on October 7, 1901, George Andrews, for the purpose of defrauding plaintiff, entered into a corrupt agreement with Butler’s agent-, in pursuance whereof Andrews attempted, to surrender possession of the theater to said agent, and afterwards on the same day and for the same purpose said Andrews pretended to accept possession of the theater from said agent for himself personally, to the exclusion of the plaintiff; that the plaintiff was the treasurer, under bond', of the Andrews Opera Company, and entitled to the custody of all money, but that the company refused to allow her to have or receive such money; that contrary to the articles of co-partnership, and without plaintiff’s approval, the defendants have incurred large debts; that the defendants are insolvent and unable h> pay their proportion of the debts of the company; that the company owes not less than two thousand dollars to other persons, and over three thousand dollars to the plaintiff; that George Andrews had acted in bad faith towards the plaintiff and the other members of the firm, in this, that although he knew the assignment of the lease by Bowles to the Andrews Opera Company, on July 29, 1901, was to be for the benefit of a co-partnership, thereafter to be formed between plaintiff and the two Andrews and King, yet he contracted with Bowles to sell to him, for $350, a half interest in the business to be done by the Andrews Opera Company, and Bowles agreed with George Andrews to divide with him the money received for the transfer of the lease, under which, it is alleged, George Andrews received five hundred dollars of the one thousand dollars paid for the lease, which he, George Andrews, had urged the plaintiff and her co-partners to pay for the lease; that the plaintiff was in reality the owner of a one-half interest in the Bowles lease before it was transferred to the opera company; that the partnership owns certain personal property of the value of less than five hundred dollars. The prayer of the petition is for the appointment of a receiver to take charge of the property, to carry on the business of the co-partnership for the benefit of the partners and their creditors, to ascertain and pay off, as far as the property will do so, the debts; that the defendants be restrained and enjoined from interfering with or disposing of any of the partnership property or any rights under the lease; that the partnership be dissolved, and for an accounting, and for further orders. The petition was verified, not as true, but as “true to the best of her knowledge and belief.”1 Upon this petition, and, so far as appears from this record, without any notice to the defendants, the court adjudged that a necessity existed for the appointment of a temporary receiver, and accordingly appointed a temporary receiver, and ordered him to take immediate possession of the Century Theater, and of all property belonging to the Andrews Opera Company, and directed him to continue the performances at the theater pending the appointment of a receiver pendente lite.

When the receiver thus appointed went to the theater to take possession he found Butler’s agent in ' possession thereof, and he refused to turn over the property to the receiver. Thereupon, on October 21st, the plaintiff filed a supplemental or amended petition, in which, in addition to the two Andrews and King, Butler’, his agent Drennon, and the lessee of the Hotel Warrick, were made parties defendant. The amended petition was like the original petition except as follows: first, it charged that George Andrews entered into a corrupt agreement with Butler and with his agent Drennon to defraud the plaintiff by surrendering the possession of the theater to Butler, whereas the original petition limited the charge* to the agent, and imputed nothing of the kind to Butler; second, it set up the facts hereinbefore stated about the engineer’s wages, his quitting on the seventh of October and the surrender of the possession by George Andrews to Butler’s agent, and charged that such proceedings were had pursuant to a corrupt and fraudulent conspiracy between George .Andrews and Butler, Drennon and Warrick, to defraud the plaintiff by producing a pretended forfeiture of the lease. This amended petition was also verified by the plaintiff as “true to tire best of her knowledge and belief.”

Upon the presentation of this amended petition and without any notice to any one, the circuit court on October 26, 1901, issued an injunction against the defendants, prohibiting them from interfering with or disposing of any of the property of the Andrews Opera Company; appointed Charles J. O’Malley receiver “of all and singular the properties, goods and effects of the Andrews Opera Company, including the lease of the Standard (now Century) Theater, now owned and held by said Andrews Opera Company;” ordered that the receiver “immediately proceed to take possession of the Century Theater Building and of all and singular the other property and effects of the said Andrews Opera Company;” commanded the two Andrews,- Drennon, Warrick and Butler to deliver at once to the receiver, all the property of the Andrws Opera Company in their possession, and specially ordered Butler to surrender and deliver up to the receiver full and complete possession of the theater building.

