Central Loan & Trust Co. v. Campbell Commission Co., 173 U.S. 84 (1899)

Central Loan and Trust Company

v. Campbell Commission Company
No. 146

Argued and submitted January 17, 1899
Decided February 20, 1899
173 U.S. 84

ERROR TO AND APPEAL FROM THE SUPREME

COURT OF THE TERRITORY OF OKLAHOMA

Syllabus

The plaintiff in error, a Texas corporation, commenced an action in a court of Oklahoma against the defendant in error, a Missouri corporation, and caused a writ of attachment to be issued and levied upon five thousand head of cattle, claimed to be the property of the Missouri corporation. After such levy, service was made upon one Pierce as garnishee of the Missouri corporation. Pierce answered, denying that he was indebted to or held property of that company, and further set up an agreement under the provisions of which he had shipped to the pastures of that company a large number of cattle, the ownership to remain in him until full payment for the cattle. The cattle levied upon were of this number. He also set up a notice from one Stoddard of an assignment to him of the contract by the Missouri company. He further set up that he was entitled to the possession of the cattle, and asked that they should be returned to him with damages. With the consent of both sides, Pierce was appointed receiver of the cattle, and then service was made upon the Missouri corporation by publication, had in compliance with requirements of law. Stoddard then filed an interplea setting up rights of other parties. This was demurred to, but no action was had on the demurrer. The receiver sold the cattle, paid himself in full, and reported to the court that he had a balance in his hands subject to its order. Then the Missouri company filed pleas to the jurisdiction of the court, and other pleas were filed, setting up claims to the balance in the receiver’s hands. The Missouri company also set up that Pierce, by becoming receiver, had abandoned his claim to the ownership of the cattle. The trial court held that the territorial act authorizing the probate judge, as to debts not yet due, to order an attachment in the absence of the district judge was unconstitutional and void, and ordered the action dismissed. The supreme court of the territory held that the court below was wrong in this respect, but affirmed its judgment on the ground that an actual levy was necessary in order to give the court jurisdiction, and there had been none. The case being brought here, the Missouri corporation set up that this Court was without jurisdiction because the Intervenors in the trial court had not been made parties to the appeal. Held:

(1) That it was not necessary to make the intervenors parties.

(2) That property of the Missouri company had been levied on under the writ of attachment, and that the decision of the supreme court of the territory to the contrary was wrong.

(3) That the Oklahoma statute requiring an affidavit in its support as a prerequisite to the issuance of a writ of attachment does not involve the discharge of a judicial function, but is the performance of a ministerial duty.

(4) That the court acquired jurisdiction of the defendant corporation by constructive service, by foreign attachment, without its consent.

(5) That the territorial statute authorizing the issue of a writ of attachment against the property of a nonresident defendant is not repugnant to the Fourteenth Amendment to the Constitution.

This action was commenced on July 2, 1895, in the District Court of Noble County, Oklahoma, by the Central Loan & Trust Company, a Texas corporation, against the Campbell Commission Company, a Missouri corporation, to recover upon certain promissory notes not then due. Upon affidavit, a writ of attachment issued, and was levied upon five thousand head of cattle, as the property of the Campbell Company. After such levy, a summons in garnishment was served upon one A. H. Pierce, who answered that he was not indebted to, and held no property owned by or in which the Campbell Company had an interest. As "a further and special answer," Pierce set out a written agreement entered into between himself and the Campbell Company for the sale and shipment by him to that company of a specified number of cattle. This agreement provided that Pierce was to deliver at Pierce Station, Texas, a designated number of cattle, which the company agreed to ship to its pastures in the Indian Territory "at its own risk, and pay all freight and other expenses," the expenses to embrace the wages of a man to be put by Pierce with the cattle "to represent his interest in said cattle." It was recited in the contract that five thousand dollars had been paid at the signing of the agreement "as part of the purchase price," and the company further agreed to pay to Pierce interest at the rate of ten percent per annum on all unpaid amounts from the date of shipment of the cattle until full and final payment in accordance with the contract. The company also agreed to ship the cattle to market during the summer or fall of 1895, for account of Pierce, and to apply the proceeds of sale to payment for the cattle, until fully paid for at the rate of fifteen dollars per head, and it was also stipulated that title and ownership of the cattle should be and remain in Pierce until such payment.

In said "further and special answer" it was also alleged that the cattle upon which the writ of attachment had been levied formed part of the number covered by the contract above referred to, and had been shipped by Pierce to the pastures of the Campbell Company, but that they had never ceased to continue in the possession of Pierce, it being further claimed that the cattle were subject to a charge for unpaid purchase money, expenses for their care and keeping, etc. The answer further stated that notice had been received by Pierce from one T. A. Stoddard, trustee, that an assignment had been made of said contract to him by the Campbell Company, and a copy of the alleged assignment was annexed. It purported to "sell and assign all the title and interest in and to" the contract between Pierce and the Campbell Company, any profit which might be derived by Stoddard from carrying the contract into final execution to be applied by him as trustee to the payment, pro rata, of certain described notes. The garnishee also declared that, on July 12, 1895, receivers had been appointed of the assets of the Campbell Company, and the answer concluded with asking that Pierce might be discharged as garnishee.

