E. Martin & Co. v. Kirby

By the Court, Norcross, J. (after stating the facts as above): The contention of counsel for the appellant that the liability of the appellant herein is secondary, and does not arise until the receiver has failed or refused to do some act which he is legally bound to do, may be conceded. Counsel for appellant mainly rely upon the following proposition: " The complaint charges a failure to pay over [214] certain sums to the various plaintiffs, and that is the only-breach charged. It must be shown that Kirby was legally liable to pay those sums, and his failure to pay is not a a breach for which this defendant is liable. Kirby was not liable to pay for the following reasons: (a) There had never been an accounting of his receivership, (b) There was never a valid order of distribution. ” There can be no question, we think, that the account filed by the receiver on the 30th day of December, 1908, was a final account. It was filed as a final account and contained all of the receipts and disbursements of the receiver and was a full statement of his transactions. In considering this account and the objections interposed thereto, the court took testimony and the entire matter was fully presented to the court. We agree with counsel for appellant in certain of his contentions relative to the order made upon this hearing. If the court had carried into its order the various matters discussed in the opinion of the trial judge, it would have been a complete disposition of the matter presented to the court for determination. The court should have specifically approved those portions of the account which it deemed proper and have specifically disallowed those items contained in the receiver’s account which the court referred to in its opinion as being illegal charges. There does not appear to have been any question as to the gross amount the receiver was required to account for. Neither the receiver nor the objecting creditors at the time suggested to the court that the order should be more specific. We need not determine whether the order in the form in which it was entered was appealable as it unquestionably would have been had the court specifically allowed or rejected all of the items of the account and directed a distribution of the funds remaining in the hands of the trustee. The orders of June 12, 1909, are not open to the objection that they do not direct the payment to certain creditors of specific amounts of money. These orders should [215] be considered in connection with the prior order sustaining the objections to the receiver’s final account. These orders are appealable, and if they were before us upon appeal the objections thereto made by counsel for appellant might or might not be well taken. It is sufficient for the purposes of the present case, which is collateral to the case of Blatt v. Cobweb Company, in which said orders were made, to say that they are not open to attack in this action. (Deegan v. Deegan, 22 Nev. 185; Van Fleet, Coll. Attack, 2, 3, 17.) The case of Deegan v. Deegan, supra, was an action brought upon the bond of the guardian for failure of the guardian to discharge the duties of his trust. The guardian had failed to account upon the order of the court and was removed for failure so to do, and another guardian appointed. This court said: "The objections in this case to the orders revoking the letters of the former guardian, and appointing the present one, is a collateral attack upon the judgment of the court in the guardianship matter. (Van Fleet, Coll. Attack, 2, 3.) In such a case the jurisdiction of the district court is conclusively presumed and evidence to the contrary is not admissible. (Black, Judgm. 271; Van Fleet, Coll. Attack, 841.)” Van Fleet on Collateral Attack, sec. 3, says: "Any proceeding provided by law for the purpose of avoiding or correcting a judgment, is a direct attack which will be successful upon showing the error; while an attempt to do the same thing in any other proceeding is a collateral attack, which will be successful only upon showing a want of power.” Again in section 17, p. 23, the author says: "A judgment must be final and on its merits, in order to bar any matter in res adjudicata, while each and every step taken or order made in the proceeding, whether it concerns the merits or not, is just as impervious to collateral attack as the final judgment on the merits. An interlocutory order, no matter how erroneous, if not void, will justify and protect all persons as completely as the final judgment itself. * * * Thus, interlocutory orders made [216] in administration proceedings are only 'prima facie correct in a direct proceeding to set them aside, but are conclusive in a suit on an administrator’s bond.” It cannot be said, we think, that the orders of June 12th, supra, were void. They were made after notice and hearing, and if the court committed error in making the same, the error could only be corrected by appeal or other direct attack. The receiver did not attempt in any way open to him to have the orders set aside and, hence, he is bound by them. Had the receiver obeyed these orders, and paid out the money to the creditors as directed, the orders would have been a protection to him in the event other creditors or parties to the proceeding sought to compel him to account to them for the money so paid out. (Hovey v. McDonald, 109 U. S. 150, 3 Sup. Ct. 136, 27 L. Ed. 888.) As the receiver is bound by these orders, so is the surety on his bond. (Deegan v. Deegan, supra; Treweek v. Howard, 105 Cal. 434, 39 Pac. 20; Douglass v. Ferris, 138 N. Y. 192, 33 N. E. 1041, 34 Am. St. Rep. 435.) Other questions presented by the record it is unnecessary to consider. It follows that the judgments should be affirmed. It is so ordered.