The St. Louis & Sandoval Coal & Mining Co. v. Sandoval Coal & Mining Co.

Mr. Justice Dickey delivered the opinion of the Court: This was an action of ejectment, brought by the St. Louis and Sandoval Coal and Mining Company, against the Sandoval Coal and Mining Company, to recover the possession of a coal mine and its appurtenances, situated at Sandoval, Marion county, Illinois, the declaration alleging title in fee in the plaintiff. The defendant pleaded the general issue, and a special plea “that the plaintiff was not at the commencement of said suit, and is not now, a corporation, as by the said writ and declaration is above supposed.” The parties waived a jury, and the cause was tried by the court. The finding was for the defendant, and overruling a motion for a new trial, the court rendered judgment against the plaintiff, and the plaintiff appeals to this court. There is no- question but that the title to the property involved in this action was in the plaintiff at the time of the sale of the same by the receiver, and still is, unless that sale, and the decree in the cause in which the sale was made, passed the title to the purchaser under whom the defendant claims. The plaintiff company was, in December, 1877, duly incorporated under the laws of this State for the purpose of mining coal near Sandoval, Illinois, the capital stock to be $50,000. The corporation procured conveyances in fee of the property in controversy,1 and received by donation the mining right to considerable land in the vicinity, upon condition that the company would, within two years, sink a shaft to a paying vein of coal, and operate a coal mine there. On June 27, 1878, the corporation having incurred an indebtedness to one Frank Seymour, under a contract for sinking a shaft, and being insolvent, as was alleged, Francis H. Edwards, Isaac Main, and others, stockholders, and said Seymour, as a creditor, filed their bill in the Marion circuit court, against said company (the plaintiff herein) and all the stockholders and officers thereof who were not complainants, charging the above facts, with others, — such as, a waste of assets, by fraudulently giving to one Townsend $10,000 in stock for nothing, — and praying for the appointment of a receiver, to take and sell the property of the company and pay its debts. Summons was served on the company by delivering a copy of the same to said Isaac Main, one of its directors, the other officers being non-residents, as was alleged in the hill. The return to the summons showed that neither the president, clerk, secretary, superintendent, general agent, cashier nor principal of the company was found. This was the only service upon the corporation. Other defendants were all, either actually or constructively, served with process, or by publication. No one appearing for the corporation, a decree pro confesso was entered against it, as well as the other defendants not answering. The court found the allegations of the bill to be substantially true, and entered a decree dissolving the corporation, and appointed George W. Herod receiver, to take possession of and dispose of the property of the company, make conveyances to purchasers, and pay the debts. The receiver took possession and sold all of the property and mining rights to said Isaac Main, for $200, and made him. a deed, which sale was reported to and approved by the court, and Main afterwards sold and conveyed the property to the defendant company in this action. On writ of error the decree was reversed in all things except as to the appointment of the receiver, and the cause remanded. (St. Louis and Sandoval Coal and Mining Co. v. Edwards, 103 Ill. 472.) When the case came again to the circuit court, plaintiff in error answered the bill. The cause was again heard at the February term, 1883, of the circuit court, and a decree was again entered dissolving the corporation and confirming the appointment of the receiver, but no other sale of the property was made under this decree. At the August term, 1882, leave was given to the plaintiff to sue for said property. Demand was made for possession, and a suit in ejectment was brought, which was dismissed at the February term, 1883, and this action was brought to the August term without any further leave, and after the decree dissolving the corporation. The validity of the receiver’s conveyance of the property made under the decree of the circuit court appointing him, depends upon the fact whether that court had acquired jurisdiction of the defendant corporation, for the law is well settled that if the court has jurisdiction of the parties and subject matter of the controversy, and the party against whom the judgment or decree is rendered has had either actual or constructive notice of the pendency of the suit, no error can render the judgment void; but when jurisdiction is wanting, either as to the