With the answer to the garnishment there was also filed by Pierce what was termed an "interplea." It was therein in substance averred that the cattle which had been levied upon were wrongfully detained from Pierce, that he was entitled to their immediate possession, and he prayed that on the hearing of the interplea, judgment might be awarded for the return of cattle, with damages for their alleged wrongful seizure and detention. A motion was also filed on behalf of Pierce, "as garnishee and interpleader," to discharge the attachment substantially on the ground that the cattle belonged to Pierce, and that the latter was not indebted to the Campbell Company, and held none of its property.

On the date when this motion came on for hearing, the plaintiff filed an application for the appointment of Pierce as receiver, "to take charge of the property attached in this action, and sell the same in accordance with a certain written contract," attached as an exhibit, being the contract referred to in the answer of Pierce to the garnishment. The service of the writ of attachment was averred, and it was stated that the cattle which had been levied upon had been "under the care, custody, and control of the Sheriff of Noble County since the third day of July, 1895, when said attachment was levied," and it was further averred

that said A. H. Pierce claims no interest in said property or this suit except as set forth in said contract hereto attached, and is entirely friendly to all parties concerned in said action, and, as plaintiff and its attorneys are informed and believe, the appointment of said A. H. Pierce as receiver herein would be entirely satisfactory to the defendant and all other parties in said action.

The pecuniary responsibility of Pierce and his large experience as a dealer and raiser and shipper of cattle and other circumstances were set forth as warranting his appointment without bond to sell the cattle in the usual commercial way, instead of at public sale, and the application concluded as follows:

That it would be to the interest of all parties concerned to have A. H. Pierce appointed receiver to take charge of said steers, and sell the same to the best advantage, accounting to the court for all sales, and, after satisfying his claim under said contract, hold the money remaining in his hands subject to the final order of this Court.

That said A. H. Pierce has already shipped from five thousand head of steers so seized in attachment about three hundred and sixty head, and sold the same in market, and now holds the proceeds thereof, which should be accounted for by said A. H. Pierce along with other accounts of shipments.

An order appointing the receiver was thereupon made, the consent of the attorneys both of Pierce and the plaintiff being noted thereon, and Pierce qualified as receiver.

A summons which had been issued having been returned "Defendant not found," publication was had in compliance with the legal requirements.

Subsequently Stoddard, trustee, filed an interplea. Therein it was averred that the contract between Pierce and the Cambell Company had been made by that company for account of a firm styled George W. Miller & Son, and had been entered into in the name of the Campbell Company in order to secure that company for advances which had been made by it to Miller & Son; that, under an assignment by the Campbell Company to Stoddard, he was entitled to the proceeds of the sale of the cattle in the hands of the receiver after the claim of Pierce had been paid. Plaintiff demurred to this interplea on November 5, 1895, but no action was ever had thereon.

A report was filed by the receiver showing that he had sold the cattle, and from the proceeds had satisfied in full his claim under the contract of September, 1894, and that a balance was in his hands subject to the order of the court. Thereafter the Campbell Company filed a "plea to the jurisdiction," and subsequently filed an amended plea which stated seven grounds why the court was without jurisdiction, all of which will be hereafter referred to.

After this, George W. Miller and J. C. Miller filed an interplea in the action, claiming that they were the real contractors with Pierce in the agreement of September 8, 1894, and averred their ownership of the cattle, and that, if the contract had been assigned to Stoddard, it was done without their authority, and was void. It was prayed that the proceeds of the cattle be paid to them after the payment to Pierce of the amount of his claim. No issue was taken on this interplea.

On the same date that the Miller interplea was filed, the plaintiff filed an answer to the interplea of A. H. Pierce, averring, among other things, that Pierce, as a result of the receivership proceedings, had waived and abandoned all his claim in and to the ownership of the cattle levied on under the attachment. On December 16, 1895, the plea of the Campbell Company to the jurisdiction was heard upon the record, over objection and exception by plaintiff. The court overruled all the grounds assigned in the plea except the second, which asserted that there was a want of power in the probate judge to issue an order for attachment. As to such ground, it held that the act of the Territorial Assembly of Oklahoma conferring power upon the probate judge, as to debts not yet due, to order an attachment in the absence of the district judge from the county, was unconstitutional and void. It thereupon concluded that all the proceedings were void, the attachment was quashed, and the suit dismissed for want of jurisdiction, without prejudice to the Campbell Company. The Campbell Company excepted to the action of the court in overruling all the grounds of its plea to the jurisdiction but that referring to the power of the probate judge, and the plaintiff excepted to the action of the court holding that there was a want of power in the probate judge.

Error was prosecuted to the supreme court of the territory. That court, while concluding that the lower court was wrong in deciding that the probate judge was without authority to allow the attachment, yet affirmed the judgment below on the ground that, as an actual levy on the property of the defendant, Campbell Company, was necessary to give the lower court jurisdiction to determine the cause, and as there had been in law no such levy, therefore the court below was without jurisdiction, and had correctly dismissed the suit. The reasoning of the court in effect sustained the third ground of the motion to quash the attachment made by the Campbell Company. A petition for rehearing having been overruled, the cause was brought to this Court.