I If I Ti • I'l ~"rnrr •miiiftfniiii'niiiir
 
 fltW AND 
 
 The 
 
 Lawyers 
 
 O^opfRA TivE Publishing 
 
 rRoCHCSTCR. N.Y. 
 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 A tri:atise 
 
 ON THE 
 
 LAW OF RECEIVERS 
 
 BY 
 
 JAMES L. HIGH 
 
 FOURTH EDITION 
 BY 
 
 SHIRLEY T. HIGH 
 
 OF THE CHICAGO BAR, 
 
 EDITOR OF THE FOURTH EDITION OF HIGH ON INJUNCTIONS 
 
 CHICAGO 
 
 CALLAGHAN AND COMPANY 
 
 1910
 
 Entered according to Act of Congress, in the year 1876, by 
 
 JAMES I,. HIGH, 
 In the office of the I^ibrarian of Congress, at V/ashington. 
 
 Entered according to Act of Congress, in the year 1886, by 
 
 JAMES I,. HIGH, 
 In the office of the I^ibrarian of Congress, at Washington. 
 
 Entered according to Act of Congress, in the year 1894, by 
 
 JAMES I.. HIGH, 
 In the office of the I<ibrarian of Congress, at Washingtotu 
 
 Copyright, 1910, by 
 SHIRIvEY T. HIGH. 
 
 (010 
 
 E. R. ANDREWS PRINTING CO., ROCHESTER, N. Y.
 
 PREFACE TO FIRST EDITION 
 
 The following work is the completion of a series of text- 
 books upon the principal extraordinary legal and equitable 
 remedies now in general use, upon which the author has been 
 engaged, in connection with his professional labors, during the 
 past eight years. The present volume follows substantially 
 the same general plan of treatment adopted in the former vol- 
 umes of the series, and is believed to be the first effort ever 
 attempted to present the entire body of English and American 
 law upon the subject of receivers. An appendix of practical 
 forms is added, some of which have been used by the author in 
 his own practice, while others have been drawn from approved 
 precedents, and it is hoped that the whole may lend an addi- 
 tional value to the book. The author desires to express his 
 grateful acknowledgments to his professional brethren for the 
 very flattering reception accorded his previous works ; and also 
 requests them to direct his attention to any errors which may be 
 noticed in any of his published works, in order that they may 
 be corrected in future editions. 
 
 J. L. H. 
 Chicago, February 20, 1876. 
 
 iii 
 
 bt? i b» b b
 
 PREFACE TO SECOND EDITION 
 
 The growth of the law of receivers during the ten years 
 which have elapsed since the publication of the first edition of 
 this work has been very marked. Six hundred new cases, 
 which have been reported in the English, Irish and American 
 reports during that time, are embodied in this edition. The 
 principal additions have been to the chapters upon Actions by 
 and against Receivers, Receivers over Corporations, Railways, 
 Real Property and Mortgages, especially to the chapter upon 
 Railways. The law of receivers over railways has been largely 
 the growth of the last ten years, and it can not be said to have 
 wholly emerged from its formative period, and considerable 
 modifications of existing doctrines may be expected. This 
 chapter has been entirely rewritten and much enlarged, present- 
 ing several topics which are wholly new, including Preferred 
 Indebtedness of Railway Receivers, Actions against the Re- 
 ceiver and Receivers' Certificates. Considerable freedom has 
 been indulged in the criticism of doubtful authorities, but the 
 author has scrupulously endeavored to present the existing 
 state of the law upon the topics under discussion. 
 
 J. L. H. 
 
 Chicago, March, 1886. 
 
 iy
 
 PREFACE TO THIRT) EDITION 
 
 The second edition of this work appeared in March, 1886. 
 Since its piibHcation nearly five hundred cases bearing upon 
 the law of receivers have been published and appear in the 
 present edition. The entire work has been thoroughly revised 
 and the book has been much enlarged, the principal changes be- 
 ing in the chapters upon Actions, Corporations, Railways, 
 Judgment Creditors, Real Property and Mortgages. 
 
 In the preface to the second edition it was stated that the 
 law of receivers over railways, while largely the growth of 
 recent years, had not wholly emerged from its formative period, 
 and that considerable modifications of existing doctrines might 
 still be expected. The correctness of this statement is shown 
 in the manv new cases which have been embodied in the present 
 chapter upon Railways, especially upon the topics of Preferred 
 Debts, Actions against the Receiver and Receivers' Certifi- 
 cates, the doctrines pertaining to which have been largely modi- 
 fied as the result of the later decisions. No feature of railway 
 receiverships has been more prolific of litigation in recent years 
 than the extent to which the ordinary contract indebtedness of 
 railway companies may, in the event of a receivership, be pre- 
 ferred over the claims of mortgage bondholders. The tendency 
 of the later decisions of the Supreme Court of the United 
 States, as shown in the present edition, has been to restrict the 
 right to a preference to much narrower limits than had been 
 fixed by the earlier cases. 
 
 Unfortunately for investors in railway securities, by section 
 six of the act of Congress creating the Circuit Court of Ap- 
 peals, approved March 3, 1891, litigants in this class of cases 
 
 V
 
 VI PREFACE. 
 
 are deprived of the right of appeal to the Supreme Court of the 
 United States, since in such cases the original jurisdiction of 
 the circuit courts is ordinarily dependent solely upon the diverse 
 citizenship of the parties, and the judgment of the Circuit Court 
 of Appeals is made final, unless that court shall see fit to certify 
 to the Supreme Court questions of law upon which it desires 
 the instruction of that court. As the result of this unfortunate 
 legislation, nine different courts of appeal now exist which are 
 thus, in effect, made courts of last resort in the most important 
 litigations which come before the federal courts. Uncertainty 
 and want of harmony in the decisions of these courts must 
 necessarily result from this system, and it is believed that the 
 embarrassments thus arising will, at no distant day, lead to an 
 earnest effort to induce Congress to so amend the act in ques- 
 tion as to give to the Supreme Court the right of review in all 
 cases of railway foreclosures and of receiverships over rail- 
 ways. 
 Chicago, December, 1894. 
 
 J, L. H.
 
 PREFACE TO FOURTH EDITM 
 
 The third edition of this work was pubh'shed in December, 
 1894. It was the intention of the author to make no further 
 revisions himself but to leave to the present editor the task of 
 bringing out any new editions which might become necessary. 
 
 During the fifteen years which have elapsed since the publi- 
 cation of the third edition, the development of the law of re- 
 ceivers has been very marked. This growth may to a great 
 extent be attributed to the large number of receiverships which 
 were the direct outcome of the financial and economic disturb- 
 ances of the years immediately following the publication of the 
 last edition and which were just beginning to appear in the 
 reports at the time of its publication. This development has 
 been especially marked in the case of corporate and railway 
 receiverships, and more than one-third of the additional cases 
 cited in the present edition and of the new matter added to the 
 text is embodied in the two chapters which treat of these im- 
 portant subjects. Considerable additions have also been made 
 to other portions of the work, especially to the chapters upon 
 Possession, Functions, Actions, Liabilities, Mortgages and Ac- 
 counts. 
 
 In the preface to the third edition, the author, in referring to 
 the doctrine of preferred debts in railway receiverships, calls 
 attention to the tendency of the later decisions of the Supreme 
 Court of the United States to restrict rather than to extend 
 the right to a preference. During tHe past few years, this ten- 
 dency has been especially noticeable, both in the decisions of the 
 Supreme Court and of the Courts of Appeals of the various
 
 viii PREFACE. 
 
 circuits, and it may be safely asserted that the limit as regards 
 such allowances has been reached. 
 
 As opposed to this tendency to restrict the right to a prefer- 
 ence in receiverships of railways and other quasi-public corpo- 
 rations, there are to be found a number of well-considered de- 
 cisions of courts of high standing, in which the right to a 
 preference has been extended to cases of purely private cor- 
 porations. Whatever may be said of the justice of such allow- 
 ances in the one case if they are properly made in the other, 
 it is confidently believed, that without the aid of legislative 
 enactment, the doctrine of these authorities will not be gener- 
 ally extended to the case of purely private corporations. 
 
 Nearly fourteen hundred new cases have been added to the 
 present edition. These represent all the decisions bearing 
 upon the subject, which have appeared in the American, English 
 and Irish reports from the date of the publication of the third 
 edition down to the beginning of the present year. Two hun- 
 dred and thirty pages have been added to the text, exclusive of 
 the table of cases and of the index. Special attention has 
 been given to the index in the endeavor to make it as complete 
 and practical as possible without unnecessary prolixity and 
 cross-reference. As in the former editions, the section num- 
 bering remains unchanged, the new sections being indicated by 
 
 lettering. 
 
 SHIRLEY T. HIGH. 
 
 Chicago, January, 1910.
 
 CONTENTS. 
 
 CHAPTER I. 
 
 Section 
 
 Of the General Features of the Jurisdiction 1 
 
 CHAPTER n. 
 
 Of the Courts Exercising the Jurisdiction 40 
 
 I._What Courts May Appoint Receivers 40 
 
 II. — Relative Powers of State and Federal Courts 50 
 
 CHAPTER III. 
 
 Of the Selection and Eligibility of the Receiver 63 
 
 CHAPTER IV. 
 
 Of the Practice °2 
 
 I.— General Rules of Practice 82 
 
 II. — Time of Appointment 103 
 
 III.— Notice of the Application HI 
 
 CHAPTER V. 
 
 Of the Receiver's Bond and Liability Thereon 118 
 
 I.— Of the Bond 118 
 
 II.— Liability of Sureties 127 
 
 CHAPTER VI. 
 
 Of the Receiver's Possession 134 
 
 I. — Nature of Receiver's Possession 134 
 
 II, — ^Interference with Receiver's Possession 163 
 
 ix
 
 X CONTENTS. 
 
 CHAPTER VII. 
 
 Section 
 
 Of the Receiver's Functions 175 
 
 I. — General Nature of his Functions 175 
 
 II. — Sales by Receivers 191 
 
 CHAPTER VIII. 
 
 Of Actions by and against Receivers 200 
 
 I. — Principles Governing Actions by Receivers 200 
 
 II. — Pleadings and Proofs in Actions by Receivers 231 
 
 III. — Actions by Receivers in Foreign Courts 239 
 
 IV. — Defenses to Actions by Receivers 245 
 
 V. — Actions against Receivers 254 
 
 CHAPTER IX. 
 
 Of the Receiver's Liabilities 269 
 
 CHAPTER X. 
 
 Of Receivers Over Corporations 287 
 
 I. — Principles Governing the Jurisdiction 287 
 
 II. — Functions, Duties and Rights of Action of the Receiver. . 313 
 
 III. — Receivers of Insolvent Corporations 343 
 
 IV. — Receivers of National Banks 358 
 
 CHAPTER XI. 
 
 Of Receivers Over Railways 365 
 
 I. — Principles Governing the Jurisdiction 365 
 
 II. — Receivers in Aid of Mortgagees and Bondholders 376 
 
 III. — Functions and Duties of the Receiver 390 
 
 IV.— Preferred Debts 394a 
 
 V. — Actions against the Receiver 395 
 
 VI. — Receivers' Certificates 398c 
 
 CHAPTER XII. 
 
 Of Receivers in Aid of Judgment Creditors 399 
 
 I. — Principles on Which the Relief is Granted 399 
 
 II.— Of the Receiver's Title 440 
 
 III. — Of the Receiver's Functions and Rights of Action 453
 
 CONTENTS. Xi 
 
 CHAPTER XIIL 
 
 Section 
 
 Of Receivers Over Partnerships 472 
 
 I.— Principles on Which the Relief is Granted 472 
 
 II. — Receiver Upon Dissolution of the Firm 509 
 
 III. — Exclusion from Firm as Ground for Receiver 522 
 
 IV.— Receiver Upon Death of Partner 530 
 
 V. — Functions and Duties of the Receiver 538 
 
 CHAPTER XIV. 
 
 Of Receivers Over Real Property 553 
 
 I.— Principles Upon Which the Relief is Granted 553 
 
 II. — Receivers as Between Tenants in Common 60.3 
 
 III. — Receivers as Between Vendors and Purchasers 609 
 
 IV. — Functions of the Receiver 618 
 
 CHAPTER XV. 
 
 Of Receivers in Cases of Mortgages 639 
 
 I. — Principles Governing the Relief 639 
 
 II. — Inadequacy of Security and Insolvency of Mortgagor 666 
 
 III.— Receivers as Between Different Mortgagees 679 
 
 CHAPTER XVI. 
 
 Of Receivers in Cases of Trusts 692 
 
 I. — Principles Governing the Relief 692 
 
 II. — Receivers Over Executors and Administrators 706 
 
 III. — Receivers Over Estates of Infants 725 
 
 IV. — Receivers Over Estates of Lunatics 7ZZ 
 
 CHAPTER XVII. 
 
 Of Receivers in Connection with Injunctions 737 
 
 I. — The Remedies Compared 7Z7 
 
 II. — The Remedies as Applied to Corporations 749 
 
 III. — Creditors' Suits 755 
 
 IV. — Partnerships 760 
 
 v.— Real Property 772 
 
 CHAPTER XVIII. 
 
 Of the Receiver's Compensation 781
 
 Xii CONTENTS. 
 
 CHAPTER XIX. 
 
 Of the Receiver's Accounts 
 
 CHAPTER XX. 
 
 Of the Removal and Discharge of Receivers 820 
 
 I.— Removal for Cause ^ 
 
 II.— Final Discharge ~2 
 
 Section 
 ,.. 797
 
 TABLE OF CASES CITED. 
 
 THE RBFERENCES ARE TO THE PAGES. 
 
 Abbott V. Baltimore & Rappahan- 
 nock Steam Packet Co., 919, 923. 
 
 Abbott V. Straiten, 117, 615. 
 
 Acker, In re, 499. 
 
 Ackerman v. Ackerman, 235. 
 
 Ackland v. Gravener, 788, 789. 
 
 Adair v. Wright, 127, 805, 808. 
 
 Adams v. Hackett, 678, 710. 
 
 Adams v. Haskell. 214. 
 
 Adams v. Trust Co.. 74, 75. 
 
 Adams v. Woods, 259. 678, 710, 941, 
 944, 947, 960. 
 
 Addison v. Lewis, 525. 
 
 Adee v. Bigler, 591. 
 
 Adkins v. Edwards, 127. 
 
 Adler v. Milwaukee Patent Brick 
 Manufacturing Co., 343, 361. 
 
 Aetna Life Ins. Co. v. Broeker, 793. 
 
 Agra & Masterman's Bank v. Barry, 
 117, 745, 840. 
 
 Ainsley, In re, 259. 
 
 Akers V. Veal, 942. 
 
 Akrill V. Selden, 883. 
 
 Alabama Coal & Coke Co. v. 
 Schackelford, 349. 
 
 Alabama Iron & R. Co. v. Annis- 
 ton L. & T. Co.. 574. 
 
 Albany City Bank v. Schermerhom, 
 203, 204, 626, 627. 
 
 Albright V. Albright. 852. 
 
 Alden v. Boston, Hartford & Erie 
 
 R. Co., 74, 81, 467. 
 ."Mexander v. Maryland T. Co., 211. 
 Alexander v. Relfe, 255, 385, 387. 
 Alexandria Gas Co. v. Irish, 130, 
 
 134. 
 Alford V. Berkele, 136. 
 Allen V. Baxter, 246, 267. 
 Allen V. Chadburn, 44. 
 Alien V. Cooley, 98, 216. 
 Allen V. D. & W. R. Co., 479, 480, 
 
 983. 
 Allen V. Dillingham, 553. 
 Allen V. Harris, 61. 
 Allen V. Hawley, 663, 664, 666. 
 Allen V. Olympia L. & P. Co., 430, 
 
 431. 
 Allen V. Walsh, 392. 
 Allison V. Weller, 644. 
 Allyn V. Boorman, 710. 
 Alven V. Bond, 224, 227. 
 American Bank v. Cooper, 119, 252. 
 American C. Co. v. Jacksonville, T. 
 
 & K. W. R. Co., 200. 
 American Investment Co. v. Farrar, 
 
 827. 
 American Loan & Trust Co. v. Cen- 
 tral V. R. Co.. 162, 546. 
 American Loan & Trust Co. v. 
 
 South Atlantic & O. R. Co., 954, 
 
 959. 
 
 Xlll
 
 XIV 
 
 TABLE OF CASES CITED. 
 
 [references ABE TO PAGES.] 
 
 American Loan & Trust Co. v. To- 
 ledo, C. & S. R. Co., 461. 
 American Mortgage Co. v. Turner, 
 
 809. 
 American National Bank v. North- 
 western M. Life Ins. Co., 796, 818. 
 American Pig Iron S. W. Co. v. 
 
 German, 378. 
 American Steel & Wire Co. v. 
 
 Bearse, 297, 309. 
 .A.merican Trust & Savings Bank v. 
 
 McGettigan, 159, 161. 
 Ames V. Ames, 759, 760. 
 Ames V. Trustees of Birkenhead 
 
 Docks, 161, 171, 172. 
 Ames V. Union Pacific R. Co., 474, 
 
 500, 533. 
 Amy V. Manning, 601. 
 Anderson v. Anderson, 224, 225. 
 Anderson v. Buckley, 374. 
 Anderson v. Cecil, 129. 
 Anderson v. Chicago T. & T. Co., 
 
 228. 
 Anderson v. Condict, 540. 
 Anderson v. Fidelity & Deposit Co., 
 
 958. 
 Anderson v. Guichard, 866, 867. 
 Anderson v. Matthews, 38, 842. 
 Anderson v. Powell, 680. 
 Anderson v. Reed, 980. 
 Anderson v. Riddle, 25. 
 Anderson v. Treadwell, 629. 
 Andrews v. Betts, 28. 
 Andrews v. Knox Co., 199. 
 Andrews v. Paschen, 178. 
 .Andrews v. Smith, 491. 
 .Andrews v. Steele City Bank, 53, 
 
 430. 
 Angel V. Smith, 153, 154, 155, 161, 
 
 162, 610. 
 Angell, In re, 919, 976. 
 Angell V. Silsbury, 385, 646. 
 Anglo-Italian Bank v. Davies, 33. 
 Anonymous, 91, 93, 145, 191, 199, 
 315, 333, 718, 736, 775, 862, 874, 
 992. 
 
 Appleton Waterw^orks Co. v. Cen- 
 tral T. Co., 74. 
 Archambeau v. New York & N. E. 
 
 R. Co., 550. 
 Archambeau v. Piatt, 561. 
 Ardmore National Bank v. Briggs 
 
 M. & S. Co., 156, 159, 343. 
 Arkansas Central R. Co. v. State, 
 
 551. 
 Armstrong v. Ettlesohn, 455. 
 Armstrong v. Sanford, 980. 
 Armstrong v. Southwell, 776. 
 Armstrong v. Troutman, 455. 
 .Armstrong v. Warner, 287, 458. 
 Arnold, Petition of, 632. 
 Arnold v. Suffolk Bank, 306. 
 Arnold v. Weimer, 159. 
 Artisans Bank v. Treadwell, 125, 
 
 158. 
 Asheville Division No. 15 v. As- 
 ton, 389. 
 Ashurst V. Lehman, 4, 6, 135. 
 Astor V. Turner, 794, 819, 829. 
 Atchison v. Davidson, 385, 407, 436. 
 Atchison, T. & S. F. R. Co. v. 
 
 O shorn, 529. 
 .\tkins V. Petersburg R. Co., 514, 
 
 516. 
 Atkins V. Wabash, St. L. & P. R. 
 
 Co., 100, 488. 
 Atkinson v. Henshaw, 64, 65. 
 .A.tkinson v. Smith, 146. 
 Atlantic Trust Co. v. Chapman, 963. 
 Atlantic Trust Co. v. Consolidated 
 
 E. S. Co., 433. 
 Atlantic Trust Co. v. Dana, 302, 
 
 315, 389, 529. 
 .A.llantic Trust Co. v. Woodbridge 
 
 C. & I. Co., 515, 526. 
 .A.tlas Bank v. Nahant Bank, 360. 
 Atlas Savings & Loan Assn. v. 
 
 Kirklin. 731. 
 Attorney-General v. Atlantic M. L. 
 
 I. Co., 364. 
 Attorney-General v. Bank of Co- 
 lumbia, 100, 115, 432, 440.
 
 TABLE OF CASES CITED. 
 
 XV 
 
 [BBFBRBNCBS ABE TO PAGES.] 
 
 Attorney-General v. Clavin, 18. 
 
 Attorney-General v. Continental 
 Life Insurance Co., 222, 329, 436, 
 711. 915, 928, 956. 
 
 Attorney-General v. Day, 20. 
 
 Attorney-General v. Gee, 99. 
 
 Attorney-General v. Guardian Mu- 
 tual Life Insurance Co., 240, 400, 
 403, 427. 
 
 Attorney-General v. Life & Fire In- 
 surance Co., 421. 
 
 Attorney-General v. Mayor of Gal- 
 way, 116. 
 
 Attorney-General v. North America 
 Life Insurance Co., 427, 915, 953. 
 
 Attorney-General v. St. Cross Hos- 
 pital, 163, 164, 888. 
 
 Attorney-General v. Vigor, 212. 
 
 Attrill V. Rockaway Beach Improve- 
 ment Co., 975. 
 
 Augusta Ice Mfg. Co. v. Gray, 110. 
 
 Austin V. Figueira, 590. 
 
 Auten V. United States National 
 Bank, 456. 
 
 Averall v. Wade, 145. 
 
 Avery v. Blees Manufacturing Co., 
 434. 
 
 Avery v. Boston S. D. & T. Co., 
 230. 
 
 B. 
 
 Bacon v. Irvine, 358. 
 
 Baer v. McCullough, 543. 
 
 Bagby v. A., M. & O. R. Co., 277, 
 
 278. 
 Baggs V. Baggs, 750. 
 Bagley v. Illinois T. & S. Bank, 795, 
 
 807. 
 Bagley v. Scudder, 197. 
 Bailey v. Belmont, 216. 
 Bailey v. Lane, 602. 
 Bailey v. Mosher, 449. 
 Bailey v. O'Mahony. 48, 216 
 Bailey v. Ryder, 601. 
 Bailie v. Bailie, 138, 
 
 Bainbrigge v. Baddeley, 716, 718. 
 
 721. 
 Bainbrigge v. Blair, 855, 989. 
 Baird v. Turnpike Co., 37. 
 Baker v. Administrator of Backus, 
 2, 3, 18, 24, 100, 101, 123, 124, 343, 
 346, 348. 
 Baker v. Baker, 129. 
 Baker v. Bartol, 142. 
 Baker v. Carraway, 294. 
 Baker v. Cooper, 248, 252. 
 Baker v. County of King, 444. 
 Baldwin v. Eazler, 915, 924. 
 Baldwin v. Hosmer, 67, 371, 372. 
 Baldwin v. Spear, 156, 159. 
 Balfe V. Blake, 779. 
 Ball V. Mabry, 540, 543. 
 Ball V. Marske, 795, 806. 
 Ball V. Oliver, 64, 65. 
 Baltimore B. & L. Assn. v. Alder- 
 son, 63, 151, 378, 379. 
 Baltimore Bargain House v. St. 
 
 Clair, 10, 13, 24, 41, 132, 133. 
 Baltimore & O. R. Co. v. Burris, 
 
 557. 
 Baltimore & O. R. Co. v. Cannon, 
 
 356. 
 Baltimore & O. R. Co. v. Flaherty, 
 
 162. 
 Bangs V. Duckinfield, 417. 
 Bangs V. Gray, 412, 417. 
 Bangs V. Mcintosh, 265, 342, 345, 
 
 416. 
 Bank v. Duncan, 150. 
 Bank t. Kennedy, 446. 
 Bank v. McLeod, 277, 278. 
 Bank v. Motherwell Iron, etc. Co., 
 
 272. 
 Bank v. Rindge, 395. 
 Bank of Bethel v. Pahquioque Bank, 
 
 443, 446. 
 Bank of Commerce v. Central C. & 
 
 C. Co., 567, 568. 
 Bank of Florence v. United States 
 
 S. & L. Co., 14, 128, 132. 
 Bank of Kentucky v. Stone, 17.
 
 XVI 
 
 TABLE OF CASES CITED. 
 
 [BEFBRENCES ABE TO PAGES.] 
 
 Bank of Monroe v. Schermerhorn, 
 
 106, 122, 123, 579, 581, 899, 978, 
 
 981. 
 Bank of Montreal v. C, C. & W. R. 
 
 Co., 492, 565, 566, 568, 569, 570. 
 Bank of Montreal v. Thayer, 566, 
 
 570. 
 Bank of Niagara, In re, 961. 
 Bank of North America v. Wheeler, 
 
 243. 
 Bank of Ogdensburg v. Arnold, 792, 
 
 828. 
 Bank of Washington v. Creditors, 
 
 146. 
 Bank of Woodland v. Herow, 157. 
 Bank of Woodland v. Stephens, 827. 
 Bank of Wooster v. Spencer, 617. 
 Banks v. Potter, 139. 
 Barber v. International Co., 10, 99. 
 Barber v. Manier, 24. 
 Barbour v. National Exchange 
 
 Bank, 240, 427. 
 Barclay v. Quicksilver Mining Co., 
 
 368, 375. 
 Barker v. Clark, 869. 
 Barker v. Dayton, 261, 619. 
 Barker v. Wayne Circuit Judge, 103. 
 Barkley v. Lord Reay, 848. 
 Barley v. Gittings, 134, 277, 280. 
 Barlow v. Gaines, 127, 808. 
 Barnes v. Jones, 113, 667, 695. 
 Barnes v. Newcomb, 439. 
 Barnett v. Montgomery, 736. 
 Barrett v. Henrietta National Bank, 
 
 447. 
 Barrett v. Mitchell, 815. 
 Barron v. Mullin, 233. 
 Barry v. Briggs, 40. 
 Barry v. Kennedy, 47. 
 Barry v. McGhee, 537. 
 Bartlett v. Cicero L., H. & P. Co., 
 
 8, 304, 337. 
 Bartlett v. Wilbur, 272. 
 Barton v. Barbour, 294, 297, 516, 
 
 541. 
 
 Bartow Lumber Co. v. Enwright, 
 
 353. 
 Bassick v. Schoolfield, 812. 
 Basting v. Aukeny, 53. 
 Bateman v. Superior Court, 739. 
 Bates V. Brothers, 644, 645. 
 Battaile v. Fisher, 331, 961, 968. 
 Battersby, In re, 303. 
 Battersby v. Homan, 737. 
 Battershall v. Davis, 441. 
 Battery Park Bank v. Western C. 
 
 Bank, 93, 159, 314. 923, 937. 
 Battle V. Davis, 3, 32, 89, 246, 248, 
 
 249. 
 Bauer v. Haggerty, 350. 
 Baughman v. Reed, 749. 
 Baughman v. Superior Court, 993. 
 Baxter v. Hewes, 917, 959. 
 Bay State Gas Co. v. Rogers, 373. 
 Bayaud v. Fellows, 591, 799, 897. 
 Bayliss v. L., M. & B. R. Co., 513. 
 Bayne v. Brewer Pottery Co., 63, 
 
 97, 402. 
 Beach v. White, 588. 
 Beamish v. Austen, 597, 633, 737, 
 
 738. 
 Beard v. Arbuckle, 127. 
 Beaser v. City of Ashland, 17. 
 Beaumont v. Beaumont, 12, 18. 
 Beck V. Burdett, 588. 
 Becker v. Hoke, 355, 358. 
 Becker v. Torrance, 623. 
 Beckford v. Kemble, 887. 
 Beckwith v. Carroll, 935. 
 Beecher v. Bininger, 19, 74, 81, 82, 
 
 124. 
 Beecher v. M. & P. R. M. Co., 41, 
 
 790. 
 Beers v. The Chelsea Bank, 990. 
 Belknap Savings Bank v. Lamar L. 
 
 & C. Co., 378, 571. 
 Bell V. American Protective League, 
 
 153, 322, 326. 
 Bell V. L, C. & L. R. Co., 550. 
 Bell V. M'Loghlin, 111. 
 Bell V. Shibley, 240, 286, 398.
 
 TABLE OF CASES CITED. 
 
 XVll 
 
 [BEFEBENCES ABE TO PAGES.] 
 
 Bell V. Wood & Co., 349. 
 
 Bell's Estate, In re, 333. 
 
 Belmont v. Erie R. Co., 117, 342, 
 
 343, 892. 
 Belmont Nail Co. v. Columbia I. & 
 
 S. Co., 429. 
 Benedict v. St. J. & W. R. Co., 480. 
 Benepe-Owenhouse Co. v. Scheideg- 
 
 ger, 114, 133. 
 Benneson v. Bill, 98, 425. 
 Bennett v. Chapin, 924, 929, 960. 
 Bennett v. Keen, 400. 
 Bennett v. Northern Pac. R. Co., 
 
 546. 
 Bennett v. Smith, 684. 
 Benson, Ex parte, 498. 
 Bergen v. Little, 630. 
 Berkeley v. Kings College, 376. 
 Bernard v. Union Trust Co., 378, 
 
 569, 570. 
 Berney v. Sewell, 788, 833. 
 Bernheimer v. Converse, 281, 397. 
 Berry v. Brett, 286, 288, 390, 413. 
 Berry v. Jones, 932. 
 Berry v. Rood, 916, 919, 954. 
 Berry v. Wood, 408. 
 Bertie v. Lord Abingdon, 969. 
 Best V. Schermier, 819, 822, 844, 
 
 845. 
 Bevan v. White, 931. 
 Beverley v. Brooke, 6, 8, 9, 155, 
 
 840, 844, 985, 987. 
 Beytagh v. Concannon, 948. 
 Bibber-White Co. v. White River & 
 
 E. R. Co., 163, 164, 567, 571. 
 Bidlack v. Mason, 277. 
 Bidwell V. Paul, 806, 807. 
 Big Creek Stone Co. v. Seward, 
 
 386. 
 Bigbee v. Summerour, 759. 
 Bigelow V. Andress, 591, 897. 
 Bigelow z'. Draper, 251. 
 Bignell, In re, 925. 
 Bill V. New Albany, etc., R. Co., 6, 
 
 74, 84, 486. 
 Billard V. Erhart, 195. 
 
 Billings V. Robinson, 409, 411. 
 
 Bininger, In re, 85. 
 
 Birdsall v. Colie, 685, 686. 
 
 Birmingham & L. J. R. Co., In re 
 466. 
 
 Bisson V. Curry, 129, 130. 
 
 Bitting V. Ten Eyck, 109. 
 
 Bivins v. Marvin, 16. 
 
 Black V. Gentery, 146. 
 
 Blackall v. Morrison, 780. 
 
 Blackwell v. Life Association, 367. 
 
 Blair v. City of Chicago, 425. 
 
 Blair v. St. L., H. & K. R. Co., 259, 
 512, 516, 527, 528, 531. 
 
 Blake Crusher Co. v. Hew Haven, 
 181. 
 
 Blake v. State Savings Bank, 299. 
 
 Blakeney v. Dufaur, 11, 659, 705, 
 
 881. 
 Blatchford v. Ross, 343. 
 Block V. Estes, 240. 
 Blondheim v. Moore, 25, 129, 591 
 
 897. 
 Blood V. Blood, 28. 
 Bloodgood V. Clark, 122, 123, 579, 
 
 580, 581, 602, 900. 
 Blum V. Van Vechten, 181. 
 Blumenthal v. Brainerd, 537, 541, 
 
 559. 
 Blunt V. Clitherow, 212. 
 BIythe V. Gibbons, 50, 665. 
 Bodkin v. Merit, 53. 
 Boehm v. Wood, 762, 769. 
 Bogardus v. ]\Ioses, 806, 810, 811. 
 Boggs V. Brown, 555, 563. 
 Boid V. Dean, 630. 
 Boland v. Whitman, 269, 415. 
 Bolles V. Dufif, 52, 105, 802. 
 Bonner v. Hearne, 70. 
 Bonner v. Mayfield, 558. 
 Booth V. Clark, 2, 3, 271, 273, 651. 
 Borden z: Enterprise T. Co., 68. 
 Bories v. Union B. & L. Assn., 
 
 159. 
 Borton v. Brines-Chase Co., 68.
 
 XVlll 
 
 TABLE OF CASES CITED. 
 
 [eefekences aee to pages.] 
 
 Bosley v. Susquehanna Canal, 880, 
 
 882. 
 Boston Mercantile Co. v. Ould-Car- 
 
 ter Co., 114. 
 Boston Safe-Deposit & T. Co. v. 
 
 Chamberlain, 919, 954. 
 Bostwick V. Elton, 643, 900. 
 Bostwick V. Menck, 630, 635, 639, 
 
 640. 
 Bosvvorth v. St. Louis Terminal R. 
 
 Assn., 209, 311, 313, 314, 938, 979, 
 
 987. 
 Bound V. South Carolina R. Co., 
 
 514, 528. 
 Bowden v. Johnson, 448. 
 Bovven v. Brecon R. Co., 484, 
 Bowen v. Parkhurst, 588, 590. 
 Bowersbank v. Colasseau, 92. 
 Bowery Savings Bank v. Richards, 
 
 200. 
 Bowling V. Scales, 863. 
 Bowling Green Savings Bank v. 
 
 Todd, 159, 161. 
 Bowman v. Bell, 110, 125, 126. 
 Bowman v. Hazen, 57, 332. 
 Boyce v. Burchard, 667, 668, 903. 
 Boyce v. Continental Wire Co., 794, 
 
 818. 
 Boyd V. Cook, 38. 
 Boyle V. Bettws-Llantwit Colliery 
 
 Co., 813. 
 Boyle V. Townes, 260. 
 Brabazon v. Teynham, 214. 
 Braddock Brewing Co. v. Pfaulder 
 
 V. F. Co., 307. 
 Bradford v. Cooledge, 965. 
 Brady v. Furlow, 186. 
 Braman v. Farmers' L. & T. Co., 
 
 216, 916, 926. 
 Bramley v. Tyree, 37. 
 Brande v. Bond, 228. 
 Brandon v. Brandon, 775. 
 Brandt v. Allen, 173. 
 Brant, hi re, 24. 
 
 Erassey v. N. Y. & N. E. R. Co., 
 469. 
 
 Brasted v. Sutton, 823. 
 
 Brenan v. Preston, 694. 
 
 Brennan v. Kenny, 111 . 
 
 Brick Company v. Robinson, 123. 
 
 Bridgeport Development Co. v. 
 Tritsch, 358. 
 
 Brien v. Harriman, 70S, 931. 
 
 Brien v. Paul, 162. 
 
 Briggs V. Merrill, 187. 
 
 Briggs V. Neal, 13. 
 
 Brigham v. Luddington, 271, 274, 
 651. 
 
 Brigstocke v. Mansel, 735. 
 
 Brinckerhoflf v. Bostwick, 444. 
 
 Brinkman v. Ritzinger, 126, 806, 
 807. 
 
 Brisenden v. Chamberlain, 243. 
 
 Bristow V. Home B. Co., 131, 219, 
 818. 
 
 Bristowe v. Needham, 966. 
 
 British Linen Co. v. South Ameri- 
 can & M. Co., 804. 
 
 British Power T. & L. Co., In re, 
 50. 
 
 Britton v. M'Donnell, 744. 
 
 Broad v. Wickham, 191, 199. 
 
 Brockert v. Central Iowa R. Co., 
 552. 
 
 Brockert v. Iowa Central Ry. Co., 
 563. 
 
 Brockhurst v. Cox, 400. 
 
 Brocklebank v. East London Rail- 
 way, 496, 784. 
 
 Brodie v. Barry, 849. 
 
 Brooker v. Brooker, 858. 
 
 Brookfield v. Hecker, 895. 
 
 Brooks V. Greathed, 161, 162, 610. 
 
 Brooks V. Town of Hartford, 166. 
 
 Brouwer v. Appleby, 400. 
 
 Brouwer v. Hill, 389, 390, 400. 
 
 B rowel 1 v. Reed, 874. 
 
 Brower v. Brower, 948. 
 
 Brown. Ex parte, 524, 531, 537, 539, 
 559, 981. 
 
 Brown, In re, 335. 
 
 Brown v. Allebach, 87.
 
 TABLE OF CASES CITED. 
 
 XIX 
 
 [EEFEBENCES ABE TO PAGES.] 
 
 Brown v. Brink, 393. 
 
 Brown v. Brown, 304, 540. 
 
 Brown v. Chase, 21, 818, 819. 
 
 Brown v. French, 895. 
 
 Brown v. Gilmore, 641, 642. 
 
 Brown v. Hazlehurst, 945. 
 
 Brown v. New York & Erie Rail 
 
 road, 490, 496. 
 Brown v. Nolan, 745. 
 Brown v. Northnip, 3, 11, 881, 882 
 Brown v. O'Connor, 776. 
 Brown v. Ranch, 297, 298. 
 Brown v. Ring, 39, 800. 
 Brown v. Schieier, 447. 
 Brown v. Vandermeulen, 41. 
 Brown v. Wabash R. Co., 562. 
 Brown v. Warner, 560. 
 Brown, Receiver v. Gay, 563. 
 Browne's Estate, In re, 948. 
 Browning v. Bettis, 580, 602. 
 Bruce v. M. & K. R. R., 74. 
 Brundage v. Home S. & L. Assn , 
 
 111, 219, 607, 805, 933. 
 Brunnemer v. Cook & B. Co., 402. 
 Bruns v. Stewart Manufacturing 
 
 Co., 978. 
 Brush V. Jay, 708. 
 Bryan v. Cormick, 835, 836, 844. 
 Bryan v. Moring, 719, 7Zi. 
 Bryant v. Bull, 33. 
 Bryant v. Fitzsimmons, 691. 
 Brydon v. Stewart, 539. 
 Brynjolfson v. Osthus, 53, 346. 
 Buchanan v. Berkshire Life Insur- 
 ance Co., 35, 807, 818, 829. 
 Buchanan v. Comstock, Z3, 672, 675. 
 Buchanan v. Smith, 82. 
 Buck V. Piedmont & Arlington Life 
 
 Insurance Co., 83, 101, 367. 
 Buck V. Stuben, 12, 816. 
 Buch V. Stuben, 12. 
 Buckeye Engine Co. v. Donau Brew- 
 ing Co., 584. 
 Buckhannon & N. R. Co. v. Davis 
 
 546. 
 Buckley v. Baldwin, 129. 
 
 Buckley v. George, 219. 
 
 Buckwalter v. Whipple, 954. 
 
 Bufkin V. Boyce, 671. 
 
 Builders' & Painters' Supply Co. v. 
 Lucas, 14. 
 
 Bunbury v. Bunbury, 887. 
 
 Bunbury v. Winter, 798. 
 
 Burgess & Co. v. Martin, 114. 
 
 Burguieres Planting Co., In re, 937. 
 
 Burk V. Muskegon M. & F. Co 
 294, 296. 
 
 Burke v. Burke, 118, 931. 
 
 Burke v. Dillingham, 553. 
 
 Burke v. Ellis, 294. 
 
 Burleigh v. Chehalis County, 165. 
 
 Burlingame v. Parce, 820. 
 
 Burnham v. Bowen, 509, 511, 519. 
 
 Burr V. Smith, 284, 397. 
 Burroughs v. Bunnell, 915. 
 Burrowes v. Molloy, 801. 
 Burwell v. Farmers' & M. Bank, 
 
 97. 
 Bush V. Mattox, 16, 17. 
 Buster v. Mann, 962. 
 Buswell V. Supreme Sitting, 371. 
 Butler V. Sprague, 329, 711. 
 Butler's Estate, In re, 154. 
 Butterworth v. O'Brien, 401, 404 
 
 C. 
 
 C. S. & C. R. Co. V. Sloan, 36. 
 Cabaniss v. Reco M. Co., 129. 
 Cadle V. Baker, 450. 
 Cadle V. Tracy, 456. 
 Cadogan v. Lyric Theatre, 586. 
 Cagger v. Howard, 627. 
 Cagill V. Wooldridge, 189, 284. 
 Caillard v. Caillard, 129. 
 Cairns v. Chabert, 743, 913. 
 Cake V. Mohun, 50, 915, 916, 954. 
 Cake V. Woodbury, 50, 915 916 
 
 954. 
 Calkins v. Atkinson, 407, 894, 
 Callaghan v. Callaghan, 145. 
 Callaghan v. Reardon, 213.
 
 XX 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 Callanan v. Shaw, 33, 787, 829. 
 
 Callaway v. Powhattan Improve- 
 ment Co., 353. 
 
 Calvert v. Adams, 753. 
 
 Cameron v. Groveland Imp. Co., 34. 
 
 Cammack v. Johnson, 216. 
 
 Camp V. Barney, 548. 
 
 Campau v. Detroit Driving Club, 
 167, 168, 916. 
 
 Campbell v. Adams, 417. 
 
 Campbell v. Foster, 632. 
 
 Campbell v. Genet, 632. 
 
 Campbell v. Lloyd's, Barnett's & 
 Bosanquet's Bank, 804. 
 
 Campbell v. Parker, 233. 
 
 Campbell v. Spratt, 978. 
 
 Candler v. Candler, 600. 
 
 Cane v. Bloomfield, 777. 
 
 Cantwell v. Columbia Lead Co., 356. 
 
 Cape May & S. L. R. Co. v. John- 
 son, 195. 
 
 Capital City Water Co. v. Weather- 
 ly, 141. 
 
 Cardot v. Barney, 537, 539, 548. 
 
 Carey v. Giles, 52, 428. 
 
 Carlisle v. Berkley, 138, 917. 
 
 Carolina National Bank, Ex parte, 
 498. 
 
 Carpenter v. Northern Pac. R. Co., 
 88, 547. 
 
 Carr v. Houser, 224. 
 
 Carroll v. Pacific National Bank, 
 53. 
 
 Carrow v. Ferrior, 715, 878. 
 
 Carstarphen Warehouse Co. v. 
 Fried, 17. 
 
 Carswell v. F. L. & T. Co., 4, 322, 
 533. 
 
 Carter v. Dime Savings Bank, 72. 
 
 Carter v. Hightower, 594. 
 
 Carter v. Hoke, 769. 
 
 Cartwright's Case, 334. 
 
 Cary Bros. v. Dalhoff C. Co., 662. 
 
 Case V. Fish, 230. 
 
 Casey v. Galli, 448. 
 
 Casey v. La Societe de Credit Mo- 
 
 bilier, 444. 
 Casey v. Northern Pac. R. Co., 321, 
 
 324, 501. 
 Cassetty v. Capps, 755. 
 Cassidy v. Meacham, 584, 588, 589, 
 
 590. 
 Cassilear v. Simons, 174, 201. 
 Catlin V. Wilcox Silver-Plate Co., 
 
 276. 
 Central Appalachian Co. v. Buchan- 
 an, 8, 12, 289. 
 Central Railroad & Banking Co. V. 
 
 Farmers' L. & T. Co., 533. 
 Central National Bank v. Hazard, 
 
 572. 
 Central Trust Co. v. Chattanooga, 
 
 R. & C. R. Co., 181, 545, 818. 
 Central Trust Co. v. Cincinnati, J. 
 
 & M. R. Co., 507, 927. 
 Central Trust Co. v. Clark, 509, 
 
 511, 514. 
 Central Trust Co. v. Continental 
 
 Trust Co., 322, 325, 533, 534. 
 Central Trust Co. v. D. & R. G. R. 
 
 Co., 541, 542. 
 Central Trust Co. v. East T. L. Co., 
 
 321, 324. 
 Central Trust Co. v. East T., V. & 
 
 G. R. Co., 474, 509, 512, 515, 526, 
 
 539, 544, 545. 
 Central Trust Co. v. Marietta & N. 
 
 G. R. Co., 561. 
 Central Trust Co. v. New York 
 
 City & N. R. Co., 508. 
 Central Trust Co. v. Ohio Central 
 
 R. Co., 495. 
 Central Trust Co. v. Sheffield & B. 
 
 C. I. & R. Co., 572. 
 Central Trust Co. v. St. Louis, A. 
 
 & T. R. Co., 515, 543, 546. 
 Central Trust Co. v. Texas & St. 
 
 Louis Railway, 513. 
 Central Trust Co. v. Thurman, 513. 
 Central Trust Co. v. Valley R. Co., 
 
 527.
 
 TABLE OF CASES CITED. 
 
 XXI 
 
 [BEPBHENCES ABB TO PAGES.] 
 
 Central Trust Co. v. Wabash, St. L. 
 & P. R. Co., 165, 488, 491, 537, 
 539, 541, 919, 926. 
 
 Central Trust Co. v. Worcester Cy- 
 cle Co., 12. 
 
 Central Union T. Co. v. State, 195. 
 
 Chadbourn v. Henderson, 791. 
 
 Chadron Banking Co. v. Mahoney, 
 12. 
 
 V. Chadwick, 838. 
 
 Chafee v. Quidnick Co., 192, 194. 
 
 Chalmers v. Littlefield, 167, 294, 
 298. 
 
 Chamberlain v. N. Y., L. E. & W. 
 R. Co., 550. 
 
 Chamberlain v. O'Brien, 591, 636. 
 
 Chandler v. Brown, 410. 
 
 Chandler v. Cushing- Young S. Co., 
 972. 
 
 Chapman v. Beach, 682. 
 
 Chappell V. Akin, 868. 
 
 Chappell V. Boyd, 764. 
 
 Charlotte, C. & A. R. Co. v. C. & 
 L. N. G. R. Co., 534. 
 
 Charrington & Co. v. Camp, 726. 
 
 Chase v. Petroleum Bank, 287. 
 
 Chase's Case, 717, 731, 732. 
 
 Chattanooga Terminal Ry. Co. v. 
 Felton, 310, 488. 
 
 Chautauque County Bank v. Risley, 
 612. 
 
 Chautauque County Bank v. White, 
 612. 
 
 Cheek V. Tilley, 31, 886. 
 
 Chemical National Bank v. Hart- 
 ford Deposit Co., 326, 327, 444. 
 
 Cheney v. Fiske, 265. 
 
 Cheney v. INIaumee Cycle Co., 112, 
 161. 
 
 Cherry v. W. W. I. E. Co., 163, 175, 
 624. 
 
 Chesapeake, O. & S. R. R. Co.'s Re- 
 ceivers V. Smith, 543. 
 
 Chetwood, In re, 445. 
 
 Chetwood V. California National 
 Bank, 445. 
 
 Chetwood v. Coffin, 823. 
 
 Chicago & Allegheny Oil & Mining 
 
 Co. V. United States Petroleum 
 
 Co., 6, 10, 12, 718, 725, 911. 
 Chicago Deposit Vault Co. v. Mc- 
 
 Nulta, 216. 
 Chicago F. P. Co. v. Park National 
 
 Bank, 446. 
 Chicago, M. & St. P. R. R. Co. v. 
 
 Packet Co., 189. 
 Chicago & Southeastern R. Co. v. 
 
 Cason, 463. 
 Chicago & Southeastern Ry Co. v. 
 
 Kenney, 18, 34. 
 Chicago & Southeastern Ry. Co. v. 
 
 McBeth, 113. 
 Chicago & Southeastern Ry. Co. v. 
 
 St. Clair, 126. 
 Chicago Steel Works v. Illinois 
 
 Steel Co., 36. 
 Chicago Title & Trust Co. v. Brady, 
 
 241. 
 Chicago Title & Trust Co. v. Smith, 
 
 159, 624. 
 Childs V. Cleaves, 398. 
 Chinnery v. Evans, 801. 
 Chipman v. Sabbaton, 628. 
 Choctaw C & M. Co. v. Williams- 
 Echols D. G. Co., 67. 
 Christian Jensen Co., In re, 141, 
 
 156, 163. 
 Citizens' Commercial & Savings 
 
 Bank v. Bay Circuit Judge, 5, 
 
 181, 303. 
 Citizens' Savings Bank v. Person, 
 
 299. 
 City of Baltimore v. Chase, 778. 
 City Bank of Buffalo, In re, 438. 
 City of Chicago v. Beck, 36. 
 City of Fort Dodge v. M. & S. L. 
 
 Ry. Co., 491. 
 City of Los Angeles v. Los Angeles 
 
 C. W. Co., 937. 
 City National Bank v. Charles Bak- 
 er Co., 166. 
 City Pottery Co. v. Yates, 429.
 
 xxu 
 
 TABLE OF CASES CITED. 
 
 [EEFERBNCES ABE TO PAGES.] 
 
 City Water Co. v. State, 83, 430, 
 
 431. 
 Clark V. Bininger, 334. 
 Clark V. Bradley Co., 13, 598. 
 Clark V. Brockway, 292, 646, 647. 
 Clark V. Brown, 15, 934. 
 Clark V. Central R. & B. Co., 504, 
 
 506, 509, 511, 513. 
 Clark V. Chandler, 66, 190. 
 Clark V. Drew, 734. 
 Clark V. Fisher, 213. 
 Clark V. Louisville Water Co., 345. 
 Clark V. National Linseed Oil Co., 
 
 344, 347, 355. 
 Clark V. Raymond, 595. 
 Clark V. Ridgely, 122, 123, 718, 735, 
 
 910. 
 Clark V. Supreme Council, 68. 
 Clark and Bininger, In re, 74, 81. 
 Clarke v. Central R. & B. Co., 507, 
 
 977. 
 Clarke v. Thomas, 408. 
 Clegg V. Fishwick, 698. 
 Cleveland v. McCravy, 166. 
 Cleveland, C. & S. R. Co. v. Knick- 
 erbocker T. Co., 512, 515, 517, 
 526. 
 Clinkscales v. Pendleton M. Co., 
 
 141, 156, 157. 
 Clyde V. Richmond & D. R. Co., 
 
 473, 534. 
 Coal & Mining Co. v. Edwards, 
 
 350. 
 Coates V. Cunningham, 36. 
 Coates V. Wilkes, 581. 
 Coburn v. Ames, 993. 
 Cochran v. Pittsburg, S. & N. R. 
 
 Co., 74. 
 Cochrane, Ex parte, 161. 
 Cochrane, In re, 162. 
 Cockburn v. Raphael, 865. 
 Cockrill V. Abeles, 449. 
 Cockrill V. United States National 
 
 Bank, 456. 
 Coddington v. Bispham, 793. 
 Coddington v. Canaday, 238, 255. 
 
 Coddington v. Tappan, 671. 
 Codrington v. Johnstone, 798. 
 Codrington v. Parker, 833, 834, 835. 
 Coe V. New Jersey Midland R. Co., 
 
 520. 
 Cofer V. Echerson, 719, 721, 723. 
 Cogswell V. Second National Bank, 
 
 451. 
 Cohen, In re, 172, 173. 
 Cohen v. Gold Creek M. Co., 159, 
 
 623, 992. 
 Cohen v. Meyers, 35, 897, 591, 593, 
 
 594. 
 Cohen v. Morris, 591. 
 Cohnen v. Sweenie, 5. 
 Colburn v. Cooper, 950. 
 Colburn v. Yantis, 162. 
 Cole V. Oil-Well Supply Co., 168. 
 Cole V. O'Neill, 730. 
 Cole V. Philadelphia & E. R. Co., 
 
 87. 
 Cole V. Price, 132, 692. 
 Cole V. Satsop R. Co., 408. 
 Coleman, In re, 222, 342, 385. 
 Coleman v. Fisher, 61, 127. 
 Coleman v. Salisbury, 174. 
 Coler V. Board of Commissioners, 
 
 17. 
 Colgate V. Michigan Lake Shore R. 
 
 Co., 994. 
 Collier v. Sapp, 741, 742. 
 Collins V. Barker, 670. 
 Collins V. Case, 211. 
 Collins V. Gross, 787. 
 Collins V. Richart, 765. 
 Colonial Trust Co. v. Pacific P. & 
 
 N. Co., 543. 
 Colt V. Brown, 286, 287, 288. 
 Coltrane v. Templeton, 43, 93. 
 Columbia National Sand Dredging 
 Co. V. Washed B. S. D. Co., 17, 
 357, 359. 
 Columbia Wire Co. v. Boyce, 44. 
 Columbian Athletic Club v. State, 
 382.
 
 TABLE OF CASES CITED. 
 
 xxni 
 
 [BEFERENCES 
 
 Columbian Book Co. v. De Golycr 
 
 181. 
 Columbian Insurance Co., In re, 
 
 970. 
 Columbian Insurance Co. v. Stev- 
 ens, 423, 965. 
 Colvin, In re. 958, 959, 975, 985, 987, 
 
 988. 
 Combs V. Smith, 560. 
 Comer v. Felton, 184, 294. 
 Commercial National Bank v. 
 
 Burch, 53. 
 Commercial & Savings Bank v. Cor- 
 
 bett, 110, 818. 
 Commissioners v. Harrington, 772. 
 Commonwealth v. Eagle Fire Insur- 
 ance Co., 953. 
 Commonwealth v. Felton, 501. 
 Commonwealth v. Franklin Insur- 
 ance Co., Z22, 533. 
 Commonwealth v. Gould, 148. 
 Commonwealth v. Hide & Leather 
 
 Insurance Co., 181. 
 Commonwealth v. Order of Vesta, 
 
 343. 
 Commonwealth v. Penn G. B. & L. 
 
 Assn., 955. 
 Commonwealth v. Runk, 304, 424. 
 Commonwealth Fire Insurance Co., 
 
 In re, 915, 951, 956. 
 Compton V. Schwabacher, 246. 
 Comstock V. Fredcrickson, 277, 278. 
 Comstock V. McDonald, 696. 
 Comyn v. Smith, 213. 
 Cone V. Combs, 808. 
 Coney, In re, 33, 853. 
 Congdon v. Lee, 584. 
 Conger v. Sands, 645. 
 Conkling v. Butler, 74, 85, 319, 472. 
 Conley v. Deere, 160. 
 Connah v. Sedgwick, 598. 
 Connelly v. Dickson, 126, 806, 807, 
 Connor v. Allen. 696. 
 Conquest v. Bank, 16. 
 
 ABE TO PAGES.] 
 
 Conro V. Gray, 350. 
 
 Consolidated Barb Wire Co. v. 
 
 Stevenson, 135. 
 Consolidated T. L. Co. v. Kansas 
 
 City V. Co., 350. 
 Const V. Harris, 656, 687, 691. 
 Continental Clay & M. Co. v. Bry- 
 
 son, 129, 130. 
 Continental Trust Co. v. Toledo, 
 
 St. L. & K. C. R. Co., 500. 
 Convers v. Crosbie, 315. 
 Converse v. Ayer, 53, 397. 
 Converse v. Hamilton, 395. 
 Converse v. Mears, 281, 397. 
 Conwell V. Lawrence, 303. 
 Cook V. Citizens National Bank, 
 
 172, 197. 
 Cook V. Cole, 158, 291. 
 Cook V. Martin, 224, 225. 
 Cook V. Sharman, 962. 
 Cooke V. Gwyn, 10, 11, 881. 
 Cooke V. Town of Orange, 181, 253. 
 Cookcs V. Cookes, 93, 94. 
 Coolbaugh v. Herman, 979. 
 Cooney v. Cooney, 625. 
 Coope V. Bowles, 238, 267, 644. 
 Cooper V. Berney National Bank, 
 
 799. 
 Cooper V. Preston, 515, 517. 
 Cooper V. Reilly, 32. 
 Copper Hill Mining Co. v. Spencer, 
 
 978, 979. 
 Coquard v. National Linseed Oil 
 
 Co., 342. 
 Corbet v. Mahon, 117, 615. 
 Corbin v. Thompson, 720. 
 Corcoran v. Doll, 765, 912. 
 Cordele Ice Co. v. Sims, 16. 
 Corey v. Long, 3, 16, 17, 884, 946, 
 
 956. 
 Corn Exchange Bank v. Blye, 444. 
 Corning v. Siesel, 13. 
 Corrigan v. Trenton Delaware Falls 
 
 Co., 438, 119. 
 Cortelyeu v. Hathaway, 819, 822, 
 823, 844.
 
 XXIV 
 
 TABLE OF CASES CITED. 
 
 [EEFEBENCES ABE TO PAGES.] 
 
 Cotter V. Cotter, 38. 
 
 Coughron v. Swift, 16, 883. 
 
 Couper V. Shirley, 790, 964. 
 
 Courand v. Hanmer, 967. 
 
 Covell V. Fowler, 272, 394. 
 
 Covington Drawbridge Co. v. Shep- 
 herd, 362. 
 
 Cowan V. Failey, 372. 
 
 Cowdrey v. G., H. & H. R. Co., 494, 
 505. 
 
 Cowdrey v. The Railroad Company, 
 497, 919, 923, 925, 949, 959, 983. 
 
 Cowen V. Merriman, 558. 
 
 Cox V. Dickie, 408. 
 
 Cox V. Peters, 685. 
 
 Cox V. Volkert, 240, 286. 
 
 Coy V. Title G. & T. Co., 3, 100. 
 
 Cramer v. Her, 159, 161. 
 
 Crandall v. Lincoln, 403. 
 
 Crane v. Ford, 223. 
 
 Crane V. McCoy, 12, 85, 888. 
 
 Cranstown v. Johnston, 887. 
 
 Crawford v. Ross, 6, 975, 978, 979, 
 980. 
 
 Crawford v. Spurling, 34. 
 
 Creed v. Moore, 751. 
 
 Cremen v. Hawkes, 16, 17, 750, 884. 
 
 Creuze v. Bishop of London, 91, 116. 
 
 Crewe v. Edleston, 482. 
 
 Crews V. United States Car Co., 
 167. 
 
 Crine v. Davis, 624. 
 
 Crittenden v. Coleman, 591. 
 
 Crockett v. Crockett, 736. 
 
 Cronibie v. Order of Solon, 33. 
 
 Cronan v. District Court, 427. 
 
 Cronin v. McCarthy, 781, 912. 
 
 Cross V. Evans, 557. 
 
 Cross V. Will County Natl. Bank, 
 818, 842. 
 
 Croton Insurance Co., In re, 421. 
 
 Crow V. Red River County Bank, 
 
 799. 
 Crow V. Wood, 112, 753. 
 Crowder v. Moone, 110, 128. 
 
 Crumlish's Adm'r v. Shenandoah V. 
 
 R. Co., 139, 915, 919, 933, 955, 
 
 956. 
 Crutchfield v. Hunter, 302. 
 Culver V. Allen Medical Assn., 917, 
 
 919. 
 Culver V. Guyer, 114, 132. 
 Cummings v. Edwards, 806 
 Cummings v. Steele, 129. 
 Cunningham v. U. S. National Bank, 
 
 96. 
 Curling v. Marquis Townshend, 
 
 578. 
 Curling V. Townshend, 120. 
 Curran v. Craig, 305. 
 Curtis V. Leavitt, 3, 216, 387, 388. 
 Curtis V. Lewis, 402. 
 Curtis V. Mcllhenny, 238. 
 Gushing v. Perot, 396. 
 Cutter V. Pollock, 963, 969. 
 Cutting V. Florida R. & N. Co., 
 
 494. 
 
 D. 
 
 Dale V. Kent, 24, 35. 
 
 Dalliba v. Winschell, 769, 930, 956, 
 958. 
 
 Dalmer v. Dashwood, 835, 837, 844. 
 
 D'Alton V. Trimleston, 738. 
 
 Daniel v. Citizens' Fire Insurance 
 Co., 260. 
 
 Dann Manufacturing Co. v. Park- 
 hurst, 57, 222. 
 
 Darrow v. Lee, 851. 
 
 Darst V. The People, 199. 
 
 Darusmont v. Patton, 762. 
 
 Davelaar v. Blue M. I. Co., 129, 132, 
 586. 
 
 Davenport v. City Bank of Buffalo, 
 441. 
 
 Davenport v. Kelly, 623, 674. 
 
 Davenport v. Receivers, 524. 
 
 David V. Levy, 141. 
 
 Davies v. Cracraft, 333. 
 
 Davies v. Lathrop, 559.
 
 TABLE OF CASES CITED. 
 
 XXV 
 
 [references are to pages.] 
 
 Davis V. Atkinson, 919. 
 
 Davis V. Barrett, 62, 107, 138, 800, 
 
 801, 887. 
 Davis V. Browne, 123. 
 Davis V. Butters Lumber Co., 164. 
 Davis V. Dale, 810, 811. 
 Davis V. Duke of Marlborough, 3, 
 
 46, 607, 609, 731, 747, 748, 838, 856, 
 
 988. 
 Davis V. Duncan, 311, 561. 
 Davis V. Edwards, 36, 348, 592. 
 Davis V. Flagstaff S. M. Co., 342. 
 Davis V. Foster, 50. 
 Davis V. Gray, 471. 894. 
 Davis V. Grove, 689, 907. 
 Davis V. Ladoga Creamery Co., 238, 
 
 390. 
 Davis V. Reaves, 719. 
 Davis V. Shearer, S3, 54, 413. 
 Davis V. Stover, 291. 
 Davis V. Talbot, 238, 390. 
 Davis V. Taylor, 739. 
 Davis V. The Railroad Co., 81. 
 Davis V. United States, E. P. & L. 
 
 Co., 344. 
 Davy V. Gronow, 871. 
 Davy V. Scarth, 916. 
 Dawson v. Raynes, 148. 
 Dawson v. Yates, 763. 
 Day, In re, \62, 204. 
 Day V. Croft, 917. 
 Day V. Postal Telegraph Co., 153, 
 
 272. 
 Dayton v. Connah, 266. 
 Dayton Hydraulic Co. v. Felsen- 
 
 thall, 322, 325. 
 Dease v. Reilly, 942. 
 De Bemer v. Drew, 368. 
 Decker v. Gardner, 306, 554. 
 Deford v. Macwatty, 231. 
 De Forrest v. Coffey, 299, 300. 
 Defries v. Creed, 139, 141, 157. 
 De Groot v. Jay, 294, 295. 
 Dehon v. Foster, 887. 
 Delaney v. Tipton, 870. 
 Delany v. Mansfield, 208. 
 
 Delaware, Lackawanna & Western 
 
 R. Co. V. Erie R. Co., 466. 
 De Leonis v. Walsh, 58. 
 Delozier v. Bird, 192. 
 Demain v. Cassidy, 331. 
 Deming v. New York Marble Co., 
 
 183. 
 Denison, In re, 234. 
 Denniston v. Chicago, Alton & St. 
 
 Louis R. Co., 515. 
 Denton v. Baker, 444. 
 Denver & R. G. R. Co. v. Gunning, 
 
 561. 
 Des Moines Gas Co. v. West, 820. 
 Detroit & Toledo S. L. R. Co. v. 
 
 Campbell, 469. 
 Devendorf v. Beardsley, 286, 398, 
 
 415, 416. 
 Devendorf v. Dickinson, 2, 3, 243, 
 
 966. 
 De Visser v. Blackstone, 153, 191, 
 
 781. 
 Devlin V. Hope, 116. 854. 
 Devoe v. Ithaca & Owego R. Co., 
 
 134, 433. 
 De Walt V. Kinard, 719. 
 De Winton v. Mayor of Brecon, 
 
 161, 171, 319, 481. 
 De Wolf V. Royal Trust Co., 322, 
 
 323. 
 Diamond Match Co. v. Taylor, SO. 
 Dick V. Laird, 700. 
 Dick V. Struthers, 251. 
 Dickens v. Dickens, 696. 
 Dickerson v. Van Tine, 603, 604. 
 Dickey v. Reed, 199. 
 Dickinson v. Saunders, 380. 
 Billing V. Foster, 142, 615. 
 Dillingham v. Hawk, 542, 544. 
 Dillingham v. Moran, 916. 
 Dillingham v. Russell, 543. 
 Dixon V. Dixon, 193. 
 Dixon V. Rutherford, 229. 
 Dobbin v. Adams, 73Z. 
 Dobson V. Simonton, 351.
 
 XXVI 
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Dodge V. Pyrolusite Manganese Co., 
 
 591. 
 Doe V. Northwest C. & T. Co., 350. 
 Doe V. Northwestern C. & T. Co., 
 
 378. 
 Dollard v. Taylor, 41, 580, 602. 
 Dollins V. Lindsay, 595. 
 Donahue v. Quackenbush, 225. 
 Donald v. Manufacturers' Export 
 
 Co., 348. 
 Doolittle, In re, 499. 
 Dorsey v. Sibert, 314. 
 Dougherty v. Jones, 978. 
 Dougherty v. McDougald, 858. 
 Douglass V. Cline, 519, 787. 
 Dow V. M. & L. R. Co., 480. 
 Dowling V. Hudson, 135. 
 Downing v. Dunlap, Coal I., & R. 
 
 Co., 353. 
 Downs V. Allen, 320. 
 Downs V. Farmers' Loan & Trust 
 
 Co., 843. 
 Downs V. Hammond, 414. 
 Drake v. Goodrich, 770. 
 Drake v. Thyng, 960. 
 Drakeford v. Adams, 198. 
 Drennen v. Mercantile T. & D. Co., 
 
 380. 
 Drever v. Maudesley, 327. 
 Drew V. Town of Geneva, 17. 
 D re wry v. Barnes, 17, 47, 884. 
 Drey v. Watson, 919. 
 Dreyspring v. Loeb, 141. 
 Driver v. Lanier, 239. 
 Drought V. Percival, 750. 
 Drury v. Roberts, 34, 688, 980. 
 Dubois V. Bowles, 792. 
 Dubois V. Cassidy, 635. 
 Duckworth v. Trafford, 121. 
 Dudley v. Dakota H. S. Co., 348. 
 Dugger V. Collins, 169. 
 Dumville v. Ashbrooke, 485, 895. 
 Duncan v. Campau, 40, 759, 760. 
 Dunham v. Byrnes, 638. 
 Dunlap V. Hedges, 818. 
 Dunn, Ex parte, 9, 470. 
 
 Dunn V. McNaught, 677, 905. 
 Durant v. Crowell, 818. 
 Durward v. Jewett, 371, 430. 
 Duryee v. United States C. S. Co., 
 
 160. 
 Dutton V. Thomas, 602. 
 DuVal V. Marshall, 862. 
 Dykman v. Keeney, 450. 
 Dysart v. Brown, 229. 
 
 Eagle Iron Works, In re, 91, 92, 
 101, 116, 440. 
 
 Eames v. Doris, 393, 894. 
 
 Earle v. Humphrey, 294, 296. 
 
 East Line & R. R. R. Co. v. Texas, 
 461. 
 
 East Tennessee, V. & G. R. Co. v. 
 Atlanta & F. R. Co., 75. 
 
 East & West T. Lumber Co. v. 
 Williams, 38. 
 
 Eastern & Midlands Railway Com- 
 pany, In re, 518. 
 
 Eastern Trust & B. Co. v. Ameri- 
 can Ice Co., 791, 794. 
 
 Eastman v. Cain, 60. 
 
 Easton v. Houston & T. C. R. Co., 
 535, 926. 
 
 Eaton & Hamilton R. Co. v. Var- 
 num, 36. 
 
 Eau Claire Canning Co. v. Western 
 Brokerage Co., 36. 
 
 Eckhardt Mfg. Co., In re, 93, 101. 
 
 Ecklund v. Willis, 794. 
 
 Eddy V. Lafayette, 546. 
 
 Edee v. Strunk, 240. 
 
 Edison v. Edison U. P. Co., 353, 
 355, 433. 
 
 Edrington v. Pridham, 206. 
 
 Edwards v. Edwards, 139, 141, 157. 
 
 Edwards v. National W. G. J. Assn., 
 271, 274. 
 
 Edwards v. Norton, 167, 169. 
 
 Edwards v. Standard Rolling Stock 
 Syndicate, 804.
 
 TABLE OF CASES CITED. 
 
 XXVll 
 
 [references ABE TO PAGES.] 
 
 Eel River R, Co. v. State, 374. 
 Egan V. North American L. Co., 
 
 296. 
 Eichman v. Hersker, 53, 54. 
 Eisenmann v. Thill, 74, 11 . 
 Elderkin v. Peterson, 53, 408. 
 Elk Fork Oil & Gas Co. v. Foster, 
 
 24, 110, 954, 962. 
 Elkhart Car Works v. Ellis, 309. 
 Ellard v. Cooper, 993. 
 Ellett V. Newman, 849. 
 Ellicott V. United States Insurance 
 
 Co., 436, 437. 
 Ellicott V. Warford, 3, 4, 11, 881, 
 
 987. 
 Ellis V. Boston, Hartford & Erie R. 
 
 Co., 8, 496, 880. 
 Ellis V. Little, 216, 321, 445, 447. 
 Ellis V. Vernon I.. L. & W. Co., 
 
 167, 168, 377. 
 Ellis V. Warsaw, 986. 
 Elmira Mechanics' Society v. 
 
 Stanchfield, 795. 
 Elwood V. First National Bank, 451, 
 
 454. 
 Embree v. Shideler, 413, 414. 
 Emeric v. Alvarado, 37. 
 Emerson v. Gaither, 449. 
 Emerson and Wall's Appeal, 719. 
 Emmons v. Garnett, 35. 
 Empire City Bank, In re, 100, 376. 
 Empire Distilling Co. v. M'Nulta, 
 
 301, 322. 
 Empire Hotel Co. v. Main, 886. 
 Ensley Development Co. v. Powell, 
 
 129. 
 Ephraim v. Pacific Bank, 935. 
 Equitable Life Assurance Society v. 
 
 Brown, 14. 
 Equitable Trust Co. v. Wilson, 53, 
 
 55. 
 Erickson v. Nesmith, 395. 
 Erie R. Co. v. Heath, 376. 
 Erskine v. Mcllrath, 557, 558. 
 Erwin v. Davenport, 537. 
 Esch V. White, 824. 
 
 Eslava v. Crampton, 825. 
 Estate of St. George, In re, 982. 
 Esterlund v. Dye, 781. 
 Etowah Mining Co. v. Wills Valley 
 
 M. & M. Co., 848. 
 Euphrat v. Morrison, 799. 
 Eureka Mining, S. & P. Co. v. 
 
 Lewiston N. Co., 63, 825. 
 Evans, Ex parte, 139, 141, 156. 
 Evans v. Coventry, 112, 366. 
 Evans v. Nellis, 274, 392, 395. 
 Evans v. Trimountain IMutual Fire 
 
 Insurance Co., 420. 
 Evansville & St. Louis R. Co. v. 
 
 Wilson, 528. 
 Evelyn v. Lewis, 161, 163, 164, 294, 
 
 304, 888, 889. 
 Everett v. The State, 247. 
 Express Co. v. Railroad Co., 560. 
 Eyre v. Eyre, 171. 
 Eyre v. M'Donncll, 224, 227. 
 Eyton V. Denbigh, Ruthin & Cor- 
 
 wen R. Co., 470, 471. 
 
 Fagan v. Boyle I. M. Co., 302. 
 
 Failey v. Fee, 67, 371. 
 
 Failey v. Talbee, 388. 
 
 Fairbairn v. Fisher, 33, 34, 862, 863, 
 869. 
 
 Fairburn v. Pearson, 676. 
 
 Falk V. Janes, 277, 279. 
 
 Falkenbach v. Patterson, 238. 
 
 Falmouth National Bank v. Cape 
 Cod S. C. Co., 591. 
 
 Farley v. St. P., M. & M. R. Co., 
 472. 
 
 Farmers Bank v. Beaston, 157, 159, 
 183. 
 
 Farmers' Loan & Trust Co. v. Bank- 
 ers & M. T. Co., 378. 
 
 Farmers' Loan & Trust Co. v. Bur- 
 lington & S. W. R. Co., 535. 
 
 Farmers' Loan & Trust Co. v. Cape 
 Fear & Y. V. R. Co., 97, 526.
 
 XXVlll 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 Farmers' Loan & Trust Co. v. Cen- 
 tral R. & B. Co., 491. 
 
 Farmers' Loan & Trust Co. v. Cen- 
 tral Railroad, 561, 562, 920, 927, 
 971. 
 
 Farmers' Loan & Trust Co. v. Cen- 
 tralia & C. R. Co., 566, 569, 57L 
 
 Farmers' Loan & Trust Co. v. Chi- 
 cago & A. R. Co., 522. 
 
 Farmers' Loan & Trust Co. v. De- 
 troit, B. C. & A. R. Co., 529. 
 
 Farmers' Loan & Trust Co. v. 
 Eaton, 495. 
 
 Farmers' Loan & Trust Co. v. Funk, 
 393. 
 
 Farmers' Loan & Trust Co. v. 
 Grape Creek Coal Co., 378. 
 
 Farmers' Loan & Trust Co. v. 
 Green, 507. 
 
 Farmers' Loan & Trust Co. v. 
 Meridian Waterworks, 469. 
 
 Farmers' Loan & Trust Co. v. 
 Minneapolis Engine & Machine 
 Works, 636. 
 
 Farmers' Loan & Trust Co. v. 
 Nestelle, 528. 
 
 Farmers' Loan & Trust Co. v. New- 
 man, 535. 
 
 Farmers' Loan & Trust Co. v. 
 Northern Pacific R. Co., 102, 527, 
 528, 529, 534, 495, 975. 
 
 Farmers' Loan & Trust Co. v. 
 Oregon Pac. R. Co., 489. 
 
 Farmers' Loan & Trust Co. v. 
 Petitioner, 571. 
 
 Farmers & Mechanics Bank v. 
 Jenks, 287, 407, 412. 
 
 Farmers & Merchants Bank v. Ger- 
 man National Bank, 115, 132. 
 
 Farmers & Merchants Insurance 
 Co. V. Needles, 272, 275. 
 
 Farmers' National Bank v. Backus, 
 219, 818. 
 
 Farmers Trust Co. v. Prudden, 824. 
 
 Farnsworth v. Wood, 392. 
 
 Farran v. Morris, 980. 
 
 Farris v. Receivers, 308. 
 
 Farsow v. Gorham, 36. 
 
 Farwell v. Great Western Tel. Co., 
 
 259, 315, 357, 385. 
 Fassett v. Tallmadge, 119. 
 Faulkener v. Daniel, 72,2>, 833, 834. 
 Favorite v. Deardoff, 798. 
 Fawcett v. Supreme Silting, 66, 
 
 371. 
 Fay V. Erie & Kala'mazoo Railroad 
 
 Bank, 428, 441, 989. 
 Featherstone v. Mitchell, 743. 
 Fellows V. Heermans, 10, 32, 41. 
 Felton V. Ackerman, 310, 312. 
 Felton V. Felton, 942, 949. 
 Fenton v. Lumberman's Bank, 116. 
 Ferguson v. Dent, 962. 
 Fernald v. Spokane & B. C. T. Co., 
 
 70. 
 Ferrior, In re, 878. 
 Ferry v. Bank of Central New York, 
 
 441, 975, 991. 
 Fessenden v. Woods, 629, 631. 
 Fidelity Insurance, T. & S.-D. Co. 
 
 V. Roanoke Iron Co., 378. 
 Fidelity T. & S. V. Co. v. Mobile 
 
 S. R. Co., 499. 
 Fidelity Title & T. Co. v. Schenley, 
 
 232. 
 Field V. Jones, 180, 182, 616, 985, 
 
 986. 
 Field V. Ripley, 128. 
 Fields V. United States, 333. 
 Fifield V. Northern Railroad, 539. 
 Fifth National Bank v. P. & C. S. 
 
 R. Co., 456, 975. 
 Fifth National Bank v. Pierce, 792. 
 Fifty-four First Mortgage Bonds, 
 
 In re, 100, 489. 
 Filkins v. Nunnemacher, 272. 
 Finance Co. v. Charleston, C. & C. 
 
 R. Co., 96, 100, 509, 514, 517, 527, 
 
 542. 
 Finch V. Houghton, 825. 
 Fincke v. Funke, 703. 
 Fingal V. Blake, IZZ, 734.
 
 TABLE OF CASES CITED. 
 
 XXIX 
 
 [BEFEKENCES AKE TO PAGES.] 
 
 Fink V. Montgomery, 26, 691. 
 
 Finney v. Guy, 274, 395. 
 
 Finnin v. Malloy, 625. 
 
 First National Bank v. Barnum 
 
 Wire & Iron Works, 39, 976, 977. 
 First National Bank v. Bunting, 
 
 314. 
 First National Bank v. Cook, 159, 
 
 624, 642, 663, 934. 
 First National Bank v. Dovetail B. 
 
 & G. Co., 386. 
 First National Bank v. Ewing, 504, 
 
 505, 508, 509, 518, 526, 566, 567. 
 First National Bank v. Gage, 588, 
 
 617. 
 First National Bank v. Illinois Steel 
 
 Co., 795, 806, 807, 818. 
 First National Bank v. Mack, 53, 
 
 56. 
 First National Bank v. Oregon 
 
 Paper Co., 917, 924, 955. 
 First National Bank v. United 
 
 States E. T. Co., 53. 
 Fischer v. Superior Court, 129, 131. 
 Fish V. Olin, 448. 
 Fish V. Potts, 439, 779. 
 Fisher v. Graham, 731. 
 Fisher v. Trust Co., 95, 129, 378. 
 Fitch V. Wetherbee, 223. 
 Fitzburgh v. Everingham, 579, 580, 
 
 900. 
 Fitzgerald v. Fitzgerald & M. C. 
 
 Co., 60, 66. 
 Fitzner v. Noullet, 231. 
 Flagler v. Blunt, 15, 18. 
 Fleming v. Carson, 684. 
 Fleming v. Fleming Hotel Co., 322. 
 Fleming v. Patterson, 195, 197. 
 Flentham v. Steward, 297, 309. 
 Fletcher v. Dodd, 952. 
 Flint V. Webb, 581, 582. 
 Flippin V. Kimball, 300. 
 Flood V. Lord Aldborough, 970. 
 Florence Gas, E. L. & P. Co. v. 
 
 Hanby, 53, 215, 343. 
 Florida Coast Co. v. Young, 42. 
 
 Fluker v. Emporia City R. Co., 353. 
 
 Flynn v. Third National Bank, 358. 
 
 Fogarty v. Bourke, 21, 582, 583. 
 
 Fogarty v. Burke, 617. 
 
 Fogg V. Supreme Lodge, 421. 
 
 Ford V. Gilbert, 933, 955. 
 
 Ford V. Rackham, 778, 968. 
 
 Ford V. Taylor, 13, 129. 
 
 Fordyce v. Dixon, 296. 
 
 Fordyce v. Du Bose, 563. 
 
 Fordyce v. Kansas City & N. C. R. 
 
 Co., 517. 
 Foreman v. Central Trust Co., 540, 
 
 543. 
 Forrester v. B. & M. C. C. & S. 
 
 M. Co., 356, 937. 
 Forsaith Machine Co. v. Lumber 
 
 Co., 223. 
 Fort Payne Coal & Iron Co. v. 
 
 Webster, 248, 249. 
 Fort Payne F. Co. v. Fort Payne 
 
 C. & I. Co., 348. 
 Fort Wayne Electric Corporation v. 
 
 Franklin E. L. Co., 433. 
 Fort Wayne, M. & C. R. Co. v. 
 
 Mellett, 162. 
 Fosdick V. Car Company, 521. 
 Fosdick V. Schall, 509, 510, 511, 519, 
 
 520. 
 Foster v. Barnes, 233. 
 Foster v. Foster, 778, 953. 
 Foster v. Rincker, 624. 
 Foster v. Row, 393. 
 Foster v. Townshend, 261, 781. 
 Fountain v. Mills, 986. 
 Fowler, In re, 852. 
 Fowler v. Beckman, 198. 
 Fowler v. Jarvis-Conklin M. Co., 
 
 99, 977. 
 Fowler v. Lamson, 395. 
 Fowler v. Osgood, 271, 274. 
 Fox River Paper Co. v. Western 
 
 Envelope Co., 297. 
 Foxwell V. Van Grutten, 718, 739. 
 Francklyn v. Sprague, 330.
 
 XXX 
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Frank v. Denver & R. G. R. Co., 
 
 499. 
 Frank v. Morrison, 253, 270, 408. 
 Frank v. New York, L. E. & W. R. 
 
 Co., 549. 
 Frankle v. Jackson, 560. 
 Franklin National Bank v. White- 
 head, 385. 
 Fraser v. City Council, 869. 
 Fraternal Guardian's Estate, 343. 
 Frazier v. Barnum, 616. 
 Fredenheim v. Rohr, 61, 129. 
 Freeholders v. State Bank, 100. 
 Freeman v. Winchester, 244, 248, 
 
 249, 501. 
 Freer v. Davis, 719. 
 Frelinghuysen v. Baldwin, 455. 
 French Bank Case, Z1 , 342. 
 French v. Gifford, 129, 130, 919, 932, 
 
 933. 
 French v. Union Pac. R. Co., 71. 
 Frick V. Fritz, 934. 
 Fricker v. Peters & C. Co., 130, 132. 
 Fripp V. The Bridgewater Co., 839. 
 Fripp V. The Chard R. Co., 481, 
 
 483. 
 Frisbee v. Trimanus, 741, 742. 
 Frisbie v. Bateman, 819, 822, 823, 
 
 844. 
 Front Street Cable Ry. Co. v. Drake, 
 
 529. 
 Frowert v. Blank, 67. 
 Fuggle V. Bland, 33. 
 Fuller V. Jewett, 549. 
 Fuller V. Taylor, 580, 602. 
 Fullerton v. Fordyce, 537, 544. 
 Furlong v. Edwards, 6, 607, 805, 992. 
 
 Gableman v. Peoria, D. & E. R. Co., 
 
 88, 550. 
 Gadsden v. Whaley, 872. 
 Gage V. Smith, 617. 
 Gainey v. Gilson, 238. 
 Gaither v. Stockbridge, 322, 533. 
 
 Gallagher v. Gingrich, 922, 956, 962. 
 
 Galluchat, Ex parte, 864. 
 
 Galster v. Syracuse Savings Bank, 
 
 319. 
 Galway v. United States Steam 
 
 Sugar Refining Co., 363. 
 Gardiner v. Tyler, 915, 924. 
 Gardner v. Blane, 138. 
 Gardner v. Caldwell, 3, 163, 167. 
 Gardner v. Howell, 34. 
 Gardner v. London, C. & D. R. Co., 
 
 464. 
 Gardner v. Smith, 649. 
 Garland v. Garland, 91, 98. 
 Garner v. Southern B. M. & L. 
 
 Assn., 74. 
 Garniss v. Superior Court, 741. 
 Garr v. Hill, 778. 
 Garretson v. Weaver, 683, 906. 
 Garrett v. City of Memphis, 579, 
 
 587. 
 Garrett v. London & L. F. Ins. Co., 
 
 61. 
 Garver v. Kent, 248, 249. 
 Gas Light & Banking Co. v. Haynes, 
 
 389, 408. 
 Gates V. McGee, 70, 348. 
 Gayle v. Johnson, 4. 
 Gaylord v. Fort Wayne, M. & C 
 
 R. Co., 74, 75, 486. 
 Gaynor v. Blewett, IIZ. 
 Gehr v. Mont Alto Iron Co., 166. 
 Geisse v. Beall, 172, 173, 202. 
 Gelpeke v. Milwaukee & Horicon 
 
 R. Co., 88, 177. 
 General Electric Co. v. Whitney, 
 
 323. 
 George Mather's Sons* Co., In re, 
 
 167. 
 Gere v. Dibble, 159, 160, 609, 623. 
 German National Bank v. Best, 950, 
 
 965. 
 German National Bank v. Farmers 
 
 & M. Bank, 393. 
 Gibbins v. Howell, 784. 
 Gibbons v. Mainwaring, 135.
 
 TABLE OF CASES CITED. 
 
 XXXI 
 
 [KEFEBENCES ABE TO PAGES.] 
 
 Gibbs V. David, 767. 
 
 Gibert v. W. C, V. M. & G. S. R. 
 
 Co.. 479, 505, 523. 
 Gibson V. Martin, 131. 
 Gibson v. Peters, 447. 
 Gibson V. Sexson, 57. 
 Gila Bend R. & I. Co. v. Gila Water 
 
 Co., 228, 229. 
 Gilbert v. Hewetson, 209. 
 Giles V. Stanton, 518. 
 Gill V. Balis, 255. 
 Gillet V. Fairchild, 255, 266. 
 Gillet V. Moody, 385, 400, 401. 
 Gillet V. Phillips, 291, 402, 419. 
 Gillett V. Higgins, 656, 691. 
 Gilman v. Ketcham, 277, 279. 
 Gilmore v. Herrick, 548. 
 Gilreath v. Union Bank & Trust Co., 
 
 129, 132. 
 Girard Insurance & Trust Co. v. 
 
 Cooper, 468, 533. 
 Gladdon v. Stoneman, 864. 
 Glenn v. Gill, 188. 
 Glenville Woolen Co. v. Ripley, 
 
 375. 
 Glossup V. Harrison, 149. 
 Glover v. Thayer, 545. 
 Goddard v. Clarke, 840, 843. 
 Goddard v. Stiles, 639, 640. 
 Godfrey v. Ohio & M. R. Co. 550. 
 Goff V. Gofif, 619. 
 Gold Hunter M. & S. Co. v. Holle- 
 
 man, 110. 
 Goldman v. Manistee Circuit Judge, 
 
 130. 
 Goldschmidt v. Oberrheinische Met- 
 
 allwerke, 621. 
 Gooch V. Haworth, 176. 
 Goodale v. Fifteenth District Court, 
 
 760. 
 Goodhue v. Daniels, 796. 
 Goodman v. Whitcomb, 682. 
 Goodnough v. Gatch, 299, 300. 
 Goodyear v. Betts, 18, 598. 
 Gordon v. Anthony, 647. 
 
 Goshen Woolen Mills v. City Na- 
 tional Bank, 36. 
 Goss V. Carter, 281. 
 Goss V. Southall, 264. 
 Gottlieb V. Miller, 624. 
 Gould V. Tryon, 21, 582, 583. 
 Goulding V. Bain, 660. 
 Gouthwaite v. Rippon, 608, 799. 
 Gowan v. Jeffries, 691. 
 Grabbe v. Moffit, 945. 
 Grady v. Richmond & D. R. Co, 
 
 308. 
 Graebner v. Post, 410. 
 Graff V. Bonnett, 632, 649. 
 Graffenried v. Brunswick & Albany 
 
 R. Co., 294. 
 Graham v. Carr, 917. 
 Graham v. Mutual Aid Society, 159. 
 Graham Button Co. v. Spielmann, 
 
 400, 402. 
 Grand De Tour Plow Co. v. Rude 
 
 Bros. Mfg. Co., 42. 
 Grand Trunk Ry. Co. v. Central Vt. 
 
 R. Co., 517, 521, 531. 
 Grandin v. La Bar, 129. 
 Grant v. Bryant, 923. 
 Grant v. City of Davenport, 186, 
 
 889. 
 Grant v. Los Angeles & P. R. Co , 
 
 937. 
 Grant v. Phoenix Life Ins. Co., 794, 
 
 808, 818. 
 Grant v. Superior Court, 937. 
 Grant v. Webb, 41. 
 Grantham v. Lucas, 608. 
 Gravenstine's Appeal, 111, 346, 893. 
 Gray v. Chaplin, 21, 22, 352, 353, 
 
 884. 
 Gray v. Gaither, 862. 
 Gray v. Grand Trunk W. Ry. Co., 
 
 557. 
 Gray v. Lewis, 246. 
 Gray v. Oughton, 35. 
 Graydon v. Church. 272, 283, 284. 
 Great Western Mining & M. Co. v. 
 Harris, 271, 273.
 
 XXXll 
 
 TABLE OF CASES CITED. 
 
 [EEFEEENCES AEE TO PAGES.] 
 
 Great Western R. Co. v. Birming- 
 ham & Oxford Junction R. Co., 
 881. 
 
 Great Western T. Co. v. Gray, 408, 
 410. 
 
 Great Western Telegraph Co. v. 
 Lowenthal, 624. 
 
 Greeley v. Missouri Pac. Ry. Co., 
 37. 
 
 Greeley v. Provident Savings Bank, 
 166, 922. 
 
 Green v. Bookhart, 650. 
 
 Green v. Bostwick, 635. 
 
 Green v. Green, 172, 176. 
 
 Green v. Hicks, 603. 
 
 Green v. Walkill National Bank, 
 444. 
 
 Green v. Winter, 245. 
 
 Greenawalt v. Wilson, 53. 
 
 Greene v. Star C. &. P. Car Co., 
 24. 
 
 Greene v. Williams, 8. 
 
 Gregg V. Mercantile Trust Co., 517, 
 526, 528. 
 
 Gregg V. Metropolitan Trust Co., 
 530. 
 
 Gregory v. Gregory, 26, 702, 718, 
 721, 724. 
 
 Grenfell v. Dean and Canons of 
 Windsor, 993. 
 
 Gresley v. Adderley, 839. 
 
 Greville v. Fleming, 13. 
 
 Gridley v. Conner, 656, 706. 
 
 Griesel v. Schmal, 269. 
 
 Griffen v. Long Island R. Co., 268. 
 
 Griffin v. Griffin Iron Co., 349. 
 
 Griffin v. Henderson, 16. 
 
 Griffith V. Blackwater B. & L. Co., 
 322. 
 
 Griffith V. Griffith, 144, 173, 176, 335, 
 752. 
 
 Groeltz v. Cole, 228. 
 
 Grogan v. Egbert, 67, 189. 
 
 Grosscup V. German S. & L. So- 
 ciety, 167, 168. 
 
 Grote V. Bing, 118. 
 
 Guarantee Trust & S. D. Co. v. 
 
 P., R. & N. E. R. Co., 499, 500. 
 Guaranty Trust Co. v. Galveston C. 
 
 R. Co., 74, 515. 
 Guardian Savings Institution, In re, 
 
 150. 
 Guardian Savings Institution v. 
 
 Bowling Green Savings Bank, 211. 
 Guernsey v. Powers, 763. 
 Guild V. Meyer, 676. 
 Guihnartin v. Middle G. & A. R. 
 
 Co., 591. 
 Gunby v. Armstrong, 53. 
 Gunby v. Thompson, 34, 764. 
 Gunn V. Blair, 853. 
 Gunning v. Sorg, 192. 
 Gurden v. Babcock, 970. 
 Gutsch V. Mcllhargey, 331. 
 Guy V. Ide, 827. 
 
 Gwynne v. Memphis A.-A. Co., 664. 
 Gypsum P. & S. Co. v. Adsit, 94. 
 
 H. 
 
 Haas V. Chicago Building Society, 
 
 126, 806, 807. 
 Habenicht v. Lissak, 617. 
 Hackensack Water Co. v. De Kay, 
 
 232. 
 Hackett v. Snow, 787. 
 Hackley v. Draper, 221, 229. 
 Hade v. McVay, 287. 
 Hagedon v. Bank of Wisconsin, 436. 
 Hagenbeck v. Hagenbeck, 852. 
 Hager v. Stevens, 48, 352, 353, 751. 
 Haggarty v. Pittman, 591, 593, 897. 
 Haigh V. Carroll, 810, 811, 972. 
 Haigh V. Grattan, 931. 
 Haight V. Burr, 695. 
 Haines v. Carpenter, 858, 860. 
 Hale V. Allison, 271, 272, 274, 276, 
 
 392, 395. 
 Hale V. Coffin, 392, 395 
 Hale V. Cushman, 398. 
 Hale V. Frost, 516. 
 Hale V. Hale, 700.
 
 TABLE OF CASES CITED. 
 
 XXXlll 
 
 [KEFEHENCES ABE TO PAGES.] 
 
 Hale V. Hardon, 272, 274, 395. 
 
 Hale V. Harris, 284. 
 
 Hale V. Nashua & Lowell Railroad, 
 
 505. 
 Hale V. Tyler, 272, 392, 395. 
 Hale-Berry Co. v. Diamond State 
 
 Iron Co., n2. 
 Hall V. Hall, 23, 681. 
 Hall V. Jenkinson, 761. 
 Hall V. Nieukirk, 357, 430. 
 Hall V. Smith, 939. 
 Hall V. Wayne Circuit Judge, 26, 
 
 39. 
 Hallam v. Tillinghast, 455. 
 Halsted v. Forest Hill Co., 208. 
 Hamacker v. Commercial Bank, 945. 
 Hamberlain v. Marble, 748. 
 Hamburgh Manufacturing Co. v. 
 
 Edsall, 12, 13, 746, 880. 
 Hamill v. Hamill, 709. 
 Hamilton, In re, 290. 
 Hamilton v. Accessory Transit Co., 
 
 369. 
 Hamilton v. Brewster, 144. 
 Hamlin v. Wright, 636, 637. 
 Hammer v. Kaufman, 99. 
 Hammerly v. Mercantile T. & D, 
 
 Co., 530. 
 Hammock v. Loan & Trust Co., 109. 
 Hammond v. Cline, 392. 
 Hamor v. Taylor-Rice E. Co., 385. 
 Hampton v. Buchanan, 356. 
 Hampton v. Norfolk & W. R. Co 
 
 529. 
 Hampton Roads R. & E. Co. v. 
 Newport News, etc., Co., 87, 163. 
 Hancock, In re, 24. 
 Hand v. Railroad Co., 493, 955. 
 Hand v. Savannah & Charleston R. 
 
 Co., 505, 506. 
 Hanna v. Hanna, 13, 25. 
 Hanna v. State Trust Co., 166, 378. 
 Hanon v. Weil, 38. 
 Hanover Fire Insurance Co. v. Ger- 
 
 mania Fire Insurance Co., 95. 
 Hanson v. Davison, 274. 
 
 Hanson v. Stephens, 938. 
 
 Hardin v. Hardin, 828. 
 
 Hardin v. Sweeney, 246, 249. 
 
 Harding v. Garber, 806. 
 
 Harding v. Glover, 675, 685. 
 
 Harding v. Nettleton, 540. 
 
 Hard wick v. Hook, 253, 263. 
 
 Hardy v. McClellan, 24. 
 
 Hargrave v. Hargrave, 758, 913. 
 
 Harland v. Bankers & Merchants 
 Telegraph Co., 248. 
 
 Harman v. Foster, 952. 
 
 Harman v. McMuUin, 3. 
 
 Harmon v. Wagener, 861. 
 
 Harrell v. Kent, 248, 249. 
 
 Harrigan v. Gilchrist, 5, 217, 224, 
 299, 325, Zn, 386, 918, 919, 92l[ 
 955, 957. 
 
 Harrington v. Foley, 965. 
 
 Harris v. Beauchamp Brothers, 33, 
 620. 
 
 Harris v. Root, 985. 
 
 Harris v. Sangston, 980. 
 
 Harris v. Sleep, 930. 
 
 Harris v. United States S. F. & L 
 
 Co., 806, 807, 818, 825. 
 Harrison v. Boydell, 970. 
 Harrison v. Dignan, 214. 
 Harrison v. Fitzgerald, HZ. 
 Harrison v. Warren Co., 8. 
 Harrup v. Winslet, 858. 
 Hart V. Marshall, 883. 
 Hart V. Tims, 586. 
 Hart V. Tulk, 12,Z. 
 Harvey v. Allen, 458. 
 Harvey v. Lord, 449. 
 Harvey v. Varney, 63, (HI, 
 Harwell v. Potts, 24. 
 Hatch V. Daniels, 34, 980. 
 Hatcher v. Massey, 848. 
 Hatfield v. Cummings, 53, 238. 
 Haugan v. Netland, 135, 837. 
 Hause v. Newel, 272. 
 Havemeyer v. Superior Court, 374. 
 Havens & Geddes Co. v. Harris 
 697.
 
 XXXIV 
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Haverly v. Elliott, 57. 
 Hawkins v. Gathercole, 617. 
 Hawkins v. Luscombe, 125. 
 Hayden v. Shearman, 72>7. 
 Hayden v. Thompson, 446. 
 Hayes v. Brotzman, 253, 270. 
 Hayes v. Dickinson, 802. 
 Hayes v. Heyer, 689. 
 Hayes v. Jasper Land Co., 6, 14, 
 
 355. 
 Hayes v. Kenyon, 391. 
 Hayner v. Fowler, 636. 
 Haywood v. Cope, 880.. 
 Hazard v. Durant, 271. 
 Hazelrigg v. Bronaugh, 194. 
 Hazeltine v. Granger, 790. 
 Head v. Miller, 242. 
 Heard v. Murray, 129. 
 Hearn v. Tennant, 197. 
 Heath v. Missouri, K. & T. R. Co., 
 
 550. 
 Heathcot v. Ravenscroft, 674, 904. 
 Heatherton v. Hastings, 664. 
 Heavilon v. Farmers Bank, 113. 
 Heermans v. Clarkson, 218. 
 Heffron v. Gage, 8, 153, 307. 
 Heffron v. Rice, 50, 916, 919, 944. 
 Heflebower v. Buck, 665, 688. 
 Hegewisch v. Silver, 139. 
 Heinze v. Butte & B. C. M. Co., 
 
 13, 44, 759, 760. 
 Heinze v. Kleinschmidt, 755. 
 Hellebush v. Blake, 63. 
 Helme v. Littlejohn, 248, 249, 252, 
 
 270, 700. 
 Helmore v. Smith, 194. 
 Hembree v. Dawson, 934. 
 Hendee v. Connecticut & P. R. R- 
 
 Co., 456. 
 Henderson v. Reynolds, 129, 131, 
 
 133. 
 Henderson v. Walker, 539. 
 Hendrie & Bolthoff Co. v. Parry, 
 
 216, 947, 950. , 
 
 Hendrix v. American F. L. M. Co., | Hilliker v. Hale, 271, 394. 
 136 809. Hinckley, In re, 927 
 
 Henn v. Walsh, 33, 658, 688, 902, 
 
 906. 
 Henning v. Raymond, 248, 252. 
 Henning v. Sampsell, 550, 551. 
 Henry v. Henry, 673, 929, 943, 946, 
 
 954, 956, 958. 
 Henry v. Kaufman, 319, 332. 
 Henshaw v. Wells, 110, 845. 
 Herbert v. Greene, 819, 821. 
 Herman v. Dunbar, 967, 993. 
 Herndon v. Hurter, 938. 
 Heroy v. Gibson, 581, 582. 
 Herrick v. Miller, 224, 796. 
 Herrick's Minors, In re, 148, 149. 
 Herring v. New York, L. E. & W. 
 
 R. Co., 462. 
 Hervey v. Fitzpatrick, 858, 865. 
 Hewitt V. Traders' Bank, 444. 
 Hibbert V. Jenkins, 104, 855. 
 Hickey v. Parrott S. & C. Co., 217, 
 
 919, 920, 921. 
 Hickox V. Holladay, 985. 
 Hicks V. Hicks, 876. 
 Hicks V. I. & G. N. R. Co., 550, 
 
 563. 
 Higgins, In re, 499. 
 Higgins V. Bailey, 702. 
 Higgins V. Gillesheiner, 636. 
 Higgins Oil & Fuel Co. v. Snow, 
 
 756, 759, 760. 
 Highland Avenue & B. Ry. Co. v. 
 
 C. E. Co., 43. 
 Highland Ave. & B. R. Co. v. 
 
 Thornton, 50. 
 Highley v. Deane, 964. 
 Hiles V. Case, 525. 
 Hiles V. Dunn, 704. 
 Hiles V. Moore, 126, 833, 835. 
 Hill V. Arnold, 859. 
 Hill V. Gould, 353. 
 Hill V. Robertson, 818, 824. 
 Hill V. Taylor, 766. 
 Hill V. Western & A. R. Co., 636.
 
 TABLE OF CASES CITED. 
 
 XXXV 
 
 [BEFEnSNCES ABE TO PAGES.] 
 
 Hinckley v. G., C. & S. R. Co., 971. 
 
 Hinckley v. Pfister, 343. 
 
 Hinckley v. Railroad Co., 916, 927, 
 
 951. 
 Hirsch, Elson & Co. v. Israel, 598. 
 Hitchen v. Birks, 65. 
 Hitz V. Jenks, 45, 842. 
 Hlawacek v. Bohman, 749. 
 Hoare v. Stephens, 804. 
 Hobart v. Ballard, 660, 661. 
 Hobart v. Bennett, 225. 
 Hobhoiise v. Hollcombe, 774. 
 Hobson V. Sherwood, 772. 
 Hodges V. McDuff, 746. 
 Hoffman v. Bank, 314, 989. 
 Hoffman v. Schoyer, 674. 
 Hoge V. Hollister, 807. 
 Holbert v. Chilvers, 792. 
 Holbrook v. Ford, 272, 309, 310, 638, 
 
 639. 
 Holbrook v. Receivers of American 
 
 Fire Insurance Co., 419. 
 Holcombe v. Executors of Hol- 
 
 combe, 925. 
 Holcombe v. Johnson, 336. 
 Holden's Administrators v. Mc- 
 
 Makin, 36, 697, 698, 907. 
 Holdrege v. Gwynne, 591, 897. 
 Holland v. Cork & Kinsale R. Co., 
 
 482, 616. 
 Holland Trust Co. v. International 
 
 B. & T. Co., 11. 
 Hollenbeck v. Donnell, 819, 821. 
 Hollier v. Hedges, IIZ. 
 Hollifield V. Wrightsville & T. R. 
 
 Co., 545. 
 Hollins V. Iron Co., 591. 
 Hollis, Ex parte, 200. 
 Hollis V. Bryant, 748. 
 Hollister v. Barkley, 34, 9S0. 
 Holmes v. Bell, 812. 
 Holmes v. Holmes, 750. 
 Holmes v. Millage, 33, 620. 
 Holshouser v. Cooper Co., 166. 
 Home Fire Ins. Co. v. Dutcher, 45. 
 
 Home P. S. F. Association, In re, 
 212. 
 
 Home Savings & Trust Co. v. Polk 
 District Court, 35. 
 
 Homer v. Barr P. E. Co., 249, 272. 
 
 Hone, In re, 217. 
 
 Honegger v. Wettstein, 306. 
 
 Hood V. First National Bank, 21. 
 
 Hook V. Bosworth, 793. 
 
 Hooper v. Central Trust Co., 378. 
 
 Hooper v. Winston, 3, 208, 943, 952. 
 
 Hoover v. M. & G. L. R. Co., 565, 
 566. 
 
 Hope Mutual Life Ins. Co. v. Tay- 
 lor, 272, 275, 652. 
 
 Hopkins v. Connel, 524. 
 
 Hopkins v. Taylor, 399. 
 
 Hopkins v. Worcester & Birming- 
 ham Canal Proprietors, 481. 
 
 Hoppe V. Fountain, 758. 
 
 Horlock V. Smith, 156. 
 
 Horn V. Bohn, 963. 
 
 Horn V. Pere Marquette R. Co., 156, 
 164. 
 
 Horner v. Bell, 744. 
 
 Horner v. Dey, 819. 
 
 Hornsby v. Eddy, 537, 539. 
 
 Horton v. White, 754. 
 
 Hottenstein v. Conrad, 10, 38, 113, 
 662, 881. 
 
 Houlditch V. Lord Donegal, 64, 887. 
 
 Houston V. Redwine, 257. 
 
 Houston & Texas C. Ry. Co. v. 
 Crawford, 556. 
 
 Hovey v. McDonald, 219, 972. 
 
 How V. Jones, 954, 955, 971. 
 
 Howard V. Chesapeake & O. R. Co., 
 272. 
 
 Howard v. Lowell Machine Co., 
 979. 
 
 Howard v. Palmer, 118, 628. 
 
 Howard v. Papera, 862. 
 
 Howard v. Whitman, 432. 
 
 Howard Co. v. Strother, 166. 
 
 Howarth v. Angle, 397. 
 
 Howarth v. Lombard, 281, 397.
 
 XXXVl 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 Howe V. Jones, 129, 964. 
 Howe V. Deuel, 342, 343, 892. 
 Howe V. Willard, 197. 
 Howell V. Dawson, 33. 
 Howell V. Hough, 4. 
 Howell V. Ripley, 21, 840. 
 Howes V. Davis, 924, 945, 954. 
 Hoyt V. Thompson, 66, 277, 422. 
 Hoyt V. Thompson's Executor, 66 
 Hubbard v. Guild, 645. 
 Hubbard v. Hamilton Bank, 436. 
 Hubbard v. Hubbard, 591, 897. 
 Hubbell V. Avenue Investment Co., 
 
 795. 
 Hubbell V. Dana, 264, 309. 
 Hudson V. Plets, 628. 
 Huellmantel v. Huellmantel, 619. 
 Huerstel v. Lorillard, 743. 
 Huet V. Lumber Co., 355. 
 Huff V. Bidwell, 129. 
 Hugh V. McRae, 430. 
 Hughes V. Hatchett, 764. 
 Huguenin v. Baseley, 11. 729, 881. 
 Hulings V. Jones, 51, 956. 
 Hull V. Caughy, 38. 
 Hull V. Thomas, 191, 197, 198. 
 Hulse V. Wright, 591, 593. 
 Hulst, In re, 81. 
 Humphreys v. Allen, 567, 571. 
 Humphreys v. Hopkins, 189. 
 Hungerford v. Cushing, 111. 
 Hunt V. American Grocery Co., 
 
 348. 
 Hunt V. Columbian Insurance Co., 
 
 67, 275, 277. 
 Hunt V. Illinois Central R. Co., 313. 
 Hunt V. Whewell, 395. 
 Hunt V. Wolfe, 3, 5, 262, 776. 
 Hursh V. Hursh, 109, 787. 
 Hutchins v. Langley, 286. 
 Hutchinson v. American P.-C. Co., 
 
 14. 
 Hutchinson v. Crutcher, 444. 
 Hutchinson v. Green, 74. 
 Hutchinson v. Hampton, 932. 
 
 Hutton V. Lockridge, 127. 
 Hyatt V. McMahon, 399. 
 Hyde v. Lynde, 286, 389, 400. 
 Hyde Park Gas Co. v. Kerber, 14, 
 
 353. 
 Hyman v. Kelly, 818, 826. 
 Hyslop V. Hoppock, 134. 
 
 I. 
 
 I. & G. N. R. Co. V. Ormond, 550, 
 
 563. 
 Idaho Gold Reduction Co. v. Crog- 
 
 ham, 263. 
 Iddings V. Bruen, 176, 226, 579, 626. 
 Iglehart v. Bierce, 249, 253, 258, 283. 
 Illinois Steel Co. v. Putnam, 158. 
 Illinois Trust & Savings Bank v. 
 
 Doud, 509, 525. 
 Illinois Trust & Savings Bank v. 
 
 Pacific Ry. Co., 53, 565, 972. 
 Illinois Trust & Savings Bank v. 
 
 Smith, 328. 
 Imperial Mercantile Credit Asso- 
 ciation V. Newry & Armagh R. 
 
 Co., 117, 482. 
 Industrial Mutual D. Co.'s Receiver 
 
 V. Taylor, 386. 
 IngersoU v. Cooper, 248, 251. 
 Insurance Commissioner v. C. M. 
 
 Ins. Co., 211, 414, 421. 
 Insurance Commissioner v. United 
 
 F. Ins. Co., 431. 
 International & G. N. Ry. Co. v. 
 
 Bender, 539. 
 International Trust Co. v. Decker 
 
 Bros., 18, 378. 
 International Trust Co. v. Town- 
 send B. & C. Co., 512, 530. 
 International Trust Co. v. United 
 
 Coal Co., 50, 363, 378, 379, 591, 
 
 915, 916, 954. 
 Investment Co. v. Ohio & N. W. R. 
 
 Co., 565. 
 Ireland v. Eade, 213, 967. 
 Ireland v. Nichols, 740, 985, 986
 
 TABLE OF CASES CITED. 
 
 XXXVll 
 
 [BEFBRBNCBS ABE TO PAGES.] 
 
 Iron Hall v. Baker, 358, 429. 
 Irons V. Manufacturers National 
 
 Bank, 451. 
 Irwin V. Everson, 660. 
 Irwin V. Granite S. P. Assn., 66, 
 
 373. 
 Irwin V. Lewis, 17. 
 Irwin V. McKechnie, 545. 
 
 J. 
 J. I. Case Plow Works v. Finks, 
 
 305, 545. 
 Jackson v. De Forest, 663, 664, 665, 
 
 683, 701. 
 Jackson v. First State Bank, 225. 
 Jackson v. Hooper, 818, 821. 
 Jackson v. Jackson, 876. 
 Jackson v. Lahee, 674. 
 Jackson v. Roberts, 412, 418. 
 Jackson v. Sheldon, 595, 596, 679, 
 
 898. 
 Jackson v. Van Slyke, 417. 
 Jacksonville Ferry Co. v. Stockton, 
 
 129, 132. 
 Jacobs V. Gibson, 815. 
 Jacobs V. Jacobs M. Co., 353. 
 Jacobs V. Miller, 111. 
 Jacobs V. Turpin, 389. 
 Jacobson v. Allen, 391. 
 Jacobson v. Landolt, 162. 
 Jacox V. Clark, 885. 
 Jaffray v. Raab, 935. 
 Janeway v. Green, 851. 
 Jasper Land Co. v. Wallis, 357, 358. 
 Jay, Ex parte, 646. 
 Jay V. De Groot, 263. 
 Jay's Case, 306, 889. 
 Jefferson v. Edrington, 772. 
 JefTerys v. Dickson, 803. 
 JeflFerys v. Smith, 759. 
 Jenkins v. Briant, 969. 
 Jenkins v. Jenkins, 864. 
 Jenks V. Horton, 743. 
 Jenner-Fust v. Needham, 804. 
 Jerome v. McCarter, 377. 
 Jewett V. Miller, 224, 226. 
 
 John V. John, 721. 
 
 Johnes v. Claughton, 163, 185, 888, 
 
 889. 
 Johns V. Johns, 106, 122, 123, 862. 
 Johnson, Ex parte, 537. 
 Johnson v. Central Trust Co., 990. 
 Johnson v. Farnum, 591. 
 Johnson v. Garrett, 935. 
 Johnson v. Gimter, 211. 
 Johnson v. Lehigh V. T. Co., 322. 
 Johnson v. Martin, 139, 263. 
 Johnson v. Powers, 240, 316. 
 Johnson v. Southern B. & L. Assn., 
 
 277, 430, 431. 
 Johnson v. Tucker, 579. 
 Johnson v. Woodruff, 606. 
 Johnston v. Hanner, 37. 
 Johnston v. Henderson, 744. 
 Johnston v. Robuck, 324. 
 
 V. Jolland, 104, 855, 875, 952. 
 
 Jolly V. Arbuthnot, 803. 
 
 Jonas H. French, 170. 
 
 Jones V. Arena Publishing Co., 381. 
 
 Jones V. Bank of Leadville, 24, 429. 
 
 Jones V. Blun, 53, 143. 
 
 Jones V. Boyd, 762. 
 
 Jones V. Dougherty, 122, 124, 600. 
 
 Jones V. Frost, 735. 
 
 Jones V. Goodrich, 64. 
 
 Jones V. Graves, 129. 
 
 Jones V. Jones, 716. 
 
 Jones V. Keen, 919, 923. 
 
 Jones V. Moore, 167. 
 
 Jones V. North P. F. & O. Co., 
 
 39. 
 Jones V. Pugh, 604, 606, 731. 
 Jones V. Purcell, 93, 189. 
 Jones V. Schall, 24. 
 Jones V. Schlapback, 547. 
 Jones V. Weir, 686. 
 Joost V. Bennett, 946. 
 Joralmon v. IMcPhee, 936, 937. 
 Jordan v. Beal, 736, 764. 
 Jordan v. Jordan, 96, 110. 
 Jordan v. Miller, 655. -^ 
 
 Jordan v. Wells, 296.
 
 XXXVIU 
 
 TABLE 07 CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Joselove v. Bohrman, 684. 
 
 Joseph Dry Goods Co. v. Hecht, 
 129, 592. 
 
 Joslin V. Williams, 57. 
 
 Joslyn V. Athens C. & C. Co., 936. 
 
 Journeay v. Brown, 44, 599. 
 
 Juckett V. Fargo, 228. 
 
 Judd V. Bankers & Merchants Tele- 
 graph Co., 74, 80. 
 
 Justice V. Kirlin, 248, 249. 
 
 K. 
 
 Kaighn v. Fuller, 980. 
 Kain v. Smith, 549. 
 Kaiser v. Kellar, 3, 4, 320. 
 Kanawha Coal Co. v. Ballard & W. 
 
 C. Co., 18. 
 Kansas Pacific Ry. Co. v. Bayles, 
 
 324, 495. 
 Kansas Pacific R. Co. v. Wood, 
 
 552. 
 Kansas Rolling Mill Co. v. A., T. 
 
 & S. F. R. Co., 38. 
 Karn v. Rorer, 568. 
 Katsch V. Schenck, 691, 693. 
 Katz V. Brewington, 691. 
 Kavanagh v. Bank of America, 312. 
 Keach, In re, 647. 
 Kean v. Colt, 18, 22, 124. 
 Keeley v. Union Pac. Ry. Co., 307. 
 Keen v. Breckenridge, 294, 296, 297. 
 Keenan v. Shannon, 747. 
 Keene v. Gaehle, 336. 
 Keep V. Michigan Lake Shore R. 
 
 Co., 74, 476, 485, 814, 818, 830. 
 Kehler v. Jack Mfg. Co., 591. 
 Kehr v. Hall, 260. 
 Keihl V. City of South Bend, 87. 
 Kellar v. Williams, 3, 708. 
 Kelley v. Boettcher, 14, 26. 
 Kellogg V. King, 17. 
 Kelly, In re, 525. 
 Kelly V. Butler, 1Z1 . 
 Kelly V. Fargo, 348. 
 
 Kelly V. Rutledge, 745, 980. 
 Kelly V. Steele, 719. 
 Kelly V. Trustees, 461, 476. 
 Kelso V. American I. & I. Co., 38. 
 Kempson v. Kempson, 198. 
 Kennedy v. Gibson, 446, 448, 452. 
 Kennedy v. I., C. & L. R. Co., 294, 
 
 299, 541, 542. 
 Kennedy v. St. Paul & Pacific R. 
 
 Co., 485, 490, 492, 565, 567. 
 Kennedy v. Thorp, 641, 
 Kenney v. Ranney, 332. 
 Kent V. Lake Superior Canal Co., 
 
 zn. 
 
 Keogh V. McManus, 841. 
 Kerchner v. Fairley, 818. 
 Kerr v. Brandon, 99, 150. 
 Kerr v. Potter, 660, 902, 903. 
 Kerr v. White, 61. 
 Kidder v. Beavers, 296. 
 Kilgore v. Hair, 98. 
 Kilpatrick v. Horton, 915, 938 
 Kimball v. Gaflford, 187. 
 Kimball v. Ives, 389. 
 Kimberly v. Blackford, 264. 
 Kimberly v. Goodrich, 264. 
 Kimberly v. Stewart, 264. 
 Kimmerle v. Dowagiac Mfg. Co., 
 
 920, 929, 955. 
 King V. Armstrong, 448. 
 King V. Cochran, 249, 261, 281, 396, 
 
 397. 
 King V. Cutts, 3, 208, 248, 251. 
 King V. O. & M. R. Co., 192, 499. 
 King V. Pomeroy, 453. 
 King V. Wooten, 165. 
 Kinney v. Crocker, 86, 294, 297, 
 
 541. 
 Kipp V. Hanna, 744. 
 Kirby v. Ingersoll, 691, 692. 
 Kirker v. O wings, 146, 942. 
 Kirkpatrick v. McElroy, 214, 700. 
 Kittanning Insurance Co., Petition 
 
 of, 429. 
 Kittredge v. Osgood, 159, 430. 
 Klee V. Steele Co., 591.
 
 TABLE OF CASES CITED. 
 
 XXX IX 
 
 [KEFEIiENCES ABE TO PAGES.] 
 
 Klein v. Gavenesch Co., 322. 
 
 Klein v. Independent B. Assn., 349. 
 
 Klein v. Jcwctt, 524, 537, 
 
 Knabe v. Johnson, 314. 
 
 Kneeland v. American L. & T. Co., 
 507, 522, 575. 
 
 Kneeland v. Bass Foundry & Ma- 
 chine Works, 507. 
 
 Kneeland v. Luce, 567, 573. 
 
 Knickerbocker v. Benes, 337. 
 
 Knickerbocker v. McKindley C. & 
 M. Co., 50, 51. 
 
 Knickerbocker Bank, In re, 103, 376. 
 
 Knickerbocker Life Insurance Co. v. 
 Hill, 815. 
 
 Knight V. Duplessis, 64, 734, 862. 
 
 Knight V. Knight, 859. 
 
 Knight V. Nash, 41, 582. 
 
 Knight V. Plimouth, 330. 
 
 Knighton v. Young, 732, 911. 
 
 Knode v. Baldridge, 674. 
 
 Knott V. Receivers of Morris Canal 
 & Banking Co., 210. 
 
 Konrad, In re, 592. 
 
 Koontz V. Northern Bank, 232, 782. 
 
 Kountze v. Omaha Hotel Co., 794, 
 818. 
 
 Kretschmar v. Stone, 244. 
 
 Kriesle v. Campbell, 180, 181. 
 
 Krohn v. Weinberger, 8, 120, 124. 
 
 Kron V. Dennis, 739. 
 
 Kronberg v. Elder, 285. 
 
 Kyme v. Digman, 214. 
 
 Lackawanna Iron & Coal Co. v. 
 
 Farmers' L. & T. Co., 526. 
 Lackmann v. Supreme Coimcil, 68. 
 La Cliaise v. Lord, 595, 596, 898. 
 Ladd V. Harvey, 110, 111, 854. 
 Lafayette Bank v. Buckingham, 385, 
 
 981. 
 Laing v. Williams, 28. 
 Lake National Bank v. Wolfebor- 
 
 ough S. Bank, 43, 74. 
 
 Lake Shore & M. S. R. Co. v. Fel- 
 ton, 164. 
 
 Lake Shore & ]\I. S. R. Co. v. Tay- 
 lor, 198. 
 
 Lamar Insurance Co. v. Gulick, 410. 
 
 Lamaster v. Elliott, 755. 
 
 Lamb v. Rowan, 220. 
 
 Lammon v. Giles, 935. 
 
 Lanauze v. Belfast, Holy wood & 
 Bangor R. Co., 745, 840. 
 
 Lancashire v. Lancashire, 718, 723. 
 
 Lancaster v. Asheville St. Ry. Co., 
 14. 
 
 Land Title & Trust Co. v. Asphalt 
 Co., 311. 
 
 Landers v. Felton, 88. 
 
 Lane v. Macon & A. Ry. Co., 520. 
 
 Lane v. Sterne, 191, 192. 
 
 Lane v. Townsend, 962. 
 
 Lane v. Washington Hotel Co., 50, 
 934. 
 
 Lang V. Macon C. Co., 621. 
 
 Langdon v. Vermont & Canada R. 
 Co., 491, 571. 
 
 Langford v. Langford, 62, 192, 202, 
 800, 887. 
 
 Langley v. Hawk, 864. 
 
 Lanier v. Gayoso Savings Institu- 
 tion, 288. 
 
 Lansing v. Manton, 613. 
 
 Laramie National Bank v. Stein- 
 hoff, 195. 
 
 Largan v. Bowen, 989. 
 
 Larsen v. Winder, 129, 130. 
 
 Latham v. Chafee, 6, 123, 848, 849. 
 
 Lathrop v. Knapp, 262. 
 
 Latimer v. A. & B. R. Co., 464. 
 
 Latta V. Catawba Electric Co., 400. 
 
 Laughlin v. United States Rolling 
 Stock Co., 378. 
 
 Lavender v. Lavender, 985. 
 
 Law V. Ford, 689. 
 
 Law V. Glenn, 803. 
 
 Lawrence v. Greenwich Fire Insur- 
 ance Co., 351. 
 
 Lawrence v. McCready, 390, 413.
 
 xl 
 
 TABLE OF CASES CITED. 
 
 [eefeeences aee to pages.] 
 
 Lawrence Iron-Works v. Rock- 
 bridge Co., 26. 
 Lawson v. Ricketts, 993. 
 Lazear v. Ohio Valley S. F. Co., 
 
 215. 
 Leach v. Tisdal, 106. 
 Leary v. Columbia R. & P. S. N. 
 
 Co.. 591. 
 Leathers v. Shipbuilders Bank, 437. 
 Leavitt v. Yates, 11, 18, 25, 351, 881, 
 
 882. 
 Leddel's Executor v. Starr, 110, 872. 
 Ledoux V. La Bee, 166, 192. 
 Lee V. Cone, 187. 
 Lee V. Powell Bros. & Sanders Co., 
 
 994. 
 Le Grand v. O'Neill, 117. 
 Lehigh C. & N. Co. v. Central R. 
 
 Co., 300, 493, 494. 
 Le Hote v. Boyet, 380. 
 Leney v. Callingham, 726. 
 L'Engle v. Florida Central R. Co., 
 
 472, 982. 
 Lenoir v. Linville I. Co., 421, 989. 
 Lenox v. Notrebe, 7, 19. 
 Levenson v. Elson, 849. 
 Levi V. Karrick, 47, 174. 
 Levin v. Florsheim, 35. 
 Levy V. Cavanagh, 185. 
 Levy V. Ely, 595, 596, 898. 
 Lewis, In re, 197. 
 Lewis V. American N. S. Co., 74, 75, 
 
 277. 
 Lewis V. Campau, 39. 
 Lewis V. Clark, 277. 
 Lewis V. Lindeen Steel Co., 380. 
 Lewis V. Singleton, 197. 
 Libby v. Rosekranz, 228, 385, 423. 
 Lichtenstein v. Dial, 919, 922, 923. 
 Liggett V. Glenn, 75. 
 Ligon V. Bishop et al., 605. 
 
 V. Lindsey, 62, 63, 887. 
 
 Link Belt Machinery Co. v. Hughes, 
 
 322, 324, 964. 
 Links V. Connecticut River B. Co., 
 
 294, 408. 
 
 Linville v. Hadden, 67, 345. 
 Litchfield Bank v. Church, 242. 
 Litchfield Bank v. Peck, 241, 242. 
 Little Warrior Coal Co. v. Hooper, 
 
 129, 348. 
 Littlefield v. Maine Central R. Co., 
 
 294. 
 Litzenberger v. Jarvis-Conklin Trust 
 
 Co., 517. 
 Livingston v. Bank of New York, 
 
 432, 440. 
 Livingston v. Olyphant, 257. 
 Livingston v. Pettigrew, 321. 
 Lloyd, In re, 98, 99. 
 Lloyd V. Chesapeake, O. & S. W. 
 
 R. Co., 846. 
 Lloyd V. Lord Trimleston, 720. 
 Lloyd V. Passingham, 604, 718, 719, 
 
 910. 
 Lloyd V. Trimleston, 734. 
 Lock V. Turnpike Co., 550. 
 Lofsky V. Maujer, 794, 797. 
 Lombard v. Wade, 971. 
 Loney v. Penniman, 704. 
 Long Branch & Sea Shore R. Co., 
 
 In re, 470, 987. 
 Longstaff v. Hurd, 181, 710. 
 Lonsdale v. Church, 952. 
 Loomis V. McKenzie, 657. 
 Lorch V. Aultman, 159, 222. 
 Lord Fingal v. Blake, 720. 
 Lotte Bros. v. American Silk Co., 
 
 91. 
 Lottimer v. Lord, 46, 216, 217, 679. 
 Louisville, New Albany & Chicago 
 
 R. Co. V. Cauble, 552. 
 Louisville & N. R. Co. v. Central 
 
 Trust Co., 521. 
 Loven v. The People, 195. 
 Low V. Holmes, 28. 
 Lowe V. Lowe, 878, 950. 
 Lowe V. Riley, 45. 
 Lowe V. Stephens, 645. 
 Lowell V. Doe, 791, 826. 
 Lowenstein v. Finney, 53. 
 Lowry V. Smith, 233.
 
 TABLE OF CASES CITED. 
 
 xU 
 
 [befekbnces abb to pages.] 
 
 Luderbach Plumbing Co. v. Its 
 
 Creditors, 208. 
 Ludgater v. Channell, 146. 
 Lumsden v. Fraser, 770. 
 Lupton V. Stephenson, 96. 
 Lycoming Fire Insurance Co. v. 
 
 Wright, 277, 413. 
 Lyle V. Commercial National Bank, 
 
 13. 
 Lyman v. Central Vermont R. Co., 
 
 297, 537, 541. 
 Lyne v. Lockwood, 738. 
 
 M. 
 
 Mabon v. Ongley Electric Co., 374 
 
 Mabry v. Harrison, 941. 
 
 Macartney v. Walsh, 780. 
 
 MacDonald v. O'Toole, 31. 
 
 Madden, In re, 731. 
 
 Madgwick v. Wimble, 656, 697, 698. 
 
 Magan v. Fallon, 335. 
 
 Magee v. Cowperthwaite, 915, 924. 
 
 Maguire v. Allen, 135. 
 
 Maher v. Bull. 708, 907. 
 
 Mahon v. Crothers, 823. 
 
 Main v. Giuthert, 831. 
 
 Maish V. Bird, 136, 800. 
 
 Makeel v. Hotchkiss, 50, 936. 
 
 Makins v. Percy Ibotson & Sons, 
 804. 
 
 Malcolm v. O'Callaghan, 929. 
 
 Malcolm v. Montgomery, 110, 136, 
 600. 
 
 Malcomson v. Wappoo Mills, 952. 
 
 Malone v. Buice, 852. 
 
 Malott V. State, 296. 
 
 Manchester & L. D. B. Co. v. Par- 
 kinson, 33, 620. 
 
 Manchester Locomotive Works v. 
 Truesdale, 525. 
 
 Manchester & Mil ford R. Co., In re, 
 466. 
 
 Mandeville v. Avery, 636, 638. 
 
 Mangle v. Lord Fingall, 781, 912. 
 
 Manhattan Trust Co. v. Sioux City 
 
 & N. R. Co., 517. 
 Manker v. Loan Association, 297, 
 
 309. 
 Manley v. Rassiga, 266, 636. 
 Manlove v. Burger, 248, 253, 414. 
 Manlove v. Naw, 414. 
 Mann v. Fairchild, 441. 
 Mann v. Caddie, 662, 676. 
 Mann v. German-American I. Co., 
 
 10, 24. 
 Mann v. Pentz, 409, 626, 646. 
 Mann v. Stennet, 149. 
 Manners v. Furze, 138. 
 Manning v. Evans, 629, 632. 
 Manning v. Monaghan, 331. 
 Manning v. Mullins, 856. 
 Manufacturers Paper Co. v. Lind- 
 
 blom, 8, 308. 
 Mapes V. Scott, 739. 
 Mardian v. Wayne Circuit Judge, 
 
 39. 
 Marion Trust Co. v. Blish, 286, 
 
 411. 
 Market National Bank v. Pacific 
 
 National Bank, 258. 
 Marr v. Littlewood, 64. 
 Marsh v. Hussey, 966. 
 Marshall v. Lockett, 163. 
 Marshall v. Sherman, 395. 
 Marshall & Ilsley Bank v. Cady, 
 
 824. 
 Marten v. Van Schaick, 663, 664, 
 
 665, 689. 
 Martin v. Atchison, 297. 
 Martin v. Black, 186. 
 Martin v. Martin, 915, 919. 
 Martin v. N. Y., S. & W. R. Co., 
 
 493. 
 Marvine v. Drexel's Executors, 869. 
 Mason v. Hubner, 231. 
 Mason v. Mason, 783, 912. 
 Mason v. Supreme Court, 343. 
 Mason v. Westoby, 33, 804. 
 Mather Humane Stock T. Co. v. 
 
 Anderson, 521.
 
 xlii 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 Mathews v. Neilson, 614, 868. 
 Maudslay, Sons & Field, In re, 62, 
 
 203. 
 Maund v. Allies, 708. 
 Maunsell v. Egen, 145, 149. 
 Mauran v. Crown C. L. Co., 938. 
 Maxwell v. Akin, 409. 
 Maxwell v. Peters Shoe Co., 132. 
 Maxwell v. Wilmington D. M. Co., 
 
 922. 
 May V. Greenhill, 591. 
 May V. Printup, 74. 
 Maynard v. Bond, 141, 156, 157. 
 Maynard v. Railey, 132, 678. 
 Mayo V. McPhaul, 721. 
 Mays V. Rose, 5, 10, 12, 18, 19, 135, 
 
 153, 154, 604, 766, 880, 881. 
 Mays V. Wherry, 752. 
 Maythorne v. Palmer, 885. 
 McAllister v. Harman, 246. 
 McAlpin V. Jones, 277, 279. 
 McAneny v. Superior Court, 619. 
 McAnrow v. Martin, 934, 935, 938, 
 
 964. 
 McArthur v. Montclair R. Co., 927. 
 McBride v. Clarke, 942. 
 McCan v. O'Ferrall, 335. 
 McCarter v. Clavin, 18. 
 McCarthy v. Peake, ID, 72, 676, 883, 
 
 905. 
 McCaskill v. Warren, 116. 
 McCaslin v. State, 763. 
 McClure v. McGee, 17. 
 McCombs V. Merryhew, 174. 
 McCord V. Weil, 41. 
 McCornack v. Salem Ry. Co., 527. 
 McCosker v. Brady, 849, 986. 
 McCraith v. Quin, 620. 
 McCulloch V. Norwood, 308. 
 McCullough V. Merchants Loan & 
 
 Trust Co., 100. 
 McCurdy v. Bowes, 569. 
 McDermott v. Crook, 558. 
 McDonald v. Carney, 264. 
 McDonald v. Railroad, 167. 
 
 McDonald v. Ross-Lewin, 393, 413, 
 
 416. 
 McDonald v. State, 455. 
 McDonnell v. White, HZ. 
 McElvey v. Lewis, 684. 
 McElwain v. Willis, 588. 
 McElwaine v. Hosey, 7. 
 McEvers v. Lawrence, 311. 
 McEwen v. Brewster, 632. 
 McGarrah v. Bank, 3, 13, 110. 
 McGhee v. Willis, 561. 
 McGilliard v. Donaldsonville F. & 
 
 M. Works, 91, 93, 102. 
 McGoldrick v. Slevin, 591, 593. 
 McGowan v. Myers, 181, 182, 631. 
 McGraw v. Union Trust Co., 322. 
 McGregor v. Third National Bank, 
 
 313. 
 Mcllhenny v. Binz, 461, 519, 532. 
 Mcllrath v. Snure, 241. 
 Mcintosh V. Perkins, 659. 
 McKay v. Van Kleeck, 54, 70, 183. 
 McKennon v. Pentecost, 210. 
 McKenzie v. Coslett, 935. 
 McKinney v. Ohio & INlississippi R. 
 
 Co., 552. 
 McKinnon v. Pike County Guano 
 
 Co., 800. 
 McKinnon v. Wolfenden, 314. 
 McLane v. Placerville & S. V. R. 
 
 Co., 480, 504, 507. 
 McLaughlin v. Kimball, 391. 
 McLaughlin v. Taylor, 222. 
 McLean v. Lafayette Bank, 135, 74S. 
 McLean v. Presley's Administrator, 
 
 791. 
 McLeod V. City of New Albany, 
 
 165, 208. 
 McMahon v. McClernan, 708. 
 McMahon v. North Kent L Co., 
 
 804. 
 McNab V. Noonan, 707. 
 McNair v. Pope, 719, 778. 
 McNeil V. Garratt, 197. 
 McNulta V. Ensch, 557. 
 McNulta V. Lochridge, 89, 547.
 
 TABLE OF CASES CITED. 
 
 xliii 
 
 [KEFERBNCES ABE TO PAGKS.] 
 
 McNulta V. Lockridge, 557, 558. 
 M'Crecry v. Beiiueti, 32. 
 Mead v. Burk, 18, 26, 763. 
 Mead v. Orrery, 138, 142. 
 Meaden v. Sealey, 133, 788. 
 Meadow Valley Mining Co. v. 
 
 Dodds, 36. 
 Meara's Administrator v. Holbrook, 
 
 304, 537, 539. 
 Mechanics Bank of Philadelphia v. 
 
 Bank of New Brunswick, 948. 
 Mechanics National Bank v. Lan- 
 
 daur, 301. 
 Medynski v. Theiss, 209. 
 Meeker v. Sprague, 301. 
 Meier v. Kansas Pacific R. Co., 
 
 3, 467. 
 Meinhard v. Strickland, 591. 
 Melendy v. Barbour, 294, 299, 312, 
 
 541. 
 M'Elmoyle v. Cohen, 273. 
 Memphis & Charleston R. Co. v. 
 
 Glover, 562. 
 Mercantile I. & G. T. Co. v. River 
 
 Plate T. L. & A. Co., 62. 
 Mercantile Insurance Co. v. Jaynes, 
 
 258. 
 Mercantile Trust Co. v. Farmers' 
 
 L. & T. Co., 322, 325, 533, 534. 
 Mercantile Trust Co. v. Kanawha & 
 
 O. R. Co., 473, 572. 
 Mercantile Trust Co. v. Lemoille 
 
 Valley R. Co., 84. 
 Mercantile Trust Co. v. Missouri, 
 
 K. & T. R. Co., 477, 495. 
 Mercantile Trust Co. v. Southern 
 
 States L. & T. Co., 182. 
 Mercantile Trust & Deposit Co. v. 
 
 Southern I. C. Line, 520. 
 Merchants' Bank v. Crysler, 959. 
 Merchants Insurance Co., In re, 5, 
 
 81, 83, 154. 
 Merchants & Manufacturers Nation- 
 al Bank v. Kent Circuit Judge, 24, 
 
 98, 800. 
 
 Merchants National Bank v. North- 
 western M. & C. Co., 408. 
 Merchants & Planters National 
 
 Bank v. Trustees, 74. 
 Meredith Village Savings Bank v. 
 
 Simpson, 294, 298. 
 Meridian N. & P. Co. v. Diem & W, 
 
 P. Co., 129, 665. 
 Meriwether v. Garrett, 579, 587. 
 Merrell v. Pemberton, 49, 886. 
 Merriam v. St. Louis, C. G. & F. 
 
 S. Ry. Co., 37, 461, 478. 
 Merriam v. Victory Mining Co., 378, 
 
 381, 971. 
 Merrill v. Elam, 110, 127. 
 Merrill v. First National Bank, 446. 
 Merritt, In re, 239, 890. 
 Mesnager v. De Leonis, 760. 
 Metcalf V. Moses, 683. 
 Aletcalfe v. Commonwealth L. & L. 
 
 Co.'s Receiver, 167. 
 Metcalfe v. Pulvertoft, 121, 122, 765. 
 Metropolitan National Bank v. Com- 
 mercial State Bank, 53, 54. 
 Metropolitan Trust Co. v. Columbus, 
 
 S. & H. R. Co., 499. 
 Metropolitan Trust Co. v. Tona- 
 
 wanda Valley & C R. Co., 565. 
 Metz V. B., C. & P. R. Co., 548, 
 
 550. 
 Metzner v. Bauer, 272, 277, 278. 
 Meyer v. Johnston, 461, 491, 565, 
 
 568. 
 Meyer v. Seebald, 747. 
 Meyer v. Thomas, 819. 
 Miami Exporting Co. v. Gano, 254. 
 Middleton v. Dodswell, 122, 605, 
 
 858, 861. 
 Middleton v. New Jersey West Line 
 
 R. Co., 490. 
 Mikkelson v. Truesdale, 540. 
 Milbank v. Revett, 755, 757. 
 Miles V. New South B. & L. Assn., 
 
 173. 
 Milhous V. Dunham, 782. 
 Miller v. Cavanaugh, 135.
 
 xliv 
 
 TABLE OF CASES CITED. 
 
 [BEFEKENCES AEE TO PAGES.] 
 
 Miller V. Jones, 106, 172, 173, 697, 
 
 698, 699, 706, 907. 
 Miller v. Kitchen, 354. 
 Miller v. Loeb, 294, 316, 994. 
 Miller v. Mackenzie, 630. 
 Miller v. Shriner, 131. 
 Miller Brothers v. Perkins, 60, 63. 
 Mills V. Fry, 776. 
 
 Miltenberger v. Logansport R. Co., 
 492, 504, 505, 506, 514, 515, 520, 
 840. 
 Milwaukee & Minnesota R. Co. v. 
 Soutter, 461, 462, 489, 809, 969, 
 979, 991. 
 Milwaukee & St. Paul R. Co. v. 
 Milwaukee & Minnesota R. Co., 
 84. 
 Minkler v. United States S. Co., 
 
 584. 
 Minneapolis Baseball Co. v. City 
 
 Bank, 392. 
 Minneapolis Western Ry. Co. v. 
 Minneapolis & St. L. R. Co., 246. 
 Minnesota T. M. Co. v. Langdon, 
 
 404, 408. 
 Missouri Pacific R. Co. v. Love, 
 
 70, 172. 
 Missouri Pacific R. Co. v. Texas 
 
 & P. R. Co., 494, 537, 543. 
 Mitchell, Ex parte, 568. 
 Mitchell V. Barnes, 730. 
 Mitchell V. Roland, 127. 
 M'Loughlin v. Longan, 772. 
 Moak V. Coats, 629. 
 Moat V. Holbein, 195. 
 Mobile & Ohio R. Co. v. Davis, 
 
 563. 
 Moies V. O'Neill, 668. 
 Moise V. Chapman, 286, 398. 
 Molony v. Cruise, 46, 856. 
 Monarch Co. v. Bank. 601. 
 Moncrieff v. Hare, 795. 
 Monitor Furnace Co. v. Peters, 434. 
 Montana, Boston & M. C. C. & S. 
 M. Co. V. Montana O. P. Co., 
 390. 
 
 Montgomery, In re, 967. 
 Montgomery v. Enslen, 197, 304. 
 Montgomery v. Merrill, 364, 752, 
 
 753, 798. 
 Montgomery v. Petersburg S. & I. 
 
 Co., 919, 954. 
 Mooney v. British Commercial Life 
 
 Insurance Co., 215. 
 Moore v. Bank, 13. 
 Moore v. Lincoln P. & S. C. Co., 
 
 934. 
 Moore v. O'Loghlin, 259. 
 Moore v. Potter, 193. 
 Moran v. Dillingham, 916. 
 Moran v. Johnston, 127. 
 Moran v. Schaeffer, 492. 
 Moran v. Wayne Circuit Judge, 
 
 102. 
 Mordaunt v. Hooper, 718, 721. 
 Morey v. Grant, 659. 
 Morford v. Hamner, 762. 
 Morgan v. County Court, 199. 
 Morgan v. Gibian, 70. 
 Morgan v. Hardee, 916. 
 Morgan v. New York & Albany R. 
 
 Co., 434, 892. 
 Morgan v. Potter, 139, 263. 
 Morgan v. South M. L. V. Co., 
 
 401. 
 Morgan's Louisiana & T. R. & S. 
 S. Co. V. Farmers' L. & T. Co., 
 526. 
 Moriarty v. Kent, 248, 249. 
 Moritz V. Miller, 128. 
 Morley v. Saginaw Circuit Judge. 
 
 497. 
 Morris v. Branshaud, 819. 
 Morris v. Elyton Land Co., 353. 
 Morris v. Taylor, 584. 
 Morrison v. Buckner, 13, 16, 786, 
 
 787. 
 Morrison v. Forman, 492. 
 Morrison v. Shuster, 591. 
 Moseby v. Burrow, 285, 430. 
 Mott V. Dunn, 595, 898. 
 Mountfort, Ex parte, 110.
 
 TABLE OF CASES CITED. 
 
 xlv 
 
 [REFERENCES ABE TO PAGES.] 
 
 Moyers v. Coiner, 130, 963. 
 Mueller v. Stinesville & B. S. Co., 
 
 223. 
 Mulcahcy v. Strauss, 153, 159, 161, 
 
 294, 297. 
 Mullane v. Ahern, 620. 
 Mullen V. Jennings, 16, 883. 
 Mullcr V. Pondir, 924. 
 Municipal Commissioners of Car- 
 
 rickfergus v. Lockhart, 21, 26, 718, 
 
 723, 910. 
 Munns v. Isle of Wight R. Co., 
 
 464. 
 Murdock's Case, 880, 882. 
 Murphy v. Fidelity M. F. Ins. Co., 
 
 53, 115, 132. 
 Murphy v. Harker, 198. 
 Murphy v. Penniman, 238, 450. 
 Murray v. Chambers, 455. 
 Murray v. Superior Court, 342, 348. 
 Murray v. Vanderbilt, 368, 369. 
 Murrey v. Chambers, 455. 
 Murrough v. French, 619. 
 Murtey v. Allen, 249, 261, 281, 395, 
 
 396. 
 Musgrove v. Gray, 178. 
 Musgrove v. Nash, 950. 
 Mutual Life Insurance Co. v. Spicer, 
 
 830. 
 Myer v. Carr Co., 520. 
 Myers v. Estell, 7, 819. 
 Myton V. Davenport, 846. 
 
 N. 
 
 N. J. & N. Y. R. Co., In re, 493. 
 
 Naglee v. Minturn, 678, 710. 
 
 Nason v. Blennerhassett, 777. 
 
 Nathan v. Whitlock, 254. 
 
 Nathans v. Steinmeyer, 792. 
 
 National Bank v. Colby, 457, 458. 
 
 National Bank of the Metropolis v. 
 Sprague, 230. 
 
 National Fire Ins. Co. v. Broad- 
 bent, 824. 
 
 National Mechanics Banking Asso- 
 ciation V. Mariposa Co., 582, 583, 
 992. 
 
 National State Bank v. Vigo Coun- 
 ty National Bank, 386. 
 
 National Trust Co. v. Miller, 279. 
 
 National Trust Co. v. Murphy, 257. 
 
 Naylor v. Sidener, 35. 
 
 Nealis v. American T. & I. Co., 
 401. 
 
 Neall V. Hill, 342, 343, 892. 
 
 Neate v. Pink, 784. 
 
 Neeves v. Boos, 53. 
 
 Neitzel v. Lyons, 348. 
 
 Nelson v. Connor, 71. 
 
 Nelson v. Kalkhofif, 322, 325. 
 
 Nelson v. Nugent, 265. 
 
 Nesbitt V. Turrentine, 726. 
 
 Neun V. Blackstone B. & L. Assn., 
 53, 214. 
 
 Nevitt V. Woodburn, 3, 4, 297. 
 
 New V. Wright, 656, 666, 676, 905. 
 
 New Amsterdam Fire Insurance 
 Co., In re, 424. 
 
 Newbold v. P. & S. R. Co., 570. 
 
 Newell V. Fisher, 261. 
 
 Newell V. Schnull, 134. 
 
 New England R. Co. v. Carnegie 
 Steel Co., 513, 516. 
 
 New Haven H. N. Co. v. Linden 
 Springs Co., 395. 
 
 Newman v. Hammond, 62, 143. 
 
 Newman v. Mills, 215. 
 
 Newman v. Newman, 801, 805. 
 
 New Orleans Gas Light Co. v. Ben- 
 nett, 389, 408. 
 
 Newport v. Bury, 104, 855, 876, 
 917. 
 
 Newport & Cincinnati Bridge Co. v. 
 Douglass, 519. 
 
 Newport Cotton Mill Co. v. Mims, 
 286, 398, 409, 411. 
 
 New South B. & L. Assn. v. Wil- 
 lingham, 114. 
 
 Newton v. Eagle P. Mfg. Co., 378. 
 
 Newton v. Ricketts, 854.
 
 xlvi 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 New York N. E. Bank v. Metropol- 
 itan S. Bank, 394. 
 
 New York, P. & O. R. Co. v. New 
 York, L. E. & W. R. Co., 533. 
 
 New York Security & T. Co. v. Illi- 
 nois T. R. Co., 302. 
 
 New York & W. U. T. Co. v. Jew- 
 ett, 316, 994. 
 
 Nichol V. Murphy, 55. 
 
 Nichols V. Perry Patent Arm Co., 
 435, 892. 
 
 Nichols V. Smith, 537. 
 
 Nicoll V. Boyd, 652. 
 
 Niemann v. Niemann, 664. 
 
 Nimick & Co. v. Iron Works Co., 
 395. 
 
 Nimocks v. Shingle Co., 34. 
 
 Nisbet V. Great Northern C. Co., 
 378. 
 
 Nisbet V. Tindall, 333. 
 
 Nix V. Ellis, 287. 
 
 Noad V. Backhouse, 46, 856. 
 
 Noe V. Gibson, 191, 192. 
 
 Noonan v. McNab, 710. 
 
 Norris v. Lake, 13, 15. 
 
 North American Gutta Percha Co., 
 In re, 159, 160. 
 
 North America Land & T. Co. v. 
 Watkins, 129, 353. 
 
 North Carolina R. Co. v. Drew, 523. 
 
 North Carolina R. Co. v. Wilson, 
 852. 
 
 Northern Alabama Ry. Co. v. Hop- 
 kiris, 916, 942. 
 
 Northern Pacific R. Co. v. Heflin, 
 541. 
 
 Northern Pacific R. Co. v. Lament, 
 512, 515, 517. 
 
 Northwestern Iron Co. v. L. & R. 
 I. Co., 70, 71. 
 
 Northwestern Mutual Life Ins. Co. 
 V. Burr, 154. 
 
 Northwestern Mutual Life Ins. Co. 
 V. Kidder, 386. 
 
 Northwestern Mutual Life Insur- 
 ance Co. V. Park Hotel Co., 816. 
 
 Norwood, Ex parte, 281. 
 
 Nowell V. International Trust Co., 
 
 930. 
 Noyes v. Rich, 479, 502. 
 Nugent V. Nugent, 224, 226, 777. 
 Nusbaum v. Stein, 129, 130, 591, 593, 
 
 897. 
 Nutting V. Colt, 660, 902. 
 
 O. 
 
 Oakes v. Myers, 165. 
 
 Oakford v. Robinson, 794, 795, 806. 
 
 Oakley v. Paterson Bank, 23, 114, 
 344, 345, 347, 435, 886, 892. 
 
 O'Brien v. Chicago, Rock Island & 
 Pacific R. Co., 359. 
 
 O'Callaghan v. O'Callaghan, 774. 
 
 Ocean Steamship Co. v. Wilder, 270. 
 
 O'Connor v. Malone, 213. 
 
 O'Donnell v. First National Bank, 
 132. 
 
 Oehme v. Rucklehaus, 739. 
 
 Ogden V. Gregg, 703. 
 
 Ogden City v. Irrigation Co., 932, 
 937, 963. 
 
 Ohio & Mississippi R. Co. v. Ander- 
 son, 550. 
 
 Ohio & Mississippi R. Co. v. Davis, 
 537, 550. 
 
 Ohio & Mississippi R. Co. v. Fitch, 
 86, 551, 552, 554. 
 
 Ohio & Mississippi R. Co. v. Nick- 
 less, 555. 
 
 Ohio & Mississippi R. Co. v. Russell, 
 553. 
 
 Ohio Turnpike Co. v. Howard, 212 
 
 O'Keeflfe v. Armstrong. 145. 
 
 Olcott V. Heermans, 218. 
 
 Oldham v. Bank, 818. 
 
 Olds V. Tucker, 300. 
 
 Oleson V. Bank, 601. 
 
 Oliver v. Clark, 284. 
 
 Oliver v. Decatur, 789. 
 
 Oliver v. Victor, 591.
 
 TABLE OF CASES CITED. 
 
 xlvii 
 
 [eefbkences ake to pages.] 
 
 Olmstead v. Distilling & C. F. Co., 
 
 102. 
 Olney v. Tanner, 272, 630, 639. 
 Olson V. Bank, 956, 961. 
 Olyphant v. St. Louis O. & S. Co.. 
 
 377. 
 Omaha & S. W. R. Co. v. Chicago, 
 
 etc., Ry. Co., 44. 
 O'Mahoney v. Belmont, 20, 48, 70, 
 
 112, 189, 958, 982. 
 Ormsby, In re, 931. 
 Orphan Asylum v. McCartee, 17, 
 
 18, 848, 853. 
 Orton V. Madden, 591. 
 Osborn v. Heyer, 3, 579, 580, 581, 
 
 899. 
 Osborne v. Big Stone G. C. Co., 
 
 568. 
 Osborne v. Harvey, 110, 125. 
 Osgood V. Laytin, 389, 390, 404, 405, 
 
 894. 
 Osgood V. Maguire, 292. 
 Osgood V. Ogden, 291, 404, 419. 
 Otis V. Gross, 328. 
 
 Overholt v. Old D. Mfg. Co., 970. 
 Overton v. M. & L. R. Co., 461. 
 Owen V. Homan, 12, 14, 26, 27, 718, 
 
 722, 880, 910. 
 Owen V. Smith, 365, 752. 
 
 Pacific Lumber Co. v. Prescott, 215. 
 Pacific R. Co. V. Wade, 542. 
 Pacific Railroad v. Ketchum, 61. 
 Pagett V. Brooks, 52, 975, 986. 
 Paige V. Smith, 294, 332, 537, 541, 
 
 559. 
 Paige V. Vankirk, 665. 
 Paine v. Holliday, 638. 
 Painter v. Painter, 304. 
 Palen v. Bushnell, 262, 644, 649. 
 Palen v. Johnson, 262. 
 Palmer v. Bank, 392. 
 Palmer v. Murray, 256. 
 
 Palmer v. Pettingill, 166. 
 i'almcr v. State, 70. 
 Palmer v. Vaughan, 31, 886. 
 Palmer v. Wright, 869. 
 Palys V. Jewett, 301, 542. 
 Pangburn v. American V., S. & L. 
 
 Co., 224, 930. 
 Panton v. Zebley, 201. 
 Paradise v. Farmers & Merchants 
 
 Bank, 279. 
 Park V. New York, L. E. & W. R. 
 
 Co., 533. 
 Parker v. Browning, 179, 201. 
 Parker v. Dunn, 213. 
 Parker v. Lamb & Sons, 272, 276. 
 Parker v. Moore, 584, 586. 
 Parker v. Parker, 759. 
 Parker v. Stoughton Mill Co., 413. 
 Parkhurst v. Kinsman, 48. 
 Parkhurst v. Muir, 671, 672. 
 Parkin v. Seddons, 64, 65, 718. 
 Parkinson v. Trousdale, 34, 980. 
 Parks V. Sprinkle, 644, 645. 
 Parks V. United States B. Corpora- 
 tion, 356. 
 Parmly v. Tenth Ward Bank, 16, 17, 
 
 363, 884. 
 Parr v. Bell, 294, 304, 305, 889. 
 Parr v. Spartanberg, etc. R. Co., 
 
 550. 
 Parsons v. Charter Oak Life Ins. 
 
 Co., 64, 372, 473. 
 Parsons v. Monroe Manufacturing 
 
 Co., 433. 
 Partington v. Booth, 195. 
 Patrick v. Eells, 308. 
 Patterson v. Lynde, 67. 
 Patterson v. Northern Trust Co., 
 
 93, 104. 
 Patterson v. Patterson, 230. 
 Patterson v. Ward, 225, 972. 
 Payne v. Atterbury, 740. 
 Payne v. Baxter, 127, 294. 
 Payne v. Hook, 652. 
 Payne v. Paddock, 885. 
 Payson v. Jacobs, 297, 298.
 
 xlviii 
 
 TABLE OF CASES CITED. 
 
 [EEFEEENCES ABE TO PAGES.] 
 
 Peabody v. New England W. Co., 
 403. 
 
 Peacock v. Peacock, 676. 
 
 Pearce v. Elwell, IS. 
 
 Pearce v. Gamble, 703. 
 
 Pearce v. Jennings, 595. 
 
 Pearson v. Kendrick, 38. 
 
 Pease v. Fletcher, 33. 
 
 Peatman v. Centerville L., H. & P. 
 Co., 354. 
 
 Peek V. Trinsmaran Iron Co., 804. 
 
 Peirce v. Van Dusen, 8, 430, 540. 
 
 Pelzer v. Hughes, 591, 598. 
 
 Pender v. Mallett, 636. 
 
 Pendleton v. Lutz, 548. 
 
 Pendleton v. Russell, 308, 437. 
 
 Penn v. Whiteheads, 24, 614, 885. 
 
 Pennsylvania Co. v. American Con- 
 struction Co., 476. 
 
 Pennsylvania Co. v. Jacksonville, T. 
 & K. W. R. Co., 962. 
 
 Pennsylvania Steel Co. v. New York 
 C. Ry. Co., 527, 529. 
 
 Pentz V. Hawley, 407, 412, 893. 
 
 Penzel Grocer Co. v. Williams, 224. 
 
 People V. Albany & Susquehanna R. 
 Co., 124, 128, 352. 
 
 People V. Bank of San Luis Obispo, 
 343. 
 
 People V. Barnett, 468. 
 
 People V. Barrett, 199. 
 
 People V. Brooks, 334. 
 
 People V. Central City Bank, 183, 
 205. 
 
 People V. Columbia Car Spring Co., 
 949. 
 
 People V. Commercial Alliance L. & 
 I. Co., 439. 
 
 People V. District Court, 118, 342. 
 
 People V. Draper, 29, 886. 
 
 People V. Hulburt, 629. 
 
 People V. Jones, 334. 
 
 People V. Knickerbocker Life Insur- 
 ance Co., 308, 437, 956. 
 People V. Mayor of New York, 
 739. 
 
 People V. Mead, 581. 
 
 People V. Merchants & Mechanics 
 
 Bank, 329. 
 People V. Norton, 135, 751. 
 People V. Rogers, 200. 
 People V. Security Life Insurance 
 
 Co., 216, 427. 
 People V. Security Life Insurance 
 
 and Annuity Co., 956. 
 People V. St. Nicholas Bank, 322. 
 People V. Sturtevant, 195. 
 People V. Universal Life Insurance 
 
 Co., 322. 
 People V. Van Buren, 195. 
 People V. Washington Ice Co., 374, 
 
 893. 
 People V. Weigley, 192, 199, 342. 
 People V. Zimmer, 334. 
 Peoples National Bank v. Virginia 
 
 Textile Co., 51. 
 People's State Bank v. Francis, 286, 
 
 447. 
 Peoria & P. U. R. Co. v. Chicago, 
 
 P. & S. W. R. Co., 506. 
 Peoria Steam Marble Works v. 
 
 Hickey, 321. 
 Pepper v. Fidelity & C. Co., 455. 
 Perrin v. Lepper, 858, 871. 
 Perry v. Oriental Hotels Co., 93, 95, 
 
 813. 
 Perry-Mason Shoe Co. v. Sykes, 
 
 954. 
 Person v. Learj^ 277. 
 Persse, In re, 294, 304, 305, 889. 
 Petaluma Savings Bank v. Superior 
 
 Court, 619. 
 Petersburg Sav. & Ins. Co. v. Del- 
 
 latorre, 575. 
 Peterson v. Baker, 543, 545. 
 Pfeltz V. Pfeltz, 717, 910. 
 Phelan v. Ganebin, 181. 
 Phelps V. Foster, 591, 897. 
 Phenix Insurance Co. v. Schultz, 
 
 277. 
 Philadelphia M. & T. Co. v. Goos, 
 791, 816.
 
 TABLE OF CASES CITED. 
 
 xlix 
 
 [eebtbrbnces are to pages.] 
 
 Philadelphia M. & T. Co. v. Oyler, 
 
 794. 
 Philadelphia & Reading R. Co. v. 
 
 Commonwealth, 469. 
 Philadelphia & R. R. Co. v. Little, 
 
 232. 
 Phillips V. Atkinson, 696. 
 Phillips V. Eiland, 764. 
 Phillips V. Smoot, 158. 
 Phipps V. Bishop of Bath, 836. 
 Phoenix Iron Co. v. New York 
 
 Wrought Iron Railroad Chair Co., 
 
 422. 
 Phoenix Mutual Life Insurance Co. 
 
 V. Grant, 125. 
 Phoenix Warehousing Co. v. Badg- 
 er, 409. 
 Pickersgill v. Myers, 389. 
 Pickett V. Fidelity & C. Co., 653. 
 Picton V. Cullen, 31. 
 Pignolet V. Bushe, 759, 760. 
 Pinchback v. Mining Co., 430, 431. 
 Pincke, Ex parte, 98, 878. 
 Pine Lake Iron Co. v. LaFayette 
 
 Car Works, 398, 399. 
 Pini V. Roncoroni, 675. 
 Pitcher v. Helliar, 874. 
 Pitkin V. Cowen, 548. 
 Pitt V. Snowden, 250, 775. 
 Pittman v. Hopkins, 954. 
 Pittsburg Carbon Co. v. McMillin, 
 
 387. 
 Pittsfield National Bank v. Bayne, 
 
 935. 
 Piatt V. Adriance, 455. 
 Piatt V. Archer, 81, 82, 83. 
 Piatt V. Beach, 455. 
 Piatt V. Beebe, 450. 
 Piatt V. Crawford, 269, 446, 450. 
 Piatt V. New York & S. B. Ry. Co., 
 
 55. 
 Piatt V. Philadelphia & R. R. Co., 
 
 473, 520, 522. 
 Poage V. Bell, 16. 883. 
 Podmore v. Gunning, 733. 
 Poertner v. Russell, 197. 
 
 Poland V. Railroad Co., 526, 531. 
 Polk V. Garver C. & M. Co., 936. 
 Polk V. Johnson, 94, 937, 939. 
 Pollard V. Southern Fertilizer Co., 
 
 114, 129, 132. 
 Pollock V. B. & L. Assn., 272. 
 Ponca Mill Co. v. Mikesell, 356, 
 
 358. 
 Pond V. Cooke, 189. 
 Pond V. F. & L. R. Co., 343. 
 Ponsonby v. Ponsonby, 992. 
 Pontius, In re, 363. 
 Pope V. Ames, 156. 
 Pope V. Pope, 776. 
 Popp V. Mining Co., 24, Zl . 
 Popper V. Scheider, 660, 661, 903. 
 Poppitz V. Rognes, 584. 
 Portarlington v. Soulby, 887. 
 Porter v. Kingman, 300. 
 Porter v. Lopes, 33. 
 Porter v. Sabin, 406. 
 Porter v. Williams, 629, 636. 
 Porter v. Williams & Clark, 250. 
 Post V. Dorr, 52, 794, 840. 
 Potter V. Bunnell, 315, 537. 
 Potter V. IMerchants Bank, 270. 
 Potter V. Spa Spring Brick Co., 
 
 162. 
 Potts, In re, 129. 
 Potts V. Leighton, 952, 953. 
 Potts V. Warwick and Birmingham 
 
 Canal Navigation Co., 609. 
 Pouder v. Catterson, 775. 
 Ponder v. Tate, 821. 
 Pound, In re, 804. 
 Fountain, In re, 877. 
 Powell V. Allarton, 885. 
 Powell V. Dayton, S. & G. R. R. Co., 
 
 554. 
 Powell V. Follett, 197. 
 Powell V. Quinn, 858. 
 Powell V. Waldron, 647, 650. 
 Powers V. Hamilton Paper Co., 433. 
 Powers V. Loughridge, 330. 
 Poythress v. Po>-thress, 848, 850.
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Prather Engineering Co. v. Detroit, 
 
 F. & S. Ry., 298. 
 Pread v. Lewis, 111. 
 Prebble v. Boghurst, 751. 
 Premier Cycle Mfg. Co., In re, 978, 
 
 979. 
 Premier Steel Co. v. McElwaine- 
 
 Richards Co., 170. 
 Prescott V. Pfeififer, 636, 638. 
 Pressley v. Harrison, 24. 
 Pressley v. Lamb, 53. 
 Preston v. American Surety Co., 151. 
 Preston v. Corporation of Great 
 
 Yarmouth, 812. 
 Preston v. Tunbridge, 840. 
 Preston National Bank v. Smith 
 
 M. P. Co., 915. 
 Price V. Abbott, 455. 
 Price V. White, 928. 
 Price's Executrix v. Price's Execu- 
 tors, 861. 
 Pringle v. Woolworth, 399, 430. 
 Pritchard v. Fleetwood, 746. 
 Probasco v. Probasco, 123, 738. 
 Provident Life & Trust Co. v. Ken- 
 
 iston, 14. 
 Prytherch, In re, 804. 
 Pueblo T. & E. Co. v. Allison, 
 
 493. 
 Pullan V. Cincinnati & Chicago R. 
 
 Co., 6, 12, 477, 881. 
 Pullis V. Pullis, 719. 
 Pullman's Palace-Car Co. v. Amer- 
 ican L. & T. Co., 521. 
 Purcell V. Woodley, 970. 
 
 Quin V. Holland, 779. 
 Quincy v. Cheeseman, 818, 829. 
 Quincy, M. & P. R. Co. v. Humph- 
 reys, 322, 533. 
 Quinn v. Brittain, 607, 833, 834. 
 
 R. 
 
 Rabb V. Albright, 60. 
 
 Rachel Colvin, In re, 205, 877. 
 
 Radebaugh v. Tacoma & P. R. Co., 
 
 53, 523. 
 Radford v. Folsom, 935, 951, 962. 
 Raht V. Attrill, 379. 
 Railroad v. Keary, 539. 
 Railway Co. v. Jewett, 130, 462. 
 Raincock v. Simpson, 775. 
 Rainey v. Freeport S. C. & C. Co., 
 
 10, 24. 
 Ralph V. Wisner, 478. 
 Ralston v. Washington & C. R. Ry. 
 
 Co., 102. 
 Randall v. Morrell, 686, 905. 
 Randfield v. Randfield, 294, 295. 
 Ranger v. Champion C. P. Co., 
 
 354. 
 Rankin v. Minor, 633. 
 Rankine v. Elliott, 407, 439, 894. 
 Ranney v. Peyser, 840, 841, 846. 
 Ratcliff V. Adler, 297, 560. 
 Rathbone v. Gas Co., 348. 
 Rath f on v. Locher, 265. 
 Rawnsley v. Trenton Mutual Life & 
 
 Fire Insurance Co., 23, 435, 886, 
 
 892. 
 Ray V. Carlisle, 825. 
 Ray V. Macomb, 259. 
 Ray V. Pierce, 548. 
 Ray V. Robert Price Coal Co., 13. 
 Ray V. Trice, 303. 
 Read v. Brayton, 162. 
 Read v. Corcoran, 961. 
 Real Estate Associates, In re, 45. 
 Real Estate Associates v. Superior 
 
 Court, 109. 
 Receiver v. First National Bank, 
 
 244, 245. 
 Receiver of Adams & Co. v. Roman, 
 
 710. 
 Receivers v. Wortendyke, 531. 
 Receivership of Dugdamonia S. & 
 L. Co., In re, 224.
 
 TABLE OF CASES CITED 
 
 li 
 
 [RBFEBENCBS AUE TO PACKS.] 
 
 Receivership of the N. I. C. Mill 
 
 Co., In re, 153, 209. 
 Reddall v. Bryan, 880. 
 Redding v. Anderson, 691. 
 Redmond v. Hoge, 369. 
 Reed v. Axtell, 299. 
 Rees V. Andrews, 26, 129. 
 Reeves v. Hastings, 937. 
 Regenstein v. Pearlstein, 156, 591. 
 Reid V. Middleton, 772. 
 Reid V. Reid, 34. 
 Reinhart v. Sutton, 542. 
 Rendall v. Rendall, 858, 866. 
 Renick v. Bank of West Union, 
 
 254. 
 Renton v. Chaplain, 685, 686, 904. 
 Republic v. Swigert, 387. 
 Reynolds v. Aetna Life Ins. Co., 
 
 629. 
 Reynolds v. Quick, 829. 
 Reynolds v. Stockton, 69. 
 Reynolds' Executor v. Pettyjohn, 
 
 239. 
 Reynolds & Hamby E. M. Co. v. 
 
 Martin, 21. 
 Rheinstein v. Bixby, 799. 
 Rhode Island Locomotive Works v. 
 
 Continental T. Co., 526, 530. 
 Rhodes v. Cousins, 591. 
 Rhodes v. Lee, 33, 671, 672, 902. 
 Rhorer v. Middlesboro, 265. 
 Rice V. Dodd, 115. 
 Rice V. St. Paul & Pacific R. Co., 
 
 16, 479. 
 Rich V. Levy, 591, 593, 898. 
 Rich V. Loutrel, 159, 160. 
 Richards, Ex parte, 198. 
 Richards v. Allen, 641, 650. 
 Richards v. Chave, 64. 
 Richards v. Haliday, 637. 
 Richards v. Morris Canal & Banking 
 
 Co., 948. 
 Richards v. People, 180, 181, 194, 
 
 195, 197. 
 Richards v. West, 195. 
 
 Richardson v. Clinton Wall Trunk 
 Co., 343. 
 
 Richardson v. Hickman, 204. 
 
 Richardson v. Turner, 443. 
 
 Riches v. Owen, 613. 
 
 Richey v. Gleeson, 118. 
 
 Richmond v. Irons, 449. 
 
 Richter v. Schroeder, 956. 
 
 Rickert v. Suddard, 388. 
 
 Ricks V. Broyles, 952. 
 
 Rider v. Bagley, 796. 
 
 Rider v. Vrooman, 796. 
 
 Ridge V. Manker, 294, 297, 309. 
 
 Ridout V. Earl of Plymouth, 138. 
 
 Ridpath v. S. P. & C. R. F. & T. 
 Co., 354. 
 
 Rigge V. Bowater, 797. 
 
 Riggs V. Whitney, 162, 651. 
 
 Righton V. Pruden, 639, 640. 
 
 Roach V. Glos, 806, 810, 841. 
 
 Robenson v. Ross, 35. 
 
 Roberson v. Roberson, 37. 
 
 Robert v. Tift, 854. 
 
 Roberts v. Anderson, 34, 980. 
 
 Roberts v. Eberhardt, 668, 681. 
 
 Roberts v. Parker, 819. 
 
 Roberts v. Pipkin, 662. 
 
 Robertson v. Detroit Pattern Works, 
 
 182. 
 Robertson v. Staed, 189. 
 Robeson v. Ford, 175, 201. 
 Robinson v. Arkansas L. & T. Co., 
 
 320. 
 Robinson v. Atlantic & Great West- 
 ern R. Co., 153, 167. 169. 
 Robinson v. Dickey, 109. 
 Robinson v. Hadley, 110. 
 Robinson v. Huidekoper, 539. 
 Robinson v. Mills, 544. 
 Robinson v. Mutual R. L. I. Co., 74, 
 
 77. 
 Robinson v. Taylor, 95. 
 Robrecht v. Robrecht, 41. 
 Roby V. Title G. & T. Co., 107. 
 Rochat V. Gee, 50, 945. 972. 
 Rockwell V. Merwin, 266.
 
 Hi 
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ARE TO PAGES.] 
 
 Rockwell V. Portland Savings Bank, 
 
 994. 
 Rodger Ballast Car Co. v. Omaha, 
 
 K. C. & E. R. Co., 525, 530. 
 Rodgers v. Adriatic Fire Ins. Co., 
 
 308, 437. 
 Rodman v. Harvey, 581. 
 Rodman v. Henry, 642. 
 Rogers v. Chippewa Circuit Judge, 
 
 543. 
 Rogers v. Corning, 188, 647. 
 Rogers v. Dougherty, 129, 131. 
 Rogers v. Haines, 277, 888. 
 Rogers v. Marshal], 740, 913. 
 Rogers v. Newton, 813. 
 Rogers v. Odom, 99, 150. 
 Rogers v. Riley, 277, 280. 
 Rogers v. Rogers Locomotive Co., 
 
 234. 
 Rogers & Baldwin Hardware Co. v. 
 
 Cleveland B. Co., 8, 74. 
 Rogers Mfg. Co. v. Rogers, 195. 
 Roller V. Paul, 209, 953. 
 Rollins V. Henry, 719, 739. 
 Roman v. Woolfolk, 358. 
 Root V. Safford, 618. 
 Rose V. Baker, 631. 
 Rose V. Bevan, 608, 899. 
 Rosenberg v. Moore, 591, 593, 594, 
 
 897. 
 Rosenblatt v. Johnston, 445. 
 Rosenthal v. McGraw, 952. 
 Ross V. Bridge, 981. 
 Ross V. Williams, 151. 
 Rossman v. Mitchell, 267. 
 Rouse V. Harry, 537. 
 Rowan v. Ide, 44. 
 Rowe V. Wood, 833, 834. 
 Rowland v. Auto Car Co., 660. 
 Roxbury v. Central Vermont R. Co., 
 
 297. 
 Royal Trust Co. v. Washburn, B. 
 
 & I. R. Co., 192. 
 Ruffner v. Mairs, 41, 129. 
 Ruggles V. Brock, 411. 
 Ruggles V. Patton, 936, 937. 
 
 Ruggles V. Southern Minnesota 
 Railroad, 461, 476, 814, 818, 895. 
 
 Rumney v. Detroit & Montana Cat- 
 tle Co., 354. 
 
 Rumney v. Donovan, 219. 
 
 Runals v. Harding, 618. 
 
 Runk V. St. John, 272, 277. 
 
 Runyon v. Farmers & Mechanics 
 Bank of New Brunswick, 4, 406. 
 
 Ruprecht v. Muhlke, 842. 
 
 Russell V. Baker, 774. 
 
 Russell V. Bruce, 806, 818. 
 
 Russell V. Chicago Trust & Savings 
 Bank, 639. 
 
 Russell V. East Anglian R. Co., 161, 
 171, 192, 195. 
 
 Russell V. Millett, 182. 
 
 Russell V. Pacific Ry. Co., 395. 
 
 Russell V. Texas & P. R. Co., 167, 
 783. 
 
 Rust V. United Waterworks Co., 
 272. 
 
 Rutherford v. Jones, 618. 
 
 Rutter V. Tallis, 156, 157, 183. 
 
 Ryan v. Hays, 510, 563. 
 
 Ryan v. Kingsbery, 200. 
 
 Ryan v. Lefroy, 839. 
 
 Ryan v. Morrill, 704. 
 
 Ryckman v. Parkins, 259, 960. 
 
 Ryder v. Bateman, 26, 719, 721. 
 
 S. 
 
 Sackhoff V. Vandegrift, 595. 
 Sacramento & P. R. Co. v. Superior 
 
 Court, 480. 
 Safford v. People, 469. 
 Sage V. Memphis & L. R. R. Co., 
 
 463, 473. 
 Salisbury z: Wilcox, 188. 
 Sallee v. Soules, 18. 
 Salway v. Salway, 328. 
 San Antonio & A. P. Ry. Co. v. 
 
 Bowles, 556. 
 Sanders v. Lord Lisle, 840, 841, 977. 
 Sandford v. Ballard, 756, 758, 913.
 
 TABLE OF CASES CITED. 
 
 liii 
 
 [RBFERBNCKS AKE TO PAGES.] 
 
 Sand ford v. Clarke, 330, 915. 
 Sandford v. Sinclair, 128, 618. 
 Sands v. Greeley & Co., 66, 67, 69, 
 
 277, 372,. 
 Sands v. Hill, 418. 
 Sands v. Roberts, 625. 
 Sands v. Sanders, 412, 416, 418. 
 Sands v. Sweet, 412, 417. 
 Sanford v. Anderson, 787. 
 Sanford v. United States F. & G. 
 
 Co., 592. 
 San Jose Safe Deposit Bank v. 
 
 Bank of Madera, 739. 
 Sankey v. O'Maley, 597. 
 Sargant v. Read, 705. 
 Saulsbury v. Lady Ensley C, I. & 
 
 R. Co., 958, 971. 
 Savage v. Medbury, 286, 398, 415. 
 Savannah, F. & W. R. Co. v. J., T. 
 
 & K. W. R. Co., 504, 506, 533. 
 Sawyer, In re, 199. 
 Saylor v. Mockbie, 655, 670, 904. 
 Scaife V. Scammon, 373. 
 Scannell v. Felton, 307. 
 Scarborough v. Borman, 227. 
 Schaberg v. McDonald, 228, 448. 
 Schenck v. Ingraham, 971. 
 Schenk v. Peay, 188. 
 Schilcer v. Brock, 114. 
 Schindelholz v. Cullum, 163. 
 Schlecht's Appeal, 113, 718, 734, 910. 
 Schmid v. N. Y., L. E. & W. R. Co., 
 
 563. 
 Schmidt v. Gayner, 294. 
 Schoeffler v. Schwarting, 980. 
 Schofield V. Palmer, 455. 
 Schoonover v. Hinckley, 410. 
 Schreiber v. Carey, 126, 806, 807, 
 
 818, 825. 
 Schtirr v. Omaha & St. L. Ry. Co., 
 
 550. 
 Schuyler's S. T. B. Co., In re, 80, 
 
 141, 156. 
 Schwartz v. Keystone Oil Co., 919, 
 920, 921, 951, 973, 
 
 Schwartz v. Rosetta G. P. & I. Co., 
 
 943. 
 Scott V. Armstrong, 287, 458, 459. 
 Scott V. Duncombe, 268. 
 Scott V. Elmore, 629. 
 Scott V. Nevius, 649. 
 Scott V. Rainier P. & R. Co., 321. 
 Scott V. Scott, 731. 
 Scott V. Searles, 61. 
 Scott V. Ware, 793. •■ 
 Screven v. Clark, 247. 
 Seagram v. Tuck, 143. 
 Sea Insurance Co. v. Stebbins, 813, 
 
 818, 819. 
 Sealy v. Munns, 784. 
 Seamans v. Millers' M. I. Co., 413. 
 Searcy v. Stubbs, 256. 
 Searle v. Choate, 294. 
 Second National Bank v. Lappe T. 
 
 Co., 68, Z7Z. 
 Second Ward Bank v. Upmann, 62, 
 
 584. 
 Secor V. T., P. & W. R. Co., 192, 
 
 499. 
 Security Bank v. National Bank of 
 
 the Commonwealth, 444, 457. 
 Security Life Insurance & Annuity 
 
 Co., In re, 915. 
 Security S. & L. Assn. v. Moore, 
 
 68. 
 Security Title & Trust Co. v. 
 
 Schlender, 704. 
 Security Trust Co. v. Goble Trust 
 
 Co., 381. 
 Sedgwick v. Menck, 74, 81, 82. 
 Sedgwick v. Place, 85. 
 Seeds Dry Plate Co. v. Heyn Photo- 
 Supply Co., 41. 
 Seibert v. Minneapolis & St. L. Ry, 
 
 Co., 533. 
 Seibert v. Seibert, 694. 
 Seidenbach v. Denklespeil, 150. 
 Seighortner v. Weissenborn, 885. 
 Seignious v. Pate, 828. 
 Sellers v. Stoffell, 806.
 
 liv 
 
 TABLE OF CASES CITED. 
 
 [REFERENCES ABE TO PAGES.] 
 
 Seney v. Wabash Western R. Co., 
 322, 533. 
 
 Sengfelder v. Hill, 719. 
 
 Sercomb v. Catlin, 194. 
 
 Seventh National Bank v. Shenan- 
 doah Iron Co., 378. 
 
 Severns v. English, 163. 
 
 Seymour v. Aultman Co., 119. 
 
 Seymour v. Wilson, 636. 
 
 Shadewald v. White, 3. 
 
 Shainwald v. Lewis, 260, 598, 599, 
 976. 
 
 Shand v. Hanley, 599. 
 
 Shannon v. Davis, 858. 
 
 Shannon v. Hanks, 41, 94, 95. 
 
 Shannon v. Wright, 667, 695. 
 
 Sharp V. Carter, 155, 156. 
 
 Shaughnessy v. The Rensselaer In- 
 surance Co., 286, 389, 398, 412, 
 415. 
 
 Shaw V. Rhodes, 952, 953. 
 
 Shaw V. Shore, 63, 801. 
 
 Shea, hi re, 234. 
 
 Shearing v. Trumbull, 88. 
 
 Shedd V. Seefeld, 297, 299, 301. 
 
 Shee V. Harris, 125, 746. 
 
 Sheeks v. Klotz, 807. 
 
 Sheets Lumber Co., In re, 224, 919. 
 
 Shehan v. Mahar, 28. 
 
 Sheldon v. Ames, 255. 
 
 Sheldon v. Parker, 125. 
 
 Sheldon v. Weeks, 117. 
 
 Shelly V. Pelham, 775. 
 
 Shephard, In re, 620. 
 
 Shepherd v. Pepper, 794, 818. 
 
 Sheppard v. Oxenford, 62, 677, 887, 
 906. 
 
 Sheridan Brick Works v. Marion 
 Trust Co., 34, 351, 359. 
 
 Sherman v. Clark, 16, 883. 
 
 Sherwood v. New England K. Co., 
 305. 
 
 Shewell V. Jones, 948. 
 
 Shinney v. North American S., L. 
 & B. Co., 69, 88. 
 
 Shoemaker v. Smith, 668. 
 Shotwell V. Smith, 792. 
 Shreve v. Hankinson, 796. 
 Shulte V. Hoflfman, 125, 141, 690. 
 Sieghortner v. Weissenborn, 903. 
 Sigua Iron Co. v. Brown, 8, 376. 
 Sigwald V. City Bank, 297. 
 Silliman v. Whitmer, 195. 
 Silver V. Bishop of Norwich, 748, 
 
 836. 
 Silverman v. Kuhn, 609. 
 Silverman v. Northwestern Mutual 
 
 Life Insurance Company, 797. 
 Simmons v. Allison, 153, 154, 915. 
 Simmons v. Henderson, 33, 34, 870. 
 Simmons v. Shelton, 942. 
 Simmons v. Taylor, 246. 
 Simmons v. Wood, 124, 131, 230, 
 
 232. 
 Simmons Hardware Co. v. Waibel, 
 
 46. 
 Simon v. Schloss, 671. 
 Simpson v. Roberts, 798. 
 Sims V. Adams, 136. 
 Siney v. New York Consolidated 
 
 Stage Co., 976, 979. 
 Singerly v. Fox, 253, 292. 
 Sjoberg v. Security S. & L. Assn., 
 
 367. 
 Skiddy v. A., M. & O. R. Co., 516, 
 
 519. 
 Skinner v. Maxwell, 3, 15, 32, 153, 
 
 162, 167, 169, 875. 
 Skinner v. Terhune, 630. 
 Skinners Company v. Irish Society, 
 
 12, 21, 22, 718, 724, SS2. 885, 910. 
 Skip V. Harwood, 184. 191, 197, 198, 
 
 709. 
 Slade V. Van Vechten, 227. 
 Slemmer's Appeal, 687. 
 Sligh V. Shelton S. R. Co., 294. 
 Sloan V. Central Iowa R. Co., 537, 
 
 562. 
 Slover V. Coal Creek C. Co., 17, 594, 
 Small V. Smith, 280. 
 Smathers ?/. Bank, 394.
 
 TABLE OF CASES CITED. 
 
 Iv 
 
 [bbfeebnces aue to pages.] 
 
 Smiley v. Sioux B. S. Co., 10, 378. 
 
 Smith, Ex parte, 62. 
 
 Smith V. Brown, 667. 
 
 Smith V. Burton, 224. 
 
 Smith V. Butcher, 41, 109, 608. 
 
 Smith V. Cawell, 33. 
 
 Smith V. Earl of Effingham, 310. 
 
 Smith V. Ely & Walker Dry Goods 
 
 Co., 55, 56, 182. 
 Smith V. Harris, 652. 
 Smith V. Hopkins, 53. 
 Smith V. Jeyes, 667, 682, 683, 903. 
 Smith V. Johnson, 387. 
 Smith V. Kelley, 764. 
 Smith V. Lowe, 671. 
 Smith V. Lowery, 38. 
 Smith V. Lusk, 7. 
 Smith V. Lyster, 876, 987. 
 Smith V. Manhattan Insurance Co., 
 
 438. 
 Smith V. McNamara, 181. 
 Smith V. Mosby, 288. 
 Smith V. New York Consolidated 
 
 Stage Co., 93, 216, 217, 259. 
 Smith V. Nursery & S. Co., 158, 
 
 159. 
 Smith V. Smith, 866. 
 Smith V. St. Louis & S. F. Ry. Co., 
 
 294, 546. 
 Smith V. Superior Court, 591. 
 Smith V. Taggart, 371. 
 Smith V. Thompson, 583, 588. 
 Smith V. Tiffany, 806. 
 Smith V. Trenton Delaware Falls 
 
 Co., 308. 
 Smith V. United States, 72. 
 Smith V. United States Express Co., 
 
 317. 
 Smith V. Vaughan, 990. 
 Smith V. Wells, 19, 20, 352. 
 Smith V. White, 739. 
 Smith V. Woodruff, 644. 
 Smith-Dimmick Lumber Co. v. 
 
 Teague, 114, 342. 
 Snow V. Winslow, 573. 
 Sobernheimer v. Wheeler, 277, 279. 
 
 Solis V. Blank, 67. 
 
 Sollory V. Leaver, 16, 738, 884. 
 
 Solomons v. American B. & L. 
 
 Assn., 952. 
 Somerset Coal Co. v. Diamond State 
 
 S. Co., 189. 
 Sorchan v. Mayo, 797. 
 Sorley v. Brewer, 596, 898. 
 South Baltimore B. & T. Co. v. 
 
 Kirby, 222, 230, 231. 
 South Carolina & G. R. Co. v. C, 
 
 C. G. & C. Ry. Co., 537. 
 South Carolina R. Co. v. People's 
 
 Saving Institution, 74. 
 Southern Bank of Kentucky v. Ohio 
 
 Insurance Co., 364. 
 Southern B. & L. Assn. v. Carey, 
 
 793. 818, 825. 
 Southern Development Co. v. Same, 
 
 526. 
 Southern Granite Co. v. Wadsworth, 
 
 8, 294, 295. 
 Southern Mutual B. & L. Assn. v. 
 
 Andrews, 306. 
 Southern Pacific R. Co. v. Maddox, 
 
 543. 
 Southern Railway Co., In re, 466. 
 Southern Ry. Co. v. Adams, 509, 
 
 511, 512, 513. 
 Southern Ry. Co. v. American 
 
 Brake Co., 509, 511, 512, 513. 
 Southern Ry. Co. v. Carnegie Steel 
 
 Co., 509, 511, 512, 513. 
 Southern Ry. Co. v. Dunlop Mills, 
 
 518. 
 Southern Ry. Co. v. Tillett, 513. 
 Spalding v. Commonwealth, 166. 
 Special Bank Commissioners v. 
 
 Franklin Institution, 917, 920, 954. 
 Speights V. Peters, 6, 16, 657, 693. 
 Speiser v. Merchants' Exchange 
 
 Bank, 921, 930, 952, 960. 
 Spencer v. Brooks, 533. 
 Spencer v. Cuyler, 581, 588, 589. 
 Spencer v. World's Columbian Ex- 
 position. 322, 323, 325.
 
 Ivi 
 
 TABLE OF CASES CITED. 
 
 [references ABE TO PAGES.] 
 
 Spinning v. Ohio Life Insurance & 
 
 Trust Co, 74, 11, 80, 161, 192, 
 
 193. 
 Spokane v. Amsterdanisch T. K, 
 
 719, 724. 
 Spokane County v. Annis, 166. 
 Spring V. Strauss, 643. 
 Springer v. Ayer, 11. 
 Stairley v. Rabe, 858, 861, 873. 
 Standish v. Musgrove, 811, 943, 944. 
 Standley v. Handrie & B. M. Co., 
 
 378. 
 Stanger Leathes v. Stanger Leathes, 
 
 33, 853. 
 Stanley v. National Union Bank, 
 
 53. 
 Stannus v. French, 228. 
 Stanton v. A. & C. R. Co., 567, 569, 
 
 574. 
 Staples V. May, 814, 815. 
 Stark V. Burke, 389, 407, 431, 432. 
 Starr v. Rathbone, 584, 586. 
 State V. A. & G. R. Co., 469. 
 State V. Allen, 727. 
 State V. Anheuser-Busch B. Assn., 
 
 61, 382. 
 State V. Bank of New England, 13. 
 State V. Bank of Rushville, 211, 217. 
 State V. Bell, 219. 
 State V. Butler, 961. 
 State V. Circuit Court, 195. 
 State V. City of New Orleans, 129, 
 
 212. 
 State V. Claypool, 981. 
 State V. Corning State S. Bank, 328. 
 State V. Bearing, 129. 
 State V. Denham, 202. 
 State V. District Court, 26, 55, 129, 
 
 132, 201, 355, 356, 592, 739. 
 State V. E. & K. R. Co., 490. 
 State V. Exchange Bank, 61. 
 State v. Fawcett, 232, 346. 
 State V. Fichtenkamm, 255. 
 State V. German Exchange Bank, 
 938. 
 
 State V. Germania Bank, 330, 930, 
 
 942, 959. 
 State V. Gibson, 146, 336. 
 State V. Gooch, 328. 
 State V. Hirzel, 219. 
 State V. J., P. & M. R. Co., 117, 129, 
 
 429, 461. 
 State V. Johnson, 45, 218. 
 State V. Judge of Civil District 
 
 Court, 53, 167. 
 State V. M. & C. R. Co., 472. 
 State V. Markuson, 195. 
 State V. McM. & M. R. Co., 490. 
 State V. Merchant, 468. 
 State V. Milligan, 199. 
 State V. Minneapolis & St. L. Ry. 
 
 Co., 551. 
 State V. Miller, 86. 
 State V. Nebraska S. & E. Bank, 
 
 916, 917, 942. 
 State V. Northern Central R. Co., 
 
 63. 
 State V. Northern Pac. R. Co., 88. 
 State V. People's U. S. Bank, 917, 
 
 932. 
 State V. Phoenix Loan Assn., 367. 
 State V. Pierce, 195. 
 State V. Port Royal & A. R. Co., 
 
 544, 547. 
 State V. Reynolds, 70, 153, 154, 188. 
 
 976. 
 State V. Rivers, 155. 
 State V. Ross, 2, 24, 55, 56. 
 State V. Stull, 45. 
 State V. Sullivan, 241, 242. 
 State V. Superior Court, 199, 624, 
 
 979. 
 State V. Theard, 199. 
 State V. Union National Bank, 24. 
 State V. Union Stock Yards State 
 
 Bank, 393. 
 State V. Wabash R. Co., 551. 
 State V. Woodson, 367. 
 State Bank, In re, 916. 
 State Bank v. Domestic S. M. Co^ 
 4.
 
 TABLE OF CASES CITED. 
 
 Ivii 
 
 [bbfeeences aue to pages.] 
 
 State Bank v. Gill, 582. 
 
 State Bank v. Receivers of Bank of 
 
 New Brunswick, 288. 
 State Central Savings Bank v. Bali- 
 Bearing Chain Co., 211, 942, 943, 
 958. 
 State Investment & Insurance Co. v. 
 
 Superior Court, 343. 
 State of Maryland v. Northern Cen- 
 tral R. Co., 484. 
 State Trust Co. v. National L. I. 
 
 & M. Co., 98. 
 Stearns Paint Mfg. Co. v. Corn- 
 stock, 921. 
 Steel V. Holladay, 932. 
 Steele v. Aspy, 20. 
 Steele v. Cobham, 858, 864. 
 Steele v. Sturgis, 141, 156, 157, 183. 
 Steele v. Walker, 301. 
 Steinke v. Loofbourow, 392, 395. 
 Stelzer v. La Rose, 703, 781. 
 Stenhouse v. Davis, 870. 
 Stephens v. Augusta T. & E. Co., 
 
 299, 302. 
 Stephens v. Meriden B. Co., 402. 
 Stephens v. Perrine, 637. 
 Sterling Electric Co. v. Augusta T. 
 
 & E. Co., 247. 
 Stern v. Austern, 598. 
 Stern v. State Board, 31. 
 Sternberg v. Wolff, 349, 351. 
 Stevens v. Davison, 461, 464. 
 Stevens v. Hadfield, 811. 
 Stevens v. Myers, 980. 
 Stevens v. South O. L. Co., 350. 
 Steward v. Green, 613. 
 Steward v. Stevens, 583, 588, 589. 
 Stewart v. Beebe, 265, 267. 
 Stewart v. Chesapeake & Ohio Canal 
 
 Co., 375. 
 Stewart v. Lay, 408, 410. 
 St. George, Estate of. In re, 982. 
 Stillman v. Dougherty, 408, 411. 
 Stillwell V. Savannah Grocery Co., 
 
 16. 
 Stihvell V. Wilkins, 729, 730. 
 
 Stith V. Jones, 759. 
 
 Stitwell V. Williams, 729, 730. 
 
 St. John V. Denison, 264. 
 
 St. Johns Table Co. v. Brown, 265. 
 
 St. Joseph & Denver City R. Co. v. 
 
 Smith, 294, 297, 298, 541. 
 St. Joseph & St. L. R. Co. v. 
 
 Humphreys, 322, 533. 
 St. Louis, A. & S. R. Co. v. Hamil- 
 ton, 153, 161, 162, 192, 294, 296. 
 St. Louis, A. & S. R. Co. v. O'Hara, 
 
 515, 517. 
 St. Louis, A. & T. R. Co. v. Whit- 
 
 aker, 168. 
 St. Louis Car Co. v. Stillwater 
 
 Street R. Co., 347. 
 St. Louis, C G. & F. S. Ry. Co. v. 
 
 Holladay, 2, 307, 430. 
 St. Louis, K. & S. R. Co. v. Wear, 
 
 102, 130, 200. 
 St. Louis Merchants' B. T. Ry. Co. 
 
 V. Continental Trust Co., 526. 
 St. Louis National Bank v. Field, 
 
 793. 
 St. Louis & S. C. & M. Co. v. San- 
 doval C. & M. Co., 56. 
 St. Louis & S. F. Ry. Co. v. Bricker, 
 
 550. 
 St. Louis S. W. Ry. Co. v. Hol- 
 
 brook, 537, 544. 
 St. Louis Trust Co. v. Riley, 509, 
 
 515, 528. 
 Stockbridge v. Beckwith, 67, 272, 
 
 275. 
 Stockley v. Thomas, 38, 369. 
 Stockton V. Central R. R. Co., 892. 
 Stockton V. Harmon, 129. 
 Stockton V. Mechanics, etc., Bank, 
 
 322. 
 Stoepel V. Union Trust Co., 322, 326. 
 Stokes V. Hoffman House, 50, 322. 
 Stokes V. Knickerbocker Investment 
 
 Co., 353, 433. 
 Stokes V. New Jersey P. Co., 403. 
 Stolze V. Manitowoc T. Co., 430. 
 Stolze V. M. & L. W. R. Co., 544.
 
 Iviii 
 
 TABLE OF CASES CITED. 
 
 [references are to pages.] 
 
 Stone V. Dodge, 288. 
 Stone V. Omaha Fire Ins. Co., 955. 
 Stone V. Taylor, 747. 
 Stone V. Wetmore, 29, 30, 886. 
 Stone V. Wishart, 98, 105, 875. 
 Stoner v. Bitters, 167. 
 Stoors V. Kelsey, 585. 
 Storm V. Ermantrout, 831. 
 Storm V. Waddell, 74, 71, 626. 
 Story V. Furman, 393. 
 St. Paul Title, I. & T. Co. v. Diago- 
 nal Coal Co., 959. 
 St. Paul Trust Co. v. Alintzer, 735. 
 Strain v. Palmer, 162, 915. 
 Strang v. M. & E. R. Co., 521. 
 Stratton v. Davidson, 136. 
 Strauss v. Inter-State B. & L. Assn., 
 
 367. 
 Street v. Anderton, 756, 757, 758, 
 
 913. 
 Streit V. Citizens Fire Insurance 
 
 Co., 360. 
 Stretch v. Gowdey, 915, 950. 
 Strong V. Carlyle Press, 804. 
 Strong V. Goldman, 599. 
 Strong V. Southworth, 448. 
 Stuart V. Boulware, 919, 955. 
 Stuart V. Hayden, 448. 
 Stubbs, In re, 804. 
 Stuparich Mfg. Co. v. Superior 
 
 Court, 175. 
 Sturch V. Young, 788. 
 Sturgeon v. Douglas, 775. 
 Sturgis V. Knapp, 155. 
 Stuyvesant Bank, In re, 105. 
 Suflfern v. Butler, 980. 
 Sullivan v. Colby, 172. 
 Sullivan v. Gage, 955. 
 Sullivan v. Judah, 195. 
 Sullivan v. Miller, 800. 
 Sullivan Electric L. & P. Co. v. Blue, 
 
 35, 129. 
 Suit V. Hochsletter Oil Co., 7. 
 Sunflower Oil Co. v. Wilson, 533. 
 Sutherland v. Lake Superior Ship 
 
 Canal R. & I. Co., 802. 
 
 Sutro V. Wagner, 667, 669, 903. 
 
 Sutton V. Jones, 104, 855. 
 
 Suydam v. Dequindre, 600. 
 
 Suydam v. Receivers of Bank of 
 New Brunswick, 420. 
 
 Swaby V. Dickon, 966. 
 
 Swan V. Mitchell, 790. 
 
 Swann v. Clark, 567, 572. 
 
 Swann v. Wright's Executor, 572. 
 
 Sweeny v. Mayhew, 33. 
 
 Sweet V. Partridge, 605, 606. 
 
 Sweet & Clark Co. v. Union Na- 
 tional Bank, 818. 
 
 Swing V. Townsend, 44. 
 
 Swope V. Villard, 358, 546. 
 
 Sykes v. Hastings, 98, 104, 855, 
 875. 
 
 Sylvester v. Reed, 614, 868. 
 
 Syme v. Bunting, 150. 
 
 Tabor v. Bank of Leadville, 916. 
 
 Tait V. Jenkins, 874. 
 
 Talbot V. Hope Scott, 715, 716, 718, 
 
 719. 
 Talladega Mercantile Co. v. Jenifer 
 
 Iron Co., 159. 
 Talmage v. Pell, 256, 385. 
 Tampa Suburban R. Co., In re, 43. 
 Tandrup v. Sampsell, 301. 
 Tanfield v. Irvine, 835, 838, 844. 
 Tapp V. Rankin, 884. 
 Tappan v. Gray, 29, 8S5. 
 Tapscott V. Lyon, 180. 
 Tarvin v. Walker's Creek C. & C. 
 
 Co., 886. < 
 
 Taylor v. Allen, 250. 
 Taylor v. Baldwin, 294, 295. 
 Taylor v. Canaday, 238. 
 Taylor v. Columbian Insurance Co., 
 
 66, 67, 275, 277. 
 Taylor v. Cuban L. & S. Co., 350. 
 Taylor v. Decatur M. & L. Co., 343. 
 Taylor v. Dickinson, 980. 
 Taylor v. Emerson, 597, 742.
 
 TABLE OF CASES CITED. 
 
 lix 
 
 [BEFBBBNCES ABU TO PAtiKB.] 
 
 Taylor v. Fanning, 40i. 
 'I'aylor v. Giileau, iiiu, 181, 
 Taylor v. Kirby, 36, 
 Taylor v. Life Association of Amer- 
 ica, 97, 143. 
 Taylor v. Mitciieii, 402. 
 Tayior V. iNeate, 665. 
 Taylor z;. P. & R. R. Co., 471, 514, 
 
 i)ZO, 56S, 567. 
 Tayior v. Sweet, 209, 
 Teller v. Randall, 643. 
 Tempest v. Ord, 946. 
 Temple v. Glasgow, 141, 157, 591. 
 Temple v. Williams, 674. 
 Tenorook v. Jessup, 732, 
 Tennis liros, Co. v. Wetzel & T, 
 
 Ry. Co., 322. 
 Terrell v. Goddard, 666. 
 Terrell v. Ingersoll, 320, 
 ierry v. Bamberger, 2o3, 390, 
 Terry v. iVlarlin, 4y, 217. 
 Texas Consolidated C. & M, Assn. 
 
 V. Storrow, 43, 353, 591. 
 Texas & Pacific R. Co. v. Adams, 
 
 563, 
 Texas & Pacific R, Co. v. Bloom, 
 
 555. 
 Texas & Pacific R. Co. v. Brick, 
 
 555. 
 Texas & Pacific R. Co, v. Collins, 
 
 553. 
 Texas & Pacific R. Co, v. Comstock, 
 
 555, 563. 
 Texas & Pacific R. Co. z/.Cox, 547. 
 Texas & Pacific R. Co. v. Gay, 5, 55, 
 
 550, 556. 
 Texas & Pacific R. Co. v. Geiger, 
 
 555, 558. 
 Texas &. Pacific R, Co, v. Griffin, 
 
 556, 
 Texas & Pacific R, Co. v. Huffman, 
 
 556, 
 Texas & Pacific R. Co. v. Johnson, 
 
 555. 
 Texas & Pacific R. Co. v. Miller, 
 
 Texas & Pacific R. Co. v. Overheis- 
 
 er, 555. 
 Texas Trunk R. Co. v. State, 461. 
 Tharpe v. Tharpe, 91, 92, 97. 
 Thayer v. Swift, 583, 588. 
 The Anvil v. Savery, 13. 
 The Jonas H. French, 170. 
 The Willamette Valley, 66, 190. 
 Thom V. Pittard, 312. 
 Thomas v. Brigstocke, 809, 991. 
 Thomas v. Cincinnati, N. O. & T. 
 
 P. R. Co., 194, 499. 
 Thomas v. Davies, 126, 806, 807. 
 Thomas v. Dawkin, 91, 92. 
 Thomas v. Gartner, 628. 
 Thomas v. Nantahala M, & T. Co., 
 
 759. 
 Thomas v. Thomas, 776. 
 Thomas v. Van Meter, 8, 22, 257. 
 Thomas v. Western Car Co., 521, 
 
 531. 
 Thomas v. Whallon, 241, 286, 399, 
 
 412, 413, 416, 417. 
 Thompsen v. DifTenderfer, 33, 591, 
 
 594, 897. 
 Thompson v. Adams, 10, 18, 591. 
 Thompson v. Allen County, 587. 
 Thompson v. Greeley, 240, 391. 
 Thompson v. Holladay, 53, 225. 
 Thompson v. McCleary, 167, 169. 
 Thompson v. Northern Pac. R, Co., 
 
 561, 562. 
 Thompson v. Orser, 861. 
 Thompson v. Phenix Insurance Co., 
 
 256, 945. 
 Thompson v. Schartzel, 456, 
 Thompson v. Scott, 294, 295, 
 Thompson v. Selby, 118. 
 Thompson v. Sherrard, 739. 
 Thompson v. Silverthome, 29. 
 Thompson v. Tower M. Co., 128. 
 Thompson v. Willamette S. M. L. 
 
 & M. Co., 928. 
 Thomson v. MacGregor, 148. 
 Thornhill v. Thornhill, 213, 
 Thornley v. Walsh Co., 373.
 
 Ix 
 
 TABLE OF CASES CITED. 
 
 [BBFERENCES AEB TO PAGES.] 
 
 Thornton v. Highland A. & B. R. 
 
 Co., 50. 
 Thornton v. Washington Savings 
 
 Bank, 173. 
 Thornton-Thomas Mercantile Co. v. 
 
 Bretherton, 57. 
 Threadgill v. Colcord, 53, 107, 223, 
 
 234. 
 Thum V. Pyke, 67. 
 Thurman v. Cherokee R. Co., 539. 
 Tillinghast v. Champlin, 699, 703. 
 Tillotson V. Wolcott, 625, 626. 
 Tiltow V. Cascade O. M. Co., 265. 
 Timothy v. Day, 20. 
 Tindall v. Nisbet, 333, 942. 
 Tink V. Rundle, 163, 164, 294, 304, 
 
 305, 888, 889. 
 Tinkham v. Borst, 260. 
 Tippecanoe Township v. Manlove, 
 
 413, 414. 
 Titherington's Adm'r v. Hodge, 224. 
 Title Insurance & T. Co. v. Grider, 
 
 53, 55. 
 Tobey v. Russell, 407. 
 Tobias v. Tobias, 297. 
 Tobin V. Central Vermont Ry. Co., 
 
 550, 561, 562. 
 Tobin V. Portland Flouring Co., 
 
 933. 
 Todd V. Crooke, 601. 
 Todd V. Lee, 597, 899. 
 Todd V. Rich, 667, 705, 932. 
 Toledo, W. & W. R. Co. v. Beggs, 
 
 258. 
 Tome V. King, 837, 923. 
 Tomlinson v. Ward, 25, 139, 669. 
 Tomlinson & Webster M. Co. v. 
 
 Shatto, 601. 
 Tompkins Co. v. Catawba Mills, 348, 
 
 591. 
 Tompson v. Huron L. Co., 919, 921, 
 
 937. 
 Torbert v. Jeffrey, 63. 
 Tornanses v. Melsing, 219. 
 Totten & Hogg I. & S. F. Co. v. 
 
 Muncie Nail Co., 159, 222. 
 
 Towle V. American B., L. & I. So- 
 ciety, 367. 
 Town of Vandalia v. St. L., V. & 
 
 T. H. R. R. Co., 36, Z7, 53, 54, 
 
 55, 153, 199, 568. 
 Towne v. Campbell, 601. 
 Tozer v. O'Gorman, 221. 
 Tracy v. First National Bank of 
 
 Selma, 306. 
 Traders Insurance Co. v. Mann, 4. 
 Travelers Insurance Co. v. Brouse, 
 
 807. 
 Tredennick v. Graydon, 605. 
 Tregaskis v. Judge of Superior 
 
 Court, 7. 
 Trenton Banking Co. v. Woodruff, 
 
 833, 834. 
 Triebert v. Burgess, 129, 130. 
 Tripp V. Boardman, 216. 
 Trissilian v. Caniflfe, 814. 
 Truman v. Redgrave, 790. 
 Trust & Deposit Co. v. Spartanburg 
 
 W. Co., 26, 348. 
 Try V. Try, 169. 
 
 Trye v. Earl of Aldborough, 814. 
 Tuckerman v. Brown, 400. 
 Tufts V. Little, 764. 
 Tumlin v. Vanhorn, 764. 
 Turner v. Cross, 553. 
 Turner v. Hannibal & St. Joseph R. 
 
 Co., 550. 
 Turner v. I., B. & W. R. Co., 509, 
 
 510, 511, 512, 523. 
 Turner v. P. & S. R. Co., 567, 
 
 569. 
 Turnipseed v. Kentucky Wagon Co., 
 
 16. 
 Tuttle V. Blow, 35, 132. 
 Tuttle V. National Bank, 395. 
 Twin City Power Co. v. Barrett, 
 
 16, 17. 
 Twitty V. Logan, 719. 
 Tylee v. Tylee, 138. 
 Tyler, In re, 165. 
 Tyler v. Whitney, 588, 590, 650. 
 Tyler v. Willis, 588, 590, 650.
 
 TABLE OF CASES CITED. 
 
 Ixi 
 
 [RKI'EEENCES ABB TO PAGES.] 
 
 Tyrrell v. Painton, 586. 
 Tysen v. Wabash R. Co., 478. 
 Tyson v. Fairclough, 756, 760. 
 
 U. 
 
 Ueland v. Haugan, 238. 
 Uhl V. Dillon, 897, 591, 592. 
 Ulman v. Clark, 741. 
 Underwood v. Sutcliffe, 638. 
 Union Bank Case, 330, 915. 
 Union Bank of Chicago v. Kansas 
 
 City Bank, 9, 12. 
 Union Boom Co. v. Samish Boom 
 
 Co., 13, 113. 
 Union M. L. I. Co. v. Union M. P. 
 
 Co., 790. 
 Union National Bank v. Mills, 915, 
 
 917, 919, 921, 938. 
 Union Street Ry. Co. v. City of 
 
 Saginaw, 470. 
 Union Trust Co. v. Atchison, T. & 
 
 S. F. R. Co., 69, 541. 
 Union Trust Co. v. C. & L. H. R. 
 
 Co., 569. 
 
 Union Trust Co. v. Illinois Midland 
 
 R. Co., 504, 509, 511, 514, 518. 566, 
 
 567, 574. 
 
 Union Trust Co. v. Morrison, 528. 
 
 Union Trust Co. v. Souther, 511, 
 
 519. 
 Union Trust Co. v. St. L., I. M. & 
 
 S. R. Co., 478. 
 Union Trust Co. v. The Rockford, 
 Rock Island & St. Louis R. Co., 
 74, 75, 84, 486, 488. 
 Union Trust Co. v. Walker, 519. 
 Union Trust Co. v. Weber, 160. 
 United States v. Church, 122, 174, 
 
 239, 343, 915, 930. 
 United States v. De Coursey, 501. 
 United States v. Duluth, 880. 
 United States v. Kane, 499. 
 United States v. Masich. 834. 
 United States Investment Corpora- 
 tion V. Portland Hospital, 51, 378 
 
 United States Rubber Co. v. Ameri- 
 can O. L. Co., 42. 
 
 United States Shipbuilding Co. v. 
 Conklin, 13, 433. 
 
 United States Trust Co. v. Harris, 
 290. 
 
 United States Trust Co. v. Mercan- 
 tile Trust Co., 535. 
 
 United States Trust Co. v. New 
 York, W. S. & B. R. Co., 516, 
 525. 
 
 United States Trust Co. v. Omaha 
 & St. L. R. Co., 499. 
 
 United States Trust Co. v. Wabash 
 
 Western R. Co., 322, 533. 
 United States Vinegar Co. v. Spam- 
 
 er, 257. 
 University of Illinois v. Globe Sav- 
 ings Bank, 8. 
 Utica Insurance Co. v. Lynch, 951, 
 957. 
 
 Vail V. Hamilton, 402. 
 
 Vail V. Knapp, 887. 
 
 Valley National Bank v. Claflin Co., 
 13, 230. 
 
 Van Allen, In re, 216, 419. 
 
 Van Alstyne v. Cook, 623, 674. 
 
 Van Antwerp v. Hulburd, 445. 
 
 Van Bianchi v. Wayne Circuit 
 Judge, 182. 
 
 Van Brocklin v. Queen City P. Co., 
 922. 
 
 Van Buren v. Chenango County Mu- 
 tual Insurance Co., 930. 
 
 Vanderbilt v. Central R. Co., 494. 
 
 Van Dusen v. Worrell, 262. 
 
 Van Dyck v. McQuade, 288. 
 
 Van Epps v. Van Epps, 226. 
 
 Vann v. Bamett, 121, 122, 123, 729. 
 
 Van Rensselaer v. Emer>', 3, 4, 684, 
 702, 902, 908. 
 
 Van Wagenen v. Clark, 407.
 
 Ixii 
 
 TABLE OF CASES CITED. 
 
 [bbferences are to pages.] 
 
 Van Wagoner v. Paterson Gas Light 
 
 Co., 286, 288, 289. 
 Varnum v. Leek, 760. 
 Vasele v. Grant Street E. R. Co., 
 
 30L 
 Vaughan v. Vaughan, 140. 
 Vaughan v. Vincent, 755. 
 Vause V. Woods, 604, 718, 719. 
 Veatch v. American L. & T. Co., 
 
 528, 529. 
 Veith V. Ress, 115, 132, 181, 217, 
 
 659. 
 Venner v. W. W. Co., 102, 430. 
 Veret v. Duprez, 65. 
 Vermont & Canada R. Co. v. Ver- 
 mont Central R. Co., 161, 192, 240, 
 
 490, 491, 498, 887, 896. 
 Verplanck v. Mercantile Insurance 
 
 Co., 128, 132, 933. 
 Very v. Watkins, 188. 
 Vestel V. Tasker, 163. 
 Vila V. Grand Island E. L., I. & 
 
 C. S. Co., 10, 14, 24, 50, 342. 
 Vilas V. Page, 508. 
 Villere v. New Orleans P. M. Co., 
 
 51, 955. 
 Vincent v. Parker, 176. 
 Virginia & Alabama Coal Co. v. 
 
 Central R. & B. Co., 504, 506, 509, 
 
 511, 513. 
 Virginia-Carolina Chemical Co. v. 
 
 Provident S. L. A. Society, 591. 
 Virginia, T. & C. Steel & I. Co. v. 
 
 Bristol Land Co., 164, 165, 888. 
 Virginia, T. & C. Steel & Iron Co. 
 
 V. Wilder, 61. 
 Visage v. Schofield, 987. 
 Visalia City Water Co. v. Superior 
 
 Court, 995. 
 Vizard v. Moody, 740. 
 Von Roun v. Superior Court, 159. 
 Von Schlemmer v. Keystone Life 
 
 Ins. Co., 356. 
 Voorhees v. Indianapolis C. & M. 
 Co., 302, 387. 
 
