State Ex Rel. Warren v. Douglass

1939 OK 111, 89 P.2d 298, 185 Okla. 3, 1939 Okla. LEXIS 228
CourtSupreme Court of Oklahoma
DecidedFebruary 21, 1939
DocketNo. 28848.
StatusPublished
Cited by5 cases

This text of 1939 OK 111 (State Ex Rel. Warren v. Douglass) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. Warren v. Douglass, 1939 OK 111, 89 P.2d 298, 185 Okla. 3, 1939 Okla. LEXIS 228 (Okla. 1939).

Opinions

OSBORN, J.

This is an application for a writ of prohibition against Honorable Frank P. Douglass, judge of the district court for the 13th Judicial district, sought by R. B. Warren and Royce Savage, who allege that they are the duly appointed and qualified receivers for the Southwest Company, an Express Trust, appointed by a judge of the district court of Tulsa county, on the 13th day of June, 1938, in an action wherein Warren & Robinson Drilling Company, a corporation, was plaintiff, and the Southwest Company, an Express Trust, and the trustees thereof, were defendants. It is alleged that upon their appointment they went into possession of all of the property of the Southwest Company, an Express Trust, and *4 they took into their possession and were operating certain oil producing properties belonging to said trust in Oklahoma county; that with knowledge of the appointment of said receivers, the respondent on August 22, 1938, without notice to these applicants, in an action wherein Hubert E. Bale was plaintiff and the Southwest Company, an Express Trust, and others were defendants, appointed one E. R. Henson as receiver of said oil properties in Oklahoma county, and that the said E. R. Henson was threatening to interfere with the possession of said property by these receivers, and that there was an intolerable conflict between the jurisdiction of the district court of Tulsa county and the district court of Oklahoma county which this court should prohibit by proper writ; that a special appearance had been made in the district court of Oklahoma county by these receivers challenging the jurisdiction, power, and authority of said court and of its receiver, which challenge had been denied by the district court of Oklahoma county.

It is conceded that the sole question to be determined herein is whether or not the district court of Tulsa county had jurisdiction to appoint said receivers, and that if it be determined that such jurisdiction existed, a writ of prohibition should issue; otherwise, it should be denied.

Looking to the allegations of the petition filed in the district court of Tulsa county, we find that Warren & Robinson Drilling Company alleged that it was a simple contract creditor of the Southwest Company, an Express Trust, b3r virtue of a certain $30,000 note payable in installments, endorsed by way of further security by W. E. Brown and A. X Diffie, two of the trustees of said trust, on which default had been made in the payment, and a further note of $9,899.48, executed by said trust and likewise endorsed and likewise defaulted. As a third cause of action the plaintiffs allege that said trust, the Southwest Company, an Express Trust, was insolvent and unable to pay its debts as they matured; that it owned three separate parcels of land in Oklahoma county on which there was one producing well on each tract; that numerous bills •for drilling and equipping said wells were unpaid and various parties had mechanics’ and materialmen’s liens on each of said wells and leases, and that several of said lien claimants were threatening to file foreclosure proceedings to foreclose their respective liens; that although said wells were producing only from 80 to 100 barrels of oil per day, said wells have not been properly completed and are not being properly cared for by reason of lack of funds to properly clean out and operate said wells, and that the trustees are unable to obtain further credit and cannot obtain the necessary funds with which to properly produce said wells; that by proper operation the production of said wells will be greatly increased and that the income will be sufficient to more than pay all creditors in full; that a receiver is necessary in order properly to conserve said property and manage same to produce income which said properties are capable of producing and in order that the claims of creditors and their priority may be determined without excessive cost and fees. The trustees admitted the indebtedness, the default thereof, and their inability by reason of insufficient funds to pay their creditors, and joined in the request for appointment of a receiver. The principal place of business of said trust, the Southwest Company, was at Tulsa and all of the defendants resided within Tulsa county. On oral argument herein it was stated that the indebtedness of the company, both secured and unsecured, exceeded $200,000.

Respondent contends that the allegations of plaintiff’s petition for the appointment of a receiver in the district court of Tulsa county are wholly insufficient to invoke the equitable jurisdiction of the court to appoint a receiver in that it is shown that plaintiff is a simple contract creditor who has not procured a judgment; that he has no lien on or interest in said property over which a receiver is sought and that under the provisions of section 773, O. S. 1931, no statutory ground for the appointment of a receiver is contained within the allegations of said petition.

On collateral attack, as is the present proceeding, we are confined to an examination of the allegations of the petition as to the relief sought. Kedney v. Hooker, 144 Okla. 148, 289 P. 1108. But even though the allegations of said petition were imperfect, if they were sufficient to “set the judicial mind in motion,” or to “challenge a judicial inquiry,” they will be held sufficient to invoke the jurisdiction of the court. Shields v. Coleman, 157 U. S. 168, 15 S. Ct. 570; Utah Ass’n of Credit Men v. Budge (Idaho) 102 P. 390; People’s Bonded Trustees v. Wight (Utah) 272 P. 200; Superior Oil Corp. v. Matlock (10th C. C. A.) 47 F.2d 993; Freeman on Judgments, vol. 1, sec. 365; Welch v. Focht (1918) 67 Okla. 275, 171 P. 730; Wagner v. Lucas (1920) 79 Okla. 231, 193 P. 421; McDougal v. Rice (1920) 79 Okla. 303, 193 P. 415; Lindeburg v. Messman (1923) 95 Okla. 64, 218 P. 844; Abraham v. Homer (1924) 102 Okla. 12, 226 *5 P. 45; Fowler v. Marguret Pillsbury General Hospital (1924) 102 Okla. 203, 229 P. 442; Foster v. Focht (1924) 102 Okla. 261, 229 P. 444; Howard v. Duncan (1933) 163 Okla. 142, 21 P.2d 489; Goldsmith v. Owens (1937) 180 Okla. 268, 68 P.2d 849; Cherry v. Goddard (1936) 179 Okla. 158, 64 P.2d 315; Ogilvie v. First Nat. Bank (1937) 179 Okla. 111, 64 P.2d 875; 34 C. J. 560; 15 R. C. L. 864; Black on Judgments, sec. 269; L. R. A. 1916E, 316, ease note.

Chapter 16 of the Session Laws of 1919 (sec. 11820, et seq., O. S. 1931), authorized the creation, formation, and operation of express trusts as business enterprises. Section 11823, O. S. 1931, provides:

“Liability to third persons for any act, omission, or obligation of a trustee or trustees of an express trust when acting in such capacity, shall extend to the whole of the trust estate held by such trustee or trustees, or so much thereof as may be necessary to discharge such liability, but no personal liability shall attach to the trustee or the beneficiaries of such trust for any such act, omission or liability.”

By section 773, O. S. 1931, a receiver may be appointed:

“First: In an action * * * by a creditor to subject any property or fund to his claim, * * * and where it is shown that the property or fund is in danger of being lost, removed or materially injured. * * * Sixth: In all other cases where receivers have heretofore been appointed by the usages of the courts of equity.”

High on Receivers (4th Ed.) page 847, section 692:

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Bluebook (online)
1939 OK 111, 89 P.2d 298, 185 Okla. 3, 1939 Okla. LEXIS 228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-warren-v-douglass-okla-1939.