Morbeck v. Bradford-Kennedy Co.

SULLIVAN, C. J. This is an application to this court for an order declaring that tile judgment and order appealed from in the above-entitled ease were superseded by the taking of an appeal, and giving a bond on appeal in the sum of $300. The action was brought by respondents as minority stockholders of the Kidd Island Lumber Co. to procure the appointment of a receiver for the appellant, the Kidd Island Lumber Co., upon the ground that its affairs are being mismanaged and to cancel a conveyance of a large amount of timber land from said Lumber Co. to the appellant, the Bradford-Kennedy Co., upon the ground that the sale was made without any consideration therefor and was fraudulent and void. It appears from the record that summons was served on the Kidd Island .Lumber Co., the Bradford-Kennedy Co. and J. N. Ashburn, on the 26th of March, 1910. The other defendants were not served and did not appear. It also appears that default was entered against the appellants, and findings of fact and conclusions of law and a decree granting all the relief prayed for were made and entered. Appellants thereafter, on the 18th of May, made a motion to vaeate and set aside the default and judgment on certain specific grounds. The motion was heard and overruled and an order entered to that effect, from which order, as well as from the judgment, an appeal was taken. A cash bond of $300 was given on said appeal. The judgment provided for the appointing of a receiver, canceling said conveyance and granting other relief. The judgment, among other things, provides as follows: “And it is further ordered, adjudged and decreed that a receiver be appointed for the Kidd Island Lumber Co., a corporation, to take charge of all of its assets and property, real, personal and mixed, and to manage and control all of the [461] assets and property, real, personal or mixed, of the Kidd Island Lumber Oo., a corporation, under the direction of and until the further order of this court herein.” It appears from the transcript on the appeal that the property involved includes considerable real estate, over two million feet of lumber, sawmill, and much other personal property. The appellant on said appeal gave a cash bond for $300, and now contends, under the provisions of sec. 4817 of the Rev. Codes of Idaho, that said judgment is superseded and all proceedings are stayed and that appellant is entitled to have possession of said sawmill plant, lumber and other property claimed to have been purchased by it from the said Kidd Island Lumber Co., to manage and control, pending the appeal. Said sec. 4817 is as follows: “In cases not provided for in sections 4810, 4811, 4812 and 4813, the perfecting of an appeal by giving the undertaking, or making the deposit mentioned in section 4809, stays proceedings in the court below, upon the judgment or the order appealed from, except where it directs the sale of perishable property; in which case the court below may order the property to be sold and the proceeds thereof to be deposited, to abide the judgment of the appellate court; and except, also, where it adjudges the defendant guilty of usurping or intruding into, or unlawfully holding, a public office, civil or military, ’ within this state; and except, also, where the order grants, or refuses to grant, a change of the place of trial of an action.” The court by its judgment found that the sale and transfer of said property by the Kidd Island Lumber Co. to the Bradford-Kennedy Co. was fraudulent and void, and now it is contended that the Bradford-Kennedy Co. is entitled to the possession of all of said property pending the appeal upon giving a bond of $300. Application was made to the trial court for an order directing the receiver to relinquish possession of all of said property to the • appellants, which application was denied. The trial court evidently concluded that it would endanger the interests of respondents to turn all of said property to the appellants pending the appeal, [462] on the giving of a $300 bond; that it was imperatively necessary to the preservation of said property in statu quo, and that the receiver’s functions should not be suspended, especially so far as the preservation of said property pending the appeal was concerned. Sec. 949 of the Code of Civil Procedure of California was substantially the same as said sec. 4817 of our Rev. Codes. In the Matter of The Real Estate Associates, 58 Cal. 356, where it was contended that all actions in or under insolvency proceedings were stayed by the appeal, and therefore the receiver had no right to prosecute any suit as such receiver, and that the giving of a $300 appeal bond stayed all proceedings pending the appeal, the court decided against that contention, and held that the functions of the receiver were not suspended during the appeal. The legislature of California has since the date of said decision amended sec. 943, C. C. P., so as to provide for the suspension of an order appointing-a receiver, pending an appeal, by giving a proper undertaking on appeal. However, we have no such provision in our statutes. We think the rule laid down in the above-cited case is applicable to the ease here, and that the court did not err-in holding that the giving of said $300 bond did not suspend or supersede the appointment of a receiver. From the record in the case it clearly appears that it is necessary that the property should be preserved in statu quo as nearly as may be pending the appeal, in order to protect the interest of the-parties. In Charles Waters v. Robert N. Dunn, Judge, ante, p. 450, 110 Pac. 258, just decided by this court, in discussing the question whether the trial court had jurisdiction to suspend the-operation of an injunctive judgment pending an appeal to the supreme court, it was said: “We find no express authority in the statutes granting such jurisdiction; but where the rights of the parties ought in justice to be preserved in statu quo until the issue between them is finally determined on appeal, the court has the inherent power to and may in its sound discretion suspend the operation of an injunction during the appeal”; and in support. [463] of that proposition certain authorities are there cited. (See, also, 17 Ency. of Pl. & Pr., p. 872.) We think that the court has the inherent power to preserve the property in litigation pending an appeal, and if necessity requires it, may place the same in the hands of a receiver for that purpose. The trial court no doubt will see that the property is preserved by the receiver; therefore the motion of appellant in this court asking for an order declaring that the judgment and order appealed from was superseded by the taking of said appeal must be denied, and it is so ordered. Costs in this court are awarded to the respondents. Ailshie, J., concura.