State ex rel. Boston & Montana Consol. C. & S. Mining Co. v. Second Judicial District Court

56 P. 219, 22 Mont. 220, 1899 Mont. LEXIS 17

• Court: Montana Supreme Court
• Decided: February 20, 1899
• Docket: Mo. 1343
• Status: Published

Opinion

HUNT, J.

The statement of the case made in ihe brief of relators’ counsel in this proceeding does not wholly conform to the rules of Court requiring the brief, among other matters, to contain “a concise abstract or statement of the case, presenting succinctly the questions involved and the manner in which they are raised, which abstract shall refer to the page numbers in the transcript in such manner that pleadings, evidence, order's and judgment may be easily found.” By an abstract or statement of the case presenting succinctly the questions involved is meant a plain and fair statement from the record, free from argumentative recitals and deductions of counsel reflecting contemptuously upon the attitude, motives or ulterior purposes of the opposite side. No matter how acrimonious may be the litigation between parties themselves, nothing should be permitted to interfere with the presentation of a perfectly impartial statement in the briefs of counsel of all that is necessary and fit to enable the Supreme Court to approach the legal questions raised in full reliance upon the correctness and sufficiency of the statement furnished. Compliance with the rule in this respect materially lightens the labors of this Court, while it is worse than having no statement at all to be met with a brief that, instead of setting forth the real substance of the issues in the record, presents only one side fully and skims over those portions of the transcript which are essential to state the position of the other. The argument and the statement have separate positions assigned to them in the brief and we hope that in the future counsel will be careful to observe the appropriate and distinct office of each.

The foregoing suggestions become very pertinent in this proceeding because of the omission on the part of relators’ counsel to put before us in their brief the facts pleaded by O’Connor in his complaint, as it is upon them that we are constrained to hold that the District Court does not appear to be acting, and about to act, in excess of its jurisdiction and power in the premises, at least so far as the appointment of a receiver pendente lite goes.

The writ of prohibition is to arrest the proceedings of any tribunal when such proceedings are without or in excess of the jurisdiction of such tribunal. (Code of Civil Procedure, Section 1980.) It is a process by which our Court, or any Superior Court, prevents a district court, or any inferior tribunal, from exercising jurisdiction with which it has not been vested by law. (Spell. Extr. Rel., Section 1716.) Negative in its manner of operation, its command is, “You stop doing,” while mandamus positively says, “You shall do. ” It is designated by the statute as ‘ ‘the counterpart of the writ of mandamus, ’ ’ but this provision of the Code, considered with the clause which says the writ arrests the proceedings of an inferior tribunal when such proceedings are without, or in excess of jurisdiction, does not enlarge the class of cases in which the writ could have been resorted to before the statute. “Counterpart” of mandamus is held not to be the exact reverse or opposite, inasmuch as the limitation of- the second clause of the statute, confining the office of the writ to specific uses, shows that the word was used in a sense designed to illustrate the operation of the writ, and not to £ ‘add to the class of cases in which it may be resorted to. ’ ’ (Maurer v. Mitchell, 63 Cal. 291.) The character of the writ is therefore not changed by the Code; nor can any question be inquired into except that of jurisdiction in the proceeding inaugurated by it. It is preventive, rather than remedial, and cannot take the place of an appeal. (Thomson v. Tracy, 60 N. Y. 31.)

S.ection 579 of the Code of Civil Procedure (Comp. St. 1887) defined the writ substantially as the new Code does, except that the present Code expressly authorizes the writ to issue to persons or boards exercising ministerial as well as judicial functions, while the former Code omitted express enumeration of those to whom it might issue. But the scope of the writ has not 'been changed. In State v. Benton, 12 Mont. 66, 29 Pac. 425, the court adopted the rule laid down by the Supreme Court of the United States in Smith v. Whitney, 116 U. S. 167, 6 Sup. Ct. 570, restricting the issuance of the writ to proceedings wherein it clearly appears that the inferior court is about to exceed its jurisdiction, and approves of the common doctrine that, unless it appears on the face of the proceedings that the court had no jurisdiction of any part of the subject matter of the complaint, prohibition will not lie. Cases may arise, however, where evidence aliunde the record is admissible to show no jurisdiction, as was held in Bullard v. Thorpe, 66 Vt. 599, 30 Atl. 36, cited by relators; but they are rare, and do not affect the general rule adopted in State v. Benton, supra. Moreover, the writ may issue in Vermont if “necessary to the furtherance of justice and the regular execution of the laws;” and, besides this, such evidence is allowed, and was permitted in the Vermont case, upon the principle that, where jurisdiction is positively excluded, no one shall be allowed to create a jurisdiction by voluntarily changing the real position of the parties into an assumed one. That would .be a fraud. (Hutson v. Lowry, 2 Va. Cas. 42.) Thus, after all, the question resolves itself solely into an inquiry by which the jurisdiction may be determined. (Bodley v. Archibald, 33 W. Va. 229, 10 S. E. 392.)