 Vose V. Reed, 14, 15, 18, 850. 
 Voshell V. Hynson, 34, 129, 131, 980. 
 
 W. 
 
 Wabash R. Co. v. Dykeman, 129, 
 
 132, 461, 463. 
 W^abash, St. L. & P. R. Co. v. 
 
 Central Trust Co., 463. 
 Wachtel v. Wilde, 591. 
 Wagar v. Stone, 790. 
 Wales V. Dennis, 692. 
 Walker, Ex parte, 881, 867. 
 Walker v. Denne, 604. 
 Walker v. Drew, 870. 
 Walker v. Fitzgerald, 719. 
 Walker v. George Taylor C. Co., 
 
 181. 
 Walker v. Green, 294. 
 Walker v. House, 696, 697, 906. 
 Walker v. Morris, 783. 
 Wall V. Piatt, 554. 
 Wallace v. Loomis, 565, 566, 569. 
 Wallace v. Milligan, 704. 
 Wallace v. Pierce-Wallace Publish- 
 ing Co., 342, 350. 
 Wallace v. Yeager, 703. 
 Walla Walla v. Walla Walla Water 
 
 Co., 17. 
 Waller v. Hamer, 392, 395. 
 Walling V. Miller, 167, 168. 
 Wall Street Fire Ins. Co. v. Loud, 
 
 825. 
 Walsh V. Byrnes, 636. 
 Walsh V. Raymond, 321. 
 Walsh V. Walsh, 779. 
 Walters v. Anglo-American M. & 
 
 T. Co., 343. 
 Walton V. Develing, 199. 
 Ward V. Hotel Randolph Co., 10, 
 
 358. 
 Ward V. Pacific M. L. I. Co., 67, 
 
 272. 
 Ward V. Petrie, 241. 
 Ward V. Swift, 184, 205. 
 Wardell v. Leavenworth, 615.
 
 TABLE OF CASES CITED. 
 
 Ixiii 
 
 [nBt'EBKNCES AUE TO PAGES.] 
 
 Wardle v. Hudson, 241, 242. 
 
 Wardle v. Townsend, 414. 
 
 Ware v. Supreme Sitting, 371. 
 
 Ware v. Ware, 871. 
 
 Waring v. Robinson, 673. 
 
 Warner v. Gouverneur's Ex'rs, 819, 
 820. 
 
 Warner v. Imbeau, 431. 
 
 Warner v. Rising Fawn Iron Co., 
 790. 
 
 Warren v. Bunch, 189. 
 
 Warren v. Monnish, 111. 
 
 Warren v. Pitts, 13, 818. 
 
 Warren v. Sprague, 259. 
 
 Warren v. Union National Bank, 
 272, 275. 
 
 Warwick v. Hammell, 845. 
 
 Warwick v. Stockton, 666. 
 
 Washer v. Brown, 34, 980. 
 
 Washington City & P. L. R. Co. v. 
 S. M. R. Co., 988. 
 
 Washington I. W. Co. v. Jensen, 
 800. 
 
 Washington Life Insurance Co. v. 
 Fleischauer, 840. 
 
 Washington Mill Co. v. Sprague 
 Lumber Co., 400. 
 
 Waterbury v. Merchants Union Ex- 
 press Co., 342, 343. 892. 
 
 Waterhouse v. Comer, 499, 500. 
 
 Waters v. Carroll, 2, 99, 100. 
 
 Waters v. Melson, 150. 
 
 Waters v. Taylor, 49. 
 
 Watkins v. Brent, 64. 
 
 Watkins V. Minnesota T. M. Co., 
 234. 
 
 Watkins v. National Bank of Lau- 
 rence, 454. 
 
 Watkins v. Pinkney, 74, 11, 78. 
 
 Watson V. Arundel, 98. 
 
 Watson V. McKinnon, 690. 
 
 Watson V. Sutherland, 17. 
 
 Watterson v. IMasterson, 394. 
 
 Wayne Pike Co. v. Hammons, 358. 
 
 Wayne Pike Co. v. State, 294. 
 
 Webb V. Overmann, 617. 
 
 Webb V. Van Zandt, 747. 
 Weber v. Weber, 704, 705. 
 Webster v. Couch, 16, 883. 
 Weed V. Central of Georgia Ry. Co., 
 
 961. 
 Weed V. Smull, 631. 
 Weeks v. Weeks, 772. 
 Weems v. Lathrop, 15, 148. 
 Wehrs v. Sullivan, 153, 975. 
 Weigand v. Alliance S. Co., 929. 
 Weigen v. Council Bluffs Ins. Co., 
 
 431. 
 Weill V. First National Bank, 246. 
 Weise v. Welsh, 759. 
 Welch V. Henry, 800. 
 Welles V. Stout, 459. 
 Wellman v. Harker, 675. 
 Wells, In re, 863. 
 
 Wells V. Hartford Manilla Co., 321. 
 Wells V. Higgins, 779. 
 Welton V. Dickson, 17. 
 Wenar v. Schwartz, 35. 
 Wenzel v. Palmetto B. Co., 358. 
 Werborn's Adm'r v. Kahn, 129. 
 Werner v. Murphy, 406. 
 Weslosky v Quarterman, 357, 
 West V. Chasten, 120, 673. 
 West V. Conant, 827. 
 West V. Mercer, 858. 
 West V. Swan, 123, 124. 
 West V. Weaver, 60. 
 Western Electric Co. v. Williams- 
 Abbott Electric Co., 44. 
 Western Union Telegraph Co. v. 
 
 Atlantic & Pacific Telegraph Co., 
 
 467. 
 Westinghouse Co. v. Christensen 
 
 Co., 44. 
 Wetter v. Schleiper, 976. 
 Wheatley v. Glover, 394. 
 Wheeler v. Clinton Canal Bank, 
 
 347. 
 Wheeler v. Dime Savings Bank, 
 
 371. 
 Wheeler v. Smith, 544. 
 Whelan v. Enterprise T. Co., 642.
 
 Ixiv 
 
 TABLE OF CASES CITED. 
 
 [befeeences are to pages.] 
 
 Whelpley v. Erie Railway Co., 13, 14, 
 
 466, 881. 
 Whightsel v. Felton, 496. 
 Whilden v. Chapman, 584, 591. 
 Whipple V. Lee, 691. 
 White, In re, 195. 
 White V. Baugh, 328. 
 White V. Bishop of Peterborough, 
 
 748. 
 White V. Britton, 100, 109. 
 White V. Colfax, 667, 670. 
 White V. Ewing, 87. 
 White V. Griggs, 827. 
 White V. Haight, 389, 390. 
 White V. Lord Westmeath, 120, 
 
 968, 989. 
 White V. Low, 265, 266. 
 White Water Valley Canal Co. v. 
 
 Vallette, 830. 
 Whitehead v. Hale, 13, 787. 
 Whitehead v. Wooten, 6, 123, 124, 
 
 129, 133, 824. 
 Whitehouse v. P. D., T. & E. Ry. 
 
 Co., 111. 
 Whitelaw v. Sandys, 743. 
 Whitely v. Central Trust Co., 527. 
 Whitely v. Lowe, 215. 
 Whiteside v. Prendergast, 140, 986. 
 Whitesides v. Lafferty, 706. 
 Whitfield, Ex parte, 874. 
 Whitley v. Berry, 111. 
 Whitley v. Challis, 804, 826. 
 Whitman v. Robinson, 667, 904. 
 Whitney v. Buckman, 119, 741, 753, 
 
 886. 
 Whitney v. Hanover National Bank, 
 
 55, 56. 
 Whitney v. N. Y. & A. R. Co., 476. 
 Whittlesey v. Delaney, 403. 
 Whittlesey v. Frantz, 650. 
 Whitworth v. Whyddon, 15, 64. 
 Whitworth v. Wofford, 739. 
 Whyte V. Spransy, 721. 
 Wickens v. Townshend, 140. 
 Wiggins V. Armstrong, 897, 591, 
 
 593. 
 
 Wigton V. Bosler, 271, 396. 
 Wilber v. Wooley, 195. 
 Wilder v. Reed, 972. 
 Wildridge v. McKane, 971. 
 Wildy V. Mid-Hants R. Co., 804. 
 Wiles V. Cooper, 749. 
 Wilkins V. Williams, 91. 
 Wilkinson v. Culver, 283. 
 Wilkinson v. Dibbie, 14. 
 Wilkinson v. Lehman-Durr Co., 2, 
 
 3, 154, 155. 
 Wilkinson v. Washington Trust Co., 
 
 916, 958. 
 Willamette Valley, 66, 190. 
 Williams v. Babcock, 240, 241, 286, 
 
 398, 399, 412, 415. 
 Williams v. Des Moines L. & T. Co., 
 
 993. 
 Williams v. Green, 749, 913. 
 Williams v. Hintermeister, 64, 372, 
 
 473. 
 Williams v. Hogeboom, 588, 589, 
 
 590. 
 Williams v. Hubbard, 588. 
 Williams v. Jenkins, 122, 135, 756, 
 
 913. 
 Williams v. Robinson, 792. 
 Williams v. Traphagen, 290. 
 Williams v. Turner, 401. 
 Williams v. Wilson, 709, 908. 
 Williams Co. v. U. S. Banking Co., 
 
 38. 
 Williamson v. Gerlach, 842. 
 Williamson v. Monroe, 671, 672. 
 Williamson v. New Albany R. Co., 
 
 478. 
 Williamson v. Pender, 172, 200. 
 Williamson v. Wilson, 3, 4, 93, 95, 
 
 667, 668, 678, 903, 906, 976. 
 Williamson's Adm'r v. W. C. V. M. 
 
 & G. S. R. Co., 13, 509. 
 Willink V. Morris Canal & Banking 
 
 Co., 308, 438. 
 Willis V. Corlies, 718, 726, 910. 
 Willitts V. Waite, 66, 67, 275. 
 Wills V. Luff, 808.
 
 TABLE OF CASES CITED. 
 
 Ixv 
 
 [RBFEBBNCHS ABB TO PAOBB.] 
 
 Wills Valley Mining & Mfg. Co. v. 
 
 Galloway, 964. 
 Wilmer v. Atlanta & R. A. L. R. Co., 
 
 75. 480, 488. 
 Wilmington Star Mining Co. v. Al- 
 len, 434. 
 Wilson V. Allen, 251, 626, 627. 
 Wilson V. Barney, 975. 
 Wilson V. Book, 394. 
 Wilson V. Davis, 35. 
 Wilson V. Fitchter, 685. 
 Wilson V. Greenwood, 691, 692, 694. 
 Wilson V. Keels, 68. 
 Wilson V. Maddox, 34, 110. 
 Wilson V. Poe, 96. 
 Wilson V. Rankin, 297. 
 Wilson V. Welch, 139, 248. 
 Wilson V. Wilson, 307, 626, 745. 
 Winans v. Gibbs & S. M. Co., 388. 
 Winchester v. Davis Pyrites Co., 
 
 299. 
 Winchester E. L. Co. v. Gordon, 
 
 130. 
 Wincock v. Turpin, 393. 
 Winfield v. Bacon, 311, 890, 968. 
 Wing V. Disse, 629. 
 Winkler v. Magdeburg, 818, 825. 
 Winkler v. Winkler, 16, 883. 
 Winslow V. Wallace, 703. 
 Winthrop Iron Co. v. Meeker, 42. 
 Wisconsin Trust Co. v. Jenkins, 248. 
 Wise V. Ashe, 142, 744. 
 Wise V. Wise Co., 166. 
 Wiswall V. Kunz, 3, 967. 
 Wiswall V. Sampson, 167, 169, 610. 
 Witz V. Gray, 12. 
 Woerishoffer v. North River C. Co., 
 
 163. 
 Wolbert v. Harris, 663, 664, 687, 
 
 691. 
 Wolf V. National Bank of Illinois, 
 
 326, 327, 446. 
 Wolfe V. Claflin, 591. 
 Wood V. Brewer, 35. 
 Wood V. Gaynon, 780. 
 Wood V. Grayson, 13. 
 
 Wood V. Hitchings, 866, 867. 
 Wood V. McCardle W. & F. C. Co., 
 
 324. 
 Wood V. N. Y. & N. E. R. Co., 512, 
 
 515, 517. 
 Wood V. Oregon Development Co., 
 
 977. 
 Wood V. Sutcliffe, 885. 
 Wood V. Wood, 335, 660. 
 Woodburn v. Smith, 163, 888. 
 Wooden v. Wooden, 16, 883, 884. 
 Woodhull V. Farmers' Trust Co., 
 
 189. 
 Woodruff V. Erie R. Co., 506, 549. 
 Woodruff V. Jewett, 316, 994. 
 Woods V. Ellis, 139, 141. 
 Woodward v. Earl of Lincoln, 195. 
 Woodward v. Ellsworth, 458. 
 Woodyatt v. Gresley, 121, 752. 
 Wooley V. Holt, 787. 
 Wormser v. Merchants National 
 
 Bank, 814, 815. 
 Worrill v. Coker, 764. 
 Worth V. Piedmont Bank, 70, 183. 
 Worth Manufacturing Co. v. Bing- 
 ham, 353, 358. 
 Woven Tape Skirt Co., In re, 206, 
 
 928. 
 Wray v. Hazlett, 294. 
 Wray v. Jamison, 248, 252. 
 Wren v. Kirton, 327. 
 Wreyham, M. & C. Q. Ry. Co., In re, 
 
 505. 
 Wright V. Merchants National Bank, 
 
 451, 453. 
 Wright V. Nostrand, 637, 644. 
 Wright V. Vernon, 126. 
 Wrixon v. Vize, 213, 215. 
 Wyatt V. O. & M. R. Co., 550. 
 Wyckoff V. Scofield, 780. 
 Wyman v. Eaton, 272, 409. 
 Wyman v. Kimberly-Clark Co., 413. 
 Wyman v. Williams, 408, 409. 
 Wynne v. Lord Newborough, 91, 93, 
 
 96, 98, 245, 752, 913.
 
 Ixvi 
 
 TABLE OF CASES CITED. 
 
 [befeebnces are to pages.] 
 
 Yeager v. Wallace, 248, 249. 
 Yetzer v. Applegate, 228. 
 Yoakum v. Selph, 553. 
 Young, In re, 305, 309. 
 Young V. Clapp, 639. 
 Young V. Frier, 591, 897. 
 Young V. Hughes, 48. 
 Young V. Irish, 922, 979. 
 Young v. M. & E. R. Co., 70. 
 
 Young V. Rollins, 70, 360, 377. 
 Young V. Stevenson, 388. 
 Young V. Wempe, 448. 
 Youngblood v. Comer, 539. 
 
 Z. 
 
 Zacher v. Fidelity T. & S. Co., 67, 
 
 68, 276. 
 Zieverink v. Kemper, 52, 397.
 
 THE LAW OF RECEIVERS. 
 
 CHAPTER I. 
 OF THE GENERAL FEATURES OF THE JURISDICTION. 
 
 i 1. A receiver defined; distinguished from trustee. 
 
 2. An executive officer; compared with sheriff; not a public officer, 
 
 when agent of plaintiff. 
 
 3. The jurisdiction a preventive one; cautiously exercised. 
 
 4. Beneficial nature of the relief; possession of the receiver that of 
 
 the court. 
 
 5. The remedy a sequestration; title net changed. 
 
 6. Remedy a provisional one; not decisive of ultimate right, nor 
 
 conclusive of merits; not granted on final hearing; present 
 necessity must exist. 
 
 7. Discretionary character of the jurisdiction; discretion defined. 
 
 8. Probability as to final decree; plaintiff must present a prima 
 
 facie case; proof on interlocutory application. 
 
 9. When power may be invoked; not when property is of little 
 
 value; bond in lieu of receiver. 
 
 10. Relief similar to that by injunction; not granted when there is a 
 
 remedy at law; remedy at law defined. 
 
 11. Plaintifif must show his own right, and danger to the property. 
 
 12. Plaintiff must have existing interest; relief not granted to 
 
 stranger; no receiver of gratuity. 
 
 13. Receiver not allowed for benefit of stranger to the cause. 
 
 14. Diligence necessary; laches and acquiescence a bar to relief. 
 
 15. The remedy compared with that by injunction. 
 
 16. Receiver not necessarily appointed because injunction granted. 
 
 17. Suit must be actually pending; allegations must be specific. 
 
 18. Insolvency as a ground for relief. 
 
 19. Courts averse to interfering with defendant in possession; con- 
 
 siderations governing court in exercise of discretion. 
 
 20. Averse to interference with tenants in common of personalty. 
 
 21. The jurisdiction not extended to conflict as to public offices. 
 
 22. Receiver may be appointed over fees and emoluments of an of- 
 
 fice; salary of school-teacher; of clerk of court. 
 
 Receivers — 1.
 
 2 RECEIVERS. [chap. I. 
 
 § 23. The jurisdiction as affected by codes of procedure; Supreme 
 Court of Judicature Act in England. 
 
 24. Receiver not granted when equities of bill are denied by answer. 
 
 25. Conflict of authority as to whether appeal will lie. 
 
 26. Appeal not allowed in certain states. 
 
 27. The question dependent upon whether the order affects a sub- 
 
 stantial right. 
 27a. Decree appealable if right finally determined. 
 276. Appeals under Court of Appeals Act. 
 
 28. Reversal by certiorari. 
 
 29. Effect of appeal on functions of receiver; supersedeas not a 
 
 matter of right. 
 
 30. Same relief sought in different suits. 
 
 31. Test as to defendant's interest; receiver over a pension; secret 
 
 code. 
 
 32. Not granted when court can not control property; license; rates 
 
 and taxes. 
 
 33. Relief refused as against innocent purchasers. 
 
 34. Peril to the fund; infringement of patent. 
 
 35. Receiver not granted to compel payment of money; subscrip- 
 
 tions to a fund. 
 
 36. Management of business by a receiver; preferring debts in- 
 
 curred. 
 
 37. Effect of acquiescence in appointment. 
 
 38. Receiver held to strict accountability. 
 
 39. Statute authorizing appointment by governor, 
 39a. Appointment can not be questioned collaterally. 
 396. The same; illustrations. 
 
 39c. Otherwise where court is without jurisdiction; not a proceeding 
 
 in rem. 
 39d. Damages for wrongful appointment; measure of damages. 
 39(?. Death of receiver; when successor not appointed at instance of 
 
 defendant. 
 
 § 1. A receiver defined; distinguished from trustee. A 
 
 receiver is an indifferent person between the parties to a cause, 
 appointed by the court to receive and preserve the property or 
 fund in litigation pendente lite, when it does not seem reason- 
 able to the court that either party should hold it.l He is not 
 
 1 Booth V. Clark, 17 How., 322; Lehman-Durr Co., 136 Ala., 463, 34 
 
 Waters v. Carroll, 9 Yerg., 102; So., 216; State v. Ross, 122 Mo., 
 
 Baker v. Administrator of Backus, 435, 25 S. W., 947, 23 L. R. A., 534; 
 
 32 111., 79 ; Devendorf v. Dickinson, St. Louis, C. G. & F. S. Ry. Co. v. 
 
 21 How. Pr., 275; Wilkinson v. Holladay, 131 Mo., 440, 33 S. W.,
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 the agent or representative of either party to the action, but is 
 uniformly regarded as an officer of the court, exercising his 
 functions in the interest of neither plaintiff nor defendant, but 
 for the common benefit of all parties in interest.^ He should 
 be a person wholly impartial and indifferent to all parties in in- 
 terest.2 Being an officer of the court, the fund or property in- 
 trusted to his care is regarded as being in ciistodia legis for the 
 benefit of whoever may finally establish title thereto, the court 
 itself having the care of the property by its receiver, who is 
 merely its creature or officer, having no powers other than 
 those conferred upon him by the order of his appointment, or 
 such as are derived from the established practice of courts of 
 equity.^ A trustee differs in many respects from a receiver. 
 He may be appointed by deed or will or in other ways without 
 any order of a court and his powers and duties are prescribed 
 
 49; Gardner v. Caldwell, 16 Mont., 
 221, 40 Pac, 590; Wiswall v. Kunz, 
 173 111., 110, 50 N. E., 184; Nevitt 
 V. Woodburn, 190 111., 283, 60 N. E., 
 500; Harman v. McMullin, 85 Va., 
 187, 7 S. E., 349. 
 
 2 Davis V. Duke of Marlborough, 
 2 Swans., 108; Booth v. Clark, 17 
 How., 322; Hooper v. Winston, 24 
 111., 353; Baker v. Administrator of 
 Backus, 32 111., 79; Kaiser v. Kellar, 
 21 Iowa, 95 ; King v. Cutts, 24 Wis., 
 627; Osborn v. Heyer, 2 Paige, 342; 
 Curtis V. Leavitt, 1 Ab. Pr., 274; 
 Brown v. Northrup, 15 Ab. Pr., N. 
 S., 2)ZZ ; Corey v. Long, 43 How. 
 Pr., 497; S. C, 12 Ab. Pr., N. S., 
 427; Williamson v. Wilson, 1 Bland, 
 418; Ellicott v. Warford, 4 Md., 80; 
 Wilkinson v. Lehman-Durr Co., 
 136 Ala., 463, 34 So., 216; McGar- 
 rah V. Bank, 117 Ga., 556, 43 S. E., 
 987; Van Rensselaer v. Emery, 9 
 How. Pr., 135; Meier v. Kansas 
 Pacific R. Co., 5 Dill., 476. But in 
 Louisiana it is held that a receiver 
 of partnership funds, appointed by 
 
 consent of both partners, pending 
 a suit for the dissolution of the 
 firm, is not an officer of the court, 
 but merely an agent of the parties, 
 and that the principles governing 
 receivers generally are inapplicable 
 to such a case. Kellar v. Williams, 
 3 Rob. (La.), 321. Since a receiver 
 is the representative of all parties 
 in interest, he is bound to exercise 
 his powers for the equal benefit of all 
 and consequently an agreement to 
 place the property and business in 
 his hands under the control and 
 management of a single party to the 
 suit is void. Shadewald v. White, 
 74 Minn., 208, 77 N. W., 42. 
 
 3 Coy V. Title G. & T. Co., 157 
 Fed., 794. 
 
 4 Booth V. Clark, 17 How., 322 ; 
 Hunt V. Wolfe, 2 Daly, 303; Deven- 
 dorf V. Dickinson, 21 How. Pr., 
 275; Corey v. Long, 43 How. Pr., 
 497; S. C, 12 Ab. Pr., N. S., 427; 
 Skinner v. Maxwell, 66 N. C, 45, 
 and see S. C, 68 N. C, 400; Battle 
 V. Davis, 66 N. C, 252; Hooper v.
 
 RECEIVERS. 
 
 [chap. I. 
 
 by the instrument creating the trust and not by the court ; nor 
 is property in his possession regarded as being in custodia Icgis, 
 as in the case of a receiver, and he may be called to account not 
 merely by the court which may have appointed him but by any 
 court which may acquire the proper jurisdiction.^ 
 
 § 2. An executive officer ; compared with sheriff ; not a 
 public officer ; v^^hen agent of plaintiff. A receiver is fre- 
 quently spoken of as the "hand of the court," and the expres- 
 sion very aptly designates his functions, as well as the relation 
 which he sustains to the court.^ He is regarded as the execu- 
 tive officer of a court of chancery in much the same sense that 
 a sheriff is the executive officer of a court- of law, and the 
 assets and property in his hands are as much in the custody of 
 the law as if levied upon under an execution or attachment. 
 Indeed, the purpose for which a receiver takes possession is 
 
 Winston, 24 111., 353; Nevitt v. 
 Woodburn, 190 111., 283, 60 N. E., 
 500; Kaiser v. Kellar, 21 Iowa, 95; 
 Ellicott V. Warford, 4 Md., 80; Co- 
 burn V. Ames, 57 Cal., 201 ; Howell 
 V. Hough, 46 Kan., 152, 26 Pac, 436; 
 Carswell v. F. L. & T. Co., 20 C. C. 
 A., 282, 74 Fed., 88, 43 U. S. App., 
 300. And see Gayle v. Johnson, 80 
 Ala., 388; Ashurst v. Lehman, 86 
 Ala., 370, 5 So., 731. 
 
 5 Nevitt V. Woodburn, 190 111., 
 283, 60 N. E., 500. As to the dis- 
 tinction between a receiver and a 
 trustee in bankruptcy, see Traders 
 Insurance Co. v. Mann, 118 Ga., 
 381, 45 S. E., 426. And see State 
 Bank v. Domestic S. M. Co., 99 Va., 
 411, 39 S. E., 141, 86 Am. St. Rep., 
 891, for the distinction between a 
 passive receiver who merely holds 
 the possession of the res and an ac- 
 tive receiver to whom is confided the 
 management of a going business 
 concern. 
 
 6 See Runyon v. Farmers & Me- 
 chanics Bank of New Brunswick, 3 
 
 Green Ch., 480; Van Rensselaer v. 
 Emery, 9 How. Pr., 135; William- 
 son V. Wilson, 1 Bland, 418; Ellicott 
 V. Warford, 4 Md., 80. "The ap- 
 pointment of a receiver," observes 
 Mr. Justice Eccleston, in Ellicott 
 V. Warford, 4 Md., 85, "does not 
 determine any right, or affect the 
 title of either party, in any manner 
 whatever. He is the officer of the 
 court, and truly the hand of the 
 court. His holding is the holding 
 of the court from him from whom 
 the possession was taken. He is 
 appointed on behalf of all parties, 
 and not of the plaintiff or of one 
 defendant only. His appointment is 
 not to oust any party of his right 
 to the possession of the property, 
 but merely to retain it for the ben- 
 efit of the party who may ultimately 
 appear to be entitled to it." And 
 see Williamson v. Wilson, 1 Bland, 
 418, for a learned and exhaustive 
 discussion of the general principles 
 governing the jurisdiction of equity 
 by the appointment of receivers.
 
 CHAP. I.] GENERAL FEATURES. 5 
 
 closely allied to that of a sheriff in levying under execution, 
 except that the scope of the receiver's authority is more com- 
 prehensive, since he is usually required to pay all demands 
 upon the fund in his hands to the extent of that fund; while 
 a sheriff is only obliged to make payment of the debt mentioned 
 in the execution out of the property levied upon.*^ And a 
 receiver is not a public officer within the meaning of a statute 
 which exempts public officers from garnishment as to funds 
 in their hands as such officers. ^ And it has been held that the 
 appointment of a receiver is, in effect, an equitable execution.^ 
 But where a receiver is appointed at the instance or in the 
 interest of the person whose property is to be taken into his 
 custody, he is not to be regarded as the hand of the court but 
 merely as the agent or representative of the person who has 
 thus procured his appointment.^^ 
 
 § 3. The jurisdiction a preventive one ; cautiously exer- 
 cised. The jurisdiction exercised by courts of equity in ad- 
 ministering relief by the extraordinary remedy of a receiv- 
 er pendente lite is a branch of their general preventive ju- 
 risdiction, being intended to prevent injury to the thing in con- 
 troversy, and to preserve it for the security of all parties in 
 interest, to be disposed of as the court may finally direct.^! 
 The power is justly regarded as one of a very high nature, and 
 
 "^ In re Merchants Insurance Co., ing him, and not the agent of the 
 
 3 Biss., 162. owner, whose property is placed in 
 
 8 Cohnen v. Sweenie, 105 Mich., his possession, is that the property 
 643, 63 N. W., 641 ; Citizens' Com- to be controlled is taken from the 
 mercial & Savings Bank v. Bay Cir- custody and management of its own- 
 cuit Judge, 110 Mich., 633, 68 N. W., er and made subject to the control 
 649. of the court without his consent; 
 
 9 Hunt V. Wolfe, 2 Daly, 303. but when the defendant owner asks 
 
 10 Texas & Pacific R. Co. v. Gay, the court to do this, he, in effect, 
 86 Tex., 571, 605, 26 S. W., 599, asks the court to make an appoint- 
 613; Harrigan v. Gilchrist, 121 Wis., ment for him, and it is but just that 
 127, 292, 99 N. W., 909, 956. In a receiver so appointed should be 
 Texas & Pacific R. Co. v. Gay, held to be his agent." 
 
 supra, Stayton, C. J., says: "The H Mays i;. Rose, Freem. (Miss.), 
 
 theory on which a receiver is held 703. 
 to be an officer of the court appoint-
 
 6 RECEIVERS. [chap. I. 
 
 not to be exercised when it would be productive of serious in- 
 justice or injury to private rights. 12 The exercise of the extra- 
 ordinary power of a chancellor in appointing receivers, as in 
 granting writs of injunction or ne exeat, is an exceedingly deli- 
 cate and responsible duty, to be discharged by the court with 
 the utmost caution, and only under such special or peculiar 
 circumstances as demand summary relief. ^^ Indeed, the ap- 
 pointment of a receiver is regarded as one of the most difficult 
 and embarrassing duties which a court of equity is called upon 
 to perform.i^ j^ jg ^ peremptory measure, whose effect, tem- 
 porarily at least, is to deprive of his property a defendant in 
 possession, before a final judgment or decree is reached by the 
 court determining the rights of the parties.l^ It is therefore 
 not to be exercised doubtingly, but the court must be convinced 
 that the relief is needful, and that it is the appropriate means of 
 securing an appropriate end.^^ And since it is a serious inter- 
 ference with the rights of the citizen, without the verdict of a 
 jury and before a regular hearing, it should be granted only 
 for the prevention of manifest wrong and injury.^^ And be- 
 cause it divests the owner of property of its possession before 
 a final hearing, it is regarded as a severe remedy, not to be 
 adopted save in a clear case, and never unless plaintiff would 
 otherwise be in danger of suffering irreparable loss.^^ And 
 since a receivership is a harsh and costly remedy, interfering 
 seriously with the rights of persons in possession, courts of 
 
 12 Opinion of Frick, J., in Mining Co. v. United States Petro- 
 Speights V. Peters, 9 Gill, 476; As- leum Co., 57 Pa. St., 83; S. C, 6 
 hurst V. Lehman, 86 Ala., 370, 5 So., Philad., 521. 
 
 731 17 Crawford v. Ross, 39 Ga., 44. 
 
 13 Crawford v. Ross. 39 Ga., 44; The court say: "The high preroga- 
 Furlong v. Edwards, 3 Md., 112; tive act of taking property out of the 
 Latham v. Chafee, 7 Fed., 525. hands of one, and putting it in 
 See, also, Beverley v. Brooke, 4 pound, under the order of a judge, 
 Grat., 187. ought not to be taken, except to 
 
 14 Drummond, J., in Bill v. New prevent manifest wrong, imminently 
 Albany, etc., R. Co., 2 Biss., 390. impending." 
 
 15 Whitehead v. Wooten, 43 Miss., 18 Pullan v. Cincinnati & Chicago 
 523. R. Co., 4 Biss., 47; Hayes v. Jasper 
 
 16 Chicago ^ Allegheny Oil & Land Co., 147 Ala., 340, 41 So., 909.
 
 CHAP. I.] GENERAL FEATURES. 7 
 
 equity exercise extreme caution in the appointment of receivers 
 and withhold the remedy until a proper case has been made 
 therefore. ^^ 
 
 § 4. Beneficial nature of the relief ; possession of the re- 
 ceiver that of the court. The power exercised by courts of 
 equity in the appointment of receivers is invoked upon many 
 occasions with great advantage to the parties. It is especially 
 beneficial when there is danger that the subject-matter in con- 
 troversy may be wasted, destroyed, injured or removed during 
 the progress of the litigation, the object of the relief being to 
 secure the fund for the person who may ultimately be found 
 entitled thereto, with as little prejudice as possible to any of 
 those concerned. 20 And a receivership is one of those remedial 
 agencies originally devised to preserve the fund or thing in 
 controversy from removal beyond the jurisdiction, or from 
 spoliation, waste or deterioration pendente lite, to the end that 
 it may be appropriated as the final decree shall direct. 21 A 
 court of equity, by its order appointing a receiver, takes the 
 entire subject-matter of the litigation out of the control of the 
 parties and into its own hands, and ultimately disposes of all 
 questions, leg"al or equitable, growing out of the proceeding. 
 
 19 Suit V. Hochsletter Oil Co., 63 hearing, to be entitled, and to pro- 
 West Va., 317, 61 S. E., 307. duce as little prejudice as possible to 
 
 20 Lenox v. Notrebe, Hemp., 225 ; any of those concerned. When one 
 Smith V. Lusk, 119 Ala., 394, 24 So., party has a clear right to the pos- 
 256. "The application for a re- session of property, and when the 
 ceiver," says Mr. Justice Clayton in dispute is as to the title only, the 
 Lenox v. Notrebe, supra, "is ad- court would very reluctantly dis- 
 dressed to the sound discretion of turb that possession. But when the 
 the court, regulated by legal princi- property is exposed to danger and 
 pies, and is exercised by the courts to loss, and the party in possession 
 upon many occasions with great has not a clear legal right to the 
 benefit to the parties. It is par- possession, it is the duty of the 
 ticularly serviceable when there is court to interpose and to have it 
 danger that the subject-matter of secured." See, also, Tregaskis v. 
 controversy may be wasted or de- Judge of Superior Court, 47 Mich., 
 stroyed, impaired, injured or re- 509, 11 N. W., 293; McElwaine v. 
 moved during the progress of the Hosey, 135 Ind., 481,. 35 N. E., 272. 
 suit. The object is to secure the 21 Myers v. Estell, 48 Miss., 401. 
 fund for the party found, upon final
 
 8 RECEIVERS. [chap. I. 
 
 And the receiver's possession being the possession of the court 
 appointing him, any attempt to disturb such possession without 
 leave of the court may be treated as a contempt of court, and 
 punished accordingly.22 
 
 § 5. The remedy a sequestration; title not changed 
 A receiver being appointed for the preservation of the fund 
 or property pendente lite, and for its uhimate disposal accord- 
 ing to the rights and priorities of the parties entitled, the rem- 
 edy is regarded as in the nature of a sequestration rather than 
 as an attachment of the property, and it ordinarily gives no ad- 
 vantage or priority to the person at whose instance the appoint- 
 ment is made, over other parties in interest. 23 Nor does the ap- 
 pointment of a receiver, in the absence of statute, vest him with 
 any title to the property in controversy, the effect of the ap- 
 pointment being merely to give him the right to the possession 
 of the property without changing the title or creating any lien 
 upon it.24 Its purpose in this respect is rather like that of an 
 injunction pendente lite, to preserve the subject-matter until 
 the rights of all parties may be judicially determined. ^^ And 
 
 22 Beverley v. Brooke, 4 Grat., liams, 22 R. I., 547, 48 Atl., 798; 
 211. Krohn v. Weinberger, 47 West Va., 
 
 23 Beverley v. Brooke, 4 Grat., 127, 34 S. E., 746; Peirce v. Van 
 187; Ellis v. Boston, Hartford & Dusen. 24 C. C. A., 280, 78 Fed., 
 Erie R. Co., 107 Mass., 1 ; Southern 693, 47 U. S. App., 339 ; Central Ap- 
 Granite Co. v. Wadsworth, 115 Ala., palachian Co. v. Buchanan, 33 C. C. 
 570, 22 So., 157. A., 598, 90 Fed., 454, 62 U. S. App., 
 
 24 Southern Granite Co. v. Wads- 195 ; ZZ C. C. A., 682, 91 Fed., 1001. 
 worth, 115 Ala., 570, 22 So., 157; And where a receiver of an insol 
 HefTron v. Gage, 149 III, 182, 36 N. vent bank was ordered to take pos- 
 E., 569; Thomas v. VanMeter, 164 session of certain securities which 
 111., 304, 45 N. E., 405; Bartlett v. appeared to belong to the bank, it 
 Cicero L., H. & P. Co., 177 III, 68, was held that his possession vested 
 52 N. E., 339; Manufacturers Paper no title in him nor created any lien 
 Co. V. Lindblom, 80 III App., 267 ; but that he merely held the property 
 Harrison v. Warren Co., 183 Mass., pending the final determination of 
 123, 66 N. E., 589; Rogers & Bald- the title thereto. University of Ill- 
 win Hardware Co. v. Cleveland B. inois v. Globe Savings Bank, 185 
 Co., 132 Mo., 442, 34 S. W., 57, 31 III, 514, 57 N. E., 417. 
 
 L. R. A., 335, 53 Am. St. Rep., 494 ; 25 Ellis v. Boston, Hartford & 
 
 Sigua Iron Co. v. Brown, 171 N. Y., Erie R. Co., 107 Mass., 1 ; Southern 
 488, 64 N. E., 194; Greene v. Wil- Granite Co. v. Wadsworth, 115 Ala.,
 
 CHAP. I.] GENERAL FEATURES. 9 
 
 in the exercise of this branch of its extraordinary jurisdiction, 
 equity reverses the ordinary course of administering justice, 
 and levies upon the property a kind of equitable execution, by 
 means of which it makes a general appropriation thereof, leav- 
 ing the question of who may finally be entitled to be determined 
 thereafter. It follows, therefore, from the peculiar nature of 
 the remedy as thus shown, as well as from the fact that the 
 court must often act before the merits of the controversy have 
 been fully developed, and when the parties in interest are not 
 all before the court, that it proceeds with extreme caution, in 
 order to avoid any unnecessary disturbance of legal rights or 
 equitable priorities.^^ 
 
 § 6. Remedy a provisional one ; not decisive of ultimate 
 right, nor conclusive of merits ; not granted on final hear- 
 ing ; present necessity must exist. It necessarily follows 
 from the nature of the jurisdiction as thus far disclosed, as 
 well as from the purpose and object usually had in view in 
 the appointment of a receiver pendente lite, that the remedy is 
 a provisional or auxiliary one, invoked as an adjunct or aid of 
 
 570, 22 So., 157. See, also, Ex court in a seasonable time, and due 
 parte Dunn, 8 S. C, 207; Union course of proceeding, to assert and 
 Bank of Chicago v. Kansas City establish their pretensions. The re- 
 Bank, 136 U. S., 223, 10 Sup. Ct. ceiver appointed is the officer and 
 Rep., 1013. representative of the court, subject 
 26 Beverley v. Brooke, 4 Grat., to its orders, accountable in such 
 187. The nature and functions of manner and to such persons as the 
 this extraordinary jurisdiction of court may direct, and having m his 
 courts of equity are very clearly character of receiver no personal in- 
 stated in the opinion of the court in terest but that arising out of his 
 this case, by Baldwin, J., as follows, responsibility for the correct and 
 p. 208 : "By means of the appoint- faithful discharge of his duties. It 
 ment of a receiver, a court of equity is of no consequence to him how or 
 takes possession of the property when, or to whom, the court may 
 which is the subject of the suit, pre- dispose of the funds in his hands, 
 serves it from waste or destruction, provided the order or decree of the 
 secures and collects the proceeds or court furnishes to him a sufficient 
 profits, and ultimately disposes of protection. The order of appoint- 
 them according to the rights and ment is in the nature, not of an 
 priorities of those entitled, whether attachment, but a sequestration; it 
 regular parties in the cause, or only gives in itself no advantage to the 
 parties in interest coming before the party applying for it over other
 
 10 
 
 RECEIVERS. 
 
 [chap. I. 
 
 the principal relief sought by the action and never as the ulti- 
 mate object of that action. The court must have jurisdiction 
 independent of the receivership and a receiver is never ap- 
 pointed except as a measure in aid of the enforcement of some 
 recognized equitable right. The appHcation for a receiver 
 may succeed or fail, and yet in no manner affect the principal 
 controversy or determine the final result. 27 And in this respect 
 the appointment of a receiver in limine bears no closer relation 
 to the action in which this extraordinary relief is sought than 
 an attachment in aid of an action upon a promissory note bears 
 to such action.28 The appointment of a receiver in limine, 
 therefore, like the granting of a preliminary or interlocutory 
 injunction, is not an ultimate determination of the right or 
 
 claimants; and operates prospect- 
 ively upon rents and profits, which 
 may come to the hands of the re- 
 ceiver, as a lien in favor of those 
 interested, according to their rights 
 and priorities in or to the principal 
 subject out of which those rents 
 and profits issue. In the exercise 
 of this summary jurisdiction, a 
 court of equity reverses, in a great 
 measure, its ordinary course of ad- 
 ministering justice; beginning at 
 the end, and levying upon the prop- 
 erty a kind of equitable execution, 
 by which it makes a general instead 
 of a specific appropriation of the 
 issues and profits, and afterwards 
 determining who is entitled to the 
 benefit of its quasi process. But 
 acting, as it often must of necessity, 
 before the merits of the cause have 
 been fully developed, and not un- 
 frequently when the proper parties 
 in interest are not all before the 
 court, it proceeds with much cau- 
 tion and circumspection, in order to 
 avoid disturbing unnecessarily or 
 injuriously legal rights and equi- 
 table priorities." 
 
 27 Barber v. International Co., 73 
 Conn., 587, 48 Atl., 758 ; Hottenstein 
 V. Conrad, 9 Kan., 435; Cooke v. 
 Gwyn, 3 Atk., 689; Vila v. Grand 
 Island E. L., I. & C. S. Co., 68 Neb., 
 222, 94 N. W., 136, 97 N. W., 613; 
 Mann v. German-American I. Co., 
 70 Neb., 454, 97 N. W., 600; Smiley 
 V. Sioux B. S. Co., 71 Neb., 581, 101 
 N. W., 253, 99 N. W., 263; Balti- 
 more Bargain House v. St. Clair, 58 
 West Va., 565, 52 S. E., 660; 
 Thompson v. Adams, 60 West Va., 
 463, 55 S. E., 668; Ward v. Hotel 
 Randolph Co., 65 West Va., 721, 
 — S. E., — . See, also, Rainey v. 
 Freeport S. C. & C. Co., 58 West 
 Va., 424, 52 S. E., 528; Mays v. 
 Rose, Freem. (Miss.) 703; Chicago 
 and Allegheny Oil and Mining Co. 
 V. United States Petroleum Co., 57 
 Pa. St., 83, 6 Philad., 521; Fellows 
 V. Heermans, 13 Ab. Pr., N. S., 1; 
 McCarthy v. Peakc, 18 How. Pr., 
 138, 9 Ab. Pr., 164. 
 
 28 Hottenstein v. Conrad, 9 Kan., 
 435.
 
 CHAP. I.] GENERAL FEATURES. 11 
 
 titlt, and the court, in passing upon the application, in no 
 manner decides the questions of right involved, nor antici- 
 pates its final decision upon the merits of the controversy ; the 
 leading idea upon the preliminary application being merely to 
 husband the property or fund in litigation for the benefit of 
 whoever may be determined in the end to be entitled thereto.29 
 The decision upon the application for a receiver pendente lite is, 
 therefore, without prejudice to the final decree which the court 
 may be called upon to make, and the court expresses no opinion 
 as to the ultimate questions of right involved. And if the 
 plaintiff presents a prima facie case, showing an apparent right 
 or title to the thing in controversy, and that there is imminent 
 danger of loss without the intervention of the court, the relief 
 may be granted without going further into the merits upon 
 the preliminary application.30 Indeed, upon an interlocutory 
 application for a receiver, a court of equity usually confines 
 itself strictly to the point which it is called upon to decide, and 
 will not go into the merits of the case at large, since the court 
 is bound to express its opinion only to the extent necessary 
 
 29Huguenin v. Baseley, 13 Ves., brought to a hearing for a final 
 
 106; Cooke v. Gvvyn, 3 Atk, 689; decree; but it does not follow that 
 
 Ellicott V. Warford, 4 Md., 80; a decisive opinion is to be ex- 
 
 Blakeney v. Dufaur, 15 Beav., 40; pressed in this stage of the cause 
 
 Leavitt v. Yates, 4 Edw. Ch., 162; upon the rights of all the parties; 
 
 Brown v. Northrup, 15 Ab. Pr., N. for, whatever may be the result of 
 
 S., 333; Ex parte Walker, 25 Ala., a motion of this kind, the general 
 
 104; Bitting v. Ten Eyck, 85 Ind., understanding is that it is without 
 
 357 prejudice to the ultimate decision 
 
 30 Leavitt v. Yates, 4 Edw. Ch., which the court may be called upon 
 
 162; Brown v. Northrup, 15 Ab. to make. Insolvency and danger to 
 
 Pr., N. S., 333. Leavitt v. Yates the fund pending the litigation, with 
 
 was a bill to set aside a deed of a prima facie case and probable 
 
 trust transferring certain securities, cause for sustaining the bill, are or 
 
 and a motion upon bill and an- ought to be sufficient in the first in- 
 
 swers for an injunction and for a stance to found an injunction and 
 
 receiver to take charge of the secu- a receivership upon, without going 
 
 rities pendente lite. McCoun, Vice- minutely into the merits. My own 
 
 Chancellor, observes: "The argu- observation has taught me that, in 
 
 ment has embraced all the points general, it is most prudent and best 
 
 which the pleadings are calculated promotes the ends of justice to go 
 
 to present when the cause shall be no further upon the motion."
 
 12 RECEIVERS. [chap. I. 
 
 to show the gfrounds upon which it disposes of the appHca- 
 tion.^^ And since a receiver derives his title from the court, 
 rather than from the act of the parties upon whose appHcation 
 or by whose consent he is appointed, it necessarily follows that ' 
 the effect of his appointment is to place the property in his 
 custody as an officer of the court, for the benefit of whoever 
 may ultimately prove to be entitled thereto, but without effect- 
 ing any change of title to the property.^2 \nd since the 
 appointment of a receiver is a provisional remedy, it should 
 not be made by final decree except where necessary to carry 
 such decree into effect. ^^ And for the same reason, if it ap- 
 pears upon an application for such appointment that the plaintiff 
 will in no event be entitled to the principal relief sought, the 
 receiver should be denied. 2"* And a receiver should not be 
 appointed simply because an occasion for such appointment 
 is anticipated or may arise in the future, but the occasion must 
 exist when the appointment is made.^^ 
 
 § 7. Discretionary character of the jurisdiction; discre- 
 tion defined. The appointment of a receiver pendente lite, 
 like the granting of an interlocutory injunction, is to a con- 
 siderable extent a matter resting in the discretion of the court 
 to which the application is made, to be governed by a considera- 
 tion of the entire circumstances of the case.^^ And since the 
 
 31 Skinners Company v. Irish 34 Witz v. Gray, 116 N. C, 48, 20 
 Society, 1 Myl. & Cr., 162. See, S. E., 1019. 
 
 also, Conro v. Gray, 4 How. Pr., 35 Chadron Banking Co. v. Ma- 
 
 166. honey, 43 Neb., 214, 61 N. W., 594. 
 
 32 Union Bank of Chicago v. , 30 Owen v. Homan, 3 Mac. & G., 
 Kansas City Bank, 136 U. S., 223, 378, affirmed on appeal to the House 
 10 Sup. Ct. Rep., 1013; Central Ap- of Lords, 4 H. L. Rep., 997; Ham- 
 palachian Co. v. Buchanan, 33 C. C. burgh Manufacturing Co. v. Edsall, 
 A., 598, 90 Fed., 454, 62 U. S. App., 4 Halst. Ch., 141 ; Chicago and Alle- 
 195 ; 33 C. C. A., 682, 91 Fed., 1001 ; gheny Oil and Mining Co. v. United 
 Central Trust Co. v. Worcester Cy- States Petroleum Co., 57 Pa. St., 83 ; 
 cle Co., 86 Fed., 35. Beaumont v. Beaumont, 166 Pa. St., 
 
 33Chadm Banking Co. v. Ma- 615, 31 Atl., 336; S. C, 6 Philad., 
 
 honey, 43 Neb., 214, 61 N. W., 594, 521; Pullan v. Cincinnati & Chicago 
 
 distinguished in Buck v. Stuben, 63 R. Co.. 4 Biss., 47 ; Crane v. McCoy, 
 
 Neb., 273, 88 N. W., 483. 1 Bond, 422; Mays v. Rose, Freem.
 
 CHAP. I.] GENERAL FEATURES. 13 
 
 appointment of a receiver is thus a discretionary measure, the 
 action of the lower court in appointing or denying a receiver 
 pendente lite will not be disturbed upon appeal unless there 
 has been a clear abuse. 3? But the discretion thus vested in 
 the chancellor in the matter of appointing receivers pendente 
 lite is not an absolute or arbitrary one but it is a sound judicial 
 discretion in view of all the circumstances of the case, to be 
 exercised for the promotion of justice where no other adequate 
 remedy exists.38 And where the court is unable to see that 
 any benefit will result from appointing a receiver in the cause, 
 or that any injury will follow from refusing the relief, it will 
 not interfere, especially if it is apparent that great confusion 
 and difficulty in the management of the property may result to 
 both parties from a receivership.39 So, if upon a consideration 
 of all the circumstances of the case, it is apparent that greater 
 injury will ensue from appointing a receiver than from leaving 
 the property in its present possession, or if other considerations 
 of propriety or of convenience render the appointment im- 
 
 (Miss.), 703; Greville v. Fleming, 2 v. Neal, 56 C. C. A., 572, 120 Fed., 
 
 Jo. & Lat., 335; Morrison v. Buck- 224, affirming S. C, 110 Fed., 477; 
 
 ner. Hemp., 442; Whelpley v. Erie United States Shipbuilding Co. v. 
 
 Railway Co., 6 Blatchf., 271 ; Hanna Conklin, 60 C. C. A., 680, 126 Fed., 
 
 V. Hanna, 89 N. C, 68; Whitehead 132; Heinze v. Butte & B. C. M. Co.] 
 
 V. Hale, 118 N. C, 601, 24 S. E., 61 C. C. A., 63, 126 Fed., 1; Moore 
 
 360; Williamson's Adm'r v. W. C. v. Bank, 106 Fed., 574; Ford v. Tay- 
 
 V. M. & G. S. R. Co., 33 Grat., 624; lor, 137 Fed., 149. And see State 
 
 Norris V. Lake, 89 Va., 513, 16 S. E., v. Bank of New England, 55 Minn., 
 
 663; Lyle v. Commercial National 139, 56 N. W., 575. 
 Bank, 93 Va., 487, 25 S. E., 547; 37 Clark v. Bradley Co., 6 App. 
 
 Warren z;. Pitts, 114 Ala., 65, 21 So., D. C, 437; Wood v. Grayson, 16 
 
 494; Ray v. Robert Price Coal Co., App. D. C, 174; Coming v. Siesel, 
 
 80 Conn., 558, 69 Atl., 355 ; Clark v. 101 Ga., 389, 28 S. E., 861 ; Heinze 
 
 Bradley Co., 6 App. D. C, 437; v. Butte & B. C. M. Co., 61 C. C. 
 
 Wood V. Grayson, 16 App. D. C, A., 63, 126 Fed., 1. 
 174; The Anvil v. Savery, 116 Ga., 38 Union Boom Co. v. Samish 
 
 321, 42 S. E., 495; McGarragh v. Boom Co., ZZ Wash., 144, 74 Pac, 
 
 Bank, 117 Ga., 556, 43 S. E., 987; 53; Baltimore Bargain House v. St. 
 
 Valley National Bank v. Claflin Co., Clair, 58 West Va., 565, 52 S. E , 
 
 108 Iowa, 504, 79 N. W., 279 ; Balti- 660. 
 
 more Bargain House v. St. Clair, 58 39 Hamburgh Manufacturing Co. 
 
 West Va, 565, 52 S. E., 660; Briggs v. Edsall, 4 Halst. Ch., 141.
 
 14 
 
 RECEIVERS. 
 
 [chap. I. 
 
 proper or inexpedient, the court will refuse to interf ere.^^ ]^or 
 will a receiver be appointed in an improper case, even by con- 
 sent of the parties, especially when the rights of third persons 
 are concerned and may be jeopardized by the appointment.^^ 
 And he who seeks the appointment of a receiver must himself 
 come into court with clean hands.'*^ 
 
 § 8. Probability as to final decree ; plaintiff must present 
 a prima facie case; proof on interlocutory application. 
 While it has already been shown that the court, in passing upon 
 the application for a receiver, in no manner forestalls or antici- 
 pates the final decision upon the merits, the probability that 
 plaintiff will ultimately be entitled to a decree in his action is 
 still a material element to be considered by the court. And when 
 upon the entire record this is a matter of much doubt, the 
 court is justified, in its discretion, in refusing a receiver.^s 
 To warrant the relief, therefore, plaintiff should present at least 
 
 40Vose V. Reed, 1 Woods, 647; 
 Provident Life & Trust Co. v. Ken- 
 iston, 53 Neb., 86, 73 N. W., 216; 
 Equitable Life Assurance Society v. 
 Brown, 213 U. S., 25, 29 Sup. Ct. 
 Rep., 404, reversing S. C, 81 C. C. 
 A., 1, 151 Fed., 1. 
 
 41 Whelpley v. Erie Railway Co., 
 6 Blatchf., 271. To the same effect, 
 see Hutchinson v. American P.-C. 
 Co., 104 Fed., 182. 
 
 42 Hyde Park Gas Co. v. Kerber, 
 5 Bradw., 132. 
 
 43 Owen V. Homan, 3 Mac. & G., 
 378, affirmed on appeal to the House 
 of Lords, 4 H. L. Rep., 997; Wilkin- 
 son V. Dibbie, 12 Blatchf., 298; Bank 
 of Florence v. United States S. &. 
 L. Co., 104 Ala., 297, 16 So., 110; 
 Builders' & Painters' Supply Co. v. 
 Lucas, 119 Ala., 202, 24 So., 416; 
 Hayes v. Jasper Land Co., 147 Ala., 
 340, 41 So., 909; Vila v. Grand Is- 
 land E. L., I. & C. S. Co., 68 Neb., 
 222, 94 N. W., 136, 97 N. W., 613; 
 
 Lancaster v. Asheville St. Ry. Co., 
 90 Fed., 129; Kelley v. Boettcher, 
 89 Fed., 125. In Owen v. Homan, 3 
 Mac. & G., 378, Lord Truro ob- 
 serves, p. 411, as follows: "I am of 
 opinion that the case upon the whole 
 record presents too much doubt as 
 to the plaintiffs' right to a decree to 
 warrant the possession of the prop- 
 erty being disturbed. It is unneces- 
 sary to do more than to state that 
 the granting a receiver is a matter 
 of discretion, to be governed by a 
 view of the whole circumstances of 
 the case ; one most material of 
 which circumstances is the probabil- 
 ity of the plaintiff being ultimately 
 entitled to a decree. In this case 
 many of the important points arise 
 upon the construction of the deeds, 
 and not upon disputed facts ; and I 
 repeat that in my opinion that con- 
 struction is attended with too much 
 doubt and difficulty to entitle the 
 plaintiff to a receiver."
 
 CHAP. I.J GENERAL FEATURES. 15 
 
 a prima facie case, and the court should be satisfied that there 
 is imminent danger of loss unless a receiver is appointed.'** 
 But it is not necessary in an application for ancillary relief by 
 the appointment of a receiver that the proof should be as full 
 and complete as would be required upon a final hearing upon 
 the merits. *5 
 
 § 9. When power may be invoked; not when property 
 is of little value ; bond in lieu of receiver. The power of ap- 
 pointing receivers is necessarily inherent in courts possessed 
 of equitable jurisdiction, and may be invoked whenever there is 
 an estate or fund in existence and no competent person en- 
 titled to hold it, or when the person entitled occupies the rela- 
 tion of a trustee and is misusing or misapplying the property. 
 And when property constituting the subject-matter of the liti- 
 gation is subject to clear equities in favor of a party to the 
 action who is out of possession, the court may appoint a receiv- 
 er when the relief seems to be just and necessary to preserve 
 the thing in dispute from the control of either party until the 
 controversy is determined.*^ So a receiver will be appointed 
 for the protection of the fund when plaintiff has an equitable 
 interest, and defendant having possession of the property is 
 wasting it, or removing it beyond the jurisdiction of the 
 court.^'^ And if the order does not in terms fix or limit the 
 duration of the receivership, it will be construed as continuing 
 during the pendency of the suit, unless the receiver is sooner 
 discharged.*^ But to warrant a court of equity in incurring 
 the expense of a receivership, it must clearly appear that there 
 is actual property in existence which ought to be protected, and 
 the courts are averse to interfering when the property is of 
 trifling value.^^ And where the property involved is such that 
 
 44 Norris v. Lake, 89 Va., 513, 16 518. And see Clark v. Brown, 57 
 S. E., 663. C. C. A., 76, 119 Fed., 130. 
 
 45Pearce v. Elwell, 116 N. C, ^I ^°'^ ^- ^''^' ^ ^^°°d^' ^7- 
 
 595 21 S E 305 Weems v. Lathrop, 42 Tex., 
 
 207. 
 
 46 Skinner v. Maxwell, 66 N. C, 49 Whitworth v. Whyddon, 2 Mac. 
 
 45 ; Flagler v. Blunt, 32 N. J. Eq., & G., 52.
 
 16 RECEIVERS. [chap. I. 
 
 it is not likely to sufifer injury by remaining in the hands of the 
 defendant and it appears that the latter is perfectly solvent, it 
 has been held error to appoint a receiver pendente lite without 
 affording the defendant the alternative of giving bond for the 
 protection of the plaintiff.^^ And it may be stated generally 
 that a court of equity has inherent power to impose conditions 
 upon the appointment and discharge of receivers, and it may 
 properly discharge a receiver previously appointed upon the 
 giving by defendant of a bond properly conditioned to save 
 the plaintiff harmless from the injuries complained of.^^ 
 
 § 10. Relief similar to that by injunction; not granted 
 when there is a remedy at law; remedy at law defined. 
 A receiver being appointed by a court of equity in the exercise 
 of its extraordinary jurisdiction, applications for the relief 
 are governed by many of the principles which control the 
 courts in administering the extraordinary remedy of an in- 
 junction. And as it is always a sufficient objection to the 
 granting of an injunction that the person aggrieved has a full 
 and adequate remedy at law,^^ so courts of equity will not 
 lend their aid by the appointment of receivers when the persons 
 seeking the relief have ample redress by the usual course of pro- 
 ceedings at law, or when the law affords any other safe or ex- 
 pedient remedy.^^ Thus, when proceedings are instituted by 
 a creditor of a banking corporation for the appointment of a 
 
 50 Stillwell V. Savannah Grocery v. Jennings, 1 Stockt., 192 ; Wooden 
 Co, 88 Ga, 100, 13 S. E., 963; Biv- v. Wooden, 2 Green Ch, 429; Sher- 
 ins V. Marvin, 96 Ga, 268, 22 S. E, man v. Clark, 4 Nev, 138. 
 
 923; Conquest v. Bank, 97 Ga, 500, 53 Sollory v. Leaver, L. R, 9 Eq., 
 
 25 S. E., 343; Turnipseed v. Ken- 22; Cremen v. Hawkes, 2 Jo. & 
 
 tucky Wagon Co, 97 Ga, 258, 23 Lat., 674; Parmly v. Tenth Ward 
 
 S. E., 84 ; Cordele Ice Co. v. Sims, Bank, 3 Edw. Ch, 395 ; Corey v. 
 
 120 Ga, 428, 48 S. E, 12. And see Long, 43 How. Pr., 497 ; S. C, 12 
 
 §§ 124, 308 and 478, /'o.r^. Ab. Pr, N. S., 427; Opinion of 
 
 51 Twin City Power Co. v. Bar- Frick, J., in Speights v. Peters, 9 
 rett, 61 C. C. A., 288, 126 Fed., 302. Gill, 476; Morrison v. Buckner, 
 
 52Coughron v. Swift, 18 111., 414; Hemp, 442; Rice v. St. Paul & Pa- 
 
 Winkler v. Winkler, 40 111., 179; cific R. Co, 24 Minn., 464; Bush v. 
 
 Poage V. Bell, 3 Rand, 586; Web- Mattox, 110 Ga., 472, 35 S. E., 640; 
 
 ster V. Couch, 6 Rand., 519; Mullen Griffin v. Henderson, 116 Ga., 310,
 
 CHAP. I.] GENERAL FEATURES. 17 
 
 receiver to wind up its affairs, but it is apparent from his bill 
 that whatever rights he may have are cognizable at law and 
 may be remedied by following the course prescribed by law for 
 that purpose, the application will be denied and the plaintiff will 
 be left to pursue his legal remedy. ^^ So where plaintiff has an 
 adequate remedy at law by attachment or garnishment, a re- 
 ceiver is properly refused. ^^ Nor does it necessarily follow, 
 because the remedy at law is attended with difficulty, that 
 plaintiff may have relief in equity by a receiver.^^ So when 
 the person aggrieved, having a remedy at law, loses that 
 remedy by his own laches, he can not come into equity and have 
 a receiver.^'? And there is no case in which a court of equity 
 appoints a receiver simply because it will be productive of no 
 harm. 5^ But in order that the existence of a remedy at law 
 may constitute a bar to the intervention of equity by the ap- 
 pointment of a receiver, it must appear that the legal remedy 
 is equally as complete, efficient and effective as that in equity, 
 and unless this appears, a court of equity may properly inter- 
 vene.^^ And where it appears that the remedy at law is inade- 
 
 42 S. E., 482; Carstarphen Ware- rett, 61 C. C. A., 288, 126 Fed., 302; 
 
 house Co. V. Fried, 124 Ga., 544, Columbia National Sand Dredging 
 
 52 S. E., 598; Slover v. Coal Creek Co. v. Washed B. S. D. Co., 136 
 
 C. Co., 113 Tenn., 421, 82 S. W., Fed., 710. For the application of the 
 
 1131. And see McClure v. McGee, same principle in the case of injunc- 
 
 128 Ky., 464, — S. W., — . tions, see Watson v. Sutherland, 5 
 
 54Parmly v. Tenth Ward Bank, Wal., 74; Walla Walla v. Walla 
 
 3 Edw. Ch., 395. Walla Water Co., 172 U. S., 1, 
 
 55 Bush V. Mattox, 110 Ga., 472, 19 Sup. Ct. Rep., 77; Irwin v. 
 35 S. E., 640; Carstarphen Ware- Lewis, 50 Miss., 363; Beaser v. 
 house Co. V. Fried, 124 Ga., 544. 52 City of Ashland, 89 Wis., 28, 
 S. E., 598; Slover v. Coal Creek C. 61 N. W., 77; Welton v. Dick- 
 Co., 113 Tenn., 421, 82 S. W., 1131. son, 38 Neb., 767, 57 N. W., 559, 
 
 56Cremen v. Hawkes, 2 Jo. & 22 L. R. A., 496, 41 Am. St. 
 
 Lat., 674. Rep., 771 ; Kellogg v. King, 114 Cal., 
 
 57 Drewry v. Barnes, 3 Russ., 94. 378, 46 Pac, 166, 55 Am. St. Rep., 
 
 58 Orphan Asylum v. McCartee, 74; Coler v. Board of Commission- 
 Hopk. Ch., 429; Corey v. Long, 43 ers, 89 Fed., 257; Bank of Kentucky 
 How. Pr., 498; S. C, 12 Ab. Pr., v. Stone, 88 Fed., 383; Drew v. 
 N. S., 427. Town of Geneva, 150 Ind., 662, SO 
 
 59 Twin City Power Co. v. Bar- N. E., 871, 48 L. R. A., 814. 
 
 Receivers — 2.
 
 18 RECEIVERS. [chap. I. 
 
 quate and ineffectual, it is not necessary that the plaintiff should 
 exhaust that remedy before appealing to a court of equity.^^ 
 § 11. Plaintiff must show his own right, and danger to 
 the property. The principal grounds upon which courts of 
 equity grant their extraordinary aid by the appointment of 
 receivers pendente lite are that the person seeking the relief 
 has shown at least a probable interest in the property, and that 
 there is danger of its being lost unless a receiver is allowed, 
 the element of danger being an important consideration in the 
 case.61 And where there is no danger to the property and 
 nothing else to show the necessity for a receiver, one should 
 not be appointed. ^2 And a remote or past danger will not 
 suffice as a ground for the relief, but there must be a well- 
 grounded apprehension of immediate injury. ^^ The power of 
 appointment is usually invoked either for the prevention of 
 fraud, to save the subject of litigation from material injury, 
 or to rescue it from threatened destruction. 6"* And to warrant 
 the interposition of a court of equity by the aid of a receiver, 
 it is essential that plaintiff should show, first, either a clear 
 legal right in himself to the property in controversy, or that he 
 has some lien upon it, or that it constitutes a special fund out 
 of which he is entitled to satisfaction of his demand. And, 
 secondly, it must appear that possession of the property was 
 obtained by defendant through fraud; or that the property 
 itself, or the income from it, is in danger of loss from the 
 neglect, waste, misconduct or insolvency of the defendant.^^ 
 
 60 Chicago & Southeastern Ry. 62 Beaumont v. Beaumont, 166 Pa. 
 Co. V. Kenney, 159 Ind., 72, 62 N. St., 615, 31 Atl., 336. 
 
 E., 26; Sallee v. Soules, 168 Ind., 63 Kean v. Colt, 1 Halst. Ch., 365. 
 
 624, 81 N. E., 587. 64 Baker v. Administrator of 
 
 61 Goodyear v. Betts, 7 How. Pr., Backus, 32 111., 70. 
 
 187; Flagler v. Blunt, 32 N. J. Eq., 65 Mays v. Rose, Freem. (Miss.), 
 
 518; Mead v. Burk, 156 Ind., 577, 703; Kanawha Coal Co. v. Ballard 
 
 60 N. E., 338; Attorney-General v. & W. C. Co., 43 West Va., 721, 29 
 
 Clavin, (also sub. nom. McCarter v. S. E., 514; Thompson v. Adams, 60 
 
 Clavin), 72 N. J. Eq., 642, — Atl, West Va., 463, 55 S. E., 668; Inter^ 
 
 — . See, also. Orphan Asylum v. national Trust Co. v. Decker Bros., 
 
 McCartee, Hopk. Ch., 429; Vose v. 81 C. C. A., 302, 152 Fed., 78. See 
 
 Reed, 1 Woods. 647. also, Leavitt v. Yates, 4 Edw. Ch.,
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 19 
 
 Not only must the plaintiff show a case of adverse and conflict- 
 ing claims to the property, but he must also show some emer- 
 gency or danger of loss demanding immediate action, and that 
 his own right is reasonably clear and free from doubt. ^^ If 
 the dispute is as to title only, the court very reluctantly disturbs 
 possession by a receiver, but if the property is exposed to dan- 
 ger and to loss, and the person in possession has not a clear 
 legal right thereto, the court will interpose by a receiver for 
 the security of the property.^"^ 
 
 § 12. Plaintiff must have existing interest; relief not 
 granted to stranger; no receiver of gratuity. It is in all 
 cases essential to the exercise of the jurisdiction that the plain- 
 tiff should have a present existing interest in the property over 
 which he seeks to have a receiver appointed.^^ And when it is 
 
 162 ; Beecher v. Bininger, 7 Blatchf., 
 170. "An application for the ap- 
 pointment of a receiver," say the 
 court in Mays v. Rose, Freem. 
 (Miss.), p. 718, "is one which is ad- 
 dressed to the sound discretion of 
 the court, to be exercised as an 
 auxiliary to the attainment of the 
 ends of justice. It is one of the 
 modes in which the preventive jus- 
 tice of a court of equity is admin- 
 istered. The great object is to se- 
 cure the property or thing in con- 
 troverisy, so that it may be subjected 
 to such order or decree as the court 
 may make in the particular case. It 
 is intended equally for the security 
 of both plaintiff and defendant. The 
 possession of the receiver is not ad- 
 verse to or in hostility to the rights 
 of the defendant ; that possession is 
 the possession of the court, held 
 equally for the greater safety of all 
 the parties concerned. A reference 
 to the various decisions upon mo- 
 tions for the appointment of re- 
 ceivers shows that each case has 
 been made to depend upon its own 
 
 peculiar features, and throws but 
 little light upon any new case, ex- 
 cept so far as they establish the 
 general principles which should gov- 
 ern the court in the exercise of its 
 discretion upon these motions. These 
 principles are: that the plaintiff 
 must show, first, either that he has 
 a clear right to the property itself, 
 or that he has some lien upon it; 
 or that the property constitutes a 
 special fund to which he has a right 
 to resort for the satisfaction of his 
 claim. And secondly, that the pos- 
 session of the property by the de- 
 fendant was obtained by fraud ; or 
 that the property itself, or the in- 
 come arising from it, is in danger 
 of loss from the neglect, waste, mis- 
 conduct or insolvency of the defend- 
 ant. These are believed to be the 
 general rules governing all applica- 
 tions of this kind." 
 
 66 Beecher v. Bininger, 7 Blatchf., 
 170. 
 
 67 Opinion of Clayton, J., in 
 Lenox v. Notrebe, Hemp., 225. 
 
 68 Smith V. Wells, 20 How. Pr.,
 
 20 RECEIVERS. [chap. I. 
 
 apparent that he has parted with his entire interest in and title 
 to the property, the court will not interfere, even though suffi- 
 cient grounds may be shown to have warranted the relief, 
 when the offense complained of was committed, and when 
 plaintiff still had an interest in the subject-matter. ^9 And a 
 receiver will not be appointed over a gratuity which amounts 
 to nothing more than a mere allowance in which the defendant 
 has no property right or interest and which has been appropriat- 
 ed for his own personal benefit.'^^^ And a receiver will be ap- 
 pointed only in behalf of a party in interest in the litigation; 
 and a stranger to the suit, who represents no interest at stake, 
 is not entitled to participate in the proceedings, or to thrust 
 himself forward and obtain a receiver, especially when the 
 parties to the action are not desirous of having one appointed.'^^ 
 So the right to propose a suitable and proper person for re- 
 ceiver, after the order for his appointment has been granted, 
 rests in the first instance with the parties in interest in the 
 cause, and the court will not permit a stranger to the action to 
 come in and propose a person for the officeJ^ 
 
 § 13. Receiver not allowed for benefit of stranger to the 
 cause. A receiver pendente lite is appointed only for the 
 benefit of such of the parties to the cause as appear to be en- 
 titled to the fund in controversy, and not for the benefit of 
 strangers to the suit. And if the receivership interferes with 
 the rights of a stranger, he may apply to the court to be heard 
 pro interesse suo, and his rights will be protected against any 
 inequitable interference therewith by the officer of the court. 
 But the appointment of the receiver does not give a mere 
 
 158; Steele v. Aspy, 128 Ind., 367, 70 Timothy v. Day, (1908) 2 L. 
 
 27 N. E., 739. R. Ir., 26. 
 
 69 Smith V. Wells, 20 How. Pr.. 71 O'Mahoney v. Belmont, 62 N. 
 
 158. And this principle would seem Y., 133, affirming S. C, 37 N. Y. 
 
 to hold good, even though plaintiff Sup'r Ct. R., 223. 
 
 still has a right of action against 72 Attorney - General v. Day, 
 
 defendants for the injury done to Madd., 246, 1st American edition, 
 
 the property while he yet had an 470. 
 interest therein. Id.
 
 CHAP. 1.] GENERAL FEATURES. 21 
 
 Stranger to the suit the benefit of the proceedings, so that he 
 may claim what he would not otherwise have been entitled to.'^^ 
 § 14. DiHgence necessary; laches and acquiescence a 
 bar to relief. It is important to observe, at the outset, that 
 courts of equity lend their extraordinary aid by the appoint- 
 ment of receivers, as in the granting of injunctions, only in 
 behalf of those who have used due diligence in the assertion 
 of their rights and in invoking the aid of the court. And a 
 plaintiff, whose right is otherwise clear, and sufficient to en- 
 title him to the relief, may be entirely debarred from the aid of 
 the court by his own laches, which will be construed as a waiver 
 of the right if he delays an unreasonable time in its assertion."^^ 
 So an application for a receiver is not entitled to favorable 
 consideration, when the plaintiff has lain by for a long period 
 of years, and quietly acquiesced in a condition of affairs which 
 he seeks to change by obtaining a receiver. "^^ Yot example, 
 where plaintiffs seek the aid of a receiver over property in 
 which they claim some interest, but which has been in posses- 
 sion of defendants for a long period of years, during all which 
 time plaintiffs and those under whom they claim have ac- 
 
 73 Howell V. Ripley, 10 Paige, 43. too late with this motion. They 
 
 74 Brown z;. Chase, Walk. (Mich.), filed their bill August 13, 1839, near- 
 43; Reynolds & Hamby E. M. Co. ly three years ago, and, for aught 
 V. Martin, 116 Ga., 495, 42 S. E., that appears from their petition, 
 796. And see Gould v. Tryon, id., might with due diligence have ob- 
 353; Gray v. Chaplin, 2 Russ., 126; tained a decree long before this 
 Fogarty v. Bourke, 2 Dr. & War., time, and had the mortgaged prem- 
 580; Skinners Company v. Irish So- ises sold. If they were entitled to 
 ciety, 1 Myl. & Cr., 162. Brown v. a receiver, their neglect to apply for 
 Chase, Walk. (Mich.), 43, was a bill his appointment at an earlier day 
 in equity for the foreclosure of a should be construed as a waiver of 
 mortgage, on which an application their right. Motion denied." 
 
 was made for a receiver of the rents 75 Fogarty v. Bourke, 2 Dr. & 
 and profits of the mortgaged prem- War., 580; Gray v. Chaplin, 2 Russ., 
 ises, on the ground of insufficiency 126; Skinners Company v. Irish So- 
 of the security and insolvency of the ciety, 1 Myl. & Cr., 162. And see 
 mortgagor. The application for a Municipal Commissioners of Car- 
 receiver was made nearly three rickfergus v. Lockhart, Ir. Rep., 3 
 years after filing the bill. The court Eq., 515; Hood v. First National 
 say: "The complainants have come Bank, 29 Fed., 55.
 
 22 RECEIVERS. [chap. I. 
 
 quiesced in such possession, equity will not interfere by a re- 
 ceiver in limine.'^^ So when the application is based upon the 
 alleged misconduct of defendant as a trustee, and his misap- 
 propriation of funds, but it is shown that the state of affairs 
 complained of has existed for very many years, with plaintiffs' 
 knowledge and without objection on their part, the court will 
 not take the property from defendant's hands and place it in 
 the custody of a receiver. '^'^ And when the wrong complained 
 of occurred, if at all, several years before the application for 
 relief, and so long since as to afford no ground for apprehen- 
 sion of impending danger, and no act is alleged as being now 
 threatened, a receiver will not be allowed. '^^ And where the 
 receiver of a plaintiff in a foreclosure suit has allowed many 
 years to elapse after the entry of a decree in the action, such 
 laches and delay constitute a bar to the right of the receiver 
 to have the proceeds of the sale paid to him where the rights 
 of third persons have intervened.''^ 
 
 § 15. The remedy compared with that by injunction. 
 The relief granted by courts of equity in the appointment of 
 receivers pendente lite bears in many respects a close analogy 
 to that by preliminary injunction. Some points of resemblance 
 jin the two forms of remedy have been already indicated, 
 while others will frequently appear throughout the following 
 pages. Both are extraordinary equitable remedies, as distin- 
 guished from the usual and ordinary modes of administering 
 relief either in courts of law or of equity. Both are essen- 
 tially preventive in their nature, being properly used only for 
 the prevention of future injury, rather than for the redress of 
 past grievances. Both, too, have one common object in so far 
 as they seek to preserve the res or subject-matter of the litiga- 
 tion unimpaired, to be disposed of in accordance with the 
 future decree or order of the court. Perhaps the principal ele- 
 ment of difference between these two important remedies lies 
 
 76 Gray v. Chaplin, 2 Russ.. 126. 78 Kean v. Colt, 1 Halst. Ch., 365. 
 
 77 Skinners Company v. Irish So- 79 Thomas v. VanRIeter, 164 III., 
 ciety, 1 Myl. & Cr., 162. 304, 45 N. E., 405.
 
 CHAP. I.] GENERAL FEATURES. 23 
 
 in this: that an injunction is strictly a conservative remedy, 
 merely restraining action and preserving matters in statu quo, 
 without affecting the possession of the property or fund in con- 
 troversy ; while the appointment of a receiver is usually a more 
 active remedy, since it changes the possession as well as the 
 subsequent control and management of the property. A court 
 of equity by an injunction ties up the hands of defendants, and 
 preserves unchanged, not only the property itself, but the rela- 
 tions of all parties thereto. But in appointing a receiver the 
 court goes still farther, since it wrests the possession from 
 defendant, and assumes and maintains the entire management 
 and control of the property or fund, frequently changing its 
 form, and retaining possession through its officer, the re- 
 ceiver, until the rights of all parties in interest are satisfactorily 
 determined. 
 
 § 16. Receiver not necessarily appointed because injunc- 
 ,tion granted. From the points of resemblance already 
 indicated between these two extraordinary equitable remedies, 
 it is not to be inferred that the appointment of a receiver nec- 
 essarily follows from the granting of an injunction, or that 
 the two remedies are necessarily inseparable. And while it 
 frequently happens that the courts are called upon to adminis- 
 ter both species of relief in the same action, and at one and the 
 same time, yet it by no means follows that because an injunc- 
 tion is granted a receiver must be appointed, and the two are to 
 be treated as distinct and independent matters. A court of 
 equity may therefore refuse a receiver, although the case pre- 
 sented is a fitting one for an injunction, and although an in- 
 junction has already been granted.^O It has been held, how- 
 ever, that the power of appointing a receiver, when the relief 
 is necessary for the collection and preservation of property 
 
 80 Rawnsley v. Trenton Mutual "the rights to those different reme- 
 
 Life & Fire Insurance Co., 1 Stockt., dies are essentially distinct, and de- 
 
 347; Oakley v. Paterson Bank, 1 pend upon totally different grounds 
 
 Green Ch., 173. And see Hall v. and circumstances." And see, post, 
 
 Hall. 3 Mac. & G., 85, where it was § 743. 
 said by the Lord Chancellor that
 
 24 RECEIVERS. [chap. I. 
 
 pending an injunction suit, is a necessary incident to the power 
 of granting an injunction ; ^^ and if the latter power be express- 
 ly conferred by law upon a judge in vacation, the former may 
 be regarded as conferred by implication.^^ 
 
 § 17. Suit must be actually pending ; allegations must be 
 specific. Ordinarily, unless perhaps in the case of infants 
 or lunatics, a suit must be actually pending to justify a court of 
 equity in appointing a receiver ;83 and it follows, necessarily, 
 that the person whose property it is sought to place in the re- 
 ceiver's hands must be made a party to the suit, in order that he 
 may have an opportunity of resisting the application, the grant- 
 ing of which might result in irreparable injury to his inter- 
 ests.8^ And since the court is without jurisdiction to appoint 
 a receiver before the bill is filed, the fact that the bill is subse- 
 quently filed and that the receiver gives bond does not impart 
 any validity to the order.85 And the suit which must be ac- 
 tually pending must be one in which the main relief sought is 
 independent of the receivership.^e But where an order ap- 
 pointing a receiver may be void because made before the actual 
 pendency of an action, a subsequent order made after the court 
 has acquired jurisdiction and confirming the original appoint- 
 
 81 Elk Fork Oil & Gas Co. v. Va., 565, 52 S. E., 660; Popp v. 
 Foster, 39 C. C. A., 615, 99 Fed., 495. Mining Co., 27 Utah, 83, 74 Pac, 
 
 82 Penn v. Whiteheads, 12 Grat., 426 ; In re Brant, 96 Fed., 257. And 
 74_ see In re Hancock, 27 Hun, 575; 
 
 83 Baker v. Administrator of Back- Plarwell v. Potts, 80 Ala., 70; Jones 
 us, 32 111., 79; Merchants & Manu- v. Bank of Leadville, 10 Colo., 464, 
 facturers National Bank v. Kent 17 Pac, 272; Pressley v. Harrison, 
 Circuit Judge. 43 Mich., 292, 5 N. 102 Ind., 14, 1 N. E., 188; Greene 
 W., 627; Jones v. Schall, 45 Mich., v. Star C. & P. Car Co., 99 Fed., 
 379, 8 N. W., 68 ; Hardy v. McClel- 656. 
 
 Ian, 53 Miss., 507 ; Barber v. Manier, 84 Baker v. Administrator of 
 
 71 Miss., 725, 15 So., 890; State v. Backus, 32 111., 79. See, also, Dale 
 
 Union National Bank, 145 Ind., 537, v. Kent, 58 Ind., 584. 
 
 44 N. E., 585, 57 Am. St. Rep., 209; 85 Harwell v. Potts, 80 Ala., 70. 
 
 State V. Ross, 122 Mo., 435, 25 S. 86 Vila v. Grand Island E. L., I. 
 
 W., 947, 23 L. R. A., 534; Rainey & C. S. Co., 68 Neb., 222, 94 N. W., 
 
 V. Freeport S. C. & C. Co., 58 West 136, 97 N. W., 613 ; Mann v. Ger- 
 
 Va., 424, 52 S. E., 528; Baltimore man- American I. Co., 70 Neb.. 454, 
 
 Bargain House v. St. Clair, 58 West 97 N. W., 600.
 
 CHAP. I.] GENERAL FEATURES. 25 
 
 ment will operate as an appointment as of that date and will be 
 binding upon the parties and their privies. Such confirmatory 
 order, therefore, constitutes a good defense to an action against 
 the receiver to recover funds received by him brought by a 
 person who is in privity with a party to the suit in which such 
 order was entered.^'' The facts relied upon as the ground for 
 the relief should be distinctly and specifically set forth, in order 
 that defendant may be fully apprised thereof and have an oppor- 
 tunity to resist the application.^^ It will not therefore suffice 
 to allege in general terms that plaintiff is entitled on principles 
 of equity to the interposition of the court, but the facts relied 
 upon should specifically appear.^^ And while fraudulent con- 
 duct on the part of defendant, or danger to the property or 
 fund in controversy, is frequently made the foundation for a 
 receivership, it will not suffice merely to allege such fraud or 
 danger upon information generally, without specifying the 
 sources of the information. And a bill whose only allegations 
 upon these points are thus vague and general does not present 
 such a case as to justify the court in interfering by a receiver.^^ 
 Nor will mere general averments of plaintiff's belief that the 
 property in controversy will be wasted or destroyed, unless a 
 receiver is appointed, warrant the court in interfering, but 
 the grounds upon which such belief is founded should be set 
 forth.9i 
 
 § 18. Insolvency as a ground for relief. While insolven- 
 cy of a defendant in possession, and against whom a receiver is 
 sought, is frequently relied upon by the courts as a ground for 
 granting the relief,^^ j^ [^ to be observed that insolvency will 
 not of itself warrant a court in appointing a receiver. It must 
 also appear that plaintiff has a probable cause of action against 
 
 87 Anderson v. Riddle, 10 Wyo., 90 Blondheim v. Moore, 11 Md., 
 277, 68 Pac, 829. 365. 
 
 88 Tomlinson v. Ward, 2 Conn., 91 Hanna v. Hanna, 89 N. C, 68. 
 396; Blondheim v. Moore, 11 Md., 92 See Leavitt v. Yates, 4 Edw. 
 365. Ch., 162. 
 
 89 Tomlinson v. Ward, 2 Conn., 
 396.
 
 26 RECEIVERS. [chap. L 
 
 the defendant, and that the benefit to result from his recovery 
 will either be wholly lost or substantially impaired by reason 
 of such insolvency, unless a receiver is appointed.^^ Upon the 
 other hand, if the case is in other respects a proper one for the 
 appointment of a receiver, the relief may be granted although 
 it appears that the defendant is entirely solvent.^^ 
 
 § 19. Courts averse to interfering with defendant in 
 possession; considerations governing court in exercise of 
 discretion. As against a defendant in the possession and 
 enjoyment of property which is the subject-matter of the liti- 
 gation, equity always proceeds with extreme caution in ap- 
 pointing a receiver.9^ Where the property has been held and 
 enjoyed by defendants in possession for a long series of years, 
 and plaintiff shows no real danger, a receiver will not ordi- 
 narily be appointed in limine. ^^ And where plaintiff's object 
 is to assert a right to property possessed by defendant, a re- 
 ceiver, if appointed at all, is appointed only upon the principle 
 of preserving the subject-matter pending a litigation which is 
 to determine the rights of the parties. In all such cases, a 
 court of equity necessarily exercises a large discretion as to 
 whether it will or will not take possession of the property by 
 its receiver, and this discretion is governed by a consideration 
 of all the circumstances of the case. It is therefore difficult to 
 establish any fixed rule in such cases, although it may be said 
 generally, that if the case as presented upon the application for 
 
 93 Gregory v. Gregory, 33 N. Y. Carrickfergus v. Lockhart, Ir. Rep., 
 Supr. Ct. R., opinion of Jones, J., 3 Eq., 515; Rees v. Andrews, 169 
 p. 39; Lawrence Iron-Works v. Mo., 177, 69 S. W., 4; State v. Dis- 
 Rockbridge Co.. 47 Fed., 755; Trust trict Court, 13 Mont., 416, 34 Pac, 
 & Deposit Co. V. Spartanburg W. 609; dictum in Hall v. Wayne Cir- 
 Co., 91 Fed., 324; Ryder v. Bate- cuit Judge, 111 Mich., 395, 69 N. 
 man, 93 Fed., 16. W., 643. 
 
 94 Mead v. Burk, 156 Ind., 577, 60 96 Municipal Commissioners of 
 N. E., 338; Fink v. Montgomery, Carrickfergus v. Lockhart, Ir. Rep., 
 162 Ind., 424, 68 N. E., 1010. 3 Eq., 515; Kelley v. Boettcher, 89 
 
 95 Owen v. Homan, 4 H. L. Rep., Fed., 125 ; Ryder v. Bateman, 93 
 997, affirming S. C, 3 Mac. & G., Fed., 16. 
 
 378; Municipal Commissioners of
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 27 
 
 a receiver is clearly in favor of plaintiff, indicating that he will 
 probably be entitled to a final recovery, the risk of injury to 
 defendant is very small, and the court does not hesitate to in- 
 terfere. If there be more doubt as to plaintiff's right, there 
 is of course more difficulty in passing upon the application, the 
 question being one of degree, as to which it is impossible to 
 lay down any precise rule.^"^ 
 
 97 Owen v. Homan, 4 H. L. Rep., 
 997, affirming S. C, 3 Mac. & G., 
 378. The doctrine of the text is 
 well stated in this case in the opin- 
 ion of the Lord Chancellor, as fol- 
 lows, page 1032 : "The receiver, if 
 appointed in this case, must be ap- 
 pointed on the principle on which 
 the court of chancery acts, of pre- 
 serving property pending the liti- 
 gation which is to decide the right 
 of the litigant parties. In such 
 eases the court must of necessity 
 exercise a discretion as to whether 
 it will or will not take possession of 
 the property by its officer. No pos- 
 itive, unvarying rule can be laid 
 down as to whether the court will 
 or will not interfere by this kind of 
 interim protection of the property. 
 Where indeed the property is as it 
 were in medio, in the enjoyment 
 of no one, the court can hardly do 
 wrong in taking possession. It is 
 the common interest of all parties 
 that the court should prevent a 
 scramble. Such is the case when 
 a receiver of a property of a de- 
 ceased person is appointed, pend- 
 ing a litigation in the ecclesiastical 
 court as to the right of probate or 
 administration. No one is in the 
 actual, lawful enjoyment of property 
 so circumstanced, and no wrong can 
 be done to any one by taking and 
 preserving it for the benefit of the 
 successful litigant. But where the 
 
 object of the plaintiff is to assert a 
 right to property of which the de- 
 fendant is in the enjoyment, the case 
 is necessarily involved in further 
 questions. The court, by taking pos- 
 session at the instance of the plain- 
 tiff, may be doing a wrong to the 
 defendant; in some cases an irrepar- 
 able wrong. If the plaintiff should 
 eventually fail in establishing his 
 right against the defendant, the 
 court may, by its interim interfer- 
 ence, have caused mischief to the 
 defendant for which the subsequent 
 restoration of the property may af- 
 ford no adequate compensation. In 
 all cases, therefore, where the court 
 interferes by the appointment of a 
 receiver of property in the posses- 
 sion of the defendant before the 
 title of the defendant is established 
 by decree, it exercises a discretion 
 to be governed by all the circum- 
 stances of the case. When the evi- 
 dence on which the court is to act 
 (here the only evidence is the an- 
 swer of Mrs. Homan) is very clear- 
 ly in favor of the plaintiff, then the 
 risk of eventual injury to the de- 
 fendant is very small, and the court 
 does not hesitate to interfere. Where 
 there is more of doubt there is of 
 course more of difficulty; the ques- 
 tion is one of degree, as to which, 
 therefore, it is impossible to lay 
 down any precise and unvarying 
 rule. In this case Lord Truro did
 
 28 RECEIVERS. [chap. I. 
 
 § 20. Averse to interference with tenants in common of 
 personalty. As between tenants in common of personal 
 property, the courts are usually averse to appointing a receiver 
 over the joint property upon the application of one co-tenant 
 against the other.^^ And one co-tenant can not, on the ground 
 of a refusal of the other to divide the property, maintain a bill 
 in equity for a receiver and for a sale and division, when it 
 is not shown that the chattels were agreed to be or were used 
 in carrying on any business for the joint benefit of the parties, 
 as partners or otherwise ; or that the tenancy in common was of 
 such a nature as to require a sale of the chattels or a termina- 
 tion of the tenancy; and when it does not appear that there is 
 any necessity for a division of the property, on account of the 
 death or insolvency of one of the co-tenants. And this is true, 
 even though the bill charges the defendant with having the 
 sole and exclusive use of the property, and that he is diminish- 
 ing its value and refuses to make a division thereof, since the 
 remedy for such grievances, if they amount to a conversion of 
 the property, must be sought by an action at law.^^ So in the 
 case of joint owners of the machinery and material of a print- 
 ing office, upon a bill by one joint owner or tenant in common 
 against the other for a partition of the property, which is in 
 defendant's possession, the court will refuse a receiver if the 
 defendant in possession will give adequate security for the 
 rents and profits pendente lite.^ And if, pending proceed- 
 ings for the partition of personalty, one of the co-owners 
 
 not think the title of the plaintiff personal property in an action for 
 
 was so clearly made out as to justify its sale and for a distribution of the 
 
 the court in turning the defendant proceeds among tenants in common, 
 
 out of possession before the plain- see Andrews v. Betts, 8 Hun, 322; 
 
 tiffs had finally established their Shehan v. Mahar, 17 Hun, 129. See 
 
 right, and I am not prepared to say Laing v. Williams, 135 Wis., 253, 
 
 that the conclusion at which he ar- 115 N. W., 821, as to the appoint- 
 
 rived was wrong; on the contrary, ment of a receiver in an action for 
 
 I think it was right." the partition of personal property. 
 
 98 Low V. Holmes, 2 C. E. Green, 99 Blood v. Blood, 110 Mass., 545. 
 
 148; Blood v. Blood, 110 Mass., 545. 1 Low v. Holmes, 2 C. E. Green, 
 
 As to the right to a receiver over 148.
 
 CHAP. I.] GENERAL FEATURES. 29 
 
 threatens the destruction or removal of the property, the 
 court may properly appoint a receiver.2 
 
 § 21. The jurisdiction not extended to conflict as to 
 public offices. The subject-matter of the jurisdiction of 
 equity being property rights, a court of equity is not the proper 
 forum for determining controversies concerning the right to 
 hold public offices, all such questions being of a purely legal 
 nature and cognizable only in courts of law. Equity will 
 not therefore extend its extraordinary jurisdiction by the grant- 
 ing of injunctions and the appointment of receivers, to the ex- 
 tent of determining the rights of conflicting claimants to a pub- 
 lic office, but will leave all such questions to be determined in 
 the manner provided by law.^ And where there are rival claim- 
 ants to an office of a public nature, held by appointment from 
 the executive of the state, a court of equity will not, in behalf 
 of one of such claimants, enjoin the other from receiving the 
 fees and emoluments of the office, and will not appoint a re- 
 ceiver of such fees, although it is alleged that defendant, who 
 has intruded into the office, is insolvent. The appointment of 
 a receiver in such a case would be, in effect, the assumption by 
 the court of a right to make a temporary appointment to the 
 office, which is by law required to be filled by the executive de- 
 partment of the government, and would be utterly foreign to 
 the jurisdiction of a court of equity.-* So when a controversy 
 
 2 Thompson v. Silverthorne, 142 fore the right to the office could be 
 
 N. C, 12, 54 S. E., 782. determined by legal proceedings; 
 
 STappan v. Gray, 9 Paige, 507. and prayed an injunction and a re- 
 See, also, People v. Draper, 24 ceiver. The Vice-Chancellor decided 
 Barb., 265; Stone v. Wetmore, 42 that the bill showed a prima facie 
 Q^ 501 case of intrusion by defendant into 
 
 4'Tappan V. Gray, 9 Paige, 507. complainant's office; and that de- 
 Complainant, claiming to be entitled fendant's insolvency was sufficient to 
 to the office of flour inspector of the sustain the bill until the right could 
 city of New York, filed his bill al- be determined upon an information 
 leging that defendant had usurped in the nature of a quo warranto. 
 the office and was receiving its fees Upon appeal, Walworth, Chancellor, 
 and emoluments ; that he was wholly held as follows : "If the Vice-Chan- 
 insolvent and unable to respond for cellor was right in the conclusion 
 the fees which he might receive be- that the complainant was entitled to
 
 30 
 
 RECEIVERS. 
 
 [chap. 1. 
 
 is pending in quo warranto to test the right to a public office, 
 equity will not assume jurisdiction over the matter, or appoint 
 a receiver to take charge of the fees and emoluments of the of- 
 fice, A receiver is appointed by a court of equity only when a 
 controversy is actually pending in that court, and a proceeding 
 in quo warranto being a legal proceeding, and depending upon 
 legal and not equitable rights, equity will not interfere, the ex- 
 ercise of its jurisdiction in such a case being contrary to pub- 
 lic policy as well as unsustained by authority.^ 
 
 § 22. Receiver may be appointed over fees and emolu- 
 ments of an office; salary of school-teacher; of clerk of 
 court. When, however, the question is not one which 
 affects the right or title to the office in controversy, but merely 
 
 discharge the duties of the office of 
 flour inspector, after the appoint- 
 ment by the governor during the 
 recess of the senate, and that such 
 appointment of the defendant to the 
 office was illegal and unauthorized, 
 I think he erred in supposing that 
 this court had jurisdiction to afford 
 the complainant any relief at this 
 time. This court certainly ought 
 not to assume the jurisdiction to 
 oust an officer in no way connected 
 with the administration of justice 
 here, and over whose appointment 
 it has no control, from an office, the 
 duties of which he is discharging 
 under color of an appointment from 
 the executive of the state, until his 
 right to such office has been settled 
 in the mode prescribed by the Re- 
 vised Statutes for the determination 
 of his claim. That, however, would 
 be the necessary effect of an injunc- 
 tion such as is prayed for in this 
 case. For the receiving and inter- 
 meddling with and enjoying the fees, 
 profits and advantages of the office 
 are so connected with the proper 
 discharge of the duties of the office 
 
 itself, that they could not be sepa- 
 rated without rendering the office 
 of no benefit whatever to the de- 
 fendant, should he finally succeed in 
 establishing his right to it on the 
 quo warranto. Such relief, there- 
 fore, could not be granted without 
 depriving the public of the benefit 
 which the inspection law contem- 
 plates, until the termination of this 
 litigation. And it would be equally 
 inconsistent with public policy and 
 the rights of those who are inter- 
 ested in having the duties of the of- 
 fice properly discharged, to appoint 
 a receiver of the fees and emolu- 
 ments of such an office. The ap- 
 pointment of a receiver to discharge 
 the duties of the office, in connection 
 with the receipt of the fees and 
 emoluments, would be still more ob- 
 jectionable in principle, as it would, 
 in effect, be the assumption of a 
 right by this court to make a tem- 
 porary appointment of a public of- 
 ficer, whose appointment is by law 
 required to be made by the execu- 
 tive department of the government." 
 5 Stone V. Wetmore, 42 Ga., 601.
 
 CHAP. I.] GENERAL FEATURES. 31 
 
 the right to its fees or profits as property, in which plaintiff 
 claims a right or interest by virtue of contract relations with the 
 officer, there would seem to be no objection upon principle to 
 interfering by a receiver in a case otherwise appropriate for 
 the relief.^ And when a public officer has assigned the profits 
 and emoluments of his office to trustees to secure payment of 
 his debts, a receiver was appointed pendente lite, upon j. bill 
 to compel the execution of the trust, but without prejudice to 
 the question of whether the profits were assignable^ So when 
 a deputy clerk was employed by a clerk of the court upon a 
 contract providing that he should receive as compensation for 
 his services one-half the fees of the office, in an action by the 
 deputy against the principal to recover the amount due under 
 the contract, an injunction was granted and a receiver appoint- 
 ed to collect the fees pending the litigation, plaintiff alleging 
 the insolvency of defendant and his inability to satisfy any 
 judgment which might be had against him. And the relief 
 was based upon the ground that the collection of the fees was 
 not an official duty, but a right pertaining to the officer indi- 
 vidually, and that plaintiff, under his contract, was entitled to 
 the same right, since a portion of the fees belonged to him, and 
 they might be collected by a receiver without in any manner 
 interfering with the defendant's official duties.^ And a receiver 
 has been appointed upon behalf of a judgment creditor over an 
 installment of the salary of a school-teacher which had become 
 due him.9 But it is held, upon principles of public policy, that 
 a judgment creditor is not entitled to a receiver by way of 
 
 6 Palmer v. Vaughan, 3 Swans., 9 Picton v. Cullen, (i900) 2 L. R. 
 173; Cheek v. Tilley, 31 Ind., 121. Ir., 612. But in Ireland it is held 
 And see Stern v. State Board, 50 that a receiver should not be ap- 
 Wash., 100, 96 Pac, 693. pointed by way of equitable execu- 
 
 7 Palmer v. Vaughan, 3 Swans., tion over future installments of a 
 173. But the court directed that if superannuation allowance granted 
 the parties should consent to such under the Superannuation Act of 
 an arrangement, the fees and profits 1859. MacDonald z;. O'Toole, (1908) 
 of the office might be paid into court, 2 L. R. Ir., 386. 
 
 in lieu of appointing a receiver. 
 S Cheek v. Tilley, 31 Ind., 121.
 
 32 RECEIVERS. [chap. I. 
 
 equitable execution over the future salary of the clerk of a 
 court.i^' And equity will not appoint a receiver of the salary 
 of a public officer when there is no permanent fund out of which 
 it is payable, it being paid out of an allowance voted by parlia- 
 ment from year to year, and when no action can be maintained 
 to recover the allowance or to enforce its payment.^i 
 
 § 23. The jurisdiction as affected by codes of procedure ; 
 Supreme Court of Judicature Act in England. In many of 
 the states of this country the jurisdiction of the courts over the 
 subject of receivers has been, to a considerable degree, fixed or 
 controlled by legislation, enlarging or abridging the jurisdic- 
 tion as exercised by courts of equity independent of statute. 
 This is especially true of those states which have adopted codes 
 of procedure similar to that of New York. And in New York 
 it is held that the appointment of a receiver, like other provi- 
 sional remedies prescribed in the code of procedure, is a mere 
 incident of the general jurisdiction of the courts, and not an 
 essential part of such jurisdiction. And the legislature, having 
 prescribed the cases in which a receiver may be appointed 
 pendente lite, and as a proceeding in the action, have as care- 
 fully excluded all other cases, thus prohibiting the appointment 
 except as authorized by the code.12 g^t in North Carolina, 
 while the code of procedure has specified certain cases in which 
 a receiver may be appointed, it is held that the code has not ma- 
 terially altered the general equity jurisdiction of the courts over 
 the subject, which remains as before. ^^ In England, under 
 the Supreme Court of Judicature Act of 1873, the power of ap- 
 pointing receivers has been extended to all cases where it shall 
 appear to the court to be just or convenient, and the relief may 
 be granted either unconditionally, or upon such terms as the 
 court may deem just.^* 
 
 lOM'Creery v. Bennett, (1904) 2 13 Skinner v. Maxwell, 66 N. C, 
 
 L. R. Ir., 69. 45. See, also, Battle v. Davis, id., 
 
 11 Cooper V. Reilly, 1 Russ. & M., 252. 
 
 560, aflfirming S. C, 2 Sim., 560. l'* Supreme Court of Judicature 
 
 12 Fellows V. Heermans, 13 Ab. Act, August 5, 1873. Paragraph 8 
 Pr. N. S., 1. of section 25 provides as follows:
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 33 
 
 § 24. Receiver not granted when equities of bill are 
 denied by answer. An important principle of general ap- 
 plication in the exercise of this branch of the extraordinary 
 jurisdiction of equity is that plaintiff is never entitled to a re- 
 ceiver when the equities of his case are fully and fairly denied 
 by the sworn answer of defendant. When, therefore, the ap- 
 plication for a receiver is made after the coming in of the 
 answer, and the equities of the bill upon which the receiver is 
 sought are fully denied by defendant's answer under oath, and 
 the evidence adduced in support of the bill does not overcome 
 the denials of the answer, the court will refuse to appoint a re- 
 ceiver.15 In such cases, the plaintiff, having addressed himself 
 to the conscience of the defendant, has made him a witness and 
 must take his answer as true, unless he can overcome it by 
 other testimony.l^ And the question is no longer regarded as 
 one addressed to the discretion of the court, but it is judicial 
 error to appoint a receiver when the charges of the bill are thus 
 
 "A mandamus or an injunction may 
 be granted or a receiver appointed 
 by an interlocutory order of the 
 court in all cases in which it shall 
 appear to the court to be just or 
 convenient that such order should 
 be made ; and any such order may 
 be made either unconditionally or 
 upon such terms and conditions as 
 the court shall think just," etc. See 
 this act construed in Pease v. 
 Fletcher, 1 Ch. D., 273; Porter v. 
 Lopes, 7 Ch. D., 358; Anglo-Italian 
 Bank v. Davies, 9 Ch. D., 275; 
 Bryant v. Bull, 10 Ch. D., 153; 
 Smith V. Cowell, 6 Q. B. D., 75; 
 Fuggle V. Bland, 11 Q. B. D., 711; 
 Howell V. Dawson, 13 Q. B. D., 67 ; 
 In re Coney, 29 Ch. D., 993 ; Stanger 
 Leathes v. Stanger Leathes, Weekly 
 Notes, 1882, p. 71 ; Mason v. West- 
 oby, 32 Ch. D., 206; Manchester & 
 L. D. B. Co. V. Parkinson, 22 Q. B. 
 Receivers — 3. 
 
 D., 173; Holmes v. Millage, (1893), 
 1 Q. B., 551 ; Harris v. Beauchamp 
 Brothers, (1894), 1 Q. B., 801. 
 These decisions indicate the marked 
 tendency of the English courts to 
 limit the relief, notwithstanding the 
 language above quoted, to cases in 
 which the High Court of Chancery 
 would have interposed prior to the 
 passage of the Judicature Act. 
 
 15 Thompsen v. Diffenderfer, 1 
 Md. Ch., 489; Simmons v. Hender- 
 son, Freem. (Miss.), 493; Henn v. 
 Walsh, 2 Edw. Ch., 129; Buchanan 
 V. Comstock, 57 Barb., 581 ; Fair- 
 bairn V. Fisher, 4 Jones Eq., 390; 
 Sweeny v. Mayhew, 6 Idaho, 455, 
 56 Pac, 85 ; Callanan v. Shaw, 19 
 Iowa, 183 ; Rhodes v. Lee, 32 Ga., 
 470; Crombie v. Order of Solon, 157 
 Pa. St. 588, 27 Atl., 710. 
 
 16 Thompsen v. Diffenderfer, 1 
 Md. Ch., 489.
 
 34 RECEIVERS [chap. I, 
 
 denied.l'^ So if a receiver has already been appointed, he 
 will be discharged upon the coming in of defendant's answer 
 fully denying the equities of the bill.^^ Indeed, the rule as here 
 stated is analogous to the well-established rule which governs 
 applications for the dissolution of interlocutory injunctions, 
 which is, that defendant is entitled to a dissolution of the in- 
 junction upon filing his answer fully denying the equities of the 
 bill.lS 
 
 § 25. Conflict of authority as to whether appeal will lie. 
 The question whether an appeal will lie from an order granting 
 or refusing a receiver in limine is one of considerable impor- 
 tance, upon which the authorities are far from reconcilable. 
 The conflict of authority upon this point is attributable in part 
 to the difference in practice in the different states with regard 
 to appeals, and in part to the different views of the courts as 
 to whether such orders are final in their nature and affect the 
 substantial rights of the parties. It may be safely said that, 
 since the appointing or refusing a receiver is largely a matter 
 of sound judicial discretion, even in those states where an ap- 
 peal is allowed from such interlocutory order, if the testimony 
 addressed to the court below is conflicting, and if that court, 
 after duly weighing and considering the testimony, either ap- 
 points or refuses to appoint a receiver, an appellate court will 
 not interfere with the exercise of this discretion, in the absence 
 of any facts showing that it has been abused.20 And when the 
 
 17 Fairbairn v. Fisher, 4 Jones 20 Njmocks t;. Shingle Co., 110 N. 
 Eq., 390. And see Wilson v. Mad- C, 230, 14 S. E., 6S4; Reid v. Reid, 
 dox, 46 West Va., 641, 33 S. E., 775. 38 Ga., 24; Gunby v. Thompson, 56 
 
 18 Drury z'. Roberts, 2 Md. Ch., Ga., 316; Crawford v. Spurling, 56 
 157 ; Voshell t;. Hynson, 26 Md., 83. Ga., 611; Gardner v. Howell, 60 
 
 19 Simmons t'. Henderson, Freem. Ga., 11; Sheridan Brick Works zl 
 (Miss.), 493. And see for applica- Marion Trust Co., 157 Ind., 292, 61 
 tion of the rule to cases of injunc- N. E., 666, 87 Am. St. Rep., 207; 
 tions, Parkinson v. Trousdale, 3 Chicago & Southeastern Ry. Co. v. 
 Scam., 367; Roberts v. Anderson, Kenney, 159 Ind., 72, 62 N. E., 26; 
 2 Johns. Ch., 202 ; Hollister v. Bark- Cameron v. Groveland Imp. Co., 20 
 ley, 9 N. H., 230; Hatch v. Daniels, Wash., 169, 54 Pac, 1128, 72 Am. St. 
 1 Halst. Ch., 14; Washer v. Brown, Rep., 26 and note. As to the ap- 
 id., 81. pealability of an order directing the
 
 CHAP. I.] GENERAL FEATURES. 35 
 
 testimony is conflicting and the court below has, after hearing, 
 refused to revoke its appointment of a receiver, an appellate 
 court will refuse to control the discretion of the inferior tribu- 
 nal.2i 
 
 § 26. Appeal not allowed in certain states. It has been 
 said in general terms, upon the question under consideration, 
 that since the appointment of a receiver to take charge of prop- 
 erty pendente lite is an interlocutory order, no appeal will lie 
 therefrom.22 And it was formerly held in Indiana that an ap- 
 peal would not lie from the refusal of a court below to set aside 
 the appointment of a receiver, all orders touching the appoint- 
 ing or removing of receivers being regarded as interlocutory 
 orders, and the statute authorizing appeals from interlocutory 
 orders not embracing such cases.23 But by a later statute an 
 appeal is authorized from an order appointing or refusing a 
 receiver. 24 And upon such an appeal, the evidence upon which 
 the court below acted in making the appointment being con- 
 flicting, the appellate court will not ordinarily interfere with 
 such action. 25 And upon an appeal from an interlocutory 
 order appointing a receiver pendente lite, the appellate tribunal 
 will not consider the case upon its merits except in so far as 
 it may incidentally become necessary to do so in determining 
 the correctness of the action of the lower court in making the 
 appointment.26 And it is held in Nevada, under the practice 
 
 sale in bulk of all the property of 24 Dale v. Kent, 58 Ind., 584. And 
 
 a corporation over which a receiver see Buchanan v. Berkshire Life Ins. 
 
 has been appointed, see Wenar v. Co., 96 Ind., 510. 
 
 Schwartz, 116 La., 151, 40 So., 599. 25 Naylor z;. Sidener, 106 Ind., 179, 
 
 21 Robenson v. Ross, 40 Ga., 375; 6 N. E., 345. 
 
 Cohen V. Meyers, 42 Ga., 46. 26 Sullivan Electric L. & P. Co. v. 
 
 22 Wilson V. Davis, 1 Mont., 98; Blue, 142 Ind., 407, 41 N. E., 805; 
 Emmons v. Garnett, 18 District of Gray v. Oughton, 146 Ind., 285, 45 
 Columbia, 52. As to the amount of N. E., 191; Levin v. Florsheim, 161 
 the penalty in an appeal bond upon Ind., 457, 68 N. E., 1025 ; Tuttle v. 
 an appeal from an order appointing Blow, 163 Mo., 625, 63 S. W., 839. 
 a receiver, see Home Savings & In such case it is enough if upon 
 Trust Co. V. Polk District Court, the verified pleadings and affidavits 
 121 Iowa, 1, 95 N. W., 522. there was a sufficient showing for 
 
 23 Wood V. Brewer, 9 Ind., 86, the appointment of a receiver.
 
 36 
 
 RECEIVERS. 
 
 [chap. I. 
 
 and procedure in that state, that an appeal will not lie from an 
 interlocutory order appointing a receiver, and that the action 
 of the inferior court in such matters can only be revised upon 
 an appeal from the final judgment in the cause. ^"^ So in Penn- 
 sylvania, where an appeal lies only from a final order or decree, 
 an order granting an injunction and appointing a receiver, up- 
 on the filing of a bill for the settlement of partnership affairs, 
 is not such a final order within the intent of the statute, and no 
 appeal will lie therefrom, it being purely an interlocutory mat- 
 ter.28 And it is held in Ohio, that an order appointing a re- 
 ceiver to take the revenues of a railway and bring them into 
 court, subject to its order and without making any application 
 of the funds, except as to certain accrued costs, is not a final 
 order from which an appeal will lie.29 So in Illinois, in the ab- 
 sence of legislation, a writ of error will not lie to a purely inter- 
 locutory order appointing a receiver, no final decree having 
 been rendered determining the rights of the parties. ^^ So in 
 
 Goshen Woolen Mills Co. v. City 
 National Bank, 150 Ind., 279, 49 N. 
 E., 154. 
 
 27 Meadow Valley Mining Co. v. 
 Dodds, 6 Nev., 261. 
 
 28 Holden's Administrators v. Mc- 
 Makin. Par. Eq. Cas., 270. 
 
 29 Eaton & Hamilton R. Co. v. 
 Varnum, 10 Ohio St., 622. But see 
 C. S. & C. R. Co. V. Sloan, 31 Ohio 
 St., 1, for a full discussion of the 
 right of appeal in such cases as af- 
 fected by the code of procedure, as 
 well as the power to appoint or dis- 
 charge a receiver by a judge at 
 chambers. Under the statute of 
 Washington, it is held that an ap- 
 peal will lie from an order denying 
 a motion to vacate the appointment 
 of a receiver. Davis v. Edwards, 
 41 Wash., 480, 84 Pac, 22. 
 
 30 Coates v. Cunningham, 80 111., 
 467; Farsow v. Gorham, 117 111., 137, 
 7 N. E., 104; Town of Vandalia v. 
 
 St. L., V. & T. H. R. R. Co., 209 
 111., 73, 70 N. E., 662. But in Illi- 
 nois, by an act approved June 14, 
 1887, an appeal is now allowed from 
 an interlocutory order or decree ap- 
 pointing a receiver or giving other 
 or further powers or property to a 
 receiver already appointed. Chica- 
 go Steel Works v. Illinois Steel Co., 
 153 111., 9, 38 N. E., 1033. As to the 
 constitutionality of certain provi- 
 sions of this statute as not embraced 
 in its title, see Taylor v. Kirby, 31 
 111. App., 658; City of Chicago v. 
 Beck, 44 111. App., 47. See Eau 
 Claire Canning Co. z/. Western Brok- 
 erage Co., 213 111., 561, n N. E., 
 430, as to the right of the receiver 
 of a foreign corporation appointed 
 in a proceeding in a foreign state 
 to dissolve the corporation, to main- 
 tain a writ of error in this state in 
 the name of the corporation.
 
 CHAP. I.] GENERAL FEATURES. Z7 
 
 the absence of statutory provision an appeal will not lie from an 
 interlocutory order appointing a receiver.3l And in Tennes- 
 see, even under a statute authorizing the supreme court to 
 grant writs of supersedeas to interlocutory orders, as in case of 
 a final decree, an order appointing a receiver, being within the 
 discretion of the court for the purpose of preserving property 
 pendente lite, can not be superseded by the supreme court.32 
 Nor will a bill of review lie to revise or correct the action of the 
 court in appointing a receiver, since, the order being interlocu- 
 tory, it may be revised or corrected by the same court ; or, if 
 improvidently made, it may be corrected upon the final hear- 
 ing.33 So under the statute of California regulating appeals, 
 no appeal lies from an order appointing a receiver.^'* So in 
 Utah it is held that an order appointing a receiver pendente 
 lite, being interlocutory, is not appealable and that an appeal 
 from such an order should be dismissed.^s So, under the 
 statute of Missouri governing appeals, an appeal will not lie 
 from an order appointing a receiver and directing certain prop- 
 erty to be turned over to him.36 And in Kansas, an order of 
 
 31 Town of Vandalia v. St. L., V. 33 Johnston v. Hanner, 2 Lea, 8. 
 
 & T. H. R. R. Co., 209 111., 7Z, 70 34 French Bank Case, S3 Cal.. 495; 
 
 N. E., 662. In this case it was held Emeric v. Alvarado, 64 Cal., 529, 2 
 
 that where the statute authorized Pac, 418. 
 
 appeals to the Appellate Court from 35 Popp v. Mining Co., 22 Utah, 
 interlocutory orders appointing re- 457, 63 Pac, 185. 
 ceivers but further provided that 36 Greeley v. Missouri Pac. Ry. 
 "no appeal shall lie or writ of error Co., 123 Mo., 157, 27 S. W., 613. 
 be prosecuted from the order en- But by the statute of 1895 an appeal 
 tered by said Appellate Court in any will lie from an order "refusing to 
 such appeal," the judgment of the revoke, modify or change an inter- 
 Appellate Court affirming such in- locutory order appointing a receiver 
 terlocutory order did not change the or receivers." Laws of 1895, p. 91 ; 
 character of such order and that the 1 Mo. Annotated Stat., 1906, § 806. 
 propriety of granting such interlocu- This statute is remedial in its char- 
 tory order could therefore be re- acter and should therefore be liber- 
 viewed in the Supreme Court only ally construed. Merriam v. St. 
 upon an appeal from a final order Louis, C. G. & F. S. Ry, Co., 136 
 or decree in the cause. Mo., 145, 36 S. W., 630. 
 
 32 Baird v. Turnpike Co., 1 Lea, 
 394; Bramley v. Tyree, 1 Lea, 531; 
 Roberson v. Roberson, 3 Lea, 50.
 
 38 RECEIVERS. [chap. I. 
 
 a judge at chambers appointing a receiver is not a final order 
 involving the merits of the action, but a mere provisional or 
 interlocutory order from which no appeal will lie-^"^ So in 
 Texas, the appointment of a receiver upon an interlocutory 
 order in a suit brought by attaching creditors to set aside prior 
 attachments upon the ground of fraud, no adjudication bemg 
 made upon the merits of the controversy, which yet remain to 
 be determined, is not a final judgment from which an appeal 
 will lie.38 And in Mississippi, an appeal formerly would not 
 lie from an order vacating the appointment of a receiver and 
 directing the return of th^ property to the persons from whom 
 it was taken.39 But under the later code the rule in Mississippi 
 has been changed and it is now held that an order discharging 
 a receiver is appealable.^^ But in Montana an order refusing 
 to appoint a receiver is not appealable^^ So in Maryland an 
 appeal will not lie from an order refusing to rescind a previous 
 order appointing a receiver.42 Nor may an appeal be main- 
 tained from an order appointing a receiver by consent.43 And 
 where, pending an appeal from an order appointing a tempo- 
 rary receiver, the temporary receivership has ceased and a per- 
 manent receiver has been appointed, the appeal should be dis- 
 missed.44 g^t under the code of Wyoming it is held that an 
 order appointing a receiver at the instance of a second mort- 
 ■^agee and denying a motion of the defendant, the first mort- 
 gagee, for the vacation of such appointment is appealable.^^ 
 And questions as to the propriety of the appointment of a re- 
 
 37 Hottenstein v. Conrad, 5 Kan., 42 Hull v. Caughy, 66 Md., 104, 6 
 249; Kansas Rolling Mill Co. t;. A., Atl., 591; Williams Co. v. U. S. 
 T. & S. F. R. Co., 31 Kan., 90, 1 Banking Co., 86 Md., 475, 38 Atl., 
 Pac, 274; Boyd v. Cook, 40 Kan., 990; Stockley v. Thomas, 89 Md., 
 675, 20 Pac, 477. 663, 43 Atl., 766. 
 
 38 East & West T. Lumber Co. v. 43 Smith v. Lowery, 56 S. C, 493, 
 Williams, 71 Tex., 444, 9 S. W., 436. 35 S. E., 129. 
 
 39 Planon v. Weil, 69 Miss., 476, 44 Kelso v. American I. & I. Co., 
 13 So., 878. 48 Wash., 5, 92 Pac, 673. 
 
 40 Pearson v. Kendrick, 74 Miss., 45 Anderson v. Matthews, 8 Wye, 
 235, 21 So., 37. 307, 57 Pac, 156. 
 
 41 Cotter V. Cotter, 16 Mont., 63, 
 40 Pac, 63.
 
 CHAP, I.] GENERAL FEATURES. 39 
 
 ceiver can be raised only by appeal from the order itself, and 
 they will not be reviewed upon an appeal from an order direct- 
 ing a distribution of the estate in the hands of the receiver.^^ 
 § 27. The question dependent upon whether the order 
 affects a substantial right. In Michigan, where the laws of 
 the state restrict the right of appeal to decrees and final orders, 
 the question under discussion has been made to turn upon 
 whether the appointment of a receiver is a substantial decision 
 of the merits involved, and the principal relief sought, or 
 whether it is merely ancillary, or incidental to the principal 
 relief. Thus, where the object of the action is to remove the 
 administrators of an estate, and to procure a receiver to take 
 charge of the assets until the question of removal is deter- 
 mined, the order appointing a receiver, although nominally 
 interlocutory, is regarded as in effect a final order or decree, 
 from which an appeal will lie, since it gives the relief prayed 
 for as the end and object of the bill upon that branch of the 
 case.^'^ And it is held in Michigan, that an order appointing 
 a receiver is appealable when it deprives a defendant of prop- 
 erty to which he is of right entitled.'*^ So an appeal will lie 
 from an order whereby the possession of property is divested.*^ 
 And an order for the sale by a receiver of the entire assets of 
 the receivership is an order from which an appeal will lie in 
 behalf of intervening petitioners.^^ So upon a bill by the 
 executor of a deceased partner for an account of the partner- 
 ship transactions, an order for a receiver to take charge of the 
 property held by defendant as surviving partner, although in- 
 terlocutory in point of time, is in substance and effect a decree 
 of the court to the extent that an appeal will lie therefrom. 
 The order is therefore to be considered as regards its effect 
 
 46 Jones z;. North P. F. & O. Co., Ill Mich., 395, 69 N. W., 643; 
 
 42 Wash., 332, 84 Pac, 1122, 114 Mardian v. Wayne Circuit Judge, 
 Am. St. Rep., 131. 118 Mich., 353, 76 N. W., 497. 
 
 47 Lewis V. Campau, 14 Mich., 458. 50 First National Bank v. Barnum 
 
 48 Brown v. Ring, 77 Mich., 159, Wire & Iron Works, 58 Mich., 315, 
 
 43 N. W., 770, 1152. 24 N. W., 543, 25 N. W., 202. 
 
 49 Hall V. Wayne Circuit Judge,
 
 40 
 
 RECEIVERS. 
 
 [chap. I. 
 
 upon the rights of the parties, rather than as to the stage of 
 the cause when made. And since the defendant, who would 
 otherwise be entitled to possession of all the assets and to close 
 up the firm business, is by the order divested of all control over 
 the matter, and the entire management of the business is placed 
 in the receiver's hands, the order partakes of the nature of a 
 decree, to the extent, at least, of being appealable.^^ Where, 
 however, the receivership is merely ancillary or incidental to 
 the principal relief sought, no appeal will lie from an order 
 appointing a receiver.^2 So an order appointing a receiver 
 to take possession of certain securities claimed by a trustee, 
 the title to which is in dispute, is treated as an interlocutory 
 order resting in the discretion of the court, and hence not ap- 
 
 51 Barry v. Briggs, 22 Mich., 201. 
 Campbell, C. J., observes, p. 206 : 
 "The effect of this order (appoint- 
 ing the receiver) is to divest the 
 entire legal estate of defendant in 
 property over which he had this ex- 
 clusive control, as well as exclusive 
 title, and in which he was equitably 
 as well as legally interested, and in 
 which no one else had any rights, 
 except to receive the amount which 
 might belong to the deceased part- 
 ntT's estate after the accounts should 
 be closed and the funds converted. 
 The specific property and its dis- 
 posal belonged to defendant. A cer- 
 tain share of the net proceeds would 
 belong to the executor. The order 
 divests the whole body of the prop- 
 erty, and puts its management as 
 well as ownership into other hands. 
 It does very nearly all that could be 
 done under the bill by a decree upon 
 the hearing. The striking of bal- 
 ances and the final distribution, al- 
 though not universally are quite fre- 
 quently subsequent steps to the prin- 
 cipal decree; and in the present case, 
 
 the principal object of the bill is to 
 transfer the trust into new hands, 
 for execution. All the other objects 
 are subordinate to this main pur- 
 pose. An adjudication which pro- 
 duces such important effects, and 
 which actually transfers the entire 
 estate from the defendant, is to all 
 intents and purposes a decree as far 
 as it goes. ... It would be a 
 very singular thing if a court could, 
 by anticipating the proper date of a 
 decree which would be appealable, 
 produce all the consequences of a 
 decree, and yet deprive a party of 
 his right to a review. The statutes 
 regulating appeals have regard to 
 the rights of parties, and not to 
 senseless formalities. And the prac- 
 tice in this state, as well as else- 
 where, has always been to apply 
 them to that end. . . . We think 
 the order in the case before us is 
 appealable, because it divests de- 
 fendant's estate." Motion to dis- 
 miss appeal denied. 
 
 52 Duncan v. Campau, 15 Mich., 
 415.
 
 CHAP. I.] GENERAL FEATURES. 41 
 
 pealable.^^ And an order refusing a receiver in an action for 
 the foreclosure of a mortgage is merely interlocutory and not 
 appealable.^* But it is held under the code of procedure in 
 New York, that an appeal will lie from an order denying a mo- 
 tion for a receiver, since the appellate court may review all 
 orders which affect a substantial right, even though they rest 
 in the discretion of the court.^^ So under the statutes of Min- 
 nesota, an order refusing a receiver in accordance with the 
 report of a referee is an order refusing a provisional remedy, 
 from which an appeal will lie.^^ And in the same state an or- 
 der appointing a receiver is an order affecting a substantial 
 right of the defendant and is appealable. ^'^ So in Nebraska, 
 under a statute authorizing appeals from orders which affect 
 a substantial right, an interlocutory order appointing a re- 
 ceiver in a judgment creditor's suit is an appealable order.^^ 
 And in Virginia, an appeal being allowed by statute in any case 
 in chancery wherein there is a decree or order requiring the 
 possession of property to be changed, an appeal lies from 
 an interlocutory order appointing a receiver to take possession 
 of real property, since such order changes the possession and 
 control of the property. ^^ And under a similar statute in 
 West Virginia, an appeal is allowed from an interlocutory or- 
 der appointing a receiver over personal property.^^ 
 
 53 Brown v. Vandermeulen, 41 57 Knight v. Nash, 22 Minn., 452. 
 Mich., 418, 49 N. W., 920. 58 McCord v. Weil, 33 Neb., 868, 
 
 54 Beecher v. M. & P. R. M. Co., 51 N. W., 300, overruling S. C, 29 
 40 Mich., 307. Neb., 682, 46 N. W., 152; Seeds Dry 
 
 55Dollard V. Taylor, ZZ N. Y. Plate Co. v. Heyn Photo-Supply 
 Supr. Ct. R., 496. And see as to the Co., 57 Neb., 214, 77 N. W., 660. 
 power of the courts of New York 59 Shannon v. Hanks, 88 Va., 338, 
 under the code, pending an appeal 13 S. E., 437. And see Smith v. 
 from a judgment, to appoint a re- Butcher, 28 Grat, 144. 
 ceiver in behalf of appellant, over 60 Ruflfner v. Mairs, 33 West Va., 
 property of which the other party 655, 11 S. E., 5; Baltimore Bargain 
 would otherwise be entitled to pos- House v. St. Clair, 58 West Va., 
 session under the judgment of the 565, 52 S. E., 660. And see Rob- 
 court, Fellows V. Heermans, 13 Ab. recht v. Robrecht, 46 West Va., 738, 
 Pr., N. S., 1. 34 S. E., 801. 
 
 56 Grant v. Webb., 21 Minn., 39.
 
 42 RECEIVERS. [chap, I. 
 
 § 27a. Decree appealable if right finally determined. 
 
 If the decree appointing a receiver determines the right to 
 the property in controversy, so that the party in whose favor it 
 is rendered is entitled to its immediate execution, an appeal 
 will lie, even though something still remains to be done to carry 
 the decree fully into execution. Thus, when a bill is filed by 
 stockholders to set aside a lease of the property of a corpora- 
 tion upon the ground of fraud, and for the appointment of a 
 receiver, and upon a hearing on the merits a decree is ren- 
 dered setting aside the lease, appointing a receiver, and direct- 
 ing that the company and its directors deliver to him all cor- 
 porate property, records and papers, and that he continue the 
 business of the company, the decree is so far final that an ap- 
 peal will lie, even though an accounting is still necessary to ad- 
 just the rights of the parties.^^ 
 
 § 21b. Appeals under Court of Appeals Act. Section 
 seven of the act of congress of March 3, 1891 creating the 
 United States Circuit Courts of Appeals is limited to interlocu- 
 tory orders or decrees granting or continuing injunctions and 
 it makes no mention of interlocutory orders appointing re- 
 ceivers. ^2 Under this section it is held that upon an appeal 
 from an interlocutory order granting an injunction and ap- 
 pointing a receiver, the propriety of only so much of the 
 order as relates to the injunction is open to review.^^ This 
 section was afterwards amended so as to authorize appeals 
 from interlocutory orders or decrees refusing, dissolving or 
 refusing to dissolve injunctions.^^ This amended section 
 makes no provision for appeals from interlocutory orders ap- 
 
 61 Winthrop Iron Co. v. Meeker, 63 Florida Coast Co. v. Young, 8 
 109 U. S., 180, 3 Sup. Ct. Rep., 111. C. C. A., 231, 59 Fed., 721. But see 
 See Grand De Tour Plow Co. v. United States Rubber Co. v. Ameri- 
 Rude Bros. Mfg. Co., 60 Kan., 145, can O. L. Co., 27 C. C. A., 118, 82 
 55 Pac, 848, as to the necessity for Fed., 248, 53 U. S. App., 444, dis- 
 a receiver being a party to an appeal missing appeal from S. C, 77 Fed., 
 from a final order taken by one of 671. 
 
 the parties to a suit. 64 Act of February 18, 1895. c. 96, 
 
 62 Act of March 3, 1891, c. 517, 28 Stat, 666. 
 § 7, 26 Stat., 828.
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 43 
 
 pointing receivers and it is held that such an order is not ren- 
 dered appealable by the incorporation into it of a direction to 
 the defendants to turn over and deliver to a receiver the prop- 
 erty in their possession.^^ But where an interlocutory order 
 has been entered appointing a receiver and granting an injunc- 
 tion, an appeal will lie from such order under section seven as 
 thus amended, although the injunction is a mere incident to the 
 receivership, where it constitutes a substantial part of the de- 
 cree of the court.^^ Both of these sections are now superseded 
 by the act of June 6, 1900, which, among other changes in the 
 prior law, permits appeals from interlocutory orders appoint- 
 ing receivers.^'' This statute is amendatory of the original act 
 
 65 Highland Avenue & B. Ry. Co. 
 V. C. E. Co., 168 U. S., 627, 18 Sup. 
 Ct. Rep., 240, 42 L. Ed., 605, an- 
 swering question certified by the 
 Court of Appeals of the 5th Circuit 
 in S. C, 28 C. C. A., 683, 84 Fed., 
 
 1018, which was an appeal from S. 
 C, 74 Fed., 920. This last appeal 
 was finally dismissed, pursuant to 
 the above decision of the Supreme 
 Court, in 33 C. C. A., 684, 92 Fed., 
 
 1019, 52 U. S. App., 762. And see 
 In re Tampa Suburban R. Co., 168 
 U. S., 583, 18 Sup. Ct. Rep., 177; 
 Texas Consolidated C. & M. Assn. 
 V. Storrow, 34 C. C. A., 182, 92 
 Fed., 5. 
 
 66 Lake National Bank v. Wolfe- 
 borough S. Bank, 24 C. C. A., 195, 
 78 Fed., 517, 33 U. S. App., 734. 
 
 67 Section seven of the law as it 
 now exists is as follows : "That 
 where, upon a hearing in equity in 
 a district court or in a circuit court, 
 or by a judge thereof in vacation, 
 an injunction shall be granted or 
 continued or a receiver appointed, 
 by an interlocutory order or decree, 
 in a cause in which an appeal from 
 a final decree may be taken under 
 
 the provisions of this Act to the 
 circuit court of appeals, an appeal 
 may be taken from such interlocu- 
 tory order or decree granting or 
 continuing such injunction or ap- 
 pointing such receiver to the circuit 
 court of appeals : Provided, That 
 the appeal must be taken within 
 thirty days from the entry of such 
 order or decree, and it shall take 
 precedence in the appellate court : 
 And the proceedings in other re- 
 spects in the court below shall not 
 be stayed, unless otherwise ordered 
 by that court, or by the appellate 
 court or a judge thereof, during the 
 pendency of such appeal : Provided 
 further, That the court below may 
 in its discretion require as a con- 
 dition of the appeal an additional 
 bond." Act of June 6, 1900, c. 803, 
 31 Stat., 660; 1 U. S. Comp. Stat. 
 1901, p. 550; 4 Fed. Stat. Ann., 
 p. 422. Prior to this statute an ap- 
 peal would not lie from an order 
 appointing a co-receiver to act with 
 one already appointed. Coltrane v. 
 Templeton, 45 C C. A., 328, 106 
 Fed., 370.
 
 44 RECEIVERS. [chap. I. 
 
 and by necessary implication it repeals the statute of 1895 
 and now contains the entire law as administered in the United 
 States courts upon the subject of such appeals. ^^ 
 
 § 28. Reversal by certiorari. Under the practice pre- 
 vailing in New Jersey, it is held that, if the court below upon 
 the case presented had authority and jurisdiction to order the 
 appointment of a receiver, if in making such order no manifest 
 error was committed, it will not be reversed on certiorari; and 
 that to reverse the action of the lower court by certiorari, it 
 must appear to the appellate tribunal that the order was an 
 illegal one. And in such case the appellate court will not 
 weigh the evidence on which the court below acted, and if there 
 was enough in the case to give the court below jurisdiction and 
 power to act, that will be deemed sufficient.^^ 
 
 § 29. Effect of appeal on functions of receiver; super- 
 sedeas not a matter of right. As regards the effect of an 
 appeal upon the functions of a receiver appointed by the court 
 below, it has been held in Ohio, that where receivers are ap- 
 pointed in an action to obtain the direction and judgment of 
 the court as to the construction of a will, and as to the duties 
 of executors in carrying it into effect, and praying lOr an 
 order of sale of real estate for the payment of legacies, and for 
 distribution, the receivers still remain in office pending an ap- 
 peal from the judgment of the court below7^ But in Florida, 
 where the laws of the state authorize appeals from interlocu- 
 tory orders, and authorize the appellate court to issue a su- 
 persedeas pending such an appeal, if a supersedeas is granted on 
 an appeal from an order allowing a preliminary injunction and 
 a receiver, it has the effect of suspending the power of the 
 
 68 Columbia Wire Co. v. Boyce, 219, 107 Fed., 165 ; Western Electric 
 
 44 C. C. A, 588, 104 Fed., 172 ; Co. v. Williams-Abbott Electric Co., 
 
 Westinghouse Co. v. Christensen 48 C. C. A., 159, 108 Fed., 951. 
 
 Co., 44 C. C. A., 92, 104 Fed., 622; 69Journeay v. Brown, 2 Dutch., 
 
 Omaha & S. W. R. Co. v. Chicago, 111. 
 
 etc., Ry. Co., 45 C. C. A., 474, 106 70 Swing v. Townsend, 24 Ohio 
 
 Fed.. 586; Rowan v. Ide, 46 C. C. St., 1. But see Allen v. Chadburn, 
 
 A., 214, 107 Fed., 161 ; Heinze v. 3 Baxter, 225. And see, post, § 190. 
 Butte & B. C M. Co., 46 C. C. A.,
 
 CHAP. I.] GENERAL FEATURES. 45 
 
 court below, and hence the power of its officer, the receiver, 
 whose authority thus becomes nugatory by operation of law. 
 And while it does not render unlawful any act done by the 
 receiver before the appeal was taken, it forbids him further to 
 act ; and it then becomes his duty to restore the property to the 
 person from whom it was taken, since his authority to take be- 
 ing inoperative, his authority to hold is equally so, both being 
 derived from the same order. "^^ In California, it is held that 
 upon an appeal from an order adjudging a defendant to be 
 insolvent, the functions of a receiver appointed in the cause 
 are not suspended ; and the court will not, therefore, stay pro- 
 ceedings in an action brought by the receiver.'^^ And it has 
 been held by the Court of Appeals of the District of Colum- 
 bia that the lower court is not, in consequence of an appeal 
 and supersedeas, deprived of the power of substituting one re- 
 ceiver in place of another, since a court which appoints a re- 
 ceiver and causes a fund to accumulate in his hands may con- 
 tinue to make all proper orders for the conservation of the 
 fund notwithstanding the appeal. "^^ But it is held generally 
 that upon an appeal from an order appointing a receiver, a 
 supersedeas will not be granted by the reviewing court as a 
 matter of right but that the granting of such application rests 
 in the discretion of the court.*^^ 
 
 § 30. Same relief sought in different suits. When two 
 different persons whose interests are conflicting are proceeding 
 for the appointment of a receiver in separate actions, the ques- 
 tion whether the receiver shall be appointed upon motion of 
 one plaintiff or the other is regarded as of minor importance 
 when the object of each proceeding is the preservation of the 
 fund in controversy, and its ultimate distribution among credit- 
 ors. And when, in such case, the appointment in one suit is 
 not completed by reason of an appeal from the order, the court 
 
 71 State V. Johnson, 13 Fla., 33. 74 Home Fire Ins. Co. v. Dutcher, 
 
 72 /„ re Real Estate Associates, 48 Neb., 755, 67 N. W., 766 ; State v. 
 58 Cal., 356. Stull, 49 Neb., 739, 69 N. W., 101 ; 
 
 73 Hitz V. Jenks, 16 App. D. C, Lowe v. Riley, 57 Neb., 252, 77 N. 
 530, 546. W., 758
 
 46 RECEIVERS. [chap. 1. 
 
 may permit the plaintiff in the other suit to proceed and obtain 
 a receiver of the fund for the benefit of all concerned, and 
 such appointment will not be vacated."^^ 
 
 § 31. Test as to defendant's interest; receiver over a 
 pension; secret code. As regards the nature of defend- 
 ant's interest in the property which it is sought to subject to a 
 receivership, it has been held that if the property is such as to be 
 subject to execution by creditors of defendant, it is competent 
 for a court of equity to appoint a receiver ; otherwise not. And 
 relying upon this distinction, the court refused to appoint a 
 receiver over a pension granted by government to the defend- 
 ant, who had conveyed his interest therein, with other property, 
 to secure an annuitant."^^ But when a merchant, transacting 
 a large business throughout the country, invents and prepares 
 for the exclusive use of himself and of his traveling salesmen a 
 secret code or system of characters to denote the cost and selling 
 price of his goods, he has such a property interest therein as 
 may be protected by the appointment of a receiver to take pos- 
 session of a copy of such code, of which defendant has wrong- 
 fully obtained possession and which he threatens to use to the 
 injury of plaintiff."^"^ 
 
 § 32. Not granted when court can not control property ; 
 license; rates and taxes. A receiver will not be appointed 
 over property when it is of such a nature that it is impossible 
 for tJie court to put him in possession, and when the court has 
 no control over the officers or persons intrusted with the man- 
 agement of the property, as in the case of a permit or license to 
 occupy a stall in a city market, the control of which is wholly 
 vested in certain municipal officers, whose discretion in grant- 
 
 75 Lottimer v. Lord, 4 E. D. civil service pension, due to the 
 Smith, 183. debtor and payable in monthly in- 
 
 76 Davis V. Duke of Marlborough, stalments. See also Noad v. Back- 
 1 Swans., 74; S. C, 2 Wils. Ch., 130. house, 2 Y. & C. C. C, 529, where a 
 See S. C, 2 Swans., 108. But see receiver was granted over a pen- 
 Molony v. Cruise, 30 L. R. Ir., 99, sion. 
 
 where a receiver was allowed in be- 77 Simmons Hardware Co. v. 
 
 half of a judgment creditor over a Waibel, 1 S. D., 488.
 
 CHAP. I.] GENERAL FEATURES. 47 
 
 ing or withholding the permit is beyond control by the courts.*^^ 
 Nor will a court of equity grant a receiver over certain rates 
 or taxes, which are to be fixed by a future assessment and are to 
 be collected at a future period by public officers designated for 
 that purpose, upon the application of a creditor who has loaned 
 money for a work of public improvement, to be repaid out 
 of such rates. And it is a sufficient objection to the relief in 
 such a case that the remedy at law, by mandamus or otherwise, 
 to compel the officers to act, affords an adequate protection to 
 the creditor.'^^ 
 
 § 33. Relief refused as against innocent purchasers. 
 While it is competent for a court of equity, by an interlocutory 
 order, to take possession of property by its receiver, pending 
 litigation concerning the rights of the parties, yet where the 
 rights of third persons have intervened, who are not parties 
 to the record, as in the case of innocent purchasers of the prop- 
 erty in contest, the court will not exercise its extraordinary ju- 
 risdiction by ordering the property into the possession of its re- 
 ceiver. The relief will be refused in such case upon the ground 
 that the rights of purchasers in good faith are not to be ad- 
 judicated or determined in the summary and collateral method 
 of an order to surrender possession to a receiver. ^^ 
 
 § 34. Peril to the fund ; infringement of patent. Peril to 
 the fund in litigation is a frequent ground for the interference 
 of equity by a receiver, when the danger is such as to demand 
 the summary interference of the court in order to preserve the 
 fund, which would otherwise be lost. Thus, upon a bill to re- 
 strain the infringement of a patent right, when an injunction 
 has been granted pendente lite, and it is apparent that if plain- 
 tiff's rights are ultimately established he will be entitled to a 
 large share of the money received by defendants from sales of 
 the patented machines, and defendants are shown to be in in- 
 solvent circumstances, and to have debts due them to a large 
 amount for machines sold since the granting of the injunction, 
 
 78 Barry v. Kennedy, 11 Ab. Pr., 79 Drewry v. Barnes, 3 Russ., 94. 
 
 N. S., 421. 80 Levi v. Karrick, 13 Iowa, 344.
 
 48 RECEIVERS. [chap. 1. 
 
 sufficient danger to the fund is shown to warrant the court in 
 appointing a receiver.^i 
 
 § 35. Receiver not granted to compel payment of mon- 
 ey; subscriptions to a fund. As a general rule, where the 
 object of the action is only to compel payment of a sum of 
 money, the courts will not appoint a receiver upon the filing 
 of the bill.^2 And where no active duty is required of any one 
 to execute the decree of the court except the payment of money 
 to the persons entitled therto, no case is presented for the ap- 
 pointment of a receiver.83 And in an ordinary action for 
 money had and received by defendant to the use of plaintiff, 
 it is not proper to allow a receiver when there is no allegation 
 or pretense that the money is in danger of being lost, or that 
 it will be in jeopardy during the pendency of the action unless 
 a receiver is appointed.^^ But when one has received sub- 
 scriptions to a given project, depositing the funds with third 
 parties, and the project is abandoned, a subscriber electing to 
 withdraw his subscription is entitled, in an action against the 
 different parties, to have a receiver of the fund in controversy. 
 And it is not a sufficient objection to the relief, in such case, 
 that a receiver of the fund has been appointed in a previous ac- 
 tion of the same nature ; but the powers and functions of the 
 second receiver will be made subordinate to those of the first, 
 and when the first becomes functus oificio, the second will be- 
 come entitled to the custody of the fund, or of so much thereof 
 as remains.85 But this doctrine is to be accepted with the 
 limitation that the subsequent receiver takes only what is un- 
 disposed of by the court in the former litigation.^S 
 
 § 36. Management of business by a receiver; prefer- 
 ring debts incurred. While it is sometimes necessary for 
 
 81 Parkhurst v. Kinsman, 2 Y., 133, affirming S. C, 37 N. Y. 
 Blatchf., 78. Supr. Ct. R., 223. 
 
 82 Hager v. Stevens, 2 Halst. Ch., 85 Bailey v. O'Mahony, 33 N. Y. 
 374. Supr. Ct. R., 239. 
 
 83 Young V. Hughes, 39 Ore., 86 Q'Mahoney v. Belmont, 62 N. 
 586, 65 Pac, 987, 66 Pac. 272. ¥., 133, affirming S. C, 37 N. Y. 
 
 84 O'Mahoney v. Belmont, 62 N. Supr. Ct. R., 223.
 
 CHAP. I.] GENERAL FEATURES. 49 
 
 the court, by its receiver, to continue the management of the 
 business over which the receiver is appointed, for the purpose 
 of effecting a more satisfactory adjustment and for better 
 protecting the interests of all parties, yet the courts are gen- 
 erally averse to assuming the management of a business except 
 as incidental to the object of the suit, and for the purpose of 
 closing it up and dividing the proceeds. And a receiver will not 
 be appointed to continue the management of a business which, 
 from its nature, can not be conducted under the direction of the 
 court, as in the case of a theater.^'' Nor will a receiver be au- 
 thorized to begin a business which has not yet been undertaken 
 by the parties, such as the manufacture and sale of medicines 
 under letters patent; nor will the court require the parties, in 
 such case, to disclose to the receiver secrets concerning the man- 
 ufacture of such medicines.^^ Nevertheless it may be regarded 
 as a matter resting within the sound discretion of the court 
 whether its receiver shall be permitted to carry on the business 
 which has come under his control. And where it is clear that 
 the conduct of a business by a receiver under the supervision 
 of the court will be for the benefit of all parties in interest and 
 will result in preserving or enhancing the estate in his posses- 
 sion, courts of equity frequently authorize their receivers for a 
 limited period and under the strict supervision of the court to 
 continue and carry on the business which has thus come into 
 their custody and control. And the power of the court thus 
 to authorize its receiver to continue a business carries with it as 
 a necessary incident the authority to authorize him to borrow 
 money for the purchase of all such supplies and materials as 
 may be necessary for the proper maintenance of the business 
 and to secure to the payment of such obligations a preference 
 over the x:laims of other creditors, making them payable either 
 
 87 Waters v. Taylor, IS Ves., 10. run the business without the au- 
 
 And see Terry v. Martin, 7 New thority of the court. 
 
 Mex., 54, 32 Pac, 157, where a re- 88 Merreli v. Pemberton, 62 Ga., 
 
 ceiver appointed to take possession 29. 
 of a drug store had proceeded to 
 Receivers — 4.
 
 50 
 
 RECEIVERS. 
 
 [chap. 1. 
 
 out of the net income in the hands of the receiver or out of 
 the corpus of the estate if the income proves insufficient.^^ 
 And where, by agreement between the creditors and others in- 
 terested in a receivership, the receiver has been authorized to 
 carry on the business of an insolvent concern, obHgations in- 
 curred by the receiver during the management of the business 
 in the purchase of necessary materials are entitled to preference 
 over the claims of the creditors. ^^ And upon the same prin- 
 ciples as those governing in the case of receivers' certificates 
 and of preferred debts of railway companies, it is held that 
 where a receiver is appointed to take possession of a hotel and 
 is directed by the order of appointment to run it as a going 
 business, he is entitled, in so doing, to purchase all necessary 
 supplies, and the indebtedness thereby incurred becomes a prior 
 charge upon the property in his possession, to be paid out of 
 the income, or in case that is not sufficient, out of the pro- 
 
 89 Cake V. Mohun, 164 U. S., 311, 
 17 Sup. Ct. Rep., 100, affirming Cake 
 V. Woodbury, 3 App. D. C, 60, and 
 distinguished in International Trust 
 Co. V. United Coal Co., 27 Colo., 
 246, 60 Pac, 621; Heffron v. Rice, 
 149 111., 216, 36 N. E., 562, 41 Am. 
 St. Rep., 271 ; Knickerbocker v. Mc- 
 Kindley C. & M. Co., 172 111., 535, 
 50 N. K, 330, 64 Am. St. Rep., 54; 
 Thornton v. Highland A. & B. R. 
 Co., 94 Ala., 353, 10 So., 442; 
 Highland Avenue & B. R. Co. 
 V. Thornton, 105 Ala., 225, 16 
 So., 699; Rochat v. Gee, 137 
 Cal., 497, 70 Pac, 478; Blythe v. 
 Gibbons, 141 Ind., 332, 35 N. E., 
 557. In Makeel v. Hotchkiss, 190 
 111., 311, 60 N. E., 524, 83 Am. St. 
 Rep., 131, the court recognize the 
 rule that a court of equity may in 
 some instances but with great cau- 
 tion permit a business to be carried 
 on by its receiver and make the ex- 
 
 penses thereof a prior charge upon 
 the property. As to the right of a 
 receiver to be indemnified for 
 money borrowed by him in excess 
 of the amount authorized by the 
 court in carrying on a business, see 
 In re British Power T. & L. Co., 
 (1906) 1 Ch., 497. As to the right 
 of the owner of the premises in 
 which a business is carried on by a 
 receiver to recover rent therefor, 
 see Lane v. Washington Hotel Co., 
 190 Pa. St., 230, 42 Atl. 697 ; Stokes 
 V. Hoffman House, 167 N. Y., 554, 
 60 N. E., 667, 53 L. R. A., 870. And 
 see Davis v. Foster, 29 Wash., 363, 
 69 Pac, 1102; Vila v. Grand Island 
 E. L., I. & C. S. Co., 68 Neb., 222, 
 94 N. W., 136, 97 N. W., 613. As 
 to the right of a receiver to hire 
 employees in the management of a 
 business, see, post, § 175. 
 
 90 Diamond Match Co. v. Taylor, 
 83 Md., 394, 34 Atl., 1015.
 
 CHAP. I.] GENERAL FEATURES. 51 
 
 ceeds of the sale.^^ But where a receiver has carried on a 
 business without any authority from the court and his manage- 
 ment has resulted in a loss, such loss must be borne by the re- 
 ceiver.92 ^j^^j where a receiver is appointed at the instance 
 and for the benefit of lien-holders who ask that he be author- 
 ized to continue a business, all charges and expenses properly 
 incurred by the receiver in so conducting the business are en- 
 titled to priority over the liens of the plaintiffs and are held 
 to be a first charge upon the net earnings or upon the 
 corpus of the estate in the hands of the receiver.93 But in no 
 event should obligations incurred by a receiver in carrying 
 on a business be given a preference over prior mortgage liens 
 where the court never authorized the receiver to contract debts 
 or incur liabilities to which a preference should be given ; nor 
 should the court itself, in the case of a purely private business 
 and against the objections of the holders of prior mortgage 
 liens, authorize the creation of debts and the incurring of obli- 
 gations payable out of the corpus of the estate in preference to 
 such prior liens.^^ 
 
 § 37. Effect of acquiescence in appointment. Where 
 parties to the action are before the court upon the appointment 
 of a receiver, and have a right to object to the order of the 
 court, or to appeal therefrom, but submit to the order without 
 objection and without subsequently appealing, their submis- 
 sion will be deemed an acquiescence in the order, so far as to 
 render it the law of the case with respect to the right to a 
 receiver. Such persons can not, therefore, call in question the 
 
 91 Knickerbocker v. McKindley poration v. Portland Hospital, 40 
 C & M. Co., 172 111., 535, 50 N. E., Ore., 523, 64 Pac, 644, 67 Pac, 194, 
 330, 64 Am. St. Rep., 54. 56 L. R. A., 627. In this case it 
 
 92 Villere v. New Orleans P. M. was held that the mere fact that a 
 Co., 122 La., 717, 48 So., 162. receiver was authorized by the 
 
 93 Peoples National Bank v. Vir- court to operate and conduct a hos- 
 ginia Textile Co., 104 Va., 34, 51 S. pital did not, ipso facto, give a pref- 
 E., 155. And see Hulings v. Jones, erence over prior mortgage liens to 
 63 West Va., 696, 60 S. E., 874. obligations which he might incur. 
 
 94 United States Investment Cor- And see, post, § 312&.
 
 52 RECEIVERS. [chap. I. 
 
 propriety of the appointment upon a final application for a 
 disposal of the funds in the receiver's hands. ^^ 
 
 § 38. Receiver held to strict accountability. From the 
 nature of a receiver's duties, and his attitude and relation 
 toward the court as its representative or officer, he is held to a 
 strict accountability for the faithful performance of the trust 
 reposed in him. Especially is this the case when his position 
 and duties with reference to the property or trust confided to 
 him as receiver are in any degree inconsistent with other in- 
 terests which he has in the same property; and in such case 
 the court will scrutinize his conduct with extreme care, and will 
 hold him to a strict performance of his duties.^^ 
 
 § 39. Statute authorizing appointment by governor. 
 It has been held that the appointment of a receiver is not 
 necessarily a judicial act in all cases, in the sense that it must 
 be made only by the courts. And the right of the legislature 
 of a state to enact a law, authorizing the governor of the state 
 to appoint a receiver of an insolvent banking corporation, is 
 not a violation of the constitutional provision limiting each de- 
 partment of the government to its own particular sphere; the 
 appointment of a receiver under such law being in no manner 
 a decree or judgment affecting title to property, and not being 
 a final determination of any rights, either legal or equitable.^'^ 
 
 § 39a. Appointment can not be questioned collaterally. 
 The general principle applicable to all judicial proceedings, 
 that the propriety of an order or decree made in a cause in 
 which the court has jurisdiction can not be challenged collater- 
 ally, applies with equal force to an order appointing a receiver 
 made by a court of competent jurisdiction. And when a court 
 having jurisdiction of the parties and of the subject-matter 
 appoints a receiver over the property or fund in controversy, 
 the validity of such appointment and the propriety of the order 
 
 95 Post V. Dorr, 4 Edw. Ch., 412; 96 Bolles v. Duff, 54 Barb., 215; 
 
 Pagett V. Brooks, 140 Ala., 257, 37 S. C, 27 How. Pr., 162. 
 
 So., 263 ; Zieverink v. Kemper, 50 97 Carey v. Giles, 9 Ga., 253. 
 Ohio St., 208, 34 N. E., 250.
 
 CHAP. I.] 
 
 GENERAL FEATURES. 
 
 53 
 
 can not be successfully challenged in a collateral suit or proceed- 
 ing.98 Thus, in an action brought by a receiver for the re- 
 covery of property claimed by him by virtue of his receiver- 
 ship, the defendant will not be permitted to question the pro- 
 priety of his appointment.99 So when a receiver is appointed 
 over a corporation, a creditor, not a party to the suit, who in- 
 tervenes, claiming an equitable lien upon funds in the receiver's 
 hands and seeking payment in full of his demand, can not, upon 
 appeal from an order dismissing his petition, call in question 
 the appointment of the receiver.^ 
 
 § 39b. The same; illustrations. As further illustrating 
 the rule under discussion it has been held that, where a receiver 
 
 98 Florence Gas, E. L. & P. Co. v. 
 Hanby. 101 Ala., 15, 13 So., 343; 
 Lowenstein v. Finney, 54 Ark, 124, 
 15 S. \V., 153; Illinois Trust & Sav- 
 ings Bank v. Pacific Ry. Co., 115 
 Cal., 285, 47 Pac, 60; Title Insur- 
 ance & T. Co. v. Grider, 152 Cal., 
 746, 94 Pac, 601; Commercial Na- 
 tional Bank v. Burch, 141 111., 519, 
 31 N. E., 420; Equitable Trust Co. 
 V. Wilson, 200 111., 23, 65 N. K, 430; 
 Town of Vandalia v. St. L., V. & T. 
 H. R. R. Co., 209 111., 73, 70 N. E., 
 662; Bodkin v. Merit, 102 Ind., 293, 
 1 N. E., 625 ; Pressley v. Lamb, 105 
 Ind., 171,4 N. E., 682; First Nation- 
 al Bank v. United States E. T. Co., 
 105 Ind., 227, 4 N. E., 846; Hatfield 
 V. Cummings, 152 Ind., 280, 50 N. 
 E., 817, 53 N. E., 231 ; Metropolitan 
 National Bank v. Commercial State 
 Bank, 104 Iowa, 682, 74 N. W., 26 ; 
 Greenawalt v. Wilson, 52 Kan., 109, 
 34 Pac. 403 ; State v. Judge of Civil 
 District Court, 45 La. An., 1418, 14 
 So., 308; Converse v. Ayer, 197 
 Mass., 443, 84 N. E., 98; Basting v. 
 Aukeny, 64 Minn., 133, 66 N. W., 
 266; Neun v. Blackstone B. & L. 
 Assn.. 149 Mo., 74, 50 S. W. 436; 
 
 Andrews v. Steele City Bank, 57 
 Neb., 173, 77 N. W., 342; Murphy 
 V. Fidelity M. F. Ins. Co., 69 Neb., 
 489, 95 N. W., 1022 ; Stanley v. Na- 
 tional Union Bank, 115 N. Y., 122, 
 22 N. E., 29; Jones v. Blun, 145 N. 
 Y., 333, 39 N. E., 954; Brynjolfson 
 V. Osthus, 12 N. Dak., 42, 96 N. W., 
 261 ; Threadgill v. Colcord, 16 Olka., 
 447, 85 Pac, 703 ; Thompson v. Hol- 
 laday, 15 Ore., 34, 14 Pac, 725; First 
 National Bank v. Mack, 35 Ore., 
 122, 57 Pac, 326; Eichman v. Her- 
 sker, 170 Pa. St., 402, 33 Atl., 229; 
 Radebaugh v. Tacoma & P. R. Co., 
 8 Wash., 570, 36 Pac, 460; Elder- 
 kin V. Peterson, 8 Wash., 674, 36 
 Pac, 1089; Smith v. Hopkins, 10 
 Wash., 77, 38 Pac, 854; Carroll v. 
 Pacific National Bank, 19 Wash., 
 639, 54 Pac, 32; Neeves v. Boos, 86 
 Wis., 313, 56 N. W., 909; Davis v. 
 Shearer, 90 Wis., 250, 62 N. W., 
 1050 ; Gunby v. Armstrong, 66 C. C. 
 A.. 627, 133 Fed., 417. 
 
 90 Greenawalt v. Wilson, 52 Kan., 
 109, 34 Pac, 403. 
 
 1 Commercial National Bank v. 
 Burch, 141 111., 519, 31 N. E. 420.
 
 54 RECEIVERS. [chap. I. 
 
 has been appointed over a mutual insurance company in a pro- 
 ceeding in which the company admitted its insolvency and con- 
 sented to the appointment, it constitutes no defense to an action 
 brought against a policy-holder to collect an assessment made 
 against him that the company was not in fact insolvent and that 
 the appointment was for this reason improper.^ So in an 
 action brought by a receiver to recover upon a promissory 
 note, it is no defense that the receiver is also the clerk of the 
 court in which the receivership proceedings were pending or 
 that as such clerk he had approved his bond as receiver, since 
 these objections affect merely his eligibility and constitute a 
 collateral attack upon the validity of his appointment.^ So 
 the propriety or validity of the appointment of a receiver can 
 not be questioned in an action brought by him to collect an 
 assessment upon premium notes given by members of a mu- 
 tual fire insurance company."* And upon a writ of error to 
 review an order authorizing the issuing of receiver's certifi- 
 cates, the propriety of the original order of appointment is not 
 subject to collateral attack where the court had jurisdiction 
 of the subject-matter and of the parties.^ And where a re- 
 ceiver has been appointed by one court, the regularity of his 
 appointment, as being without the proper notice, can not be 
 questioned in another action brought by a later receiver over 
 the same estate in a collateral suit instituted in another court 
 of concurrent jurisdiction for the purpose of determining the 
 sta'c-us of the two receivers.^ So where a receiver had been ap- 
 pointed in a foreclosure suit to which the owner of the equity 
 of redemption was properly made a party, and had collected 
 the rents and profits and had paid them out under orders of the 
 court, one who, pending the foreclosure proceeding, takes an 
 
 2Eichman v. Hersker, 170 Pa. 5 Town of Vandalia v. St. L., 
 
 St., 402, 33 Atl., 229. V. & T. H. R. R. Co., 209 111., 7Z, 
 
 3 Metropolitan National Bank v. 70 N. E., 662. 
 
 Commercial State Bank, 104 Iowa, 6 McKay v. Van Kleeck, 133 
 
 682, 74 N. W., 26. Mich., 27, 94 N. W., 367. 
 
 4 Davis V. Shearer, 90 Wis., 250, 
 62 N. W., 1050.
 
 CHAP. I.] GENERAL FEATURES. 55 
 
 assignment of the equity of redemption, can not afterward 
 maintain an independent bill in equity against the former re- 
 ceiver upon the ground that he had made an improper appli- 
 cation of the rents and profits of the mortgaged premises."^ 
 So in an action brought by a receiver who had been appointed 
 in a proceeding pending between partners, the action by the 
 receiver being for the recovery of money due the partnership 
 from third persons, it is no objection that the declaration fails 
 to allege that the particular persons were partners, since such 
 an objection is a collateral attack upon the appointment of the 
 receiver and can therefore not be maintained.^ So in an ac- 
 tion brought by the receiver of a mutual fire insurance com- 
 pany to recover an assessment, it constitutes no defense that 
 a prior receiver had been removed and the plaintiff appointed 
 as his successor without notice to the defendant.^ And an 
 order directing a receiver to make payment and distribution 
 of the funds in his possession, although erroneous, can not be 
 questioned in a collateral suit, the remedy of the aggrieved par- 
 ty in such case being by appeal from the order.^^ 
 
 § 39c. Otherwise where court is without jurisdiction; 
 not a proceeding in rem. Where, however, the court making 
 the order was without jurisdiction, a different doctrine pre- 
 vails, and in such case its order may be held void, even when 
 questioned in a collateral suit or proceedings^ So when the 
 appoir. nent of a receiver over a corporation is absolutely void 
 for want of jurisdiction over the defendant, there being no 
 proper service of process, a conveyance of property made by 
 
 7 Equitable Trust Co. v. Wilson, Miss., 1009, IS So., 33, 23 L. R. A., 
 200 111., 23, 65 N. E., 430. 531 ; Smith v. Ely & Walker Dry 
 
 8 Title Insurance & T. Co. v. Goods Co., 79 Miss., 266, 30 So., 
 Grider, 152 Cal., 746, 94 Pac, 601. 653 ; State v. Ross, 122 Mo., 435, 25 
 
 9Nichol V. Murphy, 145 Mich., S. W., 947, 23 L. R. A., 534; State 
 
 424, 108 N. W., 704. v. District Court, 21 Mont., 155, 53 
 
 10 Piatt V. New York & S. B. Ry. Pac, 272, 69 Am. St. Rep., 645 ; 
 Co., 170 N. Y., 451, 63 N. E., 532. dictum in Town of Vandalia v. St. 
 
 11 Texas & Pacific R. Co. v. Gay, L., V. & T. H. R. R. Co., 209 III., 
 86 Tex., 571, 26 S. W.. 599; Whit- 72, 70 N. E., 662. 
 
 ney v. Hanover National Bank, 71
 
 56 RECEIVERS. [chap. 1. 
 
 such receiver will be ineffectual to pass the title to real property. 
 And in such case the validity of the order appointing the re- 
 ceiver may properly be called in question in a collateral pro- 
 ceeding, as in an action of ejectment for the recovery of the 
 property so conveyed.12 So where a receiver is appointed over 
 an insolvent corporation upon an ex parte application made by 
 its officers without notice to any of the parties in interest, such 
 appointment is void and subject to attack in a collateral pro- 
 ceeding.12 And where the stockholders of an insolvent corpo- 
 ration had procured ex parte the appointment of a receiver 
 of the corporation without notice to any of the parties in in- 
 terest and without the filing of a bill, it was held that the ap- 
 pointment was void and subject to collateral attack.^^ So 
 where a receiver had been appointed over a railway company at 
 the instance of the company itself but without the filing of any 
 bill and upon an ex parte application without notice to any of 
 the parties in interest, it was held that the appointment was void 
 and subject to attack in a collateral proceeding.i^ And under 
 a statute which makes the notice of an application for the 
 appointment of a receiver jurisdictional and provides that the 
 
 12 St. Louis & S. C. & M. Co. V. the relief was the alleged insolvency 
 Sandoval C. & M. Co., Ill 111., 32. of the institution, since the appoint- 
 
 13 Whitney v. Hanover National ment in such case was erroneous at 
 Bank, 71 Miss., 1009, 15 So.. 33, 23 most but not void. It is a matter 
 L. R. A. 531. of some difficulty to reconcile this 
 
 14 Smith V. Ely & Walker Dry case with those above cited. The 
 Goods Co., 79 Miss., 266, 30 So., court point out the distinction that 
 653. in State v. Ross, supra, Mr. Justice 
 
 15 State V. Ross, 122 Mo., 435, 25 Brace seems to treat the writ of 
 S. W., 947, 23 L. R. A., 534. But prohibition, upon which the question 
 in First National Bank v. Mack, 35 arose, as equivalent, under the prac- 
 Ore., 122, 57 Pac, 326, it was held, tice of Missouri, to an appeal or 
 in an action brought by the receiver writ of error and therefore as a di- 
 of an insolvent bank to have a judg- rect and not a collateral proceeding, 
 ment against the bank declared not There is the further distinction that 
 to be a lien upon the assets of the in this case the action was instituted 
 bank, that it was no defense that the by the stockholders of the corpora- 
 receiver was appointed in an action tion, while in State v. Ross, supra, 
 instituted by a stockholder of the it was begun by the corporation it- 
 bank in which the only ground for self. And see, post, § 344a.
 
 CHAP. I.] GENERAL FEATURES. 57 
 
 appointment without notice is void, it is held that an appoint- 
 ment made prior to the time named in such notice is void and 
 therefore subject to collateral attack.^^ And an order appoint- 
 ing a receiver over property which is in no way involved in 
 the litigation is absolutely void and subject to collateral at- 
 tack.i'^ The appointment of a receiver is not, however, a pro- 
 ceeding in rem in the sense that it is binding upon all the 
 world, and persons who are not parties to the action are not 
 concluded thereby.^^ 
 
 § 39d. Damages for wrongful appointment ; measure of 
 damages. The plaintiff in a proceeding who procures the 
 appointment of a receiver over a going, solvent concern be- 
 comes liable to the defendant for damages resulting from such 
 appointment where it appears that the appointment was un- 
 warranted and the order of the court is afterward reversed 
 upon appeal. And the action is one which survives and after 
 the death of the plaintiff in the receivership proceeding, the 
 action may be maintained against the personal representative 
 of the deceasedA^ And in an action upon a bond to recover 
 damages for the wrongful appointment of a receiver, the ap- 
 proval of the receiver's accounts and an order for the disburse- 
 ment of the funds in his hands do not amount to an adjudica- 
 tion of the right of the plaintiff to recover upon the bond. 
 And in such case the rental value of the premises sequestered 
 during the receivership and the value of the services of coun- 
 sel in procuring the removal of the receiver are to be con- 
 sidered as proper elements of damage.20 
 
 16 Gibson v. Sexson, 82 Neb., 475, 20 josHn v. Williams, 76 Neb., 
 _ N. W., — . 594, 107 N. W., 837, 112 N. W., 343. 
 
 17 Bowman v. Hazen, 69 Kan., See, further, as to the measure of 
 682, 77 Pac, 589. damages in an action against the 
 
 iSDann Manufacturing Co. v. plaintiff and the sureties upon his 
 
 Parkhurst, 125 Ind., 317, 25 N. E., bond for wrongfully procuring the 
 
 347. appointment of a receiver, Haverly 
 
 19 Thornton-Thomas Mercantile v. Elliott, 39 Neb., 201, 57 N. W., 
 
 Co., V. Bretherton, 32 Mont., 80, 80 1010. 
 Pac. 10.
 
 58 RECEIVERS. [chap. I. 
 
 § 39^. Death of receiver ; where successor not appointed 
 at instance of defendant. A defendant has no right, merely 
 because of the death of a receiver appointed upon the appHca- 
 tion of the plaintiff, to procure the appointment of a successor 
 to the deceased receiver; and it is accordingly held erroneous 
 to appoint such a successor upon motion of the defendant and 
 over the objection of the plaintiff w^ithout some showing of 
 right other than the mere fact of the death of the former re- 
 
 ceiver 
 
 21 
 
 21 De Leonis v. Walsh, 148 Cal., 254, 82 Pac, 1047.
 
 CHAPTER II. 
 OF THE COURTS EXERCISING THE JURISDICTION. 
 
 I. What Courts May Appoint Receivers § 40 
 
 II. Relative Powers of State and Federal Courts 50 
 
 I. What Courts May Appoint Receivers. 
 
 § 40. English and Irish Courts of Chancery. 
 
 41. Courts granting the relief in this country; original jurisdiction; 
 
 courts of last resort. 
 
 42. Jurisdiction not exercised by probate courts. 
 
 43. Power limited to particular court must be followed strictly. 
 
 44. Receivers over property in foreign state or country. 
 
 45. Receiver in aid of decree of foreign court. 
 
 46. Receivers pending litigation concerning probate or administra- 
 
 tion. 
 
 47. Authority of receiver co-extensive only with that of court; no 
 
 extraterritorial powers, except by state comity. 
 47o. Prior receivership in one state excludes control over receiver by 
 courts of another state. 
 
 48. Court first appointing acquires control; receiver not subject to 
 
 order of other court; test as to priority. 
 
 49. New York code of procedure; court first moving has exclusive 
 
 control; rule not applicable where parties are not the same. 
 49a. Receivers in United States courts in suits concerning allotments 
 among Indians on reservations. 
 
 § 40. English and Irish Courts of Chancery. The juris- 
 diction exercised in the appointment of receivers has always 
 been treated as a purely equitable one, and the remedy has been 
 generally regarded, next to that by injunction, as the most 
 efficient and salutary of the extraordinary remedies known to 
 courts of equity. Finding its origin in the English Court of 
 Chancery, it was, until the recent abolition of that court as a 
 distinct tribunal, always regarded as one of its most efficient 
 remedies, although granted with caution and only upon a satis- 
 factory showing of the necessity for the immediate interposi- 
 
 59
 
 60 RECEIVERS. [CHAP. II. 
 
 tion of the court. It has also been a favorite remedy of the 
 Irish Court of Chancery, whose decisions afford an exceeding- 
 ly instructive presentation of the principles underlying the 
 jurisdiction, and of the conditions necessary to justify its ex- 
 ercise. 
 
 § 41. Courts granting the relief in this country; original 
 jurisdictional; courts of last resort. In those states of this 
 country which have preserved a distinct chancery system, the 
 relief has always been granted by the chancery courts, which 
 have adopted and followed the general principles governing 
 the remedy under the English system, enlarging and shaping 
 the jurisdiction to adapt it to the different conditions in -this 
 country.! In the states which have blended the systems of 
 equity and law, or which have adopted codes of procedure, re- 
 lief by receivers is usually granted by the various courts of gen- 
 eral jurisdiction throughout the states. By whatever name 
 these courts are known, the jurisdiction has preserved its dis- 
 tinctive equitable character, and it is still exercised upon the 
 same general principles of equity by which it was governed 
 before the adoption of the various codes of procedure. It is 
 also strictly an original in distinction from an appellate power, 
 and it is generally exercised by courts of original jurisdiction 
 only. In Tennessee, however, it would seem that the supreme 
 court of the state may, pending an appeal thereto from an in- 
 ferior court, appoint a receiver to take charge of the subject- 
 matter of litigation, in a case otherwise appropriate for the 
 relief.2 But while that court has power to appoint a receiver 
 when necessary to the proper administration of its appellate ju- 
 risdiction, yet to warrant the exercise of the power the proper- 
 ty in controversy must be first brought under the jurisdiction 
 
 1 See Miller Brothers v. Perkins, 2 West v. Weaver, 3 Heisk., 589, 
 
 154 Mo., 629, 55 S. W., 874. In As to the right of the supreme court 
 
 Rabb V. Albright, 93 Iowa, 50, 61 of Nebraska to appoint a receiver 
 
 N. W., 402, it was held under the pending an appeal, see Fitzgerald v. 
 
 statute of Iowa that a receiver Fitzgerald & M. C. Co., 44 Neb., 
 
 might be appointed in an action at 463, 62 N. W., 899; Eastman v. 
 
 law. Cain, 45 Neb., 48, 63 N. W., 123.
 
 CHAP. II.] COURTS. 61 
 
 of that court by virtue of an appeal, or of some order or de- 
 cree of the court, and the person against whom the receiver is 
 sought must be subject to its jurisdiction.^ And the Supreme 
 Court of the United States has refused in a particular case to 
 appoint a receiver over the property of a railway, pending an 
 appeal from a decree of foreclosure, but without deciding 
 whether a case might not arise in which the power might be 
 exercised pending an appeal.^ And the same course was fol- 
 lowed by the Supreme Court of Arkansas pending an appeal 
 from a final decree dismissing a bill to foreclose a mortgage.^ 
 In Virginia, a judge of the Supreme Court of Appeals has no 
 original jurisdiction to appoint a receiver and to direct a de- 
 fendant to surrender property to such receiver, such relief 
 having been refused by the court below. ^ But the Supreme 
 Court of Kansas has appointed a receiver to take possession 
 of the property of a non-resident corporation against which 
 an original proceeding by quo warranto was pending to oust 
 it from doing business within the state.''^ 
 
 § 42. Jurisdiction not exercised by probate courts. The 
 appointment of receivers being a power pertaining to courts 
 which are vested with chancery jurisdiction, a court of pro- 
 bate powers only can not appoint a receiver in aid of the col- 
 lection of the estate of a deceased person. ^ And since a pro- 
 bate court has no power to appoint a receiver, an action by a 
 receiver thus appointed can not be maintained.^ Where, how- 
 ever, a probate or county court, under the code of procedure 
 of the state, is empowered to hear and determine civil causes, 
 
 3 Kerr v. White, 7 Baxter, 394. Nebraska, under the constitution 
 And see Allen v. Harris, 4 Lea, 190. and laws of that state, to appoint a 
 
 4 Pacific Railroad v. Ketchum, 95 receiver over an insolvent bank. 
 U. S., 1. see State v. Exchange Bank, 34 
 
 5 Coleman v. Fisher, 66 Ark., 43, Neb., 198, 51 N. W., 765. 
 
 48 S. W., 807. 7 State v. Anheuser-Busch B. 
 
 6 Fredenheim v. Rohr, 87 Va., Assn., 76 Kan., 184, 90 Pac, 777. 
 764, 13 S. E., 193, 266. See Virginia, 8 Scott v. Searles, 13 Miss., 25. 
 
 T. & C. Steel & Iron Co. v. Wilder, 9 Garrett v. London & L. F. Ins. 
 
 88 Va., 942, 14 S. E., 806. As to Co., 15 Okla., 222, 81 Pac, 421. 
 the power of the supreme court of
 
 62 RECEIVERS. [chap. II. 
 
 and such court has rendered judgment against a debtor in a 
 case properly falling within its jurisdiction, it may appoint a 
 receiver upon proceedings supplemental to execution in the 
 nature of a creditor's bill to enforce the judgment.^^ 
 
 § 43. Power limited to particular court must be followed 
 strictly. Where, under the laws of a state, the power of 
 appointing receivers is confined to the chancellor alone, and 
 the register of court is specially prohibited from making the 
 appointment, an order of court referring the appointment to 
 the register is not simply error in a case within his jurisdic- 
 tion, but is the exercise of a power clearly beyond his control, 
 and is therefore utterly void. And it is proper for the supreme 
 court of the state to correct such unauthorized action on the 
 part of the chancellor by the writ of prohibition. ^^ So where 
 a statute authorizes the appointment of a receiver and the ap- 
 proval of his bond by the court, but not by the judge or clerk in 
 vacation, the appointment must be made by the judge in term 
 time, and not in vacation; and an appointment by the judge 
 in vacation and the approval of the bond by the clerk will be 
 held invalid. ^2 
 
 § 44. Receivers over property in foreign state or coun- 
 try. It would seem to be unnecessary that the property 
 constitut'ng the subject-matter of litigation should be within 
 the jurisdiction of the court, provided the parties in interest 
 are subject to its control, and there are frequent instances 
 where the English Court of Chancery has appointed receivers 
 over estates or property situated in foreign countries.^^ And 
 
 10 Second Ward Bank z;. Upmann, (1900) 1 Ch., 602. And see Mer- 
 12 Wis., 499. cantile I. & G. T. Co. v. River Plate 
 
 11 £x parte Smith, 23 Ala., 94. T. L. & A. Co., (1892) 2 Ch., 303, 
 
 12 Newman v. Hammond, 46 Ind., where the jurisdiction to grant the 
 119. relief as to property situated in a 
 
 13 See Davis v. Barrett, 13 L. J. foreign country is upheld, although 
 N. S. Ch., 304; Langford v. Lang- the court refused its exercise be- 
 ford, 5 L. J., N. S. Ch., 60; Shep- cause upon the facts of the case a 
 pard V. Oxenford, 1 Kay & J., 491 ; receiver would have been useless. 
 V. Lindsey, 15 Ves., And see, post, § 170. 
 
 91 ; In re Maudslay, Sons & Field.
 
 CHAP. II.] COURTS. 63 
 
 in this country it has been held proper to appoint a receiver 
 over property beyond the jurisdiction of the court where all 
 the parties in interest were within the jurisdiction. ^^ In such 
 cases it would seem to be the better practice that the receiver 
 himself should be within the jurisdiction of the court, and that 
 he should be allowed to appoint his own agent in the foreign 
 country for the management of the property there.^^ It is to 
 be observed, however, that while the power of courts of equity 
 to extend their extraordinary aid over property in a foreign 
 country is thus clearly recognized, it will not be exercised when 
 the parties in interest in the property, or representing it, are 
 not before the court or subject to its control.^^ And a receiver 
 will not be appointed as against a purchaser of the interest 
 of one partner, residing and conducting the business in an- 
 other state. ^"^ But the fact that the property over which a re- 
 ceiver is sought is located partly in one state and partly in an- 
 other, as in the case of a railway corporation whose line ex- 
 tends through two different states, the company being incor- 
 porated in both, will not prevent the courts of one of the states 
 from appointing a receiver to take charge of the railway, in a 
 case otherwise appropriate for the relief.^^ So in an action 
 to wind up a partnership and for a receiver of the partnership 
 property, it is no objection to the appointment of the receiver 
 that a portion of the partnership property is in another state. ^^ 
 And as to personal property within its jurisdiction, the court 
 may appoint a receiver to take possession of and to preserve 
 the property pendente lite, notwithstanding the defendant re- 
 sides beyond its jurisdiction and in another state.^O 
 
 14 Eureka Mining, S. & P. Co. v. Alderson, 32 C. C. A., 542, 90 Fed., 
 
 Lewiston N. Co., 12 Idaho, 472, 86 142, 61 U. S. App., 636. 
 
 Pac, 49 ; Bayne v. Brewer Pottery 17 Harvey v. Varney, 104 Mass., 
 
 Co., 82 Fed., 391. But see Miller 436. 
 
 Brothers v. Perkins, 154 Mo., 629, 18 State v. Northern Central R. 
 
 55 S. W., 874. Co., 18 Md., 193. 
 
 15 — t/. Lindsey, 15 Ves., 19 Torbert v. Jeffrey, 161 Mo., 
 
 91. 645, 61 S. W.. 823. 
 
 16 Shaw V. Shore, 5 L. J., N. S. 20 Hellebiish v. Blake, 119 Ind., 
 
 Ch., 79; Baltimore B. & L. Assn. v. 349, 21 N. E., 976.
 
 64 RECEIVERS. [chap. II. 
 
 § 45. Receiver in aid of decree of foreign court. It is 
 
 held to be competent for a court of chancery in one country 
 to appoint a receiver and grant an injunction in aid of the 
 enforcement of a decree in chancery in a foreign country. The 
 power, however, will not be exercised in such a case when it is 
 doubtful, upon the record, whether plaintiffs will ultimately 
 be entitled to a decree in the second action. 21 
 
 § 45. Receivers pending litigation concerning probate 
 or administration. Under the practice of the English 
 Court of Chancery, receivers were frequently appointed pend- 
 ing a litigation in the ecclesiastical court over the probate of a 
 will, or the right to administer an estate. The relief was grant- 
 ed in this class of cases, not because of the contest in another 
 court, but because there was no person to receive the assets, 
 and it was therefore the duty of a court of equity to lend 
 its aid for the preservation of the assets pending the litiga- 
 tion. 22 The court, however, was averse to interfering by a 
 receiver with the person in possession under the will, when 
 the property was of small value. 23 And in a contest between 
 two different executors, claiming under two different wills of 
 the deceased, a receiver would not be extended over the 
 rents and profits of real estate held by a defendant claiming 
 under a title adverse to both wills.24 And since the power was 
 exercised only for the preservation of the property, a receiver 
 would not be appointed when no danger was shown, and no 
 reason why the plaintiff could not have administration pen- 
 dente lite to secure and preserve the property.25 Where, how- 
 
 21 Houlditch V. Lord Donegal, 8 Cr.. 97 ; Marr v. Littlewood, 2 Myl. 
 
 Bligh., N. S., 301. As to the cir- & Cr., 454. See, also, Atkinson v. 
 
 cumstances which will justify the Henshaw, 2 Ves. & Bea., 85; Ball 
 
 appointment of a receiver to pro- z/. Oliver, id., 96 ; Parkin z;. Seddons, 
 
 tect the assets of a corporation as L. R., 16 Eq., 34. 
 
 ancillary to a receivership institut- 23 Whitworth v. Whyddon, 2 Mac. 
 
 ed over the corporation in another & G., 52. 
 
 state, see Williams v. Hintermeister, 24 Jones v. Goodrich, 10 Sim., 327. 
 
 26 Fed., 889; Parsons v. Charter 25 Richards v. Chave, 12 Ves., 
 
 Oak Life Ins. Co., 31 Fed., 305. 462; Knight v. Duplessis, 1 Ves., 
 
 22Watkins v. Brent, 1 Myl. & 324.
 
 CHAP. II.] COURTS. 65 
 
 ever, the bill showed a gross case of fraud on the part of de- 
 fendants contesting a will in the ecclesiastical court, and that 
 the whole object of the litigation in that tribunal was to delay 
 probate of the will, equity would take jurisdiction and appoint 
 a receiver over the estate, notwithstanding the power of the 
 ecclesiastical court to appoint an administrator pendente lite.^^ 
 But an act of parliament having authorized the ecclesiastical 
 court, pending a litigation as to the probate of a will, when 
 there was some obstacle or bar in the way of administration, 
 to appoint an administrator pendente lite, with full powers in 
 the management of the property, except as to distributing the 
 residue, and such administrator having been appointed by that 
 court, equity would refuse to appoint a receiver, since the only 
 effect of the appointment would be to produce an unseemly con- 
 flict between the two courts.^'^ If, however, the ecclesiastical 
 court had not yet exercised its power by appointing an ad- 
 ministrator pendente lite, it was held that equity might inter- 
 fere as before the statute, in a proper case, and might appoint 
 a receiver of the personal estate, when probate of the will had 
 been delayed. ^8 
 
 § 47. Authority of receiver co-extensive only with that 
 of court ; no extraterritorial powers, except by state com- 
 ity. Questions of much nicety have sometimes arisen in 
 this country as to the extent to which the courts of one state 
 will recognize the functions and powers of a receiver appointed 
 in another state, and as to the right of such receiver to act 
 beyond the territorial jurisdiction of the court appointing him. 
 The better doctrine upon this subject undoubtedly is that the 
 legal authority of a receiver is co-extensive only with the juris- 
 diction of the court appointing him, and that as a matter of 
 strict right the courts of one state are not bound to recognize 
 a receiver appointed in a foreign state. The rule is founded on 
 
 26 Atkinson v. Henshaw, 2 Ves. & 329. See, also, Hitchen v. Birks, 
 Bea., 85. See, also. Ball v. Oliver, L. R., 10 Eq., 471. 
 
 id., 96. 28 Parkin v. Seddons, L. R., 16 
 
 27 Veret v. Duprez, L. R., 6 Eq., Eq., 34. 
 
 Receivers — 5.
 
 66 
 
 RECEIVERS. 
 
 [chap. II. 
 
 the recognized principle that the laws of one state have no 
 force, proprio vigore, beyond the territorial limits of such 
 state, although, upon considerations of courtesy or comity, they 
 may be permitted to operate in another state for the promotion 
 of justice, when neither the latter state nor its citizens will 
 suffer any inconvenience from the application of the foreign 
 law. The question, then, becomes one of comity between the 
 different states, and it is upon such considerations alone that 
 the courts of one state may recognize and enforce the acts of 
 a receiver appointed in another state, when no detriment is 
 thereby caused to the citizens of the state in which the func- 
 tions of the foreign receiver are asserted. 29 Thus, a receiver 
 of an insolvent corporation appointed under the laws of New 
 Jersey, with power to take possession of all the effects of the 
 corporation, and to convey or assign all its property, real and 
 personal, may assign an indebtedness due to the corporation 
 from a citizen of New York ; and the courts of the latter state 
 may recognize such assignment as giving to the purchaser an 
 equitable right of action, which they will enforce as against the 
 debtor, the rights of citizens of New York not intervening.^^ 
 
 29Hoyt V. Thompson, 5 N. Y., 
 320, reversing S. C, 3 Sandf., 416; 
 Willitts V. Waite, 25 N. Y., 577; 
 Taylor v. Columbian Insurance Co., 
 55 Me., 290; Irwin v. Granite S. P. 
 Assn., 56 N. J. Eq., 244, 38 Atl., 
 680; The Willamette Valley, (also 
 sub. nom. Clark v. Chandler), 13 C. 
 C. A., 635, 66 Fed., 565, 29 U. S. 
 App., 447, affirming S. C, 62 Fed., 
 293, 63 Fed., 130; Sands v. Greeley 
 & Co., 31 C. C. A., 424, 88 Fed., 130, 
 59 U. S. App., 610. And see Hoyt 
 v. Thompson's Executor, 19 N. Y., 
 207; Fawcett v. Supreme Sitting, 64 
 Conn., 170, 29 Atl., 614, 24 L. R. A., 
 815. And see, post, § 239. Where 
 an action is brought by stockholders 
 against a corporation, receivers ap- 
 pointed in foreign states are not 
 
 necessary parties to such action. 
 Fitzgerald v. Fitzgerald & M. C. 
 Co., 41 Neb., 374, 59 N. W., 838. 
 
 30 Hoyt V. Thompson, 5 N. Y., 
 320, reversing S. C, 3 Sandf., 416. 
 "It is a conceded principle," says 
 Ruggles, C. J., "that the laws of a 
 state have no force, propria vigore, 
 beyond its territorial limits. But 
 the laws of one state are frequently 
 permitted, by the courtesy of an- 
 other, to operate in the latter for 
 the promotion of justice, where 
 neither that state nor its citizens 
 will suffer any inconvenience from 
 the application of the foreign law. 
 This courtesy or comity is estab- 
 lished not only from motives of re- 
 spect for the laws and institutions 
 of foreign countries, but from con-
 
 CHAP. II.] 
 
 COURTS. 
 
 67 
 
 Where, however, citizens of a state, who are creditors of a 
 non-resident debtor, have instituted proceedings in attachment 
 ag-ainst the debtor, and have acquired Hens upon his property 
 in the state of their residence, receivers of the debtor, appoint- 
 ed in the foreign state, will not be allowed to deprive such 
 creditors of their rights, and the courts will protect the lien 
 acquired by their own citizens, in preference to the claim or 
 right asserted by the foreign receivers.^i So it is held that a 
 foreign receiver of a non-resident corporation can not maintain 
 a bill in equity to set aside a deed of general assignment for 
 the benefit of creditors where such action will be against the 
 
 siderations of mutual utility and 
 advantage." 
 
 SiWillitts V. Waite, 25 N. Y., 
 577 ; Taylor v. Columbia Insurance 
 Co., 14 Allen, 353 ; Hunt v. Colum- 
 bian Insurance Co., 55 Me., 290; 
 Choctaw C. & M. Co. v. Williams- 
 Echols D. G. Co., 75 Ark., 365, 87 
 S. W.. 632 ; Solis v. Blank, 199 Pa. 
 .St., 600, 49 Atl., 302; Frowert v. 
 Blank, 205 Pa. St., 299, 54 Atl., 
 1000; Stockbridge v. Beckwith, 6 
 Del. Ch., 72, 33 Atl., 620; Sands v. 
 Greeley & Co., 31 C. C. A., 424. 88 
 Fed., 130, 59 U. S. App., 610; 
 Zacher v. Fidelity T. & S. Co., 45 
 C. C. A., 480, 106 Fed., 593; Bald- 
 win V. Hosmer, 101 Mich., 119, 
 59 N. W., 432, 25 L. R. A., 
 739; Failey v. Fee, 83 Md., 83, 
 34 Atl., 839, 32 L. R. A., 311, 55 Am. 
 St. Rep., 326 ; Ward v. Pacific M. L. 
 I. Co., 135 Cal., 235, 67 Pac, 124; 
 Grogan v. Egbert, 44 West Va., 75, 
 28 S. E., 714, 67 Am. St. Rep., 763. 
 And see Thum v. Pyke, 8 Idaho, 11, 
 66 Pac, 157; Linville v. Hadden, 88 
 Md., 594, 41 At!., 1097, 43 L. R. A., 
 222; Patterson v. Lynde, 112 111., 
 196. And see, post, § 306&. The 
 observations of Mr. Justice Barrow, 
 in Hunt v. Columbian Insurance 
 
 Co., 55 Me., 290, supra, very clearly 
 illustrate the distinction noticed, as 
 well as the principles on which it is 
 founded. He says, p. 297 : "The 
 receivers, who assert this claim 
 here, are merely the servants of the 
 court in New York, having legal au- 
 thority coextensive only with the 
 jurisdiction of the court by whom 
 they were appointed. Upon princi- 
 ples of comity, often recognized and 
 always acted on, except when they 
 come in conflict with paramount 
 rights of suitors in our courts, they 
 might be admitted here to protect 
 the interests and enforce the claims 
 of the corporation, of whose affairs 
 they are the legal guardians there. 
 But equity does not require us to 
 permit the exercise of such privi- 
 leges to the detriment of our own 
 citizens, who are pursuing appro- 
 priate legal remedies in this court." 
 Under the statute of Massachusetts 
 providing that attachments shall be 
 dissolved by the appointment of a 
 receiver to take possession of the at- 
 tached property, it is held that the 
 statute applies to the appointment 
 of the same person as ancillary re- 
 ceiver in that state who had been
 
 68 RECEIVERS. [chap. II. 
 
 interest of local creditors."^ So in an action of interpleader 
 brought in California by a sheriff having attached funds in his 
 possession against a creditor of the state and against a receiver 
 appointed in Indiana who claimed the right to the possession 
 of the attached property, it was held that the fund should be 
 decreed to the domestic creditor.^s Nor can the Indiana re- 
 ceiver in such case procure the appointment in California of 
 a local ancillary receiver in order to obtain possession of the 
 fund as against the domestic attaching creditors.34 And the 
 doctrine as above laid down has been applied in a case where 
 the appointment of the receiver had been followed by an as- 
 signment to him by the debtor of all the assets, where it ap- 
 peared that the assignment was not intended to be an inde- 
 pendent voluntary conveyance but was made in invitum and 
 was executed merely in aid of the receivership.^S So it is 
 proper for the courts of one state to appoint a receiver over 
 the assets of a non-resident corporation over which a receiver 
 has been appointed in the state of its organization, where 
 such appointment will result in the protection of the interests 
 of local attaching creditors.36 But where creditors of an in- 
 solvent debtor have voluntarily submitted themselves to the 
 jurisdiction of a foreign court by which a receiver has been 
 appointed and have proved their claims in that proceeding and 
 have received dividends upon them, they will not be heard to 
 object to a recovery by such foreign receiver of assets located 
 in the state of their domicile.^'^ And the rule as above an- 
 nounced applies only where the receiver is compelled to resort 
 
 appointed in a foreign state Sec- 33 Lackmann v. Supreme Council, 
 
 ond National Bank v. Lappe T. Co., 142 Cal., 22, 75 Pac, 583. 
 
 198 Mass., 159, — N. E., — . But 34 Clark v. Supreme Council, 146 
 
 the statute does not apply to a re- Cal., 598, 80 Pac, 931. 
 
 ceiver appointed by a federal court 35 Zacher v. Fidelity T. & S. V. 
 
 in Massachusetts. Borden v. En- Co., 109 Ky., 441, 59 S. W., 493. 
 
 terprise T. Co., 198 Mass., 590, — 36 Security S. & L. Assn. v. 
 
 N. E., — . Moore, 151 Ind., 174, 50 N. E., 869. 
 
 32 Borton v. Brines-Chase Co., 37 Wilson v. Keels, 54 S. C, 545, 
 
 175 Pa. St., 209, 34 Atl., 597. 32 S. E., 702, 71 Am. St. Rep., 816.
 
 CHAP. II.] COURTS. 69 
 
 to the aid of the foreign court to enable him to secure pos- 
 session of assets; and where the property in a foreign state 
 has actually been reduced to his possession, he may stand upon 
 his possessory title and defend his possession against all who 
 can not prove a better title.^^ 
 
 § 47a. Prior receivership in one state excludes control 
 over receiver by courts of another state. The court origi- 
 nally appointing a receiver in one state retains exclusive juris- 
 diction and control over the property pertaining to the receiver- 
 ship in that state, and this control necessarily excludes the sub- 
 sequent action of the courts of another state. The court whose 
 jurisdiction is thus originally invoked is not bound or conclud- 
 ed by the judgment of a court of another state against the 
 receiver, who has been appointed ancillary receiver in the latter 
 state, even though the receiver was a party to the cause in 
 which such judgment was rendered. Such a judgment, there- 
 fore, is not an adjudication which binds the assets in the hands 
 of the receiver in the state in which he was first appointed.^^ 
 And an ancillary receiver appointed in a foreign state over the 
 property of a railway company can not be held liable for dam- 
 ages for personal injuries suffered in the state of the original 
 appointment and resulting from the operation of the road in 
 that state by the original receiver. '^^ 
 
 § 48. Court first appointing acquires control; receiver 
 not subject to order of other court; test as to priority. As 
 between different courts appointing the same person receiver 
 in different actions, it is held that the court first appointing him 
 acquires exclusive control over the fund and the receiver hold- 
 ing it, and it will not permit such control to be interfered with 
 by the subsequent appointment of the same person in another 
 cause, but will in the exercise of its powers proceed to disburse 
 
 38 Sands v. Greeley & Co., 31 C. firming S. C, 43 N. J. Eq., 211, 10 
 C. A., 424, 88 Fed., 130, 59 U. S. Atl., 385; Shinney v. North Amer- 
 App., 610. ican S., L. & B. Co., 97 Fed., 9. 
 
 39 Reynolds v. Stockton, 140 U. 40 Union Trust Co. v. Atchison, 
 S., 254, 11 Sup. Ct. Rep., 773, af- T. & S. F. R. Co., 87 Fed., 530.
 
 70 RECEIVERS. [chap. II. 
 
 the fund as may be proper.^i Indeed, when a court of compe- 
 tent jurisdiction has appointed a receiver, who is in possession 
 of and administering the property under its orders, another 
 court of co-ordinate jurisdiction will not entertain a bill to 
 administer the same property, and to take it from the posses- 
 sion of the former receiver, and to appoint its own receiver.^2 
 In such a case, the parties aggrieved should seek relief in the 
 court which is already in possession of the property through 
 its receiver.4^ So the prior jurisdiction of a court of equity 
 powers over the subject-matter of the appointment of a receiv- 
 er, and the pendency of a motion for an injunction and a re- 
 ceiver in such court, exclude the interference of that court in 
 a subsequent suit for the same relief. And the appointment 
 of a receiver in the suit thus subsequently begun will be held 
 inoperative as against the appointment made in the former 
 cause.^^ So if the court first appointing a receiver has juris- 
 diction, its receiver will not be dispossessed of the property 
 at the suit of a receiver subsequently appointed by a court of 
 co-ordinate jurisdiction ; and this is true, regardless of whether 
 the original appointment was or was not erroneous.^^ And 
 the test as to priority is not to be found in the first actual, man- 
 ual possession of the res, but the court which first asserts ex- 
 clusive control by reason of having taken cognizance of the 
 subject-matter of the litigation is entitled to proceed wath the 
 administration of the estate.^^ Thus, where a bill had been 
 filed and served and an order had been served upon the de- 
 
 41 O'Mahoney v. Belmont, 37 N. v. Van Kleeck, 133 Mich., 27, 94 N. 
 Y. Supr. Ct. R., 380; Fernald v. W., 367, See Morgan z^. Gibian, 115 
 Spokane & B. C T. Co., 31 Wash., Ga., 145, 41 S. E., 495. 
 
 219, 71 Pac, 731. 44 Young v. Rollins, 85 N. C., 485. 
 
 42 Worth V. Piedmont Bank, 121 45 Bonner v. Hearne, 75 Tex., 
 N. C., 343, 28 S. K, 488. 242, 12 S. W., 38. 
 
 43 Young V. M. & E. R. Co., 2 46 Northwestern Iron Co. v. L. 
 Woods, 606 ; State v. Reynolds, 209 & R. I. Co., 92 Wis., 487, 66 N. W., 
 Mo., 161, 114 S. W., 1097; Missouri 515; Palmer v. State, 212 U. S., 118, 
 Pac. R. Co. V. Love, 61 Kan., 433, 29 Sup. Ct. Rep., 230, modifying and 
 59 Pac, 1072; Gates v. McGee, 15 affirming S. C, 85 C. C. A., 603, 158 
 S. Dak., 247, 88 N. W., 115; McKay Fed., 705. hnd stt, post, % SO.
 
 CHAP. II.] COURTS. • 71 
 
 fendants requiring- them to show cause why a receiver should 
 not be appointed, this was held to amount to an equitable levy 
 although no receiver had been appointed and there was no 
 manual seizure of the property, and the subsequent appoint- 
 ment of a receiver by another court was unauthorized and ir- 
 regular and should have been set aside upon the proper show- 
 ing. But in such case the order appointing the receiver in the 
 latter proceeding is not to be regarded as a nullity and the 
 receiver himself is deemed a de facto officer and all his lawful 
 acts and contracts should be considered as binding in the fur- 
 ther administration of the estate and he is entitled to reason- 
 able compensation for his services.'*'^ And a federal court 
 will not entertain a bill brought against receivers previously 
 appointed by the federal court of another circuit the object 
 of which is to compel them to adopt a particular course for 
 the recovery of property and assets, and the fact that the court 
 appointing the receiver has granted leave for the institution of 
 such a proceeding will not be sufficient to confer jurisdiction 
 upon the court. ^^ And a receiver being an officer of court, 
 and being bound to account to the court appointing him for 
 all funds which he receives in his official capacity, he can not 
 be compelled by an order of another court to pay over money 
 in his hands as receiver in satisfaction of an execution issued 
 upon a judgment of such other court, since such a procedure 
 would necessarily have the effect of producing a conflict of 
 jurisdiction, and would prevent the receiver from compliance 
 with the obligations of his bond given to the court appoint- 
 ing him.49 
 
 § 49. New York code of procedure; court first moving 
 has exclusive control ; rule not applicable where parties are 
 not the same. Under the New York code of procedure, the 
 appointment of a receiver, like the granting of an injunction, is 
 
 47 Northwestern Iron Co. v. L. & 49 Nelson v. Connor, 6 Rob. 
 R. I. Co., 92 Wis., 487, 66 N. W., (La.), 339. 
 
 515. 
 
 48 French v. Union Pac. R. Co., 
 92 Fed., 26.
 
 72 RECEIVERS. [chap. II 
 
 considered as one of the provisional remedies of the courts, 
 the two remedies being regarded as of equal weight and im- 
 portance. And since the courts of that state, under the code, 
 are regarded as having acquired jurisdiction of a cause, and 
 as having control of all the subsequent proceedings, from the 
 time of service of process, or from the allowance of a pro- 
 visional remedy, the granting of an injunction by a court of 
 competent jurisdiction is a bar to appointing a receiver in a 
 subsequent proceeding between the same parties in another 
 court; and the court first moving having acquired control by 
 the granting of an injunction, the second court will decline 
 to interfere by a receiver, or to take jurisdiction of the cause.^^ 
 But the rule has no application where the parties in the two 
 courts are not the same.^^ 
 
 § 49a. Receivers in United States courts in suits con- 
 cerning allotments among Indians on reservations. Under 
 the act of congress^^ conferring upon the circuit courts of the 
 United States authority to try actions arising within their 
 jurisdictions and involving the right of any person not wholly 
 or in part of Indian blood or descent to any allotment of land 
 under any law or treaty, it is held that the circuit court has 
 full power to determine all disputes which may arise con- 
 cerning the allotment among the Indians upon reservations 
 and may, in the proper case, appoint a receiver as an incident 
 to that power. 52 
 
 50 McCarthy v. Peake, 18 How. . . . and the judgment or decree 
 Pr., 138; S. C, 9 Ab. Pr., 164. of any such court in favor of any 
 
 51 Carter v. Dime Savings Bank, claimant to an allotment of land 
 61 Neb., 587, 86 N. W., 29. shall have the same effect, when 
 
 52 The Statute in question pro- properly certified to the Secretary 
 vides that the circuit courts of the of the Interior, as if such allotment 
 United States shall have : "Jufis- had been allowed and approved by 
 diction to try and determine any him." Act of February 6, 1901, 
 action, suit, or proceeding arising c. 217, 31 Stat., 760; 3 Fed. Stat. 
 within their respective jurisdictions Ann., 503, amending act of August 
 involving the right of any person, 15, 1894, c. 290, 28 Stat., 286, 305. 
 not wholly or in part of Indian 53 Smith v. United States, 142 
 blood or descent, to any allotment Fed., 225. 
 
 of land under any law or treaty
 
 CHAP. II.] COURTS. 73 
 
 II. Relative Powers of State and Federal Courts. 
 
 § 50. Court first acquiring control will retain it; not defeated by sub- 
 sequent dissolution of corporation. 
 
 51. Proceedings in bankruptcy; state courts assert exclusive juris- 
 
 diction, if first acquired. 
 
 52. Jurisdiction of state courts, if first acquired, recognized by Unit- 
 
 ed States courts. 
 
 53. Contrary doctrine asserted by United States courts. 
 
 54. The general doctrine applied to cases of railway mortgages. 
 
 55. Bill for account not entertained by United States court against 
 
 receiver of state court. 
 
 56. When bill for receiver by one partner in state court an act of 
 
 bankruptc}^ 
 
 57. Receiver in behalf of assignee in bankruptcy of a copartnership. 
 
 58. Conflict between state and federal court ground for a receiver. 
 
 59. Receiver of railway appointed by United States court not sub- 
 
 ject to control of state court. 
 
 60. The same; Wisconsin doctrine. 
 
 50a. Federal jurisdiction in action by receiver of United States court 
 
 is independent of citizenship and amount. 
 60&. Action against receiver of United States court is removable regard- 
 less of citizenship and amount. 
 
 61. State court will not grant writ of assistance against receiver of 
 
 United States court. 
 
 62. Right of action of receiver of United States court no greater 
 
 than of state court. 
 62a. Power of United States Supreme Court to review final decision 
 of state court. 
 
 § 50. Court first acquiring control will retain it; not de- 
 feated by subsequent dissolution of corporation. Ques- 
 tions of considerable delicacy and importance have frequently 
 arisen under our peculiar judicial system, touching the rela- 
 tive powers of the state and federal courts in the appointment 
 of receivers over the same subject-matter in litigation in both 
 tribunals. These questions have usually been determined upon 
 principles of comity, and it is now the established doctrine of 
 both the state and federal courts, that that court, whether state 
 or federal, which first acquires jurisdiction of the subject-mat- 
 ter, or of the res, and which is first put in motion, will retain 
 its control to the end of the controversy, and the possession
 
 74 
 
 RECEIVERS. 
 
 [chap. II. 
 
 of its receiver will not be disturbed by the subsequent appoint- 
 ment of a receiver by the other court.^* Nor is it necessary, 
 in the application of the general doctrine here stated, that the 
 court asserting its exclusive control by reason of having been 
 first to take cognizance of the subject-matter should be the 
 
 54 Keep V. Michigan Lake Shore 
 R. Co., U. S. Circuit Court, West- 
 ern District of Michigan, 6 Chicago 
 Legal News, 101; Bill v. New Al- 
 bany, etc., R. Co., 2 Biss., 390; 
 Union Trust Co. v. The Rockford, 
 Rock Island & St. Louis R. Co., 6 
 Biss., 197; S. C, 7 Chicago Legal 
 News, 33; Gaylord v. Fort Wayne, 
 M. & C. R. Co., 6 Biss., 286; Sedg- 
 wick V. Menck, 6 Blatchf., 156; S. 
 C, 1 Bank. Reg., Second Edition, 
 675; Alden v. Boston, Hartford & 
 Erie R. Co., 5 Bank. Reg., 230; 
 Storm V. Waddell, 2 Sandf. Ch., 
 494; Watkins v. Pinkney, 3 Edw. 
 Ch., 533; Spinning v. Ohio Life In- 
 surance & Trust Co., 2 Disney, 336; 
 May V. Printup, 59 Ga., 129; Adams 
 V. Trust Co., 15 C. C. A., 1, 66 Fed., 
 617; Garner v. Southern M. B. & 
 L. Assn., 28 C. C. A., 381, 84 Fed., 
 3, 52 U. S. App., 344; Appleton 
 Waterworks Co. v. Central T. Co., 
 35 C. C. A., 302, 93 Fed., 286; 
 Hutchinson v. Green, 6 Fed., 833 ; 
 Lewis V. American N. S. Co., 
 119 Fed., 391; Cochran v. Pitts- 
 burg, S. & N. R. Co., 158 Fed., 
 549; Robinson v. Mutual R. L. 
 I. Co., 162 Fed., 794. And see 
 Beecher v. Bininger, 7 Blatchf., 170; 
 In re Clark and Bininger, 4 Bene- 
 dict, 88; Eisenmann v. Thill, 1 Cin- 
 cinnati Sup. Ct. R., 188; Conkling 
 V. Butler, 4 Biss., 22; Bruce v. M. 
 & K. R. R., 19 Fed., 342; Judd v. 
 Bankers & Merchants Telegraph 
 Co., 31 Fed., 182. But see Mer- 
 chants & Planters National Bank v. 
 
 Trustees, 63 Ga., 549. And in South 
 Carolina R. Co. v. People's Saving 
 Institution, 64 Ga., 18, it is held that 
 the pendency of a bill in a federal 
 court in another state to foreclose 
 a railway mortgage and for a re- 
 ceiver will not interfere with the 
 operation of the attachment laws, 
 when the attachments are levied be- 
 fore a receiver is appointed in the 
 former suit. In Lake National Bank 
 V. Wolfeborough S. Bank, 24 C. C. 
 A., 195, 78 Fed., 517, 33 U. S. App., 
 734, it was held that the jurisdiction 
 of the federal court was not ousted 
 by the pendency of a prior suit be- 
 tween the same parties in a state 
 court, where the plaintiff in that ac- 
 tion had discontinued his suit and 
 the defendant had filed a motion to 
 dismiss and the receiver had never 
 had possession of the res. As to 
 the relative jurisdiction of a state 
 court which has entered judgment 
 in a mechanics' lien proceeding and 
 a federal court which has subse- 
 quently appointed a receiver who 
 has taken possession of the property 
 in question, see Rogers & Baldwin 
 Hardware Co. v. Cleveland B. Co., 
 132 Mo., 442, 34 S. W., 57, 31 L. R. 
 A., 335, 53 Am. St. Rep., 494. In 
 Guaranty Trust Co. v. Galveston C. 
 R. Co., 46 C. C. A., 305, 107 Fed., 
 311, it was held that the provision 
 of the statute of Texas authorizing 
 the appointment of receivers, defin- 
 ing their powers and duties and 
 regulating their proceedings is not 
 applicable to receiverships in the
 
 :hap. II.] 
 
 COURTS. 
 
 75 
 
 first to take actual possession of the property by its receiver.^S 
 And where, subsequent to the fihng of a bill for a receiver in 
 a creditor's suit in a federal court, but before the appointment 
 in that court, a bill is filed and a receiver is appointed in a state 
 court, the federal tribunal will refuse to recognize the receiver 
 of the state court, or to rescind its own appointment, even 
 though the bill as originally filed in the federal court was im- 
 perfect, and was amended subsequent to the appointment of the 
 receiver by the state court.56 And a federal court, having ac- 
 
 federal courts. In Rogers v. Chip- 
 pewa Circuit Judge, 135 Mich., 79, 
 97 N. W., 154, it was held that a 
 state court should not grant an in- 
 junction to restrain a receiver of a 
 telephone company who had been 
 appointed by a federal court from 
 enforcing a higher rate for service 
 than plaintiff claimed he was enti- 
 tled to charge, since his remedy in 
 such a case was by application to 
 the court which was administering 
 the estate. 
 
 55 Union Trust Co. v. The Rock- 
 ford, Rock Island & St. Louis R. 
 Co., 6 Biss., 197; S. C, 7 Chicago 
 Legal News, 33; Gaylord v. Fort 
 Wayne, M. & C. R. Co., 6 Biss., 
 286; Adams v. Trust Co., 15 C. C. 
 A., 1, 66 Fed., 617; Lewis v. Amer- 
 ican N. S. Co., 119 Fed., 391. And 
 see Liggett v. Glenn, 2 C. C. A., 
 286. 51 Fed., 381, 4 U. S. App., 438. 
 And see, ante, § 48. But see, contra, 
 Wilmer v. Atlanta & R. A. L. R. 
 Co., 2 Woods, 409 ; East Tennessee, 
 V. & G. R. Co. V. Atlanta & F. R. 
 Co., 49 Fed., 608, where it is held 
 that the court which first appoints 
 the receiver and obtains possession 
 of the property will retain jurisdic- 
 tion, notwithstanding the prior in- 
 stitution of a suit and prior service 
 of process or the granting of an in- 
 
 junction in the other forum; a dis- 
 tinction being drawn between prior 
 service of process, whicn gives ju- 
 risdiction over the person only, and 
 prior seizure of the property by the 
 appointment of a receiver, which 
 gives jurisdiction over the res. 
 