subject matter or parties, the judgment is a nullity. (Mulford v. Stalzenback, 46 Ill. 306.) The judgment or decree in such a case being void, all acts performed under it are void, and no right can be divested by it or acquired under the same. Campbell v. McCahan, 41 Ill. 45; Johnson v. Baker, 38 id. 98; Chambers v. Jones, 72 id. 275; Grand Tower Mining and Trans. Co. v. Schirmer, 64 id. 106; Haywood v. Collins, 60 id. 328; Chase v. Dana, 44 id. 262. As a general rule a judgment is void unless the court has jurisdiction of the defendant and of the subject matter of the suit. White v. Jones, 38 Ill. 159; Curtiss v. Brown, 29 id. 229; Pardon v. Dwire, 23 id. 572. But when the court has jurisdiction both of the subject matter and of the persons of the parties, a mere error or irregularity can not be taken advantage of collaterally. Adams v. Larimore, 51 Mo. 130; Wenner v. Thornton, 98 Ill. 156; Harris v. Lester, 80 id. 307; Wing v. Dodge, id. 564; Hernandez v. Drake, 81 id. 34. The case of St. Louis and Sandoval Coal and Mining Co. v. Edwards, supra, is decisive of this. In that case it was held that the service of the summons upon the defendant corporation by leaving a copy thereof with one of the complainants in the suit, although a director in such corporation, was void, and gave the court no jurisdiction over the corporation; and we adhere to the ruling in that case. The court having no jurisdiction of the party whose property was sought to be subjected to sale, its decree authorizing its sale is a nullity, • and may be attacked collaterally. It is urged that the court had at least legal power to make the order appointing the receiver, and authorize him to take possession of and sell the property of the corporation, and this court has so held in the case last above mentioned; and it is claimed that if the facts alleged in the bill were sufficient to give the court jurisdiction of the subject matter, and authorized it to appoint a receiver, its proceedings in making such appointment, even if erroneous, can not be called in question in a collateral action. It is a sufficient answer to say that the mere power to appoint a receiver pendente lite, to preserve property, does not include the power to authorize him to sell and convey real estate. The court may, on a proper showing, appoint a receiver to take charge of the assets of an insolvent corporation, and save the same from destruction or waste, before acquiring jurisdiction to adjudicate upon the rights of such corporation. In such case the receiver may be authorized to hold the same until the rights of the parties are settled and determined. The appointment of a receiver in such case is in the nature of an equitable attachment, whereby the court acquires, through its officer, the custody of property or assets, to be retained until it has acquired jurisdiction. The plaintiff in error, at the time of the sale, was not a party to the suit. The sale as against it was void. It could not be divested of its title by proceedings to which it was not a party. The subsequent decree could not relate back to and render valid that which was void. It could only sustain proceedings of sale made after the valid decree was made, and upon its authority. After a valid decree appointing a receiver for a private corporation, actions may be brought in its name, by leave of the court, against any one except the receiver, to try the legal title to property. It remains in being for the settling up of its affairs and having its property applied in the payment of its debts. (Life Association of America v. Fassett, 102 Ill. 315.) The statute relating to private corporations continues their corporate existence for two years after their powers have expired, by limitation or otherwise, for the purpose of collecting their debts and dispo~ing of their property. (Rev. Stat. chap. 32, sec. 10; Ramsey v. P. M. and M. F. Ins. Co. 55 Ill. 311.) Real estate is vested in a receiver only by a conveyance to him, in the absence of any statutory provision on the subject. (Chatauqua Bank v. Risley, 19 N. Y. 369.) The court that appointed th~ receiver and decreed the dissolution of the corporation, having authorized suit in its name to try the title to land claimed by it, the plea of nul tiel corporatiom is inapplicable, and under it the defendant can not take advantage of the decree for the dissolution of the ~orporation. It is further claimed, that if the sale and conveyance by the receiver are void, then the property in controversy is still in the custody of the court, and in the rightful possession of the receiver or his lessee. It is sufficient to say that the defendant does not hold possession of the property for the receiver, or as his lessee, but as his own. It follows from what has been s~id, that the court erred in finding ~gainst the plaintiff, and the judgment will be reversed. Judgment ~ever~ed.