To ascertain what is the power of the court involves inquiry into all that properly appears on the face of the proceedings. It may extend to the investigation of facts appearing as part of the proceedings in order that the court which is asked to issue the writ may correctly say whether the whole proceedings upon their face show that the lower court had not enough before it to set in motion its power to do the act or acts it is doing and is about to do. It must be remembered, though, that the sufficiency of the cause of action as set out in the proceedings is to be tried in the inferior court, as are all questions of law, by regular procedure, and that, if there be error in the rulings thereon, remedies by appeal are prescribed; hence, ordinarily, prohibition will not lie; but, on the other hand, if upon the face of the proceedings there has been a radical departure from the authority vested in the court, and remedy by appeal is entirely inadequate to afford redress, the writ may go, even though jurisdiction of the nature of the action was in the inferior court. We do not hold, by any means, that if the facts alleged fail to state a cause of action, or if a cause of action is stated, yet the evidence fails to sustain the complaint, that there is ground for issuing a writ of prohibition; but we believe it may issue where the showing made discloses a wholly unwarranted assumption of power by the inferior court, and where appeal either does not lie at all or is wholly inadequate to afford redress. “It is quite clear,” says Works on Jurisdiction (page 634), “that where the power to act with respect to the particular cause or matter in controversy is entirely wanting, and no discretion rests in the inferior tribunal with reference to the question whether it shall act or not, the writ is the proper remedy;” and in Sweet v. Hulbert, 51 Barb. 312, the Supreme Court of New York held that the writ would lie “io prevent the exercise of unauthorized power by an inferior tribunal in cases where it has jurisdiction as well as where it has not jurisdiction,” following the decision in Quimbo Appo v. People, 20 N. Y. 531, where Judge Selden held that originally in England the writ was never governed by any narrow or technical rules, “but was resorted to as a convenient mode of exercising a wholesome control over inferior tribunals.” The last case was affirmed in People ex rel. Mayor v. Nichols, 18 Hun. 530, and in People ex rel. Cooper v. Special Terms, 57 How. Prac. 467.

High, in Section 762 of his work on Extraordinary Legal Remedies, treats the writ of prohibition as a remedy afforded by the common law to correct encroachments of jurisdiction by inferior courts and says it is used to keep such courts within the limits ‘and bounds prescribed for them by law. “The object of the writ being to restrain subordinate judicial tribunals of every kind from exceeding their jurisdiction, its use in all proper cases should be upheld and encouraged, since it is of vital importance to the due administration of justice that every tribunal vested with judicial functions should be confined strictly to the exercise of those powers with which it has been by law intrusted. ’ ’

Extreme necessity should usually be apparent before this extraordinary remedy will be granted. (State v. Judge of New Orleans Commercial Court, 4 Rob. (La.) 48; People ex rel. Adams v. Westbrook, 89 N. Y. 152.) But, to find out whether such a necessity exists, it is not beyond the power of the Superior Court to ascertain if any evidence was before the inferior court upon which it assumed the power to act, to the end that it may say not whether the power was discreetly or wisely exercised, but to determine whether the power existed at all. We may illustrate in this way: Ordinarily, a receiver in an action before judgment therein cannot be appointed by a court without notice of the application for such an appointment to the adverse party, unless it shall appear to the court that there is immediate danger that the property or fund will be removed beyond the jurisdiction of the court, or lost or materially injured, destroyed or unlawfully disposed of. Suppose a plaintiff applies for a receiver in his action for equitable relief, gives no notice and relies upon the ground that there is the immediate danger mentioned in the statute; suppose, though, oral testimony is heard to support the averments of his complaint at an intermediate stage of the case and in support of his application for a receiver, but the proof offered fails entirely to show immediate or any danger; yet the lower court has gone ahead and has said that it does satisfactorily appear that immediate danger does exist, and is about to act by the appointment of a receiver. What then is the position of the lower court? It had jurisdiction of the subject matter of the action and the nature thereof and of the parties to it. Furthermore, it had the power under the law, apparently, to appoint a receiver pendente lite in such a suit, under the averments of the complaint, but not under the evidence. Must the Superior Court decline, under such extraordinary circumstances, to issue the writ of prohibition, because there was jurisdiction and apparent power in the lower court? To determine jurisdiction, will it not inquire whether there was any evidence from which it appeared to the lower court that immediate danger existed? It cannot be that, where there is no appeal from an order appointing a receiver pendente lite, this Court will refuse to order the lower court to desist from proceedings which are without any evidence to support an exercise of power by that court in an appointment of a receiver. The indispensable prerequisite to the existence of the power to appoint is that it shall appear that there is immediate danger. If this does not appear, the condition does not arise; it cannot arise where the power may be exercised at all. The Court has not put itself in a position where it can act by appointing a receiver, hence it' seems to us the power to act is wanting, and action by appointment is in excess of the bounds prescribed by the court by law, and is beyond its jurisdiction. (Gould v. Gapper, 5 East 345).