 56 Gaylord v. Fort Wayne, M. 
 & C. R. Co., 6 Biss., 286. "The 
 principle upon this subject," says 
 Drummond, J., p. 290, "is prop- 
 erly stated in the opinion of the 
 circuit court of the northern dis- 
 trict of Illinois, in the case of the 
 Rockford, Rock Island & St. 
 Louis Railroad Company, report- 
 ed in the 7th Chicago Legal 
 New-s, 33: that the court which 
 first takes cognizance of the con- 
 troversy is entitled to retain ju- 
 risdiction to the end of the litiga- 
 tion, and incidentally to take the 
 possession or control of the res, 
 the subject-matter of the con- 
 troversy, to the exclusion of all 
 interference from other courts of 
 concurrent jurisdiction; and that 
 the proper application of this 
 principle does not require that the 
 court which first takes jurisdic- 
 tion of the controversy shall also 
 first take the actual possession of 
 the thing in controversy. Then 
 the question is as to the applica-
 
 7^ 
 
 RECEIVERS. 
 
 [chap. II. 
 
 quired jurisdiction of the parties and of the subject-matter 
 in an action for the foreclosure of a trust-deed and having de- 
 creed a sale of the mortgaged premises, will not surrender its 
 jurisdiction in favor of a receiver subsequently appointed by 
 a state court, although no receiver has been appointed by the 
 federal court. ^7 And where a federal court has appointed a 
 
 tion of this rule or principle to 
 the present case. It is insisted 
 that because the bill was amend- 
 ed, and, between the date of the 
 filing of the bill and the amend- 
 ment, another creditor instituted 
 a suit in the state court, and had 
 a receiver appointed who took 
 possession, therefore this court 
 lost jurisdiction of the res, and 
 could not permit the imperfect al- 
 legations to be amended, and 
 thereby affect the assumed right 
 of the state court over the res. 
 The only question that arises in 
 this aspect of the case is whether 
 the federal court had jurisdic- 
 tion; if it had, then the principle 
 applies that no other court of 
 concurrent jurisdiction could in- 
 terfere with the res, which was 
 the subject-mater of the con- 
 troversy. It is to be presumed 
 that each court would equally pro- 
 tect the rights of the creditors 
 of the defendant. But which court 
 has first obtained jurisdiction and 
 has the right to call upon credit- 
 ors to come before it for the pro- 
 tection of their rights? In de- 
 ciding this question we have to 
 lay down a rule which would 
 apply to both courts, state and 
 federal; by which we would be 
 bound if the state court first ob- 
 tained jurisdiction of the res, and 
 by which the state courts should 
 also be bound when the federal 
 
 court has first obtained jurisdic- 
 tion; and we are not prepared to 
 hold that, because the allegations 
 in the bill are imperfectly stated, 
 or because an amendment is made 
 to the bill, that thereby the court 
 loses jurisdiction of the subject- 
 matter. All amendments ger- 
 mane to the bill and allowed by 
 the court relate back to the time 
 when the bill was filed, and are 
 considered as incorporated in, and 
 a part of, the original bill. And 
 it can not affect the question that 
 the amendment asks that the re- 
 ceiver shall do something else, as 
 by adopting a change in the man- 
 ner in administering the assets. 
 We think that there is no other 
 safe rule to adopt in our mixed 
 system of state and federal juris- 
 prudence, than to hold that the 
 court which first obtains jurisdic- 
 tion of the controversy, and 
 thereby of the res, is entitled to 
 retain it until the litigation is set- 
 tled. . . . Of course, in all 
 that has been said it is assumed, 
 what was the fact in this case, 
 that the bill was not only filed 
 first in this court, but that the 
 process was issued and duly 
 served upon the parties, and that 
 they were in court subject to its 
 jurisdiction before any proceed- 
 ing was instituted in the state 
 court." 
 57 Holland Trust Co. v. Inter-
 
 CHAP. II.] COURTS. 77 
 
 receiver of a corporation, its prior jurisdiction will not be de- 
 feated by a decree dissolving the corporation entered in a re- 
 ceivership proceeding subsequently instituted for that purpose 
 in a state court, since the receivership proceedings involve the 
 property of the corporation and not the corporation itself. ^^ 
 
 § 51. Proceedings in bankruptcy; state courts assert 
 exclusive jurisdiction, if first acquired. The doctrine un- 
 der consideration has been frequently applied in cases where 
 proceedings in bankruptcy have been instituted against a de- 
 fendant debtor in the United States courts, subsequent to the 
 appointment of a receiver over the debtor's effects in a state 
 tribunal, and in such cases the state courts have uniformly in- 
 sisted on maintaining their jurisdiction and disposing of the 
 assets.^^ Thus, where a receiver was appointed upon a judg- 
 ment creditor's bill in a state court, and the appointment was 
 completed and the debtor's property vested in the receiver, but 
 the debtor filed his petition in bankruptcy subsequent to the 
 filing of the creditor's bill, and was adjudicated a bankrupt 
 subsequent to the appointment of the receiver, it was held that 
 the assignee in bankruptcy took only such interests as the 
 debtor had when the assignee was appointed, and therefore took 
 the debtor's property subject to the lien acquired by the credi- 
 tor's suit; and the receiver was therefore directed to pay the 
 funds realized from the property to the plaintiff in the credi- 
 tor's suit, rather than to the assignee in bankruptcy.^^ So 
 where a receiver had been appointed in a creditor's suit, and 
 after the filing of the creditor's bill the defendant debtors filed 
 their petition in bankruptcy in the federal court, it was held 
 that the jurisdiction acquired by the latter court by the mere 
 
 national B. & T. Co., 29 C. C. A., 50 Wash., 642, 91 Pac, 774. See, 
 
 460, 85 Fed., 865, 52 U. S. App., also, Eisenmann v. Thill, 1 Cin- 
 
 599. cinnati Sup. Ct. R., 188; Spinning 
 
 58 Robinson v. Mutual R. L. I. v. Ohio Life Insurance and Trust 
 Co., 162 Fed., 794. Co., 2 Disney, 336. 
 
 59 Storm V. Waddell, 2 Sandf. 60 Storm v. Waddell, 2 Sandf. 
 Ch., 494; Watkins v. Pinkney, 3 Ch., 494. 
 
 Edw. Ch., 533; Springer v. Ayer,
 
 78 
 
 RECEIVERS. 
 
 [chap. II. 
 
 filing of the petition did not oust the previously acquired control 
 of the state court over the debtors' property, and that it was 
 at liberty to go on and operate upon the defendants and their 
 property until it became vested by assignment in their assignee 
 in bankruptcy. And without passing upon the right of the 
 judgment creditor in the state court to ultimately maintain 
 his lien upon the debtor's property, as against the as- 
 signee to be subsequently appointed in bankruptcy, it was 
 held that defendants should transfer their property to the re- 
 ceiver, notwithstanding the filing of their petition in bank- 
 ruptcy, ^i And when the state court has been the first to 
 
 61 Watkins v. Pinkney, 3 Edvv. 
 Ch., 533. This was a motion for 
 an attachment against defendants 
 in a creditor's bill, for refusing 
 to execute an assignment of their 
 property to a receiver, the 
 grounds of refusal being that, 
 since the filing of the creditor's 
 bill, the defendants had filed their 
 petition in bankruptcy. McCoun, 
 Vice-Chancellor, says, p. 534: 
 "The question is, whether the 
 court of chancery, under such 
 circumstances, will proceed to 
 compel a transfer and delivery of 
 property of the bankrupt to a 
 receiver, for the benefit of a par- 
 ticular judgment creditor. 1 
 thought proper, as it was some- 
 what a novel question, to confer 
 on the subject with the learned 
 judge of the United States dis- 
 trict court, in order to ascertain 
 his views and to avoid anything 
 like collision with the United 
 States courts in the exercise of 
 their jurisdiction under the bank- 
 rupt law. The act of congress 
 becomes the paramount law, to 
 which this court is bound to give 
 effect, even where it comes in 
 contact with the statute of the 
 
 state. The ground taken by the 
 defendant is, that the moment a 
 party presents his petition in 
 bankruptcy to a court of the 
 United States, that moment he 
 ousts the jurisdiction of the state 
 courts over him and his property, 
 and gives to the United States 
 courts sole and entire jurisdic- 
 tion to pass what property he 
 has at the time of presenting 
 his petition, to the assignee to 
 be appointed under the act. But 
 I find that the judges of the 
 United States courts are not dis- 
 posed to give such an effect to the 
 bankrupt law, because it is in 
 the power of the bankrupt to 
 withdraw his petition; and if he 
 could, by merely presenting his 
 petition, defeat the state court, he 
 could at any time afterwards 
 withdraw it, and thus defeat the 
 operation also of the bankrupt 
 law. The jurisdiction which the 
 district court acquires on the 
 presentation of a bankrupt's peti- 
 tion is not, therefore, such as to 
 defeat proceedings which may 
 have been commenced against 
 him in this court by creditor's 
 bill and which are pending at the
 
 CHAP. II.] 
 
 COURTS. 
 
 79 
 
 accjuire control over the subject-matter, and has appointed its 
 receiver, who has taken charge of the property in controversy, 
 a receiver subsequently appointed by the United States court 
 may be punished for contempt if he interferes with the receiver 
 
 time he presents his petition. 
 This court is to go on and 
 operate upon the defendant and 
 his property until such time as 
 he shall make his assignment; 
 and thus vest it in the assignee in 
 bankruptcy under the decree of 
 the United States court. This 
 proceeding is, nevertheless, sub- 
 ject to all questions that may 
 arise under the bankrupt law, 
 between the receiver appointed 
 by this court or the creditors 
 prosecuting here, and the as- 
 signee in bankruptcy. It does 
 not follow, from anything ex- 
 pressed in the act of congress, 
 that the proceedings in bank- 
 ruptcy are to interfere with the 
 proceedings in rem against a 
 debtor in the state courts. They 
 may, therefore, go on without 
 being considered as coming in 
 collision with the United States 
 courts under the bankrupt law. 
 But after the debtor's property 
 has been passed by decree to the 
 assignee in bankruptcy, this as- 
 signee can bring an action against 
 the party who has got possession 
 of the property of the debtor 
 under the proceedings here, and 
 the question will come up in 
 such action, or by petition, either 
 to the United States court or to 
 this court, and it will then be de- 
 termined whether the bankrupt 
 law is to distribute, or the par- 
 ticular creditor is to have the 
 benefit of it. In the English 
 courts, actions are very frequent- 
 
 ly brought by assignees of bank- 
 rupts' estates to recover property 
 which has got into the hands of 
 a creditor or other person to 
 whom the debtor had no right to 
 make an assignment. The ques- 
 tion now before this court is 
 merely one in relation to the 
 manner of proceeding, and 
 whether this court is to withhold 
 its jurisdiction and say, 'we have 
 no jurisdiction in the case; the 
 debtor has presented his petition 
 to a court of the United States, 
 and we have no further jurisdic- 
 tion in the matter.' It remains, 
 however, yet to be determined 
 whether the jurisdiction which 
 the court of chancery had is 
 taken away. And, until it is de- 
 termined, the court of chancery 
 will go on with this proceeding, 
 but without prejudice to the 
 rights of the assignee in bank- 
 ruptcy to be hereafter appointed. 
 Whether the creditor can main- 
 tain his right to what may pass 
 to the receiver in this cause must 
 be a subject for future considera- 
 tion; but as a matter of practice 
 here, we must go on without ref- 
 erence to the defendant's pro- 
 ceeding in the district court of 
 the United States. I must, there- 
 fore, order that the defendant ap- 
 pear before the master and do 
 what is required of him, and 
 make a transfer of such property 
 as he has and as the master may 
 direct, otherwise the attachment 
 must issue." It was held, how-
 
 80 RECEIVERS. [chap. II. 
 
 previously appointed by the state court.^^ gg when a receiver 
 is appointed in a state court, and after such order, but before 
 the fihng of the receiver's bond, the property in controversy, 
 consisting of boats, is hbeled under process from a United 
 States district court, upon filing his bond the receiver's title re- 
 lates back to the date of his appointment. And the court may, 
 in such case, enjoin the creditors from proceeding with their 
 action in the United States court.^^ 
 
 § 52. Jurisdiction of state courts, if first acquired, rec- 
 ognized by United States courts. The federal courts have 
 generally recognized the doctrine under discussion, and have 
 almost uniformly conceded the jurisdiction of the state tribu- 
 nals when the latter have first acquired control over the sub- 
 ject-matter and the parties, or when the receiver of the state 
 court has first acquired possession of the assets, even when 
 the conflict of jurisdiction has been presented to the United 
 States court in the course of proceedings in bankruptcy there. 
 Thus, when a state court has acquired prior jurisdiction over 
 the affairs of an insolvent corporation, and has appointed a re- 
 ceiver, w^ho is in possession and control of the property, a 
 federal court will not thereafter entertain a bill for a receiver 
 over the corporation.^* And the undoubted weight of author- 
 ity in the federal courts supports the proposition that when 
 the state courts have properly acquired control over the sub- 
 ject-matter in controversy, and have appointed receivers who 
 are in possession of the property or fund at the time of insti- 
 tuting proceedings in bankruptcy, the United States courts 
 will not interfere with the jurisdiction already acquired by the 
 state courts, but will respect the title of their receivers and 
 
 ever, that if the debtor had been 62 Spinning v. Ohio Life Insur- 
 
 declared a bankrupt, and had de- ance & Trust Co., 2 Disney, 336. 
 
 livered his property to his as- 63 Jn re Schuyler's S. T. B. Co., 
 
 signee, this would excuse him 136 N. Y., 169. 
 
 from making an assignment to 64 Judd v. Bankers & Merch- 
 
 the receiver, since the bankrupt ants Telegraph Co., 31 Fed., 182. 
 court would, in this event, have 
 put it out of his power to make 
 such assignment.
 
 CHAP. II.] COURTS. 81 
 
 their right to manage and control the property, at least until it 
 is impeached for some cause for which it is impeachable under 
 the bankrupt act. The jurisdiction of the state court having 
 properly attached, and its right to appoint receivers not being 
 questioned, the property of defendants is regarded as being 
 lawfully in possession of that court by its receivers, and the 
 federal court has no such superior jurisdiction or supervisory 
 power over the state tribunal as will warrant it in taking the 
 property out of the receivers' possession, or interfering with its 
 management.65 fhe bankrupt court will not, therefore, upon 
 the petition of the assignee in bankruptcy, direct its marshal to 
 take the assets out of the hands of the receivers, and it may en- 
 join the bankrupts from interfering with the property in the 
 possession of the receivers.^^ go when a receiver is appointed 
 by a state court over mortgaged premises, in an action for the 
 foreclosure of a mortgage, he will not be dispossessed by an 
 assignee in bankruptcy subsequently appointed over the mort- 
 gagor's estate in a federal court.67 And when a state court, 
 through its receiver, is in possession of the property of a judg- 
 ment debtor, who is afterwards adjudged a bankrupt by a 
 federal court, the latter court will not sanction the forcible 
 seizure of the property in the receiver's possession and its de- 
 livery to the assignee, but will leave the assignee to assert his 
 title by proceedings in accordance with the bankrupt act.^^ 
 So it is held that an assignee in bankruptcy is not entitled to a 
 
 65 Sedgwick v. Menck, 6 Blatchf., 67 Davis v. The Railroad Com- 
 156; S. C, 1 Bank. Reg., Second pany, 1 Woods, 661. 
 Edition, 675; Beecher t;. Bininger, 68 /« re Hulst, 7 Benedict, 17. 
 7 Blatchf., 170; Alden v. Boston, But in such case, in an examina- 
 Hartford & Erie R. Co., 5 Bank. tion before the register in bank- 
 Reg. 230; In re Clark & Bininger, ruptcy, concerning the affairs of 
 4 Benedict, 88; Davis v. The Rail- the bankrupt, the receiver may be 
 road Company, 1 Woods, 661. But examined as a witness, and may 
 see, contra, In re Merchants In- be compelled to produce the 
 surance Co., 3 Biss., 162; Piatt v. books of the bankrupt for exami- 
 Archer, 9 Blatchf., 559. nation. In re Hulst, 7 Benedict, 
 
 66 /,t re Clark & Bininger, 4 40. 
 Benedict, 88. 
 
 Receivers — 6.
 
 82 RECEIVERS. [chap. II. 
 
 receiver in the first instance, upon a bill filed by him, to take 
 possession of the bankrupt's property held by receivers appoint- 
 ed in a state court before the proceedings in bankruptcy. And 
 the fact that defendants in such suit, as receivers of the state 
 court, assert a prior jurisdiction acquired by that tribunal, and 
 claim thereupon the pov^er of the state court to administer it, 
 constitutes no ground for the interference of the United States 
 court by appointing a receiver in limine, especially when it is 
 not shown that the property is in peril of waste or loss in cus- 
 tody of the state court, or that the receivers are violating their 
 duty, or that they are irresponsible or threaten the removal of 
 the property. ^9 /^i^(^ a^^ action can not be maintained in the 
 United States courts, in behalf of an assignee in bankruptcy, to 
 compel a receiver appointed by a state court in a creditor's suit, 
 before the proceedings in bankruptcy, to deliver up the property 
 of the debtor to the assignee. '''^ It would seem, however, to be 
 otherwise when the proceedings in the state court are entirely 
 unauthorized and void, and in such case the decree of the state 
 court appointing a receiver is held to constitute no defense to 
 an action by the assignee against the receiver concerning the 
 property. '^1 
 
 § 53. Contrary doctrine asserted by United States 
 courts. While, as is thus shown, the federal courts sitting 
 in bankruptcy have generally recognized the jurisdiction of the 
 state tribunals, and the possession of their receivers, when ac- 
 quired previously to the bankruptcy proceedings, there have 
 been cases holding a contrary doctrine, and insisting upon the 
 exclusive control of the federal court, even though the state 
 court had first acquired jurisdiction, and though its receiver 
 was first in possession. Thus, it has been held that the ap- 
 pointment of a receiver over an insolvent corporation by a 
 state court, under proceedings instituted by the attorney-gen- 
 
 69 Beecher v. Bininger, 7 T'O Sedgwick v. Menck, 6 Blatchf., 
 
 Blatchf., 170. See contra, Piatt v. 156; S. C, 1 Bank. Reg., Second 
 
 Archer, 9 Blatchf., 559, where the Edition, 675. 
 
 assignee was himself appointed "J"! Buchanan v. Smith, 16 Wall, 
 
 a receiver in such a case. 309; S. C, 7 Bank. Reg., 513.
 
 CHAP. II.] COURTS. 83 
 
 eral of the state for the dissolution of the corporate body in 
 conformity with the laws of the state, was a "taking on legal 
 process," within the meaning of the thirty-ninth section of the 
 national bankrupt act of 1867; and that such a case did not 
 present a question of concurrent jurisdiction between the state 
 and federal tribunals, since the exclusive jurisdiction of the 
 United States court attaches whenever insolvency intervenes, 
 so as to render the debtor a proper subject for the operation of 
 the bankrupt act. And while, in such case, the federal court 
 may recognize the proceedings in the state court, so far as the 
 jurisdiction there is attempted to be exercised for the dissolu- 
 tion of the corporation, it is held that it will not allow the re- 
 ceiver of the state court to retain control of the assets of the 
 corporation, since the federal tribunal exercises exclusive juris- 
 diction in cases of bankruptcy. ''^ Sq where a creditor of an 
 insolvent insurance company had instituted proceedings to 
 obtain a receiver in a state court, and to set aside an assignment 
 by the company of all its property to a trustee, and before the 
 state court had taken any action in the matter a bill was filed 
 in the federal court by non-resident creditors for the same relief, 
 that court took jurisdiction and appointed a receiver, notwith- 
 standing the pendency of the action in the state court.'^^ The 
 doctrine of the cases here cited, however, is plainly repugnant 
 to the weight of authority, as shown in the preceding section. 
 
 § 54. The general doctrine applied to cases of railway 
 mortgages. As illustrating the general doctrine under 
 discussion, when a trustee in a deed of trust securing the bond- 
 holders of a railway company files his bill for a foreclosure in 
 the federal court, and pending this proceeding, and without 
 leave of this court, he brings an action to foreclose the same 
 
 72 In re Merchants Insurance of a corporation, the receiver 
 
 Co., 3 Biss., 162. And see Piatt v. previously appointed by a federal 
 
 Archer, 9 Blatchf., 559. In City court was neither a necessary nor 
 
 Water Co. v. State, 88 Tex., 600, a proper party. 
 .32 S. W., 1033, it was held that in T3 Buck v. Piedmont & Arling- 
 
 an action brought by the state ton Life Ins. Co., 4 Fed., 849; S. 
 
 for the forfeiture of the charter C, 4 Hughes, 415.
 
 84 RECEIVERS. [chap. II. 
 
 trust deed in a state court, where he obtains a receiver and a 
 decree of foreclosure, and sells the property, the United States 
 court nevertheless retains its jurisdiction. It may, therefore, 
 upon a proper show^ing of the necessity for such relief, appoint 
 a receiver upon the application of a bondholder, the interfer- 
 ence of the state court being regarded as unauthorized, and as 
 not affecting the previously acquired jurisdiction of the fed- 
 eral court. "^-^ Nor will the state courts entertain an action for 
 the foreclosure of a mortgage, or to avoid and set aside a 
 previous foreclosure by the mortgagee, when the mortgaged 
 premises are in the possession of a receiver duly appointed by 
 a United States court having jurisdiction for that purpose, 
 since this would necessarily disturb the possession of the re- 
 ceiver, which is the possession of the court appointing him. 
 In such a case relief should be sought in the federal court, which 
 is the more appropriate forum for determining the rights of the 
 parties, it having already taken possession of the property by 
 its receiver, and being empowered to protect the interests of all 
 parties in the distribution of the mortgage fund.'^^ 
 
 § 55. Bill for account not entertained by United States 
 court against receiver of state court. When a state court 
 has acquiredtjurisdiction of an action against a railway com- 
 pany for the forfeiture of its franchise and for a receiver, and 
 has appointed a receiver and declared the franchise forfeited 
 and the corporation dissolved, a federal court will not entertain 
 a bill against the receiver and the railway company for an 
 accounting, but will leave the person aggrieved to pursue his 
 
 74 Bill V. New Albany, etc., R. that the possession of a railway 
 Co., 2 Biss., 390. See, also, Union by a receiver appointed in a state 
 Trust Co. V. The Rockford, Rock court would not bar proceedings 
 Island & St. Louis R. Co., 6 Biss., for the foreclosure of a mortgage 
 197; S. C, 7 Chicago Legal News, upon the property of the railway 
 33. in a federal court, and that the 
 
 75 Milwaukee & St. Paul R. Co. latter court might proceed with 
 V. Milwaukee & Minnesota R. Co., the foreclosure, but without 
 20 Wis., 165. But in Mercantile interfering with the receiver, or 
 Trust Co. V. Lamoille Valley R. with his possession of the prop- 
 Co., 16 Blatchf., 324, it was held erty.
 
 CHAP. II.] COURTS. 85 
 
 remedy by applying to the state court, which alone has control 
 over the receiver.'^^ 
 
 § 56. When bill for receiver by one partner in state 
 court an act of bankruptcy. Where a business firm is in a 
 condition of actual insolvency, and one partner files a bill in a 
 state court for a dissolution of the firm, and for an accounting 
 and a receiver, his proceeding is regarded as an act of bank- 
 ruptcy within the meaning of the bankrupt law, the appoint- 
 ment of the receiver being a taking of the debtor's property on 
 legal process, and its effect being to delay and defeat the opera- 
 tion of the bankrupt act."^"^ 
 
 § 57. Receiver in behalf of assignee in bankruptcy of a 
 copartnership. Upon a bill by the assignee in bankruptcy 
 of a copartnership to set aside an assignment for the benefit of 
 creditors, made by the firm when in a condition of insolvency, 
 and to restrain the assignees from doing anything under such 
 assignment, it is proper that a receiver be appointed by the 
 bankrupt court to take charge of the property, and hold it for 
 the benefit of all creditors who may have an interest therein."^^ 
 
 § 58. Conflict between state and federal court ground 
 for a receiver. A conflict of jurisdiction between a state 
 and federal court concerning property in controversy, there 
 being actions pending in each tribunal by conflicting claimants 
 to the property, and there being imminent danger of collision 
 between the executive officers of the different courts in the en- 
 forcement of the process of their courts, has been held suffi- 
 cient ground to warrant the federal court in granting an in- 
 junction and appointing a receiver over the property, when 
 there was a probability of a bitter and long continued litiga- 
 tion at law, and the property was of a perishable nature and lia- 
 ble to be rendered entirely valueless, unless taken possession of 
 by a receiver and sold.'^^ 
 
 76 Conkling V. Butler, 4 Biss., 78 Sedgwick v. Place, 3 Bene- 
 22. diet, 360. 
 
 77 In re Bininger, 7 Blatchf., 79 Crane v. McCoy, 1 Bond, 422. 
 262.
 
 86 RECEIVERS. [chap. II. 
 
 § 59. Receiver of railway appointed by United States 
 court not subject to control of state court. When a re- 
 ceiver of a railway company is appointed by a United States 
 court, and he is charged with the duty of operating the road, 
 and is accountable to the court for the proceeds, such proceeds 
 are beyond control of the state courts, the receiver's possession 
 being the possession of the court appointing him. The state 
 courts, therefore, have no authority to enforce as against such 
 receiver the payment of a judgment recovered against the 
 railway for damages resulting from the killing of cattle, even 
 under a statute of the state providing a process for the en- 
 forcement of judgments against railways out of funds in the 
 hands of their receivers or agents. The judgment creditor, in 
 such case, should apply to the federal court, either for leave 
 to sue the receiver, or for an order on him to pay the judg- 
 ment.^<^ And when a bill has been filed in the federal court for 
 a receiver over the property of a railway company and after- 
 wards an injunction is granted by a state court enjoining the 
 company and all persons acting for it from operating the line 
 over certain property, such injunction is inoperative, and a 
 receiver, although not appointed until after the granting of the 
 injunction, can not be held guilty of contempt for continuing to 
 operate the road in violation of the writ.^^ 
 
 § 60. The same; Wisconsin doctrine. It has been held 
 in Wisconsin, that a state court might entertain an action 
 against a receiver of a railway appointed by a federal court, 
 and might proceed to judgment therein, without leave of the 
 latter court to bring such action, provided there was no actual 
 interference with the receiver's possession.^2 'phis doctrine is, 
 however, plainly repugnant to the well-established principle, 
 hereafter discussed, that no action can be maintained against 
 a receiver without leave of the court from which he derives his 
 
 80 Ohio & Mississippi R. Co. v. 82 Kinney v. Crocker, 18 Wis., 
 Fitch, 20 Ind., 498. 74. 
 
 81 State V. Miller, 54 Kan., 244, 
 38 Pac, 269.
 
 CHAP. II.] COURTS. 87 
 
 appointment.^^ And it is not perceived that the rule requir- 
 ing such permission as a condition precedent to bringing an ac- 
 tion against a receiver is in any manner affected by the fact 
 that he may have been appointed by a federal court and the ac- 
 tion be brought against him in a state court, or vice versa. 
 
 § 60a. Federal jurisdiction in action by receiver of Unit- 
 ed States court is independent of citizenship and amount. 
 Where a receiver has been appointed by a federal court in a 
 cause which properly comes within the jurisdiction of that 
 court, all actions brought by the receiver for the collection and 
 preservation of assets or for the protection of the property in 
 his custody and all other actions which may become necessary 
 for the proper administration of the estate under his control 
 are to be regarded as ancillary to the main cause, and are there- 
 fore not dependent upon diversity of citizenship or the amount 
 involved, and accordingly such suits may be instituted and 
 maintained in the federal courts regardless of the citizenship 
 of the parties or the amount in controversy.^* 
 
 § 606. Action against receiver of United States court 
 is removable regardless of citizenship and amount. The 
 rule announced in the preceding section is equally applicable 
 where the action is brought against the receiver. Where, 
 therefore, a federal court has appointed a receiver and through 
 him has assumed the exclusive control and management of the 
 property which has come into his possession, any action or 
 proceeding brought against the receiver which in any way 
 tends to control his official conduct in the management of the 
 property or which affects his administration of the estate in 
 his custody is held to be ancillary to the principal action and as 
 such is removable to the federal court from the state court if 
 instituted there, and the right of removal exists regardless of 
 
 83 See § 254, post, and authori- 687, 36 L. R. A., 228; Hampton 
 ties there cited. Roads R. & E. Co. v. Newport 
 
 84 White V. Ewing, 159 U. S., News etc., Co., 131 Fed., 534; 
 36, 15 Sup. Ct. Rep. 1018; Keihl Cole v. Philadelphia & E. R. Co., 
 V. City of South Bend. 22 C. C. A., 140 Fed., 944; Brown v. Allebach, 
 618, 76 Fed., 921, 44 U. S. App., 156 Fed., 697.
 
 88 RECEIVERS. [chap. II. 
 
 the citizenship of the parties or the amount in controversy. ^5 
 Thus, an action for a writ of mandamus brought by the attor- 
 ney-general in a state court against a receiver appointed by a 
 federal court to compel compliance with a statute of the state 
 is removable.^^ So an action brought in a state court against 
 the receiver of a railway company appointed by a federal court 
 to recover damages for personal injuries in an amount less 
 than two thousand dollars may be removed. ^"^ And where the 
 action is brought against the receiver and against others who 
 are citizens of the same state as the plaintiff to establish a 
 joint liability of all the defendants, the action is still to be re- 
 garded as one arising under the laws and constitution of the 
 United States and is therefore removable.^^ 
 
 § 61. State court will not grant writ of assistance 
 against receiver of United States court. When a receiver, 
 acting under appointment from a United States court, is in 
 actual possession of property, a state court will not grant a writ 
 of assistance to a subsequently appointed receiver in the state 
 tribunal, to enable him to get possession of the property. The 
 right to possession, under such circumstances, will not be de- 
 termined upon a mere motion, since the possession of the re- 
 ceiver of the federal court is regarded as that of a stranger, and 
 to be determined only by an action and not upon motion. ^^ 
 
 § 62. Right of action of receiver of United States court 
 no greater than of state court. The fact that a receiver 
 derives his appointment from a United States court does not 
 
 85 State v. Northern Pac. R. of removal of a receiver of a rail- 
 Co., 75 Fed., 333; Carpenter v. way company, see post, § 395c. 
 N.-:rtb2rr. Pic. R. Co., 75 Fed., 86 State v. Northern Tac. R. Co., 
 850; Shmney v. i-^ori?^ A'tiK^/ican 75 Fed., 333. 
 
 S., L. & B. Co., 97 Fed., 9 ; Land- 87 Carpenter v. Northern Pac. 
 
 ers V. Felton, 73 Fed., 311. In R. Co., 75 Fed., 850. 
 
 Gableman v. Peoria, D. & E. R. 88 Landers v. Felton, 73 Fed., 
 
 Co., 82 Fed., 790, the court qualify 311. Contra, Shearing v. Trum- 
 
 the rule as above announced by bull, 75 Fed., 33. 
 
 limiting it to cases where the 89 Gelpeke v. Milwaukee & 
 
 amount in controversy exceeds Horicon R. Co., 11 Wis., 454, 
 
 the jurisdictional amount of two opinion of Dixon, C. J., and 
 
 thousand dollars. As to the right Paine, J.
 
 CHAP. II.] COURTS. 89 
 
 confer upon him any greater power or privileges in respect to 
 bringing actions in the state courts than if he were appointed 
 by those courts, and the question of comity between the two 
 tribunals will not be considered in such case.^*^ 
 
 § 62a. Power of United States Supreme Court to re- 
 view final decision of state court. The Supreme Court of 
 the United States is empowered to review the final judgment 
 of the highest court of a state in all cases wherein any title, 
 right, privilege or immunity is claimed under any authority 
 exercised under the United States, the decision in which court 
 is against the title, right, privilege or immunity so claimed. ^^ 
 Under this power, when a receiver of a railway, appointed by 
 and operating the road under the order of a United States cir- 
 cuit court, claims immunity from a suit against him in a state 
 court without previous leave of the court by which he is ap- 
 pointed, and when the decision of the highest court of the 
 state is adverse to such claim, the receiver is entitled to a review 
 of such ruling upon writ of error from the Supreme Court of 
 the United States. But, in such case, the question whether the 
 receiver is liable for the acts of his predecessor in office is not 
 a question of federal law, but one of general jurisprudence.^^ 
 
 90 Battle V. Davis, 66 N. C, 252. 92 McNulta v. Lochridge, 141 
 
 91 R. S. U. S., § 709. U. S., 327, 12 Sup. Ct. Rep., 11.
 
 CHAPTER III. 
 
 OF THE SELECTION AND ELIGIBILITY OF THE RECEIVER. 
 
 § 63. Reference to master in chancery to select; English and New 
 York practice. 
 
 64. Interference with master's selection. 
 
 65. Discretion of court in selection of receiver rarely interfered 
 
 with; may consult with counsel. 
 
 66. When appellate court may interfere. 
 
 67. Relationship to the parties as affecting eligibility. 
 
 68. Person in defendant's interest; solicitor eligible; familiarity 
 
 with the property. 
 
 69. Eligibility as affected by distant residence; residence in state 
 
 unnecessary. 
 
 70. Person not eligible whose duty it is to watch receiver; solicitor; 
 
 master in chancery; barrister; peer; party to the cause; mem- 
 ber of reorganization committee; creditor. 
 
 71. Clerk of court not a receiver ex officio; clerk and master. 
 
 72. Officer of corporation usually ineligible as its receiver; when 
 
 eligible; shareholder; creditor. 
 
 73. One corporation may be receiver of another. 
 
 74. Trustee not usually eligible; when eligible. 
 
 75. Next friend of infants ineligible. 
 
 76. Mortgagee eligible as receiver of mortgaged premises. 
 
 77. Receiver ox debtor ineligible as his assignee in bankruptcy. 
 
 78. Administrator of deceased partner eligible as receiver of firm 
 
 assets. 
 
 79. Particular person nominated in bill; consent of parties. 
 
 80. Effect of interest as stockholder and director of a plaintiff cor- 
 
 poration. 
 
 81. Mortgagee of foreign estates eligible. 
 
 81a. Objection to eligibility must be made in apt time; how waived. 
 
 § 63. Reference to master in chancery to select; Eng- 
 lish and New York practice. A receiver being an impar- 
 tial person as between the parties, and being the officer and rep- 
 resentative of the court in the management and control of the 
 property or fund in controversy, considerable importance at- 
 taches to the question of his selection as v^ell as to his qualifica- 
 
 90
 
 CHAP. Ill,] SELECTION AND ELIGIBILITY. 91 
 
 tions and competency for the management of the trust commit- 
 ted to his charge. The usual course of practice in the EngHsh 
 Court of Chancery, with reference to the selection of a re- 
 ceiver, was to refer the matter to a master in chancery to make 
 the selection. The parties in interest in the cause were then at 
 liberty to appear before the master and to nominate suitable 
 persons for the office, whose qualifications and competency were 
 passed upon by the master, who made the appointment and re- 
 ported his selection to the court.^ A similar practice also 
 prevailed under the New York chancery system prior to the 
 adoption of the code of procedure in that state.2 
 
 § 64. Interference with master's selection. When the 
 case has been referred to a master in chancery to make the 
 appointment, and he has made his report approving and recom- 
 mending the appointment of a particular person, his report and 
 approval should stand until the person so recommended is 
 impeached as an improper person.^ And the courts are ex- 
 ceedingly averse to interfering with the discretion exercised 
 by the master in making his selection ; and when, after due in- 
 vestigation, he has made the appointment and reported to the 
 court, it will not interfere with the selection, or entertain excep- 
 tions to the appointment, unless some good and substantial 
 objection can be shown.^ The reason for the reluctance thus 
 manifested in interfering with the appointment of the master 
 
 1 For illustrations of this prac- Dawkin, 3 Bro. C. C, 508. And 
 tice in the English Chancery, see see McGilliard v. Donaldsonville 
 Thomas v. Dawkin, 1 Ves. Jun., F. & M. Works, 104 La., 544, 29 
 452; S. C, 3 Bro. C. C, 508; Gar- So., 254, 81 Am. St. Rep., 145. 
 land V. Garland, 2 Ves. Jun., 137; •* Tharpe v. Tharpe, 12 Ves., 
 Anonymous, 3 Ves., 515; Wilkins 317; In re Eagle Iron Works, 8 
 V. Williams, id., 588; Tharpe v. Paige, 385; Thomas v. Dawkin, 
 Tharpe, 12 Ves., 317; Wynne v. 1 Ves. Jun., 452. And see Gar- 
 Lord Newborough, 15 Ves., 283; land v. Garland, 2 Ves. Jun., 137; 
 Creuze v. Bishop of London, 2 Anonymous, 3 Ves., 515; Wilkins 
 Bro. C. C, 253. v. Williams, id., 588. In Tharpe 
 
 2 See /« re Eagle Iron Works, v. Tharpe, 12 Ves., 317, the 
 8 Paige, 385. master had appointed a receiver 
 
 3 Creuze v. Bishop of London, of the estate of an infant, upon 
 2 Bro. C. C, 253; Thomas v. the recommendation of the only
 
 92 
 
 RECEIVERS. 
 
 [chap. III. 
 
 is found in the necessity which exists on the part of the courts 
 of intrusting a considerable degree of discretion to the judg- 
 ment of officers, such as masters in chancery, whom they have 
 appointed for the examination of complicated matters of de- 
 tail.^ The court will not, therefore, disturb an appointment 
 made by the master merely because it may be of opinion that a 
 better selection could have been made. And to induce the 
 court to interfere, it must either be shown that the person ap- 
 pointed by the master is legally disqualified, or that his situation 
 is such as to render it probable that the interests of the parties 
 to the litigation will not be properly managed if intrusted to 
 his hands.^ If, therefore, both of the persons proposed to the 
 master for the receivership are, as to character and qualifica- 
 tions, of equal standing, the court will not interfere with the 
 appointment.'^ And while the party complaining of the mas- 
 ter's selection will not be precluded from making a special case 
 to be presented impeaching the master's judgment, yet upon 
 
 trustee named in the testator's 
 will, who had acted in the 
 management of the estate. Upon 
 exceptions to the master's report 
 as to the appointment, Lord Er- 
 skine observed, p. 319, as follows: 
 "The cases cited are built upon 
 principles that are not peculiar 
 to this court. All courts place a 
 degree of discretion in officers 
 appointed for the management of 
 concerns full of detail and compli- 
 cated circumstances; and those 
 who impeach the judgment of 
 those officers upon such points 
 must show a reason for the ex- 
 ception. Lord Anvanley, there- 
 fore, in Bowersbank v. Colasseau, 
 3 Ves., 164, states truly that the 
 judgment of the master is to be 
 disturbed only upon special 
 grounds, a strong case to show 
 that the person appointed ought 
 not to be receiver, and the court 
 
 will not enter comparisons. No 
 objection appears to the person 
 appointed in this instance. He is 
 a land surveyor, acquainted with 
 business likely to qualify him for 
 such an office; a fit person, there- 
 fore, in that respect. He was 
 recommended to the master by 
 the trustee, in whom the testator 
 reposed this peculiar trust; not 
 selected by the master at his own 
 discretion or pointed out to him 
 by accident. His residence at the 
 distance of fourteen miles only 
 is no objection. The person pro- 
 posed is, therefore, altogether un- 
 exceptionable." And the excep- 
 tions were overruled. 
 
 5 Tharpe v. Tharpe, 12 Ves., 
 317. 
 
 6 In re Eagle Iron Works, 8 
 Paige, 385. 
 
 7 Thomas v. Dawkin, 1 Ves., 
 Jun., 452; S. C, 3 Bro. C. C. 508.
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 93 
 
 the naked allegation that the person rejected by the master was 
 more competent than another, the court will not investigate the 
 particular reason why he preferred the one to the other.^ If, 
 however, the court is of opinion that the master has not given 
 proper attention to the circumstances of the case in making the 
 appointment, it is proper to require him to revise his report.^ 
 § 65. Discretion of court in selection of receiver rarely 
 interfered with; may consult with counsel. The consider- 
 ations stated in the preceding section as applicable to the ap- 
 pointment when made by a master in chancery upon a refer- 
 ence are, of course, equally applicable when the appointment 
 is made by the court itself without a reference. And in all 
 such cases the selection and appointment of a particular person 
 for the receivership, out of several candidates proposed, is re- 
 garded as a matter of judicial discretion, to be determined by 
 the court according to the circumstances of the case.^*^ The 
 exercise of this, like all other matters of judicial discretion, will 
 rarely be interfered with by an appellate tribunal. ^^ And it 
 may be asserted as a general rule, that, to induce an appellate 
 court to interfere with the decision of an inferior tribunal in 
 the selection of a receiver, it is necessary to show some "over- 
 whelming objection" in point of propriety, or some fatal ob- 
 jection upon principle, to the person named.12 And the fact 
 
 8 Anonymous, 3 Ves., 515. Pr., 208. As to the inadvisability 
 
 9 Wynne .v. Lord Newbor- of appointing more than one re- 
 ough, 15 Ves., 283. ceiver, see Battery Park Bank v. 
 
 10 Perry v. Oriental Hotels Co., Western C. Bank, 126 N. C, 531, 
 L. R., 5 Ch. App., 420; Cookes v. 36 S. E., 39. For considerations 
 Cookes, 2 De G., J. & S., 526; affecting eligibility as constitut- 
 Williamson v. Wilson, 1 Bland, ing ground for removal, see post, 
 418; Jones v. Purcell, 20 App. D. § 821. 
 
 C, 209; Patterson v. Northern H Cookes v. Cookes, 2 De G., J. 
 Trust Co., 230 111., 334, 82 N. E., & S., 526; Perry v. Oriental Ho- 
 837; Coltrane v. Templeton, 45 tels Co., L. R., 5 Ch. App., 420. 
 C. C. A., 328, 106 Fed., 370. See, 12 Cookes v. Cookes, 2 De G., J. 
 as to personal considerations & S., 526; McGilliard v. Donald- 
 governing the court in the choice sonville F. & M. Works, 104 La., 
 of a receiver, Smith v. New York 544, 29 So., 254, 81 Am. St. Rep., 
 Consolidated Stage Co., 28 How. 145; In re Eckhardt Mfg. Co.,
 
 94 
 
 RECEIVERS. 
 
 [chap. III. 
 
 that there are great disputes and differences between the parties 
 in interest, one of whom has been appointed receiver, does not 
 of itself constitute suflicient ground for reversing the appoint- 
 ment made by the court below.^^ And while the selection must 
 ultimately rest with the court, there is no objection to the 
 court's consulting with counsel or with the parties interested as 
 to the fitness of the person to be appointed. ^^ 
 
 § 66. When appellate court may interfere. When, 
 however, the objection urged to the fitness or competency of 
 the person selected by the inferior court is presented as a ques- 
 
 114 La., 119, 38 So., 78; Gypsum 
 P. & S. Co. V. Adsit, 105 Mich., 
 497, 63 N. VV., 518; Shannon v. 
 Hanks, 88 Va., 338, 13 S. E., 437. 
 Cookes V. Cookes, 2 De G., J. & 
 S., 526, was a motion before the 
 Court of Appeal in Chancery, to 
 discharge an order of the Vice- 
 Chancellor, appointing one of the 
 defendants in an action to carry 
 into execution the trusts of a will, 
 receiver of the rents of the real 
 estate in controversy, without 
 salary. Lord Justice Knight 
 Bruce observes, p. 528: "Upon a 
 mere question of the exercise of 
 discretion in the choice of one 
 out of several candidates, if I may 
 use the expression, proposed be- 
 fore the Vice-Chancellor for the 
 ofifice of receiver, the court will 
 find, according to its old practice 
 and habits, the greatest difficulty 
 in acting against the exercise of 
 that discretion. To induce the 
 court to act in such a case, 
 against the decision of the lower 
 judge by whom the selection has 
 been made, it would be necessary 
 to find some, if I may use the ex- 
 pression, overwhelming objection 
 in point of propriety of choice, or 
 some objection fatal in principle." 
 
 13 Cookes V. Cookes, 2 De G.. J. 
 & S., 526. Upon this point. Lord 
 Justice Turner observes as fol- 
 lows, p. 531: "Two points have 
 been urged in support of this ap- 
 peal as questions of principle. 
 First, it is said that there are 
 great disputes and differences in 
 this family, and that it is not for 
 the interest of the estate that 
 this gentleman should be appoint- 
 ed receiver. But if the existence 
 of differences and disputes is to 
 be considered as a question of 
 principle afifecting the appoint- 
 ment of a receiver, it is obvious 
 that there could hardly be any 
 case in which it would not be 
 competent to the parties to come 
 here, by way of appeal from the 
 appointment of a receiver; for in 
 cases where receivers are ap- 
 pointed it is almost always in 
 consequence of the differences 
 and disputes between the parties. 
 I think, therefore, that the differ- 
 ences between these parties, un- 
 fortunate as they are, furnish no 
 ground whatever for this appli- 
 cation." 
 
 14 Polk V. Johnson, 160 Ind., 292, 
 66 N. E., 752, 98 Am. St. Rep., 274.
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 95 
 
 tion of principle, and not one of mere expediency, an appellate 
 tribunal will sometimes interfere with the appointment of the 
 inferior court. Thus, when it is obvious that the person pro- 
 posed by defendants for the receivership, and rejected, is a 
 proper and unobjectionable person for the management of the 
 estate, and that the appointment of another person would result 
 in injury to the estate by causing very great additional expense, 
 the appointment of such other person may be revoked, and the 
 person proposed by defendants may be appointed. ^^ 
 
 § 67. Relationship to the parties as affecting eligibility. 
 As regards the question of relationship of the person appointed 
 to either of the parties in interest in the litigation, while the 
 fact of such relationship is not, per se, an absolute disqualifica- 
 tion for the receivership, yet it must be allowed to have its prop- 
 er weight in connection with other circumstances. And in a 
 case where the person appointed was the brother of one of the 
 parties to the action and the son of one claiming to be a large 
 creditor, and was admitted by the plaintiff to have taken an ac- 
 tive part in the controversy as his friend and agent, he was 
 regarded as too much enlisted in the cause to permit him to be 
 as unbiased and impartial as a receiver should be, and was 
 therefore removed. ^^ But it is not regarded as an abuse of ju- 
 dicial discretion to appoint as receivers the attorneys of the re- 
 spective parties to the cause, and the action of the court in 
 making such appointment will not be interfered with upon ap- 
 peal. ^"^ And a defendant himself has been appointed when he 
 was already in possession of the estate in controversy, and was 
 otherwise a fit and competent person for its management, no 
 cause being shown against his appointment.^^ 
 
 15 Perry v. Oriental Hotels Co., and close up the business in ques- 
 L. R., 5 Ch. App., 420. tion, see Hanover Fire Insurance 
 
 16 Williamson v. Wilson, 1 Co. v. Germania Fire Insurance 
 Bland, 418. As to the circum- Co., 33 Hun, 539. 
 
 stances which will justify the ap- 1'^ Shannon v. Hanks, 88 Va., 
 
 pointment of one of the parties to 338, 13 S. E., 437; Fisher v. Trust 
 
 a business transaction, when the Co., 138 N. C, 90, 50 S. E., 592. 
 
 parties themselves had agreed 18 Robinson v. Taylor, 42 Fed., 
 
 that such person should manage 803.
 
 96 RECEIVERS. [chap. III. 
 
 § 68. Person in defendant's interest; solicitor eligible; 
 familiarity with the property. It is regarded as exceed- 
 ingly objectionable to appoint as receiver a person who is in 
 the interest of the defendant, against whom the appointment 
 is made.19 And it is improper to appoint as receiver one of the 
 plaintiffs at whose instance the relief is sought. 20 But a 
 solicitor not concerned in the litigation is eligible to a receiver- 
 ship, although if appointed he can not act as solicitor in any pro- 
 ceedings which it may be necessary for him to take as re- 
 ceiver.2i But it is improper to appoint as receiver over a par- 
 ticular kind of property a person who is entirely unfamiliar 
 therewith, even though he gives an undertaking to attend to 
 the directions of another person familiar with the management 
 of the property, since it is always preferable that the receiver 
 appointed should act upon his own responsibility.22 
 
 § 69. Eligibility as affected by distant residence; resi- 
 dence in state unnecessary. The fact of the receiver chos- 
 en residing at a great distance from the estate or property which 
 is to be subjected to his management and control, while not 
 regarded as an absolute disqualification for the office, is a cir- 
 cumstance which should be taken into consideration in making 
 the appointment. 23 But where the person appointed receiver of 
 an estate was a land surveyor, and well qualified for the man- 
 agement of the property, the fact of his residence at a distance 
 of fourteen miles from the estate over which he was appointed 
 
 19 Lupton V. Stephenson, 11 Ir. ceiver and of the judge appoint- 
 Eq., 484. See, also, Finance Co. ing him by reason of their inter- 
 s'. Charleston, C. & C. R. Co., 45 est in the administration of the 
 Fed., 436, where it is held that trust estate. 
 
 "unless in cases of imperative ne- 20 Jordan v. Jordan, 121 Ala., 
 
 cessity, no person will be ap- 419, 25 So., 855. 
 
 pointed receiver of a railway 21 Wilson v. Poe, 1 Hog., 332. 
 
 company who is a party to or of 22 Lupton v. Stephenson, 11 Ir. 
 
 counsel in the cause, or who has Eq., 484. 
 
 been an ofificer in, or an official 23 Wynne v. Lord Newborough, 
 
 of the insolvent corporation." 15 Ves., 283. See 2 Daniell's 
 
 See Cunningham v. U. S. Nation- Chancery Practice, ch. XXXIX, 
 
 al Bank, 6 Okla., 184, 51 Pac, 119, § III. 
 as to the disqualification of a re-
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 97 
 
 was regarded as no valid objection.24 And it is not necessary 
 that the person selected should be a resident of the state or 
 jurisdiction in which the suit is pending. Thus, under the 
 laws of Missouri, a public officer of the state being charged 
 with the duty of instituting proceedings to wind up insolvent 
 insurance companies, and being appointed in that state receiver 
 of such a company, the same person was appointed receiver by 
 a federal court in Tennessee, in a subsequent suit instituted by 
 creditors of the company to reach its assets in the latter state.25 
 So the United States circuit court in North Carolina has ap- 
 pointed as its receiver one who was a non-resident of that 
 state,26 So it is held to be not an abuse of discretion to ap- 
 point as receiver a non-resident, where he has an interest in the 
 property and a resident is appointed as co-receiver. 2"^ And in 
 the case of receiverships in the federal courts, the court of one 
 circuit will ordinarily, in ancillary proceedings, recognize the 
 appointment of the federal court of another circuit, and will 
 accordingly name the receiver appointed in the original pro- 
 ceeding, although he may not be a resident of the state in which 
 the court is sitting.28 But where one of several receivers is a 
 non-resident, it is proper that his bond should contain a clause 
 providing that he shall appear in the court of his appointment 
 at any time when required by the court, either on notice to him 
 within or without the state or on notice to his counsel. ^9 
 
 § 70. Person not eligible whose duty it is to watch re- 
 ceiver ; solicitor ; master in chancery ; .barrister ; peer ; par- 
 ty to the cause; member of reorganization committee; 
 creditor. It is important to observe that courts of equity 
 are exceedingly jealous of appointing any person to a receiver- 
 
 24Tharpe v. Tharpe, 12 Ves., 27 Burwell v. Farmers & M. 
 
 317. Bank, 119 Ga., 633, 46 S. E., 885. 
 
 25 Taylor v. Life Association of 28 Bayne v. Brewer Pottery Co., 
 America, 3 Fed., 465. See S. C, 82 Fed., 391. 
 
 on final hearing, 13 Fed., 493. 29 Lotte Bros v. American Silk 
 
 26 Farmers' Loan & Trust Co. Co., 159 Fed., 499. 
 V. Cape Fear & Y. V. R. Co., 62 
 
 Fed., 675. 
 
 Receivers — 7.
 
 98 RECEIVERS. [chap. III. 
 
 ship whose duty it would otherwise be to watch the proceedings 
 of the receiver, or to call him to an account for his manage- 
 ment of the trust. 2^ Upon this ground a solicitor under a com- 
 mission of lunacy, under the English practice, should not be 
 appointed receiver of the estate of the lunatic.^^ And upon 
 similar ground, a solicitor in the cause is not a proper person 
 for the receivership, since no person ought to be allowed to con- 
 trol his own accounts in that capacity.^2 go it is improper to 
 appoint as receiver the law partner of the solicitor for com- 
 plainant in the cause, since such partner is presumptively as 
 much interested in the proceedings as complainant's solicitor 
 himself.^^ And a person who is connected with the firm of 
 counsel for the plaintiff at whose instance a receiver is sought, 
 is regarded as ineligible.^"* So it has been held that a master 
 in chancery is not a proper person to be appointed, since he is 
 an officer of the court, whose duty it is to examine the receiv- 
 er's accounts and to check his conduct ; and his appointment is 
 ground for reversing the decree.^^ A barrister, however, is 
 competent to act as receiver,^^ and under the English practice 
 barristers are very frequently appointed. ^"^ It has been held, 
 however, that the fact of the barrister selected being in prac- 
 tice in London at a great distance from the estate, coupled with 
 the fact of his being a member of parliament, while not an ab- 
 solute disqualification, should have been considered by the 
 master in making the appointment.^^ And in England, a re- 
 
 30 Stone v. Wishart, 2 Madd., 34 State Trust Co. v. National 
 eZ, 1st American Edition, 374; L. I. & M. Co., 72 Fed., 575. 
 
 r,Sykes v. Hastings, 11 Ves., 363; 35 Benneson v. Bill, 62 111., 408; 
 
 \jn re Lloyd, 12 Ch. D., 447. Kilgore v. Hair, 19 S. C, 486; 
 
 31 £x parte Pincke, 2 Meriv., Allen v. Cooley, 60 S. C, 353, 38 
 452. S. E., 622. 
 
 32 Garland v. Garland, 2 Ves. 36 Garland v. Garland, 2 Ves. 
 Jun., 137; In re Lloyd, 12 Ch. D., Jun., 137. 
 
 447; Watson v. Arundel, Ir. Rep., 37 2 Daniell's Chancery Prac- 
 
 9 Eq., 324. tice, ch. XXXIX, § III. 
 
 33 Merchants & Manufacturers 38 Wynne v. Lord Newborough, 
 National Bank v. Kent Circuit 15 Ves., 283. 
 
 Judge, 43 Mich., 292, 5 N. W., 627.
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 99 
 
 ceiver will not be appointed who is not subject to the ordinary 
 process of the courts by commitment, and against whom the 
 same remedies are not available as against a common citizen. 
 A peer of the realm is, therefore, not a competent person to 
 be appointed. 2^ And, unless under special circumstances, as 
 in partnership cases in some instances, a party to the cause 
 will not ordinarily be appointed without the consent of the 
 other party."^^ But it has been held to constitute no objection 
 to the eligibility of a receiver that he is a member of a reor- 
 ganization committee, although if a conflict in the plan of the 
 reorganization should be foreshadowed, he would promptly be 
 compelled to resign.^^ And a creditor of an insolvent is not as 
 a matter of law disqualified by reason of his interest to act as 
 receiver and may properly be appointed where no facts appear 
 showing that he is disqualified. '*2 
 
 § 71. Clerk of court not a receiver ex officio; clerk and 
 master. While there are some reported cases in w^hich 
 the courts have appointed their own clerks as receivers, yet a 
 clerk of a court is not by virtue of his office a receiver of the 
 court, his functions being entirely distinct from those of re- 
 ceiver.'*^ The same distinction is recognized where the offices 
 of clerk and of master in chancery are combined in one and the 
 same person. In such case the court can no more compel him 
 to take upon himself the office of receiver in a given case, than 
 it can compel any private citizen to assume such duties. And 
 when the court has ordered that the receiver in a cause deliver 
 over to the clerk and master the funds of the receivership, 
 and that the clerk and master be appointed receiver, such order 
 will not have the effect of making him the receiver, when noth- 
 ing is done by him in that capacity, and no facts appear from 
 
 39 Attorney-General v. Gee, 2 43 Hammer v. Kaufman. 39 111., 
 
 Ves. & Bea., 208. 87; Waters v. Carroll, 9 Yerg., 
 
 40 /n re Lloyd, 12 Ch. D., 447. 102; Kerr v. Brandon, 84 N. C, 
 
 41 Fowler v. Jarvis-Conklin M. 128; Rogers v. Odom, 86 N. C, 
 Co., 63 Fed., 888. 432. 
 
 42 Barber v. International Co., 
 73 Conn., 587, 48 Atl., 758.
 
 100 RECEIVERS. [chap. III. 
 
 which an inference of his acceptance may be drawn. "^^ And it 
 has been held improper to appoint the clerk of the court to 
 act as receiver.^^ 
 
 § 72. Officer of corporation usually ineligible as its re- 
 ceiver; when eligible; shareholder; creditor. In compul- 
 sory proceedings against corporate bodies for the appointment 
 of receivers, the selection of a proper person for the receiver- 
 ship is a question of much delicacy and grave importance. In 
 this class of cases, it is regarded as manifestly improper to ap- 
 point an officer of or person connected with the management 
 of the corporation itself to the post of receiver.^^ In such 
 cases the courts act upon the principle that if the officers of the 
 corporation are unfit persons for the management of its affairs 
 in their official capacity, they are equally unfit to be intrusted 
 with such management in the capacity of receivers, and the rule 
 of exclusion may be regarded as based upon sound principles 
 of public policy. When, therefore, proceedings are instituted 
 in equity against an insolvent banking corporation, under the 
 statutes of a state authorizing the appointment of receivers of 
 insolvent corporations for the winding up of their affairs, the 
 court will not appoint an officer of the bank the receiver in the 
 cause.'*'^ And, when, in proceedings against a corporation for 
 the appointment of a receiver, the person selected for the trust 
 was the secretary and treasurer of the company, as well as its 
 legal adviser and counselor, and was also the largest single 
 
 44 Waters v. Carrol!, 9 Yerg., Co., 157 Fed., 794. See, also, 
 102. Atkins v. Wabash. St. L. & P. 
 
 45 White V. Britten, 72 S. C, R. Co., 29 Fed., 161. But see In 
 175, 51 S. E., 547. re Fifty-four First Mortgage 
 
 46 Attorney-General v. Bnnk of Bonds, 15 S. C, 304. 
 Columbia, 1 Paige, 511; Baker v. 47 Attorney-General v. Bank of 
 Administrator of Backus, 32 111., Columbia, 1 Paige, 511. And see 
 79; Freeholders v. State Bank, 28 as to considerations governing 
 N. J. Eq., 166; McCullough v. the court in the appointment of 
 Merchants Loan & Trust Co., 29 a receiver of a large banking 
 N. J. Eq., 217; Finance Co. v. corporation, whose assets are of 
 Charleston, C. & C. R. Co., 45 great value. In re Empire City 
 Fed.. 436: Coy v. Title G. & T. Bank, 10 How. Pr., 498.
 
 CHAP. III.] 
 
 SELECTION AND ELIGIBILITY. 
 
 101 
 
 creditor of the corporation, and was the legal adviser of the 
 complainant, and drew the bill in the cause, he was held to be 
 totally disqualified for the position. ^^ So the vice-president of 
 an insolvent life insurance company, to whom it has assigned 
 all its effects in trust for the benefit of its creditors, is not re- 
 garded as a proper person to be appointed receiver over the 
 company in an action to set aside such assignment.'*^ If, how- 
 ever, the laws of the state providing for the voluntary dissolu- 
 tion of insolvent corporations authorize the appointment of any 
 of the officers or stockholders of the corporation as receivers, 
 it is proper to appoint the president and the book-keeper of the 
 corporation, when not otherwise disqualified, and when it is 
 not shown that their conduct or management of the business 
 has in any manner tended to produce the insolvency of the 
 company.SO But the rule above announced forbidding the ap- 
 pointment of an oflficer of a corporation as its receiver is by no 
 means inflexible and in many cases it has been relaxed. And 
 
 48 Baker v. Administrator of 
 Backus, 32 III., 79. The court 
 say, p. 112: "It seems that the 
 secretary and treasurer of the 
 company was A. C. Coventry, a 
 lawyer by profession, and its 
 counselor and adviser. He was, 
 too, the largest single creditor of 
 the company, having claims 
 against it exceeding $3,000. He 
 was the adviser, also, of the com- 
 plainant, Baker, whom the de- 
 fendant in error represents, and 
 drew the bill in the cause. He 
 was, without having disclosed 
 these facts to the court, appoint- 
 ed the receiver of all the property 
 of the company, and, without try- 
 ing the market with it by an 
 oflFering at public sale, he private- 
 ly sold it, one day after he was 
 appointed, and had his claim 
 against the company fully paid 
 out of the proceeds. . . . 
 
 There was no necessity to ap- 
 point a receiver, because no fraud 
 is alleged or shown, and no suffi- 
 cient proof that such a step was 
 necessary to save the property 
 from material injury, or rescue it 
 from impending destruction. And 
 there was a fatal objection to the 
 person appointed receiver. He 
 was not disinterested; he was the 
 legal adviser of the complainant, 
 and framed the bill; he was the 
 legal adviser of the company; he 
 was the largest single creditor; 
 all these disqualified him, and he 
 should not have been appointed." 
 And see hi re Eckhardt Mfg. Co., 
 114 La., 119, 38 So., 78. 
 
 '*9 Buck V. Piedmont & Arling- 
 ton Life Insurance Co., 4 Fed., 
 849. 
 
 50 Jn re Eagle Iron Works, 8 
 Paige, 385, affirming S. C, 3 Edw. 
 Ch., 385.
 
 102 RECEIVERS. [chap. III. 
 
 when it appears that an officer or director of a corporation is 
 especially qualified by reason of his knowledge and familiarity 
 with the affairs of the concern and that the best interests of the 
 estate will be promoted by his management, a departure from 
 the rule has been made, and an officer and director has been 
 allowed to act as receiver of the corporation.^^ And in Michi- 
 gan it has been held generally that a creditor, officer or share- 
 holder of a corporation is competent to act as its receiver.^^ 
 And in Louisiana it has been held that a shareholder in a cor- 
 poration may properly be appointed its receiver.^^ But where 
 an officer of a corporation has been appointed one of its re- 
 ceivers and it appears that he has been speculating in the stock 
 of the company, that fact constitutes good ground for his re- 
 moval. ^^ And the president of a competing line of railroad is 
 ineligible to act as receiver of an insolvent railway company.^^ 
 § 73. One corporation may be receiver of another. 
 Upon proceedings in equity against an insolvent corporation 
 for the winding up of its affairs, and the appointment of a 
 receiver, the person selected for the trust need not necessarily 
 be an individual person, and a corporate body may itself be ap- 
 pointed receiveir of another corporation upon the insolvency of 
 the latter. And this is permissible, even though the corpora- 
 tion selected for the office has previously recovered a judg- 
 ment in its capacity of receiver of a former insolvent corpora- 
 tion, against the defendant, so that it is to this extent a credit- 
 or of the defendant ; there being no unbending riile of law that 
 one who is a creditor of an insolvent institution is incompetent 
 
 51 Farmers' Loan & Trust Co. Judge, 125 Mich., 6, 83 N. W., 
 V. Northern Pac. R. Co., 61 Fed., 1004. 
 
 546; Ralston v. Washington & C. 53 McGilliard v. Donaldsonville 
 
 R. Ry. Co., 65 Fed., 557. And it F- & M. Works, 104 La., 544, 29 
 
 is held that service of process So., 254, 81 Am. St. Rep., 145. 
 
 upon the president of a corpora- 54 Olmstead v. Distilling & C. 
 
 tion who is also its receiver is F. Co., 67 Fed., 24. 
 
 valid. Venner v. U. W. Co., 40 55 St. Louis, K. & S. R. Co. v. 
 
 Colo., 212, 90 Pac, 623, 122 Am. Wear, 135 Mo., 230, 36 S. W., 357, 
 
 St. Rep., 1036. 658, 33 L. R. A., 341. 
 
 52 Moran v. Wayne Circuit
 
 CHAP. III.] 
 
 SELECTION AND ELIGIBILITY. 
 
 103 
 
 to act as its receiver.^^ And a corporation is not disqualified to 
 act as receiver for an insolvent corporation because one of the 
 directors of the insolvent concern is a shareholder, director and 
 the president of the receiver corporation. ^'^ 
 
 § 74. Trustee not usually eligible ; when eligible. As a 
 general rule, courts of equity are averse to appointing as re- 
 ceivers persons who occupy relations of trust toward the prop- 
 erty or estate which is the subject of the receivership. And 
 a trustee or executor, appointed by a testator for the manage- 
 ment of his estate, is usually regarded as an improper person 
 
 56 In re Knickerbocker Bank. 
 19 Barb., 602. The Knickerbock- 
 er Bank being insolvent, the 
 United States Trust Company 
 was appointed receiver. This 
 company had previously, as Re- 
 ceiver of the Knickerbocker Sav- 
 ings Institution, recovered a 
 judgment against the Knicker- 
 bocker Bank. The Trust Com- 
 pany, being the receiver of both 
 institutions, and thus represent- 
 ing both debtor and creditor, ap- 
 plied to the court for instructions 
 as to the course it should pur- 
 sue. The court, Mitchell, J., say, 
 p. 603: "If the appointment of 
 receiver was only for the purpose 
 of suit on behalf of the Savings 
 Institution, there would be a 
 manifest impropriety in making 
 the Trust Company, acting for 
 that institution, receiver also of 
 the bank. But this was not the 
 case. The receiver of the bank 
 was to act for all the creditors of 
 the bank, and was disinterested, 
 except as to the one claim of the 
 Savings Institution. The Trust 
 Company was especially created by 
 the legislature, in part to aid suit- 
 ors and the court by assuming 
 the exercise of trusts when it 
 
 might be difficult to get others to 
 execute them (as in this case), on 
 account of the largeness of the 
 amount of security that would be 
 required, and the difficulty of ob- 
 taining persons competent to 
 give such security, and to man- 
 age such affairs. More skillful 
 persons to take charge of a trust 
 like this, or more trustworthy, 
 probably could not be found. 
 The papers on the appeal show 
 no objection to them; nor that 
 any others were even named. 
 And as there is no unbending 
 rule of law that one who is a 
 creditor of an insolvent institu- 
 tion shall not be its receiver, the 
 objection to the receiver falls 
 to the ground. The Trust Com- 
 pany being lawfully appointed re- 
 ceiver, and deriving its appoint- 
 ment from the court, or from a 
 justice of the court, it had aright 
 to apply to the court for instruc- 
 tions. And in no case could it be 
 more proper for the receiver to 
 make the application than when 
 it was the representative of both 
 creditor and debtor." 
 
 57 Barker v. Wayne Circuit 
 Judge, 117 Mich., 325, 75 N. W., 
 886.
 
 104 RECEIVERS. [chap. III. 
 
 to be appointed receiver of the estate.^^ And this is true re- 
 gardless of whether he is a sole trustee, or whether there are 
 others joined with him as co-trustees under the will of the tes- 
 tator.59 The reason for this aversion to the appointment of 
 such persons to receiverships is found in the fact that the 
 court, in this class of cases, expects the trustee to watch the 
 proceedings with an adverse eye, and to see that the receiver 
 does his duty.^*^ The rule rejecting such persons is, however, 
 not inflexible, and when it is apparent, considering the trustee's 
 knowledge of and familiarity with the estate in litigation, that 
 its best interests will be promoted by his appointment, a de- 
 parture from the rule is allowed.^^ But it is held in such cases 
 that the trustee will be allowed to act as receiver only upon 
 condition that he shall derive no emolument from the office.^^ 
 As illustrative of when such a departure from the rule is per- 
 missible, it was held, where a testator had appointed as trustee 
 and executor of his will a person who had for many years 
 acted as receiver of certain of his property, that he was a fit 
 person to be continued as receiver for the protection of an in- 
 fant tenant for life.^^ 
 
 § 75. Next friend of infants ineligible. It has been 
 shown in the preceding section that the reason for the refusal 
 of the courts to appoint as receivers persons occupying fiduciary 
 relations to the subject-matter of the receivership is based upon 
 the necessity of their watching the proceedings of the receiver 
 adversely, and holding him to a strict account in the perform- 
 ance of his duties. The same reasoning is applicable to the case 
 of a bill filed by the next friend of infants, against the exec- 
 utors of their estate, for an accounting and a receiver. And 
 
 58 Sutton V. Jones, 15 Ves., 584; Newport v. Bury, 23 Beav., 30; 
 V. Jolland, 8 Ves., 12; Patterson v. Northern Trust Co., 
 
 Sykes v. Hastings, 11 Ves., 363. 230 111., 334, 82 N. E., 837. 
 
 59 V. Jolland, 8 Ves., 72. 62 Hibbert v. Jenkins, 11 Ves., 
 
 60 Sykes v. Hastings, 11 Ves., 363. 
 
 363. 63 Newport v. Bury, 23 Beav., 
 
 61 Hibbert v. Jenkins, cited in 30. 
 Sykes v. Hastings, 11 Ves., 363;
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 105 
 
 in such a case the next friend will not be appointed, since it is 
 his duty to watch the accounts and scrutinize the conduct of 
 the receiver, and the two characters are regarded as so incom- 
 patible with each other that the court will not permit them to 
 be combined in one and the same person. ^4 
 
 § 76. Mortgagee eligible as receiver of mortgaged 
 premises. An apparent exception to the rule that trustees 
 are ineligible as receivers over the subject-matter of their trust 
 has been recognized in the case of a mortgagee of real estate, 
 occupying the relation of a trustee of the equity of redemption. 
 And such mortgagee has been appointed receiver of the mort- 
 gaged premises, but his position and duties as receiver were 
 held to be paramount to those as mortgagee, and his interest 
 in the latter capacity was held to be subordinate to his duties 
 
 as receiver 
 
 65 
 
 § 77. Receiver of debtor ineligible as his assignee in 
 bankruptcy. The position of a receiver of the estate and 
 effects of a debtor, appointed under proceedings in a state court, 
 is regarded as incompatible with that of a trustee or assignee 
 of the estate of the same debtor in bankruptcy. And when pro- 
 ceedings in bankruptcy are subsequently instituted against the 
 debtor in the federal court, the latter tribunal will not permit 
 the receiver of the state court to be elected assignee or trustee 
 of the bankrupt's estate.^^ 
 
 § 78. Administrator of deceased partner eligible as re- 
 ceiver of firm assets. In partnership cases, the adminis- 
 trator of a deceased partner, if a fit person in other respects, 
 may be appointed receiver of the firm assets, when the surviv- 
 ing partners are guilty of laches and waste in the settlement 
 of the business. For while, primarily, such administrator has 
 no rights in the settlement and adjustment of the partnership 
 affairs, yet if there be unreasonable delay in the performance 
 of this duty by the surviving partners, it becomes the right 
 
 64 Stone V. Wishart, 2 Madd., 66 /„ re Stuyvesant Bank, 5 
 63, 1st American Edition, 374. Benedict, 566; S. C, 6 Bank. Reg., 
 
 65 Bolles V. Duff, 54 Barb., 215. 272.
 
 106 RECEIVERS. [chap. III. 
 
 and duty of the administrator of the deceased partner to file a 
 bill for an accounting and a receiver, and he himself may then 
 be appointed upon giving additional bond with proper secur- 
 ity.67 
 
 § 79. Particular person nominated in bill; consent of 
 parties. When the bill prays for the appointment of a par- 
 ticular person as receiver, and such person is appointed by the 
 court, it does not necessarily follow that he was appointed sole- 
 ly because recommended in the bill. And in such case, on ap- 
 peal to a court of last resort, it will be presumed that the court 
 below acted upon its own judgment in making the selection.^^ 
 But in the Irish Chancery, it is said to be contrary to the prac- 
 tice of the court to appoint as receiver a particular person who 
 is nominated by consent of the parties. ^^ 
 
 § 80. Effect of interest as stockholder and director of 
 a plaintiff corporation. The interest of a stockholder and 
 director in a banking corporation, which was the plaintiff in 
 the action, has been regarded as sufficient to disqualify him for 
 the post of receiver; although in such case, where the inter- 
 est was not known to the court at the time of appointment, 
 and he had entered upon his duties and spent much time in 
 familiarizing himself with the property, and no misconduct 
 or impropriety was shown, he was allowed to continue in office 
 until a new reference could be had to a master, to make a new 
 appointment."^^ 
 
 § 81. Mortgagee of foreign estates eligible. Notwith- 
 standing the general doctrine regarding receivers as impartial 
 persons between the parties, and not interested in the result of 
 the cause, there may be circumstances justifying the appoint- 
 ment of a party in interest. And a mortgagee of estates located 
 in the West Indies was, in one case, deemed a proper person 
 
 67 Miller v. Jones, 39 111., 54. 70 Bank of Monroe v. Schermer- 
 
 68 Johns V. Johns, 23 Ga., 31. horn, Clarke Ch., 366. 
 
 69 Leach v. Tisdal, 4 Ir. Ch., N. 
 S., 209.
 
 CHAP. III.] SELECTION AND ELIGIBILITY. 107 
 
 to be appointed in England as receiver of the mortgaged prop- 
 erty, and without requiring him to give the usual security."^^ 
 
 § 81a. Objection to eligibility must be made in apt 
 time; how waived. An objection to the ehgibihty of a re- 
 ceiver must be made in apt time and unless this is done it will 
 be deemed to be waived. Where, therefore, a decree appoint- 
 ing a receiver has been affirmed upon appeal or writ of error, 
 the competency of the receiver to act in that capacity can not 
 be questioned by an appeal taken or a writ of error sued out for 
 the purpose of reviewing subsequent orders entered in the re- 
 ceivership cause, especially where the party complaining has 
 consented to the entry of orders which recognize the capacity 
 of the receiver to act.'^^ And where a plaintiff who has pro- 
 cured the appointment of a receiver has failed at the proper 
 time to raise any objection to the qualification of the receiver, 
 he can not afterward question such appointment upon the 
 ground that the receiver was disqualified by reason of 
 interest.'^^ 
 
 71 Davis V. Barrett, 13 L. J., N. 73 Threadgill v. Colcord, 16 
 
 S. Ch., 304. Okla., 447, 85 Pac, 703. 
 
 T^p^by V. Title G. & T. Co., 
 166 111., 336, 46 N. E., 1110.
 
 CHAPTER IV. 
 
 OF THE PRACTICE. 
 
 I. General Rules of Practice § 82 
 
 II. Time of Appointment 103 
 
 III. Notice of the Application Ill 
 
 I. General Rules of Practice. 
 
 § 82. Practice divergent in different states. 
 
 83. Receiver appointed on bill; specific prayer not necessary. 
 83a. Court may appoint of its own motion. 
 
 84. Appointment made on notice and affidavits; and only against a 
 
 party. 
 
 85. Affidavits; admissibility of, upon hearing; affidavits must be 
 
 entitled in the cause. 
 
 86. Imperfections in bill or record no bar to appointment. 
 
 87. Order should specify over what property receiver is appointed. 
 
 88. Facts need not appear in pleadings; affidavits; copies. 
 
 89. Affidavits should be distinct and precise; general allegations not 
 
 sufficient; information and belief; verification may be waived. 
 
 90. Reference to master to appoint; exceptions to master's appoint- 
 
 ment. 
 
 91. Successive applications for receiver. 
 
 92. When motion reheard after appointment. 
 
 93. Practice on extending receivers. 
 
 94. Appointment by consent. 
 
 95. Effect of demurrer pending; amendment to bill; opportunity to 
 
 plead or answer when demurrer overruled. 
 
 96. English practice as to hearing in court and in chambers. 
 
 97. Regularity of original appointment not examined on motion to 
 
 substitute. 
 
 98. Receiver may be appointed on application for an injunction. 
 
 99. Omission of receiver to be sworn not fatal; when taking of oath 
 
 presumed. 
 
 100. Order of appointment should not apply proceeds of sale. 
 
 101. Appointment no bar to plaintiff dismissing his bill. 
 101. Order made in the alternative. 
 
 § 82. Practice divergent in different states. In a gen- 
 eral treatise upon the law of receivers, it is neither expedient 
 
 108
 
 CHAP. I\'.] 
 
 PRACTICE. 
 
 109 
 
 nor desirable to present in detail the practice prevailing^ in the 
 different states in administering this species of relief, since this, 
 like most other questions of practice, is largely regulated by 
 statute and usage in the different states. Indeed, it is practical- 
 ly impossible to reduce to a harmonious system of rules all 
 questions of practice relating to the appointment of receivers, 
 since the practice and procedure in administering equitable re- 
 lief are widely divergent in the various states. Some general 
 principles, however, which are believed to be recognized by 
 most of the courts, may be deduced from the authorities, and 
 their presentation will occupy the present chapter.^ 
 
 § 83. Receiver appointed on bill; specific prayer not 
 necessary. The usual practice, both in England and 
 America, is to appoint receivers only upon bills filed for that 
 purpose, and as a general rule the courts will not grant the re- 
 lief merely upon petition, when no cause is actually pending 
 and no bill filed to give the court jurisdiction, unless in very 
 
 1 In California it is held, under 
 the statutes of the state, that a 
 judge at chambers has power to 
 appoint a receiver, and upon an ex 
 parte application. Real Estate As- 
 sociates V. Superior Court, 60 Cal., 
 223. In Virginia, the power to ap- 
 point a receiver in a judgment cred- 
 itor's suit is incidental to the power 
 of granting an injunction; and since 
 a judge may grant an injunction in 
 vacation, he may also appoint a re- 
 ceiver in vacation. Smith v. Butcher, 
 28 Grat., 144. The appointment of 
 a receiver in vacation is not war- 
 ranted by the statutes of Illinois 
 prescribing the powers which may 
 be exercised by circuit judges in 
 vacation. Therefore, an order of a 
 state court appointing a receiver 
 over a railway in vacation is a nul- 
 lity, and the seizure of the property 
 by a receiver subsequently appointed 
 
 in a federal court is no interference 
 with the state court. Hammock v. 
 Loan and Trust Co., 105 U. S., 11 . 
 In Indiana it is held that, under the 
 code of procedure, the courts have 
 the same power to appoint receivers, 
 and for the same purposes, as per- 
 tained to courts of equity prior to 
 the adoption of the code. Bitting 
 V. Ten Eyck, 85 Ind., 357. And see 
 this case as to the practice and 
 procedure in appointing receivers in 
 Indiana. To the same point see 
 Hursh V. Hursh, 99 Ind., 500. And 
 it is improper for the court to ap- 
 point a receiver upon its own mo- 
 tion. White V. Britton, 72 S. C, 
 175, 51 S. E., 547. As to the second 
 appointment of a receiver after a 
 prior appointment of the same per- 
 son under a void order, see Robin- 
 son V. Dickey, 143 Ind., 214, 42 N. 
 E., 638.
 
 110 RECEIVERS. [chap. IV. 
 
 Special cases of emergency.^ And since a suit in chancery 
 is not begun until the filing of the bill, if a receiver is appointed 
 upon an c.v parte application before the bill is filed, the appoint- 
 ment will be revoked upon appeal, without considering the mer- 
 its of the application.^ And it has been held in England that 
 the court has no power to appoint a receiver upon the applica- 
 tion of a defendant in a cause, even though the plaintiff, after 
 filing his bill for a receiver against the defendant, refuses to 
 move for a receiver and opposes defendant's application.* It 
 is not, however, indispensable that the bill should contain a 
 specific prayer for a receiver, if the facts stated are sufficient 
 to justify the appointment, since the necessity for the relief 
 frequently occurs after the filing of the bill.^ And a receiver 
 may be appointed at the final hearing, even though the bill 
 contains no prayer for such relief.^ 
 
 § 83a. Court may appoint of its own motion. Where 
 the title to the subject-matter of the controversy is in dispute 
 and both sides claim the right of possession, and it is conceded 
 by all parties that the property should be operated pending the 
 determination of the litigation, it is held that the court, of its 
 own motion, may properly appoint a receiver to take and hold 
 possession of the property pending the litigation.*^ 
 
 ^ Ex parte Mountfort, 15 Ves., 500; Commercial and Savings Bank 
 
 445; Leddel's Executor v. Starr, 4 v. Corbett, 5 Sawyer, 172; McGar- 
 
 C. E. Green, 159. rah v. Bank, 117 Ga., 556, 43 S. E., 
 
 3 Crowder t.-. Moone, 52 Ala., 220; 987; Elk Fork Oil & Gas Co. v. 
 
 Gold Hunter M. & S. Co. v. Holle- Foster, 39 C. C. A., 615, 99 Fed., 
 
 man, 3 Idaho, 99, 27 Pac, 413. 495. And see Jordan v. Jordan, 121 
 
 ■i Robinson v. Hadley, 11 Beav., Ala., 419, 25 So., 855. But see Au- 
 
 614. But upon a bill by a second gusta Ice Mfg. Co. v. Gray, 60 Ala., 
 
 mortgagee for a foreclosure, a de- 344; Wilson v. Maddox, 46 West 
 
 fendant, who was a prior mort- Va., 641, 33 S. E., 775. 
 gagee, has been allowed a receiver 6 See observations of the Vice- 
 
 ,against the mortgagor also joined Chancellor in Osborne v. Harvey, 
 
 as defendant. Henshaw v. Wells, 1 Y. & C. C. C, 116; Merrill v. 
 
 9 Humph., 568. Elam. 2 Tenn. Ch.. 513. See, also, 
 
 5 Henshaw v. Wells, 9 Humph., Bowman v. Bell, 14 Sim., 392. 
 568; Ladd v. Harvey, 21 N. H., 514; 7 Elk Fork Oil & Gas Co. v. Fos- 
 
 Malcolm v. Montgomery, 2 Mol., ter, 39 C. C. A., 615, 99 Fed., 495.
 
 CHAP. IV.] PRACTICE. Ill 
 
 § 84. Appointment made on notice and affidavits; and 
 only against a party. It is irregular to appoint a receiver 
 when no motion for that purpose has been made, and no proof 
 adduced showing a necessity for the rehef. And the motion 
 should properly be founded on affidavits or papers, copies of 
 which should be served with the notice of the application ; ^ 
 although if the papers on which the moving party seeks the re- 
 lief are already on file in the cause, it is sufficient to refer to 
 them in the notice.^ But a receiver should not be appointed 
 against a person not before the court, and not made a party 
 to the action in which the appointment is sought.^-^ 
 
 § 85. Affidavits; admissibility of, upon hearing; affi- 
 davits must be entitled in the cause. Upon an application 
 for a receiver after the coming in of the answer, it is proper 
 for the court to permit affidavits to be read in behalf of plaintiff, 
 since the object of the court is to be informed of the true 
 circumstances of the case, in order that it may act advisedly 
 upon the application.^^ In the Irish Chancery, upon a motion 
 for a receiver on bill and answer, affidavits may be read in be- 
 half of plaintiff in reply to the answer, in explanation of a 
 doubtful passage therein, which does not disclose the whole 
 truth to the court, the affidavit disclosing all the facts.^^ And 
 where an application for the appointment of a receiver is made 
 before the defendant has filed his answer, the latter may be 
 heard upon his affidavit by way of defense to the application. ^^ 
 But upon a motion for an interlocutory injunction and receiver 
 pendente lite, it is improper to receive affidavits which are not 
 entitled in the cause and which were not taken for the purpose 
 of being used as evidence.^^ 
 
 8 Hungerford v. Gushing, 8 Wis., H Ladd v. Harvey, 21 N. H., 514. 
 320; Brundage v. Home S. & L. 12 Bell v. M'Loghlin, Flan. & K., 
 Assn., 11 Wash., 277, 39 Pac, 666; 272. 
 
 Jacobs V. Miller, 10 Hun, 230. iSWhitehouse v. P. D., T. & E. 
 
 9 Hungerford v. Gushing, 8 Wis., Ry. Go., 9 Wash., 558, 38 Pac, 152. 
 320. 14 Warren v. Monni.sh, 97 Ga., 
 
 10 Gravenstine's Appeal, 49 Pa. 399, 23 S. E., 823 ; Whitley v. Berry, 
 St., 310. 105 Ga., 251, 31 S. E., 171.
 
 112 RECEIVERS. [chap. IV. 
 
 § 86. Imperfections in bill or record no bar to appoint- 
 ment. The fact that the bill upon which an injunction and 
 a receiver are sought is multifarious, or that it is liable to ob- 
 jection because of misjoinder of parties, constitutes no suf- 
 ficient objection to a motion for a receiver. Nor is it a suf- 
 ficient answer to the application that the record is incomplete 
 in particulars, or not in such shape as may be necessary to en- 
 able the court to administer complete justice between the 
 parties.15 
 
 § 87. Order should specify over what property receiver 
 is appointed. The order of appointment should distinctly 
 state upon its face over what property or fund the receiver is 
 appointed, in order that persons dealing with him may know 
 what property is in possession of the court by its ofificer.^^ And 
 an order which directs a receiver to take possession of all the 
 property and assets of an insolvent is sufficiently broad to in- 
 clude within its scope the possession of real estate belonging 
 to the insolvent, although neither the petition nor the motion 
 upon which the receiver was appointed describes or refers to 
 the real estate. ^"^ And an order appointing a receiver of the 
 "incomes of the outstanding trust property in the pleadings 
 mentioned" is not sufficiently distinct and explicit within the 
 meaning of the rule.^^ But where a receiver is appointed to 
 take charge of all the assets of a corporation, it is not necessary 
 that the petition should allege of what the assets consist or 
 that it should describe them in detail, although he will act at 
 his peril if he takes possession of anything not expressly men- 
 tioned in the order of his appointment.^^ 
 
 § 88. Facts need not appear in pleadings; affidavits; 
 copies. It is not regarded as necessary or essential to the 
 
 15 Evans v. Coventry, 5 DeG., M. 17 Cheney v. Maumee Cycle Co., 
 & G., 911, reversing S. C, 3 Drew., 64 Ohio St., 205, 60 N. E., 207. 
 
 75. 18 Crow V. Wood, 13 Beav., 271. 
 
 16 Crow V. Wood, 13 Beav., 271; 19 Hale-Berry Co. v. Diamond 
 O'Mahoney v. Belmont, 62 N. Y., State Iron Co., 94 Ga., 61, 22 S. E., 
 133, affirming S. C, 2,1 N. Y. Siipr. 217. 
 
 Ct. R., 223.
 
 CHAP. IV.] PRACTICE. 113 
 
 appointment of a receiver that the facts upon which the ap- 
 plication is based should be set fortli in the pleadings, but it 
 is sufficient if they are presented to the court by affidavit upon 
 the hearing of the motion. Indeed, this would seem to follow 
 necessarily from the very nature of the appointment, which is 
 usually treated as an auxiliary proceeding, and not the ultimate 
 object of the action. 20 But it is not sufficient in the application 
 for a receiver to allege merely the legal conclusions upon which 
 plaintiff relies, and the facts must be averred upon which such 
 conclusions are predicated.^! And where, under the practice 
 of the state, the appellate court or court of final resort rehears 
 and decides cases upon the merits, upon an appeal from an 
 order granting an injunction and appointing a receiver, copies 
 of the affidavits and testimony upon which the motion was 
 granted should accompany the record. ^2 And upon an appeal 
 from an interlocutory order appointing a receiver, where the 
 application has been heard upon affidavits, such affidavits must 
 be incorporated into the record if the reviewing court is to 
 pass upon the merits of the appeal. 23 And such affidavits will 
 only be considered by an appellate tribunal, upon an appeal 
 from an order appointing a receiver, when properly incorpo- 
 rated into the record, as by a bill of exceptions. 2* 
 
 20 Hottenstein v. Conrad, 9 Kan., object of a suit. The statute says, 
 435. This was an action for the 'a receiver may be appointed . . . 
 settlement of partnership affairs, in in the action,' etc. All that the 
 which a receiver was appointed pleadings need disclose is, that the 
 upon notice and motion, supported action pending is one of a class in 
 by affidavits. Brewer, J., says, which the statute says a receiver 
 p. 438: "It is objected that the pe- may be appointed." 
 tition contains no averment that 21 Heavilon v. Farmers Bank, 81 
 there was danger that the property Ind., 249; Union Boom Co. v. Sam- 
 would be wasted or injured before ish Boom Co., 33 Wash., 144, 74 
 the answer, or before the trial of Pac, 53. 
 
 the case. Such an averment was 22 Schlecht's Appeal, 60 Pa. St., 
 
 entirely unnecessary. The showing 172. 
 
 of the necessity for a receiver need 23 Chicago & Southeastern Ry. 
 
 not be in the petition. The appoint- Co. v. McBeth, 149 Ind., 78, 47 N. 
 
 ment of a receiver is a provisional E., 678. 
 
 remedy. It is an auxiliary proceed- 24 Barnes v. Jones, 91 Ind., 161. 
 ing. It is not the ultimate end or 
 Receivers — 8.
 
 114 
 
 RECEIVERS. 
 
 [chap. IV. 
 
 § 89. Affidavits should be distinct and precise; general 
 allegations not sufficient; information and belief; verifica- 
 tion may be waived. Affidavits upon which the appHcation 
 is based should be distinct and precise in their allegations, es- 
 pecially where fraud is one of the grounds relied upon for the 
 interference of the court. And where a receiver is sought of 
 the affairs of a corporation, mere general allegations, in the 
 affidavits supporting the motion, as to the belief of affiants that 
 great frauds have been committed against the corporation, will 
 not justify the relief, when it is not stated by whom the frauds 
 have been committed, or in what they consist. ^^ And it may be 
 stated generally that, upon an application for a receiver pen- 
 dente lite, the verification must be based upon the knowledge 
 of the affiant and if it is based upon information and belief 
 only, it will be held insufficient.^^ Where, however, under 
 
 25 Oakley v. Patterson Bank, 1 
 Green Ch., 173. Under the statute 
 of Alabama it is held that the veri- 
 fication of a bill is sufficient without 
 the subscription of the affiant to the 
 affidavit. Culver v. Guyer, 129 Ala., 
 602, 29 So., 779. Under the code of 
 Georgia requiring that "petitions for 
 restraining order, injunction, re- 
 ceiver, or other extraordinary equi- 
 table relief should be verified posi- 
 tively by the petitioner, or support- 
 ed by other satisfactory proof," it is 
 held that an affidavit made by the 
 attorney for the petitioner is suffi- 
 cient if it states positive^' *h5t the 
 recitals of the petition are true of 
 his own knowledge. Boston Mer- 
 cantile Co. V. Ould-Carter Co., 123 
 Ga., 458, 51 S. E., 466. 
 
 26 Burgess & Co. v. Martin, 111 
 Ala., 656, 20 So., 506, followed by 
 Smith-Dimmick Lumber Co. v. 
 Teague, 119 Ala., 385. 24 So.. 4; 
 Pollard V. Southern Fertilizer Co., 
 122 Ala., 409, 25 So., 169; Schilcer 
 V. Brock, 124 Ala., 626, 27 So., 473 ; 
 
 Benepe-Owenhouse Co. v. Schei- 
 degger, 32 Mont., 424, 80 Pac, 1024 ; 
 New South B. & L. Assn. v. Wil- 
 lingham, 93 Ga., 218, 18 S. E., 435. 
 It is to be observed that in Pollard 
 V. Southern Fertilizer Co., supra, 
 Schilcer v. Brock, supra, and Ben- 
 epe-Owenhouse Co. V. Scheidegger, 
 supra, the appointment of the re- 
 ceiver was without notice. In Pol- 
 lard V. Southern Fertilizer Co., 
 supra., the verification was that the 
 facts and allegations, so far as they 
 came within affiant's own knowl- 
 edge, were true, and so far as de- 
 rived from the knowledge of others, 
 he believed them to be true. This 
 was held insufficient. In Schilcer 
 V. Brock, supra, the verification was 
 to the efTect that the matters alleged 
 in the bill as facts were true and 
 those alleged upon information and 
 belief, the affiant believed to be true. 
 This was held to be insufficient for 
 the appointment of a receiver with- 
 out notice.
 
 CHAP. IV.] PRACTICE. 115 
 
 the laws of a state it is made the duty of the attorney-general, 
 upon the insolvency of a banking corporation, to apply for an 
 injunction and a receiver for the winding up of its affairs, it 
 is not necessary that the information filed by the attorney- 
 general for this purpose should be verified by a positive affi- 
 davit as to the insolvency of the bank, but it is sufficient that 
 it is alleged upon information and belief, since only the officers 
 of the bank can swear positively as to its condition.^'^ And 
 where a bill for an injunction is improperly verified at the time 
 of the appointment of a temporary receiver, the plaintiff may, 
 by leave of court, add the proper verification upon an interlocu- 
 tory hearing before the appointment of a permanent receiver.28 
 And it is to be observed that the necessity for a verification may 
 be waived.29 
 
 § 90. Reference to master to appoint; exceptions to 
 master's appointment. Under the English practice, as 
 well as under the chancery practice in New York prior to the 
 adoption of the code of procedure, it was customary to grant an 
 order of reference to a master for the purpose of nominating 
 or appointing a receiver. Under the New York practice, when 
 the matter was referred to a master to report a proper person 
 to be appointed, the appointment was not regarded as complete 
 until confirmed by special order of the court. Where, however, 
 the master was himself directed to appoint the receiver and to 
 take from him the requisite security, no confirmation of the 
 appointment was necessary. In the latter case the master, after 
 approving of the receiver and the sureties offered, took the 
 necessary bond, which he filed with the report of his appoint- 
 ment, stating that he had approved of the bond and that it was 
 duly filed. And upon the filing of such report the appointment 
 was deemed completed and the receiver might at once enter 
 upon his duties. If either party was dissatisfied with the mas- 
 
 27 Attorney-General v. Bank of German National Bank, 59 Neb., 
 Columbia, 1 Paige, 511. 229, 80 N. W., 820; Veith v. Ress, 
 
 28 Rice V. Dodd, 94 Ga., 414, 20 60 Neb., 52, 82 N. W., 116; Murphy 
 S. E.. 339. V. Fidelity M. F. Ins. Co., 69 Neb.,. 
 
 29 Farmers & Merchants Bank v. 489, 95 N. W., 1022.
 
 116 RECEIVERS. [chap. IV. 
 
 ter's appointment, the practice seems to have been to present 
 his objections to the court by a petition, upon due notice to all 
 parties in interest, praying that the master might review his re- 
 port.20 Under the English practice, when a reference was had 
 to a master with directions to appoint, the appropriate practice 
 in objecting to the master's action was by exceptions to his 
 report. 21 
 
 § 91. Successive applications for receiver. It is proper 
 on denying a motion for a receiver to give leave to the moving- 
 party to renew his motion upon additional proof, if it appears 
 that he may, by obtaining new proof, present a strong case for 
 the relief sought.^^ ^^d it is competent for plaintiff to ask 
 and for the court to appoint a receiver after a hearing, and even 
 after a rehearing and refusal, when an altered state of facts is 
 presented showing an appropriate case for the relief.^^ But 
 when the application has once been before the court and has 
 been denied, a receiver will not be appointed upon a subse- 
 quent application upon a simple notice for that purpose, found- 
 ed upon the same papers as before, without affidavits or addi- 
 tional proof showing a necessity for the relief. And this rule 
 holds good, even though the court may have intimated, on the 
 former application, that a receiver might afterward be granted 
 if circumstances should warrant the relief.^'* 
 
 § 92. When motion reheard after appointment. After 
 a receiver has been appointed upon motion, pending an action 
 against defendant, it is proper for the court to entertain an ap- 
 plication to open and rehear the motion for the receiver, and 
 
 30 /n re Eagle Iron Works, 8 tinued to the hearing, and a writ of 
 
 Paige, 385. error is sued out to reverse such 
 
 31 Creuze v. Bishop of London, order of continuance, it is compe- 
 Dick., 687. tent for the court below in term 
 
 32 Devlin v. Hope, 16 Ab. Pr., 314. time, and before any remittitur has 
 
 33 Attorney-General v. Mayor of been returned from the supreme 
 Galway, 1 Mol., 95. court, to appoint a receiver upon 
 
 34 Fenton v. Lumberman's Bank, the same bill and upon the same 
 Clarke Ch., 360. In Georgia it is state of facts. McCaskill v. War- 
 held that when an application for ren, 58 Ga., 286. 
 
 a receiver made in vacation is con-
 
 CHAP. IV.] PRACTICE. 117 
 
 to allow defendant to introduce proofs which could not be 
 produced upon the former hearing. And if satisfied that the 
 case is not a proper one for a receiver, the court may, upon 
 such rehearing, deny the motion. ^^ But, since a motion for 
 a receiver in a creditor's suit is not regarded as involving the 
 merits of the cause, being only incidental to the principal re- 
 lief sought, where the courts are prohibited by statute from re- 
 hearing orders made in the progress of a cause which do not 
 involve the merits, a motion for a receiver will not be reheard 
 when once granted. ^^ 
 
 § 93. Practice on extending receivers. The practice is 
 frequently adopted, when a receiver has been appointed over 
 a particular subject-matter in behalf of one creditor or a class 
 of creditors, of extending the same receiver for the protection 
 of other parties interested in the same subject-matter, for the 
 purpose of saving the expense of a new appointment; or, if 
 appointed over a part only of defendant's estate, he may be ex- 
 tended over the residue for the benefit of other creditors. In 
 all such cases, the order extending the receiver is regarded as 
 substantially an original or new appointment.^"^ And when 
 a receiver has already been appointed in a pending suit and ap- 
 plication is made for like relief in a subsequent suit concern- 
 ing the same property, the court will not ordinarily displace 
 the existing receiver, preferring as a general rule to extend 
 the receivership in the former suit to the latter. But in all such 
 cases of extension the rights of the parties in each suit are 
 substantially the same as if different receivers had been ap- 
 pointed.^^ 
 
 § 94. Appointment by consent. Under the Irish chan- 
 cery practice, receivers are frequently appointed by consent of 
 
 35 Belmont v. Erie R. Co., 52 Association v. Newry & Armagh R. 
 Barb., 637. Co., Ir. Rep., 2 Eq., 1; LeGrand v. 
 
 36 Sheldon v. Weeks, 2 Barb., 532. O'Neill, 2 Ir. Ch., N. S., 569; Ab- 
 
 37 Corbet v. Mahon, 2 Jo. & Lat., bott v. Stratten, 3 Jo. & Lat, 603. 
 671 ; Agra & Masterman's Bank v. 38 State v. J., P. & M. R. Co., 15 
 Barry, Ir. Rep., 3 Eq., 443. See, Fla., 201. 
 
 also. Imperial Mercantile Credit
 
 118 RECEIVERS. [chap. rv. 
 
 the parties to a cause, the consent in such cases being made a 
 rule of court. ^^ But such a consent will not be made a rule 
 of court when it provides that the receiver shall not be obliged 
 to account before the master, unless called upon so to do, since 
 this would, in effect, make him merely the private agent of the 
 parties, and not an officer of court.'*^ 
 
 § 95. Effect of demurrer pending; amendment to bill; 
 opportunity to plead or answer when demurrer overruled. 
 Upon a special motion for a receiver, when notice has been 
 given to defendant's solicitor, who does not appear or oppose 
 the motion, the fact of a dem.urrer pending to the bill affords 
 no objection to granting the order; since, if defendant intends 
 to rely upon such demurrer as a bar to the appointment, he 
 should appear upon the hearing of the motion and urge his 
 objections. ^1 And when an answer has been filed to the origi- 
 nal bill, the court will entertain a motion for a receiver, not- 
 withstanding the original bill has been amended after answer, 
 and a plea has been filed to the amended bill and the plea is 
 still undisposed of.^^ g^t where a demurrer to the bill is over- 
 ruled, the court should ordinarily not appoint a receiver at 
 once but should first give the defendant an opportunity to 
 plead or answer. "^^ 
 
 § 96. English practice as to hearing in court and in cham- 
 bers. Under the English practice it is held that, when the 
 application for a receiver is made for the first time in the cause, 
 i*- must be heard in court ; but if the application is only to sup- 
 ply the place of a receiver already appointed, and whose office 
 has become vacant by death or otherwise, it may be made in 
 chambers. ^^ 
 
 § 97. Regularity of original appointment not exam- 
 ined on motion to substitute. Upon a mere formal mo- 
 
 39 See Burke v. Burke, Flan. & 42 Thompson v. Selby, 12 Sim., 
 K, 89. 100. 
 
 40 Richey v. Gleeson, Flan. & K., 43 People v. District Court, 33 
 99. Colo., 293, 80 Pac, 908. 
 
 41 Howard v. Palmer, Walk. 44 Grote v. Bing, 9 Hare, Appen- 
 (Mich.), 391. dix, 1.
 
 CHAP. IV.] PRACTICE. 119 
 
 tion to substitute one person in place of another as receiver 
 in the action, the opposing party is not at hberty to examine the 
 regularity of the original appointment, or the regularity of the 
 proceedings had in the suit, since this would operate as a sur- 
 prise upon the moving party, and he is entitled to notice of such 
 objections.^^ 
 
 § 98, Receiver may be appointed on application for an 
 injunction. It would seem that a receiver may be ap- 
 pointed in a case otherwise proper for the relief, if the facts 
 showing the necessity for the relief and the proper parties are 
 before the court, although the application was made for an 
 injunction, and did not specify the appointment of a re- 
 ceiver.'*^ 
 
 § 99. Omission of receiver to be sworn not fatal ; when 
 taking of oath presumed. Where a statute, authorizing 
 the appointment of receivers to wind up the affairs of banking 
 corporations, requires them to be sworn before entering upon 
 their duties, the omission to be sworn does not have the effect 
 of vitiating their proceedings, since they are officers of the 
 court and their proceedings are subject to revision by the 
 court.'*'^ And in an action by a receiver to recover money al- 
 leged to be due him in his official capacity, where it appears 
 that he duly qualified by giving bond pursuant to the order 
 of appointment in the receivership proceeding, the taking of 
 the necessary oath will be presumed. ^^ 
 
 § 100. Order of appointment should not apply proceeds 
 of sale. As regards the form of an order appointing a 
 receiver and authorizing him to sell the property in controver- 
 sy, it would seem to be the better practice not to include in such 
 order a direction as to applying the proceeds of the sale, since 
 
 45Fassett v. Tallmadge, 13 Ab. 47 American Bank v. Cooper, 54 
 
 Pr., 12. Me., 438. 
 
 46 Whitney v. Buckman, 26 Cal., 48 Seymour v. Aultman Co., 109 
 
 447; Elk Fork Oil & Gas Co. v. Iowa, 297, 80 N. W., 401. 
 Foster, 39 C. C. A., 615, 99 Fed., 
 495.
 
 120 RECEIVERS. [chap. IV. 
 
 this is a matter for adjustment after a final decree settling the 
 rights of all parties in interest. "^^ 
 
 § 101. Appointment no bar to plaintiff dismissing his 
 bill. When a receiver is appointed upon an interlocutory 
 application, before final decree in the cause, the court does not 
 thereby acquire such absolute control over the cause as to de- 
 prive plaintiff in the action of the privilege of dismissing his 
 bill if he sees f^t.^*^ 
 
 § 102. Order made in the alternative. There are fre- 
 quent instances to be met with in the reports where the court, 
 although of opinion that plaintiff was entitled to a receiver, 
 has made the order in the alternative, requiring defendant to 
 satisfy plaintiff's demand, or in default thereof that a receiver 
 be appointed.^^ 
 
 49 West V. Chasten, 12 Fla., 315; 51 See for such a case, Curling v. 
 Krohn v. Weinberger, 47 West Va., Townshend, 19 Ves., 628. 
 
 127, 34 S. E., 746. 
 
 50 White V. Lord Westmeath, 
 Beat., 174.
 
 CHAP. IV.] PRACTICE. 121 
 
 11. Time of Appointment. 
 
 § 103. Formerly appointed only after answer; modern English prac- 
 tice. 
 
 104. Grounds for appointment before answer under English prac- 
 
 tice. 
 
 105. Granted before answer in this country; creditors' suits. 
 
 106. Strong case must be shown to warrant relief before answer; 
 
 illustrations. 
 
 107. Application before answer heard on affidavits; motion to dis- 
 
 charge receiver after answer. 
 
 108. Appointment not to be antedated. 
 
 109. May be made at the final hearing. 
 
 110. Allowed after final decree in cases of emergency; illustrations; 
 
 appointed pending appeal. 
 
 § 103. Formerly appointed only after ansv/er; modern 
 English practice. Receivers are usually appointed upon 
 interlocutory application, in the earlier stages of the cause, al- 
 though, as will hereafter be shown, the appointment may be 
 made at the final hearing and as a part of the final decree. 
 Under the earlier English practice, the court would not en- 
 tertain an application for a receiver until after defendant had 
 appeared and answered. The rule, however, was gradually 
 relaxed, and under the modern practice receivers were fre- 
 quently granted before answer. And although the English 
 Court of Chancery was always averse to interference before 
 answer, unless for good cause shown, yet it may be regarded as 
 the settled English practice to grant receivers before answer, 
 in cases of emergency calling for the immediate interference 
 of the court to protect the equities of plaintiffs, and where the 
 merits of the case are sufficiently disclosed by affidavits.^2 
 
 52Vann v. Barnctt, 2 Bro. C. C, not granting a receiver before an- 
 
 158; Duckworth v. Trafford, 18 swer, was first broken through by 
 
 Ves., 283; Metcalfe v. Pulvertoft, 1 Lord Kenyon in Vann v. Barnett, 
 
 Ves. & Bea., 180; Woodyatt v. and that the order then made for a 
 
 Gresley, 8 Sim., 180. In Duckworth receiver before answer had been 
 
 V. Trafford, 18 Ves., 283, Lord El- followed since. He seems, however, 
 
 don observes that the old rule, of to have fallen into an error as to
 
 122 RECEIVERS. [chap. IV. 
 
 And if defendant has put in an affidavit in opposition to plain- 
 tiff's affidavits upon the motion, the affidavit will be regarded 
 as a sufficient appearance for the purpose of entertaining the. 
 motion. ^^ 
 
 § 104. Grounds for appointment before answer under 
 English practice. As regards the grounds upon w^hich the 
 application has been entertained before answer, under the 
 English practice, it has been held that where plaintiff shows 
 a good equitable title to the property in controversy, as against 
 which the title of defendant can not prevail, sufficient cause 
 is presented.^* So when habitual and manifest abuse is shown 
 on the part of a defendant executor in the management of his 
 trust, and when he is wasting and endangering the property 
 intrusted to him, a receiver may be appointed before answer. ^^ 
 
 § 105. Granted before answer in this country; credit- 
 ors' suits. The modern English practice, allowing the ap- 
 pointment of a receiver before answer in cases of emergency, 
 was adopted by the New York Court of Chancery, and has 
 been generally followed in this country. And it may now be 
 regarded as the uniform and well-established practice to en- 
 tertain the application and to grant the relief before answer, 
 where plaintiff can satisfy the court that he has an equitable 
 claim to the property in controversy, and that a receiver is 
 necessary to preserve it from loss, or where a clear case is shown 
 of fraud and imminent danger unless the relief is granted.^^ 
 
 the first departure froiR the ancient 53 Vann v. Barnett, 2 Bro. C. C, 
 
 practice, since Lord Kenyon, in 158. 
 
 Vann v. Barnett, only says that a 54 Metcalfe v. Pulvertoft, 1 Ves. 
 
 motion for a receiver before answer & Bea., 180. 
 
 was unusual, and that he would, if 55 Middleton v. Dodswell, 13 Ves., 
 
 necessary, have made a precedent. 266. 
 
 Vann v. Barnett was decided in 56 Bloodgood v. Clark, 4 Paige, 
 
 1787, and in a note to the case as 574; Bank of Monroe v. Schermer- 
 
 reported in 2 Bro. C. C, 158, it is horn, Clarke Ch., 214; Jones v. 
 
 said by the reporter that a receiver Dougherty, 10 Ga., 273 ; Williams v. 
 
 before answer was granted by Lord Jenkins, 11 Ga., 595; Johns v. Johns, 
 
 Bathurst in Compton v. Bearcroft, 23 Ga., 31 ; Clark v. Ridgely, 1 Md. 
 
 Trinity Term, 1773. Ch., 70; United States v. Church,
 
 CHAP. IV.] 
 
 PRACTICE. 
 
 123 
 
 In other words, if the emergency shown is such as to render 
 it essential to justice that a receiver should be immediately 
 appointed, it may be done before answer, since to delay the re- 
 lief might entirely defeat the object sought by the applica- 
 tion.^'^ The practice is especially salutary in cases of creditors' 
 bills in aid of the enforcement of judgments, and in this class 
 of cases receivers are almost uniformly granted before an- 
 
 swer 
 
 -58 
 
 § 106. Strong case must be shovs^n to warrant relief 
 before answer; illustrations. While the practice of ap- 
 pointing receivers before answer, in cases of emergency, is thus 
 shown to be well established and generally followed by courts 
 of equity in this country, yet the grounds which will induce the 
 court to interfere at this stage of a cause must be very strong, 
 and there must be clear proof of fraud, or of immediate danger 
 to the property unless it is taken into the custody of the court.^^ 
 And when there are no allegations of defendant's insolvency. 
 
 5 Utah, 361. See, also, Baker v. 
 Adm'r of Backus, 32 111., 115, 116; 
 Whitehead v. Wooten, 43 Miss., 
 523; Davis v. Browne, 2 Del. Ch., 
 188; Probasco v. Probasco, 30 N. 
 J. Eq., 108. Bloodgood v. Clark, 4 
 Paige, 574, was an appeal from a 
 decision of the Vice-Chancellor, re- 
 fusing an application for a receiver 
 of the property and effects of de- 
 fendants in a creditor's bill. Wal- 
 worth, Chancellor, says, p. 576: 
 "The Vice-Chancellor was wrong in 
 supposing that a receiver could not 
 be appointed, in a case of this kind, 
 until after the defendants had put 
 in their answer. By the ancient 
 practice of the Court of Chancery 
 in England, a receiver was not ap- 
 pointed until after the coming in of 
 the defendant's answer. This prac- 
 tice appears to have been first 
 broken in upon in the case of Comp- 
 ton V. Bearcroft, in 1773. And Lord 
 
 Kenyon, the master of the rolls, ap- 
 pointed a receiver before answer in 
 the case of Vann v. Barnett, in 1787, 
 2 Brown's C. C, 158. He said that, 
 although a motion for a receiver 
 before answer was then unusual, 
 yet had it been necessary he would 
 have made a precedent. And it 
 now appears to be well settled, both 
 here and in England, that a receiver 
 may be appointed before answer, 
 provided the plaintiff can satisfy the 
 court that he has an equitable claim 
 to the property in controversy, and 
 that a receiver is necessary to pre- 
 serve the same from loss." 
 
 57 Johns V. Johns, 23 Ga., 31. 
 
 58 See Bloodgood v. Clark, 4 
 Paige, 574; Bank of Monroe v. 
 Schermerhorn, Clarke Ch., 214. 
 
 59 Clark v. Ridgely, 1 Md., Ch., 
 70; Brick Company v. Robinson, 55 
 Md., 410; Latham v. Chafee, 7 Fed., 
 525; West v. Swan, 3 Edw. Ch.,
 
 124 RECEIVERS. [chap. IV. 
 
 or of danger to the property and interests concerned, the re- 
 lief will not be granted before answer,^^ So when insolvency 
 is the ground relied upon, but the affidavit on which the 
 application is based merely states that defendant is not deemed 
 a responsible man by those who know him, and the affidavit of 
 defendant fully negatives the insolvency, a receiver will be re- 
 fused.^^ And in an action brought by a shareholder of a cor- 
 poration to cancel certain illegal stock, and to restrain the 
 holders of such- shares from assigning or incumbering them, 
 the appointment of a receiver of the shares is improper upon 
 an ex parte application before answer, when it is not shown 
 that defendants are irresponsible, or that there is any danger 
 of loss from a transfer of the shares.^2 
 
 § 107. Application before answer heard on affidavits; 
 motion to discharge receiver after ansv^er. Interlocutory 
 applications for a receiver before answer are usually supported 
 by affidavits of the grounds relied upon, and it would ordinarily 
 seem to be sufficient if the facts upon which the application 
 is based are verified by the affidavit of plaintiff alone.^^ And 
 when plaintiff moves for an injunction and a receiver upon 
 bill filed, before the coming in of the answer, upon grounds of 
 emergency, defendant may be heard by affidavit in opposition 
 to the motion. ^^ If the appointment is made before answer, 
 
 420; Baker v. Adm'r of Backus, 32 must be strong and special reasons 
 
 III., lie, 116; Beecher v. Bininger, for the appointment before answer, 
 
 7 Blatchf., 170; Whitehead v. as on proof of fraud, by affidavits, 
 
 Wooten, 43 Miss., 523. "The ap- or immediate danger to the proper- 
 
 pointment of a receiver," says Sim- ty, unless at once taken in charge 
 
 rail, J., in the case last cited, "is a by the court." 
 
 peremptory remedial measure. Its 60 Simmons v. Wood, 45 How. 
 
 effect is to deprive the defendant Pr., 269. 
 
 in possession, temporarily at least, 61 West v. Swan, 3 Edw. Ch., 420. 
 
 of his property, before final decree 62 People v. Albany & Susque- 
 
 settling the rights of parties liti- hanna R. Co., 7 Ab. Pr., N. S., 290. 
 
 gant. If the application is made 63 Jones v. Dougherty, 10 Ga., 
 
 before the merits of the cause are 273 ; Krohn v. Weinberger, 47 West 
 
 disclosed, as before a pro confesso Va., 127, 34 S. E., 746. 
 
 or answer filed, there must be 64 Kean v. Colt, 1 Halst. Ch., 365 
 strong grounds laid. . . . There
 
 CHAP. IV.] ■ PRACTICE. 125 
 
 it is proper for the defendant, after filing his answer, to move 
 to discharge the receiver; and if, upon such motion, the bill and 
 answer, taken together, show that a receiver ought not to have 
 been appointed, he will be discharged.^^ 
 
 § 108. Appointment not to be antedated. It would 
 seem that, as regards the rights of third persons, the appoint- 
 ment of a receiver will not be allowed to take effect or date 
 back by relation to a period prior to his appointment. It is, 
 therefore, improper to insert such a clause in the order of ap- 
 pointment, and its insertion will not be allowed to affect the 
 rights of parties in interest and not notified. ^^ 
 
 § 109. May be made at the final hearing. Although it 
 is the usual practice to apply for a receiver upon interlocutory 
 motion, yet in a proper case the appointment may be made at 
 the final hearing, and as a part of the final decree.^^ Thus, in 
 case of a judgment or decree dissolving a partnership, when 
 a receiver is necessary to wind up the firm business, the ap- 
 pointment may be made as a part of the decree and for the 
 purpose of carrying it into effect.^s go where the right to a 
 receiver depends upon questions of law of much nicety, as well 
 as questions of title which are involved in considerable doubt, 
 the court may properly refuse the application in limine, and 
 leave it to be determined upon a final hearing of the cause.^^ 
 And the appointment may be made at the final hearing, even 
 though the bill contains no prayer for a receiver.'^*^ 
 
 § 110. Allowed after final decree in cases of emergency : 
 illustrations; appointed pending appeal. While it rarely 
 happens that courts are called upon to appoint a receiver after 
 
 65 PhcEiiix Mutual Life Insurance 68 Shulte v. Hoffman, 18 Tex., 
 Co. V. Grant, 3 MacArthur, 220. 678. 
 
 66 Artisans Bank v. Treadwell, 34 69 Hawkins v. Luscombe, 2 
 Barb., 553. Swans., 375. 
 
 67 Shulte V. Hoffman, 18 Tex., "0 See observations of the Vice- 
 678; Shee v. Harris, 1 Jo. & Lat., Chancellor in Osborne v. Harvey, 
 91. See, also, Bowman v. Bell, 14 1 Y. &'C. C. C, 116; Bowman v. 
 Sim., 392; Sheldon v. Parker, 66 Bell, 14 Sim., 392. 
 
 Neb., 634, 92 N. W., 923, 95 N. W., 
 1015. And see, ante, § 6.
 
 126 RECEIVERS. • [chap. IV. 
 
 a final decree in the cause, the power of appointment after 
 decree is well settled and is exercised in cases of great emer- 
 gency, or where the relief is indispensable for the protection of 
 the parties in interest."^! Thus, in an action brought by persons 
 beneficially interested under a will, against the trustees and 
 executors, to have the trusts of the will performed under 
 direction of the court, if after decree the conduct of the trus- 
 tees is such as to render a receiver necessary, the court will en- 
 tertain the application, even though the bill contains no prayer 
 for a receiver.'^^ Sq in an action to determine the conflict- 
 ing rights of parties to real estate, when a final decree has been 
 rendered establishing plaintiff's title and right to a portion of 
 the property, but the decree contains no specific directions to 
 defendants to surrender possession of such portion, and they 
 refuse so to do, plaintiff may have a receiver for the purpose of 
 collecting and preserving the rents, and to insure their proper 
 application to the expenses of the estate. In such case, the re- 
 ceiver is not appointed for the purpose of executing the de- 
 cree, or to turn defendants out of possession, but only to pro- 
 tect the rights of plaintiffs in the property. And the fact that 
 the bill did not pray a receiver is no bar to the relief in such 
 case, since the appointment is made because of circumstances 
 subsequent to the decree.''^ So after a decree for the fore- 
 closure of a mortgage, a receiver of the rents of the mortgaged 
 premises was allowed, as against a tenant in possession for 
 more than nineteen years, but who was not a party to the suit, 
 ihe exigency of the case requiring the relief to prevent the ten- 
 ant from setting up an adverse possession of twenty years.*^* 
 And after a final decree confirming a sale of land to a purchas- 
 
 71 Wright V. Vernon, 3 Drew., 208, 4 N. W., 124 ; Haas v. Chicago 
 
 112; Bowman v. Bell, 14 Sim, 392; Building Society, 89 111, 498. See, 
 
 Thomas v. Davies, 11 Beav., 29; also, Hiles v. Moore, 15 Beav., 175. 
 
 Connelly v. Dickson, 76 Ind., 440; 72 Bowman v. Bell, 14 Sim, 392. 
 
 Brinkman ?/. Ritzinger, 82 Ind., 358; 73 Wright v. Vernon, 3 Drew., 
 
 Chicago & Southeastern Ry. Co. v. 112. 
 
 St. Clair, 144 Ind., 371, 42 N. K, 74 Thomas v. Davies, 11 Beav., 29. 
 225; Schreiber v. Carey, 48 Wis.,
 
 CHAP. IV.] PRACTICE. 127 
 
 er at a judicial sale and awarding a writ of assistance, the pur- 
 chaser being entitled to the rents may have a receiver pending 
 an appeal by defendant, it appearing that defendant is in- 
 solvent, and that if he is permitted to retain possession the 
 rents will be lost to the purchaser.'^^ So, pending an appeal 
 from a decree for the sale of real property in satisfaction of 
 liens thereon, the court below has power to appoint a receiver 
 to care for and rent the property until the further order of the 
 court."^^ So, pending an appeal from a decree dismissing a 
 bill to foreclose a mortgage, the lower court may appoint a re- 
 ceiver to collect the rents and profits pending the appeal.'^''' 
 So when real estate of a debtor has been decreed to be sold in 
 satisfaction of liens and demands of his creditors, a receiver 
 has been appointed by the court below upon the application 
 of the creditors, to receive the rents and profits pending an 
 appeal and supersedeas to such decree, the defendant being 
 insolvent, and the lands being insufficient to satisfy the liens 
 thereon.'''^ But a strong case of probable injury must be made 
 out to warrant the court in entertaining the application at this 
 stage of the cause."^^ And upon a bill by a mortgagor against 
 a mortgagee for redemption of the mortgaged premises, after 
 a decree directing the redemption, the court will not, upon the 
 ex parte application of defendant, entertain a motion for a 
 receiver, such a practice being without precedent or authority. ^^ 
 
 "^5 Merrill v. Elam, 2 Tenn. Ch., action involving the title to real 
 
 513. As to the effect of the appeal property, a decree had been entered 
 
 upon such order appointing a re- adjudging the title in the plaintiff, 
 
 ceiver, see Payne v. Baxter, 2 Tenn. whereupon the defendant had prayed 
 
 Ch., 517. and perfected an appeal, it was held 
 
 7^6 Moran v. Johnston, 26 Grat., under the code of Iowa that a re- 
 
 108; Adkins v. Edwards, 83 Va., ceiver should be appointed to take 
 
 316, 2 S. E., 439. care of the property pending the 
 
 77 Coleman v. Fisher, 66 Ark., 43, appeal. Mitchell v. Roland, 95 
 48 S. W., 807. Iowa, 314, 63 N. W., 606. 
 
 78 Beard v. Arbuckle, 19 West 79 Adair v. Wright, 16 Iowa, 385. 
 Va., 145; Hutton v. Lockridge, 27 80 Barlow v. Gains, 8 Beav., 329. 
 West Va., 428. And where, in an
 
 128 RECEIVERS. [chap. IV. 
 
 III. Notice of the Application. 
 
 § 111. Courts exceedingly averse to interfering without notice. 
 
 112. The rule imperative, not discretionary; want of notice ground 
 
 for reversal; how taken advantage of; no receiver without 
 notice where injunction is sufficient. 
 
 113. What must be shown to warrant departure from the rule. 
 
 114. Whether service of process necessary, qiiccre. 
 
 115. Notice required in case of insolvent corporation. 
 
 116. Personal service of notice not always requisite; parties in court 
 
 by counsel. 
 
 117. Notice dispensed with when defendant has absconded; non- 
 
 resident defendants; partnership; foreclosure. 
 
 § 111. Courts exceedingly averse to interfering without 
 notice. Courts of equity are exceedingly averse to the ex- 
 ercise of their extraordinary jurisdiction by the appointment 
 of receivers upon ex parte applications, and this practice is 
 never tolerated except in cases of the gravest emergency, de- 
 manding the immediate interference of the court for the pre- 
 vention of irreparable injury, or in cases where defendant 
 has absconded and wilfully put himself beyond the jurisdiction 
 of the court. And it may be stated as the settled practice, 
 both in England and in America, to require the moving party 
 to give due notice of the application to defendant, over whose 
 efifects he seeks the appointment of a receiver, in order that 
 he may have an opportunity of being heard in defense, and that 
 his property may not be summarily wrested from him upon an 
 ex parte application. Even in exceptional cases of great emer- 
 gency, when the relief is demanded for the prevention of ir- 
 remediable injury, the courts are extremely averse to interfer- 
 ence ex parte, and will ordinarily entertain the application only 
 after notice to defendant, or after a rule to show cause.^^ 
 
 81 Verplanck z'. Mercantile Insur- Field v. Ripley, 20 How. Pr., 26; 
 
 ance Co., 2 Paige, 438; Sandford v. Crowder v. Moone, 52 Ala., 220; 
 
 Sinclair, 8 Paige, 373; People v. Moritz j;. Miller, 87 Ala., 331, 6 So., 
 
 Albany & Susquehanna R. Co., 7 269; Thompson v. Tower M. Co., 
 
 Ab. Pr., N. S., 265, 1 Lans., 308, 87 Ala., 77,2,, 6 So., 928; Bank of 
 
 55 Barb., 34, 38 How. Pr., 228; Florence v. United States S. & L.
 
 CHAP. IV.] 
 
 PRACTICE. 
 
 129 
 
 § 112. The rule imperative, not discretionary; want of 
 notice ground for reversal; how taken advantage of; no 
 receiver without notice where injunction is sufficient. Xhe 
 rule of practice thus stated, requiring notice to defendant 
 before an application for a receiver will be entertained, would 
 seem to be not a matter of discretion with the court, but an 
 inflexible rule which the courts are not at liberty to disregard. 
 
 Co., 104 Ala, 297, 16 So., 110; Little 
 Warrior Coal Co. v. Hooper, 105 
 Ala., 665, 17 So., 118; Gilreath v. 
 Union Bank & Trust Co., 121 Ala., 
 204, 25 So., 581 ; Pollard v. South- 
 ern Fertilizer Co., 122 Ala., 409, 25 
 So., 169; Ensley Development Co. 
 V. Powell, 147 Ala., 300, 40 So., 137 ; 
 Fischer v. Superior Court, 110 Cal., 
 
 129, 42 Pac, 561 ; State v. J., P. & 
 M. R. Co., 15 Fla., 201; Stockton 
 V. Harmon, 32 Fla., 312, 13 So., 833 ; 
 Jacksonville Ferry Co. v. Stockton, 
 40 Fla., 141, 23 So., 557; Rogers v. 
 Dougherty, 20 Ga., 271 ; Cummings 
 V. Steele, 6 Idaho, 666, 59 Pac, 15; 
 Wabash R. Co. v. Dykeman, 133 
 Ind., 56, 32 N. E., 823; Continental 
 Clay & M. Co. v. Bryson, 168 Ind., 
 485, 81 N. E., 210; Henderson v. 
 Reynolds, 168 Ind., 522, 81 N. E., 
 494; Bisson v. Curry, 35 Iowa, 72, 
 following French v. Gifford, 30 
 Iowa, 148; Howe v. Jones, 57 Iowa, 
 
 130, 8 N. W., 451, 10 N. W., 299; 
 State V. City of New Orleans, 43 
 La. An., 829; Blondheim v. Moore, 
 11 Md., 365; Triebert v. Burgess, 11 
 Md.. 452; Nusbaum v. Stein, 12 
 Md., 315; Voshell v. Hynson, 26 
 Md., 83 ; Anderson v. Cecil, 86 Md., 
 490, 38 Atl., 1074; Whitehead v. 
 Wooten, 43 Miss., 523 ; Buckley v. 
 Baldwin, 69 Miss., 804, 13 So., 851; 
 Meridian N. & P. Co. v. Diem & 
 W. P. Co., 70 Miss., 695. 12 So., 
 702; Rees v. Andrews, 169 Mo., 177, 
 
 Receivers — 9. 
 
 69 S. W., 4; State v. Dearing, 184 
 Mo., 647, 111 S. W., 967; State v. 
 District Court, 20 Mont, 284, 50 
 Pac, 852; Grandin v. La Bar, 2 N. 
 Dak., 206; Fredenheim v. Rohr, 87 
 Va., 764, 13 S. E., 193, 266; Larsen 
 V. Winder, 14 Wash., 109, 44 Pac, 
 123, 53 Am. St. Rep., 864; Ruffner 
 V. Mairs, 33 West Va., 655, 11 S. 
 E., 5; Davelaar v. Blue M. I. Co., 
 110 Wis., 470, 86 N. W., 185; North 
 America Land & T. Co. v. Watkins, 
 48 C. C. A., 254, 109 Fed., 101; 
 Cabaniss v. Reco M. Co., 54 C. C. 
 A., 190, 116 Fed., 318; Joseph Dry 
 Goods Co. V. Hecht, 57 C. C. A., 
 64, 120 Fed., 760; Huff v. Bidwell, 
 81 C. C. A., 43, 151 Fed., 563; Ford 
 V. Taylor, 137 Fed., 149; Caillard 
 V. Caillard, 25 Beav., 512; In re 
 Potts, (1893) 1 Q. B., 648. And see 
 Fisher v. Trust Co., 138 N. C, 90, 
 50 S. K, 592; Baker v. Baker, 108 
 Md., 269, 70 Atl., 418. But see 
 Heard v. Murray, 93 Ala., 127, 9 
 So., 514; Werborn's Adm'r t/. Kahn, 
 93 Ala., 201, 9 So., 729. Under the 
 statutes of Iowa, a receiver may be 
 appointed in an action at law, be- 
 fore notice to the defendant. Jones 
 V. Graves, 20 Iowa, 596. In Sulli- 
 van Electric L. & P. Co. v. Blue, 
 142 Ind., 407, 41 N. E., 805, it was 
 held that no sufficient cause was 
 shown for the appointment of a re- 
 ceiver without notice under a stat- 
 ute which provided that receivers
 
 130 RECEIVERS. [chap. IV. 
 
 And it is held to be error for the court to entertain the appli- 
 cation, and to appoint a receiver without notice to the adverse 
 party.^2 And the fact that a receiver is appointed upon the 
 same day with the filing of the bill, without notice to defendant 
 of the application, is deemed sufficient ground for reversing 
 the action of the court.^^ So when the appointment was made 
 without notice to defendants, who were merchants residing and 
 doing business in the same city, and within a short distance 
 from the court, no imperative necessity being shown for such 
 haste, the order of the court was revoked. ^^ So it is improper 
 to appoint a receiver without notice where the verification of 
 the bill is based merely upon the opinion of the affiant and con- 
 tains no recital of facts upon which such opinion is founded. ^^ 
 And it is held that a court should not appoint a receiver with- 
 out notice for a longer time than is fairly and reasonably neces- 
 sary to allow defendant whose possession is invaded to show 
 cause against the further continuance of the receivership.^^ 
 And especially should the court not appoint a receiver with- 
 out notice where no summons has been issued in the cause.^ 
 And when plaintilT had procured the appointment of a receiver 
 upon an ex parte application, late at night, and the receiver 
 
 should not be appointed until the 22 Fla., 422; Larsen v. Winder, 14 
 
 adverse party should have appeared Wash., 109, 44 Pac, 123, 53 Am. St. 
 
 or should have had reasonable no- Rep., 864. See, also. Railway Co. 
 
 tice of the application, except upon v. Jewett, 2>7 Ohio St., 649. 
 
 sufficient cause shown by affidavit. 83 Nusbaum v. Stein, 12 Md., 315. 
 
 And see Winchester E. L. Co. v. 84 Triebert v. Burgess, 11 Md., 
 
 Gordon, 143 Ind., 681, 42 N. E., 914. 452. 
 
 In Michigan it is held that the ap- 85 Continental Clay & M. Co. v. 
 
 pointment of a receiver ex parte is Bryson, 168 Ind., 485, 81 N. E., 210. 
 
 a nullity and that a writ of manda- 86 St. Louis, K. & S. R. Co. v. 
 
 mils will lie from the supreme court Wear, 135 Mo., 230, 36 S. W., 357, 
 
 to compel the lower court to vacate 658, 33 L. R. A., 341. In this case 
 
 such order of appointment. Gold- it was held that the appointment of 
 
 man v. Manistee Circuit Judge, 155 a receiver without notice with a rule 
 
 Mich., 47, — N. W., — . to defendant to show cause, which 
 
 82 Bisson V. Curry, 35 Iowa, 72, could not be heard for three months, 
 
 following French v. Gifford, 30 was improper. 
 
 Iowa, 148; Fricker v. Peters & C. 87 Alexander Gas Co. v. Irish, 
 
 Co., 21 Fla., 254; Moyers v. Coiner, 152 Ind., 535, 53 N. E., 762.
 
 CHAP. IV.] PRACTICE. 131 
 
 sold the property early the following morning, the court set 
 aside the sale, and revoked the appointment as contrary to 
 equity, and in conflict with the due and ordinary course of 
 procedure in courts of justice.^^ And a receiver should not be 
 appointed without notice where a temporary restraining order 
 or an interlocutory injunction will afford ample protection.^^ 
 And the judgment of a lower court, revoking the appointment 
 of a receiver, because of want of notice, will be affirmed by a 
 court of error.^o But it is held in Maryland that no advantage 
 can be taken in an appellate court of the want of notice, except 
 by an appeal from the order appointing the receiver.^^ Under 
 the New York chancery practice, however, if the court below 
 had improperly allowed an ex parte application for a receiver 
 and the appointment was clearly irregular, defendant could 
 not appeal directly from that order, but was required first to 
 apply to the court below to set aside or modify the order, 
 and if upon a proper application the court refused so to do, an 
 appeal would then lie from the order denying the application.^^ 
 But where the propriety of the action of the court in appoint- 
 ing a receiver without notice has been considered by the court 
 upon a motion to discharge the receiver and the court has sus- 
 tained the original order by refusing to discharge him, the 
 want of notice of the appointment is thereby cured.^^ But 
 upon an appeal from an order appointing a receiver, if the 
 record is silent as to whether due notice of the application was 
 given to defendant, it will be presumed that the court below 
 did not act without proof of notice.^^ And the statutory re- 
 quirement of notice to the defendant of an application for a 
 receiver is waived where the parties have appeared and con- 
 
 88 Simmons v. Wood, 45 How. 91 Voshell v. Hynson, 26 Md., 83. 
 Pr., 268. 92 Gibson v. Martin, 8 Paige, 481. 
 
 89 Fischer v. Superior Court, 110 93 Bristow v. Home B. Co., 91 
 Cal., 129, 42 Pac, 561 ; Henderson Va., 18, 20 S. K, 946. 
 
 V. Reynolds, 168 Ind., 522, 81 N. 94 Miller v. Shriner, 86 Ind., 493. 
 
 E., 494. 
 
 90 Rogers v. Dougherty, 20 Ga., 
 271.
 
 132 RECEIVERS. [chap. IV. 
 
 sented to the appointment or have resisted the application upon 
 grounds other than the want of notice.^^ 
 
 § 113. What must be shown to warrant departure from 
 the rule. To warrant a court in entertaining an apphca- 
 tion for a receiver without notice, it must be clearly shown that 
 the delay which would result from giving notice would defeat 
 the rights of plaintiff, or would result in great injury to him.^^ 
 Thus, it has been held proper to appoint a receiver without 
 notice where it appeared that there was imminent danger that 
 the property involved would be removed beyond the jurisdic- 
 tion and unlawfully disposed of if notice should be given,^'^ 
 And when the relief is sought upon an ex parte application, 
 upon the ground of extreme necessity, the particular facts and 
 circumstances rendering such summary proceeding necessary 
 should be set forth in the application, and a mere statement of 
 opinion as to such necessity, even though made under oath, 
 will not justify a departure from the established rule requiring 
 notice of the application.^^ And where no notice is given, the 
 
 95 Farmers & Merchants Bank v. ance Co., 2 Paige, 438 ; Wabash R. 
 German National Bank, 59 Neb., Co. v. Dykeman, 133 Ind., 56, 32 
 229, 80 N. W., 820; Veith v. Ress, N. E., 823; Bank of Florence v. 
 60 Neb., 52, 82 N. W., 116; Murphy United States S. & L. Co., 104 Ala., 
 V. Fidelity M. F. Ins. Co., 69 Neb., 297, 16 So., 110; Gilreath v. Union 
 489, 95 N. W., 1022. Bank & Trust Co., 121 Ala., 204, 
 96Maynard v. Railey, 2 Nev., 25 So., 581; Pollard v. Southern 
 313 ; Culver v. Guyer, 129 Ala., 602, Fertilizer Co., 122 Ala., 409, 25 So., 
 29 So., 779; Tuttle v. Blow, 176 169; Fricker v. Peters & C. Co., 21 
 Mo., 158, 75 S. W., 617, 98 Am. St. Fla., 254; Jacksonville Ferry Co. v. 
 Rep., 488; Cole v. Price, 22 Wash., Stockton, 40 Fla., 141, 23 So., 557; 
 18, 60 Pac, 153; Baltimore Bargain Davelaar v. Blue M. I. Co., 110 
 House V. St. Clair, 58 West Va., Wis., 470, 86 N. W., 185. In Ver- 
 565, 52 S. E., 660. For facts justi- planck v. Mercantile Insurance Co., 
 fying the appointment of receivers 2 Paige, 438, Walworth, Chancellor, 
 without notice, see Maxwell v. says, p. 450: "By the settled prac- 
 Peters Shoe Co., 109 Ala., 371, 19 tice of the court in ordinary suits, 
 So., 412; O'Donnell v. First Na- a receiver can not be appointed, ex 
 tional Bank, 9 Wyo., 408, 64 Pac, parte, before the defendant has had 
 337. an opportunity to be heard in rela- 
 97 State V. District Court. 22 tion to his rights, except in those 
 Mont., 241, 56 Pac, 281. cases where he is out of the juris- 
 ts Verplanck v. Mercantile Insur- diction of the court, or can not be
 
 CHAP. IV.] PRACTICE. 133 
 
 bill should, in addition to showing the necessity for the ap- 
 pointment, set forth the reasons justifying the failure to give 
 the necessary notice, or such reasons must at least appear from 
 the affidavits presented in support of the application.^^ And 
 a receiver should not be appointed without notice where at the 
 hearing of the motion there was no testimony of witnesses 
 and the verification of the bill was upon information and be- 
 lief.l 
 
 § 114. Whether service of process necessary, quaere. 
 As to whether defendant must be actually served with process 
 in the cause, in addition to notice of the motion for a receiver, 
 before the court will entertain the application, is not quite clear 
 from the authorities. It would seem, upon principle, that un- 
 der the prevailing practice of hearing the application before 
 answer, no real necessity exists of formal service of process 
 in the cause as a foundation for the motion, if defendant has 
 due notice of the application. And under the English chan- 
 cery practice, plaintiff was at liberty, immediately upon filing 
 his bill, to serve defendant with notice of the motion before ap- 
 pearance.2 But it has been held that a receiver should not be 
 appointed unless the court has obtained jurisdiction by service 
 of process, as well as notice to the parties in interest of the 
 application.^ And it has been held erroneous to appoint a 
 
 found ; or where, for some other Ogilvie's affidavit in this case, that 
 
 reason, it becomes absolutely neces- he was satisfied of the necessity of 
 
 sary for the court to interfere be- such a proceeding, was not suffi- 
 
 fore there is time to give notice to cient. He should have stated the 
 
 the opposite party, to prevent the facts on which his opinion was 
 
 destruction or loss of property. founded, to enable the court to 
 
 Formerly it was never done until judge of its correctness." 
 
 after answer. In every case where 99 Baltimore Bargain House v. 
 
 the court is asked to deprive the St. Clair, 58 West Va., 565, 52 S. 
 
 defendant of possession of his prop- E., 660. 
 
 erty without a hearing, or an op- 1 Benepe-Owenhouse Co. v. 
 
 portunity to oppose the application, Scheidegger, 32 Mont, 424, 80 Pac, 
 
 the particular facts and circum- 1024; Henderson v. Reynolds, 168 
 
 stances which render such a sum- Ind., 522, 81 N. E., 494. 
 
 mary proceeding proper should be 2 Meaden v. Sealey, 6 Hare, 620. 
 
 set forth in the bill or petition on 3 Whitehead v. Woolen, 43 Miss., 
 
 which such application is founded. 523. "It can not well be seen," say
 
 134 RECEIVERS. [CPIAP. IV. 
 
 receiver without notice where no summons has been issued in 
 the cause.^ If, however, a receiver is prayed for as a part of 
 the final rehef sought in the action, the process which brings 
 defendant into court to answer is sufficient notice of the final 
 relief prayed. Upon appeal, therefore, from the appointment 
 of a receiver in such case as part of the final decree, it will not 
 be reversed because of the want of other notice of the appli- 
 cation.^ And it has been held by the Court of Appeals of the 
 District of Columbia that, while it is an unusual practice to ap- 
 point a receiver before service of process, yet where the court 
 has jurisdiction of the subject-matter, the power exists to do 
 so in case of an emergency and that the existence of such emer- 
 gency is not subject to collateral inquiry,^ 
 
 § 115. Notice required in case of insolvent corporation. 
 Even under a statute authorizing the appointment of receiv- 
 ers over insolvent corporations, the appointment will not be 
 made ex parte and without an opportunity to the defendant of 
 being heard. And the practice of the New York Court of 
 Chancery in such cases was, upon the filing of a petition duly 
 verified, setting forth the grounds upon which the application 
 was based, to issue an order to show cause, a copy of which was 
 served upon the proper officers of the corporation, directing 
 them, at a future day therein named, to show cause why the 
 application should not be granted.*^ 
 
 § 116. Personal service of notice not always requisite; 
 parties in court by counsel. It is not in all cases indis- 
 pensable that the notice should be personally served upon each 
 defendant, provided service be had upon one of the defend- 
 ants authorized to represent the others. Thus, it is held suffi- 
 cient to serve the notice upon a defendant who is the author- 
 
 the court, Simrall, J., p. 527, "how 4 Alexandria Gas Co. v. Irish, 152 
 
 the court can take from a defend- Ind., 535, 53 N. E., 762. 
 
 ant the possession of property, un- 5 Newell v. Schnull, 72> Ind., 241. 
 
 less it has jurisdiction by service of 6 Barley v. Gittings, 15 App. D. 
 
 process and also by notice of mo- C, 427. 
 
 tion." And see Hyslop v. Hoppock, 7 Devoe v. Ithaca & Owego R. 
 
 5 Benedict, 447. Co., 5 Paige, 521.
 
 CHAP. IV.] PRACTICE. 135 
 
 ized agent of his co-defendant, and who is acting under a power 
 of attorney from him in the management of the very property 
 over which a receiver is sought.^ And the apphcation may be 
 entertained and determined without any previous formal no- 
 tice to the parties in interest, when they are actually repre- 
 sented in court by counsel who appear in resistance to the 
 motion.^ 
 
 § 117. Notice dispensed with v^hen defendant has ab- 
 sconded; non-resident defendants; partnership; foreclo- 
 sure. While it is the uniform practice, as already shown, 
 to entertain applications for receivers only after due notice to 
 the parties against whom the relief is sought, a departure from 
 this practice is allowed when a defendant has absconded for 
 the purpose of avoiding service of process. And in such cases 
 the application may be entertained without notice, service of 
 process, or appearance by defendant ; i^ especially when plain- 
 tiff has given notice of the application to the agents and ten- 
 ants of defendant's estate, over which a receiver is sought.^l 
 So notice may be dispensed with when defendant has left the 
 state and is not expected to return for several months, and no 
 person is authorized to represent him, and it is necessary to 
 appoint a receiver without delay to collect rents which would 
 otherwise be lost. In such case the order of appointment 
 should reserve to defendant the right to apply for relief against 
 the order upon cause shown.^^ Sq a receiver has been ap- 
 pointed without notice upon a bill by one partner against his 
 copartners, the bill alleging the insolvency of defendants, that 
 
 8 Mays v. Rose, Freem. (Miss.), 10 Maguire v. Allen, 1 Ball & B., 
 703. And see Maguirc v. Allen, 1 75; Dowling v. Hudson, 14 Beav., 
 Ball & B., 75. 423. See Gibbons v. Mainwaring, 9 
 
 9 McLean v. Lafayette Bank, 3 Sim., 11; Williams v. Jenkins, 11 
 McLean, 503; Miller v. Cavanaugh, Ga., 595. 
 
 99 Ky., m, 35 S. W., 920, 59 Am. H Maguire v. Allen, 1 Ball & B., 
 
 St. Rep., 463; Consolidated Barb 75. 
 
 Wire Co. v. Stevenson, 71 Kan., 64, 12 People v. Norton, 1 Paige, 17. 
 
 79 Pac, 1085. See, also, Haugan v. 
 
 Netland, 51 Minn., 552, 53 N. W., 
 
 873.
 
 136 RECEIVERS. [chap. IV. 
 
 they were collecting debts due to the firm and disposing of its 
 assets, and that they had excluded complainant from the part- 
 nership premises. 12 So, too, the relief has been granted upon 
 a bill to foreclose a mortgage upon growing crops, the bill 
 averring the insolvency of defendant, the mortgagor, that the 
 crops were in danger of being lost or destroyed, that defendant 
 had applied a portion of them in disregard of complainant's 
 rights, and that the security was inadequate.^* And where real 
 estate had been conveyed by a debtor in trust for the payment 
 of his debts, and the trustee had been in possession a number 
 of years without paying, a creditor was allowed a receiver un- 
 til answer, the trustee residing beyond the jurisdiction of the 
 court and not having appeared in the action. ^^ And under 
 a statute authorizing the appointment upon such notice to 
 the adverse party as the court may prescribe, when such adverse 
 party is beyond the jurisdiction of the court in another state, 
 it is not error to make the order without notice, when neces- 
 sary for the prevention of serious loss.^^ So under the code 
 of procedure of New York, it is held that a receiver may be 
 appointed over a partnership in an action for a dissolution, 
 upon the appearance of the resident partners, without notice 
 to a non-resident partner.^"^ But when it does not appear that 
 defendant has left the country to avoid service of process, and 
 no particular circumstances of hardship are shown, an ex 
 parte application for a receiver will not be entertained. ^^ 
 
 13 Sims V. Adams, 78 Ala., 395. 16 Maish v. Bird, 59 la., 307, 13 
 
 14 Ashurst V. Lehman, 86 Ala., N. W., 298. 
 
 370, 5 So., 731. See, also, Hendrix 17 Alford v. Berkele, 29 Hun, 633. 
 
 V. American F. L. M. Co., 95 Ala., 18 Stratton v. Davidson, 1 Russ. 
 
 313, 11 So., 213. & M., 484. 
 
 15 Malcolm v. Montgomery, 2 
 Mol., 500.
 
 CHAPTER V. 
 
 OF THE RECEIVER'S BOND AND LIABILITY THEREON. 
 
 I. Of the Bond § 118 
 
 II. Liability of Sureties 127 
 
 I. Of the Bond. 
 
 § 118. Bond or recognizance required; English practice; when bond 
 dispensed with. 
 
 119. Receiver's own recognizance sometimes sufficient; appoint- 
 
 ment by consent. 
 
 120. New York doctrine; security dispensed with. 
 
 121. Title does not vest until bond is executed; failure ground for 
 
 nonsuit; may be filed nunc pro tunc. 
 121a. Upon filing bond receiver's title relates back to date of ap- 
 pointment. 
 
 122. Appointment on final decree; effect of omitting bond. 
 
 123. Additional security required on extending receiver. 
 
 124. Eftect of bond by defendant to account as receiver. 
 
 125. Assignment of mortgage as security for receivership. 
 
 126. When bond to be approved by the court. 
 126c. Statute of limitations. 
 
 126b. New bond upon making temporary receiver permanent. 
 
 § 118. Bond or recognizance required; English prac- 
 tice; when bond dispensed with. Receivers are usually- 
 required, before entering upon their duties, to enter into a bond 
 or recognizance for the faithful performance of their duties, 
 with adequate security, the amount and conditions of the 
 security being usually determined by the court making the 
 appointment, due regard being had to the value of the property 
 or fund intrusted to the receiver's management. Under the 
 practice of the English Court of Chancery, established at an 
 early period, a receiver was required to enter into a recogni- 
 
 137
 
 13S RECEIVERS. [chap. V. 
 
 zance with two sureties,^ and it was customary to require him 
 to give security in all cases when the order was made in the 
 usual way by the court, and a reference had to a master to ap- 
 point ; and it was held that the security could not be dispensed 
 with in such cases, even by consent of the parties to the action.^ 
 If, however, the parties themselves agreed upon a receiver to 
 be appointed, not by authority of court, but by their own 
 consent, and then asked that he should act without giving the 
 usual security, it was regarded as proper to permit this to be 
 done.3 And when a receiver was appointed without salary, 
 it was said to be not unusual to dispense with the security 
 otherwise required.'* And a mortgagee of West Indian estates 
 was in one case appointed receiver in England, without being 
 required to give the usual security.^ 
 
 § 119. Receiver's own recognizance sometimes suffi- 
 cient; appointment by consent. It was held in an early 
 English case that persons named as receivers by parties to the 
 cause might be appointed upon their own recognizances only.^ 
 And when a receiver was satisfactory to all parties except the 
 defendant, and had been in the previous possession and man- 
 agement of the estate in controversy, it was provided by the 
 terms of the decree that he should be allowed to give security 
 by his individual recognizance."^ But in the Irish Court of 
 Chancery it is held that a receiver will not be appointed with- 
 out giving adequate security, even though the parties in in- 
 terest consent that he may be appointed merely upon his own 
 recognizance.^ 
 
 § 120. New York doctrine ; security dispensed with. In 
 New York the obligation of a receiver to give adequate se- 
 curity for the faithful performance of his trust is regarded as 
 being founded upon the general practice of courts of equity, 
 
 1 Mead v. Orrery, 3 Atk., 235. 5 Davis v. Barrett, 13 L. J., N. S. 
 
 2 Manners v. Furze, 11 Beav., 30. Ch., 304. 
 
 See, also, Tylee v. Tylee, 17 Beav., 6 Ridout v. Earl of Plymouth, 
 
 583. Dick., 68. 
 
 3 Manners v. Furze, 11 Beav., 30. 7 Carlisle v. Berkley, Amb., 599. 
 
 4 Gardner v. Blane, 1 Hare, 381. 8 Bailie v. Bailie, 1 Ir. Eq., 413.
 
 CHAP, v.] BOND AND LIABILITY. 
 
 139 
 
 and it is held to be within the power of the court to dispense 
 with the security in cases where it is plainly unnecessary. For 
 example, where, in proceedings by judgment creditors against 
 their debtor, the same person is appointed receiver in different 
 actions brought by different creditors, it is held that he need 
 not give new security in each successive action, if he has al- 
 ready given ample security.^ 
 
 § 121. Title does not vest until bond is executed; failure 
 ground for nonsuit; may be filed nunc pro tunc. The re- 
 ceiver's title and authority as well as his right of possession 
 are dependent on and accrue only upon his giving the requisite 
 bond or security as fixed by the order of his appointment.i^ 
 And a failure to execute the bond in due form, as required by 
 the order, is ground for a nonsuit in an action brought by the 
 receiver in his official capacity/^ although a mere informality 
 in the bond, as the fact that it was not executed under seal, can 
 not be taken advantage of in an action brought by the receiver 
 against third parties.^^ But if the order appointing a receiver 
 does not require the giving of any security, the omission to 
 give a bond constitutes no defense to an action brought by the 
 receiver.12 And in an action brought by a receiver pursuant 
 to an order of the court, in the absence of any affirmative or 
 direct evidence as to the giving of a bond, the fact that the 
 court directed the bringing of such action may be taken as 
 presumptive evidence that he had perfected his title by filing 
 a bond. And in such case it is improper to dismiss his action 
 for want of evidence tending to show the filing of the bond.i"^ 
 
 9 Banks v. Potter, 21 How. Pr., H Johnson v. Martin, 1 Thomp. & 
 469. C. (N. Y. Supreme Court), 504. 
 
 10 Johnson v. Martin, 1 Thomp. & And see as to receiver's failure to 
 C. (N. Y. Supreme Court), 504; give security as ground for revers- 
 Defries v. Creed, 34 L. J., N. S. ing decree, Tomlinson v. Ward, 2 
 Eq., 607; Edwards v. Edwards, 2 Conn., 396. 
 
 Ch. D., 291, reversing S. C, 1 Ch. 12 Morgan v. Potter, 17 Hun, 403. 
 
 D., 454; Woods ^'. Ellis, 85 Va., 471, 13 Wilson v. Welch, 157 Mass., 
 
 7 S. E., 852; Crumlish's Adm'r v. 77, 31 N. E., 712. 
 
 Shenandoah V. R. Co., 40 West Va., 14 Hegewisch v. Silver, 140 N. Y., 
 
 627, 22 S. E., 90. But see Ex parte 414, 35 N. E., 658. 
 
 Evans, 13 Ch. D., 252.
 
 140 RECEIVERS. [chap. V. 
 
 If, however, between the date of the appointment and the time 
 of giving the required bond of recognizance, a sohcitor in the 
 cause receives money due as rents or proceeds of the sale of 
 property which is the subject-matter of the receivership, he 
 may be compelled, after the bond or recognizance is perfected, 
 to pay such money to the receiver.^^ And when a receiver exe- 
 cutes his bond in due form, with sufficient sureties, and the 
 bond is approved by the parties, but through inadvertence is 
 not filed with the court, and the receiver takes possession of 
 the assets committed to his charge, it is proper for the court to 
 direct the bond to be filed nunc pro tunc, so as to complete the 
 receiver's appointment and render him liable to account as an 
 officer of the court, for the property which came to his hands 
 subsequent to the time when the bond should have been filed. 
 And this may be done, notwithstanding the parties to the liti- 
 gation have, after the receiver's appointment, submitted the 
 matter in dispute to referees for settlement, and have consent- 
 ed to a decree dividing the property equally between them; 
 since such submission to arbitration does not alter or affect the 
 liability of the receiver to account for the property intrusted 
 to him.l^ So where, on his appointment, a receiver had en- 
 tered into a recognizance with two sureties, and one of them 
 afterward caused himself to be discharged, and the receiver 
 entered into a new recognizance, but the time for enrolling it 
 had elapsed, it was ordered to be entered mine pro tunc.^'^ 
 
 § 121a. Upon filing bond, receiver's title relates back to 
 date of appointment. Notwithstanding some conflict of 
 authority, the doctrine may now be regarded as well estab- 
 lished that, upon the filing of his bond in accordance with the 
 order of the court, the receiver's title to and right to the pos- 
 session of the property over which he is appointed have rela- 
 tion back to the date of his appointment. Such title will, 
 
 15 Wickens v. Townshend, 1 17 Vaughan v. Vaughan, Dick., 
 Russ. & M., 361 ; In re Birt, 22 Ch. 90. 
 
 D., 604. 
 
 16 Whiteside v. Prendergast, 2 
 Barb. Ch., 471.
 
 CHAP, v.] 
 
 BOND AND LIABILITY. 
 
 141 
 
 therefore, be upheld as against creditors levying upon the 
 property between the date of the receiver's appointment and 
 the filing of his bond.i^ And this is true, even though such 
 intermediate process issues from a federal court, the receiver 
 having been appointed by a state court, since the question is 
 purely one of jurisdiction, to be determined in favor of the 
 court which first acquires control over the property in contro- 
 versy. ^^ 
 
 § 122. Appointment on final decree; effect of omitting 
 bond. When a receiver is appointed as a part of the final 
 judgment or decree in the cause, and for the purpose of car- 
 rying out and executing that decree, the fact that the court has 
 failed to require any bond of the receiver constitutes no ground 
 for reversing the decree on error, since the omission will be 
 regarded as the fault of the defendant in not insisting upon a 
 bond.20 And the omission to require a bond is not error when 
 
 18 Steele v. Stiirgis, 5 Ab. Pr., 
 442; In re Christian Jensen Co., 128 
 N. Y., 550, 28 N. E., 665; In re 
 Schuyler's S. T. B. Co., 136 N. Y., 
 169, 32 N. E., 623; Maynard v. 
 Bond, 67 Mo., 315; Clinkscales v. 
 Pendleton M. Co., 9 S. C, 318; 
 Regenstein v. Pearlstein, 30 S. C, 
 192, 8 S. E., 850; Temple v. Glas- 
 gow, 25 C. C. A., 540, 80 Fed., 441, 
 42 U. S. App., 417, affirming S. C, 
 73 Fed., 709. And see Ex parte 
 Evans, 13 Ch. D., 252. See, contra, 
 De Fries v. Creed, 34 L. J., N. S. 
 Eq., 607; Edwards v. Edwards, 2 
 Ch. D., 291, reversing S. C, 1 Ch. 
 D., 454. In Virginia it is held that 
 when a receiver, appointed to col- 
 lect the purchase money of real es- 
 tate, collects such money before fil- 
 ing his bond and defaults as to the 
 proceeds, the purchaser may be com- 
 pelled to again make payment, not- 
 withstanding the receiver files his 
 bond after collecting the money. 
 
 Woods V. Ellis, 85 Va., 471, 7 S. E., 
 852. But the case is plainly incon- 
 sistent with the doctrine as stated 
 in the text, that upon filing his bond 
 the receiver's title relates back to 
 the date of his appointment. Un- 
 der the statute of Alabama which 
 provides that before a receiver shall 
 be appointed without notice the 
 plaintiff shall give bond conditioned 
 to pay all damages suffered by the 
 adverse party if the appointment is 
 vacated, it is held error to appoint 
 a receiver without requiring plain- 
 tiff to file such a bond. Capital 
 City Water Co. v. Weatherly, 108 
 Ala., 412, 18 So., 841; Dreyspring 
 V. Loeb, 113 Ala., 263, 21 So., 11; 
 David V. Levy, 119 Ala.. 241, 24 So., 
 589. 
 
 19 /« re Schuyler's S. T. B. Co., 
 136 N. Y., 169, 32 N. E., 623. 
 
 20Shulte V. Hoffman, 18 Tex., 
 678.
 
 142 RECEIVERS. [chap. V. 
 
 no bond is required by the statute or code of procedure under 
 which the proceeding is had.-^ 
 
 § 123. Additional security required on extending re- 
 ceiver. Under the Irish chancery practice it is customary, 
 Avhen a receiver has been appointed over real property, and 
 subsequent apphcations are made for a receiver over the same 
 estate, to extend the appointment of the former receiver to such 
 apphcations. And on being so extended, he is required to give 
 additional security, or, in defauh thereof, he will be removed 
 and another appointment made.22 
 
 § 124. Effect of bond by defendant to account as re- 
 ceiver. Where, upon a bill in equity to enforce an interest 
 in a trust fund and for a receiver pendente lite, the court re- 
 fuses to appoint a receiver, upon condition of defendant exe- 
 cuting a bond to account as receiver for all goods and money 
 which have come into his possession, and to pay them over 
 pursuant to the decree of the court, such a bond will be deemed 
 good as a common-law obligation. And the obligor, although 
 not considered as a receiver or officer of the court, stands in the 
 light of one who, for a personal accommodation, has assumed 
 a legal responsibility, and after receiving the benefits of the 
 obligation he is estopped from denying its legality.^^ 
 
 § 125. Assignment of mortgage as security for receiver- 
 ship. Where one of three executors of an estate was ap- 
 pointed receiver in another matter, and he, with the other ex- 
 ecutors, united in assigning a mortgage of their testator, 
 held by them as executors, as security for such receivership, 
 although such course was regarded as exceedingly reprehen- 
 sible, it was held that the assignment was good and could not 
 be questioned, and that it must stand as security for whatever 
 amount might be due from the receiver.24 
 
 § 126. When bond to be approved by the court. It is 
 customary in the order of appointment to provide that the 
 
 21 Dilling V. Foster, 21 S. C, 334. And see, ante, § 9 and, post, §§ 308 
 
 22 Wise V. Ashe, 1 Ir. Eq.. 210. and 478. 
 
 23 Baker v. Bartol, 7 Cal., 551. 24 Mead v. Orrery, 3 Atk.. 235.
 
 CHAP, v.] BOND AND LIABILITY. 143 
 
 sureties upon the bond shall be approved by the court, although 
 it is sometimes provided that they may be approved by the 
 clerk. But when the law under which a receiver is appointed 
 authorizes his appointment and the approval of his bond by 
 the court, both acts being required to be performed by the court 
 itself, it is not proper that the bond should be approved by the 
 clerk of the court.25 But it is not necessary that the sureties 
 should be citizens of the state in which the action is pending, 
 and the court may accept non-resident sureties.26 
 
 § 126(7. Statute of limitations. It is held in England 
 that money due from a receiver, and not accounted for in the 
 settlement of his accounts, is to be treated as a debt of record, 
 as regards the application of the statute of limitations in an 
 action for the recovery of such money. And it would seem 
 that, as to money due from the receiver and not accounted for, 
 he occupies the relation of a trustee to the parties in interest, 
 and that such indebtedness is not barred by the statute of limi- 
 tations.27 
 
 § 126b. New bond upon making temporary receiver per- 
 manent. Where a temporary receiver is appointed and 
 files a proper bond which is approved by the court, if he is 
 afterward, by the judgment of the court, made permanent re- 
 ceiver in the cause, the court, may in its discretion require a 
 new bond, or, if satisfied with the security of the one already on 
 file, may permit him to act without exacting an additional 
 bond, and until required by the court to do so, the receiver is 
 under no obligation to furnish such additional security.28 
 
 25 Newman v. Hammond, 46 Ind., 27 Seagram v. Tuck, 18 Ch. D., 
 119. 296. 
 
 26 Taylor v. Life Association of 28 Jones v. Blun, 145 N. Y., 333, 
 America, 3 Fed., 465. 39 N. E., 954.
 
 1 44 RECEIVERS. [chap. V. 
 
 II. Liability of Sureties. 
 
 § 127. Sureties held to strict liability; how discharged, 
 
 128. On death of one surety receiver must procure another. 
 
 129. When liability becomes absolute; right of action; practice. 
 129a. Independent action against surety. 
 
 130. Suit against sureties on death of receiver. 
 
 130a. How far sureties concluded by order on receiver. 
 
 131. Liability for interest; costs of attachment; surety protected by 
 
 injunction. 
 
 132. Effect of payment by surety to solicitor. 
 
 133. Surety may be reimbursed out of balance in receiver's hands; 
 
 ordered to refund; remedy in equity. 
 
 133a. Sureties of clerk of court appointed receiver; liability to credit- 
 ors not named in bond. 
 
 I33b. Surety not liable for violation of duties beyond scope of ap- 
 pointment. 
 
 133(7. Surety may be liable although bill is afterwards dismissed. 
 
 § 127. Sureties held to strict liability; how discharged. 
 
 The sureties of a receiver are usually held very strictly to 
 the obligation of their recognizance or bond, and will not be 
 discharged therefrom upon their own application, unless such 
 course appears to be for the benefit of the parties to the cause,^^ 
 or unless fraud is shown, and it is made to appear that the 
 person secured by the recognizance is connected with such 
 fraud ; and if these facts are not shown, a bill to have a recog- 
 nizance vacated will be dismissed. ^^ But it is competent for 
 the parties in interest in a cause to consent that the receiver's 
 recognizance or bond be vacated as to one surety, and that he 
 be discharged, without releasing the remaining surety from his 
 liability. When it is desired to pursue this course, the contin- 
 uing surety and the receiver should enter into a written consent 
 or agreement, providing that the recognizance shall continue to 
 be binding upon them, notwithstanding it has been vacated as 
 
 29 Griffith V. Griffith, 2 Ves., 400. 30 Hamilton v. Brewster, 2 Mol., 
 
 407.
 
 CHAP, v.] BOND AND LIABILITY. 145 
 
 to the retiring surety. This agreement should be verified by 
 affidavit, and should state that the parties consent to the vacat- 
 ing of the recognizance as to the one surety, without prejudice 
 to the liability of the receiver and of the other surety, as well for 
 acts before as for those afterward done, and that they will not 
 rely on such discharge in defense of any future proceedings 
 which may be brought against them.^^ Where the premises 
 subject to a receivership have been sold under the final decree 
 in the cause, and the purchaser has been put in possession, this 
 has been held equivalent to a discharge of the receiver, and 
 sufficient ground for vacating his recognizance.^2 
 
 § 128. On death of one surety receiver must procure an- 
 other. Where one of the sureties upon the recognizance 
 of a receiver dies, without leaving any property which may be 
 made available for the purpose of satisfying the recognizance, 
 the court will require the receiver to procure a new surety.^s 
 
 § 129. When liability becomes absolute ; right of action ; 
 practice. When the bond or recognizance given by a re- 
 ceiver is conditioned to be void if he shall duly perform his 
 duties as receiver and account to the court, the obligation be- 
 comes absolute upon his failure so to do.34 It is held, how- 
 ever, that the receiver and his sureties are not liable to an action 
 upon the bond until he has failed to obey some order of the 
 court touching the effects placed in his hands. And the proper 
 practice would seem to be, to first apply to the court for a rule 
 upon the receiver to render his account. After the account is 
 adjusted and approved by the court, and the receiver is or- 
 dered to pay the effects in his hands into court, or to the person 
 entitled thereto, a failure to comply with such order renders 
 himself and his sureties liable. The receiver and his sureties 
 can not, therefore, be sued upon the bond until the court has 
 
 31 Callaghan v. Callaghan, 8 Ir. 33Averall v. Wade, Flan. & K., 
 Eq., 572; O'Keeffe v. Armstrong, 2 341. 
 
 Ir. Ch., N. S., 115. '^^ Maunsell v. Egan, 3 Jo. & 
 
 32 Anonymous, 2 Ir. Eq., 416. Lat, 251. 
 
 Receivers — 10.
 
 146 RECEIVERS. [chap. V. 
 
 adjudicated the question, and made some order touching the 
 rights of the parties to the property in his hands. ^^ 
 
 § 129a. Independent action against surety. While a 
 court of equity has the undoubted power, either by its decree 
 or by rule of court, to provide that a receiver and his surety 
 may be proceeded against, in order to enforce the liability of 
 the bond, in the original action, yet, where the court takes 
 from the receiver an ordinary common-law bond with surety, 
 conditioned for the faithful discharge of his duties and a com- 
 pliance with the orders of the court, the obligation of the 
 surety is one which can be enforced only in a separate action 
 at law upon the bond in which he may have his constitutional 
 right of trial by jury. And the court has no power to proceed 
 against him summarily by rule to show cause or by motion 
 in the cause unless he has part of the trust fund in his hands 
 and then only to the extent of such fund.^^ 
 
 § 130. Suit against sureties on death of receiver. 
 Where, upon the death of a receiver, there is a balance due from 
 him to the estate, the amount of which is not definitely ascer- 
 tained, the court, on petition of the parties in interest, will 
 grant leave to put the recognizance in suit against the sureties. 
 The receiver in such case not having paid the balance into 
 court, there is a forfeiture of the recognizance, constituting a 
 debt due from the receiver, and, there being no means of pur- 
 suing the ordinary remedy against him, resort may be had to 
 the surety.^"^ 
 
 35 State V. Gibson, 21 Ark., 140; to the estate, and prayed that the 
 Bank of Washington v. Credit- recognizance into which he had 
 ors, 86 N. C, 323; Atkinson v. entered might be put in suit 
 Smith, 89 N. C, 72. against his real and personal 
 
 36 Kirker v. Owings, 39 C. C. A., representatives and his sureties, 
 132, 98 Fed., 499; Black v. Gent- or that his personal representa- 
 ery, 119 N. C., 502, 26 S. E., 43. tive might forthwith pass the ac- 
 
 37 Ludgater v. Channell, 3 Mac. counts of his receipts and pay- 
 & G., 175, reversing S. C., 15 Sim., ments in respect to the estate. 
 479. The petition in this case al- On appeal from the decision of 
 leged that the receiver had died, the Vice-Chancellor dismissing 
 leaving a balance due from him the petition, leave was granted
 
 CHAP, v.] 
 
 BOND AND LIABILITY. 
 
 147 
 
 § 130a. How far sureties concluded by order on re- 
 ceiver. In an action against the sureties upon the bond 
 of a receiver of an insolvent corporation, an order made in the 
 cause in which the receiver was appointed, fixing the amount 
 due from him and directing its payment, is competent evidence 
 against the sureties, both as to the breach of the bond and as 
 to the amount due. And in such an action, the omission of the 
 receiver to pay to himself as receiver money which he had 
 borrowed from the corporation before his appointment is a 
 breach of the condition of his bond, for which the sureties are 
 liable. Nor, in such case, can the liability of the sureties be 
 
 to bring suit against the sureties. 
 Lord Truro observes, p. 179, as 
 follows: "It is of the utmost im- 
 portance that the functions of re- 
 ceivers, who are the officers of 
 this court, should be duly dis- 
 charged. The respondents in the 
 present case are the sureties, and 
 the representatives of the re- 
 ceiver; and the recognizance in 
 question was entered into in pur- 
 suance of a general order of the 
 court. Now the obligation of a 
 receiver is to account once a 
 year, and to pay his balances into 
 court; but here this duty was en- 
 tirely omitted, thus involving a 
 forfeiture of the recognizance, 
 and consequently constituting a 
 debt due by the receiver. Upon 
 the death of the receiver the 
 parties interested in the fund 
 come to the court and state that 
 redress may be had in one of two 
 ways, either against the represent- 
 atives of the receiver, or against 
 his sureties. They present their 
 claim in a double aspect, and call 
 on the court to grant them relief 
 as against one or other of the re- 
 spondents to the petition; and it 
 is obvious that if either of the re- 
 
 spondents had been omitted, the 
 other would have objected, and 
 with some reason, to his absence. 
 But the administratrix says she is 
 not accountable in this form of pro- 
 ceeding; and the sureties, on their 
 part, allege that there is a positive 
 rule of practice that the surety can 
 not be made to account until the 
 receiver has been called upon, and 
 further, that the mode of proceed- 
 ing in such a case is by bill against 
 the personal representative. I can, 
 however, find no authority for the 
 rule which it is thus sought to es- 
 tablish. . . . The books of prac- 
 tice show that where there are not 
 the means of pursuing the ordinary 
 course against the receiver, the 
 surety may be had recourse to; and 
 the first part of the prayer of the 
 petition is for leave to sue the 
 sureties. Not, therefore, now de- 
 ciding whether the surety shall pay, 
 or whether the administratrix may 
 or may not be called on to account 
 in this form of proceeding, I think 
 that the first part of the prayer of 
 the petition must be granted, and 
 it is unnecessary for me to advert 
 further to the alternative relief 
 sought."
 
 148 RECEIVERS. [chap. V. 
 
 reduced by the fact that the receiver has rendered vahiable 
 services as such, his compensation for which has not yet been 
 determined or paid.^^ But when the undertaking of the surety 
 is that the receiver will thenceforth faithfully discharge his 
 duties, the surety will not be liable for any default or miscon- 
 duct of the receiver prior to the execution of the bond. And 
 in such case the surety, in an action upon his bond, is not con- 
 cluded by an accounting as to the amount due from the re- 
 ceiver, and by an order fixing the amount, made in the cause 
 in which the receiver was appointed, when the surety was 
 not a party to such accounting, and was not heard thereon. ^^ 
 But if the receiver does in fact receive and collect certain notes, 
 which he is not authorized to receive in payment for the hiring 
 of property which he is authorized to hire, his sureties are liable 
 in an action upon the bond for his failure to account for the 
 proceeds. ^^ 
 
 § 131. Liability for interest; costs of attachment; sure- 
 ty protected by injunction. As a general rule, the sureties 
 of receivers will be held responsible, not only for all sums of 
 principal for which the receiver is in default, but also for in- 
 terest due thereon, and for which the receiver is liable.^^ This 
 liability of the surety for interest is, however, regarded as 
 somewhat discretionary with the court. ^^ And where the re- 
 ceiver had been bankrupt with full knowledge of all parties 
 for a considerable length of time, and no steps had been taken 
 to compel the passing of his accounts, the sureties were relieved 
 from paying interest.^s But the sureties of a defaulting re- 
 ceiver will be held liable to the extent of the sum secured by 
 
 3S Commonwealth v. Gould, 118 ties upon the bond of such former 
 
 Mass., 300. receiver. 
 
 39 Thomson v. MacGregor, 81 N. 41 Dawson v. Raynes, 2 Russ., 
 
 Y., 592. 466. 
 
 40Weems v. Lathrop, 42 Tex., 42 /„ re Herrick's Minors, 3 In 
 
 207. And see this case as to the Ch., N. S., 183. 
 
 right of a receiver, appointed upon 43 Dawson v. Raynes, 2 Russ., 
 
 the death of a former receiver, to 466. 
 maintain an action against the sure-
 
 CHAP, v.] BOND AND LIABILITY 149 
 
 the recognizance, for the costs of an attachment against him 
 for not accounting, as well as the costs of an application for 
 his removal, and for the appointment of his successor.^^ When 
 the surety has paid in full the entire balance due from the re- 
 ceiver, he may be protected by injunction from the enforcement 
 of judgment upon his recognizance for anything more.^^ 
 
 § 132. Effect of payment by surety to solicitor. Where 
 proceedings at law were instituted against the surety to enforce 
 payment of money due from the receiver, who had been dis- 
 charged under the insolvent debtor's act, it was held that pay- 
 ment of the money by the surety to the solicitor prosecuting 
 the proceedings was not a sufficient payment, and the court re- 
 fused to discharge the proceedings against the surety until 
 plaintiff had been served with notice of the application. But 
 notice having been served, and the plaintiff not appearing or 
 resisting, the proceedings against the surety were discharged.^^ 
 
 § 133. Surety may be reimbursed out of balance in re- 
 ceiver's hands; ordered to refund; remedy in equity. A 
 surety upon a receiver's bond is in a certain sense regarded as 
 an officer of the court, to the extent that he is entitled to be re- 
 imbursed what he has been compelled to pay for the receiver, 
 out of the balance in the latter's hands. The court will not, 
 therefore, permit the receiver to withdraw a balance due him 
 until the surety is reimbursed, and only the balance will be paid 
 to the receiver.47 And when the surety, to indemnify himself 
 for his liability, receives a portion of the funds collected by the 
 receiver, knowing them to be a part of the trust funds in the 
 
 44 Mannsell v. Egan, 8 Ir. Eq., out of court the balance due him 
 372, affirmed on appeal, 9 Ir. Eq., until he should satisfy payments 
 283; S. C, 3 Jo. & Lat., 251. made by the surety on his account. 
 
 45 In re Herrick's Minors, 3 Ir. Lord Eldon observes, page 135 : 
 Ch., N. S., 183. "Where the surety for a receiver 
 
 46 Mann v. Stennett, 8 Beav., 189. in this court is called upon to pay, 
 
 47 Glossup V. Harrison, 3 Ves. & as the receiver is an officer of the 
 Bea., 134. This was a motion by court, and the surety is so in a 
 the surety of a receiver vnho had sense, if there is anything due in 
 been discharged by order of the account between them, justice re- 
 court, to restrain him from taking quires that upon the application
 
 150 
 
 RECEIVERS. 
 
 [chap. v. 
 
 liands of the latter, the court has sufficient jurisdiction over the 
 surety by reason of his suretyship and of his intermeddhng 
 with the funds, to act by an order in personam in the cause in 
 which the receiver was appointed, directing the surety to pay 
 such money into court. ^^ And in Mississippi, it is held to be 
 an appropriate exercise of legislative authority to confer upon 
 a court of equity, jurisdiction over the bond of a receiver and 
 over the sureties, such jurisdiction being regarded as an- 
 cillary to its jurisdiction over the subject-matter in controversy. 
 A statute, therefore, authorizing a court of equity to give a 
 remedy by scire facias against the sureties is held to be valid and 
 constitutional.'*^ 
 
 § 133a. Sureties of clerk of court appointed receiver; li- 
 ability to creditors not named in bond. When the court 
 has appointed its own clerk as receiver in a cause, in the ab- 
 sence of any statute in force at the date of the bond fixing the 
 liability of his sureties in such case, the sureties upon the offi- 
 cial bond of the clerk are not liable for his default as receiver, 
 since they are presumed to have contracted with reference only 
 to his liability as clerk.^^ But, although the bond is conditioned 
 for the payment of certain creditors named, and the creditors 
 have been fully paid, yet if it is further conditioned that the 
 
 of the surety he shall be indemnified 
 for what he has paid for the re- 
 ceiver out of the balance due him. 
 If that has not been decided, as I 
 think it has, it must be decided 
 upon principle, as it is clearly capa- 
 ble of being maintained upon equi- 
 table grounds. The court, there- 
 fore, can not part with the fund, 
 until an opportunity is given of de- 
 termining the claim of the surety; 
 the amount of which, when ascer- 
 tained, must be paid to him ; and 
 the residue only must be paid to 
 the receiver." 
 
 48 Seidenbach v. Denklespeil, 11 
 Lea., 297. 
 
 49 Bank v. Duncan, 52 Miss., 740. 
 
 As to the right of a surety upon a 
 receiver's bond to appeal from an 
 order for the payment of the 
 amount of the bond, made in the 
 cause in which the receiver was 
 appointed, see In re Guardian Sav- 
 ings Institution, 78 N. Y., 408. 
 
 50 Kerr v. Brandon, 84 N. C, 
 128; Rogers v. Odom, 86 N. C, 
 432; Syme v. Bunting, 91 N. C, 48. 
 But see Syme v. Bunting, 91 N. C, 
 48, and Waters v. Melson, 112 N. 
 C, 89, 16 S. E., 918, as to the effect 
 of a statute enlarging the clerk's 
 liability in such cases, and as to the 
 liability of sureties upon his official 
 bond given after the passage of the 
 statute.
 
 CHAP, v.] BOND AND LIABILITY. 151 
 
 receiver will well and truly account for all moneys received by 
 him, and will pay over all such moneys and comply with all 
 orders of the court concerning the same, a breach of such condi- 
 tion will warrant a recovery against the sureties in behalf of 
 creditors who are not expressly named in the bond.^^ 
 
 § 133^7. Surety not liable for violation of duties beyond 
 scope of appointment. The liability of a surety upon the 
 bond of a receiver conditioned for the faithful performance 
 of his duties is limited to cases of a violation of those duties 
 which may properly be said to be within the scope of the order 
 of appointment. Accordingly, where a receiver, without any 
 authority from the court, has proceeded to borrow money to 
 pay off a mortgage upon real estate which is in his possession 
 as receiver and fails to account for it, the surety upon his 
 bond is not liable for such misappropriation since the act of 
 the receiver was entirely beyond the scope of the order of his 
 appointment. ^2 
 
 § 133c Surety may be liable although bill is afterward 
 dismissed. Where the appointment of a receiver was reg- 
 ularly made in a matter over which the court had assumed 
 jurisdiction, and the receiver afterwards embezzles the pro- 
 ceeds of the sale of certain property which had come into his 
 possession as receiver, the sureties upon his bond are liable for 
 the loss although the entire proceeding is afterwards dismissed 
 for want of jurisdiction.^^ 
 
 51 Ross V. Williams, 11 Heisk., 53 Baltimore B. & L. Assn. v. Al- 
 410. derson, 39 C, C. A., 609, 99 Fed., 
 
 52 Preston v. American Surety 489. 
 Co., 104 Md., 40, 64 Atl., 292.
 
 CHAPTER VI. 
 
 OF THE RECEIVER'S POSSESSION. 
 
 I. Nature of Receiver's Possession § 134 
 
 II. Ikterference with Receiver's Possession 163 
 
 I. Nature of Receiver's Possession. 
 
 § 134. Receiver's possession is possession of the court; illustrations. 
 
 135. When and to what extent regarded as possession of either 
 
 party. 
 
 136. Title and right to possession vest back to time of appointment, 
 
 but not beyond; effect of appeal. 
 
 137. The doctrine in Maryland. 
 
 138. Receiver acquires possession subject to existing liens; liens 
 
 for taxes; unrecorded mortgage; no liens acquired after ap- 
 pointment. 
 
 139. Person asserting claim to property must apply to court. 
 
 140. Receiver's possession protected by injunction; illustrations; 
 
 may proceed by petition in receivership suit. 
 140o. Property in receiver's hands not subject to seizure for taxes. 
 
 141. Property not allowed to be sold under execution; not subject 
 
 to process of another court. 
 
 142. Receiver can pay money only by order of court. 
 
 143. Interference with receiver's possession not justified because 
 
 appointment was improper. 
 
 144. Receiver entitled to aid of court to obtain possession. 
 
 145. Courts reluctant to interfere by receiver with property of third 
 
 persons; receiver should assert claim by independent action. 
 
 146. Third persons permitted to come in and be heard. 
 
 147. Practice of English Chancery to compel defendant to deliver 
 
 lands to receiver. 
 
 148. New York practice as to receiver obtaining possession. 
 
 149. Writ of assistance; when right of possession not determined on 
 
 motion; state and federal courts. 
 
 150. Third person forcibly dispossessed by receiver; how redressed. 
 
 151. Receiver not subject to attachment or garnishment as to funds 
 
 in his possession; exceptions; may be garnisheed by leave of 
 court. 
 
 152. Possession as between different receivers determined by prior- 
 
 ity. 
 
 152
 
 CHAP. VI.] POSSESSION. 153 
 
 153. Right to possession as between receiver and assignee in bank- 
 
 ruptcy. 
 
 154. Rights of common. 
 
 155. Mixture of funds by auctioneer; right of receiver. 
 
 156. Distraint for rent upon goods which have passed into receiv- 
 
 er's possession. 
 
 157. When receiver of deceased not entitled to fund held by 
 
 creditor. 
 
 158. Possession of wharf by receiver; injunction to restrain inter- 
 
 ference with. 
 
 159. Possession of commercial paper by receiver not that of bona 
 
 fide holder. 
 
 160. Defendant relieved from responsibility for property in receiv- 
 
 er's possession. 
 
 161. Receiver's title not divested by order when he is not a party; 
 
 effect of appeal on his possession. 
 
 162. Disposal of property by final decree. 
 
 162a. Right to possession not divested when property taken beyond 
 state or country; when rule not applicable. 
 
 § 134. Receiver's possession is that of court; illustra- 
 tions. The precise nature of the possession held by a 
 receiver of the property or estate intrusted to his charge is fre- 
 quently a question of much importance in determining the 
 relative rights of conflicting claimants to and parties interested 
 in the property. The general proposition is well established, 
 that, the receiver being the officer or agent of the court from 
 which he derives his appointment, his possession is exclusively 
 the possession of the court, the property being regarded as in 
 the custody of the law, m gremio legis, for the benefit of who- 
 ever may be ultimately determined to be entitled thereto.^ 
 
 1 See Robinson v. Atlantic & St. Louis, A. & S. R. Co. v. Ham- 
 Great Western R. Co., 66 Pa. St., ilton, 158 III., 366, 41 N. E., 777; 
 160; Skinner v. Maxwell, 68 N. C, Town of Vandalia v. St. L., V. & T. 
 400; Simmons v. Allison, 118 N. C, H. R. R. Co., 209 111., 7Z, 70 N. E., 
 761, 24 S. E., 740; De Visser v. 662; In re Receivership of the N. I. 
 Blackstone, 6 Blatchf., 235; Mays C. Mill Co., 109 La., 875, 33 So., 
 V. Rose, Freem. (Miss.), 703; Day 903; Bell v. American Protective 
 V. Postal Telegraph Co., 66 Md., League, 163 Mass., 558, 40 N. E., 
 354, 7 Atl., 608; Angel v. Smith, 857, 28 L. R. A., 452, 47 Am. St. 
 9 Ves., 335; HefTron v. Gage, 149 Rep., 481; State v. Reynolds, 209 
 111., 182, 36 N. E., 569; Mulcahey v. Mo., 161, 114 S. W., 1097; Wehrs v. 
 Strauss, 151 III, 70, 37 N. E., 702; Sullivan, 217 Mo., 167, — S. W., — .
 
 154 RECEIVERS. [chap. VI. 
 
 The recel\er*s possession, therefore, is neither adverse to the 
 plaintiff nor to the defendant in the htigation, being only the 
 possession of the court, which holds the property for the 
 greater safety of all parties in interest, the primary object be- 
 ing to secure the thing in controversy, so that it may be sub- 
 ject to such disposition as the court may finally direct. ^ And 
 the receiver of a court of equity being regarded as its executive 
 of^cer, in much the same light in which a sheriff is the execu- 
 tive officer of a court of law, the property in his possession is 
 regarded as in the custody of the law, to the same extent as if 
 levied upon under an execution or attachment.^ And since 
 the possession of a receiver is that of the court, it is held that 
 a change in the receiver does not have the effect of interrupting 
 such possession.'* And such possession, being that of the 
 court, is not adverse to any of the parties in interest, and it 
 is accordingly held that a defendant in ejectment, claiming 
 by adverse possession, can not tack onto his possession that 
 of a receiver who had held the property, in order to complete 
 
 So strictly was this doctrine ad- in fact his agent; all the rents are 
 hered to by Lord Eldon that he ob- applied to his use, either by pay- 
 served in Angel v. Smith, supra, ing his debts, or paramount charges, 
 that, after tenants of real estate had or by being handed over to him." 
 attorned to a receiver appointed over See Simmons v. Allison, 118 N. C, 
 the premises, the court itself be- 761, 24 S. E., 740, supra, as to the 
 came the landlord. But it was said power of a receiver, under the or- 
 by Mr. Justice Hargreave, in the der of the court, to make a lease of 
 Landed Estates Court of Ireland, the property in his possession. As 
 In re Butler's Estate, 13 Ir. Ch., to the duty of a receiver of mort- 
 N. S., 456, that "the general prin- gaged property to lease it and to 
 ciple is, that the possession of the reduce the rentals if such a step be- 
 receiver is that of all parties to the comes necessary, see Northwestern 
 suit, according to their titles. As Mutual Life Ins. Co., v. Burr, 60 
 between the owner and incum- Neb.. 467, 83 N. W., 664. 
 brancers, it is for some purposes 2 Mays 7'. Rose, Freem. (Miss.) 
 the possession of the incumbran- 703; Wilkinson v. Lehman-Durr 
 cers, who have obtained or extended Co., 136 Ala., 463, 34 So., 216. 
 the receiver; as between the owner 3 Blodgett, J., In re Merchants 
 whose possession has been displaced Insurance Co., 3 Biss., 165. 
 and a third party, it is the posses- 4 State v. Reynolds, 209 Mo., 
 sion of the former. The receiver is 161, 114 S. W., 1097.
 
 CHAP. VI.] POSSESSION. 155 
 
 the statutory period. ^ As illustrating- the doctrine that the 
 receiver's possession is that of the court appointing him, it 
 was said in an English case that after tenants of real estate 
 had attorned to the receiver appointed over the premises, the 
 court itself became the landlord.^ But when property is in 
 the actual possession of a receiver, he is regarded as having 
 such a special interest therein that the ownership may be 
 averred in him in an indictment for larceny of the property^ 
 § 135. When and to what extent regarded as posses- 
 sion of either party. It is sometimes asserted as a general 
 principle in the reported cases, that a receiver being appointed 
 primarily for the benefit of all parties in interest, his posses- 
 sion will be treated as the possession of the party who is 
 ultimately determined to be entitled thereto, and that when 
 the question of right is finally determined, the possession of 
 the party prevailing becomes exclusive throughout the whole 
 period, by relation to the date of the receiver's appointment.^ 
 While this principle is true to a limited extent, as that if any 
 benefit is to ensue to the successful party from the mere act 
 of possession, he will be regarded as having been in posses- 
 sion from the first, and none of his rights will be lost because 
 of the receiver's possession, the principle will not be carried 
 to the extent of prejudicing his rights. And when possession 
 of the property in dispute has been taken from defendant by 
 injunction, and the property has been placed in the hands of 
 a receiver, the injunction rendering the appointment of a re- 
 ceiver indispensable for the protection of all parties, if defend- 
 ant is finally adjudged to be entitled to possession and the in- 
 junction is dissolved, the receiver's possession during the inter- 
 val will not be treated as that of defendant, so as to prevent 
 him from claiming and recovering damages because of the 
 injunction.^ But when plaintiff in a bill to recover possession 
 
 5 Wilkinson v. Lehman-Durr Co., 8 See Beverley v. Brooke, 4 Grat., 
 136 Ala., 463, 34 So., 216. 212; Sharp v. Carter, 3 P. W., 375. 
 
 6 Angel v. Smith, 9 Ves., 335. 9 Sturgis v. Knapp, 33 Vt., 486. 
 ''State V. Rivers, 60 Iowa, 3S1. 
 
 13 N. W., 73, 14 N. W., 738.
 
 156 RECEIVERS. [chap. VI. 
 
 of real estate obtains a receiver as against defendant, and ob- 
 tains a verdict in his favor in an action of ejectment to try the 
 title, and the receiver is then ordered to surrender possession 
 to the plaintiff, the receiver's possession will not be deemed 
 that of the defendant, but rather of the plaintiff, who appears 
 to be entitled to the premises. ^^ And when a receiver of mort- 
 gaged premises has been directed to pay the balance in his 
 hands to a mortgagee, and to pass his accounts preliminary to 
 his final discharge, but remains in possession after such order, 
 paying the rents to the mortgagee, his possession after the 
 date of the order will be regarded as that of the mortgagee 
 himself.l^ But it would seem that the appointment of a re- 
 ceiver does not so alter possession of the estate in the person 
 who is ultimately found to have been entitled thereto at the 
 time of such appointment as to prevent the statute of limita- 
 tions from running during the dispute as to the right.^^ 
 
 § 136. Title and right to possession vest back to time 
 of appointment, but not beyond; effect of appeal. As 
 regards the precise time when the receiver's title and right of 
 possession attach to property which is the subject of the receiv- 
 ership, the better rule would seem to be, as held in New York, 
 that they vest by relation back to the date of the original order 
 appointing him, although the proceedings may not be perfected 
 until a later date; and that the receiver's title and right of 
 possession during the interval between such order and the time 
 of perfecting his appointment are superior to those of judg- 
 ment creditors, or of attaching creditors, who levy upon the 
 property during such interval. ^^ Thus, when an order of 
 
 10 Sharp V. Carter, 3 P. W., 375. dleton I\I. Co., 9 S. C, 318; Regen- 
 
 11 Horlock V. Smith, 11 L. J., N. stein v. Pearlstein, 30 S. C, 192, 
 S. Ch., 157; S. C, 6 Jur., 478. 8 S. E., 850; Maynard v. Bond, 67 
 
 12 Anonymous, 2 Atk., 15. Mo., 315; Ardmore National Bank 
 iSRutter v. Tallis, 5 Sandf., 610; v. Briggs M. & S. Co., 20 Okla., 
 
 Steele v. Sturges, 5 Ab. Pr., 442; 427, 94 Pac, 533; Horn v. Pere 
 
 In re Christian Jensen Co., 128 N. Marquette R. Co., 151 Fed., 626. 
 
 Y., 550, 28 N. E., 665 ; In re Schuy- And see Ex parte Evans, 13 Ch. D., 
 
 ler's S. T. B. Co., 136 N. Y., 169, 252; Pope v. Ames, 20 Ore., 199, 
 
 32 N. E., 623; Clinkscales v. Pen- 25 Pac, 393; Baldwin v. Spear, 79
 
 CHAP. VI.] POSSESSION. 157 
 
 reference is made to a master in chancery for the appointment 
 of a receiver, and the appointment is afterward made under and 
 pursuant to such order, the receiver's title will be held to have 
 vested as of the date of the original order, and to have attached 
 upon all property to which the receivership could extend, in 
 like manner and with the same effect as if the original order 
 had named the receiver, instead of directing a reference for 
 that purpose.l^ In all such cases actual possession by the court 
 appointing the receiver is not necessary to complete its juris- 
 diction or control over the property as against other creditors. 
 It is sufficient that the court has assumed jurisdiction over the 
 property in controversy by appointing a receiver, and it is, 
 therefore, as much in the possession of the court as if already 
 in the hands of its receiver, even though he has not yet com- 
 plied with the order requiring the execution of a bond.^^ So 
 when the order provides that, before entering upon the 
 discharge of his duties, the receiver shall execute a bond 
 with sureties, and between the time of such order and the exe- 
 cution of the bond the sheriff levies upon the property, under 
 an execution against the defendants, the receiver's title and 
 right to possession, on perfecting his bond, take effect back 
 to the date of his appointment, and the sheriff will be required 
 to surrender possession of the property to the receiver.i^ So 
 a judgment obtained against a corporation after the appoint- 
 ment of a receiver over the corporation but before the approval 
 of his bond creates no lien upon the corporate property, since 
 the approval of the bond will relate back to the date of the 
 order of appointment.^'^ It is to be observed, however, that 
 the receiver's title does not take effect back to the time of be- 
 
 Vt., 43, 64 Atl., 235. See, contra, Co., 9 S. C, 318. And see Bank of 
 
 Farmers Bank v. Beaston, 7 G. & J., Woodland v. Herow, 120 Cal., 614, 
 
 421; Defries v. Creed, 34 L. J., N. 52 Pac., 1006, as to mere appoint- 
 
 S. Eq., 607; Edwards v. Edwards, ment, ipso facto, constituting pos- 
 
 2 Ch. D., 291, reversing S. C, 1 Ch. session. 
 
 D., 454. 16 Steele v. Sturges, 5 Ab. Pr., 
 
 i4Rutter V. Tallis, 5 Sandf., 610. 442; Maynard v. Bond, 67 Mo., 315. 
 
 15 Clinkscales v. Pendleton M. 17 Temple v. Glasgow, 25 C. C.
 
 158 RECEIVERS. [chap. VI. 
 
 ginning the action in which he was appointed, so as to defeat 
 a levy by the sheriff under a judgment recovered against the 
 defendant prior to the receiver's appointment. ^^ So an attach- 
 ment Hen obtained pending an apphcation for the appointment 
 of a receiver but before he is actually appointed is not invali- 
 dated by his subsequent appointment.^^ And where a bill is 
 filed by stockholders of a railway company, not for the purpose 
 of asserting a lien or enforcing any debt, but merely for the 
 appointment of a receiver to manage the property until arrange- 
 ments may be made for discharging its debts, the filing of 
 the bill and the service of summons will not bring the property 
 of the company under the control of the court so as to prevent 
 the company, prior to the appointment of the receiver, from 
 surrendering certain property and supplies to the person from 
 whom they were purchased in partial payment of the purchase 
 price. 2*^ And when the order appointing a receiver requires 
 him to give a bond before proceeding to act as receiver, until 
 such bond is given he can not maintain an action to recover 
 possession of the property over which he is appointed. ^1 And 
 when the order appointing him is stayed by an appeal and 
 supersedeas, the property will not be deemed in the custody 
 of the law until actually reduced to possession by the receiver 
 after the affirmance of his appointment upon the appeal, until 
 which time it remains in the custody of the original defendant, 
 who is authorized to make necessary contracts for its preser- 
 vation and for the protection of his rights.22 
 
 § 137. The doctrine in Maryland. In Maryland it is 
 held that the appointment of receivers, and executing bonds 
 for the faithful performance of their duties, will not operate 
 to sequestrate the property of defendant, or debts due to him, 
 
 A., 540, 80 Fed., 441, 42 U. S. App., 15 C. C. A., 556, 68 Fed., 515, 30 
 
 417, affirming S. C, 73 Fed., 709. U. S. App., 358. 
 
 IS Artisans Bank v. Treadwell, 21 Phillips v. Smoot, 1 Mackey, 
 
 34 Barb., 553. 478. 
 
 19 Smith V. Nursery & S. Co., 109 22 Cook v. Cole, 55 Iowa, 70, 7 
 Iowa, 51, 79 N. W., 457. N. W., 419. 
 
 20 Illinois Steel Co. v. Putnam,
 
 CHAP. VI.] POSSESSION. 159 
 
 until actually reduced to the receiver's possession. And an 
 indebtedness due to a person over whose affairs receivers have 
 been appointed, but who have not taken possession, may be 
 garnished, notwithstanding such appointment. The reason for 
 the rule is said to be, that the defendant's effects not being in 
 possession of the court until taken into the receiver's custody, 
 the court can not interpose its summary jurisdiction to punish 
 any interference with the possession. And it is held that the 
 period when the effects of the defendant are to be considered 
 as under protection of the court, so as to preserve them from 
 attachment, is the time when the court may interpose an attach- 
 ment to punish a disturbance or interference with the receiver's 
 possession.23 
 
 § 138. Receiver acquires possession subject to existing 
 liens; liens for taxes; unrecorded mortgage; no liens ac- 
 quired after appointment. It is important to observe that 
 the receiver's possession is subject to all valid and existing 
 liens upon the property at the time of his appointment, and 
 does not divest a lien previously acquired in good faith. 2^ And 
 
 23 Farmers Bank v. Beaston, 7 G. Her, 63 Kan., 579, 66 Pac, 617; 
 & J., 421. Graham v. Mutual Aid Society, 161 
 
 24 Gere v. Dibble, 17 How. Pr., Mass.. 357, 37 N. E., 447; Kit- 
 31 ; In re North American Gutta tredge v. Osgood, 161 ]\Iass., 384, 37 
 Percha Co., 17 How. Pr., 549, 9 N. E., 369; Arnold v. Weimer, 40 
 Ab. Pr., 79; Rich v. Loutrel, 18 Neb., 216, 58 N. W., 709; Battery 
 How. Pr., 121 ; Talladega Mercan- Park Bank v. Western C. Bank, 
 tile Co. V. Jenifer Iron Co., 102 127 N. C, 432, 37 S. E., 461 ; Ard- 
 Ala., 259, 14 So., 743 ; Bories v. more National Bank v. Briggs M. & 
 Union B. & L. Assn., 141 Cal., 74, S. Co., 20 Okla., 427, 94 Pac, 533; 
 74 Pac, 552; Mulcahey v. Strauss, Baldwin v. Spear, 79 Vt., 43, 64 
 151 111., 70, 37 N. E., 702; Chicago Atl., 235; First National Bank v. 
 Title & Trust Co. v. Smith, 158 111., Cook, 12 Wyo., 492, 76 Pac, 674, 78 
 417, 41 N. E., 1076; Totten & Hogg Pac, 1083; Cohen v. Gold Creek M. 
 I. & S. F. Co. V. Muncie Nail Co., Co., 95 Fed., 580. And see, post, 
 148 Ind., 372, 47 N. E., 703 ; Amer- § 440. And see Bowling Green 
 ican Trust & Savings Bank v. Mc- Savings Bank v. Todd, 64 Barb., 
 Gettigan, 152 Ind., 582. 52 N. E., 146; Lorch v. Aultman, 75 Ind., 
 793, 71 Am. St. Rep., 345, and note ; 162. And see Von Roun v. Supe- 
 Smith V. Nursery & S. Co., 109 rior Court, 58 Cal., 358. 
 
 Iowa, 51, 79 N. W.. 457; Cramer v.
 
 160 RECEIVERS. £CH.AP. VI. 
 
 when creditors have obtained judgments against tlicir debtor, 
 which are a lien upon his real estate, prior to the appointment 
 of a receiver of the debtor's property and estate, the receiver 
 is seized of the land subject to the lien of the judgments.25 
 So where creditors obtain judgment and levy upon the prop- 
 erty of the debtor, and a receiver is afterward appointed, 
 who takes possession of the property and sells it, the sheriff 
 who made the levy is entitled to the proceeds of such sale.^^ 
 So a receiver can not maintain replevin for property which 
 has been levied upon and reduced to possession by credit- 
 ors having a paramount lien. 27 And the appointment of a 
 receiver over property which is subject to. taxation in no 
 manner affects or impairs a lien upon the property for taxes.28 
 So where personal property comes into the possession of a 
 receiver subject to the lien of taxes previously assessed, he takes 
 it subject to such lien, and the municipality to which the tax 
 is due may intervene in the receivership proceeding and estab- 
 lish the claim as one entitled to a preference.^^ The principle 
 extends, also, to choses in action of the defendant which pass 
 to a receiver by virtue of his appointment, and he takes them 
 subject to existing liens thereon. For example, where attor- 
 neys of a bank are employed to foreclose a mortgage, and pend- 
 ing the foreclosure a receiver is appointed of the affairs of the 
 bank, the receiver takes title to the mortgage or its proceeds, 
 subject to the lien of the attorneys for their services, although 
 buch services can not be urged by way of set-off. The right 
 of the attorneys in such case is dependent upon the common- 
 law lien which an attorney has for his fees upon the papers of 
 his client, as well as upon the proceeds of the litigation, and 
 the attorneys will be required to pay to the receiver only the 
 balance of the proceeds, after deducting their fees. But an 
 
 25 Gere v. Dibble, 17 How. Pr., 27 Conley v. Deere, 11 Lea, 274. 
 31. 28 Union Trust Co. v. Weber, 96 
 
 26 In re North American Gutta III., 346. 
 
 Percha Co., 17 How. Pr., 549; S. 29 Duryee v. United States C. S. 
 
 C, 9 Ab. Pr., 79; Rich v. Loutrel, Co., 55 N. J. Eq., 311, 37 Atl., 155. 
 18 How. Pr., 121.
 
 CHAP. VI.] POSSESSION. 161 
 
 individual member of the firm of attorneys can not, in such 
 a case, be allowed any lien upon the proceeds of the foreclosure 
 suit, as against the receiver, for an amount due him for services 
 rendered the bank by him individually.^^ And where property 
 comes into the possession of a receiver subject to pre-existing 
 liens, it is as much his duty to preserve and protect such liens 
 in favor of the holders thereof as it is to make a just distribu- 
 tion of the assets among the unsecured creditors.^^ But where 
 a mortgage of real estate has been executed before the appoint- 
 ment of a receiver but has not been placed upon record until 
 after his appointment, such mortgage does not constitute a 
 valid lien as against the receiver and the latter is entitled to 
 the proceeds of the sale for the benefit of the general creditors 
 as against the mortgagee.^2 And where a receiver has been ap- 
 pointed and has taken possession of property, no liens can be 
 obtained nor preferences acquired without the consent of the 
 court appointing the receiver.^^ 
 
 § 139. Person asserting claim to property must apply 
 to court. The possession of the receiver being, as already 
 shown, regarded as the exclusive possession of the court from 
 which he derives his appointment, the courts are exceedingly 
 averse to allowing any unauthorized interference therewith, and 
 will not tolerate any attempt to disturb him in his rightful pos- 
 session, without leave of court being first obtained for that 
 purpose.^* And when a person claiming any interest in the 
 
 30 Bowling Green Savings Bank & G., 104; Ames v. Trustees of 
 V. Todd, 64 Barb., 146. Birkenhead Docks, 20 Beav., 332; 
 
 31 American Trust & Savings Brooks v. Greathed, 1 Jac. & W., 
 Bank v. McGettigan, 152 Ind., 582, 176; DeWinton v. Mayor of Brecon, 
 52 N. E., 793, 71 Am. St. Rep., 345, 28 Beav., 200; Spinning v. Ohio 
 and note. Life Insurance -and Trust Co., 2 
 
 32 Cheney v. Maumee Cycle Co., Disney, 368; Vermont & Canada 
 64 Ohio St., 205, 60 N. E., 207. R. Co. v. Vermont Central R. Co., 
 
 33 Cramer v. Her, 63 Kan., 579, 46 Vt., 792; Ex parte Cochrane, L. 
 66 Pac, 617. R., 20 Eq., 282; Mulcahey v. 
 
 34 Evelyn v. Lewis, 3 Hare, 472; Strauss, 151 III, 70. 2,7 N. E., 702; 
 Angel V. Smith, 9 Ves., 335; Rus- St. Louis, A. & S. R. Co. v. Ham- 
 sell V. East Anglian R. Co., 3 Mac. ilton, 158 111., 366, 41 N. E., 777. 
 
 Receivers — 11.
 
 162 RECEIVERS. [chap. VI. 
 
 subject-matter of the litigation is prejudiced by the appoint- 
 ment of a receiver, or desires to assert his rights, the proper 
 course is for the court either to give him leave to bring an 
 action, or to permit him to be examined pro intcresse suo, the 
 latter being generally regarded as the most convenient and 
 desirable practice.^^ Thus, the court will not permit a claimant 
 of real estate which is in possession of its receiver to bring an 
 action of ejectment without first obtaining leave for that pur- 
 pose.^^ So an independent suit can not be maintained against 
 a receiver to foreclose a mortgage upon property in his pos- 
 session, although leave will be given to file such foreclosure 
 bill in the receivership cause.^*^ And ordinarily, when real es- 
 tate is in the actual possession of a receiver, an action of eject- 
 ment can not be maintained against him in another court, but 
 the claimant will be permitted to pursue his remedy against 
 the receiver in the action in which he was appointed. ^^ And 
 if property or funds in the receiver's possession are claimed 
 by third persons not parties to the action in which he was ap- 
 pointed, a petition or motion may be presented to the court for 
 an order on the receiver to deliver over the fund or property 
 to the claimant. ^^ The remedy of a person claiming title to 
 the property is not to regain it by an act of trespass, but to 
 apply to the court for redress or for leave to sue the receiver."*^ 
 And in thus restricting claimants or third parties from inter- 
 fering with the receiver's possession without leave, the rule is 
 
 And see Baltimore & O. R. Co. v. St. Louis, A. & S. R. Co. v. Hamil- 
 
 Flaherty, 87 Md., 102. 39 Atl., 524, ton, 158 111., 366, 41 N. E., 777. 
 
 1076; Read v. Brayton, 143 N. Y., 37 American Loan & Trust Co. v. 
 
 342, 38 N. E., 261. Central V. R. Co., 86 Fed., 390. 
 
 35 Brooks V. Greathed, 1 Jac. & 38 Fort Wayne, M. & C. R. Co. 
 W., 176; Brien v. Paul, 3 Tenn. Ch., v. Mellett, 92 Ind., 535. And see 
 357; Strain v. Palmer, 86 C. C. A., Potter v. Spa Spring Brick Co., 47 
 618, 159 Fed., 628. See, also, Skin- N. J. Eq., 442, 20 At!., 852. 
 
 ner v. Maxwell, 68 N. C, 400; 39 Rjggg v. Whitney, IS Ab. Pr., 
 
 Jacobson v. Landolt, 73 Wis., 142, 388. 
 
 40 N. W., 636; Colburn v. Yantis, 40 /„ re Day, 34 Wis., 638; Ex 
 
 176 Mo., 670, 75 S. W., 653. parte Cochrane, L. R., 20 Eq., 282. 
 
 36 Angel v. Smith, 9 Ves., 335;
 
 CHAP. VI.] POSSESSION. 163 
 
 applied regardless of whether such persons claim paramount 
 to or under the right which the receiver was appointed to pro- 
 tect.41 
 
 § 140. Receiver's possession protected by injunction; 
 illustrations; may proceed by petition in receivership suit. 
 
 This exclusive possession of the receiver may be and frequently 
 is protected by the aid of an injunction restraining any unau- 
 thorized interference with the property or the unauthorized 
 prosecution of suits against the receiver for its recovery, the 
 granting of an injunction in such cases being a necessary in- 
 cident to the power of appointing a receiver.^^ Thus, when a 
 receiver is appointed over real property which is the subject- 
 matter of the litigation, it is proper to enjoin one of the parties 
 to the cause from distraining for rent against the other, as 
 well as to restrain him generally from all interference with 
 the property in the receiver's possession.^3 And when a claim- 
 ant is asserting his title by an action at law to property held 
 by a receiver, without having obtained leave of the court to 
 institute such action, he may be enjoined, on the application of 
 the receiver, from proceeding with his action, regardless of 
 
 41 Evelyn v. Lewis, 3 Hare, 472. to the right of a receiver of an in- 
 
 42 Tink V. Rundle, 10 Beav., 318; solvent corporation appointed in 
 Attorney-General v. St. Cross Hos- one state to enjoin in that jurisdic- 
 pital, 18 Beav., 601 ; Evelyn v. tion proceedings under attachments 
 Lewis, 3 Hare, 472; Johnes v. or judgments against the corpora- 
 Claughton, Jac, 573; Woerishoflfer tion in another state, see Schindel- 
 V. North River C. Co., 99 N. Y., holz v. Cullum, 5 C. C. A., 293, 55 
 398, 2 N. E., 47; In re Christian Fed., 885, 12 U. S. App., 242. Un- 
 Jensen Co., 128 N. Y., 550, 28 N. E., der a statute requiring the giving 
 665; Marshall v. Lockett, 76 Ga., of an injunction bond, it is held 
 289; Woodburn v. Smith, 96 Ga., that a receiver seeking the aid of 
 241, 22 S. E., 964; Vestel v. Tasker, an injunction against a stranger to 
 123 Ga., 213, 51 S. E., 300; Gard- the cause must file the necessary 
 ner v. Caldwell, 16 Mont., 221, 40 bond and that he is not exempt by 
 Pac, 590; Sevems v. English, 19 reason of his office. Cherry v. W. 
 Okla., 567, 101 Pac, 750; Bibber- W. I. E. Co., 11 Wash., 586, 40 Pac, 
 White Co. V. White River V. E. 136. 
 
 R. Co., 107 Fed., 176; Hampton 43 Marshall v. Lockett, 76 Ga., 
 
 Roads R. & E. Co. v. Newport 289. 
 News etc., Co., 131 Fed., 534. As
 
 164 RECEIVERS. [chap. VI. 
 
 however clear his right may be, or of whether he was apprised 
 of the receiver's appointment when he brought his action at 
 law ; '*'* since the claimant, although he may have a clear legal 
 right to the property, will not be allowed to disturb the re- 
 ceiver's possession until he has established his right by proper 
 proceedings for that purpose. Thus, when a receiver is ap- 
 pointed over certain church property, and a churchwarden, 
 claiming to be legally entitled thereto, takes possession by force 
 and prevents the minister from holding religious services, an 
 injunction may be granted to restrain such unauthorized inter- 
 ference with the receiver's possession. ^^ And it is held that the 
 receiver of a bank may enjoin a defendant from prosecuting 
 an action against the bank in another state, where such action 
 results in preventing or interfering with the collection of the 
 assets of the bank to the possession of which the receiver is 
 entitled. "^^ And an injunction is sometimes granted, althougii 
 the party enjoined is proceeding in the exercise of a right given 
 by statute. Thus, where real estate is in possession of a re- 
 ceiver, and a railway company, desiring a portion of it for the 
 construction of its road, institutes proceedings for condemna- 
 tion in accordance with statute, but without obtaining leave of 
 the court before interfering with the receiver's possession, an 
 injunction may be granted restraining the company from pro- 
 ceeding until further order of court."*"^ And a receiver is en- 
 titled to an injunction to restrain unauthorized interference 
 with the property in his possession even as against strangers 
 who are not parties to the receivership proceeding ; and in such 
 case the court may properly allow him to proceed by petition in 
 the receivership suit and need not require him to resort to an 
 independent action in equity.'*^ 
 
 44 Evelyn v. Lewis, 3 Hare, 472. Felton, 43 C. C. A., 189, 103 Fed., 
 
 45 Attorney-General v. St. Cross 227; Horn v. Pare Marquette R. 
 Hospital, 18 Beav., 601. Co., 151 Fed., 626; Bibber-White 
 
 46 Davis V. Butters Lumber Co., Co. v. White River V. E. R. Co., 
 132 N. C, 233, 43 S. E.. 650. 107 Fed., 176; Virginia, T. & C. S. 
 
