State Ex Rel. Claude v. District Court Fourth Judicial District

283 N.W. 738, 204 Minn. 415, 1939 Minn. LEXIS 581
CourtSupreme Court of Minnesota
DecidedFebruary 3, 1939
DocketNo. 32,057.
StatusPublished
Cited by6 cases

This text of 283 N.W. 738 (State Ex Rel. Claude v. District Court Fourth Judicial District) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Claude v. District Court Fourth Judicial District, 283 N.W. 738, 204 Minn. 415, 1939 Minn. LEXIS 581 (Mich. 1939).

Opinions

Gallagher, Chief Justice.

An original proceeding on an order to show cause why a writ of prohibition issued out of this court on the 25th day of January, 1939, should not be made absolute. The writ referred to commands respondents, the district court for the fourth judicial district of Minnesota; the Honorable Vince A. Day, one of the judges thereof; Edwrard J. Goff, county attorney in and for Hennepin county, Minnesota; and Michael J. Dillon, receiver, and each of them, to desist and refrain from further proceeding in a certain action now pending in the district court of the fourth judicial district of Minnesota entitled: “State of Minnesota, ex rel. Edward J. Goff, County Attorney of Hennepin County, Minnesota, Plaintiff, vs. J. Hammerbacher and C. J. Claude, doing business as Family Finance Company, and Don A. Leo, T. Ernest Knudson and John P. Newcomb, Defendants,” “until the further order of this court.”

The complaint in the district court action alleges in substance that plaintiff is the county attorney of Hennepin county and brings the action in behalf of the state of Minnesota; that defendants, J. Hammerbacher and C. J. Claude, doing business as Family Finance Company, keep and maintain a common or public nuisance in Hennepin county to the injury of the public and contrary to the public policy of the state of Minnesota; that said nuisance consists of the operation of a business commonly known as the “loan shark business”; that its principal object was and is to collect *417 illegal and usurious rates of interest ranging between 99 per cent and 106 per cent per annum from wage earners in necessitous circumstances; that such business is offensive and detrimental to the general public in that it tends to break down and does break down the morale of the necessitous borrower and in many cases causes him to lose his job and thereby adds to the charity load and relief rolls of the community; that the legal remedies and defenses of the borrowers against defendants and their practices are inadequate and ineffective; and, finally, that an emergency exists and that unless a receiver be appointed there is imminent danger of defendants disposing of their property to individuals not subject to the jurisdiction of the court, thereby causing irreparable loss or damage.

The complaint contains many other allegations pertaining to the method of operation of said business not necessary to recite herein, and prays for the appointment of a receiver to take charge of the assets and property used in connection with its operation and for an injunction restraining defendants, and each of them, from directly or indirectly interfering with or disturbing the receiver in the possession, use, and enjoyment of any of said properties.

On the verified complaint and on motion of plaintiff and without notice to defendants, or any of them, the district court made an “ea> parte” order appointing Michael J. Dillon receiver of all of the property and assets of defendants “wherever situated, held, owned, or controlled by defendants in the prosecution of their business,” and enjoined the defendants, and all of them, “from directly or indirectly interfering with or disturbing the receiver in the possession, use and enjoyment” of said property. The order recited that the court found “that an emergency exists and that immediate and irreparable loss or damage would result to the plaintiff unless this order be made and the receiver appointed.” It required the receiver to file an oath and a bond in the sum of $500 and the defendants to show cause before the court on the sixth day of February, 1939, why the receivership and injunction should not be continued until a final determination of the cause.

The order, summons, complaint, and a notice of motion were thereafter served on the defendants. In the meantime the receiver *418 had summarily ousted relators from their place of business and taken possession of all the books, papers, furniture, and other property therein. The value of the property in question is said to be more than $142,000.

On the 25th day of January, 1939, on the affidavit of C. J. Claude, one of the defendants, the order to show cause referred to in the beginning of the opinion was issued out of this court.

The question is whether defendants are entitled to have the writ made absolute. Relators urge:

First, that the county attorney is without legal authority to institute the proceedings; second, that the district court is without jurisdiction either to enjoin them from the conduct of their business and the use and possession of their assets or to appoint a receiver for such business and assets; and, third, that the district court was wholly without jurisdiction to appoint a receiver “ex parte” or to grant a temporary restraining order.

We do not deem it necessary to discuss at any length the merits of the first two questions raised by relators. We assume, without deciding, that the county attorney is a proper party to maintain the action. If he is not, and there is a defect of parties in that respect, the objection must be taken by demurrer. 5 Dunnell, Minn. Dig. (2 ed. & Supps.) § 7323.

We may also assume for the purpose of this opinion, without so deciding, that the trial court had jurisdiction of the subject matter. The action was one to abate a nuisance in which injunctive relief and the appointment of a receiver were asked. Such actions are ordinarily within the jurisdiction of the district court. In any event, the court possessed the power to inquire into the extent of its jurisdiction and to determine as to what, if any, relief plaintiff was entitled to. If it erred in such determination, the decision could be reviewed by appeal or, if not by appeal, by certiorari. State v. Laughlin, 204 Minn. 291, 293, 283 N. W. 395.

There is cause, however, for making the writ absolute. • It arises out of the “ex parte” appointment of a receiver on plaintiff’s application and without notice to defendants.

*419 To warrant this court in granting the extraordinary remedy of prohibition, it must clearly appear that the inferior court or tribunal to which it is directed is proceeding in some matter over which it possesses no rightful jurisdiction, or is exceeding its legitimate powers in a matter of which it has jurisdiction. State ex rel. Jonason v. Crosby, 92 Minn. 176, 178, 99 N. W. 636; State ex rel. Jarvis v. Craig, 100 Minn. 352, 353, 111 N. W. 3; State ex rel. Roberts v. Hense, 135 Minn. 99, 103, 160 N. W. 198.

Assuming the right of the county attorney to maintain the action and the jurisdiction of the trial court to entertain it, after notice and opportunity to be heard have been provided, we nevertheless are of the opinion that the district court exceeded its jurisdiction and power when, without notice.to relators and without giving- them an opportunity to be heard, it appointed a receiver to seize their property and deprive them of its use. Respondents endeavor to justify the application of that drastic remedy by asserting that an emergency exists. The trial court so found.

It is true that the district court has power to appoint receivers ex parte in cases of extreme emergency. Haugan v. Netland, 51 Minn. 552, 53 N. W. 873; Greenfield v. Hill City Land, L.

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Cite This Page — Counsel Stack

Bluebook (online)
283 N.W. 738, 204 Minn. 415, 1939 Minn. LEXIS 581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-claude-v-district-court-fourth-judicial-district-minn-1939.