Spelling on Extraordinary Relief (Section 1730) refers to the California decisions in Havemeyer v. Superior Court, 84 Cal. 327, 24 Pac. 121, and Bruner v. Superior Court, 28 Pac. 341, as establishing a doctrine that the adequacy of the remedy by appeal in any given case is an open question, and says: ‘ ‘The doctrine is quite reasonable and in consonance with general principles governing the employment of extraordinary remedies; for if it is a general principle that if an ordinary remedy, or such remedy as is available ‘in the ordinary course of law, ’ does not afford a party the specific relief to which he is entitled, or does not meet the emergencies of his case, it is no bar to injunction, mandamus or other remedies of an extraordinary character; why, then, should such fruitless resort stand in the way of prohibition?” This reasoning impresses us as sound, and reverts to the propositions- laid down by Seldon, J., in the leading case of Quimbo Appo v. People, supra, to the effect that the writ will issue where a court goes ‘ ‘beyond its legitimate powers, ’ ’ even in a matter where such tribunal has jurisdiction. The English decisions are referred to by Judge Selden as proving “that the writ lies to prevent the exercise of any unauthorized power in a cause or proceeding of which the subordinate tribunal has jurisdiction, no less than when the entire cause is without its jurisdiction.” We are thus led back to the doctrine approved of in State v. Benton, supra, which does not preclude the .Superior Court, within the limitations discussed, from ascertaining by all that appears upon the face of the proceedings whether it is clearly apparent that the inferior court is about to exceed its jurisdiction.

In the discussion of this point we have digressed from what is necessary to a decision herein. Our views may, therefore, be a subject for argument at some other time, but we have thought it none the less proper to indicate them now. They are not material in this case, because we need look no further than to the averments of O’Connor’s complaint, which are to be taken as true upon this hearing. The substance of them is set forth in the statement preceding this opinion and we shall not take the space to recapitulate them-. They show that O’Connor, as a shareholder in the Montana corporation, has been grievously wronged and the Montana corporation greatly injured by the illegal transfer of the property of that corporation to a foreign corporation. They show that he and other bona fide shareholders in the Montana Company never assented to any such transfer. They show that certain defendants whom he sues have conspired to continue themselves as directors of the corporation in order to carry out a scheme of. depriving the Montana Company of its property and terminating its existence. They show that, notwithstanding this Court has decided that by the law of this State a domestic corporation cannot exchange its property and stock for the stock of a foreign corporation without the consent of all its stockholders, the defendants have refused to reinvest the Montana Company with its own property illegally held by the New York corporation. They show that the Montana Company has no officer in Montana, and that the books of the Montana Company are in other states, and without the jurisdiction of the courts of this State. They show that the property of the Montana Company is largely in valuable mines, and that the proceeds from the sale of ores have been removed by the defendants and converted to their own use. They show that, unless injunction issues, and a receiver is appointed, the New York Company will continue to extract, ores and unlawfully dispose of the same, to the great detriment and injury of the Montana Company and its-shareholders. They show that the New York Company is insolvent, and has dissipated large sums of money, and will continue to do so unless a receiver is appointed. They show that plaintiff is entitled to have an accounting by the New York Company to the Montana Company, and that already §5,000,000 worch of ore has been converted by defendants. They show that the directors of the New York corporation are using the proceeds of the sale of ores to speculate in the stock of the Montana Company to their own gain; and, finally, that, unless a receiver is appointed, it will be impossible to ascertain the amount or value of the ores already extracted, or to bring about a retransfer of the property belonging to the Montana Company. O’Con-nor’s prayer is for a receiver to take charge pending the litigation; but he asks that the New York Company he reguired to deliver possession to the receiver, and account for the use of the property while it has been in its possession; that the directors be removed; that the deeds heretofore given by the Montana corporation be declared null and void; that the title of the Montana Company be quieted; and that upon final hearing the Montana corporation be dissolved, and its property sold, or, if dissolution be not decreed, that trustees be appointed for the Montana Company, and its affairs settled,' and for general relief.