 47Tink V. Rundle, 10 Beav., 318. & I. Co. v. Bristol Land Co.. 88 
 48 Lake Shore & M. S. R. Co. v. Fed., 134. And see, post, § 747.
 
 CHAP. VI.] 
 
 POSSESSION. 
 
 165 
 
 § 140a. Property in receiver's hands not subject to sei- 
 zure for taxes. As still further illustrating the exclusive 
 character of the receiver's possession and the jealousy with 
 which it is guarded by the courts, it is held that property in 
 the possession of a receiver appointed by a federal court, as in 
 the case of a receivership over a railway, while subject to taxa- 
 tion under the laws of the state in which it is situated, can not 
 be levied upon and sold by an officer of the state in satisfaction 
 of unpaid taxes. The remedy of the officer in such case should 
 be sought by intervention in the suit in which the receiver was 
 appointed, and that court may properly enjoin him from levying 
 upon the property, and has undoubted jurisdiction to punish 
 him for contempt in violating such injunction.'*^ And in such 
 
 49 In re Tyler, 149 U. S., 164, 13 
 Sup. Ct. Rep., 785 ; King v. Wooten, 
 4 C. C. A., 519, 54 Fed., 612, 2 U. 
 S. App., 651; Oakes v. Myers, 68 
 Fed., 807; Burleigh v. Chehalis 
 County, 75 Fed., 873, 34 L. R. A., 
 393; Virginia, T. & C. S. & I. Co. 
 V. Bristol Land Co., 88 Fed., 134. 
 And see McLeod v. City of New 
 Albany, 13 C C. A., 525, 66 Fed., 
 378, 24 U. S. App., 601. But see, 
 contra, Central Trust Co. v. Wa- 
 bash, St. L. & P. R. Co., 26 Fed., 
 11. The doctrine of the text deny- 
 ing the right of taxing officers to 
 interfere with property in the pos- 
 session of receivers is clearly set 
 forth in the opinion of Fuller, C. J., 
 In re Tyler, 149 U. S., 164, 13 Sup. 
 Ct. Rep., 785, as follows, p. 182: 
 "The general doctrine that property 
 in the possession of a receiver ap- 
 pointed by a court is in custodia 
 legis, and that unauthorized inter- 
 ference with such possession is 
 punishable as a contempt, is con- 
 ceded; but it is contended that the 
 salutary rule has no application to 
 the collection of taxes. Undoubt- 
 
 edly property so situated is not 
 thereby rendered exempt from the 
 imposition of taxes by the govern- 
 ment within whose jurisdiction the 
 property is, and the lien for taxes 
 is superior to all other liens what- 
 soever, except judicial costs, when 
 the property is rightfully in the 
 custody of the law; but this does 
 not justify a physical invasion of 
 such custody and a wanton disre- 
 gard of the orders of the court in 
 respect of it. The maintenance of 
 the system of checks and balances 
 characteristic of republican institu- 
 tions requires the co-ordinate de- 
 partments of government, whether 
 federal or state, to refrain from any 
 infringement of the independence 
 of each other, and the possession of 
 property by the judicial department 
 can not be arbitrarily encroached 
 upon, save in violation of this fun- 
 damental principle. The levy of a 
 tax warrant, like the levy of an or- 
 dinary £eri facias, sequestrates the 
 property to answer the exigency of 
 the writ; but property in the pos- 
 session of the receiver is already in
 
 166 
 
 RECEIVERS. 
 
 [CIIAP. VI. 
 
 case a receiver may have an injunction to restrain the collection 
 of a tax, although tiiere are present none of the grounds of 
 equitable jurisdiction, as where the property seized is per- 
 sonalty and could accordingly be recovered in an action at 
 law. 5^ And the rule under discussion is not confined in its 
 application to the federal courts but has been recognized and 
 followed by the state courts.^^ 
 
 sequestration, already held in equi- 
 table execution; and while the lien 
 for taxes must be recognized and 
 enforced, the orderly administra- 
 tion of justice requires this to be 
 done by and under the sanction of 
 the court. It is the duty of the 
 court to see to it that this is done; 
 and a seizure of the property 
 against its will can only be predi- 
 cated upon the assumption that the 
 court will fail in the discharge of its 
 duty, an assumption carrying a con- 
 tempt upon its face." 
 
 50 Ledoux V. La Bee, 83 Fed., 
 761. 
 
 51 Cleveland v. McCravy, 46 S. 
 C, 252, 24 S. E., 175; Palmer v. 
 Peftingill, 6 Idaho, 346, 55 Pac, 
 653. And see Spokane County v. 
 /\nnis, 43 Wash., 655, 86 Pac, 
 1066. And it is held that the right 
 of the state to the payment of taxes 
 upon property in the hands of a re- 
 ceiver is paramount to the rights 
 of creditors, and the receiver will 
 be directed to pay such taxes be- 
 fore distribution of the funds in 
 his hands among creditors. Gree- 
 ley V. Provident Savings Bank, 98 
 Mo., 458, 11 S. W., 980; Gehr v. 
 Mont Alto Iron Co., 174 Pa. St., 
 430, 34 Atl., 638; Spokane County 
 V. Annis, 43 Wash., 655, 86 Pac, 
 1066. And receiver's certificates 
 
 •may properly be issued for such 
 taxes and given a preference over 
 
 prior liens. Hanna v. State Trust 
 Co., 16 C. C. A., 586, 70 Fed., 2, 36 
 U. S. App., 61, 30 L. R. A., 201. 
 But in Massachusetts it is held that 
 the receiver of a corporation is not 
 taxable for personal property of the 
 corporation in his hands. City Na- 
 tional Bank v. Charles Baker Co., 
 180 Mass., 40, 61 N. E., 223. And it 
 has been held that a foreign state 
 is not entitled to a preference over 
 local creditors on account of an un- 
 paid franchise tax due to the state 
 from an insolvent corporation of 
 that state, over which the receiver 
 has been appointed in the local pro- 
 ceedings. Holshouser v. Copper 
 Co., 138 N. C, 248, 50 S. E. 650. 
 See, further, as to the liability to 
 taxation of funds or property in 
 the hands of receivers, Howard Co. 
 V. Strother, 71 Iowa, 683, 33 N. W., 
 238; Brooks v. Town of Hartford, 
 61 Conn., 112, 23 Atl., 697; Spald- 
 ing V. Commonwealth. 88 Ky., 135, 
 10 S. W., 420. In Wise v. Wise Co., 
 153 N. Y., 507, 47 N. E., 788, it was 
 held that a specific lien by attach- 
 ment process upon personal prop- 
 erty prior to the appointment of a 
 receiver and the delivery of certain 
 property to him would not be dis- 
 placed in favor of a subsequent 
 claim for taxes upon the same prop- 
 erty where no specific lien had ever 
 been obtained by warrant or other 
 legal process. As to the right of the
 
 CHAP. VI.] 
 
 POSSESSION. 
 
 167 
 
 § 141. Property not allowed to be sold under execution ; 
 not subject to process of another court. So extremely 
 jealous are courts of equity of any interference, pendente lite, 
 with the possession of their receivers, that they will not ordi- 
 narily permit property which is the subject of the receivership 
 to be sold on execution.^^ p^^^^ while the appointment of a 
 receiver does not destroy existing liens upon the property, it 
 prevents their enforcement by the ordinary legal process and 
 compels the persons asserting such liens to seek their remedy 
 in the cause in which the receiver is appointed. ^^ Even though 
 an execution has been levied upon the property before the ap- 
 pointment of the receiver, it is held that there can not be a law- 
 
 purchaser at a tax sale of vacant 
 land forming part of the estate of 
 a receiver to take possession under 
 his tax deed, see Metcalfe v. Com- 
 monwealth L. & L. Co.'s Receiver, 
 113 Ky., 751, 68 S. W., 1100. In 
 Stoner v. Bitters, 151 Ind., 575, 52 
 N. E., 149, it was held, under a 
 statute providing that it should be 
 the duty of the receiver of any cor- 
 poration to pay the taxes due upon 
 its pro^rty, and where he neglected 
 to do so, the county treasurer might 
 file in the court a statement show- 
 ing the delinquency and the court 
 should thereupon issue an order di- 
 recting the receiver to show cause 
 why the taxes with penalty should 
 not be paid and, upon his failure to 
 show good and sufficient cause, the 
 court should direct them to be paid, 
 that the prior sale by the receiver 
 of the property of the corporation 
 subject to liens was a good and suf- 
 ficient cause under the statute. As 
 to the liability of the receiver of an 
 insolvent corporation for a fran- 
 chise tax incurred in carrying on 
 the business of the corporation, see 
 In re George Mather's Sons' Co., 
 52 N. J. Eq., 607, 30 Atl., 321; 
 
 Crews V. United States Car Co., 57 
 N. J. Eq., 357, 42 Atl., 272. 
 
 52 Robinson v. Atlantic & Great 
 Western R. Co., 66 Pa. St., 160; 
 Thompson v. McCleary, 159 Pa. St., 
 189, 28 Atl., 254; Skinner v. Max- 
 well, 68 N. C, 400; Wiswall v. 
 Sampson, 14 How., 52; Edwards v. 
 Norton, 55 Tex., 405; Ellis v. Ver- 
 non I., L. & W. Co., 86 Tex., 109, 
 23 S. W., 858; Walling v. Miller, 
 108 N. Y., 173, 15 N. E., 65 ; Chal- 
 mers V. Littlefield, 103 Me., 271, 69 
 Atl., 100; Campau v. Detroit Driv- 
 ing Club, 130 Mich., 417, 90 N. W., 
 49; Gardner v. Caldwell, 16 Mont, 
 221, 40 Pac, 590; Jones v. Moore, 
 106 Tenn., 188, 61 S. W., 81, (re- 
 plevin) ; Grosscup z/* German S. & 
 L. Society, 162 Fed., 947. See, also, 
 Russell V. Texas & P. R. Co., 68 
 Tex., 646, 5 S. W., 686; State v. 
 Judge of Civil District Court, 45 
 La. An., 1418, 14 So., 308; McDon- 
 ald V. Railroad, 93 Tenn., 281, 24 
 S. W., 252. 
 
 •"13 Walling V. Miller, 108 N. Y., 
 173, 15 N. E., 65; Ellis v. Vernon 
 I., L. & W. Co., 86 Tex., 109, 23 S. 
 W., 858.
 
 168 
 
 RECEIVERS. 
 
 [chap. VI. 
 
 fill sale under such execution without leave of the court ap- 
 pointing the receiver. ^^ And when the property of an insolvent 
 corporation passes into the custody of a receiver in an action 
 to wind up its affairs, it is held that a sale of real estate of the 
 corporation made after, although under an execution levied 
 before the receivership will pass no title to the property sold.^^ 
 And the sale under execution of the equity of redemption of 
 premises which are in the possession of a receiver pending a 
 foreclosure suit is void and no title thereunder passes to the 
 purchaser.^6 And when a sheriff has levied upon property in 
 the hands of a receiver, equity will not interpose by an injunc- 
 tion in behalf of the sheriff, to restrain an action at law against 
 
 54 Walling v. Miller, 108 N. Y., 
 173, IS N. E., 65 ; Campau v. De- 
 troit Driving Club, 130 Mich., 417, 
 90 N. W., 49. But in such case the 
 court appointing the receiver may 
 allow a creditor to proceed and sell 
 under a prior execution. Cass v. 
 Sutherland, 98 Wis., 551, 74 N. W., 
 337. 
 
 55 Ellis V. Vernon I., L. & W. 
 Co., 86 Tex., 109, 23 S. W., 858. 
 The cases of Walling v. Miller, 108 
 N. Y., 173, 15 N. E., 65, Ellis v. 
 Vei-non I., L. & W. Co., 86 Tex., 
 109, 23 S. W., 858, and Campau v. 
 Detroit Driving Club, 130 Mich., 
 417, 90 N. W., 49, may be regarded 
 as extending the doctrine of non- 
 interference with the receiver's pos- 
 session to its extreme limits, since 
 the lien of the judgment creditor 
 having been perfected by levying his 
 execution before the appointment of 
 the receiver, it would seem, upon 
 principle, to be the better doctrine 
 that the rights thus acquired are 
 paramount to the receivership, and 
 that the judgment creditor should 
 be permitted to proceed with his 
 levy and sale, without being re- 
 quired to seek relief in the cause in 
 
 which the receiver is appointed. 
 And in Cole v. Oil-Well Supply Co., 
 57 Fed., 534, where, prior to the re- 
 ceivership in a federal court, proper- 
 ty of the defendant had been seized 
 by a sheriff under attachment from 
 a state court in an action against 
 the defendant, a foreign corpora.- 
 tion, which action resulted in judg- 
 ment against the defendant and the 
 levy of execution upon the property 
 so attached, the federal court re- 
 fused upon petition of the receiver 
 to order the surrender of the prop- 
 erty by the sheriff. And the doc- 
 trine of non-interference is confined 
 to property which is actually em- 
 braced in the receivership, and does 
 not extend to property of which the 
 receiver may have taken possession 
 but to which he is not entitled. 
 Such property, not being within the 
 scope of the receivership, is not 
 property in custodia legis, and it 
 may, therefore, be sold under exe- 
 cution. St. Louis, A. & T. R. Co. 
 V. Whitaker, 68 Tex., 630, 5 S. W., 
 448. 
 
 56 Grosscup V. German S. & L, 
 Society, 162 Fed., 947.
 
 CHAP. VI.] POSSESSION. 169 
 
 him for such interference.^''^ The proper remedy for a judg- 
 ment creditor, who desires to question the receiver's right to 
 the property, is to apply to the court appointing him, to have 
 the property released from the receiver's custody, in order 
 that he may proceed against it under his judgment ;^^ since 
 to permit the property, while in custody of the receiver, to be 
 levied upon and sold under the process of another court, would 
 at once give rise to a conflict of jurisdiction and would seriously 
 interfere with and impair the receiver's right to the manage- 
 ment of the property. ^^ So when real estate is in the actual 
 possession of a receiver, pending litigation as to the title, it is 
 not subject to levy and sale under execution to satisfy a judg- 
 ment rendered subsequent to the receiver's appointment.^^ 
 And when the judgment was obtained before the appointment, 
 but the lien was not acquired by placing an execution in the 
 hands of the sheriff until afterward, it was held that a pur- 
 chaser under the execution sale, the real estate being then in 
 the receiver's possession, and the sale being made without leave 
 of court, acquired no title, and the court refused to put him into 
 possession. ^1 And while the principle, as above stated, is not 
 understood as prohibiting absolutely the acquisition of new 
 rights to the fund or property in controversy, pending the re- 
 ceiver's possession, it yet prevents the person so acquiring 
 rights from asserting them by the process of another court, 
 thus compelling him to apply to the court having jurisdiction 
 over the property and the receiver for a determination 
 of his rights. And it matters not, in such case, that 
 the receiver has declined to act, since the property is 
 still in the custody of the law.^^ go a vessel in the posses- 
 
 57 Try V. Try, 13 Beav., 422. 60 Edwards v. Norton, 55 Tex., 
 
 58 Robinson v. Atlantic & Great 405. 
 
 Western R. Co., 66 Pa. St., 160; Gl Dugger v. Collins, 69 Ala., 324. 
 
 Thompson v. McCleary, 159 Pa. St., 62 Skinner v. Maxwell, 68 N. C, 
 
 189, 28 Atl., 254; Dugger t'. Collins, 400. The court, Rodman, J., say, 
 
 69 Ala., 324. See Wiswall v. Samp- p. 404 : "When a court of equity 
 
 son, 14 How., 52. has undertaken to adjudicate upon 
 
 59 Robinson v. Atlantic & Great and distribute a fund among the 
 Western R. Co., 66 Pa. St., 160. parties entitled to it, it would be
 
 170 RECEIVERS. [chap. VI. 
 
 sion of receivers appointed by the United States circuit court 
 is not subject to seizure under admiralty proceedings brought 
 to enforce a claim for the wages of seamen, and, upon petition 
 presented to the admiralty court by the receivers, that court 
 will order the release of the vessel. ^^ And where a court which 
 has appointed a receiver, who has property in his possession, 
 permits him to be made a party defendant to an action insti- 
 tuted in anotlier court for the purpose of asserting liens or 
 other claims against the property which existed before his ap- 
 pointment, such permission is to be construed as allowing the 
 prosecution of the action merely for the purpose of determin- 
 ing and establishing such liens and can not be held to go to the 
 extent of authorizing the property to be taken from the pos- 
 session of the receiver and applied by the other court to the 
 satisfaction of the claims if they are established.^^ 
 
 § 142. Receiver can pay money only by order of court. 
 As still further illustrating the aversion entertained by courts 
 of equity toward any interference with the possession of their 
 receivers, it is held that a receiver is not justified in paying 
 out money in any other manner than upon the order of the 
 
 inconvenient for the court of law, no right to it can be acquired by 
 
 or any other court, by its process, sale under execution. And it makes 
 
 to interrupt the adjudication and no difference that the receiver ap- 
 
 create new rights in the property pointed declined to act; the prop- 
 
 itself This rule is not understood erty was nevertheless in the custody 
 
 as absolutely preventing the acqui- of the law." 
 
 sition of new rights to the fund in 63 The Jonas H. French, 119 Fed., 
 controversy after the commence- 462. The order entered in this case 
 ment of the proceedings. Any per- was that the petition of the re- 
 son claiming to have acquired such ceivers should be granted as to the 
 an interest pendente lite, while he release of the vessel but that the 
 cannot interfere under the process order of restoration should not is- 
 of another court, may apply to the sue for three days in order that the 
 court which has jurisdiction of the libelants might apply to the circuit 
 fund, pro interesse suo, and his court for leave to proceed with their 
 claim will be heard. The limits of libel. 
 
 this principle are somewhat uncer- 64 Premier Steel Co. v. McEI- 
 
 tain, but it is sufficient for the pres- waine-Richards Co., 144 Ind., 614, 
 
 ent case to say that, while the prop- 43 N. E., 876. 
 erty is in the hands of a receiver,
 
 CHAP. VI.] POSSESSION. 171 
 
 court appointing him, and that this court will not sanction a 
 payment made by him, even upon the compulsory process of 
 another court. And when a judgment creditor has attached 
 money in the hands of a receiver, under proceedings instituted 
 in a court of law, and has obtained an order therein for pay- 
 ment of the money attached, which order is obeyed by the re- 
 ceiver, such payment will not be allowed by the court in pass- 
 ing his accounts.^^ 
 
 § 143. Interference with receiver's possession not jus- 
 tified because appointment was improper. Courts of equi- 
 ty will not permit any unauthorized interference with the pos- 
 session of their receivers to be justified upon the ground that 
 the appointment was ill-advised or illegal, and that the parties 
 interfering were, therefore, not bound to regard it. It is suffi- 
 cient that there is a subsisting order of the court appointing 
 a receiver; and parties dissatisfied therewith, or deeming such 
 order erroneous, must take the proper course to question its 
 validity by application to the court itself, and it is not com- 
 petent for any person to interfere with the receiver's posses- 
 sion upon the ground that his appointment was improvidently 
 made.^^ The appropriate course in all cases, where parties 
 are desirous of obtaining possession of property which has 
 
 65 De Winton z/. Mayor of Brecon, matter, and to do that which is just 
 28 Beav., 200. Lord Romilly, Mas- in the cause between the parties, 
 ter of the Rolls, observes, p. 202: It is always to be remembered that 
 "... I apprehend this is clear, the receiver in this case would not 
 that the court never allows any per- have got a penny, except by the or- 
 son to interfere, either with money der of the court enabling him to 
 or property in the hands of its re- receive it, and entitling him to give 
 ceiver, without its leave ; whether it a good discharge to the person who 
 is done by the consent or submis- paid it; and, consequently, it is 
 sion of the receiver, or by compul- strictly money belonging to the 
 sory process against him. The court of chancery, and the receiver 
 court is obliged to keep a strict can only discharge himself by pay- 
 hand over property in the hands of ing it in obedience to the direction 
 a receiver, or which, by virtue of and order of that court." 
 the order of the court, may come 66 Russell v. East Anglian R. Co., 
 into his hands, in order to preserve 3 Mac. & G., 104; Ames v. Trustees 
 entire jurisdiction over the whole of Birkenhead Docks, 20 Beav., 332;
 
 172 
 
 RECEIVERS. 
 
 [CIIAP. VI. 
 
 come into the hands of a receiver, is to apply to the court from 
 which he derives his appointment; and the rule is not limited 
 to property actually in the receiver's possession, but extends 
 also to property which he has been appointed to receive, but 
 which he has not yet reduced to possession. ^'^ 
 
 § 144. Receiver entitled to aid of court to obtain pos- 
 session. The receiver, being the ofticer or agent of the 
 court, is entitled to its assistance in obtaining possession of 
 property which is the subject-matter of his receivership, and 
 may have an order of court to procure possession of such prop- 
 erty, not only against defendant in the action, but in a proper 
 case against his agents and employees, although not parties to 
 the record, requiring them to deliver up the specific property.^^ 
 So the receiver of an insolvent corporation may, by petition 
 in the cause in which he was appointed and without the nec- 
 essity of an independent suit, procure the transfer and delivery 
 of a note held by officers of the corporation as a part of its 
 
 Cook V. Citizens National Bank, 7Z 
 Ind., 256; Missouri Pac. R. Co. v. 
 Love, 61 Kan., 433, 59 Pac, 1072; 
 Williamson v. Pender, 127 N. C, 
 481, 37 S. E., 495. And see, post, 
 % 165. 
 
 6" Ames V. Trustees of Birken- 
 head Docks, 20 Beav., 332. "There 
 is no question," says Lord Romilly, 
 Master of the Rolls, p. 353, "but 
 that this court will not permit a 
 receiver, appointed by its authority, 
 and who is, therefore, its officer, to 
 be interfered with or dispossessed 
 of the property he is directed to re- 
 ceive, by any one, although the or- 
 der appointing him may be perfectly 
 erroneous ; this court requires and 
 insists that application should be 
 made to the court for permission to 
 take possession of any property of 
 which the receiver either has taken 
 or is directed to take possession, 
 
 and it is an idle distinction (which 
 could not be maintained if it were 
 attempted, which it is not by coun- 
 sel at the bar, though suggested by 
 the affidavits), that this rule only 
 applies to property actually in the 
 hands of the receiver. If a receiver 
 be appointed to receive debts, rents 
 or tolls, the rule applies equally to 
 all these cases, and no person will 
 be permitted, without the sanction 
 or authority of the court, to inter- 
 cept or prevent payment to the re- 
 ceiver of the debts, rents or the 
 tolls, which he has not actually re- 
 ceived, but which he is appointed to 
 receive." 
 
 68 /n re Cohen, 5 Cal.. 494. See, 
 also, Geisse v. Beall, 5 Wis., 224; 
 Green v. Green, 2 Sim., 430; JMiller 
 V. Jones, 39 111., 54; Sullivan v. 
 Colby, 18 C. C. A., 193, 71 Fed., 
 460, 34 U. S. App., 432.
 
 CHAP. VI.] POSSESSION. 173 
 
 assets, even though such officers are not parties to the cause. ^^ 
 And when a receiver is appointed over real property, of which 
 the owner is in possession, the proper course is to apply to the 
 court to have the owner deliver possession to the receiver, since 
 the latter can not distrain upon the owner in possession, as he 
 is not a tenant of the receiver. "^^^ Such procedure does not con- 
 flict with the principle that no man shall be deprived of his 
 property without due process of law, since the surrender to 
 the receiver does not affect the ultimate question of the right 
 to the property, any more than does the levy of an attach- 
 ment ; the purpose being merely to secure the property by get- 
 ting it into the receiver's possession, so that it may be safely 
 delivered to the party who shall be finally determined to be 
 entitled thereto.'^! And the order for the surrender of prop- 
 erty to the receiver may, if necessary, be enforced by process 
 of attachment J2 And when a receiver has been appointed to 
 take charge of certain trust funds held by defendant, the court 
 may require defendant's attorney to appear before the receiver, 
 and to deliver to him all the trust property which may have 
 come to his hands since the suit was instituted, and to compel 
 him to render an account and inventory of such property, and 
 to verify it under oath,'^^ go when a party to the cause exe- 
 cutes a lease of real property to a third person, both lessor and 
 lessee having full knowledge that a receiver has been appointed 
 over the property, however valid such lease may be as between 
 the parties, it confers no right as against the receiver, and he 
 is entitled to a writ of possession as against the lesseeJ* So 
 a receiver of an insolvent corporation is entitled to an order 
 requiring a banking company to turn over certain securities 
 owned by the insolvent corporation. "^5 
 
 69 Brandt v. Allen, 76 Iowa, 50, 72 Miller v. Jones, 39 111., 54. 
 40 N. W., 82. 73 Geisse v. Beall, 5 Wis., 224. 
 
 70 Griffith V. Griffith. 2 Ves., 400. 74 Thornton v. Washington Sav- 
 
 71 In re Cohen, 5 Cal., 494; Miles ings Bank, 76 Va., 432. 
 
 V. New South B. & L. Assn., 95 75 Miles v. New South B. & L. 
 
 Fed., 919. Assn., 95 Fed.. 919.
 
 174 RECEIVERS. [chap. VI. 
 
 § 145. Courts reluctant to interfere by receiver with 
 property of third persons ; receiver should assert claim by 
 independent action. It is to be borne in mind, however, 
 in considering the extent to which a court of equity will aid 
 its receiver in obtaining possession, that the court is always 
 reluctant to interfere with the right of possession by par- 
 ties claiming a legal title in the property."^^ And while it is 
 competent for the court, by an interlocutory order, to take pos- 
 session of property by its receiver pending litigation concern- 
 ing the rights of the parties, yet when the rights of third per- 
 sons have intervened who are not parties to the record, as in 
 the case of purchasers in good faith of the property in contest, 
 the court will decline to take possession by its receiver. The 
 interference is withheld under such circumstances, upon the 
 ground that the rights of purchasers in good faith are not to 
 be adjudicated and determined by the summary method of an 
 order to surrender possession to a receiver.'^'^ And when the 
 plaintiff seeks to have an actual delivery of defendant's prop- 
 erty to the receiver, some of which is claimed by a third person 
 under an assignment from defendant, the question as to what 
 property is under defendant's control must first be determined, 
 before he will be directed to deliver it to the receiver.'^^ So 
 when a banker, holding a specific fund in his possession, makes 
 an assignment for the benefit of his creditors, and a receiver 
 is afterward appointed over the fund in question, the court 
 will not, upon summary motion, compel the assignees to pay 
 the money to the receiver.'''^ And the court will not, upon a 
 summary application, compel a delivery to the receiver of prop- 
 erty purchased at a sheriff's sale, under execution against the 
 
 ''^ Cassilear v. Simons, 8 Paige, cause in which he was appointed 
 
 273 ; McCombs v. Alerryhew, 40 and without an independent action. 
 
 Mich., 721. United States v. Church, 5 Utah^ 
 
 77 Levi V. Karrick, 13 Iowa, 344. 538, 18 Pac, 35. 
 
 But in the case of a merely color- 78 Cassilear v. Simons, 8 Paige, 
 
 able or fraudulent transfer to third 273. And see Parker v. Browning, 
 
 persons, it has been held that the 8 Paige, 389. 
 
 receiver might compel the delivery 79 Coleman v. Salisbury, 52 Ga., 
 
 of the property by petition in the 470.
 
 CHAP. VI.] POSSESSION. 175 
 
 defendant, when the purchaser's agent is shown to be exercis- 
 ing control over the property, with the power of reducing it 
 at any time to actual possession. Under such circumstances, 
 the court will first require the purchaser to be made a party 
 to the litigation, that he may have an opportunity to defend 
 his title and right of possession.^^ And where personal property 
 is in the possession of a third person, not a party to the receiver- 
 ship proceeding, under a claim of title, it is improper for the 
 court which appointed the receiver to order him to take posses- 
 sion of such property, but he should be instructed to institute 
 a separate action at law for its recovery ; and the enforcement 
 of such order is properly restrained by writ of prohibition.^^ 
 And where a receiver seeks to set aside a certificate of sale of 
 real estate which was sold subsequent to the appointment of 
 the receiver under an attachment lien which was obtained 
 prior to his appointment, it appearing that the attaching credit- 
 or is a stranger to the receivership proceeding and is in no 
 way interfering with the possession of the receiver, the latter 
 should proceed by independent action and not by petition in 
 the receivership proceeding.^2 
 
 § 146. Third persons permitted to come in and be heard. 
 When a receiver is in possession of real estate pendente lite, 
 although the court will not permit his possession to be inter- 
 fered with by third persons without its consent, such persons 
 will be permitted to come in and be heard with reference to 
 their interests, and such orders will be made as are necessary 
 to protect their rights in the subject-matter of the litigation, 
 until they may be finally determined. For example, when a 
 receiver is appointed over the premises in controversy, and a 
 third party is entitled to a portion of the premises in right of 
 his wife, but a proceeding for divorce is pending on the part 
 of the wife against the husband, in which she claims the entire 
 
 80 Robeson v. Ford, 3 Edw. Ch., 82 Cherry v. W. W. I. E. Co., 11 
 441. Wash., 586, 40 Pac, 136. 
 
 81 Stnparich Mfg. Co. v. Superior 
 Court, 123 Cal., 290, 55 Pac, 985. 
 And see, post, § 457.
 
 176 RECEIVERS. [chap. VI. 
 
 rents and profits, while the court will not determine the relative 
 rights of the husband and wife upon an application for payment 
 of the money to the former, it will direct the receiver to pay 
 that portion of the rents into court, to await the result of the 
 litigation between husband and wife.^^ And when a receiver 
 had been appointed of the rents and profits of real estate in be- 
 half of a person having a life estate therein, and directed to 
 pay the rents to such person, and in another action an order 
 for costs had been made against the same tenant for life, the 
 court gave the successful party leave to prosecute proceedings 
 for costs against the life estate, notwithstanding the appoint- 
 ment and possession of the receiver.^* 
 
 § 147. Practice of English Chancery to compel defend- 
 ant to deliver lands to receiver. Under the practice of the 
 English Court of Chancery, when it was sought to* compel a 
 defendant to deliver up possession of lands to a receiver ap- 
 pointed in the cause, an order was first obtained to deliver pos- 
 session, and a writ of execution of such order was then served 
 upon defendant. And until this was done no further order 
 would be made by the court.^^ 
 
 § 148. New York practice as to receiver obtaining pos- 
 session. Under the former chancery practice in New 
 York, when a receiver was appointed and invested under decree 
 of the court with the title to real and personal property in 
 controversy, and defendants were required by the decree to 
 deliver the property to the receiver, it w^as held that he himself 
 might take the necessary steps to obtain possession and control 
 of the property, and that he need not wait for the parties to 
 the litigation to move in the matter, it being his duty to pro- 
 tect and preserve the property for the interests of all parties 
 concerned. ^^ 
 
 83 Vincent v. Parker, 7 Paige, 65. 417. And see this case for a review 
 
 84 Gooch V. Haworth, 3 Beav., 428. of the authorities, English and 
 
 85 Green v. Green, 2 Sim.. 430. American, upon the right of the re- 
 See, also, Griffith v. Griffith, 2 Ves., ceiver to initiate any action con- 
 400. cerning his receivership. 
 
 86 Iddings v. Bruen, 4 Sandf. Ch.,
 
 CHAP. VI.] POSSESSION. 177 
 
 § 149. Writ of assistance ; when right of possession not 
 determined on motion; state and federal courts. While a 
 court of equity will, in a proper case, freely extend its aid by 
 a writ of assistance, to enable its receiver to obtain possession 
 of property to which he is entitled, it will not thus interfere 
 upon mere motion, as against the possession of a stranger to 
 the action, claiming a superior title under which he holds pos- 
 session, but will leave the disputed question of title to be deter- 
 mined by an action for that purpose. For example, when a 
 receiver is in possession. of property under appointment from 
 a United States court, the state courts will not grant a writ 
 of assistance to a subsequently appointed receiver in the state 
 tribunal, to enable him to get possession of the same property. 
 The possession of the receiver appointed by the federal court, 
 in such a case, is regarded as the possession of a stranger, whose 
 rights can not be determined arbitrarily and upon a mere mo- 
 tion, but only by a regular action at law. And it can make no 
 difference that the jurisdiction of the federal court, to enter- 
 tain the action in which its receiver was appointed, is assailed 
 and denied, since that is a question of too great importance 
 to be disposed .of merely by a motion in the state court.^'^ So 
 
 87 Gelpeke v. Milwaukee & Hori- cuted by the corporation defendant, 
 con R. Co., 11 Wis., 454. "I know When this was made to appear, he 
 of no case," says Dixon, C. J., page should have arrested the proceed- 
 457, "where it has been adjudged ing, and turned the parties over to 
 that the possession of a stranger, their appropriate remedy by action. 
 who sets up a superior title, in pur- His attempt to adjudicate upon and 
 suance of which he claims to have settle the rights of Mr. Ward, upon 
 entered and to hold, might be thus a mere motion, supported by affi- 
 disturbed. In such cases it has been davits, was unauthorized. Such 
 the uniform rule to leave the par- was not the proper mode of pro- 
 ties to their remedies by action. cecding by which to determine his 
 And in this case I think that the rights. It is only adapted to those 
 circuit judge erred in proceeding cases where the court can say, 
 to award the writ as against Mr. clearly and unhesitatingly, that the 
 Ward, when it appeared that he was possession is subsequent to the com- 
 in possession by virtue of the order mcncement of the action, and sub- 
 of the district court, made in a ject to the decree or order which 
 proceeding to foreclose a mortgage has been made, or that the person 
 which had been previously exe- holding the same has no legal right. 
 Receivers — 12.
 
 178 RECEIVERS. [chap. VI. 
 
 a receiver is not entitled to a writ of assistance to recover prop- 
 erty in the possession of persons who are not parties to the 
 receivership proceeding and who in good faith deny the right 
 of the receiver to the possession of the property in question.^^ 
 § 150. Third person forcibly dispossessed by receiver; 
 how redressed. While it is true, when property is legally 
 and properly in possession of a receiver, that it is the duty of 
 the court to protect that possession, not only as against acts of 
 violence, but in some instances even against actions at law, so 
 that a third person claiming the property may be compelled 
 to come in and be examined pro intercssc suo in the original 
 action ; yet the case is different if the property is in possession 
 of a third person, under claim of right, and is forcibly taken 
 from his possession by the receiver without any order of court. 
 Under such circumstances, neither the order of court appoint- 
 ing the receiver, nor the construction of its order, being in 
 question, and a complaint being made of misconduct on the 
 part of an officer of the court, acting under color of authority 
 merely, the court may, in its discretion, either take cognizance 
 
 And it could make no difference son I was opposed to and refused 
 that the jurisdiction of the district to hear its discussi&n in this court 
 court (of the United States) to en- upon the present motion. Courts 
 tertain those actions was assailed can only act, in such cases, where 
 and denied. That, too, was a ques- the rights of the parties are obvious, 
 tion of great gravity and impor- and not the subjects of doubts or 
 tance, and not to be disposed of serious controversy. It was urged 
 with the same speed and facility that unless the question involved 
 that we would strike out an ob- could be determined in this pre- 
 viously frivolous answer or demur- ceeding. that then the receiver was 
 rer. It was one which admitted of, remediless, and there was no form 
 at least, some doubt, and upon ei- of action in which Mr. Ward, ad- 
 ther side of which the most learned mitting his possession to be without 
 counsel would not think it unbe- warrant of law, could be deposed, 
 coming or improper to spend many I can not agree to this proposition, 
 hours or days in earnest argument, I think it may be done by some one 
 before any court where it should be of the forms of action now in use." 
 raised. And the very fact that it See, also, Andrews v. Paschen, 67 
 would admit of such doubt or argu- Wis., 413, 30 N. W., 712. 
 ment was sufficient to exclude it 88 Musgrove v. Gray, 123 Ala., 
 from the consideration of the court, 376, 26 So., 643, 82 Am. St. Rep., 
 upon such a motion. For that rea- 124.
 
 CHAP. VI.] 
 
 POSSESSION. 
 
 179 
 
 of the complaint and do justice between its officer and the party 
 aggrieved, or it may permit the latter to bring an action at law 
 for his alleged injury. And the latter course would seem to 
 be preferable, in order that the benefit of a trial by jury may 
 be had.^^ But where a receiver has made a demand for goods 
 
 89 Parker v. Browning, 8 Paige, 
 388. This was an appeal by a re- 
 ceiver from an order allowing cer- 
 tain petitioners to bring an action 
 against the receiver, and other per- 
 sons acting under him, for an al- 
 leged trespass in forcibly entering 
 a store which petitioners claimed to 
 belong to them and to be in their 
 possession, and taking the goods 
 therefrom. Walworth, Chancellor, 
 says, p. 389 : "There is certainly 
 room for doubt in this case, whether 
 the defendant Browning had not 
 some interest in the store of goods. 
 And if the receiver had taken pos- 
 session thereof under the express 
 directions of the court, or if the 
 master had decided that the goods 
 were in the possession and under 
 the power and control of the de- 
 fendant, and had directed him to 
 deliver the possession thereof to the 
 receiver, this court ought to have 
 assumed the exclusive jurisdiction 
 over the subject of complaint, in- 
 stead of suffering its officer to be 
 harassed in a suit at law for obey- 
 ing its order. But as I understand 
 the case, the validity of the order 
 appointing the receiver is not in 
 controversy here, nor is his right 
 to take the property of the defend- 
 ant Browning, as such receiver, in- 
 tended to be questioned. The peti- 
 tioners, on the contrary, claim that 
 the receiver, without any direction 
 to that effect from the court, has 
 forcibly taken goods which belong 
 to them exclusively, out of their 
 
 possession, under the pretense that 
 such goods were the property of the 
 defendant Browning. Where the 
 authority of the court or the con- 
 struction of its order is not in ques- 
 tion, but the complaint is made 
 against the misconduct of its officer, 
 acting under color of authority 
 merely, this court may, in its dis- 
 cretion, either take to itself the cog- 
 nizance of the complaint and do 
 justice between its officers and the 
 parties aggrieved, or it may permit 
 the latter to bring a suit at law for 
 the alleged injury. And in cases of 
 this description it is more in ac- 
 cordance with the spirit of our in- 
 stitutions to permit the parties com- 
 plaining to proceed at law, where 
 they may have the benefit of a jury 
 trial, than to attempt to settle their 
 rights by a reference to a master. 
 It is not necessary in any case for 
 the receiver to put himself in a 
 situation where he is not entitled to 
 the full protection of this court; as 
 he is under no obligation to attempt 
 to take property out of the posses- 
 sion of a third person, or even out 
 of the possession of the defendant 
 himself, by force, and without an 
 express order of the court directing 
 him to do so. The proper course, 
 as this court has repeatedly decided, 
 where the defendant is directed to 
 deliver over his property to the re- 
 ceiver under the direction of a 
 master, is for the receiver, or the 
 party who wishes for an actual de- 
 livery of the property in addition
 
 180 
 
 RECEIVERS. 
 
 [CIIAP. VI. 
 
 transferred by an insolvent in fraud of his creditors to a third 
 person who thereupon voluntarily surrenders them to the re- 
 ceiver, the latter is bound to accept the goods and an action 
 of trespass wiU not He against him for so doing.^^ 
 
 § 151. Receiver not subject to attachment or garnish- 
 ment as to funds in his possession; exceptions; may be 
 garnished by leave of court. The receiver's possession 
 being the possession of the court from which he derives his 
 appointment, he is not subject to process of attachment or gar- 
 nishment as to funds in his hands or subject to his control, and 
 such process will be regarded as a nullity when directed against 
 him.^^ And when a receiver is duly appointed of the effects 
 
 to the legal assignment thereof, to 
 call upon the master to decide, 
 upon the examination of the de- 
 fendant, and on the evidence before 
 him, what property legally or equi- 
 tably belonging to the defendant, 
 and to which the receiver is entitled 
 under the order of the court, is in 
 the possession of the defendant or 
 imder his power and control. And 
 it is the duty of the master to direct 
 the defendant to deliver over to the 
 receiver the actual possession of all 
 such property, in such manner and 
 within such time as the master may 
 think reasonable. Where such a di- 
 rection is given, the defendant, if he 
 is dissatisfied with the decision of 
 the master, must apply to the court 
 to review the same, or he will be 
 compelled by process of contempt 
 to comply with that decision. And 
 if the property is in the possession 
 of a third person who claims the 
 right to retain it, the receiver must 
 either proceed by suit, in the ordi- 
 nary way, to try his right to it, or 
 the complainant should make such 
 third person a party to the suit, 
 and apply to have the receivership 
 extended to the property in his 
 
 hands, so that an order for the de- 
 livery of the property may be made 
 which will be binding upon him, 
 and which may be enforced by 
 process of contempt, if it is not 
 obeyed. Where the property is 
 legally and properly in the posses- 
 sion of the receiver, it is the duty 
 of the court to protect that posses- 
 sion, not only against acts of vio- 
 lence but also against suits at law; 
 so that a third person, claiming the 
 same, may be compelled to come ii\ 
 and ask to be examined pro inter- 
 esse suo, if he wishes to test the 
 justice of such claim. But where 
 the property is in the possession of 
 a third person, under a claim of 
 title, the court will not protect the 
 officer who attempts by violence to 
 obtain possession, any further than 
 the law will protect him ; his right 
 to take possession of property of 
 which he has been appointed re- 
 ceiver being unquestioned." 
 
 90 Tapscott V. Lyon, 103 Cal., 297, 
 37 Pac, 225. 
 
 91 Field V. Jones, 11 Ga., 413; 
 Taylor v. Gillean, 23 Tex.. 508; 
 Kriesle v. Campbell, 89 Tex., 104, 
 33 S. W., 852; Richards v. People,
 
 CHAP. VI.] 
 
 POSSESSION 
 
 181 
 
 of a copartnership, in an action brought by a creditor of the 
 firm, he can not be garnished by judgment creditors of the firm, 
 as to partnership assets in his hands, such assets not being sub- 
 ject to garnishee process.^^ Sq where receivers are appointed 
 over an insolvent corporation, they are not Hable to garnishee 
 process, since the property which they hold is intrusted to them, 
 not by act of the party, but by operation of law.^^ The court 
 of equity being the actual custodian of the property or fund in 
 litigation, it will not yield its jurisdiction to a court of law and 
 permit the right to the property to be there tried. In other 
 words, since the receiver's possession is that of the court, it 
 will not permit itself to become a suitor in another forum con- 
 cerning the property in question. And an additional reason 
 for holding the receiver not subject to process of garnishment 
 
 81 111., 551; Blake Crusher Co. v. 
 New Haven, 46 Conn., 473; Cooke 
 V. Town of Orange, 48 Conn., 401 ; 
 Longstaff v. Hard, 66 Conn., 350, 
 34 Atl., 911; Citizens' Commercial 
 & Savings Bank v. Bay Circuit 
 Judge, 110 Mich., 633, 68 N. W., 
 649; Walker v. George Taylor C. 
 Co., 56 Ark., 1, 18 S. W., 1056, 19 
 S. W., 601 ; McGowan v. Myers, 66 
 Iowa, 99, 23 N. W., 282; Veith v. 
 Ress, 60 Neb., 52, 82 N. W., 116; 
 Commonwealth v. Hide & Leather 
 Insurance Co., 119 Mass., 155; Blum 
 V. Van Vechten, 92 Wis., 378, 66 
 N. W., 507; Central Trust Co. v. 
 Chattanooga, R. & C. R. Co., 68 
 Fed., 685. See, also, Columbian 
 Book Co. V. De Golyer, 115 Mass., 
 67; Smith v. McNamara, 15 Hun, 
 447. Notwithstanding the doctrine 
 of the text is well established, both 
 upon principle and authority, it is 
 held in Colorado that receivers over 
 a railway company, appointed be- 
 yond the state but operating a rail- 
 road within the state, are subject to 
 garnishee process when such pro- 
 
 ceeding does not tend to disturb the 
 rights of the receivers under the 
 general orders of the court by 
 which they were appointed. Phe- 
 lan V. Ganebin, 5 Colo., 14. And 
 in such case it is held that the gar- 
 nishee process may be properly 
 served upon the agent of the re- 
 ceivers within the state, in like 
 manner as service upon the agent 
 of a foreign corporation. Phelan 
 V. Ganebin, 5 Colo., 14; Ganebin v. 
 Phelan, 5 Colo., 83. In Kriesle v. 
 Campbell, 89 Tex., 104, 33 S. W., 852, 
 supra, it was held that a garnish- 
 ment proceeding brought against a 
 receiver was not a suit against him 
 within the meaning of a statute 
 which provided for the bringing of 
 suits against receivers without first 
 obtaining leave of the appointing 
 court. As to garnishment against a 
 receiver of a railway, see, post, 
 § 39Sb. 
 
 92 Taylor v. Gillean, 23 Tex., 508. 
 
 93 Columbian Book Co. v. De 
 Golyer, 115 Mass., 67. See, also, 
 Richards v. People, 81 111., 551.
 
 182 RECEIVERS. [chap. VI. 
 
 is, that such liability, if recognized, would defeat the very ends 
 for which he was appointed, since a judgment at law upon 
 the garnishment would, if recognized and sustained, entirely 
 divest the jurisdiction of equity. ^^ So when creditors whose 
 judgments against their debtor are not a lien upon his property, 
 which has passed into the hands of a receiver, obtain leave of 
 court to garnish the receiver, they do not thereby acquire any 
 priority over other judgment creditors as to the surplus funds 
 remaining in the receiver's hands.^^ And where a receiver has 
 been appointed over an insolvent corporation at the instance 
 of a mortgage bondholder and has taken possession of the 
 property of the corporation, a creditor who afterward procures 
 judgment against the corporation acquires no legal or equita- 
 ble lien upon the property in the possession of the receiver not 
 covered by the mortgage nor any right greater than he had 
 at the institution of the receivership proceeding.^^ But a 
 receiver is always liable to garnishment where leave of the 
 court appointing him is obtained. ^'^ And where the action 
 in which a receiver has been appointed has been settled or dis- 
 missed and nothing remains for the receiver to do but turn 
 over the fund, or where the receiver has a fund in his hands 
 more than sufficient to satisfy the claims against it, garnish- 
 ment will lie against him.^^ So a receiver may be garnished 
 without leave where nothing remains to be done by him except 
 to pay money to the principal defendant under the final de- 
 cree.^^ And where the appointment of a receiver over an in- 
 solvent corporation is absolutely void, funds in the possession 
 of such pretended receiver are subject to garnishment by any 
 creditor of the insolvent corporation. ^ In Maryland it has 
 
 94 Field V. Jones, 11 Ga., 413. 98 Russell v. Millett, 20 Wash., 
 
 95 McGowan v. Myers, 66 Iowa, 212, 54 Pac, 44. 
 
 99, 23 N. W., 282. 99 Robertson v. Detroit Pattern 
 
 96 Mercantile Trust Co. v. South Works, 152 Mich., 612, 116 N. W., 
 ern States L. & T. Co.. 30 C. C. A., 196. 
 
 349, 86 Fed., 711, 52 U. S. App., 675. l Smith v. Ely & Walker Dry 
 
 97 Van Bianchi v. Wayne Circuit Goods Co., 79 Miss., 266, 30 So., 
 Judge, 124 Mich., 462, 83 N. W., 26. 653.
 
 CHAP. VI.] POSSESSION. 183 
 
 been held that an indebtedness due to the defendant, over whose 
 effects receivers have been appointed, is subject to garnish- 
 ment at any time before the receivers have taken possession.^ 
 This ruHng, however, is plainly inconsistent with the doctrine 
 of the courts of New York, that the receiver's title and right 
 to possession vest by relation back to the date of the original 
 order for his appointment, although the proceedings may not 
 be perfected until a later date.^ 
 
 § 152. Possession as between different receivers deter- 
 mined by priority. As regards the right of possession 
 when two different receivers have been appointed, in different 
 proceedings, over the same fund or estate, the question of 
 priority or precedence must be determined with reference to 
 the date of appointment, since the courts will not permit both 
 to act, the title of the one being necessarily exclusive of that 
 of the other.4 And in such case, where an order of reference 
 has been made to appoint, the receiver appointed under the first 
 order of reference will be entitled to possession, the appoint- 
 ment being regarded as dating back by relation to the date 
 of the order of reference ; and the appointment, under proceed- 
 ings begun of a later date, will be treated as having been im- 
 providently made, and the receiver under the first order will 
 be allowed precedence.^ When both appointments have been 
 made on one and the same day, the court may and will inquire 
 into fractions of the day in determining the question of prior- 
 ity, and that one whose appointment is of an earlier hour will 
 be given priority. And the question of precedence being de- 
 termined adversely to the receiver in actual possession of the 
 assets, he will be required to surrender possession to the other.^ 
 
 2 Farmers Bank v. Beaston, 7 G. Bank, 121 N. C, 343, 28 S. R, 488; 
 
 & J., 421. McKay v. Van Kleeck, 133 Mich., 
 
 .■5 See Rutter v. Tallis, S Sandf., 27, 94 N. W., 367. 
 
 610; Steele v. Sturges, 5 Ab. Pr., 5 Deming v. New York Marble 
 
 442. Co., 12 Ab. Pr., 66. 
 
 4 People V. Central City Bank, 53 6 People v. Central City Bank, 53 
 
 Barb., 412; S. C, 35 How. Pr., 428; Barb., 412, 35 How. Pr.,428; Worth 
 
 Deming v. New York Marble Co., v. Piedmont Bank, 121 N. C, 343, 
 
 12 Ab. Pr., 66; Worth v. Piedmont 28 S. E., 488. In the last case cited
 
 184 RECEIVERS. [chap. VI. 
 
 In no event will a receiver appointed in the subsequent action 
 be justified in interfering with the possession already acquired 
 by the former receiver, without some order or direction of the 
 court.'^ And where there is a controversy between two re- 
 ceivers appointed by the same court as to the right of pos- 
 session of certain property, the proper practice is to proceed 
 by petition or independent bill in the suit in which the receiver 
 in possession was appointed, in order to determine the contro- 
 versy.^ 
 
 § 153. Right to possession as between receiver and as- 
 signee in bankruptcy. As between the right of possession 
 of a receiver and of assignees of the same estate under subse- 
 quent proceedings in bankruptcy, the doctrine of the English 
 Chancery is, that the appointment of the receiver will not be 
 superseded nor his possession defeated by the bankrupt pro- 
 ceedings. The appointment of the receiver is regarded as a 
 discretionary power, exercised by the court of chancery with 
 as great utility as any power belonging to it, and the receiver 
 first appointed by that court is entitled to possession, and the 
 assignees in bankruptcy and all others will be required to sur- 
 render possession to him.^ 
 
 the court say: "The test of juris- after a dissolution, for an account 
 diction in such cases is not the first and a receiver of the partnership 
 issuing of the summons, nor the assets. Subsequent to the appoint- 
 first preparation and verification of ment of the receiver, one member 
 the papers, which are the acts of of the firm was adjudicated a bank- 
 the parties, nor which receiver first rupt, and his assignees obtained pos- 
 took possession since that has no session of a portion of the firm 
 eflfect unless legally authorized assets, which the bankrupt had 
 (which it can not be if a prior order clandestinely conveyed away from 
 has been made appointing another), the receiver. The assignees insisted 
 but which court is first "seized of that they were entitled to posses- 
 jurisdiction" by making an order sion, and that the partner who had 
 upon legal proceedings exhibited obtained the receiver must come in 
 before it." and share pari passu with the cred- 
 
 7 Ward V. Sv/ift, 6 Hare, 309. itors. Lord Hardwicke said: "A 
 
 8 Comer v. Felton, 10 C. C. A., judgment creditor, to be sure, has 
 28. 61 Fed., 731, 22 U. S. App., 313. no preference under commissions of 
 
 9 Skip V. Harwood, 3 Atk., 564. bankruptcy, though execution has 
 This was an action by one partner, been taken out, if not actually ex-
 
 CHAP. VI.] POSSESSION. 185 
 
 § 154. Rights of common. While the appointment of a 
 receiver over real property does not interfere with the exer- 
 cise of rights of common then actually enjoyed by other parties, 
 yet if the receiver has taken possession, the court will not, as 
 against such possession, permit the exercise of an alleged right 
 of common which had been abandoned for several years. And 
 in such a case, where the person claiming the right of com- 
 mon had turned his cattle into a part of the estate, and the re- 
 ceiver had impounded them, but he persisted in the trespass 
 and brought an action of replevin for the cattle, he was en- 
 joined from further trespassing upon the property, and from 
 further prosecuting his action of replevin, but was given leave 
 to go before a master and be examined, pro inter esse siio, as 
 to the right claimed. i*^ 
 
 § 155. Mixture of funds by auctioneer; right of receiver. 
 •Where a person doing business as an auctioneer is in the 
 habit of depositing the proceeeds of sales made by him, in 
 the course of his business, in bank to his own credit, and in 
 his own name, and a customer of the auctioneer, familiar with 
 this method of doing business, has permitted the auctioneer to 
 deposit money arising from the sale of his goods, with his own 
 funds in bank, without objecting thereto, as against such a 
 customer the receiver of the auctioneer is entitled to the whole 
 fund in bank, which becomes vested in him by virtue of his 
 appointment, and the customer becomes merely a general credit- 
 or of the auctioneer.l^ 
 
 § 156. Distraint for rent upon goods which have passed 
 into receiver's possession. With reference to the right of 
 a landlord to distrain for rent due from a defendant, upon 
 
 ecuted ; but then a commission of provisional only for the more speedy 
 
 bankruptcy can not supersede a de- getting in of a party's estate, and 
 
 cree of this court for a receiver, securing it for the benefit of such 
 
 which is of a different considera- person who shall appear to be en- 
 
 tion, and is a discretionary power titled, and does not at all affect the 
 
 exercised by this court with as great right." 
 
 utility to the subject as any sort of 10 Johnes v. Claughton, Jac, 573. 
 
 authority that belongs to it, and is H Levy t/. Cavanagh. 2 Bosw., 100.
 
 186 RECEIVERS. [chap. VI. 
 
 goods of the defendant which have passed into the possession 
 of his receiver, it is held, where the property is actually removed 
 by the receiver from the demised premises before the landlord 
 attempts to exercise his right of distraint, that the landlord's 
 right has terminated with the removal of the goods. In such 
 a case, therefore, if the receiver has done no act to indicate his 
 acceptance of the lease, the landlord has no right to follow the 
 goods, which belong to the receiver and are not the property of 
 the defendant at the time of their removal. ^2 
 
 § 157. When receiver of deceased not entitled to fund 
 held by creditor. A receiver appointed to sell the proper- 
 ty of a decedent, pending litigation concerning the adminis- 
 tration of his estate, is not entitled to possession of a fund 
 held by a creditor of the deceased as security for certain lia- 
 bilities of the holder as an indorser for the deceased. The 
 holder of such a fund, having acquired a legal title thereto 
 by agreement w^ith the deceased, will not be compelled to sur- 
 render his title to a receiver, especially when it is not shown 
 that the fund is in any danger.^^ 
 
 § 158. Possession of wharf by receiver; injunction to 
 restrain interference with. Where, pending litigation con- 
 cerning a block of real estate and certain mills situated thereon, 
 a receiver is appointed with power to take charge of the prop- 
 erty and to perform all other duties pertaining to his office, the 
 receiver is entitled to the possession of and to collect the 
 wharfage due from a wharf or landing upon a river in front 
 of the mills, which was constructed for the purpose of more 
 conveniently conducting the business of the mills, the whole 
 constituting in effect one property, and the receiver holding 
 and renting it for the benefit of all parties interested in the liti- 
 gation. And being thus entitled to possession, he may maintain 
 a bill for an injunction against the authorities of a municipal 
 corporation, who interfere with his possession and attempt to 
 collect the wharfage. ^^ 
 
 12 Martin v. Black, 9 Paige, 641. 14 Grant v. City of Davenport. 18 
 
 13 Brady v. Fiirlow, 22 Ga., 613. Iowa, 179. It is to be observed that
 
 CHAP. VI.] POSSESSION. 187 
 
 § 159. Possession of commercial paper by receiver not 
 that of bona fide holder. It is to be observed as regards 
 the possesssion of commercial paper by a receiver, which has 
 come into his hands from the defendant by virtue of his ap- 
 pointment, that he acquires his title thereto by legal process, 
 and not in the regular course of dealing in commercial paper. 
 He does not, therefore, stand in the situation of a bona fide 
 holder for value of such paper.l^ And when a receiver takes 
 possession of notes and securities which are the property of 
 a third person, not a party to the cause, such person may by 
 petition in the cause require the receiver to surrender them.^^ 
 
 § 160. Defendant relieved from responsibility for prop- 
 erty in receiver's possession. The effect of taking proper- 
 ty from a defendant, and placing it in the possession of a 
 receiver, would seem to be to relieve the defendant from any 
 further responsibility concerning the property. And where, 
 upon a bill to recover certain property consisting of slaves, a 
 receiver is appointed and the slaves are placed in his posses- 
 sion, in accordance with the prayer of the bill, the defendant 
 from whom they are taken will not be held liable for their 
 value, if they are afterwards emancipated by the act of the 
 people. The property, in such case, being put into the receiver's 
 possession, is regarded as being in custodia legis, thereby di- 
 vesting defendant of all control over it.^'^ 
 
 § 161. Receiver's title not divested by order when he is 
 not a party; effect of appeal. on his possession. After the 
 title to property has become vested in a receiver, by virtue of 
 the order appointing him, it can not be divested merely upon 
 the order of the court made in a proceeding to which he was 
 
 the statutes of Iowa provide with erty, and generally to do such acts, 
 
 refer«nce to the powers of receiv- in respect to the property commit- 
 
 ers, as follows: "Subject to the ted to him, as the court may au- 
 
 control of the court, a receiver has thorize." 
 
 power to bring and defend actions, if" Briggs v. Merrill, 58 Barb., 389. 
 
 to take and keep possession of 16 Kimball v. Gafford, 78 Iowa, 
 
 property, to collect debts, to receive 65, 42 N. W., 583. 
 
 the rents and profits on real prop- 17 Lee v. Cone, 4 Cold., 393.
 
 188 RECEIVERS. [chap. VI. 
 
 not a party.i^ And where, pending litigation, property is 
 placed in the hands of a receiver, who is vested with the usual 
 powers of such officers, and the defendants to the litigation 
 pray an appeal from the final decree of the court below, the 
 effect of the appeal and giving bond thereon is not such as to 
 warrant the court in granting an order against the receiver 
 to turn over the property and money in his hands, and he will 
 still be allowed to retain possession, notwithstanding the ap- 
 peal. ^^ 
 
 § 162. Disposal of property by final decree. When 
 property has been in a receiver's possession pending litigation, 
 and a final decree is made directing that a sufficient portion be 
 set aside to satisfy the plaintiff's demand, which is accordingly 
 done pursuant to the decree, the property thus set aside be- 
 comes that of the plaintiff, although he may refuse to receive 
 it. And it would seem, on such a state of facts, that the re- 
 ceiver, having ceased to act in that capacity, holds the prop- 
 erty thenceforth only as trustee of the person entitled thereto 
 under the final decree.^O And when the decision of a court 
 of last resort dissolves an injunction against the defendant 
 and discharges a receiver of the fund in litigation, so that de- 
 fendant becomes entitled to the possession of his property, but 
 he has, pendente lite, applied for the benefit of the state insol- 
 vent laws, his trustee under such proceedings becomes entitled 
 to possession of the property, and the receiver will be required 
 to deliver it to such trustee.^i And when the appointment of 
 
 18 Rogers V. Corning, 44 Barb., bill. Upon appeal the judgment of 
 229. foreclosure was reversed because 
 
 19 Schenk v. Peay, 1 Dill., 267. the bill failed to describe the mort- 
 To the same effect, see State v. gaged premises with sufficient ex- 
 Reynolds, 209 Mo., 161, 114 S. W., actness to warrant the imposition 
 1097. In Salisbury v. Wilcox, 128 of a lien or to justify a sale. It 
 Cal., 347, 60 Pac, 979, a bill had was held that the order appointing 
 been filed to foreclose a mortgage the receiver should also be reversed 
 on real estate and a receiver had because there was no res of which 
 been appointed to take possession he could take possession. 
 
 of a fruit crop growing upon the 20 Very v. Watkins, 23 How., 469. 
 
 mortgaged premises described in the 21 Glenn v. Gill, 2 Md., 1.
 
 CHAP. VI.] POSSESSION. 189 
 
 a receiver is reversed, as having been illegal and unauthorized, 
 the court will require him to restore the fund to the person 
 from whom it was obtained.22 Sq when the bill upon which a 
 receiver is appointed is afterward dismissed for want of juris- 
 diction over the person of the defendant, the receiver should 
 be directed to return the property, which has come into his pos- 
 session, to the persons from whom such possession was ob- 
 tained, regardless of the adverse claim of title of other persons 
 thereto. 23 
 
 § 162a. Right to possession not divested when property 
 taken beyond state or country; when rule not applicable. 
 While the powers and functions of a receiver are co-extensive 
 only with the jurisdiction of the court appointing him, yet if 
 he has rightfully obtained possession of personal property sit- 
 uated within the jurisdiction of his appointment, and in the 
 discharge of his duties he takes the property into another state, 
 his title and right of possession are not thereby divested. And 
 in such case, an attachment will not be sustained against the 
 property in the latter state in behalf of creditors resident 
 there.24 So where a receiver, who has been appointed over 
 an insolvent railway company by a court of a foreign country, 
 has come into the possession of property of the company which 
 he subsequently brings into this country, where it is attached 
 by local creditors of the insolvent railway company, the re- 
 ceiver may maintain an action of replevin in the courts of this 
 country as against such local attaching creditors.25 But the 
 
 22 O'Mahoney v. Belmont, 62 N. Coal Co. v. Diamond State S. Co., 
 Y., 133. affirming S. C, 37 N. Y. 224 Pa. St., 217, — Atl., — . See, 
 Snpr. Ct. R., 380. contra, Humphreys v. Hopkins, 81 
 
 23 Warren z: Bunch, 80 Ga., 124, Cal., 551, 22 Pac, 892. See, also, 
 7 S. E., 270. Grogan v. Egbert, 44 West Va., 75, 
 
 24 Chicago, M. & St. P. R. Co. 28 S. E., 714, 67 Am. St. Rep., 763. 
 t/.Packet Co., 108 111., 317, 48 Am. 25 Robertson v. Staed, 135 Mo., 
 St. Rep., 557; Woodhull v. Farmers' 135, 36 S. W., 610, 33 L. R. A., 202, 
 Trust Co., 11 N. Dak., 157, 90 N. 58 Am. St. Rep., 569. And see this 
 W., 795, 95 Am. St. Rep., 712; Jones case as to the proof of the receiver's 
 V. Purcell, 20 App. D. C, 209; Cagill appointment by the court of the for- 
 V. Wooldridge, 8 Baxter. 580; Pond eign country. 
 
 V. Cooke, 45 Conn., 126; Somerset
 
 190 RECEIVERS. [chap. VI. 
 
 rule has no application where the Hen asserted is for the pur- 
 pose of enforcing- an indebtedness which has been incurred in 
 the foreign jurisdiction by the receiver himself in the care and 
 management of the property in question. Thus, where a re- 
 ceiver sends a vessel which constitutes part of the receivership 
 estate in his possession beyond the jurisdiction of his appoint- 
 ment and into a foreign state, where necessary supplies are 
 furnished the vessel, the person furnishing such supplies may 
 maintaining proceedings i)i ran in the admiralty court of that 
 jurisdiction to enforce the payment of his demand. ^6 
 
 26 The Willamette Valley, (also App., 447, affirming S. C, 62 Fed., 
 sub nom. Clark v. Chandler), 13 293 and 63 Fed., 130. 
 C. C. A., 635, 66 Fed., 565, 29 U. S.
 
 CHAP. VI.] POSSESSION. 191 
 
 II. Interference with Receiver's Possession. 
 
 § 163. Interference a contempt of court; punished accordingly; illus- 
 trations; distraint for rent. 
 
 164. The doctrine further considered; suit in another jurisdiction; 
 
 interference by another receiver. 
 
 165. Liability for disturbing receiver's possession not dependent 
 
 upon legality of appointment. 
 
 166. Not necessary that person should be officially apprised of re- 
 
 ceivership. 
 166a. No liability for interference where order appointing receiver is 
 void. 
 
 167. Interference with collection of rents by receiver. 
 
 168. Surrender of property by defendant to receiver; void order; 
 
 surrender by purchaser; what not a contempt. 
 
 169. Court itself must decide as to compliance with its order, and 
 
 as to attachment for contempt. 
 
 170. Contempt for interference with receivership in foreign coun- 
 
 try; what not a contempt. 
 
 171. Actual interference necessary to contempt; levy and sale by 
 
 sheriff under execution. 
 
 172. Receiver's title not determined in proceedings for contempt; 
 
 payment for property as reparation. 
 
 173. Contest between different receivers. 
 
 174. Receiver liable to attachment for not turning over property as 
 
 directed by court. 
 174a. Receiver of corporation entitled to rights under patent. 
 1746. Form of judgment in contempt proceedings. 
 
 § 163. Interference a contempt of court; punished ac- 
 cordingly; illustrations; distraint for rent. The receiver 
 being an officer of the court, and his possession being regarded 
 as the possession of the court, any unauthorized interference 
 therewith, whether by taking forcible possession of the prop- 
 erty committed to his charge, or by legal proceedings for that 
 purpose without the sanction of the court from which he derives 
 his appointment, is regarded as a contempt of court, and is 
 punished accordingly, the usual punishment to which resort 
 is had being by attachment for contempt.27 Thus, wliere an 
 
 27 Noe V. Gibson, 7 Paige, 513; Skip v. Harwood, 3 Atk.. 564; Hull 
 De Visser v. Blackstone, 6 Blatchf., v. Thomas, 3 Edw. Ch., 236; Anony- 
 235; Lane v. Sterne, 3 Gif., 629; mous, 2 Mol., 499; Broad v. Wick-
 
 192 RECEIVERS. [chap. VI, 
 
 ofticer levies an execution upon property of defendants, which 
 has already passed into the hands of a receiver, who distinctly 
 notifies the officer in writing at the time of making his levy 
 that such property is in his possession in his capacity of re- 
 ceiver, the officer is guilty of a contempt of court if he pro- 
 ceeds with the levy.28 So a landlord will not be permitted to 
 take property from a receiver's possession, under a distraint for 
 rent due from defendant in the action in which the receiver 
 was appointed, his proper course being to apply to the court, 
 upon notice to the receiver, for an order requiring him to pay 
 the rent, or that the landlord be at liberty to proceed by dis- 
 traint, or otherwise, as the court may direct. And where, with- 
 out such authority or sanction of the court, the landlord seizes 
 the property under a distress warrant, both he and his officer 
 levying the warrant will be punished by attachment for con- 
 tempt of court.29 So where a receiver has been ordered to col- 
 lect the rents and profits of real estate, he is regarded as being in 
 constructive possession, and any interference with such posses- 
 sion is punishable as a contempt.^^ And where, after the dis- 
 solution of a partnership, one of the partners proceeds to tam- 
 per with the employees in the employ of the receiver of the 
 
 ham. 4 Sim., 511; Russell v. East Bee, 83 Fed., 761. See People v. 
 
 Anglian R. Co., 3 Mac. & G., 104; Weigley, 155 III, 491, 40 N. E., 300, 
 
 Langford v. Langford, 5 L. J., N. S. supra, to the effect that it is im- 
 
 Ch., 60; Vermont & Canada R. Co. material whether or not the person 
 
 V. Vermont Central R. Co., 46 Vt., charged is a party to the receiver- 
 
 792; Spinning v. Ohio Life Insur- ship proceeding, 
 ance and Trust Co., 2 Disney, 368; 28 Lane v. Sterne, 3 Gif., 629. It 
 
 Chafee v. Quidnick Co., 13 R. I., is said in this case that the practice 
 
 442; Secor v. T., P. & W. R. Co., 7 in the English Court of Chancery 
 
 Biss., 513 ; King v. O. & M. R. Co., in such cases is not to punish the 
 
 7 Biss., 529; People v. Weigley, 155 offense ordinarily by committal, but 
 
 111., 491, 40 N. E., 300; St. Louis, that the court uniformly requires 
 
 A. & S. R. Co. V. Hamilton, 158 111., the offending party to pay the costs 
 366, 41 N. E., 777 ; Gunning v. Sorg, and expenses occasioned by his im- 
 214 111., 616, 7Z N. E., 870; Delozier proper conduct. 
 
 V. Bird, 125 N. C, 493, 34 S. E., 29 Noe v. Gibson, 7 Paige, 513. 
 
 643; Royal Trust Co. v. Washburn, 30 Delozier v. Bird, 125 N. C, 
 
 B. & I. R. Co., 71 C. C. A., 579, 139 493, 34 S. E., 643. 
 Fed., 865 ; dictum in Ledoux v. La
 
 CHAP. VI.] POSSESSION. 193 
 
 partnership, who is engaged in carrying on the business under 
 the order of the court, and induces them to leave the employ 
 of the receiver for the purpose of engaging in a rival business 
 conducted by such partner, such conduct amounts to an unlaw- 
 ful interference with the receiver's possession and may be re- 
 strained by injunction; and in such case it is immaterial that 
 no contracts are being broken by such employees.^^ But since 
 the refusal of the receiver of the vendee of personal property 
 to accept the property under the terms of the contract prevents 
 the title and the right of possession from vesting in the re- 
 ceiver, the vendor will not be held in contempt for disposing 
 of the property without the consent of the court.^^ 
 
 § 164. The doctrine further considered; suit in another 
 jurisdiction; interference by another receiver. The doc- 
 trine that an unauthorized interference with a receiver's pos- 
 session constitutes a contempt of court necessarily results from 
 the receiver's position as an officer of the court, acting under 
 its authority and in all things subject to its control. Any un- 
 authorized attempt to interfere with or disturb his possession 
 directly questions the power of the court appointing him, and it 
 becomes the duty of the court to protect him, the same rule be- 
 ing applicable which obtains when sheriffs, trustees or mastei s 
 in chancery have been invested under a judicial order with the 
 control of property pendente lite. In all such cases, the power 
 to protect the receiver or officer of the court necessarily follows 
 from the power to appoint, and the court will extend its pro- 
 tection by punishing as for a contempt any unauthorized in- 
 terference with his possession, even though it be by another 
 receiver afterwards appointed by another court, which had sub- 
 sequently acquired jurisdiction over the matter.^^ Nor can 
 such interference be justified by the fact that it is committed 
 
 31 Dixon V. Dixon, (1904) 1 Ch., 33 Spinning v. Ohio Life Insur- 
 161. ance and Trust Co., 2 Disney, 368. 
 
 32 Moore v. Potter, 155 N. Y., 
 481, SO N. E., 271, 63 Am. St. Rep., 
 692. 
 
 Receivers — 13.
 
 194 RECEIVERS. [chap. VI. 
 
 beyond the jurisdiction of the court and in another state, as 
 by instituting attachment proceedings in another state and 
 garnishing funds due to the receiver. And an attorney who 
 appears for and consents to the appointment of a receiver over 
 a corporation and assists in framing the order, and who then 
 attaches the funds of the corporation in another state to recover 
 for professional services, is guil'v of a plain contempt of court, 
 and will be dealt with accordingly.^^ So when a receiver is 
 appointed over an insolvent partnership, and a manager of a 
 non-resident corporation which is a creditor of the firm, such 
 manager residing within the jurisdiction of the court, insti- 
 tutes proceedings in attachment in a foreign jurisdiction to 
 recover property of the debtor there located, he may be pun- 
 ished for contempt in thus interfering with the rights of the 
 receiver. ^^ So one may be guilty of contempt in interfering 
 with the business of a receiver, even though there is no direct, 
 physical interference with his possession. Thus, when a former 
 clerk of a firm over which a receiver is appointed sends to the 
 customers of the firm a circular containing an unfair and un- 
 truthful statement as to the effect of the proceedings in which 
 the receiver is appointed, and soliciting the customers of the 
 firm, he may be punished for contempt. ^^ So a wilful attempt 
 to interfere with a receiver's operation of a railroad upon the 
 part of persons who are conspiring together in an unlawful 
 combination, the object of which is to injure the business of 
 the railroad, constitutes an unlawful interference with the re- 
 ceiver's possession and as such is punishable as a contempt.^'^ 
 And so jealous are courts of equity in protecting the rights 
 of their receivers, that they will not sanction any unauthorized 
 interference with property or funds to which the receiver is 
 entitled, even though not yet reduced to possession.^S Thus, 
 
 34 Chafee v. Quidnick Co., 13 R. 37 Thomas v. Cincinnati, N. O. & 
 I., 442. T. P. R. Co., 62 Fed., 803. 
 
 35 Sercomb v. Catlin, 128 111., 556, 38 Richards v. People, 81 111., 551 ; 
 21 N. E., 606. Hazelrigg v. Bronaugh, 78 Ky., 62. 
 
 36Helmore v. Smith, 35 Ch. D., 
 449.
 
 CHAP. VI.] POSSESSION. 195 
 
 one who, with full knowledge of the appointment of a receiver, 
 attempts by garnishee proceedings to reach credits which are 
 due to the receiver, but of which he has not yet obtained pos- 
 session, will be punished for contempt of court. ^^ 
 
 § 165. Liability for disturbing receiver's possession not 
 dependent upon legality of appointment. The liability of 
 one who disturbs the possession of a receiver, like that of a 
 defendant in violating an injunction,^^ jg ^ot dependent upon 
 the regularity or legality of the appointment, and it affords no 
 justification for an unauthorized interference with the receiver's 
 possession that the order may have been illegally or improvi- 
 dently made. While the order continues in existence, the court 
 requires that it shall receive implicit obedience, and will not 
 permit its legality to be questioned by disobedience, the court 
 itself being always open to any proper application calling in 
 question the legality or propriety of its order. If, therefore, 
 a sheriff has levied executions upon property in the custody 
 of a receiver, the officer making the levy being fully notified 
 and apprised of the receiver's appointment and possession, up- 
 on a motion to commit for contempt of court, the respondent 
 can not justify his interference upon the ground that the ap- 
 pointment was improperly made, and the court will not, upon 
 such a motion, consider the merits of the original order.^l 
 
 39 Richards v. People, 81 111., 551. 396; Billard v. Erhart, 35 Kan., 616, 
 
 40 See for a discussion of this 12 Pac, 42; State v. Pierce, 51 
 principle in cases of injunctions, Kan., 241, 32 Pac, 924; Central 
 Moat V. Holbein, 2 Edw. Ch., 188; Union T. Co. v. State, 110 Ind., 
 Woodward v. Earl of Lincoln, 3 203, 10 N. E., 922, 12 N. E., 136; 
 Swans., 626; Richards v. West, 2 In re White, 113 Cal., 282. 45 Pac, 
 Green Ch., 456; People v. Sturte- 323; Loven v. The People, 158 111., 
 vant, 9 N. Y., 263; Sullivan v. 159, 42 N. E., 82; Wilber t;. Wooley, 
 Judah, 4 Paige, 444 ; Partington v. 44 Neb., 739, 62 N. W., 1095 ; State 
 Booth, 3 Meriv., 148; Rogers Mfg. v. Markuson, 7 N. Dak.. 155. 7Z N. 
 Co. V. Rogers, 38 Conn., 121; Peo- W., 82; Silliman v. Whitmer, 173 
 pie V. Van Buren, 136 N. Y., 252, Pa. St., 401, 34 Atl., 56; State v. 
 32 N. E., 775, 20 L. R. A., 446; Circuit Court, 98 Wis., 143, 73 N. 
 Cape May & S. L. R. Co. v. John- W., 788; Laramie National Bank v. 
 son, 35 N. J. Eq., 422 ; Fleming v. Steinhoff, 7 Wyo., 464, 53 Pac, 299. 
 Patterson, 99 N. C, 404, 6 S. E., 41 Russell v. East Anglian R. Co.,
 
 196 
 
 RECEIVERS. 
 
 [chap. VI. 
 
 And in proceedings for contempt for interfering with a re- 
 ceiver's possession, the court will not consider whether the or- 
 der appointing the receiver was erroneous, since such order 
 can not be assailed in a collateral proceeding, if the court had 
 
 3 Mac. & G., 104. This was an ap- 
 peal from an order of the Vice- 
 Chancellor upon a motion to com- 
 mit a sheriff and under-sheriff for 
 an alleged contempt of court, in 
 having interfered with the posses- 
 sion of a receiver by levying upon 
 and taking from him certain goods 
 and chattels under a A. fa., in favor 
 of judgment creditors of the de- 
 fendants. Lord Truro observes, 
 p. 115: "When the motion to com- 
 mit was made the answer given to 
 it was that, although the receiver, 
 at the time of the levy, gave notice 
 that he was in possession of the 
 property as an officer of the court 
 of chancery, yet that the plaintiffs 
 in the execution considered the 
 order, under which the receiver was 
 appointed, an ill-advised, illegal and 
 indiscreet order, and that therefore 
 they were justified in treating it as 
 a nullity. It was contended, on the 
 other side, that it was wholly irrele- 
 vant to the application whether the 
 order was or was not such an order 
 as this court on further considera- 
 tion would deem it right to have 
 made; that it was a subsisting or- 
 der; that the officer was acting un- 
 der it when he was interrupted by 
 the sheriff; that an officer so acting 
 under the authority of the court 
 was entitled to the protection of the 
 court ; that if the order was incor- 
 rect in a degree which interfered 
 with the legal rights of the plaintiffs 
 in the execution, it was open to 
 them to come to the court to ques- 
 tion the propriety of that order in 
 
 a proper manner, but that it was 
 not open to them to do so by dis- 
 obeying it, and by interrupting the 
 officer of the court. The case was 
 discussed at considerable length, 
 and the Vice-Chancellor appears to 
 have entertained doubts, which I 
 think were well founded, with re- 
 gard to that order; but he stated, 
 and it appears to me correctly, that 
 that was not the occasion on which 
 the court could be properly called 
 upon to decide on the validity of 
 the objection to the order, and he 
 therefore declined to express any 
 determinate opinion upon that sub- 
 ject, intimating that they might be 
 proper matters to be discussed here- 
 after. ... I have looked with 
 care through the very numerous au- 
 thorities that have been cited, but 
 it is not necessary for me to go 
 through them. The result appears 
 to be this : that it is an established 
 rule of this court that it is not open 
 to any party to question the orders 
 of this court, or any process issued 
 under the authority of this court, 
 by disobedience. I know of no act 
 which this court may do which 
 may not be questioned in a proper 
 form and on a proper application ; 
 but I am of opinion that it is not 
 competent for any one to interfere 
 with the possession of a receiver, 
 or to disobey an injunction, or any 
 other order of the court, on the 
 ground that such orders were im- 
 providently made. Parties must 
 take a proper course to question 
 their validity, but while they exist
 
 CHAP. VI.] POSSESSION. 197 
 
 jurisdiction of the parties and of the subject-matter. ^2 So 
 upon an appeal from an order adjudging a defendant debtor 
 guilty of contempt in refusing to assign his property to a re- 
 ceiver in a judgment creditor's suit, the court will not review 
 or consider the propriety of appointing the receiver.^S Sq ^^qj^ 
 a petition filed by a receiver for an injunction against an action 
 of trover which had been instituted against him without leave 
 of court, the decree appointing the receiver can not be assailed 
 because erroneously or improperly made."** 
 
 § 166. Not necessary that person should be officially 
 apprised of receivership. It is also a well-established prin- 
 ciple, that, to render a defendant or other person liable by at- 
 tachment for contempt in disturbing or interfering with prop- 
 erty of which a receiver is entitled to possession, it is not nec- 
 essary that he should be officially apprised of the receiver's 
 appointment, or even that the formal order should have been 
 actually drawn, provided he has actual notice of the receiver- 
 ship, or of the order of court directing the appointment. Any 
 actual knowledge of the granting of the order is sufficient to 
 fix defendant's repsonsibility for its violation, the same prin- 
 ciple being applicable in such cases as in case of the violation 
 of an injunction.45 Thus, where defendants have knowledge 
 
 they must be obeyed. I consider Lewis, 52 Kan., 660, 35 Pac, 287. 
 
 the rule to be of such importance See, ante, § 39a. 
 
 to the interests and safety of the 43Bagley v. Scudder, 66 Mich., 
 
 public, and to the due administra- 97, 33 N. W., 47. 
 
 tion of justice, that it ought on all 44 Montgomery v. Enslen, 126 
 
 occasions to be inflexibly main- Ala., 654, 28 So., 626. 
 
 tained. I do not see how the court 45 Hull v. Thomas, 3 Edw. Ch., 
 
 can expect its officers to do their 236; Skip v. Harwood, 3 Atk., 564; 
 
 duty, if they do it under the peril Lewis v. Singleton, 61 Ga., 164. 
 
 of resistance, and of that resistance And see the same doctrine dis- 
 
 being justified on grounds tending cussed and applied to the violation 
 
 to the impeachment of the order of injunctions, in Howe v. Willard, 
 
 under which they are acting." And 40 Vt., 654 ; Hearn v. Tennant, 14 
 
 see, ante, § 143. Ves., 136; McNeil v. Garratt, Cr. & 
 
 42 Cook V. Citizens National Ph., 98; Poertner v. Russell, 33 
 
 Bank, 73 Ind., 256; Richards v. Wis., 193 ; Fleming t;. Patterson, 99 
 
 Ptople, 81 111., 551. See, also, In re N. C, 404, 6 S. E., 396; Powell v.
 
 198 RECEIVERS. [chap. VI. 
 
 of the granting of an injunction against their disposal of cer- 
 tain property, and the appointment of a receiver over the prop- 
 erty, they are in contempt of court if they dispose of it, even 
 though the order of the court is not yet served upon them.^^ 
 And where a defendant is present in court during the hearing 
 of a cause, and knows that an order granting a receiver of his 
 estates has been allowed, although the decree itself has not yet 
 been drawn, he is guilty of a contempt of court if he removes 
 a portion of the property and puts it beyond the receiver's pos- 
 session for the purpose of evading the decree, and he can not 
 justify on the ground that the decree has not yet been entered.^'^ 
 So where an order had been entered requiring one who had 
 money in his possession to turn it over to a receiver, it is not 
 necessary that he should be officially served with a copy of such 
 order to render him liable for failure to obey it.^^ 
 
 § 166a. No liability for interference v^here order ap- 
 pointing receiver is void. The rule as announced in the 
 preceding sections must always be understood as applying 
 
 Follett, Dick., 116; Murphy v. was of opinion that, "where a per- 
 
 Harker, 115 Ga., 77, 41 S. E., 585; son, as Mr. Harwood has done, 
 
 Lake Shore & M. S. R. Co. v. attends a cause to which he is a 
 
 Taylor, 134 III., 603, 25 N. E., 588; defendant, the whole time of the 
 
 Kempson v. Kempson, 61 N. J. Eq., hearing, and had notice of the de- 
 
 303, 48 Atl., 244, modified and af- cree by being present when it was 
 
 firmed in 63 N. J. Eq., 783, 52 Atl., pronounced in court, if he does any 
 
 360, 625 ; Fowler v. Beckman, 66 act that is a contravention to the 
 
 N. H., 424, 30 Atl., 1117; Ex parte decree he is guilty of a contempt, 
 
 Richards, 117 Fed., 658. and punishable for it, notwithstand- 
 
 46 Hull V. Thomas, 3 Edw. Ch., ing the decretal order is not drawn 
 236. up; and there are several instances 
 
 47 Skip V. Harwood, 3 Atk., 564. of this kind, or otherwise it would 
 This was a bill between two part- be extremely easy to elude decrees, 
 ners, after a dissolution, for an some of which in their nature re- 
 accounting and a receiver. The de- quire a considerable length of time 
 fendant, Harwood, was present in before they can be completely 
 court during the hearing, which drawn up." The defendant was ac- 
 occupied three days, and knew of cordingly committed to the Fleet 
 the order appointing a receiver, but for his contempt of court. 
 
 before the decree was drawn or 48Drakeford v. Adams, 98 Ga., 
 
 entered he removed a large portion 722, 25 S. E., 833. 
 of the firm assets. Lord Hardwicke
 
 CHAP. VI.] POSSESSION. 199 
 
 only to cases where the court had jurisdiction of the subject- 
 matter of the controversy and where the complaint is therefore 
 merely one of an irregular or erroneous exercise of such juris- 
 diction, which should have been corrected upon appeal or by 
 application to the appointing court. Where, therefore, the 
 court which appointed the receiver was entirely without juris- 
 diction of the subject-matter of the suit and had no power 
 under any circumstances to grant the principal relief sought, 
 its order appointing the receiver is to be regarded as a nullity 
 and an unauthorized interference with the possession of such 
 receiver is therefore not punishable as a contempt of court. '^^ 
 § 167. Interference with collection of rents by receiver. 
 When a receiver is appointed to collect rents, it is his duty, upon 
 being apprised by the tenants of interference with the rents by 
 defendant, to move the court for an attachment against de- 
 fendant, and the receiver's affidavit upon information and 
 belief is sufficient foundation for the proceedings in attach- 
 ment.^^ And when a person has taken forcible possession of 
 estates over which a receiver has been appointed, an order for 
 his commitment may be made, upon proof of service of notice 
 of the motion, without a rule nisi being first obtained.^l But 
 when a receiver was appointed over mortgaged premises, 
 pending an action to foreclose the mortgage, and a third person 
 not a party to the action had collected the rents, under an as- 
 signment thereof from the owner of the equity of redemption 
 made prior to the receiver's appointment, he was held not 
 liable as for a contempt of court, although he was apprised 
 
 49 People V. Weigley, 155 111., 491, rett, 203 111., 99, 67 N. E., 742; In 
 
 40 N. E., 300; Town of Vandalia re Sawyer, 124 U. S., 200, 8 Sup. 
 
 V. St. L., V. & T. H. R. R. Co., 209 Ct. Rep., 482 ; Morgan v. County 
 
 111., 73, 70 N. E., 662. And see, Court, 53 West Va., 372, 44 S. E., 
 
 post, §§ 168 and 203. For the ap- 182; State v. Superior Court, 105 
 
 plication of the same principle in Wis., 651, 81 N. W., 1046, 48 L. 
 
 cases of injunctions, see Walton v. R. A., 819; State v. Milligan, 3 
 
 Develing, 61 111., 201 ; Darst v. The Wash., 144, 28 Pac, 369 ; State v. 
 
 People, 62 III., 306; Andrews v. Theard, 48 La. An., 1448, 21 So., 28. 
 
 Knox Co., 70 111., 65 ; Dickey v. 50 Anonymous, 2 Mol., 499. 
 
 Reed, 78 111., 261; People v. Bar- 51 Broad z/. Wickham, 4 Sim., 511.
 
 200 RECEIVERS. [chap. VI. 
 
 of the receivership, the receiver having taken no steps to col- 
 lect the rent or to secure the attornment of the tenant.^2 /^^d 
 when a third person, not a party to a suit in which a receiver is 
 appointed over an insolvent debtor, claims title to certain prop- 
 erty, under a conveyance from such debtor, it is not proper to 
 determine the disputed question of title upon proceedings for 
 contempt in collecting the rents of such property, the appro- 
 priate proceeding being by an order directing the receiver to 
 bring an action to set aside the conveyance.^^ 
 • § 168. Surrender of property by defendant to receiver; 
 void order ; surrender by purchaser ; what not a contempt. 
 A defendant, over whose property a receiver is appointed, 
 may be attached for contempt, if he refuses to comply with an 
 order of court directing him to surrender all his property, 
 under oath, to the receiver. ^^ jsJqj- ^j-e such attachment pro- 
 ceedings a violation of the constitutional restriction against 
 imprisonment for debt, since the order directing the defendant 
 to deliver property or money to the receiver is not an order 
 for the payment of an indebtedness, and the receiver holds the 
 fund as a trustee for the benefit of whoever may be entitled 
 thereto.^^ So the refusal of an officer of a railway company, 
 over which a receiver is appointed, to comply with an order 
 directing the delivery to the receiver of all books of the com- 
 pany, and the collection by such officer and depositing in bank 
 to the credit of the company of moneys due to it, after the re- 
 ceiver's appointment, constitute a contempt of court.^^ But the 
 refusal in such case constitutes no contempt where the order 
 was beyond the jurisdiction and authority of the court.^'^ 
 And when defendant is ordered to assign and deliver his prop- 
 
 52 Bowery Savings Bank v. Rich- 55 Ryan v. Kingsbery, 88 Ga., 361, 
 
 ards, 6 Thomp. & Cook, N. Y. S. C, 14 S. E., 596. 
 
 59, 3 Hun, 366. 56 American C. Co. v. Jackson- 
 
 53£;r parte Hollis, 59 Cal., 405. ville, T. & K. W. R. Co., 52 Fed., 
 
 54 People V. Rogers, 2 Paige, 103 ; 937. 
 
 Ryan v. Kingsbery, 88 Ga., 361, 14 57 St. Louis, K. & S. R. Co. v. 
 
 S. R, 596; Williamson v. Pender, Wear, 135 Mo., 230, 36 S. W., 357, 
 
 127 N. C, 481, 37 S. E., 495. 658, 33 L. R. A., 341.
 
 CHAP. VI.] POSSESSION. 201 
 
 erty to a receiver, under oath, under direction of a master in 
 chancery, if the plaintiff seeks an actual deUvery of the property 
 in addition to a legal assignment, when a portion of it is 
 claimed by a third person under an assignment from the debtor, 
 he must first have the master determine what property is under 
 defendant's control, and obtain an order upon him to deliver 
 over such property. And until this is done, defendant is not 
 in contempt for disobeying the order of the court.^^ And a 
 purchaser of property at a sheriff's sale, under execution 
 against a defendant over whose effects a receiver has been ap- 
 pointed, is not in contempt for refusing to comply with the 
 order of a master, commanding him to surrender possession 
 of the property to the receiver, if such purchaser has not been 
 made a party to the litigation, and has had no opportunity of 
 asserting his rights before the court.^^ And where a defendant 
 has been ordered by the court to deliver certain notes, held by 
 him in trust, to a receiver previously appointed in the action, 
 he will not be held in contempt for a refusal to deliver the 
 notes to the plaintiff in the action, or his attorney, when the 
 receiver himself has not demanded the notes. In such a case 
 the defendant has not, in strictness, refused to comply with 
 the order of the court, and can not, therefore, be punished for 
 an alleged contempt for refusing to deliver the notes to the 
 plaintiff.^^ And where funds which were on deposit in a bank 
 to the credit of a receiver have been attached and the bank 
 garnished, the refusal of the cashier to turn such money over 
 to the receiver upon his presentation of his check therefor con- 
 stitutes no contempt where the order of appointment was abso- 
 lutely void and beyond the jurisdiction of the court to enter. ^^ 
 And where an order has been entered upon the appointment of 
 
 58 Cassilear v. Simons, 8 Paige, 61 State v. District Court, 21 
 273. And see Parker v. Browning, Mont., 155, 53 Pac, 272, 69 Am. St. 
 id., 389. Rep.", 645. And see, ante, § 166a 
 
 59 Robeson v. Ford, 3 Edw. Ch., and, post, § 203. 
 441. 
 
 60 Panton v. Zebley, 19 How. Pr., 
 394.
 
 202 RECEIVERS. [chap. VI. 
 
 a receiver of a corporation directing that the property of the 
 corporation be turned over to the receiver, one who is not a 
 party to the suit can not be held guilty of contempt for re- 
 fusing to surrender property claimed by the receiver, which 
 he believes in good faith belongs to others to whom he would 
 in fact be responsible if it did so belong to them. ^2 
 
 § 169. Court itself must decide as to compliance with its 
 order, and as to attachment for contempt. As regards 
 the power of punishing a defendant, by attachment or other- 
 wise, for a contempt of court in refusing to obey an order 
 to surrender his property to the receiver, the court issuing the 
 order is the only competent judge as to the question of com- 
 pliance. An attachment, therefore, for contempt in such a case 
 should be issued or withheld, sustained, modified, or set aside, 
 only by the direct order of the court itself ; and it is improper 
 to make the issuing of such attachment dependent upon the 
 judgment of a special commissioner, appointed by the court 
 to take an account of the property involved. ^^ 
 
 § 170. Contempt for interference with receivership in 
 foreign country; what not a contempt. The power of a 
 court of equity over persons within its jurisdiction and sub- 
 ject to its process, to appoint a receiver of their property, sit- 
 uated in foreign country, is, as has elsewhere been shown,^^ 
 well established. And while the court may not have the means 
 of sending its officers into the foreign country, to carry into 
 effect its orders there, yet if the defendant within the jurisdic- 
 tion of the court instructs his representatives or agents in the 
 foreign country to resist the enforcement of the order for the 
 receiver, he is guilty of resistance to the mandate of the court, 
 and liable to punishment as for contempt. ^^ But where the 
 
 62 State V. Denhatn, 30 Wash., within the jurisdiction of the Court 
 643, 71 Pac, 196. of Chancery there, a receiver was 
 
 63 Geisse v. Beall, 5 Wis., 224.' appointed over his estates in Ire- 
 
 64 Ante, § 44. land. The defendant instructed his 
 63 Langford v. Langford, 5 L. J., solicitor in Ireland "to oppose, as 
 
 N. S. Ch., 60. In this case the de- far as the law would permit, the 
 fendant being in England, and receivers of such rents and profits
 
 CHAP. VI.] 
 
 POSSESSION. 
 
 203 
 
 property is located in a foreign country and is therefore not in 
 the possession of the receiver, a person, not a party to the suit, 
 who takes proceedings in that country is not guiUy of contempt 
 for interfering with the receiver's possession.66 
 
 § 171. Actual interference necessary to contempt; levy 
 and sale by sheriff under execution. To render a person 
 liable to attachment for contempt of court in interfering with 
 the possession of a receiver, there must be an actual interfer- 
 ence with or disturbance of the possession.^'!' Where, therefore, 
 a receiver is in the actual possession of defendant's real estate, 
 which is subject to the lien of a judgment against the defend- 
 ant, the levy upon and sale of defendant's interest in the real 
 estate by a sheriff does not disturb the receiver's possession, 
 and is not a contempt of court. The sheriff, in such case, 
 merely sells the interest of the judgment debtor in the real es- 
 tate, subject to all just claims of the receiver or of any other 
 
 from receiving the same." The so- 
 licitor accordingly notified defend- 
 ant's tenants in Ireland that the 
 order of the English Court of 
 Chancery appointing a receiver was 
 of no effect in Ireland, and that de- 
 fendant would still enforce pay- 
 ment of his rents as before. The 
 English receiver was thus pre- 
 vented from receiving any rents. 
 Upon motion for a sequestration 
 against the defendant for the con- 
 tempt, Lord Langdale, Master of 
 the Rolls, held as follows : "That 
 this is a contempt, I have no doubt. 
 It is true that this court has not 
 the means of sending its officers to 
 carry into effect its orders in Ire- 
 land; but it has jurisdiction over all 
 persons in this country, and can 
 compel obedience to its orders. The 
 defendant sends to his solicitors in 
 Ireland to oppose by all lawful 
 means the receiver appointed by 
 this court from receiving the rents. 
 
 If he meant by all lawful means 
 in this country, there should be no 
 resistance at all; because a party 
 is not justified in opposing the 
 order of the court; but he says by 
 all lawful means in Ireland ; that 
 is to say, because this court can not 
 send its process into Ireland, there- 
 fore Lord Langford's agent is to 
 use all means in Ireland to oppose 
 the order of the court here." His 
 Honor said he hoped that Lord 
 Langford would see his error, and 
 know that he could not resist the 
 order of this court ; and that the 
 order for a sequestration must, 
 therefore, be made, unless his Lord- 
 ship ceased to interfere with the 
 officer of the court. 
 
 66 In re Maudslay, Sons & Field, 
 (1900) 1 Ch., 602. 
 
 67 Albany City Bank v. Schermer- 
 horn, 9 Paige, 372; Same v. Same, 
 10 Paige, 263.
 
 204 RECEIVERS. [chap. VI. 
 
 person, and does not, therefore, commit a contempt of court.^^ 
 And a mere formal levy by the sheriff upon property construct- 
 ively under the receiver's control does not constitute such a 
 disturbance of possession as to render the sheriff liable to at- 
 tachment therefor, when immediately upon making the levy he 
 consents that the receiver may take possession of the interest 
 levied upon and dispose of the same, holding the proceeds sub- 
 ject to the order of the court by which the receiver was appoint- 
 ed. In such a case the possession of the court is not disturbed, 
 since the property is placed in the same situation which it would 
 have occupied had the receiver in the first instance reduced it 
 to actual possession and retained it throughout.^^ And it has 
 been held that the fact that the property was in the hands of a 
 receiver would not prevent the prosecution of an action to es- 
 tablish a mechanic's lien against the property. '^^ 
 
 § 172. Receiver's title not determined in proceedings 
 for contempt; payment for property as reparation. In a 
 proceeding for contempt instituted against a claimant of prop- 
 erty, who has taken it from the receiver's possession without the 
 sanction of the court, the court will not determine the question 
 of the receiver's title or ultimate right to the property, since 
 this can only be tried in some action appropriate for that pur- 
 pose, to be instituted against the receiver. But when, in such 
 proceedings for contempt, the claimant has taken the property 
 out of the state, and it is impossible for the court to compel its 
 restoration to the receiver, it is proper to order him to pay the 
 receiver the value of the property by way of reparation. "^^ 
 
 § 173. Contest between different receivers. While 
 courts of equity will not justify any unauthorized interference 
 with the possession of a receiver regularly appointed, yet as be- 
 tween two different receivers appointed over the same property 
 in different actions, in a contest as to their right of possession, 
 
 68 Albany City Bank v. Schermer- 70 Richardson v. Hickman, 32 
 horn, 9 Paige, 372. Ark., 406. 
 
 69 Albany City Bank v. Schermer- 71 hi re Day, 34 Wis., 638. 
 horn, 10 Paige, 263.
 
 CHAP. VI.] POSSESSION. 205 
 
 the court will hesitate to exercise its extreme powers against 
 the second receiver by commitment for contempt in interfer- 
 ing with the possession of the first, when the dispute as to pos- 
 session has been determined, and the only object of the appli- 
 cation is to compel payment of costs.'^2 ^nd where, as between 
 two receivers of the same property, appointed in different pro- 
 ceedings, the question of priority is determined adversely to 
 the receiver in possession, and he is required to surrender the 
 property to the other, he will not be punished by attachment 
 for disobedience of the order of the court appointing the 
 other receiver, when it is apparent that he has acted in good 
 faith, under authority of the order appointing him, since he was 
 entitled to regard such order as valid until the question of prior- 
 ity could be determined by a competent tribunal.'^^ 
 
 § 174. Receiver liable to attachment for not turning 
 over property as directed by court. Since a receiver is 
 not properly entitled to an appeal from an order of the court 
 discharging him from his trust, not being a party in interest, 
 but merely the officer or representative of the court, he may 
 be compelled to turn over the property as directed by the order 
 for his discharge, notwithstanding he has prayed an appeal to 
 an appellate court and has filed an appeal bond. And if he 
 refuses to comply with such order as to the disposition of the 
 assets, obedience may be enforced by attachment. But the 
 court will not, under such circumstances, direct an attachment 
 to issue in the first instance, when the receiver expressly dis- 
 claims any intentional disregard of its authority. "^4 
 
 § 174a. Receiver of corporation entitled to rights under 
 patent. When a corporation is dissolved and its property 
 and assets are vested in a receiver, who is authorized by the 
 court to continue the business, the corporation having been 
 vested with the exclusive right to manufacture certain articles 
 
 72 Ward V. Swift, 6 Hare, 309, 12 74 /„ re Rachel Colvin, 3 Md. Ch., 
 Jur., 173. 300. 
 
 73 People V. Central City Bank, 
 S3 Barb., 412, 35 How. Pr., 428.
 
 206 RECEIVERS. [chap. VI. 
 
 under letters patent, this right passes to the receiver by virtue 
 of his appointment. And in such case, a former officer of the 
 corporation who engages in the business of manufacturing the 
 same articles, even under a license from the patentee, is guilty 
 of such an interference with the possession and rights of the . 
 receiver as to render him liable for contempt of court.'^^ 
 
 § 1 74^. Form of judgment in contempt proceedings. A 
 proceeding instituted by a receiver in the cause in which he is 
 appointed against an officer of a corporation defendant, for 
 contempt of court in withholding funds to which the receiver is 
 entitled, is not regarded as a civil action for the recovery of 
 money. The appropriate judgment in such case, if respondent 
 is found guilty, is by fine or imprisonment, or both, and it is 
 improper to render a money judgment against respondent 
 for the recovery of the amount of money which he has refused 
 to surrender to the receiver.'^^ 
 
 75 In re Woven Tape Skirt Co., 76 Edrington v. Pridham, 65 Tex., 
 12 Hun, 111. 612.
 
 CHAPTER VII. 
 
 OF THE RECEIVER'S FUNCTIONS. 
 
 I. General Nature of His Functions § 175 
 
 II. Sales by Receivers 191 
 
 I. General Nature of His Functions. 
 
 § 175. Office one of trust; limited discretion; not an assignee; repre- 
 sents all parties; not an adverse party; hiring employees; 
 can not profit at expense of trust; should make inventory; 
 may make admissions in cause. 
 
 176. Discretion in accepting or rejecting bids; degree of care neces- 
 
 sary. 
 
 177. Subject to court in settlement of demands or suits. 
 
 178. No discretion in application of funds; when not allowed offset; 
 
 payments made in good faith. 
 
 179. Enlargement of powers by court; protection of court. 
 
 180. Power as to making repairs. 
 
 181. Not allowed to originate action under English and Irish prac- 
 
 tice; practice in this country. 
 
 182. Custodians in the nature of receivers; same rules applicable. 
 
 183. Exemption from arrest while attending court. 
 
 184. Effect of receivership as regards statute of limitations. 
 
 185. Abatement of cause does not determine receiver's functions; 
 
 order of removal necessary. 
 
 186. Power of court over receiver's contract; assignee of contract 
 
 with receiver; lease of offices. 
 
 187. Relative functions as between different receivers. 
 
 188. Entitled to advice and instruction of court; may have his own 
 
 counsel; must show necessity therefor; attorney and counsel; 
 should not employ counsel of party. 
 
 189. May receive money not yet due. 
 
 190. Effect on receiver's functions of appeal and supersedeas. 
 190o. Court may make administrative orders for care of property 
 
 notwithstanding appeal and supersedeas. 
 
 § 175. Office one of trust; limited discretion; not an 
 assignee ; represents all parties ; not an adverse party ; hir- 
 ing employees; can not profit at expense of trust; should 
 make inventory; may make admissions in cause. The of- 
 fice of recei'/er is treated as one of confidence and trust, al- 
 
 207
 
 208 RECEIVERS. [chap. VII. 
 
 though his discretionary powers are limited. As a rule he may 
 do nothing to impair the funds in his hands without the order 
 of the court, and may make no dividend without the special 
 sanction of the court, since the funds in his possession are 
 considered as in custodia legis for whoever may ultimately es- 
 tablish a title thereto.^ And a receiver has no greater rights 
 than the guardian of a ward's estate, and is not an assignee of 
 the person over whose estate he is appointed, being simply 
 an officer of the court appointed to take charge of the prop- 
 erty pending litigation. ^ And it is necessary to a proper un- 
 derstanding of the functions of a receiver, and of the real na- 
 ture of his office, to bear in mind that he is not appointed for 
 the benefit merely of the plaintiff on whose application the ap- 
 pointment is made, but for the equal benefit of all persons who 
 may establish rights in the cause, and that he is not the plain- 
 tiff's agent, but is equally the representative of all parties in 
 his capacity as an officer of the court.^ And since a receiver is 
 the representative of all the parties, he is in no sense an adverse 
 party within the meaning of a statute requiring the service of 
 
 1 Hooper v. Winston, 24 111., 353. was held that, where a receiver was 
 
 2 King V. Cutts, 24 Wis., 627. appointed to manage and control 
 
 3 Delany v. Mansfield, 1 Hog., the property of a debtor under the 
 234; McLeod v. City of New Alba- orders of the court, it was no part 
 ny, 13 C. C. A., 525, 66 Fed., 378, of the duty of the receiver to pre- 
 24 U. S. App., 601. In the case last sent the claim of a creditor, and 
 cited it was held that, since a re- where the receiver's report had been 
 ceiver represented all parties to a filed and approved and the assets 
 suit in defending against an inter- distributed, a claim which the cred- 
 vening petition filed by a munici- itor, through his own negligence, 
 pality to enforce the payment of had failed to present was barred, 
 back taxes upon the property in the In Luderbach Plumbing Co. v. Its 
 possession of the receiver, the lat- Creditors, 121 La., 371, 46 So., 359, 
 ter, upon an appeal from an order it was held that the brother of a re- 
 directing such payment, could not ceiver might buy up claims against 
 object that certain of the parties to the estate where there was no sug- 
 the proceeding had not been form- gestion that the receiver was in any 
 ally notified of the filing of the way interested with him in the pur- 
 intervening petition. In Halsted v. chase. 
 
 Forest Hill Co., 109 Fed., 820, it
 
 CHAP. VII.] FUNCTIONS. 209 
 
 notice of an appeal by appellant upon the adverse party.* If 
 he is empowered by the court to continue the management of 
 the business over which he is appointed, he may employ such 
 persons as may be necessary for this purpose, and the court 
 will not interfere with his discretion as regards such employ- 
 ment unless some abuse is shown. ^ And since a receiver occu- 
 pies a position of confidence, he will not be permitted to profit 
 at the expense of his trust. Thus, where a receiver purchases 
 at a discount claims which are payable out of the funds in his 
 possession, he is not entitled to credit in the settlement of his 
 accounts for the full face value of such claims but only for the 
 amount which he actually paid for them.^ And it is held that a 
 trusted clerk of a receiver can not, by taking advantage of his 
 knowledsfe of the affairs of the debtor over whom the receiver 
 has been appointed, buy up claims and make a secret profit out 
 of the administration of the estate; and having made such a 
 profit ^nd having invested the proceeds in real estate, it was 
 held that the receiver could maintain a bill in equity to declare 
 a constructive trust in the land."^ And one of the first duties 
 of a receiver, immediately after his appointment, is to make a 
 complete inventory of all the property which has come into his 
 hands. 8 xA.nd as the representative and custodian of the estate 
 in his possession, a receiver may, subject to the supervision of 
 the court, bind it by admissions made in good faith in the 
 progress of a suit.^ 
 
 § 176. Discretion in accepting or rejecting bids; degree 
 of care necessary. In the management of property in- 
 trusted to their charge, receivers are vested with a certain de- 
 
 4 Medynski v. Theiss, 36 Ore., 8 Jn re Receivership of the N. I. 
 397, 59 Pac, 871. C. Mill Co, 109 La., 875, 33 So., 
 
 5 Taylor v. Sweet, 40 Mich., 736. 903. 
 
 As to management of business by 9 Bosworth v. St. Louis Terminal 
 
 a receiver generally, see ante, § 36. R. Assn., 174 U. S., 182, 19 Sup. Ct. 
 
 6 Roller v. Paul, 106 Va., 214, 55 Rep., 625, 43 L. Ed., 941, modifying 
 S. E., 558. and affirming S. C, 26 C. C. A., 279, 
 
 7 Gilbert v. Hewetson, 79 Minn, 80 Fed., 969, 53 U. S. App., 302. 
 326, 82 N. W, 655, 79 Am. St. Rep., 
 
 486. 
 
 Receivers — 14. 
 
 9
 
 210 RECEIVERS. [chap. VII. 
 
 gree of discretion for which they are responsible to the court 
 appointing them, and in the exercise of which they are subject 
 to its control ; and if they act in good faith and without preju- 
 dice to the rights of the parties in interest, their action will be 
 sustained by the court. For example, when receivers have ad- 
 vertised for proposals for leasing property under their control, 
 they may exercise a wide discretion in accepting or rejecting 
 bids received, and are not bound to lease the property for the 
 highest price offered, without regard to the bidder or to the dis- 
 position he may make of the property. And the advertisement 
 of the receivers, in such a case, does not constitute such a con- 
 tract with the bidder as to compel them to take the highest bid, 
 nor does it limit them to a certain time within which to receive 
 bids. If, therefore, the receivers, in the exercise of their dis- 
 cretion, have awarded the lease of the premises to a particular 
 bidder, and have acted prudently in the matter and with regard 
 to the best interests of the trust committed to their charge, 
 the court will not entertain the application of another bidder 
 to compel the receivers to execute a lease to him.^*^ And in 
 handling the trust estate in his possession, a receiver should 
 exercise the same degree of discretion which an ordinarily 
 prudent man of business would exercise in the management of 
 his own affairs.ll 
 
 § 177. Subject to court in settlement of demands or 
 suits. The power of courts over their own receivers, in- 
 cluding their authority to control them in the settlement of 
 all demands against the property held by them in their capacity 
 as receivers, is well established, and as officers of the court it is 
 their duty to obey all orders of the court in this regard. And it 
 is equally the duty of the court appointing a receiver to com- 
 pel the settlement of claims against the property in his posses- 
 sion in the most expeditious manner, and so as to avoid litiga- 
 
 10 Knott V. Receivers of Morris H McKennon v. Pentecost, 8 
 
 Canal & Banking Co., 3 Green Ch., Okla., 117, 56 Pac, 958. 
 423.
 
 CHAP. VII.] FUNCTIONS. 211 
 
 tion and expense to the fund in charge of the court.^2 /^ri^j 
 the right of a receiver to settle claims and compromise actions 
 with the approval and sanction of the court is well recognized. ^^ 
 And, in the absence of an abuse of discretion, the action of the 
 court in authorizing its receiver to compromise an action will 
 not be disturbed upon appeal. ^^ 
 
 § 178. No discretion in application of funds; when not 
 allowed offset; payments made in good faith. A receiver 
 has in general no discretion in the application of funds in his 
 hands by virtue of his receivership, but holds them strictly sub- 
 ject to the order of the court, to be disposed of as the court 
 may direct.^^ He will usually be required to pay over funds 
 in his hands to the persons who are ratably entitled thereto, 
 rather than to invest them, when the persons entitled are al- 
 ready ascertained, and when there can be no difficulty in carry- 
 ing out the direction of the court in this respect.^^ And when 
 he is ordered to make any particluar disposition of funds in his 
 hands, as, for example, to return money to the person from 
 whom he collected it, he will not be allowed to offset his own 
 personal claims against the person to whom he is directed to 
 return the money, since to allow this would render the dis- 
 position of the money as uncertain as before the receiver's 
 appointment, and would thus defeat the very object of his 
 appointment.^'^ He will be protected as to payments made 
 
 12 Guardian Savings Institution 16 Collins v. Case, 25 Wis., 651. 
 V. Bowling Green Savings Bank, 65 17 Johnson v. Gunter, 6 Bush, 
 Barb., 275. 534, Mr. Justice Peters, for the 
 
 13 Alexander t/. Maryland T. Co., court, says, p. 536: "If the mere 
 106 Md., 170, 66 Atl., 836; State v. agent or instrument of the court 
 Bank of Rushville, 57 Neb., 608, 78 can be permitted, after receiving 
 N. W., 281 ; Insurance Commis- funds under its order, to set up 
 sioner v. C. M. Ins. Co., 20 R. I., claims to them wholly foreign to 
 7, 36 Atl., 930. And see, /'o.j/, § 336. the object of his appointment, the 
 
 14 State V. Bank of Rushville, 57 position of a receiver is perverted 
 Neb., 608, 78 N. W., 281. into that of a speculator in funds, 
 
 15 Johnson v. Gunter, 6 Bush, constructively at least in court, and 
 534; State Central Savings Bank v. their destiny becomes as uncertain 
 Ball-Bearing Chain Co., 118 Iowa, after they enter the precincts of the 
 698, 92 N. W., 712. court as before. The court will
 
 212 RECEIVERS. [chap. VII. 
 
 in good faith, under an existing order of court, although 
 such order is afterwards reversed upon appeal. In such case 
 he will not be directed in the first instance to repay the mon- 
 ey to the person who is found to be entitled thereto; but if 
 the money has been applied under the order of court to a 
 particular purpose, as in payment of counsel fees, the court 
 may compel its restitution to the receiver, who may then be 
 required to make payment to tlie proper person. l^ 
 
 § 179. Enlargement of powers by court; protection of 
 court. It frequently happens that an enlargement of a 
 receiver's powers becomes necessary in order that he may 
 properly discharge his trust, or because of obstructions or 
 resistance which he may receive in attempting to perform his 
 duties. In such cases it is the province of the court which has 
 appointed him, upon the facts being properly presented, to en- 
 large his powers and to afford him the necessary protection in 
 the performance of his duties.^^ 
 
 § 180. Power as to making repairs. Receivers are not 
 usually permitted, at their own discretion, to apply funds in 
 their hands in repairing or improving the premises under their 
 control, without a previous application to the court and obtain- 
 ing leave so to do.^*^ If, however, a receiver has made repairs 
 without permission, a reference may be had to a master to in- 
 quire whether they were reasonable. ^l And if, upon reference 
 to a master, it is found that the repairs were necessary and 
 proper, and for the lasting benefit and improvement of the es- 
 tate, they may be allowed by the court.^^ And a general direc- 
 tion to a receiver of landed property to manage it, authorizes 
 him to propose to the master, from time to time, to make all 
 
 not thus permit itself to be made a 20 Blunt v. Clitherow, 6 Ves., 
 
 quasi suitor." 799; Attorney-General v. Vigor, 11 
 
 18 In re Home P. S. F. Associa- Ves., 563. 
 
 tion, 129 N. Y., 288, 29 N. E., 323. 21 Attorney-General v. Vigor, 11 
 
 I'? Ohio Turnpike Co. v. Howard, Ves., 563. 
 
 1 Western Law Journal 216; State 22 Blunt v. Clitherow, 6 Ves., 
 
 V. City of New Orleans, 106 La., 799. 
 469, 31 So., 55.
 
 CHAP. VII.] FUNCTIONS. 213 
 
 ordinary repairs, and a special application to the court for that 
 purpose is unnecessary in such case.^S 
 
 § 181. Not allowed to originate action under English 
 and Irish practice; practice in this country. It seems to 
 be the estabhshed rule in England, that a receiver in a cause is 
 not allowed to originate any steps or proceedings therein of his 
 own motion, but should leave the parties to the cause to make 
 all applications for that purpose. The rule, however, is not 
 without exception, and when the parties are guilty of great 
 delay or laches in moving, the receiver is justified in himself 
 proceeding.24 Under the practice of the Irish Court of Chan- 
 cery, it is also held that a receiver should not, of his own mo- 
 tion, interfere with the rights of parties to the cause by ap- 
 plications to the court, and that court has always manifested an 
 extreme reluctance to granting orders upon motions made by a 
 receiver himself, upon the ground that he should not assume to 
 himself the management of the cause.^^ Thus, a motion made 
 by a receiver to let certain lands under his control has been re- 
 fused by that court, on the ground that such a motion should 
 properly come from the plaintiff in the cause. ^6 So it has been 
 held that an application to the court for directions as to whether 
 a mortgage on the lands subject to the receivership should be 
 paid, should be made by the parties to the cause, and not by the 
 receiver.27 So, too, a motion by a receiver for permission to 
 bring an ejectment against certain lands in possession of one 
 of the defendants has been denied, on the ground that it was 
 not the proper function of the receiver to carry on plaintiff's 
 cause upon a question involving the relative rights of the par- 
 ties. 28 In this country, however, the courts have inclined to a 
 broader view of the proper functions of a receiver, and it is 
 
 23Thornhill v. Thornhill, 14 see Callaghan v. Reardon, Sail. & 
 
 Sim., 600. Sc, 682; Clark v. Fisher, id.. 684. 
 
 24 Ireland v. Eade, 7 Beav.. 55 ; 2G Wrixon v. Vize, 5 Ir. Eq., 276. 
 Parker v. Dunn, 8 Beav., 497. 27 O'Connor v. Malone, 1 Ir. Eq., 
 
 25 O'Connor v. Malone, 1 Ir. Eq., 20. 
 
 20; Wrixon v. Vize, 5 Ir. Eq., 276; 28 Comyn v. Smith, 1 Hog., 81. 
 
 Comyn v. Smith, 1 Hog., 81. And
 
 214 RECEIVERS. [chap. VII. 
 
 believed that his right to apply to the court for directions as to 
 the management of the estate, or for leave to institute any nec- 
 essary proceedings connected therewith, is generally recognized 
 by the courts in most of the states.^^ 
 
 § 182. Custodians in the nature of receivers; same rules 
 applicable. When custodians of a fund which is in litiga- 
 tion occupy the same relation to the fund and to the court as 
 regularly appointed receivers, their functions or possession 
 differing only in name, it would seem that they are to be gov- 
 erned as to their rights and liabilities by the same rules which 
 apply in the case of receivers. And it follows, necessarily, that 
 since they are bound to obey the orders of the court in relation 
 to the fund in their possession, they are entitled to the protec- 
 tion of the court against all loss by reason of disbursements 
 which were necessary and proper, and such as a reasonable 
 and prudent man, acting as receiver, would have been justified 
 in incurring.^^ 
 
 § 183. Exemption from arrest while attending court. 
 Under the Irish chancery system, a receiver is exempt from 
 arrest while in attendance upon the court ; and when a receiver 
 was in attendance upon a motion made against him in the 
 course of his receivership, and was arrested for debt under a 
 ca. sa., he was discharged upon the ground that he was privi- 
 leged from arrest. ^1 
 
 § 184. Effect of receivership as regards statute of limi- 
 tations. The appointment of a receiver over an estate or 
 property does not alter or affect the rights of parties as regards 
 the operation of the statute of limitations.^^ And a payment 
 made by a receiver to one of the parties in the cause, out of 
 funds collected by him in his receivership, is not regarded as a 
 payment made by the debtor, to the extent of being an acknowl- 
 edgment of the indebtedness so as to take the cause out of the 
 
 29 See Neun v. Blackstone B. & 32 Harrison v. Dignan, 1 Con. & 
 L. Assn., 149 Mo., 74, 50 S. W., 436. Law., 376 ; Kyme v. Dignan, 4 Ir. 
 
 30 Adams v. Haskell, 6 Cal., 475. Eq.," 562. But see Kirkpatrick v. 
 
 31 Brabazon v. Teynham, 2 Ir. McElroy, 41 N. J. Eq., 539, 7 Atl., 
 Ch., N. S., 563. 647.
 
 CHAP. VII.] FUNCTIONS. 215 
 
 Statute of limitations, since such payment is made by the receiv- 
 er in his official capacity and as an officer of the court,^^ But it 
 has been held that the appointment of a receiver prevents the 
 statute of limitations from running, at least in a court of equity, 
 in favor of a stranger to the suit.^^ 
 
 § 185. Abatement of cause does not determine receiv- 
 er's functions; order of removal necessary. The abate- 
 ment of the cause in which a receiver was appointed does not 
 necessarily determine his functions, and his authority is regard- 
 ed as continuing until an order for his removal. And until 
 such order, he may continue to take the necessary steps to en- 
 force the collection of rents, which it is still his duty to receive 
 and account for.^^ 
 
 § 186. Power of court over receiver's contract; assignee 
 of contract with receiver ; lease of offices. Since a receiver 
 is an officer of the court, and all contracts made with him are 
 subject to ratification by the court, it has undoubted power to 
 vacate or modify any agreement or contract which the receiver 
 has made, and to direct the making of another agreement; 
 but it will not exercise such power without notice and without 
 hearing the contracting parties. ^^ And where one who enters 
 into a contract with a receiver assigns his interest therein to 
 another, who agrees to be bound by the conditions of the con- 
 tract, such assignee thereby submits himself to the jurisdiction 
 of the court ; and the court, upon proper notice, has the power to 
 vacate the contract on account of the refusal of the assignee to 
 fulfil his obligations thereunder.^'^ And since a receiver has no 
 power to make contracts without the authority of the court, 
 all persons contracting with him are chargeable with knowledge 
 
 33 Whitely v. Lowe, 2 DeG. & J., corporation to enforce its contracts, 
 704, affirming S. C, 25 Beav., 421. see Florence Gas, E. L. & P. Co. v. 
 
 34 Wrixon V. Vize, 3 Dr. & War., Hanby, 101 Ala., 15, 13 So., 343. 
 104. And see Lazear v. Ohio Valley S. 
 
 35 Newman v. Mills, 1 Hog., 291. F. Co., 65 West Va., 105, — S. E., 
 
 36 Mooney v. British Commercial — . 
 
 Life Insurance Co., 9 Ab. Pr., 37 Pacific Lumber Co. v. Pres- 
 
 N. S., 103. As to the right of the cott, 40 Ore., 374, 67 Pac, 207. 
 court to authorize the receiver of a
 
 216 RECEIVERS. [chap. VII. 
 
 of his functions in this regard and contract at their peril. ^^ 
 So a receiver of a railway has no power, without the sanction 
 of the court, to lease offices for a term of years, even though by 
 tlie order appointing him he is authorized to make all contracts 
 which may be necessary in carrying on the business of the road, 
 subject to the supervision of the court. -^^ 
 
 § 187. Relative functions as between different receivers. 
 A receiver may be appointed to take charge pendente lite 
 of the fund in controversy, notwithstanding a receiver has 
 previously been appointed over the same fund in another action. 
 But in such case the powers and functions of the second re- 
 ceiver are subordinate to those of the first, and he is only en- 
 titled to custody of the fund, or of so much as remains of it, 
 after the first receiver has become functus oificioA^ 
 
 § 188. Entitled to advice and instruction of court; may 
 have his own counsel; must show necessity therefor; at- 
 torney and counsel; should not employ counsel of party. 
 A receiver being always regarded as an officer of the court, 
 and at all times subject to its direction and orders, it is proper, 
 in the discharge of his official duties, that he should on suitable 
 occasions apply to the court for instruction and advice ; and he 
 is at all times entitled to such advice from the court, and should 
 not hesitate to apply for it when questions of intricacy or diffi- 
 culty occur.'*^ Such an application may be made ex parte/^ 
 although it is deemed the better practice to give notice to all 
 
 38 Tripp V. Boardman, 49 Iowa, 41 Jn re Van Allen, 37 Barb., 225 ; 
 410; Ellis V. Little, 27 Kan., 707; Smith v. New York Consolidated 
 Hendrie & Bolthoff Co. v. Parry, Stage Co., 28 How. Pr., 377, 18 Ab. 
 Z7 Colo., 359, 86 Pac., 113. Pr., 431; Curtis v. Leavitt, 1 Ab. 
 
 39 Chicago Deposit Vault Co. v. Pr., 274 ; Lottimer v. Lord, 4 E. D. 
 McNulta, 153 U. S., 554, 14 Sup. Ct. Smith, 191 ; Cammack v. Johnson, 
 Rep., 915, 38 L. Ed., 819. To the 1 Green Ch., 163; People v. Secu- 
 same effect, see Braman v. Farmers' rity Life Insurance Co., 79 N. Y., 
 L. & T. Co., 51 C. C. A., 644, 114 267. 
 
 Fed., 18. 42 Allen v. Cooky, 53 S. C, 414, 
 
 40 Bailey v. Belmont, 10 Ab. Pr., 31 S. E., 634. 
 N. S., 270; Bailey v. O'Mahoney, 33 
 
 N. Y. Supr. Ct. R., 239.
 
 CHAP. VII.] FUNCTIONS. 217 
 
 parties in interest in the estate or fund.'*^ And a receiver acts 
 at his peril where he assumes to determine as between different 
 claimants to the fund in his possession without seeking the ad- 
 vice of the court."*^ And since the receiver in a cause is not the 
 representative or receiver of the person at whose instance he is 
 appointed, he should not act under his advice or that of his 
 counsel, but in all cases of doubt, and especially when there is a 
 conflict of interest, he should obtain the direction of the court; 
 and he will be allowed to and should obtain counsel for him- 
 self.^^ Indeed, it has been held reversible error to make an al- 
 lowance of counsel fees to a receiver's attorney who also repre- 
 sented the plaintiff in the action. ^^ But while a receiver is 
 entitled as a matter of right to counsel where the nature of his 
 duties requires it and while he usually selects his own counsel, 
 he can not make any contract for hiring or agreement for 
 compensation which will in any way be binding upon the court, 
 for it is the function of the court to determine the necessity 
 for the employment of counsel and the compensation to be 
 allowed.'*''^ Nor will a receiver be permitted to employ counsel 
 unless the services of one are reasonably necessary and then 
 only to the extent that they are thus required ; nor should a re- 
 ceiver, in such case, except under extraordinary circumstances, 
 employ different persons, one as his attorney and another as 
 counsel.'*^ And in making an application for the employment 
 of counsel, the receiver must show some necessity for such em- 
 ployment.'*^ And it is held that the action of the lower court 
 in advising and instructing its receiver will not be disturbed 
 upon appeal unless there has been a clear abuse of discretion.^*^ 
 
 43 Smith v. New York Consol- 47 Hickey v. Parrott S. & C. Co., 
 idated Stage Co., 28 How. Pr., 32 Mont., 143, 79 Pac, 698. 
 
 377, 18 Ab. Pr., 431. 48 Harrigan v. Gilchrist. 121 
 
 44 In re Hone, 153 N. Y., 522, 47 Wis., 127, 437, 99 N. W., 909, 1008. 
 N. E., 798. 49 Terry v. Martin, 7 New Mex., 
 
 45Lottimer v. Lord, 4 E. D. 54, 32 Pac, 157. 
 
 Smith, 191. 50 State v. Bank of Rushville, 57 
 
 46 Veith V. Ress, 60 Neb., 52, 82 Neb., 608, 78 N. W., 281. 
 N. W., 116. And see, post, § 216.
 
 218 RECEIVERS. [chap. VII. 
 
 § 189. May receive money not yet due. When a re- 
 ceiver is appointed pendente lite, and is authorized by 
 the order of the court to sue for and collect such debts as are 
 due and may become due, he may properly receive not only 
 money which is actually due, but money not yet due, and may 
 give a receipt and satisfaction therefor.^^ So if he is author- 
 ized by the order of the court appointing him to execute and 
 acknowledge for record formal satisfaction of all real-estate 
 mortgages which come to his hands as receiver, upon payment 
 or collection by him of the debts which they were given to se- 
 cure, he may receive payment of and discharge a mortgage 
 which is not yet due.^^ 
 
 § 190. Effect on receiver's functions of appeal and su- 
 persedeas. If an appeal is taken from an order appointing 
 a receiver, and the appellate court grants a supersedeas and 
 directs the receiver to undo what he has done, and to restore to 
 its original owners the property which he has taken, his author- 
 ity is thereby completely suspended and rendered nugatory by 
 operation of law\ And while the supersedeas does not render 
 nugatory or unlawful any action of the receiver, had under 
 the order of the court below before the appeal was taken, it 
 forbids that court and its officer from further acting in the 
 matter. The power of the court below being suspended, the 
 power of its officer necessarily becomes inoperative. If, 
 therefore, the receiver refuses to obey the mandate of the ap- 
 pellate court, and continues to exercise the functions of his 
 office, he is guilty of a contempt of court, and may be pun- 
 ished by imprisonment until he complies with the order.^^ 
 And where a receiver has been appointed and has taken pos- 
 session of the property of the defendant, and afterward an 
 appeal is taken from the order of appointment and a supersedeas 
 bond is filed in accordance with the provisions of the statute, the 
 
 51 Olcott V. Heermans, 3 Hun, 53 State v. Johnson, 13 Fla., 33. 
 431. And see, ante, §§ 29 and 161. 
 
 52 Heermans v. Clarkson, 64 N. 
 Y., 171.
 
 CHAP. VII.] FUNCTIONS. 219 
 
 power of the receiver is entirely suspended thereby, and upon 
 being notified of the filing of the bond, it is his duty to imme- 
 diately restore to the defendant the possession of the proper- 
 ty. 5'* So where, upon the granting of an appeal, the reviewing 
 court has issued a writ of supersedeas requiring a receiver to 
 restore to the defendants the possession of certain property 
 which had been taken from them as the result of the receiver- 
 ship proceeding, the refusal of the receiver to obey the writ 
 constitutes a contempt for which he may be punished by impris- 
 onment. And in such case it is no defense that the action of the 
 receiver was based upon the advice of counsel. And while, 
 ordinarily, the fact that the action was based upon such ad- 
 vice will be received in mitigation of the punishment, this re- 
 sult will not follow where it is clear that this defense is a mere 
 pretense and that the action of the receiver was willful and de- 
 liberate. Nor can the receiver defend upon the ground that 
 the writ was too broad in its effect, since his remedy in such 
 case was to apply to the court for a modification. ^5 And where 
 an appeal has been perfected and a supersedeas bond filed, the 
 court has no jurisdiction to pass the final account of the re- 
 ceiver and order his discharge.56 But when by a final decree 
 the receiver is directed to pay over the fund in his hands to the 
 person found to be entitled thereto, he may properly make such 
 payment before an appeal from the decree is perfected by giv- 
 ing a bond to operate as a supersedeas. And in such case, al- 
 though the decree is finally reversed upon appeal, the receiver 
 can not be again required to account for the money so paid.^'^ 
 
 54 Farmers' National Bank v. A., 615, 106 Fed., 775. And see 
 Backus, 63 Minn., 115, 65 N. W., this case to the effect that where 
 255 ; Buckley -v. George, 71 Miss., the punishment is fixed at imprison- 
 580, 15 So., 46; State v. Hirzel, 137 ment, the costs of the contempt 
 Mo., 435, 37 S. W., 921, 38 S. W., proceedings should not be taxed 
 961 ; Rumney v. Donovan, 28 Mont., against the receiver. 
 
 69, 72 Pac, 305. And see State v. 56 Brundage v. Home S. & L. 
 
 Bell, 36 Wash., 196, 78 Pac, 908. Assn., 11 Wash., 288, 39 Pac, 669. 
 
 Contra, Bristow v. Home B. Co., 57 Hovey v. McDonald, 109 U. 
 
 91 Va., 18, 20 S. K, 946. S., ISO, 3 Sup. Ct. Rep., 136. 
 
 55 Tornanses v. Mel sing, 45 C. C.
 
 220 RECEIVERS. [chap. VII. 
 
 § 190(7. Court may make administrative orders for care 
 of property notwithstanding appeal and supersedeas. An 
 
 appeal from a linal decree in a receivership cause and the grant- 
 ing of a supersedeas upon the tiHng of the proper bond will 
 not have the effect of depriving the lower court of the right 
 to make all necessary administrative orders for the proper care 
 and preservation of the property in its charge. In such case 
 the property is still in the custody of the court through its re- 
 ceiver and it is the duty of the receiver, under the directions of 
 the court, to protect and preserve the property or fund for 
 the benefit of the persons who shall ultimately be adjudged to 
 be entitled thereto. ^^ 
 
 58 Lamb v. Rowan, 81 Miss., 369, 33 So., 4.
 
 CHAP. VII.] FUNCTIONS. 221 
 
 11. Sales by Receivers. 
 
 § 191. Sale subject to action of court; does not divest existing liens; 
 may be conducted by master in chancery or agent of receiver. 
 
 192. Court vested with power of sale whenever necessary, although 
 
 rights in property not ascertained; sale of steamboat. 
 
 193. Receiver can not purchase at his own sale; general rule as to 
 
 trustees applicable; can not purchase in name of wife. 
 
 194. Illustrations of the rule; purchase in receiver's interest set 
 
 aside. 
 
 195. Departure from rule by consent of parties. 
 
 196. Order for receiver's sale can not be questioned collaterally; 
 
 illustrations. 
 
 197. Satisfactory evidence required as to necessity for sale; order 
 
 should be specific; sale to pay taxes. 
 
 198. Discretion as to sales in bulk or by parcels; private sale; ex 
 
 parte application; stockholder of corporation may object; 
 improper advertisement; notice of sale; order of sale appeal- 
 able; same of order confirming sale of real estate. 
 
 199. Receiver's power to execute deed; when deed should be made. 
 199fl. Sale subject to incumbrances; title of third person; partner- 
 ship; dower interest. 
 
 I99b. Doctrine of caveat emptor applied. 
 
 199c. Confirmation of sale unnecessary; when confirmation not re- 
 fused; no redemption from sale. 
 \99d. Fraudulent sale by receiver. 
 199c. Sale must take place at time designated by court. 
 
 § 191. Sale subject to action of court; does not divest 
 existing liens; may be conducted by master in chancery 
 or agent of receiver. The functions and powers of receiv- 
 ers touching the sale of property committed to their charge, 
 unless defined or regulated by statute, rest upon and are 
 governed by the orders of the court appointing them. Good 
 faith and fair dealing are required of receivers in the execution 
 of such orders, and if a receiver fraudulently imposes upon and 
 deceives the court in obtaining an order of sale, the sale may 
 be vacated and the parties may be restored to their original 
 position. 59 And when, acting under a misapprehension as to 
 
 59 Hackley v. Draper, 60 N. Y., And see Tozer v. O'Gorman, 60 
 88. affirming S. C, 4 Thomp. & C. Minn., 42, 61 N. W., 895. 
 (N. Y. S. C), 614, 2 Hun, 523.
 
 222 RECEIVERS. [chap. VII. 
 
 the value of certain assets, a receiver sells them at a grossly in- 
 adequate price, and upon learning the real facts he refuses to 
 complete the sale and to deliver the property, the court may, 
 in the exercise of its discretion, refuse an application by the 
 purchaser to compel the completion of the sale. Such a contract 
 of sale, while it remains executory, is subject to the supervision 
 of the court, and the purchaser will be presumed to have pur- 
 chased subject to the implied condition that the court may, 
 in the exercise of a sound discretion, sanction or disapprove the 
 sale, as it shall see fit.^^ And since the appointment of a receiv- 
 er does not divest existing liens upon the property which is 
 subject to the receivership, it follows that a sale by a receiver 
 of a partnership property mortgaged by the firm gives to the 
 purchaser only such interest as the firm itself had in the prop- 
 erty, and does not divest or impair the paramount mortgage 
 lien of a stranger to the action in which the receiver was ap- 
 pointed.^l And where real estate which is sold by a receiver 
 is subject to a judgment lien, the purchaser takes title subject 
 to the lien. ^2 Sq where a mechanic's lien has attached to 
 property which subsequently comes into the possession of a 
 receiver, such lien is not disturbed by the appointment of the re- 
 ceiver, and, upon a sale of the property, the lien attaches to 
 the fund.^'^ So when executions have become liens upon per- 
 sonal property, a sale of such property by a receiver subsequent- 
 ly appointed in an action to. which the lien-holders were not 
 parties will not divest their liens, which may still be enforced 
 notwithstanding such sale.^* Nor will the fact that the order 
 of the court, directing a sale by a receiver, does not specifically 
 provide that the property shall be sold to pay off adjudged liens 
 
 60 Attorney-General v. Continen- 62 /„ re Coleman, 174 N. Y., 373, 
 tal Life Insurance Co.. 94 N. Y., 66 N. E., 983. 
 
 199; South Baltimore B. & T. Co. 63Totten & Hogg I. & S. F. Co. 
 
 V. Kirby, 89 Md., 52, 42 At!., 913. v. Muncie Nail Co., 148 Ind., 372, 
 
 61 Lorch V. Aultman, 75 Ind., 47 N. E., 703. 
 
 162; McLaughlin t;. Taylor, 115 Ga., 64 Dann Manufacturing Co. v. 
 
 671, 42 S. E., 30. And see, post, Parkhurst, 125 Ind., 317, 25 N. E., 
 § 199a. 347.
 
 CHAP. VII.] FUNCTIONS. 223 
 
 cut off such liens or compel the lienors to look to the property 
 in the hands of the purchaser.^^ So when a corporation over 
 which a receiver is appointed has, prior to such appointment, 
 conveyed lands to trustees to secure the holders of stock of the 
 corporation, and thereafter, and before the receiver is appoint- 
 ed, the equity of redemption in such lands is also sold under 
 execution against the corporation, and the time for redemption 
 expires without redemption being made, the receiver takes no 
 title to such lands, and a sale by him will convey no title. ^^ 
 And, in the absence of any statutory prohibition, a receiver's 
 sale may be conducted by a master in chancery or agent upon 
 behalf of the receiver, and it need not necessarily be conducted 
 by the receiver himself; nor need such master or agent give 
 bond or take an oath before conducting the sale.^'^ 
 
 § 192. Court vested with power of sale whenever neces- 
 sary, although rights in property not ascertained; sale of 
 steamboat. A court of equity appointing a receiver to 
 take possession of property, pending a litigation concern- 
 ing the rights of the parties thereto, is vested with the 
 power of selling the property in the receiver's hands, when- 
 ever such course becomes necessary to preserve the in- 
 terests of all parties. ^^ Thus, in an action to determine 
 the rights of conflicting claimants to a steamboat which 
 was placed in the hands of a receiver pendente lite, and was 
 operated under his direction for two years, the court, upon 
 being satisfied that it was highly inconvenient and unfit to con- 
 tinue in possession and operate the boat for a longer period, 
 ordered it sold, although the bill on which the receiver was al- 
 lowed was not framed for the purpose of effecting a sale.^^ 
 
 65 Mueller v. Stinesville & B. S. As to the circumstances which will 
 Co., 154 Ind., 230, 56 N. E., 222. justify the court in directing a re- 
 
 66 Fitch V. Wetherbee, 110 111., ceiver's sale of the real and per- 
 475. sonal property of an insolvent cor- 
 
 67 Threadgill v. Colcord, 16 poration and in retaining the fund 
 Okla., 447, 85 Pac, 703. to be distributed upon a final hear- 
 
 68 Crane v. Ford, Hopk. Ch., 114; ing, see Forsaith Machine Co. v. 
 Smith V. Burton, 67 Vt., 514, 32 Lumber Co., 109 N. C, 576, 13 S. E., 
 Atl., 467. 869. 
 
 6» Crane v. Ford, Hopk. Ch., 114.
 
 224 RECEIVERS. [CIIAP. VII. 
 
 And a sale may be decreed in such case, although the rights 
 of the parties to the property have not yet been ascertained and 
 estabhshed ; nor is it an objection to the sale that a petition has 
 not been filed therefor, where the bill prays for a sale and a 
 receivership pending the sale.'^^ 
 
 § 193. Receiver can not purchase at his own sale; gen- 
 eral rule as to trustees applicable; can not purchase in 
 name of wife. A receiver is regarded as occupying a fiduciary 
 relation, in the sense that he will not be allowed to purchase 
 for his own benefit property connected with or forming a part 
 of the subject-matter of his receivership, or in his possession in 
 that capacity. The courts will not permit him, any more than 
 any other trustee, to subject himself to the temptation arising 
 from a conflict between the interest of a purchaser and the 
 duty of a trustee. And the rule has its foundation in grounds 
 of public policy, and in the peculiar relation sustained by a re- 
 ceiver to the fund or estate in his custody, which resembles in 
 this respect that of a solicitor, trustee, or any other fiduciary 
 relation of a like nature where the same rule of equity prevails. 
 Unless, therefore, it clearly appears that it would be for the 
 benefit of the parties in interest to hold the receiver to his 
 purchase, he will not be permitted to derive any benefit from a 
 purchase made by himself of property pertaining to his receiv- 
 ership ; and whatever purchase he may make will be held to 
 be for the benefit of the real parties interested, whose interests 
 he as receiver represents, and his purchase will be held voidable 
 at their election. "^^ And a court of equity will not ordinarily 
 
 <o Smith V. Burton, 67 Vt., 514, 40, 87 S. W., 625, 1024; In re 
 
 32 Atl., 467. Sheets Lumber Co., 52 La. An., 
 
 Tljewetti/. Miller, 10 N. Y., 402; 1337, 27 So., 809; Pangburn v. 
 
 Carr v. Houser, 46 Ga., 477; Alven American V., S. & L. Co., 205 Pa. 
 
 V. Bond, Flan. & K., 196; S. C, 3 St., 93, 54 Atl., 508; Harrigan v. 
 
 Ir. Eq., 365 ; Eyre v. M'Donnell, 15 Gilchrist, 121 Wis., 127, 363, 99 N. 
 
 Ir. Ch., N. S., 534; Anderson v. W., 909, 982. See, also, Penzel 
 
 Anderson, 9 Ir. Eq., 23 ; Nugent v. Grocer Co. v. Williams, 53 Ark., 
 
 Nugent. (1908), 1 Ch., 546, affirm- 81, 13 S. W., 736; Herrick v. Mil- 
 
 ing S. C, (1907), 2 Ch., 292; Tith- ler, 123 Ind., 304, 24 N. E., Ill; In 
 
 crington's Adm'r v. Hodge, 81 re Receivership of Dugdamonia S- 
 
 Ky., 286; Cook v. Martin, 75 Ark., & L. Co., 118 La., 242, 42 So., 789;
 
 CHAP. VII.] FUNCTIONS. 225 
 
 permit a receiver to become a bidder at a sale of lands of which 
 he has had the previous management as receiver, it being re- 
 garded as of great importance to the interests of suitors, and 
 to the faithful discharge of their duties by receivers, that they 
 should be beyond the reach of all temptation to compromise 
 those duties.'^2 Pqj. jjj^g reasons a receiver will not be permitted 
 to become a mortgagee or pledgee of property committed to 
 his charge, to secure a personal indebtedness due to himself 
 for money advanced, even though such advances were made in 
 good faith. He may not, therefore, take a chattel mortgage 
 upon shares of stock held by him as receiver, to secure moneys 
 which he has loaned or advanced to one of the defendants in 
 the cause, pendente liteJ^ So, where a receiver has been ap- 
 pointed in a creditor's suit to take charge and collect the rents 
 of real estate, he will not be permitted, in the name of his wife, 
 to purchase a superior outstanding title, but such title will 
 be decreed to be held for the benefit of the parties to the pro- 
 ceeding in which he was appointed.'^^ If, however, he pur- 
 chases property at an execution sale against a corporation over 
 which he is appointed, the propriety of his action and the va- 
 lidity of the sale will not be considered in a suit to redeem from 
 the sale."^^ And while a sale in which a receiver is interested as 
 purchaser is presumptively irregular, the presumption is not 
 conclusive, and the sale is not void but only voidable at the 
 election of the beneficiary, whose subsequent conduct may pre- 
 clude him from objecting to the sale.'^^ 
 
 § 194. Illustrations of the rule; purchase in receiver's 
 interest set aside. The general rule as above stated, deny- 
 ing receivers the privilege of becoming purchasers of property 
 
 Donahue v. Quackenbush, 75 Minn., 73 Thompson v. Holladay, 15 
 
 43, 77 N. W., 430. As to the right Ore., 34, 14 Pac, 725. 
 
 of a receiver to purchase from him- 74 Cook v. Martin, 75 Ark., 40, 
 
 self as an individual, see Patterson 87 S. W., ^25, 1024. 
 
 V. Ward, 6 N. Dak, 609, 72 N. W., 75 Hobart v. Bennett, 77 Me., 
 
 1013. 401. 
 
 72 Anderson v. Anderson, 9 Ir. 7G Jackson v. First State Bank, 
 
 Eq., 23. 21 S. Dak., 484, 113 N. W., 876. 
 Receivers — 15.
 
 226 
 
 RECEIVERS. 
 
 [chap. VII. 
 
 pertaining to their trust, is entirely independent of the question 
 Avhether any fraud in fact has intervened.''"^ And a receiver of 
 an insolvent bank, who in that capacity holds the equity of re- 
 demption of certain mortgaged premises, and who purchases 
 the premises at a foreclosure sale under the mortgage, can not 
 take any title or benefit of such purchase to himself. And the 
 general rule applies in such a case, notwithstanding the sale is 
 a judicial sale, under a decree against the receiver, and based 
 upon a title paramount to his title, and to the interest of his 
 cestui que trustJ^ And when a portion of the premises sold 
 under the decree in the cause has been purchased for the re- 
 
 77 Nugent V. Nugent, (1908) 1 
 Ch., 546, affirming S. C, (1907) 2 
 Ch., 292. 
 
 78 Jewett V. Miller, 10 N. Y., 402. 
 Johnson, J., observes, p. 404: 
 "When Miller purchased the prem- 
 ises in question at the master's sale, 
 December 7, 1842, he Vvfas receiver 
 of the Wayne County Bank. The 
 sale was made on a foreclosure of 
 a mortgage made by one Williams, 
 then the owner of the premises, to 
 Minot C. ^Morgan and others, dated 
 October 15, 1838, which mortgage 
 was assigned first to the Wayne 
 County Bank by Morgan and 
 others, and afterward by the bank 
 to the people of the state of New 
 York as collateral security for 
 moneys borrowed by the bank from 
 the canal fund. After this last as- 
 signment, Williams sold the prem- 
 ises to the defendant, Cook, who 
 gave his mortgage for the purchase- 
 money, and this mortgage was as- 
 signed by Williams to the bank as 
 security for a debt due by him to 
 the bank. On the 28th of August, 
 1841, as receiver of the Wayne 
 County Bank, Miller procured a 
 quitclaim deed of the premises from 
 Cook and wife. Miller then as re- 
 
 ceiver had the right to redeem the 
 mortgage assigned as security to 
 the state, and also the general equi- 
 ty of redemption by the quit- 
 claim from Cook and wife. Thus 
 situated upon the foreclosure by the 
 state, he became the purchaser of 
 the premises. It is contended, on 
 the part of the defendant Miller, 
 that his case is out of the general 
 rule which forbids a trustee to pur- 
 chase on his own account the trust 
 property, upon the ground that the 
 sale in this case was a judicial sale, 
 made under a decree against the 
 trustee, and based upon a title par- 
 amount to the title of the trustee, 
 and to the interest of the cestui que 
 trust. That this is not the rule 
 was adjudged in the case of Van 
 Epps V. Van Epps (9 Paige, 237) ; 
 Iddings V. Bruen (4 Sandf. Ch. R., 
 263). It is hardly possible to state 
 the rule of equity too broadly or 
 too strongly. It will not permit a 
 trustee to subject himself to the 
 temptation which arises out of the 
 conflict between the interest of a 
 purchaser and the duty of a trustee. 
 It was Miller's duty as receiver to 
 make the property bring the high- 
 est possible price; but as purchaser
 
 CHAP. VII.] 
 
 FUNCTIONS. 
 
 227 
 
 ceiver, the sale may be set aside, even after confirmation by 
 the court, such a case falHng directly within the principle of the 
 general rule as above stated. '^^ And when a receiver had pur- 
 chased at an undervaluation an annuity, which was charged 
 upon certain lands subject to his receivership, and which it 
 was his duty to collect, the personal representatives of the 
 vendor were held entitled to rescind the purchase and to re- 
 cover the annuity.^0 
 
 § 195. Departure from rule by consent of parties. 
 While, as already shown, the courts insist upon a strict observ- 
 ance of the rule that a receiver shall not derive any advantage 
 from the purchase of the trust property, yet upon obtaining 
 
 this was not his interest. The rule 
 is entirely independent of the ques- 
 tion whether in point of fact any 
 fraud has intervened. It is to avoid 
 the necessity of any such inquiry 
 in which justice might be balked, 
 that the rule takes so general a 
 form. After the purchase by Mil- 
 ler, it follows that his cestui que 
 trust had the right either to demand 
 a resale of the property or to adopt 
 his purchase as made for their ben- 
 efit, subject, of course, in the latter 
 case, to his lien for advances. 
 (Slade V. Van Vechten, 11 Paige, 
 21.)" 
 
 79 Alven v. Bond, Flan. & K., 196. 
 The doctrine is very clearly set 
 forth in this case by Sir Michael 
 O'Loghlen, Master of the Rolls, in 
 the following language, p. 211: "I 
 do not at all agree with the counsel 
 for the purchaser, who contend 
 that if the court shall set aside this 
 sale, because the purchase was 
 made in trust for the receiver, it 
 will introduce a new doctrine into 
 a court of equity, and make an or- 
 der which no other judge ever be- 
 fore ventured to make, when I find 
 it to be the general rule of this 
 
 court, founded on principles of pub- 
 lic policy, that trustees, assignees of 
 bankrupts, solicitors or agents for 
 the assignees, and all persons fill- 
 ing any confidential office in rela- 
 tion to the property to be sold, shall 
 not, without the special leave of the 
 court, and probably the assent of 
 all parties interested, purchase the 
 property with which they are by 
 their office connected. I make no 
 new decision if I apply that prin- 
 ciple to a receiver, and hold that 
 the purchase made by him at a sale 
 under a decree of this court of the 
 property over which he is acting as 
 receiver, made without the sanction 
 of the court or the assent of the 
 parties interested, but concealed 
 from both, can not be sustained. 
 I only apply a well-established rule 
 of the court to a case which I think 
 fully within it, and show that this 
 rule of a court of equity is, as Lord 
 Cottenham, in Scarborough v. Bor- 
 man, 4 Myl. & Cr., 379, says our 
 legal system is, 'capable of adapt- 
 ing itself to the exigencies of so- 
 ciety.' " 
 
 80 Eyre v. M'Donnell, 15 Ir. Ch., 
 N. S., 534.
 
 228 RECEIVERS. LCHAP. VII. 
 
 consent of all parties interested in the lands forming the sub- 
 ject-matter of the litigation, a receiver has been allowed to be- 
 come a tenant of the lands, when such course appeared to the 
 court to be beneficial to the estate and to all parties in interest.^^ 
 And a sale of real property by a receiver to his sons will not be 
 set aside because of such relationship, when made in good faith, 
 for the full value of the premises and with the consent, express 
 or implied, of all parties in interest.^2 
 
 § 196. Order for receiver's sale can not be questioned 
 collaterally; illustrations. When a court of equity prop- 
 erly acquires jurisdiction of the parties and of the subject-mat- 
 ter in a cause, and appoints a receiver therein and orders him to 
 sell the property in controversy, such order, although irregular 
 and improvident, can not be assailed or questioned in a col- 
 lateral action, and such an action will not lie to set aside the 
 order of sale and proceedings thereunder.^^ The appropriate 
 method of correcting such irregularities is by motion to the 
 court making the order, and an independent action for that 
 purpose will not be entertained.^^ And the rule applies al- 
 though the sale has been made by a court of a foreign state.^^ 
 And where a receiver purchases at his own sale, while such sale 
 would be voidable if attacked directly upon that ground by 
 parties interested, it is not void and is not subject to being as- 
 sailed in a collateral proceeding.^^ And the failure of the court 
 to enter a formal order extending a receivership from one cause 
 to another is a mere irregularity to be taken advantage of in 
 
 SlStannus v. French, 13 Ir. Eq., 150, 102 N. W., 604; Gila Bend 
 
 161. R. & I. Co. V. Gila Water Co., 9 
 
 82Yetzer v. Applegate, 85 Iowa, Ariz., 57, 76 Pac, 990, affirmed in 
 
 121, 52 N. W., 118. 202 U. S., 270, 26 Sup. Ct. Rep., 
 
 83Libby v. Rosekranz, 55 Barb., 615, 50 L. Ed., 1023. 
 
 219 ; Brande v. Bond, 63 Wis., 140, 84 Libby v. Rosekranz, 55 Barb., 
 
 23 N. W., 101 ; Anderson v. Chica- 219. 
 
 go T. & T. Co., 101 Wis., 385, 77 N. 85 Anderson v. Chicago T. & T. 
 
 W., 710 ; Schaberg v. McDonald, 60 Co., 101 Wis., 385, 77 N. W., 710. 
 
 Neb., 493, 83 N. W., 7Z7 ; Groeltz v. 86 Groeltz v. Cole, 128 Iowa, 
 
 Cole, 128 Iowa, 340, 103 N. W., 977; 340, 103 N. W., 977. 
 Juckett V. Fargo M. Co., 19 S. Dak.,
 
 CHAP. VII. J FUNCTIONS. 229 
 
 the proceeding; and where a receiver's sale has been had in the 
 latter proceeding, such sale is not subject to collateral attack 
 on account of the irregularity in question in a subsequent action 
 brought to quiet the title to the property sold.^'^ But when the 
 receiver has procured an order of sale by a fraudulent imposi- 
 tion upon the court, it has been held that an action would lie to 
 set aside the sale, even though relief might be had upon motion 
 before the court appointing the receiver.^s 
 
 § 197. Satisfactory evidence required as to necessity for 
 sale; order should be specific; sale to pay taxes. When a 
 receiver applies for an order of court to authorize him to sell 
 certain of the property in his possession, for the purpose of 
 meeting taxes due and to become due upon other property, the 
 evidence showing the necessity for such a sale should be clear 
 and satisfactory to the court, and the order of sale should be 
 specific, and should designate the particular property which the 
 receiver is authorized to sell.^^ And where an application is 
 made by a collector of taxes to the court for an order on a re- 
 ceiver to pay taxes due upon property in his possession, the 
 court should either direct the receiver to sell a part of the prop- 
 erty in his custody in order to raise a fund sufficient to pay the 
 taxes or should give him directions which will enable him, 
 without a sale, to bring about the same result, and it is no de- 
 fense that the income arising from the property is insufficient 
 to pay operating expenses or that such sale will jeopardize the 
 interests of the general creditors. ^^ 
 
 § 198. Discretion as to sales in bulk or by parcels; pri- 
 vate sale ; ex parte application ; stockholder of corporation 
 may object ; improper advertisement ; notice of sale ; order 
 of sale appealable; same of order confirming sale of real 
 estate. As regards the functions and powers of receivers 
 
 87 Gila Bend R. & I. Co. v. Gila 88, affirming S. C., 4 Thomp. & C. 
 
 Water Co., 9 Ariz., 57, 16 Pac, (N. Y. S. C), 614, 2 Hun, 253. 
 
 990, affirmed in 202 U. S., 270, 26 ^ J*^ ^'^^^ ^- ^"therford, 26 Ga., 
 
 Sup. Ct. Rep., 615, 50 L. Ed., 1023. 90 Dysart v. Brown, 100 Ga.. 1. 
 
 88Hackley v. Draper, 60 N. Y., 26 S. E., 767.
 
 230 RECEIVERS. [chap. VII. 
 
 in effecting sales of personal property intrusted to their charge, 
 considerable latitude and discretion are allowed them as to 
 whether the sale shall be in bulk or by parcels. And when 
 the receiver has exercised his discretion in the matter in good 
 faith, the court will not set aside the sale merely because it may 
 differ from him as to which, under all the circumstances, was 
 the best method of selling.^^ But where a receiver has adver- 
 tised a sale to be made as a whole or in parcels as may be to 
 the best interest of the trust, and a sale is made in parcels 
 and the property is not offered in bulk, the sale is properly set 
 aside at the instance of a prospective buyer upon his entering 
 into a bond to bid at a sale in bulk more than the property 
 realized at the sale in lots.^^ And where it appears, in a bill 
 for a receiver filed by the mortgagee in a chattel mortgage, 
 that a sale by a receiver from retail sales would produce better 
 prices than could be obtained by sales in bulk under the mort- 
 gage, a proper case is presented for the appointment of a re- 
 ceiver.^3 And when the order for the appointment of a re- 
 ceiver w^as obtained by the plaintiff late at night, and upon 
 an ex parte application, and the receiver sold the property at 
 private sale early the following morning, without notice to 
 the defendants interested therein, the sale was set aside and 
 the receiver's appointment revoked, the proceedings being re- 
 garded as contrary to all principles of equity, and in conflict 
 with the due and ordinary course of procedure in courts of 
 justice.^* And where a decree requires a public sale to be 
 made, a private sale* made contrary to the provisions of the 
 decree will be set aside.^^ So, where a receiver, without any 
 authority from the court, proceeds to dispose of property at a 
 
 91 National Bank of the Metrop- 93 Valley National Bank v. Claflin 
 olis V. Sprague, 5 C. E. Green, 170. Co., 108 Iowa, 504, 79 N. W., 279. 
 As to the manner in which a re- 94 Simmons v. Wood, 45 How. 
 ceiver over a large manufacturing Pr., 268. 
 
 business should sell the business 95 South Baltimore B. & T. Co., 
 
 and personal property, see Case v. v. Kirby, 89 Md., 52, 42 Atl., 913. 
 Fish, 63 Wis., 475, 22 N. W., 322. 
 
 92 Patterson v. Patterson, 207 Pa. 
 St.. 252. 56 Atl.. 442.
 
 CHAP. VII.] FUNCTIONS. 231 
 
 private sale, and it appears that the property has brought less 
 than would have been realized at a public sale, the sale should 
 be set aside.^^ And in such case, a stockholder in the cor- 
 poration over which the receiver has been appointed has such 
 an interest in the matter as will entitle him to make the appli- 
 cation to vacate the sale.^"^ So a sale is properly set aside 
 where the terms of the sale are such that the property is not 
 fairly placed upon the market and consequently sells for much 
 less than its real value. And where neither the order of sale 
 nor the advertisement thereof conveys any information that a 
 bulk sale of the property in the receiver's hands will give to 
 the purchaser the right to use certain valuable patents, the sale 
 is properly set aside. So the neglect of the receiver to answer 
 inquiries in regard to the nature of the property is a sufficient 
 reason for setting aside the sale. And it is improper to direct 
 the receiver to sell all the bills payable and debts due the con- 
 cern where they are widely scattered and it is impossible to 
 form an estimate of their probable value.^^ And the court 
 may, of its own motion, revoke an order of sale improvidently 
 made, as where the sale had been ordered to be made on credit 
 when it should have been for cash.^^ But a sale should not be 
 set aside because of want of notice to a particular creditor, 
 where it appeared that the sale was made in good faith and 
 that the highest amount obtainable had been realized from 
 the property.! And an order made after notice to the parties 
 in interest and after a hearing, directing a receiver of a rail- 
 way company to sell certain bonds and property of a third 
 party, which have been pledged to the receiver as an indemnity 
 against debts and obligations of the company, is an order con- 
 cluding the rights of the parties in interest and is, therefore, 
 
 96 Mason v. Hubner, 104 Md., 98 Deford v. Macwatty, 82 Md., 
 554, 65 Atl., 367. 168. 33 Atl., 488. 
 
 97 South Baltimore B. & T. Co. v. 99 Fitzner v. Noullet, 114 La., 400, 
 Kirby, 89 Md., 52, 42 Atl., 913; 38 So., 398. 
 
 Mason v. Hubner, 104 Md., 554, 65 1 Nisbet v. Great Northern C. 
 
 Atl., 367. Co., 41 Wash., 107, 83 Pac, 15.
 
 232 RECEIVERS. [chap. VII. 
 
 appealable.2 And it is held that an order confirming a sale of 
 real estate by a receiver is appealable.^ 
 
 § 199. Receiver's power to execute deed; when deed 
 should be made. When a receiver is authorized and re- 
 quired by order of court to sell real estate, the authority to 
 sell necessarily carries with it authority to give to the pur- 
 chaser the usual evidence of a transfer of title, the power of 
 the receiver to give the deed being necessarily implied from 
 the order of sale. And while it may be irregular for the re- 
 ceiver to execute a conveyance of the real estate sold, before 
 confirmation of the sale by the court, such conveyance is not 
 on that account void, but only voidable, and the sale having 
 been confirmed by the court the objection is removed.^ But 
 when, by the terms of his appointment, a receiver is authorized 
 to sell the property committed to his trust, subject to the order 
 of the court, no transfer can be properly made or consummated 
 by the receiver until the sale is reported to the court and con- 
 firmed, after notice to the parties who have appeared in the 
 action. And any transfer before such confirmation is unau- 
 thorized, and any payment made is at the purchaser's risk.^ 
 
 § 199(7. Sale subject to incumbrances; title of third per- 
 son; partnership; dower interest. A sale by a receiver, 
 under an order of court which makes no mention of prior liens 
 or incumbrances, operates as a transfer of title to the purchaser 
 subject to the lien of whatever incumbrances may be outstand- 
 ing ; ^ and the purchaser may contest the validity of apparent 
 incumbrances, either with respect to their legal existence, or 
 as to the amount due.*^ Nor is the title of a third person, not 
 a party to the cause in which the receiver is appointed and the 
 
 2 Philadelphia & R. R. Co. v. 6 Fidelity Title & T. Co. v. Schen- 
 Little, 41 N. J. Eq., 519, 7 Atl., 356. ley P. & H. R. Co., 189 Pa. St., 363, 
 
 3 State V. Fawcett, 6 Neb., 393, 42 Atl., 140, 69 Am. St. Rep., 815. 
 83 N. W., 176. 7Hackensack Water Co. v. De- 
 
 4Koontz V. Northern Bank, 16 Kay, 36 N. J. Eq., 548. And see, 
 Wal., 196. ante, § 191. 
 
 5 Simmons v. Wood, 45 How. Pr., 
 268.
 
 CHAP. VII.] FUNCTIONS. 233 
 
 sale made, divested or affected by such sale. And a receiver 
 over a partnership who sells the real estate of the firm, under 
 an order of court, sells it subject to the lien of a judgment 
 against the individual interest of one member of the firm. 
 And the title of a purchaser at a sheriff's sale under such judg- 
 ment will prevail over that of a purchaser from the receiver.^ 
 So a sale of the husband's real estate, by a receiver appointed 
 in behalf of judgment creditors, should be made subject to the 
 dower interest of the wife, and it is improper to direct pay- 
 ment by the receiver to the wife of her inchoate right of dower 
 out of the proceeds.^ 
 
 § 1996. Doctrine of caveat emptor applied. The doc- 
 trine of caveat emptor applies in cases of receivers' sales, like 
 all other judicial sales, the purchaser being chargeable with 
 knowledge that only the interest of the parties to the suit can 
 be sold by the receiver, and it is for him to ascertain before 
 purchasing what that interest is. The rule applies to the con- 
 dition of the property as well as to its title ; and to an action 
 by a receiver against a purchaser for the recovery of the pur- 
 chase price of real estate sold by the receiver, the defendant can 
 not plead the defective condition of the property at the time of 
 his purchase, in the absence of fraud or misrepresentation. 
 And when such purchaser has acquiesced in and consented to 
 the ratification of the sale, he can not defeat an action for the 
 recovery of the purchase-money upon the ground that another 
 piece of real estate was included in the sale but omitted from 
 the deed tendered to him by the receiver.io And the rule ap- 
 plies even though the sale has been made without an express 
 order of the court.^^ 
 
 § 199c. Confirmation of sale unnecessary; when con- 
 firmation not refused; no redemption from sale. If, in 
 making a sale of property, the receiver conforms in all re- 
 
 8 Foster v. Barnes, 81 Pa. St., H Campbell v. Parker, 59 N. J. 
 
 377. Eq., 342, 45 Atl., 116. 
 
 n Lowry v. Smith, 9 Hun, 514. 
 10 Barron v. Mullin, 21 Minn., 
 374.
 
 234 RECEIVERS. [CHAP. VII. 
 
 spects to the order of the court, no confirmation of the sale 
 is necessary to give it full validity and effect. The sale is re- 
 garded as a judicial sale and the purchaser becomes subject 
 to the jurisdiction of the court, which may, by order in the 
 cause, compel him to complete his purchase.^^ And a sale 
 fairly made by a receiver to a bona fide bidder, who is pur- 
 chasing in good faith, will not be refused confirmation because 
 a higher bid is subsequently obtained. ^^ And it is held that 
 a receiver's sale of real estate of an insolvent corporation is not 
 subject to redemption by a judgment creditor, whose judg- 
 ment is recovered subsequent to the receiver's appointment, as 
 in ordinary sales of real estate under execution. In such case 
 the property is regarded as in the custody of the law for the 
 benefit of the creditors, and, therefore, not subject to the or- 
 dinary remedies of creditors having no liens at the date of the 
 receivership.!'* 
 
 § 199cy. Fraudulent sale by receiver. Fraud and collu- 
 sion in a sale made by a receiver always afford good ground 
 for setting aside the sale. Thus, where a receiver, his insolvent 
 and a third person enter into a fraudulent and collusive agree- 
 ment by which the latter is to purchase the property at much 
 less than its real value and is afterward to transfer it to the 
 wife of the insolvent for the benefit of the latter, such sale is 
 properly set aside by the court and the receiver charged with 
 the full value of the property.!^ 
 
 § 199^. Sale must take place at time designated by 
 court. A receiver, when ordered by the court to make a 
 sale, should see that it takes place at the time designated by 
 the court. And where he holds the sale without authority at a 
 date later than the time named by the order of the court, thr 
 
 12 /n re Denison, 114 N. Y., 621, 14 Watkins v. Minnesota T. M. 
 
 21 N. E., 97. As to what amounts Co., 41 Minn., 150, 42 N. W., 862. 
 to a confirmation of a sale by a re- 15 In re Shea, 57 Minn., 415, 59 
 
 ceiver, see Threadgill v. Colcord, N. W., 494. 
 16 Okla., 447, 85 Pac, 703. 
 
 13 Rogers v. Rogers Locomotive 
 Co., 62 N. J. Eq., IJl, 50 Atl.. 10.
 
 CHAP. VII.] FUNCTIONS. 235 
 
 sale is regarded as totally void, and confirmation, over objec- 
 tion presenting the question, can not take the place or answer 
 the purpose of an order, made in advance, directing the sale 
 to be made.i^ 
 
 16 Ackerman v. Ackerman, SO Neb., 54, 69 N. W., 388L
 
 CHAPTER VIII. 
 
 OF ACTIONS BY AND AGAINST RECEIVERS. 
 
 I. Principles Governing Actions by Receivers § 200 
 
 II. Pleadings and Proofs in Actions by Receivers 231 
 
 III. Actions by Receivers in Foreign Courts 239 
 
 IV. Defenses to Actions by Receivers 245 
 
 V. Actions Against Receivers 254 
 
 I. Principles Governing Actions by Receivers. 
 
 § 200. Practice divergent in different states. 
 
 201. Receiver succeeds to principal's rights of action; what he must 
 
 show; action on note. 
 
 202. Court maintains strict control over receiver; does not permit 
 
 unauthorized suits. 
 
 203. Regularity of receiver's appointment and his competency can 
 
 not be questioned collaterally; otherwise if order void. 
 
 204. Appointment of receiver does not change rights of action; suit 
 
 by receiver of insurance company; sale prior to appointment. 
 
 205. Defense available against original plaintiff, available against re- 
 
 ceiver. 
 
 206. Judgment in favor of receivers of banking corporation, bar to 
 
 subsequent suit in name of bank. 
 
 207. Receiver not restricted in management of suit; may remove 
 
 cause to United States court; but is limited to existing 
 remedies. 
 
 208. Receiver should obtain leave of court before bringing action; 
 
 English and American doctrine. 
 
 209. Conflict of authority as to name in which receiver must sue; 
 
 the general rule stated. 
 
 210. Exceptions to the rule; suits in name of receiver. 
 
 211. The question as regulated by statute. 
 
 212. The same; trover by receiver of bank; suits by receiver of in- 
 
 surance company; by receiver of insolvent state bank against 
 directors. 
 
 213. On removal or death of receiver, suit continued by his suc- 
 
 cessor. 
 
 214. Receiver substituted in lieu of original plaintiff on terms. 
 
 236
 
 CHAP. VIII.] ACTIONS. 237 
 
 § 215. Foreclosure of mortgage by successors to original receivers of 
 bank. 
 
 216. Employment of counsel by receiver; should not employ coun- 
 
 sel of either party. 
 
 217. The rule limited to cases of adverse interest, 
 
 218. Receiver may bring action of detinue. 
 
 219. Judgment recovered by receiver, bar to subsequent suit by 
 
 plaintiff in original cause. 
 
 220. Suit by administrator subsequently appointed receiver. 
 
 221. Distinction as to receiver's rights of action founded upon title 
 
 to real estate. 
 
 222. Receiver may recover usury paid by principal. 
 
 223. May recover rents on notice to tenant; action for unpaid pur- 
 
 chase money. 
 
 224. May enforce an unpaid subscription. 
 
 225. Suit by receiver of corporation; illegality of appointment no 
 
 defense; corporation not a proper party plaintiff. 
 
 226. When right of action relates back to beginning of principal's 
 
 title. 
 
 227. Failure of receiver to execute bond a ground for nonsuit; in- 
 
 formality in bond. 
 
 228. May move for judgment against sheriff for money collected. 
 
 229. Receiver's liability for costs. 
 
 230. May garnish plaintiff in original suit. 
 
 § 200. Practice divergent in different states. One of 
 
 the most important functions exercised by receivers in the dis- 
 charge of their official duties is that of bringing such actions 
 as may be necessary to the proper discharge of their trust, as 
 well as to secure and protect the assets and funds to whose con- 
 trol they are entitled by virtue of their appointment. In some 
 of the states the functions of receivers, as regards the bringing 
 of actions, are regulated to a considerable extent by statute, 
 while in others the English practice prevails, leaving the entire 
 subject to be regulated by the court making the appointment, 
 in accordance with established principles governing the juris- 
 diction. 
 
 § 201. Receiver succeeds to principal's rights of action; 
 what he must show ; action on note. In general, a receiver, 
 by virtue of his appointment, is clothed with only such rights 
 of action as might have been maintained by the persons over 
 whose estate he has been appointed, and to whose rights, for
 
 238 
 
 RECEIVERS. 
 
 [chap. VIII. 
 
 purposes of litigation, he has succeeded.^ It is essential, there- 
 fore, in order to sustain a suit brought by him in his represent- 
 ative capacity, that he should allege and set forth the equities 
 of the parties whose rights of action he represents, and he must 
 also show that by the appointment of the court, properly made 
 in a matter within its jurisdiction, authority has been conferred 
 upon him, in his representative capacity as receiver, to prose- 
 cute the action ; and failing to show this, he can not maintain 
 an action. 2 And when an obligation has been extinguished 
 or paid to the obligee, his receiver can not afterward maintain 
 an action thereon, either at law or in equity.^ But where a 
 receiver has come into the possession of notes belonging to the 
 person over whose estate he has been appointed and has been 
 
 1 Coope V. Bowles, 28 How. Pr., 
 10, 42 Barb., 87; Curtis v. Mcll- 
 henny, 5 Jones Eq., 290; Falken- 
 bach V. Patterson, 43 Ohio St., 359, 
 1 N. E., 757. 
 
 2 Coope V. Bowles, 28 How. Pr., 
 10, 42 Barb., 87; Davis v. Ladoga 
 Creamery Co., 128 Ind., 222, 27 N. 
 E., 494; Hatfield v. Cummings, 142 
 Ind., 350, 39 N. E. 859; Gainey v. 
 Gilson, 149 Ind., 58, 48 N. E., 633. 
 And see, post, § 231. For allega- 
 tions of a receiver's authority to sue 
 held to be sufficient under the rule, 
 see Hatfield v. Cummings, 152 Ind., 
 280, 50 N. E., 817, 53 N. E., 231; 
 Taylor v. Canaday, 155 Ind., 671, 57 
 N. E., 524, 59 N. E., 20 ; Coddington 
 V. Canaday, 157 Ind., 243, 61 N. E., 
 567. In Hatfield v. Cummings, 142 
 Ind., 350, 39 N. E., 859, supra, an 
 allegation that the receiver "was ap- 
 pointed, and has since qualified as 
 receiver of said association, and is 
 empowered to collect by suits the 
 claims due said association" was 
 held insufficient. And see Davis v. 
 Talbot, 137 Ind., 235, 36 N. £., 1098. 
 
 In Ueland v. Haugan, 70 Minn., 349, 
 73 N. W., 169, it was held, under 
 the provisions of the statute of 
 Minnesota, that the receiver of an 
 insolvent state bank might maintain 
 an action against the shareholders 
 of the bank to enforce their double 
 stock liability without alleging and 
 proving his authority from the court 
 to maintain the action, since the ac- 
 tion against the shareholders was to 
 be regarded as merely a part of the 
 main receivership cause. In Davis 
 7'. Ladoga Creamery Co., 128 Ind., 
 222, 27 N. E., 494, supra, it was held 
 that upon the appointment of a re- 
 ceiver over a corporation, he suc- 
 ceeds to all its rights of action, and 
 that the right of the corporation to 
 bring suit is suspended during the 
 receivership. As to the right of a 
 receiver to maintain an action in his 
 representative capacity against him- 
 self in his individual capacity, see 
 Murphy v. Penniman, 105 Md., 452, 
 66 Atl., 282. 
 
 3 Curtis V. Mcllhenny, 5 Jones, 
 Eq., 290.
 
 CHAP. VIII.] ACTIONS 239 
 
 directed to bring suit thereon, he and no other person can main- 
 tain the action to enforce their payment. ^ 
 
 § 202. Court maintains strict control over receiver ; does 
 not permit unauthorized suits. Courts of equity are in- 
 clined to the exercise of a strict control over their receivers 
 in the matter of allowing them to bring suits concerning their 
 receivership, and an action brought by a receiver is considered 
 as brought under the order of the court itself. And a re- 
 ceiver will not be permitted to abuse the power intrusted to 
 him by unauthorized suits against third persons, under pre- 
 tense of authority derived from the court. If, therefore, he 
 institutes an action in the name of a third person, without his 
 authority and without any foundation or pretense of right, the 
 parties to such suit are entitled to the protection of the court 
 against such unauthorized proceedings on the part of the re- 
 ceiver, who will be directed to discontinue the action and will 
 be enjoined from further proceeding therein.^ No greater de- 
 gree of diligence is exacted of receivers in instituting actions 
 concerning their trust than in the case of a trustee, who is 
 required to act in good faith and with the same prudence and 
 discretion which a prudent man is accustomed to exercise in 
 his own affairs.^ 
 
 § 203. Regularity of receiver's appointment and his 
 competency can not be questioned collaterally ; otherwise 
 if order void. It would seem that the regularity of a re- 
 ceiver's appointment, or the competency of the person ap- 
 pointed, may not be called in question in a collateral action, but 
 must be impeached, if at all, in a direct proceeding for that 
 purpose. It follows, therefore, that in an action 'instituted by 
 a receiver in matters connected with his trust, as to obtain pos- 
 session of funds belonging to him in his official capacity, if 
 
 4 Driver v. Lanier, 66 Ark., 126, to which a receiver will be upheld 
 49 S. W., 816. in effecting a compromise of a pend- 
 
 5 In re Merritt, 5 Paige, 125. ing action or controversy, see Unit- 
 
 6 Reynolds' Executor v. Petty- ed States v. Church, 6 Utah, 9, 21 
 John, 79 Va., 327. As to the extent Pac, 503, 524.
 
 240 RECEIVERS. [chap. VIII. 
 
 proper record evidence of his appointment is produced, it will 
 be regarded as conclusive upon the question of the receiver's 
 right. The court proceeds, in such a case, upon the ground 
 that it is immaterial whether the appointment was proper or 
 improper in the first instance ; and that while it remains a sub- 
 sisting order of a court of competent jurisdiction, it is not to 
 be questioned, unless by appropriate proceedings to test its 
 validity."^ If, however, the order is absolutely void, a different 
 rule prevails, and in such case the objection to its validity may 
 be urged in a collateral proceeding. For example, when a stat- 
 ute provides that notice to a defendant shall be given of any 
 application for the appointment of a receiver, and that the or- 
 der, if made without notice, shall be void, a defendant over 
 whose property a receiver is appointed without notice may 
 maintain an action against such receiver to recover rents of 
 the premises which he has collected.^ 
 
 § 204. Appointment of receiver does not change rights 
 of action ; suit by receiver of insurance company ; sale prior 
 to appointment. The appointment of a receiver does not 
 have the effect of changing any rights of action, or of changing 
 the contract relations existing between the original parties, 
 against whom the receiver is appointed, and their debtors. A 
 receiver, therefore, can not maintain an action upon a note or 
 obligation running to the original party, which he himself 
 could not have maintained.^ For example, in the case of a 
 mutual insurance company, when the obligation of the assured 
 upon a premium note given for a policy of insurance depends 
 upon an assessment and notice thereof, which assessment and 
 notice have' never been given by the company, so that it 
 
 7 Vermont & Canada R. Co. • v. son v. Greeley, 107 Mo., 577, 17 S. 
 
 Vermont Central R. Co., 46 Vt., W., 962. See, ante, § 39a. 
 
 792; Cox V. Volkert, 86 Mo., 505; 8 Johnson v. Powers, 21 Neb., 
 
 Barbour v. National Exchange 292, 32 N. W., 62. But see Edee v. 
 
 Bank, 45 Ohio St., 133, 12 N. E., 5. Strunk, 35 Neb., 307, 53 N. W., 70. 
 
 See, also, Attorney-General v. See, ante, §§ 166a and 168. 
 
 Guardian Mutual Life Insurance 9 Williams v. Babcock, 25 Barb., 
 
 Co., 77 N. Y., 272; Block v. Estes, 109; Bell v. Shibley, 33 Barb., 610. 
 92 Mo., 318, 4 S. W., 731 ; Thomp-
 
 CHAP. VIII.] ACTIONS. 241 
 
 could maintain no action upon the note, a receiver of the com- 
 pany stands in the same situation, and will not be allowed to 
 sue without having taken the necessary steps to fix the maker's 
 liability.io And a receiver can not maintain an action for the 
 recovery of property of the defendant which had been sold 
 under execution prior to his appointment.^! 
 
 § 205. Defense available against original plaintiff, avail- 
 able against receiver. For the purpose of actions and suits 
 connected with their receivership, receivers occupy substan- 
 tially the same relation which was occupied by the original 
 parties against whom or over whose estate they were appointed. 
 Any defense, therefore, which a defendant might have made 
 to an action brought by the original party in interest is equally 
 available, and may be made with like effect when the action is 
 instituted by his receiver.12 Thus, when receivers of a bank- 
 ing corporation institute an action upon a note given for a sub- 
 scription to the capital stock of the bank, and the maker relies 
 for his defense upon the fact that the note was obtained through 
 fraudulent representations made by agents of the bank as to 
 the condition and value of its stock, such defense is available 
 to the same extent and with like effect as if interposed in an 
 action brought by the bank itself.l^ If, however, the defend- 
 ant in such a case is himself culpably chargeable with partici- 
 
 10 Williams v. Babcock, 25 Barb., and another for a fraudulent con- 
 109. See also, Thomas v. Whallon, spiracy to prevent the collection of 
 31 Barb., 172. the judgment creditor's debt, see 
 
 11 Mcllrath v. Snure, 22 Minn., Ward v. Petrie, 157 N. Y., 301, 51 
 391. N. E., 1002, 68 Am. St. Rep., 790. 
 
 12 Litchfield Bank v. Peck, 29 13 Litchfield Bank v. Peck, 29 
 Conn., 384; Wardle v. Hudson, 96 Conn., 384. Sandford, J., says, p. 
 Mich., 432, 55 N. W., 992; State v. 385: "The only question in this 
 Sullivan, 120 Ind., 197, 21 N. E., case is, whether the defense set up 
 1093, 22 N. E., 325 ; Chicago Title can be made available against these 
 & Trust Co. V. Brady, 165 Mo., 197, receivers. That it would have been 
 65 S. W., 303. As to the right of a entirely so, in a contest between 
 receiver in supplementary proceed- the defendant and the bank itself, 
 ings under the code of New York is undeniable, and is^ not denied; 
 to^ maintain an action to recover but the receivers claim that they 
 damages from the judgment debtor represent creditors, and therefore 
 
 Receivers — 16.
 
 242 RECEIVERS. [chap. VIII. 
 
 pation in tlie fraud, having united with others in the formation 
 of a fraudulent banking corporation, which passes into the 
 hands of receivers for the benefit of its creditors, he can not 
 urge such fraudulent organization in defense of an action 
 brought against him by the receivers to enforce his subscrip- 
 tion to the capital stock.^^ So when a receiver of an insolvent 
 mutual fire insurance company brings an action against a mem- 
 ber of the company to recover an assessment, which would 
 have been barred by the statute of limitations had the action 
 been brought by the corporation itself, such defense is equally 
 available as against the receiver.^^ And a receiver can not 
 maintain an action against the debtor, over whom he is ap- 
 pointed, and his sureties upon an official bond, since the debtor 
 himself could not have maintained such action. ^^ So when, 
 pending a suit for the recovery of property held by a copart- 
 nership, a receiver is appointed over the defendants, who in- 
 tervenes in the suit and is substituted as defendant, he will be 
 permitted to assert no title to the property other than or dif- 
 ferent from that of the original defendants. ^"^ 
 
 § 206. Judgment in favor of receivers of banking corpo- 
 ration, bar to subsequent suit in name of bank. When re- 
 stand on higher ground than the the law charged with, any respon- 
 bank ever stood, and that against sibility for its debts or obligations, 
 them this defense can not be inter- These receivers are not indorsees, 
 posed. That they represent cred- nor were they in fact appointed un- 
 itors may be conceded, and that in til after maturity of the note, so 
 some cases they may enforce claims that the rule of policy which pro- 
 which the bank itself could not en- tects the holder of negotiable paper 
 force, need not, perhaps ought not, can have no application in their 
 to be denied ; but in what way and favor." 
 
 by force of what principles of law, 1^ Litchfield Bank v. Church, 29 
 
 equity or justice, receivers or cred- Conn., 137. And see comments up- 
 itors could avoid the application or on this case in Litchfield Bank v. 
 escape the force of this defense. Peck, 29 Conn., 387, 388. 
 and compel the payment of this de- 1^ Wardle v. Hudson, 96 Mich., 
 
 mand, we are unable to discover. 432, 55 N. W., 992. 
 . . . Neither in law, equity or 16 State v. Sullivan, 120 Ind., 197, 
 
 conscience was this defendant the 21 N. E., 1093, 22 N. E., 325. 
 debtor of the bank, nor had he as- i"*" Head v. Miller, 45 Minn., 446, 
 
 sumed, nor was he by the charter or 48 N. W., 192.
 
 CHAP. VIII. J ACTIONS. 243 
 
 ceivers of a banking corporation institute an action in one state 
 upon liabilities due to the bank, and recover judgment thereon, 
 such judgment constitutes a good defense in bar to an action 
 brought against the same defendants for the same cause of ac- 
 tion in another state, even though the former suit was brought 
 in the name of the receivers, and the latter in the name of the 
 bank itself. Such receivers, being empowered by the law where 
 they were appointed to sue in the corporate name, or in their 
 individual names, and being clothed with all the powers and 
 rights in the collection of debts due to the bank which the cor- 
 poration itself possessed, are merely its representatives for the 
 purposes of litigation, and the judgment recovered by them in 
 that capacity should have the same effect as if recovered in the 
 name of the corporation. ^^ 
 
 § 207. Receiver not restricted in management of suit; 
 may remove cause to United States court; but is limited 
 to existing remedies. It is important to observe, that the 
 general doctrine of courts of equity, recognizing a receiver as 
 the officer or representative of the court from which he derives 
 his appointment, is not to be understood as limiting or restrict- 
 ing his rights in the management of a suit which he has once 
 undertaken. And after entering upon the litigation, he is re- 
 garded as being entitled to all the freedom of action of any 
 other suitor, and the fact that he appeals from a decision which 
 is adverse to him is not of itself evidence of bad faith or of 
 mismanagement of his trust, and may be a meritorious 
 rather than a censurable act.^^ So if the citizenship of a re- 
 ceiver is such as to entitle him to remove a cause brought 
 against him in a state court to a federal court, he may exercise 
 the right of removal, although the citizenship of the corpora- 
 tion over which he is appointed would not have entitled it to 
 remove the cause if brought against the corporation itself.^o 
 
 18 Bank of North America v. 20 Brisenden v. Chamberlain, 53 
 Wheeler, 28 Conn., 433. Fed., 307. 
 
 19 Devendorf v. Dickinson, 21 
 How. Pr., 275.
 
 244 RECEIVERS. [chap, VIII. 
 
 A receiver, however, in all actions which he may bring by virtue 
 of his receivership, must pursue the appropriate and existing 
 remedies, and the authority to sue conferred upon him by the 
 court can not convert that into an equitable right of action 
 which was before a legal one, or change the established methods 
 of procedure for enforcing the right.^i If, therefore, the de- 
 mand sued upon by the receiver is legal in its nature, and sus- 
 ceptible of enforcement in an action at law, he can not maintain 
 a bill in equity. Thus, when by the order of his appointment 
 the receiver of a railway company is vested with full power to 
 "take into his possession the bills, bonds, notes, and other evi- 
 dences of debt, belonging to said company, with full power 
 to sue for and collect all moneys due on the same," the right 
 of action thus conferred is to be exercised in accordance with 
 the appropriate existing remedies, and the receiver can not 
 maintain a bill in equity, in his own name, to enforce a subscrip- 
 tion to the capital stock of the company, since the liability of 
 defendant is purely a legal one, to be enforced by an action at 
 law.22 So if the proper mode of procedure to enforce the right 
 in question is by bill in equity, a receiver can not maintain his 
 
 21 Freeman v. Winchester, 18 failure to pay. The remedy by for- 
 Miss., 577; Receiver v. First Na- feiture and sale is but cumulative, 
 tional Bank, 34 N. J. Eq., 450. And The question then is, can the corn- 
 see Kretschmar v. Stone, 90 Miss., plainant sue in his own name in 
 375, 43 So., 177. equity, to recover a debt which, as 
 
 22 Freeman v. Winchester, 18 between the original parties, was 
 Miss., 577. This was a bill by the recoverable only at law? . . . 
 receiver of a railway company, in He is but an officer of the court, ap- 
 his own name, to enforce an unpaid pointed to hold a fund pending lit- 
 subscription to the capital stock of igation or infancy. But if he can 
 the company. The court, Sharkey, sue at all it must be in the name 
 C. J., says, p. 579: "The liability of of the party having the legal right; 
 the respondent on his subscription, and authority to sue does not con- 
 as it originally existed, was purely vert that into an equitable right 
 legal in its character. He was liable which was before purely legal, or 
 to be sued at lav/ by the corpora- he could not bring ejectment. If 
 tion for the amount which he had he is to be regarded as an assignee, 
 subscribed, although the charter he should sue at law, of course on 
 may have contained a clause provid- mere legal demands. And if he is 
 ing for a forfeiture of the stock, on considered as trustee, it is the same
 
 CHAP. VIII.] ACTIONS. * 245 
 
 action by a mere petition, but must conform to the established 
 and usual practice in this regard. ^3 
 
 § 208. Receiver should obtain leave of court before 
 bringing action; English and American doctrine. The us- 
 ual practice, both in England and in America, before institut- 
 ing actions by a receiver in matters connected with his trust, 
 is to apply to the court from which he derives his appointment 
 for leave to bring such actions. And although it is frequently 
 the case that the order of appointment in general terms author- 
 izes the receiver to sue for and collect all demands due, yet it 
 is a common practice to first obtain special leave of court be- 
 fore beginning any action. In the English Court of Chancery, 
 the rule was laid down in the time of Lord Thurlow, that a re- 
 ceiver had not, by virtue of his appointment, sufficient author- 
 ity, without permission of the court, to institute an action of 
 ejectment against tenants of the estate over which he was ap- 
 pointed.24 jhe same rule was recognized and adopted by the 
 New York Court of Chancery, which required the receiver to 
 first obtain special leave of court before bringing an action of 
 ejectment. And when a receiver was appointed over certain 
 lands held in trust by defendant for plaintiffs, and the defend- 
 ant trustee was enjoined from interfering with the trust estate, 
 the court, on the application of the cestui que trust, authorized 
 the receiver to institute actions of ejectment for the recovery 
 of portions of the estate held by adverse claimants, when it was 
 apparent that such course was necessary for the security and 
 benefit of the trust.25 The same general principle is recognized 
 
 thing, for a trustee may sue at law. cellor can not convert remedies 
 
 But does the receiver derive power from legal to equitable. If he 
 
 to sue in this instance from the could confer the power to sue, he 
 
 order of his appointment? It is could confer it to be exercised as 
 
 alleged in the bill that he is author- well at law as in equity." 
 
 ized to sue for and collect all 23 Receiver v. First National 
 
 moneys due the company. Admit- Bank, 34 N. J. Eq., 450. 
 
 ting that this order conferred the 24 Wynn v. Lord Newborough, 3 
 
 power to sue, it only gives the Bro. C. C, 88. 
 
 power to be exercised according to 25 Green v. Winter, 1 Johns. Ch., 
 
 the appropriate remedy. The chan- 60.
 
 246 RECEIVERS. [chap. VIIl. 
 
 and enforced in North Carolina, where it is held that, notwith- 
 standing the adoption of a code of procedure regulating to a 
 certain extent the powers of courts in appointing receivers, the 
 right of a receiver to maintain an action is to be governed by 
 the established rules of equity, and the courts still follow the 
 practice of the English Chancery in this regard, as settled by 
 the authorities. A receiver, therefore, is not allowed to bring 
 an action for the recovery of property belonging to the estate 
 over which he has been appointed, without an order of court 
 authorizing the proceeding.26 So in Minnesota, it is held that 
 the receiver of a railway company can not institute condemna- 
 tion proceedings without first obtaining leave of the appointing 
 court. 27 And in Tennessee, the receiver of an insolvent cor- 
 poration can not, without leave of court, maintain an action to 
 enforce the liability of the shareholders upon their stock sub- 
 scriptions and to recover from the officers and directors for 
 negligence in the management of the affairs of the corpora- 
 tion. ^8 And in Virginia, it is held that a receiver who has been 
 directed to collect the purchase money for lands, the sale of 
 which has been confirmed in the cause, can not, without leave 
 of court, institute an action in another court to set aside an 
 alleged fraudulent conveyance of other land made by the pur- 
 chase-money debtor, in order to subject it to the payment of 
 the debt which the receiver is ordered to collect. ^9 So in 
 
 20 Battle V. Davis, 66 N. C, 252. rer. Hardin v. Sweeney, 14 Wnsli., 
 
 But see Gray v. Lewis, 94 N. C. 129, 44 Pac, 133; Allen v. IVixter, 
 
 392. And in Weill v. First National 42 Wash., 434, 85 Pac, 26. And in 
 
 Bank, 106 N. C, 1, 11 S. E., 277, it Compton v. Schwabachcr. 15 Wa^li.. 
 
 was held under the provisions of the 306, 46 Pac, 338. it was held ilr\t a 
 
 code of procedure that a receiver receiver may institute an action 
 
 in aid of judgment creditors, upon without leave of court. 
 
 proceedings supplemental to execu- 27 Minneapolis Western Ry. Co. 
 
 tion, might sue to recover property v. Minneapolis & St. L. R. Co., 61 
 
 of the debtor without leave of court. Minn., 502, 63 N. W., 1035. 
 
 In Washington it is held that a 28 Simmons v. Taylor, 106 Tenn., 
 
 declaration which fails to allege 729, 63 S. W., 1123. 
 
 that a receiver is authorized to 29 McAllister v. Harman, 97 Va., 
 
 bring the action in his own name is 543, 34 S. E., 474. 
 not obnoxious to a general demur-
 
 CHAP. VIII.] ACTIONS. 247 
 
 Georgia, it is held that a receiver has in general no authority to 
 bring suit to recover property over which he is appointed, with- 
 out an order of court, and that his general authority to col- 
 lect and hold the assets is not sufficient to warrant him in 
 bringing suit ; since, being an officer of the court, it is for the 
 court to say whether there shall be litigation.^*^ And in au- 
 thorizing its receiver to bring suit, it is proper for the court 
 to make the bringing of the action conditioned that, upon in- 
 vestigation, it shall appear that there is a reasonable prospect 
 of realizing upon any judgment which may be rendered.^^ 
 In Maryland, however, it has been held, that when receivers 
 are in possession of property, which is taken from them pend- 
 ing an appeal from the order for their appointment, the appeal 
 bond standing in lieu of the property, upon their appointment 
 being affirmed by the appellate court, it is their immediate duty 
 to bring an action upon the appeal bond, without any special 
 order of court for that purpose.32 And in Wisconsin, under 
 the provisions of the statute of that state, it is held that an ac- 
 
 30 Screven v. Clark, 48 Ga., 41. Chancery Practice, 1988 et seq. A 
 This was an action by a receiver of receiver is at last only an officer of 
 a railway corporation to recover the court, and the foundation of the 
 certain cars of the company, his rule probably is that it is always 
 only authority being the order ap- for the court itself to determine 
 pointing him temporary receiver of whether it shall be dragged into 
 the company and of all its prop- litigation. At law the party having 
 erty, and containing these words: the legal right to sue is the proper 
 "And he is hereby ordered to col- party, and if one comes suing for 
 lect immediately all said property the property of another, he must 
 together, and hold the same sub- show, as part of his right to re- 
 ject to the further order of the cover, the authority he has to come 
 court." This was held insufficient into a court of law asserting an- 
 to authorize him to bring suit, Mc- other's right. We think this fail- 
 Cay, J., observing, p. 42, as follows : ure to show any authority to sue is 
 "The rule is perhaps an arbitrary fatal to the case of the plaintiff be- 
 one, but is, nevertheless, well set- low." 
 
 tied, that the receiver has no right 31 Sterling Electric Co. v. Augus- 
 
 to sue without express authority ta T. & E. Co., 124 Ga., 371, 52 S. 
 
 from the chancellor; his general au- E., 541. 
 
 thority to collect and keep the as- 32 Everett v. The State, 28 Md., 
 
 sets is not sufficient to justify him 190. The decision, however, rests 
 
 in bringing an action. Daniell's upon a law of that state making it
 
 248 RECEIVERS. [chap. VIII. 
 
 tion brought by a receiver to set aside a fraudulent conveyance 
 niav be maintained without leave of the appointing court. ^^ 
 It will thus be seen that, while there are respectable authorities 
 to the contrary, the decided weight of authority is in support 
 of the general rule that a receiver can not institute an action 
 connected with the administration of his trust without first 
 procuring the leave of the court which has appointed him. 
 
 § 209. Conflict of authority as to name in which receiver 
 must sue; the general rule stated. Some conflict of author- 
 ity exists in the reported cases upon the question whether, in 
 the absence of statutory authority, a receiver may institute and 
 conduct actions in his own name, in matters concerning his re- 
 ceivership, or whether he must sue in the name of the original 
 party in whose favor the action accrued. It is believed, how- 
 ever, that the weight of authority clearly supports the proposi- 
 tion, that the receiver must sue in the name of the person hav- 
 ing the legal right, and that when neither the laws of the state 
 nor the order of his appointment authorize him to proceed in 
 his own name, he can only proceed in the name of the person 
 in whom the right of action existed before the receiver's ap- 
 pointment.^^ Thus, a receiver of a corporation can not, by 
 
 the duty of receivers to take charge King v. Cutts, 24 Wis., 627; Wilson 
 of and sell the property, and collect v. Welch, 157 Mass., 77, 31 N. E., 
 the debts, and declaring that they 712; Fort Payne Coal & Iron Co. v. 
 shall be "bound and held liable for Webster, 163 Mass., 134, 39 N. E., 
 their default, negligence or mal- 786; Harland v. Bankers & Mer- 
 feasance in office." And the court chants Telegraph Co., 32 Fed., 305; 
 say that, in such case, it is unneces- Freeman v. Winchester, 18 Miss., 
 sary to inquire whether, ordinarily, 577; Battle v. Davis, 66 N. C, 252; 
 a receiver can bring an action with- Carver v. Kent, 70 Ind., 428; Mo- 
 out a previous order of the court riarty v. Kent, 71 Ind., 601 ; Harrell 
 from which he derives his appoint- v. Kent, 71 Ind., 602. See, also, 
 ment. See as to the doctrine in Ingersoll v. Cooper, 5 Blackf., 426; 
 Louisiana, Helme v. Littlejohn, 12 Harland v. Bankers & Merchants 
 La. An., 298. Telegraph Co., 33 Fed., 199. But 
 
 33 Wisconsin Trust Co. v. Jen- see, contra. Wray v. Jamison, 10 
 kins, 110 Wis., 531, 86 N. W., 153. Humph., 186; Henning v. Raymond, 
 
 34 Yeager v. Wallace, 44 Pa. St., 35 Minn., 303, 29 N. W., 132; Helme 
 294; Justice v. Kirlin, 17 Ind., 588; v. Littlejohn, 12 La. An., 298; Baker 
 Manlove v. Burger, 38 Ind., 211; v. Cooper, 57 Me., 388. And see
 
 CHAP. VIII.] 
 
 ACTIONS. 
 
 249 
 
 virtue of his appointment, prosecute suits for the enforcement 
 of choses in action and debts originally due to the corporation, 
 in his own name, but must proceed in the name of the corpora- 
 tion, in whose favor the legal right accrued. ^^ And the rule 
 applies, even though the order of his appointment authorizes 
 the receiver to collect such choses in action as may come to his 
 hands, for which purposes he is authorized to prosecute suits 
 in the courts of the state, and he must still proceed in the name 
 of the corporation, and can not sue in his own name.^^ So in 
 the case of a receiver over a partnership, it is held that he can 
 not maintain an action of trover, in his own name, for the con- 
 version of property before his appointment, but that suit must 
 be brought in the name of the firm in which the right of action 
 originally existed. The receiver's appointment, it is held, does 
 not transfer to him the legal rights of the firm in any of their 
 choses in action, and trover can only be maintained by one who 
 has the legal right.^"^ And where, pending litigation concern- 
 
 Iglehart v. Bierce, 36 111., 133. In 
 Hardin v. Sweeney, 14 Wash., 129, 
 44 Pac, 138, the court refer to the 
 rule that a receiver is a quasi-as- 
 signee, and may therefore sue in 
 his own name. And see Murtey v. 
 Allen, 71 Vt., Z77, 45 Atl., 752 ; King 
 V. Cochran, 72 Vt., 107, 47 Atl., 394. 
 
 35 Battle v. Davis, 66 N. C, 252; 
 Justice V. Kirlin, 18 Ind., 588; Free- 
 man V. Winchester, 18 Miss., 577; 
 Garver v. Kent, 70 Ind., 428 ; Mori- 
 arty V. Kent, 71 Ind., 601; Harrell 
 V. Kent, 71 Ind., 602; Fort Payne 
 Coal & Iron Co. v. Webster, 163 
 Mass., 134, 39 N. K, 786. And see 
 Homer v. Barr P. E. Co., 180 Mass., 
 163, 61 N. E., 883, 91 Am. St. Rep., 
 269. 
 
 36 Battle v. Davis, 66 N. C, 252. 
 
 37 Yeager v. Wallace, 44 Pa. St., 
 294. But see Helme v. Littlejohn, 
 12 La. An., 298. Yeager v. Wallace 
 was an action of trover by a re- 
 
 ceiver of a partnership to recover 
 for the alleged conversion of firm 
 property before the receiver's ap- 
 pointment. Judgment was for plain- 
 tiff, which was reversed on appeal, 
 the court, Strong, J., holding as fol- 
 lows, p. 295 : "But can a receiver of 
 the property of a partnership main- 
 tain an action of trover in his own 
 name for the conversion of the per- 
 sonal property of a firm by a wrong- 
 doer before the appointment of a re- 
 ceiver was made? He is but an 
 officer of the court which appoints 
 him, and does not become the legal 
 owner of the property which he is 
 required to take in charge. The 
 appointment of a receiver does not 
 transfer to him the legal rights of 
 the partnership in any of their 
 choses in possession or in action. 
 Trover can only be maintained by 
 him who has the legal right. How, 
 then, can the receiver sue, except
 
 250 
 
 RECEIVERS. 
 
 [CIIAP. VIII. 
 
 ing certain real estate, a receiver is appointed to take charge of 
 and lease the premises pendente lite, his powers are to be re- 
 garded as identical with those of a receiver in chancery gen- 
 erally. He is not an assigiiee of the owner, and can not, there- 
 fore, maintain an action of forcible entry and detainer in his 
 own name, to remove a lessee holding possession under a lease 
 executed prior to the receivership, and it would seem to be the 
 proper course for him to apply for leave to prosecute the action 
 
 in the name of the firm? That he 
 can not, not only seems manifest 
 upon principle, but is established by 
 authority. Thus, in Taylor v. Allen, 
 2 Atk.. 213, Lord Chancellor Hard- 
 wicke appointed a receiver to col- 
 lect the assets of a testator, and em- 
 powered him to bring actions in 
 the name of the executrix. In Pitt 
 z\ Snowden, 3 Atk., 750, the same 
 chancellor said, a receiver must dis- 
 train in the name of him who has 
 the legal right. This, however, can 
 not apply to a case where the ten- 
 ant has attorned to the receiver, for 
 by the attornment the legal right 
 becomes vested in the receiver, and 
 he may then distrain in his own 
 name. Daniell's Chan. Prac, 1977. 
 Indeed I do not find it has ever 
 been decided that a receiver can 
 sue in his own name for any debt, 
 claim, or demand of a party of 
 whose effects he has been appointed 
 receiver, or to recover the posses- 
 sion or control of any real estate or 
 choses in action of such party, un- 
 less some statute has enabled him. 
 He has always been regarded, not 
 as having the legal right, but as a 
 mere custodian to take charge of 
 the property during a pending liti- 
 gation. If possession be withheld 
 from him by the party whose prop- 
 erty has been taken charge of by 
 the court, delivery to the receiver is 
 
 enforced by attachment. If a third 
 person, not a party to the proceed- 
 ings in equity, withhold the prop- 
 erty, suit may be brought by the re- 
 ceiver with the consent of the court, 
 but he must bring it in the name of 
 him who has the legal right. In 
 New York, it is true, a receiver is 
 more than a custodian. He is a 
 statutory assignee. But this is in 
 consequence of the statute of that 
 state of April 28, 1845, Laws, 90, 91, 
 and of the code of 1849. The act of 
 1845 empowered receivers to sue in 
 their own name for any debt, claim, 
 or demand transferred to them, or 
 to the possession or control of 
 which they are entitled as re- 
 ceivers. In Wilson v. Wilson, 1 
 Barb. Chan. Rep., 594, the chancel- 
 lor thought the act not broad 
 enough to transfer the title of real 
 estate to the receiver by the mere 
 order of the court, and without an 
 actual conveyance from the party to 
 the suit in whom such legal title 
 was vested. But the code put real 
 and personal estate on the same 
 footing. Porter v. Williams & 
 Clark, 5 Seld., 142. Without the 
 statutes of New York, it was never 
 ruled in that state that a receiver 
 had the legal title even to person- 
 alty. The right to sue in his own 
 name was always rested upon the 
 act of 1845, or upon the code, or
 
 CHAP. VIII.] ACTIONS. 251 
 
 in the name of the lessor.^^ So a trustee in the nature of a re- 
 ceiver, appointed by the court to receive and collect certain 
 notes, is not authorized by virtue of his appointment to sue in 
 his own name on notes not made to or assigned to himself, but 
 must bring his action in the name of the person in whom is 
 the legal title.^^ And a receiver of a corporation, which is the 
 owner of letters patent, does not by virtue of his appointment 
 acquire the title of the corporation to such letters patent and 
 can not, therefore, maintain an action in his own name for an 
 infringement.'*^ And under a statute providing that a com- 
 plaint in a condemnation proceeding must contain the name of 
 the corporation or person in charge of the public use for which 
 the property is sought, it is held that such action, when brought 
 upon behalf of a railway company, must be brought in the 
 name of the company and not of its receiver ; and in such case, 
 where improperly brought in the name of the receiver, it is 
 proper to allow the plaintiff to amend the summons and plead- 
 ings ; and this may be done even after verdict.^l 
 
 § 210. Exceptions to the irule; suits in name of receiver. 
 Notwithstanding the decided weight of authority is in support 
 of the rule laid down in the preceding section, a contrary doc- 
 trine has been strongly maintained in some of the states, which 
 have recognized and upheld the receiver's right to institute 
 
 upon an act passed in 1825, not than an equitable interest in the 
 upon any rule or course of practice property or rights in action corn- 
 in chancery. See 1 Johns. Chan. mitted to his charge, or which in- 
 Cases. In Wilson v. Allen, 6 Barb. vests him with the legal ownership. 
 545, it is said that at law an ordi- It seems, therefore, to follow that 
 nary receiver was not considered he can not sue in his own name, 
 as having the legal title, so as to and that the present suit, being in 
 authorize him to institute a suit in the name of the receiver, was erro- 
 his own name, for any debt or de- neously brought. The judgment is 
 mand transferred to him (under reversed, and a writ of restitution 
 the order of his appointment), or to is awarded." 
 
 the possession or control of which S8 King v. Cutts, 24 Wis., 627. 
 
 he was entitled, under an order of 39 IngersoU v. Cooper, 5 Blackf., 
 
 the court, until the act of 1845. 426. 
 
 There is no act of the assembly in 40 Dick v. Struthers, 25 Fed., 103. 
 
 this state that gives to a receiver of 41 Bigelow v. Draper, 6 N. Dak., 
 
 a court of equity anything more 152, 69 N. W., 570.
 
