Nevin v. Pacific Coast & Norway Packing Co.

Parker, J. F. J. Wilson, a stockholder in the Pacific Coast & Norway Packing Company, seeks, by his — 193 — petition filed in this action, in which receivers have been appointed for tbe company by the superior court for King county, to have tbe receivers removed and dispossessed of tbe property of tbe company in their hands; to compel an accounting by the receivers, particularly as individuals, and by certain named other parties, for all of the property of the company and the alleged earnings thereof which have come into their hands; and to have the order of the superior court appointing the receivers, and all orders of the court made in the receivership, set aside and held for naught, to the end that the company be restored to its possession and enjoyment of such property and the alleged earnings thereof. The relief sought by Wilson is rested upon the alleged collusion and fraud practiced by the receivers and the other parties named in the petition against whom it is directed, resulting in the bringing about of the receivership and the placing of the property of the company therein beyond the control of its officers. The case is before us upon Wilson’s appeal from an order of the superior court sustaining the motion of the receivers to strike his petition from the files, and from an order sustaining motions of the other parties against whom the petition is directed to quash the order to show cause and service thereof upon them by which it was sought to obtain jurisdiction over them; such parties appearing specially for the sole purpose of making such motions. In September, 1914, the plaintiff, Nevin, commenced this action in the superior court for King county against the defendant packing company, seeking recovery of a money judgment, and also seeking the appointment of a receiver for the defendant and its property. No one other than Nevin and the packing — 194 — company was a party to the action. The defendant was then a corporation organized under the laws of the state of Minnesota, and was authorized to do, and was doing, business in this state and in the territory of Alaska, its principal business office being in the city of Seattle, in this state. The defendant appeared in the action and answered to the merits. Thereafter, on September 16,1914, the superior court entered its order in the action appointing E. Schoenwald “receiver in this action of all the property, assets and business of the defendant.” Soon thereafter Schoenwald duly qualified as such receiver, taking his oath of office and filing his bond as required by the order of his appointment. Soon thereafter the superior court appointed S. T. Hills as a joint receiver with Schoenwald, who also duly qualified as such. At all times since then these receivers have continued to be the duly appointed, qualified and acting receivers for the property and business of the defendant, administering its affairs as such receivers in this action. In December, 1917, more than three years after the appointment and qualification of the receivers, and approximately three years after they had taken possession of the larger part of the property and business of the defendant situated in this state and in Alaska, Wilson filed in this action his petition praying for relief as above indicated. The petition alleges as grounds for relief, in substance, that the defendant packing company was not, at the time of the appointment of the receivers, insolvent or in danger of insolvency, and that there was no cause then, nor any since, warranting the appointment of a receiver for its property or business; that the appointment of the receivers was collusively and fraudulently procured by false representations made to the court by the receivers themselves and the other parties named in Wilson’s petition against whom he seeks — 195 — relief; that the purpose of all these parties in so procuring the appointment of the receivers was to “freeze out” certain of the stockholders of the defendant and gain possession of its property; and that the trustees of the defendant packing company have refused the relief asked by Wilson. Since it is apparent that the superior court refused to entertain the petition because the relief sought, even as against the receivers, should be sought in another independent action, and because the court did not acquire jurisdiction Qf the persons against whom relief is sought, other than the receivers, by its order to show cause and the service thereof, we think this is a sufficient statement of the allegations of the petition, the relief prayed for, and the parties against whom such relief is sought. Upon the filing of the petition, the superior court issued its order to show cause, a's a process to bring into the case all the parties named in the petition against whom relief was sought. This order was in usual form, directing the parties to show cause why the relief prayed for in the petition should not be granted, was made returnable ten days after its issuance, and was within that period served upon the parties against whom relief was sought. The parties, other than the receivers, appeared specially and made motions to quash the order to show cause and the service thereof as a process seeking to bring them into the case and compel them to respond to the petition, challenging the court’s