Kerns v. Morgan

AILSHIE, J. (After making the statement of facts.)— Keane and the California Consolidated Mining Company were total strangers to the case of Kerns, Receiver, v. McAulay and DeLashmutt, and to recognize their right, or that of any other stranger to the proceeding, to come in by petition or otherwise, without notice to the receiver or anyone interested in the proceeding, and procure an ex parte order, like the one of January 7th, affecting the entire assets of the insolvent estate, would be permitting a practice contrary to every principle of law and justice, and too dangerous to be tolerated for a moment. The petitioner had no standing in the proceeding and could not rightfully obtain a standing without notice and an order of court allowing him to become a party or to intervene. The receiver acting under direction and authority of the court is the legal representative of the insolvent bank, and as such is the party whose duty it is to know the condition of the business and affairs of the insolvent estate. He is presumed to be better informed as to the debts and liabilities outstanding against the insolvent estate and the orders and judgments necessary for its protection than a mere intruder and interloper whose petition shows upon its face that his entire interest is personal and private and adverse to the [580] interests represented by the receiver. An order made under the conditions and circumstances accompanying the order of January 7, 1905, is and was void from the beginning. It is contended, however, by counsel for the California Consolidated Mining Company, that the order of August 1st, vacating and setting aside the order of January 7th, was void and in excess of the jurisdiction of the court making it, for the reason that it was made more than six months after the adjournment of the term of court at which the original order was made, and without notice to the California Company or Keane. Section 4229 of the Revised Statutes provides, inter alia: “The court may likewise, in its discretion, after notice to the adverse party, .... relieve a party or his legal representative from a judgment, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect; and .... .may grant the relief upon application made within a reasonable time, not exceeding six months after the adjournment of the term.” We do not think this provision 'of the statute applies to judgments and orders which were nullities and void from the beginning, and so appear on their face. (People v. Greene, 74 Cal. 400, 5 Am. St. Rep. 448, and note, 16 Pac. 197.) Notice is required under section 4229, supra, to “the adverse party.” Adverse party as here used must mean a party to the original action or proceeding, or one who has been brought into the case by order of court, or one who has been allowed by order of court, to intervene or become a party plaintiff or defendant in the action as originally instituted. Here neither Keane nor the Califor nia Consolidated Mining Company became a party to the proceeding in any manner known to the statute or rules of practice, and was not, with reference to the order of January 7th, entitled to notice and consideration as an adverse party. Keane did not seem to think it necessary to notify the receiver that he would apply for the order of January 7th, but after making himself a party to the case without notice to or consent of anyone, he concludes that he is an “adverse party,” and that the order he thus obtained should not be vacated or set aside without first notifying him; and this, too, [581] after he or his company has failed to deposit the money in the bank in compliance with the order he thus procured. Litigation usually subjects the moving party to the risks of losing as well as affording him the chances of winning; but not so with this company — it was proceeding altogether on the chances of winning without the risks of losing. If it could win on appeal it did not propose to live up to the compromise agreement, but if it lost on appeal, then it proposed to compel the receiver to live up to the agreement to compromise a $58,000 judgment for $6,000 after over two years of litigation. We conclude that the order of January 7th was unauthorized and void, and the court had the power to vacate and set aside such order on his own motion or at the instance of any person affected thereby at any time the matter might be called to his attention. Passing now to a consideration of the order of October 6th, we find that the effect thereof is to enjoin the collection of this $58,000 judgment or any part thereof out of the thirteen-sixteenths interest in the California lode claim until such time as the case of the California Consolidated Min. Co. v. Manley et al. shall be again heard and finally determined in this court on appeal. There has been no pretense made at giving a supersedeas bond in the appealed case on the writ of error from the United States supreme court to this court as provided by section 1007 of the United States Compiled Statutes, and that question does not therefore enter into the consideration of the present case. In the California Consolidated ease the trial court held that the plaintiff was an innocent purchaser of the thirteen-sixteenths interest in the California lode claim, and entered a decree perpetually enjoining and restraining a sale thereof under execution issued in the case of Kerns, Receiver, v. McAulay and DeLashmutt. On appeal this court held that "the California Consolidated Company was not an innocent purchaser, but that the sale had been made in fraud of the creditors of the Coeur d’Alene Bank, insolvent, of which Kerns is receiver. The judgment and mandate of this court was as follows: “The perpetual injunction is dissolved, and the cause [582] is remanded with directions to the trial court to make findings and enter judgment in accordance with the views herein expressed.” The trial court, in compliance with the judgment of this court, made and entered findings and judgment against the California company and in favor of the receiver, and it appears that the company appealed from the judgment so made and entered, and the court fixed the amount of a supersedeas bond to be given under section 4813 of the Revised Statutes, and a bond in accordance therewith was executed, filed and approved October 6th; whereupon the order complained of by the receiver was made and entered by the trial judge. This practice and procedure would be regular and proper in a ease that has not already been passed upon and disposed of on appeal; but here the case had already been heard and determined on appeal, and this court had dissolved the injunction and held that the thirteen-sixteenths interest in the California lode claim previously levied upon by the sheriff under his writ in case of Kerns, Receiver, v. McAulay and DeLashmutt, was subject to sale under that writ. Now, to allow the district court to again delay the execution of that writ indefinitely by recalling the same until such time as another appeal can be prosecuted, heard and determined in the same case would amount to trifling with final judgments and decrees and justly bring the administration of the law into reproach. The district court has no power or authority to again issue, in the same case, an injunction or restraining order which has, on appeal, been dissolved by the supreme court. It is the duty of the courts to dispose of and close up litigation; it is to the interest of honest litigants, and also the public whose interests are often largely affected by prolonged legal controversies over vast property rights. The writ issued on application of the California Consolidated Mining Company to review the action of the district judge in making the order of August 1st is quashed. The order made by the district judge October 6th, recalling the execution in case of Kerns, Receiver, v. McAulay and DeLashmutt, is hereby annulled and vacated. Costs incurred in both these cases are awarded in favor of the receiver and [583] against the California Consolidated Mining Company, and if not paid within ten days after filing a copy of this decision with the clerk of the district court in and for Shoshone county, execution may issue therefor. Stockslager, C. J., and Sullivan, J., concur.