 252 RECEIVERS. [chap, VIII. 
 
 actions in his own name, by virtue of his appointment and of 
 the general powers thereby conferred. "^^ Thus, in Tennessee, 
 it is held that the necessary effect of the delivery of a demand 
 or chose in action to a receiver, duly appointed by a court of 
 equity, is to invest him in his capacity as receiver with such an 
 interest in the debt to be recovered that he alone is entitled to 
 sue therefor, and in his own name, the right of action being 
 divested from the original parties of whose estate he has been 
 appointed receiver. And the addition to his name of words 
 indicating his capacity as receiver is regarded as a mere de- 
 scriptio pcrsonaeA^ So, in Louisiana, it is held that a receiver 
 of partnership assets, appointed pending litigation for the set- 
 tlement of the firm business, is authorized by virtue of his ap- 
 pointment to institute an action in his own name for the recov- 
 ery of money due to the firm, and that a judgment in his favor 
 in such action is a sufficient protection to the defendant there- 
 in. 44 So, too, it is held in Maine, that receivers of a bank may 
 maintain in their own name an action of forcible entry and de- 
 tainer, to obtain possession of real estate to which the bank is 
 entitled. Their right of action in their own name, under such 
 circumstances, is based upon the fact that the right to posses- 
 sion, if obtained in the name of the bank, would require the of- 
 ficer executing the writ to put the bank and not the receivers in 
 possession, while the very purpose of the proceeding is to en- 
 able the receivers to obtain possession. 45 But it is held in the 
 same state, that the appointment of receivers to wind up the af- 
 fairs of a bank does not prevent the bank from maintaining an 
 action in its own name, at the instance of the receivers, to re- 
 cover upon a liability due to the bank from an indorser of a 
 promissory note.46 It is held in Pennsylvania, that when prop- 
 
 42 See Wray v. Jamison, 10 44 Helme v. Littlejohn, 12 La., 
 Humph., 186; Helme v. Littlejohn, An., 298. 
 
 12 La. An., 298; Baker v. Cooper, 45 Baker v. Cooper, 57 Me., 388. 
 
 57 Me., 388 ; Henning v. Raymond, 46 American Bank v. Cooper, 54 
 
 35 Minn., 303. Me., 438. 
 
 43 Wray v. Jamison, 10 Humph., 
 186.
 
 CHAP. VIII.] ACTIONS. 253 
 
 erty has come into a receiver's hands by virtue of his appoint- 
 ment, and he has sold it under order of the court, he may main- 
 tain an action of assumpsit in his own name to recover the pur- 
 chase price.^'^ And in Georgia, it is held that a court of equity 
 in appointing a receiver has power to authorize him to bring 
 suits concerning the subject-matter of his receivership, and that 
 when so authorized he may sue in his own name.^^ In Illinois, 
 it is held that in an action brought by receivers of the assets of 
 a banking corporation, to recover money due to the estate, as 
 in the foreclosure of a mortgage, the bank itself need not be 
 made a party to the suit ; since its property having passed into 
 the hands of receivers, the prima facie intendment is that the 
 bank has no such interest in the subject-matter as to render it a 
 necessary party, its only right being to call upon the receivers 
 for an accounting. ^^ 
 
 § 211. The question as regulated by statute. The ques- 
 tion discussed in the preceding sections, as to the receiver's 
 right to sue in his own name, is sometimes determined by the 
 statutes of the state under which he is appointed. And where 
 a statute provides for appointing receivers to wind up the af- 
 fairs of insolvent corporations, and authorizes such receivers 
 to sue in the name of the corporation or otherwise, a receiver 
 appointed under the statute may properly bring suit in his own 
 name to recover upon notes due to the corporation. ^^ And 
 where, under the laws of the state, a receiver of an insolvent 
 corporation is vested with the legal title to all the property of 
 the corporation, with full authority to sue in his own name for 
 
 47 Singerly v. Fox, 75 Pa. St., 112. tion. Terry v. Bamberger, 44 Conn., 
 
 48 Hardwick v. Hook, 8 Ga., 354. 558. And in the same state, a re- 
 
 49 Iglehart v. Bierce, 36 111., 133. ceiver over a foreign corporation, 
 
 50 Manlove v. Burger, 38 Ind., appointed in another state, may sue 
 211; Hayes v. Brotzman, 46 Md., in his own name to recover money 
 519. See, also, Frank v. Morrison, due him for the completion of con- 
 58 Md., 423. And under the stat- tracts made originally with the cor- 
 utes of Connecticut, a receiver over poration over which he is appointed. 
 a corporation may bring suit in his Cooke v. Town of Orange, 48 Conn., 
 own name to recover for the con- 401. 
 
 version of property of the corpora-
 
 254 RECEIVERS. [chap. VIII. 
 
 the recovery of debts due to the corporation, if an indebtedness 
 due to the company has been released and discharged in fraud 
 of the rights of innocent shareholders, an action to recover 
 such indebtedness is properly brought in the name of the re- 
 ceiver.^^ So where laws of the state governing the appointment 
 of receivers of corporations provide that such receivers shall 
 have full power to sue for and to collect any demands, or to 
 recover any property, in the name of the corporation for the 
 use of its creditors, in the same way and to the same extent that 
 the corporation itself might recover, the corporation can not 
 prosecute an action in its own name, the right of action being 
 vested in the receivers by virtue of the statute. Otherwise, 
 actions might be prosecuted in the name of a dissolved corpo- 
 ration, by unauthorized persons, without right and in viola- 
 tion of the rights of debtors, creditors and shareholders. ^^ 
 
 § 212. The same; trover by receiver of bank; suits by 
 receiver of insurance company; by receiver of insolvent 
 state bank against directors. When the receiver's author- 
 ity is derived, not merely from the order appointing him, but 
 from a statute under which the appointment is made, his func- 
 tions as regards the bringing of suits, in matters concerning 
 his receivership, must be determined with reference to the ex- 
 tent of the powers conferred by the statute. And when a stat- 
 ute providing for the appointment of receivers of insolvent 
 corporations, authorizes the receiver to sue in his own name, 
 or otherwise, and to recover all the estate, debts and things in 
 action belonging or due to the corporation, the term "chose in 
 action" will be construed as extending to all rights to personal 
 property not in possession, which may be enforced by action, 
 whether growing out of contract or tort. The receiver of a 
 banking corporation, appointed under such statute, may, there- 
 fore, maintain an action of trover for the conversion of per- 
 sonal property of the bank, such as bonds, even though the 
 
 51 Nathan v. Whitlock, 9 Paige 13 Ohio, 269. See, also, Renick v, 
 Ch., 152. Bank of West Union, 13 Ohio, 298. 
 
 52 AJinmi Exporting Co. v. Gano,
 
 CHAP. VIII.] ACTIONS. 255 
 
 alleged conversion occurred before his appointment.^^ So 
 when the court appointing a receiver over an insolvent insur- 
 ance company is empowered by statute to make such orders and 
 decrees as may be necessary for winding up the affairs of the 
 company, under the general authority thus conferred the court 
 may authorize the receiver to sue in his own name to recover 
 unpaid subscriptions to the capital stock of the company,^'* 
 or to recover money wrongfully misappropriated and wasted 
 by its officers. ^^ So, under a similar statute authorizing the 
 appointment of a receiver of an insolvent state banking cor- 
 poration and empowering him to bring and defend actions in 
 his own name and to collect the assets of the bank, it is held 
 that such a receiver may maintain an action to recover dam- 
 ages from the directors for their negligence in the management 
 of the affairs of the bank ; and in such case it is not necessary 
 to allege that there were unpaid claims against the bank or that 
 the assets in the hands of the receiver were insufficient to pay 
 them.56 
 
 § 213. On removal or death of receiver, suit continued 
 by his successor. In New York, where the laws of the 
 state authorize receivers to bring actions in their own name 
 concerning matters pertaining to their receivership, when an 
 action is instituted by a receiver for the recovery of money 
 due to the estate over which he is appointed, and the receiver 
 is afterward removed and another is appointed in his stead, it 
 is proper to substitute the successor as plaintiff in the action. 
 And in such case, the death of the first receiver, after the sub- 
 stitution, does not affect or abate the right of action in his 
 successor.^"^ So where an action is instituted by a banking cor- 
 poration in the name of its president, and a receiver is subse- 
 ts Gillet V. Fairchild, 4 Denio, 80. 56Coddington v. Canaday, 157 
 
 54 Gill V. Balis, 72 Mo., 424. Ind., 243, 61 N. R, 567. 
 
 55 Alexander v. Relfe, 74 Mo., 495. 57 Sheldon v. Ames, 27 How. Pr., 
 See, as to the power of receivers to 179, 41 Barb., 54. 
 
 sue in their own names under the 
 statutes of Missouri, State v. Fich- 
 teukamm, 68 Mo., 289.
 
 256 RECEIVERS. [CIIAP. VIII. 
 
 quently appointed, who is invested with all the rights of the 
 corporation and of the plaintiff, as president, in the subject- 
 matter of the action already begun, the receiver must be made 
 a party to such suit before the court will allow it to proceed, 
 and no order affecting his right to be substituted as plaintiff, 
 and to continue the suit, will be made without notice to him.^^ 
 And when, after instituting an action concerning his receiver- 
 ship, the receiver dies and a successor is appointed, who suc- 
 ceeds to all the rights and duties of the former, the action must 
 be continued in the name of the new receiver. And the proper 
 method of thus continuing the action and bringing the new re- 
 ceiver into the case, under the New York practice, is said to 
 be by proceedings in the nature of a bill of revivor, or a supple- 
 mental bill.^^ So in Georgia, it is held that an action brought 
 by a receiver does not abate by reason of his death, but that it 
 may be continued in the name of his successor, when the cause 
 of action is one which survives. But the appropriate practice 
 in that state, in substituting the successor as plaintiff in the 
 action, is said to be by sci. fa. to the defendant. ^^ And in an 
 action by a receiver against a fire insurance company to reform 
 and enforce a policy issued to his predecessor in office, the com- 
 pany, having received the premium, will not be heard to object 
 that the former receiver had no authority to contract for in- 
 surance. In such case, the policy containing a provision that 
 it shall become void if any change occurs in the title or pos- 
 session of the property, whether by legal process, judicial de- 
 cree or by voluntary conveyance, the appointment of a success- 
 or to the original receiver does not invalidate the policy, the 
 title being regarded as still in the persons for whose benefit the 
 receiver holds, and the possession being that of the court.^^ 
 
 § 214. Receiver substituted in lieu of original plaintiff 
 on terms. When a receiver is appointed of the effects and 
 estate of the plaintiff in an action, and moves to be substituted 
 
 58 Talmage v. Pell, 9 Paige, 410. 61 Thompson v. Phenix Insurance 
 
 59 Palmer v. Murray, 18 How., Co., 136 U. S., 287, 10 Sup. Ct. Rep., 
 Pr., 545. 1019. 
 
 60 Searcy v. Stubbs, 12 Ga., 437,
 
 CHAP. Vin.] ACTIONS. 257 
 
 in lieu of the original plaintiff and to continue the action in 
 his own name as receiver, it is competent for the court, in grant- 
 ing the motion, to impose such conditions as may be necessary 
 to promote the ends of justice. For example, when an action 
 is brought upon a note, the defense being a failure or want of 
 consideration, and by the fault or negligence of the parties 
 representing the plaintiff, the action has been permitted to 
 slumber for a period of years sufficient to bar a recovery upon 
 the note, and a receiver of the original plaintiff, seven years 
 after plaintiff's death, moves to be substituted in his stead and 
 to continue the action, the court may properly impose upon 
 him, as a condition of granting his motion, that he assume the 
 burden of proving the consideration of the note.^^ Sq when a 
 corporation institutes an action for the foreclosure of a mort- 
 gage, and a receiver is afterward appointed over the corpora- 
 tion in another state, in which it was incorporated, it is proper 
 to substitute the receiver as complainant in the foreclosure 
 suit, upon such terms as may be appropriate for the protection 
 of any citizens of that state who may be creditors of the com- 
 pany, and for securing obedience to the orders of the court 
 with respect to the fund which may be realized by the suit.^^ 
 And when a corporation, plaintiff in a pending action, expires 
 by limitation of its charter and a receiver is appointed over its 
 assets for the benefit of its creditors and shareholders, the re- 
 ceiver may be substituted as plaintiff in such action. ^^ But 
 where a receiver has been appointed over the plaintiff in a fore- 
 closure suit, the mere filing by the receiver of an affidavit in 
 the foreclosure to the effect that he has been so appointed, 
 will not, in the absence of an order of court, make him a 
 party to such action. ^^ And when judgment is obtained against 
 a defendant and a recovery had thereunder, but the judgment is 
 
 62 Livingston v. Olyphant, 2 Rob., 64 Houston v. Redwine, 85 Ga., 
 (N. Y.), 639. And see United 130, 11 S. K, 662. 
 
 .States Vinegar Co. v. Spamer, 143 65 Thomas v. Van Meter, 164 111., 
 
 N. Y., 676, 38 N. E., 731. 304, 45 N. E., 405. 
 
 63 National Trust Co. v. Murphy, 
 30 N. J. Eq., 408. 
 
 Receivers — 17.
 
 258 RECEIVERS, [chap. VIII. 
 
 afterward reversed, it is proper to order restitution of the 
 money collected under the judgment to be made to a receiver 
 of the defendant.^^ And the appointment of a receiver over a 
 corporation does not afford ground for the continuance of an 
 action previously brought against the corporation. ^'^ Nor is 
 it error for the court in which an action is pending against a 
 corporation at the time of appointing a receiver of its affairs 
 to refuse, upon application of the corporation defendant, to 
 join the receiver as defendant, and if he desires to defend, he 
 should himself make the application. ^^ 
 
 § 215. Foreclosure of mortgage by successors to origi- 
 nal receivers of bank. A mortgage of real estate, executed 
 to receivers of a banking corporation to secure an indebtedness 
 due from the mortgagor to the bank, may be foreclosed by suc- 
 cessors of the original receivers, in their own name, in a state 
 other than that in which they were appointed. And in such 
 foreclosure proceedings, the bank itself need not be joined as a 
 party, it being presumed to have no property or interest in 
 jeopardy, and the proceedings being in reality for the benefit 
 of its creditors. ^9 
 
 § 216. Employment of counsel by receiver; should not 
 employ counsel of either party. The employment of coun- 
 sel by receivers is regarded as an appropriate means to attain 
 the end sought by litigation. The general rule, however, sub- 
 ject to the limitations to be hereafter noticed, is that the re- 
 ceiver should not employ the counsel of either of the parties 
 to the litigation in which he was appointed; since their duty 
 being to protect the interests of their respective clients and to 
 watch the receiver's proceedings, to the end that a faithful 
 performance of his duties may be insured, they are not re- 
 garded as competent to act as counsel for the receiver, and 
 their undertaking to act in such a capacity might frequently 
 
 66 Market National Bank v. Pa- 68 Mercantile Insurance Co. v. 
 cific National Bank, 102 N. Y., 464, Jaynes, 87 111., 199. 
 
 7 N. E., 302. 69 Iglehart v. Bierce, 36 111., 133. 
 
 67 Toledo, W. & W. R. Co. v. 
 Beggs, 85 111., 80.
 
 CHAP. VIII.] ACTIONS. 259 
 
 cast upon them inconsistent and conflicting duties, which could 
 not be properly discharged by one and the same personJ^ It 
 is also regarded as improper, when a receiver seeks leave of 
 court to bring an action in relation to personal property pertain- 
 ing to his receivership, to employ the counsel of the persons 
 holding the property, or interested therein, which is the sub- 
 ject-matter of the controversy.'^^ And when counsel for the 
 plaintiff, in a proceeding for the dissolution of the partnership, 
 have also acted as associate counsel for the receiver, the court 
 
 has refused to allow a claim for compensation in their be- 
 half.72 
 
 § 217. The rule limited to cases of adverse interest. It 
 
 is to be observed, however, that the rule, as above stated, pro- 
 hibiting a receiver from employing the counsel of either party 
 in the cause, is limited in its application to cases where the re- 
 ceiver is acting adversely to one of the parties to the litigation, 
 since it is only in such cases that there can be any impropriety 
 in the employment of such counsel by the receiver.'^^ And the 
 rule is intended only for the protection of the rights of the par- 
 ties themselves, and can not be invoked by a stranger to the 
 original action in which the receiver was appointed. Where, 
 therefore, no objection is urged by such parties, the receiver 
 may employ the counsel of either of them to aid him in the dis- 
 charge of his trust ; and a mere stranger to the original action 
 will not be heard to object that the receiver has employed 
 such counsel to institute an action against him.'^* And when 
 a receiver is appointed in a creditor's suit brought to set aside 
 fraudulent transfers of his property by the judgment debtor, 
 
 70 Ryckman v. Parkins, 5 Paige, "^1 In re Ainsley, 1 Edw. Ch., 576. 
 
 543; In re Ainsley, 1 Edw. Ch., 576; 72 Adams v. Woods, 8 Cal., 306. 
 
 Ray V. Macomb, 2 Edw. Ch., 165 ; 73 Smith v. New York Consoli- 
 
 Adams v. Woods, 8 Cal., 306; dated Stage Co., 28 How. Pr., Z77, 
 
 Moore v. O'Loghlin, 3 L. R. Ir., 18 Ab. Pr., 431. 
 
 405; Farwell v. Great Western Tel. 74 Warren v. Sprague, 11 Paige, 
 
 Co., 161 111., 522, 613, 44 N. E., 891. 200, affirming S. C, 4 Edw. Ch., 416, 
 And see, ante, § 188. See, also, 
 Blair v. St. L., H. & K. R. Co., 20 
 Fed., 348.
 
 260 RECEIVERS. [chap. ViU. 
 
 it is regarded as especially appropriate that the receiver should 
 employ the counsel for the creditors who is familiar with the 
 litigation resulting in the receivership.''^ 
 
 § 218. Receiver may bring action of detinue. A receiv- 
 er, duly appointed by a court of competent jurisdiction, may 
 maintain an action of detinue for property which has been in 
 his possession as receiver; for, while he can not maintain the 
 action upon the ground of a right of property in himself merely 
 by virtue of his appointment, he is yet entitled to its possession, 
 and the right of possession is sufficient foundation for the 
 action. "^^ And he has such a qualified or special interest in the 
 property which comes into his possession as receiver as to en- 
 able him to maintain an action against one who wrongfully 
 takes it from his possession and converts it to his own use.'^'^ 
 
 § 219. Judgment recovered by receiver, bar to subse- 
 quent suit by plaintiff in original cause. Where a receiver 
 has brought an action and recovered judgment therein, for 
 the benefit of the plaintiff in the action in which he was appoint- 
 ed, such proceedings constitute a bar to a subsequent suit 
 brought by such plaintiff for the same cause of action. Under 
 such circumstances, the receiver is regarded as the representa- 
 tive of the plaintiff, just as an executor or administrator repre- 
 sents the interests of the estate of a deceased person. And to 
 permit one at whose solicitation the receiver was appointed to 
 prosecute a demand for which judgment has already been ob- 
 tained for his benefit by the receiver, would be to multiply un- 
 necessary litigation. "^8 
 
 § 220. Suit by administrator subsequently appointed re- 
 ceiver. To warrant a receiver in bringing an action at law, 
 he must either have in himself the legal title to the matter or 
 thing in controversy, or must bring the action in the name of 
 the person having such legal title. When, therefore, an action 
 
 75 Shainwald v. Lewis, 8 Fed., 77 Kehr v. Hall, 117 Ind., 405, 20 
 878; Daniel v. Citizens' Fire-Insur- N. E., 279. 
 
 ance Co., 149 Mich., 626, 113 N. W., 78 Tinkham v. Borst, 24 How. Pr., 
 
 17. 246. 
 
 76 Boyle V. Towncs, 9 Leigh, 158.
 
 CHAP. VIII.] ACTIONS. 261 
 
 is brought by an administrator to recover upon a promissory 
 note due to the deceased, and the proceedings are subsequently 
 amended by changing the character of the plaintiff from that of 
 administrator to that of receiver, such an amendment is an 
 abandonment of the capacity in which he originally sued, and 
 virtually destroys the action.'^^ 
 
 § 221. Distinction as to receiver's rights of action found- 
 ed upon title to real estate. In Wisconsin, a distinction is 
 drawn between actions brought by a receiver to remove ob- 
 structions to title and determine adverse claims, or to obtain 
 a transfer or conveyance of title to the receiver, and actions 
 brought by him to recover for injuries to real estate, or for the 
 recovery of its possession. The former class of actions is re- 
 garded as founded upon the theory that the receiver has not 
 obtained title to the realty, while the latter is based upon the as- 
 sumption of title in himself. And a receiver in that state, ap- 
 pointed in proceedings supplementary to execution under the 
 code of procedure, to take charge of the estate of a defendant 
 in a divorce suit, against whom a decree for alimony has been 
 rendered, may maintain the former class of actions; he may, 
 therefore, bring an action to set aside a fraudulent conveyance 
 of defendant's real estate, made by him with a view to defeat 
 the decree for alimony.^^ 
 
 § 222. Receiver may recover usury paid by principal. 
 Upon the question of what rights of action pass to a receiver 
 by virtue of his appointment, it has been held in New York, 
 under a statute conferring a right of action upon a borrower 
 to recover back money which he has paid by way of usury, 
 that this right of action passes to his receiver, who may main- 
 tain a suit for the recovery of the usurious payments. But 
 since the right of action in such a case is wholly dependent upon 
 
 79 Newell v. Fisher, 24 Miss., 392. of a receiver under the New York 
 And see, ante, § 209. And see Mur- code of procedure, to set aside a 
 tey V. Allen, 71 Vt., 377, 45 Atl., fraudulent conveyance of defend- 
 752; King v. Cochran, 72 Vt., 107, ant's property, where no assign- 
 47 Atl., 394. ment has been made by defendant 
 
 80 Barker v. Dayton, 28 Wis., 367. to the receiver, Foster v. Town- 
 And see, as to the right of action shend, 12 Ab. Pr., N. S., 469.
 
 262 RECEIVERS. [chap. VIII. 
 
 Statute, it can only be sustained if brought within the time 
 prescribed by the statute.^! 
 
 § 223. May recover rents on notice to tenant; action for 
 unpaid purchase-money. To entitle a receiver to sue for 
 and recover rents accruing from property of a defendant debtor 
 over whose estate he is appointed, he must give notice of his 
 appointment to the tenant, and without such notice he can not 
 maintain an action. The object of the notice is twofold : first, 
 to protect the estate from payment to the \Arong person ; and, 
 secondly, to prevent the tenant from dealing with the former 
 owner in ignorance of the appointment of a receiver.^^ g^i- 
 when one has made a deed of real estate, absolute upon its face, 
 but intended in the nature of a mortgage as security for a 
 loan, and the grantee sells the premises conveyed, a receiver of 
 the grantor may maintain an action against the grantee for the 
 balance of the purchase-money due, after satisfying the amount 
 loaned. ^^ 
 
 § 224. May enforce an unpaid subscription. When sev- 
 eral persons enter into a subscription to contribute certain 
 sums to a common object, and on proceedings in equity by 
 some of the subscribers a receiver is appointed to take posses- 
 sion of the funds and assets realized by the subscription, it 
 would seem that the receiver has the same right of action to 
 enforce an unpaid subscription that the other subscribers would 
 have had.^"* Nor does it constitute any objection to such a 
 suit by the receiver that he represents all parties to the subscrip- 
 tion, including the defendant, whose subscription he is seeking 
 to enforce by action.^^ 
 
 § 225. Suit by receiver of corporation; illegality of ap- 
 pointment no defense; corporation not a proper party 
 plaintiff. In an action brought by the receiver of a cor- 
 
 81 Palen v. Johnson, 46 Barb., 21. 84 Lathrop v. Knapp, 27 Wis., 214, 
 And see Palen v. Bushnell, 46 opinion of Dixon, C. J.; S. C, 37 
 Barb., 24. Wis., 307. 
 
 82 Hunt V. Wolfe, 2 Daly, 298. 85 Lathrop v. Knapp, Z7 Wis., 307. 
 
 83 Van Dusen v. Worrell, 4 Ab. 
 Ct. Ap. Dec, 473.
 
 CHAP. VIII.] ACTIONS. 263 
 
 poration against a debtor to the corporation, when judgment 
 was obtained on failure to answer, and defendant moved to 
 set aside the judgment to enable him to set up in defense the 
 illegality of plaintiff's appointment as receiver, it was held that, 
 as plaintiff was acting under an order of court, which was ac- 
 quiesced in by the corporation over whose assets he was ap- 
 pointed receiver, the defendant could not object to irregulari- 
 ties in the appointment, if enough appeared in the original pro- 
 ceedings to give the court jurisdiction.^^ And where a re- 
 ceiver of a corporation institutes an action to recover money 
 due him as such receiver, it is erroneous to join the corporation 
 as a party plaintiff.^'^ 
 
 § 226. When right of action relates back to beginning 
 of principal's title. When a receiver is authorized and di- 
 rected, by the terms of the order or decree appointing him, 
 to collect, and, if necessary, to sue for the hire of certain 
 property, his right of action will be held to relate back to the 
 beginning of his principal's title; and being substituted in 
 place of the owners of the property, he is subrogated to all their 
 rights.^^ 
 
 § 227. Failure of receiver to execute bond a ground for 
 nonsuit; informality in bond. It has been held that the 
 failure of a receiver to execute a bond with sureties, as required 
 by the order appointing him, was sufficient ground for a non- 
 suit in an action instituted by the receiver in his official capa- 
 city, since no title could vest in him until he had complied with 
 the order requiring the bond.^^ But a mere informality in a 
 bond executed by a receiver appointed in a creditor's suit, can 
 not be taken advantage of by the defendant in an action brought 
 by such receiver, and only the judgment debtor can take advan- 
 tage of such irregularity.^^ 
 
 86 Jay V. De Groot, 17 Ab. Pr., 88 Hardwick v. Hook, 8 Ga., 354. 
 36, note. 89 Johnson v. Martin, 1 Thomp. & 
 
 87 Idaho Gold Reduction Co. v. C (N. Y. S. C), 504. 
 Crogham, 6 Idaho, 471, 56 Pac, 164. 90 Morgan v. Potter, 17 Hun, 403.
 
 264 RECEIVERS. [chap. VIII. 
 
 § 228. May move for judgment against sheriff for mon- 
 ey collected. Where a statute of the state authorizes 
 judgment against a sheriff for money collected by him in his 
 official capacity, such judgment to be entered upon motion in 
 behalf of the person entitled to the fund collected, a receiver of 
 such person, being entitled to receive the fund in behalf of the 
 original parties, may properly move for judgment against the 
 sheriff.9i 
 
 § 229. Receiver's liability for costs. As regards the 
 liability of a receiver for costs in actions instituted by him 
 concerning his receivership, he stands in much the same relation 
 as an executor or administrator prosecuting in behalf of an 
 estate, and is entitled to the same consideration, being an officer 
 of the court. And when he has acted in good faith, he should 
 not be held liable for costs for not proceeding to the trial of a 
 cause which he has noticed for trial, but which he has been 
 prevented from trying by sufficient reasons, such as the ab- 
 sence of a material and necessary witness.^^ 
 
 § 230. May garnish plaintiff in original suit. Since a 
 receiver represents all parties in the action, whether plaintiffs, 
 defendants, or creditors, and may take possession of, and exer- 
 cise control over, all matters connected with his receivership, 
 he may, in an action instituted by him in his official capacity, 
 garnish the plaintiff in the suit in which he was appointed.^^ 
 
 91 Goss V. Southall, 23 Grat, 825. of procedure, Kimberly v. Stewart, 
 
 92 St. John V. Denison, 9 How. 22 How. Pr., 281; Kimberly v. 
 Pr., 343. See, further, as to costs Goodrich, 22 How. Pr., 424; Kim- 
 against receivers, Hubbell v. Dana, berly v. Blackford, 22 How. Pr., 
 9 How. Pr., 424. And see as to 443. 
 
 requiring receivers to give security 93 McDonald v. Carney, 8 Kan., 
 
 for costs under the New York code 20.
 
 CHAP. VIII.] ACTIONS. 265 
 
 II, Pleadings and Proofs in Actions by Receivers. 
 
 § 231. Receiver must set forth his authority in traversable terms. 
 
 232. Conflict of authority; stringency of former rule in New York. 
 
 233. Later New York rule less stringent; general averment held suf- 
 
 ficient; rule in Minnesota. 
 
 234. Allegations required in action by receiver in creditor's suit. 
 
 235. Execution of bond by defendant to receiver, when an estoppel; 
 
 former judgment an estoppel. 
 
 236. Action by receiver of insolvent insurance company; receiver of 
 
 partnership. 
 
 237. Averments as to appointment of receiver of national bank. 
 
 238. Rule as to proof of appointment required on the trial. 
 
 § 231. Receiver must set forth his authority in travers- 
 able terms. Upon the question of the extent to which a 
 receiver, in an action brought by him in his official capacity, 
 should set forth in his pleadings the authority under which he 
 acts and the proceedings of the court in the original suit from 
 which he derives his appointment, the authorities are not alto- 
 gether harmonious or reconcilable. The general principle, 
 however, may be regarded as uncontroverted, that a receiver, 
 like any other person bringing suit under special authority, 
 must duly allege and set forth his authority in the pleadings, 
 and this must be alleged in a traversable form, so that issue 
 may be taken thereon ; in which event it must be proven upon 
 the trial, in like manner as any other traversable fact.^^ Stated 
 in other words, the rule is that sufficient facts should be alleged 
 to show that the appointment has actually been made, and 
 these facts should be alleged in issuable form.^^ 
 
 94 Bangs v. Mcintosh, 23 Barb., see Nelson v. Nugent, 62 Minn., 203, 
 591. And see Stewart v. Beebe. 28 64 N. W., 392; Rathfon v. Locher, 
 Barb., 34. 215 Pa. St., 571, 64 Atl., 790. And 
 
 95 White v. Low, 7 Barb., 204; see Tiltow v. Cascade O. M. Co., 
 Rhorer v. Middlesboro T. & L. Co., 15 V^ash., 652, 47 Pac, 19, as to 
 103 Ky., 146, 44 S. W., 448. See, proof of a receiver's authority to 
 as to sufficiency of allegations of sue. Where the plaintiff in an ac- 
 the receiver's appointment, under tion upon a promissory note claims 
 the New York code of procedure, through an indorsement made by a 
 and as to the method of taking ad- receiver, the appointment and au- 
 vantage of their insufficiency, Che- thority of the receiver must be 
 ney v. Fisk, 22 How. Pr., 236. And shown. St. Johns Table Co. v.
 
 266 RECEIVERS. [chap. VIII. 
 
 § 232. Conflict of authority; stringency of former rule 
 in New York. But in attempting to determine how far 
 the receiver's pleadings must set forth the original proceedings 
 or appointment, so as to render them issuable, a want of har- 
 mony becomes apparent in the decided cases. Under the 
 earlier decisions of the New York courts bearing upon this 
 question, a somewhat stringent rule was adopted. And it was 
 held that the recei\er must set forth the time and mode of his 
 appointment,^^ as well as the place,^^ in order that defendant 
 might be enabled to take issue upon these points. Thus, when 
 the receiver of a banking corporation, deriving his appoint- 
 ment and authority under a statute conferring upon him rights 
 of action in his own name for the recovery of demands due the 
 corporation, brought an action of trover to recover certain 
 bonds, the property of the bank, it was held insufficient that he 
 should allege in his declaration, merely in general terms, that 
 he was duly appointed receiver of the bank, since such an aver- 
 ment was not issuable or triable ; and that he should set forth 
 the particulars of his appointment, in order that the court 
 might determine whether he was duly appointed.^s 
 
 § 233. Later New York rule less stringent; general 
 averment held sufficient; rule in Minnesota. The later 
 decisions in New York, however, have very greatly relaxed the 
 stringency of the former rule ; and it is now held that in actions 
 by a receiver to recover upon obligations due to a defendant 
 debtor, over whose estate the receiver has been appointed, 
 an averment of his appointment in general terms, as that he was 
 at such a time duly appointed receiver, is sufficient to sustain 
 the action; and under such an averment the receiver may, 
 upon the trial, show all the necessary facts conferring juris- 
 diction.99 And it is held unnecessary to set forth all the pro- 
 Brown, 126 Mich., 592, 85 N. W., 98 Gillet v. Fairchild, 4 Denio, 80. 
 1124. 99 Rockwell v. Merwin, 45 N. Y., 
 
 96 Dayton v. Connah, 18 How. 166, affirming S. C, 1 Sweeney, 484, 
 Pr., 326. 8 Ab. Pr., N. S., 330. See. also, 
 
 97 White v. Low, 7 Barb., 204. Manley v. Rassiga. 13 Hun, 288.
 
 CHAP. VIII.] ' ACTIONS. 267 
 
 ceedings showing the appointment, it being sufficient if enough 
 is alleged to enable defendant to take issue.^ And in Minne- 
 sota it is held that an allegation in general terms by the plain- 
 tiff that at such a time, in such an action or proceeding and by 
 such a court, he was duly appointed receiver is sufficient and 
 that anything short of this is insufficient. 2 
 
 § 234. Allegations required in action by receiver in 
 creditor's suit. Where, however, a receiver of a judgment 
 debtor, appointed on proceedings supplementary to execution 
 by judgment creditors, under the New York code, institutes 
 an action to set aside an assignment of his property made by the 
 debtor, it would seem to be necessary that the receiver should 
 state the equities of the creditors whom he represents ; since he 
 is only clothed with such rights of action, for the purpose of 
 setting aside such an assignment, as might have been main- 
 tained by the creditors themselves. It has accordingly been 
 held insufficient, in such a case, for the receiver to allege merely 
 that he was appointed receiver in the creditor's suit, but the 
 judgment and other facts necessary to maintain that action 
 should be set forth.^ 
 
 1 Stewart v. Beebe, 28 Barb., 34. receiver thereof." Held, upon de- 
 
 This was an action by the receiver murrer, that this was a sufficient al- 
 
 of the Bowery Bank, to recover legation of plaintiff's appointment 
 
 upon a note due to the bank. The and title. It is held, under the code 
 
 complaint alleged that "by an order of Washington, in an action brought 
 
 of the supreme court of the state of by a receiver, that the failure to 
 
 New York, made at the city hall of allege that he is qualified and acting 
 
 the city of New York on the Sth as such receiver and to show in 
 
 day of November, 1857, the plaintiff what cause and by what court he 
 
 was duly appointed receiver of the was appointed can not be raised by 
 
 Bowery Bank, of the city of New demurrer to the declaration but can 
 
 York, upon filing certain security be raised only by motion. Allen 
 
 therein mentioned; which said se- v. Baxter, 42 Wash., 434, 85 Pac, 
 
 curity was duly filed on the 6th day 26. 
 
 of November, 1857; and that the 2 Rossman v. Mitchell, 11 Minn., 
 
 plaintiff thereupon entered upon the 198, 75 N. W., 1053. 
 duties of his appointment, and is 3 Coope v. Bowles, 28 How. Pr., 
 
 now in the lawful possession of the 10, 42 Barb., 87. 
 property and effects of the bank as
 
 268 RECEIVERS. [chap. VIII. 
 
 § 235. Execution of bond by defendant to receiver, when 
 an estoppel; former judgment an estoppel. While the 
 cases already cited sufficiently indicate that the receiver must 
 set forth, at least in general terms, the authority by virtue of 
 which he institutes the action, it may happen that the defendant 
 is estopped by his own conduct or admissions from denying the 
 right of the receiver to sue in that capacity. Thus, when, in an 
 action brought by a receiver, defendant demurs and his de- 
 murrer is overruled, and he then obtains leave to plead to the 
 merits, upon condition of his executing a bond with sufficient 
 sureties, conditioned to abide the result of the action, the exe- 
 cution of such bond will be regarded as an admission by the 
 obligors, not only that the plaintiff was duly appointed re- 
 ceiver, but that he was authorized to bring the action men- 
 tioned in the condition of the bond. And when, in such case, 
 the receiver obtains judgment in the original action, and then 
 brings suit upon the bond, it is not necessary for him to prove 
 either his appointment or his authority to bring the action.^ 
 So in an action brought by a receiver in which the legality of 
 his appointment is put in issue by the defendant, a judgment 
 against the same defendant in a former suit between the same 
 parties, in which the same issue was tendered, will operate as 
 a bar, the former judgment being res judicata as between the 
 parties upon the question of the validity of the receiver's ap- 
 pointment.^ 
 
 § 236. Action by receiver of insolvent insurance com- 
 pany; receiver of partnership. In Indiana, it is held, when 
 an action is brought by a receiver of an insolvent insurance 
 company to recover an assessment upon premium notes due 
 to the company, that it is not necessary for the receiver to 
 present with his pleadings a transcript of the decree against 
 the insurance company under which he derives his appointment, 
 and by which the assessment was made upon the premium 
 notes, since the evidence of his right of action, although essen- 
 
 4 Scott V. Buncombe, 49 Barb., ^ Griffin v. Long Island R. Co., 
 
 73. 102 N. Y., 449, 7 N. E., 735.
 
 CHAP. VIII.] ACTIONS. 269 
 
 tial to a recovery, is not the foundation of the action, and rests 
 only in averment.^ And in an action brought by the receiver 
 of a partnership to recover an indebtedness due to the firm, 
 the omission of any averment as to when or by what court he 
 was appointed will be cured by verdict.'^ 
 
 § 237. Averments as to appointment of receiver of na- 
 tional bank. In an action brought by the receiver of a 
 national bank, appointed by the comptroller of the currency 
 under the national banking act of June 3, 1863, it is held that 
 the fact of the receiver's appointment, alleged in general terms, 
 is all that is in strictness necessary to sustain the action. That 
 the emergency had arisen, and that the adjudication establish- 
 ing it, which the law requires to precede and justify the ap- 
 pointment, had been made, need not be alleged or proven as 
 between the receiver and a debtor of the bank, any further than 
 the proof afforded by the appointment itself, followed by the 
 acquisition of the assets.^ 
 
 § 238. Rule as to proof of appointment required on the 
 trial. Upon the question of the degree of proof as to his 
 appointment, which is required of a receiver, upon the trial of 
 an action brought by him in his official capacity, it has been 
 held, when the only proof produced at the trial was a copy of 
 the order of appointment, and the giving of a bond in conform- 
 ity therewith, that the pendency of the original action in which 
 
 6 Boland v. Whitman, 33 Ind., 64. ler of the currency, in accordance 
 
 7 Griesel v. Schmal, 55 Ind., 475. with the provisions of said act of 
 
 8 Piatt V. Crawford, 8 Ab. Pr., N. congress, and the amendments 
 S., 297. In this case, the receiver thereof, by and with the concur- 
 set forth in his complaint the cor- rence of the secretary of the treas- 
 porate existence of the bank under ury; that in accordance with the 
 the act of Congress, with the follow- said provisions of said acts the 
 ing averment of his appointment : plaintiff thereupon took possession 
 "That on said September 5, 1867, of the books, records and assets of 
 Hiland R. Hulburd was the comp- such association, of every descrip- 
 troller of the currency of the United tion, including the note hereinafter 
 States ; and that on said September mentioned." Held, on demurrer, 
 5, 1867, this plaintiff was duly ap- that this allegation was sufficient 
 pointed a receiver of said bank by as to the question of plaintiff's ap- 
 said Hiland R. Hulburd, comptrol- pointment.
 
 270 RECEIVERS. [CIIAP. VIII. 
 
 the appointment was made might be sufficiently proved by the 
 recitals of the order, when the court making the appointment 
 was a court of general jurisdiction, the presumption being en- 
 tertained that all things were done which were required by law 
 to authorize the order.^ And it has been held to be unneces- 
 sary for the receiver to produce upon the trial a transcript of 
 all the proceedings in the suit in which he was appointed, and 
 that a certified copy of the entry or order of appointment was 
 sufficient prima facie evidence that the court had the proper 
 parties before it when the order was made, leaving defendant 
 to rebut this presumption if possible.^^ And, in an action 
 brought to recover for the alleged conversion of certain proper- 
 ty consigned to defendant for shipment, where the defense is 
 that, at the time of the conversion, defendant's steamship line 
 was being operated by a receiver, a certified copy of the order 
 of appointment is sufficient, and it is not necessary that the de- 
 fendant should produce the entire record of the receivership 
 proceeding.il 
 
 9 Potter V. Merchants Bank, 28 dence. But we think that to re- 
 N. Y., 641 ; Hayes v. Brotzman, 46 quire the receiver to produce in 
 Md., 519. See, also, Frank v. Mor- every suit he may be required to 
 risen, 58 Md., 423. bring a transcript of all the pro- 
 
 10 Helme !>. Littlejohn, 12 La. An., ceedings in the suit in which he re- 
 298. This was an action by the re- ceived his appointment, would in a 
 ceiver of a partnership, who upon great measure deprive the parties 
 the trial, to prove his official ca- of the benefit of his appointment, 
 pacity, introduced a certificate of and unnecessarily increase the cost 
 the judge of the court, certifying of every suit brought by the re- 
 his appointment in the action after ceiver. We think that the certified 
 considering the evidence, the plead- copy of the entry alone making the 
 ings and the law. It was objected appointment ought to be deemed 
 that the certificate did not show prima facie proof that the court 
 that the judge had the proper par- had the proper parties before it 
 ties before him, and that the re- when the appointment was made, 
 ceiver should have produced the leaving the opposite side to rebut 
 entire record. Merrick, C. J., says : the presumption." 
 
 "There is force in the objection H Ocean Steamship Co. z*. Wilder, 
 
 under the ordinary rules of evi- 107 Ga., 220, 33 S. E., 179.
 
 CHAP. VIII.] ACTIONS. 271 
 
 III. Suits by Receivers in Foreign Courts. 
 
 § 239. Receiver's jurisdiction; no extraterritorial right of action. 
 
 240. The rule further illustrated. 
 
 241. Departure from the rule sometimes allowed upon principles of 
 
 comity. 
 241a. Receiver may sue in foreign court when he has title or is 
 quasi-assignee. 
 
 242. Receiver of insolvent corporation may prove debt in bank- 
 
 ruptcy in another district. 
 
 243. Receiver allowed to foreclose mortgage in another state. 
 
 244. When allowed to sue for property in another state; assign- 
 
 ment to receiver; descriptio personce. 
 244a. When jurisdiction of foreign court not presumed. 
 
 § 239. Receiver's jurisdiction; no extraterritorial right 
 of action. Upon the question of the territorial extent of a 
 receiver's jurisdiction and powers, for the purpose of institut- 
 ing actions connected with his receivership, the prevailing doc- 
 trine, established by the Supreme Court of the Unted States 
 and sustained by the weight of authority in various states, 
 is that the receiver has no extraterritorial jurisdiction or 
 power of official action, and can not, as a matter of right, go 
 into a foreign state or jurisdiction and there institute a suit 
 for the recovery of demands due to the person or estate sub- 
 ject to his receivership. His functions and powers, for the 
 purposes of litigation, are held to be limited to the courts of 
 the state within which he was appointed, and the principles 
 of comity between nations and states, which recognize the judi- 
 cial decisions of one tribunal as conclusive in another, do not 
 apply to such a case, and will not warrant a receiver in bringing 
 an action in a foreign court or jurisdiction.^^ When, therefore, 
 
 12 Booth V. Clark, 17 How., 322; 51, 128 Fed., 321, which reversed S. 
 Hale V. Allison, 188 U. S., 56, 23 C, 111 Fed., 38; Hilliker v. Hale, 
 Sup. Ct. Rep., 244, 47 L. Ed., 380, 54 C. C. A., 252, 117 Fed.. 220, re- 
 affirming S. C, 45 C. C. A., 270, versing S. C, 109 Fed., 273; Fowler 
 106 Fed., 258, which affirmed S. C, v. Osgood, 72 C. C. A., 276, 141 
 102 Fed., 790; Great Western Min- Fed., 20; Brigham v. Luddington, 
 ing & M. Co. V. Harris, 198 U. S., 12 Blatchf., 237; Hazard v. Durant, 
 561, 25 Sup. Ct. Rep., 770, 49 L. Ed., 19 Fed., 471 ; Wigton v. Bosler, 102 
 1163, affirming S. C, 63 C. C. A., Fed., 70; Edwards v. National W.
 
 272 
 
 RECEIVERS 
 
 [chap. VIII. 
 
 upon a creditor's bill filed against a judgment debtor in the 
 courts of New York, a receiver was appointed of all the assets 
 and effects of the debtor, and the debtor afterwards went into 
 New Hampshire, and took the benefit of the national bankrupt 
 act, and an assignee was appointed of his estate, upon a bill 
 filed by the New York receiver, in the District of Columbia, to 
 get possession of a fund due to the debtor, it was held upon ap- 
 peal that the court below properly dismissed the bill, since it 
 could not recognize the power of a receiver to institute the 
 proceedings in a jurisdiction other than that of his appoint- 
 
 G. J. Assn., 139 Fed., 795; Covell 
 V. Fowler, 144 Fed., 535 ; Ward v. 
 Pacific M. L. I. Co., 135 Cal., 235, 
 67 Pac, 124; Stockbridge v. Beck- 
 with, 6 Del. Ch., 72, 33 Atl., 620; 
 Holbrook v. Ford, 153 III., 633, 39 
 N. E., 1091, 27 L. R. A., 324, 46 
 Am. St. Rep.,' 917; Parker v. Lamb 
 & Sons, 99 Iowa, 265, 68 N. W., 
 686, 34 L. R. A., 704; Wyman v. 
 Eaton, 107 Iowa, 214, 77 N. W., 865, 
 43 L. R. A., 695, 70 Am. St. Rep., 
 193 ; Homer v. Barr P. E. Co., 180 
 Mass., 163, 61 N. E., 883, 91 Am. 
 St. Rep., 269; Farmers & Merchants 
 Insurance Co. v. Needles, 52 Mo., 
 17; Hope Mutual Life Ins. Co. v. 
 Taylor, 2 Rob. (N. Y.), 278; War- 
 ren V. Union National Bank, 7 
 Phila., 156; Bank v. Motherwell 
 Iron, etc., Co., 95 Tenn., 172, 31 S. 
 W., 1002, 29 L. R. A., 164; Fillcins 
 V. Nunnemacher, 81 Wis., 91, 51 N. 
 W., 79. And see, ante, § 47. See, 
 also, Graydon v. Church, 7 Mich., 
 36; Rust V. United Waterworks Co., 
 17 C. C. A., 16, 70 Fed., 129. 36 
 U. S. App., 167; Olney v. Tanner, 
 10 Fed., 101, affirmed on appeal, 21 
 Blatch., 540; Bartlett v. Wilbur, 53 
 Md., 485 ; Day v. Postal Telegraph 
 Co., 66 Md., 354, 7 Atl., 608; How- 
 
 ard V. Chesapeake & O. R. Co., 11 
 App. D. C, 300. But see, contra, 
 Metzner v. Bauer, 98 Ind., 425 ; Hale 
 V. Harden, 37 C. C. A., 240, 95 Fed., 
 747, reversing S. C, 89 Fed., 283; 
 Hale V. Tyler, 104 Fed., 757. And 
 see Runk v. St. John, 29 Barb., 585. 
 See Hale v. Allison, 188 U. S., 56, 
 23 Sup. Ct. Rep., 244, 47 L. Ed., 
 380, supra, as to maintaining the ac- 
 tion in order to prevent a multi- 
 plicity of suits. But the rule does 
 not apply in the case of an action 
 brought by a receiver in another 
 court of the state of his appoint- 
 ment. Hause v. Newel, 60 Minn., 
 481, 62 N. W., 817. And since a 
 receiver has no extraterritorial ju- 
 risdiction, the appointment of a re- 
 ceiver over a foreign corporation 
 which has a local agent in another 
 state does not affect the service of 
 process upon such agent in the 
 courts of that state. Pollock v. B. 
 & L. Assn., 48 S. C, 65, 25 S. E., 
 977, 59 Am. St. Rep., 695. As to 
 the right of the receiver of an in- 
 solvent corporation to maintain an 
 action in a foreign state for the pur- 
 pose of enforcing the statutory lia- 
 bility of stockholders, see. post, 
 §§ 317^ and 317c.
 
 CHAP. VIII.] 
 
 ACTIONS. 
 
 273 
 
 ment.^^ Nor does the fact that the receiver is appointed by a 
 federal court in one circuit, and sues as receiver in the federal 
 court in another circuit, alter the rule, or entitle him to main- 
 tain the action, since such courts exercise only a local and limit- 
 
 is Booth V. Clark, 17 How., 322, 
 the leading case upon the subject. 
 The court, Mr. Justice Wayne de- 
 livering the opinion, say, p. 338: 
 "He (the receiver) has no extra- 
 territorial power of official action; 
 none which the court appointing 
 him can confer, with authority to 
 enable him to go into a foreign ju- 
 risdiction to take possession of the 
 debtor's property; none which can 
 give him, upon the principle of 
 comity, a privilege to sue in a for- 
 eign court or another jurisdiction, 
 as the judgment creditor himself 
 might have done, where his debtor 
 may be amenable to the tribunal 
 which the creditor may seek. In 
 those countries of Europe, in which 
 foreign judgments are regarded as 
 a foundation for an action, whether 
 it be allowed by treaty stipulations 
 or by comity, it has not as yet been 
 extended to a receiver in chancery. 
 In the United States, where the 
 same rule prevails between the 
 states as to judgments and decrees, 
 aided as it is by the first section of 
 the fourth article of the constitu- 
 tion, and by the act of congress of 
 26th of May, 1790, by which full faith 
 and credit are to be given in all of 
 the courts of the United States, to 
 the judicial sentences of the differ- 
 ent states, a receiver under a cred- 
 itors' bill has not as yet been an 
 actor as such in a suit out of the 
 state in which he was appointed. 
 This court considered the effect of 
 that section of the constitution, 
 Receivers — 18. 
 
 and of the act just mentioned, in 
 M'Elmoyle v. Cohen, 13 Pet., 
 324-327. But, apart from the ab- 
 sence of any such case, we think 
 that a receiver could not be ad- 
 mitted to the comity extended to 
 judgment creditors without an en- 
 tire departure from chancery pro- 
 ceedings as to the manner of his 
 appointment, the securities which 
 are taken from him for the per- 
 formance of his duties, and the 
 direction which the court has over 
 him in the collection of the estate 
 of the debtor, and the application 
 and distribution of them. If he 
 seeks to be recognized in another 
 jurisdiction, it is to take the fund 
 there out of it, without such court 
 having any control of his subse- 
 quent action in respect to it, and 
 without his having even official 
 power to give security to the court, 
 the aid of which he seeks, for his 
 faithful conduct and official ac- 
 countability. All that could be done 
 upon such an application from a re- 
 ceiver, according to chancery prac- 
 tice, would be to transfer him from 
 the locality of his appointment to 
 that where he asks to be recognized, 
 for the execution of his trust in the 
 last, under the coercive ability of 
 that court; and that it would be dif- 
 ficult to do, where it may be asked 
 to be done, without the court ex- 
 ercising its province to determine 
 whether the suitor, or another per- 
 son within its jurisdiction, Avas the 
 proper person to act as receiver."
 
 274 RECEIVERS. [chap. VIII. 
 
 ed jurisdiction, and their receivers can not sue in another terri- 
 torial jurisdiction.!^ Nor can the action be maintained by rea- 
 son of the fact that the receiver sues in tlie name of his princi- 
 pal or that the court of his appointment has entered an order 
 directing him to bring the suit in question. ^^ And if, under the 
 law or statutes of the state where the receiver is appointed, 
 he can not maintain an action of the kind which he seeks to 
 maintain in a foreign state, or if the statute permits the action 
 only after the performance of conditions precedent which have 
 not been performed, it follows that the action can not be main- 
 tained by the receiver in the foreign state.^^ And the refusal 
 of a court of a state other than that in which the receiver was 
 thus appointed to entertain such an action by the receiver, does 
 not amount to a failure to give full faith and credit to the laws 
 and judgment of the state of appointment within the meaning 
 of the federal constitution. i"^ 
 
 § 240. The rule further illustrated. In further illustra- 
 tion of the rule, it has been held in a garnishee proceeding in- 
 stituted in the courts of Pennsylvania, against a debtor of a 
 corporation existing in and under the laws of the state of Ten- 
 nessee, where judgment was had against the garnishee, that a 
 receiver of the Tennessee corporation, appointed in a credi- 
 
 l4Brigham v. Luddington, 12 23 Sup. Ct. Rep., 244, 47 L. Ed., 
 
 Blatchf., 237; Great Western Min- 380, affirming S. C, 45 C. C. A., 
 
 ing & M. Co. V. Harris, 198 U. S., 270, 106 Fed., 258, which affirmed 
 
 561, 25 Sup. Ct. Rep., 770, 49 L. S. C, 102 Fed., 790 ; Evans t;. Nellis, 
 
 Ed., 1163, affirming S. C, 63 C. C. 187 U. S., 271, 23 Sup. Ct. Rep., 74, 
 
 A., 51, 128 Fed., 321, which reversed 47 L. Ed., 173. But see dictum in 
 
 S. C, 111 Fed., 38; Edwards v. Hanson v. Davison, IZ Minn., 454, 
 
 National W. G. J. Assn., 139 Fed., 76 N. W., 254. And see the strong 
 
 795. dissenting opinion of Mr. Justice 
 
 15 Great Western Mining & M. Canty in the case last cited. And 
 Co. V. Harris, 198 U. S., 561, 25 see, contra. Hale v. Harden, 37 C. 
 Sup. Ct. Rep., 770, 49 L. Ed., 1163, C. A., 240, 95 Fed., 747, reversing 
 affirming S. C, 63 C. C. A., 51, 128 S. C, 89 Fed.. 283. 
 
 Fed., 321, which reversed S. C. Ill 17 Finney v. Guy, 189 U. S., 335, 
 
 Fed., 38. And see Fowler v. Os- 23 Sup. Ct. Rep., 558, 47 L. Ed., 
 
 good, 72 C. C. A., 276, 141 Fed., 20. 839, affirming S. C, 106 Wis., 256, 
 
 16 Hale V. Allison, 188 U. S., 56, 82 N. W., 595, 49 L. R. A., 486.
 
 CHAP, viir.] 
 
 ACTIONS. 
 
 275 
 
 tors' suit in that state, could not contest plaintiff's right to the 
 verdict obtained by them in the garnishee suit in Pennsyl- 
 vania. ^^ So when an insurance company, incorporated under 
 the laws of Illinois, had passed into the hands of a receiver 
 duly appointed in that state, it was held in Missouri, that the 
 receiver could not maintain an action in the latter state upon 
 a note running to the corporation, and that the suit must be 
 brought in the name of the corporation itself.^^ So the re- 
 ceiver of an insolvent corporation can not maintain a bill in 
 a foreign state for an injunction to restrain creditors of the 
 corporation in that state from enforcing judgments recovered 
 by them in garnishment proceedings based upon claims against 
 the corporation. 20 So, also, a receiver who has been appointed 
 by the court of a foreign state to wind up the affairs of a cor- 
 poration of that state but who is in no way vested with any title 
 
 18 Warren v. Union National 
 Bank, 7 Phila., 156. See, also, Wil- 
 litts V. Waite, 25 N. Y., 577; Hunt 
 V. Columbian Insurance Co., 55 Me., 
 290; Taylor v. Columbian Insurance 
 Co., 14 Allen, 353. 
 
 19 Farmers and Merchants Insur- 
 ance Co. V. Needles, 52 Mo., 17. 
 See, also, Hope Mutual Life Insur- 
 ance Co. V. Taylor, 2 Rob. (N. Y.), 
 278. In Farmers and Merchants 
 Insurance Co. v. Needles, 52 Mo., 
 17, Ewing, J., observes, p. 18: 
 "This is an action on a promissory 
 note alleged to have been executed 
 by defendant to plaintiff. An 
 amended petition was filed, which 
 alleges substantially that the insur- 
 ance company is a corporation duly 
 incorporated under the laws of the 
 state of Illinois, with power to sue, 
 etc.; that W. H. Benneson was 
 duly appointed receiver by the cir- 
 cuit court of Adams county, in the 
 state of Illinois, with the rights, 
 property and assets of the plaintiff, 
 in 1869, and gave bond which was 
 
 duly approved, etc. That as such 
 receiver he is in possession of the 
 property and effects of said corpo- 
 ration. The petition then alleges 
 the execution of the note by de- 
 fendant to plaintiff, said corpora- 
 tion, and that said note is part of 
 the assets and property which came 
 to the hands of said receiver, and 
 that the same is due and unpaid. 
 . . . It is admitted by the demur- 
 rer that Benneson was duly ap- 
 pointed receiver, and as such is in 
 possession of the property and ef- 
 fects of the corporation, including 
 the note in controversy. And as it 
 does not appear by any averment 
 in the petition that the note has 
 ever been assigned or transferred 
 by the payee thereof, the corpora- 
 tion only can maintain an action 
 thereon, unless the receiver as such 
 has a right of action. A receiver 
 can not sue in a foreign jurisdic- 
 tion for the property of the debtor." 
 20 Stockbridge v. Beckwith, 6 Del. 
 Ch., 72, 33 Atl., 620.
 
 276 RECEIVERS. [chap. VIII. 
 
 to the property of the corporation, can not maintain an action 
 in the federal court of another state to recover funds there lo- 
 cated as against attaching creditors in the latter state, even 
 though subsequent to the attachment a general conveyance is 
 executed and delivered by the corporation to the receiver.21 
 And since a receiver's rights of action in a state other than that 
 in which he is appoiitted are recognized only as a matter of 
 comity, it is held in Indiana that a receiver of an insolvent part- 
 nership appointed in Illinois, the firm residing and doing busi- 
 ness in that state, can not recover funds due from a debtor to 
 the firm in Indiana which have been attached by a citizen of 
 Connecticut, Nor, in such case, does the fact that the firm has 
 executed an assignment of all its effects to the receiver vary 
 the rule, since such assignment, as against non-resident credi- 
 tors, confers upon the receiver no better title than that ac- 
 quired under the order appointing him.22 Nor can an action 
 be maintained by a receiver in the court of a foreign state upon 
 principles of comity, where the courts of the state in which the 
 receiver was appointed hold that an action similar to the one 
 brought in the foreign jurisdiction can not be maintained in 
 the state of his appointment.^^ Nor will an action by the re- 
 ceiver of an insolvent foreign insurance company be permitted 
 in the courts of a foreign state upon principles of comity, where 
 the company has failed to comply with the statutes governing 
 foreign insurance companies doing business in the state.^^ 
 And the doctrine of comity which, as will hereafter be shown, 
 recognizes the right of a receiver in certain cases to sue in 
 courts beyond his jurisdiction, has never been carried to the 
 extent of allowing a receiver in a foreign jurisdiction to in- 
 
 21 Zacher v. Fidelity T. & S. Co., 23 Hale v. Allison, 188 U. S., 56, 
 45 C. C. A., 480, 106 Fed., 593. And 23 Sup. Ct. Rep., 244, 47 L. Ed., 380, 
 see this case as to the right of a affirming S. C, 45 C. C. A., 270, 106 
 creditor whose attachment is made Fed., 258, which affirmed S. C, 102 
 subsequent to the conveyance by the Fed., 790. 
 
 corporation to the receiver. 24 Parker v. Lamb & Sons, 99 
 
 22 Catlin v. Wilcox Silver-Plate Iowa, 265, 68 N. W., 686, 34 L. R. 
 Co., 123 Ind., 477, 24 N. E., 250. A., 704.
 
 CHAP. VIII.] 
 
 ACTIONS. 
 
 277 
 
 terfere, by attorney or otherwise, in the conduct of Htigation in 
 a cause where the local court has already appointed its own re- 
 
 25 
 
 ceiver. 
 
 § 241. Departure from the rule sometimes allowed upon 
 principles of comity. While, as is thus seen, the courts 
 have generally denied the receiver's extraterritorial right of ac- 
 tion as a question of strict right, it has frequently been recog- 
 nized as a matter of comity.26 Thus, it has been held that 
 receivers of a foreign corporation, appointed in other states, 
 might sue in New York, in their official capacity, in cases where 
 no detriment would result to citizens of the latter state, the 
 privilege of thus suing being regarded as based rather upon 
 courtesy than upon strict right, and the courts declining to 
 extend their comity so far as to work detriment to citizens of 
 their own state who have been induced to give credit to the 
 foreign corporation. ^'7 And the same doctrine prevails in 
 
 25 Johnson v. Southern B. & L. 
 Assn., 99 Fed., 646. 
 
 26Runk V. St. John, 29 Barb., 
 585; Hoyt v. Thompson, 5 N. Y., 
 320, reversing S. C, 3 Sandf., 416; 
 Bagby v. A., M. & O. R. Co., 86 Pa. 
 St., 291 ; Bank v. McLeod, 38 Ohio 
 St., 174; Comstock v. Frederickson, 
 51 Minn., 350, 53 N. W., 713 ; Oilman 
 V. Ketcham, 84 Wis., 60, 54 N. W., 
 395; Falk v. Janes, 49 N. J. Eq., 
 484, 23 Atl., 813 ; Metzner v. Bauer, 
 98 Ind., 425; McAlpin v. Jones, 10 
 La. An., 552; Lycoming Fire Insur- 
 ance Co. V. Wright, 55 Vt., 526; 
 Barley v. Gittings, 15 App. D. C, 
 427; dictum in Person v. Leary, 127 
 N. C, 114, 37 S. E., 149; Sands v. 
 Greeley & Co., 31 C. C. A., 424, 88 
 Fed., 130, 59 U. S. App., 610; Lewis 
 V. Clark, 64 C. C. A., 138, 129 Fed., 
 570; Rogers v. Riley, 80 Fed., 759; 
 Lewis V. American N. S. Co., 119 
 Fed., 391. And see Bidlack v. Ma- 
 son, 26 N.J. Eq., 230; Sobernheimer 
 
 V. Wheeler, 45 N. J. Eq., 614, 18 
 Atl., 234; Hunt v. Columbian In- 
 surance Co., 55 Me., 290; Taylor v. 
 Columbian Insurance Co., 14 Allen, 
 353 ; Rogers v. Haines, 103 Ala., 198, 
 15 So., 606; Phenix Insurance Co. 
 V. Schultz, 25 C. C. A., 453, 80 Fed., 
 337, 42 U. S. App., 483, reversing 
 S. C, 77 Fed., 375. As to the proof 
 of the appointment of a foreign re- 
 ceiver in an action brought by him 
 in a court of another state, see Per- 
 son V. Leary, 126 N. C, 504, 36 S. 
 E., 35. 
 
 27Runk V. St. John, 29 Barb., 
 585; Hoyt v. Thompson, 5 N. Y., 
 320, reversing S. C, 3 Sandf., 416; 
 Sands v. Greeley & Co., 31 C. C. A., 
 424, 88 Fed., 130, 59 U. S. App., 610. 
 In Runk v. St. John, 29 Barb., 585, 
 the court, Gierke, J., say: "The 
 plaintiffs are receivers of a corpo- 
 ration chartered in the states of 
 Pennsylvania and New Jersey, and 
 were appointed under the decree
 
 278 RECEIVERS. [chap. VIII. 
 
 Minnesota. 28 And in Indiana, it is held, as a matter of com- 
 ity, that receivers duly appointed and qualified in another state 
 may, to the extent of their authority, maintain actions in the 
 courts of Indiana. 29 Upon similar grounds of comity it is 
 held in Pennsylvania, that when a receiver is appointed over a 
 railway in another state, the courts of Pennsylvania will rec- 
 og"nize his right to property of the railway company in Penn- 
 sylvania, when not in conflict with the rights of citizens of 
 that state. And in such case, a creditor residing in the state 
 in which the receiver is appointed will not be permitted by 
 attachment proceedings in Pennsylvania, to reach the assets 
 and credits of the company claimed by the receiver.^^ So a, 
 receiver over a railway appointed in foreclosure proceedings in 
 Kentucky, with full power to take possession of all property of 
 the company and to institute all necessary actions in his own 
 name, may maintain an action in Ohio, to recover rolling stock 
 of the company covered by the mortgages, which has been 
 seized in Ohio, by a Kentucky creditor, pending the applica- 
 tion for the receiver and before his appointment.^^ And when 
 
 dissolving the corporation, made by rights of creditors in this state. All 
 
 the court of chancery in the latter that has been settled by the deci- 
 
 state, and were confirmed by an act sions to which we have been re- 
 
 of the legislature of the former. ferred on this subject, is, that our 
 
 The defendant's counsel denies the courts will not sustain the lien of 
 
 capacity of receivers, appointed in foreign assignees or receivers, in 
 
 other states and countries, to sue in opposition to a lien created by at- 
 
 the courts of this state. The laws tachment under our own laws. In 
 
 and proceedings of other sovereign- other words, we decline to extend 
 
 ties have not, indeed, such absolute our wonted courtesy so far as to 
 
 and inherent vigor as to be effica- work detriment to citizens of our 
 
 cious here under all circumstances. own state, who have been induced 
 
 But in most instances, they are rec- to give credit to the foreign corpo- 
 
 ognized by the courtesy of the ration." 
 
 courts of this state; and the right 28 Comstock v. Frederickson, 51 
 
 of foreign assignees or receivers to Minn., 350, 53 N. W., 713. 
 
 collect, sue for, and recover the 29 Metzner v. Bauer, 98 Ind., 425. 
 
 property of the individuals or cor- 30 Bagby v. A., M. & O. R. Co., 
 
 porations they represent, has never 86 Pa. St., 291. 
 
 been denied, except where their 31 Bank v. McLeod, 38 Ohio St., 
 
 claim came in conflict with the 174.
 
 CHAP. VIII.] ACTIONS. 279 
 
 property to which a receiver is entitled has been fraudulently 
 removed beyond the jurisdiction of the court appointing him 
 and into another state, he has been allowed to maintain an 
 action in such other state for its recovery.^2 Sq ^ receiver over 
 a foreign corporation, appointed in the state of its creation, 
 may be admitted to defend an action brought against the corpo- 
 ration in New Jersey, both as a matter of comity and under a 
 statute subjecting foreign corporations to the provisions of 
 the state law. And when thus admitted to defend an action 
 brought upon a mortgage given by the corporation, he may 
 question its validity, being regarded for that purpose as the 
 representative both of the corporation and of its creditors.^^ It 
 is also held in New Jersey, that a New York receiver, appoint- 
 ed in proceedings supplementary to execution in behalf of a 
 judgment creditor residing in New Jersey, may maintain an 
 action in the latter state for the recovery of the debtor's prop- 
 erty located there, the rights of no New Jersey creditors being 
 impaired by the proceeding.^^ So a receiver over a partner- 
 ship, appointed in another state, may maintain an action in 
 New Jersey to set aside a sale of partnership assets made in 
 the latter state by one partner in fraud of the rights of his co- 
 partner, no New Jersey creditors being affected and the only 
 person to be benefited by the suit being the partner who has been 
 defrauded.35 And it is held in Wisconsin, that a receiver ap- 
 pointed in New York in a suit for the dissolution of a corpora- 
 tion of that state in which creditors have been enjoined from 
 bringing actions against the corporation, may recover funds 
 in Wisconsin which have been attached by a New York creditor 
 after the receiver's appointment, the rights of the New York 
 receiver being recognized in such case upon principles of com- 
 ity.36 So, upon principles of comity, a foreign receiver may 
 
 32 McAlpin V. Jones, 10 La. An., 34 Palk v. Janes, 49 N. J. Eq., 484, 
 552. See, also, Paradise v. Farm- 23 Atl., 813. 
 
 ers & Merchants Bank, 5 La. An., 35 Sobernheimer v. Wheeler, 45 
 
 710. N. J. Eq., 614, 18 Atl., 234. 
 
 33 National Trust Co. v. Miller, 36 Gilman v. Ketcham, 84 Wis., 
 33 N. J. Eq., 155. 60, 54 N. W., 395.
 
 280 RECEIVERS. [chap. VIII. 
 
 maintain an action to recover real estate in the possession of 
 defendant, where the action will not result in detriment to citi- 
 zens of the state.^'^ And it has been held that a receiver ap- 
 pointed by a court of Virginia over an insolvent corporation of 
 that state may intervene in a receivership proceeding against 
 the corporation in which a receiver has been appointed by a 
 court of the District of Columbia and that it was error to dis- 
 miss such petition before a final decree in the administration 
 of the affairs of the corporation by the court of the District of 
 Columbia, since the Virginia receiver would be entitled at 
 least to receive for transmission to the court of his appoint- 
 ment whatever surplus there might be after the payment of 
 costs and claims by the court of the District of Columbia. ^^ 
 And a receiver appointed by the courts of Tennessee over an 
 insolvent building and loan association of that state may main- 
 tain a bill in equity in the federal court in Kentucky to enforce 
 the liability of stockholders in the insolvent corporation, where 
 there are no domestic creditors whose interests would be im- 
 paired by the action. ^^ And where a receiver had been ap- 
 pointed over a corporation which was thereupon dissolved, 
 and the receiver had become the successor of the corporation 
 and the only person who might enforce its rights, it was held 
 that he could maintain an action in a foreign state to recover 
 an indebtedness due the corporation.'*^ It is thus apparent that 
 the exceptions to the rule denying to receivers any extraterri- 
 torial right of action have become as well recognized as the 
 rule itself, and the tendency of the courts is constantly toward 
 an enlarged and more liberal policy in this regard. And it is 
 believed that the doctrine will ultimately be established giving 
 to receivers the same rights of action, in all states of the 
 Union, with which they are invested in the state or jurisdiction 
 in which they are appointed. 
 
 37 Small V. Smith, 14 S. Dak, 39 Rogers v. Riley, 80 Fed., 759. 
 621, 86 N. W., 649, 86 Am. St. Rep., 40 Avery v. Boston S.-D. & T. 
 807. Co., 72 Fed., 700. 
 
 38 Barley v. Gittings, 15 App. D, 
 C, 427.
 
 CHAP. VIII.] ACTIONS. 281 
 
 § 241a. Receiver may sue in foreign court when he has 
 title or is quasi-assignee. The rule as above announced has 
 reference to cases of ordinary receivers appointed under gen- 
 eral chancery powers, where the receiver is vested with no sort 
 of legal title but is regarded as a mere custodian of the fund 
 or property while it remains under the control of the court. 
 And where, by the law or statutes of a state, a receiver is made 
 a quasi-assignee and is thus vested with the title to the fund or 
 property, his right to maintain actions connected with his 
 trust in the courts of states other than that of his appointment 
 is well recognized.^^ 
 
 § 242. Receiver of insolvent corporation may prove debt 
 in bankruptcy in another district. It has also been held 
 that a receiver of an insolvent corporation, appointed by the 
 courts of a particular state, may prove a debt in bankruptcy 
 due to the estate which he represents, although the proceedings 
 in bankruptcy are pending in a federal court in a state other 
 than that in which the receiver was appointed. The federal 
 court in which the bankruptcy proceedings are pending will, it 
 is held, take judicial notice of the laws of all the states and of 
 the powers of the state officers, whether executive or judicial. 
 And the receiver, being clothed with full power to represent 
 the corporation by the laws of the state where he is appointed, 
 stands, by virtue of his appointment, in the shoes of the cor- 
 poration, and will be allowed to prove a claim in bankruptcy 
 in the federal court of another district as fully as if vested with 
 his powers as receiver by virtue of a decree of a court within 
 the district in which the proceedings in bankruptcy are pend- 
 ing.42 
 
 4lBernheimer v. Converse, 206 377, 45 Atl., 752; King v. Cochran, 
 
 U. S., 516, 27 Slip. Ct. Rep., 755, 72 Vt., 107, 47 Atl., 394. And see, 
 
 51 L. Ed., 1163; Goss v. Carter, 84 post, § 317c. 
 
 C. C. A., 402, 156 Fed., 746; Con- 42 h^; ^ar?^ Norwood, 3 Biss., 504. 
 
 verse v. Hears, 162 Fed., 767; Ho- "To my mind," says Blodgett, J., 
 
 warth V. Lombard, 175 Mass., 570, p. 512, "there is, to say the least, 
 
 579, 56 N. E., 888, 891 ; King v. a strong analogy between the right 
 
 Cochran, 76 Vt., 141, 56 Atl., 667. of the receiver in this case to prove 
 
 And see Miirtey v. Allen, 71 Vt., the debt due the estate he repre-
 
 282 
 
 RECEIVERS. 
 
 [chap. VIII. 
 
 § 243. Receiver allowed to foreclose mortgage in an- 
 other state. When a citizen of one state has recognized 
 the appointment of a receiver in another state, by incurring ob- 
 ligations to him in his official capacity, sufficient to create a 
 right of action, there would seem to be no satisfactory reason, 
 
 sents, and the right of the executor 
 or administrator appointed in an- 
 other state to represent the right 
 of a deceased creditor before this 
 court, and prove a debt due his tes- 
 tator or intestate, and such right 
 has never been drawn in question. 
 Under authority of all the bank- 
 rupt laws which have been passed 
 by the congress of the United 
 States, the practice has been uni- 
 form, so far as I can ascertain, to 
 allow guardians, executors, admin- 
 istrators, and all persons acting in 
 a representative capacity, to appear 
 before the bankrupt court and 
 prove the claims pertaining to the 
 estate which they severally repre- 
 sent. If the bankruptcy proceed- 
 ings in this case were pending be- 
 fore a United States court in the 
 state of New York, there can be 
 no doubt that such a court would 
 recognize the rights of the receiver 
 in this case, and allow him to prove 
 this claim. Why should a federal 
 court of the state of New York 
 recognize the authority of this re- 
 ceiver, appointed under the laws of 
 the state of New York, without any 
 relation to the federal laws or the 
 bankrupt law, any more than this 
 court should? Do state lines make 
 any difference? The federal courts 
 take judicial notice of the laws of 
 all the states and of the powers of 
 all state officers, whether executive 
 or judicial. It seems to me it 
 would be applying a very narrow 
 rule to the provisions of the bank- 
 
 rupt law, and limit the usefulness 
 of that statute very considerably, if 
 the federal courts should require all 
 executors, administrators, guard- 
 ians of minors, or conservators of 
 insane or idiotic persons, as a con- 
 dition precedent to the proving of 
 their claims against the estate of 
 their debtors, to take out auxiliary 
 or supplemental letters of adminis- 
 tration or guardianship from the 
 state courts, within the jurisdiction 
 of the court where the bankruptcy 
 proceedings were pending. The 
 bankrupt law is national in its ap- 
 plication. It is intended to serve 
 all creditors alike, and gives all 
 creditors acting in a representative 
 capacity, resident out of the dis- 
 trict, as well as those within the 
 district wherein the proceedings 
 are pending, all the rights to prove 
 their debts which natural persons 
 might exercise, and it seems to me 
 that this court would do gross in- 
 justice to the principles of the law 
 to hold that this receiver, clothed 
 as he is with full powers, by the 
 laws of the state of New York, to 
 represent the estate of the Lorillard 
 Insurance Company, and standing, 
 by virtue of the decree of the su- 
 preme court of the state of New 
 York, in the shoes and place of the 
 Lorillard Fire Insurance Company, 
 should not be allowed to prove his 
 debt here as fully as if he had been 
 vested with those powers by virtue 
 of a decree from any court within 
 this district."
 
 CHAP. VIII.] ACTIONS. 283 
 
 either upon principle or authority, why the receiver should not 
 be allowed to maintain his action in the state where such citizen 
 resides. It has accordingly been held, when a mortgage of 
 property situated in one state was executed to receivers ap- 
 pointed by the courts of another state, and the receivers re- 
 signed, and successors were duly appointed, that such succes- 
 sors to the original receivers might maintain an action in their 
 own names to foreclose the mortgage in the state where the 
 premises were located, and that the use of the word receivers, 
 in such cases, was merely a description of the person.^^ And 
 when a receiver obtains judgment in an action brought by him 
 in the state of his appointment, he may then maintain an action 
 upon such judgment in another state, since he then sues in 
 the capacity of a judgment creditor rather than that of a re- 
 ceiver.^'* 
 
 § 244. When allowed to sue for property in another 
 state; assignment to receiver; descriptio personae. When 
 the rights of the receiver do not rest merely upon his appoint- 
 ment by the courts of another state, but, in addition thereto, 
 and for the purpose of carrying out the objects of the receiv- 
 ership, the defendant over whom he is appointed has made an 
 assignment of all his property to the receiver, sufficient to pass 
 the title to real estate, which assignment is recorded in the 
 proper recorder's office in another state where real property 
 of the defendant is situated, the receiver may, by virtue of 
 such assignment, bring an action in that jurisdiction concern- 
 ing the property. In such case, he sues, not strictly in his 
 official capacity as receiver by virtue of his appointment in the 
 former state, but in his capacity as assignee. And he need not 
 go behind the assignment and prove the prior proceedings, or 
 any order of the court appointing him, but the matters in the 
 assignment will be taken as true until disproven.^^ So, where 
 a mortgage which a foreign receiver seeks to foreclose in an- 
 
 43 Iglehart v. Bierce, 36 111., 133. 45 Graydon v. Church, 7 Mich., 36. 
 
 44 Wilkinson v. Culver, 25 Fed., 
 639. 23 Blatchf., 416.
 
 284 RECEIVERS. [chap. vni. 
 
 other state, has actually been assigned to him by the mort- 
 gagee, he becomes vested with the legal title and may maintain 
 an action in another state regardless of any considerations of 
 comity.^^ And in such case, his designation in the pleadings 
 as receiver may be treated as a descriptio pcrsonceA'^ So a 
 receiver appointed by the court of a foreign state may maintain 
 his action in the federal court of another state to recover pos- 
 session of real property there located, where he is relying upon 
 a conveyance from the former owners and not alone upon the 
 decree vesting title in him.'*^ And where a statute creating the 
 liability of stockholders in a corporation, provides that the 
 court may appoint a receiver to enforce such liability, with 
 power to maintain actions in other jurisdictions, such a re- 
 ceiver, appointed by the court of one state, may maintain an 
 action against a stockholder in a foreign state to enforce his 
 liability.49 So when a court, having jurisdiction of the parties 
 and of the subject-matter, and having the property in contro- 
 versy within its control, appoints a receiver over such property, 
 who reduces it to actual possession, and sends it under the order 
 of the court into another state for sale, where it is attached, 
 the receiver may maintain replevin in the latter state to recover 
 the property. And in such case, third persons, not parties to 
 the original suit in which the receiver was appointed, can not 
 avail themselves of irregularities in his appointment.^^ But 
 the courts of Texas have refused to recognize a title acquired 
 by a receiver appointed in another state to real estate in Texas, 
 as against creditors in that state, upon the ground that the re- 
 ceiver has no official capacity or power beyond the jurisdiction 
 of the court creating him. Thus, when attaching creditors in 
 Texas levied upon lands of a Tennessee corporation, over which 
 a receiver had been appointed in the latter state, and to whom 
 a conveyance of the lands had been executed under his receiv- 
 
 46 Hale V. Harris, 112 Iowa, 372, 48 Oliver v. Clark, 45 C. C. A., 
 
 83 N. W., 1046. 360, 106 Fed., 402. 
 
 47Graydon v. Chufch, 7 Mich., 49 Burr v. Smith, 113 Fed., 858. 
 
 36; Hale v. Harris, 112 Iowa, 372, 50 Cagill z/. Wooldridge, 8 Baxter, 
 
 83 N. W., 1046. 580. And see, ante, § 162o.
 
 CHAP. VIII.] ACTIONS. 285 
 
 ership, it was held that the title thus acquired could not pre- 
 vail as against the attachment proceedings. ^^ 
 
 § 244a. When jurisdiction of foreign court not pre- 
 sumed. In an action brought by a receiver deriving his 
 appointment from the courts of another state, if the jurisdic- 
 tion of the court appointing him is denied by answer, and no 
 proof is offered as to the powers of such court, either from the 
 laws of the state or otherwise, its jurisdiction to appoint a re- 
 ceiver will not be presumed, when it does not appear from the 
 record whether it was a court of general or of special juris- 
 diction.^2 
 
 51 Moseby v. Burrow, 52 Tex., 52 Kronberg v. Elder, 18 Kan., 
 
 396. 150.
 
 286 RECEIVERS. [chap. VIII. 
 
 IV. Defenses to Actions by Receivers. 
 
 § 245. General rule; same defenses available as against original party. 
 
 246. Defense of fraud not available where all parties participated. 
 
 247. General rule as to set-ofTs; its applications. 
 
 248. Rule applied to suit by receiver of insolvent corporation. 
 
 249. Set-ofif accruing after receiver's appointment not allowed; 
 
 counter-claim for services rendered receiver. 
 
 250. Set-off inadmissible when receiver represents creditors. 
 
 251. Suit to recover notes of bank illegally transferred; counter- 
 
 claim denied. 
 
 252. Suit by receiver of insolvent debtor on notes; judgment against 
 
 receiver not a set-ofif. 
 
 253. Rent due on premises used by partnership not a set-off in suit 
 
 by receiver of firm. 
 253a. Notes not subject to attachment in another state. 
 
 § 245. General rule; same defenses available as against 
 original party. Since the appointment of a receiver in limine 
 does not affect any questions of right involved in the action, 
 and does not change any contract relations or rights of action 
 existing between parties,^^ it follows as a general rule that in 
 ordinary actions brought by a receiver in his official capacity, to 
 recover upon an obligation or demand due to the person or 
 estate which has passed under the receiver's control, the de- 
 fendant may avail himself of any matter of defense which he 
 might have urged had the action been brought by the original 
 party instead of by his receiver.^^ For example, when a 
 banking corporation advances money to a depositor, upon his 
 
 53 Williams v. Babcock, 25 Barb., 234; Newport Cotton Mill Co. v. 
 109; Bell v. Shibley, 2,2> Barb., 610. Mims, 103 Tenn., 465, 53 S. W., 736. 
 And see Savage v. Medbury, 19 See, also, Williams v. Babcock, 25 
 N. Y., 32; Shaughnessy v. The Barb., 109; Thomas v. Whallon, 31 
 Rensselaer Insurance Co., 21 Barb., Barb., 172; Colt v. Brown, 12 Gray, 
 605. 233 ; Van Wagoner v. Paterson Gas 
 
 54 Moise V. Chapman, 24 Ga., 249 ; Light Co., 3 Zab., 283 ; Berry v. 
 Cox V. Volkert, 86 Mo., 505 ; Deven- Brett, 6 Bosw., 627; Hyde v. Lynde, 
 dorf V. Beardsley, 23 Barb., 656; 4 N. Y., 387; People's State Bank 
 Marion Trust Co. v. Blish, 170 Ind., v. Francis, 8 N. Dak., 369. 79 N. 
 686, 84 N. R, 814, 85 N. E., 344; W., 853. 
 
 Hutchins v. Langley, 27 App. D. C,
 
 CHAP. VIII.] ACTIONS. 287 
 
 agreement that his balance on deposit, and that of the firm of 
 which he is a member, shall be applied in payment of the ad- 
 vances, such agreement amounts to an equitable appropriation 
 of the balances, and if the bank passes into the hands of a re- 
 ceiver before the balances are actually thus applied, and an ac- 
 tion is brought for the receiver's use upon a note given for such 
 advances, the defendant is entitled to have such balances de- 
 ducted from the amount due, to the same extent as if they had 
 actually been thus applied on the books of the bank.^^ 
 
 § 246. Defense of fraud not available where all parties 
 participated. Where, however, the defense relied upon 
 in an action brought by a receiver of a corporation is that the 
 note or obligation upon vv'hich the receiver sues was given with- 
 out consideration, and in aid of a fraudulent and illegal trans- 
 action, such defense can not be maintained if it is apparent 
 that all parties to the transaction, including the defendant him- 
 self, were participants in the fraud. ^^ 
 
 § 247. General rule as to set-offs; its applications. The 
 question as to the grounds which may be urged in defense of 
 actions brought by receivers is most frequently presented in 
 cases where it is sought to interpose a demand due to the de- 
 fendant by way of set-off to the receiver's action. The general 
 principle governing this subject is, as regards demands or 
 choses in action in favor of the original party over whom a 
 receiver is appointed, that the reciever takes such choses in ac- 
 tion subject to any equitable set-offs which defendant might 
 have urged against the original party holding the legal title.^'^ 
 Thus, when receivers of a banking corporation institute an ac- 
 tion upon a promissory note or bill of exchange due to the bank, 
 the defendant will be allowed to set off against such demand 
 
 55 Chase v. Petroleum Bank, 66 strong, 146 U. S., 499, 13 Sup. Ct. 
 Pa. St., 169. Rep., 148, reversing S. C, 36 Fed., 
 
 56 Farmers & Mechanics Bank v. 63; Nix v. Ellis, 118 Ga., 345, 45' 
 Jenks, 7 Met., 592. S. E., 404, 98 Am. St. Rep., 111. 
 
 57 Colt V. Brown, 12 Gray, 233; See, also, Hade v. McVay, 31 Ohio 
 Armstrong v. Warner, 49 Ohio St., St., 231. 
 
 376, 31 N. E., 877; Scott v. Arm-
 
 2SS RECEIVERS. [CIIAP. VIII. 
 
 bills and notes of the bank, received by him in the ordinary 
 courses of business before the insolvency of the bank, or be- 
 fore the injunction sequestrating and setting apart the assets 
 of the bank for the benefit of its creditors. ^^ But the bills of 
 the bank received after such injunction will not be allowed as a 
 set-off.^^ In accordance with the same general principle, it is 
 held that in an action by a receiver of an insolvent insurance 
 company, to recover upon a premium note given for a policy of 
 insurance, the maker of the note may set off a demand in his 
 favor against the company, which was liquidated before the re- 
 ceiver's appointment.^*^ But in an action by a receiver of an 
 insolvent bank to recover upon a demand due to the bank, if 
 defendant seeks to set off a demand against the bank, the bur- 
 den of proof rests upon him to show that such demand accrued 
 in his favor before the receivership. ^^ And in such case, a 
 cause of action or demand against the bank, which is assigned 
 to the defendant after the filing of the bill for a receiver, or 
 after his appointment, can not be set off against the receiver's 
 action. ^2 ^n^j where a corporation had made a lease of cer- 
 tain property to another corporation and at the same time and 
 as part of the same transaction had made a conveyance of cer- 
 tain other property to the corporation with covenants of war- 
 ranty and of seisin, which were in fact broken when made be- 
 cause of the existence of a prior mortgage upon the property, 
 and the grantor corporation afterward became insolvent and 
 a receiver was appointed who obtained judgment against the 
 grantee for rentals due under the lease, and after the rendition 
 of such judgment the holder of the prior mortgage instituted 
 foreclosure proceedings by which the grantee was totally de- 
 
 58 Colt V. Brown, 12 Gray, 233; 59 Colt v. Brown, 12 Gray, 233. 
 
 Van Wagoner v. Paterson Gas 60 Berry v. Brett, 6 Bosw., 627. 
 
 Light Co., 3 Zab., 283. And see, 61 Smith v. Mosby, 9 Heisk., 501. 
 
 further, as to set-offs which may be 62 Lanier v. Gayoso Savings Insti- 
 
 allowed by receivers of banking tution, 9 Heisk., 506, Van Dyck v. 
 
 corporations, State Bank v. Receiv- McQuade, 85 N. Y., 616; Stone v. 
 
 ers of Bank of New Brunswick, 2 Dodge, 96 Mich., 514, 56 N. W., 75. 
 Green Ch., 266.
 
 CHAP. VIII.]i ACTIONS. 289 
 
 I 
 
 prived of the property, it was held that since, at the time of the 
 rendition of the judgment, the full damage to the grantee re- 
 sulting from the breach of warranty was unascertained and 
 unliquidated and could therefore not be set off in the action, 
 such damage was entitled to be set off in equity in a proceeding 
 brought by the receiver for the enforcement of the judgment.^^ 
 § 248. Rule applied to suit by receiver of insolvent cor- 
 poration. The general rule above stated as to set-offs in 
 this class of actions is recognized in New Jersey, in actions 
 brought by a receiver of an insolvent corporation appointed 
 under a statute for the prevention of frauds by incorporated 
 companies, the statute fixing the functions of such receivers 
 and authorizing them to allow just set-offs in all cases where 
 it shall appear that they ought to be allowed according to law 
 or equity. The transfer of the property from the corporation 
 to its receivers in such case, being by operation of law, passes 
 all rights of the corporation in the same condition, and subject 
 to the same equities, as when held by the corporation itself. 
 And when the receivers of an insolvent banking corporation, 
 appointed under such a statute, sue upon a note due to the 
 bank, the makers of such note may set off against the demand 
 the amount of their deposit in the bank at the time of its in- 
 solvency.^* The rule is otherwise, however, when the debts 
 
 63 Central Appalachian Co. v. regarded as voluntary assignees and 
 Buchanan, 33 C. C. A., 598, 90 Fed., personal representatives of the cor- 
 454, 62 U. S. App., 195 ; S. C, 33 poration. The statute, moreover, in 
 C. C. A., 682, 91 Fed., 1001. cases of mutual dealing between the 
 
 64 Van Wagoner v. Paterson Gas corporation and any other person 
 Light Co., 3 Zab., 283. "The as- or persons, expressly authorizes the 
 signment to the receiver," says receivers to allow just set-offs in 
 Green, C. J., p. 292, "being by op- favor of such persons in all cases in 
 eration of law, passes the rights which it shall appear to the receiv- 
 and property of the corporation pre- ers that the same ought to be al- 
 cisely in the same plight and con- lowed according to law and equity. 
 dition, and subject to the same equi- The claim of the defendants in this 
 ties, as the corporation held them. case does not, as has been seen from 
 The receivers are not assignees for technical considerations, constitute 
 a valuable consideration, in the or- a set-off at law. But as the claim 
 dinary sense of that term, but are was a clear, legal and equitable set- 
 Receivers — 19.
 
 290 RECEIVERS [chap. VIII. 
 
 do not exist Between the parties in the same right or capacity. 
 Thus, when the action is brought by a receiver of an insolvent 
 bank against a shareholder to recover an unpaid subscription 
 to capital stock, the defendant can not set off the amount of his 
 individual deposit in the bank, since the capital stock is a trust 
 fund for the benefit and security of creditors, and to allow a 
 shareholder to set off a debt due to him from the bank in such 
 case would give him preference as a creditor.^^ 
 
 § 249. Set-off accruing after receiver's appointment not 
 allowed; counter-claim for services rendered receiver. It 
 is also to be observed that the rule recognizing such set-offs 
 to actions brought by receivers as might have been urged in 
 defense of the action as between the original parties, does not 
 extend to demands in defendant's favor accruing after the 
 receiver's appointment. And in an action upon a promissory 
 note, brought by a receiver of the payee against the maker, the 
 defendant will not be allowed to set off a demand alleged to be 
 due to him from the payee, but which had not accrued before 
 maturity of the note, or before the receiver was appointed.^^ 
 And where a receiver has been appointed to wind up the affairs 
 of a banking association, a debtor of the firm can not set off 
 against his indebtedness the amount of a check of the firm which 
 he had acquired with knowledge of the suspension, even though 
 he acquired it prior to the appointment of the receiver.^'^ But 
 in an action brought by a receiver in his official capacity to re- 
 cover upon a note due to the estate over which he is appoint- 
 ed, the defendant is entitled by way of counter-claim to a de- 
 mand for services which he has rendered to the receiver, under 
 
 off against the bank at the time of against the demand of the receiv- 
 
 the insolvency, and as the receivers ers." 
 
 took the rights and property of the 65 Williams v. Traphagen, 38 N. 
 
 corporation in the same plight and J. Eq., 57. 
 
 condition, and subject to the same 66 United States Trust Co. v. 
 
 equities that the bank held them, Harris, 2 Bosw., 75. 
 
 it is clear that the claim of the de- 67 Jn re Hamilton, 26 Ore., 579, 
 
 fendants is an equitable set-off 38 Pac, 1088.
 
 CHAP. VIII.J ACTIONS. 291 
 
 an employment by the latter for the benefit of the estate.^^ 
 And one who has rendered services to a corporation pending 
 an action for the appointment of a receiver over its property, 
 but before the property passes into the receiver's hands, may 
 set off the value of such services against a demand due from 
 him to the corporation prior to the receivership, but can not 
 set off an account for services rendered after the receivership.^^ 
 
 § 250. Set-off inadmissible when receiver represents 
 creditors. When the receiver, for the purposes of the liti- 
 gation, is the representative, not of the title or interest of the 
 original party, but of creditors for w^hose benefit he sues, a dif- 
 ferent principle prevails, and in such case no set-off can be al- 
 lowed in favor of the defendant upon a demand against the or- 
 iginal party, which is not binding against the receiver in the 
 capacity in which he acts. Thus, in an action brought by re- 
 ceivers of an insolvent corporation against a shareholder, for 
 the recovery of illegal dividends paid by the corporation while 
 in a condition of insolvency, the defendant can not set off 
 against the demand of the receivers a claim growing out of in- 
 dependent matters between the corporation and himself. The 
 foundation of the action being the illegal payment of dividends 
 in fraud of the creditors, and the reparation sought being the 
 restoration of the fund for the creditors' benefit, the receiver 
 is regarded as the representative of the creditors and not of the 
 corporation, and hence the defense is unavailable.*^^ 
 
 § 251. Suit to recover notes of bank illegally trans- 
 ferred; counter-claim denied. It is also held, that in an ac- 
 tion by receivers of an insolvent banking corporation, to recov- 
 er notes of the bank illegally transferred to one of its directors 
 knowing the insolvent condition of the bank, the defendant can 
 not be allowed by way of counter-claim the amount actually 
 paid by him for the notes, since such defense rests upon his 
 own illegal conduct."^^ 
 
 68 Davis V. Stover, 58 N. Y., 473. 70 Osgood v. Ogden, 4 Keyes, 70. 
 
 69 Cook V. Cole, 55 Iowa, 70, 7 71 Gillet v. Phillips, 13 N. Y., 114. 
 N. W., 419.
 
 292 RECEIVERS [chap. VIII. 
 
 § 252. Suit by receiver of insolvent debtor on notes; 
 judgment against receiver not a set-off. In an action by 
 the receiver of an insolvent debtor, appointed in behalf of cred- 
 itors, upon notes due to the debtor, the maker of such notes 
 can not set off against the action a judgment which he has ob- 
 tained against the receiver upon a note of the debtor, since this 
 would virtually give the defendant a preference over the other 
 creditors; and the judgment in defendant's favor against the 
 receiver is treated as being only a legal determination of the 
 amount and validity of defendant's demand, and not that it 
 shall take preference over demands of other creditors. '^^ 
 
 § 253. Rent due on premises used by partnership not a 
 set-off in suit by receiver of firm. Where the assets of a 
 partnership pass into the hands of a receiver to await a settle- 
 ment between the partners, and are sold by him under order of 
 the court, in an action brought by the receiver to recover the 
 purchase price, the purchaser can not set off a claim or demand 
 which he himself holds against the partnership, as for rent of 
 premises occupied by the firm; since to allow such a set-off 
 would be to give the defendant a preference over other cred- 
 itors.'^^ 
 
 § 253a. Notes not subject to attachment in another 
 state. When receivers over an insolvent corporation in 
 New York, receive as part of the assets of the corporation notes 
 due from a resident of Massachusetts, it is no defense to an 
 action brought by the receivers upon such notes in New York, 
 that, after the receivers' appointment, the notes were attached 
 in an action brought by a creditor of the corporation in Massa- 
 chusetts. In such case, the notes being transferred to receivers 
 in New York, for the benefit of creditors, they are not subject 
 to the jurisdiction of the courts of another state.*^^ 
 
 72 Clark v. Brockway, 3 Keyes, 74 Osgood v. Maguire, 61 N. Y., 
 13; S. C, 1 Ab. Ct. Ap. Dec, 351. 524. 
 
 73 Singerly v. Fox, 75 Pa. St., 112.
 
 CHAP. VIII.] ACTIONS. 293 
 
 V. Actions Against Receivers. 
 
 § 254. Receiver may not be sued without leave of court; exceptions 
 to the rule. 
 
 254a. Conflict of authority as to leave being jurisdictional; presump- 
 tion as to leave; court may fix forum. 
 
 254&. Usual practice by petition; trial by jury; action for tort; dis- 
 missal of action begun without leave; granting leave dis- 
 cretionary; no appeal from order granting leave. 
 
 254c. Practice on petitions of intervention. 
 
 254J. Revocation of leave to sue; leave may be conditional. 
 
 255. Court itself may give relief on motion, or may authorize suit; 
 
 receiver of railway; liability not a personal one. 
 
 256. Courts may enjoin unauthorized suits against their receivers; 
 
 illustrations. 
 
 257. Suit against receiver for mere trespass not enjoined. 
 
 258. Receiver as a party to action against original debtor; must 
 
 file plea; receiver as party to appeal. 
 
 259. Effect of receiver over one defendant in foreclosure suit. 
 
 260. Receivers of corporations as parties defendant. 
 
 261. Receiver's appearance waives objection as to want of leave. 
 
 262. Courts will not enjoin their own receivers; relief granted in 
 
 receivership proceeding; mandatory injunction against re- 
 ceiver. 
 
 263. Rival claimants against receiver; bill of interpleader. 
 
 264. Receivers not allowed to waive defense; when receiver not 
 
 required to make particular defense. 
 264o. When receiver may appeal from orders entered in receivership 
 
 cause. 
 264&. Receiver can not appeal from administrative orders; nor from order 
 
 of distribution; costs on unauthorized appeal. 
 
 265. Notice of application for leave to sue receiver; when corporate 
 
 creditors not necessary parties to action by stockholders against 
 receiver of corporation. 
 
 266. English practice as to defending actions of ejectment against 
 
 receivers. 
 
 267. When receiver not entitled to costs. 
 
 268. Effect of receiver's discharge. 
 
 268a. When receiver concluded by judgment. 
 
 § 254. Receiver may not be sued without leave of court ; 
 exceptions to the rule. A receiver being an officer of the 
 court, acting under its direction, and in all things subject to its 
 authority, it is contrary to the established doctrine of courts 
 of equity to permit him to be made a party defendant to liti-
 
 294 
 
 RECEIVERS. 
 
 [CIIAP, VIII. 
 
 gation, unless by consent of the court appointing him. And it 
 is in all cases necessary that a person desiring to bring suit 
 against a receiver in his official capacity, should first obtain 
 leave of the court by which he was appointed, since the courts 
 will not permit the possession of their receivers to be disturbed 
 by suit or otherwise, without their consent and permission.'^^ 
 The rule is established for the protection of receivers against 
 
 75 Taylor v. Baldwin, 14 Ab. Pr., 
 166; Wray v. Hazlett, 6 Phila., 155; 
 DeGroot v. Jay, 30 Barb., 483, 9 Ab. 
 Pr., 364; Miller v. Loeb, 64 Barb., 
 454; Randfield v. Randfield, 3 DeG., 
 F. & J., It^i, reversing S. C., 1 Dr. 
 & Sm., 310; Barton v. Barbour, 104 
 U. S., 126, affirming S. C, 3 i\Iac- 
 Arthur, 212; Comer v. Felton, 10 
 C. C. A., 28, 61 Fed., 731, 22 U. S. 
 App., 313: Ridge v. Manker, 67 C. 
 C. A., 596, 132 Fed., 599; Thompson 
 V. Scott, 4 Dill., 508, 3 Central Law 
 Journal, IZT ; Kennedy v. I., C. & 
 L. R. Co., 3 Fed., 97, 2 Flippin, 704; 
 Searle v. Choate, 25 Ch. D., 723; 
 Southern Granite Co. v. Wads- 
 worth, 115 Ala., 570, 22 So., 157; 
 Baker v. Carraway, 133 Ala., 502, 
 31 So., 933 ; Links v. Connecticut 
 River B. Co., 66 Conn.. 277, 33 Atl., 
 1003 ; Graffenried v. Brunswick & 
 Albany R. Co., 57 Ga., 22 ; Mulcahey 
 V. Strauss, 151 111., 70, Zl N. E., 
 702; St. Louis, A. & S. R. Co. v. 
 Hamilton, 158 111., 366, 41 N. E., 
 ni; Keen v. Breckenridge, 96 Ind., 
 69; Wayne Pike Co. v. State, 134 
 Ind., 672, 34 N. E., 440; Meredith 
 Village Savings Bank v. Simpson, 
 22 Kan., 414 ; Chalmers v. Littlefield, 
 103 Me., 271, 69 Atl., 100; Burk v. 
 Muskegon M. & F. Co., 98 Mich., 614, 
 57 N. W., 804; Earle v. Humphrey, 
 121 Mich., 518, 80 N. W.. 370; Smith 
 V. St. Louis & S. F. Ry. Co., 151 
 Mo., 391, 52 S. W., 378, 48 L. R. A., 
 
 368, and note; Melendy v. Barbour, 
 78 Va., 544. See, also, Evelyn v. 
 Lewis, 3 Hare, 472; In re Persse, 
 8 Ir. Eq., Ill; Parr v. Bell, 9 Ir. 
 Eq., 55 ; Tink v. Rundle, 10 Beav., 
 318; Payne v. Baxter, 2 Tenn. Ch., 
 517; Schmidt v. Gayner, 59 Minn., 
 303, 61 N. W., ZZZ, 62 N. W., 265 ; 
 Sligh V. Shelton S. R. Co., 20 Wash., 
 16, 54 Pac, 763 ; Littlefield v. Maine 
 Central R. Co., 104 Me., 126, — 
 Atl., — . See, contra, Kinney v. 
 Crocker, 18 Wis., 74; Paige v. 
 Smith, 99 Mass., 395; St. Joseph & 
 Denver City R. Co. v. Smith, 19 
 Kan., 225. In Tennessee it would 
 seem that an action for the recovery 
 of damages for personal injuries 
 may be maintained against the re- 
 ceiver of a railway company with- 
 out the leave of the appointing 
 court, although all questions as to 
 the manner of the payment of any 
 judgment will be left entirely for 
 the determination of that court. 
 Burke v. Ellis, 105 Tenn., 702, 58 
 S. W., 855. See Walker v. Green, 
 60 Kan., 20, 55 Pac, 281, as to the 
 practice of giving leave generally to 
 all persons to institute suits in 
 courts of competent jurisdiction 
 against a receiver without leave of 
 the ap{)ointing court. By section 3 
 of the act of congress approved 
 March 3, 1887 (c. 373, 24 Stat., 554), 
 as revised and corrected by an act 
 approved August 13, 1888 (c. 866,
 
 CHAP. VIII.] 
 
 ACTIONS. 
 
 295 
 
 unnecessary and expensive litigation, and in most instances a 
 party aggrieved may have ample relief by application on mo- 
 tion to the court appointing the receiver. And when an action 
 is instituted against a receiver in his official capacity, without 
 first obtaining leave of the court, the plaintiff in such action is 
 guilty of a contempt of court and will be punished according- 
 ly."^^ It is not, however, usual for the court to refuse leave to a 
 person upon application to contest a right which he claims as 
 against a receiver, unless it is perfectly apparent that there is 
 no foundation for the demand.''"^ But to warrant a court in 
 granting leave to sue its receiver, the applicant should show by 
 his petition at least a probable ground of recovery ; and when, 
 upon the face of his petition, it is apparent that he has no cause 
 
 25 Stat., 436), it is enacted as fol- 
 lows : "That eveo' receiver or man- 
 ager of any property appointed by 
 any of the courts of the United 
 States may be sued in respect of 
 any act or transaction of his in car- 
 rying on the business connected with 
 such property, without the previous 
 leave of the court in which such 
 receiver or manager was appointed ; 
 but such suit shall be subject to the 
 general equity jurisdiction of the 
 court in which such receiver or 
 manager was appointed, so far as 
 the same shall be necessary to the 
 ends of justice." 1 U. S. Comp. 
 Stat. 1901, p. 582 ; 4 Fed. Stat. Ann., 
 p. 387. As to the construction of 
 this act, see, post, § 395&. 
 
 76 Thompson v. Scott, 4 Dill., 508; 
 S. C, 3 Central Law Journal, 7Z7 ; 
 Taylor v. Baldwin, 14 Ab. Pr., 166 ; 
 Lane v. Capsey (1891), 3 Ch., 411; 
 Southern Granite Co. v. Wadsworth, 
 115 Ala., 570, 22 So., 157; DeGroot 
 V. Jay, 30 Barb., 483, 9 Ab. Pr., 364. 
 In the latter case, as reported in 30 
 Barb., 483, the court observe, p. 484: 
 "The receiver is the officer of the 
 
 court, and, by the well-settled prac- 
 tice, permission of the court was 
 necessary to warrant an action 
 against him. This rule is essential 
 for the protection of receivers 
 against unnecessary and oppressive 
 litigation, and should be carefully 
 maintained. It is a contempt of the 
 court to sue a receiver without such 
 permission. In most cases of claims 
 against a receiver, or the fund or 
 property in his hands, the remedy 
 by special motion is adequate. Any 
 person having such a claim may re- 
 sort to this summary remedy. The 
 fund or property being held by the 
 court, by its receiver, in trust for 
 those entitled to it, or to be paid 
 out of it, the court may administer 
 justice to claimants without suit, 
 upon special application. In the 
 present case, all the relief sought, 
 to which the plaintiff is entitled, 
 might be obtained in that mode. 
 And that mode is commended by 
 considerations of economy as well 
 as expedition." 
 
 77 Randfield v. Randfield, 3 DeG.,
 
 296 RECEIVERS. [chap. VIII. 
 
 of action, leave will not be granted. "^^ And it is necessary to 
 aver in the complaint or declaration against a receiver, that 
 leave of court has been granted to bring the action, and the ab- 
 sence of such an averment is fatal upon demurrer.'^^ But per- 
 mission to bring suit against a receiver is regarded as extend- 
 ing to his successor in office. When, therefore, by leave of the 
 court appointing him an action is brought against a receiver, 
 who resigns pending such action, his successor being then 
 joined as a defendant, it constitutes no objection to maintaining 
 the action that no permission was granted to bring suit against 
 such successor.^^ And where an action is brought against a 
 receiver appointed by the court of a foreign state to remove a 
 cloud upon the title of real estate, and the receiver is in neither 
 the actual nor the constructive possession of the property, leave 
 of the appointing court to institute the action is not necessary.^! 
 And a mortgagee of chattels belonging to an insolvent corpora- 
 tion in the hands of a receiver may maintain an action to en- 
 force his mortgage without first procuring leave of the court 
 which has appointed the receiver, where the property is in the 
 possession of a third person claiming to have purchased it 
 and has never been in the possession of the receiver.^2 jsjor 
 does the general rule apply where the unauthorized suit against 
 the receiver was instituted in a court of the same county, al- 
 though of a different district, as that of the court of appoint- 
 ment and one over which the same judge presides. The rea- 
 son for the general rule is to prevent the unauthorized inter- 
 ference by one court with the possession of another, and in such 
 
 F. & J., 766, reversing S. C, 1 Dr. 804; Earle v. Humphrey, 121 Mich., 
 
 & Sm., 310. 518, 80 N. W., 370. 
 
 78 Jordan v. Wells, 3 Woods, 527. 80 Fordyce v. Dixon, 70 Tex., 694, 
 
 79 Keen v. Breckenridge, 96 Ind., 8 S. W., 504. 
 
 69; Malott v. State, 158 Ind., 678, 81 Egan v. North American L. 
 
 64 N. E., 458; St. Louis, A. & S. Co., 45 Ore., 131, 76 Pac, 774, 77 
 
 R. Co. V. Hamilton, 158 111., 366, 41 Pac, 392. 
 
 N. E., 777; Burk v. Muskegon M. 82 Kidder v. Beavers, 33 Wash., 
 
 & F. Co., 98 Mich., 614, 57 N. W., 635, 74 Pac, 819.
 
 CHAP. VIII.] ACTIONS 297 
 
 case, the reason failing, the rule ceases to apply.^^ And a 
 trustee appointed by a court of equity to execute the trusts 
 created by a will does not stand in the position of a receiver in 
 the respect under discussion, and it is therefore not regarded 
 as a contempt to institute proceedings against such a trustee 
 without first obtaining the consent of the court which made the 
 appointment.^'* 
 
 § 254a. Conflict of authority as to leave being jurisdic- 
 tional; presumption as to leave; court may fix forum. 
 The authorities are far from reconcilable upon the question 
 whether the want of leave to bring an action against a receiver 
 is jurisdictional, and therefore fatal to maintaining the action, 
 or whether it is merely an omission, which will subject the par- 
 ty suing without such leave to proceedings for contempt of the 
 court appointing the receiver, but without impairing the juris- 
 diction of that court to proceed with and determine the cause. 
 While the better considered authorities formerly supported the 
 proposition that leave to sue the receiver was jurisdictional in 
 its na^are, the great weight of authority, as the result of the 
 later decisions, sustains the opposite view, and it is accordingly 
 held that the failure to obtain leave is not jurisdictional and 
 that its omission is not fatal to maintaining the action. ^^ And 
 
 83 RatcHff V. Adler, 71 Ark., 269, v. Bearse, 194 Mass., 596, 80 N. K, 
 
 72 S. W., 896. 623 ; Flentham v. Steward, 45 Neb., 
 
 84Nevitt V. Woodburn, 190 111., 640, 63 N. W., 924; dictum in Wil- 
 
 283, 60 N. E., 500. son v. Rankin, 129 N. C, 447. 40 S. 
 
 85 Kinney t;. Crocker, 18 Wis., 74; E., 310; Tobias v. Tobias, 51 Ohio 
 Lyman v. Central Vermont R. Co., St., 519, 38 N. E., 317; Sigwald v. 
 59 Vt., 167, 10 Atl., 346; Roxbury City Bank, 82 S. C, 382, — S. E., — ; 
 V. Central Vermont R. Co., 60 Vt, Payson v. Jacobs, 38 Wash.. 203. 80 
 121, 14 Atl., 92; St. Joseph & Den- Pac, 429; Ridge v. Manker, 67 C. 
 vcr City R. Co. v. Smith, 19 Kan., C. A.. 596, 132 Fed., 599. See, con- 
 225; Mulcahey v. Strauss, 151 111., ira, Barton v. Barbour, 104 U. S., 
 70, 37 N. E., 702; Shedd v. Seefeld, 126, affirming S. C, 3 MacArthur, 
 230 111., 118, 82 N. E., 580; Fox 212; Keen v. Breckenridge, 96 Ind., 
 River Paper Co. v. Western En- 69; Brown v. Rauch, 1 Wash., 497 
 velope Co., 109 111. App., 393; Man- (Territorial Supreme Court) ; Mar- 
 ker V. Loan Association, 124 Iowa, tin v. Atchison, 2 Idaho, 590, 33 
 341; American Steel & Wire Co. Pac, 47. And see, post, § 261. In
 
 298 RECEIVERS. [chap. VIIL 
 
 where the want of leave to sue a receiver is held not to be juris- 
 dictional, the objection is not available upon appeal unless it has 
 been properly urged in the lower court.^*^ And in a collateral 
 proceeding, the court will presume, if necessary, that such leave 
 was obtained where the record is silent.^'^ But where the want 
 of leave to bring the action is held to go to the jurisdiction of 
 the court and is not merely error, the question may be raised 
 at any stage of the cause and even upon appeal from a judg- 
 ment against the receiver, and when he has not raised the ques- 
 tion in the court below.^^ And upon an application to the court 
 for leave to sue its receiver, the court may determine the forum 
 in which the action shall be brought. It may, therefore, grant 
 leave to sue the receiver in its own jurisdiction, and may refuse 
 to permit him to be sued in another court. And when the order 
 is made in this form, and the action is brought in the court by 
 which the receiver was appointed, but the plaintiff then files a 
 petition and bond for the removal of the cause to a federal 
 court, it is not error for the former court, of its own motion, 
 to revoke the permission to sue its receiver and to dismiss the 
 action.^^ So when a receiver is appointed by a state court, the 
 refusal of that court to permit a claimant against its receiver to 
 bring an action, such claimant being by reason of his citizen- 
 Maine the failure to procure leave versies, and not by challenging the 
 would seem to be jurisdictional, jurisdiction of other tribunals. 
 Chalmers v. Littlefield, 103 Me., When, therefore, a receiver is sued 
 271, 69 Atl., 100. As to whether in a court other than that by which 
 want of leave is jurisdictional in he was appointed, an averment in 
 Michigan, see Prather Engineer- his answer that he is such receiver 
 ing Co. V. Detroit, F. & S. Ry., 152 raises no question as to the jurisdic- 
 Mich., 582, 116 N. W., 376. In St. tion of the court in which the ac- 
 Joseph & Denver City R. Co. v. tion is brought. 
 Smith, 19 Kan., 225, supra, it is 86 Payson v. Jacobs, 38 Wash., 
 
 held that the ordinary jurisdiction 203, 80 Pac, 429. 
 of the courts is not taken away or 87 Payson v. Jacobs, 38 Wash., 
 
 impaired by the appointment of a 203, 80 Pac, 429. 
 receiver by another court, and while 88 Brown v. Ranch, 1 Wash., 497 
 
 that court may draw to itself all (Territorial Supreme Court), 
 controversies to which he is a 89 Meredith Village Savings Bank 
 
 party, it does so by acting directly v. Simpson, 22 Kan., 414. 
 upon the parties to such contro-
 
 CHAP. VIII.] ACTIONS. 299 
 
 ship entitled to sue in a federal court, is not error, it being dis- 
 cretionary with the court to grant leave to sue, or to determine 
 the controversy upon petition in the cause in which the receiver 
 was appointed. ^*^ 
 
 § 2546. Usual practice by petition ; trial by jury ; action 
 for tort ; dismissal of action begun without leave ; granting 
 leave discretionary; no appeal from order granting leave. 
 The more common practice, and that which has been generally 
 commended by the courts, is to hear and determine all rights of 
 action and demands against a receiver by petition in the cause 
 in which he was appointed, without remitting the parties to a 
 new and independent suit.^^ And it rests wholly within the 
 discretion of the court to grant leave to bring an independent 
 action against its receiver, or to determine the controversy up- 
 on petition in the original cause, directing, if necessary, an is- 
 sue to be tried by a jury as to questions of fact or of damages. ^^ 
 And the right to a trial by jury in such cases is wholly discre- 
 tionary with the court, which may direct the issues of fact to 
 be tried by a jury, or may refer them to a master for deter- 
 mination. ^^ And where a claimant might, under the act of 
 congress,^^ have instituted an action at law against the re- 
 ceiver of a railway company without leave of court, he waives 
 his right to a trial by jury by intervening in the receivership 
 proceeding and submitting himself to the jurisdiction of the 
 chancery court, and in such case the verdict of the jury in favor 
 of the petitioner is merely advisory and the court may set it 
 
 90 Reed V. Axtell, 84 Va., 231, 4 Gatch, 37 Ore., 5, 60 Pac, 383; 
 S. R, 587. Harrigan v. Gilchrist, 121 Wis., 127, 
 
 91 Citizens' Savings Bank v. Per- 280, 99 N. W., 909, 952; De Forrest 
 son, 98 Mich., 173, 57 N. W., 121. v. Coffey, 154 Cal., 444, — Pac, — ; 
 Winchester v. Davis Pyrites Co., 14 dictum in Blake v. State Savings 
 C. C. A., 300, 67 Fed., 45, 28 U. S. Bank, 12 Wash., 619, 41 Pac, 909. 
 App., 353, affirming S. C, 64 Fed., And see, post, § 395a. 
 
 664. And see, ante, § 139. 93 Kennedy v. I., C. & L. R. Co., 
 
 92MeIendy v. Barbour, 78 Va., 3 Fed., 97, 2 Flippin, 704; Shedd v. 
 
 544; Kennedy v. I., C. & L. R. Co., Seefeld, 230 111., 118, 82 N. E., 580. 
 
 3 Fed., 97, 2 Flippin, 704; Stephens 9* For the citation of this statute, 
 
 V. Augusta T. & E. Co., 120 Ga., see, ante, § 254, note. 
 1082, 48 S. E., 433; Goodnough v.
 
 300 RECEIVERS. [chap. VIII. 
 
 aside and dismiss the petition. ^^ And since the question of 
 permitting an independent action against a receiver is one lying 
 within the discretion of the court, mandamus will not lie to 
 compel the court to grant leave for the commencement of an 
 independent suit against the receiver.^^ And it is proper for 
 the court, when application is made for leave to sue its receiv- 
 er, to investigate the subject-matter of the petition, and if it 
 appears that the case is free from difficulty, or that it involves 
 no question which must necessarily be determined by an action 
 at law, the court may itself determine the matter upon peti- 
 tion. ^'^ So if an equitable right or title is asserted in property 
 W'hich is in the custody of a receiver, the court will not ordi- 
 narily permit an action to be brought against him, but will re- 
 quire the claimant to proceed by petition. ^^ And persons hav- 
 ing a claim or lien upon a fund in a receiver's hands should as- 
 sert such claim by petition, rather than by an action against the 
 receiver.99 And where a person, asserting a claim to property 
 in the possession of a receiver, institutes an independent ac- 
 tion against him, it is proper for the court in which the action 
 was begun to dismiss it ; and the fact that the plaintiff has se- 
 cured leave of the appointing court to commence his suit upon 
 an ex parte hearing and without notice to the parties in interest 
 will not preclude the court from thus dismissing the proceed- 
 ing.i And where a court, having jurisdiction of the subject- 
 matter and of the parties, has appointed a receiver and or- 
 dered him to take possession of certain property, which he has 
 done, an action of trespass will not lie against the receiver at 
 the suit of a stranger to the receivership proceeding, claiming 
 title to the property, to recover damages for the taking of it by 
 the receiver, his remedy in such case being by intervention in 
 
 95 Flippin V. Kimball, 31 C. C. A., 98 Porter v. Kingman, 126 Mass., 
 282, 87 Fed., 258, 59 U. S. App., 1. 141. 
 
 96 De Forrest v. Cofifey, 154 Cal., 99 Olds v. Tucker, 35 Ohio St., 
 444, — Pac. — . 581. 
 
 97 Lehigh C. & N. Co. v. Central 1 Goodnough v. Gatch, 37 Ore,., 
 R. Co., 38 N. J. Eq., 175. 5, 60 Pac, 383.
 
 CHAP. VIII.] ACTIONS. 301 
 
 the receivership proceeding.^ And a petition filed in a re- 
 ceivership proceeding seeking the payment of a claim alleged 
 to be due petitioner for which the receiver is liable is defective 
 where it contains no allegations that there are funds in the 
 hands of the receiver out of which the claim can be paid, and 
 a demurrer is properly sustained.^ If, however, the cause of 
 action is in tort, it is regarded as the more appropriate practice 
 to apply for leave to bring an action, rather than to submit the 
 matter upon petition.* And in an action of tort against the 
 receiver of an insolvent lessee street railway company, it is 
 proper to join the lessor company as a joint tort-feasor.^ But 
 when the court has appointed a receiver over an insolvent cor- 
 poation and has entered an order requiring all creditors to 
 come in and prove their demands, its refusal to grant leave to a 
 mortgagee to institute an independent action to foreclose his 
 mortgage upon the property of the corporation is not error. ^ 
 And since the question whether an independent action shall be 
 brought, or the party aggrieved shall be permitted to intervene 
 in the suit in which the receiver was appointed, rests wholly 
 within the discretion of the court, the refusal to grant leave to 
 bring such action will not be reviewed upon appeal unless there 
 has been a manifest abuse of judicial discretion.'^ And an ap- 
 
 2 Steele v. Walker, 115 Ala., title of the cause without prefixing 
 485, 21 So., 942, 67 Am. St. Rep., it with "as" renders such word 
 62. In this case it is not clear merely descriptio persons; and the 
 whether or not the action had been defect is not cured in such case by 
 commenced against the receiver by an allegation that the receiver has 
 leave of the court which had ap- the charge and control of the prop- 
 pointed him. erty of the company, where it is 
 
 3 Empire Distilling Co. v. M'Nul- not averred that he has such charge 
 ta, 23 C. C. A., 415, 77 Fed., 700, 46 and control as receiver. Vasele v. 
 U. S. App., 578. Grant Street E. R. Co., 16 Wash., 
 
 4 Palys V. Jewett, 32 N. J. Eq., 602, 48 Pac, 249. 
 
 302, distinguished in Shedd v. See- 5 Tandrup v. Sampsell, 234 111., 
 
 feld, 230 111., 118, 82 N. E., 580. 526, 85 N. E., 331, 17 L. R. A., (N. 
 
 Where an action is brought against S.), 852. 
 
 a railway company and its re- 6 Meeker v. Sprague, 5 Wash., 
 
 ceiver to recover damages for per- 242, 31 Pac, 628. 
 
 sonal injuries, the use of the word ''^ Mechanics National Bank v. 
 
 "receiver" after his name in the Landauer, 68 Wis., AA, 31 N. W.,
 
 302 RECEIVERS. [chap. VIII. 
 
 peal will not He from an order of a federal court granting leave 
 to sue its receiver in a state court.^ 
 
 § 254c. Practice on petitions of intervention. When 
 a court of equity has taken jurisdiction of an estate by its re- 
 ceiver, as in the case of an insolvent corporation, upon proceed- 
 ings in the nature of a judgment creditors' bill, creditors as- 
 serting liens or claims upon the property as found in the re- 
 ceiver's possession may file their petitions of intervention in the 
 suit in which the receiver was appointed.^ Such petitions are 
 substantially independent suits and may proceed to final judg- 
 ment, allowing or rejecting the demand or claim asserted, inde- 
 pendent of the judgment in the principal cause. Every such 
 intervention is regarded as, in effect, a suit against the receiver, 
 and any party to the cause who may be dissatisfied with the 
 final order made upon such petition may appeal therefrom.^^ 
 And the effect of such an intervention is to create an equitable 
 levy and to fasten upon the property in the hands of the receiver 
 an equitable lien for the satisfaction of the petitioner's judg- 
 ment or claim, subject to prior liens and superior equities.^^ 
 
 § 254(/. Revocation of leave to sue; leave may be con- 
 ditional. The power of the court to appoint a receiver 
 and to grant leave that he shall be sued either in the court of his 
 appointment or in any other court necessarily implies the power 
 to revoke such leave in the proper case. Accordingly, where 
 the appointing court has granted leave that an action may be 
 brought against a receiver in another court, and, after such 
 action was instituted, the plaintiff therein amends his bill with- 
 out notice to the receiver defendant and obtains an order of in- 
 junction restraining the receiver from applying to the appoint- 
 
 160; Stephens v. Augusta T. & E. 10 Pagan v. Boyle I. M. Co., 65 
 
 Co., 120 Ga., 1082, 48 S. E., 433. Tex., 324; Voorhees v. Indianapolis 
 
 8 New York Security & T. Co. v. C. & M. Co., 140 Ind., 220, 39 N. E., 
 Illinois T. R. Co., 44 C. C. A., 161, 738. 
 
 104 Fed., 710. H Atlantic Trust Co. v. Dana, 62 
 
 9 Pagan v. Boyle I. M. Co.. 65 C. C. A., 657, 128 Fed., 209. 
 Tex., 324; Crutchfield v. Hunter, 
 
 138 N. C, 54, 50 S. E., 557.
 
 CHAP. VIII.] ACTIONS. 303 
 
 ing court for relief concerning the property in his possession, 
 the latter court may require the plaintiff to have such improper 
 injunction dissolved, and, in default thereof, may revoke the 
 order permitting the plaintiff to join the receiver as a defend- 
 ant to his action.i2 Sq, also, the court, in granting leave to 
 sue its receiver, may impose such reasonable conditions as it 
 sees fit, such, for example, as that the action shall not be insti- 
 tuted within a specified time ; and if the plaintiff commences his 
 proceeding before the expiration of the time limited, he is guil- 
 ty of contempt; nor will he be allowed, upon proceedings 
 against him for contempt, to assert that the condition in ques- 
 tion was unreasonable.^^ And where leave has been granted 
 to commence garnishment proceedings against a receiver, the 
 court may, in its discretion, set aside such order if improvident- 
 ly made ; and, in the absence of an abuse of discretion in so do- 
 ing, a reviewing court will not interfere with such action.^"* 
 But after the court has granted permission to bring an action 
 against its receiver for the recovery of property claimed by 
 him, and an action is brought accordingly and a large amount 
 of costs is incurred, it is regarded as an abuse of the discre- 
 tionary powers of the court to revoke such permission and to 
 dismiss the action. ^^ 
 
 § 255. Court itself may give relief on motion, or may 
 authorize suit ; receiver of railway ; liability not a personal 
 one. While it is the more commonly recognized practice 
 for persons having claims or demands against an estate, over 
 which a receiver is appointed, to apply, by petition or other- 
 wise, to the court appointing the receiver for the relief desired, 
 yet this method of obtaining redress does not exclude the rem- 
 edy by action against the receiver, in cases where an action is 
 proper. And when complaint is made against a receiver for in- 
 juries sustained by reason of negligence in the discharge of his 
 
 12 Ray V. Trice, 53 Fla., 864, 42 ings Bank v. Bay Circuit Judge, 
 So., 901. lib Mich., 633, 68 N. V^., 649. 
 
 13 In re Battersby, 31 L. R. In, 15 Conwell v. Lawrence, 46 Kan., 
 73. 83, 26 Pac, 461. 
 
 1* Citizens' Commercial & Sav-
 
 304 RECEIVERS. [chap. VIII. 
 
 official duties, the court appointing him may either take cog- 
 nizance of the complaint and administer justice between the 
 parties, or it may permit the party aggrieved to bring his ac- 
 tion for the injury sustained. And in case of an action brought 
 against the receiver of a railway corporation, for injuries al- 
 leged to have been sustained through negligence of employees 
 in the management of the road, the receiver can not object to 
 the action that he is a public officer, and as such not responsible 
 in his official capacity for the negligence of his employees.i^ 
 But it may be observed generally, that in an action instituted 
 against a receiver in his official capacity, he incurs no personal 
 liability, and whatever judgment is obtained against him should 
 be so entered as to be enforced only out of funds properly 
 chargeable to him in the capacity of receiver.^''' 
 
 § 256. Courts may enjoin unauthorized suits against 
 their receivers; illustrations. Courts of equity are so 
 jealous of permitting any unauthorized interference with their 
 receivers, that they frequently interpose by injunction to re- 
 strain the prosecution of actions against them, when leave of 
 court has not been first obtained. ^^ And when a person is pro- 
 ceeding to assert his claims to property held by a receiver, by 
 an action at law, without obtaining permission of the court to 
 bring such action, the court may, on application of the receiver, 
 enjoin him from proceeding with his suit, regardless of how- 
 ever clear his right may appear to be, or of whether he was ap- 
 prised of the receiver's appointment at the time of bringing his 
 action.19 So when a railroad company has instituted proceed- 
 
 16 Meara's Administrator v. Hoi- St. Rep., 47, and note, as to the con- 
 brook, 20 Ohio St., 137. clusiveness of a judgment rendered 
 
 17 Commonwealth v. Rvmk, 26 Pa. against a receiver upon the parties 
 St., 235; Meara's Administrator v. whom he represents. 
 
 Holbrook, 20 Ohio St., 137; Bart- 18 Evelyn v. Lewis, 3 Hare, 472; 
 
 lett V. Cicero Light Co., 177 111., Tink v. Rundle, 10 Beav.. 318; In 
 
 68, 52 N. E., 339, 68 L. R. A.. 78, 69 re Persse, 8 Ir. Eq., Ill; Parr v. 
 
 Am. St. Rep., 206; Brown v. Brown, Bell, 9 Ir. Eq., 55; Montgomery v. 
 
 71 Tex., 355, 9 S. W., 261. And see, Enslen, 126 Ala., 654, 28 So., 626. 
 
 post, § 398&. See Painter v. Paint- 19 Evelyn v. Lewis, 3 Hare, 472. 
 «r, 138 Cal., 231. 71 Pac, 90, 94 Am.
 
 CHAP. VIII.] ACTIONS. 305 
 
 ings to condemn for the use of its road certain real estate in the 
 custody of a receiver, without obtaining leave of court, an in- 
 junction has been allowed ex parte, to restrain the company 
 from proceeding until further order.^O And where tenants, 
 without leave of court, have brought actions of replevin or of 
 trespass against a receiver, who has distrained for their rent, 
 they may be enjoined from proceeding with such actions.^l So 
 an injunction is properly granted at the instance of a receiver 
 appointed by a federal court to restrain the prosecution of ac- 
 tions at law brought against him in a state court without leave 
 to recover the possession of property in his custody, the case 
 not being one in which, under the provisions of the act of con- 
 gTess,22 an action may be instituted without leave of court. ^3 
 
 § 257. Suit against receiver for mere trespass not en- 
 joined. Notwithstanding the extreme jealousy thus shown 
 by the courts in protecting their receivers against unauthor- 
 ized interference by suit, such protection will not be extended to 
 acts which are outside and in excess of the functions of the re- 
 ceiver, or to matters in which he occupies the attitude of a mere 
 trespasser, as in dealing with or assuming possession and con- 
 trol of property which is not embraced in his receivership. 
 Thus, when suit is brought against a receiver in another court 
 for acts committed by him as an individual, as for taking and 
 retaining possession of property not pertaining to his receiver- 
 ship, and as to which he is a mere trespasser, such action will 
 not be enjoined by the court appointing the receiver.24 Nor 
 will a writ of prohibition lie to restrain an inferior court from 
 entertaining an action against a receiver in such case.^^ And 
 an action of replevin has been maintained for the recovery of 
 such property, although leave of court had not been obtained 
 to bring the action. And it has been held that an action against 
 
 20 Tink V. Rundle, 10 Beav., 318. 26 C. C. A., 46, 81 Fed., 529, 52 U. 
 
 21 /n re Persse, 8 Ir. Eq., Ill; S. App., 253. 
 Parr v. Bell, 9 Ir. Eq., 55. 24 /„ re Young, 7 Fed., 855. And 
 
 22 For the citation of the act in see Curran v. Craig, 22 Fed., 101. 
 question, see ante, § 254, note. 2.'. Sherwood v. New England K. 
 
 23 J. I. Case Plow Works v. Finks, Co., 68 Conn., 543, 37 Atl., 388. 
 
 Receivers — 20.
 
 306 RECEIVERS. [chap. VIII. 
 
 a receiver in his official capacity, concerning matters pertaining 
 to his receivership, will not be enjoined, on motion of the re- 
 ceiver, upon the ground that the matters in controversy have 
 been passed upon by the court in other proceedings, since, if 
 this be true, it furnishes a complete and sufficient defense to 
 the action sought to be enjoined, and the receiver should avail 
 himself of it in that action. 26 
 
 § 258. Receiver as a party to action against original 
 debtor; must file plea; receiver as party to appeal. As re- 
 gards actions instituted against a debtor or person over whom a 
 receiver is appointed, there would seem to be no necessity for 
 making the receiver a party defendant to such actions, wdiere 
 the rights and remedies of the plaintiff terminate with the orig- 
 inal debtor, and when the receiver is not to be adjudged or 
 compelled to do anything for plaintiff's benefit. And in order 
 to make the receiver a proper co-defendant with the original 
 debtor in an action against the latter, some right to relief at 
 the receiver's hands should be stated, and some relief prayed as 
 against him.^^ But it is to be observed with reference to ac- 
 tions already begun against a debtor, over whose affairs a re- 
 ceiver is subsequently appointed, that the receiver can have nc 
 status in court until he has become a party to the action, the' 
 proper course, if he desires to be made a party, being to ap[Jy 
 to the court for that purpose ; and until this is done he can not 
 appear or take any action in the cause.^^ And where, per /jng 
 an appeal from a judgment against a railway company a re- 
 ceiver is appointed over the property of the company, int re- 
 
 26 Jay's Case, 6 Ab. Pr., 293. the mortgagee seeking t. redeem 
 
 27 Arnold v. Suffolk Bank, 27 the mortgaged premises be tore fore- 
 Barb., 424. And see Decker v. closure, a receiver having the equit- 
 Gardner, 124 N. Y., 334, 26 N. E., able title to the mortgagu and the 
 814. And see, post, § 344b. As to sole authority to enfon e it is a 
 the right of a receiver to be admit- necessary party to the vroceeding. 
 ted to defend an action brought Southern Mutual B. & 1 .. Assn. v. 
 against the persons over whose af- Andrews, 122 Ala., 598, 25 So., 113. 
 fairs he is appointed, see Honegger 28 Tracy v. First National Bank 
 V. Wettstein, 94 N. Y., 252. Upon of Selma, 37 N. Y., 523. 
 
 a bill filed by a mortgagor against
 
 CHAP. VIII.] ACTIONS. 307 
 
 ceiver is not a necessary party to such appeal, where there is 
 no attempt to charge the assets in his hands with the payment 
 of plaintiff's judgment.^^ But the receiver of an insolvent 
 debtor is a necessary party to an appeal from a judgment ren- 
 dered in the debtor's favor prior to the appointment of the re- 
 ceiver,^^ And where the receiver of an insolvent debtor has 
 been made a party defendant to an action previously com- 
 menced against the debtor, he can not complain that a judgment 
 rendered against the debtor is erroneous where he has wholly 
 failed himself to file a plea to the declaration. ^^ 
 
 § 259. Effect of receiver over one defendant in foreclo- 
 sure suit. The appointment of a receiver over the effects 
 of one of the defendants, in an action for the foreclosure of a 
 mortgage, constitutes no bar to the continuance of the action, 
 if properly begun ; and such appointment can at most only ren- 
 der the action defective as to parties, so as to render it neces- 
 sary for the plaintiff to bring the receiver before the court by a 
 supplemental bill in the nature of a bill of revivor.32 And even 
 this course is not necessary when the parties in interest are suffi- 
 ciently represented before the court to enable it to properly de- 
 termine the controversy.^^ And where a foreclosure suit is in- 
 stituted against two mortgagors, a receiver appointed at the in 
 stance of one of the mortgagors over the other to wind up the 
 affairs of a partnership existing between them is not vested, by 
 the order of appointment and in the absence of a conveyance, 
 with such an interest in or title to the partnership property as 
 to render him a necessary party to the foreclosure proceeding.^'* 
 
 § 260. Receivers of corporations as parties defendant. 
 In an action to foreclose a mortgage given by a corporation, 
 when a decree pro confesso is taken against the corporation, b}i 
 
 29 Keeley v. Union Pac. Ry. Co., 32 Wilson v. Wilson, 1 Barb. Ch., 
 58 Kan., 161, 48 Pac, 843. 592. 
 
 30 Scannell v. Felton, 57 Kan., 33 Wilson v. Wilson, 1 Barb. Ch,. 
 468, 46 Pac, 848. 592; St. Louis, C. G. & F. S. Ry. 
 
 31 Braddock Brewing Co. v. Co. v. Holladay, 131 Mo., 440, 33 S. 
 Pfaudler V. F. Co., 45 C. C. A., 491, W., 49. 
 
 106 Fed., 604. 34 Heffron v. Gage, 149 111., 182,
 
 308 RECEIVERS. [CIIAP. VIII. 
 
 which plaintiff's right to recover is estahhshed, and receivers 
 of the corporation are afterward appointed, it is not necessary 
 that they should be made parties defendant to the proceeding, 
 although the court may properly admit them as parties at any 
 stage of the cause, if they seek to be so admitted.^^ And the 
 question whether a receiver shall be permitted to defend an ac- 
 tion brought against the person or corporation over whose af- 
 fairs he is appointed, rests wholly in the discretion of the court 
 appointing him, and is not a matter of right upon the part of 
 the receiver. When, therefore, a receiver of a corporation is 
 denied permission to defend an action for the foreclosure of 
 mortgages given by the corporation, such action of the court 
 will not be reversed upon appeal.^^ But when a corporation is 
 dissolved, and a receiver is appointed in an action in the state 
 of its domicile, and a court of another state proceeds to render 
 judgment against the corporation in an action there pending, 
 without making the receiver a party, such judgment is not bind- 
 ing against the receiver of the corporation in the state wliere 
 it was dissolved.^'^ And when the action will, if sustained, re- 
 sult in relieving the receivers of the corporation of a consider- 
 able portion of their duties, being equivalent to that extent to a 
 removal from their office, it is manifestly proper and right that 
 they should be made parties defendant, and be allowed an op- 
 portunity of being heard in their own behalf.^^ 
 
 36 N. E., 569, followed by Manu- Adriatic Fire Ins. Co., 148 N. Y., 
 
 facturers Paper Co. v. Lindblom, 80 34, 42 N. E., 515. 
 111. App., 267. 38 Smith v. Trenton Delaware 
 
 35Willink v. Morris Canal & Falls Co., 3 Green Ch., 505. Since 
 
 Banking Co., 3 Green Ch., 377. an action against the receiver of a 
 
 36 Patrick v. Eells, 30 Kan., 680, corporation is in effect against the 
 2 Pac, 116. corporation itself, service of pro- 
 
 37 McCulloch V. Norwood, 58 N. cess may be had in such an action 
 Y., 562, reversing S. C, 36 N. Y., upon an agent of the corporation, 
 Supr. Ct. R., 180. See, also, Pen- under a statute providing that when 
 dleton V. Russell, 144 U. S., 640, an action is brought against a cor- 
 12 Sup. Ct. Rep., 743, affirming S. poration, service may be had upon 
 C. sub. nom. People v. Knicker- a local agent. Farris v. Receivers, 
 bocker Life Insurance Co., 106 N. 115 N. C, 600, 20 S. E., 167; Grady 
 Y., 619, 13 N. E., 447; Rodgers v.
 
 CHAP. VIII.] ACTIONS. 309 
 
 § 261. Receiver's appearance waives objection as to 
 want of leave. It has already been shown that the weight 
 of authority supports the doctrine that want of leave to sue a 
 receiver is not jurisdictional.39 And where the rule thus pre- 
 vails, it follows that where a receiver against whom an action 
 has been instituted without the leave of the appointing court 
 enters his voluntary appearance in the cause or in any other 
 way submits himself generally to the jurisdiction of the court 
 and defends upon the merits, the objection is thereby deemed to 
 be waived.'**^ Thus, a motion to dismiss an action brought 
 against a receiver, upon the ground that leave of court was not 
 first had before beginning the action, is waived by the appear- 
 ance of counsel for the receiver, such appearance being an ad- 
 mission that the defendant has been regularly brought into 
 court. Want of permission, therefore, to bring the action can 
 not be urged as a ground for dismissal after such appearance on 
 the part of the receiver.^i So it is held that when a receiver, 
 who is sued with other defendants, joins in answering to the 
 merits of the action, without raising the objection that leave of 
 court was not had to bring suit against him, he will not be 
 heard to make the objection upon motion in arrest of judg- 
 ment.'*2 go where a creditor has commenced attachment suits 
 in a foreign state to reach assets of his debtor over whom a re- 
 ceiver has been appointed in another state, but has failed to pro- 
 cure leave of the court making such appointment, the failure of 
 the creditor to dismiss such attachment suits upon being noti- 
 fied of the receivership is waived by the entry of the receiver's 
 
 V. Richmond & D. R. Co., 116 N. C, v. Steward, 45 Neb., 640, 63 N. W., 
 
 952, 21 S. E., 304. 924; American Steel & Wire Co. v. 
 
 s'o See, ante, § 254a. Bearse, 194 Mass., 596, 80 N. E., 
 
 40Hubbell v. Dana, 9 How. Pr., 623; Manker v. Loan Association, 
 
 424; Elkhart Car Works v. Ellis, 124 Iowa, 341. 
 
 113 Ind.. 215, 15 N. E., 249; Ridge 41 Hubbell v. Dana, 9 How. Pr., 
 
 V. Manker, 67 C. C. A., 596, 132 424. See, also, In re Young, 7 Fed., 
 
 Fed., 599; Holbrook v. Ford, 153 855. 
 
 111., 633, 39 N. E., 1091, 27 L. R. A., 42 Elkhart Car Works v. Ellis, 
 
 324, 46 Am. St. Rep., 917; Flentham 113 Ind., 215, 15 N. E., 249.
 
 310 RECEIVERS. [chap. VIII. 
 
 appearance in the attachment proceedings accompanied by a 
 motion to dismiss.^^ 
 
 § 262. Courts will not enjoin their own receivers; relief 
 granted in receivership proceeding; mandatory injunction 
 against receiver. Courts of equity will not ordinarily en- 
 tertain a bill for an injunction against their receivers, the prop- 
 er remedy for the party aggrieved being to apply to the court 
 for leave to assert his rights and to enforce his remedies in the 
 action in which the receiver was appointed.^^ And where a 
 receiver appointed by a federal court is maintaining an obstruc- 
 tion to a highway which amounts to a nuisance, a third person 
 injured thereby may intervene in the receivership proceeding 
 and is entitled to an injunction restraining the continuance of 
 the nuisance.^^ So where a receiver of a railway company has 
 unlawfully and without authority taken possession of certain 
 tracks and switches of another company, the latter, by inter- 
 vening in the receivership proceeding, may not only obtain a 
 prohibitory injunction restraining such use and occupation but 
 may have a mandatory injunction against the receiver requir- 
 ing the removal of certain tracks and switches. ^^ And since 
 a receiver, authorized by the court to bring an action, is bound 
 to proceed therewith, the court will not permit him to be en- 
 joined from so proceeding. The proper course, in such case, 
 
 43 Holbrook v. Ford, 153 111., 633, manage and operate such property 
 39 N. E., 1091, 27 L. R. A., 324, 46 according to the requirements of the 
 Am. St. Rep., 917. valid laws of the state in which 
 
 44 Smith v. Earl of Effingham, 2 such property shall be situated, in 
 Beav., 232. the same manner that the owner or 
 
 45 Felton V. Ackerman, 9 C. C. A., possessor thereof would be bound 
 457, 61 Fed., 225, 22 U. S. App., to do if in possession thereof." Sec- 
 154. This decision is based upon tion 2, of Act of March 3, 1S87, c. 
 section 2, of the act of congress of Z7Z, 24 Stat., 554, as amended by 
 August 13, 1888, which defines the Act of August 13, 1888, c. 866, 25 
 jurisdiction of circuit courts of the Stat., 436; 1 U. S. Comp. Stat., 
 United States and provides that 1901, p. 582; 4 Fed. Stat. Ann., ;,. 
 where, in any cause pending in such 386. 
 
 court, "there shall be a receiver or 46 Chattanooga Terminal Ry. Co. 
 
 manager in possession of any prop- v. Felton, 69 Fed., 273. 
 erty, such receiver or manager shall
 
 CHAP. VIII.] ACTIONS. 311 
 
 for parties dissatisfied with the receiver's conduct, is to apply 
 to the court appointing- him for relief, instead of seeking to en- 
 join him by another suit.^'^ 
 
 § 263. Rival claimants against receiver; bill of inter- 
 pleader. When there are different and rival claimants 
 to a fund in the hands of a receiver, each of whom has insti- 
 tuted proceedings against him for the fund, it is proper for the 
 receiver to bring an action in the nature of a bill of interpleader 
 against such claimants, and to compel them to interplead and 
 to determine their conflicting rights to the fund.'^^ 
 
 § 264. Receivers not allowed to waive defense; when 
 receiver not required to make particular defense. It is 
 held, in actions against receivers in their official capacity, that 
 they may not, either expressly or impliedly, waive any legal or 
 equitable defense on which their principal might have relied 
 had the action been brought against him. Receivers of an in- 
 surance company may not, therefore, in an action brought 
 against them to recover upon a policy of insurance issued by 
 the company, waive or dispense with the conditions of the pol- 
 icy as to notice of loss.^^ And although leave may be granted 
 to sue a receiver, he is at liberty to assert any defense which 
 he may have to the action, either by plea, answer or demurrer.^^ 
 But the court appointing a receiver will not, at the instance of a 
 party interested, require the receiver to set up certain matters 
 in defense to an action against him, where, upon investigation, 
 he is satisfied that such matters are not in accordance with the 
 facts and are incapable of proof. ^^ 
 
 47 Winfield v. Bacon, 24 Barb., Rep., 625, 43 L. Ed., 941, modifying 
 154. and affirming S. C, 26 C. C. A., 
 
 48 Winfield v. Bacon, 24 Barb., 279, 80 Fed., 969, 53 U. S. App., 
 154. 302, the court say : "It becomes 
 
 49 McEvers v. Lawrence, Hoffm., important to consider what are the 
 172. rights and duties of a receiver in 
 
 50 Davis V. Duncan, 19 Fed., 477. respect to claims made against the 
 
 51 Land Title & Trust Co. v. As- estate in his possession. It is often 
 phalt Co., 121 Fed., 192. In Bos- said that he is merely the hand of 
 worth V. St. Louis Terminal R. the court which has appointed him; 
 Assn., 174 U. S., 182, 19 Sup. Ct. and for certain purposes that is not
 
 312 
 
 RECEIVERS. 
 
 [chap. VIII, 
 
 § 264(7, When receiver may appeal from orders entered 
 in receivership cause. As to the right of a receiver to 
 appeal from orders and judgments entered in the course of the 
 receivership proceedings, it is held that he has the same right of 
 appeal from an adverse judgment for the recovery of funds 
 pertaining to his receivership, as the party over whom he was 
 appointed would have had.^^ ^nd where a claim for damages 
 for personal injuries has been allowed in a receivership proceed- 
 ing, the receiver, being the representative of all parties to the 
 suit and being under obligation to protect the property in his 
 possession, has the right to appeal from such order.^^ And 
 where, upon an intervening petition filed by a third person in 
 the receivership cause, an injunction has been granted restrain- 
 ing the receiver from continuing a nuisance, the receiver may 
 appeal from such in junctional order, and his action in so doing 
 is regarded as consonant with his relation to the court. ^^ And 
 
 an inapt expression. He is charged 
 with the duty of carrying into exe- 
 cution the orders of that court, but 
 he is also a custodian of property, 
 and has by virtue of such custody 
 .certain obligations to the parties 
 owning or interested therein. 
 
 First. A receiver may defend, 
 both in the court appointing him and 
 by appeal, the estate in his posses- 
 sion against all claims which are an- 
 tagonistic to the rights of both par- 
 ties to the suit. For instance, he 
 may thus contest a claim for taxes, 
 because if valid they are superior 
 to the rights of both parties; in a 
 case like the present, superior to the 
 rights of mortgagor and mortgagee. 
 Second. He may likewise defend 
 the estate against all claims which 
 are antagonistic to the rights of 
 either party to the suit, subject to 
 the limitation that he may not in 
 such defense question any order or 
 decree of the court distributing bur- 
 
 dens or apportioning rights between 
 the parties to the suit, or any order 
 or decree resting upon the discre- 
 tion of the court appointing him. 
 
 In the case at bar one defense, 
 as shown by the exceptions taken 
 to the report of the master, was that 
 the claim of the intervener was not 
 against the estate, but against some 
 third party. That defense the re- 
 ceiver had a right to make. We do 
 not mean that he alone can act ; we 
 do not stop to inquire what rights 
 either party to the suit may have in 
 this respect. All we now decide is 
 that the receiver is a proper party 
 to make the defense." 
 
 52 Melendy v. Barbour, 78 Va., 
 544; Kavanagh v^ Bank of Ameri- 
 ca, 239 111., 404, 88 N. E., 171. 
 
 53Thom V. Pittard, 10 C. C. A., 
 352, 62 Fed., 232, 8 U. S. App., 597. 
 
 54 Felton V. Ackerman, 9 C. C. A., 
 457, 61 Fed., 225, 22 U. S. App., 154.
 
 CHAP. VIII.]' ACTIONS. 313 
 
 the right of appeal has been recognized to the extent of hold- 
 ing that, where an application is made to the court to effect a 
 settlement with a receiver, which is represented to be advan- 
 tageous to all parties, and an order is entered requiring the re- 
 ceiver to accept the settlement in question, the receiver, if dis- 
 satisfied, may maintain an appeal from such order.^^ And a 
 receiver's right of appeal from the allowance of a claim against 
 the estate in his possession does not necessarily fail when the 
 receivership has been terminated to the extent of surrendering 
 the property to the parties entitled thereto. ^^ 
 
 § 2646. Receiver can not appeal from administrative or- 
 ders; nor from orders of distribution; costs on unauthor- 
 ized appeal. An appeal will not lie, how^ever, upon behalf 
 of a receiver from purely administrative orders which the court 
 in the exercise of its discretion, may make in the cause for the 
 proper care and management of the property in its custody. 
 Thus, where a receiver has been appointed over the property 
 of a railway company, an order which has in view the safe op- 
 eration of the road is purely administrative and, as such, whol- 
 ly within the discretion of the court, and an appeal from such 
 an order by the receiver will therefore be dismissed. ^'^ Nor can 
 a receiver maintain an appeal from an order directing the dis- 
 ss McGregor v. Third National decrees which may finally be entered 
 Bank. 124 Ga., 557, 53 S. E., 93. against the estate." 
 
 56 Bosworth v. St. Louis Termi- S7 Hunt v. Illinois Central R. Co., 
 
 nal R. Assn., 174 U. S., 182, 19 Sup. 37 C. C. A., 548, 96 Fed., 644. In 
 Ct. Rep.. 625, 43 L. Ed., 941, modi- Bosworth v. St. Louis Terminal R. 
 fying and affirming S. C, 26 C. C. Assn., 174 U. S., 182. 19 Sup. Ct. 
 A., 279, 80 Fed., 969, 53 U. S. App., Rep., 625, 43 L. Ed., 941, modifying 
 302. In this case the court say: and affirming S. C, 26 C. C. A., 
 "It is common practice in courts of 279, 80 Fed., 969, 53 U. S. App., 302, 
 equity, anxious as they are to be the court say: "He (the receiver) 
 relieved of the care of property, to may not appeal from an order dis- 
 turn it over to the parties held en- charging or removing him, or one 
 titled thereto, even before the final directing him in the administration 
 settlement of all claims against it, of the estate, as for instance to issue 
 and at the same time to leave to the receiver's certificates, to make im- 
 receiver the further defense of such provements, or matters of that kind, 
 claims, the party receiving the prop- all of which depend on the sound 
 crty giving security to abide by any discretion of the trial court."
 
 314 
 
 RECEIVERS. 
 
 [chap. VIII. 
 
 tribution of funds in his hands among the different creditors 
 or claimants entitled thereto.^^ And since he is the mere serv- 
 ant or agent of the court, he will not be allowed of his own 
 volition to appeal from an order made in the progress of the 
 cause in which he is appointed. When, therefore, without au- 
 thority of the court, he prosecutes such an appeal, it may be 
 dismissed on motion.^^ Even under a statute allowing ap- 
 peals "as a matter of right on the application of either party, 
 or his personal representatives," a receiver is not entitled to an 
 appeal from an order directing him to pay a claim which has 
 been allowed by the court, since he is not a party to the cause.^^ 
 And where a receiver thus takes an unauthorized appeal, it is 
 proper to tax the costs of the appeal against the receiver per- 
 sonally.^^ 
 
 § 265. Notice of application for leave to sue receiver; 
 when corporate creditors not necessary parties to action by 
 stockholders against receiver of corporation. When per- 
 
 SSKnabe v. Johnson, 107 Md., 
 616, 69 Atl., 420; Battery Park Bank 
 V. Western C. Bank, 127 N. C, 432, 
 yj S. E., 461. See Hoffman v. 
 Bank, 4 N. Dak., 473, 61 N. W., 
 1031. In Bosworth v. St. Louis 
 Terminal R. Assn., 174 U. S., 182, 
 19 Sup. Ct. Rep., 625, 43 L. Ed., 
 941, modifying and affirming S. C, 
 26 C. C. A., 279, 80 Fed., 969, 53 
 U. S. App., 302, the court say: 
 "Neither can he question any subse- 
 quent order or decree of the court 
 distributing the estate in his hands 
 between the parties to the suit. It 
 is nothing to him whether all of the 
 property is given to the mortgagee 
 or all returned to the mortgagor. 
 He is to stand indiflferent between 
 the parties, and may not be heard 
 either in the court which appointed 
 him, or in the appellate court, as to 
 the rightfulness of any order which 
 is a mere order of distribution be- 
 
 tween the parties. In this connec- 
 tion it must be noticed that an in- 
 tervenor, although for certain pur- 
 poses recognized as a party to the 
 litigation, is not such a party as 
 comes within the scope of the limi- 
 tation just announced. He is one 
 who comes into the litigation assert- 
 ing a right antagonistic or superior 
 to that of one or both of the parties 
 thereto, and a receiver, who repre- 
 sents, so far as the property is con- 
 cerned, the interests of the parties, 
 may rightfully challenge his claim; 
 provided that in such challenge he 
 does not question any orders of the 
 court heretofore referred to." 
 
 59 McKinnon v. Wolfenden, 78 
 Wis., 237, 47 N. W., 436. 
 
 SODorsey v. Sibert, 93 Ala., 312, 
 9 So., 288. 
 
 61 First National Bank v. Bunt- 
 ing, 7 Idaho, 27, 59 Pac, 929, 1106.
 
 CHAP. VIII.] ACTIONS. 315 
 
 sons apply for and obtain leave of court to bring an action 
 against a receiver in his official capacity, it is not essential to the 
 jurisdiction of the court over the receiver, or to the validity of 
 the order, that the application should be based upon notice to 
 the parties in the action wherein the receiver was appointed. It 
 is sufficient that leave be granted by the court having control 
 over the receiver, upon notice to him, against whom alone the 
 cause of action exists, and against whom the proceedings must 
 be brought. 62 And where an action is brought by shareholders 
 of a corporation against the receiver of the corporation to set 
 aside a decree providing for an assessment upon the subscribers 
 to the stock, the creditors of the corporation are held not to be 
 necessary parties to the action against the receiver.63 
 
 § 266. English practice as to defending actions of eject- 
 ment against receivers. The practice of the English Court 
 of Chancery, with reference to defending actions of ejectment 
 brought against receivers, seems to have been to apply to the 
 court for leave to defend. And an order of reference to a mas- 
 ter was sometimes made, to ascertain and report whether it was 
 for the best interests of the parties that the receiver should de- 
 fend the ejectment. 6^ 
 
 § 267. When receiver not entitled to costs. As regards 
 the liability for costs incurred by a receiver in defense of an ac- 
 tion, it has been held that he is not entitled to the costs of 
 defending, when he has not first obtained leave of the court ap- 
 pointing him to defend. 65 
 
 § 268. Effect of receiver's discharge. After a receiver 
 has been duly discharged and has parted with all the assets 
 which came to his possession, the court will not entertain an 
 application by a claimant or creditor for payment of his de- 
 mand by the receiver. In such case, the receiver being functus 
 officio and no longer the agent or representative of the court, 
 
 «2 Potter V. Bunnell, 20 Ohio St., 64 Anonymous, 6 Ves., 287. 
 
 150; Atlantic Trust Co. v. Dana, 62 65 Convers v. Crosbie, 6 Ir. Eq, 
 
 C C. A., 657, 128 Fed.. 209. 657. 
 
 63 Farwell v. Great Western Tel. 
 Co., 161 III., 522, 44 N. E., 891.
 
 316 RECEIVERS [chap. VIII. 
 
 and having no funds in his hands, the remedy of a creditor 
 should be sought by an apphcation to vacate the order of dis- 
 charge, and while such order stands, he can not enforce his de- 
 mand against the receiver.^^ If, however, a receiver is dis- 
 charged pending an appeal from a judgment against him, and 
 the judgment is afterward affirmed, the discharge is no bar to 
 the final entry of judgment against the receiver as affirmed. ^'^ 
 And the rescinding of an order for a receiver, without preju- 
 dice to any person in interest, constitutes no defense to an ac- 
 tion against him to recover property of which he had taken pos- 
 session under such appointment. ^^ And when a receiver is ap- 
 pointed without notice to defendant, under a statute providing 
 that an order appointing a receiver without notice shall be void, 
 the owner of the premises in controversy may maintain an ac- 
 tion against the receiver to recover rents which he has collected 
 by virtue of such appointment.^^ 
 
 § 268a. When receiver concluded by judgment. A re- 
 ceiver, like any other suitor, will be concluded by a judgment in 
 an action to which he was in effect a party, although not joined 
 as such by name. Thus, when a receiver of an insolvent bank 
 in Illinois, whose funds in New York are attached by creditors 
 after the receiver's appointment, causes the appearance of the 
 bank to be entered in the attachments in New York and pro- 
 cures the giving of a bond to release the funds attached, and 
 thereby obtains possession of such funds, if the attachments re- 
 sult in judgments in favor of the creditors, the receiver will not 
 be allowed to enjoin such creditors from enforcing their judg- 
 ments by actions upon such bond or otherwise. And in such 
 case, although no formal order of the court authorized the re- 
 
 66 New York & W. U. T. Co. v. defense to the receiver when finally 
 Jewett, lis N. Y., 166, 21 N. E., called upon for satisfaction of the 
 1036. See, contra, Miller v. Loeb, judgment. 
 
 64 Barb., 454. 68 Johnson v. Powers, 21 Neb., 
 
 67 Woodruff V. Jewett, 115 N. Y,. 292, 32 N. W., 62. 
 
 267, 22 N. E., 156. But Mhe court 69 Johnson v. Powers, 21 Neb., 
 
 decline to pass upon the question of 292, 32 N. W., 62. 
 the effect of such discharge as a
 
 CHAP. VIII.] ACTIONS. 317 
 
 ceiver to appear in the New York suits, yet the retention by the 
 court of the funds thus accruing to the receiver is held to be 
 equivalent to a ratification of his action in that regard."^^ 
 
 iO Smith V. United States Express Co., 135 III, 279, 25 N. E., 525.
 
 CHAPTER IX. 
 OF THE RECEIVER'S LIABILITIES. 
 
 § 269. Receiver responsible directly to court; liabilities to third per- 
 sons, how and when enforced; not accountable to other 
 court. 
 
 270. Receiver liable for injury to property while in his possession; 
 
 plaintiff not liable. 
 
 271. Leave of court necessary before bringing suit against receiver. 
 
 272. Not personally liable on covenant made in official capacity; 
 
 when personally liable on note given in carrying on business. 
 
 273. Not liable on covenants of original party; when liable for rent. 
 273a. Becomes liable by adoption of covenant; election to adopt 
 
 lease; lessor's lien; no personal liability for rent. 
 273b. Rule further illustrated; question of adoption of covenant one 
 
 of discretion. 
 273c. Liability for rent; stipulated rent or rent based on reasonable 
 
 rental value. 
 273d. Can not impair contract liability of original party. 
 
 274. Liability for loss of funds on failure of bank; liable for ming- 
 
 ling funds. 
 274a. When receiver of bank liable to pay deposit or draft in full; 
 check; del credere commission. 
 
 275. Liability dependent upon receiver's negligence; bills of ex- 
 
 change of failing tradesman; misconduct of attorney. 
 
 276. When liable for employing property in his private business; 
 
 speculative profits. 
 
 277. Liable as trespasser for selling mortgaged property; liable for 
 
 tort; liable for rent of real estate. 
 
 278. Liability does not terminate until discharged; appointed trustee 
 
 in insolvent proceedings, still liable as receiver. 
 
 279. Receivers of railway liable in another state for breach of duty 
 
 as common carriers. 
 
 280. Liable to commitment for failure to pay balance into court; 
 
 the practice in such cases. 
 28L When not liable to landlord for rent of partnership premises. 
 
 282. Liable for paying money to persons not entitled. 
 
 283. Not liable for loss to real property remaining in owner's 
 
 possession. 
 
 284. Solicitor assuming to act as receiver, liable for loss in rents. 
 
 318
 
 CHAP. IX.] LIABILITIES. 319 
 
 § 285. Receiver's liability extended to his administrator. 
 
 286. Dismissal of bill does not discharge liability; receiver pro- 
 tected by order. 
 
 286o. Claims for damages for tort of receiver's agents, when a 
 charge upon the fund. 
 
 286b. Remedy for fraudulent conversion of estate by receiver and 
 his attorney; supplemental bill in receivership cause. 
 
 § 269. Receiver responsible directly to court; liabilities 
 to third persons, how and when enforced ; not accountable 
 to other court. A receiver is responsible for his official acts 
 directly to the court appointing him, and this responsibility con- 
 tinues until he is finally discharged.^ This immediate and di- 
 rect responsibility to the court, however, does not relieve him 
 from liabilities which he may incur toward third parties, and 
 these liabilities are generally recognized and frequently en- 
 forced by the same court which has appointed him. And when 
 a party to the cause, who is interested in the funds in the re- 
 ceiver's hands, ascertains that the receiver has made improper 
 payments or has misapplied the funds, or any portion of them, 
 he may apply to the court for relief at any stage of the cause, 
 and it is not necessary that he should wait until the receiver 
 passes his accounts, and then have the improper payments dis- 
 allowed.2 As a general rule, however, a receiver can only be 
 called to account by the court appointing him, and another court 
 will not entertain a bill to compel him to account for the per- 
 formance of his trust, since he is not the receiver of the second 
 court, and can not be called upon to answer as such.^ And he 
 can only be divested of the fund intrusted to him as receiver by 
 an order of the court appointing him, made in the action in 
 which he was appointed.'* 
 
 § 270. Receiver liable for injury to property while in 
 his possession; plaintiff not liable. When property in liti- 
 gation passes by order of court into the hands of a receiver, 
 who gives a bond for the faithful execution and performance 
 
 1 Henry v. Kaufman, 24 Md., 1. 3 Conkling v. Butler, 4 Biss., 22. 
 See Conkling v. Butler, 4 Biss., 22. •* Galster v. Syracuse Savings 
 
 2 DeWinton v. Mayor of Brecon, Bank, 29 Hun, 594. 
 28 Beav., 200.
 
 320 RECEIVERS. [CIIAP. IX. 
 
 of his trust, the remedy for injury done or alleged to be done 
 during- the receiver's possession should be sought against him 
 and his sureties, and not against the plaintiff in the action in 
 which he was appointed. The receiver being appointed for the 
 benefit, not of the plaintiff alone, but of all parties in interest, 
 and being an officer of the court, he is liable for any fraud or 
 negligence of his own whereby injury accrues to the property 
 intrusted to him. In the absence, therefore, of any evidence of 
 fraud or collusion on the part of the plaintiff in the action, he 
 will not be held liable for injury to the property while in the re- 
 ceiver's possession. 5 
 
 § 271. Leave of court necessary before bringing suit 
 against receiver. It is important to observe, that while 
 the receiver's liability to the parties in interest, for misconduct 
 or injury to the property intrusted to his care, is generally rec- 
 ognized by courts of equity, they will not ordinarily permit such 
 liability to be enforced against him by legal proceedings, unless 
 leave of court is first obtained for that purpose. Being the rep- 
 resentative of the court, it will not permit him to be made a 
 defendant without its consent having first been given. And 
 persons desirous of enforcing demands against a receiver are, 
 therefore, required either to apply to the court, by motion or 
 petition, for relief against the receiver, or to ask leave of the 
 court to institute an action against him.^ 
 
 § 272. Not personally liable on covenant made in official 
 capacity ; when personally liable on note given in carrying 
 on business. A receiver will not be held personally liable, 
 in his individual capacity, upon a covenant or instrument made 
 by him in his official capacity, and the only remedy upon such 
 covenant must be sought against the estate of which he was re- 
 ceiver. Thus, when the receiver of a banking corporation sells 
 and assigns certain judgments in favor of the bank, and the in- 
 
 5 Kaiser v. Kellar, 21 Iowa, 95; 77; Downs v. Allen, 10 Lea, 652. 
 
 Robinson v. Arkansas L. & T. Co., And see, post, § 645. 
 
 74 Ark., 292, 85 S. W., 413. See, 6 See chapter VIII, subdivision V. 
 
 also, Terrell v. Ingersoll, 10 Lea, Actions against Receivers.
 
 CHAP. IX.] LIABILITIES. 321 
 
 strument of assignment is executed strictly in his official, and 
 not in his personal, capacity, and contains a covenant that the 
 several judgments sold are due and unpaid, no personal liabil- 
 ity is incurred by the receiver upon such covenant, and it will be 
 presumed, under such circumstances, that the purchaser trust- 
 ed to the receiver in his official capacity.''' So when, upon the 
 settlement of the receiver's accounts, the court fixes the amount 
 to be paid as counsel fees for services rendered to the receiver, 
 upon notice to such counsel and his appearance upon the ap- 
 plication, and the court thereupon accepts the final account of 
 the receiver and discharges him from his trust, no action will 
 lie against him for the recovery of a balance claimed to be due 
 for such services.^ But in Iowa it has been held that, where 
 the order appointing a receiver authorized him to purchase 
 stock and material to carry on a business, and a note is given 
 by him for such purchases signed by him as receiver, such note 
 is beyond the authority of the receiver and does not bind the es- 
 tate in his possession and he consequently remains personally 
 liable upon it.^ 
 
 § 273. Not liable on covenants of original party; when 
 liable for rent. As a rule, receivers are not liable upon the 
 covenants of the persons over whose effects they are appointed, 
 but become liable solely by reason of their own acts.^^ And 
 receivers who have been appointed over a corporation, and who 
 have accepted the trust and taken possession of the assets, do 
 not thereby become liable for rent of the premises held by the 
 company under a lease; nor can they be held liable until they 
 elect to take possession of the premises, or until the doing of 
 some affirmative act which would in law be equivalent to such 
 
 7 Livingston v. Pettigrew, 7 Lans., 10 Wells v. Hartford Manilla Co., 
 405. See, also, Ellis v. Little, 27 76 Conn., 27, 55 Atl., 599; Scott v. 
 Kan., 707. Rainier P. & R. Co., 13 Wash., 108, 
 
 8 Walsh V. Raymond, 58 Conn., 42 Pac, 531 ; Casey v. Northern Pac. 
 251, 20 Atl., 464. R. Co., 15 Wash., 450, 48 Pac, 53; 
 
 9 Peoria Steam Marble Works v. Central Trust Co. v. East T. L. Co., 
 Hickey, 110 Iowa, 276, 81 N. W.. 79 Fed., 19. 
 
 473, 80 Am. St. Rep., 296. 
 Receivers — 21.
 
 jJZ 
 
 RECEIVERS. 
 
 [CIIAP. IX. 
 
 an election. 1^ Nor does the receiver, merely by virtue of taking 
 possession of leased property, forming a part of the assets or 
 estate of the receivership, become an assignee of the term or 
 liable for the rent in accordance with the covenants of the lease. 
 He is entitled to a reasonable time after taking possession to de- 
 termine whether he will elect to affirm the lease and to retain 
 the premises. ^2 Nor can the liability created by the contracts 
 
 11 Commonwealth v. Franklin In- 
 surance Co., 115 Mass., 278; Gaither 
 V. Stockbridge, 67 Md., 222, 9 At!., 
 632, 10 Atl., 309. And see Common- 
 wealth V. Franklin Insurance Co., 
 
 115 Mass., 278, and Dayton Hy- 
 draulic Co. V. Felsenthall, 54 C. C. 
 A., 537, 116 Fed., 961, as to what 
 constitutes such an election. And 
 see Griffith v. Blackwater B. & L. 
 Co., 46 West Va., 56, 33 S. E., 125 ; 
 Tennis Bros. Co. v. Wetzel & T. 
 Ry. Co., 140 Fed., 193. 
 
 i2Quincy, M. & P. R. Co. v. 
 Humphreys, 145 U. S., 82, 12 Sup. 
 Ct. Rep., 787; St. Joseph & St. L. 
 R. Co. V. Humphreys, 145 U. S., 
 105, 12 Sup. Ct. Rep., 795; United 
 States Trust Co. v. Wabash West- 
 ern R. Co., 150 U. S., 287, 14 Sup. 
 Ct. Rep., 86; Seney v. Wabash 
 Western R. Co., 150 U. S., 310, 14 
 Sup. Ct. Rep., 94; Carswell v. F. 
 L. & T. Co., 20 C. C. A., 282, 74 
 Fed., 88, 43 U. S. App., 300; Empire 
 Distilling Co. v. M'Nulta, 23 C. C 
 A., 415, 77 Fed., 700, 46 U. S. App., 
 578; Mercantile Trust Co. v. Far- 
 mers' L. & T. Co., 26 C. C. A., 383, 
 81 Fed., 254, 49 U. S. App., 462, 
 affirming S. C, 71 Fed., 601 ; Central 
 Trust Co. V. Continental Trust Co., 
 30 C. C. A., 235, 86 Fed., 517, 58 
 U. S. App., 604; Dayton Hydraulic 
 Co. V. Felsenthall, 54 C. C. A., 537, 
 
 116 Fed., 961; Johnson v. Lehigh 
 V. T. Co., 130 Fed., 932; Spencer 
 
 V. World's Columbian Exposition, 
 163 111., 117, 45 N. E., 250; DeWolf 
 V. Royal Trust Co., 173 111., 435, 50 
 N. E., 1049; Link Belt Machinery 
 Co. V. Hughes, 174 111., 155, 51 N. 
 E., 179; Bell v. American Protective 
 League, 163 Mass., 558, 40 N. E., 
 857, 28 L. R. A., 452, 47 Am. St. 
 Rep., 481 ; Stoepel v. Union Trust 
 Co., 121 Mich., 281, 80 N. W., 13; 
 Nelson v. Kalkhoff, 60 Minn., 305, 
 62 N. W., 335; Stokes v. Hoffman 
 House, 167 N. Y., 554, 60 N. E., 
 667, 53 L. R. A., 870. See, contra, 
 People V. Universal Life Insurance 
 Co., 30 Hun, 142. And see Stockton 
 V. Mechanics etc.. Bank, 32 N. J. 
 Eq., 163; Klein v. Gavenesch Co., 64 
 N. J. Eq., 50, 53 Atl., 196 ; McGraw 
 V. Union Trust Co., 135 Mich., 609, 
 98 N. W., 390. See, post, % 394/?. 
 In Fleming v. Fleming Hotel Co., 
 69 N. J. Eq., 715, 61 Atl., 157, it 
 was held, under a lease providing 
 for a forfeiture by the lessor in case 
 the lessee failed to pay the rent, that 
 where a receiver had been appointed 
 and had gone into possession of the 
 premises, the lessor could not forfeit 
 the lease until it should be made to 
 appear that the receiver was unable 
 or unwilling to pay the past due 
 rent. In People v. St. Nicholas 
 Bank, 151 N. Y., 592, 45 N. E., 1129, 
 the premises had been leased to a 
 corporation which afterward became 
 insolvent and over which a receiver
 
 CHAP. IX.] LIABILITIES. 323 
 
 or covenants of an insolvent company be imposed upon the re- 
 ceiver upon the ground that the receivership is based upon the 
 insolvency and fraudulent management of a trust estate as dis- 
 tinguished from a proceeding brought for the foreclosure of 
 liens.i^ 
 
 § 273(2. Becomes liable by adoption of covenant; elec- 
 tion to adopt lease; lessor's lien; no personal liability for 
 rent. Upon the other hand, w^hile the mere acceptance of 
 the trust will not render the receiver liable, yet where, by his 
 unequivocal acts, he has indicated an intention to receive and 
 accept the benefits of the contract of his principal, he will be 
 held to have elected to be bound thereby and accordingly he 
 becomes subject to the liabilities thereby created. i'* And where 
 a receiver has taken possession of the demised premises under 
 a lease of his principal and has remained in possession after the 
 lapse of a reasonable time in which to make his election, he 
 will be held, by implication, to have accepted the lease and to be 
 bound thereby; and having thus become bound by the cov- 
 enants of the lease, he is held to have adopted it as a whole, 
 and he can not afterward escape liability as to the unexpired 
 portion of the term by serving notice upon the lessor and surren- 
 dering possession. 15 And in such case, where the lease pro- 
 vides that the lessor shall have a lien for rent upon the property 
 
 was then appointed, who took pos- 13 General Electric Co. v. Whit- 
 session of the premises but shortly ney, 20 C. C. A., 674, 74 Fed., 664, 
 afterward vacated them. The lessor 41 U. S. App., 165. 
 thereupon leased them at a reduced !■* Spencer v. World's Columbian 
 rental for the balance of the term. Exposition, 163 111., 117, 45 N. E., 
 This was a claim for the difference 250. 
 
 in rental for the balance of the term l^DeWolf v. Royal Trust Co., 
 
 and it was held that the receiver 173 III., 435, 50 N. E., 1049. And 
 
 should recognize the claim. From it is held in New Jersey, under a 
 
 the report of the case it is not clear statute providing that leased prem- 
 
 whether the claim was presented for ises shall not be liable to be taken 
 
 preference as one of the expenses of under execution, attachment or 
 
 the receivership or merely as the "other process," unless the person 
 
 claim of a general creditor to be at whose instance such process is 
 
 paid /jro rata with those of other issued shall first pay to the landlord 
 
 creditors. all rent due, that the appointment
 
 324 RECEIVERS. [chap. IX. 
 
 of the lessee and the receiver has taken possession and adopted 
 the lease, he is bound by such provision, and the lessor is there- 
 fore entitled to a lien upon the proceeds of the sale of the in- 
 solvent's estate for the payment of the rent due under the 
 lease.i^ But where a receiver has surrendered the demised 
 premises upon the expiration of the receivership, he can not be 
 held personally liable under the lease for rent accruing there- 
 after, since no privity exists between him and the lessor which 
 could render him personally liable.^'^ 
 
 § 273b. Rule further illustrated; question of adoption 
 of covenant one of discretion. As further illustrating the 
 rule under discussion, it is held that the receivers of a railway 
 company are not bound by a contract to carry passengers en- 
 tered into by the company prior to their appointment. ^^ So 
 the receiver of an insolvent corporation may elect whether he 
 will be bound by an executory contract which had been made by 
 the corporation for the purchase of real estate or abide the dam- 
 ages resulting from its breach. ^^ And upon similar principles, 
 it is held that a receiver who' succeeds a former receiver is not 
 bound by the contracts of the latter and is under no obligation 
 to carry them out.20 And a receiver who is directed to con- 
 tinue a business temporarily for the purpose, among other 
 things, of finishing uncompleted contracts, while not bound 
 to finish them or warranted in so doing where the property 
 would not otherwise be jeopardized, should at least investigate 
 them and should pass judgment whether the best interests of 
 
 of a receiver over, and his taking 16 Link Belt Machinery Co. v. 
 
 possession of such premises, is such Hughes, 174 111., 155, 51 N. E., 179. 
 
 a taking under "other process" as 17 Johnston v. Robuck, 114 Iowa, 
 
 brings the case within the statute. 530, 87 N. W., 491. 
 
 The receiver may, therefore, be re- 18 Casey v. Northern Pac. R. Co., 
 
 quired to pay to the landlord the 15 Wash., 450, 48 Pac, 53. 
 
 rent due at the filing of the bill 19 Central Trust Co. v. East T. L. 
 
 for a receiver in preference to the Co., 79 Fed., 19. 
 
 claims of general creditors. Wood 20 Kansas Pacific Ry. Co. v. 
 
 V. McCardle W. & F. C. Co., 49 Bayles, 19 Colo., 348, 35 Pac, 744. 
 
 N. J. Eq., 433, 24 Atl., 228.
 
 CHAP. IX.] LIABILITIES. 325 
 
 the estate require their fulfillment.^! And the question whether 
 a receiver shall renounce the covenants of his principal or elect 
 to be bound by them is one of administrative policy resting 
 M^holly within the discretion of the chancellor, and his action in 
 this regard will not be disturbed upon appeal. ^2 
 
 § 273c. Liability for rent; stipulated rent or rent based 
 on reasonable rental value. Where a receiver takes pos- 
 session of the demised premises which had been occupied by his 
 principal under a lease and makes his election to be bound by the 
 covenants thereof, he becomes subject to all the obligations of 
 the lease, and in such case, it is, of course, clear that he is liable 
 for the rent at the rate stipulated in the instrument and not 
 upon the basis of the reasonable rental value of the premises. ^3 
 Where, however, the receiver has renounced the lease and has 
 elected not to be bound by the obligations thereof, there is a 
 direct conflict of authority as to whether he becomes liable for 
 the rent during the period of his occupancy at the rate stipu- 
 lated in the lease or only for the reasonable rental value. It 
 has been held that, although the receiver elects not to be bound 
 by the covenants of the lease, nevertheless, if he continues in 
 possession, he becomes liable for the stipulated rent.24 This 
 view is founded upon the theory that although not bound by any 
 of the covenants of the lease, he is nevertheless in possession 
 under it, since otherwise he would be a trespasser, and, since his 
 possession is thus under the lease, the rental accruing for such 
 possession must be determined by that instrument. The oppo- 
 site and, undoubtedly, the better view is supported by the weight 
 of authority which holds that where the receiver renounces the 
 
 21 Harrigan v. Gilchrist, 121 Wis., 23 Spencer v. World's Columbian 
 127, 352, 99 N. W., 909, 978. Exposition, 163 111., 117, 45 N. E., 
 
 22 Mercantile Trust Co. v. Far- 250; Dayton Hydraulic Co. v. Fel- 
 mers' L. & T. Co., 26 C. C. A., 383, senthall, 54 C. C. A., 537, 116 Fed., 
 81 Fed., 254, 49 U. S. App., 462, 961. 
 
 affirming S. C, 71 Fed, 601 ; Cen- 24 Nelson v. Kalkhoff, 60 Minn., 
 
 tral Trust Co. v. Continental Trust 305, 62 N. W., 335. 
 Co., 30 C. C. A, 235, 86 Fed., 517, 
 58 U. S. App., 604.
 
 326 RECEIVERS. [chap. IX. 
 
 lease, he is subject to none of the obHgations created by it, and 
 his Hability is accordingly held to be limited to the reasonable 
 rental value of the premises.25 
 
 § 2Tid. Can not impair contract liability of original 
 party. While, as has already been shown, a receiver is in 
 no way bound by the contracts or covenants of the person over 
 whose estate he is appointed, it is equally true that where a valid 
 and subsisting contract has been entered into by his principal 
 and a third person, a receiver who is afterward appointed can 
 do no act which will in any way impair the obligations of such 
 contract, and the obligee may therefore maintain an action 
 against the insolvent to recover damages resulting from a vio- 
 lation of the agreement, and to such action the receiver is neith- 
 er a necessaiy nor a proper party.26 Where, therefore, at the 
 time of the appointment of a receiver, a valid lease was out- 
 standing whereby a liability was created for the payment of rent 
 thereunder upon the part of one of the parties who subsequent- 
 ly becomes insolvent, the receiver can not, by serving notice of 
 his intention of terminating the lease, relieve his insolvent from 
 liability for the rent, and an action may therefore be maintained 
 against the latter to recover damages resulting from the vio- 
 lation of the covenants of the lease. And in such case the re- 
 ceiver is not a necessary party to the action and it is therefore 
 not error to refuse to render judgment against him where he 
 was joined as a party defendant to the proceeding.27 So, where 
 a national bank, upon selling certain bonds, has made a valid 
 agreement to repurchase the bonds upon certain conditions, and 
 such contract is a binding and outstanding obligation against 
 the bank at the time of the appointment of a receiver over it, the 
 
 25 Bell V. American Protective 16 Slip. Ct. Rep., 439; Wolf v. Na- 
 League, 163 Mass., 558, 40 N. E., tional Bank of Illinois, 178 III., 85, 
 857, 28 L. R. A., 452, 47 Am. St. 52 N. E., 896. 
 
 Rep., 481 ; Stoepel v. Union Trust 27 Chemical National Bank v. 
 
 Co., 121 Mich., 281, 80 N. W., 13. Hartford Deposit Co., 156 111., 522, 
 
 26 Chemical National Bank v. 41 N. E., 225; S. C, 161 U. S., 1. 
 Hartford Deposit Co., 156 111., 522, 16 Sup. Ct. Rep., 439. 
 
 41 N. E., 225; S. C, 161 U. S., 1.
 
 CHAP. IX.] LIABILITIES. 327 
 
 laiter has no power to impair the obligation thereby created, 
 and an action may therefore be maintained against the bank 
 to recover damages for a violation of its undertaking.^^ But 
 it is to be observed, in such case, that any judgment which may 
 be rendered should run against the obligor only and not against 
 his receiver.29 
 
 § 274. Liability for loss of funds on failure of bank; lia- 
 ble for mingling funds. The question of a receiver's lia- 
 bility for loss of the funds intrusted to him, by reason of the 
 misconduct of another, is one of importance, and has sometimes 
 arisen in cases of the failure of banks having funds of receivers 
 in their custody. The question would seem to depend upon the 
 manner of keeping the account, and it has been held that if a 
 receiver remits to his bank money which comes to his hands in 
 his official capacity, to be deposited with his private account, and 
 not to a separate account as receiver, thereby mingling the trust 
 funds with his individual funds, he will be liable for the loss on 
 the failure of the bank.^^ So when a receiver deposits the 
 funds of his receivership with his bankers and receives from 
 them for his own benefit interest upon the balances remaining 
 on deposit, he will be held liable for any loss which may result 
 from their bankruptcy, and will be compelled to make good 
 such loss.^l And a receiver will be held accountable for the loss 
 of all funds of the receivership occasioned by the failure of a 
 banker with whom they are deposited, if deposited in such man- 
 ner as to be beyond his absolute control. For example, when a 
 receiver, in order to induce certain persons to become his sure- 
 ties, enters into an arrangement with them whereby the funds 
 of his receivership are to be deposited in bank in the joint names 
 of the sureties, to be drawn therefrom upon drafts drawn by a 
 partner of one of the sureties and signed by the receiver, and 
 
 28 Wolf V. National Bank of Illi- tional Bank of Illinois, 178 111., 85. 
 nois, 178 111., 85, 52 N. K, 896. 52 N. E., 896. 
 
 29 Chemical National Bank v. 30 Wren v. Kirton, 11 Ves., 377. 
 Hartford Deposit Co., 156 111., 522, 31 Drever 2'. Maudesley, 13 L. J.. 
 41 N. E., 225; S. C, 161 U. S., 1, N. S. Ch., 433; S. C, 8 Jur., 547. 
 16 Sup. Ct. Rep., 439; Wolf v. Na-
 
 328 RECEIVERS. [chap. IX. 
 
 the bankers fail, thereby causing a loss to the fund, the receiver 
 and his sureties are liable for such loss, since the receiver has 
 parted with his exclusive control over the fund by associating 
 with himself the authority of another person. ^^ /^i-^^\ ^ re- 
 ceiver of an estate of infant heirs who deposits the funds ac- 
 cruing from such estate, without authority of court, in a bank 
 in another state, taking a certificate of deposit to himself as 
 receiver, may be held liable for a loss resulting from a failure 
 of such bank, although he acted in good faith and believed the 
 bank to be solvent. ^^ But in the selection of a bank as a de- 
 positary of the funds of a receiver, it is held to be no objection 
 that the bank is a creditor of the estate over which the receiver 
 has been appointed.^^ 
 
 § 274a. When receiver of bank liable to pay deposit or 
 draft in full ; check ; del credere commission. The question 
 of the liability of the receiver of a bank to payment in full of 
 moneys which had been specially deposited in or remitted to the 
 bank, would seem to be controlled by the fact as to whether 
 such funds were kept separate and distinct from the general 
 funds of the bank, so as to be capable of identification, or wheth- 
 er they were mingled with the general funds, with no means of 
 discriminating between them. Thus, money collected by an in- 
 solvent bank upon a draft sent to it for collection and mingled 
 with its general funds, with no marks of distinction, can not 
 be recovered in full against a receiver of the bank, such money 
 being incapable of identification or of being distinguished from 
 the funds belonging to the general creditors.^^ So when a sav- 
 ings bank is made, by an order of court, the depositary of the 
 funds belonging to suitors in such court and held by its officers, 
 such funds being received by the bank from time to time like all 
 
 32 Salway v. Salway, 2 Russ. & 34 State v. Corning State S. Bank, 
 
 M., 215, reversing S. C, 4 Russ., 60, 128 Iowa, 597, 105 N. W., 159. 
 and affirmed on appeal to the House 35 Illinois Trust & Savings Bank 
 
 of Lords, sub nom. White v. Baugh, v. Smith, 21 Blatchf., 275. 
 9 Bli., N. S., 181. 
 
 S3 State V. Gooch. 97 N. C, 186, 
 1 S. E.. 653.
 
 CHAP, IX.] LIABILITIES. 329 
 
 other deposits, and mingled with its other funds with no 
 means of identification, a receiver of the bank will not be re- 
 quired to pay such deposit in full, and it will only be entitled to 
 share pro rata with other depositors and creditors. Nor, in 
 such case, does the fact that the bank did not pay interest on 
 such deposit, as on others, change the principle. And this is 
 true, even though the court making the deposit is the same 
 which appoints the receiver, it having no other or greater rights 
 under such circumstances than those of any other creditor.^^ 
 And since a check drawn in the ordinary form, and not describ- 
 ing any particular fund out of which it is payable, does not ope- 
 rate as an assignment of funds in the hands of the drawer, if a 
 receiver is afterward appointed over the drawer of the check, 
 who takes possession of the entire fund on deposit before the 
 check is presented, the drawee is not entitled to payment in full 
 at the hands of the receiver, having no specific lien upon the 
 fund.^'^ And to entitle the payee of a draft drawn upon a bank, 
 but not paid before the appointment of a receiver over the bank, 
 to payment in full as against the receiver, the specific fund must 
 be traced into the hands of the receiver against which the draft 
 was drawn, or which, before the receivership, had been set apart 
 to its payment in such manner as to constitute it a trust fund, 
 the equitable title to which had vested in the payee of the draft. 
 And when this does not appear, the payee can not, as against the 
 receiver, claim priority over other creditors.^^ But since the 
 proceeds of goods consigned to a factor to be sold on a del cred- 
 ere commission continue to be the property of the consignor so 
 long as they may be traced and identified, they may likewise be 
 claimed as against a receiver of the factor, who only succeeds 
 to the factor's rights in this respect. And the proceeds of goods 
 thus consigned having been kept distinct, the receiver may be 
 required to apply them in payment of drafts drawn by the con- 
 
 36 Otis V. Gross, 96 111., 612. 38 People v. Merchants & Mechan- 
 
 37 Attorney-General v. Continen- ics Bank, 78 N. Y., 269. 
 tal Life Insurance Co., 71 N. Y., 
 
 325. See, also, Butler v. Sprague, 
 66 N Y., 392.
 
 330 RECEIVERS. [chap. IX. 
 
 signor upon the factor, which have passed into the hands of 
 third parties. ^^ 
 
 § 275. Liability dependent upon receiver's negligence; 
 bills of exchange of failing tradesman; misconduct of at- 
 torney. The extent of a receiver's habihty for the miscar- 
 riage or fault of another is dependent in a large degree upon 
 whether the loss occurred through the receiver's own negligence 
 or default, and in the preceding section it has been shown that, 
 in cases of loss occurring by reason of his own negligence or 
 misfeasance, the receiver will be held liable. Where, however, 
 he has acted with evident caution and for what he deemed the 
 best interests of the estate, and a loss occurs without fault of his 
 own, he will not ordinarily be required to make good such 
 oss."^^ And where a receiver collected a large sum of money due 
 the estate, and, deeming it unsafe to remit the money in specie, 
 he purchased bills of exchange of a tradesman then in good 
 credit, but who soon afterward failed, the receiver having had 
 no knowledge of his failing circumstances, it was held that he 
 was not personally liable for the loss.^^ So when a loss occurs 
 through the fraud or misconduct of an attorney, as by his mis- 
 appropriation of funds collected for the receiver, if the receiver 
 uses due and reasonable care in selecting such attorney, he will 
 not be charged with the loss.^^ Sq where it becomes necessary 
 in the course of the administration of the estate to employ coun- 
 sel, and the receiver, acting in good faith, does so employ an 
 attorney and follows the advice given by him, he can not be 
 held liable for consequent loss.'*^ 
 
 39 Francklyn v. Sprague, 10 Hun, 42 Powers v. Loughridge, 38 N. J. 
 589. Eq., 396; Union Bank Case, 11 N. 
 
 40 Knight V. Plimouth, 3 Atk., J. Eq., 420, affirmed on appeal sub 
 480; Union Bank Case, 37 N. J. Eq., nom. Sandford v. Clarke, 38 N. J. 
 420, affirmed on appeal sub nom. Eq., 265. 
 
 Sandford v. Clarke, 38 N. J. Eq., 43 State v. Germania Bank, 106 
 
 265; Powers v. Loughridge, 38 N. Minn., 164, 118 N. W., 683. 
 J. Eq., 396. 
 
 41 Knight V. Plimouth, 3 Atk., 
 480.
 
 CHAP. IX.] LIABILITIES. 331 
 
 § 276. When liable for employing property in his pri- 
 vate business; speculative profits. When property is 
 placed in a receiver's hands for an indefinite period, with a prob- 
 ability of remaining there for a number of years pending the lit- 
 igation, and it is of such a nature that it may be profitably em- 
 ployed by hiring, it would seem to be the receiver's duty so to 
 do. And if, instead of so hiring it, he employs the property in 
 and about his own private business, he thereby receives a benefit 
 from the trust committed to him for which he will be held ac- 
 countable, and which should be charged to him in his ac- 
 counts.^^ But when a receiver sells property belonging to his 
 receivership, he is liable for the proceeds only upon the basis of 
 actual sales and receipts ; and in the absence of negligence, mis- 
 conduct or bad faith on his part, he is not liable for probable or 
 speculative profits which might have been realized had he con- 
 tinued the management of the property.'*^ 
 
 § 277. Liable as trespasser for selling mortgaged prop- 
 erty; liable for tort; liable for rent of real estate. When a 
 receiver, without permission of court, and pending an injunc- 
 tion restraining him from so doing, forcibly takes possession 
 of property which had been mortgaged by the defendant debt- 
 or before the receiver's appointment, and sells the same, he 
 becomes liable therefor as a trespasser, and will be deemed as 
 much a trespasser as the mortgagor himself would have been 
 had he undertaken to seize and sell the property after giving 
 the mortgage."*^ So a receiver may become personally liable 
 for a tort, as for the wrongful taking possession and disposing 
 of property, although he acts under color of his official author- 
 ity, and in such case his official character will not protect him 
 from the consequences of his tortious act.^'^ So where an order 
 
 44 Battaile v. Fisher, 36 Miss., against the receiver as a trespasser 
 321 in such case was sustained, but the 
 
 45 Demain v. Cassidy, 55 Miss.. case was reversed for misjoinder of 
 320. parties. And see S. C, 10 Bosw., 
 
 46 Manning v. Monaghan, 1 231, when tried again in the court 
 Bosw., 459. See S. C, 23 N. Y., below. 
 
 539, where the right of action 47 Gutsch v. Mcllhargey, 69
 
 332 RECEIVERS. [chap. IX. 
 
 authorizing a receiver to take possession of real estate is totally- 
 void because the real estate is in no way involved in the suit 
 he becomes liable to the owner for the rents and profits collected 
 by him as receiver.^^ 
 
 § 278. Liability does not terminate until discharged; 
 appointed trustee in insolvent proceedings, still liable as 
 receiver. The liability of a receiver to the court appoint- 
 ing him does not terminate until his discharge. And when a 
 defendant, whose property the receiver has taken into posses- 
 sion and sold by order of the court, afterward takes advantage 
 of the insolvent laws of the state, and the receiver is appointed 
 as his trustee in the insolvent proceedings, such appointment 
 does not relieve him from his responsibility to the court of 
 equity as receiver. The power of that court in such a case 
 is regarded as ancillary to the jurisdiction of the insolvent 
 court, and the receiver may be required by the court of equity to 
 bring the fund into that court.'*^ 
 
 § 279. Receivers of railway liable in another state for 
 breach of duty as common carriers. The general doctrine 
 already considered, that receivers are liable only to the court 
 appointing them, has been somewhat modified in Massachu- 
 setts, in the case of receivers over railways. And it is there 
 held that, when receivers are operating a railway under ap- 
 pointment from a court of chancery of another state, and the 
 courts of that state hold them liable as common carriers and 
 they are acting in that capacity, they are liable to an action in 
 the courts of Massachusetts, for a breach of duty as common 
 carriers.^^ This doctrine, however, is plaintly inconsistent with 
 the weight of authority, in so far as it recognizes a right of ac- 
 tion against receivers, without permission of the court ap- 
 pointing them.^^ 
 
 Mich., 377, 37 N. W., 303; Kenney 49 Henry v. Kaufman, 24 Md., 1. 
 
 V. Ranney, 96 Mich., 617, 55 N. W., 50 Paige v. Smith, 99 Mass., 395. 
 
 982. 51 See chapter VIII, subdivision 
 
 48 Bowman v. Hazen, 69 Kan., V, Actions against Receivers. 
 682, 77 Pac, 589.
 
 CHAP. IX.] LIABILITIES. 333 
 
 § 280. Liable to commitment for failure to pay balance 
 into court; the practice in such cases. When a receiver 
 fails to comply with an order requiring him to pay into court 
 a balance reported to be in his hands, he is liable to be com- 
 mitted for disobeying the order. But the proper practice is not 
 to grant an order for the commitment in the first instance, but 
 to make the order in the alternative, requiring him to pay the 
 money within a given time or to stand committed.^^ j^^^^ 
 where a receiver has misappropriated funds which, under the 
 order of the court, he had deposited in a bank, and he has 
 thereupon been ordered to turn over the amount to the clerk 
 of the court, his failure to comply with such order amounts to 
 a continuing contempt for which he may be imprisoned until 
 such time as he purges himself. ^^ When he is in default in 
 the payment into court of interest upon a balance due from 
 him, and has disobeyed orders of the court for its payment, 
 he may be punished by committal.^'* And since the receiver is 
 an officer of the court, he need not be served with a writ of exe- 
 cution of a decretal order of the court, but only with a copy 
 of the order, and if he disobeys this, he is liable to be commit- 
 ted.^^ So the refusal of a receiver to pay over moneys in ac- 
 cordance with the order of the court constitutes a contempt 
 and may be punished as such. And upon appeal by the re- 
 ceiver from an order adjudging him guilty of contempt for such 
 refusal, the court will not review the propriety of the order 
 directing such payment, since if the court below had power to 
 make the order, and if it is not appealed from, its propriety 
 can not be questioned upon an appeal from the order adjudg- 
 
 52 Davies v. Cracraft, 14 Ves., 143. S. E., 450, 849. As to the right of 
 See Fields v. United States, 27 App. the court to release the receiver in 
 D. C, 433, for an indictment against such case upon the showing of his 
 a receiver for embezzlement of inability to pay, see Nisbet v. Tin- 
 funds which have come into his dall, 115 Ga., 374, 41 S. E.. 569. 
 hands as receiver. 54 /,j re Bell's Estate, L. R., 9 
 
 53 Tindall v. Nisbet, 113 Ga., Eq., 172. 
 
 1114, 39 S. E., 450, 55 L. R. A., 225; 55 Anonymous, Mos., 40. 
 
 Tindall v. Nisbet, 114 Ga., 224, 39
 
 334 RECEIVERS. [chap. IX. 
 
 ing the receiver guilty of contempt. ^^ Nor, in proceedings 
 against a receiver for contempt in refusing to turn over money 
 in accordance with tlie direction of the court, can he justify 
 such refusal upon the ground that he has been garnished as 
 to the money in question. ^"^ And the appropriation by the re- 
 ceiver to his own use of the funds in his possession, without 
 leave of court, constitutes a gross breach of his trust, and a 
 contempt of court which may be punished either by fine or im- 
 prisonment, or by both, at the discretion of the court. And 
 in such case, the object of an attachment and commitment for 
 the contempt being not merely to compel the restoration of the 
 mone}' illegally taken by the receiver, but to punish the offense 
 as well, the discretion of the court will not be controlled by 
 the fact that the receiver has no present means of repaying 
 what he has abstracted. ^^ So when the appointment of a re- 
 ceiver is revoked and he is ordered to restore to the proper 
 parties the property and money received by him, he may be 
 punished for contempt if he refuses to obey such order, ^^ 
 And where a receiver is committed for contempt in not com- 
 plying with the order of the court directing him to turn over 
 funds which he has wrongfully converted, the court should 
 not place a limit upon the term of his imprisonment, but he 
 should be confined until he complies w^ith the order of the 
 court or until othenvise discharged by due process of law.^^ 
 
 § 281. When not liable to landlord for rent of partner- 
 ship premises. When a receiver is appointed of the effects 
 of a partnership, but the only assets which come into his hands 
 are notes and book accounts of the firm, it has been held that he 
 is not liable to the landlord of the premises where the business 
 
 56 Clark v. Bininger, 75 N. Y., 230; People 7'. Zimmer, 238 111., 607, 
 344. And see this case as to the 87 N. E., 845. And see Cartwright's 
 practice upon proceedings against a case, supra, for the procedure in 
 receiver for contempt under the such cases. 
 
 statutes of New York. fJO People v. Jones, 33 Mich., 303. 
 
 57 People V. Brooks, 40 Mich., 333. P-o People v. Zimmer, 238 111., 607, 
 
 58 Cartwright's Case, 114 Mass., 87 N. E., 845.
 
 CHAP. IX.] LIABILITIES. 335 
 
 was conducted for the rent thereof, since he was not possessed 
 of any property on which the landlord had a right to distrain. ^^ 
 
 § 282. Liable for paying money to persons not entitled. 
 It has been said that if a receiver pays money to persons who 
 prove not to be entitled thereto, although he may have acted 
 innocently and supposed them to be entitled in right of the 
 parties to the cause, he should be held liable to the parties in 
 interest, upon the ground that in making such payments he de- 
 parts from the strict line of his duty, and is, therefore, liable 
 for any error which he may commit in so doing.^2 
 
 § 283. Not liable for loss to real property remaining in 
 owner's possession. Under the practice of the English 
 Court of Chancery, in the case of a receiver over real property, 
 it was proper for the parties to the cause to make application to 
 the court that the owner be required to deliver possession to the 
 receiver. And if a loss occurred because of the owner being 
 allowed to remain in possession, it was held to be the fault of 
 the parties in interest in the cause in not applying for such an 
 order, rather than the fault of the receiver.^^ 
 
 § 284. Solicitor assuming to act as receiver, liable for 
 loss in rents. When a solicitor in a cause has improperly 
 assumed the character of a receiver, and has acted in that 
 capacity without having been appointed, thereby leading the 
 parties in interest to believe that he had been duly appointed as 
 receiver, he will be held liable for any loss in the collection of 
 the rents which may occur through his negligence.^'* 
 
 § 285. Receiver's liability extended to his administrator. 
 It would seem that the liability of a receiver may sometimes be 
 extended to his administrator. For example, when the admin- 
 istrator of a deceased receiver submits to an accounting as to 
 rents which came to the receiver's hands during his lifetime, 
 the court may order him to pay over the amount which ap- 
 pears to be due.^^ 
 
 61 In re Brown, 3 Edw. Ch., 384. 63 Griffith v. Griffith, 2 Ves., 400. 
 
 62 McCan v. O'Ferrall, West H. 6^ Wood v. Wood, 4 Russ., 558. 
 L., 593. 65 Magan v. Fallon, 5 Ir. Eq., 409.
 
 336 RECEIVERS. [CIIAP. IX. 
 
 § 286. Dismissal of bill does not discharge liability; re- 
 ceiver protected by order. It is to be observed, as regards 
 the receiver's accountability to the court from which he de- 
 rives his appointment, that the dismissal of the bill upon which 
 he was appointed does not have the effect of releasing him in 
 any manner; and, being an officer of the court, he is subject to 
 its orders in relation to the fund or effects placed in his hands, 
 until he is finally discharged by the court. ^^ But when the 
 funds of the receivership have been regularly distributed under 
 the orders of the court among the creditors of the estate 
 whose claims have been duly proven, the receiver is not liable 
 in an action for further demands or claims made by other cred- 
 itors.^^ And an order appointing a receiver in a cause in which 
 the court has full jurisdiction, affords protection to the receiver 
 for all acts done under and in conformity with such order, 
 even though it is afterward reversed for error. An action 
 can not, therefore, be maintained against a receiver to recover 
 rents collected and paid over by him as receiver out of real es- 
 tate of a judgment debtor, the court having full jurisdiction of 
 the matter, even though the appointment is subsequently re- 
 versed upon the ground that the property in question was ex- 
 empt from execution, and, therefore, not subject to the ap- 
 pointment of a receiver.^8 
 
 § 286(7. Claims for damages for tort of receiver's agents, 
 when a charge upon the fund. Damages for torts resulting 
 from the negligence of the agents or servants of a receiver 
 become a charge upon the receivership estate in the nature of 
 operating expenses and are payable out of the net income or out 
 of the proceeds in case of a sale. And since the receiver him- 
 self, in the absence of personal fault, incurs no responsibility 
 for such damages, the liability follows the fund after his dis- 
 charge. And where the estate, after the termination of the 
 receivership, has been turned back to the debtor, the latter be- 
 comes liable for the damages in question to the extent to which 
 
 66 State v. Gibson, 21 Ark., 140. 68 Holcombe v. Johnson, 27 Minn., 
 
 67 Keene v. Gaehle, 56 Md., 343. 353. 7 N. W., 364.
 
 CHAP. IX.] LIABILITIES. 337 
 
 the net income has been applied for the permanent improvement 
 of the property.69 And in such case it is immaterial that suc- 
 cessive receivers have been appointed, since the receivership 
 continues, although the personnel of the receiver may change.'^^ 
 § 286&. Remedy for fraudulent conversion of estate by 
 receiver and his attorney ; supplemental bill in receivership 
 cause. Where a receiver and his attorney have wrongfully 
 and fraudulently paid out and disposed of the property and as- 
 sets in the hands of the receiver as part of a conspiracy by which 
 the officers and directors of an insolvent corporation are to se- 
 cure a preference over general creditors in the administration 
 of the affairs of the corporation and in the distribution of its 
 assets, it is proper for the court, by a supplemental bill in the 
 receivership proceeding, even after the discharge of the re- 
 ceiver and the settlement of his accounts, to make the guilty 
 parties defendants in the pending suit with some creditor or 
 creditors as plaintiff or plaintiffs, and to broaden the scope of 
 the proceeding sufficiently to cover all such fraudulent trans- 
 actions and to include in the general decree entered in the cause 
 judgments and recoveries against all such guilty parties accord- 
 ing to the nature and extent of their liabilities. In such case 
 the guilty ones are to be regarded as in the nature of trustees, 
 and the jurisdiction is based upon the general power of courts 
 of equity to interfere for the protection of the interests of the 
 beneficiaries of a trust. No statutory authority is necessary 
 to warrant such a proceeding by the court nor is it a defense to 
 the proceeding that the specific property misappropriated can 
 not be followed into the hands of the beneficiaries.'^^ Nor is 
 
 69 Bartlett v. Cicero Light Co., in his very elaborate and masterly 
 
 177 III., 68, 52 N. E., 339, 68 L. R. opinion in this case, uses the fol- 
 
 A., 78, 69 Am. St. Rep., 206; Knic- lowing language, (121 Wis., p. 225, 
 
 kerbocker v. Benes, 195 111., 434, 63 99 N. W., p. 933) : "With the views 
 
 N. E., 174. And see, post, § 397a. above expressed, notwithstanding, 
 
 '!'0 Knickerbocker v. Benes, 195 as indicated, it seemed that there 
 
 111., 434, 63 N. E., 174. was practical submission to the 
 
 71 Harrigan v. Gilchrist, 121 Wis., power of the trial court in this case 
 
 127, 99 N. W., 909. Marshall, J., by appellants, when the appeals were 
 Receivers — 22.
 
 338 
 
 RECEIVERS. 
 
 [chap. IX. 
 
 the jurisdiction defeated by the fact that it is customary in such 
 cases to cite the receiver into court without the use of any proc- 
 ess and to try tlie disputed matters in his account in a sum- 
 mary way, or, if compHcated, by reference to the master, where 
 
 taken up for decision, after a full 
 argument thereof upon the merits, 
 we were confronted at the threshold 
 of our deliberations by the necessity 
 to determine whether such court 
 had not gone so far in an attempt 
 to do justice as tp transgress its 
 jurisdiction. Doubts in that regard 
 became so serious that it seemed 
 that counsel for the respective par- 
 ties should have a full opportunity 
 to aid the court to the best of their 
 ability in reaching a right conclu- 
 sion, and to that end this question 
 was formulated, definitely covering 
 the subject, and a reargument there- 
 on ordered : 'The property of an 
 insolvent corporation having been 
 placed under the control of a re- 
 ceiver appointed by the court in a 
 winding-up suit, and it being claimed 
 that such receiver, in the course of 
 his administration, has wrongfully 
 lost such property or some portion 
 thereof, his attorneys and others 
 participating in the wrong; is it 
 competent for the court to make the 
 alleged guilty parties defendants in 
 the pending suit with some creditor, 
 or creditors, standing for all persons 
 so circumstanced, as plaintiff or 
 plaintiffs, broaden out the complaint 
 so as to cover the new matters by a 
 supplemental bill, litigate the same, 
 and include in the general decree in 
 such suit recoveries against all of 
 such alleged guilty parties according 
 to the nature or extent of their lia- 
 bilities?'" The court further say, 
 (121 Wis., p. 302, 99 N. W., p. 960) : 
 "If it is alleged as to a receiver, that 
 
 during the course of his administra- 
 tion he pursued a systematic course 
 hostile to the primary beneficiaries, 
 concealing his conduct from the 
 knowledge of the court till the trust 
 fund was, by him and those fraudu- 
 lently colluding with him, wasted or 
 put beyond the reach of such bene- 
 ficiaries, except so far as the same 
 could be recovered by judicial pro- 
 ceedings, and there is probable 
 ground for believing that the charge 
 is true, and the issues raised in the 
 action in respect to the trust are 
 still open, it is competent for the 
 court, on such showing, to permit 
 the claim on behalf of the creditors, 
 against the receiver and his alleged 
 guilty participants, to be treated as 
 a part of the original subject of the 
 action, and to be brought into it for 
 trial by supplemental bill. 
 
 "If an action is commenced osten- 
 sibly to administer the assets of an 
 insolvent corporation, but really pur- 
 suant to a fraudulent agreement be- 
 tween its officers or its officers and 
 others, to enable them to control the 
 corporate assets for their own bene- 
 fit, and in execution of such fraudu- 
 lent scheme those controlling the 
 suit induce the court, by false pre- 
 tenses, to appoint as receiver one of 
 their own number who will use his 
 office to enable them to effect their 
 wrongful purpose, and he does so 
 use it, the court may, upon being 
 satisfied of a probability that such 
 fraud has been committed, for the 
 purpose of having the truth of the 
 matter judicially determined, permit
 
 CHAP. IX.] 
 
 LIABILITIES. 
 
 339 
 
 resort may not be had to such summary methods.'^^ And in 
 such case, where the entire property and assets of the corpora- 
 tion have thus been improperly disposed of and converted, it is 
 not necessary that the creditors seeking rehef should procure 
 the appointment of another receiver, since adequate relief may 
 be had merely bv an account without the necessity for such 
 appointment."^^ 
 
 the creditors to treat such receiver 
 as having been the agent of the cor- 
 poration and its officers, and the as- 
 sets of the corporation to have been 
 by his aid continued under their 
 control, though being ostensibly un- 
 der the control of the court. In 
 such circumstances it is eminently 
 proper for the court — the condition 
 of the suit being such that under 
 any circumstances a supplemental 
 complaint might be made — to allow 
 such officers and such agents to be 
 made parties defendant and charged 
 as trustees for creditors, as to the 
 property of the corporation still in 
 their hands, and the value of all 
 wrongfully appropriated by them or 
 otherwise lost through their wrong- 
 ful conduct, or that of either of 
 them, in execution of the original 
 fraudulent design. To bring such 
 parties into the suit as defendants 
 on either of the contingencies men- 
 tioned, it is believed, would not be 
 a stretch of judicial discretion, and 
 
 on the last one mentioned would be 
 a very wise exercise of judicial 
 power. 
 
 "Upon a review of the whole situ- 
 ation, we can see no legitimate 
 ground for appellants to complain. 
 They had as full an opportunity to 
 be heard in their defense as they 
 would have had if any other method, 
 adequate under the circumstances to 
 meet the case, had been adopted. 
 Certainly, no good ground exists for 
 the court to hold that the practice 
 adopted was such an abuse of ju- 
 dicial power as to constitute juris- 
 dictional error. On the contrary, in 
 view of the feature of the case as 
 to Rust (the receiver) being really 
 the arm of the corporation defend- 
 ant and its officers, instead of that 
 of the court, the practice adopted 
 meets with our approval." 
 
 72 S. C, 121 Wis., p. 253, 99 N. 
 W., p. 943. 
 
 73 S. C, 121 Wis., p. 270, 99 N. 
 W., p. 949.
 
 CHAPTER X. 
 
 OF RECEIVERS OVER CORPORATIONS. 
 
 I. Principles Governing the Jurisdiction § 287 
 
 II. Functions, Duties and Rights of Action of the Receiver. . 313 
 
 III. Receivers of Insolvent Corporations 343 
 
 IV. Receivers of National Banks 358 
 
 I. Principles Governing the Jurisdiction, 
 
 § 287. Jurisdiction of equity over corporations enlarged by statute. 
 
 288. Power to wind up corporation conferred by statute; receiver 
 
 not usually granted under general equity powers. 
 
 289. Statutes enlarging the jurisdiction strictly construed; method 
 
 prescribed must be strictly followed. 
 
 290. Corporation a necessary party to the proceeding; omission of, 
 
 may be taken advantage of by writ of error; corporate 
 functions suspended by appointment of receiver. 
 
 291. Receiver need not be made a party to subsequent proceeding 
 
 for another receiver; bill not demurrable because it prays 
 receiver. 
 
 292. General allegations of fraud insufficient; insolvency alone in- 
 
 sufficient; receiver not appointed when no fraud or danger 
 shown; insolvency and fraud. 
 
 293. Breach of trust by corporate officers; no place of business 
 
 and no corporate officers; trust deed securing unauthorized 
 notes of bank; deadlock among directors. 
 
 294. Receiver of unauthorized issue of stock, when refused; share- 
 
 holder who has parted with his interest not entitled to relief, 
 
 295. Long acquiescence of shareholder a bar to relief; receiver of 
 
 rents and tools refused; effect of shareholder's participation 
 
 in fraud. 
 295a. Bill by minority shareholders; when receiver not appointed. 
 295&. The same; when receiver appointed; action against directors; 
 
 when demand on receiver to sue unnecessary. 
 295c. The same; demand upon officers and directors to proceed. 
 
 296. Legislation and decisions of other states, when considered in 
 
 refusing receiver over new issue of stock. 
 