jurisdiction for want of proper process directed against and served upon them. The receivers moved to strike the petition from the files of the case upon the ground, in substance, that the court had not acquired jurisdiction of the other parties against whom relief was sought, that their presence in court was necessary to the determination of the matters presented in the petition, and that the matters so — 196 — presented were in no event properly determinable in this action, but should be heard and determined, if at all, in a separate action instituted for that purpose. Did the court acquire jurisdiction of the persons, other than the receivers, against whom the petition was directed and from whom an accounting was sought? It seems to us that this question must be answered in the negative, since they, with the exception of Nevin, were not parties to the action before the filing of the petition, and they never became such by the issuance of a summons nor by any general appearance in the action. If the order to show cause and the service thereof can.be said to be a sufficient process to bring these parties into the case as defendants, manifestly a defendant sued upon a simple debt obligation can be brought into the action as a defendant and compelled to answer or suffer a default against him by the issuance and service of a mere order to show cause, instead of by the issuance and service of a summons as prescribed by our statute relative to the commencement of civil actions. To permit such a method of procedure to be substituted for the issuance and service of a summons would be to ignore the plain provisions of the statute. Rem. Code, § 220. State ex rel. Boardman v. Ball, 5 Wash. 387, 31 Pac. 975, 34 Am. St. 866; Cherry v. Western Washington Industrial Exp. Co., 11 Wash. 586, 40 Pac. 136; State ex rel. Nolte v. Superior Court, 15 Wash. 500, 46 Pac. 1031; Interior Warehouse Co. v. Hays, 91 Wash. 507, 158 Pac. 99. It seems quite clear to us that the quashing of the order to show cause and the service thereof was proper, and that the court’s order to that effect must be affirmed. It is so ordered. Was the court in error in refusing to entertain Wilson’s petition by the striking of it from the files of the case upon the motion of the receivers made in that be — 197 — half? It is difficult to view the contention of counsel for Wilson other than as being inconsistent. He argues that the receivership proceedings should be held void and of no effect upon the ground that they were brought about by fraud, and at the same time he asks that all the parties against whom the petition is directed be compelled to account in the receivership proceedings. We think, however, in view of the nature of the alleged relationship and concert of action between the receivers and the other parties, there was, in any event, a discretion vested in the trial court as to whether or not it would permit Wilson to seek the relief which he prays for as against the receivers in this action or relegate him to an independent action; in other words, assuming that the trial court might have entertained Wilson’s petition in the receivership as against the receivers alone, whether or not it would do so was a matter within its discretion. Meeker v. Sprague, 5 Wash. 242, 31 Pac. 628; Blake v. State Sav. Bank, 12 Wash. 619, 41 Pac. 909; Schwabacher Brothers & Co. v. Schade & Parshall Co., 99 Wash. 271, 169 Pac. 783. We think that the challenging of the validity of the receivership proceedings by Wilson from the beginning, and the seeking by him to set aside, upon the ground of fraud, 'all orders of the court made therein, was sufficient to warrant the court in refusing to entertain his petition for relief in this action. Treating Wilson’s petition as one directed against the receivers and the plaintiff herein alone, it possibly could have been entertained by the court as a petition for intervention, had it been timely filed, but having been filed three years after the appointment of the receivers and the commencement of the administering of their trust, and presumably about the same length of time following the entry of the final judgment upon the claim of the plaintiff, Nevin, in the action, the — 198 — record before us being silent as to tbe exact date of tbe judgment, tbe filing of tbe petition comes too late to be entertained even as one of intervention. Wooding v. Wooding & Co., 10 Wash. 531, 39 Pac. 137; Seattle & Northern R. Co. v. Bowman, 53 Wash. 416, 102 Pac. 27; Longmire v. Yakima Highlands Irr. & Land Co., 95 Wash. 302, 163 Pac. 782. We are of tbe opinion that tbe order of tbe superior court refusing to entertain Wilson’s petition and striking it from tbe files of tbe case must be affirmed. It is so ordered. By wbat we bave said we do not want to be understood as in tbe least impairing Wilson’s right, as a stockholder of tbe defendant packing company, to petition tbe superior court looking to tbe compelling of tbe receivers to properly account, as such, in tbe receivership, or to make any application to'the trial court looking to tbe compelling of tbe proper performance of tbe duties of tbe receivers as such. His right to so apply to tbe superior court in this action is, of course, tbe same as that of any stockholder of tbe defendant packing company. Tbe orders appealed from are affirmed. Mount and Holcomb, JJ., concur.