State Journal Co. v. Commonwealth Co.

The opinion of the court was delivered by Horton, C. J.: 2. Receiver — irpoStmentC It is contended that the Commonwealth Company was not entitled to have a receiver appointed; therefore that the order making the appointment was erroneous, and that this company should be taxed with all the costs connected therewith. These costs aggregate over $2,000. As the receiver was appointed to receive and preserve the property, pendente lite, and as he was subsequently * ' •* * -i » discharged upon a bond executed voluntarily to the Journal Company, this company is in no situation to contest the costs of the receiver. Upon the approval of the bond this company obtained all of the property described in the mortgages. The bond was not compulsory, but optional only. (Babbitt v. Corby, 13 Kas. 612; Hoffmire v. Holcomb, 17 id. 378; Price v. Allen, 39 id. 476.) [98] The bond stipulated that the Journal Company would satisfy any judgment or decree obtained in the action by the Commonwealth Company, together with all the costs. 1- g||e-fore°-rt' ceiverapIn this connection, it is proper to observe that in view of the provisions of the chattel mortgages, the embarrassed condition of the Journal Company, and the trouble existing between the officers of the company, and considering that the value of its property, franchises, etc., largely depended upon the continuation of its business, the appointment of a receiver upon the allegations of the petition was almost a necessity. Section 254 of the code expressly provides that— “A receiver may be appointed in an action by a mortgagee for the foreclosure of his mortgage and sale of the mortgaged property, where it appears that the mortgaged property is in danger of being lost, removed or materially injured, or that the condition of the mortgage has not been performed, and that the property is probably insufficient to discharge the mortgage debt, and in all other cases where receivers have heretofore been appointed by the usages of the courts of equity.” If the Commonwealth Company had instituted an action against the Journal Company to recover the possession of the personal property covered by the chattel mortgages, as it might have done under its claim that the notes were due and unpaid, such a proceeding would have been more disastrous to the Journal Company than a receiver. It would have closed its office, and suspended the publication of its paper. It is next contended that the Commonwealth Company had no authority to buy the notes or mortgages sued on; that this action was wrongfully instituted, and that the Commonwealth Company cannot recover upon the notes or mortgages. The question of ultra vires is not raised by the pleadings. The answer alleges the payment of two of the notes, and denies the execution of the third, and also denies that the parties signing the third note had any authority to do so from the Journal Company. The answer further alleges a large indebtedness due to the Journal Company from Le Grand By [99] ington, who sold and transferred the notes, and also alleges a conspiracy between Le Grand Byington and the officers of the Commonwealth Company to take possession of and control the business of the Journal Company. There is an allegation in the answer “that the notes and mortgages were not purchased or obtained by the Commonwealth Company in the usual and ordinary course of business, or in good faith.” None of the allegations of the answer set forth the purpose for which the Commonwealth Company was formed, and the answer does not raise any question as to the power of that company to buy or hold the notes and mortgages. It appears from the testimony that Le Grand Byington purchased stock of the Commonwealth Company, and gave the notes and mortgages in payment therefor. The Journal Company had authority in carrying on its business to execute the notes and mortgages, and Byington had the right to purchase or hold the same. It is therefore doubtful whether the question of ultra vires has been properly presented by the pleadings, and whether the Journal Company, after receiving the benefit of the money for which the notes and mortgages were executed, could avoid payment to the Commonwealth Company, which received them for its stock. It is finally contended that the trial court committed error in refusing to grant the Journal Company a jury trial. In Clemenson v. Chandler, 4 Kas. 558, it was decided that— “In an action for a judgment on a note, and foreclosure of a mortgage securing it, and adjustment of the priority of liens, held that, on demand of defendant, the issues should have been sent to a jury, no reference of the case having been made.” In Cavenaugh v. Fuller, 9 Kas. 233, it was held that — “In a suit on a note and mortgage, where a personal judgment against the defendant is sought, and the answer sets up payment of the note, and the reply traverses the allegation of payment, the defendant, in an issue made up, is entitled to a jury, and to refuse a demand therefor is error.” In Bradley v. Parkhust, 20 Kas. 462, it was said: “So far as uniting two causes of action, in one of which [100] defendant may be entitled to a jury as a matter of right, and in the other not, we reply, that so far as the foreclosure is concerned it was long ago held in this court, that defendant was entitled to a jury, it being an action for the recovery of money, though not one for the recovery of money only. (Clemenson v. Chandler, 4 Kas. 558; Gen. Stat., p. 680, § 266.)” In Morgan v. Field, 35 Kas. 162, it was stated: “If issue had been joined upon the demand for money, a jury trial should have been awarded, as was decided in Clemenson v. Chandler, 4 Kas. 558; but no issue of fact was joined upon that question. The administrator of the estate of Dennis Morgan, deceased, made default. And the plaintiff in error did not deny the execution of the promissory note, nor question the right of the defendant in error to recover the amount claimed by him. The pleadings, therefore, admitted the allegations respecting the promissory note, and the right of defendant in error to recover judgment for the amount claimed, and left nothing to be tried except his right to have the mortgage foreclosed, and the lands sold in satisfaction of his claim.” Under the allegations of the answer, an issue was raised as to the payment of two of the notes, which entitled the Journal Company to a jury. The issue as to those notes was what amount, if anything was due thereon. This issue was submitted to the jury, and they found thereon $1,877.20. Therefore, as to two of the notes, the Journal Company has no complaint. The judgment rendered by the district court upon these two notes was $1,711.33. The court modified the verdict of the jury, but as the amount rendered was less than that returned by the jury, the Journal Company cannot object. ' when entitled to jury. As to the note of January 19, 1885, for $2,216, the special verdict of the jury was set aside.by the subsequent findings and judgment of the trial court. The court had authority to set aside the special verdict as to this note and grant a new trial, but the issues of fact joined upon that note should have been submitted again to a jury. The counsel for the Commonwealth Company insists that [101] there is no motion for a new trial before the court for consideration ; also, that the record does not show any final judgment or decree; and further, that the “case-made” has not been properly settled so as to preserve all of the proceedings. In all of these objections, counsel labors under a misapprehension. In the brief of the Journal Company there is an intimation that a new trial is not desired, but a demand is made for judgment upon the pleadings and testimony in favor of that company. Upon the oral argument, the counsel of the Journal Company stated if his company was not entitled to judgment under the provisions of § 559 of the code, that he insisted upon a new trial for the errors alleged in the record. As a motion for a new trial was filed and overruled in the court below, and the errors therein alleged have not been waived, the question for a new trial is fairly presented. The “case-made” contains the final judgment and decree of the trial court. The district judge is not required in authenticating a “case-made” to certify that it contains the pleadings, testimony, or other proceedings. (Eddy v. Weaver, 37 Kas. 540 and the cases there cited.) The judgment upon two of the notes for $1,711.33, is affirmed. The judgment for $2,477.23, on the note of January 19, 1885, is reversed on account of the refusal of the district court to grant the Journal Company a jury trial upon the issues framed upon that note. The costs in this court will be divided. All the Justices concurring.