 297. Sequestration for benefit of creditors; rights of attaching cred- 
 
 itors subordinate; transfer to new corporation. 
 340
 
 CHAP. X.] CORPORATIONS. 341 
 
 § 298. Right of judgment creditors to receiver over corporation, con- 
 ferred by statute. 
 
 299. Officers and shareholders required to account to receiver to 
 
 pay judgment creditors. 
 
 300. Judgment creditor allowed receiver over rents and tolls of 
 
 bridge company. 
 
 301. Creditor not entitled to receiver before judgment; nor when 
 
 there is a remedy at law. 
 
 302. Prior lien of judgment creditor not divested or affected by re- 
 
 ceivership; title to real estate not divested. 
 
 303. Title divested by appointment of receiver on final dissolution; 
 
 departure from common-law rule. 
 
 304. Waste of trust fund by officers of insurance and loan associa- 
 
 tion, ground for receiver; insolvency and assignment; build- 
 ing and loan association; foreign life insurance company. 
 
 305. Receivers in behalf of creditors of foreign corporations. 
 
 306. Receiver appointed in one state over assets of corporation 
 
 organized in another state. 
 
 306a. Domiciliary receiver of mutual benefit association, when en- 
 titled to possession of assets in another state; ancillary re- 
 ceiver. 
 
 306&. Ancillary receiverships. 
 
 307. In proceedings by quo warranto against corporation, receiver 
 
 not appointed before judgment of forfeiture; nor upon in- 
 voluntary dissolution by expiration of charter. 
 
 308. Corporation allowed to give bond to judgment creditor in lieu 
 
 of receiver; case retained for accounting. 
 
 309. Appointment of receiver no defense to action against share- 
 
 holder for unpaid subscription. 
 
 310. Registration of shares in receiver's hands. 
 
 311. Receiver not granted over dividends due from college fellow- 
 
 ship. 
 
 312. One corporation may be appointed receiver over another. 
 312a. Duty of officers to deliver assets to receiver. 
 
 Z\2b. Receiver's certificates. 
 
 312c. Conflict of authority as to preference for labor and supply 
 
 claims incurred before receivership. 
 Z\2d. Weight of authority is opposed to preference. 
 312(?. Abuse of corporate franchise as ground for receiver in quo 
 
 warranto proceeding for forfeiture of charter. 
 
 § 287. Jurisdiction of equity over corporations enlarged 
 by statute. In most of the states of this country, as well as 
 in England, the jurisdiction of courts of equity over corpora- 
 tions has been extended by legislative enactments to the ap- 
 pointing of receivers and sequestrating the property of the cor-
 
 342 RECEIVERS. [chap. X. 
 
 poration, in proper cases; and in some of the states the juris- 
 diction has even been enlarged by statute to the extent of wind- 
 ing up the affairs of the corporation, and to the forfeiture of 
 its franchise. While these legislative enactments vary largely 
 in the different states, their general purpose and scope are to 
 provide a more effectual method for the protection of creditors 
 and shareholders than may be had by the ordinary process of 
 courts of law. And while in the decisions of the courts under 
 these various statutes, there is sometimes manifested a lack of 
 harmony and uniformity, certain well-defined principles have 
 yet been established which serve as precedents for future guid- 
 ance, and the discussion of these will occupy the present chap- 
 ter. 
 
 § 288. Power to wind up corporation conferred by stat- 
 ute; receiver not usually granted under general equity 
 powers. It is to be observed, at the outset, that the gen- 
 eral jurisdiction of equity over corporate bodies does not ex- 
 tend to the power of dissolving the corporation, or of winding 
 up its affairs and sequestrating the corporate property and 
 effects, in the absence of express statutory authority. And 
 courts of equity will not, ordinarily, by virtue of their gen- 
 eral equitable jurisdiction, or of their visitorial powers over 
 corporate bodies, sequestrate the effects of the corporation, 
 or take the management of its affairs from the hands of its own 
 officers and intrust it to the control of a receiver of the court, 
 upon the application either of creditors or shareholders.^ And 
 while equity may properly compel officers of corporations to 
 
 1 Bangs V. Mcintosh, 23 Barb., mick Lumber Co. v. Teague, 119 
 
 591; Howe v. Deuel, 43 Barb., 504; Ala., 385, 24 So., 4; People v. Dis- 
 
 Waterbury v. Merchants Union Ex- trict Court, 33 Colo., 293. 80 Pac, 
 
 press Co., 50 Barb., 157; Belmont v. 908; People v. Weigley, 155 111., 491, 
 
 Erie R. Co., 52 Barb., 637; In re 40 N. E., 300; Coquard v. National 
 
 Coleman, 174 N. Y., 373, 66 N. E., Linseed Oil Co., 171 111., 480, 49 N. 
 
 983; Davis v. Flagstaff S. M. Co., E., 563; Wallace v. Pierce-Wallace 
 
 2 Utah, 74; Neall v. Hill, 16 Cal., Publishing Co., 101 Iowa, 313, 70 
 
 145; French v. Bank Case, 53 Cal., N. W., 216, 38 L. R. A., 122, 63 
 
 495; Murray v. Superior Court, 129 Am. St. Rep., 389; Vila v. Grand 
 
 Cal., 628, 62 Pac, 191 ; Smith-Dim- Island E. L., I. & C. S. Co.. 68 Neb.,
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 343 
 
 account for any breach of trust in their official capacity, yet in 
 the absence of statutes extending its jurisdiction, it will usu- 
 ally decline to assume control over the manag-ement of the af- 
 fairs of a corporation, upon a bill filed by a stockholder alleg- 
 ing fraud, mismanagement and collusion on the part of the cor- 
 porate authorities, since such interference would necessarily 
 result in the dissolution of the corporation, and the court would 
 thus accomplish indirectly what it has no power to do direct- 
 ly. The remedial power exercised by courts of equity, in such 
 cases, ordinarily extends no further than the granting of an 
 injunction against any special misconduct on the part of the 
 corporate officers ; and although the facts shown may be suffi- 
 cient foundation for such an injunction, the court will not en- 
 large its jurisdiction by taking the affairs of the corporation 
 out of the management of its own officers, and placing them 
 in the hands of a receiver.2 
 
 222, 94 N. W., 136, 97 N. W., 613; 
 Ardmore National Bank v. Briggs 
 M. & S. Co., 20 Okla, 427, 94 Pac, 
 533. See, also. Baker v. Adminis- 
 trator of Backus, 32 111., 79; Pond 
 V. F. & L. R. Co., 130 Mass., 194; 
 Hinckley v. Pfister, 83 Wis., 64, 53 
 N. W., 21; Florence Gas, E. L. & 
 P. Co. V. Hanby, 101 Ala., 15, 13 
 So., 343 ; State Investment & Insur- 
 ance Co. V. Superior Court, 101 Cal., 
 135, 35 Pac, 549 ; Walters v. Anglo- 
 American M. & T. Co., 50 Fed., 316; 
 Taylor v. Decatur M. & L. Co., 112 
 Fed., 449. But see Blatchford v. 
 Ross, 54 Barb., 42, 5 Ab. Pr., N. S., 
 434, 37 How. Pr., 110; Adler v. 
 Milwaukee Patent Brick Manufac- 
 turing Co., 13 Wis., 57. As to the 
 power of congress to enact a law 
 repealing a charter granted to a re- 
 ligious corporation by a territorial 
 legislature, and as to the right to a 
 receiver under such act of congress, 
 see United States v. Church, 5 Utah, 
 
 361, 15 Pac, 473. As to the statu- 
 tory power of appointing a receiver 
 over a corporation, which has been 
 dissolved by judgment of ouster in 
 Pennsylvania, see Commonwealth v. 
 Order of Vesta, 156 Pa. St., 531, 27 
 Atl., 14; Fraternal Guardian's Es- 
 tate, 159 Pa. St., 603, 28 Atl., 479. 
 As to the right of the attorney-gen- 
 eral to procure the appointment of 
 a receiver over a state bank under 
 the statute of California of March 
 24, 1903, as amended by the act of 
 March 20, 1905, see People v. Bank 
 of San Luis Obispo, 154 Cal., 194, 
 — Pac, — . 
 
 2 Waterbury v. Merchants Union 
 Express Co., 50 Barb., 157; Neall v. 
 Hill, 16 Cal., 145; Howe v. Deuel, 
 43 Barb., 504; Belmont v. Erie R. 
 Co., 52 Barb., 637; Mason v. Su- 
 preme Court, 77 Md., 483, 27 Atl., 
 171 ; Richardson v. Clinton Wall 
 Trunk Co., 181 Mass., 580, 64 N. E., 
 400. Waterbury f. Merchants Union
 
 344 
 
 RECEIVERS. 
 
 [chap, X. 
 
 § 289. Statutes enlarging the jurisdiction strictly con- 
 strued; method prescribed must be strictly followed. 
 When the jurisdiction of courts of equity has been extended by 
 legislation to the appointment of receivers over incorporated 
 companies, the power thus conferred is treated by the courts 
 as a delegated authority, the exercise of which requires the 
 most careful consideration. The effect of appointing a re- 
 ceiver being to take the property of the corporation out of 
 the control of its own officers, to whom it has been intrusted 
 by its stockholders, the courts proceed with extreme caution in 
 the exercise of so summary a power.^ And, in construing 
 
 Express Co., 50 Barb., 157, was an 
 action brought by a stockholder of 
 the defendant corporation, against 
 the company and its executive or 
 managing committee, to obtain a 
 dissolution of the corporation and 
 the appointment of a receiver for 
 winding up its affairs. Barnard, J., 
 denying the motion for a receiver, 
 observes, p. 166 : "The remaining 
 grounds for the relief which the 
 plaintiff demands resolve them- 
 selves into the alleged personal 
 misconduct of the executive or 
 managing committee. This has, I 
 think, nothing to do with the pres- 
 ent motion for a receiver. The in- 
 fidelity or misconduct of some, or 
 even of all, of the trustees or man- 
 agers of such an association, affords 
 no ground for taking away the 
 rights of the shareholders who con- 
 stitute the company, either by dis- 
 solving it, or taking away its man- 
 agement and placing it in the hands 
 of an officer of the court. In such 
 a case, the principles of remedial or 
 preventive justice go no further 
 than to enjoin or forbid the mis- 
 conduct, or remove the unfaithful 
 officer. I am not aware of any au- 
 thority for dissolving a corporation. 
 
 or an unincorporated stock associa- 
 tion, or for taking its management 
 from its proprietors or sharehold- 
 ers, on the mere ground that one, 
 or even all, of its trustees, are un- 
 faithful. The court may enjoin 
 the trustee, or suspend and remove 
 him, and if necessary may order a 
 new election, but can not substitute 
 its own officer." But in Blatchford 
 V. Ross, 54 Barb., 42, 5 Ab. Pr., 
 N. S., 434, 37 How. Pr., 110, the 
 court inclined to the opinion that 
 the action of the executive commit- 
 tee of a corporation in repeatedly 
 voting to themselves large sums of 
 money in addition to their regular 
 compensation, for their services as 
 promoters or originators of the com- 
 pany, was sufficient ground for ap- 
 pointing a receiver in behalf of 
 stockholders, but a decision as to 
 the appointment was reserved on 
 other grounds. 
 
 3 Oakley v. Paterson Bank, 1 
 Green Ch., 173 ; Clark v. National 
 Linseed Oil Co., 45 C. C. A., 53, 
 105 Fed., 787. See, also, Davis v. 
 United States, E. P. & L. Co., 77 
 i\Id., 35, 28 Atl., 982. In Kentucky, 
 it is held that a water company 
 seeking to enjoin the collection of
 
 CHAP. X.] CORPORATIONS. 345 
 
 such statutes, they are inchned to give them a strict construc- 
 tion, and require the prescribed method of obtaining jurisdic- 
 tion of the person and of the subject-matter to be strictly fol- 
 lowed. Thus, when a statute authorizes the court, upon ap- 
 plication of any judgment creditor of a corporation, after exe- 
 cution returned unsatisfied, to sequestrate the property, stock 
 and choses in action of the corporation, and to appoint a re- 
 ceiver, the statute will be strictly construed, since the exer- 
 cise of the jurisdiction which it confers involves the virtual 
 dissolution of the corporate body, and the loss of its franchises.^ 
 And when the statute authorizes the court to interfere upon 
 the petition of the person obtaining such judgment, the court 
 can not acquire jurisdiction by any other means than a peti- 
 tion by the judgment creditor himself, and a petition by his 
 attorney will not suffice.^ And it by no means follows, be- 
 cause an injunction has been granted against the operations 
 of the corporate body, that a receiver should necessarily be ap- 
 pointed, since the two questions are independent of and dis- 
 tinct from each other, and circumstances may call for and de- 
 mand a suspension of the business of the corporation, while its 
 officers in charge are not implicated, and are the most proper 
 persons to wind up its affairs.^ 
 
 § 290. Corporation a necessary party to the proceeding ; 
 omission of, may be taken advantage of by writ of error; 
 corporate functions suspended by appointment of receiver. 
 Since the appointment of a receiver over a corporation is gen- 
 erally equivalent to a suspension of its corporate functions, and 
 of all authority over its property and effects,'^ and is also equiv- 
 
 taxes upon its property, upon the ing. Clark v. Louisville Water Co., 
 
 ground that it is exempt by law 90 Ky., 515, 14 S. W., 502. 
 
 from taxation, may be required to 4 Bangs v. Mcintosh, 23 Barb., 
 
 pay the amount of the taxes into ^^ • ^ , ^-, t^ , 
 
 . , r ,. r J • xi. ^ ^ Bangs V. Mcintosh, 23 Barb., 
 
 court, or m default of so domg that _ . 
 
 the management of the company 6 Oakley v. Paterson Bank, 1 
 
 may be intrusted to a receiver until Green Ch. 173. 
 
 a sufficient sum is realized to pay 7 Linville v. Hadden, 88 Md., 594^ 
 
 the taxes and costs of the proceed- 41 Atl., 1097. 43 L. R. A., 222.
 
 346 RECEIVERS. [chap, X. 
 
 alent to an injunction restraining its agents and officers from 
 intermeddling with its property, the courts will not exercise 
 this extraordinary power when the corporate body, as such, is 
 not made a party to the action, and is not before the court.^ 
 And this is true, even when the bill is filed against the stock- 
 holders of the company, assailing the franchise itself, and as- 
 serting that the company is not a corporation proper, but a 
 mere partnership. The object of such a proceeding being to 
 take away the corporate franchise, the corporation itself must 
 be made a party defendant to enable it to be heard ; and, being 
 an indispensable party to the proceedings, the omission to join 
 it is not a mere formal error, but one of substance, which may 
 be taken advantage of by the stockholders on writ of error.^ 
 And since the appointment of a receiver over a corporation 
 operates as a suspension of its corporate functions and of all 
 its authority over its property and effects, the delivery by an 
 officer of the corporation, after the appointment of a receiver, 
 of a deed which had been executed by the corporation prior 
 to such appointment is of no effect.!^ 
 
 § 291. Receiver need not be made a party to subsequent 
 proceeding for another receiver; bill not demurrable be- 
 cause it prays receiver. Notwithstanding the corporation 
 over which a receiver is sought is itself an indispensable party 
 to the suit, as above shown, yet when a receiver has already 
 been appointed, he need not be joined as a party to subsequent 
 proceedings having for their object the appointment of a re- 
 ceiver over the same corporation. Thus, upon a bill filed 
 against a banking association by one of its creditors, charging 
 that defendants are only a nominal or pretended corporation, 
 having fraudulently combined to deceive their creditors, and 
 
 8 Gravenstine's Appeal, 49 Pa. St., ceiver to resist an order made by 
 
 310; Baker v. Administrator of the court for the sale of its real 
 
 Backus, 32 111., 79. See State v. estate. 
 
 Fawcett, 58 Neb., 371, 78 N. W., 9 Baker v. Administrator of Back- 
 
 636, as to the right of an insolvent us, 32 III, 79. 
 
 banking corporation which has con- 10 Brynjolfson v. Osthus, 12 N, 
 sented to the appointment of a re-
 
 CHAP. X.] CORPORATIONS. 347 
 
 being only a voluntary association in the nature of a partner- 
 ship, it is not necessary to join as a party defendant a receiver 
 of the bank appointed upon proceedings instituted by another 
 creditor. Nor is such a bill demurrable because it prays the 
 appointment of a receiver, since, whether a receiver be or be 
 not necessary, the objection because of the prayer for his ap- 
 pointment can not sustain a demurrer.^ And the fact that a 
 receiver has been appointed in an action to foreclose a mort- 
 gage given by a corporation is no bar to appointing a receiver 
 in a subsequent suit to sequestrate the property of the corpora- 
 tion for the benefit of its creditors under the insolvent laws of 
 the state. 12 
 
 § 292. General allegations of fraud insufficient; insol- 
 vency alone insufficient; receiver not appointed where no 
 fraud or danger shown; insolvency and fraud. It has al- 
 ready been shown that courts of equity proceed with extreme 
 caution in the appointment of receivers over corporate bodies, 
 under legislative enactments enlarging their general jurisdic- 
 tion for this purpose. 13 And in proceedings under such stat- 
 utes, mere general allegations in the affidavits in support of 
 the motion for a receiver, as to the belief of affiants that great 
 frauds have been committed, are not sufficient ground for the 
 interference, when it is not stated in what the frauds consist, 
 or by whom they were committed. 14 Nor is the loss of the 
 property of a corporation or its failure to continue business 
 sufficient ground for a receiver in the absence of a showing of 
 gross mismanagement, nor will general averments of negli- 
 gence and mismanagement supply the deficiency, nor the be- 
 lief of the plaintiff that frauds have been committed, where it 
 is not clearly shown of what such frauds consist. 1^ Nor is 
 
 Dak., 42, 96 N. W., 261. 14 Oakley v. Paterson Bank, 1 
 
 11 Wheeler v. Clinton Canal Bank, Green Ch., 173. And see State v. 
 Harring. (Mich.), 449. Bearing, 184 Mo., 647, 111 S. W., 
 
 12 St. Louis Car Co. v. Stillwater 967. 
 
 Street R. Co., 53 Minn., 129, 54 N. 15 Clark v. National Linseed Oil 
 
 W., 1064. Co., 45 C. C. A., 53, 105 Fed., 787. 
 
 13 See, ante, § 289.
 
 348 
 
 RECEIVERS. 
 
 [chap. x» 
 
 there any necessity for appointing a receiver when no fraud is 
 alleged or shown, and when no satisfactory proof is produced 
 that the court should interfere to save the property from ma- 
 terial injui*y, or to rescue it from impending destruction. ^^ 
 So mere insolvency, unaccompanied by any charge of frauds 
 wa^te or mismanagement in the affairs of the corporation, nev- 
 er of itself constitutes sufficient ground for the appointment 
 of a receiver.!"^ So where there is no charge of insolvency or 
 of fraud or mismanagement upon the part of the directors, the 
 court will not appoint a receiver, where the only question is as 
 to the policy in regard to the management of the business. ^^ 
 And where a corporation is perfectly solvent and no fraud is 
 charged, a receiver will not be appointed at the instance of a 
 shareholder and director, who is also a creditor, upon general 
 charges of mismanagement which will result in injury and 
 waste and the total loss of the property. ^^ Nor will a re- 
 
 16 Baker v. Administrator of 
 Backus, 32 111., 79; Fort Payne F. 
 Co. V. Fort Payne C. & I. Co., 96 
 Ala., 472, 11 So., 439; Trust & De- 
 posit Co. V. Spartanburg W. Co., 91 
 Fed., 324; Murray v. Superior 
 Court, 129 Cal., 628, 62 Pac, 191. 
 See, also, Rathbone v. Gas Co., 31 
 West Va., 798, 8 S. E., 570 ; Neitzel 
 V. Lyons, 48 Neb., 892, 67 N. W., 
 867; Donald v. Manufacturers' Ex- 
 port Co., 142 Ala., 578, 38 So., 841. 
 As to the appointment of a receiver 
 under the statutes of South Dakota, 
 see Dudley v. Dakota H. S. Co., 11 
 S. Dak., 559, 79 N. W., 839; Gates 
 V. McGee, 15 S. Dak., 247, 88 N. 
 W., 115; Kelly v. Fargo M. Co., 16 
 S. Dak., 73, 91 N. W., 350. 
 
 IT' Murray v. Superior Court, 129 
 Cal., 628, 62 Pac, 191 ; Trust & De- 
 posit Co. V. Spartanburg W. Co., 91 
 Fed., 324. But it is held under the 
 statute of Washington that a simple 
 contract creditor of a corporation. 
 
 whose claim is not controverted, is 
 entitled to a receiver over the corpo- 
 ration upon a mere showing of in- 
 solvency. Davis V. Edwards, 41 
 Wash., 480, 84 Pac, 22. In this case 
 the court say: "Whatever the rule 
 may be in other jurisdictions, the 
 rule is established in this state that 
 a simple contract creditor, whose 
 claim is not controverted, is entitled 
 to a receivership against a debtor 
 corporation upon a mere showing 
 of insolvency." 
 
 18 Hunt V. American Grocery Co., 
 80 Fed., 70. But in Tompkins Co. 
 V. gatawba Mills, 82 Fed., 780, it 
 was held that dissensions among the 
 officers and directors of a corpora- 
 tion which were deep-seated and 
 could not be healed made a receiver 
 imperatively necessary even though 
 there was no showing of the insol- 
 vency of the corporation. 
 
 19 Little Warrior Coal Co. v. 
 Hooper, 105 Ala., 665, 17 So., 118.
 
 CHAP. X.] CORPORATIONS. 349 
 
 ceiver be appointed to wind up the affairs of a corporation 
 merely because of dissension among the shareholders, where 
 it appears that the corporation is quite solvent and that its bus- 
 iness is prosperous.20 Nor is the fear upon the part of a share- 
 holder that a certain action pending against an officer of a 
 solvent corporation will not be diligently prosecuted sufficient 
 ground for the appointment of a receiver in the absence of 
 charges of fraud or mismanagement.^! Nor does it constitute 
 sufficient ground for a receivership of a corporation, at the in- 
 stance of a shareholder, that the directors are holding over in 
 •default of an election of their successors, or that the plaintiff 
 has been denied access to the corporate books and papers, or 
 that the directors refuse to disclose material facts connected 
 with the business of the corporation. ^2 And it is held that a 
 receiver should not be appointed over a corporation at the in- 
 stance of a majority of the shareholders, where it appears that 
 there are no scattered assets to be marshalled and there are no 
 charges of fraud or mismanagement in the affairs of the com- 
 pany, .and the only effect of the receivership would be to hinder 
 and delay the collection of a valid claim. ^^ And where a cor- 
 poration is a prosperous, solvent, going concern, a receiver 
 should not be appointed in a proceeding brought by a share- 
 holder against the corporation and its officers to compel the 
 latter to account for profits made by them as individuals in 
 selling real estate to the corporation at fraudulently excessive 
 valuations.24 Nor can one of two equal co-owners of the 
 stock of a corporation have a receiver over the corporation up- 
 on the ground that there are irreconcilable differences between 
 the two and that the other has assumed the control and manage- 
 ment of the business and excludes the plaintiff from partici* 
 
 20 Sternberg v. Wolflf, 56 N. J. 23 Bell v. Wood & Co., 181 Pa. 
 Eq., 555, 42 Atl., 1078. St., 175, 37 Atl., 201. 
 
 21 Griffin v. Griffin Iron Co., 96 24 Klein v. Independent B. Assn., 
 Fed., 577. 231 III., 594, 83 N. E., 434. 
 
 22 Alabama Coal & Coke Co. v. 
 Shackelford, 137 Ala., 224, 34 So., 
 S33, 97 Am. St. Rep., 23.
 
 350 RECEIVERS. LCHAP. X. 
 
 pating in it.^^ If, ho\ve\'er, the corporation is insolvent and 
 its directors have been guilty of fraudulent mismanagement of 
 its affairs, and if it has ceased to transact the business for which 
 it was incorporated, its financial embarrassments being such as 
 to render it impracticable to resume, a fit case is presented for 
 a receiver, in order to preserve the property of the corporation 
 for the benefit of its creditors and stockholders.26 And where 
 one of two shareholders of a corporation has constituted him- 
 self a trustee for the collection and distribution of the assets 
 of the corporation and has made false statements as to his col- 
 lections and has proved generally unfaithful to his trust, a re- 
 ceiver is properly appointed to take charge of the collection of 
 the assets of the corporation. 27 But ordinarily a receiver will 
 not be appointed over a corporation upon a preliminary ap- 
 plication, where all the charges of insolvency, fraud and mis- 
 management upon which the right to the belief is based are ful- 
 ly and unequivocally denied by affidavit. ^^ 
 
 § 293. Breach of trust by corporate officers ; no place of 
 business and no corporate officers ; trust deed securing un- 
 authorized notes of bank; deadlock among directors. In 
 New York, the jurisdiction over corporations conferred by 
 statute upon courts of equity powers is sufficient to authorize 
 the appointing of a receiver, when it is apparent that the cor- 
 poration has ceased to act as such, and when the president and 
 principal shareholders have assumed to use the corporate prop- 
 erty as their own, and the president has been guilty of a breach 
 of trust in making an assignment of such property. 29 So when 
 it is apparent to the court that the corporation against which 
 the proceedings are instituted is without any office or place of 
 
 25 Wallace v. Pierce-Wallace Pub- 27 Bauer v. Haggerty, 42 Wash., 
 lishing Co., 101 Iowa, 313, 70 N. W., 313, 84 Pac, 871. 
 
 216, 38 L. R. A., 122, 63 Am. St. 28 Taylor v. Cuban L. & S. Co., 
 
 Rep., 389. 106 Fed., 437; Brady v. Bay State 
 
 26 Coal & Mining Co. v. Edwards, Gas Co., 106 Fed., 584. 
 
 103 111., 472; Doe v. Northwest C. 29 Conro z;. Gray, 4 How. Pr. K/). 
 
 & T. Co., 64 Fed., 928. See Stevens And see Consolidated T. L. Co. v. 
 
 V. South O. L. Co., 14 Utah, 232, Kansas City V. Co., 43 Fed.. 204. 
 47 Pac, 81.
 
 CHAP. X.] CORPORATIONS. 351 
 
 business, that it has no officers to attend to its affairs and no 
 person authorized to take charge of and manage its business, 
 it is proper to appoint a receiver, upon a bill by a stockholder, 
 to preserve the effects of the company for the benefit of the 
 stockholders generally.^^ And when a banking association 
 has issued notes, which are unauthorized and expressly pro- 
 hibited by the banking laws of the state, and has secured these 
 notes by a deed of trust of certain securities, upon a bill to set 
 aside such trust deed, the court may appoint a receiver in limine, 
 to take charge of the securities assigned until the final deter- 
 mination of the cause upon its merits.^^ So in an action 
 brought by creditors of a pretended banking corporation aver- 
 ring that the bank was never incorporated, but transacted busi- 
 ness under a corporate name under the management of its 
 principal promoter, its supposed assets being in fact his, and 
 averring his death and that his representative is wasting his 
 assets, the bill seeking to set aside certain judgments and to 
 recover the assets and for an accounting, a proper case is 
 presented for the appointment of a receiver pendente lite.^^ 
 And where, after the death of one of a board of three direct- 
 ors, who was also president of the corporation and a share- 
 holder and large creditor, the two remaining directors are un- 
 able to agree upon a president or third director, and the busi- 
 ness of the corporation is suspended and is being seriously im- 
 paired, a receiver pendente lite is properly appointed. ^^ And 
 where there are dissensions among the directors of a corpora- 
 tion which have resulted in a deadlock in the management of 
 the business, a receiver pendente lite may be appointed.^^ 
 
 § 294. Receiver of unauthorized issue of stock, when 
 refused ; shareholder who has parted with his interest not 
 entitled to relief. While receivers are thus allowed for the 
 
 30 Lawrence v. Greenwich Fire 33 Sheridan Brick Works v. Ma- 
 Insurance Co., 1 Paige, 587. rion Trust Co., 157 Ind., 292, 61 N. 
 
 31 Leavitt v. Yates, 4 Edw. Ch., E., 666, 87 Am. St. Rep., 207. 
 
 173, 175. 34 Sternberg v. Wolff, 56 N. J. 
 
 32 Dobson V. Simontcn, 78 N. C, Eq.. 389. 39 Atl.. 397, 39 L. R. A., 
 63. 762, 67 Am. St. Rep., 494.
 
 352 RECEIVERS. [chap. X. 
 
 protection of shareholders in certain classes of cases, the courts 
 proceed with much caution in the exercise of the jurisdiction. 
 And in an action brought by a shareholder for the purpose of 
 canceling- certain shares of stock, alleged to have been illegally 
 issued by the corporation, and to restrain the holders of such 
 shares from assigning or incumbering them, the appointment 
 of a receiver of the shares in controversy is unauthorized and 
 improper, upon an ex parte application, before answer, and 
 when it is not shown that defendants are irresponsible, or that 
 there is any danger of loss from the transfer of the stock. ^^ 
 Nor is a former shareholder entitled to a receiver as against 
 trustees or officers of the corporation, upon the ground of mis- 
 management of their trust, when he has sold and parted with 
 his entire interest in the corporation and in its effects. ^^ 
 
 § 295. Long acquiescence of shareholder a bar to relief ; 
 receiver of rents and tolls refused; effect of shareholder's 
 participation in fraud. It is also to be observed, with ref- 
 erence to this species of relief when sought in behalf of share- 
 holders of a corporation, that the acquiescence or consent of a 
 shareholder for a long period of years in any given state of 
 facts or conduct on the part of the corporate authorities, which 
 he afterward seeks to make the foundation for the appoint- 
 ment of a receiver, will generally prove a bar to the relief 
 sought.^'^ For example, when the authorities of a corporation 
 have made an agreement in the nature of a lease, for letting 
 the tolls of the company for a longer period than they are 
 authorized to do under the act of incorporation, but such agree- 
 ment is acquiesced in by the shareholders for a period of forty- 
 seven years without objection or complaint, during which time 
 the lessee and his successors have remained in undisturbed pos- 
 session and receipt of the tolls, equity will not appoint a receiver 
 of the rents and tolls in limine, in an action by a shareholder to 
 
 35 People v. Albany & Susque- 37 Gray v. Chaplin, 2 Russ., 126; 
 hanna R. Co., 7 Ab. Pr., N. S., 290. Hager v. Stevens, 2 Halst. Ch., 374. 
 
 36 Smith V. Wells, 20 How. Pr., 
 158.
 
 CHAP. X.] CORPORATIONS. 353 
 
 set aside the agreement or leasees So when a shareholder 
 files a bill for a receiver to take charge of certain real estate 
 in another state, alleged to have been purchased with the funds 
 of the corporation and the title taken in the name of another 
 person, when the situation of the title has remained unchanged 
 for a number of years, during all which time the plaintiff has 
 been a shareholder, and no greater danger is shown to the title 
 than has existed during all this period, and it is not shown that 
 the person holding the legal title is insolvent, no sufficient cause 
 is presented for the extraordinary aid of the court by a re- 
 ceiver. Especially will the court be justified in refusing to in- 
 terfere in such case, when it is apparent from the bill that the 
 property over which the receiver is sought was accumulated by 
 fraud, of which the plaintiff shareholder was himself cogni- 
 zant.39 And a shareholder seeking a receiver over a corpora- 
 tion, upon the ground of misconduct or breach of trust on the 
 part of its officers, must himself be free from participation in 
 such misconduct.^^ 
 
 § 295a. Bill by minority shareholders; when receiver 
 not appointed. A minority of the stockholders of a cor- 
 poration is not entitled to a receiver because of dissatisfaction 
 with the policy and management of a majority of the officers 
 and directors in the absence of any showing of fraud or of in- 
 solvency. ■*! And especially will the appointment of a receiver 
 
 38 Gray v. Chaplin, 2 Russ., 126. & M. Assn. v. Storrow, 34 C. C. A., 
 
 39 Hager v. Stevens, 2 Halst. Ch., 182, 92 Fed., 5 ; North America 
 374. Land & T. Co. v. Watkins, 48 C. 
 
 40 Hyde Park Gas Co. v. Kerber, C. A., 254, 109 Fed., 101 ; Worth 
 5 Bradw., 132. Manufacturing Co. v. Bingham, 54 
 
 41 Fluker v. Emporia City R. Co., C. C. A., 119, 116 Fed., 785. And 
 48 Kan., 577, 30 Pac, 18; Bartow see Jacobs v. Jacobs M. Co., 37 
 Lumber Co. v. Enwright, 131 Ga., Mont., 321, 96 Atl., 723; Stokes v. 
 329, 62 S. E., 233 ; Callaway v. Pow- Knickerbocker Investment Co., 70 
 hattan Improvement Co., 95 Md., N. J. Eq., 518, 61 Atl., 736; Downing 
 177. 52 Atl., 916; Hill v. Gould, 129 v. Dunlap Coal, I. & R. Co., 93 
 Mo., 106, 30 S. W., 181 ; Edison v. Tenn., 221, 24 S. W., 122. In Mor- 
 Edison U. P. Co., 52 N. J. Eq., 620, ris v. Elyton Land Co., 125 Ala., 
 29 At!., 195; Texas Consolidated C. 263, 28 So., 513, it was held proper, 
 
 Receivers — 23.
 
 354 RECEIVERS. [chap. X. 
 
 be denied where the corporation is solvent and its business 
 prosperous and it is not sought to have it wound up, since, in 
 such case, the wrongs complained of may be remedied under 
 the ordinary powers of a court of equity and without the ap- 
 pointment of a receiver.42 Nor will the relief be granted in 
 liynine and before answer upon a bill by a minority of share- 
 holders charging misconduct by the president, the management 
 being satisfactory to a majority of the shareholders and the 
 corporation being solvent.'*^ Nor will a receiver be appointed 
 at the instance of the minority stockholders upon the ground 
 that the affairs of the corporation are not managed for the best 
 interests of the stockholders and that a different policy should 
 be adopted. ^^ Nor should a receiver be appointed at the in- 
 stance of a minority shareholder where the corporate property 
 is in no way endangered and there is no mismanagement of the 
 business of the company, the only charge being the refusal to 
 allow the plaintiff to inspect the books of the company on ac- 
 count of his failure to pay his subscription to the capital stock."*^ 
 Nor are the minority stockholders entitled to a receiver upon 
 the ground that another stockholder has obtained control of 
 the management of the corporation and that there are no meet- 
 ings of the directors and no reports of the condition of the 
 company have been filed, where it does not appear that the 
 corporation is insolvent or that other stockholders are dissat- 
 isfied with the management.^^ Nor is the loss of the property 
 of the corporation or its failure to continue business sufficient 
 
 upon the facts, to appoint a receiver 44 Peatman v. Centerville L., H. 
 
 over the property of a corporation & P. Co., 100 Iowa, 245, 69 N. W., 
 
 upon a bill filed by a minority stock- 541. 
 
 holder to set aside an ultra vires ^5 Ridpath v. S. P. & C. R. F. & 
 
 sale and conveyance of all the cor- T. Co., 26 Wash., 427, 67 Pac, 229. 
 
 porate property to another corpora- ^6 Rumney v. Detroit & Montana 
 
 tion. Cattle Co., 116 Mich., 640, 74 N. W., 
 
 42 Miller v. Kitchen, 73 Neb., 711, 1043. 
 103 N. W., 297. 
 
 43 Ranger v. Champion C. P. Co., 
 52 Fed., 609.
 
 CHAP. X.] CORPORATIONS. 355 
 
 ground for a receiver at the instance of the minority stock- 
 holders in the absence of a showing of mismanagement, nor 
 will general averments of negligence and mismanagement sup- 
 ply the deficiency, nor the belief of the plaintiff that frauds 
 have been committed, where it is not clearly shown of what 
 such frauds consist.^'^ Nor can a minority stockholder main- 
 tain a bill for a receiver, where there is no contest concerning 
 the corporate property and no dispute of any kind between the 
 parties, and the only object of the bill is to have the court take 
 the property of the corporation under its management during 
 the pendency of a writ of error to be sued out by the corpora- 
 tion with respect to judgments obtained in another court, which 
 the corporation, by reason of its insolvency, would be unable 
 to supersede.48 Nor will the relief be granted upon the ground 
 that there is a difference of opinion as to the best method of 
 carrying on the business of the corporation ; 49 nor upon the 
 ground that the officers and directors are fraudulently misap- 
 propriating the assets of the corporation, where it appears that 
 the defendants are all perfectly solvent ; 50 nor to enable a 
 stockholder, who has deposited his stock as collateral for a 
 debt, to have an account of the corporate assets.^i Nor will a 
 receiver be appointed without notice at the instance of the 
 minority stockholders upon the ground that the business of 
 the corporation is being mismanaged and that it is being car- 
 ried on by the officers in violation of a resolution of the stock- 
 holders calling for a winding-up and dissolution of the cor- 
 poration.52 Nor will a receiver be appointed over a foreign 
 corporation upon behalf of the minority stockholders, where no 
 receiver has been appointed in the state of its domicile and 
 where no creditors appear and there is no showing that the 
 
 47 Clark v. National Linseed Oil 50 Hayes v. Jasper Land Co., 147 
 Co., 45 C. C. A., S3, 105 Fed., 787. Ala., 340, 41 So., 909. 
 
 48 Becker v. Hoke, 26 C. C. A., 51 Huet v. Lumber Co., 138 N. C, 
 282, 80 Fed., 97Z, 53 U. S. App., 366. 443, 50 S. E., 846. 
 
 49 Edison v. Edison U. P. Co., 52 52 State v. District Court, 20 
 N. J. Eq., 620, 29 Atl., 195. Mont., 284, 50 Pac, 852.
 
 356 RECEIVERS. [chap. X. 
 
 corporation is insolvent. ^^ Nor will a receiver be appointed 
 at the instance of a minority stockholder who acquired his stock 
 with full knowledge of the conditions of which he complains.^* 
 Even after the dissolution of a corporation a minority of its 
 shareholders is not necessarily entitled to a receiver to wind 
 up its affairs and to dispose of its assets ; especially when they 
 are in the hands of a responsible trustee and no mismanage- 
 ment or improper conduct in the discharge of his trust is 
 shown. ^^ And where a receiver has been appointed at the in- 
 stance of the minority stockholders of a corporation which is 
 shown to be entirely solvent and conducting a prosperous busi- 
 ness, it is proper for the reviewing court, upon an appeal by 
 the defendant from such order of appointment, to order a stay 
 and restitution of the property by the receiver to the corpora- 
 tion pending such appeal. ^^ 
 
 § 295b. The same; when receiver appointed; action 
 against directors ; when demand on receiver to sue unnec- 
 essary. Where, however, it appears that the officers and a 
 majority of the stockholders of a corporation are grossly mis- 
 managing its affairs in their own interests and are fraudulent- 
 ly and wrongfully misappropriating the corporate property for 
 their individual profit, a proper case is presented for the ap- 
 pointment of a receiver at the instance of the minority stock- 
 holders.^"^ And the relief may be granted where the bill dis- 
 closes a scheme upon the part of the majority of the directors 
 to wreck the corporate property in the interest of a wrongful 
 combination of a majority of the stockholders with a majority 
 of the board of directors.^^ And the relief has been granted 
 
 53 Parks V. United States B. Cor- 57 Ponca Mill Co. v. Mikesell, 55 
 poration, 140 Fed., 160. Neb., 98, 75 N. W., 46; Hampton 
 
 54 Von Schlemmer v. Keystone v. Buchanan, 51 Wash., 155, 98 Pac, 
 Life Ins. Co., 121 La., 987, 46 So., 374. 
 
 991. 58 Cantwell v. Columbia Lead Co., 
 
 53 Baltimore & O. R. Co. v. Can- 198 Mo., 1, 95 S. W., 856. And in 
 
 non, 72 Md., 493, 20 Atl., 123. State v. District Court, 15 Mont.,. 
 
 56 Forrester v. B. & M. C. C. & 324, 39 Pac, 316, 27 L. R. A., 392, 
 
 S. M. Co., 22 Mont., 430, 56 Pac, 48 Am. St. Rep., 682, a receiver was 
 
 868. appointed upon behalf of the mi-
 
 CHAP. X.] CORPORATIONS. 357 
 
 although it appeared that the corporation was quite solvent. 
 Thus, a receiver has been held properly appointed at the in- 
 stance of a minority of the stockholders of a solvent corpora- 
 tion where it is shown that there are two sets of persons, each 
 claiming to be the board of directors, and where, as the re- 
 sult of the conflict between them, the affairs of the corporation 
 are being seriously jeopardized.^^ So where the board of di- 
 rectors are a majority of the stockholders and are grossly mis- 
 managing the affairs of the corporation and are conducting the 
 business for their own individual gain, the minority stockhold- 
 ers are entitled to the appointment of a receiver although 
 it appeared that the corporation was solvent. ^^ a^^j where an 
 insolvent corporation has been placed in the hands of one of its 
 directors as receiver, a minority of the stockholders may insti- 
 tute an action against the receiver and the other directors for 
 the purpose of enforcing their individual liability for mis- 
 conducting the affairs of the corporation ; and in such case it 
 is unnecessary to allege any demand upon the receiver to bring 
 the action, since he can not sue himself, nor is he the proper 
 person to prosecute an action against his fellow wrong-doers. 
 The receivers should, nevertheless, be made a party defendant 
 in order that he may defend the action, and the corporation 
 should be joined as plaintiff or defendant in order to be bound 
 by any decree which may be entered. ^^ And where the re- 
 ceiver of a corporation has failed or refused to bring an action 
 necessary for the protection of the interests of the corporation 
 and of its stockholders and creditors and it is apparent from his 
 conduct that a demand upon him would be unavailing, a stock- 
 holder of the corporation may maintain a bill in his own name 
 against the corporation and the receiver without any previous 
 demand upon the receiver to institute such proceeding.^2 g^t 
 
 nority stockholders upon similar ing Co. v. Washed B. S. D. Co., 136 
 
 facts. And see Hall v. Nieukirk, Fed., 710. 
 
 12 Idaho, 33, 85 Pac, 485. 61 Weslosky v. Quarterman, 123 
 
 59 Jasper Land Co. v. Wallis, 123 Ga., 312, 51 S. E., 426. 
 
 Ala., 652, 26 So., 659. 62 Farwell v. Great Western Tel. 
 
 60 Columbia National Sand Dredg- Co./ 161 111, 522, 44 N. E., 891.
 
 358 RECEIVERS. [chap. X. 
 
 a stockholder in a corporation which is in the hands of a receiv- 
 er can not maintain a suit upon a cause of action due to the cor- 
 poration which the receiver refuses to enforce, in the absence of 
 a showing that he has apphed to the court for an order upon 
 the receiver to institute the necessary proceedings.^^ But a 
 stockholder of an insolvent bank may maintain a bill for an 
 accounting against the directors for their negligent manage- 
 ment, and, in such case, it is unnecessary that the action should 
 be brought by the receiver of the bank where he is also one of 
 the di rectors. ^^ 
 
 § 295c, The same; demand upon ojEficers and directors 
 to proceed. In order to entitle a minority of the stock- 
 holders to a receiver over the corporation, it must appear that 
 the complaining stockholders have made all reasonable efforts 
 to procure the directors or other stockholders to redress their 
 grievances, or to obtain authority to prosecute the action in the 
 name of the company, or else to show why this could not have 
 been done.^^ But when the directors and officers of the cor- 
 poration, who are defendants to the action, are themselves 
 charged with fraudulent mismanagement of the affairs of the 
 corporation and misappropriation of its assets as a ground 
 for the relief, upon a bill by a shareholder for a receiver and 
 an accounting, a previous demand upon such directors and 
 officers to bring suit is unnecessary to sustain the action. In 
 such case, it being apparent that a demand would be unavail- 
 ing, equity will not require a useless or fruitless thing as a 
 condition to bringing the action. ^^ Nor is the demand neces- 
 
 63 Swope V. Villard, 61 Fed., 417. 65 West Va., 721, — S. E., — . See, 
 
 64 Flynn v. Third National Bank, also, Bacon v. Irvine, 70 Cal., 221, 
 122 Mich., 642, 81 N. W., 572. 11 Pac, 646. 
 
 65 Roman v. Woolfolk, 98 Ala., 66 Wayne Pike Co. v. Hammons, 
 219, 13 So., 212; Wenzel v. Palmetto 129 Ind., 368, 27 N. E., 487; Iron 
 B. Co., 48 S. C, 80, 26 S. E., 1 ; Hall v. Baker, 134 Ind., 293, 33 N. 
 Becker v. Hoke, 26 C. C. A., 282, E., 1128; Bridgeport Development 
 80 Fed., 973, 53 U. S. App., 366; Co. v. Tritsch, 110 Ala., 274, 20 So., 
 Worth Manufacturing Co. v. Bing- 16; Jasper Land Co. v. Wallis, 123 
 ham, 54 C. C. A., 119, 116 Fed., Ala., 652, 26 So., 659; Ponca Mill 
 785; Ward v. Hotel Randolph Co., Co. v. Mikesell, 55 Neb., 98, 75 N.
 
 CHAP. X.] CORPORATIONS 359 
 
 sary where there is no directory or other governing body upon 
 which it may be made.^'^ 
 
 § 296. Legislation and decisions of other states, when 
 considered in refusing receiver over new issue of stock. 
 
 The propriety of the reHef as against corporations is some- 
 times determined by the legislation or decisions of other states, 
 in which the association was incorporated, upon the matter 
 urged as a ground for a receiver. Thus, in an action brought 
 by holders of the original stock of a corporation created by 
 and under the laws of other states, to set aside a new issue of 
 stock made by the corporation, it is not proper to grant an in- 
 junction against the action of the corporate officers and to 
 appoint a receiver of the new issue, when the states in which 
 the company was incorporated have, by legislative action and 
 by the decision of a court of last resort, ratified the acts of the 
 corporation in issuing the new stock, and have declared it to 
 be legal.68 
 
 § 297. Sequestration for benefit of creditors; rights of 
 attaching creditors subordinate; transfer to nev/ corpora- 
 tion. When the statutes of a state authorize and provide 
 for appointing receivers in proceedings against corporations 
 whose charters have expired, the courts being vested with full 
 jurisdiction in equity for that purpose, and being fully empow- 
 ered by statute to make all orders necessary for the enforcement 
 of the trust, and the statute requiring the receiver to divide the 
 fund collected among the creditors pro rata, the remedy thus 
 provided is regarded, in effect, as a method of sequestration 
 for the benefit of all the creditors of the corporation. In such 
 case, attaching creditors of the property of the corporation can 
 not acquire valid liens, so as to prevent the receivers from sell- 
 ing the property and applying the proceeds in payment of all 
 the creditors. And the mode of sequestration thus afforded 
 
 W., 46; Columbia National Sand rion Trust Co., 157 Ind., 292, 61 N. 
 
 Dredging Co. v. Washed B. S. D. E., 666, 87 Am. St. Rep., 207. 
 
 Co., 136 Fed., 710. 68 O'Brien v. Chicago, Rock Is- 
 
 67 Sheridan Brick Works v. Ma- land & Pacific R. Co., 53 Barb., 568.
 
 360 RECEIVERS. [chap. X. 
 
 by the statute will be held to take effect as against attaching 
 creditors, even though they may have attached before the re- 
 ceivers were actually appointed, but after the filing of the bill 
 and the issuing of an injunction restraining the corporation 
 from further conducting its affairs. ^^ But when a corporation 
 becomes extinct by virtue of an act of legislature, its assets and 
 powers being transferred to a new corporation, the courts are 
 powerless, upon an ex parte application, to appoint a receiver 
 over the former corporation, it having ceased to exist, and 
 there being no person competent to represent it, the new cor- 
 poration not being made a party to the action. "^^ 
 
 § 298. Right of judgment creditors to receiver over cor- 
 poration, conferred by statute. The right of judgment 
 creditors of a corporation to a sequestration of the corporate 
 effects and to a receiver, in aid of their judgments at law after 
 execution returned unsatisfied, is a right which is given by stat- 
 ute in many if not in most of the states ; and it may be regarded 
 as an extension or enlargement of the general jurisdiction of 
 courts of equity, which, as already shown, does not extend to 
 sequestrating the property and winding up the business of the 
 corporation.'''^ It is inconsistent with the purpose and scope 
 of this work to attempt any discussion of these various stat- 
 utes, and it is believed that each practitioner is sufficiently fa- 
 miliar with the legislation and practice of his own state to 
 render any such discussion unnecessary in the present treatise. 
 And it will be sufficient, for the purposes of the present work, 
 to present the principles deduced from the decisions in the va- 
 rious states, without attempting to discuss or to analyze the stat- 
 utes, which are undergoing constant modification and change. 
 
 § 299. Officers and shareholders required to account to 
 receiver to pay judgment creditors. It is held in Wiscon- 
 sin, that a creditor of a corporation who has established his de- 
 
 69 Atlas Bank v. Nahant Bank, 23 laws of New Jersey, when the corn- 
 Pick., 480. pany has ceased to do business, see 
 
 70 Young t;. Rollins, 85 N. C, 485. Streit v. Citizens Fire Insurance 
 As to the right to a receiver over Co., 29 N. J. Eq., 21. 
 
 an insurance company under the 71 See § 288, ante, and cases cited.
 
 CHAP. X.] CORPORATIONS. 361 
 
 mand by judgment at law, may, after execution returned un- 
 satisfied in whole or in part, file a bill in behalf of himself and 
 such other creditors of the corporation as may elect to become 
 parties thereto, against both the corporation and its delinquent 
 or withdrawing shareholders, whereupon he may have a decree 
 for an account of the assets and liabilities of the corporation, 
 and for a receiver. And the officers and shareholders will be 
 required to pay in and account to the receiver for so much of 
 the capital stock as will be sufficient to pay plaintiff's judgment, 
 and the debts of such other creditors as may choose to come in 
 under the decree. In such case, the maxim of the law that 
 "equality is equity" applies, and the creditors must all share 
 alike in the funds realized, in proportion to the amount of 
 their respective claims.'^^ 
 
 § 300. Judgment creditor allowed receiver over rents 
 and tolls of bridge company. The question of the extent 
 to which equity will interfere with the tolls and franchises of a 
 corporation, such as a bridge company, in aid of judgment 
 creditors, when the chief value consists in such tolls or fran- 
 chise, is not altogether free from difficulty. But it is held by 
 the Supreme Court of the United States, that when the rents 
 and profits of the company for a given period are sold under 
 execution, and purchased by the judgment creditor, he, with 
 other judgment creditors, may, upon a bill in equity, have a re- 
 ceiver to collect the tolls and pay them into court, to the end of 
 
 72 Adler v. Milwaukee Patent corporation, and appointing a re- 
 Brick Manufacturing Co., 13 Wis., ceiver to wind up its concerns, 
 57. The jurisdiction of equity, in exists at common law and inde- 
 this class of cases, is said by Dixon, pendent of statute is certainly un- 
 C. J., delivering the opinion, to supported by the weight of author- 
 exist at common law and inde- ity, as already shown. See § 288, 
 pendent of statutory authority, "as ante, and cases cited. Nor does the 
 a sort of distinct exercise of equi- assertion of this doctrine seem to 
 table jurisprudence." As regards have been necessary to the decision 
 the remedy against delinquent of the case, as regards the appoint- 
 shareholders, the statement is ment of a receiver, since the power 
 doubtless true. But the assertion of appointment in this class of cases 
 that the jurisdiction of equity by was expressly conferred by statute. 
 sequestrating the property of the
 
 362 
 
 RECEIVERS. 
 
 [chap. X. 
 
 discharging- the judgment indebtedness. And the relief is ex- 
 tended, in such case, upon the ground of the inadequacy of the 
 remedy at law and the difficulty of obtaining complete satis- 
 faction of the judgments without the aid of equity. "^^ 
 
 § 301. Creditor not entitled to receiver before judg- 
 ment ; nor when there is a remedy at law. In New York, 
 it is held that a creditor at large, i. e., before judgment, of a 
 manufacturing corporation, is not entitled to a receiver in an 
 action brought by him for a dissolution of the corporation and 
 a sequestration of its effects, upon the ground of insolvency 
 
 73 Covington Drawbridge Co. v. 
 Shepherd, 21 How., 112. In this 
 case, the corporation was created 
 by act of legislature of the state of 
 Indiana, and built a drawbridge 
 over the Wabash river in that state, 
 pursuant to its charter. Judgments 
 were had against the corporation 
 in the United States circuit court 
 for the district of Indiana, under 
 which execution was levied upon 
 the bridge as real property, and the 
 marshal sold the rents and profits 
 of the bridge under the execution 
 for the term of one year, the exe- 
 cution creditor becoming the pur- 
 chaser. He, with other judgment 
 creditors, then filed a bill in the 
 United States circuit court and ob- 
 tained a decree appointing a re- 
 ceiver, with directions to take pos- 
 session of the bridge, receive its 
 tolls and pay them into court, to be 
 applied in satisfaction of the judg- 
 ments pro rata. Upon appeal, the 
 decree was sustained, the court, 
 Catron, J., using the following lan- 
 guage, p. 124: ". . . By the 
 laws of Indiana, lands and tene- 
 ments can not be sold under execu- 
 tion until the rents and profits 
 thereof for a term not exceeding 
 seven years shall have been first of- 
 
 fered for sale at public auction ; and 
 if that term, or a less one, will not 
 satisfy the execution, then the debt- 
 or's interest or estate in the land 
 may be sold, provided it brings two- 
 thirds of its appraised vahie. The 
 tolls, under the idea that they were 
 rents and profits of the bridge, were 
 sold for one year, according to the 
 forms of this law. The tolls of the 
 bridge being a franchise, and sole 
 right in the corporation, and the 
 bridge a mere easement, the corpor- 
 ation not owning the fee in the land 
 at either bank of the river, or un- 
 der the water, it is difficult to say 
 how an execution could attach to 
 either the franchise or the struc- 
 ture of the bridge as real or person- 
 al property. This is a question that 
 this court may well leave to the 
 tribunals of Indiana to decide on 
 their own laws, should it become 
 necessary. One thing, however, is 
 plainly manifest, that the remedy 
 at law of these execution creditors 
 is exceedingly embarrassed, and we 
 do not see how they can obtain sat- 
 isfaction of their judgments from 
 this corporation (owning no cor- 
 porate property but this bridge), un- 
 less equity can aflford relief. . . . 
 All that we are called on to decide
 
 CHAP. X.] CORPORATIONS. 363 
 
 and suffering other creditors to obtain a preference."^^ So a 
 simple contract creditor of a mining corporation can not have 
 a receiver to prevent the corporation from fraudulently dis- 
 posing of its property and from placing beyond its power the 
 ability to respond in damages.'^^ And it may be stated as a 
 general proposition, founded upon established principles of 
 equity, that a creditor of a corporation is not entitled to the ex- 
 traordinary aid of equity in the enforcement of his demand, 
 when he can obtain full and adequate relief at law. When, 
 therefore, proceedings are instituted by a creditor of a banking 
 corporation for the appointment of a receiver to wind up its 
 affairs, but it is apparent from his bill that whatever rights he 
 may have are cognizable at law, and may be remedied by fol- 
 lowing the mode pointed out by law for that purpose, the appli- 
 cation for a receiver will be denied, and the creditor will be left 
 to pursue his legal remedy. "^^ 
 
 § 302. Prior lien of judgment creditor not divested or 
 affected by receivership; title to real estate not divested. 
 As regards the effect of appointing a receiver over a 
 corporation, upon the lien previously acquired by a judg- 
 ment creditor, the rule in Indiana is, that the appoint- 
 ment does not operate to divest or affect the judgment 
 lien. And when a judgment creditor may enforce his 
 
 in this case is that the court below New York, under a statute of the 
 
 had power to cause possession to state, to appoint a receiver over a 
 
 be taken of the bridge, to appoint corporation which had been dis- 
 
 a receiver to collect tolls and pay solved, upon the ground of delay 
 
 them into court, to the end of dis- on the part of the trustees ap- 
 
 charging the judgments at law; pointed to wind up its affairs, see 
 
 and our opinion is that the power In re Pontius, 26 Hun, 232. And 
 
 to do so exists, and that it was see, for this subject generally, § 
 
 properly exercised. It is, therefore, 406, post. 
 
 ordered that the decree below be '^^ International Trust Co. v. 
 
 affirmed, and the circuit court is di- United Coal Co., 27 Colo., 246, 60 
 
 rected to proceed to execute its de- Pac, 621, 83 Am. St. Rep., 59, and 
 
 cree." note. 
 
 74 Galway v. United States Steam 76 Parmly v. Tenth Ward Bank, 3 
 
 Sugar Refining Co., 13 Ab. Pr., 211. Edw. Ch., 395. And see, post, § 
 
 As to the power of the courts of 403.
 
 364 RECEIVERS. [CIIAP. X. 
 
 judgment in the ordinary way, by levy upon and sale of the 
 real estate of the corporation on which his judgment is a lien, 
 the court may properly refuse to grant an order upon the re- 
 ceiver to pay the judgment out of moneys in his hands, when 
 it is not shown that such moneys are the proceeds of a 
 sale of the property upon which the judgment was a lien.'^'^ 
 A somewhat similar doctrine prevails in Michigan, and it is 
 there held that a receivership of a corporation pendente lite, 
 and before a final decree of forfeiture, is merely conditional 
 and inchoate, the right of the receiver being only a possessory 
 right for the purposes of the suit. His appointment, therefore, 
 does not divest the title of the corporation to its real estate, 
 and when no conveyance of such title is made by the corpora- 
 tion to the receiver, who afterward becomes functus officio, 
 the real estate of the corporation is subject to the lien of a judg- 
 ment and execution, as if there had never been a receiver.'^^ 
 
 § 303. Title divested by appointment of receiver on final 
 dissolution; departure from common-law rule. While, as 
 is thus seen, the appointment of a receiver pendente lite, and 
 before a final dissolution of the corporation, does not have the 
 effect of divesting the title to its real property, a different ef- 
 fect results from the appointment when made upon final dis- 
 solution of the corporate body. At the common law, upon the 
 dissolution or civil death of a corporation, all its real property 
 remaining unsold at the time of such dissolution reverted to the 
 original grantors or to their heirs, the reversion being a condi- 
 tion annexed by law and resulting from the failure of the 
 cause for which the grant was made."^^ The common-law rule, 
 however, is now almost entirely obsolete, and in this country 
 the disposition to be made of the corporate property upon dis- 
 
 77 Southern Bank of Kentucky v. title to its real estate vests in the 
 Ohio Insurance Co., 22 Ind., 181. receiver, see Attorney-General v. 
 
 78 Montgomery v. Merrill, 18 Atlantic M. L. I. Co., 100 N. Y., 
 Mich., 338. As to the effect of a re- 279. 
 
 ceivership over an insolvent in- "9 Angell & Ames on Corpora- 
 
 surancc company under the statutes tions, § 779, and cases cited, 
 of New York and as to whether the
 
 CHAP. X.] CORPORATIONS. 365 
 
 solution is usually regulated by legislative enactments, having 
 for their object the protection of creditors and shareholders. 
 And the general tendency of the legislation and judicial deci- 
 sions upon this subject is to regard all the property of a cor- 
 poration, upon its dissolution, as a trust fund pledged to the 
 payment of the demands of creditors and shareholders.^^ 
 Thus, in New York, the common-law rule, that upon dissolu- 
 tion of the corporate body the title to its realty reverts to the 
 original proprietors or grantors, or to their heirs, is entirely 
 obsolete, and under the laws of that state, the title to all the 
 property, real or personal, vests in the receiver of the corpora- 
 tion appointed upon its dissolution, for the benefit of the cred- 
 itors and shareholders.^^ 
 
 § 304. Waste of trust fund by officers of insurance and 
 loan association ground for receiver; insolvency and as- 
 signment; building and loan association; foreign life in- 
 surance company. When creditors of a corporation have 
 a charge upon a particular fund in the nature of a trust fund, 
 for the satisfaction of their demands, the mismanagement and 
 waste of such fund by the corporate officers intrusted with its 
 control may warrant the court in appointing a receiver for the 
 preservation of the property pendente lite. For example, upon 
 a bill filed by persons insured in an insurance and loan associa- 
 tion, against the directors and managers, showing gross mis- 
 management upon the part of defendants, and that a large por- 
 tion of the trust funds out of which the assured were to be paid 
 had been lost by the negligence of defendants, and its appear- 
 ing that the secretary of the association had absconded with a 
 large amount of its funds, and that there was great danger of 
 the remainder being wasted, the case was regarded as a plain 
 one for an injunction and a receiver. And the aid of equity, in 
 such a case, is founded upon the necessity of interfering to pre- 
 vent waste of the funds in question, and also upon the breach 
 of trust of the defendants charged with the management of the 
 
 80 Angell & Ames on Corpora- 81 Owen v. Smith, 31 Barb., 641. 
 
 tions, § 779a.
 
 366 
 
 RECEIVERS. 
 
 [chap. X. 
 
 trust fund.S2 j^ federal court may also entertain jurisdiction 
 of a bill by a shareholder of a building and loan association 
 for a receiver, the requisite conditions of citizenship existing", 
 and may appoint a receiver, the corporation being shown to be 
 insolvent, and its officers being charged with gross misman- 
 agement of its affairs, and with fraudulent misappropriation 
 
 82 Evans v. Coventry, 5 DeG., M. 
 & G., 911, reversing S. C., 3 Drew., 
 75. The motion for an injunction 
 and receiver having been refused 
 by the vice-chancellor, his decision 
 was reversed by the lords justices 
 upon appeal, and a receiver and 
 an injunction were allowed. The 
 grounds upon which the interfer- 
 ence was based were stated by Lord 
 Justice Knight Bruce, as follows, 
 p. 916 : ". . . The application be- 
 fore the court is founded on the 
 common right of persons who are 
 interested in property which is in 
 danger to apply for its protection. 
 Upon the bill and answer it appears 
 that the plaintiffs are interested in 
 the funds of that which was an 
 association, under whatsoever cir- 
 cumstances of honesty or dishon- 
 esty constituted or carried on, but 
 the affairs of which have ceased to 
 be, and probably can never again 
 be, in a state of activity. It was 
 intimately connected with another 
 society or alleged society, of a sub- 
 sidiary nature. The defendants are 
 persons, or include persons, who 
 owed duties to those represented 
 by the plaintiffs in respect of the 
 funds of the society, for the pur- 
 pose of care and protection. Those 
 duties appear to have been aban- 
 doned in a manner deserving, as 
 it would at present appear, the 
 strongest observation. This has led 
 to a grievous loss, which has been 
 
 sustained by persons of small means 
 and in humble circumstances, who 
 are ill able to bear it. These same 
 defendants have now under their 
 control, or in their power, a poor 
 remnant of the property which they 
 have so ill cared for. Whatever 
 may be the specific allegations or 
 want of specific allegations in the 
 bill, the true and necessary result 
 of the entire pleadings as they stand 
 is, that this remnant of property is 
 in danger. In my judgment, the 
 objections which have been argued 
 against this application, at the exist- 
 ing stage of the cause, might be 
 urged with as much reason, as much 
 force, and as much effect, if this 
 were an application to restrain the 
 felling of timber or the destruction 
 of a house. It is a case of waste, 
 partly perpetrated and obviously 
 imminent. But for the judgment 
 which has been given, and for which 
 I feel the most unaffected respect, 
 I should have said, from my ex- 
 perience of the practice of the court 
 in Lord Eldon's time, that this was 
 a plain case for that injunction, and 
 that receiver, which I think ought 
 now to be granted." And Lord 
 Justice Turner adds : "Whatever 
 else may be said of this motion, it 
 can not be said that any argument 
 has been omitted which could be 
 urged against it. What the court 
 has to look at is the position of the 
 parties on the record. According
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 367 
 
 and waste of its assets.^^ So the insolvency of a life insurance 
 company and its assignment of all its property to a trustee for 
 its creditors, without the authority of its stockholders, being an 
 abandonment of the franchises of the company, constitute suffi- 
 cient ground for a receiver in behalf of creditors.^^ But a re- 
 ceiver should not be appointed over a foreign life insurance 
 company where there are no assets within the state which 
 could come into the possession of the receiver except assess- 
 ments to become thereafter due from policy-holders resident in 
 the state.85 
 
 § 305. Receivers in behalf of creditors of foreign cor- 
 porations. Under the New York code of procedure, courts 
 of equity jurisdiction are empowered to appoint receivers over 
 
 to the allegation of the bill, verified 
 by affidavit or admitted by the an- 
 swer, the plaintiffs are in the posi- 
 tion of parties who have a charge 
 on the funds of what I may for the 
 present purpose call the original 
 association. The defendants are in 
 the position of trustees of the asso- 
 ciation. It appears that funds of 
 that association have been lost by 
 the act of the treasurer, whose con- 
 duct it was the duty of the other de- 
 fendants to superintend. Prima 
 facie, therefore, there appears a 
 clear case for the interference of 
 the court; for I certainly can not 
 accede to Mr. Selwyn's argument, 
 that a breach of trust is not a suffi- 
 cient ground for the interference of 
 the court by the appointment of a 
 receiver. Whether the plaintiffs will 
 ultimately establish the commission 
 of a breach of trust is not the ques- 
 tion now before the court. It is ad- 
 mitted that funds have been lost, 
 of which it was the duty of the de- 
 fendants to take care. That loss is 
 prima facie evidence of a breach of 
 the duty of the defendants, sufficient 
 
 to authorize the interference of the 
 court by the appointment of a re- 
 ceiver." 
 
 83 Towle V. American B., L. & I. 
 Society, 60 Fed., 131. And see 
 Strauss v. Inter-State B. & L. Assn., 
 117 N. C, 308, 23 S. E., 450, 30 L. 
 R. A., 693, 53 Am. St. Rep., 585; 
 S. C, 118 N. C, 556, 24 S. E., 116. 
 As to the power of the court, under 
 the statute of Missouri, to appoint 
 a receiver of a building and loan 
 association during vacation, see 
 State V. Phoenix Loan Assn., 159 
 Mo., 102, 60 S. W., 74; State v. 
 Woodson, 161 Mo., 444, 61 S. W., 
 252. See Sjoberg v. Security S. & 
 L. Assn., 73 Minn., 203, 75 N. W., 
 1116, 72 Am. St. Rep., 616, where 
 the facts were held insufficient to 
 justify the appointment of a re- 
 ceiver of a building and loan asso- 
 ciation upon a bill filed by a minor- 
 ity of the shareholders. 
 
 84 Buck V. Piedmont & Arlington 
 Life Insurance Co., 4 Fed., 849, 4 
 Hughes, 415. 
 
 85 Blackwell v. Life Association, 
 141 N. C, 117, 53 S. E., 833.
 
 36S RECEIVERS. [chap. X. 
 
 the effects of foreign corporations, upon the apphcation of judg- 
 ment creditors, and are fully authorized to take charge of the 
 property of such corporations in order to preserve it for the 
 benefit of creditors and shareholders.^^ And the courts of a 
 state may appoint a receiver over a foreign corporation having 
 assets within the jurisdiction of the appointing court, although 
 the courts of the domicile of the corporation or of some 
 other state may already have placed its affairs in the hands 
 of a receiver, the foreign receivership, in such case, being re- 
 garded as ancillary to the original receivership. But a state 
 court will not appoint a receiver over a foreign corporation, 
 where it has no property in the state of appointment and has 
 not appeared or been served with process and has no officers or 
 other agents to control or represent it in the state of appoint- 
 ment.^'^ And when a creditor of a foreign corporation has ob- 
 tained judgment against the company in the state where it is 
 incorporated, and in aid of his judgment has procured the ap- 
 pointment of a sequestrator of the property of the corporation 
 in that state, but the defendant transfers its property and assets 
 to a new corporation in New York, upon no other consideration 
 than shares of stock in the new company, the judgment creditor 
 may enforce his judgment against the new company in New 
 York, and may have a receiver in aid of such proceedings.^^ 
 But when an association, incorporated in a foreign country, has 
 been dissolved by a decree or order of the government of that 
 country, but the decree of dissolution is not absolute and still 
 leaves the corporation in existence for certain specified pur- 
 poses, and it has property within the limits of this country un- 
 der control of its officers resident here, the courts of this coun- 
 try will not appoint a receiver of the assets here, upon grounds 
 which would not have availed for that purpose in the foreign 
 
 86DeBemer v. Drew, 57 Barb., 88 Barclay v. Quicksilver Mining 
 
 438; Murray z*. Vanderbilt, 39 Barb., Co., 9 Ab. Pr., N. S., 283. See, 
 140. also, S. C, 6 Lans., 25. 
 
 STHolbrook v. Ford, 153 111., 633, 
 39 N. E., 1091, 27 L. R. A., 324, 46 
 Am. St. Rep., 917.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 369 
 
 country.^9 And a receiver will not be appointed over a for- 
 eign corporation upon behalf of local creditors unless it can be 
 shown that he will be able to exercise the powers of a receiver.^^ 
 § 306. Receiver appointed in one state over assets of 
 corporation organized in another state. It is held in New 
 York that when a corporation is created in another state and is 
 in process of voluntary dissolution there, but a portion of its 
 assets is in New York, in possession of some of its officers resi- 
 dent there and subject to the jurisdiction of the New York 
 courts, and not amenable to the courts of the state under whose 
 laws the corporation was created and exists, upon a bill by 
 shareholders in New York for an accounting and distribution, 
 the court may appoint a receiver when it is shown that the cor- 
 porate officers in New York are insolvent, and that the funds 
 are in jeopardy. Under such circumstances, the courts of New 
 York, having undoubted jurisdiction over the officers of the 
 corporation resident in that state, as well as over the property 
 there located, may properly interfere to preserve a fund which 
 is endangered by the insolvency or improper conduct of de- 
 fendants.^1 
 
 89 Hamilton v. Accessory Transit 
 Co., 26 Barb., 46. And see Murray 
 V. Vanderbilt, 39 Barb., 140. 
 
 90Stock]ey v. Thomas, 89 Md., 
 663, 43 Atl, 766. 
 
 91 Redmond v. Hoge, 3 Hnn, 171. 
 The grounds of the jurisdiction, in 
 such a case, are very clearly set 
 forth by Davis, P. J., as follows, 
 p. 175 : "The whole scope and 
 story of this action may be stated 
 almost in a sentence. The officers 
 who have complete control of a 
 foreign corporation, now in process 
 of voluntary dissolution, being all 
 residents of this city and having in 
 their possession here certain funds 
 of the corporation, which their own 
 insolvency has put in jeopardy, and 
 Receivers — 24. 
 
 neither they nor the funds being 
 amenable to the jurisdiction of the 
 state under whose laws the corpora- 
 tion was created and exists, refuse 
 to make application of such funds 
 to the creditors and stockholders 
 in conformity to the proceedings for 
 dissolution, or to put the same in a 
 place of safety. They possess, be- 
 ing all the executive and a majority 
 of the administrative officers of the 
 corporation, such power of control, 
 that no suit can be commenced by 
 the corporation itself to protect the 
 fund. Is a court of equity of the 
 state powerless, at the suit of a 
 minority of the officers who are 
 stockholders and personally inter- 
 ested in the application and dislribu-
 
 370 
 
 RECEIVERS. 
 
 [chap. X. 
 
 § 306a. Domiciliary receiver of mutual benefit associa- 
 tion, when entitled to possession of assets in another state ; 
 ancillary receiver. Where a mutual benefit association 
 having a reserve fund held by subordinate lodges in various 
 states, but owned and controlled by the supreme body, has be- 
 come insolvent and a statutory assignee or a receiver in the na- 
 ture of an assignee has been appointed by a court of the domicile 
 of the corporation with power to collect the assets wherever 
 found, or with the powers usually conferred upon receivers in 
 such cases, such receiver or assignee may have ancillary receiv- 
 ers appointed in other states who will be ordered to collect 
 
 tion of the fund, to appoint a re- 
 ceivership of the particular fund, 
 and apply it, first, to the creditors 
 of the corporation, and secondly, to 
 the stockholders, in accordance with 
 the proceedings for dissolution in 
 the home state of the corporation? 
 We have clearly jurisdiction of the 
 persons of the officers in the state. 
 We have jurisdiction of the prop- 
 erty because it is within our terri- 
 tory. The plaintiffs are also citizens 
 of our state and show themselves 
 to be remediless both in Connecticut 
 and in the federal courts. We are 
 not prepared to say, until some 
 higher tribunal shall admonish us 
 to the contrary, that this court has 
 not, under such circumstances, 
 power to intervene, so far as re- 
 lates to the property actually within 
 the state. The court is not power- 
 less, in such a case, to enforce any 
 judgment it may render, so long as 
 it is limited to the particular fund 
 which it finds here and takes from 
 the hands of persons over whom its 
 jurisdiction is complete and puts it 
 into the safe keeping of its own of- 
 ficers ; and we are aware of no au- 
 thority which denies to us jurisdic- 
 tion in a case containing all the ele- 
 
 ments of that before us. It is idle 
 to answer that the courts of Con- 
 necticut have jurisdiction over the 
 corporation; for such jurisdiction, 
 so far as it affects the questions 
 and remedies here, is futile. Its 
 impotency was illustrated in the 
 proceeding commenced in the supe- 
 rior court of that state in which 
 Eaton was appointed receiver, and 
 in which he was forced, in sub- 
 stance, to report that all the assets 
 of the corporation were detained 
 in the city of New York, and that 
 'he never has had, nor permitted 
 to have, possession of any of the 
 assets of the said corporation.* A 
 receiver, if appointed there, must 
 resort to our courts to reach the 
 appellants and the fund in their 
 hands, by an action similar to the 
 present, and become substantially 
 the receiver of this court, in order 
 to acquire possession of the fund. 
 But while no such officer exists in 
 Connecticut, there seems to us no 
 sound reason why the jurisdiction 
 of this court may not be invoked 
 to preserve a fund now in the hands 
 of persons in our jurisdiction and 
 in danger of being lost by their 
 insolvency or improper use."
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 371 
 
 and transmit the local assets to the domiciliary receiver, or, 
 if a receiver has already been appointed in the foreign 
 state, the domiciliary receiver may intervene in such pro- 
 ceeding and the receiver there appointed will be required 
 to turn over the local assets to the domiciliary receiver. Such a 
 case differs from one in which there is a contest between gen- 
 eral creditors for the possession of assets, since the members 
 of such an association are held to have contracted with refer- 
 ence to an equal and ratable distribution of the assets among all 
 members wherever located without regard to their domicile, 
 and to have impliedly agreed that such distribution shall be 
 made by a court of the domicile of the corporation which is 
 the only court by which it may be effectively done.^^ And 
 in such case the application to have the local receiver surrender 
 the local assets to the domiciliary receiver may be maintained 
 by a certificate-holder and member of the association.^^ But 
 it is important to observe that the local court, in directing 
 its receiver to surrender the local assets to the principal re- 
 ceiver, will see that the necessary steps are taken to presei-ve 
 equality and to secure to the local members their proportionate 
 share of the assets upon the final distribution.^^ And where 
 
 92 Buswell V. Supreme Sitting, 
 161 Mass., 224, 36 N. E., 1065, 23 
 L. R. A., 846 ; Ware v. Supreme Sit- 
 ting, (N. J.) 28 Atl., 1041; Bald- 
 win V. Hosmer, 101 Mich., 119, 59 
 N. W., 432, 25 L. R. A., 739; Dur- 
 ward V. Jewett, 46 La. An., 559, 15 
 So., 386; Smith v. Taggart, 30 C. 
 C A., 563, 87 Fed., 94, 57 U. S., 
 App., 493 ; Wheeler v. Dime Savings 
 Bank, 116 Mich., 271, 74 N. W., 496, 
 72 Am. St. Rep., 521. In Fawcett 
 V. Supreme Sitting, 64 Conn.. 170, 
 29 Atl., 614, 24 L. R. A., 815, it 
 was held that the certificate-holders 
 in Connecticut had the right to 
 treat their contracts with the order 
 as rescinded upon the insolvency 
 of the corporation and thereupon 
 
 to demand the return of what they 
 had paid in, and that their claims 
 then became in the nature of those 
 of general creditors, and the court 
 accordingly denied the application 
 of the domiciliary receiver to have 
 the local receiver surrender the as- 
 sets collected by him. And in 
 Failey v. Fee, 83 Md., 83, 34 Atl., 
 839, it was held that the holders of 
 matured certificates were to be con- 
 sidered and treated as general cred- 
 itors and that their prior attach- 
 ment liens should therefore be 
 given a preference over the claim of 
 the domiciliary receiver. 
 
 93 Ware v. Supreme Sitting, (N, 
 J.) 28 Atl, 1041. 
 
 94 Buswell V. Supreme Sitting,
 
 372 RECEIVERS. [chap. X. 
 
 the court of original appointment had ordered that all funds 
 of the local branches be turned over to the domiciliary receiver 
 and that, in default thereof, the local receivers should be barred 
 from receiving any distribution upon the claims represented by 
 them until all others who had accounted should be fully paid, 
 it was held that members of the association who were within 
 the jurisdiction of a foreign court which refused to comply with 
 such order but directed the local funds to be distributed among 
 the local creditors and who were thereby prevented from com- 
 plying with the order of the domiciliary court, might intervene 
 in the original proceeding and prove their claims therein for 
 the balance remaining due after the payment of the amounts re- 
 ceived under the distribution made by the foreign court.^^ And 
 upon the appointment of a receiver to wind up the affairs of an 
 insolvent life insurance company in the state of its incorpora- 
 tion, in accordance with the laws of that state, policy-holders 
 residing in another state will not be allowed a receiver over 
 the property of the company in the latter state, as against the 
 receivers of the state in which the company was incorporated. 
 In such case the policy-holders are treated as having contract- 
 ed with reference to the laws of the state of incorporation, and 
 are bound thereby. And the receivers thus originally appointed 
 may have an ancillary receiver appointed in such foreign state 
 to convert the assets of the company there located into money, 
 and to remit the proceeds for distribution in the original suit.^^ 
 § 306&. Ancillary receiverships. It has already been 
 shown that a receiver has no extraterritorial right of action and 
 that it is only upon considerations of comity that he will be 
 permitted to maintain actions in the courts of a foreign state, 
 and that such comity has never been carried to the extent of 
 permitting a foreign receiver to deprive local creditors of their 
 
 161 Mass., 224, 36 N. E., 1065, 23 96 Parsons v. Charter O. L. I. 
 
 L. R. A., 846; Baldwin v. Hosmer, Co., 31 Fed., 305. See, further, as 
 
 101 Mich., 119, 59 N. W., 432, 25 L. to ancillary receiverships, Williams 
 
 R. A., 739. V. Hintermeister, 26 Fed., 889. 
 
 93 Cowan v. Failey, 149 Ind., 382, 
 49 N. E., 270.
 
 CHAP. X.] CORPORATIONS. 373 
 
 rights in local assets to which the receiver lays claim. ^'^ In 
 accordance with this principle, it is held that where a receiver 
 appointed by the court of one state over an insolvent corpora- 
 tion goes into another state and procures the appointment 
 of an ancillary receiver, attachment liens obtained upon local 
 assets by local creditors prior to the appointment of the ancil- 
 lary receiver will be given preference over the claims of the 
 latter, and such ancillary receiver will accordingly not be per- 
 mitted to transmit the local assets to the court of original 
 appointment until the claims of such local creditors have been 
 satisfied. ^^ Upon the other hand, where a receiver has been 
 appointed over an insolvent corporation by the court of the 
 state of its domicile and an ancillary receiver is afterward ap- 
 pointed in another state to take possession of assets there lo- 
 cated, the latter may be required tO' turn over such assets to the 
 domiciliary receiver where no creditors of the foreign state have 
 acquired any priority of lien upon such assets.^^ And where 
 the original order of appointment of a receiver over an in- 
 solvent corporation gives him power to institute actions to re- 
 cover property or money due the corporation, and he after- 
 ward receives an ancillary appointment in another district with 
 the same powers as were given by the original order of ap- 
 pointment, he may maintain an action in the federal court of 
 the latter district.^ Ai;id upon the presentation of the proceed- 
 ings of a court of a foreign state appointing a receiver over 
 an insolvent corppration of that state, a federal court in another 
 state may appoint an ancillary receiver to take possession of 
 the property and assets of the corporation in the latter state 
 and may authorize him to sell and dispose of them.^ But the 
 
 97 Ante, § 47. 99 Sands v. Greeley & Co., 31 C. 
 
 98 Second National Bank v. C. A., 424, 88 Fed., 130, 59 U. S. 
 Lappe T. Co., 198 Mass., 159, 84 App., 610. 
 
 N. E., 301 ; Thornley v. Walsh Co., 1 Bay State Gas Co. v. Rogers, 
 
 200 Mass., 179, 86 N. E., 355. See 147 Fed., 557. 
 
 Irwin V. Granite S. P. Assn., 56 N. 2 Scaife v. Scammon I. & S. 
 
 J. Eq., 244, 38 Atl., 680, as to the Assn., 71 Kan., 402, 80 Pac, 957. 
 
 practice in New Jersey in ancillary 
 
 receiverships.
 
 374 RECEIVERS. [chap. X. 
 
 receiver of an insolvent foreign corporation appointed by a 
 court of the state of its domicile in a proceeding for the wind- 
 ing-up of the corporation, with power to demand, sue for and 
 collect all the property and effects of the corporation can not 
 maintain an action in another state against the corporation as 
 sole defendant for the sole purpose of procuring the appoint- 
 ment of an ancillary receiver.^ 
 
 § 307. In proceedings by quo warranto against corpora- 
 tion, receiver not appointed before judgment of forfeiture ; 
 nor upon involuntary dissolution by expiration of charter. 
 It is held, under the code of procedure in New York, upon pro- 
 ceedings by the attorney-general in the nature of a quo zvar- 
 ranto, for the dissolution of a corporation and the forfeiture 
 of its franchises, that the court has no power to appoint a re- 
 ceiver before judgment of forfeiture, although an injunction 
 may properly issue to prevent the corporation from doing any 
 illegal act, or from disposing of its funds."* And in proceed- 
 ings in quo luarranto for the forfeiture of the charter and fran- 
 chises of a corporation, under the code of procedure of Califor- 
 nia, pending an appeal from a judgment of forfeiture, the court 
 has no jurisdiction to appoint a receiver of the property of the 
 corporation.^ And it is held that the involuntary dissolution 
 of a corporation resulting from the expiration of its charter by 
 limitation of time constitutes no ground for a receiver upon 
 behalf of shareholders, where its property and assets and the 
 management of its affairs are in the hands of the persons des- 
 ignated by statute.^ 
 
 3 Mabon v. Ongley Electric Co., with the business and property of 
 156 N. Y., 196, 50 N. E., 805. the corporation in such case, after 
 
 4 People V. Washington Ice Co., the issuing of a writ of prohibition 
 18 Ab. Pr., 382. And see Eel River to the court below, Havemeyer v. 
 R. Co. V. State, 155 Ind., 433, 57 Superior Court, 87 Cal., 267, 25 
 N. E., 388. Pac, 433. 
 
 5 Havemeyer v. Superior Court, 6 Anderson v. Buckley, 126 Ala., 
 84 Cal., 327, 24 Pac, 121. And see. 623, 28 So., 729. But see Buckley 
 as to proceedings against such a re- v. Anderson, 137 Ala., 325, 34 So., 
 ceiver for contempt in interfering 238, where, upon the facts, it was
 
 CHAP. X.] CORPORATIONS. 375 
 
 § 308. Corporation allowed to give bond to judgment 
 creditor in lieu of receiver; case retained for accounting. 
 
 In the case of a corporation transacting a large business and 
 where large interests are involved, upon application for a re- 
 ceiver in behalf of a judgment creditor seeking the enforce- 
 ment of his judgment against the corporation, the court may 
 give the defendant an opportunity of preventing the interfer- 
 ence of a receiver by giving security in lieu thereof. And for 
 this purpose a reasonable time may be allowed the defendant 
 corporation, within which to file a bond with sufficient sureties, 
 to secure the plaintiff in any recovery which may be had in his 
 action.'^ And although the facts may not warrant a receiver 
 in behalf of mortgage bondholders of a corporation, as of a 
 canal company, the court may yet retain the cause for the pur- 
 pose of requiring the company to render accounts from time 
 to time of its receipts and disbursements, for the information 
 and protection of such bondholders.^ 
 
 § 309. Appointment of receiver no defense to action 
 against shareholder for unpaid subscription. When an ac- 
 tion has been instituted by a corporation against one of its 
 shareholders, to recover the amount of his unpaid subscription 
 to the capital stock of the company, it constitutes no defense to 
 such action, that a receiver is afterward appointed over the 
 corporation, and the action will not be defeated because of such 
 appointment ; especially when the receiver has taken no steps to 
 possess himself of the cause of action, or to collect the amount 
 due from defendant.^ And the appointment of a temporary 
 receiver over a foreign corporation by a federal court in an- 
 other state will not prevent the corporation from maintaining 
 
 held that plaintiff was entitled to a 8 Stewart v. Chesapeake & Ohio 
 
 receiver over the corporate property Canal Co., 5 Fed., 149, 4 Hughes, 
 after the dissolution of the corpora- 47. 
 
 tion by expiration of its charter by 9 Glenville Woolen Co. v. Ripley, 
 
 limitation of time. 43 N. Y., 206. 
 
 7 Barclay v. Quicksilver Mining 
 Co., 9 Ab. Pr., N. S., 283. And see, 
 ante, §§ 9, 124, post, § 478.
 
 376 RECEIVERS. [CIIAP. X. 
 
 an action against a shareholder for the recovery of his unpaid 
 stock subscription.^^ 
 
 § 310. Registration of shares in receiver's hands. Where 
 certain shares of stock in an incorporated company are in the 
 hands of its receiver, the certificates having been duly issued to 
 him, and the certificates are entitled to be registered by the 
 registering agent of the company, and to be certified as repre- 
 senting shares duly registered, such registration being a val- 
 uable privilege appurtenant to the shares, one who prevents 
 them from being so registered, and who converts the privilege 
 to his own use, by procuring it to be conferred upon an equal 
 number of shares of his own stock, may be compelled by the 
 court to make good the stock in the hands of the receiver by 
 restoring such privilege.^l 
 
 § 311. Receiver not granted over dividends due from 
 college fellowship. It has been held in England, in a case 
 where the defendant, holding a fellowship in a college corpora- 
 tion, had assigned the profits thereof to the plaintiff, that the 
 latter could not have a receiver of the dividends and moneys 
 due from such fellowship. 12 
 
 § 312. One corporation may be appointed receiver over 
 another. The principles governing courts of equity in the 
 selection of receivers over corporations are sufficiently treated 
 elsewhere in this volume.^^ It may be here observed, how- 
 ever, that the receiver of a corporation need not necessarily be 
 an individual person, and a corporate body may itself be ap- 
 pointed receiver of another corporation, upon the insolvency of 
 the latter.l4 
 
 § 312a. Duty of officers to deliver assets to receiver. 
 When a receiver is appointed over a corporation, with the usual 
 
 10 Sigua Iron Co. v. Brown, 171 14 Jn ye Knickerbocker Bank, 19 
 N. Y., 488, 64 N. E., 194. Barb., 602. And see as to consid- 
 
 11 Erie R. Co. v. Heath, BBlatchf. erations governing the court in se- 
 536. lecting a receiver of a large bank- 
 
 12 Berkeley v. Kings College, 10 ing corporation, whose assets are 
 Beav., 602. of great value. In re Empire City 
 
 13 See chapter III, ant,. Bank, 10 How. Pr., 498.
 
 CHAP. X.] CORPORATIONS. 377 
 
 powers of receivers, and specially empowered by the order of 
 the court to receive all the effects and choses in action of the 
 corporation, such order involves a correlative duty upon the 
 part of the corporate officers to deliver the assets to the receiv- 
 er, even though such delivery is not specifically directed by the 
 court. A failure, therefore, by the officers of the corporation 
 to deliver its assets to the receiver, and their sale by such offi- 
 cers, constitute a contempt of court and will be punished as 
 such.i^ 
 
 § 312b. Receiver's certificates. The question of the 
 power of a court of equity which has undertaken to administer 
 the assets of an insolvent corporation, other than a railway 
 company, by the appointment of a receiver, to create indebted- 
 ness for the management and operation of the property, and to 
 charge the same as a lien upon the property, or upon the pro- 
 ceeds of its sale, prior to mortgage indebtedness, and to issue 
 receiver's certificates of indebtedness therefor, has given rise 
 to some conflict of authority.^^ It has been held in the case 
 of a water-works company that the court might, in the distri- 
 bution of the proceeds of sale, allow priority over mortgage 
 bondholders to receiver's certificates issued for the maintenance 
 and operation of the property, for expenses of administration 
 and for the costs of litigation.^"^ Receiver's certificates have 
 also been issued to raise funds for the completion of a ship canal 
 when such completion within a given time was necessary to 
 prevent the lapsing of a valuable land grant.^^ The result, 
 
 15 Young V. Rollins, 90 N. C, 125. Rep., 650. As to the effect of an 
 
 16 As to the power to issue such order appointing a receiver over an 
 certificates in cases of railway re- insolvent corporation and requiring 
 ceiverships see Chapter XI, post, him to carry out existing contracts 
 Subdivision VI, entitled "Receiver's with third persons, and as to the 
 Certificates." rights of creditors under such con- 
 
 1'^ Ellis V. Vernon I., L. & W. Co., tracts for the purchase and sale of 
 
 86 Tex., 109, 23 S. W., 858. materials, as against mortgage 
 
 18 See, for a discussion of such bondholders, see Olyphant v. St. 
 
 certificates, Jerome v. McCarter, 94 Louis O. & S. Co., 28 Fed., 729. As 
 
 U. S., 734; Kent v. Lake Superior to the right of general creditors for 
 
 Canal Co., 144 U. S., 75, 12 Sup. Ct. labor, materials and supplies fur-
 
 27S 
 
 RECEIVERS. 
 
 [chap. X. 
 
 however, of the later decisions has been to set the question at 
 rest, and it may now be stated as a general rule supported by 
 the overwhelming weight of authority that, in the case of a 
 purely private as distinguished from a quasi-public corporation, 
 the court will not, as against the objection of a minority of the 
 bondholders, issue receiver's certificates and make them a prior 
 lien upon the mortgaged property, for the purpose of procur- 
 ing funds to continue the management and operation of the 
 business, the power of the court to incur liabilities being lim- 
 ited strictly to the necessary care and preservation of the prop- 
 erty during the receivership. Such cases are held to be dis- 
 tinguishable from receiverships over railways, where, from 
 the peculiar character of the property and its relations to the 
 public, such certificates are sometimes issued.^^ Thus, in an 
 
 nished to a corporation before the 
 appointment of a receiver to pref- 
 erence over mortgage bondholders, 
 under the statutes of Virginia and 
 independent of statute, see Seventh 
 National Bank v. Shenandoah Iron 
 Co., 35 Fed., 436; Fidelity I. & S. D. 
 Co. V. Shenandoah Co., 42 Fed., 
 372, where such preference was de- 
 nied, the cases being distinguished 
 from receiverships over railways 
 where such claims have been pre- 
 ferred. And see American Pig Iron 
 S. W. Co. V. German, 126 Ala., 194, 
 28 So., 603, 85 Am. St. Rep., 21; 
 Smiley v. Sioux B. S. Co., 71 Neb., 
 581, 101 N. W., 253, 99 N. W., 263 ; 
 Fisher v. Trust Co., 138 N. C, 90, 
 SO S. E., 592; Nisbet v. Great 
 Northern C. Co., 41 Wash., 107, 83 
 Pac, 15. 
 
 19 Farmers' Loan & Trust Co. v. 
 Grape Creek Coal Co., 50 Fed., 481, 
 16 L. R. A., 603; International 
 Trust Co. V. United Coal Co., 27 
 Colo., 246, 60 Pac, 621, 82 Am. St. 
 Rep., 59, and note; Standley v. Hen- 
 drie & B. M. Co., 27 Colo., 331, 61 
 
 Pac, 600; Belknap Savings Bank v. 
 Lamar L. & C. Co., 28 Colo., 326, 
 64 Pac, 212; Hooper v. Central 
 Trust Co., 81 Md., 559, 32 Atl., 
 505, 29 L. R. A., 262; Merriam v. 
 Victory Mining Co., 37 Ore., 321, 
 56 Pac, 75, 58 Pac, 37, 60 Pac, 
 997; United States Investment Cor- 
 poration V. Portland Hospital, 40 
 Ore., 523, 64 Pac, 644, 67 Pac, 194, 
 56 L. R. A., 627; Hanna v. State 
 Trust Co., 16 C. C. A.. 586, 70 Fed., 
 2, 36 U. S. App., 61, 30 L. R. 
 A., 201 ; Baltimore B. & L. Assn. v. 
 Alderson, 32 C. C. A., 542, 90 Fed., 
 142, 61 U. S. App., 636; Interna- 
 tional Trust Co. V. Decker Bros., 
 81 C. C. A., 302, 152 Fed., 78; Bern- 
 ard V. Union Trust Co., 86 C. C. A., 
 610, 159 Fed., 620; Laughlin v. 
 United States Rolling Stock Co., 
 64 Fed., 25 ; Fidelity Insurance, T. 
 & S.-D. Co. V. Roanoke Iron Co., 
 68 Fed., 623 ; Newton v. Eagle & P. 
 Mfg. Co., 76 Fed., 418; Doe v. 
 Northwestern C. & T. Co., 78 Fed., 
 62. And see Farmers' Loan & 
 Trust Co. V. Bankers & M. T. Co.,
 
 CHAP. X.] CORPORATIONS. 379 
 
 action by a shareholder to dissolve and wind up the affairs of 
 an insolvent hotel company, the court should not, by an ex parte 
 order, issue receiver's certificates for the payment of v^^ages and 
 make such certificates a lien upon the property prior to its mort- 
 gage bonds, the bondholders not being parties to the cause and 
 having no notice of the application for such order. Nor may 
 such priority be justified upon the ground that the laborers 
 whose wages are to be thus paid are in desperate circum- 
 stances and have become riotous and threaten the destruction 
 of the property, since such facts do not make the debt one which 
 is necessary to the preservation of the property, and it will not 
 be assumed that the ordinary agencies of the law are inadequate 
 to furnish the necessary protection.20 So upon a bill filed by a 
 shareholder and simple contract creditor of a hotel company 
 praying for the appointment of a receiver over the property of 
 the corporation and for the issuing of receiver's certificates to 
 complete and furnish the hotel, it is improper to authorize the 
 issuing of such certificates without the consent of the creditors 
 whose liens against the property would be thereby affected.^i 
 
 148 N. Y., 315, 42 N. E., 707, 31 tion, and with the proper parties 
 L. R. A., 403, 51 Am. St. Rep., 690. present, through the instrumen- 
 In International Trust Co. v. Unit- tality of a receiver carry on the 
 ed Coal Co., 27 Colo., 246, 60 Pac, business of private corporations 
 621, 83 Am. St. Rep., 59, supra, or individuals temporarily, and 
 Campbell, C. J., uses the following incur obligations therefor that 
 language: "After a careful con- may be made a paramount lien 
 sideration of all the authorities on the corpus of the property, such 
 cited, we are of opinion that, in obligations must have been con- 
 administering the affairs of an or- tracted for, and must relate strictly 
 dinary insolvent private business tc, the preservation of the status of 
 corporation for which a receiver the property at the time of the ap- 
 has been appointed, a court of equity pointment of the receiver. We are 
 has not the power to authorize the not disposed to extend the doctrine 
 receiver to incur indebtedness for established by the federal courts in 
 carrying on the business and to administering upon insolvent rail- 
 make the same a first and para- way corporations to those of or- 
 mount lien upon the corpus of the dinary business corporations." 
 property superior to that of prior 20Raht v. Attrill, 106 N. Y., 423, 
 lien holders without their consent. 13 N. E., 282. 
 While it may, in the proper ac- 2lBaltimore B. & L. Assn. v.
 
 380 RECEIVERS. [chap. X. 
 
 And where the holders of certificates which have been issued 
 by the receiver of a private corporation and which have been 
 given a preference over other claims upon the property in the 
 possession of the receiver are voluntarily surrendered by the 
 holders thereof, who, in their place, take a later issue of cer- 
 tificates which have not been given a preference by the order 
 authorizing them, such certificates are entitled to no preference 
 over the other claims against the estate.22 
 
 § 312c. Conflict of authority as to preference for labor 
 and supply claims incurred before receivership. As to the 
 right of the holders of labor and supply claims, incurred a 
 short time prior to the appointment of a receiver over a purely 
 private corporation, to be preferred over the mortgage bond- 
 holders and general creditors in the payment of their claims, 
 there is a conflict of authority. The supreme court of Alabama 
 has held that the principle upon which a preference is 
 allowed in such cases is one of equity, and, recognizing the 
 undoubted right to a preference in the case of receiverships 
 over railway and other quasi-public corporations, they hold 
 that the equity in favor of the allowance is the same in the case 
 of a private corporation, and they have accordingly allowed a 
 preference over the mortgage debt in favor of the claims of 
 laborers for wages incurred a short time prior to the appoint- 
 ment of the receiver. The right to the preference is also based 
 upon the theory that the claims in question have resulted in the 
 betterment of the property. ^3 And the doctrine as thus laid 
 down has been applied in Mississippi. ^^ And in Massachu- 
 setts it is held, upon a bill for a receiver over an insolvent 
 
 Alderson, 32 C. C. A., 542, 90 Fed., son v. Saunders, 63 C. C. A., 666, 
 
 142, 61 U. S. App., 636. 129 Fed., 16, where a preference 
 
 22 Lewis V. Lindeen Steel Co., 183 seems to have been allowed by con- 
 Pa. St., 248, 38 Atl., 606. sent of the parties. As to the al- 
 
 23 Drennen v. Mercantile T. & D. lowance of such claims in cases of 
 Co., 115 Ala., 592, 23 So., 164, 39 railway receiverships, see Chapter 
 L. R. A., 623, 67 Am. St. Rep., 72. XI, post, Subdivision IV, entitled 
 
 24LeHote v. Boyet, 85 Miss., "Preferred Debts." 
 636, 38 So., 1. And see Dickin-
 
 CHAP. X.] CORPORATIONS. 381 
 
 private corporation filed by creditors, that unpaid wages due to 
 operatives, clerks and servants of the corporation to an amount 
 not exceeding one hundred dollars for labor performed within 
 one year prior to the appointment of the receiver should re- 
 ceive a preference in the settlement of the receiver's accounts.^^ 
 § 312d. Weight of authority is opposed to preference. 
 The weight of authority, however, sustains the opposite view, 
 which limits the right to a preference to receiverships over rail- 
 way or other quasi-public corporations and will not recognize 
 it in the case of a purely private corporation. Thus, in Oregon 
 it is held that claims for labor and supplies furnished shortly 
 before the appointment of a receiver over a private corporation 
 should not be allowed a preference over the mortgage indebt- 
 edness. ^6 So, also, where a railway company, although or- 
 ganized for the purpose of operating a railway, was in fact en- 
 gaged in a private business and claims for labor and supplies 
 furnished within ninety days prior to the appointment of a re- 
 ceiver were incurred in connection with such business, a pref- 
 erence over the lien of the mortgage was refused.^"^ As is 
 
 25 Jones v. Arena Publishing Co., of estates by receivers, be entitled 
 171 Mass., 22, 50 N. E., 15. In this to priority in the order named : 
 case the court base the decision up- . . . Second, Wages to an 
 on the ground that since the wage- amount of not more than one hun- 
 earners would have been allowed a dred dollars due to an operative, 
 preference at law under an assign- clerk or servant for labor, either 
 ment for the benefit of creditors, performed within one year last 
 the creditor can not deprive them of preceding the appointment of the 
 this preference by resorting to receiver or for the payment for 
 equity for the appointment of a re- which a suit, which was commenced 
 ceiver, although Chief Justice Field, within one year after the perform- 
 in his dissenting opinion, points out ance of the labor, is pending or was 
 that there was no statute in force terminated within one year after 
 when the suit was commenced such appointment." 
 which gave priority of one unse- 26 Merriam v. Victory Mining 
 cured debt over another, which, in Co., 37 Ore., 321, 56 Pac, 75, 58 
 terms, applied to the proceeding. Pac, 37, 60 Pac, 997. 
 This case was decided in 1898. By 27 Security Trust Co. v. Goble R. 
 the Revised Laws of 1902, c. 150, Co., 44 Ore., 370, 74 Pac, 919, 75 
 § 29, it is provided : "The follow- Pac, 697. 
 ing claims shall, in the settlement
 
 382 RECEIVERS. [chap. X. 
 
 elsewhere pointed out, the allowance of such claims in any case 
 is indefensible upon sound principle, and, while the right to the 
 preference is too firmly established to admit of doubt in the case 
 of railway receiverships, it is confidently believed that, with- 
 out the aid of statutory enactment, the doctrine will not be gen- 
 erally extended to the case of purely private corporations. 
 
 § 312^. Abuse of corporate franchise as ground for re- 
 ceiver in quo warranto proceeding for forfeiture of charter. 
 It has been held, w^iere a corporation was engaged in violating 
 the laws of the state and was misusing its corporate powers 
 and franchise by holding and conducting prize-fights in viola- 
 tion of the statutes of the state, that the state, upon the relation 
 of her law officers, might maintain a proceeding brought for 
 the dissolution of the corporation and the forfeiture of its 
 franchise, and could have an injunction against the holding 
 of such prize-fights, and, as an incident thereto, could procure 
 the appointment of a receiver to take possession of the proper- 
 ty and premises in which such events were being carried on. 28 
 So a receiver of the property of a non-resident corporation do- 
 ing business in Kansas was held properly appointed in an or- 
 iginal proceeding in the supreme court by quo warranto to 
 oust the corporation from doing business in the state upon the 
 ground that it was sellins: intoxicating liquors in violation of 
 the laws of the state.29 
 
 28 Columbian Athletic Club v. 29 State v. Anheuser-Busch B. 
 
 State, 143 Ind., 98, 40 N. E., 914, Assn., 76 Kan., 184, 90 Pac, 777. 
 28 L. R. A., 727, 52 Am. St. Rep., 
 407.
 
 CHAP. X.] CORPORATIONS. 383 
 
 II. Functions, Duties and Rights of Action of the 
 Receiver. 
 
 i 313. Want of harmony in the decisions. 
 
 314. Receiver of insolvent corporation a trustee for creditors and 
 
 shareholders. 
 
 315. Receiver represents the corporation for purposes of litigation; 
 
 may recover funds in another state. 
 315o. May purchase at mortgage sale; may prosecute or defend suits. 
 
 316. Succeeds to all rights of action of the corporation; trover for 
 
 conversion of note; suit on note for policy of insurance; suit 
 for money due, or improperly disposed of. 
 
 317. Rights of action of receiver of insolvent bank, 
 
 317a. Right to enforce individual or additional liability of stock- 
 holders. 
 317&. Right to enforce such liability in foreign state. 
 317c. The same; receiver as quasi-assignee. 
 
 318. Appointment does not change rights of action or contract rela- 
 
 tions; same defenses allowed; mutual insurance company; 
 change of corporate name. 
 
 319. Receiver cannot disaffirm settlement made by corporation; can 
 
 not sue on canceled note of insurance company. 
 
 320. May disaffirm act of corporation in fraud of creditors; illegal 
 
 transfer of securities; fraudulent disposal of money and 
 notes; illegal mortgage; fraudulent judgment and transfers. 
 
 321. Right of action to recover illegal dividends declared by in- 
 
 solvent corporation. 
 
 322. When powers derived wholly from statute. 
 
 323. Presumption as to receiver's right to divide assets among 
 
 creditors. 
 
 324. Receiver's right of action to recover of shareholders unpaid 
 
 subscriptions to capital stock. 
 324a. Defenses to such actions; transfer of shares. 
 
 325. Shareholder can not enjoin receiver from collecting unpaid 
 
 subscription; defense of fraud not admissible when all parties 
 participated. 
 
 326. Receivers of mutual insurance companies may recover assess- 
 
 ments due on premium notes; action in foreign state. 
 
 327. What receiver must allege to maintain this class of actions. 
 
 328. Liability of makers of premium notes not increased by ap- 
 
 pointment of receiver; assessment must be alleged and 
 proven. 
 
 329. Receiver takes place of directors in making assessment, sub- 
 
 ject to sanction of court.
 
 384 RECEIVERS. [chap. X. 
 
 § 330. Acts in a ministerial and not a judicial capacity; may re-assess 
 for unpaid balances. 
 
 331. When may assess all notes; what proof required as to losses. 
 
 332. Receiver may allow equitable claims for losses. 
 
 333. Principles governing set-offs in actions by receivers of 
 
 corporations. 
 
 334. Discretion as to compromising demands against the corpo- 
 
 ration; may decline to ratify contract; may not waive ex- 
 press stipulations of insurance policy. 
 
 335. Limited to allowance of claims recoverable against the corpo- 
 
 ration. 
 
 336. Court may authorize receiver to compromise doubtful claims; 
 
 receiver may allow salaries of ofiicers pro rata; when such 
 salaries not allowed. 
 
 337. Receiver may exercise option of company as to deposit of 
 
 collaterals. 
 
 338. May assign chose in action; sale not set aside because applied 
 
 for by creditor who was also a judge of the court. 
 
 339. When defendant entitled to costs out of fund in receiver's 
 
 hands. 
 
 340. Judgment against receiver for taxes, enforced only against 
 
 funds in his hands as receiver. 
 
 341. Enforcement of demand by receiver against debtor, not a 
 
 taking under legal process. 
 
 342. Receiver should not himself apply money in payment of judg- 
 
 ments; distribution made by court. 
 342a. Ancillary bill by receiver to determine claims to property in 
 his possession; injunction. 
 
 § 313. Want of harmony in the decisions. It has already 
 been shown, that in most of the states of this country, the gen- 
 eral jurisdiction of courts of equity over corporations has been 
 enlarged by legislation to the extent of authorizing the ap- 
 pointment of receivers in behalf of creditors and shareholders. 
 The general purpose of these legislative enactments has been to 
 provide adequate protection, in case of insolvency of the cor- 
 porate body or of misconduct on the part of its officers, to those 
 who might otherwise be without remedy in the usual course of 
 proceedings at law. The question of the status or relation oc- 
 cupied by receivers thus appointed, and of their duties and 
 functions, is one of much importance; and while a want of har- 
 mony is sometimes apparent in the decisions upon these points, 
 it is believed that they are generally susceptible of being har-
 
 CHAP. X.] CORPORATIONS. 385 
 
 monized, and that they are not inconsistent with established 
 principles of equity. 
 
 § 314. Receiver of insolvent corporation a trustee for 
 creditors and shareholders. As regards the relation occu- 
 pied by the receiver of an insolvent corporation towards the 
 parties in interest, the better doctrine undoubtedly is that he 
 stands as the representative, both of the creditors of the cor- 
 poration and of its shareholders. He is not, therefore, the 
 agent or representative of the corporation exclusively, but is 
 to be regarded rather as a trustee for both creditors and share- 
 holders. ^^ Thus, under the laws of New York authorizing the 
 appointment of a receiver of the effects of a corporation, upon 
 the application of a judgment creditor after return of execution 
 unsatisfied, it is held that the receiver, by virtue of his appoint- 
 ment, becomes a trustee, not only for the creditor on whose ap- 
 plication he was appointed, but for all other creditors of the 
 corporation, and also. a trustee for the shareholders, in which 
 capacity he is as much bound to guard and subserve their in- 
 terests as those of the creditors.^^ And while a receiver rep- 
 
 30 Gillet V. Moody, 3 N. Y., 479; banking corporation, under the laws 
 Talmage v. Pell, 7 N. Y., 347; Libby of Ohio, Lafayette Bank v. Buck- 
 V. Rosekrans, 55 Barb., 217; In re ingham, 12 Ohio St., 419; State v. 
 Coleman, 174 N. Y., 373, 66 N. E., Claypool, 13 Ohio St., 14. 
 983; Alexander v. Relfe, 74 Mo., 31 Libby v. Rosekrans, 55 Barb., 
 495; Farwell v. Great Western Tel. 217, 220. But see Atchison v. Da- 
 Co., 161 111., 522, 44 N. E., 891; vidson, 2 Pin. (Wis.), 48, where it 
 Franklin National Bank v. White- is held that receivers of corpora- 
 head, 149 Ind., 560, 49 N. E., 592, tions are appointed for the benefit 
 39 L. R. A., 725, 63 Am. St. Rep., of creditors, with power and author- 
 302; Hamor v. Taylor-Rice E. Co., ity to collect and pay over to them 
 84 Fed., 392. But see Atchison v. the assets. The choses in action 
 Davidson, 2 Pin. (Wis.), 48. See, of the corporation, it is held, are in 
 as to functions and powers of a re- the possession of the receivers for 
 ceiver of a moneyed corporation un- the creditors, and are to all intents 
 der the statutes of New York, ap- and purposes the property of the 
 pointed in behalf of a judgment creditors, the receivers holding the 
 creditor, after execution returned property and assets of the corpora- 
 unsatisfied, Angell V. Silsbury, 19 tion in trust for the creditors, as 
 How. Pr., 48. And see, as to func- the agents of the court, 
 tions of a receiver over an insolvent 
 Receivers— 2.'^
 
 386 RECEIVERS. [chap. X. 
 
 resents the court in the sense that he derives his power from the 
 court and acts for it, he represents all the parties entitled pri- 
 marily or otherwise to the trust fund and in this sense is to be 
 regarded as a trustee for all.^^ /^ii^j where an insolvent cor- 
 poration has conveyed property to one of its creditors in pref- 
 erence to the others, such a conveyance being declared by stat- 
 ute to be for the equal benefit of all creditors, he is regarded as 
 more than the representative of the corporation, but as repre- 
 senting all the creditors, and he may consequently maintain an 
 action to recover the property so conveyed, although the as- 
 signment would have been valid as against the corporation it- 
 self.^3 And the receiver of an insolvent corporation and not a 
 creditor is the proper party to maintain an action to recover 
 property and assets belonging to the corporation. ^^ 
 
 § 315. Receiver represents the corporation for purposes 
 of litigation; may recover funds in another state. While 
 the receiver of an insolvent corporation is thus treated as the 
 representative of both creditors and shareholders, so far as any 
 beneficial interest is concerned, yet, for the purpose of deter- 
 mining the nature and extent of his title, he is regarded as rep- 
 resenting only the corporate body itself, and not its creditors 
 or shareholders, being vested by law with the estate of the 
 corporation, and deriving his own title under and through it. 
 For purposes of litigation, therefore, he takes only the rights 
 of the corporation, such as could be asserted in its own name, 
 and upon that basis only can he litigate for the benefit of either 
 shareholders or creditors, except when acts have been done in 
 fraud of the rights of the latter, but which are valid as against 
 
 32 Harrigan ^'. Gilchrist, 121 Wis., 330; First National Bank v. Dove- 
 127, 249, 99 N. W., 909, 941. tail B. & G. Co., 143 Ind., 534, 42 
 
 33 Industrial Mutual D. Co.'s Re- N. E., 924; Big Creek Stone Co. 
 ceiver v. Taylor, 118 Ky., 851, 82 v. Seward, 144 Ind., 205, 42 N. E., 
 S. W., 574. And see, post, § 320. 464, 43 N. E., 5; Northwestern 
 
 34 National State Bank v. Vigo Mutual Life Ins. Co. v. Kidder, 
 County National Bank, 141 Ind., 162 Ind., 382, 70 N. E., 489. 
 
 352, 40 N. E., 799, 50 Am. St. Rep.,
 
 CHAP. X.] 
 
 CORFORATIONS. 
 
 387 
 
 the corporation itself, in which case he holds adversely to the 
 corporation. 35 And as regards the nature of the defense which 
 he may interpose in an action brought against him in his offi- 
 cial capacity, it would seem that he stands in no better posi- 
 tion than the corporation would have done, and is to this ex- 
 tent its representative. Thus, when the laws of the state pre- 
 
 ss Curtis V. Leavitt, 15 N. Y., 44; 
 Alexander v. Relfe, 74 Mo., 495, 
 Voorhees v. Indianapolis C. & M. 
 Co., 140 Ind., 220, 39 N. E., 738. 
 The doctrine of the text is well 
 stated by Mr. Justice Comstock, in 
 Curtis V. Leavitt, 15 N. Y., 44, as 
 follows : "The appellant, as re- 
 ceiver (of an insolvent banking cor- 
 poration), has no interest in or 
 power over the property affected 
 by the trusts in question, except 
 such as he derives under the stat- 
 utes which have been mentioned. 
 It has been said in this, as in other 
 cases, that he represents the credit- 
 ors and the stockholders, but for 
 all the purposes of inquiring into 
 this title, he really represents the 
 corporation. He is by law vested 
 with the estate or the corporate 
 body, and takes his title under and 
 through it. It is true, indeed, that 
 he is declared to be a trustee for 
 creditors and stockholders ; but this 
 only proves that they are the bene- 
 ficiaries of the funds in his hands, 
 without indicating the sources of 
 his title or the extent of his powers. 
 If, then, in a controversy between 
 the receiver and thivd parties, in 
 respect to the corporate estate, it is 
 possible to form a conception of 
 rights, legal or equitable, belonging 
 to the shareholders as individuals, 
 which the corporation itself could 
 not assert in its own name, the re- 
 ceiver does not represent those 
 
 rights. So far as shareholders are 
 concerned, he can litigate respect- 
 ing the fund upon precisely the 
 grounds which would be available 
 to the corporation, if it were still in 
 existence, solvent, and no receiver- 
 ship had been constituted. In re- 
 gard to creditors, I should certainly 
 incline to take the same view of his 
 rights and powers under the stat- 
 utes referred to. It has, however, 
 been uniformly assumed, and was 
 not denied on the argument, that 
 he succeeds to the rights of credit- 
 ors, and takes his title under them, 
 where conveyances have been made 
 in fraud of their rights, but other- 
 wise valid. In such cases, he held 
 adversely to the debtor corporation. 
 For all the purposes of the present 
 controversy, I shall proceed upon 
 this assumption. In general, then, 
 a receiver of this description takes 
 merely the rights of the corpora- 
 tion, such as could be asserted in 
 its own name, and on that basis 
 only can he litigate for the benefit 
 of either stockholders or creditors, 
 except when acts have been done 
 in fraud of the rights of the latter, 
 but valid as to the corporation 
 itself." See, also, Pittsburg Carbon 
 Co. V. McMillin, 119 N. Y., 46. 23 
 N. E., 530; Smith v. Johnson, 57 
 Ohio St., 486, 49 N. E., 693. But 
 see, contra, Republic Life Insurance 
 Co. V. Swigert, 135 111., 150, 25 N. 
 E., 680. where it is held that a re-
 
 388 
 
 RECEIVERS. 
 
 [chap. X. 
 
 hibit a corporation from interposing the defense of usury to 
 any action brought against it, it would seem that the receiver 
 is affected by the prohibition to the same extent as the corpora- 
 tion itself would have been.^'^ g^t when a court of competent 
 jurisdiction has appointed a receiver over an insolvent corpora- 
 tion of that state, and has undertaken the administration of its 
 assets, such receiver may maintain an action against representa- 
 tives of the corporation in another state to recover funds of the 
 corporation in their possession. ^'^ 
 
 ceiver of an insolvent life in- 
 surance companj-, under the stat- 
 ute of Illinois for the winding up 
 of such companies, may enforce no 
 rights of action which the company 
 itself might not have enforced. 
 And the company having surren- 
 dered their certificates of stock to 
 stockholders who had paid but 
 twenty per cent, of their subscrip- 
 tions, and having issued to them 
 new certificates for the number of 
 shares at par represented by the 
 twenty per cent, so paid, it was 
 held that the receiver could not 
 maintain an action against such 
 shareholders to recover for the ben- 
 efit of creditors the amount of 
 their original unpaid subscriptions, 
 the transaction being binding as 
 between the shareholders and the 
 corporation, and one which the lat- 
 ter could not have set aside. In 
 Young V. Stevenson, 180 111., 608, 54 
 N. E., 562, 72 Am. St. Rep., 236, it 
 was held that the receiver of a 
 building and loan association ac- 
 quired no right of action which the 
 association itself could not assert; 
 and it was accordingly held that 
 where defendant, a stockholder and 
 officer of the association, with 
 knowledge of its insolvency, had 
 surrendered his shares at their with- 
 drawal value, any right of action 
 
 which might accrue to recover back 
 such withdrawal value was in the 
 other stockholders and not in the 
 corporation, and that the receiver 
 of the corporation could therefore 
 not maintain an action to recover 
 such withdrawal value. And in 
 Rickert v. Suddard, 184 111., 149, 56 
 N. E., 344, the same principle was 
 applied in a similar case, and it was 
 held that where the shares had been 
 surrendered and the withdrawal 
 completed by the corporation giv- 
 ing its check for the amount of the 
 surrender value, the stockholder 
 ceased to be a member of the cor- 
 poration and, since the receiver suc- 
 ceeded to no greater rights than the 
 association, he had no right to open 
 up for readjustment the settlement 
 which had thus been made between 
 the association and the stockholder. 
 
 36 Curtis V. Leavitt, 15 N. Y., 85, 
 86, per Comstock, J. 
 
 37 Failey v. Talbee, 55 Fed., 892. 
 But in Kansas it is held that the 
 fact that a receiver has been ap- 
 pointed over a corporation of an- 
 other state, in such state, will not 
 prevent the corporation from main- 
 taining an action in Kansas to re- 
 cover upon a promissory note. Wi- 
 nans v. Gibbs & S. M. Co., 48 Kan., 
 m, 30 Pac, 163,
 
 CHAP. X.] CORPORATIONS. 389 
 
 § 315a. May purchase at mortgage sale; may prosecute 
 or defend suits. Since the receiver succeeds to the title 
 and rights of action of the corporation itself, he may purchase 
 property at a mortgage sale in satisfaction of a debt due to the 
 corporation, having the same powers in this regard that the 
 corporation might have exercised. ^^ And a receiver appointed 
 over a corporation, under the statutes of North Carolina, for 
 the purpose of winding up its affairs, may prosecute an action 
 to recover its property after the corporation has ceased to exist 
 by reason of the expiration of its charter.^^ So a receiver of an 
 insolvent insurance company, under the laws of Pennsylvania, 
 being empowered by statute to defend suits in the name of the 
 corporation or otherwise, and to do all other acts necessary to 
 the settlement of its affairs, may be substituted in an action of 
 attachment which had been begun against the corporation prior 
 to his appointment.^^ But, under the New York code of pro- 
 cedure, when a receiver of a corporation has brought an action 
 against its directors to recover for their neglect of duty, the 
 stockholders have no such ownership of, or interest in the cause 
 of action as to entitle them to be admitted as a matter of right 
 as parties plaintiff with the receiver.^1 
 
 § 316. Succeeds to all rights of action of the corpora- 
 tion ; trover for conversion of note ; suit on note for policy 
 of insurance ; suit for money due, or improperly disposed 
 of. As regards the rights of action vested in the receiver 
 of a corporation by virtue of his appointment, the general rule 
 is that he takes all rights of action which the corporation itself 
 originally had, and may enforce them by the same legal reme- 
 dies.^2 He may, therefore, maintain an action of trover to re- 
 
 38 Jacobs V Turpin, 83 111., 424. good v. Laytin, 48 Barb., 464. And 
 
 39 Asheville Division No. 15 v. see Shaughnessy v. The Rensselaer 
 Aston, 92 N. C, 578. Insurance Co., 21 Barb., 605 ; Stark 
 
 40 pickersgill z;. Myers, 99 Pa. St., v. Burke, 5 La. An., 740; New Or- 
 602. leans Gas Light Co. v. Bennett, 6 
 
 41 Kimball v. Ives, 30 Hun, 568. La. An., 457; Gas Light & Banking 
 
 42 Brouwer v. Hill, 1 Sandf., 629; Co. v. Haynes, 7 La. An., 114; Hyde 
 White V. Haight, 16 N. Y., 310; Os- v. Lynde, 4 N. Y., 387; Atlantic
 
 390 RECEIVERS. [chap. X. 
 
 cover the value of a promissory note due to the corporation 
 and converted by defendant, the right of action accruing be- 
 fore his appointment.^^ So he may maintain an action of 
 trover for the wrongful conversion of property of the corpora- 
 tion.'*^ And the receiver of an insolvent corporation is en- 
 titled to enforce all the securities belonging to the corporation 
 for the purpose of paying its debts. A receiver of an insolvent 
 insurance company may, therefore, maintain an action to col- 
 lect a note given for a policy of insurance by the assured."*^ 
 And in New York, receivers of insolvent corporations are held 
 to be fully authorized, both by statute and by virtue of their 
 general powers, to sue for all money due to the corporation, 
 and for all property improperly disposed of in violation of 
 either the rights of creditors or of shareholders, for the purpose 
 of paying the debts of the corporation, and dividing the sur- 
 plus, if any, among the shareholders.'*^ 
 
 § 317. Rights of action of receiver of insolvent bank. 
 The same general doctrine prevails in Rhode Island, where it 
 is lield that the receiver of an insolvent banking corporation, 
 appointed under a statute authorizing the proceeding, is 
 clothed with all the powers and rights of the corporation itself, 
 with respect to the collection of its debts and the enforcement 
 of obligations in its favor. His principal duty being to protect 
 the creditors of the bank, he may take advantage of any fraud 
 in derogation of the rights of creditors to which the insolvent 
 
 Trust Co. V. Dana, 62 C. C. A., 657, it held that a receiver succeeds to 
 
 128 Fed., 209. all the rights of action of a corpora- 
 
 43 Brouwer v. Hill, 1 Sandf., 629. tion over which he is appointed, and 
 
 44 Terry v. Bamberger, 14 that the right of the corporation to 
 Blatchf., 234. sue is suspended pending the re- 
 
 45 White V. Haight, 16 N. Y., 310. ceivership. Davis v. Ladoga 
 
 46 Osgood V. Laytin, 48 Barb., Creamery Co., 128 Ind., 222, 27 N. 
 464. And see, as to right of action E., 494; Davis v. Talbot, 137 Ind., 
 of the receiver of an insolvent in- 235, 36 N. E., 1098. And the same 
 surance company under the laws of doctrine has been announced in 
 New York, upon premium notes Montana. Boston & M. C. C. & S. 
 due the company, Lawrence v. Mc- M. Co. v. Montana O. P. Co., 24 
 Cready, 6 Bosw., 329; Berry v. Mont., 142, 60 Pac, 990. 
 
 Brett, id., 627. And in Indiana it
 
 CHAP. X.] CORPORATIONS. 391 
 
 corporation was a party, and may maintain an action to re- 
 cover money of which the corporation has been defrauded. 
 When, therefore, an officer of the bank, in breach of his trust, 
 has wrongfully appropriated funds of the bank to his own use, 
 the receiver may maintain an action for money had and re- 
 ceiver against such officer. And in such action it is not neces- 
 sary that the receiver, as a condition precedent to his recovery, 
 should prove a special injury resulting from the wrong com- 
 plained of to some creditor or shareholder of the bank. Nor 
 need the receiver, in order to entitle him to a recovery, tender 
 to the defendant his shares of capital stock in the bank, with 
 which he had parted in consideration of the securities for the 
 conversion of which the action is brought.^? So it is held in 
 Missouri that a receiver of an insolvent savings bank may, un- 
 der the direction of the court, maintain an action against direc- 
 tors of the bank for losses sustained by reason of loaning money 
 without security, contrary to the provisions of a statute reg- 
 ulating such banks. ^8 
 
 § 317a. Right to enforce individual or additional liabil- 
 ity of stockholders. The authorities are not wholly recon- 
 cilable as to the right of a receiver of a corporation to maintain 
 an action in behalf of its creditors, to recover of shareholders 
 an individual or additional liability, imposed by charter or 
 statute upon shareholders for the protection of creditors. Re- 
 garding the receiver as limited to such rights of action as 
 might have been enforced by the corporation itself, under a 
 bank charter making stockholders liable for double the amount 
 of their stock, it has been held that a receiver of the bank 
 could not enforce such liability, since it is construed to exist 
 in favor of the creditors and not of the corporation.^^ /^j-,^^ 
 the rule thus laid down has been applied under the statutes of 
 Utah and Iowa creating the liability of stockholders in state 
 banks.50 So it was held, under a former statute of Minnesota 
 
 4T Hayes v. Kenyon, 7 R. I, 136. 40 jacobson v. Allen, 20 Blatchf., 
 
 48 Thompson v. Greeley, 107 Mo., 525. 
 577, 17 S. W., 962. 50 McLaughlin v. Kimball, 20
 
 392 RECEIVERS. [chap. X. 
 
 creating the additional liability of stockholders of corporations 
 of that state, that the liability under the statute was to the cred- 
 itors and not to the corporation and that the receiver of the cor- 
 poration could therefore not maintain an action for its enforce- 
 ment.^i And under a statute which provided that the stock- 
 holders of a corporation should be individually liable to pay all 
 contracts made by the corporation which were not paid by it, 
 it w^as held that the liability was created in favor of the cred- 
 itors and not of the corporation and that the receiver of the 
 latter could therefore not enforce it.^^ And in an action 
 brought by the receiver of an insolvent corporation under the 
 statute of Kansas to enforce the additional liability of the stock- 
 holders, it is held that the proceeding must be brought against 
 all the stockholders within the jurisdiction and that the re- 
 ceiver could not maintain an action against a single stock- 
 holder.^^ So when stockholders are made liable by statute to 
 the creditors of the corporation, to an amount equal to their 
 stock, for all debts and contracts made until the whole amount 
 of capital stock is paid in, the liability being regarded as neither 
 in favor of the corporation itself, nor of all its creditors, but 
 only for the benefit of such creditors as fall within the pre- 
 scribed conditions, the receiver can not maintain an action to 
 enforce such liability.^'* And wdien, by the charter of a bank, 
 its shareholders are made severally and individually liable, to 
 
 Utah, 254, 58 Pac, 685, 11 Am. St. which affirmed S. C, 102 Fed., 790; 
 
 Rep., 908; Steinke v. Loofbourow, Hale v. Coffin, 114 Fed., 567. And 
 
 17 Utah, 252, 54 Pac, 120. The case see Hale v. Tyler, 104 Fed., 757. 
 
 last cited fully sustains the rule as For the statute in question see Ch. 
 
 announced in the text, although 76, of the General Statutes of Minn- 
 
 the action was instituted by a re- esota, of 1878 and 1894. 
 
 ceiver in a foreign court. 52 Hammond v. Cline, 170 Ind., 
 
 51 Palmer v. Bank, 65 Minn., 90, 452, 84 S. E., 827. 
 
 67 N. W., 893 ; Minneapolis Base- 53 Waller v. Hamer, 65 Kan., 168, 
 
 ball Co. V. City Bank, 66 Minn., 69 Pac, 185; Evans v. Nellis, 187 
 
 441, 69 N. W., 331, 38 L. R. A., 415; U. S., 271, 23 Sup. Ct. Rep., 74, 47 
 
 Allen V. Walsh, 25 Minn., 543; Hale L. Ed., 173. 
 
 V. Allison, 188 U. S., 56, 23 Sup. Ct. 54 Farnsworth v. Wood, 91 N. Y., 
 
 Rep., 244, 47 L. Ed., 380, affirming 308. 
 S. C, 45 C. C. A., 270, 106 Fed., 258,
 
 CHAP. X.] CORPORATIONS. 393 
 
 the amount of their stock, to depositors, the right of action is 
 construed as being conferred directly upon the depositors, and 
 it can not, therefore, be enforced by the receiver.^^ But under 
 a statute making all persons composing the corporation liable 
 to the extent of their respective shares of stock, for all debts 
 due at the time of the dissolution of the corporation, a receiver 
 appointed in an action brought in behalf of all creditors to 
 wind up the corporation, may enforce such liability against the 
 shareholders. ^6 And the same doctrine has been announced in 
 Iowa under similar provisions of the code of that state.^'^ And 
 when the additional stock liability is created by charter in favor 
 of a certain class of creditors as an entirety, an action may be 
 maintained by some of such creditors in behalf of all, the re- 
 ceiver proceeding concurrently with them by petition in the 
 same proceeding, to enforce such stock liability in equity for 
 the benefit of the entire body of creditors interested therein. 
 And in such action the court may enjoin individual creditors 
 from pursuing their separate actions at law to enforce such lia- 
 bility for their own benefit.^^ And it is held that the individual 
 liability of the stockholders in an insolvent state bank under 
 the statute of Nebraska is for the benefit of all creditors and 
 that when an action is brought, it should be for the benefit of 
 all, and when a receiver has been appointed, the action should 
 be prosecuted in his name.^^ And under the statute of Wash- 
 ington creating the additional liability of stockholders in state 
 banks, it is held that the proper practice for the purpose of en- 
 forcing such liability is by a proceeding in equity brought by 
 the receiver of the bank against all the stockholders and upon 
 
 55 Wincock v. Turpin, 96 III, 135. 58 Eames v. Doris, 102 111., 350. 
 
 56 Story v. Furman, 25 N. Y., 59 Farmers' Loan & Trust Co. v. 
 214. See, also, McDonald v. Ross- Funk, 49 Neb., 353, 68 N. W., 520; 
 Lewin, 29 Hun, 87; Foster v. Row, German National Bank v. Farmers 
 120 Mich., 1, 79 N. W., 696, 11 Am. & M. Bank, 54 Neb., 593, 74 N. W., 
 St. Rep., 565. 1086 ; Brown v. Brink, 57 Neb., 606, 
 
 57 State V. Union Stock Yards 78 N. W., 280. 
 State Bank, 103 Iowa, 549, 70 N. 
 
 W.. 752, 72 N. W., 1076.
 
 394 RECEIVERS. [chap, X. 
 
 behalf of all the creditors.^*^ And this practice has been ap- 
 proved and followed in North Carolina/^i And since the action 
 should be brought by the receiver, it is held that it can not 
 be maintained by a creditor against the stockholders ; nor will 
 it avail that the receiver is joined as a party defendant to such 
 action. ^2 ^nd in an action brought by the receiver of an in- 
 solvent state bank to enforce the individual liability of the 
 stockholders, it is only necessary to allege the order of the court 
 authorizing the bringing of the action, and it is not necessary 
 to show authority upon the part of the creditors to institute the 
 proceedings, nor is it necessary that a copy of the bill or peti- 
 tion under which the receiver was appointed should be attached 
 as an exhibit to the declaration against the stockholders.*^^ 
 
 § 31 7^. Right to enforce such liability in foreign state. 
 The authorities display a still greater want of harmony as to 
 the right of the receiver of an insolvent corporation to maintain 
 an action to enforce the individual or additional liability of the 
 shareholders in the courts of a foreign state. Much of this 
 want of harmony is due to the varying nature of the provisions 
 of the statutes of the different states by which the liability is 
 created and the methods of its enforcement are prescribed. The 
 right of the receiver to maintain the action has been denied un- 
 der the general rule heretofore discussed that the powers of a 
 receiver are co-extensive only with the court of his appoint- 
 ment and that he has no extraterritorial right of action. ^^ 
 Other courts have applied the general rule that where a statute 
 creates a liability unknown to the common law and prescribes 
 a method for its enforcement, the special remedy thus created 
 is exclusive of all other remedies, and since from its nature it 
 
 60 Wilson V. Book, 13 Wash., 676, 63 Wheatley v. Glover, 125 Ga., 
 43 Pac, 939 ; New York N. E. Bank 710, 730. 
 
 V. Metropolitan S. Bank, 28 Wash., 64 Hilliker v. Hale, 54 C. C. A., 
 
 553. 68 Pac, 905. 252, 117 Fed., 220, reversing S. C, 
 
 61 Smathers v. Bank, 135 N. C, 109 Fed., 273 ; Covell v. Fowler, 
 410, 47 S. E., 893. 144 Fed., 535. For a discussion of 
 
 62 Watterson v. Masterson, 15 the general rule referred to, see 
 Wash., 511, 46 Pac, 1041. ante, § 239, ef seq.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 395 
 
 can not be applied outside of the courts of the state where it 
 is created, the right of the receiver to maintain the action in 
 the courts of a foreign state is denied. ^^ And where, under 
 the law or statutes of the state creating the liability, the re- 
 ceiver can not maintain an action against the stockholder to 
 enforce his individual liability, or where he can do so only after 
 the performance of certain conditions which have not been ful- 
 filled, it follows that he can not maintain a similar action in the 
 courts of a foreign state. Thus, where the liability is construed 
 as being to the creditors and not to the corporation, it is held 
 that, since the receiver can not maintain an action locally, he 
 can not maintain it in a foreign court.^^ So, under the stat- 
 ute of Kansas providing that upon the insolvency of a corpora- 
 tion, a receiver shall be appointed to close up the affairs of the 
 corporation, who shall immediately institute proceedings 
 against all stockholders to enforce their liability, the statutory 
 remedy thus provided is held to be a prerequisite to maintain- 
 ing an action against a single stockholder in a foreign court.^"^ 
 
 65 Finney v. Guy, 106 Wis., 256, 
 82 N. W., 595, 49 L. R. A., 486, af- 
 firmed in 189 U. S., 335. 23 Sup. Ct. 
 Rep., 558, 47 L. Ed., 839; Hunt v. 
 Whewell, 122 Wis., 33, 99 N. W., 
 599; Converse v. Hamilton, 136 
 Wis., 589, 118 N. W., 190. And see 
 Murtey v. Allen, 71 Vt., 377, 45 
 Atl., 752, 76 Am. St. Rep., 779. 
 For the application of the rule gen- 
 erally, see Erickson v. Nesmith, 4 
 Allen, 233; New Haven H. N. Co. 
 V. Linden Springs Co., 142 Mass., 
 349, 7 N. E., nZ; Bank v. Rindge, 
 154 Mass., 203, 27 N. E., 1015; Fow- 
 ler V. Lamson, 146 111., 472, 34 N. E., 
 932; Tuttle v. National Bank, 161 
 111., 497, 44 N. E., 984 ; Marshall v. 
 Sherman, 148 N. Y., 9, 42 N. E., 
 419; Nimick & Co. v. Iron Works 
 Co., 25 West Va., 184; Russell v. 
 Pacific Ry. Co., 113 Cal., 258, 45 
 Pac, 323. 
 
 66 Hale v. Allison, 188 U. S., 56, 
 23 Sup. Ct. Rep., 244, 47 L. Ed., 
 380, affirming S. C, 45 C. C. A., 
 270, 106 Fed., 258, which affirmed 
 S. C, 102 Fed., 790; Steinke v. 
 Loofbourow, 17 Utah, 252, 54 Pac, 
 120. And see Hale v. Tyler, 104 
 Fed., 757; Hale v. Coffin, 114 Fed., 
 567. But see, contra, Hale v. Har- 
 don, 37 C. C. A., 240, 95 Fed., 747, 
 reversing S. C, 89 Fed., 283. 
 
 67 Evans v. Nellis, 187 U. S., 271, 
 23 Sup. Ct. Rep., 74, 47 L. Ed., 173, 
 following, as to the construction of 
 the statute, Waller v. Hamer, 65 
 Kan., 168, 69 Pac, 185, which, how- 
 ever, was not an action in a for- 
 eign court. For the statute in ques- 
 tion, see Laws of 1898, c. 10, sec- 
 tions 14 and 15.
 
 396 RECEIVERS. [chap. X. 
 
 And in Vermont it is held that the receiver of an insolvent 
 state bank organized under the laws of Nebraska can not main- 
 tain an action to enforce the additional liability of a stock- 
 holder, since, under the laws of that state, the liability is for 
 the benefit of the creditors and the receiver has no such title 
 as will enable him to maintain an action at law in his own name 
 in a foreign state. "^^ And it is held that an individual creditor 
 of an insolvent Kansas corporation can not hold a stockholder 
 upon his statutory liability in a foreign court where the cor- 
 poration is in the hands of a receiver under the statute, since 
 the right to recover from the stockholders in such case is in 
 the receiver for the common benefit of all creditors and not in a 
 single creditor.69 Aj-kJ where a statute makes the liability of a 
 stockholder of a state bank conditional upon the insolvency of 
 the bank and upon there being insufficient assets to pay its 
 debts and liabilities, a receiver appointed under the general 
 chancery powers of the court can not maintain an action in a 
 federal court in another state against a stockholder to enforce 
 his statutory liability until there has been an ascertainment of 
 such facts. '''^ 
 
 § 317c. The same; receiver as quasi-assignee. Where 
 the statute under which a receiver is appointed over an insolvent 
 corporation makes him a quasi-assignee of the property and as- 
 sets of the corporation and gives him full authority to maintain 
 actions in his own name in other jurisdictions for the purpose 
 of enforcing the statutory liability of the stockholders, the right 
 of the receiver to maintain such actions in foreign courts has 
 frequently been recognized. Thus, it is held that the receiver of 
 an insolvent state bank of Washington appointed in that state 
 under the statute, is to be regarded as a quasi-assignee and as 
 being vested with the legal title to the assets of the bank, and 
 that he may therefore maintain an action in his own name in the 
 
 68 Murtey v. Allen, 71 Vt., 377, 69 Gushing v. Perot. 175 Pa. St., 
 
 45 Atl., 752, 76 Am. St. Rep., 779, 66, 34 Atl., 447, 34 L. R. A., 72>7, 
 
 followed by King v. Cochran, 72 and note, 52 Am. St. Rep., 835. 
 
 Vt., 107, 47 Atl., 3S4. 70 Wigton v. Bosler, 102 Fed., 70.
 
 CHAP. X.] CORPORATIONS. 397 
 
 courts of a foreign state for the purpose of enforcing the statu- 
 tory Hability of the stockholders. '^i And the action may be 
 maintained aUhough the Habihty under the statute is to the cred- 
 itors, since it is also to be regarded as a secondary asset of the 
 bank, the title to which is in the receiver.'^^ ^j^^^ ^^g right of the 
 receiver of an insolvent state bank of Washington to maintain 
 such an action as a quasi-assignee has been recognized in New 
 York, where it is held that the action may be maintained upon 
 principles of comity if it works no detriment to citizens of the 
 latter state and is not repugnant to its policy J^ Sq under the 
 statute of Minnesota which provides for the appointment of a 
 receiver of an insolvent corporation to enforce the additional 
 liability of the stockholders upon behalf of the creditors and 
 makes such receiver a quasi-assignee with power to institute 
 proceedings in any state or country, it is held that the receiver 
 is to be regarded as more than an ordinary chancery receiver, 
 and that he may maintain such an action in a foreign stated** 
 So, under the statute of Ohio which creates the additional lia- 
 bility of stockholders and provides that the court may appoint 
 a receiver to enforce such liability with power to maintain ac- 
 tions in his own name in other jurisdictions, it is held that such 
 a receiver may maintain an action against a stockholder in a 
 federal court in another state for the purpose of enforcing the 
 liability. "^5 And under the statute of Minnesota providing for 
 the appointment of a receiver in an action brought for the pur- 
 pose of enforcing the liability of stockholders in an insolvent 
 state bank, the liability being for the common benefit of all 
 creditors, it is held that a receiver appointed in such a proceed- 
 
 71 Howarth v. Lombard, 175 S., 516, 27 Sup. Ct. Rep., 755, 51 L. 
 Mass., 570, 579, 56 N. E., 888, 891, Ed., 1163; Converse v. Hears, 162 
 49 L. R. A., 301; King v. Cochran, Fed., IdT ; Converse v. Ayer, 197 
 76 Vt, 141, 56 Atl., 667. Mass., 443, 84 N. E., 98. For the 
 
 72 King V. Cochran, 16 Vt., 141, statute in question see Laws of 1899, 
 56 Atl., 667. c. 272, p. 315. 
 
 73 Howarth v. Angle, 162 N. Y., 75 Burr v. Smith, 113 Fed., 858. 
 179, 56 N. E., 489, 47 L. R. A., 725. And see Zieverink v. Kemper, 50 
 
 74 Bemheimer z;. Converse, 206 U. Ohio St., 208, 34 N. E., 250.
 
 398 RECEIVERS. [chap, X. 
 
 ing in ]\Iinnesota may, upon principles of comity, maintain an 
 action in another state for the purpose of enforcing the habihty 
 of stockholders.'^'^ 
 
 g 318. Appointment does not change rights of action or 
 contract relations; same defenses allowed; mutual insur- 
 ance company; change of corporate name. It follows nec- 
 essarily from the principles already discussed and illustrated, 
 that the appointment of a receiver over a corporation does not 
 have the effect of changing any rights of action, or of changing 
 the contract relations existing between the corporation and its 
 debtors.'^'^ No question of right, as between these parties, being- 
 affected by the appointment, any defense which the debtor might 
 have urged in an action brought against him by the corporation 
 itself, may still be made in an action brought against him by the 
 receiver.'''^ And in the case of a mutual insurance company, 
 where the obligation of the assured upon a premium note given 
 for a policy of insurance depends upon an assessment and notice 
 thereof, which assessment and notice have never been given by 
 the company, so that it could maintain no action against the 
 maker of the note, a receiver of the company stands in the same 
 situation, and will not be allowed to maintain an action, without 
 
 76 Childs V. Cleaves, 95 Me., 498, plaintiff, as receiver of the Amer- 
 50 Atl., 714. As to the running of ican Mutual Insurance Company, 
 the statute of limitations in an ac- takes its notes and assets subject 
 tion brought by the receiver to en- to all the conditions and legal dis- 
 force the statutory liability of a abilities with which they were tram- 
 stockholder of an insolvent Min- meled in the hands of the corpora- 
 
 nesota corporation, see Hale v. 
 Cushman, 96 Me., 148, 51 Atl., 874, 
 
 77 Williams v. Babcock, 25 Barb. 
 109; Bell v. Shibley, 33 Barb., 610, 
 And see Shaughnessy v. The Reus 
 selaer Insurance Co., 21 Barb., 605 
 Savage v. Medbury, 19 N. Y., 32. 
 
 78 Moise V. Chapman, 24 Ga., 249 
 
 tion itself; he can not impeach or 
 disaffirm its authorized acts, nor the 
 authorized acts of its agents. If 
 a note in the hands of the corpora- 
 tion was void, or incapable of en- 
 forcement, by reason of fraud or il- 
 legality in its procurement or incep- 
 tion, passing it into the hands of a 
 
 Newport Cotton Mill Co. v. Mims, receiver does not purge it of these 
 
 103 Tenn., 465, 53 S. W., 736; Dev- defects." See, also, Pine Lake Iron 
 
 endorf v. Beardsley, 23 Barb., 656. Co. v. La Fayette Car Works, S3 
 
 In the latter case, Mr. Justice James Fed., 853. 
 cl serves, p. 659, as follows: " The
 
 CHAP. X.] CORPORATIONS. 399 
 
 having taken the necessary steps to fix the Hability of the de- 
 fendant.'^^ And when a receiver of an insolvent corporation 
 brings an action upon a note as part of the corporate assets, 
 but the note is by its terms made payable to the order of a dif- 
 ferently named corporation, a change of the corporate name 
 having been effected, it is necessary for the receiver to show, 
 by proper averments, that the note is part of the assets of the 
 corporation over which he has been appointed.^0 jsj-qj- ^^m 
 the receiver be permitted to litigate questions which have al- 
 ready been determined adversely to the corporation. He can 
 not, therefore, enjoin the collection of a tax assessed against 
 the corporation which has already been determined to be valid 
 in an action brought in behalf of the corporation, the receiver 
 being as much concluded by such former litigation as the cor- 
 poration itself.^l And an action pending against a corpora- 
 tion at the date of a receivership may proceed to judgment 
 against the corporation, and such judgment will be conclusive, 
 as against the receiver, of the amount of plaintiff's demand.^^ 
 And, in an action to enforce against the receiver a judgment 
 previously obtained against the corporation, the receiver can 
 not contest the amount of the indebtedness, or reopen questions 
 which were litigated in the former action, or interpose any de- 
 fense to the merits which might then have been interposed. It 
 is, however, still reserved for the court appointing the receiver 
 to determine the respective priorities among creditors as to pay- 
 ment out of the fund in the receiver's hands.^^ 
 
 § 319. Receiver can not disaffirm settlement made by 
 corporation; can not sue on cancelled note of insurance 
 company. Since the receiver of a corporation, as we have 
 already seen, succeeds to the estate of and derives his title from 
 the corporation, he is bound by all its lawful and authorized 
 acts done before the receivership, and will not be allowed to 
 
 79 Williams v. Babcock, 25 Barb., 81 Hopkins v. Taylor, 87 111., 436. 
 109; Thomas v. Whallon, 31 Barb., 82 pjne Lake Iron Co. v. La Fay- 
 172. ette Car Works, 53 Fed., 853. 
 
 80 Hyatt V. McMahon, 25 Barb., 83 Pringle v. Woolworth, 90 N. 
 457. Y., 502.
 
 400 RECEIVERS. [chap, X. 
 
 disaffirm or set them aside. As to all such matters, he stands 
 in precisely the same position as the corporation itself stood 
 before his appointment; and he can not avoid a settlement 
 which the corporation was duly authorized to make, and which 
 was effected before his appointment. When, therefore, an in- 
 surance company has surrendered and canceled a note given 
 for insurance, upon the assured surrendering his policy, and 
 no fraud upon the creditors of the company is shown, a re- 
 ceiver subsequently appointed will not be allowed to maintain 
 an action upon the note, since he can have no greater rights for 
 this purpose than the company itself had.^^ 
 
 § 320. May disaffirm act of corporation in fraud of cred- 
 itors; illegal transfer of securities; fraudulent disposal of 
 money and notes; illegal mortgage; fraudulent judgment 
 and transfers. When, however, the act of the corporation 
 which it is sought to disaffirm is illegal and in violation of the 
 rights of creditors, a different rule prevails. And in such case, 
 the receiver, being regarded for all beneficial interests connected 
 with the receivership as the representative of the creditors 
 and stockholders, will not be concluded by such act.^^ When, 
 
 84 Hyde v. Lynde, 4 N. Y., 387. mann, 50 N. J. Eq., 120, 24 Atl., 571 ; 
 Bronson, C. J., observes, p. 392: Bennett v. Keen, 59 N. J. Eq., 634, 
 "He (the receiver) is as much 43 Atl., 1070; Brockhurst v. Cox, 
 bound by a settlement which the 71 N. J. Eq., 703, 64 Atl., 182 (a 
 company was authorized to make, receivership for the dissolution of a 
 as was the company itself. It partnership and an accounting) ; 
 would be strange, indeed, if the Washington Mill Co. v. Sprague 
 legal acts of a corporation did not Lumber Co., 19 Wash., 165, 52 Pac, 
 bind the receiver of its effects. If 1067. And see Latta v. Catawba 
 the rule were not so, no one would Electric Co., 146 N. C, 285, 59 S. E., 
 dare to venture to deal with a cor- 1028. And see, ante, § 314. As to 
 poration." the right of the receiver of an in- 
 
 85 Gillet V. Moody, 3 N. Y., 479 ; solvent corporation under the code 
 Tuckerman v. Brown, 33 N. Y., of New York to maintain an ac- 
 297; Brouwer v. Appleby, 1 Sandf., tion to recover money paid to the 
 158; Brouwer z;. Hill, 1 Sandf., 629; defendant by the corporation for 
 Attorney-General v. Guardian Mut- the purpose of giving an unlawful 
 ual Life Insurance Co., 77 N. Y., preference and as to the necessity 
 272; Graham Button Co. v. Spiel- of joining the corporation as a par-
 
 CHAP. X.] CORPORATIONS. 401 
 
 therefore, the directors of a corporation have made an illegal 
 transfer of securities, constituting a part of the corporate assets, 
 to one of the shareholders in exchange for his stock, the trans- 
 fer impairing the security of creditors and being void as to 
 them, a receiver of the corporation subsequently appointed may 
 maintain an action to set aside such transfer. Indeed, such an 
 action is regarded as the most appropriate course on the part of 
 the receiver to compel the restoration of the securities, for the 
 benefit of all the creditors.^^ So the receiver of an insolvent 
 corporation appointed in a general creditors suit may maintain 
 an action against the directors of the corporation to recover as- 
 sets which they have applied, by way of an unlawful preference, 
 to debts for which they were personally liable.^"^ So when the 
 president of a banking corporation has put into the bank ficti- 
 tious notes, and has used them in lieu of a like amount of 
 money of the bank, and has fraudulently disposed of the money, 
 a receiver of the bank may maintain an action against the presi- 
 dent for the recovery of the money. And in such case the 
 possession of the notes by the receiver will be regarded as pre- 
 sumptive evidence that the money has not beeij repaid, and 
 as sufficient cause of action on his part.^^ So when a banking 
 corporation, while in a condition of insolvency, acting through 
 its cashier, has made an illegal and unauthorized transfer of 
 notes held by the bank, to one of its directors who knew of its 
 insolvency, a receiver subsequently appointed to wind up the 
 affairs of the bank may, as the representative of the creditors, 
 repudiate the transfer and maintain an action to recover back 
 the value of the notes, or the amount realized on them by the 
 defendant. And in such an action, the defendant will not be 
 allowed, by way of counter-claim, the amount which he has ac- 
 
 ty to such action, see Nealis v. 87 Williams v. Turner, 63 Neb., 
 
 American T. & I. Co., 150 N. Y., 575, 88 N. W., 668. 
 
 42, 44 N. E., 944. 88 Butterworth v. O'Brien, 24 
 
 86 Gillet V. Moody, 3 N. Y., 479. How. Pr., 438. 
 And see Morgan v. South M. L. V. 
 Co., 100 Wis., 465, 76 N. W., 354. 
 Receivers — 26.
 
 402 RECEIVERS [chap. X. 
 
 tually paid for the notes, since such defense arises out of his 
 own illegal conduct. ^^ So the receiver of an insolvent cor- 
 poration may maintain an action to set aside a mortgage and 
 sale thereunder to the directors who were also creditors of the 
 corporation.^^ So where the directors of an insolvent cor- 
 poration who were also creditors have executed the corporate 
 note to themselves as payees and afterward assign it for the 
 purpose of having suit brought, and an action is instituted and 
 judgment rendered against the corporation, the receiver may 
 maintain a bill to set aside the judgment and cancel the note.^^ 
 So in New York, a receiver of an insolvent corporation may 
 maintain an action to set aside a mortgage executed by the 
 corporation without the assent of the requisite number of its 
 shareholders, as required by its charter.^^ Sq the receiver of 
 an insolvent corporation is entitled to have a mortgage given by 
 the corporation set aside which, although valid as against the 
 corporation is void as to its creditors.^^ So the receiver of an 
 insolvent corporation, being the representative of the creditors 
 as well as of the corporation, may set aside a chattel mortgage 
 which, under the laws of the state, is void as to creditors for 
 want of filing, even though the mortgage is -good as against 
 the corporation.^^ So, too, he may maintain an action to set 
 aside fraudulent agreements and transfers of its property made 
 by the corporation, being to this extent regarded as the repre- 
 sentative of creditors. And the court by which the receiver is 
 appointed, having jurisdiction of the proceedings for winding 
 up the corporation, may, upon application of the receiver, en- 
 join creditors from prosecuting like actions, even though be- 
 
 89 Gillet V. Phillips, 13 N. Y., mann, 50 N. J. Eq., 120, 24 Atl., 571 ; 
 114. Curtis V. Lewis, 74 Conn.. 367, 50 
 
 90 Taylor v. Mitchell, 80 Minn., Atl., 878. And see Stephens v. Mer- 
 492, 83 N. W., 418. iden B. Co., 160 N. Y., 178. 54 N. K, 
 
 91 Taylor v. Fanning, 87 Minn., 781, 1Z Am. St. Rep., 678; Brun- 
 52. 91 N. W., 269. nemer v. Cook & B. Co., 180 N. Y., 
 
 92 Vail V. Hamilton, 85 N. Y., 453, 188. And see, post, § 454. 
 affirming S. C, 20 Hun, 355. 94 Bayne v. Brewer Pottery Co., 
 
 93 Graham Button Co. v. Spiel- 90 Fed., 754.
 
 CHAP. X.] CORPORATIONS. 403 
 
 gun prior to the receiver's appointment. In such a case, the 
 decree dissolving the corporation and appointing the receiver 
 being regarded as in the nature of a judgment for all the credit-, 
 ors, they are subject to the summary jurisdiction of the court in 
 matters pertaining to the administration of the estate. It is 
 proper, therefore, to enjoin them from proceeding with their 
 actions, upon petition or motion by the receiver in the cause in 
 which he was appointed, without bringing a new suit for this 
 purpose.^^ And since the capital stock of a corporation is re- 
 garded as a trust fund for the payment of its indebtedness, a 
 receiver appointed upon its insolvency may recover from share- 
 holders money paid to them by the corporation for the purchase 
 of their stock after the impairment of its capital; and this, 
 wholly independent of any actual fraud on the part of the 
 shareholders making such sales.^^ So where a collusive judg- 
 ment has been rendered by default against an insolvent cor- 
 poration upon a claim against which the corporation had a 
 good defense, the receiver of the corporation is not bound by its 
 act in allowing the judgment, and he may accordingly appear 
 for the protection of the corporation and its creditors and move 
 to reopen the judgment and allow a defense to be made to the 
 claim upon which it was rendered.^"^ And the receiver of an 
 insolvent corporation may move to set aside a judgment which 
 has been rendered by confession against the corporation upon 
 a warrant of attorney which has been signed by the president 
 but which he had no authority to make.^^ And the receiver 
 of a corporation may maintain an action to set aside a judg- 
 ment which has been rendered against the corporation by fraud 
 and collusion and to interpose a defense to the alleged claim 
 upon which it was based. ^^ 
 
 95 Attorney-General v. Guardian Co., 184 111., 625, 56 N. E., 957, 75 
 Mutual Life Insurance Co., 77 N. Am. St. Rep., 195. 
 
 Y., 272. 98 Stokes v. New Jersey P. Co., 
 
 96 Crandall v. Lincoln, 52 Conn., 46 N. J. Law, 237. 
 
 73. 99 Whittlesey v. Delaney, 73 N. 
 
 97 Peabody v. New England W. Y., 571.
 
 404 
 
 RECEIVERS. 
 
 [chap. X. 
 
 § 321. Right of action to recover illegal dividends de- 
 clared by insolvent corporation. The right of action of a 
 receiver of an insolvent corporation, to recover back dividends 
 which have been improperly paid, may be based upon the prin- 
 ciples which have been discussed in the preceding section. And 
 where the law of the state, regulating the incorporation of in- 
 surance companies, provides that no dividend shall be made by 
 any company incorporated under the act when its cap- 
 ital stock is impaired, or when the making of such dividend 
 will have the effect of impairing the capital stock, a dividend 
 paid to shareholders of the corporation, while it was in a condi- 
 tion of insolvency, may be recovered back by its receivers. In 
 such case, the shareholders being made liable by statute to the 
 creditors of the corporation to the extent of such illegal divi- 
 dends, the action to enforce this liability is properly brought by 
 the receivers, who are, to this extent and for this purpose, re- 
 garded as trustees for the benefit of all the creditors.^ And in 
 
 1 Osgood V. Laytin, 3 Keyes, 521, 
 affirming S. C, 48 Barb., 464; Os- 
 good V. Ogden, 4 Keyes, 70. And 
 see Minnesota T. M. Co. v. Lang- 
 don, 44 Minn., 37, 46 N. W., 310. 
 But see, contra, Butterworth v. 
 O'Brien, 24 How. Pr., 438, where it 
 was held that the right of action to 
 recover such dividends was in the 
 creditors themselves. Osgood v. 
 Laytin, 3 Keyes, 521, in which the 
 doctrine of the text was very clearly 
 enunciated, was an action by re- 
 ceivers of an insolvent insurance 
 company to recover illegal dividends 
 paid to shareholders, and to enjoin 
 certain creditors of the corporation, 
 who were made defendants, from 
 prosecuting similar actions. The 
 statute under which the company 
 was incorporated provided that no 
 dividend should ever be made when 
 the capital stock was impaired, or 
 when the effect of such dividend 
 
 would be to impair it, and that any 
 shareholder receiving such a divi- 
 dend should be individually liable 
 to the creditors of the corporation 
 to the extent of the dividend re- 
 ceived. Judgment for plaintiffs on 
 demurrer, from which defendants 
 appealed. The court of appeals 
 affirmed the judgment, Grover, J., 
 for the court, holding as follows, 
 p. 523: "The design, plainly ex- 
 pressed by the language of the sec- 
 tion, was to prohibit a dividend of 
 the capital among the stockholders, 
 but to preserve the same intact as 
 a fund for the payment of creditors 
 and the security of dealers. It fol- 
 lows that the dividend in the pres- 
 ent case was illegal, and that the 
 stockholders receiving the same are 
 liable to the creditors for the 
 amount by them respectively re- 
 ceived. The next question is, how 
 is this to be recovered from the
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 405 
 
 such case, it is the duty of the court to protect the shareholders 
 from being harassed by other actions instituted for the same 
 purpose by individual creditors of the corporation, and it may, 
 therefore, enjoin such creditors from prosecuting their actions.^ 
 And when a state court has appointed a receiver over an in- 
 
 stockholders? Their liability is to 
 the creditors of the company. It 
 is clear that no one creditor of the 
 company can maintain an action 
 against an individual stockholder, 
 for the reason that the liability 
 created by statute is to the creditors 
 generally, and not to individual 
 creditors, thus creating a liability 
 to the creditors jointly. Again, a 
 creditor, if permitted individually 
 to sue the separate stockholders, 
 might institute actions against each, 
 although his demand amounted to 
 far less than the aggregate liability, 
 and he would continue a creditor 
 until he had obtained satisfaction 
 of his debt, and could obtain judg- 
 ment in all the actions. Again, in 
 equity, this liability inures to the 
 creditors in proportion to the 
 amount of their debts respectively. 
 The maxim, that equality among 
 creditors is equity, is applicable to 
 the case. A court of law can not, 
 in a joint action by all the cred- 
 itors, vi'ork out this equity and do 
 justice between the parties. This 
 confers jurisdiction in equity, upon 
 the ground that there is no ade- 
 quate remedy at law. The plain- 
 tiffs, as receivers, are trustees for all 
 the creditors, and the appropriate 
 parties to prosecute in their behalf, 
 thus avoiding the troublesome in- 
 quiry as to who are creditors in the 
 proceeding to collect from the stock- 
 holders the several amounts each is 
 liable to pay. All the stockholders 
 who are liable may and should be 
 
 included as defendants in the same 
 action. There is no difficulty in de- 
 termining the amount each is to pay, 
 upon the trial of the cause; and in 
 case the whole amount of the lia- 
 bility is not required for the pay- 
 ment of the debts of the company, 
 the precise amount each is to pay 
 can be determined in the action. 
 This course of proceeding is also 
 necessary to prevent multiplicity of 
 actions, as there are several hun- 
 dreds of stockholders. The above 
 views dispose of the case as to the 
 stockholders. The creditors insist 
 that they are not proper parties to 
 the action against the stockholders, 
 and that, upon this ground, they are 
 entitled to judgment upon the de- 
 murrer. Equity having the power 
 to enforce payment from the stock- 
 holders, and an action having been 
 instituted in the proper mode for 
 that purpose, which, in its result, 
 will place the fund in the possession 
 of the court for distribution among 
 the creditors, it is the duty of the 
 court to protect the stockholders 
 from being harassed by other ac- 
 tions instituted to enforce the same 
 liability. This can only be done by 
 restraining such actions. To enable 
 the court effectually to do this, those 
 creditors who have instituted such 
 suits, and those who threaten so to 
 do, are proper parties to the action. 
 The judgment appealed from should 
 be affirmed." 
 
 2 Osgood V. Laytin, 3 Keyes, 521.
 
 406 RECEIVERS. [chap. X. 
 
 solvent corporation and is winding up its affairs, the entire as- 
 sets of the corporation, inckiding its choses in action, are re- 
 garded as subject to the exclusive jurisdiction of that court. A 
 federal court, therefore, will not, pending such proceedings, 
 entertain a bill by shareholders of the corporation against its 
 officers to recover for fraudulent misappropriations of its prop- 
 erty, since this would be an interference with the administra- 
 tion of the estate by the state court; and this is true, even 
 though the state court has refused to direct its receiver to en- 
 force such cause of action.^ 
 
 § 322. When povirers derived wholly from statute. 
 When receivers over corporations are appointed under a stat- 
 ute which regulates their functions and prescribes their pow- 
 ers and duties, it is held that they derive their powers 
 wholly from the statute under which they are appointed, 
 and have no authority other than such as is thus conferred. 
 But to warrant them in the exercise of a power, it need not be 
 expressly conferred, and if it can be fairly implied, either from 
 the general scope and purpose of the statute, or as an incident 
 to a power expressly given, there is sufficient warrant for its 
 exercise.^ 
 
 § 323. Presumption as to receiver's right to divide as- 
 sets among creditors. It is held in Wisconsin, that in a 
 collateral action, in the absence of any proof as to the authority 
 of receivers of a corporation to dispose of its assets, they are 
 fully empowered to dispose of and divide them among the 
 creditors. When, therefore, receivers of a banking corporation 
 transfer to a third person a negotiable note, part of the assets 
 of the bank, in payment and satisfaction of a demand held by 
 him against the bank, in an action upon such note, the court 
 will indulge the presumption that the receivers have properly 
 discharged their duties ; and, in the absence of any proof of 
 
 3 Porter v. Sabin, 149 U. S., 473, 4 Runyon v. Farmers & Mechan- 
 
 13 Slip. Ct. Rep., 1008, affirming S. ics Bank of New Brunswick, 3 
 
 C, 36 Fed., 475. And see Werner Green Ch., 480. 
 V. Murphy, 60 Fed., 769.
 
 CHAP. X.] CORPORATIONS. 407 
 
 fraud, the legal title to the note will be held to have passed by 
 the action of the receivers to the assignee, so that he may re- 
 cover upon it against the makers.^ 
 
 § 324. Receiver's right of action to recover of share- 
 holders unpaid subscriptions to capital stock. Under the 
 laws and practice of many of the states, the right of action to 
 recover of shareholders the amounts due upon their subscrip- 
 tions to the capital stock of a corporation, vests in the receiver 
 appointed in behalf of creditors, upon the insolvency of the 
 company. Thus, in New York, receivers of insolvent corpora- 
 tions are vested with this power, and may maintain actions to 
 recover of delinquent stockholders their unpaid subscriptions,^ 
 and to enjoin the creditors of the corporation from proceeding 
 with separate actions for the recovery of their individual de- 
 mands.*^ And it was formerly held in New York, that such 
 actions must be instituted against the shareholders individually, 
 and that they could not be maintained against them collective- 
 ly ; ^ but the later doctrine recognizes the right of the receiver 
 to bring the action against all shareholders collectively, or to 
 sue them individually. ^ So in Rhode Island, receivers of mu- 
 tual insurance companies are authorized by law to make assess- 
 ments upon the shareholders for paying the indebtedness of 
 the corporation. 10 And in Louisiana, on the appointment of a 
 receiver over a corporation upon its insolvency, the right of ac- 
 tion against delinquent shareholders for arrearages of their 
 subscriptions to the capital stock, for the purpose of paying 
 the debts of the corporation, is distinctly recognized as being 
 in the hands of the receiver and not in the corporation or its 
 individual members. ^^ And it would seem that the remedy 
 
 5 Atchison v. Davidson, 2 Pin. 12; Rankine v. Elliott, 16 N. Y., 
 (Wis.), 48. 377. 
 
 6 Pentz V. Hawley, 1 Barb. Ch., 8 Calkins v. Atkinson, 2 Lans., 
 122; Farmers & Mechanics Bank 12. 
 
 V. Jenks, 7 Met., 592; Calkins v. 9 Van Wagenen z;. Clark, 22 Hun,' 
 
 Atkinson, 2 Lans., 12; Rankine v. 497. 
 
 Elliott, 16 N. Y., 377. 10 Tobey v. Russell, 9 R. I., 58. 
 
 7 Calkins v. Atkinson, 2 Lans., H Stark v. Burke, 5 La. An.,
 
 408 RECEIVERS. [chap. X, 
 
 of creditors, in this class of cases, is to apply to the court for 
 an order on the receiver to make calls upon the stockholders for 
 the purpose of meeting the indebtedness of the corporation.^^ 
 Indeed, where the receiver of an insolvent corporation has the 
 right to maintain actions against the shareholders for their un- 
 paid stock subscriptions, the individual creditors w^ho have had 
 their claims allowed in the receivership proceeding have no 
 right to maintain such actions against the shareholders. In 
 such case, their remedy, upon the refusal of the receiver to in- 
 stitute the actions, is to proceed in the receivership cause for 
 the removal of the receiver or for such other appropriate re- 
 lief as the court may grant in that proceeding.^^ And in 
 Maryland, a receiver under a statute for the dissolution of cor- 
 porations may maintain an action to recover a balance due from 
 a shareholder upon his unpaid subscription. i* And the right 
 of the receiver to enforce such subscriptions by actions against 
 the shareholders is also recognized in Ohio,^^ in lowa,^^ in 
 Illinois,!^ in Minnesota,^^ in Washington,!^ and in Missouri.2<> 
 And while an action will not lie upon behalf of the receiver of 
 
 740; New Orleans Gas Light Co. v. Minn., 361, 51 N. W., 119. See, 
 
 Bennett, 6 La. An., 457; Gas Light also, Minnesota T. M. Co. v. Lang- 
 
 & Banking Co. v. Haynes, 7 La. An., don, 44 Minn., 37, 46 N. W., 310. 
 
 114. 19 Elderkin v. Peterson, 8 Wash., 
 
 12 New Orleans Gas Light Co. v. 67A, 36 Pac, 1089; Cole v. Satsop 
 Bennett, 6 La. An., 457. And see R. Co., 9 Wash., 487, 37 Pac, 700, 
 Wyman v. Williams, 52 Neb., 833, 43 Am. St. Rep., 858; Cox v. Dickie, 
 72, N. W., 285. 48 Wash., 264, 93 Pac, 523. And in 
 
 13 Links V. Connecticut River B. the case last cited it was held that 
 Co., 66 Conn., 277, 33 Atl., 1003. the receiver could proceed by an ac- 
 And see, post, § 352. tion against the individual stock- 
 
 14 Stillman v. Dougherty, 44 Md., holders or that he might join all 
 380 ; Frank v. Morrison, 58 Md., stockholders in the action to recover 
 423. their subscriptions. And in the 
 
 15 Clarke v. Thomas, 34 Ohio St., same case it was also held that it 
 46. constitutes no defense that the stock 
 
 16 Stewart v. Lay, 45 Iowa, 604. was purchased by the stockholder as 
 
 17 Great Western T. Co. v. Gray, being fully paid for. 
 
 122 111., 630, 14 N. E., 214. 20 Berry v. Wood, 168 Mo., 3*6, 
 
 18 Merchants National Bank v. 67 S. W., 644. 
 Northwestern M. & C. Co., 48
 
 CHAP. X.] CORPORATIONS. 409 
 
 an insolvent corporation to recover unpaid stock subscriptions 
 w^ithout first exhausting the other corporate property, yet 
 v\/^here the board of directors have made a call upon the stock- 
 holders, such assessment becomes an asset of the corporation 
 and it is held that the action will lie without showing- that the 
 other corporate assets have been exhausted. 21 And it is held 
 that the receiver of an Oregon corporation has the power to 
 make assessments against the stockholders upon their subscrip- 
 tions where the board of directors was vested with the power 
 of levying and collecting such assessments but had failed or re- 
 fused to do so. 22 But [j^ New York, a receiver of a corporation 
 appointed on a creditors' bill, and vested with only the ordinary 
 powers of receivers in creditors' suits, can not maintain a bill 
 in equity to enforce an unpaid balance due from a shareholder 
 upon his subscription.23 Nor can a receiver of an insolvent cor- 
 poration recover unpaid subscriptions when the corporation it- 
 self could not have maintained the action.24 But if an action 
 for the recovery of unpaid subscriptions has been brought by 
 the corporation before the appointment of a receiver, it may be 
 continued in the name of the original plaintiff for the benefit 
 of the receiver.25 But a receiver appointed by a foreign court 
 over a non-resident fire insurance company can not maintain an 
 action in another state to hold the defendants liable upon their 
 stock subscriptions.26 
 
 § 324a. Defenses to such actions; transfer of shares. 
 No errors which may have been committed by the court in ap- 
 pointing the receiver, or in directing and controlling his action, 
 will avail in defense of a suit by the receiver to enforce unpaid 
 subscriptions to capital stock ; nor do the fraudulent acts of the 
 receiver, or of the officers of the corporation, constitute a de- 
 
 21 Wyman v. Williams, 53 Neb., Mims, 103 Tenn., 465, 53 S. W., 736. 
 670, 74 N. W., 48. 25 Phoenix Warehousing Co. v. 
 
 22 Maxwell v. Akin, 89 Fed., 178. Badger, 67 N. Y., 294. 
 
 23 Mann v. Pentz, 3 N. Y., 415. ^GWyman v. Eaton, 107 Iowa, 
 
 24 Billings V. Robinson, 28 Hun, 214, 77 N. W., 865, 43 L. R. A., 
 122; Newport Cotton Mill Co. v. 695, 70 Am. St. Rep., 193.
 
 410 RECEIVERS. [CIIAP. X. 
 
 fensc^"^ Nor can the stockholder defend such action upon any 
 ground whicli questions the action of the court in appointing 
 the receiver and in ordering the assessment, such as fraud in 
 procuring the receiver, or that the corporation is not indebted, 
 or that the action is prosecuted to harass the defendant, and all 
 such defenses should be interposed in the proceeding in which 
 the receiver is appointed and the assessment ordered.^s To 
 conclude a stockholder by a proceeding under the Illinois stat- 
 ute to wind up an insolvent corporation and to recover unpaid 
 subscriptions, when a receiver appointed in such proceeding 
 sues for the subscription, the stockholder should have been 
 made a party to the original proceeding, and the receiver should 
 show his appointment by a decree which is conclusive against 
 the defendant.2^ But the rule is otherwise when the proceed- 
 ing is brought independent of statute to wind up an insolvent 
 corporation and to distribute its assets for the benefit of its 
 creditors. In such case a shareholder can not defeat an action 
 brought by the receiver for the recovery of a stock subscrip- 
 tion upon the ground that he was not a party to the suit in 
 which the receiver was appointed. ^^ And the fact that the 
 entire capital stock had not been subscribed is no bar to the 
 action, if the defendant, with knowledge of that fact, partici- 
 pated in the affairs of the company in a manner which could 
 
 27 Stewart v. Lay, 45 Iowa, 604. 28 Schoonover v. Hinckley, 48 
 
 And see this case for a general dis- Iowa, 82. 
 
 cussion of the defenses which may 29 Lamar Insurance Co. v. Gulick, 
 
 and may not be interposed in such 102 111., 41 ; Chandler v. Brown, 77 
 
 an action. In an action by the re- 111., 333 ; S. C, 8 Chicago Legal 
 
 ceiver of an insolvent corporation News, 123. And in the latter case 
 
 against the president of the corpora- the decree was also held objection- 
 
 tion to recover a balance due upon able in that it assumed to confer 
 
 his stock subscription, the latter is upon the receiver discretionary pow- 
 
 entitled to credit for an amount ad- ers to compromise with stockholders 
 
 vanced by him for the employment as to payment of subscriptions, since 
 
 of counsel to represent the corpora- each stockholder had a vested right 
 
 tion in threatened litigation before in the contract for subscription of 
 
 the appointment of the receiver. every other stockholder. 
 
 Graebner v. Post, 119 Wis., 392, 96 SO Great Western T. Co. v. Gray, 
 
 N. W., 783. 122 III., 630, 14 N. E., 214.
 
 CHAP. X.] CORPORATIONS. 411 
 
 only be justified upon the assumption that the subscribers in- 
 tended to proceed with the capital stock only partially sub- 
 scribed.21 So in an action by a receiver to recover unpaid sub- 
 scriptions to capital stock, the fact that the defendant acted as 
 a director of the corporation estops him from denying its cor- 
 porate existence, and from asserting that the amount of capital 
 stock required to be paid in full in cash had not been paid, and 
 that he subscribed upon the faith of representations that it had 
 been fully paid, which representations were false.^^ And since, 
 as has already been shown, ^^ the receiver succeeds, for the 
 purposes of litigation, only to the rights of the corporation, ex- 
 cept where acts have been done in fraud of the rights of stock- 
 holders or creditors, it follows that in an action brought by 
 the receiver against a stockholder to recover his unpaid stock 
 subscription, the receiver must base his right to recover upon 
 the title of the corporation, and it is accordingly held that the 
 receiver can not maintain the action where the subscription was 
 procured by fraud. ^'* Nor can the receiver recover where the 
 subscription was to the capital stock of a corporation with a 
 given amount of stock, whereas the corporation is organized 
 with a materially greater amount of authorized capital. ^^ And 
 when a shareholder transfers his shares in good faith before 
 the appointment of the receiver, all assessments thereon hav- 
 ing been fully paid to the time of such transfer, and it not ap- 
 pearing that any of the present creditors of the corporation 
 were creditors at the time of such sale, such shareholder is 
 not liable to the receiver for the balance of the subscription.^^ 
 § 325. Shareholder can not enjoin receiver from col- 
 lecting unpaid subscription; defense of fraud not admis- 
 sible when all parties participated. When a statute, au- 
 
 31 Stillman v. Dougherty, 44 Md., 35 Newport Cotton Mill Co. v. 
 380. Minis, 103 Tenn., 465, 53 S. W.. 736. 
 
 32 Ruggles V. Brock, 6 Hun, 164. 36 Billings v. Robinson, 28 Hun, 
 ^^Ante, § 315. 122. 
 
 34 Marion Trust Co. v. Blish, 170 
 Ind., 686, 84 N. E., 814, 85 N. K, 
 344.
 
 412 RECEIVERS. [CIIAP. X. 
 
 thorizing the appointment of receivers to wind up the affairs 
 of insolvent corporations, makes it the receiver's duty to collect 
 from the shareholders of tlie corporation the sums remaining 
 due on account of their unpaid subscriptions, and a receiver, 
 in the performance of this duty, has obtained a decree against 
 a shareholder for the payment of the balance due from him, 
 such shareholder is not entitled to an injunction to restrain the 
 receiver from collecting the amount until all the debts of the 
 corporation may be ascertained, and the amount due from each 
 shareholder be determined. Any equity upon which such share- 
 holder might rely as the foundation for an injunction should 
 have been urged in defense of the action brought by the receiv- 
 er, and will not avail the shareholder after a decree against him 
 in that action.^? And when a receiver is appointed to close up 
 the affairs of an insolvent banking corporation for the benefit of 
 its creditors, in an action brought by him upon a note given by 
 a stockholder for his subscription to the capital stock of the 
 bank, it constitutes no defense to the action that the note was 
 given without consideration, and in aid of an illegal and fraud- 
 ulent transaction, when all the parties participated in the 
 fraud.^^ 
 
 § 326. Receivers of mutual insurance companies may re- 
 cover assessments due on premium notes ; action in foreign 
 state. Under the practice prevailing in the states of New 
 York and Indiana, receivers of insolvent mutual insurance 
 companies are empowered to recover assessments due upon 
 premium notes held by such companies for the purpose of ad- 
 justing losses and settling the indebtedness of the corpora- 
 tions. In New York, the power of the receiver to thus assess 
 the premium notes is derived wholly from statute, as will be 
 seen by an examination of the authorities in that state.'^ In 
 
 37Pentz v. Hawley, 1 Barb. Ch., Hams v. Babcock, 25 Barb., 109; 
 
 122. Thomas v. Whallon, 31 Barb., 172; 
 
 38 Farmers & Mechanics Bank v. Sands v. Sweet, 44 Barb., 108; 
 Jenks, 7 Met., 592. Bangs v. Gray, 12 N. Y., 477, re- 
 
 39 Shaiighnessy v. The Rensselaer versing S. C, 15 Barb., 264; Sands 
 Insurance Co., 21 Barb., 605; Wil- v. Sanders, 28 N. Y., 416; Jackson
 
 CHAP. X.] CORPORATIONS. . 413 
 
 Indiana, however, it is held, even in the absence of any state- 
 ute conferring such authority upon the receiver of a mutual 
 insurance company, that he is authorized to make assessments 
 upon premium notes due to the company, for the purpose of 
 meeting its obligations. The authority to make the assessments 
 is impHed from the necessity of making them, since without 
 such power it would not be possible for the receiver to manage 
 and adjust the affairs of the corporation. ^^ In both these 
 states, the receiver is regarded, for the purpose of making such 
 assessments, as standing in the position and succeeding to 
 the powers of the directors of the corporation. "^^ And the re- 
 ceiver, being empowered in the state of his appointment to in- 
 stitute and defend all suits in the name of the corporation, or 
 otherwise, may sue in another state to recover assessments upon 
 premium notes, no creditor in the latter state having interfered 
 to prevent the prosecution of the suit, or to assert any claim to 
 its proceeds. "^^ But since the right of the foreign receiver to 
 maintain the action in such case rests upon principles of comity, 
 it is subject to such restrictions and limitations as the state may 
 see fit to impose. Thus, where the statute of the state in which 
 the action is brought prescribes a period within which such pro- 
 ceedings shall be begun, the failure of the receiver to institute 
 the suit within the time limited is a bar to the action.^^ And 
 where the statute authorizing the directors to levy such as- 
 sessments upon premium notes, limits the power to cases 
 
 V. Roberts, 31 N. Y., 304 ; Lawrence 40 Embree v. Shideler, 36 Ind., 
 
 V. McCready, 6 Bosw., 329; Berry 423, sustained in Tippecanoe Town- 
 
 V. Brett, id., 627. See, also, Mc- ship v. Manlove, 39 Ind., 249. 
 
 Donald v. Ross-Lewin, 29 Hun, 87. 41 Thomas v. Whallon, 31 Barb., 
 
 And in Wisconsin it is held that the 172; Embree v. Shideler, 36 Ind., 
 
 receiver of a mutual fire insurance 423. 
 
 company, in making an assessment 42 Lycoming Insurance Co. v. 
 
 on premium notes, should include a Wright, 55 Vt., 526; Parker v. 
 
 reasonable amount for his compen- Stonghton Mill Co., 91 Wis., 174, 
 
 sation and for the expenses of the 64 N. W., 751, 51 Am. St. Rep., 881. 
 
 receivership. Davis v. Shearer, 90 43 Wyman v. Kimberly-Clark Co., 
 
 Wis.. 250, 62 N. W., 1050 ; Seamans 93 Wis.', 554, 67 N. W., 932. 
 V. Millers' M. I. Co., 90 Wis., 490, 
 63 N. W., 1059.
 
 414 RECEIVERS. [chap. X. 
 
 where it is necessary for the payment of "just claims on the 
 corporation," and it is apparent that neither the receiver, nor 
 the court appointing him and to which he reported his action, 
 and from which he obtained an order to make the assessment, 
 has examined or passed upon the vahdity of the claims or de- 
 mands against the corporation for which the assessment was 
 made, the receiver can not maintain an action to collect such 
 assessment upon a premium note.^* And in Rhode Island it is 
 held that the receiver of a mutual insurance company, in making 
 an assessment, should not include in it claims for losses which 
 have occurred since his appointment, since such appointment 
 operated as a dissolution of the company and the contracts of 
 insurance were thereby terminated by operation of law.^^ 
 
 § 327. What receiver must allege to maintain this class 
 of actions. The rule in Indiana, as to the pleadings re- 
 quired in actions brought by receivers of insolvent insurance 
 companies to recover assessments upon premium notes, is that 
 all the facts necessary to show a liability upon the note must be 
 pleaded by the receiver. For, while the court appointing him 
 may properly pass upon the question of the necessity for a re- 
 ceiver, it can not in that proceeding settle the question of the 
 liability of the maker of a premium note to pay, either in whole 
 or in part."*^ And the receiver must, therefore, allege and prove 
 that the court has examined and determined the validity of the 
 demands, for the payment of which the assessment is made.^"^ 
 But it is not necessary that he should present with his pleadings 
 a transcript of the decree of the court by which he was ap- 
 
 44 Embree v. Shideler, 36 Ind., mutual fire insurance company 
 423; Downs v. Hammond, 47 Ind., under the laws of Michigan ta 
 131. make assessments upon policy-hold- 
 
 45 Insurance Commissioner v. C. ers to pay the liabilities of the com- 
 M. Ins. Co., 20 R. I., 7, 36 Atl., 930. pany and the expenses of the re- 
 
 46 Manlove 7^. Burger, 38 Ind., 211. ceivership, and as to his right ta 
 See, also, Embree v. Shideler, 36 maintain an action upon such as- 
 Ind., 423, sustained in Tippecanoe sessment, see Wardle v. Townsend, 
 Township v. Manlove, 39 Ind., 249; 75 Mich., 385, 42 N. W., 950. 
 Manlove v. Naw, 39 Ind., 289. As 47 Downs v. Hammond, 47 Ind,, 
 to the right of the receiver of a 131.
 
 CHAP. X.] CORPORATIONS. 415 
 
 pointed receiver of the company, and by which the assessment 
 was made upon the premium notes, since the evidence of his 
 right of action, although essential to a recovery, is not the 
 foundation of the action, and rests only in averment.'*^ 
 
 § 328. Liability of makers of premium notes not in- 
 creased by appointment of receiver; assessment must be 
 alleged and proven. In New York, the doctrine is well 
 established, in the class of cases under consideration, that 
 the liability of the members of mutual insurance companies 
 upon their premium notes is not increased by reason of the 
 insolvency of the corporation and the appointment of a re- 
 ceiver, since the receiver is merely substituted in place of the 
 directors of the company, and vested with their rights and pow- 
 ers and nothing more.'^^ The liability of the makers of pre- 
 mium notes being contingent upon certain conditions, such as 
 loss by the company, assessment upon the notes and notice to 
 the makers, such contingent or conditional liability is not 
 changed into an absolute one by the insolvency of the company 
 and the appointment of a receiver; since the courts can not 
 change the terms of the agreement, nor make that an absolute 
 promise which was before a conditional one. And the appoint- 
 ment of the receiver merely clothes him with the power, under 
 the statutes, of determining the amount of indebtedness due 
 upon the notes by proceeding to make the necessary assess- 
 ments, and by taking such other steps as are required by law to 
 fix the liability of the makers of the notes, the appointment 
 itself in no manner fixing such liability.^^ The statutes, there- 
 fore, requiring an assessment in order to fix the liability of 
 makers of premium notes, an assessment by the receiver is an 
 indispensable condition to his right of action. ^1 And such an 
 assessment and apportionment of losses by the receiver, being 
 
 48 Boland v. Whitman, 33 Ind., 64. 50 Williams v. Babcock, 25 Barb., 
 
 49 Shaughnessy v. The Rensselaer 109. 
 
 Insurance Co., 21 Barb., 605; Wil- 51 Shaughnessy 7/. The Rensselaer 
 
 liams V. Babcock, 25 Barb., 109; Insurance Co., 21 Barb., 605. See, 
 
 Savage v. Medbury, 19 N. Y., 32. also, Williams v. Babcock, 25 Barb., 
 
 And see Devendorf v. Beardsley, 23 109. 
 Barb., 656.
 
 416 RECEIVERS. [CIIAP. X. 
 
 a condition precedent to his recovery upon the notes, must be 
 pleaded in the action and proved upon the trial. ^^ When, 
 therefore, the complaint of the receiver contained no averment 
 as to the liabilities of the company, and, therefore, laid no 
 foundation for the introduction of proof upon that point, and 
 there was no proof of the existence of any liabilities for the 
 payment of which an assessment was necessary, the receiver 
 was held not entitled to recover. ^^ 
 
 § 329. Receiver takes place of directors in making as- 
 sessment, subject to sanction of court. It is also the doc- 
 trine of the New York courts, in this class of cases, that the 
 receiver takes the place of the directors in ascertaining the 
 amount of demands against the insurance company, and in 
 determining the necessity for an assessment, as well as its 
 amount, with this limitation upon his authority, that he can 
 not act without the sanction of the court. The court, however, 
 does not make the assessment, the receiver being himself the 
 actor for that purpose, and his authority depending, not upon 
 the order of the court, but upon the existence of the facts ren- 
 dering an assessment necessary and proper. The requirement 
 of the sanction and approval of the court is an additional re- 
 striction and limitation upon the receiver's authority, but does 
 not dispense with the other and more important conditions. 
 The court, therefore, neither adjudicates upon the liability of 
 the company, nor the amount for which assessments shall be 
 made, nor the ratio of assessment, but merely sanctions the 
 acts of the receiver in doing these things. ^^ 
 
 § 330. Acts in a ministerial and not a judicial capacity; 
 may re-assess for unpaid balances. In thus making assess- 
 
 52Devendorf v. Beardsley, 23 v. Sanders, 28 N. Y., 416; Jackson 
 
 Barb., 656; Thomas v. Whallon, 31 v. Roberts, 31 N. Y., 304. 
 Barb., 172. And see, as to degree 53 Thomas v. Whallon, 31 Barb., 
 
 of particularity required of the re- 172. 
 
 ceiver in making the assessment and 54 Thomas v. Whallon, 31 Barb., 
 
 giving notice, as a condition prec- 172. See, also, McDonald v. Ross- 
 
 edent to his right of action, Bangs Lewin, 29 Hun, 87. 
 V. Mcintosh, 23 Barb., 591; Sands
 
 CHAP. X.] CORPORATIONS. 417 
 
 ments upon the makers of premium notes under the laws of 
 New York, the receiver acts under the statute in a ministerial 
 and not in a judicial capacity.^^ And his action being minis- 
 terial in distinction from judicial, the fact that a former re- 
 ceiver has made an assessment upon the same notes, which still 
 remains unenforced, will not prevent his successor from making 
 a new assessment for the same purposes, since it is merely re- 
 peating the performance of a condition precedent to a right of 
 action upon the notes by the receiver, and is by no means a ju- 
 dicial determination of the matter. ^^ Nor is the approval of the 
 assessment by the court regarded as a judicial decision, or as 
 conclusive upon the maker of the note as to the particulars of 
 the assessment, in an action brought by the receiver upon the 
 note ; such approval by the court only serving to place the act 
 of the receiver in making the assessment, in the same position 
 as the act of the directors, had the assessment been made by 
 them.^'' And the receiver in levying assessments upon such 
 notes, may properly include as a portion of the amount to be 
 raised an unpaid balance of former assessments, which ought to 
 have been paid by delinquent members, but which, owing to the 
 inability or insolvency of such members, have not been paid.^^ 
 § 331. When may assess all notes; what proof required 
 as to losses. As regards the form of the assessment made 
 by a receiver in this class of cases in New York, it is held that 
 when he is satisfied from the liabilities of the company, and 
 from an examination of all classes of its notes, that there is 
 no note which is not chargeable to its full amount for lia- 
 bilities justly attaching, he may make a general assessment 
 upon all the notes to their full amount, without regard to 
 classes, and without specifying the name of the party bound to 
 
 55 Thomas v. Whallon, 31 Barb., 116, note a, overruling Campbell v. 
 172; Sands v. Sweet, 44 Barb., 108. Adams, 38 Barb., 132. 
 
 And see Bangs v. Duckinficld, 18 ^1 Bangs v. Duckinfield, 18 N. Y., 
 
 N. Y., 592. 592. 
 
 56 Sands v. Sweet, 44 Barb, 108; 58 Bangs v. Gray, 12 N. Y., 477, 
 Tackson v. Van Slyke, 44 Barb., reversing S. C, 15 Barb., 264. 
 
 Receivers — 27.
 
 418 RECEIVERS. [chap. X. 
 
 contribute, or the amount of the note.^^ And the receiver is not 
 required to prove all the facts upon which he or the company- 
 allowed the losses for v.^hich the assessment was made. All he 
 is required to show, in this respect, is that sufficient claims for 
 losses were presented to the company, or to him, and which he 
 allowed, to make up the sum for which the assessment was 
 levied.60 
 
 § 332. Receiver may allow equitable claims for losses. 
 It is also held that a receiver of an insolvent mutual insurance 
 company, under the laws of New York, may properly allow 
 equitable claims for losses against the company, although no 
 actions to recover the same could be maintained, by reason of 
 the neglect of the claimants to bring them within the time fixed 
 by the charter or by-laws of the corporation, or by statute. And 
 when such claims have been allowed, the receiver is bound to 
 pay them, if there be funds for that purpose ; or, if there are no 
 funds, it is his duty to collect enough from the makers of the 
 premium notes to satisfy such demands. And the maker of 
 such a note can not defeat an action thereon by a receiver, 
 brought for the collection of such an assessment, upon the 
 ground that the receiver might have avoided allowance of the 
 claims upon merely technical grounds, such as that they were 
 not brought within the time prescribed by law for that pur- 
 pose.^l 
 
 § 333. Principles governing set-offs in actions by receiv- 
 ers of corporations. As regards the right or power of a re- 
 ceiver of a corporation to allow set-offs claimed by debtors to 
 the corporation, against the indebtedness which he is seeking to 
 enforce, it would seem that the right of set-off is dependent 
 upon and governed by the same equitable principles which regu- 
 late the law of set-off in general, as between creditors and 
 debtors. And when the debts are due to and from the same 
 persons respectively, and in the same capacity, the right of the 
 
 59 Sands v. Sanders, 28 N. Y., 416. 61 Sands v. Hill, 42 Barb., 651. 
 
 60 Sands v. Hill, 42 Barb., 651; 
 Jackson v. Roberts, 31 N. Y., 504.
 
 CHAP. X.] CORPORATIONS. 419 
 
 receiver to allow one to be set off against the other may be re- 
 garded as clear; but if otherwise, he will not be justified in al- 
 lowing the set-off. And in cases of this nature, when there is 
 doubt in the mind of the receiver as to what course he should 
 pursue, it is proper and fitting that he should apply to the court 
 for instructions. ^2 And when the court appointing receivers 
 over an insolvent corporation, is empowered by statute with a 
 general direction and control over them in the discharge of 
 their duties, it may, upon a summary application, direct them 
 to allow a set-off against a demand which they are seeking to 
 enforce, if satisfied that such set-off is just and equitable. ^^ 
 But in an action by receivers of an insolvent corporation against 
 a shareholder, to recover illegal dividends declared by the com- 
 pany, in violation of a statute prohibiting any dividends which 
 might impair the capital stock of the corporation, a defendant 
 shareholder will not be allowed to set off an indebtedness due 
 to himself from the corporation ; since, for the purposes of such 
 action, the receivers do not represent the corporation, but its 
 creditors, for whose benefit the suit is brought. The dividends 
 thus illegally paid being a fraud upon the creditors of the in- 
 solvent corporation, and the reparation sought being the res- 
 toration of the funds for the benefit of the creditors, whom alone 
 the receivers represent for the purposes of the action, claims 
 growing out of independent matters between the defendant and 
 the corporation itself are not a proper subject of set-off. ^^ 
 
 § 334. Discretion as to compromising demands against 
 the corporation; may decline to ratify contract; may not 
 waive express stipulations of insurance policy. The first 
 duty of receivers of insolvent corporations is to faithfully col- 
 lect and justly disburse the assets of the corporation, which con- 
 stitute a trust fund for its creditors. In the discharge of this 
 duty, they are properly vested with a certain degree of discre- 
 
 62 In re Van Allen, 37 Barb., 225. 64 Osgood v. Ogden, 4 Keyes, 70. 
 
 63 Holbrook z^. Receivers of Amer- See, also, Gillet v. Phillips, 13 N. 
 ican Fire Insurance Co., 6 Paige, Y., 114. 
 
 220.
 
 420 RECEIVERS. [chap. X. 
 
 tion in the compromising and settlement of demands against 
 the corporation ; but, in the exercise of their discretionary 
 powers they should keep constantly in view the interest of 
 those whom they represent, and for whom they act. As illus- 
 trating this discretionary power, it is held that receivers of an 
 insolvent banking corporation may properly decline to ratify 
 a contract made by the corporation after its insolvency, when 
 they are satisfied that the ratification of the contract would 
 result in the loss of the fund intrusted to their charge.^^ But 
 a receiver of an insurance company would seem to be limited, 
 as to his powers in the adjustment of losses, to such powers as 
 might have been lawfully exercised by the officers of the com- 
 pany. He is not, therefore, empowered by virtue of his ap- 
 pointment, in adjusting proofs of loss against the company, 
 to dispense with or to waive express stipulations of the policy 
 which relate to the substance of the contract.^^ 
 
 § 335. Limited to allowance of claims recoverable 
 against the corporation. When receivers, who have been 
 appointed in conformity with the laws of the state for winding 
 up the affairs of an insolvent corporation, are authorized by 
 statute to settle all claims against the corporation, and to allow 
 all demands of whose justice they are satisfied, they are limited 
 to the allowance of such claims as might be recovered against 
 the corporation, either at law or in equity, if suit be brought. 
 And they have no authority to allow a demand, which is not 
 a proper charge upon the fund in their hands, without the 
 consent of all persons interested in having the claim rejected, 
 the receivers in this respect being considered as guardians of the 
 rights of all persons in interest. And when such receivers have 
 disallowed demands against the corporation, and the matter 
 has been referred to referees for adjustment, it is the duty of 
 the receivers to resist the allowance of the demands before the 
 referees, and to continue their defense so long as it may, in 
 
 65 Suydam v. Receivers of Bank 66 Evans v. Trimountain Mutual 
 
 of New Brunswick, 2 Green Ch., 114. Fire Insurance Co., 9 Allen, 329. 
 See, also, Same v. Same, id., 276.
 
 CHAP. X,] CORPORATIONS. 421 
 
 their opinion, be rendered effectual. ^"^ So when claims are pre- 
 sented to the receiver of a corporation after the expiration of 
 the time fixed by the court for such purpose, the receiver is not 
 justified in allowing them, and if special circumstances exist 
 which in his opinion render it just that they should still be 
 received, application should be made to the court for the neces- 
 sary authority.^^ 
 
 § 336. Court may authorize receiver to compromise 
 doubtful claims ; receiver may allow salaries of officers pro 
 rata; when such salaries not allowed. It is competent for 
 the court appointing a receiver over an insolvent corporation 
 to authorize him to compromise disputed and doubtful claims 
 by the allowance of such an amount as he may deem just and 
 equitable ; or to authorize him to submit such claims to arbitra- 
 tion when this method of settlement is provided by statute.^^ 
 The court may also empower him, generally, in any case where 
 he may deem it expedient and for the interest of the creditors 
 and shareholders, to compromise with debtors of the corpora- 
 tion who are unable to pay in full. And the receiver of such 
 a corporation may allow its officers the amounts due to them 
 for salaries, up to the time of his appointment, as debts to be 
 paid ratably with other demands, no preference being given to 
 the officers. "^0 And where a receiver has been appointed over a 
 corporation, and all its property has come into his possession 
 and he has assumed the entire management of its affairs, such 
 appointment has the effect of suspending the functions of all 
 the officers, and there are no further duties which they can per- 
 form, and it is accordingly held in such case that they are not 
 entitled to draw their salaries for the period during which the 
 affairs of the corporaticHi were in the hands of the receiver. "^^ 
 
 67 Attorney-General v. Life & Fire 70 /« re Croton Insurance Co., 3 
 Insurance Co., 4 Paige, 224. Barb. Ch., 642. 
 
 68 Fogg V. Supreme Lodge, 159 71 Lenoir v. Linville I. Co., 126 
 Mass., 9, 33 N. E., 692. N. C, 922, 36 S. E., 185. 
 
 69 Insurance Commissioner v. C. 
 M. Ins. Co., 20 R. I., 7, 36 Atl., 930. 
 And see, ante, § 177.
 
 422 RECEIVERS. [chap. X. 
 
 § 337. Receiver may exercise option of company as to 
 deposit of collaterals. When an incorporated company de- 
 posits certain securities with its creditor, as collateral to an in- 
 debtedness due from the corporation, but reserves the right or 
 option of having such securities considered as an absolute pay- 
 ment upon notifying the creditor to that effect, and the corpora- 
 tion subsequently passes into the hands of a receiver, the op- 
 tion reserved to the company may be legally exercised or assert- 
 ed by the receiver, who is for this purpose regarded as the legal 
 representative of the corporation. And when the requisite no- 
 tice is given by the receiver, it has the effect of making the 
 deposit of collaterals an absolute payment, and thus releasing 
 the indebtedness.'^^ 
 
 § 338. May assign chose in action; sale not set aside be- 
 cause applied for by creditor v^^ho was also a judge of the 
 court. Receivers of an insolvent corporation, appointed 
 under a statute authorizing such mode of winding up the af- 
 fairs of insolvent companies, may make an assignment of a 
 chose in action due to the corporation, without using the cor- 
 porate seal, since the sale or assignment by the receivers is 
 not the act of the corporate body itself, but rather the act of 
 the receivers operating under the statute. And a sale by the 
 receivers, under a power given them by statute for that purpose, 
 is as effectual to convey the title as if the right of property was 
 vested in them, and such sale need not, therefore, be authen- 
 ticated by the corporate seal."^^ Nor is it a sufficient ground for 
 setting aside a sale of the property of a corporation, made by 
 its receiver, that the application for the order of sale was made 
 by a judgment creditor of the corporation, who was also a jus- 
 tice of the court to which the appHcation was made, or that it is 
 alleged that he was able, by means of his official position, to 
 exercise an improper influence upon the proceedings in the 
 court in which they were taken, when it does not appear that 
 
 72 Phoenix Iron Co. v. New York 73 Hoyt v. Thompson, 5 N. Y., 
 
 Wrought Iron Railroad Chair Co., 320, reversing S. C, 3 Sandf., 416. 
 3 Dutch., 484.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 423 
 
 his official position resulted in producing any different order 
 from that authorized by the settled practice of the court, or 
 from that which would have been given upon the application of 
 any other person. '^^ 
 
 § 339. When defendant entitled to costs out of fund in 
 receiver's hands. When receivers of a corporation insti- 
 tute an action for the collection of money demands alleged to be 
 due, the proceeding being carried on for the enhancement of 
 the fund in the receivers' hands and for the benefit of those 
 who may be finally determined to be entitled thereto, if they 
 are unsuccessful in such suit, the defendant is entitled to costs 
 out of the fund in the receivers' hands. And in such case, the 
 defendant will not be required to await the final distribution 
 of the assets of the corporation, and then share with other cred- 
 itors or parties in interest pro rata, but is entitled to an imme- 
 diate order for payment of the costs out of any funds in the re- 
 ceivers' hands. "^5 
 
 74 Libby v. Rosekrans, 55 Barb., 
 218. 
 
 "^5 Columbian Insurance Co. v. 
 Stevens, 37 N. Y., 536. "The right 
 of the defendants," says Woodruff, 
 J., p. 537, "to have judgment for 
 their costs in such an action as the 
 present, brought against them for 
 the recovery of money only, is ab- 
 solute as well by the law before as 
 since the code of procedure. There 
 is no claim nor ground of claim 
 that the allowance of costs in the 
 action was discretionary. The lia- 
 bility of the receiver in whom the 
 alleged cause of action became 
 vested after the summons herein 
 was served, and by whom the 
 action was prosecuted, is made by 
 section 321 of the code, the same 
 as if he had caused himself to be 
 made a party. The questions her^ 
 are, therefore : 1. In an action 
 prosecuted by receivers for the col- 
 
 lection of alleged money demands, 
 instituted or carried on for the en- 
 hancement of the fund, for the 
 benefit of those to whom it is ulti- 
 mately to be paid, is the defendant 
 entitled to costs to be paid to him 
 immediately, or must he stand as 
 a general creditor to await the final 
 administration, and receive only (as 
 the case may be) his distributive 
 share of the fund pro rata, with 
 those for whose benefit he has been 
 subjected to a groundless litigation? 
 2. Is the question stated, addressed 
 to the discretion of the court, in 
 such sense that no appeal lies to 
 this tribunal from the decision 
 made below? It was conceded on 
 the argument that the costs in 
 question are chargeable upon and 
 are to be collected out of the fund. 
 This could not well be denied, and 
 yet in a case in which it does not 
 appear by anything stated in the
 
 424 RECEIVERS. [chap. X. 
 
 § 340. Judgment against receiver for taxes, enforced 
 only against funds in his hands as receiver. Where an ac- 
 tion is brought by the state against receivers of a corporation, 
 for the purpose of enforcing the collection of taxes due from 
 the corporation, and judgment is recovered against the receiv- 
 ers, the judgment should be so entered as to be enforced only 
 against the funds that are or should be in the hands of defend- 
 ants as receivers."^^ 
 
 § 341. Enforcement of demand by receiver against debt- 
 or, not a taking under legal process. When a corporation 
 is dissolved under proceedings in a state court, and a receiver is 
 appointed to close up its affairs, the enforcement and collection 
 by the receiver of a demand against a debtor of the corporation 
 is not a "taking under legal process," within the meaning of the 
 national bankrupt act of 1867, so as to constitute an act of 
 bankruptcy.'^''' 
 
 § 342. Receiver should not himself apply money in pay- 
 ment of judgments; distribution made by court. When a 
 receiver is appointed over an insolvent insurance company, 
 
 papers that there are other claims opinion, upon clear and just rules, 
 
 on that fund, of any sort, except governing the subject, impair the 
 
 the interests of the stockholders of defendants' right to be paid in full, 
 
 the company, it would seem to fol- the fund being confessedly suffi- 
 
 low, as of course, that the receiver cient. The receiver is pro hac vice 
 
 should have been directed to pay the representative of the company, 
 
 those costs. Such an order is the its creditors and stockholders. The 
 
 appropriate mode of reaching funds action is prosecuted for the increase 
 
 in the receiver's hands. Not being of a fund which is to be paid to 
 
 in form a party to the action, no them. It is not according to any 
 
 execution could reach the proper- rule of justice or equity toward 
 
 ty he holds, and being the custo- third parties that actions like the 
 
 dian of the funds as an officer of present should be prosecuted by 
 
 the court, he is subject to immedi- the company or such representa- 
 
 ate direction to pay it to a party tive, otherwise than at the expense 
 
 entitled. If it be assumed that the and risk of the fund which it is 
 
 company was insolvent, and that sought thereby to increase." 
 
 the funds which the receiver holds '^^ Commonwealth v. Runk. 26 Pa. 
 
 or may collect may not prove suf- St., 235. 
 
 ficient to satisfy all the creditors of '^'^ In re New Amsterdam Fire In- 
 
 the company, this does not, in my surance Co., 6 Benedict, 368.
 
 CHAP. X.] CORPORATIONS. 425 
 
 with authority to collect debts and to pay liabilities, upon a bill 
 by judgment creditors of the corporation against the receiver, 
 to compel him to bring suits for the recovery of its assets, it 
 is not proper for the court to decree that the receiver should 
 apply the money in payment of the judgments; but he should 
 be directed to bring it into court, in order that the court itself 
 may distribute it to the parties entitled.'^^ 
 
 § 342a. Ancillary bill by receiver to determine claims to 
 property in his possession; injunction. Where third per- 
 sons are asserting rights and making claims which cast a cloud 
 upon the title to the property of an insolvent corporation which 
 is in the possession of a receiver and is being administered by 
 him and which consists largely of franchises and other assets 
 of an intangible nature, the receiver may, under the direction 
 of the court, proceed by ancillary bill to protect the jurisdiction 
 and right to administer such property and to determine and ad- 
 judicate the validity of the rights and claims of the parties in 
 the estate in his possession ; and in such case it is proper to grant 
 an injunction until the rights of the parties are determinedJ^ 
 
 78 Benneson v. Bill, 62 III., 408. SO L. Ed., 801, reversing S. C, 132 
 
 79 Blair v. City of Chicago, 201 Fed., 84& 
 U. S., 400, 26 Sup. Ct Rep., 427,
 
 426 RECEIVERS. [chap. X. 
 
 III. Receivers of Insolvent Corporations. 
 
 § 343. Statutes authorizing receivers on insolvency of corporation; 
 power of appointment may be conferred upon executive 
 officer. 
 
 344. Object to preserve assets for benefit of creditors; when corpo- 
 
 ration allowed to resume management; shareholders may 
 have relief; effect of assignment. 
 
 344a. Receiver not appointed over insolvent corporation upon its 
 own petition. 
 
 344b. Corporation not dissolved by appointment of receiver; actions 
 against the corporation do not abate; otherwise on dis- 
 solution. 
 
 345. In proceedings to forfeit charter, appointment of receiver does 
 
 not revive corporate existence. 
 
 346. Allegations as to insolvency; when affidavit on information in- 
 
 sufficient; notice and rule to show cause. 
 346a. Shareholders entitled to relief; fraudulent transfers; discretion- 
 ary powers of court. 
 
 347. Injunction against directors and officers in aid of receivership; 
 
 when management left in hands of officers. 
 
 348. Appointment of receiver does not impair lien already acquired 
 
 by creditors; attaching creditors. 
 
 349. Lien of judgment creditors on real estate, limited to interest 
 
 of corporation at time of appointment; court not concluded 
 by judgment in another state. 
 
 350. Creditors may be prohibited by statute from proceeding 
 
 against corporation after receivership; creditors may come in 
 under decree. 
 
 351. Appointment operates as transfer of corporate property to re- 
 
 ceiver; right to rents before and after sale by receiver; legal 
 services. 
 
 352. Liability of shareholders for unpaid subscriptions may not be 
 
 enforced by creditors, but only by receiver. 
 
 353. Statutory proceedings by attorney-general against insolvent 
 
 bank. 
 
 354. Eligibility of corporate officers as receivers. 
 
 355. Answer of corporation can not determine litigation between 
 
 claimant and receiver. 
 
 356. Purchaser at receiver's sale acquires no right of action 
 
 against former officer; when shareholder estopped from ques- 
 tioning order of sale. 
 
 357. When receiver may be discharged.
 
 CHAP, X.] 
 
 CORPORATIONS. 
 
 427 
 
 § 343. Statutes authorizing receivers on insolvency of 
 corporation ; power of appointment may be conferred upon 
 executive officer. Under the laws and practice of many of 
 the states, the jurisdiction of equity over corporate bodies has 
 been enlarged to the extent of authorizing the appointment of 
 receivers upon the insolvency of the corporation, for the pro- 
 tection of creditors and shareholders ; and the statutory power 
 thus conferred is in some of the states sufficiently broad to au- 
 thorize the court to dissolve the corporate organization, and to 
 forfeit its franchises.^^ Usually the power of appointing re- 
 
 SO In New York, the appointment 
 of receivers over insolvent insur- 
 ance companies, and the functions 
 and duties of such receivers, are 
 largely regulated by legislation. As 
 to the power of the court under 
 such legislation to adjudicate upon 
 claims against the company and to 
 pay dividends, and as to the right 
 of appeal from such orders, and the 
 right of other creditors to intervene 
 and be heard concerning such mat- 
 ters, and as to costs upon such in- 
 tervention, see People v. Security 
 Life Insurance Co., 71 N. Y., 222. 
 As to the proper method of distri- 
 bution of the assets of an insolvent 
 insurance company among its cred- 
 itors, when a receiver has been ap- 
 pointed under the New York stat- 
 ute, the method of computing 
 amounts due to policy-holders as a 
 basis for payment of dividends, 
 priorities among different classes 
 of creditors, allowances for death 
 losses, and set-offs of premium notes 
 due from policy-holders, see People 
 V. Security Life Insurance Co., 78 
 N. Y., 114; Attorney-General v. 
 North America Life Insurance Co., 
 82 N. Y., 172; Attorney-General v. 
 Guardian Mutual Life Insurance 
 Co., 82 N. Y., 336. As to proof of 
 
 claims of creditors and policy-hold- 
 ers in such cases, and extension of 
 time for such proofs and notice to 
 creditors, see People v. Security Life 
 Insurance Co., 79 N. Y., 267. As to 
 the right of such a receiver to a 
 mandamus to compel the superin- 
 tendent of the insurance department 
 to pay to the receiver the proceeds 
 of securities deposited by the com- 
 pany with the superintendent, see 
 Attorney-General v. North America 
 Life Insurance Co., 80 N. Y., 152. 
 As to the compensation of such re- 
 ceivers, and the basis upon which it 
 will be allowed upon receipts and 
 disbursements, see Attorney-General 
 V. North America Life Insurance 
 Co., 89 N. Y., 94. As to the right 
 of a surety of an insolvent corpora- 
 tion to the appointment of a receiver 
 to manage and dispose of its assets 
 and to pay its indebtedness, under 
 the statutes of Ohio, see Barbour v. 
 National Exchange Bank, 45 Ohio 
 St., 133, 12 N. K, 5. As to facts 
 held insufficient to justify the ap- 
 pointment of a receiver over an al- 
 leged insolvent corporation upon be- 
 half of a judgment creditor under 
 the statute of Idaho, see Cronan v. 
 District Court, 15 Idaho, 184, 96 
 Pac, 768.
 