On the same day Butler filed a motion asking that so much of the order as commanded him to turn over his theater building to the receiver be revoked, alleging that such order Was without authority of law and that such order so summarily ousting him from the possession of his property was contrary to the Constitution of Missouri, and particularly to section '28 of article 2, in that it deprived him of the right of a trial by jury. In support of and in opposition to this motion .the respective parties filed affidavits; from which the facts herein stated have been collected and compiled. The circuit court overruled the motion to vacate the appointment of the receiver and the defendant Butler appealed.

I.

Many reasons suggest themselves showing that the order appealed from, so far as it directs the receiver to take immediate possession and the defendant to surrender and deliver to the receiver the full and complete possession of the theater building, is without authority of law. No reason has been suggested, and none can be conceived, which justifies or permits such an order.

It would not be profitable, and it is not necessary, at this, time to enter upon an extended or exhaustive discussion of the power of courts of equity, in proper cases, to take the properly in controversy out of the possession of one of the parties litigant and place it in the possession of a receiver. Some of the cases treat such a proceeding as analogous to an, attachment in an action at law, and some hold that it partakes somewhat of the nature of a writ of injunction. [17 Enc. PL and Pr., p. 683, and cases cited in notes.] But all the eases concur in holding that bef ore such an order is made the persons to be affected mupt have notice and an opportunity to be heard, and the only exceptions to this rple are, first, where the defendants are non-residents or conceal themselves to prevent service of notice, and, second, where irreparable injury will probably ensue if the property is not brought into court at once and before notice can be served. [17 Enc. Pl. and Pr., p. 719, and cases; Smith on Receiverhsips, p. 14; Beach on Eeceivers, p.. 153, sec. 148. Consult Railroad v. Wear, 135 Mo. l. c. 262, 263, and 253.]

In the case at bar, no such excusatory conditions are present Butler is a resident of Missouri and could have been brought into the’circuit court of Jackson county in this case. The theater building belonged to Butler. He was not insolvent. On the contrary, the record shows that he owns over two hundred thousand dollars worth of real estate in Kansas City. Th© petition alleges that the two- Andrews and King are insolvent, and the proof shows that the Andrews Opera Company is insolvent^ having less than five hundred dollars’ worth of property, which was seized on attachment on. the second of October, and owing over five thousand dollars. The plaintiff is th© only member of the firm who seems to have had any money, and the record shows that she only had a cashier’s check for forty-two dollars, fifteen dollars in cash, and some household furniture, the value of which is not stated. The petition does not charge that Butler is insolvent, nor that irreparable injury would probably ensue if the property is not brought into court at once and before notice could be served, nor yet, that there is imminent danger of loss, or great damage, or that it is a ease of gravest emergency. [Smith on Receiverships, p. 17, and cases in notes.]

In fact the petition is bottomed entirely upon the proposition that the defendant obtained th© possession of his theater by fraud, and, hence it is contended that it was within the power of a court of equity to appoint a receiver, order the owner to turn his property over to- the receiver, and thus oust the owner from possession.

The fraud alleged is, solely, that after Browning, King & Co., had attached the box receipts and all the property of the partnership of the Andrews Opera Company, and after the theater had remained closed from the second of October to the seventh of October, the engineer quit because his week’s wages were not paid. This would have resulted in the heat, hot water and steam being shut off from the hotel adjoining the theater. The partnership as alleged in the petition, and it is the conceded fact, was then wholly insolvent, its property was in the hands of the constable, the actors were unpaid. and clamorous, the engineer’s wages for a week were due, the water license was due, the coal bills- were unpaid. In such dire straights George Andrews, the general manager of the partnership, notified Butler’s agent that the firm was unable to comply with the terms of the lease. The agent went to the building and notified the Andrews Opera Company, in plaintiff’s presence, that he had come to forfeit the lease. The plaintiff offered to guarantee the engineer’s wages, but was informed that would not do. She then gave her check to the engineer for his wages. He resumed his work, but the next day when the check was presented and payment refused, he quit, and thereupon Andrews surrendered the possession of the theater to Butler’s agent, who' proceeded to carry out the terms of his lease to- the hotel by furnishing heat, hot water, etc., from the plant in the theater building to the hotel building.