Kelators err in assuming that the ultimate purpose of O’Connor’s action is simply to bring about a dissolution of the Montana Company, and so to destroy it. It is upon this erroneous assumption they have formulated many of the propositions of law advanced in their brief. The action, though, seeks other and different relief as well. The expressions of the complaint do not allow us to confine its objects exclusively to the obtaining of a dissolution of the' Montana Company. On the contrary, full equitable relief is asked, the principal feature of which is that the Montana Company be reinvested with the millions of dollars’ worth of its property which has been illegally transferred by the trustees thereof to a foreign corporation of no solvency, and beyond the jurisdiction of our courts and the reach of the shareholders who dissent from the transfer by the Montana Company, and to secure an accounting for the vast sums of money claimed to be due to the Montana Company for ores sold since the time of. the illegal transfer alleged. If in asking for a dissolution of the Montana corporation, or, in lieu thereof, for the appointment of trustees, he has asked more than the law- will give him, it is nevertheless beyond our power to say in this proceeding that the District Court has no jurisdiction to proceed with his case, and to grant him such relief as he may be entitled to under his bill. No presumption is permissible which would sustain a holding that, where a plaintiff in an equity suit, showing himself entitled to a measure of relief, asks for more than the law should give him, the District Court having j urisdiction of the subject-matter of his bill will exceed its jurisdiction, and-extend its relief beyond the limits of its power. In the absence of a very clear showing to the contrary, we are obliged to act upon the theory that the lower court will confine itself within its proper limits, and go no further than it legally may. The appointment of a receiver is asked as ancillary to the main suit, and pendente lite only. He is to take possession and manage the affairs of the corporation under the direction of the court while the charges made by O’Connor against the trustees of the Montana Company are being investigated upon a trial. As a shareholder, O’Connor has a right to ask this relief, and in doing so he has brought himself squarely within the doctrine of State v. Second Judicial Dist. Court, 15 Mont. 324, 39 Pac. 316, the reasoning of which we must approve, and here apply. It does not necessarily follow that the appointment of a receiver pendente lite means the dissolution of the corporation, or its destruction. (Decker v. Gardner, 124 N. Y. 334, 26 N. E. 814; Beach, Rec. Sec. 335.) It means that the District Court, if it acts, will, in the best interests of all concerned, appoint some one, to be regarded as its officer, to take charge of the property in litigation; but the corporation’s existence need not be destroyed. The person to be appointed is, in law, an indifferent one, to be clothed with the power to receive and preserve the property and assets of the corporation and its shareholders for the benefit of whoever may finally be declared to be entitled to them. The principle upon which the court may act is that, in order to secure the property — the subject-matter of the litigation — to its owners, the court itself, by an order appointing a receiver, may say that it is inequitable that any party to the litigation should have possession of the property of the Montana Company, and the 'issues and profits thereof, pending the litigation in which O’Connor, as a shareholder, asks equitable relief.

We cannot grant the writ upon the showing made of Judge Clancy’s prejudice or enmity. That argument must be dismissed as without any foundation of record. The facts that Judge Clancy does not like Mr. For bis, one of several counsel for relators, that he has decided various cases against relators, and is on friendly terms with the officers of the Montana Ore Purchasing Company, and may not select a fit person as receiver, if he appoints one, are far from sufficient to oust the lower court of jurisdiction.

It is also said that the Supreme Court, by virtue of its constitutional power to exercise general supervisory control over all inferior courts, has the power to grant these relators relief from the danger which they say surrounds them. The power of this Court is not unlimited, but expressly authorized and vested ‘ ‘under such regulations and limitations as may be provided by law. ’ ’ (Art. VIII, Sec. 2, of the Constitution of Montana.) In the matter of granting writs of prohibition there are statutory regulations and limitations, as discussed in the former part of this opinion. Therefore power to go outside of them does not exist.

If the lower court shall issue the injunction prayed for by O’Connor enjoining the individual defendants sued from exercising functions as trustees of the Montana Company, or enjoin the New York corporation in respect to the matters mentioned in the order to show cause, its action can be reviewed by appeal from such order; or if any action may be taken suspending the powers of the defendants as directors, or removing them from their positions as trustees of the Montana corporation, remedy may be sought by appropriate proceedings. The power- of a court of equity to suspend or remove trustees of a corporation is a very doubtful one. Whether it exists, or to what extent it goes if it exists, has not been argued very fully by relators’ counsel, and is not discussed at all by defendants. Under such conditions, considering the great importance of the question, we prefer to refrain from expressing an opinion upon it, particularly where no unusual harm is apt to ensue by not doing so at this time. The writ of prohibition being largely a discretionary one, we have concluded not to issue it to prohibit the court from acting in this respect. In the other respects hereinbefore discussed relators have not made a case to entitle them to its issuance.

Writ denied,, and petition dismissed.

Brantly, C. J., and Pigott, J., concur.