 428 RECEIVERS. [chap. X. 
 
 ceivers over corporations is conferred by legislative enactment 
 upon the courts themselves ; but in some instances it is vested 
 in executive officers of the government, as in the case of re- 
 ceivers of national banks, appointed by the comptroller of the 
 currency, under the provisions of the national banking act of 
 June 3, 1864.^1 And since the appointment of a receiver in 
 limine is not regarded as a strictly judicial act, in the sense of 
 being a decree or judgment affecting title to property, or final- 
 ly determining the rights of the parties, it is competent for the 
 legislature to authorize the executive department of the govern- 
 ment to appoint receivers, with authority to take charge of and 
 wind up the affairs of insolvent corporations, such as banking 
 institutions. Nor does such legislation in any manner impair 
 the obligation of the original contract with the corporation, by 
 taking from it the right secured by its charter to sue and be 
 sued in its corporate name, the appointment of the receiver 
 being for the purpose of preserving and not destroying 
 rights. ^2 
 
 § 344. Object to preserve assets for benefit of creditors ; 
 when corporation allow^ed to resume management; share- 
 holders may have relief; effect of assignment. The primary 
 object, however, of proceedings in chancery against insolvent 
 and failing corporations, when such proceedings are authorized 
 by statute, is not so much a dissolution of the charter, which is 
 the appropriate duty of a court of law, as to protect and pre- 
 serve the corporate assets for the benefit of creditors. And it 
 may, therefore, be regarded as discretionary with the court 
 whether to continue the possession of the receiver, or to allow 
 the corporation to resume the management of its own affairs, 
 if satisfied that the interest of all parties will be best subserved 
 in this way.^2 So under a statute authorizing the appointment 
 
 81 13 U. S. Statutes at Large, 82 Carey v. Giles, 9 Ga., 253. 
 
 p. 99. See § 50; U. S. Revised Stat- 83 Fay v. Erie & Kalamazoo Rail- 
 
 utes, § 5234; 3 U. S. Comp. Stat. road Bank, Harring. (Mich.), 194. 
 1901, p. 3507; 5 Fed. Stat. Ann., 
 p. 170.
 
 CHAP. X.] CORPORATIONS. 429 
 
 of receivers over insolvent corporations, the court v^ill decline 
 to appoint, although the corporation is insolvent, if its direc- 
 tors, who are trustworthy persons, are closing up its affairs, 
 and if all the creditors and all stockholders save complainant, 
 are satisfied with the management of the directors. ^'^ But un- 
 der a statute authorizing the appointment of a receiver over a 
 corporation when it becomes insolvent, or in immediate danger 
 of insolvency, the relief is not confined to cases instituted by 
 creditors, but may be granted upon a bill by a shareholder al- 
 leging the insolvency of the corporation and gross mismanage- 
 ment of its affairs by its ofiicers.^^ And upon a bill for a re- 
 ceiver over an insolvent corporation, the court having juris- 
 diction of the subject-matter, and jurisdiction of the parties 
 by service of process, the execution by the corporation after 
 such service of an assignment of its property to a trustee for 
 the benefit of creditors will not deprive the court of jurisdic- 
 tion, and it may grant the relief notwithstanding such assign- 
 ment.^^ 
 
 § S44fl. Receiver not appointed over insolvent corpora- 
 tion upon its own petition. A court of equity has no juris- 
 diction to appoint a receiver over a corporation upon its own 
 petition alleging its insolvency and inability to continue its 
 business and seeking a ratable distribution of its assets among 
 its creditors, no adverse parties being joined as defendants to 
 such petition and no action being pending.^'^ Nor will a re- 
 ceiver be appointed upon a bill by a banking corporation against 
 its judgment creditors, alleging its insolvency and that the de- 
 fendants are seeking by the enforcement of their judgments to 
 obtain an undue preference over its other creditors, since equity 
 
 84 City Pottery Co. v. Yates, 37 Colo., 464, 17 Pac, 272. And see 
 N. J. Eq., 543. State v. J., P. & M. R. Co., 15 Fla., 
 
 85 Iron Hall v. Baker, 134 Ind., 201. And see, ante, § 39c. See, 
 293, ZZ N. E., 1128. contra, Petition of Kittanning In- 
 
 86 Belmont Nail Co. v. Columbia surance Co., 146 Pa. St., 102, 23 
 I. & S. Co., 46 Fed., 8. Atl., IZd. 
 
 87 Jones v. Bank of Leadville, 10
 
 430 RECEIVERS. [chap, X. 
 
 has no jurisdiction to assume the administration of a debtor's 
 estate upon the mere gTound of insolvency. ^^ 
 
 § 344^. Corporation not dissolved by appointment of re- 
 ceiver ; actions against the corporation do not abate ; other- 
 wise on dissolution. It is important to observe that, in the 
 absence of statute, the appointment of a receiver over an in- 
 solvent corporation does not work the dissolution of the cor- 
 poration or in any way affect its corporate existence.^^ Ex- 
 cept so far as the control of its affairs is placed in the hands 
 of the receiver, it continues to exist for all purposes, and its 
 officers, except as enjoined by the court appointing the receiver, 
 continue to exercise their functions as if no receiver had been 
 appointed.^^ It follows that actions which are pending against 
 the corporation at the time of the appointment of a receiver do 
 not abate as the result of the appointment but may be continued 
 to final judgment, so long as there is no attempt to interfere 
 with property in the possession of the receiver,^! although it 
 is proper in such case for the receiver to intervene in the ac- 
 tion, if necessary, and answer and defend upon behalf of the 
 corporation. ^2 j^^^id where there has been no dissolution of 
 the corporation and no injunction against the institution of ac- 
 
 88 Hugh V. McRae, Chase's Deci- Fed., 693, 47 U. S. App., 339. And 
 sions, 466. see, post, § 358, for the application 
 
 89 Pringle v. Woolworth, 90 N. of the same doctrine in receiverships 
 Y., 502 ; Venner v. U. W. Co., 40 of insolvent national banks, and 
 Colo., 212, 90 Pac, 623, 122 Am. St. § 370& for its application in railway 
 Rep., 1036 ; Moseby v. Burrow, 52 receiverships. 
 
 Tex., 396 ; City Water Co. v. State, 90 Venner v. U. W. Co., 40 Colo., 
 
 88 Tex., 600, 32 S. W., 1033 ; Pinch- 212. 90 Pac, 623, 122 Am. St. Rep., 
 
 back V. Mining Co., 137 N. C, 171, 1036. 
 
 49 S. E., 106; Allen v. Olympia L. 91 Kittredge v. Osgood, 161 Mass., 
 
 & P. Co., 13 Wash., 307, 43 Pac, 384, 37 N. R, 369; St. Louis, C. G. 
 
 55 ; Stolze v. Manitowoc T. Co., 100 & F. S. Ry. Co. v. Holladay, 131 
 
 Wis., 208, 75 N. W., 987 ; Johnson Mo., 440, 33 S. W., 49 ; Andrews v. 
 
 V. Southern B. & L. Assn., 99 Fed., Steele City Bank, 57 Neb., 173, 77 
 
 646; Hall v. Nieukirk, 12 Idaho, 33, N. W., 342; Stolze v. Manitowoc 
 
 85 Pac, 485 ; Durward v. Jewett, 46 T. Co., 100 Wis., 208, 75 N. W., 987. 
 
 La. An., 559, 15 So., 386; Peirce v. 92 Andrews v. Steele City Bank, 
 
 Van Dusen, 24 C C. A., 280, 78 57 Neb., 173, 77 N. W., 342.
 
 CHAP. X.] CORPORATIONS. 431 
 
 tions against it, persons having claims against the corporation 
 may maintain actions against it for the enforcement of their 
 demands and may prosecute them to final judgment.^^ And 
 in the enforcement of their judgments, resort may be had to 
 all the property of the corporation which does not come within 
 the scope of the receivership.^^ And since the appointment of 
 a receiver over an insolvent corporation does not ordinarily dis- 
 solve or discontinue the existence of the corporation, it is en- 
 titled, being a party to the receivership proceeding, to be rep- 
 resented by counsel, although this must be at its own expense.^^ 
 But where a statutory proceeding is instituted to dissolve an 
 insolvent corporation and wind up its business and a judgment 
 of dissolution is entered and a receiver appointed, it works an 
 abatement of all actions pending against the corporation, and, 
 unless revived under some statutory provision, all subsequent 
 proceedings against the corporation are void. Hence, when an 
 action is pending in another state at the time of the appointment 
 of the receiver, and a judgment is subsequently rendered therein 
 against the corporation, such judgment is not valid or binding 
 upon the receiver.^^ 
 
 § 345. In proceedings to forfeit charter, appointment of 
 receiver does not revive corporate existence. In Louisi- 
 ana, the right of the courts to appoint a receiver for the protec- 
 tion of all parties in interest, pending proceedings for the liqui- 
 dation and settlement of the affairs of an insolvent corporation, 
 is treated as too well established to admit of question. ^'^ And 
 when proceedings are pending for the forfeiture of the charter 
 of an insolvent corporation and for the settlement of its af- 
 
 93 Weigen v. Council Bluffs Ins. 94 city Water Co. v. State, 88 
 
 Co., 104 Iowa, 410, IZ N. W., 862; Tex., 600, 32 S. W., 1033. 
 
 Warner v. Imbeau, 63 Kan., 415, 65 95 Johnson v. Southern B. & L. 
 
 Pac, 648; Allen v. Olympia L. & P. Assn., 99 Fed., 646. 
 
 Co., 13 Wash., 307, 43 Pac, 55; City reinsurance Commissioner v. 
 
 Water Co. v. State, 88 Tex., 600, 32 United F. Ins. Co., 22 R. I., 377, 48 
 
 S. W., 1033; Pinchback v. Mining Atl., 202. And see, post, § 349. 
 
 Co., 137 N. C, 171, 49 S. E.. 106. 97 Stark v. Burke, 5 La. An., 740. 
 And see, ante, § 258.
 
 432 RECEIVERS. [chap. X. 
 
 fairs, the appointment of a receiver does not have the effect of 
 reviving the corporate body, it being merely a necessary meas- 
 ure for protecting the property and preserving the rights of 
 creditors.^S 
 
 § 346. Allegations as to insolvency; when affidavit on 
 information insufficient; notice and rule to show cause. 
 W^here the statutes of a state provide that a receiver may be 
 appointed when a corporation has been dissolved, or when it 
 "is in imminent danger of insolvency, or has forfeited its cor- 
 porate rights," in proceedings against an insurance company 
 for the appointment of a receiver under the statute, it is suffi- 
 cient ground for the relief to allege that the company is in- 
 solvent and unable to meet its liabilities, and that its officers 
 have misapplied the funds and are rapidly wasting the only 
 means of the company for the payment of losses. Such a state 
 of facts, if it does not show an absolute condition of insolvency, 
 shows at least that there is such "imminent danger of insol- 
 vency" as to warrant the appointment of a receiver under the 
 statute. And the facts alleged being sufficient to give the court 
 jurisdiction of the subject-matter, and authority to appoint a 
 receiver, its proceedings in making such appointment, even if 
 erroneous, can not be called in question in a collateral action. ^^ 
 But an affidavit alleging the insolvency of a banking corpora- 
 tion, upon information and belief, will not warrant the court 
 in interposing its extraordinary aid by appointing a receiver, 
 when such affidavit is contradicted by the regular official re- 
 ports of the bank, made under oath and published by direction 
 of law, since such reports are presumed to be entitled to at 
 least as much weight, judicially, as the affidavit.^ And under 
 a statute making insolvency of a corporation ground for a re- 
 ceiver, the fact of insolvency is regarded as jurisdictional, and 
 
 98 Stark v. Burke, 5 La. An., 740. \t is otherwise, however, when such 
 
 S9 Howard v. Whitman, 29 Ind., affidavit is not thus contradicted. 
 
 557. Attorney-General v. Bank oi Co- 
 
 1 Livingston v. Bank of New lumbia, 1 Paige, 511. 
 
 York, 26 Barb., 304, 5 Ab. Pr., 338.
 
 CHAP. X.] CORPORATIONS. 433 
 
 the proof must be clear and convincing before the court will 
 interfere.2 And in addition to the insolvency of the corpora- 
 tion, it must appear that there is no reasonable prospect that 
 the corporation, if let alone, will soon be placed by its man- 
 agers in a condition of solvency.^ And the courts will not ex- 
 ercise their statutory power of appointing receivers over an 
 insolvent corporation, upon an ex parte application, and with- 
 out giving the defendant an opportunity to be heard. But upon 
 filing a petition duly verified, setting forth the grounds on 
 which the application is based, an order to show cause should 
 issue and a copy thereof should be served upon the officers of 
 the corporation, directing them to show cause on a future day 
 why the application should not be granted.'* And where a state 
 statute provides that whenever any corporation shall become 
 insolvent, any creditor or stockholder may apply for the issu- 
 ance of an injunction and the appointment of a receiver, •« 
 federal court sitting in that state may properly appoint a re- 
 ceiver over the corporation upon a bill filed by mortgage bond- 
 holders and stockholders in which the corporation is alleged 
 to be insolvent and its affairs are charged to have been grossly 
 mismanaged by its officers and directors. And in such case the 
 jurisdiction exists independently of the statute and under the 
 general chancery powers of the court. ^ 
 
 § 346(7. Shareholders entitled to relief; fraudulent trans- 
 fers; discretionary powers of court. Shareholders are en- 
 titled to a receiver over a corporation upon a bill for relief 
 
 2 Atlantic Trust Co. v. ConsoH- 4 Devoe v. Ithaca & Owego R. 
 dated E. S. Co., 49 N. J. Eq., 402, Co., 5 Paige, 521. As to the suffi- 
 23 Atl., 934; Edison v. Edison U. ciency of the allegations necessary 
 P. Co., 52 N. J. Eq., 620, 29 Atl., to procure a receiver of an insolvent 
 195 ; Stokes v. Knickerbocker In- corporation under the statutes of 
 vestment Co., 70 N. J. Eq., 518, 61 Wisconsin, and as to the functions 
 Atl., 736. And see Parsons v. Mon- and powers of such a receiver when 
 roe Manufacturing Co., 3 Green Ch., appointed, see Powers v. Hamilton 
 187. Paper Co.. 60 Wis., 23, 18 N. W., 20. 
 
 3 Fort Wayne Electric Corpora- 5 United States Shipbuilding Co. 
 tion V. Franklin E. L. Co., 57 N. J. v. Conklin, 60 C. C. A., 680, 126 
 Eq., 7, 41 Atl., 666. Fed., 132. 
 
 Receivers — 28.
 
 434 RECEIVERS. [chap. X. 
 
 against a note and mortgage executed by the officers of the cor- 
 poration fraudulently and without adequate consideration, 
 their conduct having been such as to render it unfit that they 
 should retain control of the affairs of the corporation pending 
 the litigation.^ But, after the appointment of a receiver under 
 a statute for v^inding up insolvent corporations, it is still com- 
 petent for the court to entertain an independent action by a 
 judgment creditor to set aside an alleged fraudulent transfer 
 of the corporate property, the receiver having taken no steps to 
 set aside such transfer. And such an action is, in effect, an 
 application to the court to direct the receiver in the discharge 
 of his duty and may be maintained as such.'^ So when the 
 property of an insolvent corporation has passed into the hands 
 of a receiver, and the corporation is managed and its business 
 conducted through the receiver, questions pertaining to the ad- 
 ministration of the business must be left largely to the discre- 
 tion of the court having the receivership in charge. And a 
 court of appellate jurisdiction will be reluctant to disturb the 
 action of the court below upon such questions, unless in cases of 
 flagrant error and injustice.^ 
 
 § 347. Injunction against directors and officers in aid of 
 receivership; when management left in hands of officers. 
 Upon the appointment of a receiver of all the assets and effects 
 of a corporation, for the purpose of sequestrating its property 
 and closing up its affairs, it is proper for the court, in con- 
 nection with such appointment and as a part of the order, to 
 enjoin the directors and officers of the corporation from collect- 
 ing any debts or demands, and from delivering or incumbering 
 any of the corporate property to any other person, such an in- 
 junction being regarded as an appropriate adjunct of the re- 
 ceivership.9 It by no means follows, however, because an in- 
 junction has been granted against a corporation, restraining it 
 
 6 Avery v. Blees Manufacturing 8 Wilmington Star Mining Co. V. 
 Co., 27 N. J. Eq., 412. Allen, 95 111., 288. 
 
 7 Monitor Furnace Co. v. Peters, ^ Morj^^an v. New York & Albany 
 40 Ohio St., 575. R. Co., 10 Paige, 290.
 
 CHAP. X.] CORPORATIONS. 435 
 
 from continuing in business because of its insolvency, that a 
 receiver will necessarily be appointed to wind up its affairs, 
 even though by the statute authorizing the proceeding the court 
 is fully empowered to appoint a receiver. And when, in such 
 case, it is apparent to the court that a receiver is not necessary 
 for the protection of the interests either of creditors or of stock- 
 holders, and that a stranger to the affairs of the company can 
 not wind up its business as advantageously as its directors, a 
 receiver will be refused and the management will be left in the 
 hands of the directors, who may be required to act under the 
 immediate control and direction of the court. ^^ But the court 
 will not leave the management of the affairs of a corporation 
 in the hands of its directors or officers, after declaring the cor- 
 poration itself insolvent, unless it is shown to be for the in- 
 terest of the creditors and shareholders that this course should 
 be pursued. And when fraudulent and improper conduct is 
 shown against the officers of the corporation, in making ille- 
 gal sales of its property and effects after its insolvency, it is the 
 clear duty of the court to take the management out of the hands 
 of such officers, and to place it in the hands of a receiver, and 
 the court has no discretion in the premises. ^^ 
 
 § 348. Appointment of receiver does not impair lien al- 
 ready acquired by creditors; attaching creditors. As re- 
 gards the effect of appointing a receiver of an insolvent cor- 
 poration upon the rights of creditors, the decisions are not al- 
 together harmonious, owing, doubtless, to the difference in the 
 various statutes in force in the several states, under which the 
 courts are empowered to appoint receivers over corporate bod- 
 ies. It may, however, be regarded as an established rule, that 
 such appointment does not affect or impair a lien already ac- 
 quired by the creditor upon assets of the corporation. When, 
 therefore, under the statutes of the state for the winding up of 
 
 10 Rawnsley v. Trentofi Mutual Nichols v. Perry Patent Arm Co., 
 
 Life & Fire Insurance Co., 1 3 Stockt., 126. 
 
 Stockt., 347. See, also, Oakley v. n Nichols v. Perry Patent Arm 
 
 Paterson Bank, 1 Green Ch., 173; Co., 3 Stockt., 126.
 
 436 RECEIVERS. [chap. X. 
 
 insolvent corpotations, a receiver of such a body is appointed 
 and an injunction is granted against the corporation, such pro- 
 ceedings do not have the effect of dissolving an attachment of 
 the assets of the corporation previously made by a creditor, and 
 a creditor who has been thus diligent in acquiring a lien by at- 
 tachment will be allowed to retain it, notwithstanding the sub- 
 sequent proceedings. 12 g^t when a receiver is appointed to 
 take charge of the assets of a banking corporation for the bene- 
 fit of creditors, and he has filed his bond with security, which 
 has been approved by the court, the assets of the corporation, 
 although not yet reduced to possession by the receiver, are re- 
 garded as in custody of the law, m gremio legis, and not liable 
 to levy under an attachment in favor of a creditor of the bank.^^ 
 § 349. Lien of judgment creditors on real estate, lim- 
 ited to interest of corporation at time of appointment; 
 court not concluded by judgment in another state. When 
 receivers are appointed to take charge of the affairs of an in- 
 solvent corporation pendente lite, it is held that such proceed- 
 ing does not prevent the general creditors from enforcing their 
 demands by suit, when it does not appear that the appointment 
 was made with a view to a settlement and an equal distribution 
 of the corporate funds to all the creditors, but only to provide 
 for the safety of the assets pending the litigation And, in 
 such a case, the lien acquired by a judgment creditor upon the 
 real estate of the corporation will be upheld, notwithstanding 
 the appointment and possession of the receivers, and even 
 though the judgment was obtained after such appointment and 
 possession. 14 But the lien acquired by the judgment creditor, 
 under such circumstances, is only a lien upon such interest in 
 the real estate of the corporation as was held by it at the time 
 of the appointment of the receivers, and it will not be extended 
 
 12 Hubbard v. Hamilton Bank, 7 14 EIHcott v. United States Insur- 
 Met, 340. ance Co., 7 Gill, 307. But see At- 
 
 13 Hagedon v. Bank of Wisconsin, torney-General v. Continental Life 
 1 Pin. (Wis.), 61. And see com- Insurance Co., 28 Hun, 360. 
 ments upon this case in Atchison 
 
 V. Davidson, 2 Pin. (Wis.), 48.
 
 CHAP. X.] CORPORATIONS. 437 
 
 to the increased value of the property resulting from payments 
 of purchase-money made thereon by the receivers.i^ And a 
 court appointing a receiver over an insolvent corporation in a 
 proceeding to wind up its affairs and to administer its assets 
 is not bound or concluded as to the assets in its possession by a 
 judgment recovered in another state against the corporation 
 after the receivership and after the dissolution of the corpora- 
 tion. ^^ Nor, in such case, does the fact that the receiver has 
 employed counsel and has been heard upon a writ of error under 
 which a former judgment in the same cause in the foreign state 
 has been reversed alter the rule or conclude the court appointing 
 the receiver as to the effect of the final judgment in the foreign 
 state. 1*^ 
 
 § 350. Creditors may be prohibited by statute from pro- 
 ceeding against corporation after receivership; creditors 
 may come in under decree. When the statute of a state, 
 regulating the winding up of banking corporations by receivers, 
 provides that no action shall be maintained against a bank after 
 the appointment of a receiver, but that all creditors shall have 
 their remedy under the provisions of the statute, the courts 
 will not entertain an action brought against the bank by one 
 of its creditors, such an enactment being regarded as constitu- 
 tional and within the power of the legislative branch of the 
 government.!^ /^^(^ when, under the laws of the state, a re- 
 ceiver for winding up the affairs of an insolvent corporation, 
 upon the final order for his appointment, becomes absolutely en- 
 titled to all the property and effects of the corporation, 
 for the purpose of distributing them among its creditors and 
 
 15 Ellicott V. United States Insnr- 17 Pendleton v. Russell, 144 U. S., 
 ance Co., 7 Gill, 307. 640, 12 Sup. Ct. Rep., 743, 36 L. Ed., 
 
 16 Pendleton v. Russell, 144 U. S., 574, affirming S. C. suh nom. Peo- 
 640, 12 Sup. Ct. Rep., 743, 36 L. Ed., pie v. Knickerbocker Life Insurance 
 574, affirming S. C. sub nom. Peo- Co., 106 N. Y., 619, 13 N. E., 447. 
 pie V. Knickerbocker Life Insurance 18 Leathers v. Shipbuilders Bank, 
 Co., 106 N. Y., 619, 13 N. E., 447; 40 Me., 386. 
 
 Rodgers v. Adriatic Fire Ins. Co., 
 148 N. Y., 34, 42 N. E., 515. And 
 see, ante, § MAb.
 
 438 RECEIVERS. [chap. X. 
 
 shareholders, such final order is in the nature of a decree in an 
 ordinary creditors' suit, against executors or others who are 
 trustees of a fund upon which several creditors have claims for 
 the payment of their debts ratably, or according to a specified 
 order of priorities. And in such case, any creditors, who are 
 not nominal parties to the suit, may make themselves such par- 
 ties in fact by coming in and presenting their claims under the 
 decree, and by submitting themselves to the jurisdiction of the 
 court for the adjustment of their demands; and a creditor thus 
 coming in as a quasi party to the action is entitled to the full 
 benefit of the decree. ^^ 
 
 § 351. Appointment operates as transfer of corporate 
 property to receiver ; right to rents before and after sale by 
 receiver; legal services. It is held in New Jersey, that the 
 appointment of a receiver over an insolvent corporation, under 
 the statute conferring such jurisdiction, operates as a convey- 
 ance or transfer of all the property of the corporation to the 
 receiver for the benefit of creditors, to be distributed in accord- 
 ance with the statute.20 It is, therefore, held that rents of the 
 corporate property, accruing after its sale by the receivers, 
 belong to the purchaser of the property, while rents accruing 
 after the appointment of the receivers, but before a sale of the 
 premises by them, belong to the receivers for the benefit of 
 creditors. 21 But an action will not lie against the receiver to 
 
 19 /m re City Bank of Buffalo, 10 and that such appointment did not 
 Paige, 378. And see, as to the time necessarily put an end to the exist- 
 when plaintiff, in an action pend- ence of the corporate body, the re- 
 ing against an insolvent corporation, ceivers being substituted in place 
 may prove up his claim and share of the managers and directors of 
 in a dividend declared by the re- the corporation for the purpose of 
 ceiver, Smith v. Manhattan Insur- closing up its affairs, and that the 
 ance Co., 4 Hun, 127. title to its property did not change, 
 
 20 Corrigan v. Trenton Delaware the power only being delegated to 
 
 Falls Co., 3 Halst. Ch., 489. It was the receivers to take charge of and 
 
 held, however, in an earlier case sell it. Willink v. Morris Canal & 
 
 in New Jersey, that the corporate Banking Co., 3 Green Ch., 377. 
 
 property did not vest in the receiv- 21 Corrigan v. Trenton Delaware 
 
 ers by virtue of their appointment, Falls Co., 3 Halst. Ch., 489. See,
 
 CHAP. X.] CORPORATIONS. 439 
 
 recover for legal services rendered to the corporation after the 
 appointment of the receiver, although such services rendered 
 before the receivership may be recovered against him. And 
 the question of what allowance should be made out of the funds 
 of the receivership for counsel fees and legal services rendered 
 to the corporation in resisting the appointment of a receiver 
 would seem to be wholly within the discretion of the court. 22 
 
 § 352. Liability of shareholders for unpaid subscriptions 
 may not be enforced by creditors, but only by receiver. 
 When the affairs of an insolvent corporation have passed into 
 the hands of a receiver, in an action instituted in behalf of all 
 its creditors, and the court is authorized and required by the 
 statute conferring the jurisdiction to cause the property and as- 
 sets of the corporation to be distributed among its creditors 
 pro rata, it will not permit actions to be prosecuted against 
 shareholders for their unpaid subscriptions by creditors of the 
 corporation, whereby they might obtain a preference over other 
 creditors. The receiver being appointed for the benefit of the 
 creditors, and the property and choses in action of the corpora- 
 tion being vested in him for their benefit, by virtue of his ap- 
 pointment, if the shareholders are liable to the corporation for 
 unpaid balances on account of their subscriptions to the capital 
 stock, such liability may be enforced by the receiver only, and 
 not by individual creditors. 23 
 
 § 353. Statutory proceedings by attorney-general 
 against insolvent bank. Under a statute making it the 
 duty of the attorney-general of the state, whenever any incor- 
 porated bank becomes insolvent and unable to pay its debts, to 
 apply to a court of equity for an injunction and a receiver, and 
 for the winding up of the corporation, when the fact of the 
 insolvency of the bank is satisfactorily established, the court to 
 which the application is addressed has no discretion left as to 
 
 also, Fish V. Potts, 4 Halst. Ch., 277, Alliance L. I. Co., 148 N. Y., 563, 
 
 aflfirmed on appeal to the court of 42 N. E., 1044. 
 
 errors and appeals, id., 909. -'^ Rankine v. Elliott, 16 N. Y., 
 
 22 Barnes v. Newcomh, 89 N. Y., Z77. And see, ante, § 324. 
 108. And see People v. Commercial
 
 440 RECEIVERS. [chap. X. 
 
 the appointment, and a receiver will be granted as of course.24 
 And it is not necessary that the information filed by the attor- 
 ney-general should be verified by a positive affidavit as t© the 
 insolvency of the bank, but it is sufficient that it is alleged on 
 information and belief, since no person but the officers of the 
 bank may swear positively as to its insolvency.^^ 
 
 § 354. Eligibility of corporate officers as receivers. Up- 
 on compulsory proceedings, under a statute, for the appoint- 
 ment of a receiver to wind up an insolvent banking corpora- 
 tion, it is regarded as improper to appoint an officer of the 
 bank as receiver, since if the officers as such are unfit for the 
 management of the bank in that capacity, the court will not in- 
 trust its management to them as receivers, the rule of exclu- 
 sion, in such case, being based upon principles of sound public 
 policy.26 It is otherwise, however, when the proceedings are 
 instituted voluntarily by the corporation for a dissolution, and 
 when the statute regulating them authorizes the appointment 
 of officers or shareholders as receivers. And under such cir- 
 cumstances, it is proper to appoint the president and book-keep- 
 er, when it is not shown that their conduct or management of 
 the business has in any manner tended to produce the insolvency 
 of the corporation. 2"^ 
 
 § 355. Answer of corporation can not determine litiga- 
 tion between claimant and receiver. When, under the laws 
 of a state, the appointment of a receiver over an insolvent cor- 
 poration operates as a virtual dissolution of the corporate body, 
 substituting the receiver in lieu thereof as to all its property 
 and effects, in a contest concerning the right to certain property 
 
 24 Attorney-General v. Bank of be appointed. Livingston v. Bank 
 Columbia, 1 Paige, 511. of New York, 26 Barb., 304, 5 Ab. 
 
 25 Attorney-General v. Bank of Pr., 338. 
 
 Columbia, 1 Paige, 511. When, 26 Attorney-General v. Bank of 
 
 however, the allegations as to in- Columbia, 1 Paige, 511. And see, 
 
 solvency rest on information and ante, § 72. 
 
 belief, and are contradicted by the 27 /n re Eagle Iron Works, 8 
 
 regular official reports of the bank, Paige, 385, affirming S. C, 3 Edw. 
 
 made under oath and published ac- Ch., 385. 
 
 cording to law, a receiver will not
 
 CHAP. X,] CORPORATIONS. 441 
 
 of the corporation in the hands of its receiver, the answer of the 
 corporation itself under the corporate seal can have no effect in 
 determining the controversy, since the litigation is between the 
 claimant and the receiver alone. ^8 
 
 § 356. Purchaser at receiver's sale acquires no right of 
 action against former officer; when shareholder estopped 
 from questioning order of sale. While a purchaser of the 
 assets of an insolvent corporation, sold at a receiver's sale, ob- 
 tains by his purchase such title as the receiver himself had, he 
 can not by such purchase from the receiver acquire any right of 
 action against a former officer of the corporation to compel 
 him to account for assets and effects of the corporation in his 
 hands in the capacity of trustee. ^^ But a shareholder who has 
 joined in proceedings for the dissolution of an insolvent cor- 
 poration and for a receiver is estopped from questioning the 
 appointment, and from questioning an order of court directing 
 the receiver to sell the corporate assets.^^ 
 
 § 357. When receiver may be discharged. When a re- 
 ceiver has been appointed of the effects of a corporation, under 
 a statute authorizing receivers in cases of insolvency, it is 
 proper for the court to discharge him upon motion of the de- 
 fendant corporation, upon its satisfying the court that it is in 
 solvent circumstances and able to resume business, and that the 
 best interests of its creditors will thereby be secured. ^^ The 
 interests of the creditors are in all cases to be kept in view in 
 determining whether the receiver shall be continued or dis- 
 charged. And a creditor who has, upon his own bill, obtained 
 the appointment of a receiver, is not entitled as of right, upon 
 the settlement of his own debt, to have the receiver discharged, 
 when the rights of other creditors have intervened. In such a 
 case, it is the right and duty of the court to protect the interests 
 of all the creditors who may have presented their demands. ^^ 
 
 28 Davenport t;. City Bank of Buf- 31 Ferry v. Bank of Central New 
 falo, 9 Paige, 12. York, IS How. Pr., 445. 
 
 29 Mann v. Fairchild, 2 Keyes, 106. 32 Pay v. Erie & Kalamazoo Rail- 
 30Battershall v. Davis, 31 Barb., road Bank, Harring. (Mich.), 194. 
 
 323.
 
 442 RECEIVERS. [chap. X. 
 
 IV. Receivers of National Banks. 
 
 § 35S. Appointment under National Banking Act; effect of appointment; 
 corporation still exists and may be sued. 
 
 359. Receiver holds only such title as bank had; can not avoid 
 
 pledge of assets as collateral made by bank; exemption from 
 taxation. 
 
 360. Receiver the agent of the comptroller; his functions and rights 
 
 of action; claim allowed against bank should be certified to 
 
 comptroller for payment. 
 360a. May enforce individual liability of shareholders. 
 360b. Receiver's right of action against directors for mismanaging 
 
 affairs of bank. 
 
 361. Allegations and proof of his appointment in suits by the re- 
 
 ceiver, 
 
 362. Power of comptroller not exclusive of jurisdiction of equity; 
 
 when courts may appoint receiver. 
 
 363. Jurisdiction of state and federal courts in actions by or 
 
 against the receiver. 
 
 364. Property of bank can not be sold by creditor as against re- 
 
 ceiver. 
 364a. Receiver subject to same set-offs as bank. 
 
 § 358. Appointment under National Banking Act; effect 
 of appointment; corporation still exists and may be sued. 
 
 The subject of the appointment of receivers over national banks 
 incorporated under the act of congress of June 3, 1864, and of 
 the functions and powers of such receivers, is one of consider- 
 able importance, and has been presented to the courts in sev- 
 eral different aspects. Under the fiftieth section of the act in 
 question, commonly known as the National Banking Act, au- 
 thority is conferred upon the comptroller of the currency to 
 appoint receivers over national banks, upon their refusal to 
 pay their circulating notes, and the general duties of receivers 
 thus appointed are defined by the statute.^^ It would seem 
 
 33 Act of June 3, 1864, c. 106, 13 lating notes as therein mentioned, 
 
 Statutes at Large, 99. Section 50 and is in default, the Comptroller 
 
 contains the following provision : of the Currency may forthwith ap- 
 
 "That on becoming satisfied, as spe- point a receiver, and require of him 
 
 cified in this act, that any associa- such bond and security as he shall 
 
 tion has refused to pay its circu- deem proper, who, under the direc-
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 443 
 
 that the appointment of a receiver under this section has the 
 effect of superseding the authority of the directors to exercise 
 the incidental powers necessary to carry on the business of 
 banking, although the corporate franchise is not destroyed, and 
 the bank as a legal entity still continues to exist.^'* And since 
 the bank still has an existence, it is proper to institute an action 
 against it in its corporate capacity, in which capacity it should 
 
 tion of the Comptroller, shall take 
 possession of the books, records and 
 assets of every description of such 
 association, collect all debts, dues 
 and claims belonging to such asso- 
 ciation, and upon the order of a 
 court of record of competent juris- 
 diction, may sell or compound all 
 bad or doubtful debts, and on a 
 like order, sell all the real and per- 
 sonal property of such association, 
 on such terms as the court shall di- 
 rect; and may, if necessary to pay 
 the debts of such association, en- 
 force the individual liability of the 
 stockholders provided for by the 
 twelfth section of this act; and such 
 receiver shall pay over all money 
 so made to the Treasurer of the 
 United States, subject to the order 
 of the Comptroller of the Currency, 
 and also make report to the Comp- 
 troller of all his acts and proceed- 
 ings." Section 50 of the original 
 act, as above quoted, is substan- 
 tially re-enacted in section 5234 of 
 the Revised Statutes of the United 
 States, as follows : "On becoming 
 satisfied, as specified in sections 
 5226 and 5227, that any association 
 has refused to pay its circulating 
 notes as therein mentioned, and is 
 in default, the Comptroller of the 
 Currency may forthwith appoint a 
 receiver, and require of him such 
 bond and security as he deems 
 
 proper. Such receiver, under the 
 direction of the Comptroller, shall 
 take possession of the books, rec- 
 ords, and assets of every descrip- 
 tion of such association, collect all 
 debts, dues, and claims belonging 
 to it, and, upon the order of a court 
 of record of competent jurisdiction, 
 may sell or compound all bad or 
 doubtful debts, and, on a like order, 
 may sell all the real and personal 
 property of such association, on 
 such terms as the court shall di- 
 rect; and may, if necessary to pay 
 the debts of such association, en- 
 force the individual liability of the 
 stockholders. Such receiver, shall 
 pay over all money so made to the 
 Treasurer of the United States, sub- 
 ject to the order of the Comptroller, 
 and also make report to the Comp- 
 troller of all his acts and proceed- 
 ings." 3 U. S. Comp. Stat. 1901, 
 p. 3507; 5 Fed. Stat. Ann., p. 170. 
 Under the provisions of the statute 
 quoted it is held that the receiver 
 of a national bank appointed by the 
 Comptroller of the Currency may 
 apply to a court of competent juris- 
 diction for leave to sell the assets 
 of the insolvent bank, without ob- 
 taining the formal consent of the 
 Comptroller to make such applica- 
 tion. Richardson v. Turner, 52 La. 
 An., 1613, 28 So., 158. 
 34 Bank of Bethel v. Pahquioque
 
 444 RECEIVERS. [CIIAP. X. 
 
 be defended. "^^ And where a judgment is obtained against the 
 bank in such a case, it is binding upon the receiver unless ren- 
 dered void by reason of fraud or collusion. ^^^ 
 
 § 359. Receiver holds only such title as bank had; can 
 not avoid pledge of assets as collateral made by bank ; ex- 
 emption from taxation. As regards the title acquired by a 
 receiver of a national bank thus appointed, the rule is that he 
 holds only such estate and title as the bank itself had in its as- 
 sets, his title being similar in this respect to that of an assignee 
 in bankruptcy. He is not a third person in the sense of com- 
 mercial transactions, and can not avoid a pledge of assets of 
 the bank which could not be avoided by the corporation itself. 
 When, therefore, the bank has deposited notes constituting a 
 part of its assets with a creditor as security for advances, the 
 bank itself being concluded by the deposit or pledge, the re- 
 ceiver is not entitled to such notes, and can not maintain an 
 action therefor until the creditor or pledgee is made whole for 
 his advances.^"^ Nor does he acquire title to property of which 
 the bank is merely custodian, and the owner of such property 
 may recover it in an action against the receiver.^^ And the 
 personal property and assets of the bank are still exempt from 
 taxation under state laws, notwithstanding the appointment of 
 
 Bank, 14 Wal., 383 ; Chemical Na- recover from the directors because 
 tional Bank v. Hartford Deposit of fraudulent and negligent man- 
 Co., 156 111., 522, 41 N. E., 225; agement of the bank, see Brincker- 
 Hutchinson v. Crutcher, 98 Tenn., hoff v. Bostwick, 88 N. Y., 52. As 
 421, 39 S. W., 725, 37 L. R. A., 89. to the liability of the receiver of a 
 See, also, Security Bank v. National state or national bank for taxes, see 
 Bank of the Commonwealth, 2 Hun, Baker v. County of King, 17 Wash., 
 287 ; Green v. Walkill National 622, 50 Pac, 481 ; Hewitt v. Traders' 
 Bank, 7 Hun, 63. And see, ante, Bank, 18 Wash., 326, 51 Pac, 468. 
 § 344&, and, post, § 370^. 36 Denton v. Baker, 24 C. C. A., 
 35 Security Bank v. National Bank 476, 79 Fed., 189, 48 U. S. App., 235. 
 of the Commonwealth, 2 Hun, 287. 37 Casey v. La Societe de Credit 
 See, also, Green v. Walkill National Mobilier, 7 Chicago Legal News, 
 Bank, 7 Hun, 63. As to the effect 313; S. C, 2 Woods, 77. 
 of appointing a receiver upon the 38 Corn Exchange Bank v. Blye, 
 right of action of shareholders to 101 N. Y., 303, 4 N. E., 635.
 
 CHAP. X.] CORPORATIONS. 445 
 
 a receiver, being regarded in legal contemplation as still be- 
 longing to the bank, to be administered according to law.^'^ 
 
 § 360. Receiver the agent of the comptroller; his func- 
 tions and rights of actions; claim allowed against bank 
 should be certified to comptroller for payment. A receiver 
 of a national bank appointed by the comptroller, under this 
 section of the act, is limited as to his functions by the object of 
 the receivership and the duties which it involves.'*^ Practically 
 such a receiver is the mere agent of the comptroller of the cur- 
 rency, for the purpose of bringing the residue of the assets in- 
 to the United States treasury."*! And while, for the full accom- 
 plishment of the object of the statute, and the due performance 
 of his duties, all necessary authority is conferred upon him, yet 
 this authority does not extend to the control of bonds deposited 
 by the bank with the treasurer of the United States to secure 
 the currency of the bank. The receiver, therefore, has no con- 
 cern with and is not a proper party defendant to a suit 
 brought to establish title to such bonds by one claiming them 
 by assignment from the bank.^2 ^^d being the mere agent of 
 the comptroller or of the government, the fact that the receiver 
 applies to a court for leave to sell assets of the bank which are in 
 his possession does not have the effect of making him an officer 
 of the court or of placing such assets within the control of the 
 court in the sense in which control is acquired where the re- 
 ceiver is appointed by the court."*^ And for the same reason, 
 a decree establishing the claim of a creditor of the bank should 
 not require the receiver to declare a dividend to pay the amount 
 
 39 Rosenblatt v. Johnston, 104 U. Blatchf., 282. As to the status of an 
 S., 462. agent appointed by the shareholders 
 
 40 Van Antwerp v. Hulburd, 8 of an insolvent national bank to suc- 
 Blatchf., 282; Ellis v. Little, 27 ceed the receiver appointed by the 
 Kan., 707. Comptroller of the Currency, see 
 
 41 In re Chetwood, 165 U. S., 443, Chetwood v. California National 
 17 Sup. Ct. Rep., 385, 41 L. Ed., Bank, 113 Cal., 649, 45 Pac, 854. 
 782; Van Antwerp v. Hulburd, 8 43 /^ re Chetwood, 165 U. S., 443, 
 Blatchf., 282. 17 Sup. Ct. Rep., 385, 41 L. Ed., 782. 
 
 42 Van Antwerp v. Hulburd, 8
 
 446 RECEIVERS. [chap. X. 
 
 of the claim, but it should merely direct him to certify the 
 amount of the claim to the comptroller of the currency to be 
 paid by him in due course of administration.'** He has, how- 
 ever, undoubted authority to bring suits to enforce demands 
 due to the bank,"*^ and such actions may be instituted, either in 
 his own name or in the name of the bank.*^ And it is not 
 necessary that he should first obtain the consent of the comp- 
 troller, before beginning such an action, the case being clearly 
 distinguishable from that of an action against shareholders to 
 enforce their personal liability.*'^ Thus, the receiver may main- 
 tain an action in equity against the shareholders of the bank for 
 the purpose of recovering dividends which had been unlawfully 
 paid to them out of the capital of the bank at a time when the 
 institution had earned no profits and was in fact insolvent.*^ 
 The authority to bring such actions for the enforcement of de- 
 mands due to the bank, in addition to being expressed by the 
 act of congress, is regarded as a necessary incident to the prop- 
 er discharge of the receiver's functions.'*^ But the receiver 
 can not render himself liable, or charge the estate in his hands 
 
 44 Merrill v. First National Bank, 47 Bank v. Kennedy, 17 Wal., 19; 
 21 C. C. A., 282, 75 Fed., 148, 41 Hayden v. Thompson, 17 C. C. A., 
 U. S. App., 529, affirmed in 173 U. 592, 71 Fed., 60, 36 U. S. App., 361, 
 S., 131, 19 Sup. Ct. Rep., 360, 43 reversing S. C, 67 Fed., 273. In 
 L. Ed., 640; Wolf v. National Bank Bank v. Kennedy, supra, the court, 
 of Illinois, 178 111., 85, 52 N. E., 896. Bradley, J., say, p. 22: "His very 
 
 45 Bank v. Kennedy, 17 Wal., 19; appointment makes it his duty to 
 Piatt V. Crawford, 8 Ab. Fr., N. S., collect the assets and debts of the 
 297. See, also, Kennedy v. Gibson, association. With regard to ordi- 
 8 Wal., 498; Bank of Bethel v. nary assets and debts no special di- 
 Pahquioque Bank, 14 Wal., 383. rection is needed ; no unusual ex- 
 
 46 Bank v. Kennedy, 17 Wal., 19. ercise of judgment is required. 
 See, also, Kennedy v. G'\hson, supra; They are to be collected of course; 
 Bank of Bethel v. Pahquioque Bank, that is what the receiver is ap- 
 14 Wal., 383. But the bank may pointed to do." 
 
 bring an action in its own name 48 Hayden v. Thompson. 17 C. C. 
 
 upon a promissory note and may A., 592, 71 Fed., 60, 36 U. S. App., 
 
 recover judgment, notwithstanding 361, reversing S. C, 67 Fed., 273. 
 
 the appointment of a receiver. Chi- 49 piatt v. Crawford, 8 Ab. Pr., 
 
 cago F. P. Co.. V. Park National N. S., 297. 
 Bank, 145 111., 481, 32 N. E., 534.
 
 CHAP. X.] CORPORATIONS. ' 447 
 
 by any executory contract, unless authorized so to do by the 
 provisions of the national banking act and by the order of a 
 court of competent jurisdiction obtained under the terms of that 
 act. So under an order authorizing him to sell the property of 
 the bank, he can not make a binding contract to exchange or 
 barter it for other property, and can not be held liable in an ac- 
 tion for damages resulting from his refusal or inability to com- 
 ply with such a contract, which he is without power to make. 
 And his powers being limited, one who deals with him in his 
 official capacity is chargeable with knowledge of his authority 
 and contracts at his own peril. ^0 And he has no power to con- 
 tract with an attorney to give him a contingent interest in the 
 proceeds to be recovered under a mortgage held by the bank as 
 a part of its assets.^i Nor can he maintain a bill in equity 
 against the bank's lessor to impeach a lease made by the lat- 
 ter to the bank under the provisions of which the bank had 
 undertaken and completed the construction of a bank build- 
 ing, upon the alleged ground that the lease was ultra vires 
 and that the construction of the building would result in an 
 excessive expenditure of the funds of the bank.^^ B^t t|-ie 
 receiver has authority to grant an extension of time for the 
 payment of demands due the bank, where it appears that he 
 may thereby gain additional security which, in his judgment, 
 strengthens the claim. ^^ 
 
 § 360a. May enforce individual liability of shareholders. 
 The receiver may maintain an action in his own name to en- 
 force the individual liability of shareholders, such power being 
 expressly conferred by the statute. And he is not required 
 
 50 Ellis V. Little, 27 Kan., 707. ices in his official and not in his per- 
 
 51 Barrett v. Henrietta National sonal capacity. Gibson v. Peters, 
 Bank, 78 Tex., 222, 14 S. W., 569. 150 U. S.. 342, 14 Sup. Ct. Rep., 
 For services rendered by a United 134, affirming S. C, 36 Fed., 487, 
 States district attorney to a re- and overruling S. C, 35 Fed., 721. 
 ceiver of a national bank appointed 52 Brown v. Schleier, 55 C. C. A., 
 by the Comptroller of the Currency, 475, 118 Fed., 981, affirming S. C, 
 he is not entitled to any compensa- 112 Fed.. 577. 
 
 tion beyond that expressly allowed 53 People's State Bank v. Francis, 
 
 by law, since he performs such serv- 8 N. Dak., 369, 79 N. W., 853.
 
 44S RECEIVERS. [chap. X. 
 
 to proceed by bill in equity against all the shareholders to col- 
 lect an assessment made by the comptroller of the currency, but 
 may proceed by separate actions at law against individual share- 
 holders.^^ And such an action may be maintained by the re- 
 ceiver in a state court.^^ He may also maintain a bill in equity 
 to set aside a transfer of his stock made by a shareholder for 
 the purpose of evading his individual liability.^^ And a letter 
 from the comptroller of the currency, directing the receiver 
 to institute legal proceedings to enforce the liability of share- 
 holders under the act of congress, is sufficient evidence that 
 the comptroller has determined it to be necessary to enforce 
 such liability.^'^ Being regarded, however, merely as the in- 
 strument of the comptroller, he may not institute proceedings 
 against the stockholders of the bank to enforce their personal 
 liability, without the consent and direction of the comptroller ; 
 since it is for the latter to decide when it is necessary to insti- 
 tute such proceedings, and whether the whole or a part, and 
 if only a part how much, shall be collected. ^^ And the deter- 
 mination of the comptroller as to the necessity for and the 
 amount of the assessment is conclusive in an action by the re- 
 ceiver against a shareholder to recover such assessment. ^^ And 
 where the full amount of the liability is sought to be enforced, 
 it must be by an action at law.'^o If, however, the individual 
 liability of shareholders is sought to be enforced by a general 
 
 54 U. S. Revised Statutes, § 5234; 402, 36 U. S. App., 462, affirmed in 
 
 3 U. S. Comp. Stat. 1901, p. 3507; 169 U. S., 1, 18 Sup. Ct. Rep., 274, 
 
 5 Fed. Stat. Ann., p. 170. See King 42 L. Ed., 639, which is modified 
 
 V. Armstrong, 50 Ohio St., 222, 34 on rehearing in 42 L. Ed., 1204. 
 
 N. E., 163. And in such an action 57 Bowden v. Johnson, 107 U. S., 
 
 it is no defense that the receiver 251, 2 Sup. Ct. Rep., 246. 
 
 may make an improper disposition 5S Kennedy v. Gibson, 8 Wal., 
 
 of the funds after collecting them. 498. 
 
 Schaberg v. McDonald, 60 Neb., 59 Kennedy v. Gibson, 8 WaU 
 
 493. 83 N. W.. 737. 498; Casey v. Galli, 94 U. S., 673; 
 
 53 Fish V. Olin, 76 Vt., 120, 56 Strong v. Southworth, 8 Ben., 331; 
 
 Atl., 533. Young v. Wempe, 46 Fed., 354. 
 
 56 Bowden v. Johnson, 107 U. S., 60 Kennedy v. Gibson, 8 Wal., 
 
 251, 2 Sup. Ct. Rep., 246; Stuart v. 498; Casey v. Galli, 94 U. S., 673; 
 
 Hayden, 18 C. C. A., 618, 72 Fed., Young v. Wempe, 46 Fed., 354.
 
 CHAP. X.] CORPORATIONS. 449 
 
 creditors' bill, pursuant to the act of congress of June 30, 
 1876,^^ amendatory of the national banking act, the pendency 
 of such suit constitutes a good plea in abatement to an action 
 brought by a receiver of the bank subsequently appointed by 
 the comptroller to enforce the same liability.^^ ^nd the ex- 
 penses of a receivership over an insolvent national bank insti- 
 tuted upon a judgment creditors' bill will not be charged against 
 the shareholders in a proceeding by the creditors in the same 
 cause to enforce the individual liability of the shareholders. 
 The receivership being unnecessary for the purpose of enforcing 
 such liability, which is being enforced by the creditors them- 
 selves, such expenses should be borne by the creditors in whose 
 behalf the receiver is appointed. ^^ And since the liability of 
 the officers and directors of a national bank for a violation of 
 the act^4 is an asset of the bank belonging to all creditors in 
 proportion to their claims, a single creditor can not maintain an 
 action to enforce such liability, but the proceeding must be 
 brought by the receiver for the benefit of all creditors.^^ 
 
 § 360b. Receiver's right of action against directors for 
 mismanaging affairs of bank. As to the right of the re- 
 ceiver of an insolvent national bank to enforce the liability of 
 the directors, it is held that the receiver may maintain an action 
 in equity in his own name against the directors to hold them 
 liable for losses which have occurred as the result of an unlaw- 
 ful and fraudulent increase in the capital stock of the bank made 
 by the directors. ^^ So the receiver may maintain an action in 
 equity to hold the directors liable for negligence in the manage- 
 ment of the affairs of the bank.^"^ And such a procedure has 
 
 61 Act of June 30, 1876, c. 156, Stat., 116; 3 U. S. Comp. Stat. 1901, 
 § 2, 19 Stat., 63 ; 3 U. S. Comp. Stat. p. 3515, 5 Fed. Stat. Ann., p. 180. 
 1901, p. 3509, 5 Fed. Stat. Ann., p. 65 Bailey v. Mosher, 11 C. C. A., 
 106. 304, 63 Fed., 488, 27 U. S. App., 
 
 62 Harvey v. Lord, 11 Biss., 144. 339. 
 
 63 Richmond v. Irons, 121 U. S., 66 Cockrill v. Abeles, 30 C. C. A., 
 27, 7 Sup. Ct. Rep., 788, 30 L. Ed., 223, 86 Fed., 505, 58 U. S. App., 
 864. 648. 
 
 WU. S. Revised Statutes, § 5239; 67 Emerson v. Gailher, 103 Md., 
 
 act of June 3, 1864, c. 106, § 53, 13 564, 64 Atl., 26. 
 Receivers — 29.
 
 450 RECEIVERS. [CIIAP. X. 
 
 beeii held proper in the case of a receivership of a state bank.^^ 
 But the opposite view has been taken in New York, where it is 
 held that the action is one at law and that something more is 
 required to warrant the intervention of a court of equity than 
 mere allegations showing that the acts complained of are nu- 
 merous and complicated and that they are difficult of ascertain- 
 ment without discovery and that a multiplicity of suits would 
 result.^^ 
 
 § 361. Allegations and proof of his appointment in suits 
 by the receiver. In an action brought by such a receiver to 
 recover an indebtedness due to the bank, the debtor can not in- 
 quire into the legality of the receiver's appointment, and it is 
 sufficient for the purposes of such suit that he is appointed and 
 is receiver in fact ; since the action of the comptroller in making 
 the appointment is conclusive, until set aside upon the applica- 
 tion of the bank itself. It is not, therefore, necessary in such 
 action that the receiver should specifically aver the existence 
 of all the conditions necessary to satisfy the comptroller that a 
 receiver should be appointed.*^^ And a general allegation of the 
 receiver's appointment by the comptroller, and of his taking 
 possession of the assets, is sufficient, without setting forth in 
 detail the circumstances leading to such action. "^^ As regards 
 the proof required upon the trial as to the receiver's appoint- 
 ment and authority to sue, it would seem to be sufficient to pro- 
 duce a certificate from the comptroller of the currency, ap- 
 proved and concurred in by the secretary of the treasury, re- 
 citing the existence of all the facts necessary to authorize the 
 appointment, and the fact of the appointment with the concur- 
 rence of the secretary of the treasury.'^^ 
 
 § 362. Power of comptroller not exclusive of jurisdic- 
 tion of equity ; when courts may appoint receiver. It is im- 
 portant to observe that the power exercised by the comptroller 
 
 68 Murphy v. Penniman, 105 Md., 70 Cadle v. Baker, 20 Wal., 650. 
 452, 66 Atl., 282. 71 pjatt v. Crawford, 8 Ab. Pr., 
 
 69 Dykman v. Keeney, 154 N. Y., N. S., 297. 
 
 483, 48 N. E., 894. 72 pjatt v. Beebe, 57 N. Y., 339.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 451 
 
 of the currency, in appointing receivers over national banks, 
 under section 50 of the act of congress of June 3, 1864, is not 
 exclusive of the jurisdiction of equity to appoint receivers over 
 such banks, in cases where the courts would otherwise be au- 
 thorized to interfere against insolvent corporations.'^^ And a 
 judgment creditor oi a national bank, who has exhausted his 
 remedy at law, and who is entitled to a receiver under the law 
 and practice of the state, may have a receiver of such a bank, 
 upon a bill in the federal court charging that its officers have 
 made fraudulent payments and preferences, and that there is 
 no property of the corporation subject to seizure or execution, 
 which plaintiff can obtain by any proceeding at law, the comp- 
 troller having declined to appoint a receiver for want of author- 
 ity.*^^ And in the absence of any action by the comptroller of 
 
 73 Irons V. Manufacturers Na- 
 tional Bank, 6 Biss., 301; Wright 
 V. Merchants National Bank, 1 
 Flippin, 568; Elwood v. First Na- 
 tional Bank, 41 Kan., 475, 21 Pac, 
 673 ; Cogswell v. Second National 
 Bank, 76 Conn., 252, 56 Atl., 574. 
 
 "^^ Irons V. Manufacturers Na- 
 tional Bank, 6 Biss., 301. This was 
 an ordinary creditors' bill, alleging 
 the recovery of judgment against 
 defendant, the return of execution 
 unsatisfied, and also charging the 
 officers of the defendant corporation 
 with having made fraudulent pref- 
 erences and payments. It appeared 
 from an exhibit annexed to the bill, 
 that certain creditors of the bank 
 had previously applied to the comp- 
 troller of the currency to appoint a 
 receiver, which he declined to do on 
 the ground that the relations be- 
 tween the bank and his department 
 having ceased, he had no authority 
 to interfere. Upon demurrer to the 
 bill, it was held that the court had 
 full jurisdiction in the premises, and 
 a receiver was accordingly appoint- 
 
 ed. Blodgett, J., held as follows: 
 "... It would seem from an ex- 
 amination of the banking law, that 
 the comptroller of the currency 
 has no authority to appoint a receiv- 
 er except in certain contingencies, 
 such as the failure to make good a 
 reserve, the failure to reduce cir- 
 culating notes on demand, the fail- 
 ure to make good the capital stock 
 whenever the same becomes im- 
 paired, and the failure to meet cer- 
 tain other requirements of the bank- 
 ing law. Now, neither of these con- 
 tingencies is charged in this bill to 
 have occurred, and it is only in the 
 case of such contingencies that the 
 comptroller acquires the right to 
 appoint a receiver. It is claimed 
 on the part of the defendant, and 
 has been very strenuously and in- 
 geniously argued, that there is no 
 power in any court to appoint a 
 receiver for this bank, because the 
 delegation of the power \o the 
 comptroller of the currency to ap- 
 point a receiver in certain contin- 
 gencies to wind up the affairs of
 
 452 
 
 RECEIVERS. 
 
 [chap. X. 
 
 the currency toward the appointment of a receiver, a court of 
 equity may grant the rehef upon an ordinary judgment credit- 
 ors' Liil, notwithstanding the remedy provided by the act of con- 
 
 the bank, excludes the authority 
 of any tribunal or person to ap- 
 point a receiver. I have carefully 
 examined the banking law, and the 
 decisions of the supreme court, and 
 those of various states made since 
 this banking law took effect, upon 
 the various questions which have 
 arisen, and do not find that this 
 precise question has ever been 
 made. But I can see nothing in 
 the law itself, nor in the decisions 
 of the courts upon the law, so far 
 as they have gone, to exclude the 
 idea that a corporation created as 
 this is under an act of congress for 
 certain specific purposes, does not 
 come within the general provision 
 of the law regulating the remedies 
 of creditors as against this corpora- 
 tion, as much as against any other 
 corporation, except where there are 
 specific provisions to meet those 
 cases. For instance, a holder of 
 the circulating notes of the bank, 
 who had presented them for pay- 
 ment, and payment had been re- 
 fused, would undoubtedly find this 
 remedy within the special provi- 
 sions of the banking law itself, be- 
 cause there is a specific provision 
 meeting that case, and his remedy 
 would undoubtedly be found in the 
 action of the comptroller of the 
 currency. But, in a large class of 
 cases, when the defendant corpora- 
 tion may not have infringed any of 
 the specific provisions of the bank- 
 ing law, which authorizes the comp- 
 troller to appoint a receiver, there 
 may be cases where they have 
 at some time rendered themselves 
 
 liable to be proceeded against as 
 any other debtor for the failure to 
 pay their debts. The allegations 
 in this bill are very full that this 
 bank was insolvent at the time it 
 closed its doors, and has been ever 
 since; that it failed to pay its debts; 
 that a large amount of its debts are 
 still unpaid ; and the question is, 
 what remedy have the creditors of 
 this bank if a court of equity can 
 not take on itself the administra- 
 tion of its affairs where the bank- 
 ing law does not provide that it 
 shall be done by the comptroller of 
 the currency? It is true that in 
 the case of Kennedy v. Gibson, 8 
 Wallace, the supreme court state 
 that the provision of the banking law 
 making the stockholders liable for 
 the debts of the corporation to the 
 amount of the stock held by them 
 respectively, could not be enforced 
 except under the action of the 
 comptroller through a receiver ap- 
 pointed by him. Whether that 
 opinion will be found to entirely 
 express the full meaning and inten- 
 tion of the supreme court whenever 
 they come to examine it in the 
 light of future cases and facts 
 which might be brought before it, 
 is doubted by myself, at least. I 
 do not feel sure that the supreme 
 court will adhere to quite as broad 
 a statement as is made in that case; 
 but still they may. But even that 
 does not oust the jurisdiction of a 
 court of equity to take hold of 
 whatever assets the bank may have, 
 aside from the personal liability of 
 the stockholders, and administer
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 453 
 
 75 
 
 gress.'*' So when a national bank has become insolvent and is 
 in process of voluntary liquidation, mismanagement of its af- 
 fairs by its officers and the giving of preferences to some of its 
 
 those as it would the affairs of any 
 insolvent corporation. The law is 
 well settled in this state, and the 
 courts of the United States, that the 
 proper remedy of a creditor against 
 a corporation, when the assets are 
 of such a nature that they can not 
 be levied upon and sold on execu- 
 tion, is by a proceeding in equity 
 to marshal and distribute the assets. 
 It is unnecessary to cite authorities 
 upon that question. The law, I 
 think, is as well settled as any 
 branch of the law can be consid- 
 ered as settled in this country." 
 
 75 Wright v. Merchants National 
 Bank, 1 Flippin, 568. In King v. 
 Pomeroy, 58 C. C. A., 209, 121 Fed., 
 287, it appeared that a national bank 
 doing business in the state of Kan- 
 sas had gone into voluntary liquida- 
 tion under § 5220 et seq. of the Re- 
 vised Statutes. ( Act of June 3, 
 1864, c. 106, 13 Stat., 112; 3 U. S. 
 Comp. Stat. 1901, p. 3503; 5 Fed. 
 Stat. Ann., p. 166). The bank was 
 insolvent and the comptroller of the 
 currency had been requested to ap- 
 point a receiver but had declined to 
 do so upon the ground that he had 
 no jurisdiction over the affairs of 
 a bank in voluntary liquidation. 
 Thereupon a creditor of the bank, 
 a citizen of the state of Missouri, 
 filed a bill against it in the United 
 States circuit court for the District 
 of Kansas, praying for the appoint- 
 ment of a receiver to collect its as- 
 sets and pay its debts. The bank 
 appeared and consented to the ap- 
 pointment of a receiver and one was 
 
 thereupon appointed and entered 
 upon the discharge of his duties. 
 After collecting and distributing 
 certain assets, he sought directions 
 regarding the enforcement of the 
 liability of the shareholders. There- 
 upon another creditor who had 
 proven his claim against the bank 
 intervened in the suit, set forth 
 his claim, the indebtedness of the 
 bank and the names and addresses 
 of the shareholders, and prayed 
 that the court would ascertain the 
 necessity of the enforcement of the 
 liability of the shareholders, and 
 that it would make an assessment 
 upon them and appoint a receiver 
 to enforce such assessment. There- 
 upon the court made an interlocu- 
 tory order finding the facts set 
 forth in the intervening petition to 
 be true; that the amount of the as- 
 sessment necessary to pay the debts 
 of the bank was 38.84 per cent, of 
 the par value of the shares, and that 
 an assessment of this amount should 
 be made and should be paid by the 
 shareholders to the receiver al- 
 ready appointed within sixty days 
 from the date of the order. Upon 
 this state of facts the receiver thus 
 appointed had brought this action 
 against an individual shareholder 
 for the purpose of collecting the 
 assessment made against him. The 
 court held that the receiver was 
 properly appointed by the circuit 
 court under its general equity pow- 
 ers and that such receiver had power 
 to maintain this action against the 
 individual shareholder to enforce 
 his individual liability. The court.
 
 454 
 
 RECEIVERS. 
 
 [CIIAP. X. 
 
 creditors over others will justify the appointment of a receiver 
 by a state court, at the suit of a shareholder."^ But a receiver 
 will be refused when the bank is in process of voluntary liqui- 
 dation and when its affairs are being properly administered by 
 its directors and officers, no fraud or misconduct being 
 shown."'' 
 
 Sanborn, J., say: "Conceding now 
 that in all these cases in which the 
 power to appoint a receiver and to 
 enforce the liability of the share- 
 holders was vested in the comp- 
 troller by the act of 1864, that au- 
 thority was thereby withdrawn 
 from the courts under the familiar 
 rule that, where the same act 
 creates the right and prescribes the 
 remedy for its enforcement, that 
 remedy is exclusive, still the fact 
 remains that in all the cases in 
 which no such power was vested 
 in the comptroller the jurisdiction 
 and authority of the courts re- 
 mained unimpaired and plenary. 
 Thus, full jurisdiction still remained 
 in the courts of equity to appoint a 
 receiver to liquidate the debts of an 
 insolvent bank and to enforce the 
 liability of its shareholders where 
 the transfers of notes or other evi- 
 dences of debt, assignments of 
 mortgages or other securities, de- 
 posits of money, bullion, or other 
 valuable things, and payments of 
 money were made by the national 
 banks with a view to give pref- 
 erences in contemplation of insol- 
 vency in violation of section 5242, 
 Rev. St. (Act of June 3, 1864, c. 
 106, § 52, 13 Stat, 115; 3 U. S. 
 Comp. Stat. 1901, p. 3517; 5 Fed. 
 Stat. Ann., p. 188), as well as where 
 a bank had gone into voluntary 
 liquidation under sections 5220 and 
 5221, and its funds were being 
 
 fraudulently diverted from the ces- 
 tiiis que tnistent. . . . The con- 
 clusion is irresistible that, if it did 
 go into liquidation, and if it did 
 not fall into any of the other classes 
 of cases in which the comptroller 
 was authorized to appoint a re- 
 ceiver, he was without such author- 
 ity, and the jurisdiction of the 
 courts over national banks in volun- 
 tary liquidation remained as com- 
 plete as it was over the ordinary 
 insolvent corporation. The argu- 
 ment that, although a court of equi- 
 ty might have had the authority to 
 appoint a receiver to liquidate the 
 debts of this bank, yet it had no 
 power to enforce the liability of the 
 shareholders, is not persuasive. 
 . . . The conclusion is that, because 
 there was no other adequate remedy 
 to enforce the liability of share- 
 holders of an insolvent national 
 bank in voluntary liquidation under 
 the act of 1864, and because that 
 liability was a trust fund, or the 
 pledge of a trust fund for the bene- 
 fit of the creditors of the bank, a 
 court of equity had plenary power 
 to appoint a receiver, and to author- 
 ize him to enforce that liability by 
 actions at law." 
 
 76 Elwood V. First National Bank, 
 41 Kan., 475, 21 Pac, 673. 
 
 77 Watkins v. National Bank of 
 Lawrence, 51 Kan., 254, 32 Fac., 
 914.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 455 
 
 § 363. Jurisdiction of state and federal courts in actions 
 by or against the receiver. A receiver of a national bank 
 appointed by the comptroller of the currency is regarded as an 
 officer of the United States, in the sense that he is entitled to 
 maintain an action to recover an indebtedness due to the bank, 
 or to recover assessments made by the comptroller of the cur- 
 rency upon shareholders in the federal court of the district in 
 which the bank vi^as located,'^^ and such actions may be main- 
 tained, either in the district court of the place where the bank 
 was located, or in a federal court in another state, and this re- 
 gardless of the citizenship of the receiver or of the amount in 
 controversy. "^^ So an action brought against the receiver of a 
 national bank appointed by the comptroller under the act of 
 congress is one arising under the laws of the United States 
 and may therefore properly be instituted in the federal courts. ^0 
 
 78 Frelinghuysen v. Baldwin, 12 
 Fed., 395; Price v. Abbott, 17 Fed., 
 506; Piatt V. Beach, 2 Ben., 303; 
 Murrey v. Chambers, 151 Fed., 142. 
 Section 1001 of the Revised Stat- 
 utes provides that : "Whenever a 
 writ of error, appeal, or other pro- 
 cess in law, admiralty, or equity, 
 issues from or is brought up to the 
 Supreme Court, or a circuit court, 
 either by the United States or by di- 
 rection of any Department of the 
 Government, no bond, obligation, or 
 security shall be required from the 
 United States, or from any party 
 acting under the direction aforesaid, 
 either to prosecute said suit, or to 
 answer in damages or costs. In case 
 of an adverse decision, such costs 
 as by law are taxable against the 
 United States, or against the party 
 acting by direction as aforesaid, 
 shall be paid oat of the contingent 
 fund of the Department under 
 whose directions the proceedings 
 were iristituted." 1 U. S. Comp. Stat. 
 
 1901, p. 713; 4 Fed. Stat. Ann., p. 
 615. Under this statute it is held 
 that where an action is brought by 
 a non-resident receiver of a nation- 
 al bank appointed by the comptroller 
 of the currency, he should give the 
 proper undertaking for costs, unless 
 he files, within a time fixed by the 
 court, a certificate of the comptrol- 
 ler to the effect that process in the 
 action is taken out by express direc- 
 tion of the treasury department. 
 Piatt V. Adriance, 90 Fed., 772; 
 Schofield V. Palmer, 134 Fed., 753. 
 But see Pepper v. Fidelity & C. Co., 
 125 Fed., 822. 
 
 79 Armstrong v. Troutman, 36 
 Fed., 275; Armstrong v. Ettlesohn, 
 36 Fed., 209; Schofield v. Palmer, 
 134 Fed., 753; Murray v. Chambers, 
 151 Fed., 142. 
 
 80 McDonald v. State, 41 C. C. A., 
 278, 101 Fed., 171, and cases cited. 
 But in Hallam v. Tillinghast, 75 
 Fed., 849, it was held that when an 
 action was brought in a state court
 
 456 RECEIVERS. [chap. X. 
 
 And where one of the parties defendant to an action is the re- 
 ceiver of a national bank appointed by the comptroller, such re- 
 ceiver being an officer of the United States, the action is one 
 arising under the laws of the United States as distinguished 
 from one dependent upon diversity of citizenship, and an ap- 
 peal will accordingly lie from the court of appeals to the su- 
 preme court.^^ So the jurisdiction which the district courts of 
 the United States formerly exercised under the act of congress 
 over all suits by or against national banks,^^ -^^s held suffi- 
 cient to authorize such courts to appoint a receiver over a rail- 
 way company at the suit of a national bank.^^ The receiver 
 may also maintain an action in a circuit court of the United 
 States, against a defendant residing within the district, to en- 
 join such defendant from prosecuting a suit in a foreign juris- 
 diction to deprive the receiver of property of the bank, since 
 in such case he sues as an officer of the United States, and as 
 such may properly bring his action in the federal court.^* But 
 while such receivers are thus regarded as officers of the United 
 States to the extent of permitting them to sue in the federal 
 court of the district where the bank is located, the jurisdiction 
 of the federal courts in such cases is not exclusive of, but con- 
 current with that of the state courts. Such a receiver may, 
 therefore, maintain an action in his official capacity in a state 
 court.^^ 
 
 against the receiver of a national 84 Hendee v. Connecticut & P. R. 
 
 bank appointed by the comptroller R. Co., 23 Blatchf., 453. 
 
 of the currency upon a claim for 85 Thompson v. Schaetzel, 2 S. 
 
 less than two thousand dollars, the Dak., 395, 50 N. W., 631. But see, 
 
 receiver could not remove the cause contra, Cadle v. Tracy, 11 Blatchf., 
 
 to the federal court. 101, where it was held that the 
 
 81 Auten f. United States Nation- jurisdiction of the federal courts 
 
 al Bank, 174 U. S., 125, 19 Sup. Ct. over actions against national banks 
 
 Rep., 628, 43 L. Ed., 920, affirming under the then existing legislation 
 
 Cockrill V. United States National of congress was exclusive of that of 
 
 Bank, 27 C. C. A., 678, 82 Fed., the state courts. And a receiver of 
 
 1000, 49 U. S. App., 774. a national bank was, therefore, 
 
 ^- U. S. Revised Statutes, § 563. granted an injunction to restrain 
 
 83 Fifth National Bank v. P. & C. the enforcement of a judgment in 
 
 S. R. Co., 1 Fed., 190. attachment recovered in a state
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 457 
 
 § 364. Property of bank can not be sold by creditor a& 
 against receiver. Although, as has been already shown, an 
 action may be instituted against a national bank in its corporate 
 capacity, notwithstanding the appointment of a receiver by the 
 comptroller of the currency,^^ yet the property of the bank, 
 which is attached at the suit of an individual creditor, can not 
 be subjected to sale in satisfaction of his demand as against the 
 receiver. And it is the receiver's duty, in such a case, to apply 
 to the court to dissolve the attachments'^ So the object of the 
 
 court against the assets of the bank, 
 the action in the state court having 
 been brought after the appointment 
 of the receiver. The jurisdiction 
 of the courts of the United States 
 under existing legislation over ac- 
 tions by or against national banks, 
 is as follows : By section 4 of the 
 act of congress of July 12, 1882, it 
 is enacted. . . . "that the juris- 
 diction for suits hereafter brought 
 by or against any association es- 
 tablished under any law providing 
 for national-banking associations, 
 except suits between them and the 
 United States, or its officers and 
 agents, shall be the same as, and 
 not other than, the jurisdiction for 
 suits by or against banks not organ- 
 ized under any law of the United 
 States which do or might do bank- 
 ing business where such national- 
 banking association may be doing 
 business when such suits may be be- 
 gun: And all laws and parts of 
 laws of the United States incon- 
 sistent with this proviso be, and 
 the same are hereby, repealed." Act 
 of July 12, 1882, c. 290, § 4, 22 Stat., 
 163; 3 U. S. Comp. Stat. 1901, p. 
 3458; 5 Fed. Stat. Ann., p. 194. And 
 section 4 of the act of congress de- 
 fining the jurisdiction of the circuit 
 courts of the United States, ap- 
 
 proved March 3, 1887, as revised 
 and corrected by the act of Au- 
 gust 13, 1888, provides as follows : 
 "Sec. 4. That all national banking 
 associations established under the 
 laws of the United States shall, for 
 the purposes of all actions by or 
 against them, real, personal, or 
 mixed, and all suits in equity, be 
 deemed citizens of the States in 
 which they are respectively located ; 
 and in such cases the circuit and 
 district courts shall not have juris- 
 diction other than such as they 
 would have in cases between in- 
 dividual citizens of the same State. 
 The provisions of this section shall 
 not be held to affect the jurisdic- 
 tion of the courts of the United 
 States in cases commenced by the 
 United States or by direction of any 
 officer thereof, or cases for winding 
 up the affairs of any such bank." 
 Act of March 3, 1887, c. 373, 24 
 Stat., 554, as amended by act of 
 August 13, 1888, c. 866, 25 Stat., 436; 
 1 U. S. Comp. Stat. 1901, p. 514; 5 
 Fed. Stat. Ann., p. 193. 
 
 86 Security Bank v. National 
 Bank of the Commonwealth, 2 Hun, 
 287. 
 
 87 National Bank v. Colby, 21 
 Wal., 609.
 
 458 RECEIVERS. [CIIAP. X. 
 
 national banking act being to secure to the United States a 
 preference or priority of lien upon the assets of the bank, for 
 any deficiency in redeeming- its notes, and then to secure the as- 
 sets for ratable distribution among its general creditors, this 
 object will not be allowed to be defeated by attachment suits 
 against the bank after its insolvency.88 And if the receiver 
 promptly brings suit to recover funds of the bank which have 
 been attached after its insolvency, joining all parties in interest 
 as defendants, he is entitled to recover such assets, notwith- 
 standing a judgment in the state court in favor of the attach- 
 ing creditors, under which the money is actually received by 
 them before judgment in the receiver's suit.^^ Sq when the 
 property of a bank is levied upon by state authorities in satis- 
 faction of a tax levied after the bank became insolvent, it is 
 proper to enjoin a sale of such property upon the application 
 of the receiver.9^ 
 
 § 364a. Receiver subject to same set-offs as bank. A 
 receiver of a national bank, appointed by the comptroller of the 
 currency in accordance with the act of congress, acquires its 
 assets and choses in action subject to all defenses which might 
 have been interposed in an action brought by the corporation 
 itself. And when there are mutual obligations between the 
 bank and a debtor which would have justified a set-of¥ in behalf 
 of the debtor as against the demand of the bank in the event of 
 its insolvency, or which the debtor might have enforced against 
 the bank prior to the receivership, such set-off will be sustained 
 in behalf of the debtor as against the receiver.^l Thus, when a 
 bank becomes insolvent, holding a note against a customer who 
 has also a deposit in the bank to his credit, such deposit may be 
 
 88 National Bank v. Colby, 21 91 Scott v. Armstrong, 146 U. S., 
 Wal., 609; Harvey v. Allen, 16 499, 13 Sup. Ct. Rep., 148, revers- 
 Blatchf., 29. ing S. C, 36 Fed., 63 ; Armstrong v. 
 
 89 Harvey v. Allen, 16 Blatchf., Warner, 49 Ohio Sl, 376, 31 N. E., 
 29. 877. 
 
 90 Woodward v. Ellsworth, 4 
 Colo., 580.
 
 CHAP. X.] 
 
 CORPORATIONS. 
 
 459 
 
 set off in an action brought by the receiver upon the note, 
 even though it does not mature until after the receiver's ap- 
 pointment.^^ 
 
 92 Scott V. Armstrong, 146 U. S., 
 499, 13 Sup. Ct. Rep., 148, reversing 
 S. C, Zd Fed., 63. And see 
 this case for a discussion as to the 
 jurisdiction of the circuit courts of 
 the United States in equity in such 
 cases. See as to the right of set-off 
 
 or counter-claim by a defendant in 
 an action brought by a receiver of 
 a national bank to recover an as- 
 sessment levied by the comptroller 
 of the currency upon shareholders, 
 Welles V. Stout, 38 Fed., 807.
 
 CHAPTER XI. 
 
 OF RECEIVERS OVER RAILWAYS. 
 
 I. Principles Governing the Jurisdiction § 365 
 
 II. Receivers in Aid of Mortgagees and Bondholders 376 
 
 III. Functions and Duties of the Receiver 390 
 
 IV. Preferred Debts 394o 
 
 V. Actions Against the Receiver 395 
 
 VI. Receivers' Certificates 398c 
 
 I. Principles Governing the Jurisdiction. 
 
 § 365. Courts of equity averse to placing railways in the hands of re- 
 ceivers; relief refused when ordinary remedies are available. 
 
 366. Receiver appointed on bill by shareholder to set aside un- 
 
 authorized lease. 
 
 367. Granted for protection of vendor's lien upon insolvency of the 
 
 company. 
 
 368. Granted for protection of common easement; right of passage 
 
 through a tunnel; injunction refused. 
 
 369. When receiver refused on bill to recover back money paid for 
 
 stock illegally issued. 
 
 370. When United States court in bankruptcy will refuse to inter- 
 
 fere with receiver previously appointed in state court; juris- 
 diction as between state and federal courts. 
 
 370a. Two receivers not desirable; contract made by one binding on 
 other. 
 
 3706. Receivership does not dissolve corporation; injunction; taxes; 
 condemnation suit. 
 
 371. When appointed before default; failure of company to operate 
 
 road; receiver not relieved until exigency ceases; receiver 
 to prevent forfeiture of franchise. 
 
 372. Vendor's right to distrain notwithstanding rent charge; can 
 
 not distrain upon trust property or locomotives. 
 
 373. Receiver may enjoin state officers from disposing of land 
 
 grant; stockholders' meeting. 
 
 374. United States court will not entertain bill for account against 
 
 receiver of railway appointed by state court; mandamus re- 
 fused. 
 
 460
 
 CHAP. XI.] RAILWAYS. 461 
 
 § 375. On vacating appointment receiver should restore management 
 and control of road to owners; application of surplus funds. 
 375a. Ancillary receiverships. 
 
 § 365. Courts of equity averse to placing railways in 
 the hands of receivers ; relief refused when ordinary reme- 
 dies are available. While the jurisdiction of equity over 
 raihvay corporations, as enlarged by the statutes and practice 
 of the various states, is based upon and exercised in accord- 
 ance with substantially the same principles which govern its 
 jurisdiction over other corporations, the courts are more re- 
 luctant to lend their extraordinary aid by the appointment of 
 receivers over railways than over other corporate bodies. The 
 importance of these corporations, as being quasi public bodies, 
 and the peculiar nature of their property and franchises, suffi- 
 ciently explain the reluctance with which equity interferes 
 with their management, and in general the courts proceed with 
 extreme caution in placing them in the hands of receivers.^ 
 And whenever the ordinary remedies provided by law are open 
 
 1 Milwaukee & Minnesota R. Co. being embraced in the errors as- 
 V. Soutter, 2 Wall., 510; S. C, signed. As to the constitutionality 
 Woolworth's C. C, 49; Stevens v. of acts of the legislature of Texas 
 Davison, ' 18 Grat., 819 ; Ruggles v. authorizing the appointment of re- 
 Southern Minnesota Railroad, U. S. ceivers over corporations upon their 
 Circuit Court, District of Minne- dissolution or insolvency, and as to 
 sota, 5 Chicago Legal News, 110; the circumstances which will jus- 
 Overton v. M. & L. R. Co., 10 Fed., tify a receivership over a railway 
 866 ; S. C, 3 McCrary, 436 ; Meyer in such cases, see East Line & R. R. 
 V. Johnston, 53 Ala., 237; Kelly v. R. Co. v. Texas, 75 Tex., 434, 12 
 Trustees, 58 Ala., 489; State v. J., S. W., 690; Texas Trunk R. Co. v. 
 P. & M. R. Co., 15 Fla., 201 ; Wabash State, 83 Tex., 1, 18 S. W., 199. As 
 R. Co. V. Dykeman, 133 Ind., 56, 32 to the jurisdiction of the courts of 
 N. E., 823. And see American Loan New York, under the statutes and 
 & Trust Co. V. Toledo, C. & S. R. code of procedure of that state, to 
 Co., 29 Fed., 416; Merriam v. St. appoint temporary and final receiv- 
 Louis, C. G. & F. S. Ry. Co., 136 ers over railway companies, as to 
 Mo., 145, 36 S. W., 630. In Mcll- the powers and functions of such 
 henny v. Binz, 80 Tex., 1, the pro- receivers, and as to the conclusive 
 priety of appointing a receiver at effect of such proceedings as re- 
 the suit of a railway company al- gards the title to property of a rail- 
 Icging its insolvency is criticised way company sold in such proceed- 
 but not decided, the question not ings, when questioned by creditors
 
 4oJ RECEIVERS. [CHAP. XI. 
 
 to the creditors of such corporations for the enforcement of 
 their demands, the appointment and continuance of a receiver 
 in office for a long period of years is the exercise of a judicial 
 power which can only be justified by the pressure of an ab- 
 solute necessity. Thus, when a judgment creditor of a rail- 
 way company, which is in the receipt of large earnings and op- 
 erating an extended line of railway, has the ordinary means 
 open to him of enforcing his judgment, the court will not coun- 
 tenance the taking of the railroad property from its rightful 
 possession, and placing it in the hands of a receiver ; especially 
 when the judgment is for a small amount, as compared with 
 the receipts of the company, and when its lien is seriously con- 
 troverted. ^ Nor does the alleged violation by stockholders of 
 a railway company of an injunction restraining the consolida- 
 tion of two companies warrant the appointment of a receiver, 
 when it is not shown that the company or any of its directors 
 intend to surrender or transfer its property in violation of such 
 injunction. Nor should a receiver be appointed over a railway 
 without notice to the company, when neither fraud nor insol- 
 vency is charged against the defendants, end when it does not 
 appear that the property of the company is in danger of re- 
 moval beyond the jurisdiction of the court, the controversy be- 
 ing solely as to the effect of an alleged illegal consolidation 
 with another railway company.^ And the relief will not be 
 
 of the company, not parties thereto, ing the appointment of receivers 
 
 who seek to recover such property, and the sale of its property for the 
 
 see Herring v. New York, L. E. & benefit of all concerned. In this 
 
 W. R. Co., 105 N. Y., 340, 12 N. E., case, the railway system in question 
 
 763. was made up by the consolidation 
 
 2 Milwaukee & Minnesota Rail- of numerous lines of road, which 
 road Co. v. Soutter, 2 Wall., 510. had been separately mortgaged 
 
 3 Railway Company v. Jewett, 37 prior to such consolidation, the bill 
 Ohio St., 649. But receivers have averring that if the system was 
 been appointed over a railway upon broken up as an entirety, and if 
 the application of the company it- separate receivers were appointed 
 self, the bill averring its insolvency over the several lines thus sepa- 
 and inability to meet its mortgage rately mortgaged, irreparable in- 
 and floating indebtedness, and pray- jury would result to all persons in
 
 CHAP. XI.] RAILWAYS. 463 
 
 granted upon an ex parte application unless jn cases of the 
 gravest emergency, and the mere apprehensions and fears of 
 the plaintiff, which are not shown to be supported by actual 
 facts as to the danger apprehended, will not justify the court 
 in acting without notice to the defendant.^ So it is not the 
 province of a court of equity to conduct the business of a rail- 
 way for the mere convenience of the parties, or except where 
 the exercise of its extraordinary jurisdiction is indispensable 
 for the protection of some clear right of the suitor. And when 
 a receiver has been appointed by collusion between the parties, 
 in order to protect the road from adverse proceedings by credi- 
 tors, and to enable the parties, through the receiver, to apply 
 the entire income to the improvement of the property and not 
 to the payment of its debts, the court, upon being apprised of 
 the facts, may of its own motion discharge the receiver.^ 
 
 § 366. Receiver appointed on bill by shareholder to set 
 aside unauthorized lease. While, as is thus seen, courts of 
 equity are extremely averse to the appointment of receivers to 
 take charge of and manage railway corporations, yet the relief 
 will be granted when the aid of equity is indispensable to se- 
 cure the rights of the legitimate shareholders, and to prevent 
 a failure of justice. For example, when the board of directors 
 of a railway company, without authority of law and without 
 the sanction of a lawful meeting of the shareholders, by whom 
 alone such action could be authorized, have made a lease for 
 years of the road and property of the corporation, the lease 
 being absolutely null and void, upon a bill filed by a share- 
 holder, in behalf of himself and such other shareholders as 
 may elect to join in the proceedings, to set aside the lease, the 
 court may appoint a receiver to take charge of and manage the 
 road, until it can be ascertained by proper inquiry who are the 
 
 interest. Wabash, St. L. & P. R. Southeastern R. Co. v. Cason, 133 
 
 Co. V. Central Trust Co., 22 Fed., Ind., 49, 32 N. E., 827. 
 
 272. 5 Sage v. M. & L. R. Co., 5 Mc- 
 
 4 Wabash R. Co. v. Dykeman, 133 Crary, 643. 
 Ind., 56, 32 N. K, 823; Chicago &
 
 464 RECEIVERS. [chap. XI. 
 
 legitimate shareholders, and to whom the custody and man- 
 agement of the road shall be committed.'^ 
 
 § 367. Granted for protection of vendor's lien upon in- 
 solvency of the company. In England, a receiver may be 
 allowed for the protection of a vendor's lien for real estate 
 sold to a railway, upon failure to pay the purchase-money and 
 insolvency of the company. Thus, when a land-owner con- 
 tracts with a railway company to convey to it certain lands for 
 the construction of its road, and upon its failure to complete the 
 purchase, he obtains a decree for the specific performance of 
 the contract, and declaring his vendor's lien upon the premises 
 for the balance of unpaid purchase-money, upon the insolvency 
 of the company, the vendor may have a receiver, although not 
 entitled to an injunction to restrain the company from operat- 
 ing its cars over and using the land. In such case, the railway 
 corporation is treated precisely as any other insolvent purchas- 
 er, and the receiver is appointed for the preservation of the 
 property, and to render it profitable for all parties in interest."^ 
 But in such case, a receiver will not be appointed before a final 
 decree for the specific performance of the contract.^ 
 
 6 Stevens v. Davison, 18 Grat., a receiver over a railway, Lord 
 819. Justice Cairns says, p. 212: "But 
 
 7 Munns v. Isle of Wight R. Co., in addition to the general principle 
 L. R., 5 Ch., 414. that the Court of Chancery will not 
 
 8 Latimer v. A. & B. R. Co., 9 Ch. in any case assume the permanent 
 D., 385. It is worthy of note that management of a business or un- 
 the English Court of Chancery was dertaking, there is that peculiarity 
 extremely averse to appointing a in the undertaking of a railway 
 receiver over a railway with power which would, in my opinion, make 
 to manage and operate the road, it improper for the Court of Chan- 
 upon the ground that it would not eery to assume the management of 
 assume the permanent manage- it at all. When parliament, acting 
 ment of a business or undertaking, for the public interest, authorizes 
 especially when, as in the case of the construction and maintenance 
 a railway, such management had of a railway, both as a highway for 
 been delegated by parliament to the public, and as a road on which 
 the company itself. Thus, in Gard- the company may themselves be- 
 ner v. London, C. & D. R. Co., L. come carriers of passengers and 
 R., 2 Ch., 201, which was an ap- goods, it confers powers and im- 
 plication by debenture holders for poses duties and responsibilities of
 
 CHAP, XI.] 
 
 RAILWAYS. 
 
 465 
 
 § 368. Granted for protection of common easement; 
 right of passage through a tunnel ; injunction refused. The 
 
 jurisdiction of equity over railway corporations, in the manage- 
 ment of a common easement or right to which different com- 
 panies are entitled, is regarded as well settled to the extent, if 
 necessary, of appointing a receiver to hold and manage the 
 
 the largest and most important 
 kind, and it confers and imposes 
 them upon the company which par- 
 liament has before it, and upon no 
 other body of persons. These pow- 
 ers must be executed and these du- 
 ties discharged by the company. 
 They can not be delegated or trans- 
 ferred. The company will, of course, 
 act by its servants, for a corpora- 
 tion can not act otherwise, but the 
 responsibility will be that of the 
 company. The company can not, 
 by agreement, hand over the man- 
 agement of the road to the debent- 
 ure holders. It is impossible to sup- 
 pose that the Court of Chancery 
 can make itself, or its officer, with- 
 out any parliamentary authority, 
 the hand to execute these powers, 
 and all the more impossible when 
 it is obvious that there can be no 
 real and correlative responsibility 
 for the consequences of any imper- 
 fect management. It is said that 
 the railway company do not object 
 to the order for the manager. This 
 may well be so. But in the view I 
 take of the case, the order would be 
 improper, even if made on the ex- 
 press agreement and request of the 
 company." 
 
 But by the Railway Companies 
 Act of 1867, 30th and 31st Victoria, 
 chapter 127, section 4, it was pro- 
 vided as follows : "The engines, 
 tenders, carriages, trucks, machin- 
 ery, tools, fittings, materials and 
 
 Receivers — 30. 
 
 effects, constituting the rolling stock 
 and plant used or provided by a 
 company for the purposes of the 
 traffic on their railway, or of their 
 stations or workshops, shall not, 
 after their railway or any part 
 thereof is open for public traffic, be 
 liable to be taken in execution at 
 law or in equity at any time after 
 the passing of this act, and before 
 the 1st day of September, 1868, 
 where the judgment on which ex- 
 ecution issues is recovered in an 
 action on a contract entered into 
 after the passing of this act, or in 
 an action not on a contract com- 
 menced after the passing of this 
 act ; but the person who has recov- 
 ered any such judgment may ob- 
 tain the appointment of a receiver, 
 and, if necessary, a manager, of the 
 undertaking of the company, on 
 application by petition in a sum- 
 mary way to the Court of Chan- 
 cery in England or in Ireland, ac- 
 cording to the situation of the rail- 
 way of the company; and all 
 money received by such receiver or 
 manager shall, after due provision 
 for the working expenses of the 
 railway and other proper outgoings 
 in respect to the undertaking, be 
 applied and distributed under the 
 direction of the court in payment of 
 the debts of the company or other- 
 wise, according to the rights and 
 priorities of the persons for the time 
 being interested therein ; and on
 
 466 RECEIVERS. [chap. XI. 
 
 easement should occasion require. And where several rail- 
 way companies are tenants in common of an easement, or right 
 of passage through a tunnel, a court of equity will entertain 
 a bill for an injunction and a receiver, upon a question of con- 
 flict between two of the companies as to their relative rights in 
 the tunnel ; but the court will not appoint a receiver of the tun- 
 nel, if, from all the circumstances of the case, it \s satisfied 
 that the rights of the parties may be preserved and protected 
 without such appointment.^ 
 
 § 369. When receiver refused on bill to recover back 
 money paid for stock illegally issued. Upon a bill filed 
 against a railway company by the holder of certain shares of 
 stock, which are alleged to have been issued in violation of the 
 charter and contrary to law, the bill praying an injunction and 
 a receiver, and that the company may be decreed to pay to the 
 receiver a sufficient sum to enable him to repay to plaintiff the 
 amount advanced for the stock, no sufficient cause is present- 
 ed to justify the appointment of a receiver, when the moneys re- 
 ceived for the stock have passed into the general funds of the 
 corporation, and can no longer be traced or identified.^^ 
 
 § 370. When United States court in bankruptcy will re- 
 fuse to interfere with receiver previously appointed in state 
 court; jurisdiction as between state and federal courts. 
 It is held, when receivers over a railroad have been appointed 
 under proceedings in the state courts, and have taken posses- 
 tion of the property of the road and entered upon their duties, 
 
 payment of the amount due to every officers of the company as such 
 
 such judgment creditor as aforesaid, manager and receiver, see In re 
 
 the court may, if it think fit, dis- Manchester & Milford R. Co., 14 
 
 charge such receiver or such receiv- Ch. D., 645. See, also, In re Birm- 
 
 er and manager." And this section ingham & L. J. R. Co., 18 Ch. D., 
 
 was made perpetual in 1875, 38th 155; In re Southern Railway Co., 
 
 and 39th Victoria, chapter 31. For 5 L. R., Jr., 165. 
 
 a full discussion of the effect of ^ Delaware, Lackawanna & West- 
 
 this act, and of the circumstances ern R. Co. v. Erie R. Co., 6 C. E. 
 
 justifying the appointment of a Green, 298. 
 
 manager as well as receiver, and of 10 Whelpley v. Erie Railway Co., 
 
 the eligibility of the directors or 6 Blatchf., 271.
 
 CHAP. XI.] RAILWAYS. 467 
 
 before the instituting of proceedings in bankruptcy in the 
 United States courts against the company, that the bankrupt 
 court will not interfere with the possession and control of the 
 receivers under the state courts, unless for some cause for which 
 the title of the receivers might be impeached under the bank- 
 rupt act. And until their title is thus impeached, the manage- 
 ment and control of the road and of the property in the hands 
 of the receivers will be left to the state courts. ^^ So when a 
 railway company is in the hands of a receiver appointed by a 
 federal court, no rights can be acquired under condemnation 
 proceedings instituted in a state court by a telegraph company 
 against the railway company to obtain a right of way over the 
 property of the latter, if such proceedings are brought without 
 leave of the court appointing the receiver, ^2 
 
 § 370(3. Two receivers not desirable; contract made by 
 one binding on other. The practice has been adopted in 
 some instances of appointing two receivers over a railway, but 
 this course is ordinarily regarded as unnecessary and embar- 
 rassing, a single receiver being preferred, both upon considera- 
 tions of economy and of harmonious action. And when two 
 receivers have been appointed in the first instance, by consent 
 of the parties, as the representatives of different interests, and 
 they prove unable to harmonize in the management of the re- 
 ceivership, it is proper to remove them and to appoint a single 
 receiver; and such receiver should be wholly uninterested in 
 the affairs of the company, and a resident within the jurisdic- 
 tion of the court appointing him and in which the affairs of 
 the road are to be administered. ^^ And where two receivers 
 have been appointed over a railway company and work has 
 been done under a contract made with one of them and has re- 
 ceived the approval and sanction of the court, it is immaterial 
 
 11 Alden v. B., H. & E. R. Co., 5 13 Meier v. Kansas Pacific R. Co., 
 Bank. Reg., 230. 5 Dill., 476. 
 
 12 Western Union Telegraph Co. 
 V. Atlantic & Pacific Telegraph Co., 
 7 Biss., 367.
 
 468 RECEIVERS. [chap. XI. 
 
 that the other receiver did not join in the making of the con- 
 tract. Indeed, where there are two or more receivers of a 
 railway system residing at considerable distance from each 
 other, it may frequently happen that a contract must be made 
 by one receiver without the assent of the other which will 
 be binding upon the estate.^'* 
 
 § 370/\ Receivership does not dissolve corporation; in- 
 junction; taxes; condemnation suit. It is to be observed 
 that the appointment of a receiver over a railway does not op- 
 erate as a dissolution of the corporation itself.^^ Such appoint- 
 ment, therefore, and the sale of the entire property of the com- 
 pany do not afford ground for judgment of ouster against the 
 directors of the company elected after the appointment of the 
 receivers.^^ And the fact that a railway has passed into the 
 hands of receivers, pending proceedings by the company for 
 mandamus to compel the delivery of municipal-aid bonds, af- 
 fords no ground for abating the mandamus proceedings, or 
 for refusing to comply with the mandamus, since the corpora- 
 tion still remains in being and capable of suing and of being 
 sued.^'^ So an injunction, granted by a state court, restrain- 
 ing a railway company from obstructing certain streets in 
 a city, is held to be operative upon receivers of the company 
 afterward appointed by a federal court, and they may be pun- 
 ished as for contempt in disregarding such injunction, al- 
 though they have been removed from their receivership when 
 proceedings for contempt are instituted against them. Nor 
 can one of the two receivers, in such case, escape liability by 
 having remained inactive in the matter, since it was his duty 
 to prevent disobedience of the injunction, and he can not avoid 
 
 !•* Girard Insurance & Trust Co. ers of both receivers in the other 
 
 V. Cooper, 162 U. S., 529, 16 Sup. during the time named. 
 
 Ct. Rep., 879, 40 L. Ed., 1062. affirm- 15 State v. Merchant, 37 Ohio St., 
 
 ing S. C, 2 C. C. A., 245, 51 Fed., 251 ; People v. Barnett, 91 111., 422. 
 
 332, 4 U. S. App., 631. In this case And see, ante, §§ 344& and 358. 
 
 an order had been entered giving 16 State v. Merchant, 37 Ohio St., 
 
 one of the receivers leave of absence 251. 
 
 for a year and vesting all the pow- 17 People v. Barnett, 91 111., 422
 
 CHAP. XI.] RAILWAYS. 469 
 
 liability by mere inaction. ^^ So the fact that a railway has 
 passed into the hands of receivers, who are operating the road 
 and receiving its earnings, constitutes no bar to a judgment 
 in favor of the state against the company for taxes due to the 
 state upon the gross earnings of the road while operated by 
 the receivers.^^ And the appointment of a receiver over a rail- 
 way company does not divest it of its power to maintain con- 
 demnation proceedings or have the effect of suspending the 
 exercise of that power while the property of the company is 
 in the custody of the court. ^0 
 
 § 371. When appointed before default; failure of com- 
 pany to operate road ; receiver not relieved until exigency 
 ceases ; receiver to prevent forfeiture of franchise. While 
 receivers over railways are usually appointed in aid of fore- 
 closure proceedings, after default in paym.ent of the mortgage 
 indebtedness, the relief has been allowed before default when 
 the company was insolvent and unable to pay either mortgage 
 or floating indebtedness, and unable to pay amounts due to con- 
 necting lines, and in danger of the absolute destruction of its 
 business and about to default in payment of interest upon its 
 mortgages.2l And where a statute of a state authorizes and 
 provides for the appointment of receivers, to take charge of and 
 operate any railway which shall discontinue its operations for 
 a given length of time, the object of the statute being the re- 
 lief of citizens residing along the line of the suspended road, 
 and a receiver is accordingly appointed over a railway com- 
 pany which has failed to operate its road for the prescribed 
 
 18 Safford v. People, 85 III, 558. v. Campbell, 140 Mich., 384, 103 N. 
 
 19 Philadelphia & Reading R. Co. W., 856. 
 
 V. Commonwealth, 104 Pa. St., 80. 21 Brassey v. N. Y. & N. E. R. 
 
 As to the right to levy upon and Co., 19 Fed., 663, 22 Blatch., 72, fol- 
 
 sell the property of a railway which lowed by Farmers' Loan & Trnst 
 
 is in the hands of a receiver of a Co. v. Meridian Waterworks, 139 
 
 federal court, to satisfy unpaid taxes Fed., 661, where a receiver was ap- 
 
 due to the state under the laws of pointed over the property of a water 
 
 Georgia, see State v. A. & G. R. Co., company although there was no de- 
 
 3 Woods, 434. fault either in the interest or prin- 
 
 20 Detroit & Toledo S. L. R. Co. cipal of its bonds.
 
 470 RECEIVERS. [chap. XI. 
 
 time, while the courts may and will restore the property to the 
 company or to its rightful owners, upon being satisfied of 
 their ability and willingness to operate and manage the road, 
 it will not stay the operation of the receivership for the pur- 
 pose of inquiring as to the causes which have led to the fail- 
 ure to operate the road. In such a case, the public necessity 
 will be regarded as of paramount importance, and the receiver 
 will not be relieved until the court is satisfied that the exigency 
 has ceased which called for the appointment. ^2 And where a 
 city is about to enforce a forfeiture of the franchise of a street 
 railway company because of its failure to comply with the 
 conditions of the ordinance under which it is operating and 
 the appointment of a receiver will prevent such forfeiture, a. 
 receiver is properly appointed. ^3 
 
 § 372. Vendor's right to distrain notwithstanding rent 
 charge; can not distrain upon trust property or locomo- 
 tives. When the owner of lands has conveyed them to a 
 railway, in consideration of an annual rent charge, reserving 
 by his conveyance the right to enter upon the lands conveyed, 
 and to distrain for rent whenever it may be in arrear, the 
 subsequent appointment of a receiver over the railway will 
 not be allowed to disturb the vendor's rights. And upon ap- 
 plication to the court he will be given leave to distrain, not- 
 withstanding the receiver's possession, such a case being sim- 
 ilar to that of an application by a stranger for leave to bring 
 an action of ejectment.24 But the court will not, under such 
 circumstances, grant permission to distrain upon property of 
 the railway company which had been conveyed to trustees for 
 
 22 In re Long Branch & Sea Shore holders, see Ex parte Dunn, 8 S. C, 
 
 R. Co., 9 C. E. Green, 398. As to 207. 
 
 the right of a state to take posses- 23 Union Street-Ry. Co. v. City of 
 
 sion of a railway, under an act of Saginaw, 115 Mich., 300, 7i N. W., 
 
 legislature, in the event of the in- 243. 
 
 solvency of the company and its 24 Eyton v. Denbigh, Ruthin & 
 
 failure to pay its bonds guaranteed Corwen R. Co., L. R., 6 Eq., 14. 
 
 by the state, after the appointment See, also, S. C, id., 488. 
 of a receiver in behalf of its bond-
 
 CHAP. XI.] RAILWAYS. 471 
 
 the benefit of creditors, nor upon locomotives passing over 
 the land for the purpose of working the line. 25 
 
 § 373. Receiver may enjoin state ofEcers from dispos- 
 ing of land grant; stockholders' meeting. A receiver over 
 a railway company, who is authorized by the order of his ap- 
 pointment to secure and protect the assets, franchises and 
 rights of the company, as well as a land grant and reservation 
 due the company from the state, may maintain a bill in equity 
 for an injunction against officers of the state to prevent them 
 from granting to other persons the same lands which have 
 been previously granted to the railway, and which the state 
 has attempted to forfeit. Such a suit by the receiver is re- 
 garded as auxiliary to the original action, and is analogous to 
 a petition by a receiver to the court to protect his possession 
 from disturbance, or the property in his charge from destruc- 
 tion.26 But the primary object of the receivership being to 
 preserve the railway for the benefit of its creditors, the court 
 will not extend its jurisdiction beyond the necessity for such 
 preservation. It will not, therefore, upon the petition of the 
 company, assume jurisdiction over the question of postponing 
 a stockholders' meeting called for the election of officers, the 
 exercise of such jurisdiction not being pertinent to the pur- 
 poses of the receivership.27 
 
 § 374. United States court will not entertain bill for ac- 
 count against receiver of railway appointed by state court ; 
 mandamus refused. When a receiver has been appointed 
 in a state court over a railway company, and its franchises are 
 declared forfeited, and its property is placed in the receiver's 
 hands, a United States court will not entertain a bill for an ac- 
 counting against the receiver and the corporation, but will 
 leave the party aggrieved to pursue his remedy by applying to 
 the court which appointed the receiver, and under whose con- 
 
 25Eyton V. Denbigh, Ruthin Sz 27 Taylor v. P. & R. R. Co., 7 
 
 Corwen R. Co., L. R., 6 Eq., 488. Fed., 381. 
 
 26 Davis V. Gray. 16 Wall., 203, 
 affirming S. C, 1 Woods, 420.
 
 472 RECEIVERS. [chap. XI. 
 
 trol he acts.28 So when a railway is being operated by a re- 
 ceiver, appointed by a court of competent jurisdiction, man- 
 damus will not lie against the company and its receiver to 
 direct or control the operations of the road, the court appoint- 
 ing the receiver being fully empowered to determine all ques- 
 tions in controversy.^^ 
 
 § 375. On vacating appointment receiver should restore 
 management and control of road to owners ; application of 
 surplus funds. When a receiver is appointed over a rail- 
 way company, and defendant afterward moves and plaintiff 
 consents that the order of his appointment be vacated, the mo- 
 tion, being concurred in by all parties in interest, should be 
 granted so far as to restore the possession, management and 
 control of the road to the owner; and such control should 
 manifestly include the receipt and disbursement of its future 
 earnings. It is, therefore, error for the court to require the 
 receiver to restore the railroad and its appurtenances and 
 management to the company, but to still require him to receive 
 and disburse its earnings and income. ^^ And a receiver of a 
 railway, who enters into a fraudulent combination with third 
 parties for the purchase of the road at a foreclosure sale, fur- 
 nishing information for this purpose in violation of his trust, 
 can not maintain a bill against such purchasers for an acount- 
 ing and for the recovery of a share of the profits arising from 
 such fraudulent transaction.^^ And when a receiver is ap- 
 pointed over a railway upon a bill by a judgment creditor, and 
 the court afterward directs the receiver to surrender the prop- 
 erty to the company, the surplus earnings remaining in his 
 hands, after payment of all expenditures, should be paid to 
 such creditor to be applied in satisfaction of his judgment, 
 rather than to trustees for mortgage bondholders who have 
 
 28Conkling v. Butler, 4 Biss., 22. 31 Farley v. St. P., M. & M. R. 
 
 29 State V. M. & C. R. Co., 35 Co., 4 McCrary, 138. 
 Ohio St., 154. 
 
 SOL'Engle v. Florida Central R. 
 Co., 14 Fla., 266.
 
 CHAP. XI.] RAILWAYS. 473 
 
 • 
 
 neglected, during the receivership, to intervene in the cause 
 and claim such earnings, their only claim thereto being as 
 mortgage trustees not in possession. ^2 
 
 § 375a. Ancillary receiverships. In cases where a line 
 of railway extends through several states, it has been a com- 
 mon practice to institute the receivership by an original bill, 
 usually for foreclosure, in the federal court in one of such 
 states, and by ancillary proceedings in the federal courts of 
 the other states to extend the receivership to the remaining 
 portions of the road. This practice has, however, been dis- 
 approved in a vigorous and well-considered opinion, in which 
 it is held that such an ancillary proceeding will not be main- 
 tained, or a receiver be appointed, in another federal court 
 when the sole purpose of such action is to procure an ancillary 
 receivership as an adjunct of the principal receivership in an- 
 other jurisdiction, the bill seeking no other independent or 
 affirmative relief.^^ Substantially the same result is, however, 
 obtained by filing original and independent bills for foreclosure 
 in the federal courts of the various states through which the 
 line of railway extends, procuring the appointment of a re- 
 ceiver upon such a bill in one district and having the same re- 
 ceiver appointed under the various original bills filed in the 
 other districts. In such cases, by comity among the several 
 courts which have thus appointed the same receiver, the gen- 
 eral administration of the estate is had in the court in which 
 the receiver was first appointed. And in such cases, one who 
 claims a lien upon the fund in the receiver's hands growing 
 out of a judgment for personal injuries prior to the receiver- 
 ship, like any other claimant, may be required to present his 
 application to the court in which the receiver was originally 
 
 32 Sage V. Memphis & L. R. R. Co., 54 Fed., 569; Clyde v. Rich- 
 Co., 125 U. S., 361, 8 Sup. Ct. Rep., mond & D. R. Co., 56 Fed., 539; 
 887. Parsons v. Charter Oak L. I. Co., 
 
 33 Mercantile Trust Co. v. Kana- 31 Fed., 305; Williams v. Hinter- 
 wha & O. R. Co., 39 Fed., 337. But meister, 26 Fed., 889. 
 
 see Piatt v. Philadelphia & K R.
 
 474 
 
 RECEIVERS. [CHAP. XI. 
 
 appointed, and under whose orders the fund is being adminis- 
 tered.*^"^ 
 
 34 Central Trust Co. v. East T., general direction and control of the 
 
 V. & G. R. Co., 30 Fed., 895. See, court in which the receivership was 
 
 further, as to the administration of initiated, Ames v. Union Pacific R. 
 
 the assets in such cases under the Co., 60 Fed., 966.
 
 CHAP. XI.] RAILWAYS. 475 
 
 11. Receivers in aid of Mortgagees and Bondholders. 
 
 § 376. Relief granted upon principles governing applications for re- 
 ceivers in foreclosure suits; insolvency of company and in- 
 adequacy of security. 
 
 377. When receiver refused, although railway company in default 
 
 in payment of interest. 
 
 378. Proceedings regarded as in rem; receiver's right extends only 
 
 to mortgaged property; may lease other lines. 
 
 379. Right to take possession upon default. 
 
 380. Mortgagee of tolls of railway entitled to receiver. 
 
 381. The same; judgment at law not necessary; judgment creditor 
 
 not entitled to priority over mortgages of earlier date. 
 
 382. Relative rights as between different mortgagees of tolls. 
 
 383. As between different mortgagees of railway without priority, 
 
 equity will not permit a preference. 
 
 384. When state entitled to receiver over railway; road running 
 
 through different states. 
 
 385. Receiver of tolls of turnpike company in behalf of mortgagee. 
 
 386. Receiver in behalf of bondholders to prevent land grant from 
 
 lapsing. 
 
 387. On application for receiver in aid of bondholders, court will 
 
 not determine validity of bonds. 
 
 388. Relative jurisdiction of state and federal courts on applications 
 
 for receivers over railways. 
 388a. Jurisdiction of United States court over consolidated road in 
 
 different states. 
 388&. When president and directors regarded as receivers. 
 
 389. Right of company to discharge receiver on payment of debt. 
 389a. Liability of plaintiff in foreclosure for wages of receiver's em- 
 ployees. 
 
 § 376. Relief granted upon principles governing appli- 
 cations for receivers in foreclosure suits; insolvency of 
 company and inadequacy of security. The most frequent 
 ground for invoking the extraordinary aid of equity by 
 the appointment of receivers over railway corporations 
 is for the protection of mortgagees and bondholders, 
 whose securities are a Hen upon the road, upon the faihu-e 
 of the corporation to pay the principal or interest upon its ob- 
 ligations thus secured. And in actions for the foreclosure of 
 railway mortgages, given to secure bonds issued by railway 
 companies for purposes of construction and equipment, the
 
 476 RECEIVERS [chap. XI. 
 
 courts, upon an application for a receiver in behalf of the mort- 
 gagees, proceed upon the usual principles governing applica- 
 tions for receivers in aid of the foreclosure of mortgages; and 
 in conformity with such principles, inadequacy of the mortgage 
 security, coupled with insolvency of the mortgagor, may be re- 
 garded as sufficient ground for the relief.^^ And while the 
 courts are reluctant to exercise their jurisdiction in this class of 
 cases, except upon a strong showing, yet if the road and its ap- 
 purtenances are manifestly an inadequate security for the mort- 
 gage indebtedness, and the corporation is shown to be insolv- 
 ent, a receiver will be appointed and the company and its 
 agents will be enjoined from any interference with him or 
 with the property.2^ And when, upon a bill to foreclose 
 mortgages given by a railway company to secure its bonds, the 
 insolvency of the company and inadequacy of the security are 
 shown, and the company has neglected to apply its earnings, 
 which are the only fund for that purpose, in payment of the 
 bonded indebtedness secured by the mortgages, such neglect, 
 in connection with the other circumstances shown, constitutes 
 sufficient ground to justify the interference of equity by a re- 
 ceiver.^"^ So it is proper to appoint a receiver over a railway 
 
 35 Ruggles V. Southern Minnesota the same railway in a foreclosure 
 
 Railroad, U. S. Circuit Court, Dis- suit, see Whitney v. N. Y, & A. R. 
 
 trict of Minnesota, 5 Chicago Legal Co., 32 Hun, 164. 
 
 News, 110; Keep v. Michigan Lake 36 Ruggles v. Southern Minnesota 
 
 Shore R. Co., U. S. Circuit Court, Railroad, U. S. Circuit Court, Dis- 
 
 Western District of Michigan, 6 trict of Minnesota, 5 Chicago Legal 
 
 Chicago Legal News, 101; Kelly v. News, 110. 
 
 Trustees, 58 Ala., 489 ; Pennsylvania 37 Keep v. Michigan Lake Shore 
 
 Co. V. American Construction Co., R. Co., U. S. Circuit Court, Western 
 
 5 C. C. A., 53, 55 Fed., 131, 2 U. S. District of Michigan, 6 Chicago 
 
 App., 606. As to the appointment Legal News, 101. This was a bill 
 
 of a receiver in behalf of judgment for foreclosure by trustees named 
 
 creditors of a railway in an action in certain railway mortgages, exe- 
 
 to sequestrate its property under the cuted to secure the bonded indebt- 
 
 statutes of New York, as to the edness of the road, the bill also 
 
 practice in such cases, as to the praying that a receiver might be 
 
 powers and duties of such a receiver, appointed. The court, Withey, J., 
 
 and as to his relative rights com- say, p. 402 : "The rule asserted is 
 
 pared with those of a receiver over that a receiver will not be appointed
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 477 
 
 company in behalf of mortgage bondholders, when the inter- 
 est upon the mortgages has been long unpaid, and when it is 
 apparent that the mortgaged property will not bring sufficient 
 to satisfy the indebtedness. ^8 And the fact that large amounts 
 of interest upon mortgage bonds are in default, that the in- 
 come of the road can be secured only through a receivership, 
 its diminishing business and decreasing revenues and serious 
 disagreement among the various parties in interest in its man- 
 agement, coupled with its insolvency and inadequacy of the 
 security, afford sufficient ground for the relief.^^ So a re- 
 
 unless there has been abuse, or is 
 danger of abuse, on the part of the 
 mortgagor or party in possession. 
 Receivers are not appointed as a 
 matter of course, but it rests in 
 the sound discretion of the court. 
 Whether the power will be exercised 
 depends always upon the facts and 
 rights as they appear before the 
 court. There is a multitude of cases 
 showing where the power has and 
 where it has not been exercised, 
 each case depending on its particu- 
 lar facts and circumstances. From 
 the decided cases, the general rule 
 which should govern is abundantly 
 illustrated. One ingredient to jus- 
 tify the appointment of a receiver, 
 in a case of foreclosure of mort- 
 gaged premises, is that the security 
 is inadequate. This the bill avers; 
 another, that the party to the suit 
 is in possession by himself or his 
 tenant, and the proper parties are 
 before the court; such is this case; 
 again, the mortgagor, or party per- 
 sonally liable for the debt, must be 
 shown to be irresponsible for any 
 deficiency on sale of the mortgaged 
 premises ; this the bill shows. A 
 large amount of interest is overdue 
 and unpaid. From the case before 
 the court it would seem that the in- 
 
 terest must be met from the earn- 
 ings of the road, and yet the net 
 earnings are not applied. Is it not 
 an abuse on the part of the mort- 
 gagors, if insolvent, that the net 
 earnings are not applied to the in- 
 terest? What excuse exists for the 
 omission? The obligation of the 
 mortgagor is common to all mort- 
 gagors, viz. : to meet its accrued in- 
 debtedness, and if its only means 
 with which to meet the interest are 
 not thus applied, such neglect of a 
 paramount obligation is little less 
 than an abuse which will justify the 
 appointment of a receiver, in con- 
 nection with all the facts in this 
 case. The mortgage provides that 
 in case of default in payment of any 
 interest or principal of the secured 
 debt, the trustees may take posses- 
 sion of the road and property in 
 person, or by a receiver, and operate 
 the road. The court is of opinion 
 that a receiver should be appointed 
 with the usual powers in such cases. 
 The order may be drawn and sub- 
 mitted to the court for approval." 
 
 38 Pullan V. Cincinnati & Chicago 
 R. Co., 4 Biss., 35. 
 
 39 Mercantile Trust Co. v. Mis- 
 souri, K. & T. R. Co., Z6 Fed.^ 221.
 
 478 RECEIVERS. [chap. XI. 
 
 ceiver is properly appointed over the property of a street rail- 
 way company, where it appears that the atTairs of the com- 
 pany are in extremely chaotic condition and that it is without 
 a president, vice-president or treasurer to carry on its affairs 
 and that the interest upon its bonds is past due and unpaid. ^^ 
 § 377. When receiver refused, although railway com- 
 pany in default in payment of interest. But the appoint- 
 ment of a receiver is not a matter of course in aid of 
 the foreclosure of a mortgage given by a railway cor- 
 poration, upon default in the payment of any portion 
 of the interest of the indebtedness.'^^ And when, by the 
 terms of a mortgage or deed of trust executed by a 
 railway company to secure its bonds, it is provided that 
 the trustee, on default of payment either of principal or 
 interest, may take possession of the mortgaged property, but 
 the trustee upon default does not elect to take possession, and 
 institutes an action for the appointment of a receiver, in the 
 absence of any facts showing an abuse in the management of 
 the company the court will exercise an equitable discretion in 
 the matter, and will refuse to allow a receiver when it would 
 cause irreparable injury to the company. '*2 And in the exer- 
 cise of the discretion vested in courts of equity touching the 
 appointment of receivers, a receiver will not be appointed in 
 aid of the foreclosure of a railroad mortgage when much great- 
 er injury would result to all parties in interest by such ap- 
 pointment than by permitting the road to be operated by the 
 company pending the foreclosure proceedings.^^ Nor should 
 a receiver be appointed over an entire railway system upon 
 behalf of bondholders whose mortgage covers but a part of 
 the road.44 
 
 40 Ralph V. Wisner, 100 Mich., v. St. L., I. M. & S. R. Co., 4 Dill., 
 164, 58 N. W., 837. 114. 
 
 41 Williamson v. New Albany R. 43 Tysen v. Wabash R. Co., 8 
 Co.. 1 Biss., 198: Tysen v. Wabash Biss., 247. 
 
 R. Co., 8 Biss., 247. 44 Merriam v. St. Louis, C. G. & 
 
 42 Williamson v. New Albany R. F. S-. Ry. Co., 136 Mo., 145, 36 S. 
 Co., 1 Biss., 198; Union Trust Co. W., 630.
 
 CHAP, XI.] RAILWAYS. 479 
 
 § 378. Proceedings regarded as in rem; receiver's right 
 extends only to mortgaged property; may lease other 
 lines. Proceedings for the appointment of receivers, in 
 actions for the foreclosure of railway mortgages, are regarded 
 as in rem, to the extent that they seek to reach such property 
 of the corporation as was mortgaged to secure the bondholders. 
 And the right of the receiver to the possession of the corporate 
 property, being subject to the same limitations governing the 
 rights of the mortgage bondholders in whose behalf he was 
 appointed, extends only to the specific property which is the 
 subject of the litigation and covered by the mortgage.^^ But 
 a court of equity, having appointed a receiver over a railway 
 in an action for the foreclosure of a mortgage, may exercise 
 all necessary powers with reference to the protection and pres- 
 ervation of the property for the benefit of its creditors which 
 are not in excess of the powers of the corporation itself. It 
 may, therefore, authorize the receiver to lease other lines of 
 railway to be operated in connection with, and as a part of, the 
 road over which he is appointed, when such course is neces- 
 sary for the interests of the creditors.^^ 
 
 § 379. Right to take possession upon default. Railway 
 mortgages, or deeds of trust in the nature of mortgages, fre- 
 quently contain a provision authorizing the trustee or mort- 
 gagee, in case of default, to take possession of and manage the 
 railway and to receive and apply its income. In such cases, if 
 the trustees have a complete remedy at law to recover posses- 
 sion, the court may properly refuse to appoint a receiver when 
 it does not appear that the trustees have made any efifort to ob- 
 tain possession, or that the mortgaged premises are an inade- 
 quate security.'*'^ If, however, the trustees neglect and refuse 
 to take possession after default and a request from the bond- 
 holders, upon a bill by the bondholders to enforce the trust, 
 
 45Noyes v. Rich, 52 Me., 115. 47 Rice v. St. Paul & Pacific R. 
 
 46 Gibert v. W. C, V. M. & G. S. Co., 24 Minn., 464. But see Allen 
 R. Co., 33 Grat., 586, v. D. & W. R. Co., 3 Woods, 316.
 
 480 RECEIVERS. [chap. XI. 
 
 a receiver may be appointed, the right to the rehef, in such 
 case, not being dependent upon inadequacy of the mortgage 
 security.^^ Nor is the right to rehef, in such cases, confined to 
 actions for the foreclosure of the mortgage, since a receiver 
 may be appointed upon a bill seeking to obtain possession after 
 default, the railway company being insolvent and the security 
 inadequate.^^ So a receiver may be appointed, after default, 
 in an action brought by a surviving trustee in the deed of trust 
 to enforce the trust and to obtain possession of the property.^^ 
 In such case it is proper to appoint the surviving trustee as re- 
 ceivers^ And it has been held, when the deed of trust author- 
 ized the trustees to take possession upon default, that the de- 
 fault itself constituted sufficient ground for a receiver, without 
 showing the inadequacy of the mortgage security. ^^ And a 
 receiver has been appointed after a decree of foreclosure, in 
 behalf of bondholders entitled to the net income of the road, 
 when, under the laws of the state, no sale could be had until 
 the expiration of six months from the date of the decree.^^ 
 
 48 Wilmer v. A. & R. A. L. R. 50 Sacramento & P. R. Co. v. Su- 
 Co., 2 Woods, 409. perior Court, 55 Cal., 453; McLane 
 
 49 Dow V. M. & L. R. Co., 20 v. Placerville & S. V. R. Co., 66 
 Fed., 260. In this case, the court Cal., 606. 6 Pac, 748. 
 
 required plaintiffs, as a condition 51 McLane v. Placerville & S. V. 
 to the appointment of a receiver, R. Co., 66 Cal., 606, 6 Pac, 748. 
 to consent that all debts due to 52 Allen v. D. & W. R. Co., 3 
 other companies for freight and Woods, 316. But in this case, ad- 
 ticket balances, all debts for labor, ditional grounds for the relief were 
 supplies and materials used in found in the fact that the com- 
 equipping, repairing or operating pany was actually insolvent, that 
 the road, and all obligations in- the contractor for building the 
 curred in transporting freight or road had failed and abandoned his 
 passengers, or for injuries to per- contract, and that the charter and 
 sons or property, which had ac- a valuable land grant were about 
 crued within six months prior to to lapse by the non-completion of 
 the appointment, should be paid by a small remaining portion of the 
 the receiver out of the earnings of road within the time required by 
 the road, or, if not so paid, should law. 
 
 constitute a lien upon the road 5.3 Benedict v. St, J. & W. R. Co., 
 
 paramount to that of the mortgage 19 Fed., 173. 
 indebtedness.
 
 CHAP. XI.] RAILWAYS. 481 
 
 § 380. Mortgagee of tolls of railway entitled to receiv- 
 er. It was the doctrine of the English Court of Chancery, 
 that when a company, incorporated by act of parhament as a 
 common carrier, is authorized by its act of incorporation to 
 borrow money by mortgaging its tolls, and in pursuance of 
 such authority has mortgaged its tolls to secure advances and 
 loans obtained for carrying on the undertaking, the mortgagee 
 is entitled to the aid of equity by a receiver upon non-payment 
 of his principal when due.^^ And the receiver thus appointed 
 will be ordered to pay the costs of the proceeding, and then 
 to keep down the interest on the mortgages and pay the balance 
 into court.^^ It is held, in such cases, that the power of mort- 
 gaging the corporate tolls and rents necessarily carries with it 
 as an incident all the appropriate and necessary remedies to 
 compel payment. Equity may, therefore, appoint a receiver of 
 the tolls in an action to foreclose the mortgage, even though 
 the power is not conferred in express terms by the act of par- 
 liament, the remedy being a necessary incident of the powers 
 expressly granted. ^^ And it is no objection to the appointment 
 of a receiver of the tolls, rates, duties and other property of a 
 railway, upon the application of a mortgagee, that the court 
 can not prescribe everything which is necessary to be done for 
 the proper management of the affairs of the corporation, and 
 that it is liable to indictment in case the receiver does not per- 
 form the duties required of the company by its act of incor- 
 poration.^''' 
 
 § 381. The same; judgment at law not necessary; judg- 
 ment creditor not entitled to priority over mortgages of 
 earlier date. It is held, in the Irish Chancery, that railway 
 bondholders are entitled to a receiver over the tolls and traffic 
 
 54 Hopkins v. Worcester & Birm- 56 De Winton v. Mayor of Brecon, 
 ingham Canal Proprietors, L. R., 6 26 Beav., 533. 
 
 Eq., 437; De Winton v. Mayor of "'7 Fripp v. The Chard R. Co., 11 
 
 Brecon, 26 Beav., 533. Hare, 241 ; S. C. 17 Jur., 887; S. C, 
 
 55 Hopkins V. Worcester & Birm- 22 L. J., N. S., 1084. 
 ingham Canal Proprietors, L. R., 6 
 
 Eq., 437. 
 
 Receivers — 31.
 
 482 RECEIVERS. [chap, XI. 
 
 of the road, when their bonds are an equitable charge upon such 
 tolls, and when the inconvenience of proceeding at law for the 
 enforcement of their demands is so great as to render the legal 
 remedy practically useless. And it is not necessary, to entitle 
 them to the relief, that the bondholders should have first re- 
 covered judgment at law and issued execution, when the right 
 to be paid out of the tolls is attached to the bonds themselves, 
 and a receiver previously appointed over the tolls of the com- 
 pany will be extended to the payment of the demands of such 
 bondholders.^^ But a judgment creditor of a railway com- 
 pany, whose judgment is only a lien or charge upon its lands, 
 to the extent of such estate or interest as the corporation it- 
 self has in them, is not entitled, upon obtaining a receiver of 
 the railway, to be paid the profits received by the receiver in 
 priority to interest due on mortgages of the company which 
 antedate his judgment. ^^ 
 
 § 382. Relative rights as between different mortgagees 
 of tolls. The jurisdiction of the English Court of Chan- 
 cery, in this class of cases, was sometimes invoked when there 
 were different mortgagees of the tolls, who were entitled to 
 have them applied for the payment of their advances. And 
 when the trustees of an incorporated turnpike company are 
 authorized by the act of incorporation to mortgage its tolls, 
 the mortgagee may have a receiver of the tolls if there are other 
 mortgages thereon, and he will not be required to take pro- 
 ceedings at law to obtain possession under his mortgage. In- 
 deed, such a case would seem to be a stronger one for the in- 
 terposition of equity by a receiver than the case of an ordinary 
 mortgage of lands.^^ And when a railway company, incor- 
 
 58 Imperial Mercantile Credit As- "that the rights under a mortgage 
 sociation v. Newry & Armagh R. of this description differ materially 
 Co.. Ir. Rep., 2 Eq., 1. from the rights under an ordinary 
 
 59 Holland v. Cork & Kinsale R. mortgage of land. Under an ordi- 
 Co.. Ir. Rep., 2 Eq., 417. nary mortgage the mortgagee, when 
 
 60 Crewe v. Edleston, 1 De G. & he enters into possession, holds for 
 J., 93. "It is to be observed, too," his own benefit. Under a mortgage 
 says Lord Justice Turner, p. 109, of this description he becomes,
 
 CHAP. XI.] RAILWAYS. 483 
 
 porated by act of parliament, is authorized to obtain loans 
 by mortgaging its rates, tolls, duties and other property, a 
 second mortgagee, who has advanced money to the company 
 upon this security, is entitled to a receiver in an action to es- 
 tablish his mortgage, when it is shown that the property is un- 
 productive as to the second mortgagees, and their interest has 
 been unpaid for a series of years. And the relief may be al- 
 lowed in such a case, even though, by the act of incorporation, 
 special provision is made for the appointment of a receiver in 
 behalf of a mortgagee on application to justices of the peace for 
 that purpose, the act providing that this special remedy shall 
 be without prejudice to any remedies, either at law or in equity, 
 which the mortgagee may have. In such a case, it constitutes 
 no sufficient objection to granting the relief sought that the 
 mortgagee has not joined as defendants to the action other 
 mortgagees secured by the same mortgage with himself.^^ 
 
 § 383. As between different mortgagees of railway with- 
 out priority, equity will not permit a preference. As be- 
 between different mortgage creditors of a railway company, 
 whose mortgages are a charge upon the property of the com- 
 pany, to be paid pari passu, and without priority or preference, 
 equity will not permit one of the mortgagees to obtain a prefer- 
 ence over others. And where some of the mortgagees have filed 
 a bill for an account of the principal and interest due upon their 
 mortgages, and have obtained a receiver of the railway and 
 its tolls, the court will not allow another of the mortgagees, 
 who has obtained judgment upon his demand, to issue execu- 
 tion against the property of the company, otherwise than as 
 
 when he enters into possession, lia- the tolls, and if this court can be 
 
 ble to the other mortgagees, to the called upon to appoint a receiver 
 
 extent of their interests. This lia- immediately after the possession re- 
 
 bility, I apprehend, would entitle covered at law, it can hardly be 
 
 him, immediately upon possession necessary that the proceedings at 
 
 taken, to come to this court to have law should first be taken." 
 
 it ascertained what is due upon the 61 Fripp v. The Chard R. Co., 11 
 
 other mortgages, and for a receiver Hare, 241; S. C, 17 Jur., 887; 22 
 
 to aid him in the due application of L. J., N. S., 1084.
 
 484 RECEIVERS. [chap. XI. 
 
 trustee for himself and all other mortgage creditors of the 
 company. But the court may, in such case, direct an inquiry 
 as to whether it will be for the benefit of the mortgage cred- 
 itors generally that any proceedings should be taken for the 
 purpose of making the judgment available for their benefit.^" 
 
 § 384. When state entitled to receiver over railway; 
 road running through different states. Where a railway 
 company, chartered by two different states, and whose line of 
 road lies in both of the states, executes a mortgage of the en- 
 tire line of its road to one of the states to secure the payment 
 of an annuity due from the company, and the state occupies the 
 relation of a second and third incumbrancer, it is entitled to 
 the aid of a receiver, upon a bill showing that the tolls and 
 revenues of the road are being diverted to the payment of 
 junior obligations and liens, in violation of the duty incum- 
 bent upon the corporation. And although the courts of the 
 state in which the relief is granted have jurisdiction of the 
 matter only within the limits of that state, they will yet inter- 
 fere to the extent of their jurisdiction; and the fact that their 
 authority does not extend beyond the territorial limits of the 
 state will not deter them from acting, in a proper case, to the 
 extent of such limits. In such a case the defendant, as to that 
 portion of its property and franchises within the limits of the 
 state where the relief is sought, will be treated as a domestic 
 corporation and will be dealt with accordingly.^^ 
 
 § 385. Receiver of tolls of turnpike company in behalf 
 of mortgagee. When the mortgagee of the tolls of a turn- 
 pike company, under an act of parliament providing that none 
 of the mortgagees of such tolls should have preference over 
 others, had taken possession of the turnpike gates without any 
 legal proceedings, and was in receipt of the tolls and retained 
 the entire amount in discharge of his own demand, instead of 
 applying it for the benefit of all the mortgagees pari passu, as 
 required by the act of parliament, an injunction was granted 
 
 62 Bowen v. Brecon R. Co., L. R., 63 State of Maryland v. Northern 
 
 3 Eq., 541. Central R. Co., 18 Md^ 193.
 
 CHAP. XI.] RAILWAYS. 485 
 
 against him and a receiver of the tolls was appointed, upon the 
 appHcation of another mortgagee.^* 
 
 § 386. Receiver in behalf of bondholders to prevent land 
 grant from lapsing. When a railway company is endowed 
 with a valuable land grant, which constitutes the principal se- 
 curity of its bondholders, and there is danger of the grant 
 lapsing before the completion of the road, which is required 
 to be completed within a specified time, a receiver may be 
 appointed on application of the bondholders, the exigencies of 
 the case being regarded as sufficient to warrant a court of 
 equity in interfering. And such receiver may be authorized 
 to borrow money sufficient to complete the line within the time 
 specified, and to issue his obligations for that purpose, which 
 may be made a lien upon the road.^^ 
 
 § 387. On application for receiver in aid of bondholders, 
 court will not determine validity of bonds. In an action 
 for the foreclosure of a mortgage given by a railway company 
 to secure its bonds, it affords no sufficient objection to appoint- 
 ing a receiver in behalf of the bondholders, that the proceed- 
 ings of the corporation in issuing the bonds and mortgage are 
 impeached by mere negative testimony, as by an affidavit of 
 the secretary of the company stating that he is not able to find 
 any record of authority, given by the stockholders to the di- 
 rectors or officers of the company, to execute the bonds and 
 mortgage in question ; since, upon a preliminary application 
 for the appointment of a receiver, the court will not pass upon 
 or determine the validity of the bonds, but will leave that ques- 
 tion to the final hearing.^*^ 
 
 § 388. Relative jurisdiction of state and federal courts 
 on applications for receivers over railways. Questions of 
 difficulty have occurred in determining the relative jurisdiction 
 
 64 Dumville v. Ashbrooke, 3 Rnss., receiver under such circumstances. 
 99 note c. ^^^' ^'^°' ^- ^■' ^ Dill., 519. 
 
 66 Keep v. Michigan Lake Shore 
 
 65 Kennedy v. St. Paul & Pacific j._ q^ ^ ^ g. Circuit Court, West- 
 R. Co., 2 Dill., 448. And see this ern District of Michigan, 6 Chicago 
 case for form of order appointing a Legal News, 101.
 
 486 RECEIVERS. [chap. XI. 
 
 of the state and federal courts, upon applications for receivers 
 in aid of the foreclosure of railway mortgages. The true rule 
 upiMi this subject undoubtedly is, that the court first acquiring 
 jurisdiction of the subject-matter, or of the res, will retain ju- 
 risdiction to the end of the litigation, and will, if necessary, 
 take possession or control of the property by a receiver, to the 
 exclusion of all interference from other courts of concurrent 
 jurisdiction.67 Accordingly, when a trustee in a deed of trust, 
 given by a railway company to secure its bonds, files his bill 
 in the United States court for a foreclosure, which thus ob- 
 tains jurisdiction of the subject-matter, and pending this ac- 
 tion, and without leave of the federal court, the trustee insti- 
 tutes proceedings in a state court to foreclose the same trust 
 deed, upon which a receiver is appointed, a foreclosure ordered 
 and the property sold, the United States court retains its juris- 
 diction. It may, therefore, upon a proper showing of the ne- 
 cessity for a receiver, make such appointment on the applica- 
 tion of one of the bondholders secured by the mortgage, and 
 the interference of the state court will be treated as unauthor- 
 ized, and as not affecting the previously acquired jurisdiction 
 of the federal tribunal. ^^ Nor is it necessary, in the applica- 
 
 67 Bill V. New Albany R. Co., 2 they seem to have had the opinion 
 Biss., 390; Union Trust Co. v. The of a state court to justify their ac- 
 Rockford, Rock Island & St. Louis tion, but as this court was the one 
 R. Co., 6 Biss., 197 ; S. C, 7 Chicago in which the controversy was orig- 
 Legal News, 33. See, also, to the inally commenced, and in which, 
 same effect, Gaylord v. The Fort for certain purposes, it was yet 
 Wayne. M. & C. R. Co.. 6 Biss., 286. pending, it is the only tribunal 
 
 68 Bill V. New Albany R. Co., 2 whose decision was binding upon 
 Biss., 390. The principles govern- the parties in this court. Before 
 ing in such case are well stated by he adopted so grave a measure, 
 Drummond, J., p. 400, as follows: therefore, and one calculated so 
 "It could hardly be said then to be much to complicate and embarrass 
 fair dealing, while the case was matters in dispute, he should have 
 thus proceeding here, for the trustee come to this court for directions 
 and some of the bondholders to and relief. One litigation should 
 turn over to another jurisdiction have been disposed of before an- 
 rights which had been partially ad- other on the same subject-matter 
 judicated, thus ignoring everything was begun. The fact appears to be, 
 that occurred here. It is true that that the trustee and the first bond-
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 487 
 
 tion of the general rule as above stated, that the court which 
 first acquires jurisdiction of the case shall also first take by its 
 officers possession of the property in controversy, since this 
 would only lead to unseemly haste on the part of receivers to 
 reduce the property to manual possession ; and while the court 
 first appealed to was investigating the rights of the respective 
 parties, another court, acting with greater haste, might, by 
 seizing the property, render the first suit wholly unavailing. 
 And when a bill in the United States court, in behalf of hold- 
 ers of railway bonds, seeking the aid of a receiver for the pro- 
 tection of their security, was dismissed upon demurrer, but 
 afterward, and at the same term, this judgment was set aside 
 and the bill reinstated, and plaintiffs were allowed to amend, 
 
 holders thought that the last bond- 
 holders had ceased to have any 
 interest in the road, because of the 
 inadequacy of the property to re- 
 spond to inferior liens, and acted 
 accordingly — a conclusion which 
 could only be reached under ihe 
 authority of this court. Inasmuch, 
 therefore, as the case was still here, 
 as for certain purposes the property 
 was subject to the control of the 
 court, in the interests of the parties 
 before it, to appeal to another court 
 to foreclose the mortgages and sell 
 the road was unwarranted, and not 
 consistent with the obligations due 
 to all. The trustee was responsible 
 just as much to others as he was 
 to those who demanded he should 
 foreclose, and whose instructions he 
 obeyed. If, then, it was a bren'-h 
 of duty for Williamson to proceed 
 in the court of common pleas of 
 White county, as I think it was, 
 what is the effect upon the right of 
 this court to retain jurisdiction of 
 the cause and of the subject-mat- 
 ter? There can be no doubt it has 
 created great confusion in the posi- 
 
 tion of those claiming under the 
 mortgages, and embarrassment in 
 the court to deal properly with 
 their interests. It has thus brought 
 about an apparent conflict between 
 courts, state and federal, which 
 should always be avoided. But the 
 conflict arises from acts done after 
 this court had obtained jurisdiction 
 of the cause, and for which, there- 
 fore, it can not be justly held 
 accountable; and when a party 
 affected by an order or decree en- 
 tered in a pending cause asks for 
 relief, it is no answer to say that 
 another jurisdiction has attempted 
 to seize the property, and thus 
 place it beyond the power of the 
 court to give relief. The question 
 always must be, is it competent for 
 the court to act? If so, its duty is 
 plain, and it necessarily follows 
 from what has been said, that, in 
 my opinion, the property is still 
 within the control of this court to 
 adjudicate upon the equitable 
 rights of all who have ever been 
 before it."
 
 488 RECEIVERS. [chap. XI. 
 
 a receiver was appointed to take charge of the railway for the 
 protection of the bondholders, notwithstanding another cred- 
 itor of the company, in the interval between the dismissal of 
 the bill and its reinstatement in the federal court, had filed a 
 bill in the state court and procured a receiver thereon. "^^ 
 
 § 388a. Jurisdiction of United States court over consoli- 
 dated road in different states. When two different rail- 
 ways, incorporated in different states, have been legally con- 
 solidated into one corporation, which is operating the road as 
 an entire and indivisible property through both such states, 
 having mortgaged its entire line thus consolidated, a federal 
 court in one of the states may appoint a receiver over the en- 
 tire property. And in such case, the trustees being authorized 
 by the mortgage to take possession of and to operate the road 
 upon default, and having refused so to do after request by the 
 bondholders, the relief may be granted upon a bill by the bond- 
 holders to enforce the trust and to foreclose the mortgage.*^^ 
 But when a consolidated railway system is composed of many 
 different lines extending through several states and receivers 
 are appointed, upon a bill filed by the company itself alleging 
 its insolvency, in a federal court in one of such states, and by 
 ancillary proceedings the same receivers are appointed in a 
 federal court of another state over the lines in that state, which 
 are covered by separate mortgages, the latter court may, at 
 the suit of mortgage bondholders, remove such receivers and 
 appoint a new receiver over the lines within its jurisdiction.'''^ 
 
 69 Union Trust Co. v. Rockford, session before the appointment of 
 
 Rock Island & St. Louis R. Co., a receiver by the federal court, 
 
 6 Biss., 197; S. C, 7 Chicago Legal such possession would not be dis- 
 
 News, 33. But see, contra, Wilmer turbed by the latter court, although 
 
 V. A. & R. A. L. R. Co., 2 Woods, it had first acquired jurisdiction by 
 
 409, where it was held that the the filing of the bill and by service 
 
 priority of jurisdiction between the of process. 
 
 federal and state court should be "^O Wilmer v. A. & R. A. L. R. 
 
 determined, not by prior jurisdic- Co., 2 Woods, 409. 
 
 tion of the person or service of 71 Atkins v. Wabash, St. L. & P. 
 
 process, but by prior seizure of the R. Co., 29 Fed., 16L And see Cen- 
 
 property; and that, the receiver of tral Trust Co. v. Wabash, St. L. & 
 
 the state court having taken pos- P. R. Co., 29 Fed., 618 ; Chattanooga
 
 CHAP. XI.] RAILWAYS. 489 
 
 § 388&. When president and directors regarded as re- 
 ceivers. When in an action brought for the foreclosure of 
 a railway mortgage, and seeking the appointment of a receiver, 
 an order is made authorizing the president and directors of 
 the company to continue in the possession and management 
 of the road, under and subject to the orders of the court, to 
 which they are required to report from time to time the condi- 
 tion of the road and its earnings and expenses, such order is to 
 be construed as appointing them receivers of the property, and 
 they will be regarded as operating the road as officers of the 
 court and not of the railway company.'^^ 
 
 § 389. Right of company to discharge receiver on pay- 
 ment of debt. When a receiver is appointed upon a bill 
 to foreclose a mortgage executed by a railway company to 
 secure its bonds, the right to a discharge of the receiver and a 
 restoration of the property, upon payment of the mortgage in- 
 debtedness, is a clear, legal right, in no sense discretionary 
 with the court, and a refusal to grant such right is judicial 
 error. ''^2 
 
 § 289a. Liability of plaintiff in foreclosure for wages of 
 receiver's employees. The appointment of a receiver of a 
 railway in aid of mortgage bondholders is not a matter of strict 
 right but rests in the sound discretion of the court subject to 
 such conditions as the court may see fit to impose. While, 
 therefore, it is proper to make such appointment upon the con- 
 dition that the plaintiff shall undertake to secure to employees 
 of the receiver the payment of their wages in case the net earn- 
 ings of the receivership are insufficient to meet such demands, 
 yet where no such condition has been imposed, no liability at- 
 taches to the plaintiff who has procured the appointment, where 
 the net earnings are insufficient to meet the demands for wages 
 of employees.'''^ 
 
 Terminal Ry. Co. v. Fclton, 69 Fed., v. Soutter, 2 Wal., 510. See S. C, 
 
 273. Wool worth's C. C, 49. 
 
 72 7n re Fifty- four First Mort- 74 Farmers' Loan & Trust Co. v. 
 gage Bonds, 15 S. C, 304; Ex parte Oregon Pac. R. Co., 31 Ore., 237, 48 
 Brown, 15 S. C, 518. Pac, 706, 38 L. R. A., 424, 65 Am. 
 
 73 Milwaukee & Minnesota R. Co. St. Rep., 822.
 
 490 RECEIVERS. [chap. XI. 
 
 III. Functions and Duties of the Receiver. 
 
 § 390. Receiver's functions and duties usually fixed by order; when 
 authorized to complete road. 
 390j. Contracts subject to control of court; construction of rival 
 line; unjust discrimination; pooling contracts. 
 
 391. To payment of what debts earnings applied. 
 
 392. Discretion allowed as to expenditures; what may be allowed 
 
 in receiver's accounts. 
 
 393. Injunction against diverting earnings or divesting receiver of 
 
 control. 
 393a. Strikers punished for contempt. 
 393b. Revision of wages by court. 
 393c. Receiver not bound by contract of company; joint traffic 
 
 agreement; contract to carry passengers. 
 
 394. Rights of action vested in receiver. 
 
 § 390. Receiver's functions and duties usually fixed by 
 order ; when authorized to complete road. The usual prac- 
 tice of courts of equity, in appointing receivers over railway 
 corporations, is to prescribe in the order of appointment the 
 functions and duties of the receiver, which may be modified 
 or extended from time to time by further order of court, as 
 the exigencies of the case may require. In general, these du- 
 ties comprise the operation and management of the road, the 
 payment of current expenses, and the application of the residue 
 of the earnings and receipts to the extinguishment of the in- 
 debtedness, to secure which the receiver was appointed.'^^ The 
 receiver is seldom authorized to enlarge the operations of the 
 company, or to extend its line of road, his functions being usu- 
 
 75 Brown v. New York & Erie ton v. New Jersey West Line R. 
 Railroad, 19 How. Pr., 84. Ken- Co., 10 C. E. Green. 306. As to the 
 nedy v. St. Paul & Pacific R. Co., functions and liabilities of statutory 
 2 Dill., 448; Vermont & Canada R. receivers of railways appointed by 
 Co. V. Vermont Central R. Co., 46 the governor of the state pursuant 
 Vt., 792. See, as to the power of to statute, in Tennessee, see State v. 
 the receiver of a railway company, E. & K. R. Co., 6 Lea, 353; State v. 
 under the laws of New Jersey, to McM. & M. R. Co., 6 Lea, 369. As 
 sell the property, rights and fran- to the effect of a consent decree ter- 
 chises of the company, free from minating a receivership over a rail- 
 all liens and incumbrances. Middle- way, the receivers still continuing
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 491 
 
 ally limited to the management of the property in its existing 
 condition for the protection of creditors, and subject always 
 to the supervision of the court. And the better doctrine un- 
 doubtedly is, that the power of the court extends only to the 
 custody and preservation of the property, and that it has no 
 power to extend or to complete a railway enterprise, and for 
 this purpose to raise money by charging the railway and its 
 appurtenances with liens which shall supersede prior mort- 
 gages, without the consent of the holders of such mortgages. "^^ 
 
 in possession of and operating the 
 road as managers, see Vermont & 
 Canada R. Co. v. Vermont Central 
 R. Co., 50 Vt., 500. See, also, Lang- 
 don V. Vermont & Canada R. Co., 
 53 Vt., 228; S. C, 54 Vt., 593. As 
 to the liability of such managers to 
 an accounting in a subsequent ac- 
 tion brought by mortgage bond- 
 holders in a federal court, and as to 
 the effect of a plea to such action 
 of the pendency of the former pro- 
 ceedings in the state court, see 
 Andrews v. Smith, 5 Fed., 833. As 
 to the proper orders to be entered 
 concerning the operation and man- 
 agement by receivers of a system of 
 railway extending through several 
 states, made up of various consoli- 
 dated and leased lines, the entire 
 system being covered by one gen- 
 eral mortgage and the various sub- 
 ordinate lines by underlying mort- 
 gages, some of the lines being prof- 
 itable and others unprofitable, and 
 as to the method of accounting be- 
 tween such lines and the right of 
 lessor companies to reclaim leased 
 lines, see Central Trust Co. v. Wa- 
 bash, St. L. & P. R. Co., 23 Fed., 
 863. For mandamus against the re- 
 ceiver of a railway company to 
 compel him to comply with the pro- 
 visions of a statute providing that 
 
 where a street has been raised or 
 lowered for railroad purposes, it 
 shall be placed in as good repair 
 as it originally was, see City of 
 Fort Dodge v. M. & St. L. Ry. Co., 
 87 Iowa, 389, 54 N. W., 243. As to 
 the right of the court to prevent the 
 unwarranted discharge of an em- 
 ployee of a railway company by 
 its receiver, see Farmers' Loan & 
 Trust Co. V. Central R. & B. Co., 
 166 Fed., 333. 
 
 76 Meyer v. Johnston, 53 Ala., 
 237. Manning, J., delivering the 
 opinion of the court, says, p. 337: 
 "It is in the exercise of the judicial 
 function only that a court obtains 
 jurisdiction between litigant parties 
 of the cause in which it is author- 
 ized to take such control for the 
 preservation of the property in- 
 volved. And we are not aware of 
 any principle of law or element of 
 wise policy which would justify 
 such court, after so getting posses- 
 sion, in laying aside its judicial 
 character and engaging, however 
 hopeful the scheme, in the comple- 
 tion of unfinished undertakings, and 
 in raising money for this purpose, 
 as the parties themselves could not, 
 namely, by setting up liens which 
 shall displace other and older liens, 
 without the consent of the persons
 
 492 
 
 RECEIVERS. 
 
 [CIIAP. XI. 
 
 In extreme cases, however, the courts have authorized the ex- 
 tension or completion of a road by a receiver, when necessary 
 to its successful maintenance and operation,'^'^ or to prevent 
 the forfeiture of valuable land grants and franchises which 
 would result from the non-completion of the road within the 
 time fixed by law."^^ And in such cases, the receivers have 
 been authorized to issue debentures or certificates, to meet the 
 expenses of construction, which were made a first lien upon 
 the railway."^ And in such case the court may authorize its 
 receiver to institute and prosecute condemnation proceedings 
 to acquire land for the completion of the road.^^ In general, 
 
 to whom they belong. ... If, 
 therefore, the action of the chan- 
 cellor, in this case, goes to the ex- 
 tent of taking the property of the 
 defendant corporation in its hands 
 for the purpose, through its ap- 
 pointees, of completing an unfin- 
 ished work, or of enlarging or 
 improving a finished one, beyond 
 what is necessary for its preserva- 
 tion, and, to that end, of raising 
 money by charging the railway and 
 its appurtenances with liens which 
 are to supersede older ones, with- 
 out the consent of the holders of 
 these, he has inadvertently passed 
 beyond the boundaries of a chan- 
 cellor's jurisdiction. In our opin- 
 ion, no such power is vested or re- 
 sides in any judicial tribunal." 
 
 'i'7 Miltenberger v. Logansport R. 
 Co., 106 U. S., 286, 1 Sup. Ct. Rep., 
 140; Bank of Montreal v. C, C. & 
 W. R. Co., 48 Iowa, 578. 
 
 "8 Kennedy v. St. Paul & Pacific 
 IL Co., 2 Dill., 448; S. C, 5 Dill., 
 519. Dillon, J., says, 5 Dill., p. 525 : 
 "I assent in the fullest manner to 
 the proposition that a court of 
 equity ought not to enter upon the 
 work of either operating or build- 
 ing a railway, if this can possibly be 
 
 avoided without the certain and 
 great sacrifice of the rights and se- 
 curities of the parties in interest. 
 The original order in this case was 
 made upon this principle, and upon 
 the exceptional case which the rec- 
 ord presented (Kennedy v. St. Paul 
 & Pacific Railroad Co., 2 Dill., 448). 
 It is not to be inferred from the re- 
 port of that case that authority even 
 to complete the building of an un- 
 finished line of railway, and to issue 
 debentures for that purpose, is to be 
 conferred without an overwhelm- 
 ing and irresistible necessity. When 
 such authority is conferred it ought 
 to be guarded with the utmost 
 care." And see the form of order 
 in this case, 2 Dill., 448; 5 Dill., 
 527, and the subsequent proceedings 
 in the case, 5 Dill., 530. As to the 
 power of receivers of an insolvent 
 railway in New York, to complete 
 the construction of the road, and 
 as to the right of abutting property 
 owners to enjoin such construction 
 when their damages have not been 
 paid, see Moran v. SchaefTer, 27 
 Hun, 582. 
 
 "^9 See cases cited supra. 
 
 80 Morrison v. Forman, 177 111., 
 427, 53 N. E., 73.
 
 CHAP. XI.] RAILWAYS. 493 
 
 however, the courts look with extreme jealousy upon any 
 proposition for the extension of railway projects by their re- 
 ceivers, and, ordinarily, before such an expenditure is author- 
 ized by the court, there should be a reference to a master to 
 determine the necessity for the contemplated improvement.^^ 
 And the court has refused to authorize receiver's certificates 
 for an extension of a mile in a street railway system under an 
 ordinance providing that the company should add during each 
 calendar year at least one mile of additional track until a speci- 
 fied mileage was reached, and that in default thereof they 
 should forfeit all further rights to the streets granted under 
 the ordinance. ^2 
 
 § 390a. Contracts subject to control of court ; construc- 
 tion of rival line ; unjust discrimination ; pooling contracts. 
 A receiver of a railway has no power, without the sanction 
 of the court, to make contracts, as for the purchase of materials, 
 which will bind the fund or estate which he represents. All 
 contracts made by him are subject to modification by the court, 
 and persons contracting with him are chargeable with notice of 
 his limited powers in this regard, and deal with him at the 
 risk of their contracts not being approved by the court.^-^ If, 
 however, he is empowered by the court to purchase such ma- 
 terials and supplies as he may deem necessary, completed con- 
 tracts made by him for the purchase of necessary materials 
 bind the estate or fund and not the receiver personally. Par- 
 si Hand v. Railroad Co., 10 S. the companies before their insolv- 
 C, 406, approved in Pueblo T. & E. ency for the use by one company of 
 Co. V. Allison, 30 Colo., 337, 70 the tracks and terminal facilities 
 Pac, 424. of the other. In re N. J. & N. Y. R. 
 
 82'pueblo T. & E. Co. V. Allison, Co., 29 N. J. Eq., 67. But the ex- 
 30 Colo., 337, 70 Pac, 424. ercise of such power may well be 
 
 83 Lehigh, C. & N. Co. v. Central challenged as impairing the obliga- 
 R. Co., 35 N. J. Eq., 426. It is also tion of the contract. As to the 
 held in New Jersey, that when two extent to which covenants of the 
 insolvent railway companies are in receiver are binding upon subse- 
 the hands of receivers appointed by quent purchasers of the railway, 
 the same court, the court may, see Martin v. N. Y., S. & W. R. Co., 
 upon the application of either re- 36 N. J. Eq., 109. 
 ceiver, modify a contract made by
 
 494 RECEIVERS. [CHAF. XI. 
 
 ties claiming under such contracts, therefore, may have the 
 same rehef against a successor of the original receiver after 
 his death to which they would have been entitled against 
 the original receiver. If, however, such contracts are ill-ad- 
 vised and injudicious, as for an amount of materials largely 
 in excess of the real necessities of the road, such successor 
 will not be required to perform them, nor will damages, as 
 such, be allowed for their non-performance. But if the par- 
 ties so contracting to furnish materials have acted in good 
 faith, and without fraud, they may be reimbursed any actual 
 loss which they may have sustained in preparing to perform 
 the contracts before their disaffirmance by the receiver, and 
 for this amount may be compensated out of the fund in his 
 hands.^"* It is not the duty of the receiver to interfere with or 
 to prevent the construction of a rival line, even though such 
 construction might result in diminishing the earnings of the 
 road under his control. He will not, therefore, be allowed 
 credit in his accounts for money expended in endeavoring to 
 defeat a subsidy in aid of the construction of a parallel road.^'** 
 Nor will he be allowed to give a preference for freights to one 
 shipper over another, or to permit an unjust discrimination in 
 rates in violation of the laws of the state in which the railway is 
 located. ^^ And he may be directed to repay to a shipper 
 amounts which have been exacted from him as the result of 
 unjust discrimination and in excess of rates charged other 
 shippers. ^"^ But if the receiver continues the operation of a 
 pooling contract as to certain classes of freight, which was in 
 force with other roads at the time of his appointment, he may 
 be decreed to pay to such other companies the proportions due 
 to them under the contract which come into his hands as re- 
 
 84 Vanderbilt v. Central R. Co., 85 Cowdrey v. G., H. & H. R. Co., 
 
 43 N. J. Eq., 669, reversing S. C, 93 U. S., 352. 
 
 sub. nom. Lehigh C. & N. Co. v. 86 Missouri P. R. Co. v. Texas & 
 
 Central Co., 41 N. J. Eq., 167, and P. R. Co., 30 Fed., 2; Cutting v. 
 
 overruling in part Lehigh C. & N. Florida R. & N. Co., 43 Fed., 747. 
 
 Co. V. Central R. Co., 35 N. J. Eq., 8' Cutting v. Florida R. & N. Co., 
 
 426. 43 Fed.. 747.
 
 CHAP. XI.] RAILWAYS. 495 
 
 ceiver, and this regardless of whether the contract was vahd 
 in the first instance.^^ And a receiver appointed over the prop- 
 erty of a railway system and ordered to continue the opera- 
 tion of the system, has, within the scope of his authority, the 
 same powers and is subjected to the same liabilities as the com- 
 pany itself. And it is accordingly held that such a receiver 
 has the power to contract for the transportation of goods be- 
 yond the line of the company and to assume liability for the 
 entire distance over the connecting lines.^^ And the court may 
 authorize the receiver of a railway to lease the property of the 
 company, although in such case the court should act with great 
 care and not make a lease running for such a length of time as 
 unnecessarily to prolong the receivership proceeding. And 
 where, during the term of the lease, the property has been sold 
 at foreclosure sale and the lessee ousted of his possession, the 
 court should make him an allowance for the damages sus- 
 tained by reason of the termination of the lease.^^ And the 
 court may authorize its receiver to take a lease of another 
 road.91 
 
 § 391. To payment of what debts earnings applied. 
 When, upon a bill filed by bondholders for the foreclosure of a 
 railway mortgage securing their bonds, receivers of the rail- 
 road are appointed pendente lite, and hold the property of the 
 road only provisionally and until the ultimate determination of 
 the cause, they are not authorized to appropriate the property 
 and assets of the corporation and its earnings to the payment 
 of debts of the company previously incurred by contract. The 
 contract obligation, although binding upon the railway com- 
 pany, does not constitute a lien upon its property or franchises, 
 
 88 Central Trust Co. v. Ohio 90 Farmers' Loan & Trust Co. v. 
 Central R. Co., 23 Fed., 306. Eaton, 51 C. C. A., 640, 114 Fed., 
 
 89 Farmers' Loan & Trust Co. v. 14. 
 
 Northern Pac. R. Co., 57 C. C. A., 91 Mercantile Trust Co. v. M., K. 
 
 533, 120 Fed., 873, reversing S. C, & T. R. Co., 41 Fed., 8. 
 
 112 Fed., 829; Kansas Pacific Ry. 
 
 Co. V. Bayles, 19 Colo., 348, 35 Pac, 
 
 744.
 
 496 RECEIVERS. [chap. XI. 
 
 and the appropriation by the receivers of funds of the company 
 to the payment of such an obHgation would be, in effect, to give 
 a preference to such indebtedness, and would be inconsistent 
 with the purposes for which the receivers were appointed. ^^ 
 So the receiver of a railway will not be permitted to adopt a 
 contract which had been made prior to the receivership between 
 the company and an injured employee, whereby the latter, in 
 consideration of the settlement of his claim, was to be retained 
 in the employ of the company under certain conditions. In 
 such case the contract is an unsecured obligation of the com- 
 pany the adoption of which would result in giving a prefer- 
 ence over other unsecured obligations.^^ So when the mort- 
 gage bondholders of a railroad have obtained a receiver, in 
 an action for the foreclosure of their mortgages, and by his 
 order of appointment the receiver is authorized to pay the 
 amounts due and maturing for materials and supplies about 
 the operation and for the use of the road, the court will incline 
 to limit the construction of the order to the payment of such 
 obligations as are necessary to keep the road in running order, 
 and will not, therefore, extend it so far as to direct the receiv- 
 er to pay old obligations incurred several years previous, such 
 demands being regarded as secondary to the rights of the 
 mortgagees.^'* 
 
 § 392. Discretion allowed as to expenditures ; what may 
 be allowed in receiver's accounts. The duties of the re- 
 
 ^2 Ellis V. Boston, Hartford & such contracts are charged as in- 
 
 Erie R. Co., 107 Mass., 1. And in cumbrances upon the property, or 
 
 this case it is said by the court, are necessary to its proper preserva- 
 
 Wells, J., p. 28: "They (the re- tion and security. They are en- 
 
 ceivers) continue the operation of titled to repayment of their reason- 
 
 the road and the conduct of its able expenses and charges, in pref- 
 
 business, because this is essential erence to all other claims upon the 
 
 to its proper preservation. They property of whatever nature." See, 
 
 may fulfil the contracts of the cor- also, Brocklebank v. East London 
 
 poration so far as beneficial. They Railway, 12 Ch. D., 839. 
 
 will not pay its debts, nor fulfil 93 Whightsel v. Felton, 95 Fed., 
 
 contracts which are burdensome or 923. 
 
 tend to diminish the value of the ^4 Brown v. New York & Erie 
 
 property in their control, unless Railroad, 19 How. Pr., 84.
 
 CHAP. XI.] RAILWAYS. • 497 
 
 ceiver of a railway, intrusted with the management and opera- 
 tion of the road, being very different from and far more re- 
 sponsible than those of a passive receiver, appointed merely to 
 collect and hold money, a somewhat wider discretion is allowed 
 him in the matter of expenditures necessary to operate the 
 road. ^5 And it may be said in general that all outlays made 
 by him in good faith, in the ordinary course of the business of 
 the road, with a view to advance and promote its interests, and 
 to render it profitable and successful, may be allowed him in 
 passing his accounts. Such outlays may include not only keep- 
 ing the road and its buildings and rolling stock in repair, but 
 also providing such additional accommodations and stock as 
 the necessities of the business may demand, always referring 
 to the court or master for advice and authority when any con- 
 siderable outlay is required. Thus, charges for rebate on 
 freight; for horses and wagons for the delivery of freight; 
 for drayage and wharfage; for the purchase of scales; 
 for office room; for advertising the accommodations of the 
 road ; and for interest paid to a bank for loans of money, have 
 all been allowed. ^6 So money borrowed by the receiver for the 
 
 95 Morley v. Saginaw Circuit which he is invested, are very dif- 
 
 Judge, 117 Mich., 246, 75 N. W., ferent from those of a passive re- 
 
 466, 41 L. R. A., 817. In this case ceiver, appointed merely to collect 
 
 the receivership was of a street and hold moneys due on prior 
 
 railway company. transactions, or rents accruing from 
 
 OeCowdrey v. The Railroad Co., houses and lands. And to such out- 
 1 Woods, 331. "It may be laid lays in ordinary course may prop- 
 down as a general proposition," erly be referred, not only the keep- 
 says Mr. Justice Bradley, p. 336, ing of the road, buildings and roll- 
 "that all outlays made by the re- ing stock, in repair, but also the 
 ceiver in good faith, in the ordi- providing of such additional ac- 
 nary course, with a view to advance commodations, stock and instru- 
 and promote the business of the mentalities as the necessities of the 
 road, and to render it profitable business may require, always re- 
 and successful, are fairly within ferring to the court, or to the mas- 
 the line of discretion which is nee- ter appointed in that behalf, for 
 essarily allowed to a receiver in- advice and authority in any mat- 
 trusted with the management and ter of importance, which may in- 
 operation of a railroad in his hands. volve a considerable outlay of 
 His duties, and the discretion with money in lump. And except in 
 Receivers — 32.
 
 498 RECEIVERS. [chap. XI. 
 
 necessary maintenance and operation of the road, may be re- 
 paid out of the income of the receivership-^*^ And rebates up- 
 on freight allowed by the receiver, which are not inequitable 
 or against public policy, may be allowed and paid out of the 
 receiver's earnings. ^^ 
 
 § 393. Injunction against diverting earnings or divest- 
 ing receiver of control. It is the clear duty of the court ap- 
 pointing a receiver over a railway to afford him all necessary 
 protection in the performance of his official duties. And when 
 the order of appointment directs him to operate and manage 
 the road, subject to the decrees and orders made in the cause, 
 and subject to the further direction of the court, since the suc- 
 cessful management of the road depends upon the control of 
 the receiver over its income and earnings, any attempt by other 
 parties to divert such earnings, or to divest the receiver of his 
 control over them, will be enjoined by the court, when the 
 parties making such attempt are within its jurisdiction, even 
 though they are proceeding to divert the earnings from the re- 
 ceiver's control by suit in another state. In such a case, the 
 court, in the protection of its receiver, does not operate by its 
 injunction upon the court in the other state in which the ac- 
 tion is pending, but merely operates in personam upon the par- 
 ties within its own jurisdiction, and restrains them from inter- 
 fering with or diverting the income and funds properly be- 
 longing to the custody of the receiver.^^ And the court ap- 
 pointing a receiver over a street railway will protect his pos- 
 session by enjoining another company from entering upon and 
 
 extraordinary cases, the submission involving a large outlay of money, 
 
 by the receiver of his accounts to the receiver should always apply to 
 
 the master at frequent intervals, the court in advance, and obtain 
 
 whereby the latter may ascertain its authority for the purchase or 
 
 from time to time the character of improvement proposed." 
 
 the expenditures made, and dis- ^^ Ex parte Carolina National 
 
 allow whatever may not meet his Bank, 18 S. C, 289. 
 
 approval, will be regarded as a suf- ^^ Ex parte Benson, 18 S. C, 38. 
 
 ficient reference to the court for its 99 Vermont & Canada R. Co. v. 
 
 ratification of the receiver's pro- Vermont Central R. Co., 46 Vt., 
 
 ceedings. In extraordinary cases, 792.
 
 CHAP. XI.] RAILWAYS. 499 
 
 taking possession of a portion of the right of way and road- 
 bed of the former company without lawful authority.^ So an 
 injunction will lie to protect the receiver of a railway company 
 in the joint use of a portion of the line of another company 
 under a valid lease for that purpose.^ 
 
 § 393a. Strikers punished for contempt. Any unauthor- 
 ized interference with the property in the hands of the receiver 
 constitutes a contempt of court, and may be punished by at- 
 tachment for contempt in the cause in which the receiver was 
 appointed, the punishment being, as in cases of contempt gen- 
 erally, by fine or imprisonment in the discretion of the court. 
 Striking workmen, therefore, who interfere with or obstruct 
 the management of trains or the operation of the road by the 
 receiver, or who interfere with his employees in the discharge 
 of their duties, whether such interference be by acts of phys- 
 ical violence, or by intimidations and threats, are subject to 
 attachment for contempt and to such punishment as the court, 
 in its discretion, may impose.^ 
 
 § 393&. Revision of wages by court. It is proper for the 
 court which has appointed a receiver over a railway to enter- 
 tain an application by an organized body of employees in the 
 service of the receiver for an adjustment of difficulties between 
 receiver and employees concerning wages.'* And in such a 
 proceeding the court may properly direct its receiver to enter 
 into an appropriate contract with such employees concerning 
 
 1 Fidelity T. & S. V. Co. v. Mo- way, and of the relative rights of 
 bile S. R. Co., 53 Fed., 687. such employees and the receiver, 
 
 2 Metropolitan Trust Co. v. Co- see observations of Mr. Justice 
 lumbus, S. & H. R. Co., 95 Fed., Brewer, in Frank v. Denver & R. G. 
 18. R. Co., 23 Fed., 757. And see In re 
 
 3 Secor v. T., P. & W. R. Co., 7 Acker, 66 Fed., 290. 
 
 Biss., 513; King v. O. & M. R. Co., 4 Waterhouse v. Comer, 55 Fed., 
 
 7 Biss., 529; United States v. Kane, 149; Thomas v. Cincinnati, N. O. & 
 
 23 Fed., 748; In re Doolittle, 23 T. P. R. Co., 62 Fed., 669; United 
 
 Fed., 544; In re Higgins, 27 Fed., States Trust Co. v. Omaha & St. 
 
 443; Thomas v. Cincinnati, N. O. & L. R. Co., 63 Fed., 7?>7 ; Guarantee 
 
 T. P. R. Co., 62 Fed., 803. For a Trust & S. D. Co. v. P., R. & N. E. 
 
 full discussion of the rights of em- R. Co., 69 Conn., 709, 38 Atl, 792, 
 
 ployees of the receiver of a rail- 38 L. R. A., 804.
 
 500 RECEIVERS. [chap. XI. 
 
 their emplo}'Tnent, and upon such terms and conditions as to 
 the court may seem just.^ And the court has the power to 
 revise the wage schedule of the employees of the receiver even 
 though it becomes necessary for the receiver to send such em- 
 ployees, in the operation of the system, beyond the jurisdiction 
 of the court, part of the system being in another state. And 
 while the court of original appointment would ordinarily be the 
 proper court to entertain a petition for the revision of such 
 schedules, nevertheless it may be possible that the interests of 
 the property may require and the nature of the proceedings in 
 both courts justify, the direction of the court of ancillary juris- 
 diction as to the wages of the employees. And when the court 
 has ordered the receiver to restore a higher wage schedule 
 which had existed at the time of his appointment, an appeal 
 will lie from such order upon behalf of the receiver.^ While, 
 however, the court will receive and entertain such an applica- 
 tion, it will not ordinarily interfere with matters of detail in 
 the administration of the estate which are properly intrusted 
 to the receiver, no abuse of his discretion in such matters being 
 shown. "^ 
 
 § 393c. Receiver not bound by contract of company; 
 joint traffic agreement; contract to carry passengers. It 
 is elsewhere shown that a receiver is not ordinarily liable upo.i 
 the contracts and covenants of the person over whose property 
 he is appointed.^ Upon this principle it has been held that a 
 receiver appointed over a railway company is not bound by a 
 joint traffic agreement made by the company prior to the re- 
 ceivership. And it is accordingly held that such receiver is not 
 criminally liable under the provisions of the interstate com- 
 
 «"» Waterhouse v. Comer, 55 Fed., may be exercised by the court over 
 
 149. the action of its receivers in chan- 
 
 6 Guarantee Trust & S. D. Co. v. ging schedules and regulations gov- 
 P., R. & N. E. R. Co., 69 Conn., erning the employment and wages 
 709, 38 Atl., 792, 38 L. R. A., 804. of operatives and laborers, Ames v. 
 
 7 Continental Trust Co. v. To- Union Pacific R. Co., 60 Fed., 
 ledo, St. L. & K. C. R. Co., 59 Fed., 674. 
 
 514. See, as to the control which 8 Ante, § 273; post, § 398a.
 
 CHAP. XI.] RAILWAYS. 501 
 
 merce law for departing from the rates named in the schedule 
 filed with the agreement.^ And the receiver of a railway com- 
 pany is not bound by a contract to carry passengers which had 
 been made by the company prior to his appointment.^^ But it 
 has been held, under the act of congress which requires that 
 receivers appointed by a federal court shall manage the prop- 
 erty under their control according to the valid laws of the 
 state, that an indictment will lie against such a receiver for 
 failure to comply with a statute which requires that water 
 closets shall be maintained at stations.^i 
 
 § 394. Rights of action vested in receiver. As regards 
 rights of action vesting in a receiver of a railway corporation 
 by virtue of his appointment, he must, in their enforcement, 
 pursue the appropriate remedies provided by law for that pur- 
 pose. And when he is authorized to take possession of the 
 bills, bonds, notes and other evidences of indebtedness belong- 
 ing to the company, with full power and authority to sue for 
 and collect all money due thereon, if he seeks to enforce pay- 
 ment of a subscription due from a subscriber to the capital 
 stock of the company, he must bring an action at law, the 
 right being of a legal nature, and he will not be allowed to 
 maintain a bill in equity.12 And since proceedings for the 
 foreclosure of a mortgage, given by a railway company to se- 
 cure its bonds, are regarded as in rem, in that they seek to 
 reach such property of the corporation as was mortgaged to 
 
 9 United States v. De Coursey, manager in possession of any prop- 
 82 Fed., 302. erty, such receiver or manager shall 
 
 10 Casey v. Northern Pac. R. Co., manage and operate such property 
 15 Wash., 450, 48 Pac, 53. according to the requirements of the 
 
 11 Commonwealth v. Felton, 107 valid laws of the State in which 
 Ky., 330, 53 S. W., 1046. Section such property shall be situated, in 
 
 2, of the act of congress of March the same manner that the owner or 
 
 3, 1887, c. 2>72), 24 Stat., 554, as possessor thereof would be bound 
 amended by the act of August 13, to do if in possession thereof." 1 
 1888, c. 866, 25 Stat., 436, provides: U. S. Comp. Stat. 1901, p. 582; 4 
 "that whenever in any cause pend- Fed Stat. Ann., 386. 
 
 ing in any court of the United 12 Freeman v. Winchester, 18 
 
 States there shall be a receiver or Miss., 577.
 
 502 RECEIVERS. [chap. XI. 
 
 secure its bonds, the right of a receiver appointed therein ex- 
 tends only to the specific property which is the subject of the 
 Htigation and covered by the mortgage, being necessarily 
 subject to the same limitations as the right of the bondholders 
 themselves. The receiver, therefore, can not maintain an ac- 
 tion against the superintendent of the railway company for 
 the recovery of money held by him, which had accrued from 
 the earnings of the road before the receiver was appointed, 
 where the mortgage itself did not attach to such earnings.^^ 
 
 13 Noyes v. Rich, 52 Me., 115.
 
 CHAP. XI.] RAILWAYS. 503 
 
 IV. Preferred Debts. 
 
 § 394fl. Unsecured debts preferred to mortgages; indefensible upon 
 principle. 
 
 394b. Receiver's expenses a prior charge; extending line; damages; 
 rentals; supplies; distribution; taxes; rolling stock. 
 
 394c. Diversion of current income ground of preference to current 
 debts. 
 
 394d. Preference based upon necessity of preserving property, inde- 
 pendent of diversion; salary of attorney; wages. 
 
 394^. Mortgagee seeking equitable relief must submit to conditions; 
 preference to assignee of debt. 
 
 394/. Rolling stock; car-trust leases; sale of rolling stock under fore- 
 closure; use of rolling stock by receiver; right of appeal. 
 
 394g. When judgment creditors allowed priority. 
 
 394/1. Claims of general creditors other than for operating expenses 
 not preferred. 
 
 394i. Judgments and claims for personal injuries occurring prior to 
 receivership not preferred. 
 
 394/. When payment allowed out of proceeds of sale. 
 
 294k. Statutory liens preserved; when interest disallowed. 
 
 394/. Claims for construction; board; groceries. 
 
 394m. Receiver not an assignee of term under lease; how far liable 
 for rent. 
 
 394«. Paramount lien enforced by resale of road. 
 
 § 394a. Unsecured debts preferred to mortgages; in- 
 defensible upon principle. The most important and most 
 difficult questions connected with railway receiverships are 
 those which pertain to indebtedness incurred in the manage- 
 ment and operation of the railway, and the extent to which 
 certain classes of pre-existing debts may be preferred in pay- 
 ment, either out of the income of the receivership, or out of the 
 proceeds of foreclosure, as against the claims of mortgage 
 bondholders and other creditors. That mere contract debts 
 of a railway company, as for labor, materials and supplies, in- 
 curred prior to the appointment of a receiver, and unsecured 
 by any Hen upon the property, may, through the aid of a court 
 of equity, be given priority over antecedent mortgages, would 
 seem to be a proposition wholly indefensible upon sound legal 
 reasoning. The allowance of such preference plainly impairs
 
 504 RECEIVERS. [chap. XI. 
 
 the obligation of the mortgage contract, and in practice fre- 
 quently absorbs much of the mortgage security. Nevertheless 
 the doctrine of the courts upon this subject, although fre- 
 quently criticised by the profession and in vigorous and able 
 dissenting opinions from the bench, is so strongly intrenched 
 in authority that it may no longer be questioned. And it only 
 remains to consider what may now be regarded as well estab- 
 lished rules applicable to this class of questions, with the rea- 
 soning of the courts upon which such rules are founded. 
 
 § 394??. Receiver's expenses a prior charge; extending 
 line ; damages ; rentals ; supplies ; distribution ; taxes ; roll- 
 ino- stock. As reerards indebtedness incurred by the re- 
 ceiver himself in the maintenance, operation, necessary repairs 
 and betterments of the road while in his custody, but little 
 difficulty is experienced in practice, and the power of a court 
 of equity to create such debts through its receiver, and to give 
 them preference over the lien of the mortgage indebtedness, 
 is well established.!^ The exercise of this power rests upon the 
 obvious principle, that the court having undertaken the man- 
 agement of the railway at the request and for the benefit of 
 the mortgage creditors, all necessary expenses incurred in such 
 management are a prior charge upon the fund or property, and 
 constitute, in effect, a part of the necessary costs of the litiga- 
 tion. It is, therefore, customary in the order appointing the 
 receiver, to direct him to pay, out of the earnings of the road, 
 all necessary expenses of management and operation. Such 
 subsequent orders with reference to this class of debts are from 
 time to time made during the progress of the cause as the 
 
 14 Miltenberger v. Logansport R. affirmed in 170 U. S., 355, 18 Sup. 
 
 Co, 106 U. S., 286, 1 Sup. Ct. Rep., Ct. Rep., 657, 42 L. Ed., 1068, siih 
 
 140; Union Trust Co. v. Illinois nom. Virginia & Alabama Coal Co. 
 
 Midland R. Co., 117 U. S., 434, 6 v. Central R. & B. Co.; Savannah, 
 
 Sup. Ct. Rep., 809; ^IcLane v. Plac- F. & W. R. Co. v. J., T. & K. W. 
 
 erville & S. V. R. Co., 66 Cal., 606, R. Co., 24 C. C. A., 437, 79 Fed., 
 
 6 Pac, 748 ; Clark v. Central R. & 35, 52 U. S. App., 51 ; First National 
 
 B. Co., 14 C. C. A., 112, 66 Fed., Bank v. Ewing, 43 C. C. A., 150, 103 
 
 803, 30 U. S. App., 263, which was Fed., 16a
 
 CHAP. XI.] RAILWAYS. 505 
 
 exigencies of the case may require, and if the receiver's income 
 proves insufficient to satisfy his indebtedness, the residue is 
 usually paid out of the proceeds of the foreclosure sale, before 
 a distribution is made to the mortgage bondholders. Nor is 
 such expenditure by the receiver limited to the actual operation 
 and management of the property; and reasonable expenses in- 
 curred by him in completing the road for operation, thereby 
 preserving the property and rendering it productive for the 
 benefit of the mortgage bondholders, have been allowed prior- 
 ity over other claims against the company, including those of 
 the bondholders. 15 And when, under authority of the court, 
 the receiver has constructed a branch line of road out of the 
 income of the receivership, thereby largely increasing the rev- 
 enues and profits of the road, and no complaint is made by the 
 parties in interest until more than two years after such action, 
 the court will not entertain objections to such expenditure. ^^ 
 So damages for goods lost in transportation, and for injury to 
 property while the road is operated by the receiver, are a proper 
 charge upon his earnings before the bondholders are entitled 
 to share therein. ^^ So rentals due for a line or road operated 
 by the company under lease, the operation of which the re- 
 
 15 Hale V. Nasliua & Lowell Rail- construction will not be paid in full 
 road, 60 N. H., 333; First National out of the proceeds of sale, but will 
 Bank v. Ewing, 43 C. C. A., 150, be prorated in the proportion which 
 103 Fed., 168. See, also, Milten- the value of the extension bears 
 berger v. Logansport R. Co., 106 to the value of the entire road, 
 U. S., 286, 6 Sup. Ct. Rep., 809. considered with reference to the 
 
 16 Gibert v. W. C, V. M. & G. S. purchase-money of the whole. 
 R. Co., ii Grat., 586. But when Hand v. Savannah & Charleston R. 
 the receiver is authorized by the Co., 17 S. C, 219. 
 
 court to construct an additional 1" Cowdrey v. G., H. & H. R. Co., 
 
 tract or extension, to be paid for 92 U. S., 352. In In re Wreyham, 
 
 out of surplus income, the order re- ]\I. & C. Q. Ry. Co., (1900) 2 Ch. 
 
 serving a lien upon such track as 436, it was held that a judgment for 
 
 security for the persons furnishing injuries to plaintiff's property oc- 
 
 material and money therefor, and curring through the negligence of a 
 
 such branch is afterward sold with receiver is not entitled to priority 
 
 the road as an entirety in the fore- under the provisions of the Railway 
 
 closure proceedings, claims for its Companies Act.
 
 506 RECEIVERS. [chap. XI. 
 
 ceiver is authorized to continue under the lease, may be paid 
 out of the receiver's income. ^^ And when the receiver contin- 
 ues to use a line which had been leased to the company, with 
 the full knowledge and acquiescence of the mortgage bond- 
 holders, the payment of a fair rental for the use of such line 
 and for supplies and materials in its operation may be en- 
 forced out of the proceeds of foreclosure, prior to distribution 
 among the bondholders. ^^ So a claim for the reasonable rental 
 value of terminal facilities furnished to the receiver of an in- 
 solvent railway company after his appointment is entitled to 
 payment as a preferred claim.^^ So, also, a claim for coal 
 which was on hand at the time of the appointment of a re- 
 ceiver and for other coal which was furnished him after his 
 appointment and used in the operation of the road is entitled 
 to priority in payment. ^l But to warrant the payment of the 
 receiver's operating expenses, as for money advanced, supplies 
 and damages incurred, out of the corpus of the mortgaged 
 property in preference to the bondholders, such priority must 
 be specially authorized by the court, and it will not be allowed 
 merely under an order authorizing him to pay operating ex- 
 penses out of income.22 It is proper to allow the expenses 
 of the receiver incurred in the discharge of his trust, such as 
 counsel fees, costs of litigations in protecting the property, ex- 
 penses of care and maintenance, as well as for necessary rolling 
 stock and machinery the purchase of which has been author- 
 is Woodruff V. Erie R. Co., 93 N. amount of rental, see Peoria & P. 
 Y., 609. U. R. Co. V. Chicago, P. & S. W. 
 
 19 Miltenberger v. Logansport R. R. Co., 127 U. S., 200, 8 Sup. Ct. 
 Co., 106 U. S., 286, 6 Sup. Ct. Rep., Rep., 1125. 
 
 809. 21 Clark v. Central R. & B. Co., 
 
 20 Savannah, F. & W. R. Co. v. 14 C. C. A., 112, 66 Fed., 803, 30 
 J., T. & K. W. R. Co., 24 C. C. A., U. S. App., 263, which was affirmed 
 437, 79 Fed., 35, 52 U. S. App., 51. in 170 U. S., 355, 18 Sup. Ct. Rep.. 
 As to the liability of the receiver 657, 42 L. Ed. 1068, sub notn. Vir- 
 for the use of terminal facilities of ginia & Alabama Coal Co. v. Cen- 
 another company, continued by him tral R. & B. Co. 
 
 durii^ his receivership, in the ab- 22 Hand v. Savannah & Charles- 
 
 sence of any contract as to the ton R. Co., 17 S. C, 219.
 
 CHAP. XI.] RAILWAYS. 507 
 
 ized by the court.23 So supplies furnished the receiver, which 
 are necessary to the continued operation of the road and which 
 become a part of the mortgaged property sold under foreclos- 
 ure, may be awarded priority of payment out of the proceeds 
 of sale, there being no other fund available for their payment. 
 And the road consisting of different divisions, which were 
 operated by the receiver as an entirety and sold at different 
 times under separate mortgages upon the respective divisions, 
 in the absence of proof to the contrary it will be presumed upon 
 appeal that the order of distribution of such indebtedness by 
 the court below among the different divisions is correct.^^ In 
 such case, supplies furnished under his original appointment 
 upon a creditor's bill, subsequently extended in a foreclosure 
 suit afterwards instituted, may be allowed priority, such sup- 
 plies having contributed to the preservation of the property dur- 
 ing the receivership. 25 And when an insolvent railway is 
 operated by a receiver in a foreclosure suit, who has in his 
 hands sufficient funds arising from gross earnings with which 
 to pay taxes imposed under the laws of the state upon gross 
 
 23 McLane v. Placerville & S. V. nary taxable costs incurred in the 
 R. Co., 66 Cal., 606, 6 Pac, 748. As proceeding. Farmers' Loan & 
 to the allowance of the expenses of Trust Co. v. Green, 24 C. C. A., 
 a reorganization committee, see 506, 79 Fed., 222, 52 U. S. App., 69. 
 Clarke v. Central R. & B. Co., 54 24 Kneeland v. Bass Foundry & 
 Fed., 556; Central Trust Co. v. Machine Works. 140 U. S., 592, 11 
 Cincinnati, J. & M. R. Co., 58 Fed., Sup. Ct. Rep., 857. 
 500. Where the purchaser at a 25 Kneeland v. Bass Foundry & 
 foreclosure sale of a railroad after- Machine Works, 140 U. S., 592, 11 
 wards seeks to be released from his Sup. Ct. Rep., 857. But see, contra, 
 purchase and is finally so released Kneeland v. American L. & T. Co., 
 and his deposit is ordered returned 136 U. S., 89, 10 Sup. Ct. Rep., 
 to him, the proceeding is to be re- 950, where rentals for rolling stock 
 garded as a hostile one and not as used by the receiver in the same 
 one brought for the benefit or pro- case were refused priority during 
 tection of the subject-matter of the the period of the receivership under 
 receivership, and it is consequently the judgment creditor's bill, but al- 
 error to allow him counsel fees to lowed priority during the receiver- 
 be paid out of the funds in the ship as extended in the foreclosure 
 hands of the receiver. But in such proceedings, 
 case he should be allowed the ordi-
 
 508 RECEIVERS. [chap. XI. 
 
 earnings, the Hen of the state for such taxes will be held para- 
 mount, and the court may, upon the application of the attorney- 
 general of the state, direct their payment by the receiver. 26 
 And in such case it is proper to allow interest, penalties and 
 costs.^"^ So it is competent for the court in a receivership over 
 a railway, under foreclosure proceedings, to authorize the re- 
 ceiver to purchase necessary rolling stock for the use of the 
 road, and to make such indebtedness a prior lien upon the mort- 
 gaged premises, or upon their proceeds.^S 
 
 § 394c. Diversion of current income ground of prefer- 
 ence to current debts. With regard to indebtedness in- 
 curred by a railway company for labor, materials, equipment 
 and supplies before the appointment of a receiver, the right to 
 priority of payment out of the income of the receivership has 
 frequently, although not always, been based upon a diversion 
 of current income from the payment of current indebtedness. 
 The duty of the railway company being to apply its current 
 income to the payment of obligations incurred in the daily 
 operation and management of the road, before applying such 
 income for the benefit of mortgage bondholders, a diversion 
 of such income, as by payment of bonded indebtedness, or by 
 permanent improvement of the property for the benefit of the 
 bondholders, will justify the court in restoring to such unse- 
 cured creditors from the receiver's income what has been im- 
 properly diverted by the company for the benefit of bond- 
 holders. The mortgagee, in accepting his security, is regarded 
 as having impliedly agreed that the current debts of the com- 
 pany incurred in the ordinary course of its business shall be 
 paid out of its receipts before he has any claim upon the in- 
 come. And the court, in directing such payment out of the 
 receiver's income, only does in effect what the company itself 
 
 26 Central Trust Co. v. New 28 Vilas v. Page, 106 N. Y., 439, 
 York City & N. R. Co., 110 N. Y., 13 N. K, 743. 
 
 250, 18 N. E., 92. 
 
 27 First National Bank v. Ewing, 
 43 C. C. A., 150, 103 Fed., 168.
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 509 
 
 should have done had no receiver been appointed. Whenever, 
 therefore, the current income of the road has been diverted by 
 the company from the payment of debts for supphes, materials 
 and labor, and has been appropriated for the benefit of mort- 
 gage bondholders, either by the payment of interest or by the 
 permanent betterment of the property, the labor and supply 
 creditors may be allowed priority of payment out of the re- 
 ceiver's income. 29 It is obvious that the allowance of such 
 
 29Fosdick V. Schall, 99 U. S., 
 235, 25 L. Ed., 339; Burnliam v. 
 Bowen, 111 U. S., 776, 4 Sup. Ct. 
 Rep., 675 ; Williamson's Adm'r v. 
 VV. C, V. M. & G. S. R. Co., 33 Grat., 
 624 ; Turner v. I., B. & W. R. Co., 
 8 Biss., 315 ; Clark v. Central R. & 
 
 B. Co., 14 C. C. A., 112, 66 Fed., 803, 
 30 U. S. App., 263, which was af- 
 firmed in 170 U. S., 355, 18 Sup. Ct. 
 Rep., 657, 42 L. Ed., 1068, sub nom. 
 Virginia & Alabama Coal Co. v. 
 Central R. & B. Co.; St. Louis 
 Trust Co. V. Riley, 16 C. C. A., 610, 
 70 Fed., 32, 36 U. S. App., 100, 30 
 L. R. A., 456; Southern Ry. Co. v. 
 Carnegie Steel Co., 22 C. C. A., 
 289, 76 Fed., 492, 42 U. S. App., 
 145, which was affirmed in 176 U. 
 S., 257, 20 Sup. Ct. Rep., 347, 44 L. 
 Ed., 458; Southern Ry. Co. v. 
 American Brake Co., 22 C. C. A., 
 298, 76 Fed., 502, 42 U. S. App., 
 162; Southern Ry. Co. v. Adams, 22 
 
 C. C. A., 300, 76 Fed., 504, 42 U. S. 
 App., 167; Central Trust Co. v. 
 East T., V. & G. R. Co., 26 C. C. A., 
 30, 80 Fed., 624, 47 U. S. App., 663 ; 
 Central Trust Co. v. Clark, 26 C, 
 C A., 397, 81 Fed., 269, 49 U. S. 
 App., 453; First National Bank v. 
 Ewing, 43 C. C. A., 150, 103 Fed., 
 168; Illinois Trust & Savings Bank 
 V. Doud, 44 C. C. A., 389, 105 Fed., 
 123. See, also. Union Trust Co. v. 
 Illinois Midland R. Co., 117 U. S., 
 
 434, 6 Sup. Ct. Rep., 809, affirming 
 in part and reversing in part S. C, 
 28 Fed., 169; Finance Co. v. Char- 
 leston, C. & C. R. Co., 48 Fed., 
 188; Finance Co. v. Charleston, C. 
 & C. R. Co., 49 Fed., 693. Fosdick 
 V. Schall, 99 U. S., 235, 25 L. Ed., 
 339, is regarded as the leading case 
 upon the subject, and although what 
 is there said upon the question of 
 diversion is obiter, the opinion of 
 the court seems to have been in- 
 tended to establish the rule for fu- 
 ture cases, and has so been general- 
 ly accepted. Two questions were 
 presented: 1st, whether the lien of 
 railway mortgages attached to af- 
 ter-acquired cats; and, 2nd, whether 
 the payment of rentals for such cars 
 during the receivership, and for six 
 months prior thereto, out of the 
 fund in court, it not appearing that 
 there were any funds except those 
 resulting from the foreclosure sale, 
 was warranted. From the case as 
 reported, it does not appear that 
 income had been diverted, either 
 by the company or by the receiver, 
 and the question of diversion does 
 not appear to have been argued by 
 counsel. Waite, C. J., says, p. 251 : 
 "As to the second question, we 
 have no doubt that when a court 
 of chancery is asked by railroad 
 mortgagees to appoint a receiver 
 of railroad property pending pro-
 
 510 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 claims does not rest upon any lien in the technical sense, but 
 rather upon the exercise of the equitable powers of the court 
 in dealing with property of a peculiar character, and under cir- 
 cumstances which, until recently, have been without precedent 
 
 ceedings for foreclosure, the court, 
 in the exercise of a sound judicial 
 discretion, may, as a condition of 
 issuing the necessary order, impose 
 such terms in reference to the pay- 
 ment from the income during the 
 receivership of outstanding debts 
 for labor, supplies, equipment or 
 permanent improvement of the 
 mortgaged property, as may, under 
 the circumstances of the particular 
 case, appear to be reasonable. . . . 
 The income out of which the mort- 
 gagee is to be paid is the net in- 
 come obtained by deducting from 
 the gross earnings what is required 
 for necessary operating and man- 
 aging expenses, proper equipment 
 and useful improvements. Every 
 railroad mortgagee, in accepting 
 his security, impliedly agrees that 
 the current debts made in the or- 
 dinary course of business shall be 
 paid from the current receipts be- 
 fore he has any claim upon the in- 
 come. If, for the convenience of 
 the moment, something is taken 
 from what "may not improperly be 
 called the current debt fund, and 
 put into that which belongs to the 
 mortgage creditors, it certainly is 
 not inequitable for the court, when 
 asked by the mortgagees to take 
 possession of the future income and 
 hold it for their benefit, to require, 
 as a condition of such an order, 
 that what is due from the earnings 
 to the current debt shall be paid by 
 the court from the future current 
 receipts before anything derived 
 from that source goes to the mort- 
 
 gagees. In this way the court will 
 only do what, if a receiver should 
 not be appointed, the company 
 ought itself to do. . . . We think, 
 also, that, if no such order is made 
 when the receiver is appointed, and 
 it appears in the progress of the 
 cause that bonded interest has been 
 paid, additional equipment pro- 
 vided, or lasting and valuable im- 
 provements made out of earnings 
 which ought in equity to have been 
 employed to keep down debts for 
 labor, supplies, and the like, it is 
 within the power of the court to 
 use the income of the receivership 
 to discharge obligations which, but 
 for the diversion of funds, would 
 have been paid in the ordinary 
 course of business." 
 
 It has generally been supposed 
 that Fosdick v. Schall was the first 
 reported case upon the question of 
 diversion of income as the ground 
 for awarding preference to labor 
 and supply creditors. But the doc- 
 trine had been previously recog- 
 nized and followed in some of the 
 circuits, and it is plainly indicated, 
 in the earlier reported opinion of 
 Drummond, J., in Turner v. I., B. 
 & W. R. Co., 8 Biss., 315. Upon 
 the question of diversion of cur- 
 rent income by the receiver to the 
 betterment of the mortgaged prop- 
 erty, as entitling a claimant for 
 personal injuries sustained while 
 the road was operated by the re- 
 ceiver to payment out of the pro- 
 ceeds of such property, see Ryan v. 
 Hays, 62 Tex., 42.
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 511 
 
 in the history of litigation.^^ Nor is it necessary that the 
 diversion of income should have occurred before the appoint- 
 ment of the receiver; and if, during the receivership, current 
 income is apphed for the benefit of the mortgagees, as in pay- 
 ment for additional grounds and rolling stock which inure to 
 their benefit, and which are sold as a part of the mortgaged 
 property, debts of the company for supplies may be made a 
 charge upon the property acquired under the foreclosure, which 
 may be sold to satisfy such indebtedness.^^ But the allowance 
 
 30 Opinion of Drummond, J., in 
 Turner v. I., B. & W. R. Co., 8 
 Biss., 315; Central Trust Co. v. 
 Clark, 26 C. C. A., 397, 81 Fed., 269, 
 49 U. S. App., 453. 
 
 31 Union Trust Co. v. Souther, 
 107 U. S., 591, 2 Sup. Ct. Rep., 295; 
 Burnham v. Bowen, 111 U. S., 776, 
 4 Sup. Ct. Rep., 675 ; Clark v. Cen- 
 tral R. & B. Co., 14 C. C. A., 112, 
 66 Fed., 803, 30 U. S. App., 263, 
 which was affirmed in 170 U. S., 
 355, 18 Sup. Ct. Rep., 657, 42 L. 
 Ed., 1068, sub nom. Virginia & 
 Alabama Coal Co. v. Central R. & 
 
 B. Co.; Southern Ry. Co. v. Car- 
 negie Steel Co., 22 C. C. A., 289, 
 76 Fed., 492, 42 U. S. App., 145, 
 which was affirmed in 176 U. S., 
 257, 20 Sup. Ct. Rep., 347, 44 L. 
 Ed., 458 ; Southern Ry. Co. v. Amer- 
 ican Brake Co., 22 C. C. A., 298, 
 76 Fed., 502, 42 U. S. App., 162; 
 Southern Ry. Co. v. Adams, 22 C. 
 
 C. A., 300, 76 Fed., 504, 42 U. S. 
 App., 167. See, also. Union Trust 
 Co. V. Illinois Midland R. Co., 117 
 U. S., 434, 6 Sup. Ct. Rep., 809, 
 affirming in part and reversing in 
 part S. C, 28 Fed., 169. In Burn- 
 ham V. Bowen, 111 U. S., 776, 4 
 Sup. Ct. Rep,, 675, Waite, C. J., 
 says, p. 782: "But it is furtlier in- 
 sisted that, even though the court 
 
 did err in using the income of the 
 receivership to pay the fixed prior 
 charges on the mortgaged property, 
 and thus increased the security of 
 the bondholders, there is no power 
 now to order a sale of the property 
 in the hands of the trustees to pay 
 back what has thus been diverted. 
 In Fosdick v. Schall, p. 245, it was 
 said that if in a decree of fore- 
 closure a sale is ordered to pay the 
 mortgage debt, provision may be 
 made for a restoration from the 
 proceeds of the sale of the fund 
 which has been diverted, and this 
 clearly because, in equity, the diver- 
 sion created a charge on the prop- 
 erty for whose benefit it had been 
 made. Here the parties interested 
 preferred a decree of strict foreclo- 
 sure, which the court gave, but in 
 giving it saved the rights of all in- 
 tervenors, and continued the case 
 for the final determination of all 
 such questions. The present appeal 
 is from a decree which grew out of 
 this reservation. As the diversion of 
 the fund created in equity a charge 
 on the property as security for its 
 restoration, it is clear that if the 
 mortgagees prefer to take the prop- 
 erty under a decree of strict fore- 
 closure, they take it subject to the 
 charge in favor of the current debt
 
 512 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 of such current debt claims, to be paid out of net income, does 
 not necessarily entitle them to payment out of the corpus of the 
 property, and such preference will not be allowed unless special 
 equities are shown entitling the claimants to priority over 
 the mortgage indebtedness.^^ g^t where it appears that there 
 has been a diversion of income by the payment of interest on 
 
 creditor whose money they have 
 got, and that he can insist on a sale 
 of the property for his benefit, if 
 they fail to make the payment with- 
 out." See, also, Langdon v. Ver- 
 mont & Canada R. Co., 54 Vt., 593, 
 to the point that debts incurred by 
 managers of a railway, after their 
 discharge as receivers proper, under 
 a consent decree, constitute a lien 
 upon the property in the nature of 
 an equitable mortgage, which may 
 be enforced by strict foreclosure. 
 
 32 Blair v. St. L., H. & K. R. Co., 
 22 Fed., 471. As to the length of 
 time prior to the receivership within 
 which current debt claims must have 
 ciccrued to entitle them to priority 
 of payment out of the receiver's in- 
 come, no fixed rule has been deter- 
 mined by the courts, and from the 
 nature of the case none can be. In 
 the United States circuit court for 
 the seventh circuit, the time has 
 frequently been fixed at six months, 
 and this has been followed in other 
 circuits. The only known reason 
 for limiting the time to six months 
 in the seventh circuit is by analogy 
 to a statute of Illinois giving a stat- 
 utory lien upon railways for labor, 
 materials and supplies furnished, 
 provided suit be brought within six 
 months after completion of the con- 
 tract. See, upon this point, opinion 
 of Drummond, J., in Turner v. I., 
 B. & W. R. Co., 8 Biss., 315. And 
 the rule fixing the time at six 
 
 months has been adopted in the 
 sixth circuit. Central Trust Co. v. 
 East T., V. & G. R. Co., 26 C. C. 
 A., 30, SO Fed., 624, 47 U. S. App., 
 663, criticizing the rule which recog- 
 nized a reasonable time; Interna- 
 tional Trust Co. V. Townsend B. & 
 C. Co., 37 C. C. A., 396, 95 Fed., 
 850. But this rule has been rejected 
 in the eighth circuit. Northern Pac. 
 R. Co. V. Lamont, 16 C. C. A., 364, 
 69 Fed., 23, 32 U. S. App., 480. 
 And the circuit court for the north- 
 ern district of Ohio, eastern divi- 
 sion, also declined to be bound by 
 it in Cleveland, C. & S. R. Co. v. 
 Knickerbocker T. Co., 86 Fed., 7Z. 
 And the rule has not been generally 
 adopted, and such claims have been 
 allowed priority, although accruing 
 one or more years before the re- 
 ceivership. The rule recognizing a 
 reasonable time has been adopted in 
 the fourth circuit, and also by the 
 circuit court for the district of Mass- 
 achusetts. Southern Ry. Co. v. 
 Carnegie Steel Co., 22 C. C. A., 289, 
 76 Fed., 492, 42 U. S. App., 145, 
 which was affirmed in 176 U. S., 
 257, 20 Sup. Ct. Rep., 347, 44 L. Ed., 
 458; Southern Ry. Co. v. American 
 Brake Co., 22 C. C. A., 298, 76 Fed., 
 502, 42 U. S. App., 162; Southern 
 Ry. Co. V. Adams, 22 C. C. A., 300, 
 76 Fed., 504, 42 U. S. App., 167; 
 Wood V. N. Y. & N. E. R. Co., 70 
 Fed., 741. See the authorities as to 
 time reviewed in note to Blair v.
 
 CHAP. XI.] RAILWAYS. 513 
 
 bonds prior to the appointment of the receiver and it also ap- 
 pears that after his appointment, he has expended large sums 
 out of income for permanent improvements, the creditor should 
 be allowed payment of his claims from the corpus if the earn- 
 ings in the hands of the receiver are not sufficient to pay 
 them. ^2 And where an insolvent railway company had been 
 operating a leased line as a part of its system and prior to the 
 receivership had applied earnings of the system to improve- 
 ments upon the leased road and to the payment of interest 
 upon its bonds, a claim for repairs upon the leased line arising 
 prior to the appointment of the receiver is entitled to priority 
 over the mortgage bondholders and is entitled to payment as 
 against the purchasers at the foreclosure sale.^* And an addi- 
 tional reason for the allowance of preferred claims is found 
 where the receiver has been appointed not in a proceeding 
 brought for the foreclosure of a mortgage but in a suit insti- 
 tuted by stockholders for the appointment of a receiver to 
 manage the road until satisfactory arrangements can be made 
 for a financial reorganization. ^5 And where, prior to the ap- 
 pointment of the receiver, an action has been commenced 
 against the company to recover the amount of the claim in ques- 
 
 St. L., H. & K. R. Co., 22 Fed., 475. 34 Southern Ry. Co. v. Tillett, 22 
 
 See, also, Central Trust Co. v. C. C. A., 303, 76 Fed., 507, 42 U. S. 
 
 Texas & St. Louis Railway, 22 Fed., App., 173. 
 
 135; Central Trust Co. v. Thurman, 35 New England R. Co. v. Car- 
 94 Ga., 735, 20 S. E., 141. As to negie Steel Co., 21 C. C. A., 219, 75 
 the extent to which the services of Fed., 54, 33 U. S. App., 491 ; South- 
 counsel necessary in the manage- ern Ry. Co. v. Carnegie Steel Co., 
 ment of the road are entitled to 22 C. C. A., 289, 76 Fed., 492, 42 
 priority out of the proceeds of fore- U. S. App., 145, which was affirmed 
 closure, see Bayliss v. L., M. & B. in 176 U. S., 257, 20 Sup. Ct. Rep., 
 R. Co., 9 Biss., 90. 347, 44 L. Ed., 458; Southern Ry. 
 33 Clark v. Central R. & B. Co., Co. v. American Brake Co., 22 C. 
 14 C. C. A.. 112, 66 Fed., 803, 30 C. A., 298, 76 Fed., 502, 42 U. S. 
 U. S. App., 263, which was affirmed App., 162; Southern Ry. Co. v. 
 in 170 U. S., 355, 18 Sup. Ct. Rep., Adams, 22 C. C. A., 300, 76 Fed.. 
 657, 42 L. Ed., 1068, sub nom. Vir- 504, 42 U. S. App., 167. 
 ginia & Alabama Coal Co. v. Cen- 
 tral R. & B. Co. 
 
 Receivers — 33.
 
 514 RECEIVERS. [chap. XI. 
 
 tion, the prosecution of the action to judgment after the in- 
 stitution of the receivership proceedings will not constitute a 
 waiver of the preferential character of the claim. But the 
 judgment in such case is not conclusive upon the receiver, and 
 where it appears that the company interposed a counterclaim 
 for damages resulting from a delay in the delivery of the goods 
 in question and the record of the judgment affirmatively 
 showed that the issue raised by such counter-claim had never 
 been tried in that proceeding, it is proper to allow the receiver 
 to recoup the damages alleged to have resulted from the delay. 
 In such case the receiver is allowed to make the counter-claim 
 upon the theory that the intervener, in seeking to have his claim 
 allowed, is proceeding upon purely equitable grounds and 
 must accordingly do equity himself in order to have a standing 
 in court.^^ But when rails, which are necessary to the main- 
 tenance of the road as a going concern, are furnished the com- 
 pany upon such credit as indicates an expectation that interest 
 upon the mortgage debts is to be paid, and current income is 
 diverted by the company to the payment of interest to second- 
 mortgage bondholders, at whose suit the receiver is appointed, 
 such indebtedness is held not to be a prior charge upon the 
 receiver's earnings as against such bondholders.^'^ 
 
 § 394(/. Preference based upon necessity of preserving 
 property, independent of diversion; salary of attorney; 
 wages. The right to priority of payment, of the class of 
 claims under consideration, has been recognized and the prefer- 
 ence allowed independent of any question of diversion of in- 
 come, and solely upon the necessity for preserving the property 
 and continuing its operation. ^^ Thus, the receiver has been 
 
 36 Central Trust Co. v. Clark, 26 Co., 106 U. S., 286, 1 Sup. Ct. Rep., 
 C. C. A., 397, 81 Fed., 269, 49 U. 140; Taylor v. P. & R. R. Co., 7 
 S. App., 453. Fed., Z77 ; Atkins v. Petersburg R. 
 
