U.S. Supreme Court CLARK v. WILLIARD, 292 U.S. 112 (1934)

[Page 292 U.S. 112, 127]

The situation was much the same in Merges v. Altenbrand, 45 Mont. 355, 123 P. 21. The charter of a solvent corporation had expired, and there was no sufficient ground for superseding the directors through the appointment of receivers. [Footnote 4]

[Page 292 U.S. 112, 138]

of Mieyr, a mere general creditor. Consequently the particular orders complained of by Williard and others were invalid as they had claimed. Determination of that question of state law gave adequate basis for disposition of the cause. It is enough to support the judgment and is not reviewable here. Discussion of federal questions was unnecessary, and views of the court in respect of them are not presently important.

In any event, it seems reasonably clear that the only federal question before the Supreme Court of Montana which may be open for our consideration concerns the effect of the Iowa statutes and court decree under which Clark became receiver. It accepted the view that his appointment or designation did not operate to vest him with adequate title to the property of the defunct company wherever situated, that 'such (an) involuntary assignment in aid of a statutory judicial proceeding will not be recognized outside of the jurisdiction of the appointment, where the rights of domestic creditors are involved, if the receiver has not obtained possession of the property and where the creditors have obtained rights or liens upon the property even after the appointment in the foreign jurisdiction.' Probably this conclusion was erroneous. It involved a federal question. At the most we should announce the correct rule with the reasons therefor and send the cause back to the Supreme Court of Montana for further proceedings not in conflict with our determination. But this Court is neither called upon nor can it, without impropriety, discuss mere questions of state law which may hereafter be presented for decision by the courts of Montana. It is not our function to suggest to state courts how they should interpret their own laws. Theirs is the duty of deciding such matters, ours requires forbearance from tendering advice in that regard.

The writ of certiorari should be dismissed. Footnotes

Footnote 1 National Surety Co. v. Cobb (C.C.A.) 66 F.(2d) 323; Marion Phoshate Co. v. Perry (C.C.A) 74 F. 425, 33 L.R.A. 252; Fitts v. National Life Association of Hartford, 130 Ala. 413, 30 So. 374; Riddell v. Rochester German Insurance Co., 35 R.I. 45, 85 A. 273; Morgan v. New York National Building & Loan Association, 73 Conn. 151, 46 A. 877.

Footnote 2 The insolvent corporation in Sterrett v. Second National Bank of Cincinnati, supra, was not to be dissolved until there had been a final settlement of the business. Pages 74, 75 of 248 U.S., 39 S.Ct. 27.

Footnote 3 9303. 'Upon the dissolution of any corporation, the district court of the county in which the corporation carries on its business, or has its principal place of business, on application of any creditor of the corporation, or of any stockholder or member thereof, may appoint one or more persons to be receivers or trustees of the corporation, to take charge of the estate and effects thereof, and to collect the debts and property due and belonging to the corporation, and to pay the outstanding debts thereof, and to divide the moneys and other property that shall remain over among the stockholders or members.'

Another section dealing with the appointment of receivers is 9301, subd. 5. 'A receiver may be appointed by the court in which an action is pending, or by the judge thereof: ...'In cases when a corporation has been dissolved, or is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights.'

By construction, that section has been limited to receivers appointed pendente lite.'It is a well-settled rule of law that there cannot be such a thing as an action brought distinctively and solely for the appointment of a receiver.' State v. District Court, 50 Mont. 259, 263, 146 P. 539, 540. A receivership is a provisional remedy. 'An action must be pending before a receiver can be appointed.' State v. District Court, supra.

All this according to our understanding has no relation to an application under section 9303, where the appointment of a receiver is the end and aim of the proceeding.

Compare the decisions in California under statutes identical in form; Henderson v. Palmer Union Oil Co., 29 Cal.App. 451, 156 P. 65; French Bank Case, 53 Cal. 495, 553; Havemeyer v. Superior Court, 84 Cal. 327, 365, 24 P. 121, 10 L.R.A. 627, 18 Am.St.Rep. 192; State I. & I. Co. v. San Francisco, 101 Cal. 135, 147, 148, 35 P. 549; Elliott v. Superior Court, 168 Cal. 727, 145 P. 101.

Footnote 4 Gilna v. Barker, 78 Mont. 357, 254 P. 174, it would seem, is even farther from the case at hand. A creditor brought suit against a domestic corporation for the liquidation of a debt. The trial court dismissed the complaint on the ground that suit was unnecessary after the corporation had been dissolved. That judgment was reversed. The court did not hold that there would be no occasion for a receivership thereafter. It left that question open. 'Counsel for defendants argue that plaintiff should have intervened in the case in which the court decreed a sale of the property of the defunct corporation, and should have asked for a receiver. He may have been entitled to that privilege, but, if so, it did not deprive him of the right to institute the instant case, reduce his claim to judgment, and take the chance of realizing on it.' Page 367 of 78 Mont., 254 P. 174, 178.