It is charged in the petition that George Andrews instigated the engineer to quit and to give as a reason the fact that his wages were in arrears, and also that he tricked the plaintiff into not getting to the bank in time to make a deposit to protect her check. But there is not a scintilla of legal evidence adduced to support any of these or any of the other allegations of fraud in the case. So that the trial court not only erred in Ordering the defendant Butler to turn over the theater to the receiver, without giving Butler notice and an opportunity to J)e heard, but it further erred in refusing to revoke the said order when the facts were presented to it. The evidence wholly fails to show that Butler or his agent were guilty of any fraud in respect to forfeiting the lease or in getting possession of the property. He only did what any owner similarly situated and similarly obligated to furnish heat and hot water to the hotel, would have done under the same circumstances, and there is á complete lack of any evidence tending to show any oppression or overreaching on his part.

Hpon the facts, then, the order should have been re-voted. [Pullis v. Pullis, 157 Mo. l. c. 580.] Eor this reason it is not deemed necessary to discuss the power of a court of equity to oust a party in possession of real property and turn it over to' a receiver, simply because the petition alleges that the possession was obtained by fraud. It is only necessary to say here that when analyzed the cases that accord such poryer to' a court of equity are generally cases where two parties were entitled to the joint possession or easement and the one ousted the other, or else they were cases where the possession of the res, was a mere incident to* the determination of the controversy, and where no rights of third persons were involved.

Of course, the possession of real estate can not be transferred from one to another of adverse claimants by the process of a court of equity appointing a receiver and ordering the party' in possession to turn over the possession to the receiver and afterwards ordering the receiver to turn over the possession to the other party. Such a proceeding would be a speedy method of settling land questions. It would render useless the time-honored remedy of ejectment, and would emasculate the modem, summary remedy of ¡forcible or unlawful entry and detainer. It would do away with a trial by jury and the decree would be res adjudicaba of the question of right of possession, a result not heretofore attainable by a suit in ejectment. And such a newly-invented remedy, would, of course, carry with it punishment as for a contempt, if the defendant failed to pay the damages for detention that might be awarded, and thus a new method of collecting a judgment from an insolvent or covered-up debtor would be afforded. But as Utopian as this may be, the law has not yet been so changed that equity has power or juris diction -to act where the parties litigant have an adequate remedy at law. And such was the case here. If Butler by disseizin or unlawfully and without force obtained possession of the theater building contrary to his rights under the lease, the law afforded a complete and adequate remedy to the receiver to regain the possession for the benefit of the firm of the Andrews Opera Company, and as Butler was entirely solvent, the law also afforded ample remedy to the receiver to recover any damages the firm’s business may have suffered. But in such a case as this, where the Andrews Opera Company was wholly insolvent, its property seized under an attachment, where it was wholly unable to carry out the terms of the lease to it, where every opportunity was given by Butler to that company and to the plaintiff to get something out of the lease, and when Butler never knew that the plaintiff was a member of the partnership of the Andrews Opera Company, and never consented to her having any interest in the leaase, but on the contrary expressly refused to' consent to the plaintiff or any woman having any interest in the lease, it would be unprecedented to permit the order complained of to stand, and in a suit of this character, the main purpose of which is to dissolve and wind up a partnership of which Butler is not a member, to oust the owner from the possession of his own property, and tó turn it over to a receiver of a co-partnership that is confessedly insolvent and has no other property or means for complying with or carrying out the terms of the lease, would be without a parallel ih the law.

But aside from all these considerations, the plaintiff has not shown that she has any interest in the lease. On the contrary, it clearly appears that while as between herself and the two Andrews and Xing, she, having an interest in the partnership, has, sub 1nodo, an interest in the lease, yet as between Butler and herself she has no interest in the lease. Eor Butler expressly refused to consent to any assignment of the lease, or any interest in it, to her, and when he consented to the assignment of the lease from Bowles to the Andrews Opera Company, that company was composed of the two Andrews and King, and the plaintiff did not become a member of the firm until after that assignment. Hence, the relation of lessor and lessee never existed between the plaintiff and Butler. Therefore, she had no rights under the lease that a court could be called on to protect.

For these reasons the judgment of the circuit court refusing to vacate the order directing and ordering the defendant Butler to turn over to the receiver the possession of the Century Theater Building, is reversed.

All concur.