Roberts Telephone & Electric Co. v. Farmers' & Merchants' Nat. Bank of Abilene

WILLSON, a J. (after stating the facts as above). [1] It conclusively appeared that the services performed by Speed and the expense incurred by him were performed and incurred by him while acting as receiver, and not while acting as an employs of James as receiver. Having found, correctly, we think, that the appointment of Speed was void, because he was not at the time a citizen of this state (article 2130, R. S. 1911), and therefore that he was not entitled to compensation for services rendered and expense incurred as receiver, we think the court should not have undertaken indirectly to do what it had determined it could not directly do, to wit, compensate him for such services and expenses. Therefore we think the court erred when it allowed $1,000 to James for Speed. If such a course is permissible, then it is possible in every case to defeat the prohibition in the statute by appointing a citizen of this state to act as receiver with one who is not a citizen of the state. In-,this way an ineligible person could in any case be placed in charge as receiver, and his acts treated as valid because also the acts of the eligible receiver, by allowances to whom the ineligible receiver could be compensated. *632 Speed should have been left to look for compensation for his services and expenses to the party who procured his appointment as receiver. Sullivan v. Gage, 145 Cal. 759, 79 Pac. 541; 34 Cyc. 367. [2] It appearing that James was the cashier and active manager of the bank and a stockholder therein at the time he was appointed and while he acted as receiver, it is insisted (1) that he therefore was ineligible, and consequently that his appointment was void; and (2) that, if his appointment was not void, the court erred in allowing him anything for his services as receiver. The statute declares that “no party, attorney, or any person interested in any way in an action for the appointment of a receiver shall be appointed receiver therein,” but does not declare that an appointment of such a. person in .violation of its inhibition shall be void. Article 2129, R. S. 1911. Because he was a stockholder in the bank James was interested in the suit. Adams v. Minor, 121 Civ. 372, 53 Pac. 815. The act of the court in appointing him receiver was not, therefore void, however. It was erroneous merely. Railway Co. v. Adams, 11 Tex. Civ. App. 198, 32 S. W. 734. But the reasons which justify a holding that the act of the court in appointing him was only voidable and not void, notwithstanding the inhibition of the statute, based as they are on a necessity for protecting rights of other parties dealing with him as receiver, do not apply when the question is as to whether he shall be allowed compensation for his services as receiver or not. He knew when he accepted the appointment as receiver that he was a stockholder in the bank, and therefore interested in the action for the appointment o'f a receiver. Charged as he was with knowledge of the prohibition in the statute, it must be assumed he knew he could not, on account of his interest, lawfully be appointed receiver. I-Ie'might have declined the5 appointment. Choosing, instead, to accept it and act in face of the prohibition in the statute, we think he was not entitled to the compensation allowed him out of funds belonging to the Roberts Company. 1-Ie, like Speed, should have been required to look to the party at whose instance he was appointed for compensation for his services. The prohibition in the statute should be observed, and perhaps there is no more effectual way to enforce its observance than to deny compensation to one whose appointment as receiver is procured in violation thereof. [3] The court found as facts that Speed and James, acting as receivers and in conformity to authority conferred on them by his order, employed Hardwick & Hardwick and Leggett & Kirby to act as attorneys for them in their capacity as receivers, and that said Hardwick & Hardwick and Leggett & Kirby, in the discharge of duties assumed by them as such attorneys, performed services for the ■receivers as such. The court further found that the services so performed by said Hard-wick & Hardwick and Leggett & Kirby were reasonably of the value of $3,000, and approved the claim of the receivers for an allowance of that sum on account of said services. The action of the court is attacked as erroneous, on the ground that the sum allowed is excessive. The parties mentioned acted as attorneys for the receivers from October, 1907, to October, 1911, or during four years. During all that time the telephone exchange belonging to the Roberts was being operated by the receivers, and it appears from the findings transacted business aggregating over $100,000. If Hardwick & Hardwick and Leggett & Kirby were entitled to claim anything of the receivers on account of their services, we cannot say the amount allowed them exceeded the sum they were entitled to. The question as to whether they were entitled to an allowance at all out of the funds belonging to the Roberts Company is not so presented by assignments as to require a determination of it by us. The court, found that on May 1, 1910, the balance remaining unpaid of the Stromberg-Carlson . Company’s claim amounted to $974.65, and in the judgment directed the receiver out of the funds in his hands to pay that sum to said Stromberg-Carlson C'om-pansr. It is claimed the finding of the court as to the amount of the balance due that company was erroneous — that the balance due it at that time was the sum of $745.52 only. From the amended final report of the receivers it appeared that the balance due said Stromberg-Carlson Company was $974.65 as found by the court. The report in this respect was not excepted to. We have not been referred to, nor have We found in the record, testimony which we think will justify us in saying that the finding by the court as to the amount was erroneous. From the findings we have made it appears that James as receiver has in his hands subject to the payment of debts of the Roberts ' Company and its receiver the sum of $5,653.75, instead of the sum- of $2,170.40 as found by the court below. The indebtedness of the Roberts Company and its receiver established in the suit and shown to be unpaid, including costs of the suit, amounts to less than $3,000. It thus appearing that the Roberts Company is solvent, it is unnecessary to determine other questions made by the assignments. The judgment of the court below will be so reformed as to require James out of the sum of $5,65.3.75 belonging to the Roberts Company in his hands as receiver to pay to the Stromberg-Carlson Telephone Manufacturing Company the balance of $974.65 and interest thereon from October 13, 1911, at the rate of 6 per cent, per annum, amounting to $77.98, and aggregating the sum of $1,052.60 due it, and to the Farmers’ & Merchants’ National Bank of Abilene the balance of $440.39 and interest thereon from October 13,' 1911, at the rate of 10 per cent, per annum, amounting to *633 $58.64, and aggregating the sum of $499.03 du.e it, and then to pay into the registry of the Taylor county district court the balance of $4,102.12 remaining of said sum of $5,653.75. Said judgment will be further so reformed as to require the clerk of said district court to pay out said sum of $4,102.12, when same reaches his hands, as follows: (1) To the clerk of said district court all unpaid costs of the suit, except the costs of this appeal. (2) To the clerk of this court the costs of this appeal. (3) To Lyman E. Klotz the sum of $187 and interest thereon from October 13, 1911, at the rate of 6 per cent, annum. (4) To the North Electric Company $849.54 and interest thereon from September 26, 1908, at the rate of 8 per cent, per annum. (5) To the Roberts Telephone & Electric Company the balance of said sum of $4,102.12 then remaining in his hands. As so reformed, the judgment will be affirmed.