 37 Bound V. South Carolina R. Co., 3 Hughes, 307; Union Trust 
 Co., 7 C. C. A., 322, 58 Fed., 473, Co. v. lUinois Midland R. Co., 117 
 8 U. S. App., 461, reversing, as to U. S., 434, 6 Sup. Ct. Rep. 809, 
 such allowance, S. C, 47 Fed., 30. affirming in part and reversing in 
 
 38 Miltenberger v. Logansport R. part S. C, 28 Fed., 169; Finance Co.
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 515 
 
 authorized to pay arrears due for operating expenses for a 
 period of ninety days prior to his appointment, as well as 
 amounts due to other railway companies for materials and re- 
 pairs and for ticket and freight balances before the receiver- 
 ship. And these allowances, together with sums due for 
 rolling stock purchased by the receiver, and for completing an 
 additional line and a bridge as part of the main line of road, 
 have been given priority over the mortgage indebtedness, to 
 be paid out of the earnings of the receiver, or, if necessary, out 
 of the proceeds of foreclosure.^^ So when employees of the 
 
 V. C, C. & C. R. Co., 10 C. C. A., 
 323, 62 Fed., 205, 8 U. S. App., 547; 
 Northern Pacific R. Co. v. Lament, 
 16 C. C. A., 364, 69 Fed., 23, 32 U. 
 S. App., 480; St. Louis Trust Co. v. 
 Riley, 16 C. C. A., 610. 70 Fed., 32, 
 36 U. S. App., 100, 30 L. R. A., 456 ; 
 Central Trust Co. v. East T., V. & 
 G. R. Co., 26 C. C. A., 30, 80 Fed., 
 624, 47 U. S. App., 663; Guaranty 
 Trust Co. V. Galveston C. R. Co., 
 46 C. C. A., 305, 107 Fed., 311; 
 Wood V. N. Y. & N. E. R. Co., 70 
 Fed., 741 ; Cleveland, C. & S. R. Co. 
 V. Knickerbocker T. Co., 86 Fed., 
 72i ; Cooper v. Preston, 105 Fed., 
 403; St. Louis, A. & S. R. Co. v. 
 O'Hara, 177 111., 525, 52 N. E., 734, 
 S3 N. E., 118. And see Central 
 Trust Co. V. St. Louis, A. & T. R. 
 Co., 41 Fed., 551. See, contra, Den- 
 niston v. Chicago, Alton & St. Louis 
 R. Co., 4 Biss., 414. And the rule 
 laid down in the text has been ap- 
 plied in the case of a receivership 
 of an irrigation company which is 
 held to be a quasi-public corpora- 
 tion. Atlantic Trust Co. v. Wood- 
 bridge C. & I. Co., 79 Fed., 39; 
 Atlantic Trust Co. v. Woodbridge 
 C. & I. Co., 86 Fed., 975. 
 
 30 Miltenberger v. Logansport R. 
 Co., 106 U. S., 286, 1 Sup. Ct. Rep., 
 
 140. Mr. Justice Blatchford says, 
 p. 311: " Many circumstances may 
 exist which may make it necessary 
 and indispensable to the business of 
 the road and the preservation of the 
 property, for the receiver to pay 
 pre-existing debts of certain classes 
 out of the earnings of the receiver- 
 ship, or even the corpus of the prop- 
 erty, under the order of the court, 
 with a priority of lien. Yet the dis- 
 cretion to do so should be exercised 
 with very great care. The payment 
 of such debts stands, prima facie, 
 on a different basis from the pay- 
 ment of claims arising under the 
 receivership, while it may be 
 brought within the principle of the 
 latter by special circumstances. It 
 is easy to see that the payment of 
 unpaid debts for operating expenses, 
 accrued within ninety days, due by 
 a railroad company suddenly de- 
 prived of the control of its prop- 
 erty, due to operatives in its em- 
 ploy, whose cessation from work 
 simultaneously is to be deprecated 
 in the interests both of the property 
 and of the public, and the payment 
 of limited amounts due to other and 
 connecting lines of road for mate- 
 rials and repairs and for unpaid 
 ticket and freight balances, the out-
 
 516 RECEIVERS. [chap. XI. 
 
 company were threatening to strike because of non-payment of 
 wages, and many of them had brought attachment suits and 
 recovered judgments against the company, advances to the 
 company to pay such wages, with an agreement for repayment 
 out of the first net earnings, have been allowed priority out of 
 receiver's income.^^ So claims for materials and supplies, such 
 as car springs and spirals and supplies furnished to the ma- 
 chinery department, before the appointment of the receiver, 
 and used by him in the management and operation of the road, 
 may be paid in full out of the net income of the receivership 
 in preference to the demands of mortgage bondholders. Such 
 claims are preferred upon the principle that the net earnings 
 of a railway, while in the hands of a receiver appointed in be- 
 half of mortgagees, are not necessarily or exclusively the prop- 
 erty of the mortgagees, but are subject to the disposal of the 
 court in the payment of claims having superior equities.'*^ So 
 the regular annual salary of the attorney of the company im- 
 mediately prior to the receivership has been given preference 
 in payment.42 ^^d preferences have been allowed in the case 
 
 come of indispensable business re- 40 Atkins v. Petersburg R. Co., 3 
 lations, where a stoppage of the Hughes, 307. In this case, the ad- 
 continuance of such business rela- vances for wages were made nearly 
 tions would be a probable result in two years before the receivership, 
 case of non-payment, the general In Skiddy v. A., M. & O. R. Co., 
 consequence involving largely also 3 Hughes, 320, the same court or- 
 the interests and accommodation of dered payment by the receivers of 
 travel and traffic, may well place wages due to employees for eight 
 such payments in the category of months prior to the receivership, 
 payments to preserve the mortgaged but refused payment of such claims 
 property in a large sense, by main- which had been assigned to third 
 taining the good will and integrity persons, and also refused payment 
 of the enterprise and entitle them for rails and supplies furnished to 
 to be made a first lien." To the the company. 
 
 same effect, see Barton v. Barbour, 41 Hale v. Frost, 99 U. S., 389. 
 
 104 U. S., 126. And see New Eng- See, also. United States Trust Co. 
 
 land R. Co. v. Carnegie Steel Co., v. New York, W. S. & B. R. Co., 
 
 21 C. C. A., 219, 75 Fed., 54, 33 25 Fed., 797. 
 
 U. S. App., 491. And see the case 42 Blair v. St. Louis. H. & K R. 
 
 last cited as to the allowance of Co., 23 Fed., 521. 
 interest upon the claim.
 
 CHAP. XI.] RAILWAYS. 517 
 
 of the following claims, which have been held to be properly 
 classed as current expenses incurred in the ordinary operation 
 and maintenance of the road : an unpaid traffic balance ; ^^ 
 balance due for rental of terminal facilities ; ^* claim for repair 
 work done in placing a defective and unsafe railroad bridge 
 in good condition ; "^^ claim for cross ties used to replace old, 
 decayed ties ; ^^ claim for necessary coupling links, pins and 
 tank steel ; ^'^ claim based upon judgment for providing, fur- 
 nishing and maintaining passenger waiting rooms, office rooms 
 for the company's agents and a convenient place for its em- 
 ployees to board and lodge at reduced rates ; ^^ materials fur- 
 nished for the construction of freight cars which were neces- 
 sary to keep the road a live, going concern ; ^^ claim for dam- 
 ages resulting to an abutting property owner from the con- 
 struction of a railway in a public highway ; ^^ claim based upon 
 the loss of cars which had been furnished by another railway 
 company ; ^1 claim for rail joints and track bolts furnished a 
 street railway company in such small quantities as to amount 
 to nothing more than ordinary repairs.^2 ^^id wages of labor- 
 ers and employees of a street railway company for a period of 
 sixty days before the receivership have been allowed as a lien 
 upon the mortgaged property prior to the lien of mortgage 
 bondholders.^^ It is to be observed, however, as regards 
 claims which are allowed priority of payment out of the pro- 
 
 43 Finance Co. v. C, C. & C. R. O'Hara, 177 111., 525, 52 N. E., 734, 
 Co., 10 C. C. A., 323, 62 Fed., 205, 53 N. E., 118. 
 
 8 U. S. App., 547. 50 Fordyce v. Kansas City & N. 
 
 44 Manhattan Trust Co. v. Sioux C. R. Co., 145 Fed., 566. 
 
 City & N. R. Co., 102 Fed., 710. 51 Grand Trunk Ry. Co. v. Ccn- 
 
 45 Cleveland, C. & S. R. Co. v. tral Vt. R. Co., 88 Fed., 636. 
 Knickerbocker T. Co., 86 Fed., 73. 52 Cooper v. Preston, 105 Fed., 
 
 46 Gregg v. Mercantile Trust Co., 403. 
 
 48 C. C. A., 318, 109 Fed., 220. 53 Litzenberger v. Jarvis-Conklin 
 
 47 Wood V. N. Y. & N. E. R. Co., Trust Co., 8 Utah, 15, 28 Pac, 871. 
 70 Fed., 741. As to the right to priority of various 
 
 48 Northern Pac. R. Co. v. La- classes of claims out of the net 
 mont, 16 C. C. A., 364, 69 Fed., 23, earnings of the receiver, or out of 
 32 U. S. App., 480. the proceeds of foreclosure, in pref- 
 
 49 St. Louis, A. & S. R. Co. v. erence to mortgage bondholders, as
 
 518 RECEIVERS. [chap. XI. 
 
 ceeds of foreclosure, in preference to mortgage bonds, whether 
 represented by receivers' certificates or otherwise, that no pref- 
 erence of one claim over another is allowed among the differ- 
 ent classes of such demands, except as to indebtedness for taxes 
 and receivers' certificates issued to pay taxes or to discharge 
 tax liens, which are given priority over all other demands. ^^ 
 And where the principal sum of a preferred claim for supplies 
 furnished a railway company has been paid by the receiver and 
 accepted by the claimant, the latter can not afterward recover 
 interest upon the claim. ^^ 
 
 § 394t'. Mortgagee seeking equitable relief must submit 
 to conditions; preference to assignee of debt. Preference 
 has also been given in the payment out of receiver's income of 
 operating expenses incurred by the company, as for labor, sup- 
 plies and equipment in the operation of the road, upon the 
 ground that the mortgagee, having invoked the extraordinary 
 aid of a court of equity by the appointment of a receiver in 
 aid of the foreclosure, the court may impose such just and rea- 
 sonable conditions to the relief sought as the exigencies of the 
 case may require. The mortgagee usually having the right 
 under the terms of his mortgage to take possession after de- 
 fault, he may, if he sees fit, invoke the ordinary legal remedies 
 to obtain such possession and to enforce his lien. If, instead 
 of so doing, he seeks the extraordinary remedy of a receiver 
 to manage the property, he must submit to such conditions as 
 the court may see fit to impose with reference to the payment of 
 operating expenses already incurred, out of the income of the 
 receivership. And the fact that the mortgagee has suffered 
 
 affected by legislation in Texas, see 54 Union Trust Co. v. Illinois 
 
 Giles V. Stanton, 86 Tex., 620, 26 Midland R. Co., 117 U. S., 434. 6 
 
 S. W., 615. As to priority of "work- Sup. Ct. Rep., 809, affirming in part 
 
 ing expenses" of a railway operated and reversing in part S. C, 28 Fed., 
 
 by a receiver under the English 169; First National Bank v. Ewing, 
 
 Railway Companies Act of 1867, 43 C. C. A., 150, 103 Fed., 168. 
 
 and as to payment of instalments 55 Southern Ry. Co. v. Dunlop 
 
 due upon conditional sales of rolling Mills, 22 C. C. A., 302, 76 Fed., 505, 
 
 stock, see In re Eastern & Midlands 42 U. S. App., 169. 
 Railway Company, 45 Ch. D., 367.
 
 CHAP. XI.] RAILWAYS. 519 
 
 the railway company to continue in the possession and manage- 
 ment of the property for a considerable period of time after de- 
 fault, thereby permitting new obligations to be incurred for 
 operating expenses and for the maintenance of the property, 
 affords additional ground for requiring such obligations to be 
 discharged out of the income of the receiver as a condition to 
 his appointment.^^ And in this class of cases, the right to 
 preference is regarded as attaching to the debt or demand itself, 
 and not to the person of the creditor. It therefore passes by 
 assignment, and the same preference may be allowed to an as- 
 signee of the original demand.^"^ 
 
 § 394/. Rolling stock; car-trust leases; sale of rolling 
 stock under foreclosure; use of rolling stock by receiver; 
 right of appeal. Questions concerning the payment out of 
 receiver's income of rentals due upon rolling stock leased by the 
 company prior to the receivership are governed by substantially 
 the same rules which have been discussed in the preceding sec- 
 tions. These questions are usually presented in cases where 
 the company had leased rolling stock under what are known as 
 car-trust leases, or other evidences of conditional sale, the lessor 
 or vendor retaining the title to or a lien upon the rolling stock, 
 until the stipulated payments are fully made by the company. 
 In such cases, the vendor's title or lien is unaffected by the ap- 
 pointment of the receiver, that officer acquiring no better title 
 to the rolling stock than that of the company. If the receiver 
 continues to use such rolling stock, the owner or lessor is en- 
 titled to just compensation for its use, to be paid out of the re- 
 ceiver's earnings, such payment being, in effect, the application 
 
 56 Union Trust Co. v. Souther, Newport & Cincinnati Bridge Co. v. 
 
 107 U. S., 591, 2 Sup. Ct. Rep., 295 ; Douglass, 12 Bush, 673. 
 
 Douglass V. Cline, 12 Bush, 608. 57 Union Trust Co. v. Walker, 
 
 See, also, Fosdick v. Schall, 99 U. 107 U. S., 596, 2 Sup. Ct. Rep., 299; 
 
 S., 235, 25 L. Ed., 339; Burnham v. Burnham v. Bowen, 111 U. S., 776, 
 
 Bowen, 111 U. S., 776, 4 Sup. Ct. 4 Sup. Ct. Rep., 675; Mcllhenny v. 
 
 Rep.. 675. As to the right to net Binz, 80 Tex., 1, 13 S. W., 655. 
 
 earnings in such a case, as between See, contra, Skiddy v. A., M. & O. 
 
 mortgage bondholders and various R. Co., 3 Hughes, 320. 
 classes of unsecured creditors, see
 
 520 RECEIVERS. [chap. XI. 
 
 of ciiiTcnt income to the payment of current expenses. ^^ 
 Whether, in the event of a deficiency of receiver's income, such 
 car rentals, accruing either before or during the receivership, 
 are entitled to payment in full out of the proceeds of fore- 
 closure sale, has been said to be dependent upon whether there 
 has been a diversion of current income from current expenses 
 during the receivership.^^ Upon principle, however, it is im- 
 possible to discriminate between claims of this character, and 
 those for wages, materials and other operating expenses, which, 
 as already shown, have been frequently allowed priority out of 
 receiver's income, or have been paid out of the sale of the prop- 
 erty, in the absence of any evidence of diversion of income, 
 upon other equitable considerations addressing themselves to 
 the discretionary powers of the court.<50 g^t if the receiver's 
 income is sufficient to pay for additional rolling stock necessary 
 to the operation of the road, the court will not permit him to 
 make a loan by the creation of a car trust to procure such roll- 
 ing stock, in order that current income may be applied to in- 
 terest upon bonded indebtedness.^^ And if cars held by the 
 company under conditional sales are used by the receiver and 
 
 58 Fosdick V. Schall, 99 U. S., 235, forth in the case as reported, and 
 25 L. Ed., 339; Myer v. Car Co., having purchased additional rolling 
 102 U. S., 1 ; Coe v. New Jersey stock, these allowances, with others, 
 Midland R. Co., 27 N. J. Eq., 37; were awarded priority over the 
 Piatt V. Philadelphia & R. R. Co., mortgage indebtedness, to be paid 
 28 C. C. A., 488, 84 Fed., 535, 55 out of the receiver's earnings, or, 
 U. S. App., 452; Mercantile Trust if necessary, out of the proceeds of 
 & Deposit Co. V. Southern I. C. foreclosure. In Coe v. New Jersey 
 Line, 113 Ala., 543, 21 So., 373; Midland R. Co., 27 N. J. Eq., 37, 
 Lane v. Macon & A. Ry. Co., 96 it was held that lessors of rolling 
 Ga., 630, 24 S. E., 157. stock leased to a railway company 
 
 59 Fosdick v. Schall, 99 U. S., were not entitled to payment in full 
 235, 25 L. Ed., 339. of the rent reserved in the lease, at 
 
 60 Miltenberger v. Logansport R. the hands of the receivers, unless 
 Co., 106 U. S., 286, 1 Sup. Ct. Rep., the court should find that such pay- 
 140. In this case, the receiver having ment was for the best interests of 
 made an adjustment with the own- the trust represented by the re- 
 ers of rolling stock held under con- ceivers. 
 
 ditional sales to the company, the 61 Taylor v. P. & R. R. Co., 9 
 
 nature of which is not clearly set Fed., 1.
 
 CHAP. XI.] RAILWAYS. 521 
 
 sold under the foreclosure decree, the vendor may be paid in 
 full out of the proceeds of such sale, his lien upon the cars being 
 paramount to that of the mortgagees. ^2 go if rolling stock is 
 purchased by the receiver out of the earnings of the road and 
 sold under the foreclosure, the mortgage covering after-ac- 
 quired property, the purchaser at the sale is entitled to such 
 rolling stock as against the mortgagees.^'^ Rental for cars 
 leased and used by the receiver is entitled to preference, as 
 well as a reasonable sum expended for ordinary repairs to the 
 cars so used, although interest upon such sums will not be al- 
 lowed as against mortgage bondholders or purchasers. But car 
 rentals incurred prior to the receivership will not be preferred, 
 such indebtedness being distinguished from claims for labor 
 and supplies which are necessary from day to day for the 
 maintenance of the road.^^ So track rentals incurred sev- 
 eral years prior to the receivership are not entitled to payment 
 out of the proceeds of the foreclosure sale, especially where 
 there is nothing to show that the claimant relied upon any- 
 thing more than the general credit of the company and where 
 there is no other special equity which it is the duty of the 
 court to enforce.^^ Nor will such a claim be allowed upon 
 the ground that the insolvent railroad has received income for 
 the use of the leased cars upon other lines of road after the 
 making of the lease and prior to the appointment of the re- 
 ceiver.66 And the receiver of a railway company is not bound 
 
 62 Fosdick V. Car Company, 99 U. Stock T. Co. v. Anderson, 22 C. C. 
 S., 256. A., 109, 76 Fed., 164, 46 U. S. App., 
 
 63 Strang v. M. & E. R. Co., 3 138; Pullman's Palace-Car Co. v. 
 Woods, 613. But it is held in the American L. & T. Co., 28 C. C. A., 
 same case, that the purchaser is not 263, 84 Fed., 18, 55 U. S. App., 170; 
 entitled to a balance of income re- Grand Trunk Ry. Co. v. Central Vt. 
 maining in the receiver's hands, R. Co., 90 Fed., 163. 
 
 such income belonging to the cred- 65 Louisville & N. R. Co. v. Cen- 
 
 itors of the company in the order tral Trust Co., 31 C. C. A., 89, 87 
 
 of their priorities. Fed., 500, 59 U. S. App., 694. 
 
 64 Thomas v. Western Car Co., 66 Mather Humane Stock T. Co. 
 149 U. S., 95, 13 Sup. Ct. Rep., 824, v. Anderson, 22 C. C. A., 109, 76 
 reversing in part and modifying S. Fed., 164, 46 U. S. App., 138. 
 
 C, 36 Fed., 808; Mather Humane
 
 522 RECEIVERS. [chap. XI. 
 
 by such leases but is eutitled to a reasonable leng-th of time 
 after his appointment in which to elect whether or not he will 
 adopt them, and a mere temporary use under the order of his 
 appointment does not constitute such an election, nor will an 
 experimental arrangement by which the receiver retains pos- 
 session of the cars with a view to determining whether or not 
 their use will be profitable constitute such an adoption of the 
 lease.^^'^ \\'hen a receiver appointed in a foreclosure suit, 
 brought by the trustee in the mortgage, takes possession of 
 and continues to use rolling stock wdiich had been leased to 
 the company under car-trust leases, he thereby becomes liable 
 for a reasonable rental. In such case it is proper to allow a 
 fair monthly rental, instead of rental upon the basis of actual 
 mileage, and if there are no net earnings by the receiver, such 
 rental may be decreed to be paid in full out of the proceeds of 
 foreclosure sale before distribution among mortgage bond- 
 holders. Such priority, however, will not be allowed for the 
 use of the cars during a prior receivership in a judgment 
 creditor's suit, before the trustee in the mortgage had filed its 
 bill for foreclosure and for a receiver. And the purchaser at 
 the foreclosure sale, to whom is reserved by the decree the 
 right to appeal from all orders allowing priorities, may appeal 
 from an order fixing the amount of such rentals and giving 
 them priority over mortgage indebtedness.^^ So an order 
 made upon a petition of creditors, preferring their claims over 
 
 67 Piatt V. Philadelphia & R. R. cumstances of the case, entitle the 
 Co., 28 C. C. A., 488, 84 Fed., 535, owner or lessor to rental under the 
 55 U. S. App., 452. leases at the hands of the receiver, 
 
 68 Kneeland v. American L. & T. or out of the corpus of the estate, 
 Co., 136 U. S., 89, 10 Sup. Ct. Rep., but only to a return of the cars 
 950. In Farmers' Loan & Trust Co. within a reasonable time and to 
 V. Chicago & A. R. Co., 42 Fed., rental upon a quantum meruit for 
 6, it was held that the retention and their use by the receiver. It was 
 use by the receiver, with the knowl- further held that there was no con- 
 edge of mortgage bondholders and version of the cars by the receiver 
 without their disapproval, of cars because of his non-compliance with 
 held by the company under car- a demand upon him by the owner 
 trust leases, did not, under the cir- for their surrender.
 
 CHAP. XI,] RAILWAYS. 523 
 
 that of a mortgagee of rolling stock and directing its sale in 
 satisfaction of their demands, is an appealable order, since it 
 finally determines the title to the rolling stock as against the 
 mortgagee. 6^ 
 
 § 394^. When judgment creditors allowed priority. The 
 income of a railroad while operated by receivers appointed in 
 behalf of mortgage bondholders is regarded as part of the 
 mortgaged property in the sense that it is to be applied to ex- 
 penses of administration and management, and to the liens 
 and trusts with which it is charged. And until such expenses 
 and liens have been satisfied, judgment creditors of the rail- 
 way company are not entitled to payment out of the income.*^^ 
 But judgment creditors of the company, who are entitled to 
 payment out of the funds in the hands of or due to the com- 
 pany when the receiver is appointed, may, if such funds are 
 otherwise appropriated by the receiver, be paid in full out of 
 the receiver's income in preference to mortgage bondholders."^^ 
 Whether a judgment against the receiver himself is payable out 
 of the proceeds of foreclosure would seem to depend rather up- 
 on the nature of the cause of action than upon the fact that the 
 demand has been reduced to judgment. If the cause of action 
 grows out of materials supplied for the necessary operation of 
 the road for the benefit of the mortgagees, as for rental of and 
 repairs to rolling stock used by the receiver, a judgment re- 
 covered against him in a suit brought by leave of the court ap- 
 pointing him, and in a court of competent jurisdiction, is con- 
 clusive against the bondholders and may be paid out of the 
 proceeds of foreclosure.'^^ g^t if the judgment is for personal 
 injuries sustained by a passenger upon the road while oper- 
 ated by the receiver, it is held not to be entitled to payment 
 out of the fund arising from the foreclosure. Such a judg- 
 ment, it is held, is no more entitled to be made a lien upon 
 
 on Radebaugh v. Tacoma & P. R. 71 Gibert v. W. C, V. M. & G. S. 
 
 Co.. 8 Wash., 570, 36 Pac, 460. R. Co., 33 Grat., 645. 
 
 70 North Carolina R. Co. v. Drew, 72 Turner v. I., B. & W. R. Co., 
 
 3 Woods, 692. 8 Biss., 527.
 
 524 RECEIVERS. [chap. XI. 
 
 the property or fund, as against the mortgagees, than if the 
 injury had been sustained while the road was operated by the 
 company, the creation of such hen not being necessary to the 
 operation of the road for the benefit of the bondholders in 
 whose behalf the receiver is appointed.'^^ Such a judgment 
 may, however, be paid out of the net income of the receiver- 
 ship in preference to the claims of the bondholders to such in- 
 come7* 
 
 § 394/?. Claims of general creditors other than for op- 
 erating expenses not preferred. Claims of general cred- 
 itors of a railway company, which have been incurred prior to 
 the receivership, and which do not fall within the class of cur- 
 rent expenses for the ordinary operation and maintenance of 
 the road, such as necessary labor, supplies, materials or equip- 
 ment, and which do not, therefore, have any special equities 
 entitling them to payment out of current income, will not be 
 preferred out of the earnings of the receiver, or out of the 
 proceeds of the foreclosure sale. The allowance of claims, 
 which results in the displacement of the priority of mortgage 
 liens, is to be regarded as the exception and not as the rule, 
 and such claims will not be given a preference unless they may 
 fairly and reasonably be regarded as debts incurred in the or- 
 dinary, daily operation and maintenance of the road. And 
 where the expense is an extraordinary one, incurred outside 
 the ordinary course of the business of the road, such as for 
 original construction or reconstruction, or for extraordinary 
 repairs, or for extensions or permanent improvements, the pref- 
 erence W'ill not be granted. And while, from the illustrations 
 given in the preceding sections, where preferences have been 
 given, it will be seen that the courts have, in particular in- 
 stances, gone to unwarranted extremes in the recognition of 
 such claims, the decided tendency at the present time, as shown 
 by the recent cases, is to restrict rather than to extend the al- 
 
 73 Davenport v. Receivers, 2 1'^ Ex parte Brown, 15 S. C, 518; 
 
 Woods, 519. And see Hopkins v. Klein v. Jewett, 26 N. J. Eq., 474. 
 Connel, 2 Tenn. Ch., 323.
 
 CHAP. XI.] RAILWAYS. 525 
 
 lowance. As Illustrating the rule it is held that a loan made 
 to an electric street railway company upon the pledge of its 
 current income to enable it to construct a substantial and bene- 
 ficial addition to its plant, which was necessary to the main- 
 tenance of the volume of its business, but was not indispensable 
 to its continuance as a going concern, should not be allowed a 
 preference. '^^ So a preference has been denied upon a claim 
 for a plow car and ballast cars which were purchased by a 
 railway company to be used in filling in the road."^^ So the 
 court has refused a preference for claims for salaries of offi- 
 cers of the company, money loaned to the company, claims of 
 contractors for construction,'^'^ clocks furnished for the use of 
 the company, ''^^ and money advanced to complete the construc- 
 tion of the road, which will not be preferred when it is not 
 shown that such advances were made at the request of or by 
 reason of the promises of the bondholders.'^^ So a cause of ac- 
 tion against a railway company, growing out of the destruc- 
 tion of property caused by fire escaping from a locomotive, 
 does not fall within that class of operating expenses which have 
 been allowed priority, and can not be enforced against the re- 
 ceiver.^o And when a locomotive had been sold to the com- 
 pany on credit and had become subject to the lien of its mort- 
 gage more than six months prior to the appointment of a 
 receiver in a foreclosure suit, and the owner had recovered a 
 considerable portion of the purchase price by pursuing his or- 
 dinary legal remedies against the company, he was denied pref- 
 erence in the payment of the balance of his claim out of the re- 
 ceiver's net earnings.^l As further illustrating the rule under 
 discussion, the following claims have been denied a, prefer- 
 
 75 Illinois Trust & Savings Bank New York, W. S. & B. R. Co., 25 
 V. Doud, 44 C. C. A., 389, 105 Fed., Fed., 800. 
 
 123. 79 /„ re Kelly, 5 Fed., 846; S. C, 
 
 76 Rodger Ballast Car Co. v. 10 Biss., 151. 
 
 Omaha. K. C. & E. R. Co., 83 C. 80 Hiles v. Case, 14 Fed., 141. 
 
 C. A., 403, 154 Fed., 629. 81 Manchester Locomotive Works 
 
 77 Addison v. Lewis, 75 Va., 701. v. Truesdale, 44 Minn., 115, 46 N. 
 
 78 United States Trust Co. v. W., 301.
 
 526 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 ence : a claim for twenty thousand tons of steel rails held to be 
 material for work of original construction ; ^^ money loaned 
 to a railway company upon its notes at various times from 
 nine months to four years prior to the receivership for the 
 purpose of placing the road in a safer condition and resulting 
 in increased earnings and additional security to the bond- 
 holders; ^^ claim for the use of terminal facilities under a per- 
 petual lease which gave the lessor the right to terminate the 
 lease and retake possession of the premises and all improve- 
 ments made thereon by the lessee upon default in payment of 
 the rent for thirty days ; ^^ balance due for locomotives where 
 it does not appear that the expenditure was to keep the road a 
 going concern, although it increased the earning capacity and 
 enhanced the security of the bondholders ; ^^ claim for adver- 
 tising matter ;^^ claims for labor, materials and supplies fur- 
 nished for w^ork of original construction or reconstruction ; ^'^ 
 claim for heaters, purifiers and condensers furnished a street 
 
 82 Lackawanna Iron & Coal Co. 
 V. Farmers' L. & T. Co., 24 C. C. 
 A., 487, 79 Fed., 202, 52 U. S. App., 
 91, affirmed in 176 U. S., 298, 20 
 Sup. Ct. Rep., 363, 44 L. Ed., 475. 
 
 83 Morgan's Louisiana & T. R. & 
 S. S. Co. V. Farmers' L. & T. Co., 
 24 C. C. A., 495, 79 Fed., 210, 52 
 U. S. App., 107; Southern Develop- 
 ment Co. V. Same, 24 C. C. A., 497, 
 79 Fed., 212, 52 U. S. App., 111. 
 
 84 Gregg V. Mercantile Trust Co., 
 48 C. C. A., 318, 109 Fed., 220; St. 
 Louis Merchants' B. T. Ry. Co. z>. 
 Continental Trust Co., 49 C. C. A., 
 529, 111 Fed., 669. 
 
 85 Rhode Island Locomotive 
 Works 7'. Continental T. Co., 47 C. 
 C. A., 147, 108 Fed., 5; Gregg v. 
 Mercantile Trust Co., 48 C. C. A., 
 318, 109 Fed., 220. 
 
 86 Central Trust Co. v. East T., 
 V. & G. R. Co., 26 C. C. A.. 30, 80 
 Fed., 624, 47 U. S. App., 663. And 
 
 see Poland v. Railroad Co., 52 Vt., 
 144. 
 
 87 First National Bank v. Ewing, 
 43 C. C. A., 150, 103 Fed., 168; St. 
 Louis Merchants' B. T. Ry. Co. v. 
 Continental Trust Co., 49 C. C. A., 
 529, 111 Fed., 669; Farmers' Loan 
 & Trust Co. V. Cape Fear & Y. V. 
 R. Co., 73 Fed., 712; Atlantic Trust 
 Co. V. Woodbridge C. & I. Co., 79 
 Fed., 39; Atlantic Trust Co. v. 
 Woodbridge C. & I. Co., 86 Fed., 
 975. In Cleveland, C. & S. R. Co. 
 V. Knickerbocker T. Co., 86 Fed., 
 73, the court define "original con- 
 struction" as "that construction of 
 bridges, grades, culverts, rails, ties, 
 docks, etc., that is necessary to be 
 done before the road can be opened, 
 or before it can be occupied or used, 
 not such structures as are intended 
 to replace old and worn-out counter- 
 parts."
 
 CHAP. XI.] RAILWAYS. 527 
 
 railway company ; ^^ claim of a surety company based upon its 
 liability as surety upon a supersedeas bond given by a railway 
 company upon appeals from judgments against it, the com- 
 pany having, pending the appeal, become insolvent and a re- 
 ceiver having been appointed. ^^ So claims for legal services 
 rendered to the company more than a year before the receiver- 
 ship have been refused priority as against mortgage bondhold- 
 ers, such claims being distinguishable from those for labor and 
 supplies necessary to maintain the road as a going concern.^^ 
 And while legal services rendered and disbursements paid 
 by the regular counsel of the company before the receivership 
 may be paid out of the receiver's income in like manner and to 
 the same extent as the services of other employees, under an 
 order authorizing the receiver to pay all sums due to employees 
 for ninety days before his appointment, they will not be allowed 
 priority over mortgage bonds; but the attorney's lien upon 
 papers and muniments of title of the company in his posses- 
 sion will be recognized to the full extent of his entire claim. ^^ 
 
 ^8 McCornack v. Salem Ry. Co., ment of the judgment, suits were 
 
 34 Ore., 543, 56 Pac, 1022. brought against the sureties upon 
 
 80 Whitely v. Central Trust Co., the bond. Thereupon the sureties 
 
 22 C. C. A., 67, 76 Fed., 74, 34 L. intervened in the receivership pro- 
 
 R. A., 303; Pennsylvania Steel Co. ceeding to have the judgment paid 
 
 V. New York C. Ry. Co., 165 Fed., out of net income. The court held 
 
 485. In Farmers' Loan & Trust Co. that the liability of the sureties did 
 
 V. Northern Pac. R. Co., 71 Fed., not become fixed until default by 
 
 245, a judgment had been rendered the company after the appointment 
 
 against a railway company for per- of the receiver and that the claim 
 
 sonal injuries sustained through the was one for the ordinary operation 
 
 negligent operation of the road. of the road and was therefore en- 
 
 This judgment being affirmed by titled to a preference, 
 the supreme court of the state, a 90 Blair v. St. Louis, H. & K. R. 
 
 writ of error was sued out of the Co., 23 Fed., 521 ; Finance Co. v. 
 
 supreme court of the United States, Charleston, C. & C. R. Co., 52 Fed., 
 
 upon the filing of a supersedeas 678. 
 
 bond with sureties. The latter 01 Finance Co. v. Charleston, C. 
 
 court dismissed the proceeding for & C. R. Co., 52 Fed., 526. As to 
 
 want of jurisdiction. In the mean- the allowance of counsel fees for 
 
 time the road had gone into the services rendered in behalf of cred- 
 
 hands of a receiver and, upon de- itors in procuring the allowance of 
 
 fault of the company in the pay- claims against the receiver, see Cen-
 
 52S RECEIVERS. [chap. XI. 
 
 So a claim for legal services rendered to a former railway 
 company, whose property has passed by foreclosure and sale 
 to a new company, will not be enforced against a receiver in 
 foreclosure proceedings against the new company. ^2 go claims 
 for advances by an attorney to pay judgments against the com- 
 pany for wages and for killing stock before the receivership 
 will not be allowed priority. Nor will preference be given to 
 the claim of an attorney for the amount of judgments recov- 
 ered against the company and paid by him as surety upon ap- 
 peal bonds, the judgments being upon demands which would 
 not have been entitled to priority.^^ 
 
 § 394/. Judgments and claims for personal injuries oc- 
 curring prior to receivership not preferred. The rule is 
 well established that judgments or claims for damages for 
 personal injuries resulting from the negligence of the em- 
 ployees of a railway company prior to the appointment of a 
 receiver are not entitled to priority over the mortgage bond- 
 holders and are therefore not payable as preferred debts either 
 out of the surplus income or out of the corpus of the estate in 
 the case of a sale. Such judgments or claims can in no sense 
 be said to have been incurred for the improvement of the 
 road or to be based upon considerations which in any way 
 enure for the benefit of the mortgage security, and accordingly 
 no equity exists in favor of their allowance,^^ Nor can such 
 
 tral Trust Co. v. Valley R. Co., 55 vent a sale of its property under ex- 
 Fed., 903. And see Evansville & ecution, to a lien upon the property 
 St. Louis R. Co. V. Wilson, 138 U. of the company after its sale under 
 S., 501, 11 Sup. Ct. Rep., 405, 34 foreclosure, see Union Trust Co. v. 
 L. Ed., 1023 ; Gregg v. Mercantile Morrison, 125 U. S., 591, 8 Sup. Ct. 
 Trust Co., 48 C. C. A., 318, 109 Rep., 1004. 
 Fed., 220. 94 St. Louis Trust Co. v. Riley, 
 
 92 Bound V. South Carolina R. 16 C. C. A., 610, 70 Fed., 32, 36 
 Co., 51 Fed., 58. S. C, on appeal U. S. App.. 100, 30 L. R. A., 456; 
 from final decree, 7 C. C. A., 322, Farmers' Loan & Trust Co. v. 
 58 Fed., 473, 8 U. S. App., 461. Northern Pac. R. Co., 24 C. C. A., 
 
 93 Blair v. St. Louis, H. & K. R. 511, 79 Fed., 227, 48 U. S. App,, 
 Co., 23 Fed., 521. As to the right 324; Farmers' Loan & Trust Co. v. 
 of a surety upon an injunction bond Nestelle, 25 C. C. A., 194, 79 Fed., 
 given by a railway company to pre- 748, 48 U. S. App., 326; Veatch v.
 
 CHAP. XI.] RAILWAYS. 529 
 
 a judgment or claim be allowed upon the ground of diversion 
 of income by the bondholders' receiver, where the trust deed 
 provides that in case of default, the trustee may take posses- 
 sion and may from time to time make such repairs and im- 
 provments as may seem proper to promote the interests of the 
 bondholders. But where, prior to the appointment of the re- 
 ceiver for the mortgage bondholders, a receiver had been ap- 
 pointed in a stockholders' suit, in whose hands income had ac- 
 cumulated, to which the lien of the mortgage did not attach, 
 such judgments or claims, whether arising in contract or tort, 
 are entitled to participate in the distribution of such income 
 which had thus accumulated while the road was being oper- 
 ated by the receiver, at the instance of the stockholders, before 
 the income had been impounded by the mortgage bondhold- 
 ers.^^ But such judgments or claims are not payable out of 
 net income which had been earned prior to the receivership 
 and turned over to the receiver upon his appointment, where 
 the claimant had delayed proceeding against the fund until 
 the company had paid the money to the receiver.^^ 
 
 § 394;'. When payment allowed out of proceeds of sale. 
 Upon the question whether debts and obligations incurred in 
 the ordinary operation and maintenance of a railroad prior 
 to the appointment of a receiver are entitled to payment, as 
 against the mortgage bondholders, out of the proceeds of the 
 foreclosure sale where there is no sufficient income in the hands 
 
 American L. & T. Co., 25 C. C. A., Northern Pac. R. Co., 74 Fed., 431 ; 
 
 39, 79 Fed., 471, 49 U. S. App., 191, Front Street Cable Ry. Co. v. 
 
 affirmed on rehearing in 28 C. C. Drake, 84 Fed., 257; Pennsylvania 
 
 A., 384, 84 Fed., 274, 55 U. S. App., Steel Co. v. New York C. Ry. Co., 
 
 191 ; Hampton v. Norfolk & W. R. 165 Fed., 457. 
 
 Co., 62 C. C. A., 388, 127 Fed., 662; 95 Veatch v. American L. & T. 
 
 Atlantic Trust Co. v. Dana, 62 C. Co., 25 C. C. A., 39, 79 Fed., 471, 
 
 C. A., 657, 128 Fed., 209 ; Atchison, 49 U. S. App., 191, affirmed on re- 
 
 T. & S. F. R. Co. V. Osborn, 78 hearing in 28 C. C. A.. 384, 84 Fed., 
 
 C. C. A., 378, 148 Fed., 606; Far- 274, 55 U. S. App., 191. 
 
 mers' Loan & Trust Co. v. Detroit, ^6 Farmers' Loan & Trust Co. v. 
 
 B. C. & A. R. Co., 71 Fed., 29; Detroit, B. C. & A. R. Co., 71 Fed., 
 
 Farmers' Loan & Trust Co. v. 29. 
 Receivers — 34.
 
 530 RECEIVERS [chap. XI. 
 
 of the receiver to meet them, the authorities are somewhat un- 
 settled. The tendency at the present time, however, is to make 
 the solution of the question depend upon whether or not there 
 has been a diversion of income prior to the appointment of 
 the receiver. The supreme court of the United States has 
 made the distinction between debts incurred for supplies which 
 were necessary for the business of the road and those which 
 were necessary merely for its preservation, holding that claims 
 of the latter class are not entitled to payment out of the corpus 
 of the estate in the hands of the receiver unless a prior diver- 
 sion of income can be shown. ^"^ And the court of appeals of 
 the sixth circuit in several well considered cases has held gen- 
 erally that claims of the character under discussion are payable 
 out of the corpus of the estate only when there has been a 
 prior diversion of income and then only to the extent of such 
 diversion. ^^ And the rule as thus laid down has been applied 
 by the supreme court of Alabama. ^^ 
 
 § 394A;. Statutory liens preserved; when interest dis- 
 allowed. Statutory liens upon the property of a railway 
 company, given to creditors furnishing labor and supplies, may 
 be enforced and the rights of such creditors protected, not- 
 withstanding the appointment of receivers in foreclosure pro- 
 ceedings against the company. And when such creditors are 
 entitled, by statute, to an attachment against the rolling stock 
 and personal property of the railway, the rights of the mort- 
 gagees being subordinated by the statute to those of the at- 
 taching creditors, they may enforce their rights after the ap- 
 pointment of receivers against such property, and if that shall 
 prove insufficient they may be preferred in payment out of 
 
 97 Gregg V. Metropolitan Trust Townsend B. & C. Co., 37 C. C. A., 
 Co., 197 U. S., 183, 25 Sup. Ct. Rep., 396, 95 Fed., 850; Rhode Island Lo- 
 415, affirming S. C, 59 C. C. A., comotive Works v. Continental T. 
 637. 124 Fed., 721. And see Rodger Co., 47 C. C. A., 147, 108 Fed., 5 ; 
 Ballast Car Co. v. Omaha, K. C. & Gregg v. Mercantile Trust Co., 48 
 E. R. Co., 83 C. C. A., 403, 154 Fed., C. C. A., 318, 109 Fed., 220. 
 
 629. 99Hammerly v. Mercantile T. & 
 
 98 International Trust Co. v. D. Co., 123 Ala., 596, 26 So., 646.
 
 CHAP. XI.] RAILWAYS. 531 
 
 the net income of the receivers.^ So when the receiver has 
 been appointed by a federal court, creditors claiming statutory- 
 liens upon the property may be permitted to present their 
 claims in the suit in which the receiver was appointed, with 
 like effect as if filed in the courts of the state. And creditors 
 claiming an equitable lien under demands arising in other states, 
 where no statutory lien is given, may establish their claims in 
 the same manner against the fund in the hands of the re- 
 ceiver. ^ But whether interest shall be paid upon demands 
 which are allowed by the court out of the funds of the receiver- 
 ship is regarded as depending upon the nature of the cause of 
 action itself, rather than upon the fact that it has been reduced 
 to judgment. And when claims for damages resulting from 
 the operation of the railway are reduced to judgment in ac- 
 tions against the corporation, and are afterward allowed as 
 claims against the receiver's fund, they are not entitled to in- 
 terest, since as against the fund they are treated as divested of 
 their character as judgments and rest upon the equities of the 
 original cause of action, the damages in which were unliquidat- 
 ed.3 And in general, where the property of an insolvent rail- 
 way company passes into the hands of a receiver, interest on 
 claims should not be allowed against the fund, since the delay 
 in such case is the act of the law and is a necessary incident to 
 the settlement of the estate."* 
 
 § 394/. Claims for construction; board; groceries. As 
 regards claims for construction prior to the receivership, when 
 mortgages securing bonds of the company are executed upon 
 
 1 Poland V. Railroad Co., 52 Vt., parties in interest. Receivers v. 
 144. Wortendyke, 27 N. J. Eq., 658. 
 
 2 Blair v. St. L., H. & K. R. Co., 3 Ex parte Brown, 18 S. C, 87. 
 19 Fed., 861. But persons claiming And see, post, § 803. 
 
 an equitable lien for advances upon 4 Thomas v. Western Car Co., 
 
 rolling stock in use by the receiver 149 U. S., 95, 13 Sup. Ct. Rep., 824, 
 
 should not be heard, or their rights reversing in part and modifying S. 
 
 determined, in advance of a final C, 36 Fed., 808; Grand Trunk Ry. 
 
 hearing as to all claims upon such Co. v. Central Vt. R. Co., 91 Fed., 
 
 property, when conflicting claims 569. 
 and liens are asserted by different
 
 532 RECEIVERS. [chap. XI. 
 
 its unfinished road, which show upon their face that the work 
 of construction shall be carried to completion and that the 
 mortgage lien shall attach to the road as completed, the new 
 road thus constructed after the execution of the mortgages 
 may be regarded as a "useful improvement" for the purpose 
 of determining the right of creditors for such construction to 
 priority over bondholders. If the road passes into the hands of 
 a receiver before payment for such construction is made, and 
 if the receiver's net income from operation is diverted to pay- 
 ment of interest upon the mortgage bonds and to permanent 
 betterments of the property, priority may be allowed for such 
 construction as against the bondholders. Upon similar grounds 
 claims for labor in construction, operation and maintenance, 
 which are entitled to liens under the laws of the state, may 
 be allowed priority, although incurred more than six months 
 before the receivership. So claims of boarding-house keepers 
 for boardiflg laborers and of grocers for furnishing supplies 
 to such boarding houses, the wages of the laborers having been 
 withheld for payment of such claims, but not applied for that 
 purpose, are entitled to like priority. Nor does the taking 
 of additional security, as the note of the company, for such 
 claims deprive them of their right to priority.^ And where, 
 prior to the appointment of a receiver over a railway com- 
 pany, work had been commenced upon the construction of a 
 building to be occupied as a hotel and for offices of the com- 
 pany, and the building was afterward completed under a con- 
 tract with the receiver, and it appeared that the work was for 
 the benefit of the railroad and its receiver and was in other 
 respects in furtherance of the interests of the road and that 
 the building must be completed or the work already done would 
 be a total loss, it was held that the balance due for the comple- 
 tion of the structure was entitled to payment as a preferred 
 claim. And it was further held that the fact that the building 
 was not covered by the mortgage rendered it more equitable 
 
 5 Mcllhenny v. Binz, 80 Tex., 1, 13 S. W., 655.
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 533 
 
 that the proceeds of any sale of the building should be applied 
 to the payment of the cost of its construction. ^ 
 
 § 394wi. Receiver not an assignee of term under lease; 
 how far liable for rent. A receiver of a railway, by taking 
 possession of leased lines which are embraced in the order ap- 
 pointing him, does not thereby become an assignee of the 
 term or liable for rent under the covenants of the leases. He 
 is entitled to a reasonable time after taking possession to de- 
 termine whether it is advantageous to retain such leased lines, 
 and when within such time he reports to the court that a leased 
 line is not profitable, and the court afterward surrenders it 
 to the owners, rental for the use of such line by the receiver 
 will not be decreed priority out of the proceeds of sale of the 
 mortgaged premises.*^ Upon the other hand, where the court 
 
 6 Girard Insurance & Trust Co. 
 V. Cooper, 162 U. S., 529, 16 Sup. 
 Ct. Rep., 879, 40 L. Ed., 1062, af- 
 firming S. C, 2 C. C. A., 245, 51 
 Fed., 332, 4 U. S. App., 631. 
 
 TQuincy, M. & P. R- Co. v. 
 Humphreys, 145 U. S., 82, 12 Sup. 
 Ct. Rep., 787, affirming S. C, 34 
 Fed., 259; St. Joseph & St. L. R. 
 Co. V. Humphreys, 145 U. S., 105, 
 12 Sup. Ct. Rep., 795, affirming S. 
 C, 34 Fed., 259; United States 
 Trust Co. V. Wabash W. R. Co., 
 150 U. S., 287, 14 Sup. Ct. Rep., 
 86; Seney v. Wabash W. R. Co., 
 150 U. S., 310, 14 Sup. Ct. Rep., 94; 
 Ames V. Union Pacific R. Co., 60 
 Fed., 966; Carswell v. F. L. & T. Co., 
 20 C. C. A., 282, 74 Fed., 88, 43 U. S. 
 App., 300; Mercantile Trust Co. v. 
 Farmers' L. & T. Co., 26 C. C. A., 
 383, 81 Fed., 254, 49 U. S. App., 462, 
 affirming ». C, 71 Fed., 601; Cen- 
 tral Trust Co. V. Continental Trust 
 Co., 30 C. C. A., 235, 86 Fed., 517, 
 58 U. S. App., 6.04. And see, ante, 
 § 273. And see Sunflower Oil Co. 
 V. Wilson, 142 U. S., 313, 12 Sup. 
 
 Ct. Rep., 235; Savannah, F. & W. 
 R. Co. V. J., T. & K W. R. Co., 24 
 C. C. A., 437, 79 Fed., 35, 52 U. S. 
 App., 51 ; Park v. New York, L. E. 
 & W. R. Co., 57 Fed., 799; New 
 York, P. & O. R. Co. v. New York, 
 L. E. & W. R. Co., 58 Fed., 268; 
 Central Railroad & Banking Co. v. 
 Farmers' L. & T. Co., 79 Fed., 158; 
 Commonwealth v. Franklin Insur- 
 ance Co., 115 Mass., 278; Gaither v. 
 Stockbridge, 67 Md., 222, 9 Atl., 632, 
 10 Atl., 309 ; Seibert v. Minneapolis 
 & St. L. Ry. Co., 58 Minn., 53, 59 
 N. W., 879. In Spencer v. Brooks, 
 97 Ga., 681, 25 S. E., 480, it was 
 held that where an employee of a 
 railway company had entered into a 
 contract with the company agreeing 
 to be bound by a rule prohibiting 
 brakemen to go between cars to 
 couple and uncouple them, such con- 
 tract was inadmissible in evidence 
 upon behalf of the receiver of the 
 company in an action brought by a 
 brakeman against the receiver for 
 injuries suffered while uncoupling 
 cars.
 
 534 RECEIVERS. [chap. XI. 
 
 determines that it is for the best interests of the parties con- 
 cerned that the receiver should adopt the leases covering leased 
 lines, the rents reserved by them become an integral part of 
 the operating expenses of the receivership and as such are 
 entitled to a preference over the mortgage indebtedness out of 
 the earnings of the receivership or the proceeds of the sale. 
 And in such case the determination of the question whether 
 it is to the best interest of all concerned that the leases should 
 be adopted or renounced is one of business and administrative 
 policy resting largely in the discretion of the chancellor and 
 his judgment in the matter, in the absence of a clear abuse of 
 such discretion, will not be disturbed upon appeal.^ And when 
 the company is operating leased lines prior to a receivership up- 
 on a bill for foreclosure by mortgage bondholders, and immedi- 
 ately upon the appointment of the receivers the lessor demands 
 of them the adoption of the lease or the surrender of the leased 
 lines, and against his protest a delay of several weeks occurs 
 in determining whether the receivers will elect to surrender the 
 property, which is then surrendered, for the period of such use 
 by the receivers they may be decreed to pay full rental in ac- 
 cordance with the terms of the lease. Nor, in such case, will 
 the receivers be permitted to set off against such rental de- 
 mands in favor of the lessee company and against the lessor 
 which accrued prior to the receivership.^ If, however, the re- 
 ceivers are ordered to take possession of, operate and manage 
 all rolling-stock leases and other property of the company, and 
 they take possession of sleeping-cars held under contract or 
 lease by the company, and, with full knowledge of such con- 
 tract and of its covenants, they continue to use such cars until 
 the expiration of the term, they will be treated as assignees of 
 
 8 Mercantile Trust Co. v. Far- 9 Farmers' Loan & Trust Co. v. 
 
 mers' L. & T. Co., 26 C. C. A., 383, Northern Pacific R. Co.,^ 58 Fed., 
 
 81 Fed., 254, 49 U. S. App., 462, 257. And see Charlotte, C. & A. 
 
 affirming S. C, 71 Fed., 601; Cen- R. Co. v. C. & L. N. G. R. Co., 
 
 tral Trust Co. v. Continental Trust 118 N. C, 1078, 24 S. E., 769; Clyde 
 
 Co., 30 C. C. A., 235, 86 Fed., 517, v. R. & D. R. Co., 63 Fed., 21. 
 58 U. S. App., 604.
 
 CHAP. XI.] RAILWAYS. 535 
 
 the company and will be liable for necessary repairs to the cars 
 upon their return to the lessor, to the same extent that the les- 
 see would have been liable.^^ And where a railway company 
 was operating part of its line under a lease from another com- 
 pany, by which the lessee agreed to pay all taxes upon the 
 leased line, and the receiver of the lessee railway company has 
 adopted and affirmed the lease, a claim for prior taxes which 
 have been paid by the lessor but for which the lessee was li- 
 able under its agreement is entitled to. priority as a preferred 
 claim. ^1 
 
 § 394w. Paramount lien enforced by resale of road. 
 When an indebtedness is incurred by the receiver of a railway, 
 under an order of the court, in discharging a paramount lien 
 upon the mortgaged property, and a sale is had without satis- 
 fying such indebtedness, the sale being made subject to such 
 liens as the court may thereafter determine, the appropriate 
 method of satisfying such demand, in default of payment by 
 the purchaser, is by a resale of the property, or of so much as 
 may be necessary for this purpose. And in such case, satis- 
 faction should be had by a resale, rather than by setting aside 
 the former sale after its confirmation and after the execution 
 of a deed to the purchaser.^^ 
 
 10 Easton v. Houston & T. C. R. the receiver was not appointed until 
 Co., 38 Fed., 784. 1894. 
 
 11 United States Trust Co. v. 12 Farmers' Loan & Trust Co. v. 
 Mercantile Trust Co., 31 C. C. A., Newman, 127 U. S., 649, 8 Sup. Ct. 
 427, 88 Fed., 140, 59 U. S. App., Rep., 1364. This case in effect 
 330. It is to be observed in this overrules Farmers Loan & Trust 
 case that the taxes in question were Co. v. Burlington & S. W, R. Co., 
 for the years 1887 and 1888, while 32 Fed., 805.
 
 536 RECEIVERS. [chap. XI. 
 
 V. Actions Against the Receiver. 
 
 § 395. Receivers answerable in official capacity for injuries sustained; 
 
 judgment not personal; action need not be at receiver's 
 
 domicile. 
 395a. Leave to sue receiver necessary; relief on petition. 
 395b. Rule changed by act of congress; construction of act. 
 395c. Removal of cause by receiver to federal court. 
 395d. New York decisions unsettled; liability for injuries; rental of 
 
 leased lines. 
 
 396. Railway company in hands of receiver not responsible for 
 
 negligence of his servants; liability of company for failure 
 to comply with penal statute. 
 
 397. Statutory liability of company; judgment not enforceable by 
 
 state court out of funds held by receiver of United States 
 
 court. 
 397a. Suit against company after surrender of possession by receiver. 
 397b. Receiver's liability official, not personal; may be enforced 
 
 against his successor. 
 
 398. Receivers liable to action for breach of duty as common car- 
 
 riers. 
 
 398a. Right of way; contract with express company; personal con- 
 tracts of company not binding on receiver. 
 
 398&. Receiver not liable after discharge; liability of purchasers of 
 road. 
 
 § 395. Receivers answerable in official capacity for in- 
 juries sustained; judgment not personal; action need not 
 be at receiver's domicile. It has elsewhere been shown, 
 that, as to rights of action which may be maintained against 
 receivers, they are, in general, the same which might have been 
 maintained against the person to whose estate and rights the 
 receiver succeeds. And in conformity with this general doc- 
 trine, when the affairs of a railway company have passed into 
 the hands of receivers, who are operating the road under the 
 direction of the court, having exclusive charge of its manage- 
 ment and of the employment of operatives and employees, the 
 entire control of the company having passed to the receivers 
 as fully as it was before exercised by the officers of the road, 
 the receivers may be held answerable in their official capacity 
 for injuries sustained, in the same manner that the corpora-
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 537 
 
 tion would have been liable. An action will, therefore, lie 
 against such receivers in their official capacity, leave of court 
 being obtained, to recover for personal injuries sustained by 
 reason of the negligent management of the road. And in de- 
 termining the liability of the receivers, in such cases, upon 
 such questions as negligence of principal and of agent, acts of 
 co-employees, responsibility for defective machinery, and kin- 
 dred questions, the same principles are applicable which gov- 
 ern this class of actions when instituted against railways 
 themselves.12 In such an action, the receivers can not exempt 
 
 13 Meara's Administrator v. Hol- 
 brook, 20 Ohio St., 137; Potter v. 
 Bunnell, id., 159; Klein v. Jewett, 
 26 N. J. Eq., 474; Erwin v. Daven- 
 port, 9 Heisk., 44; Ex parte Brown, 
 IS S. C, 518; Ex parte Johnson, 
 19 S. C, 492; Blumenthal v. Brain- 
 erd, 38 Vt., 402; Lyman v. Central 
 Vermont R. Co., 59 Vt., 167, 10 Atl., 
 346; Missouri Pacific R. Co. v. 
 Texas Pacific R. Co., 30 Fed., 167; 
 Missouri Pacific R. Co. v. Texas 
 Pacific R. Co., 30 Fed., 169; Central 
 Trust Co. V. Wabash, St. L. & P. 
 R. Co., 26 Fed., 12; Hornsby v. 
 Eddy, 56 Fed., 461 ; Rouse v. Harry, 
 55 Kan., 589, 40 Pac, 1007 ; Fuller- 
 ton V. Fordyce, 121 Mo., 1, 25 S. 
 W., 587, 42 Am. St. Rep., 516; St. 
 Louis .S. W. Ry. Co. v. Holbrook, 
 19 C. C. A., 385, 73 Fed., 112, 41 
 U. S. App., 33. See, also, Ohio & 
 Mississippi R. Co. v. Davis, 23 Ind., 
 553; Nichols v. Smith, 115 Mass., 
 332; Sloan v. Central Iowa R. Co., 
 62 Iowa, 728, 16 N. W., 331 ; Paige 
 V. Smith, 99 Mass., 395. But see, 
 contra, Cardot v. Barney, 63 N. Y., 
 281. In South Carolina & G. R. Co. 
 V. C, C. G. & C. Ry. Co., 35 C. C. 
 A., 423, 93 Fed.. 543, it was held 
 that where the receiver of an in- 
 solvent railway company had en- 
 
 tered into a valid agreement by 
 which another railway company was 
 to operate the insolvent railroad, 
 whereby the latter became the agent 
 of the receiver, and judgments for 
 personal injuries resulting from the 
 operation of the road had been re- 
 covered against the agent carrier, 
 the latter was entitled to be reim- 
 bursed by the receiver on account 
 of such judgments, where it ap- 
 peared that the injuries were not 
 the result of recklessness or gross 
 carelessness upon the part of the 
 operating railway and that the lat- 
 ter had exercised due care in the 
 management of the road and in the 
 selection of employees. In Georgia 
 the liability of receivers and others 
 operating railways has been defined 
 by statute. Laws of 1895, p. 103. 
 See Barry v. McGhee, 100 Ga., 759, 
 28 S. E., 455. Meara's Administra- 
 tor V. Holbrook, 20 Ohio St., 137, 
 supra, was an action by an adminis- 
 trator, brought by leave of court 
 against the receivers of a railroad, 
 for personal injuries alleged to have 
 been sustained by the deceased, who 
 was a laborer on the railroad, in the 
 employ of defendants, in attempting 
 to couple two cars in use upon the 
 road. The cause of action was set
 
 538 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 themselves from liability upon the ground that they are public 
 officers, and as such, not responsible for the negligence of 
 their employees, nor on the ground that they are agents and 
 trustees; for, as to the public and as to their employees, the re- 
 ceivers occupy neither of these capacities, there being no tangi- 
 ble principle behind them who can be held liable in such ac- 
 
 forth in a petition and an amended 
 petition, to both of which demurrers 
 were filed. The demurrers were 
 sustained in the court below and 
 judgment was rendered against the 
 plaintiff. On error to the supreme 
 court, the judgment was reversed. 
 The court, Day, J., observe, p. 147: 
 'The demurrers admit the truth of 
 the allegations contained in the peti- 
 tions.- It is averred in each of them 
 that Meara was employed by the re- 
 ceivers as a laborer on the railroad. 
 It is, therefore, not questioned but 
 that his position as such was subor- 
 dinate to the managing agents and 
 superintendents of the receivers. 
 It is averred in each of the peti- 
 tions that the death of Meara was 
 caused while engaged in the busi- 
 ness of the receivers, without any 
 fault of his own. In the original 
 petition it is alleged to have been 
 caused by the negligence of the 
 agents and superintendents of the 
 receivers; and, in both the amended 
 petitions, by the negligence of the 
 receivers themselves. The questions 
 are, therefore, presented, whether a 
 receiver operating a railroad is an- 
 swerable in his official capacity for 
 an injury to his servant, sustained, 
 while in his employment, by reason 
 of the negligence of the receiver, or 
 the negligence of his agents in a 
 position superior to that of the serv- 
 ant. On the strength of the authori- 
 ties already cited, as well as the 
 
 reason and justice of the case, we 
 think the question of his liability, in 
 an action against him as receiver, 
 should be determined by the same 
 rules and principles that are appli- 
 cable to persons or corporations en- 
 gaged in the business of operating 
 a railroad. . . . Nor would a re- 
 covery against him, and satisfac- 
 tion out of the fund properly ap- 
 plicable to that purpose, work a 
 greater hardship to the creditors 
 and stockholders of the company 
 than that always sustained by them 
 where the company itself is made 
 liable for like grievances when it 
 operates its own road. On the con- 
 trary, if the receiver be not held 
 officially chargeable, in many in- 
 stances they might gain an advan- 
 tage, by his operating the road, over 
 what they would have if the com- 
 pany conducted its own business, 
 subject to its incidental losses. Nor 
 does it follow, if the receiver be 
 held answerable as the company 
 would have been if it had operated 
 the road, that he would be relieved 
 from accountability to his cestui 
 que trust for losses they might 
 sustain through his personal mis- 
 conduct or negligence. In every 
 view, therefore, it accords with 
 sound principle and reason, that a 
 receiver, exercising the franchises 
 of a railroad company, should be 
 held amenable in his official ca- 
 pacity to the same rules of liability
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 539 
 
 tions.i^ /^n^ since they exercise the functions and powers of 
 common carriers, they can not escape corresponding duties and 
 liabilities.!^ When, therefore, a statute of the state provides 
 that railway companies shall be liable for all damages which 
 may be sustained by any employee by reason of the negligence 
 of other employees, or when damages are given by statute for 
 the killing of cattle by a railway company, a receiver operating 
 a railway is liable in like manner and to the same extent as the 
 company itself would have been.i^ It is, however, important 
 
 that are applicable to the company 
 while it exercises the same powers 
 of operating the road. In deter- 
 mining the case before us, then, it 
 only remains for us to apply the 
 ordinary principles controlling cases 
 of this class. Where a subordinate 
 servant is injured, without his own 
 fault, while engaged in the business 
 of his employment, by reason of the 
 negligence of his master or his 
 agents, the master is liable to him in 
 damages. Fifield v. Northern Rail- 
 road, 42 N. H., 225; Brydon v. 
 Stewart, 2 Macq. H. L., 30; Rail- 
 road V. Keary, 3 Ohio St., 201. 
 Meara was the servant of the re- 
 ceivers and was injured according 
 to the cases made in the several 
 petitions demurred to, either 
 through the negligence of the re- 
 ceivers, or that of their agents in a 
 position superior to that of Meara. 
 The receivers are, therefore, liable. 
 It follows that the court of common 
 pleas erred in sustaining the de- 
 murrers of the receivers to each of 
 the petitions, and that the judgment 
 in their favor must, therefore, be 
 reversed." 
 
 14 Mcara's Administrator v. Hol- 
 brook, 20 Ohio St., 137. See, con- 
 tra. Cardgt v. Barney, 63 N. Y., 281. 
 
 15Z:-r parte Brown, 15 S. C, 518. 
 
 16 Hornsby v. Eddy, 56 Fed., 461 ; 
 Central Trust Co. v. Wabash, St. 
 L. & P. R. Co., 26 Fed., 12; Inter- 
 national & G. N. Ry. Co. V. Bender, 
 87 Tex., 99, 26 S. W., 1047. But see 
 Central Trust Co. v. Wabash, St. 
 L. & P. R. Co., 30 Fed., 344. In 
 Georgia it is held that a statute pro- 
 viding that railway companies shall 
 be liable for injuries caused to their 
 employees through the negligence 
 of co-employees does not apply to 
 the receiver of a railway company 
 and that the fellow-servant rule 
 therefore remains in force. And it 
 is accordingly held that the receiver 
 is not liable where the injury results 
 from the negligence of a fellow- 
 servant. Henderson v. Walker, 55 
 Ga., 481 ; Thurman v. Cherokee R. 
 Co., 56 Ga., 376; Youngblood v. 
 Comer, 97 Ga., 152, 23 S. E., 
 509, 25 S. E., 838; Robinson v. 
 Huidekoper, 298 Ga., 306, 25 S. 
 E., 440; Central Trust Co. v. 
 East Tennessee, V. & G. Ry. 
 Co., 69 Fed., 353, followed by Same 
 V. Same, 69 Fed., 357. But in 
 Minnesota it is held that the em- 
 ployees of the receiver of a rail- 
 way company who is operating and 
 managing the road come within the 
 protection of the statute of that 
 state which abolishes the fellow-
 
 540 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 to observe that judgment should be rendered against a re- 
 ceiver in his official character only and it should not be made a 
 lien upon the property or earnings in his possession.^"^ Such 
 a judgment is regarded as merely ascertaining and fixing the 
 amount due to the plaintiff, leaving the court which appointed 
 the receiver to determine how and when it may be paid out of 
 the assets in the receiver's hands.^^ And since the action is 
 brought against the receiver in his official capacity and not 
 against him personally, it is not necessary that it should be 
 brought at the domicile of the receiver, but where the road is 
 operated through several counties, it may be brought in the 
 county in which the cause of action has arisen.^^ But the 
 receiver of a railway company is not liable for damages for 
 personal injuries suffered prior to his appointment and he is 
 therefore not a proper party to an action brought for the recov- 
 
 servant rule in its application to 
 railway companies. Mikkelson v. 
 Truesdale, 63 Minn., 137, 65 N. W., 
 260. And in Peirce v. Van Dusen, 
 24 C. C. A., 280, 78 Fed., 693, 47 U. 
 S. App., 339, it was held that the 
 statute of Ohio which provided 
 that railway companies within the 
 state should not make certain con- 
 tracts for exemption from liability 
 to employees, and also abolished 
 under certain circumstances the fel- 
 low-servant rule, did not apply to a 
 receiver appointed over such a rail- 
 way company, and that it made no 
 difference in such case that the re- 
 ceiver had been appointed by a fed- 
 eral court. 
 
 17 Brown v. Brown, 71 Tex., 355, 
 9 S. W., 261. 
 
 18 Harding v. Nettleton, 86 Mo., 
 658; Brown v. Brown, 71 Tex., 355, 
 9 S. W., 261. Where receiver's 
 certificates, by the order authoriz- 
 ing their issue and upon their face, 
 are made a first and prior lien up- 
 
 on the property of the company and 
 upon all net income derived from 
 its operation after the payment of 
 operating expenses and the costs 
 of administration, a claim for per- 
 sonal injuries suffered during the 
 operation of the road by the re- 
 ceiver is to be regarded as an ex- 
 pense incurred in the operation of 
 the road and, as such, it is entitled 
 to payment out of the income or 
 out of the corpus in preference to 
 such certificates. Anderson v. Con- 
 diet, 35 C. C. A., 335, 93 Fed., 349. 
 As to the liability of the corpus of 
 the estate in the hands of the re- 
 ceiver of a railway company for the 
 satisfaction of a claim for personal 
 injuries suffered prior to the ap- 
 pointment of the receiver, see Fore- 
 man V. Central Trust Co., 18 C. C. 
 A., 321, 71 Fed., 776, 30 U. S. App., 
 653. 
 
 19 Ball V. Mabry, 91 Ga., 781, 18 
 S. E., 64.
 
 CHAP. XI.] RAILWAYS. 541 
 
 ery of such damages. ^0 And an ancillary receiver appointed 
 in a foreign state over the property of a railway company can 
 not be held liable for damages for personal injuries suffered 
 in the state of original appointment and resulting from the 
 operation of the road in that state by the original receiver. ^i 
 § 395a. Leave to sue receiver necessary; relief on peti- 
 tion. It is to be borne in mind that the general doctrine 
 elsewhere discussed,22 requiring leave of court to be granted 
 before suit may be brought against a receiver, applies, in the 
 absence of legislation to the contrary, with equal force in ac- 
 tions against receivers of railways.23 And it rests wholly with- 
 in the discretion of the court appointing the receiver, upon 
 leave being asked to bring an action against him, to grant per- 
 mission to bring an independent suit, or to determine the mat- 
 ter upon petition in the cause in which he was appointed, di- 
 recting, if necessary, an issue to be tried by a jury as to the 
 damages sustained.24 The general usage is to determine all 
 demands against a receiver upon petition in the original cause, 
 and this practice is both more expeditious and more economical 
 than by resort to an independent action. And the right to a 
 
 20 Northern Pacific R. Co. v. 3 Fed., 97; S. C, 2 Flippin, 704; 
 Heflin, 27 C. C. A., 460. 83 Fed., Central Trust Co., v. Wabash, St. 
 93, 48' U. S. App., 562. And see, L. & P. R. Co., 23 Fed., 858; 
 post, § 397&. Central Trust Co. v. D. & R. G. R. 
 
 21 Union Trust Co. v. Atchison, Co., 38 C. C. A., 143, 97 Fed., 239. 
 T. & S. F. R. Co., 87 Fed., 530. And see Lyman v. Central Vermont 
 
 22 Chapter VIII,' subdivision V, R. Co., 59 Vt., 167, 10 Atl., 346, 
 ante. where it is held that when a re- 
 
 23 Barton v. Barbour, 104 U. S., ceiver of a railway is also operating 
 126, affirming S. C, 3 MacArthur, in connection therewith another 
 212; Melendy v. Barbour, 78 Va., road as lessee, he is regarded as 
 544; Kennedy v. I., C. & L. R. Co., operating the leased road, not in his 
 3 Fed., 97; S. C, 2 Flippin, 704. official capacity, but under contract 
 See, contra, Kinney v. Crocker, as lessee, and that an action may be 
 18 Wis., 74; St. Joseph & Denver brought against him to recover for 
 City R. Co. V. Smith, 19 Kan., 225; injuries sustained by the negligence 
 Blumcnthal v. Brainerd, 38 Vt., of his servants in the operation of 
 402; Paige v. Smith, 99 ]\Iass., 395. such leased road, without leave of 
 
 24 Melendy v. Barbour, 78 Va., court. 
 544; Kennedy v. I., C. & L. R. Co.,
 
 542 RECEIVERS. [chap. XI. 
 
 trial by jury, in such cases, is treated as wholly discretionary 
 with the court, which may direct the issues of fact to be tried 
 by a jury if it sees fit, or may refer them to a master for de- 
 termination. 25 But it is regarded as the better practice, when 
 the cause of action is in tort, to grant leave to bring an inde- 
 pendent action at law against the receiver, a court of equity 
 not being the proper forum for determining questions of tort 
 and of damages. 26 And when a street railway company is au- 
 thorized by statute to intersect with and use the lines of an- 
 other company, upon payment of just compensation, the court, 
 having appointed a receiver over an existing street railway, 
 has power to entertain a petition by another company to deter- 
 mine the compensation to be paid by it for the use of the tracks 
 and appurtenances in the receiver's possession.^'^ But since a 
 receiver of a railway is not liable to an action for injuries sus- 
 tained before his appointment and while the road was op- 
 erated by the company, leave of court will not be granted to 
 bring such action, and the person aggrieved will be left to pur- 
 sue his remedy against the company.28 
 
 § 3956. Rule changed by act of congress; construction 
 of act. The common-law rule requiring leave of court 
 before bringing an action against a receiver has been changed 
 by act of congress, as regards actions brought against re- 
 ceivers of United States courts, in respect to their transac- 
 tions in carrying on the business committed to their charge, 
 as to which matters suit may now be brought without leave of 
 court.29 The effect of this act is to authorize the bringing of 
 
 25 Kennedy v. I., C. & L. R. Co., may be reviewed upon the merits on 
 3 Fed., 97; S. C, 2 Flippin, 704. appeal. And see Central Trust Co. 
 
 26 Palys V. Jewett, 32 N. J. Eq., v. D. & G. R. Co., 38 C. C. A., 143, 
 302. But it is held in the same case, 97 Fed., 239. 
 
 that where the person seeking dam- -~ Pacific R. Co. v. Wade, 91 Cal., 
 ages for injuries sustained while 449, 27 Pac, 768. 
 the road is operated by a receiver 28 Finance Co. v. Charleston, C. h 
 submits his demand by petition in C. R. Co., 46 Fed., 508. 
 the equity suit, and both parties 29 Section 3, of the act of con- 
 submit to a hearing in this form, gress approved T^Tarch 3, 1887, c. 
 the judgment of the court below 373, 24 Stat., 554, as revised and
 
 CHAP. XL] 
 
 RAILWAYS. 
 
 543 
 
 actions against such receivers in all matters growing out of 
 their management of the property in their charge, in any court 
 having jurisdiction of the subject-matter, and without leave of 
 the federal court by which the receiver was appointed. And 
 while no other court may interfere with the custody of the 
 property in the receiver's possession, it may yet establish a debt 
 by its judgment against the receivership, leaving the manner 
 of its payment and the adjustment of all equities between dif- 
 ferent claimants interested in the property to the determina- 
 tion of the court which appointed the receiver.^^ And under 
 
 corrected by an act approved Au- 
 gust 13, 1888, c. 866, 25 Stat., 436, 
 provides as follows : "That every 
 receiver or manager of any proper- 
 ty, appointed by any court of the 
 United States, may be sued in re- 
 spect of any act or transaction of 
 his in carrying on the business con- 
 nected with such property, without 
 the previous leave of the court in 
 which such receiver or manager 
 was appointed; but such suit shall 
 be subject to the general equity 
 jurisdiction of the court in which 
 such receiver or manager was ap- 
 pointed, so far as the same shall be 
 necessary to the ends of justice." 
 1 U. S. Comp. Stat. 1901, p. 582; 4 
 Fed. Stat. Ann., 387. 
 
 30 Dillingham v. Russell, 73 Tex., 
 47, 11 S. W., 139; Dillingham v. 
 Hawk, 9 C. C. A., 101, 60 Fed., 494, 
 23 U. S. App., 273. 23 L. R. A., 517; 
 Reinhart v. Sutton, 58 Kan.. 726, 51 
 Pac, 221; Chesapeake, O. & S. R. 
 R. Co.'s Receivers v. Smith, 101 
 Ky., 707, 42 S. W., 538; Baer v. 
 McCullough, 176 N. Y., 97, 68 N. 
 E., 129. See, also, Southern Pac. 
 R. Co., V. Maddox, 75 Tex., 300, 
 12 S. W., 815; Foreman v. Central 
 Trust Co., 18 C. C. A., 321. 71 Fed., 
 776, 30 U. S. App., 653; Colonial 
 
 Trust Co. V. Pacific P. & N. Co., 
 142 Fed., 298; Ball v. Mabry, 91 
 Ga., 781, 18 S. E., 64; Rogers v. 
 Chippewa Circuit Judge, 135 Mich., 
 79, 97 N. W., 154; Peterson v. 
 Baker, 78 Kan., 337, — Pac, — . 
 As to the control exercised by the 
 federal court over judgments ob- 
 tained against its receiver since the 
 passage of the act in question, as to 
 the effect of such judgments and as 
 to the method of enforcing their 
 payment, see Central Trust Co. v. 
 St. Louis, A. & T. R. Co., 41 Fed., 
 551 ; Missouri Pacific R. Co. v. 
 Texas Pacific R. Co., 41 Fed., 
 311. In Baer v. McCullough, supra, 
 it was held, under the New York 
 code of procedure which provides 
 that in case of a transfer of inter- 
 est or devolution of liability, the 
 action may be continued by or 
 against the original party, unless 
 the court directs the person to 
 whom the interest is transferred 
 or upon whom the liability is de- 
 volved to be substituted in the ac- 
 tion or joined with the original 
 party, that an action instituted un- 
 der the act of congress against the 
 receiver of a railway company may, 
 upon the final discharge of the re- 
 ceiver by the federal court, be con-
 
 544 RECEIVERS. [CITAP. XT. 
 
 the statute it is held that where a judgment is recovered against 
 the receiver of a federal court in the court of a state, such judg- 
 ment is concUisive as to the existence and amount of the plain- 
 tiff's claim when it is sought to enforce it in the receivership 
 proceeding.31 Nor is the conclusiveness of the judgment im- 
 paired because it was rendered without a trial by jury, where 
 the statute of the state permits either party to call a jury but 
 they have failed to do so in the particular case.^^ A^d the 
 act is held to be broad enough to include an action for dam- 
 ages for injuries resulting from the negligence of a receiver 
 in failing to keep a station platform in a reasonably safe condi- 
 tion. ^^ And an action against the receiver of a water company 
 for injuries resulting from a defective highway which the re- 
 ceiver was bound to keep in a reasonably safe condition comes 
 within the act and leave to sue is unnecessary.^^ So, an action 
 against the receivers of a railway company to restrain them 
 from entering upon plaintiff's land for railroad purposes until 
 condemnation and payment of compensation falls within the 
 statute and may be brought without leave of the appointing 
 court.^^ And the act applies to a receiver of a corporation 
 created under federal law appointed by one of the territorial 
 courts of the United States.^^ Nor is the right given by the 
 statute limited to the bringing of actions against the receiver 
 in the court by which he was appointed, or in other federal 
 courts, but he may be sued in any court of competent jurisdic- 
 tion, either state or federal. ^^^ And process may be served upon 
 the receiver in the same manner prescribed by the law of the 
 
 tinued against him, or the plaintiff Holbrook, 19 C. C. A., 385, 73 Fed, 
 
 in the action may substitute the pur- 112, 41 U. S. App., 33. 
 
 chaser as party defendant. 33 Fullerton v. Fordyce, 121 Mo., 
 
 31 Dillingham v. Hawk, 9 C. C. 1, 25 S. W., 587, 42 Am. St. Rep., 
 A. 101, 60 Fed., 494, 23 U. S. App., 516. 
 
 273. 23 L. R. A., 517; St. Louis S. 34 Robinson v. Mills, 25 Mont., 
 
 W. Ry. Co. V. Holbrook, 19 C. C. 391, 65 Pac, 114. 
 
 A.. 385, 73 Fed., 112, 41 U. S. App., 35 Stoize v. M. & L. W. R. Co., 
 
 33. And see State v. Port Royal 104 Wis., 47, 80 N. W.. 68. 
 
 & A. R. Co., 84 Fed., 67. 36 Wheeler v. Smith, 81 Fed., 319. 
 
 32 St. Louis S. W. Ry. Co. v. 36a Central Trust Co. v. E. T., V. 
 
 & G. R. Co., 59 Fed., 523.
 
 CHAP. XI.] RAILWAYS. 545 
 
 state for the service of like process upon the corporation over 
 which he has been appointed. ^"^ But the act does not apply to 
 or authorize proceedings by garnishment, since such proceed- 
 ings are not suits against the receiver for any act or transac- 
 tion of his, but are an equitable seizure of the fund within the 
 custody of the court.^^ Upon the same principle it is improp- 
 er to institute an action in a state court without leave of the 
 federal court which has appointed a receiver, where the object 
 of the action is to recover the possession of property in the 
 custody of the receiver, ^^ Nor will the statute dispense with 
 the necessary leave to sue in the case of an action brought 
 against the receiver for the purpose of taking from his posses- 
 sion and control property belonging to the company and held 
 by it under a claim of title at the time the receiver was ap- 
 pointed. ^^ Nor does the act apply where an action is brought 
 against the receiver by a judgment creditor of a third person 
 for the purpose of subjecting to the payment of such judgment 
 money claimed to be due from the receiver to such third per- 
 son ; ^1 nor to an action brought against the receiver to quiet 
 title to land claimed by the plaintiff but in which the receiver 
 
 37 Peterson v. Baker, 78 Kan., upon the judgment against the re- 
 337, — Pac, — . And see this case ceiver and that the manner in which 
 as to the continuance of the action the judgment shall be paid is a mat- 
 in the name of the receiver not- ter under the exclusive control of 
 withstanding his discharge by the the court which appointed the re- 
 federal court. ceiver, and the judgment can be sat- 
 
 38 Central Trust Co. v. East- isfied only by application to that 
 Tennessee, V. & G. R. Co., 59 Fed., court. Irwin v. McKechnie, 58 
 523 ; Central Trust Co. v. Chatta- Minn., 145, 59 N. W., 987, 26 L. R. 
 nooga, R. & C. R. Co., 68 Fed., A., 218, and note, 49 Am. St. Rep., 
 685. The contrary view has been 495. 
 
 taken in Minnesota, where it is 39 j. I. Case Plow Works v. 
 
 held that a garnishment suit may Finks, 26 C. C. A., 46, 81 Fed., 529, 
 
 be maintained against the re- 52 U. S. App., 253. 
 
 ceiver of a railway company to 40 Hollifield v. Wrightsville & T. 
 
 reach funds in his possession R. Co., 99 Ga., 365, 27 S. E., 715. 
 
 belonging to the defendant, al- 41 Glover v. Thayer, 101 Ga., 824, 
 
 though it is expressly stated that 29 S. E., 36. 
 no executory process shall issue 
 Receivers — 35.
 
 546 RECEIVERS. [chap. XI. 
 
 claims some interest upon behalf of the company ; ^2 nor to an 
 action for damages for personal injuries sustained prior to the 
 appointment of the receiver ; ^^ nor to an action brought against 
 mortgagors and a receiver appointed in another proceeding to 
 foreclose a mortgage upon property in the hands of the re- 
 ceiver.'*^ Nor is the refusal of the receiver to agree upon 
 terms and conditions under which another railroad may cross 
 its lines at grade,^^ or his refusal to institute an action upon a 
 cause of action due the company,^^ an act or transaction of the 
 receiver within the meaning of the statute in question. The 
 evident purpose of the act is to place receivers of railway com- 
 panies appointed by the federal courts upon the same footing 
 as the companies themselves, both as regards their liability for 
 acts done in the operation of the road and in obtaining service 
 of process.^'^ The right given by the act is not limited to cases 
 where the cause of action arises from the act of the receiver 
 himself or his agents, but it extends to the successor of a 
 former receiver under whose administration the right of ac- 
 tion accrued. So long as the property remains in the custody 
 of the court and is administered through the agency of its 
 officer, the receivership is continuous and uninterrupted, al- 
 though the personnel of the receiver may change. The action 
 is, therefore, in effect against the receivership, rather than 
 against the receiver, the liability being an official and not a 
 
 42 Bennett v. Northern Pac. R. where receivers were appointed by 
 Co., 17 Wash., 534, 50 Pac, 496. a federal court over a railway ex- 
 
 43 Smith V. St. Louis & S. F. Ry. tending through different states, 
 Co., 151 Mo., 391, 52 S. W., 378, having their principal office in one 
 
 ;., 48 L. R. A., 368, and note. of such states so that they could 
 
 44 American Loan & Trust Co. v. not be personally served in the 
 Central V. R. Co., 84 Fed., 917. other, an order was entered direct- 
 
 45Buckhannon & N. R. Co. v. ing that service upon a clerk or 
 
 Davis. 68 C. C. A., 345, 135 Fed., station agent of the receivers at 
 
 707, affirming S. C, 131 Fed., 115. any station in the county in which 
 
 46 Swope V. Villard, 61 Fed., 417. process might issue, should be ef- 
 
 47 Eddy v. Lafayette, 1 C. C. A., fective as valid service upon the re- 
 441, 49 Fed., 807, 4 U. *S. App., 247, ceivers. Central Trust Co. v. St. 
 affirmed in 163 U. S., 456, 16 Sup. Louis, A. & T. R. Co., 40 Fed., 426. 
 Ct. Rep., 1082, 41 L. Ed., 225. And
 
 CHAP. XI.] RAILWAYS. 547 
 
 personal one, and a successor may be sued for the act of a 
 former receiver in a state court, and without leave of the fed- 
 eral court.'*^ But the rule in such case applies only where the 
 property involved is the same, and it has no application where 
 the succeeding receiver is appointed over only a small part of 
 the property over which the former receiver was appointed.*^ 
 And an action may be brought without leave against a receiver 
 appointed after the passage of the act of congress, although for 
 an injury sustained by the plaintiff before the passage of the 
 act.50 
 
 § 395c. Removal of cause by receiver to federal court. 
 Upon the question as to the right of the receiver of a railway 
 company appointed by a federal court, when sued without 
 leave in a state court, to remove the cause to the court of his 
 appointment where the amount involved is less than two thou- 
 sand dollars, there is a direct conflict of authority in the deci- 
 sions of the various circuits. It has been held that such actions, 
 notwithstanding the statute, are to be considered as ancillary 
 to the main proceeding and are therefore removable without 
 the jurisdictional amount involved.^! The weight of author- 
 ity, however, sustains the contrary and undoubtedly the better 
 view. These cases hold that while, prior to the statute, such 
 an action in a state court might properly be considered as an- 
 cillary to the main cause and therefore removable without the 
 jurisdictional amount being involved, since the enactment of 
 the statute they are no longer to be regarded as ancillary but 
 are separate and independent suits and are therefore not re- 
 movable unless the requisite amount is involved ; and that to 
 hold otherwise would be to defeat the obvious purpose of the 
 
 48 McNulta V. Lochridge, 141 U. 50 Texas & Pacific R. Co- v. Cox, 
 S. 327, 12 Sup. Ct. Rep., 11, affirm- 145 U. S., 593, 12 Sup. Ct. Rep., 
 ing S. C, 137 111., 270, 27 N. E., 905. 
 
 452 ; State v. Port Royal & A. R. 51 Carpenter v. Northern Pac. R. 
 
 Co., 84 Fed., 67. Co., 75 Fed., 850; Sullivan v. Bar- 
 
 49 Jones v. Schlapback, 81 Fed., nard, 81 Fed., 886. 
 274.
 
 548 RECEIVERS. [chap. XI. 
 
 Statute which permits such actions without the leave of the 
 court which has appointed the receiver.^^ 
 
 § 395t/. New York decisions unsettled; liability for in- 
 juries; rental of leased lines. Notwithstanding the general 
 doctrine, holding receivers of railways to the same liabilities 
 as common carriers as the companies themselves, has the clear 
 weight both of principle and of authority in its support, it has 
 not be uniformly followed in New York, and some incon- 
 sistency and much uncertainty are observable in the decisions 
 in that state upon the question under consideration. Thus, it 
 has been held that the receiver occupies a position analogous to 
 that of a public officer, charged with duties of a public nature, 
 in the performance of which he is compelled to act in part 
 through others, and that it would be a great hardship to im- 
 pose upon him the responsibilities Vv^hich attach to persons act- 
 ing through agents appointed for their own convenience or 
 profit. And upon these considerations, it has been held that he 
 is not liable to passengers for injuries sustained by the negli- 
 gence of his employees, when no personal neglect is imputed 
 to the receiver in their selection, the doctrine of respondeat 
 superior not being applicable in such cases. ^^ The same court 
 having previously held that, when a railroad is operated by a 
 special receiver appointed in bankruptcy proceedings, the com- 
 pany is not liable in an action for damages sustained through 
 the negligence of the receiver's employees,^'* in the light of these 
 decisions there would seem to be absolutely no remedy in New 
 York, to one sustaining loss or damage through the operation of 
 
 52 Ray V. Peirce, 81 Fed., 881; court of New York, that, while an 
 Gilmore v. Herrick, 93 Fed., 525; action for personal injuries sus- 
 Pitkin V. Cowen, 91 Fed., 599; Pen- tained by a passenger would not lie 
 dleton V. Lutz, 78 Miss., 322, 29 So. against the receiver personally, he 
 164. As to the right of removal would be liable in such action as re- 
 in cases which do not come within ceiver, and the judgment should be 
 the statute, see ante, § 60b. made payable out of the funds in 
 
 53 Cardot v. Barney, 63 N. Y., his hands as receiver. 
 
 281. In Camp v. Barney. 6 N. Y. S. 54 Metz v. B., C. & P. R. Co., 58 
 
 C. (Thomp. & Cook), 622; 4 Hun, N. Y., 61. 
 373, it was held by the supreme
 
 CHAP. XI.] RAILWAYS. 549 
 
 a railroad by a receiver. But in a later case, it is held that 
 a receiver of another state, who, under the authority of the 
 court appointing him, operates a railroad in New York as les- 
 see, having covenanted in the lease to assume all obligations 
 of the lessor company as a common carrier or otherwise, is 
 liable to an action in New York for damages for injuries sus- 
 tained by an employee upon such road by reason of defective 
 machinery. In such case, it is held that his liability is not af- 
 fected by the fact that he is a receiver in the foreign state, since 
 he is not in possession of the road in New York, as such re- 
 ceiver, but by virtue of his contract, and he can not, therefore, 
 escape the ordinary liabilities of persons operating railroads. 
 And the action being in tort, it may be brought against one of 
 several receivers who occupy the same relation to the property 
 and to the subject-matter of the action.^^ And in a still later 
 case, it is held that when, by the order appointing him, the re- 
 ceiver is authorized to take possession of all the property of the 
 company and to exercise its functions and continue its opera- 
 tions, and to pay rentals under any leases held by the company, 
 if he takes possession of and operates a road held under lease 
 by the company, he thereby assumes the obligations of the les- 
 see and binds the estate to the payment of the rent. An action 
 may, therefore, be maintained against him to recover such rent 
 out of the funds in his hands, and in such action he is estopped 
 from denying the validity of the lease.^^ 
 
 § 396. Railway company in hands of receiver not re- 
 sponsible for negligence of his servants; liability of com- 
 pany for failure to comply with penal statute. Since re- 
 ceivers of a railway, who are vested with its absolute control 
 and management, are thus liable for injuries resulting from 
 negligence in operating the road, to the same extent that the 
 company itself might have been held liable, it would seem to be 
 
 55Kain v. Smith, 80 N. Y., 458. Y., 609. See, also, Frank v. New 
 
 And see Fuller v. Jewett, 80 N. Y., York, L. E. & W. R. Co., 122 N. Y, 
 
 46. 197, 25 N. E., 332. 
 
 56 Woodruff V. Erie R. Co., 93 N.
 
 550 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 clear, upon principle, and in the absence of any absolute lia- 
 bility created by statute, that the corporation itself can not be 
 held responsible for the negligence of servants of a receiver op- 
 erating the road. The receiver's possession is not the posses- 
 sion of the corporation, which can not control either the re- 
 ceiver or his employees. And in an action against a railway 
 company for damages for personal injuries, or for the killing 
 of stock, alleged to have resulted from the carelessness and neg- 
 ligence of employees and servants, it is a sufficient defense that 
 the road, at the time of the alleged injury, was not in defend- 
 ant's possession, but in the possession of a receiver, who had 
 exclusive charge of the employment and management of the 
 agents and employees engaged in operating the road.'^'^ And 
 while the owner and lessor of a street railway company may 
 be liable for the negligence of the servants of its lessee, it can 
 
 5" Ohio & Mississippi R Co. v. 
 Davis, 23 Ind., 553 ; Bell v. I., C. & 
 L. R. Co., 53 Ind., 57; Turner v. 
 Hannibal & St. Joseph R. Co., 74 
 Mo., 602; Ohio & Mississippi R. Co. 
 V. Anderson, 10 Bradw., 313 ; Hicks 
 V. I. & G. N. R. Co., 62 Tex., 38; 
 Henning v. Sampsell, 236 111., 375, 
 86 N. E., 274; Schurr v. Omaha & 
 St. L. Ry. Co., 98 Iowa, 418. 67 N. 
 W., 280 ; St. Louis & S. F. Ry. Co. 
 V. Bricker, 65 Kan., 321, 69 Pac, 
 328; Archambeau v. New York & 
 N. E. R. Co., 170 Mass., 272, 49 N. 
 E., 435; Tobin v. Central Vermont 
 Ry. Co., 185 Mass., 337, 70 N. E., 
 431 ; Chamberlain v. N. Y., L. E. & 
 W. R. Co., 71 Fed., 636; Gableman 
 V. Peoria, D. & E. R. Co., 82 Fed., 
 790. For the application of the 
 same principle in the case of a turn- 
 pike company, see Lock v. Turn- 
 pike Co., 100 Tenn.. 163, 47 S. W., 
 133. See, also, Metz v. B., C. & P. 
 R. Co., 58 N. Y.. 61 ; I. & G. N. R. 
 Co. V. Ormond, 62 Tex., 274; Heath 
 
 V. Missouri, K. & T. R. Co., 83 Mo„ 
 617. See, also, Godfrey v. Ohio & 
 M. R. Co., 116 Ind., 30, 18 N. E., 
 61. But it has been held that in 
 such an action against the company, 
 the fact that the road is in the 
 hands of a receiver can not be in- 
 quired into upon a motion to dis- 
 miss for want of jurisdiction, al- 
 though it may be urged in defense 
 of the action. Wyatt v. O. & M. 
 R. Co., 10 Bradw., 289. And in 
 South Carolina it has been held that 
 a railway company is liable for the 
 tort of the receiver of its lessee. 
 Parr v. Spartanberg, etc. R. Co., 
 43 S. C, 197, 20 S. E., 1009, 49 Am. 
 St. Rep., 826. See Texas & Pacific 
 R. Co. V. Gay, 88 Tex., Ill, 30 S. 
 W., 543, as to the liability of a 
 railway company which has collu- 
 sively procured the appointment of 
 a receiver over its property for in- 
 juries to employees in the employ 
 of the receiver.
 
 CHAP. XI.] RAILWAYS. 551 
 
 not be held liable for injuries resulting from the negligence of 
 receivers of the lessee company while they are engaged in the 
 operation of the road.^^ So when a railway is in the hands of 
 a receiver and is operated by his servants and employees, the 
 company will not be held liable for their action in obstructing 
 a public street. 5^ So where a railway is being operated by a 
 receiver, the company can not be held liable for failure to com- 
 ply with a statute requiring the giving of a signal upon ap- 
 proaching a public highway, since compliance by the company 
 with the statute would necessitate interference with the opera- 
 tion of the road by the receiver.^^ But where the statutory re- 
 quirement is one with which the company may comply without 
 interfering with the possession and operation of the road by the 
 receiver, as where the statute requires the erection of sign- 
 boards at crossings, the reason for the rule ceases and the com* 
 pany may be held liable.^! But where a railroad is in the hands 
 of a receiver, the company can not be held criminally liable for 
 obstructing a public highway during the time that it is in the 
 hands of the receiver.^^ "When a railway company, in an ac- 
 tion brought against it for damages, pleads the appointment of 
 a receiver who has charge of its affairs, a copy of the order of 
 appointment, or the original, should be set forth with the plead- 
 ings.^^ 
 
 § 397. Statutory liability of company; judgment not 
 enforceable by state court out of funds held by receiver of 
 United States court. When, however, an absolute liability 
 is fixed upon a railway company by statute, a different prin- 
 ciple prevails. Thus, if the company is made by statute abso- 
 lutely liable for the killing of stock in cases where its road is 
 
 58 Henning v. Sampsell, 236 111., 62 State v. Minneapolis & St. L. 
 375, 86 N. E., 274. Ry. Co., 88 Iowa, 689, 56 N. W., 
 
 59 State V. Wabash R. Co., 115 400. 
 
 Ind., 466, 17 N. E., 909. 63 Ohio & Mississippi R. Co. v. 
 
 60 Arkansas Central R. Co. v. Fitch, 20 Ind., 498. 
 State, 72 Ark., 250. 79 S. W., 77:i. 
 
 61 Arkansas Central R. Co. v. 
 State, 72 Ark., 252, 79 S. W., 772.
 
 552 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 not securely fenced, the fact that the affairs of the company 
 have passed into the hands of a receiver, appointed by a fed- 
 eral court, constitutes no defense to an action on such liability 
 against the railway company in a state court, and the plaintiff 
 may recover judgment in such action upon the statutory lia- 
 bility, notwithstanding the possession of the receiver. In such 
 cases it is held that the corporate body still exists, and 
 since the law renders it liable, the receiver operates the road 
 subject to such liability.^^ So under a statute providing that 
 upon the refusal of a railway company to fence its right of 
 
 64 Ohio & Mississippi R. Co. v. 
 Fitch, 20 Ind., 498; McKinney v. 
 Ohio & Mississippi R. Co., 22 Ind., 
 99; Louisville, New Albany & Chi- 
 cago R. Co. V. Cauble, 46 Ind., 277 ; 
 Kansas Pacific R. Co. v. Wood, 24 
 Kan., 619. But see, contra, Brock- 
 crt V. Central Iowa R. Co., 82 Iowa. 
 369, 47 N. W., 1026. The doctrine 
 of the text is very clearly stated in 
 Louisville, New Albany & Chicago 
 R. Co. V. Cauble, 46 Ind., 277, by 
 Buskirk, J., who says, p. 279: "By 
 the first section of the act of March 
 4, 1863, 3 Ind. Stat., 413, it is pro- 
 vided 'that lessees, assignees, re- 
 ceivers and other persons, running 
 or controlling any railroad, in the 
 corporate name of such company, 
 shall be liable, jointly or severally 
 •with such company, for stock killed 
 or injured by the locomotives, cars 
 or other carriages of such company, 
 to the extent and according to the 
 provisions of this act.* By the 
 above quoted section, lessees, as- 
 signees, receivers or other persons 
 running or controlling any railroad 
 company in the corporate name of 
 such company are made liable 
 either jointly with the railroad 
 company, or severally, that is, with- 
 out the company being joined with 
 
 them, for stock killed or injured by 
 the locomotives, cars or other car- 
 riages of such company, to the ex- 
 tent and according to the provisions 
 of such act. By the second section 
 of such act, it is provided in express 
 terms that such action may be 
 brought against the railroad, 
 whether the same was being run 
 by the company or by a lessee, as- 
 signee, receiver or other person in 
 the name of the company. The 
 question discussed by counsel for 
 appellant therefore resolves itself 
 into the question of whether the 
 legislature of this state possessed 
 the constitutional power to pass the 
 above recited act. The corporate 
 existence, powers and franchises of 
 the appellant were conferred by 
 the legislature of this state. We 
 have carefully examined the decree 
 of the United States circuit court 
 for the district of Indiana, appoint- 
 ing Mr. Chapman receiver, and find 
 nothing therein which attempts to 
 take away the corporate existence, 
 powers or franchises of the appel- 
 lant, and it is, therefore, unneces- 
 sary for us to express any opinion 
 as to the power of the federal 
 judiciary to decree a forfeiture of 
 the corporate existence and fran-
 
 CHAP. XI.] RAILWAYS. 553 
 
 way, an adjacent owner may build the fence and recover double 
 its value from the company, the fact that the property of the 
 company has passed into the hands of and is being operated by 
 a receiver constitutes no defense to such an action against the 
 company. 65 And under a statute giving a right of action when 
 the death of any person has been caused by the negligence or 
 carelessness of the proprietor, owner, charterer or hirer of any 
 railroad, or by the negligence or carelessness of his servants or 
 agents, an action under the statute will not lie against a re- 
 ceiver who is operating a railroad. Such a receiver does not 
 fall within the class of persons designated, but is the official 
 representative of the court and holds possession in that capa- 
 city, having no personal proprietorship, ownership or interest 
 in the property.^^ g^t under a statute providing that every 
 railway company shall be responsible in damages to any person 
 whose buildings or other property might be injured by fire 
 communicated by locomotives, it is held that the statute, being 
 remedial, should be given a liberal construction, and that the 
 
 chises of a corporation created by company and its operations de- 
 a sovereign state. The whole de- pended upon its corporate existence. 
 cree proceeds upon the theory that If that had been taken away, the 
 the appellant is a corporation ere- power and authority of the receiver 
 ated and existing under the laws would have ceased and terminated, 
 of this state. The whole effect of for no court, federal or state, can 
 the decree is, to take the custody, confer corporate powers and fran- 
 control and management of such chises upon an individual. Such 
 corporation out of the hands of the powers can be created and con- 
 persons who were controlling and ferred by the legislative department 
 managing the same, and to place alone." 
 
 the same into the custody and 65 Ohio & Mississippi R. Co. v. 
 
 under the control and management Russell, 115 111., 52, 3 N. E., 561. 
 of the receiver for a specified time 66 Turner v. Cross, 83 Tex., 218, 
 
 and for a special purpose. The cor- 18 S. W., 578; Yoakum v. Selph, 
 
 porate existence of the appellant 83 Tex., 607, 19 S. W., 145; Texas 
 
 was left intact. The corporate & Pacific R. Co. v. Collins, 84 Tex., 
 
 powers and franchises which had 121, 19 S. W., 365; Allen v. Dilling- 
 
 been exercised by the officers of ham, 8 C. C. A., 544, 60 Fed., 176, 
 
 the company were conferred for 23 U. S. App., 167; Burke v. Dil- 
 
 the time being upon the receiver. lingham, 9 C. C. A., 255, 60 Fed., 
 
 The power and authority of the re- 729, 23 U. S. App., 153. 
 ceiver to manage and control the
 
 554 RECEIVERS. [chap. XI. 
 
 receiver of a railway company should therefore be held liable 
 under it.^'^ And in an action brought by a lessor of real estate 
 against the lessee, a railway company, to recover damages for 
 waste to the demised premises, it affords no defense to the ac- 
 tion that the alleged acts of waste occurred while the railway 
 was in the possession of and operated by a receiver. In such 
 case, there being an implied covenant upon the part of the les- 
 see to so use the premises that no injury shall result to them, 
 the fact that the breach of such covenant occurs through the 
 act of a stranger to the lease, the receiver, affords no defense 
 to the action. ^^ And since the appointment of a receiver over 
 a railway company does not prevent the prosecution of pend- 
 ing actions against the company, it is improper to join the re- 
 ceiver as a party defendant to a pending action to recover for 
 an alleged trespass committed by the company prior to the re- 
 ceivership.^9 A state court is powerless to enforce payment of 
 a judgment against a railway company, out of funds in the 
 hands of a receiver appointed by a United States court, even 
 under a statute of a state providing a process for the enforce- 
 ment of judgments against railway corporations out of the 
 funds in the hands of their receivers or agents. The receiver 
 deriving his appointment and authority from the federal court, 
 and being charged with the duty of operating the road and ac- 
 countable to that court for the proceeds, these proceeds are be- 
 yond the jurisdiction or control of the state court. The proper 
 course for the plaintiff, in such a case, would seem to be either 
 to apply to the federal court for leave to sue the receiver, or for 
 an order on the receiver to pay the judgment recovered in the 
 state court."^^ And in an action against a railway company to 
 recover damages for personal injuries, defendant can not plead, 
 either in bar or in abatement of the action, that at the time of 
 beginning the suit the company was in the hands of a receiver, 
 
 67 Wall V. Piatt, 169 Mass., 398, 69 Decker v. Gardner, 124 N. Y., 
 48 N. E., 270. 334, 26 N. E., 814. 
 
 68 Powell V. Dayton, S. & G. R. 70 Ohio & Mississippi R. Co. v. 
 R. Co., 16 Ore., 33, 16 Pac, 863. Fitch, 20 Ind., 498.
 
 CHAP. XI.] RAILWAYS. 555 
 
 since the appointment of the receiver does not impair the juris- 
 diction of the court over the defendant company, or over the 
 subject-matter of the action.'^^ 
 
 § 397a. Suit against company after surrender of posses- 
 sion by receiver. One who sustains injuries by the negli- 
 gent operation of a railway while in the hands of a receiver of 
 a federal court may maintain an action in a state court on ac- 
 count of such injury against the railway company after its 
 property has been restored to its possession by the federal court, 
 when the current earnings of the road, while operated by the 
 receiver, have been applied to permanent improvements and 
 betterments of the property to an extent exceeding the amount 
 of the judgment in such action. And this may be done, not- 
 withstanding the federal court has discharged the receiver and 
 has entered an order barring all claims which were not presented 
 to that court within a given period, the plaintifif in such action 
 not having presented his claim or intervened under the order. 
 In such case the order requiring claimants to intervene and to 
 present their claims within a given time does not affect the 
 rights of parties in interest to enforce their demands in any 
 other lawful manner and within such time as the law may 
 prescribe.'^2 And when in such case a judgment has been re- 
 covered against the receiver prior to his discharge, it may be 
 
 '''^ Ohio & Mississippi R. Co. v. court. Texas & Pacific R. Co. v. 
 
 Nickless, 71 Ind., 271. Bloom, 164 U. S., 636, 17 Sup. Ct. 
 
 72 Texas & Pacific R. Co. v. John- Rep., 216, 41 L. Ed., 580, affirming 
 
 son, 76 Tex., 421, 13 S. W., 463 ; s. C, 9 C. C. A., 300, 60 Fed., 979, 
 
 Texas & Pacific R. Co. v. Over- 23 U. S. App., 143. See, also, Texas 
 
 heiser, 76 Tex., 437, 13 S. W., ^ paj.iflj, r q^ ^ Johnson, 151 U. 
 
 468; Texas & Pacific R. Co. v. g^ g^^ ^4 ^^^ q j^^p^ 250. which 
 
 Geiger, 79 Tex.. 13, IS S W., ^^^ ^ ^^.^ ^^ ^^^^^ ^^ ^^^^^^^ ^^^ 
 
 ^^'^' '^'^f i' ^^'If' ,?■ c „r judgment of the supreme court of 
 Miller, 79 Tex., 78, 15 S. W., L ■ ,u 7/; t 
 
 ... ' ' 00 T Texas m the same case, 76 lex.. 
 
 421, 13 S. W., 463. In this case it 
 
 264; Boggs v. Brown, 82 Tex., 
 
 41, 17 S. W., 830; Texas & Pacific . ,, , , 
 
 R Co z; Brick, 83 Tex., 526, 18 ^'^^ held by the supreme court of 
 
 S. W, 947; Texas & Pacific R. Co. the United States, that m the case 
 
 V. Comstock, 83 Tex., 537, 18 S. W., as decided by the supreme court of 
 
 946. And in such case the action Texas there was no error m the 
 
 may be maintained in a federal disposition of the federal questions
 
 556 
 
 RECEIVERS. 
 
 [chap. XL 
 
 enforced against the railway company after its property has 
 been restored to its possession.'^^ But since the raihvay com- 
 pany is not in such cases hable, ipso facto, for the neghgence 
 of its receiver, but only upon the ground of a diversion of the 
 receiver's income in betterments upon the property afterward 
 surrendered to the company, in the absence of proof of such 
 diversion, judgment should not be rendered against the com- 
 pany.'^'* But where a railway company has been allowed to 
 resume possession of its road, which had been in the hands of 
 a receiver in a foreclosure suit, under an order of the court 
 which directed the receiver to turn over the possession of the 
 
 involved, and its judgment was, 
 therefore, affirmed. And see Hous- 
 ton & Texas C. Ry. Co. v. Craw- 
 ford, 88 Tex., 277, 31 S. W., 176, 
 28 L. R. A., 761, 53 Am. St. Rep., 
 752; San Antonio & A. P. Ry. Co. 
 V. Bowles, 88 Tex., 634, 32 S. W., 
 880. 
 
 73 Texas & Pacific R. Co., v. Grif- 
 fin, 76 Tex., 441, 13 S. W., 471. 
 
 74 Texas & Pacific R. Co. v. Huff- 
 man, 83 Tex., 286, 18 S. W., 741. 
 The cases cited in support of the 
 foregoing section arose under the 
 receivership of the Texas & Pacific 
 Railway Company, whose road ex- 
 tended through the state of Texas, 
 the receiver being originally ap- 
 pointed by the United States circuit 
 court for the eastern district of 
 Louisiana, and the principal admin- 
 istration of the receivership being 
 had in that court. No part of the 
 road was located in the state of 
 Louisiana, but the same receiver 
 was afterward appointed in a sim- 
 ilar action in the United States cir- 
 cuit court for the eastern district of 
 Texas. While in some of the cases 
 above cited the supreme court of 
 Texas criticised the propriety of 
 
 such a receivership, it seems to have 
 conceded that the circuit court of 
 the United States in Louisiana had 
 jurisdiction and that its order ap- 
 pointing the receiver was, therefore, 
 valid, and could not be questioned 
 in a collateral proceeding. But in 
 a later case in the same court, Texas 
 & Pacific R. Co. V. Gay, 86 Tex., 
 571, 26 S. W., 599, it was held in 
 an elaborate and exhaustive opinion, 
 in the case of the same railway com- 
 pany, incorporated under an act 
 of congress, its road extending 
 through Texas with its eastern 
 terminus in that state, and no 
 part of its line extending into the 
 state of Louisiana, that the federal 
 court in the latter state had no ju- 
 risdiction to appoint a receiver over 
 the property and that its order was, 
 therefore, void. It was further held 
 that the receiver, acting under a 
 void order, occupied, in effect, the 
 position of an agent of the com- 
 pany, and that after his discharge 
 th,e company itself might be held 
 liable for injuries occurring while 
 the railway was operated by him, in 
 like manner as if operated by an 
 ordinary agent.
 
 CHAP. XI.] RAILWAYS. 557 
 
 property and to render a report of receipts and disbursements, 
 but reserved the settlement of all claims against the receiver, 
 and provided that the company should take possession upon 
 condition that it should pay off all obligations incurred by the 
 receiver, it was held that the company was liable as a defendant 
 to an intervening petition filed in the receivership proceeding 
 for injuries resulting from the negligent operation of the road 
 in the hands of the receiver. '^^ And where a railway company 
 is organized under a statute which provides that it shall pur- 
 chase the property of an insolvent railway company in the 
 hands of a receiver and further provides that such purchasing 
 company shall take the property subject to all suits and claims 
 for damages against the receiver, the purchasing corporation 
 becomes liable for damages for personal injuries resulting 
 from the operation of the road by the receiver, and judgment 
 is properly rendered against such company regardless of the 
 question of betterments.'^^ 
 
 § 397b. Receiver's liability official, not personal; may 
 be enforced against his successor. The liability of the re- 
 ceiver of a railway for the negligence or torts of his servants 
 and employees in operating the road is not a personal one, and 
 he is only liable in his official capacity as receiver or agent of 
 the court, the proceeding being analogous to a proceeding in 
 rem, and binding the property or estate, rather than the person 
 of the receiver.'^'^ It is, therefore, error to render judgment 
 against a receiver in his individual capacity and to award 
 execution thereon, and the judgment should be against 
 the receiver as such, to be paid out of the funds held by 
 him in that capacity in due course of the administration of his 
 receivership.'^^ So when the receiver resigns and a successor 
 
 75 Baltimore & O. R. Co. v. Bur- affirmed in 141 U. S., 327. 12 Sup. 
 ris, 50 C. C. A., 48, 111 Fed., 882. Ct. Rep., 11; Erskine v. Mcllrath, 
 
 76 Cross V. Evans, 29 C. C. A., 60 Minn., 485, 62 N. W., 1130; Gray 
 523, 86 Fed., 1, 52 U. S. App., 720. v. Grand Trunk W. Ry. Co., 84 C. 
 
 77 McNulta V. Ensch, 134 III., 46, C. A., 392, 156 Fed., 736. 
 
 24 N. E., 631 ; McNulta v. Lock- 78 McNulta v. Ensch, 134 111., 46, 
 
 ridge, 137 111., 270, 27 N. E., 452, 24 N. E., 631.
 
 558 RECEIVERS. [chap. XI. 
 
 is appointed, an action may be maintained against such suc- 
 cessor and a recovery had against him for damages sustained 
 by an injury occurring during the administration of the former 
 receiver, the judgment being payable out of the funds in the 
 hands of the successor in due course of administration. "^^ And 
 since the habihty of a receiver in this class of cases is an offi- 
 cial and not a personal liability, it constitutes no defense to 
 such an action that a defect in the road which caused the in- 
 jury existed when the property came into the receiver's pos- 
 session, and that he had not had sufficient time to repair or to 
 remedy such defect.^^ And an action against the receivers of 
 a railway company for the death of plaintiff's intestate is not 
 abated or barred by an order of the court in the receivership 
 proceeding directing that the property in the hands of the re- 
 ceivers should be turned back to the company, but providing 
 that it should be accepted upon condition that the company 
 should pay all obligations incurred by the receivers which 
 should be adjudged to be valid debts and obligations of the 
 receivers, the court retaining jurisdiction for the adjustment 
 of such claims, but not providing for the discharge of the re- 
 ceivers.^i But an action can not be maintained against the 
 receiver of a railway company to recover damages for injuries 
 sustained as the result of the alleged negligence of the company 
 prior to the appointment of the receiver.^^ Sq an action will 
 not lie against the receiver individually to hold him liable for 
 negligence of servants employed by him as receiver.^^ 
 
 § 398. Receivers liable to action for breach of duty as 
 common carriers. It has already been shown that receiv- 
 ers of railways are liable to actions for personal injuries in- 
 curred during their management and operation of the road, 
 
 "!■!> McNulta V. Lockridge, 137 III., 81 Cowen v. Merriman, 17 App. 
 
 270, 27 N. E., 452, affirmed in 141 D. C, 186. And see, ante, § 395. 
 U. S., 327, 12 Snp. Ct. Rep., 11. 82 McDermott v. Crook, 20 App. 
 
 80 Texas & Pacific R. Co. v. D. C, 465. 
 Geiger, 79 Tex., 13, 15 S. W., 214; 83 Erskine v. Mcllrath, 60 Minn., 
 
 Bonner v. Mayfield, 82 Tex., 234, 485. 62 N. W., 1130. 
 18 S. W.. 305.
 
 CHAP. XI.] RAILWAYS. 559 
 
 leave of court being had to bring the action.^^ It is not 
 to be understood that their Habihty is confined to this class of 
 actions, and it may be affirmed, generally, that they are liable 
 as common carriers for negligence in the performance of their 
 duties, and an action for damages sustained by such negligence 
 will lie against them in their official capacity. The fact that 
 they were acting as receivers, under appointment from a court 
 of chancery, can not be recognized as a defense to a suit at law 
 for breach of any obligation or duty voluntarily assumed by 
 them in conducting their business as such receivers. And their 
 assumption of the duties and responsibilities of common car- 
 riers is not regarded as incompatible with any duty or respon- 
 sibility imposed upon them as receivers.^^ Being thus held 
 liable as common carriers in the state of their appointment, 
 such receivers may be held to the same liability in another state. 
 And in an action brought against them in another state to re- 
 cover damages for loss of freight, the court will not concede 
 to the defendants an exemption from the ordinary liabilities of 
 common carriers more extensive than is allowed them in the 
 state of their appointment, and in which the loss occurred. 
 And in such a case, the ordinary rule, that receivers are amen- 
 able solely to the court appointing them, has been held to be in- 
 applicable.^^ But while the cases supporting this doctrine are 
 believed to state the correct rule as to the liability of railway re- 
 ceivers as common carriers, they are not to be accepted as au- 
 thoritative upon the right to institute such actions without 
 leave of the court appointing the receiver, since, as we have al- 
 ready seen, the better considered doctrine, and that supported 
 by the clear weight of authority, in the absence of legislation 
 to the contrary, requires such permission before the action may 
 be brought.^"^ 
 
 84 See, ante, § 395. that when a citizen of New Jersey 
 
 85 Blumenthal v. Brainerd, 38 Vt, is appointed receiver over a rail- 
 402; Ex parte Brown, 15 S. C, 518. way corporation of that state, and 
 
 86 Paige v. Smith, 99 Mass., 395. afterward, by an ancillary proceed- 
 
 87 See § 395a, ante. In Davies v. ing in New York, he is appointed 
 Lathrop, 20 Blatchf., 397, it is held receiver over the property of the
 
 560 RECEIVERS. [chap. XI. 
 
 § 39Sa. Right of way; contract with express company; 
 personal contracts of company not binding on receiver. 
 
 An action may be maintained against the receiver, by leave of 
 court, to recover damages sustained by plaintiff by the construc- 
 tion of the railway through his premises without making com- 
 pensation therefor, prior to the receiver's appointment, the 
 judgment, when recovered, to be satisfied out of the assets in 
 the receiver's hands under the orders of the court appointing 
 hini.^^ But a contract by which a railway company gives to 
 an express company the exclusive right to transact all express 
 business over the road for a given period, can not be enforced 
 against a receiver afterward appointed in foreclosure proceed- 
 ings against the railroad. Such a contract gives no lien upon 
 the property of the company, and its specific performance by 
 the receiver would be only a form of payment or satisfaction 
 which he can not be required to make.^^ So the receiver is 
 not bound by contracts of the railway company which are of 
 a personal character and which he has not adopted or affirmed. 
 Thus, a contract by which the company agrees to maintain a 
 switch upon the land of a property owner is regarded as of a 
 personal nature, and if receivers of the company discontinue 
 such switch, they will not be liable in an action brought by the 
 property owner.^^ So when a railway company has contract- 
 ed with a marble company to carry marble from its quarries 
 to a given point, allowing it to be stopped at an intermediate 
 
 company in that state, and an ac- 89 Express Co. v. Railroad Co., 99 
 
 tion is brought by citizens of New U. S., 191. And see, ante, §§ 273 
 
 York, in a court of that state, and 393c. 
 
 against the receiver, to recover for ^0 Brown v. Warner, 78 Tex., 543, 
 
 the death of plaintiff's intestate 14 S. W., 1032. As to the right of 
 
 upon a train operated by the re- an abutting property owner to main- 
 
 ceiver in New Jersey, the receiver tain an action against a receiver of 
 
 will be regarded as a citizen of New a railway for damages resulting 
 
 Jersey, and the cause may, there- from the improper use of a street 
 
 fore, be removed to the United occupied by the tracks of the com- 
 
 States court in New York. pany, see Frankle v. Jackson, 30 
 
 88 Combs V. Smith, 78 Mo., 32 ; Fed., 398. 
 Ratcliff V. Adler, 71 Ark., 269, 72 
 S. W., 896.
 
 CHAP. XI.] RAILWAYS. 
 
 561 
 
 station to be prepared for market, and a considerable quantity 
 of marble upon which the freight has been prepaid under the 
 contract is at such intermediate point at the date of appointing 
 a receiver over the railway company, an action can not be 
 maintained against the receiver for the specific performance of 
 the contract, or the refunding of the freight already paid, the 
 shipper having no lien for the amount thus paid.^^ 
 
 § 398&. Receiver not liable after discharge; liability of 
 purchasers of road. After the discharge of the receiver, no 
 action can be maintained against him to recover for personal 
 injuries sustained by the negligence of his employees, since he 
 can not be made personally liable for their torts.92 if^ how- 
 ever, the purchaser at the foreclosure sale acquires the property 
 subject to all demands against the receiver, the court still re- 
 taining jurisdiction of the cause for the purpose of enforcing 
 payment of such demands, it may entertain a petition against 
 the purchaser to recover for personal injuries sustained during 
 the receiver's operation of the road.^S And in such case, a 
 judgment for such cause of action being by the laws of the 
 
 01 Central Trust Co. v. Marietta afterward the property was sold to 
 
 & N. G. R. Co., 51 Fed., 15. another company^ the order of the 
 
 92 Davis V. Duncan, 19 Fed., 477; court providing that the sale should 
 Farmers' Loan & Trust Co. v. Cen- be upon the express condition that 
 tral Railroad, 7 Fed., 537; McGhee the purchaser should pay all obliga- 
 V. Willis, 134 Ala., 281, 32 So., 301 ; tions and indebtedness legally con- 
 Archamb'cau v. Piatt, 173 Mass., tracted by the receiver before the 
 249, 53 N. E., 816; Tobin v. Central delivery of the possession of the 
 Vermont Ry. Co., 185 Mass., 337. property and that the receiver 
 70 N. E., 431. And see Thompson should be discharged but that his 
 V. Northern Pac. R. Co., 35 C. C. discharge should not operate to pre- 
 A., 357, 93 Fed., 384. And see, ante, vent him from defending any suit 
 § 255. brought against him as such re- 
 
 93 Farmers' Loan & Trust Co. v. ceiver still undetermined or any suit 
 Central Railroad, 17 Fed., 758. In that might thereafter be brought 
 Denver & R. G. R. Co. v. Gunning, against him as such receiver, it was 
 33 Colo., 280, 80 Pac, 727, where a held that both the receiver and the 
 claim for damages had arisen as the purchaser were proper parties de- 
 result of the death of the plaintiff's fendant to an action brought to en- 
 wife through the negligent opera- force the claim. 
 
 tion of the road by the receiver, and 
 Receivers — 36.
 
 562 RECEIVERS. [chap. XI. 
 
 State made a lien upon the railway, the judgment may be estab- 
 lished as a lien after the road has passed into the hands of 
 purchasers.^'* But when the road is sold, subject to the pay- 
 ment of all liabilities incurred by the receiver in its operation, 
 a bill in equity can not be maintained against the purchasers 
 to recover damages for injuries sustained during the receiver- 
 ship, since equity will not assume jurisdiction of a controversy 
 for the recovery of unliquidated damages in tort.^^ Such a 
 purchaser, however, having purchased subject to all liabilities 
 growing out of the receiver's operation of the road, is liable 
 in an action at law for the recovery of such damages, the injury 
 having been caused by the negligence of the receiver's employ- 
 ees.^^ So where a proceeding has been instituted against the re- 
 ceivers of a railway company to recover a statutory penalty for 
 failure to maintain cattle guards, and, pending the proceeding, 
 the receivers are discharged and the property is sold to another 
 company under a decree which provides that the purchasers 
 shall pay any unpaid obligations or liabilities incurred by the 
 receivers, the action against the receivers is properly revived 
 against the purchasing company and the latter may be held 
 liable for the statutory penalty in question.^'^ And when a 
 foreclosure sale is had expressly subject to all indebtedness in- 
 curred by the receiver, which is declared to be a lien vipon the 
 property prior to that of the mortgagees, the purchasers cov- 
 enanting to pay all damages and liabilities incurred by the re- 
 ceiver, or which should have been paid out of the property, 
 the purchasers are liable for the payment of a judgment recov- 
 ered against the receiver on account of the death of plaintiff's 
 intestate while the road was operated by the receiver. In 
 such case, the judgment creditor may maintain an action 
 against the purchasers for the recovery of the judgment, or 
 
 04 Farmers' Loan & Trust Co. v. em Pac. R. Co., 35 C. C. A., 357, 
 
 Central Railroad, 17 Fed., 758; S. 93 Fed., 384. But the contrary view 
 
 C, 5 McCrary, 421. has been taken in Massachusetts. 
 
 95 Brown v. Wabash R. Co., 96 Tobin v. Central Vermont Ry. Co., 
 111., 297. 185 Mass., 337, 70 N. E.. 431. 
 
 96 Sloan V. Central Iowa R. Co., ^7 Memphis & Charleston R. Co. 
 62 Iowa, 728; Thompson v. North- v. Glover, 78 Miss., 467, 29 So., 89.
 
 CHAP. XI.] RAILWAYS. 563 
 
 to establish a lien upon the property and for its sale in satisfac- 
 tion of the judgment.^^ So when property is purchased and 
 paid for out of the receiver's income, and is delivered to the 
 company upon the surrender back of the road at the termina- 
 tion of the receivership, such property is liable in equity for 
 damages sustained by injuries while the road was operated by 
 the receiver, when the rights of third persons have not inter- 
 vened, the liability, in such case, being based upon the diver- 
 sion of income by the receiver.^^ But since the liability of a 
 receiver of a railway for damages sustained during his man- 
 agement of the road is an official and not a personal liability, 
 it terminates with his discharge, and after he has been dis- 
 charged and the property has been delivered pursuant to the 
 order of the court, no judgment can be rendered against him 
 for such injuries, even in an action which is pending at the 
 time of his discharge. If the property has been delivered back 
 to the railway company without sale it is proper to substitute 
 the company as a defendant rather than to abate the action 
 itself. In such case an amendment to the petition or com- 
 plaint making the railway company a defendant after the dis- 
 charge of the receiver is not the beginning of a new action, 
 but merely a continuation of the former suit, and the statute 
 of limitations as to the cause of action is suspended by the 
 bringing of the original action against the receiver.^ And when 
 a receiver, appointed by a federal court, has been discharged 
 by that court and the property delivered over according to the 
 orders of the court, the official existence of the receiver ceases, 
 and suits pending in the state courts, upon a plea of the dis- 
 charge, must be abated. ^ 
 
 98 Schmid v. N. Y., L. E. & W. 1 Brown, Receiver, v. Gay, 76 
 
 R. Co., 32 Hun, 335. And see Ryan Tex., 444, 13 S. W., 472; Boggs v. 
 
 V. Hays, 62 Tex., 42; Hicks v. I. Brown, 82 Tex., 41, 17 S. W., 830; 
 
 & G. N. R. Co., 62 Tex., 38; I. & Texas & Pacific R. Co. v. Com- 
 
 G. N. R. Co. V. Ormond, 62 Tex., stock, 83 Tex., 537, 18 S. W., 946. 
 
 274; Brockert v. Iowa Central Ry. And see Texas & Pacific R. Co. v. 
 
 Co., 93 Iowa, 132, 61 N. W., 405. Adams, 78 Tex., 372, 14 S. W., 666. 
 
 09 Mobile & Ohio R. Co. v. Davis, 2 Fordyce v. Du Bose, 87 Tex., 
 
 62 Miss., 271. 78, 26 S. W., 1050.
 
 564 RECEIVERS. [chap. XL 
 
 VI. Receivers' Certificates. 
 
 § 39Sc-. Receivers' certificates sustained by authority; not invalid because 
 bill is demurrable. 
 
 398c?. Purposes for which issued; order strictly construed; priorities; 
 notice. 
 
 398^. Not commercial paper; innocent holders not protected; pur- 
 chasers charged with notice of order. 
 
 398/. When bondholder estopped from questioning validity; when 
 bondholder not estopped; consent of trustee to certificates; 
 order for certificates appealable. 
 
 298g. Sale of road subject to certificates; purchaser concluded; me- 
 chanic's lien. 
 
 398h. Certificates for construction; when new company liable for 
 certificates. 
 
 398i. Case of Illinois Midland Railway Company. 
 
 398/. Priority as between compensation of receiver and that of 
 trustee; same as to counsel fees. 
 
 § 398c. Receivers' certificates sustained by authority; 
 not invalid because bill is demurrable. In actions for the 
 foreclosure of raihvay mortgages, a practice has grown up in 
 recent years of authorizing the receiver appointed in the fore- 
 closure proceedings to issue debentures or certificates of in- 
 debtedness for the purpose of raising money to procure ma- 
 terials, labor, supplies and rolling stock, for the maintenance 
 and repair of the road, and in some instances for completing 
 an unfinished line or for making extensions of an existing line 
 of road. These certificates are, by the order of the court, de- 
 clared to be a first lien upon the entire property, income and 
 franchises of the railway company, and such order is usually 
 recited in the body of the certificate itself. In cases where re- 
 sort is had to this method of raising money, the income of the 
 receivership being generally inadequate to the payment of the 
 certificates, they are usually paid out of the proceeds of fore- 
 closure, before distribution among the mortgage bondholders. 
 The power to thus create a new lien or mortgage upon the 
 property, and to give it priority over existing mortgages, marks 
 the extreme limit which courts of equity have thus far attained 
 in the exercise of their extraordinary jurisdiction. It can 
 hardly be questioned that the exercise of such a power impairs
 
 CHAP. XI.] RAILWAYS. 565 
 
 the obligation of the mortgage contract, and frequently results 
 in the diversion of a large portion of the mortgage security. 
 A power so dangerous because so boundless can not be sus- 
 tained upon any just principles of legal reasoning. Neverthe- 
 less, as was said upon the question of preferring payment of 
 operating expenses prior to the receivership, as against the 
 lien of mortgage bondholders, this branch of the jurisdiction 
 is so well established upon authority that its existence is no 
 longer open to question.^ The exercise of the jurisdiction is 
 justified upon the principle that the court having taken under 
 its charge the property of the railway company as a trust fund 
 for the payment of incumbrances, it may authorize its receiv- 
 ers to raise money necessary for the preservation and manage- 
 ment of the property, and may charge the same as a lien there- 
 on, when necessary for the preservation of the trust estate."* 
 The exercise of the power is also justified from the peculiar 
 nature of railway property and from the necessity of continu- 
 ing it in operation as a "going concern," pending foreclosure 
 proceedings, as well as for the preservation and protection of 
 the interests of the public.^ The jurisdiction is to be exercised 
 with extreme caution, and, if possible, with the consent or 
 acquiescence of the parties in interest.^ And when the cer- 
 tificates have thus been issued, either with the consent of the 
 bondholders, or without objection on their part, they will be 
 
 3 Wallace v. Loomis, 97 U. S., as against mortgage bondholders, 
 
 146; Meyer v. Johnston, S3 Ala., to issue receivers' certificates and 
 
 237; Hoover v. M. & G. L. R. Co., to make them a prior lien and 
 
 29 N. J. Eq., 4; Taylor v. P. & R. charge upon the mortgaged prem- 
 
 R. Co., 7 Fed., 377; Bank of Mont- ises, for the payment of wages due 
 
 real v. C, C. & W. R. Co., 48 Iowa, to operatives prior to the receiver- 
 
 518; Kennedy v. St. Paul & Pacific ship. 
 
 R. Co., 2 Dill., 448; S. C, 5 Dill., 4 Wallace v. Loomis, 97 U. S., 
 
 519; Illinois Trust & Savings Bank 146. But see Street v. Maryland C. 
 
 V. Pacific Ry. Co., 115 Cal., 285, 47 R. Co., 59 Fed., 25. 
 
 Pac, 60. See, contra, Metropolitan ^ Meyer v. Johnston, 53 Ala., 237. 
 
 Trust Co. V. Tonawanda Valley & 6 Wallace v. Loomis, 97 U. S., 
 
 C. R. Co., 103 N. Y., 245, 8 N. E., 146; Investment Co. v. Ohio & N. 
 
 488, where it was held in a well- W. R. Co., 36 Fed., 48. 
 considered opinion to be improper,
 
 S66 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 enforced as a prior Hen upon the property, and will be paid out 
 of the proceeds of foreclosure, before payment to the bond- 
 holders.''' Nor are receivers' certificates which are otherwise 
 valid rendered invalid by the fact that the bill in the proceed- 
 ing in which they are issued is bad upon demurrer.^ 
 
 § 398(/. Purposes for which issued; order strictly con- 
 strued; priorities; notice. No limit has been fixed to the 
 purposes for which receivers' certificates may be issued, other 
 than that they shall be germane to the objects of the receiver- 
 ship and necessary to the proper administration of the trust. 
 Thus, they have been authorized for the preservation, manage- 
 ment and repair of the road, and for the purchase of rolling 
 stock; ^ for the making of repairs only; ^^ for the further con- 
 struction, equipment and final completion of the road ; ^^ to 
 
 7 Wallace v. Loomis, 97 U. S., 
 146. Mr. Justice Bradley, deliver- 
 ing the opinion of the court, says, 
 p. 162: "The receivers were au- 
 thorized by the order appointing 
 them, amongst other things, to put 
 the road in repair and operate the 
 same, and to procure such rolling 
 stock as might be necessary; and, 
 for these purposes, to raise money 
 by loan to an amount named in the 
 order, and issue their certificates of 
 indebtedness therefor; and the or- 
 der declared that such loan should 
 be a first lien upon the property, 
 payable before the first mortgage 
 bonds. The power of a court of 
 equity to appoint managing receiv- 
 ers of such property as a railroad, 
 when taken under its charge as a 
 trust fund for the payment of in- 
 cumbrances, and to authorize such 
 receivers to raise money necessary 
 for the preservation and manage- 
 ment of the property, and make the 
 same chargeable as a lien thereon 
 for its repayment, can not, at this 
 day, be seriously disputed. It is a 
 
 part of that jurisdiction, always ex- 
 ercised by the court, by which it is 
 its duty to protect and preserve the 
 trust funds in its hands. It is, un- 
 doubtedly, a power to be exercised 
 with great caution ; and, if possible, 
 with the consent or acquiescence of 
 the parties interested in the fund. 
 In this case it appears that the par- 
 ties most materially interested either 
 expressly consented to the order, or 
 offered no objection to it." 
 
 8 Farmers' Loan & Trust Co. v. 
 Centralia & C. R. Co., 37 C. C A., 
 528, 96 Fed., 636. 
 
 9 Wallace v. Loomis, 97 U. S., 
 146; Union Trust Co. v. Illinois 
 Midland R. Co., 117 U. S., 434, 6 
 Sup. Ct. Rep., 809, affirming in part 
 and reversing in part S. C, 28 Fed., 
 169. 
 
 10 Hoover v. M. & G. L. R. Co., 
 29 N. J. Eq., 4. 
 
 11 Bank of Montreal v. C, C. & 
 W. R. Co., 48 Iowa, 518; Bank of 
 Montreal v. Thayer, 7 Fed., 622; 
 First National Bank v. Ewing, 43 
 C. C. A., 150, 103 Fed., 168. In
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 567 
 
 complete an unfinished portion of the road within the time 
 fixed by law, and thus to prevent the lapsing of valuable 
 land grants and franchises of the company ; ^^ for the im- 
 provement, repair and operation of the road ; ^^ to procure 
 rolling stock, machinery and necessary supplies, and to repair 
 and operate the road,^^ and in payment for labor, materials, 
 supplies and taxes due prior to the receivership.^^ So they have 
 been issued in payment for the construction of a line of railway 
 which, while not a part of the mortgaged system, yet formed 
 a part of the continuous line or system made up of different di- 
 visions operated by the receiver as an entirety, and the use by 
 the receiver of the branch in question being necessary to pre- 
 vent the dismemberment of such system. ^^ And when an iron 
 company has constructed a railroad for the transportation of 
 ore from its mines, upon the appointment of a receiver over 
 the company, certificates have been issued for rebuilding a 
 bridge upon such railroad, for paying taxes and expenses of 
 
 Bibber-White Co. v. White River 
 V. E. R. Co., 53 C. C. A., 282, 115 
 Fed., 786, it was held to be an er- 
 roneous exercise of judicial discre- 
 tion for the court to authorize re- 
 ceivers' certificates for the comple- 
 tion of a line of railroad of which 
 only one-third was already com- 
 pleted, and to give such certificates 
 preference over other certificates 
 previously issued, especially where 
 the bondholders were given no op- 
 portunity to be heard. But in 
 Rutherford v. Penn. M. R. Co., 178 
 Pa. St., 38, 35 Atl., 926, it was held 
 that while ordinarily receivers' cer- 
 tificates should not be issued for 
 the completion of an unfinished line 
 of railroad, yet it was proper to 
 issue them where it was done with 
 the approval of 96 per cent, of the 
 bondholders and was without pre- 
 judice to the non-assenting bond- 
 holders. 
 
 12 Kennedy v. St. Paul & Pacific 
 R. Co., 2 Dill., 448; S. C, 5 Dill., 
 519. 
 
 13 Turner v. P. & S. R. Co., 95 
 111., 134; Stanton v. A. & C. R. Co., 
 2 Woods, 506. 
 
 14 Swann v. Clark, 110 U. S., 602, 
 4 Sup. Ct. Rep., 241. 
 
 15 Humphreys v. Allen, 101 111.. 
 490; Taylor v. P. & R. R. Co., 7 
 Fed., 377; Union Trust Co. v. Illi- 
 nois Midland R. Co., 117 U. S., 434, 
 6 Sup. Ct. Rep., 809, affirming in 
 part and reversing in part S. C, 28 
 Fed., 169; First National Bank v. 
 Ewing, 43 C. C. A., 150, 103 Fed., 
 168; Bank of Commerce v. Central 
 C. & C. Co., 53 C. C. A., 334, 115 
 Fed., 878. 
 
 i6Kneeland v. Luc-?, 141 U. S., 
 491, 12 Sup. Ct. Rep., 32.
 
 568 RECEIVERS. [chap. XI. 
 
 condemnation suits and for other purposes necessary to put 
 the property in a salable condition ; and such certificates have 
 been preferred in payment out of the proceeds of a sale of the 
 property over the claims of mortgage bondholders.^"^ So the 
 court may properly authorize the issuing of receivers' certifi- 
 cates for the purpose of raising funds to defray the costs and 
 expenses of a proposed litigation, and the fact that the result 
 of such litigation is uncertain constitutes no objection.^^ As 
 between receivers' certificates issued to pay debts incurred for 
 labor, materials and supplies prior to the appointment of the 
 receiver, and those issued to pay for repairs and other expenses 
 incurred by the receiver himself in the operation of the road, 
 the latter are to be regarded as the debts of the court rather 
 than of the company and are therefore entitled to a preference 
 in payment over the former, which are to be considered as the 
 debts of the company.^^ The issue of certificates is, however, 
 confined strictly to the purposes expressed in the order, and 
 these purposes will not be extended by implication. And when 
 the receiver is authorized to issue certificates as material is fur- 
 nished and labor performed in extending the road, not to ex- 
 ceed a given amount per mile, he can not issue them in advance 
 of the actual performance of the labor or furnishing of the 
 materials.20 Nor will they be issued without notice to all 
 parties in interest, nor without a full hearing as to the necessity 
 for the proposed expenditure,^^ nor at a higher rate of interest 
 than that allowed by law.22 But notice to the trustee of mort- 
 gage bondholders, of the application for leave to issue the cer- 
 tificates, will be treated as notice to the bondholders, the trustee 
 being regarded for such purposes as the representative of the 
 
 l7Karn v. Rorer, 86 Va., 754, 11 20 Bank of Montreal v. C, C. & 
 
 S. E., 431. W. R. Co., 48 Iowa, 518. 
 
 18 Town of Vandalia v. St. L., V. 21 Ex parte Mitchell, 12 S. C, 83; 
 & T. H. R. R. Co., 209 111., 73, 70 Meyer v. Johnston, 53 Ala., 237; 
 N. E., 662. Osborne v. Big Stone G. C. Co., 96 
 
 19 Bank of Commerce v. Central Va., 58, 30 S. E., 446. 
 
 C. & C. Co., 53 C. C A., 334, 115 22 Meyer v. Johnston, 53 Ala., 237. 
 
 Fed., 878.
 
 CHAP. XI.] RAILWAYS. 569 
 
 bondholders. 23 But the bondholders are not to be treated as 
 represented by the trustee in the matter of notice when the trus- 
 tee, although named as a defendant in the proceeding, was not 
 in fact a party, and in such case the trustee, when finally made 
 a party, may contest the validity of the certificates. ^4 
 
 § 398^. Not commercial paper ; innocent holders not pro- 
 tected; purchasers charged with notice of order. Receiv- 
 ers' certificates, being merely evidence of indebtedness issued 
 for a special purpose, under a judicial order, and payable out 
 of a special fund, are not negotiable instruments or commercial 
 paper in the sense that innocent purchasers for value will be 
 protected as against the equities existing between the original 
 parties. And while they may be transferred by assignment, 
 or even by delivery if payable to bearer, the purchaser or as- 
 signee may only recover upon them to the extent that the 
 original payee might have recovered. ^5 It follows, therefore, 
 that the assignor or indorser of such certificates is not liable 
 as a guarantor or indorser of commercial paper, nor does the 
 assignment import a warranty that the certificates are collect- 
 ible and will be paid. 26 So it is held that the negotiation and 
 sale of the certificates is a trust personal to the receiver, which 
 he can not delegate to an agent. And when one has purchased 
 the certificates from an agent or broker of the receiver at a 
 large discount, the agent not accounting to the receiver for the 
 proceeds, the purchaser can not enforce the certificates. ^'7 So the 
 certificates referring upon their face to the order under which 
 they are issued, a purchaser is chargeable with notice of the 
 terms of such order, and is bound to know at his peril whether 
 
 23 Wallace v. Loomis, 97 U. S., H. R. Co., 7 Fed., 513; McCurdy v. 
 146. Bowes, 88 Ind., 583; Stanton v. 
 
 24 Farmers' Loan & Trust Co. v. Alabama & C. R. Co., 31 Fed., 585; 
 Centralia & C. R. Co., 37 C. C. A., Bernard v. Union Trust Co., 86 C. 
 528, 96 Fed., 636. C. A., 610, 159 Fed., 620. 
 
 25 Turner v. P. & S. R. Co., 95 26 McCurdy v. Bowes, 88 Ind., 
 111., 134; Bank of Montreal v. C, 583. 
 
 C. & W. R. Co., 48 Iowa, 518 ; 27 Union Trust Co. v. C. & L. H. 
 
 Stanton v. A. & C. R. Co., 2 Woods, R. Co., 7 Fed., 513. 
 506; Union Trust Co. v. C. & L.
 
 570 RECEIVERS. [chap. XI. 
 
 they are issued in accordance with its terms and conditions.28 
 Anil although the order of the court authorizing the issuing 
 of certificates has described them as being negotiable, one who 
 takes such certificates can not claim to hold as an innocent 
 purchaser without notice, since they have not the quality of ne- 
 gotiable instruments in the law merchant, and the purchaser is 
 put upon inquiry of all which is done in the cause in which 
 they have been issued. ^9 And certificates issued in excess of 
 the amount authorized by the court are void, even in the hands 
 of innocent holders, and will not be awarded priority of pay- 
 ment out of the funds of the receivership. But when money 
 is advanced in good faith upon such an overissue of certificates, 
 and is used by the receiver in payment of overdue coupons 
 for interest upon the mortgage indebtedness, the persons ad- 
 vancing such money may be subrogated to the rights of the 
 coupon holders, and may receive the proportion due to such 
 coupons out of the proceeds of the foreclosure sale, upon final 
 distribution. ^0 If, however, a receiver executes and places 
 upon the market certificates containing false and fraudulent rep- 
 resentations intended to deceive purchasers, the receiver is 
 personally liable in an action for damages brought by one who 
 purchases the certificates in good faith and relying upon such 
 representations.^^ 
 
 § 398/. When bondholder estopped from questioning 
 validity; vi^hen bondholder not estopped; consent of trus- 
 tee to certificates; order for certificates appealable. Al- 
 though, as has already been shown, receivers' certificates 
 are not negotiable instruments, yet when a receiver in 
 foreclosure proceedings is authorized to issue them in 
 payment for operating expenses, rentals, taxes and im- 
 provements incurred before his appointment, a bondholder 
 desiring to question their validity and priority of lien 
 
 28 Bank of Montreal v. C, C. & 30 Newbold v. P. & S. R. Co., 5 
 W. R. Co., 48 Iowa, 518. Bradw., 367. 
 
 29 Bernard v. Union Trust Co., ^i Bank of Montreal v. Thayer, 7 
 86 C. C A., 610, 159 Fed., 620. Fed., 622.
 
 CHAP. XI.] RAILWAYS. 571 
 
 should do so before they are issued and sold. And if, 
 with full knowledge of all the facts, he permits them 
 to be sold without objection, he and those claiming under him 
 with full notice of such facts, can not afterwards be heard to 
 question the payment of such certificates in full out of the pro- 
 ceeds of the foreclosure sale, before distribution among the 
 bondholders. ^2 g^t where, in an action brought to foreclose a 
 trust deed securing bonds, one of the bondholders filed his peti- 
 tion of intervention asking to be made a party plaintiff and to 
 adopt the allegations of the bill except so far as modified by 
 his ownership of the bonds, but the court refused to grant the 
 petition and it was afterwards withdrawn and the bondholder 
 thereupon appeared as a defendant in the action, it was held 
 that the bondholder was not estopped to deny the validity of 
 receivers' certificates previously issued. ^^ So where a trustee 
 for mortgage bondholders consents that receivers' certificates 
 shall issue and shall be a first lien upon the mortgaged property 
 prior to the lien of the trust deed, such action by the trustee 
 is a gross breach of trust and the mortgage bondholders will 
 not be estopped from objecting to the validity of the certifi- 
 cates.^* But when, after a final decree of foreclosure against 
 a railway company and pending an appeal and supersedeas 
 therefrom, the court below orders an issue of receivers' cer- 
 tificates as a paramount lien upon the mortgaged property, 
 an appeal will lie from such order, since it is a final determina- 
 tion of the rights of the parties, which changes the relation of 
 the company to its property and displaces rights already de- 
 termined and established by the foreclosure decree.^^ 
 
 32 Humphreys v. Allen, 101 111., Petitioner, 129 U. S., 206, 9 Sup. 
 490. See, also, Langdon v. Ver- Ct. Rep., 265. To the same effect, 
 mont & Canada R. Co.. 53 Vt., 228. see Bibber-White Co. v. White 
 
 33 Belknap Savings Bank v. La- River V. E. R. Co., 53 C. C. A., 282, 
 mar L. & C. Co., 28 Colo., 326, 64 115 Fed., 786. See Farmers' Loan 
 Pac, 212. & Trust Co. v. Centralia & C. R. 
 
 34 Belknap Savings Bank v. La- Co., Z7 C. C. A., 528, 96 Fed., 636. 
 mar L. & C. Co., 28 Colo., 326, 64 as to the effect upon the validity of 
 Pac, 212. receivers' certificates of the assent 
 
 35 Farmers' Loan & Trust Co., of a bondholders' committee.
 
 572 RECEIVERS. [chap. XI. 
 
 § 398°:. Sale of road subject to certificates; purchaser 
 concluded; mechanic's lien. When receivers' certificates 
 are issued in foreclosure proceedings as a first lien upon all the 
 property of a railway company, to be paid before payment to 
 mortgage bondholders out of the proceeds of sale, and the 
 property is sold expressly subject to such liens and to all lia- 
 bilities incurred by the receiver, a decree in a subsequent suit 
 brought by the holders of the certificates, declaring them to be 
 a first lien upon the property to the extent of the money actually 
 advanced to the receiver thereon, will be upheld as against a 
 purchaser at the foreclosure sale, and in an action by the hold- 
 ers of the certificates to enforce their lien by a sale of the road, 
 such purchaser will not be heard to question the validity of the 
 certificates. 2^ In such case, the purchaser having acquired his 
 title subject to all such liens and priorities as may be allowed 
 by the court prior to the mortgage indebtedness, he can not, 
 after such liens have been established in the foreclosure pro- 
 ceedings, maintain a new action to dispute their validity, the 
 parties in interest in the former suit having been fully heard 
 in the proceeding to establish the validity and priority of such 
 prior liens. 3"^ If, however, the railway is sold to satisfy the cer- 
 tificates, such sale will not divest a mechanic's lien claimed by a 
 creditor for the construction of the road, who has instituted 
 proceedings to enforce his lien before the appointment of the 
 receiver, and who was not made a party to the suit in which 
 he was appointed and in which the property was sold. In such 
 case, the receiver in no manner represents the creditor claim- 
 
 36 Swann v. Clark, 110 U. S., 602, certificates, and as to the effect of 
 
 4 Sup. Ct. Rep., 241; Central Na- laches by the certificate holder in 
 
 tional Bank v. Hazard, 30 Fed., asserting his rights against the pur- 
 
 484, 24 Blatch., 310. See, also, chasers at the foreclosure sale, Mer- 
 
 Central Trust Co. v. Sheffield & B. cantile Trust Co. v. Kanawha & O. 
 
 C. I. & R. Co., 44 Fed., 526. But R. Co., 7 C. C. A., 3, 58 Fed., 6, 16 
 
 see, as to the effect of a final de- U. S. App., 37. 
 
 tree confirming a foreclosure sale 37 Swann v. Wright's Executor, 
 
 and divesting the lien of receivers' 110 U. S., 590, 4 Sup. Ct. Rep., 235.
 
 CHAP. XI.] RAILWAYS. 573 
 
 ing such Hen, and the property is, therefore, regarded as hav- 
 ing been sold subject to his hen.^^ 
 
 § 398/z. Certificates for construction; when new com- 
 pany liable for certificates. When certificates are issued, 
 with the consent of the mortgage trustee, to pay for the con- 
 struction of a line not a part of the mortgaged system, but 
 forming a part of a continuous system operated by the receiver 
 and necessary for its continuous operation, the creditors re- 
 ceiving such certificates surrendering the shares of stock which 
 represent the ownership of the line so constructed, such shares 
 passing to the purchaser at the foreclosure sale as part of his 
 purchase, the bondholders and purchaser are estopped from 
 questioning the lien of the certificates, or their right to be pre- 
 ferred in payment out of the proceeds of sale.^^ 
 
 § 398/. Case of Illinois Midland Railway Company. Re- 
 ceivers' certificates issued for necessary repairs and better- 
 ments, for the payment of tax liens, for wages of employees six 
 months prior to the receivership, for debts due to other railway 
 companies for track rentals, materials, labor and traffic bal- 
 ances, for supplies and damages and to replace earnings which 
 have been diverted from operating expenses and ordinary re- 
 pairs to pay for betterments, while debts to a larger amount for 
 operating expenses and ordinary repairs have been incurred, 
 have been allowed priority out of the proceeds of a foreclosure 
 sale as against mortgage bondholders. And such priorities 
 have been allowed although the receivership was instituted 
 upon a judgment creditor's bill, bills for foreclosure being 
 afterward filed which were consolidated with the creditor's 
 suit, although no order was entered in the foreclosure suits 
 appointing a receiver. In such case, the express consent of the 
 bondholders or trustee to the issuing of certificates is not nec- 
 essary when the road has been operated for a considerable time 
 by the receiver with their knowledge and without objection, 
 and when the trustee has failed to avail itself of its rights un- 
 
 3S Snow V. Winslow, 54 Iowa, 29 Kneeland v. Luce, 141 U. S., 
 
 200, 6 N. W., 191. 491, 12 Sup. Ct. Rep., 32.
 
 574 
 
 RECEIVERS. 
 
 [chap. XI. 
 
 der the mortgage. And such certificates having been sold at 
 a discount by order of the court, the holders may be allowed 
 payment of their face value with interest, the discount having 
 been within the limit fixed by the order.^O And the road con- 
 sisting of three separate divisions or sections covered by sep- 
 arate mortgages, the line being operated by the receiver as an 
 entirety, it is proper to apportion claims thus allowed priority 
 among the different sections or divisions according to their 
 length. But when the receiver has borrowed large sums of 
 money without authority of the court, priority will not be al- 
 lowed to such obligations, even though the money has been 
 expended for necessary expenses of the receivership, for re- 
 pairs, pay-rolls and supplies.'*^ 
 
 40 Union Trust Co. v. Illinois 
 Midland R. Co., 117 U. S., 434, 6 
 Sup. Ct. Rep., 809. But in Stanton 
 V. A. & C. R. Co., 2 Woods, 506, it 
 is held that while persons who ad- 
 vance money upon the faith of re- 
 ceivers' certificates are not bound 
 to see to its application, they may 
 only enforce their certificates out 
 of the proceeds of foreclosure to 
 the extent of their actual advances 
 to the receiver. But see Alabama 
 Iron & R. Co. v. Anniston L. & T. 
 Co., 6 C. C. A., 242, 57 Fed., 
 25, 13 U. S. App., 506. 
 
 41 Union Trust Co. v. Illinois 
 Midland R. Co., 117 U. S., 434, 6 
 Sup. Ct. Rep., 809. The case of the 
 Illinois Midland Railway Company 
 here cited may be regarded as fix- 
 ing the extreme limit thus far 
 reached by courts of equity in the 
 exercise of their extraordinary 
 jurisdiction in divesting mortgage 
 liens and in giving preference to 
 the rights of general and unsecured 
 creditors. In the progress of the 
 litigation in the circuit court of the 
 United States for the seventh cir- 
 
 cuit, eighteen different series of re- 
 ceiver's certificates were issued, in 
 satisfaction of claims of almost 
 every character incurred by the 
 railway company and by its receiv- 
 ers. Each series of certificates was, 
 by the order authorizing its issue, 
 decreed to be a prior and paramount 
 lien upon the entire property of the 
 railway company. Many of these 
 certificates were, by the action of 
 the circuit court, afterward held 
 invalid, others were so held by the 
 judgment of the supreme court, 
 while the validity of still others was 
 affirmed by that court. The history 
 of railway foreclosures and receiv- 
 erships may be searched in vain for 
 a more instructive commentary up- 
 on the dangers which result from 
 the exercise of a jurisdiction which, 
 in effect, impairs the obligation of 
 the mortgage contract by divesting 
 its lien in favor of the demands of 
 inferior and unsecured creditors. 
 Well might the court call a halt up- 
 on the exercise of this extraordi- 
 nary jurisdiction, in the language 
 of Mr. Justice Brewer in Kneeland
 
 CHAP. XI.] 
 
 RAILWAYS. 
 
 575 
 
 § 398/. Priority as between compensation of receiver 
 and that of trustee; same as to counsel fees. It has been 
 held, where the receiver of a street railway company has issued 
 certificates which were declared to be a first lien upon the 
 property of the company prior to the lien of the mortgage, 
 that such certificates were entitled to priority over the com- 
 pensation of the trustee named in the trust deed and of the trus- 
 tee's counsel; but it was held that they were not entitled to a 
 preference over the compensation of the receiver and his coun- 
 sel, since such items were to be regarded as part of the costs of 
 the suit.42 
 
 V. American L. & T. Co., 136 U. S., 
 89, 10 Sup. Ct. Rep., 950, as fol- 
 lows, page 97: "Upon these facts 
 we remark, first, that the appoint- 
 ment of a receiver vests in the court 
 no absolute control over the prop- 
 erty, and no general authority to 
 displace vested contract liens. Be- 
 cause in a few specified and limited 
 cases this court has declared that 
 unsecured claims were entitled to 
 priority over mortgage debts, an 
 idea seems to have obtained that a 
 court appointing a receiver acquires 
 power to give such preference to 
 any general and unsecured claims. 
 It has been assumed that a court 
 appointing a receiver could right- 
 fully burden the mortgaged prop- 
 erty for the payment of any unse- 
 cured indebtedness. Indeed, we are 
 advised that some courts have made 
 the appointment of a receiver con- 
 ditional upon the payment of all 
 unsecured indebtedness in pref- 
 erence to the mortgage liens sought 
 to be enforced. Can anything be 
 conceived which more thoroughly 
 destroys the sacredness of contract 
 obligation? One holding a mort- 
 gage debt upon a railroad has the 
 same right to demand and expect 
 
 of the court respect for his vested 
 and contracted priority as the hold- 
 er of a mortgage on a farm or lot. 
 So, when a court appoints a receiv- 
 er of railroad property, it has no 
 right to make that receivership con- 
 ditional on the payment of other 
 than those few unsecured claims 
 which, by the rulings of this court, 
 have been declared to have an equit- 
 able priority. No one is bound to 
 sell to a railroad company or to 
 work for it, and whoever has deal- 
 ings with a company whose prop- 
 erty is mortgaged must be assumed 
 to have dealt with it on the faith of 
 its personal responsibility, and not 
 in expectation of subsequently dis- 
 placing the prioritiy of the mort- 
 gage liens. It is the exception and 
 not the rule that such priority of 
 liens can be displaced. We empha- 
 size this fact of the sacredness of 
 contract liens, for the reason that 
 there seems to be growing an idea, 
 that the chancellor, in the exercise 
 of his equitable powers, has unlim- 
 ited discretion in this matter of the 
 displacement of vested liens." 
 
 42 Petersburg Sav. & Ins. Co. v. 
 Dellatorre, 17 C. C. A., 310, 70 Fed., 
 643, 30 U. S. App., 504.
 
 CHAPTER XII. 
 OF RECEIVERS IN AID OF JUDGMENT CREDITORS. 
 
 I. Principles Upon Which the Relief is Granteb § 399 
 
 II. Of the Receiver's Title 440 
 
 III. Of the Receiver's Functions and Rights of Action 453 
 
 I. Principles Upon Which the Relief is Granted. 
 
 § 399. The jurisdiction of English origin; inadequacy of legal remedy 
 the ground for relief. 
 
 400. American law shaped by New York courts; no answer to 
 
 application that defendant has no property; duty of creditor 
 to apply for receiver. 
 
 401. Supplementary proceedings under New York code; receiver 
 
 granted almost as of course. 
 
 402. Judgment c editor must be diligent in assertion of his rights; 
 
 effect of delay as a bar to relief. 
 
 403. Plaintiff must fully exhaust his remedy at law; receiver not 
 
 granted when execution may be satisfied in the ordinary 
 way; receiver appointed where debtor's interest is purely 
 equitable. 
 403a. Receiver not appointed to collect municipal tax in aid of judg- 
 ment creditor. 
 
 404. Receiver can not be appointed on sheriff's return of execution 
 
 nulla bona before its return day. 
 
 405. Receiver of joint property of two defendants on judgment ren- 
 
 dered against one; omission in direction of execution to 
 sheriff. 
 
 406. Receiver not granted in aid of general creditor before judg- 
 
 ment; illustrations of the rule; attaching creditors. 
 
 407. Apparent exception to the rule in New York in cases of 
 
 partnerships; receiver allowed before judgment. 
 
 408. Lien of creditors who have advanced money for repairing 
 
 vessel, when protected by receiver. 
 
 409. Receiver over effects of married woman doing business as 
 
 trader, in action to charge her individual property. 
 
 410. Creditor holding annuity which is a charge on real estate may 
 
 have receiver when annuity is in arrears. 
 
 576
 
 CHAP. XII.] CREDITORS. 577 
 
 § 411. Fraudulent assignment by debtor ground for receiver; appoint- 
 ment of receiver does not determine rights of assignee. 
 
 412. Receiver granted to carry out assignment by debtor for bene- 
 
 fit of creditors, on refusal of assignee to act, or on his mis- 
 conduct; right to receiver not affected by subsequent assign- 
 ment by debtor. 
 
 413. No bar to the relief that property is claimed by adverse claim- 
 
 ants; or beyond jurisdiction of court. 
 
 414. Answer denying property no bar to reference to master to ap- 
 
 point; receiver not appointed to attack fraudulent assign- 
 ment which creditor can set aside. 
 
 415. Practice on reference to master to appoint under New York 
 
 system; assignment to receiver; examination of debtor, pur- 
 pose and extent of. 
 
 416. Courts averse to interfering when contest is as to title of real 
 
 estate claimed by third persons. 
 
 417. Buildings erected by debtor with his own funds, receiver ap- 
 
 pointed over rents. 
 
 418. Receiver allowed over realty in first instance under English 
 
 practice; infant heirs; rights of judgment creditors in posses- 
 sion not affected. 
 
 419. Receiver not appointed on creditors' bill, as against mortgagee 
 
 in possession; different mortgages; inadequate security. 
 
 420. Receiver in aid of judgment creditors as against mortgagee of 
 
 chattels. 
 
 421. Judgment creditors may maintain action to set aside fraudu- 
 
 lent mortgage; rights of judgment creditor in England. 
 
 422. Real estate in receiver's possession can not be sold under 
 
 another judgment. 
 
 423. Priority as between purchasers of real estate at receiver's sale 
 
 and at sheriff's sale. 
 
 424. The same; receiver acquires real property subject to judgment 
 
 liens. 
 
 425. Discharge in bankruptcy, when no defense to creditors' bill 
 
 seeking receiver. 
 
 426. Receiver under English bankrupt act of 1861. 
 
 427. Receiver refused on creditors' bill when his appointment would 
 
 interfere with administration of estate of deceased. 
 
 428. Relief granted against judgment debtor doing business in 
 
 name of wife; error to pay creditors before priority de- 
 termined. 
 
 429. Discretion of court as to amount of defendant's property over 
 
 which receiver will be extended; discretion as to sale; re- 
 ceiver extended for other creditor. 
 
 430. Creditor not entitled to priority over interest due on mort- 
 
 gages prior to his judgment. 
 
 431. Appointment after bill dismissed on demurrer. 
 
 Receivers — Zl .
 
 578 RECEIVERS. [chap. XII. 
 
 § 432. Nature of property subject to receivership; rings and jewelry; 
 notes and interest in firm; benefice of clergyman; seats in 
 stock and produce exchange. 
 
 433. Relief refused when answer alleges nothing due to plaintiff; 
 
 delay to determine regularity of proceedings. 
 
 434. Waiver of answer under oath no ground of objection. 
 
 435. When defendant directed to pay fund into court. 
 
 436. Courts averse to interfering on ex parte application. 
 
 437. Prior creditors protected, notwithstanding dismissal of bill. 
 
 438. Receiver in divorce proceedings to enforce decree for alimony. 
 
 439. Relief granted when only security for judgment is a life estate. 
 439a. Supreme Court of Judicature Act in England. 
 
 439&. No preference allowed as between creditors of the same class. 
 
 § 399. The jurisdiction of English origin; inadequacy 
 of legal remedy the ground for relief. No branch of the 
 law of receivers is more frequently invoked in this country 
 than that which governs the jurisdiction as exercised in behalf 
 of judgment creditors, for the enforcement of their judgments 
 in cases where the usual legal remedies have been exhausted, 
 and when the aid of equity is, therefore, necessary for the 
 protection of the creditor. The jurisdiction of equity by the 
 appointment of receivers, in this class of cases, while deriving 
 its origin from the English Court of Chancery, has been more 
 largely shaped and developed by the decisions of American 
 courts, than has any other branch of the law under considera- 
 tion. The fundamental principle upon which it rests is the 
 inadequacy of the legal remedy, and the consequent necessity 
 for the aid of equity to supplement the remedy at law. This 
 principle may be traced back through all the adjudications upon 
 the subject, and it was said by Lord Eldon, to have been long 
 settled, that when a judgment creditor took out execution, and 
 found the estate of his debtor protected by circumstances re- 
 specting a prior title, he might apply for a receiver, and that the 
 fact that the creditor could not execute his judgment at I'aw 
 would entitle him to a receiver of the debtor's estate.^ The 
 same principle, it is believed, will be found to underlie most of 
 the decisions in this country upon this topic, and it may be 
 
 1 See Curling v. Marquis Townshend, 19 Ves., 628,
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 579 
 
 regarded as the foundation of the entire jurisdiction of equity 
 in appointing receivers in creditors' suits.^ 
 
 § 400. American law shaped by New York courts; no 
 answer to application that defendant has no property; 
 duty of creditor to apply for receiver. The American law 
 upon this subject has been very largely shaped by the deci- 
 sions of the New York courts, both under the former chancery 
 practice in that state, and under the code of procedure by which 
 the former system was superseded. Under the practice of the 
 New York Court of Chancery, the appointment of receivers 
 on creditors' bills, after return of execution unsatisfied, was 
 almost a matter of course, for the preservation of the debtor's 
 property pending the litigation.^ And it was held that when 
 the sworn bill, filed by the judgment creditor, showed that he 
 had an equitable right to all the funds and property of the de- 
 fendant to satisfy his debt, if this right was not denied by de- 
 fendant in answer to the application for a receiver, no reason 
 
 2 As to the power of a court of 
 equity to appoint a receiver to col- 
 lect taxes due to a municipal cor- 
 poration and to apply them in pay- 
 ment of the indebtedness of such 
 corporation, at the suit of its cred- 
 itors, its charter having been re- 
 voked by the legislature, see Meri- 
 wether V. Garrett, 102 U. S., 472; 
 Garrett v. City of Memphis, 5 Fed., 
 860. 
 
 3 See Bloodgood v. Clark, 4 
 Paige, 574; Osborn v. Heyer, 2 
 Paige, 342; Fitzburgh v. Evering- 
 ham, 6 Paige, 29; Bank of Monroe 
 V. Schermerhorn, Clarke Ch., 214. 
 And see Johnson v. Tucker, 2 Tenn. 
 Ch., 398. Indeed, the practice 
 seems to have been more liberal 
 than was at all times consistent 
 with the established principles of 
 equity; so much so, at least, as to 
 provoke the criticism of Vice-Chan- 
 
 cellor Sandford, in Iddings v. 
 Bruen, 4 Sandf. Ch., 424. "Most 
 of our notions of a receiver at this 
 day," says the learned judge, "are 
 derived from the course and prac- 
 tice in judgment creditors' suits, 
 where they are principally used, and 
 in which many things have occurred 
 to render them the mere puppets of 
 the complainant in the particular 
 suit. One cause of this has been the 
 difficulty of procuring persons to 
 accept the appointment, and give 
 the security requisite, where the 
 prospect of assets and of corre- 
 sponding compensation was often 
 doubtful, if not desperate. And an- 
 other cause was the practice of lim- 
 iting the assets to be handed over, 
 to the amount of complainant's debt, 
 and probable costs, where he had 
 the good fortune to discover more 
 than his own debt required."
 
 580 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 existed why the appointment should not be made* And it was 
 not a sufficient answer to the appHcation to say that there was 
 no property to protect belonging to defendant, since, in such 
 case, he could suffer no injury, and plaintiff proceeded at the 
 peril of his costs.^ The court proceeded upon the theory that, 
 after the defendant debtor was enjoined from interfering with 
 or disposing of his property himself, he could have no honest 
 motive in resisting the appointment of a receiver, since, if he 
 had property, it was for his own interest that it should be pre- 
 served pending the litigation, and if he had none, there was 
 nothing for the receiver to do, and plaintiff was liable for 
 costs.6 And it was held to be the duty of the judgment credi- 
 tor, after filing his bill to reach the equitable assets of his 
 debtor, and obtaining an injunction to restrain the debtor from 
 interfering therewith, to apply to the court within a reasonable 
 
 4 Bloodgood V. Clark, 4 Paige, 
 574. 
 
 5 Bloodgood V. Clark, 4 Paige, 
 574; Browning v. Bettis, 8 Paige, 
 568. The practice which obtained 
 under the New York Court of 
 Chancery was stated by Chancellor 
 Walworth in Bloodgood v. Clark, 
 as follows, p. 577: "In these cases 
 of creditors' bills, where the return 
 of the execution unsatisfied presup- 
 poses that the property of the de- 
 fendant, if any he has, will be mis- 
 applied, and entitles the complainant 
 to an injunction in the first instance, 
 it seems to be almost a matter of 
 course to appoint a receiver to col- 
 lect and preserve the property pend- 
 ing the litigation. And where the 
 sworn bill of the complainant shows 
 that he has an equitable right to all 
 the funds and property of the de- 
 fendant to satisfy his debt, if the 
 right of the complainant is not de- 
 nied by the defendant, in answer to 
 the application for a receiver, there 
 can be no good reason why the com- 
 
 plainant should not have a receiver 
 appointed to preserve the property 
 from waste or loss. Indeed, this 
 court has already declared that it 
 is the duty of a complainant who 
 has obtained an injunction upon 
 such a bill, restraining the defend- 
 ant from collecting his debts or 
 disposing of property which might 
 be liable to waste or deterioration, 
 to apply to the court and have a 
 receiver appointed without any un- 
 reasonable delay. (See Osborn v. 
 Heyer, 2 Paige, 343.) It is no suf- 
 ficient answer to such an applica- 
 tion to say there may not be any 
 property to protect, as the com- 
 plainant proceeds at the peril of 
 costs, if there is no property. And 
 if there is nothing for the receiver 
 to take, the defendant can not be 
 injured by the appointment." See, 
 also, Fuller v. Taylor, 2 Halst. Ch., 
 301. But see, contra, Dollard v. 
 Taylor, 33 N. Y. Supr. Ct. R., 496. 
 
 6 Fitzburgh v. Everingham, 6 
 Paige, 29.
 
 CHAP. XII.] CREDITORS. 581 
 
 time for a receiver of the debtor's assets, in order to prevent 
 their being wasted, and to secure the collection of the debts.'' 
 And in such case, when the bill made out a prima facie case for 
 a receivei, it was regarded as no objection to the appointment 
 that the defendant had not yet answered.^ 
 
 § 401. Supplementary proceedings under Nev^r York 
 code ; receiver granted almost as of course. Under the New 
 York code of procedure, as well as in many of the states 
 which have adopted the code practice from New York, pro- 
 vision is made for the appointment of receivers on proceedings 
 by judgment creditors "supplementary to execution," which 
 proceedings have taken the place of the former creditors' bill. 
 Indeed, the appointment of a receiver on supplementary pro- 
 ceedings under the code of procedure, is regarded merely as a 
 substitute for the proceedings had for the same purpose under 
 the former chancery practice.^ And an examination of the 
 New York decisions, in this class of cases, will show that the 
 courts of that state are still governed by the principles estab- 
 lished under the former practice, in administering this %ecies 
 of relief in behalf of judgment creditors. Under the present 
 system, the appointment of a receiver of the effects of a judg- 
 ment debtor, upon supplementary proceedings, has become al- 
 most a matter of course ; as much so, indeed, as it formerly was 
 on creditors' bills under the chancery practice.^^ The object 
 
 7 Bank of Monroe v. Schermcr- ceivers, of the principles governing 
 horn, Clarke Ch., 214; Osborn v. the courts in appointing them, and 
 Heyer, 2 Paige, 342. See, also, of the practice and procedure under 
 Bloodgood V. Clark, 4 Paige, 574. the code of procedure of North 
 
 8 Bank of Monroe v. Schermer- Carolina. 
 
 horn, Clarke Ch.. 214. 10 Heroy v. Gibson, 10 Bosw., 591. 
 
 9 Spencer v. Cuyler, 9 Ab. Pr., See, also, Coates v. Wilkes, 92 N. 
 382; People v. Mead, 29 How. Pr., C, 376; Flint v. Webb, 25 Minn., 
 360. And see this case, generally, 263. But see, contra, Rodman v. 
 for a statement of the practice and Harvey, 102 N. C, 1, 8 S. E., 888, 
 procedure in appointing receivers where it is held that the appoint- 
 in this class of proceedings under ment of a receiver in such proceed- 
 the code. And see Coates v. ings is not as of course, and that it 
 Wilkes, 92 N. C, 376. for a full dis- will be allowed only when it ap- 
 cussion of the functions of such re- pears probable that the relief is
 
 582 RECEIVERS. [chap. XII. 
 
 of the proceeding under the code is to compel the apphcation 
 of property concealed by the debtor, or which from its nature 
 can not be levied upon under execution, to the payment of the 
 creditor's judgment. And the remedy is regarded as a cumu- 
 lative one, and would seem, therefore, to extend to property 
 which might be the subject of levy and sale under execution.^l 
 So in Minnesota, upon proceedings supplementary to execu- 
 tion, a receiver may, in the discretion of the court, be appointed 
 immediately upon the granting of an order for the examination 
 of the judgment debtor, this being regarded as the better prac- 
 tice, since the judgment creditor thereby acquires that priority 
 of lien upon his debtor's property to which his vigilance entitles 
 him. 12 And under proceedings supplementary to execution 
 in Minnesota, a receiver may be appointed over the estate of a 
 judgment debtor, with power to collect a debt due to him from 
 a municipal corporation. ^^ 
 
 § 402. Judgment creditor must be diligent in assertion 
 of his rights; effect of delay as a bar to relief. The first 
 general principle to be observed as governing this branch of 
 the extraordinary jurisdiction of equity is, that a judgment 
 creditor, seeking the aid of the court by the appointment of a 
 receiver, must have used due diligence in the assertion of his 
 rights. 1"* The bill must, therefore, be filed within a reasonable 
 time after the return of execution unsatisfied. And while it is 
 impossible to fix any precise period of limitation, within which 
 
 necessary to properly apply the property of the judgment debtor, 
 
 debtor's property to the payment of but which stand upon the books of 
 
 the judgment, and that a receiver the corporation in the name of the 
 
 should not be appointed to receive wife, see State Bank v. Gill, 23 
 
 and collect notes which are in fact Hun, 410. 
 
 the property of the debtor's wife, 12 Flint v. Webb, 25 Minn., 263. 
 
 although executed to the debtor as 13 Knight v. Nash, 22 Minn., 452. 
 
 payee. 14 Gould v. Tryon, Walk. (Mich.), 
 
 11 Heroy v. Gibson, 10 Bosw., 591. 353. See, also, Fogarty v. Bourke, 
 
 .\s to the right to a receiver, under 2 Dr. & War., 580; National Me- 
 
 the New York code, in an action chanics Banking Association v. 
 
 by a judgment creditor to recover Mariposa Co., 60 Barb., 423. 
 shares of stock alleged to be the
 
 CHAP, XII.] CREDITORS. 583 
 
 the judgment creditor must assert his right to the aid of equity, 
 it has been held that when he has suffered a period of nine years 
 to elapse, after the return of his execution nulla bona, without 
 taking any steps for the enforcement of his demand, and then 
 files a creditors' bill on which he moves for a receiver, his long 
 delay is of itself sufficient ground for refusing the relief.^^ 
 And when, after moving for a receiver of the debtor's prop- 
 erty, the judgment creditor permitted the proceedings to lie 
 dormant, and took no further steps to procure the appointment 
 for a perisd of more than a year, and until another creditor 
 had procured an order for a receiver, the court refused to allow 
 the receiver appointed on the second application to be displaced, 
 but removed the other one. Such a case, it was held, should be 
 governed by the principles applicable to dormant executions, 
 and the vigilant creditor should be allowed priority.^^ And 
 when the creditor had acquiesced in the debtor's possession of 
 his property and estate for a long period of years, and had 
 recognized the debtor's title by accepting from him a lease of a 
 portion of the property, it was held sufficient ground for refus- 
 ing a receiver, when the answer positively alleged that the in- 
 debtedness had been paid in full.!"^ 
 
 § 403. Plaintiff must fully exhaust his remedy at law; 
 receiver not granted when execution may be satisfied in 
 the ordinary way ; receiver appointed where debtor's inter- 
 est is purely equitable. Another leading principle, and one 
 of equal importance with that just stated, by which courts of 
 equity are governed in the appointment of receivers in behalf 
 of judgment creditors, is, that the plaintiff must have fully 
 and completely exhausted his remedy at law for the collection 
 of his judgment, before he is entitled to the aid of a receiver 
 in equity.i^ And when the bill itself shows that defendant is 
 
 15 Gould r. Tryon, Walk. (Mich.). 17 Pogarty v. Bourke, 2 Dr. & 
 353. War., 580. 
 
 16 National Mechanics Banking 18 Smith v. Thompson, Walk. 
 Association v. Mariposa Co., 60 (Mich.), 1; Thayer v. Swift, 
 Barb., 423. Harring. (Mich.), 430; Steward v.
 
 584 RECEIVERS. [chap. XII. 
 
 in possession of property which is subject to levy and sale un- 
 der execution, and that there is no obstacle or impediment in 
 the way of enforcing the judgment by the usual process at 
 law, no ground is presented for the appointment of a receiver.^^ 
 And when it is apparent that the defendant debtor has such an 
 interest in real estate as may be reached by execution, his 
 title being clear and there being no obstacle in the way of en- 
 forcing the judgment by execution, an additional reason for 
 refusing a receiver, and for leaving the plaintiff to sell the 
 property under execution, is found in the fact that by this 
 course the defendant will not be deprived of the redemption 
 allowed by law. For, while it would be possible to reserve the 
 right of redemption on a sale by the receiver, it is regarded as 
 the safer course to follow the method prescribed by law for 
 sales under execution.^o So when both the judgment creditor 
 and the sheriff to whom his execution was delivered were ap- 
 prised of defendant's ownership of particular real estate, 
 which had been offered in satisfaction of the debt before judg- 
 ment obtained, and there was no impediment to its sale under 
 execution, the court was of opinion that the legal remedy had 
 not been sufficiently exhausted to give the judgment creditor a 
 standing in a court of equity, or the right to a receiver of the 
 rents and profits of such real estate.^l And when the bill itself 
 
 Stevens, id., 169; Parker v. Moore, gine Co. v. Donau Brewing Co., 47 
 
 3 Edw. Ch., 234; Congdon v. Lee, Fed., 6. 
 
 id., 304; Starr v. Rathbone, 1 Barb., 20 Second Ward Bank z'. Upmann, 
 
 70; Cassidy v. Meacham, 3 Paige, 12 Wis., 499. 
 
 311; Poppitz V. Rognes, 76 Minn., 21 Congdon v. Lee, 3 Edw. Ch., 
 
 109, 78 N. W., 964; Minkler v. 304. This was a motion on the part 
 
 United States S. Co., 4 N. Dak., of plaintiffs in a creditor's bill, that 
 
 507, 62 N. W., 594, 33 L. R. A., 546, the tenants of certain real estate on 
 
 and note; Morris v. Taylor, 32 L. which their judgment was a lien be 
 
 R. Ir., 14. And see Whilden v. required to attorn and pay their 
 
 Chapman, 80 S. C, 84, 61 S. E., rents to the receiver, before ap- 
 
 249. And see, ante, § 301. pointed in the cause. McCoun, 
 
 19 Parker v. Moore, 3 Edw. Ch., Vice-Chancellor, says, p. 308: "The 
 
 234; Starr v. Rathbone, 1 Barb., 70; facts, as they now appear by the 
 
 Second Ward Bank v. Upmann, 12 answer and by the affidavits read 
 
 Wis., 499. See, also, Buckeye En- in opposition to the motion of the
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 585 
 
 showed the possession of a large amount of property in the 
 defendant, which could be taken on execution, and that no ex- 
 ecution had been issued on the judgment for a period of three 
 years, and that defendant was doing business as a merchant 
 in his own name, it was held that there was no obstacle in the 
 way of enforcing plaintiff's remedy at law, and he was refused 
 
 complainants, show that there was 
 no necessity for the complainants 
 coming into this court for a discov- 
 ery of the defendant's real estate 
 now sought to be reached. The 
 complainants were informed be- 
 forehand of this particular prop- 
 erty, and knew all about it. It 
 was offered to them in satisfaction 
 of their debt, before the judgment 
 was obtained. When the sheriff 
 called with the execution and in- 
 quired for property, he was referred, 
 by the defendant, to the records of 
 deeds for a description of the prop- 
 erty which he could levy on and 
 sell ; and there was no impediment 
 to such a sale. This must be sup- 
 posed to have been well known, 
 both to the complainants and the 
 sheriff, who nevertheless returned 
 the execution unsatisfied, without 
 taking any step toward a levy or 
 sale. There is no direct proof of 
 collusion in this case between the 
 complainants and the sheriff, but 
 there is enough to show that the 
 legal remedy had not been fairly 
 exhausted when the bill was filed. 
 The sheriff made a false return, or, 
 at least, a return which he could 
 not vouch for the truth of, until he 
 had exposed the property for sale; 
 and the complainants knew it to 
 be so, yet immediately filed their 
 bill founded upon it. With respect 
 to the property in question, they 
 stood in no need of a discovery or 
 
 of any aid of this court to effect a 
 sale. What right, then, have the 
 complainants to a standing in this 
 court, with respect to this property? 
 To give them a right to the rents 
 through the medium of the receiver, 
 they should be honestly and fairly 
 in court, either for the purpose of 
 discovery or relief, or both. True, 
 the sheriff's return of an execution 
 unsatisfied, prima facie gives the 
 right to file a bill of this sort ; and 
 in Stoors v. Kelsey, 2 Paige, 418, a 
 receiver was appointed, though it 
 appeared that the defendant owned 
 a lot of ground and gave the sheriff 
 notice of the fact, and requested 
 him to advertise it, which he re- 
 fused to do; but there it did not 
 pppear that the plaintiff had any 
 knowledge or information of the 
 fact of the defendant's ownership 
 or interest in the land; and there 
 was nothing from which to infer 
 collusion between the plaintiff and 
 sheriff in making the return. Here 
 the case, in that respect, is differ- 
 ent; and I think, under the circum- 
 stances and the law and practice of 
 this court in respect to these cred- 
 tors' bills, that the complainants 
 are bound to pursue their legal 
 remedy for a sale of the property; 
 and, not being legitimately in court 
 for the purpose of discovery, and it 
 not appearing how far, if any, the 
 property will be deficient toward 
 satisfying the judgment upon a
 
 586 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 the aid of a receiver.22 So when it appeared by the bill that 
 the defendant debtor was the proprietor of a hotel, having a 
 large amount of furniture and other property in his hotel, a re- 
 ceiver was denied, the remedy at law by execution not having 
 been exhausted. ^3 And when defendant showed by his affi- 
 davit that the proceedings under the creditors' bill had been 
 precipitated against him, without necessity and with no pre- 
 vious notice of the amount of the judgment, or how much he 
 was required to pay, and that he would have paid the judgment 
 forthwith, had he been notified thereof, the court refused to ap- 
 point a receiver.24 But where the debtor's interest in the prop- 
 erty over which a receiver is sought is purely equitable and for 
 this reason can not be reached by the ordinary process of the law 
 by execution under the plaintiff's judgment, a receiver may 
 properly be appointed. ^5 So where the property of the debtor 
 which it is sought to subject to plaintiff's claim is an equitable 
 reversionary interest in the proceeds of the sale of real estate 
 which can not be reached by execution, a receiver is properly 
 appointed. 26 And where a creditor has obtained judgment 
 against an insolvent corporation and another and each is bound 
 to pay the whole debt, he is entitled in the proper case to a re- 
 ceiver over the corporation, although he has not exhausted his 
 legal remedies against the judgment debtor.27 
 
 § 403a. Receiver not appointed to collect municipal tax 
 in aid of judgment creditor. It is, however, to be borne in 
 
 sheriff's sale, the court has not 
 jurisdiction to lay hold of the rents 
 in the meantime, and prevent the 
 defendant from receiving them. 
 The result is, that the complain- 
 ants' motion must be denied, and 
 the defendant's motion to dissolve 
 the injunction be granted, so far as 
 it restrains the defendant from in- 
 terfering with the real estate or the 
 rents and profits of it. With the 
 injunction thus removed, the de- 
 fendant can do no act to prejudice 
 
 the lien of the judgment, or em- 
 barrass a sale under a new execu- 
 tion to be issued." 
 
 22 Parker v. Moore, 3 Edw. Ch., 
 234. 
 
 23 Starr v. Rathbone, 1 Barb., 70. 
 
 24 Hart V. Tims, 3 Edw. Ch., 226. 
 
 25 Cadogan v. Lyric Theatre, 
 (1894) 3 Ch., 338. 
 
 26 Tyrrell v. Painton, (1895) 1 Q. 
 B., 202. 
 
 27Davelaar v. Blue M. I. Co., 
 110 Wis., 470, 86 N. W., 185.
 
 CHAP. XH.] CREDITORS. 587 
 
 mind that the fact that the remedy at law has proved ineffectual 
 in the particular case, does not confer jurisdiction upon a court 
 of equity to appoint a receiver if the legal remedy is adequate 
 and complete in itself, its inefficiency being wholly due to the 
 actions of the persons or officers whose duty it is to afford the 
 desired relief. Thus, when plaintiff obtains judgment against 
 a county upon its obligations issued in aid of a subscription to 
 a railway company, and in obedience to a writ of mandamus a 
 tax is levied by the county authorities to pay the judgment, 
 but the person selected as collector of the tax refuses to qualify 
 or to act as such collector, equity has no jurisdiction to appoint 
 a receiver for the purpose of collecting the tax, even though it 
 is shown that no person may be found who will undertake such 
 collection. The power of collecting taxes being wholly foreign 
 to courts of equity, its exercise will not be assumed by such 
 courts merely because the appropriate legal remedy has failed 
 to afford relief. ^8 
 
 § 404. Receiver can not be appointed on sheriff's return 
 of execution nulla bona before its return day. Intimately 
 connected with the doctrine requiring the creditor to first ex- 
 haust his remedy at law, is the question whether the aid of 
 a receiver may properly be extended to a judgment creditor, 
 upon the sheriff's return of an execution nulla bona before the 
 return day thereof. While this question has given rise to some 
 conflict of authority, and has not been wholly free from doubt, 
 the doctrine may now be regarded as established, both upon 
 principle and authority, that the return of an execution un- 
 satisfied, before its return day and in the life-time of the writ, 
 does not lay the foundation for a receiver upon a bill in be- 
 half of the judgment creditor. The rule is founded upon the 
 
 28 Thompson v. Allen County, 115 poration and to apply them in pay- 
 U. S., 550, 6 Sup. Ct. Rep., 140; ment of its indebtedness, its charter 
 S. C, 18 Chicago Legal News, 127. having been revoked by the legisla- 
 See Supervisors v. Rogers, 7 Wal., ture, see Meriwether v. Garrett, 102 
 175. As to the power of a court of U. S., 472; Garrett v. City of Mem- 
 equity to appoint a receiver to col- phis, 5 Fed., 860. 
 lect taxes due to a municipal cor-
 
 588 
 
 RECEIVERS. 
 
 [chap, XII. 
 
 fundamental principle, that equity never lends its aid for the 
 enforcement of rights which may be remedied in the usual 
 course of proceedings at law, and the courts will not permit a 
 judgment debtor to be harassed with a suit in chancery, until 
 the creditor has availed himself of all his rights at law for the 
 collection of his judgment. The court can not know, until 
 the return day of the execution has elapsed, that the debtor 
 may not have had property with which to satisfy the judgment ; 
 and if it may dispense with a legal and sufficient return to the 
 execution, it may dispense with the execution entirely, and thus 
 assume a jurisdiction not given by law. It is, therefore, requi- 
 site that the execution shall remain in the hands of the sheriff 
 the full period of its life-time.29 
 
 29 Thayer v. Swift, Harring. 
 (Mich.), 430; Spencer v. Cuyler, 9 
 Ab. Pr., 382. See, also, Cassidy v. 
 Aleacham, 3 Paige, 311; Smith v. 
 Thompson, Walk. (Mich.), 1; Wil- 
 liams V. Hubbard, id., 28; Beach v. 
 White, id., 495; Steward v. Stev- 
 ens, Harring. (Mich.), 169; Beck v. 
 Burdett, 1 Paige, 305; McElwain v. 
 Willis, 9 Wend., 548. But see, con- 
 tra, Williams v. Hogeboom, 8 Paige, 
 469: Tyler v. Willis, 33 Barb., 327; 
 S. C, suh noni. Tyler v. Whitney, 
 12 Ab. Pr., 465; Bowen v. Park- 
 hurst, 24 111., 257; First National 
 Bank v. Gage, 79 111., 207. The doc- 
 trine of the text is forcibly stated in 
 Thayer v. Swift, Harring. (Mich.), 
 430, where the execution had been 
 returned by the sheriff some days 
 before its return day, as follows: 
 "That there was no goods and chat- 
 tels, lands and tenements to be 
 found in his bailiwick to secure or 
 pay the sum due the complainant, 
 or any part thereof, to his knowl- 
 edge, after diligent search." The 
 motion for a receiver was denied. 
 Farnsworth, Chancellor, observes 
 
 as follows, p. 431 : "The founda- 
 tion of the jurisdiction of this court 
 in this class of cases is, that the 
 judgment creditor shall have fully 
 exhausted his remedy at law. It 
 has been repeatedly held that the 
 court will not retain a bill as a judg- 
 ment creditor's bill merely, filed 
 before the return day of the execu- 
 tion. In the absence of any author- 
 ity or dicta upon the subject, I 
 should have as little doubt upon a 
 case where the execution was actu- 
 ally returned before the return day, 
 although the bill was not filed un- 
 til after the return day had elapsed. 
 Courts of chancery have held the 
 judgment creditor in every ad- 
 judged case, before administering 
 this harsh remedy of depriving the 
 debtor absolutely of all control over 
 every part and portion of his prop- 
 erty, to bring himself strictly and 
 rigidly within this rule. No case 
 can be found where this remedy 
 has been afforded without a strict 
 compliance with all the forms. 
 What is the reason of the rule? It 
 is that a judgment debtor shall not
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 585 
 
 § 405. Receiver of joint property of two defendants on 
 judgment rendered against one; omission in direction of 
 execution to sheriff. Where an execution was issued 
 against the joint property of two defendants, upon a judgment 
 rendered against one of the two, personal service having been 
 had only upon the one, and the sheriff returned to the execu- 
 tion that the defendants had no goods or chattels, lands or 
 
 be harassed with a suit in chancery 
 until the creditor has availed him- 
 self of all his common-law rights 
 to collect his judgment. The only 
 dictum to be found which has ever 
 led to any doubt upon this subject, 
 is to be found in the opinion of 
 Chancellor Walworth, in the case 
 of Cassidy v. Meacham, 3 Paige, 
 312. This idea is thrown out as a 
 perhaps, and rather as a specula- 
 tion than as a decision. He says, 
 perhaps a return made before the 
 return day may be good by rela- 
 tion. But if we once depart from 
 the well-settled rule, that the cred- 
 itor shall fairly and fully first ex- 
 haust his remedy at law, where 
 shall we stop?" See, also, opinion 
 of the same court in Steward v. 
 Stevens, Harring. (Mich.), 169, 
 where the same doctrine is an- 
 nounced with regard to creditors' 
 bills, although it does not appear 
 from the reported case whether 
 any motion was made for a re- 
 ceiver. In Spencer v. Cuyler, 9 Ab. 
 Pr., 382, which was under the New 
 York code of procedure, the sheriff 
 had returned the executions, at 
 plaintiff's request, before maturity. 
 The supreme court, at general term, 
 say, Johnson, J., delivering the 
 opinion : "A return thus procured 
 is, for this purpose, to be regarded 
 as the act of the party, and not the 
 official act of the sheriff. The 
 
 remedy by execution, in such case, 
 has not been exhausted, as the stat- 
 ute obviously intended it should be 
 before these supplementary pro- 
 ceedings could be instituted. If the 
 practice adopted in the cases before 
 us is to prevail, the issuing and re- 
 turn of an execution would become 
 a mere empty form, and might as 
 well be dispensed with altogether; 
 and besides, it would naturally, if 
 not inevitably, lead to the most in- 
 tolerable favoritism and abuse. If 
 we allow a sheriff to yield to the 
 persuasion or dictation of a friendly 
 or influential creditor, and fix at his 
 own discretion or caprice different 
 return days for different execu- 
 tions in his hands at the same time, 
 we at once invest him with the 
 dangerous powers of discriminat- 
 ing between creditors, and giving 
 one a preference over another in 
 respect to all the equitable assets 
 of the debtors, capable of being 
 reached by these proceedings. This 
 consideration alone seems to us a 
 sufficient objection to the practice, 
 without adverting to the hardship 
 and oppression to which a defend- 
 ant may be so readily and so sum- 
 marily subjected under it." But in 
 Williams v. Hogeboom, 8 Paige, 
 469, it was held that the objection 
 that the complainant had not ex- 
 hausted his remedy at law, because 
 the sheriff did not wait until after
 
 590 RECEIVERS. [chap. XII. 
 
 tenements, out of which to satisfy the execution, without in 
 express terms negativing the fact that either of the two had 
 any separate property, such return was held sufficient founda- 
 tion for a creditor's bill and a receiver of the joint property of 
 the two defendants and of the separate property of the defend- 
 ant who was served with process. ^^ But the objection that the 
 bill did not allege that the execution was directed to the sheriff 
 of the county where the defendant resided when it was issued, 
 although an objection of form, was held to be sufficient ground 
 for refusing a receiver, but the application was denied without 
 costs, and the plaintiff was given leave to amend and to renew 
 the application after amendment.^^ 
 
 § 406. Receiver not granted in aid of general creditor 
 before judgment ; illustrations of the rule ; attaching cred- 
 itors. Having already shown that the aid of a receiver 
 is extended only in behalf of creditors who have fully ex- 
 hausted their remedy at law, it follows necessarily that the 
 jurisdiction will not be exercised in favor of mere general 
 creditors, whose rights rest only in contract and are not yet re- 
 duced to judgment, and who have acquired no lien upon the 
 property of the debtor. Courts of equity will not permit any 
 interference with the right of a debtor to control his own prop- 
 erty, at the suit of creditors who have acquired no lien thereon, 
 and whatever embarrassment the creditor may experience, 
 by reason of the slow procedure of the courts of law, must be 
 
 return day of the execution before its return day, constituted no ob- 
 making his return, was not well jection to the appointment of a re- 
 taken, although it was said, follow- ceiver, in the absence of any collu- 
 ing the dictum of Chancellor Wal- sion or fraud on the part of plaintiff 
 worth in Cassidy v. Meacham, 3 to prevent a levy on the debtor's 
 Paige, 311, that the court would property. And it is held in Illinois, 
 not permit a creditor's bill, founded that a creditor's bill will lie upon 
 upon such a return, to be filed the return of an execution nulla 
 until after the return day of the bona before the return day. Bowen 
 execution had passed. And in v. Parkhurst, 24 111., 257. 
 Tyler v. Willis, 33 Barb., 327; S. C, 30 Austin v. Figueira, 7 Paige, 56. 
 sub nom. Tyler v. Whitney, 12 Ab. 31 Williams v. Hogeboom, 8 
 Pr., 465, it was held that the return Paige, 469. 
 of the execution unsatisfied, before
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 591 
 
 remedied by legislative and not by judicial authority. And 
 while there are a few instances where the courts have main- 
 tained a contrary doctrine, the great weight of authority sup- 
 ports the rule, that, in the absence of statutory provisions to 
 the contrary, a general contract creditor, before judgment, 
 is not entitled either to an injunction or a receiver against his 
 debtor, upon whose property he has acquired no lien.^^ ^^y 
 
 32 Hollins V. Iron Co., 150 U. S., 
 371, 14 Sup. Ct. Rep., 127; Uhl v. 
 Dillon, 10 Md., 500; Niisbaum v. 
 Stein, 12 Md., 315; Hubbard v. 
 Hubbard, 14 Md., 356; Rich v. Levy, . 
 16 Md., 74; Hulse v. Wright, 
 Wright, 61 ; McGoIdrick v. Slevin, 
 43 Ind., 522; Bayaud v. Fellows, 28 
 Barb., 451; May v. Greenhill, 80 
 Ind., 124; Adee v. Bigler, 81 N. Y., 
 349; Smith v. Superior Court, 97 
 Cal., 348; Johnson v. Farnum, 56 
 Ga., 144; Dodge v. Pyrolusite Man- 
 ganese Co., 69 Ga., 665; Guilmartin 
 V. Middle G. & A. R. Co., 101 Ga., 
 565, 29 S. E., 189; Virginia-Carolina 
 Chemical Co. v. Provident S. L. A. 
 Society, 126 Ga., 50, 54 S. E., 929; 
 International Trust Co. v. United 
 Coal Co., 27 Colo., 246, 60 Pac, 621, 
 83 Am. St. Rep., 59, and note; Klee 
 V. Steele Co., 60 Minn., 355, 62 N. 
 W., 399; Thompson v. Adams, 60 
 West Va., 463, 55 S. E., 668; Temple 
 V. Glasgow, 25 C. C. A., 540, 80 
 Fed., 441, 42 U. S. App., 417, affirm- 
 ing S. C, 7Z Fed., 709; Texas Con- 
 solidated C. & M. Assn. V. Storrow, 
 34 C C. A., 182, 92 Fed., 5 ; Leary 
 V. Columbia R. & P. S. N. Co., 82 
 Fed., 775 ; Tompkins Co. v. Catawba 
 Mills, 82 Fed., 780. And see Blond- 
 heim v. Moore, 11 Md., 365; Wig- 
 gins V. Armstrong, 2 Johns. Ch., 
 144; Hoidrege v. Gwynne, 3 C. E. 
 Green, 26 ; Young v. Frier, 1 Stockt., 
 465; Phelps v. Foster. 18 111., 309; 
 
 Bigelow V. Andress, 31 III., 322; 
 Rhodes v. Cousins, 6 Rand., 188; 
 Falmouth National Bank v. Cape 
 Cod S. C. Co., 166 Mass., 550, 44 
 N. E., 617. But see, contra, Hag- 
 garty v. Pittman, 1 Paige, 298; 
 Cohen v. Meyers, 42 Ga., 46; Cohen 
 V. Morris, 70 Ga., 313; Crittenden 
 V. Coleman, 70 Ga., 293; Oliver v. 
 Victor, 74 Ga., 543; Orton v. Mad- 
 den, 75 Ga., 83; Wolfe v. Claflin, 
 81 Ga., 64, 6 S. E., 599; Thompsen 
 V. Diffenderfer, 1 Md. Ch., 489; 
 Rosenberg v. Moore, 11 Md., 376; 
 Wachtel v. Wilde, 58 Ga., 50; Mor- 
 rison V. Shuster, 1 Mackey, 190. 
 See, also, Kehler v. Jack Mfg. Co., 
 55 Ga., 639. Under the statutes of 
 Minnesota, a receiver may be ap- 
 pointed over the estate of an in- 
 solvent debtor at the suit of cred- 
 itors before judgment, and such re- 
 ceiver may maintain an action to set 
 aside fraudulent transfers of his 
 property by the debtor. Chamber- 
 lain V. O'Brien, 46 Minn., 80, 48 N. 
 W., 447. So by statute in South 
 Carolina creditors without judg- 
 ment may maintain an action for a 
 receiver over property of a debtor 
 which has been transferred in fraud 
 of his creditors. Regenstein zi. 
 Pearlstein, 30 S. C, 192; Meinhard 
 V. Strickland, 29 S. C, 491. And 
 see Pelzer v. Hughes, 27 S. C, 408; 
 Whilden v. Chapman, 80 S. C, 84, 
 61 S. E., 249. And see, ante. § 301.
 
 592 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 interference with the debtor's property, or with his right of 
 disposing of it, before judgment, is beyond the judicial power, 
 and courts of equity will not extend their extraordinary juris- 
 diction beyond the limits fixed by the authorities.^^ Nor is the 
 rule affected or varied by reason of fraud on the part of the 
 debtor, and a receiver will not be granted in favor of a creditor 
 
 Under the statute of Washington, 
 it is held that a simple contract 
 creditor of a corporation is entitled 
 to a receiver over the corporation 
 upon the mere showing of its in- 
 solvency. Davis V. Edwards, 41 
 Wash, 480, 84 Pac, 22. In Joseph 
 Dry Goods Co. v. Hecht, 57 C. C. 
 A., 64, 120 Fed, 760, where plaintiff 
 had apparently never obtained a 
 judgment against the debtor, it was 
 held that a receiver should not be 
 appointed pendente lite where there 
 was no showing that the debtor was 
 insolvent or that he was without 
 property sufficient to satisfy a final 
 decree. As to the right of a surety 
 upon the official bond of a tax col- 
 lector, upon default by the latter, to 
 have a receiver for the purpose of 
 preventing a fraudulent transfer of 
 his property, see Sanford v. United 
 States F. & G. Co., 116 Ga, 689, 43 
 S. E, 61. As to the right to a 
 receiver in aid of an action of debt 
 under the code of Montana, see 
 State V. District Court, 14 Mont., 
 577, 37 Pac, 969. As to the right 
 of a debtor to waive the objection 
 that the plaintiff has never recovered 
 a judgment against him, see In re 
 Konrad, 208 U. S, 90, 28 Sup. Ct. 
 Rep, 219, 52 L. Ed, 403. 
 
 SSUhlz'. Dillon, 10 Md, 500. This 
 was a bill for an injunction and a 
 receiver by a creditor upon an open 
 account, alleging that the defend- 
 ant was largely indebted for his 
 
 stock in trade; that he was dis- 
 posing of his stock, had sold his 
 real estate, and was collecting debts 
 due him, with intent to defraud his 
 creditors, and that he intended to 
 abscond to parts unknown for the 
 purpose of hindering, delaying and 
 defrauding his creditors. An in- 
 junction was granted and a receiver 
 was appointed by the court below, 
 but on appeal the decree was re- 
 versed and bill dismissed. The 
 court, Bartol, J., say, p. 503 : "The 
 bill filed by the appellees in this 
 cause states no sufficient case en- 
 titling them to the relief prayed. 
 No authority has been shown to 
 this court, nor can any be pro- 
 duced, entitled to consideration, 
 which sanctions the exercise of the 
 high and extraordinary power of a 
 court of chancery to interpose, by 
 writ of injunction, in a case like 
 the one before us, restraining a 
 debtor in the enjoyment and power 
 of disposition of his property. The 
 appellees (the complainants below) 
 are merely general creditors of the 
 appellant, who have not prosecuted 
 their claim to judgment and ex- 
 ecution, nor in any other manner 
 acquired a lien upon the debtor's 
 property, and were not entitled to 
 the writ of injunction nor to the 
 appointment of a receiver. What- 
 ever may be the supposed defects 
 of the existing laws of the state, 
 in leaving to the debtor the abso-
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 593 
 
 before judgment, even though the bill alleges that the debtor 
 has made fraudulent transfers and mortgages of his property.^* 
 Thus, where the bill alleged that the debtor was wasting his 
 resources and sending his goods beyond the reach of his credi- 
 tors; that he was utterly insolvent and had executed a mort- 
 gage of his effects, without consideration and for the purpose 
 of hindering and defrauding his creditors; and that plaintiff 
 had brought suit upon his demand, but would not be able to 
 obtain judgment and execution before defendant's assets would 
 be wasted, the court refused an injunction and a receiver.^^ 
 So it is held that the fact of the debtor having entered his ap- 
 pearance and consented to judgment in certain actions, brought 
 by other creditors upon demands which were justly due, will 
 not warrant the court in granting a receiver upon the applica- 
 tion of a creditor without judgment, since it is a debtor's right 
 to prefer any creditor whom he may choose.^^ Nor will a re- 
 
 lute power of disposing of his 
 property, and leaving the creditor 
 to the slow and very inadequate 
 legal remedies now provided, if 
 such defects exist, it is solely in the 
 power of the legislature to correct 
 them. It is not within the province 
 of the chancery courts to stretch 
 their power beyond the limits of 
 the authorities of the law, for the 
 purpose of remedying such defects. 
 Such a course would be productive 
 of great mischief, and make the 
 rights of the citizen depend upon 
 the vague and uncertain discretion 
 of the judges, instead of the safe 
 and well-defined rules of law. The 
 learned Chancellor Kent, in the de- 
 cision of the case of Wiggins v. 
 Armstrong, 2 Johns. Ch. Rep., 144, 
 has stated, most clearly and forci- 
 bly, the principles which govern 
 the case before us, and we adopt its 
 reasoning as applicable here." 
 .34Hulse V. Wright, Wright, 61; 
 Receivers — 38. 
 
 Rich V. Levy, 16 Md., 74; Nusbaum 
 V. Stein, 12 Md., 315. But in the 
 latter case, the court seem to base 
 their decision somewhat upon the 
 fact that it appeared from the bill 
 that the debtor's assets were suffi- 
 cient to discharge his liabilities. 
 See, contra, Haggarty v. Pittman, 
 1 Paige, 298; Cohen v. Meyers, 42 
 Ga., 46; Rosenberg v. Moore, 11 
 Md., 376. 
 
 35 Rich V. Levy, 16 U^ 74. 
 
 36 McGoldrick v. Slevin, 43 Ind., 
 522. While the general doctrine 
 of the text is believed to be sus- 
 tained by the undoubted weight of 
 authority, there are several cases 
 in which a contrary doctrine has 
 been announced. In Haggarty v. 
 Pittman, 1 Paige, 298, an injunc- 
 tion and a receiver were allowed in 
 behalf of creditors without judg- 
 ment, upon a bill alleging insolv- 
 ency of the debtor, and that he 
 had made an assignment of his
 
 594 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 ceiver be appointed at the instance of one who has instituted an 
 action at law in tort, for the purpose of taking possession of 
 property of the defendant and of preventing waste in order 
 that the property may be turned over to the plaintiff in satis- 
 faction of such judgment as may be obtained in the action at 
 law.3" Even under a statute enacting that a receiver may be 
 had in an action by a creditor to subject any property or fund 
 to his demand, it is held that the relief will be allowed only as 
 to funds or property upon which the creditor has a specific lien, 
 and that the statute does not apply to the case of a general cred- 
 itor upon account, who has acquired no lien upon the property 
 of his debtor.38 Nor does a creditor, by attaching real prop- 
 erty which is alleged to have been conveyed by the debtor in 
 fraud of his creditors, acquire such a lien as to entitle him to 
 
 property to one of his creditors, 
 who was himself insolvent. So in 
 Rosenberg v. Moore, 11 Md., 376, 
 an injunction and a receiver were 
 allowed on the application of gen- 
 eral creditors, before judgment, 
 upon the ground of a fraudulent 
 conveyance of a portion of his 
 property by the debtor, in trust for 
 his creditors, and upon the further 
 ground that the property was in 
 imminent danger, being in the cus- 
 tody of a person of notoriously bad 
 character. But it does not appear 
 from the case as reported, that any 
 objection was urged on the ground 
 that plaintiffs had no judgment or 
 lien upon the debtor's property. 
 In Thompsen v. Diffenderfer, 1 Md. 
 Ch., 489, the court inclined to hold 
 that creditors without judgment 
 were entitled to a receiver, upon a 
 bill alleging fraudulent transfers 
 of his property by the debtor, and 
 that he was in insolvent circum- 
 stances, but the receiver was re- 
 fused on the ground that the 
 answers fully denied the equities 
 
 of the bill. In Cohen v. Meyers, 42 
 Ga., 46, where the bill charged in- 
 solvency of the debtor, and that he 
 had fraudulently transferred his 
 goods to a third person, who was 
 charged with complicity in the 
 fraud, and that the debtor had 
 bought the goods with intent to 
 defraud the plaintiffs, a receiver 
 was allowed before judgment. In 
 this case, the court based the right 
 of the creditors to the relief upon 
 the ground that the goods for 
 which the indebtedness sued on 
 was incurred, never in equity be- 
 longed to the defendant, he having 
 obtained them by fraudulent in- 
 tent, and that a proper case was, 
 therefore, presented for the action 
 of a court of equity. Notwithstand- 
 ing these cases, however, it is be- 
 lieved that the weight of authority 
 and reasoning supports the rule as 
 laid down in the text. 
 
 37 Slover v. Coal Creek C. Co., 
 113 Tenn., 421, 82 S. W., 1131. 
 
 38 Carter v. Hightower, 79 Tex., 
 135, 15 S. W., 223.
 
 CHAP. XII.] CREDITORS. 595 
 
 a receiver over the property, his demand not having been re- 
 duced to judgment.29 
 
 § 407. Apparent exception to the rule in New York in 
 cases of partnerships; receiver allowed before judgment. 
 While, as is thus shown, the rule denying the aid of a receiver 
 for the protection of contract or general creditors, before judg- 
 ment, is well established, an apparent exception to the rule has 
 been recognized under the code of procedure in New York, in 
 cases of partnership creditors, the exception, however, being 
 based upon equitable principles not inconsistent with the spirit 
 of the general rule. Thus, in the case of an indebtedness due 
 from a copartnership, when the insolvency of the firm and of its 
 individual members is conceded, and the indebtedness is ad- 
 mitted to be justly due, the creditor may have an injunction 
 and a receiver, as against the partners and third persons to 
 whom they have attempted to assign their property for the pur- 
 pose of hindering and delaying their creditors, even though 
 his demand is not yet reduced to judgment. In such case, the 
 debt not being disputed, and there being no advantage to be de- 
 rived from a preliminary judgment and execution, it is deemed 
 proper to extend all the relief desired in one and the same ac- 
 tion, without compelling the creditor to resort to the delay of 
 obtaining judgment in a separate suit.^^ The doctrine, how- 
 ever, of the New York courts upon this point, would seem to be 
 limited to cases where the indebtedness is not disputed, and 
 
 39 Clark v. Raymond, 84 Iowa, 10 How. Pr., 461. In Mott v. Dunn, 
 251, 50 N. W., 1068. And see Clark considerable reliance is placed by 
 V. Raymond, 86 Iowa, 661, 53 N. the court upon the provision of the 
 W., 354. As to the right to a re- code of procedure, that "where, 
 ceiver in aid of attaching creditors during the pendency of an action, 
 in Alabama, see Pearce v. Jennings, it shall appear by affidavit that the 
 94 Ala., 524, 10 So., 511; Dollins v. defendant threatens or is about to 
 Lindsey, 89 Ala., 217, 7 So., 234; remove or dispose of his property 
 Sackhoff V. Vandegrift, 98 Ala., 192. with intent to defraud his creditors, 
 
 40 Mott V. Dunn, 10 How. Pr., a temporary injunction may be 
 225. See, also. Levy v. Ely, 15 granted to restrain such removal 
 How. Pr., 395 ; Jackson v. Sheldon, or disposition." 
 
 9 Ab. Pr., 127; LaCliaise v. Lord,
 
 596 RECEIVERS. [CIIAP. XII. 
 
 where the plaintiff creditor is proceeding not merely in behalf 
 of himself and to secure his individual demand, but for the 
 benefit of all creditors of the firm.^^ And in the case of a 
 limited or special partnership, where, upon the insolvency of 
 the firm, the assets become a trust fund, which it is the duty of 
 the general partners to assign to a trustee for the benefit of all 
 the firm creditors, if the general partners fail to perform this 
 duty, the court may interfere by appointing a receiver of the 
 firm assets for the benefit of all the creditors, in an action insti- 
 tuted by a general creditor for himself and such others as may 
 elect to take the benefit of the action. The relief, in such case, 
 would seem to be founded upon the nature of the firm assets, 
 as a trust fund upon the insolvency of the partners, the credi- 
 tor instituting the proceedings being regarded as a cestui que 
 trust of such fund, even though he has not yet obtained judg- 
 ment.42 
 
 § 408. Lien of creditors who have advanced money for 
 repairing vessel, when protected by receiver. It is also to 
 be noted that creditors, even before judgment, may have such a 
 special or equitable lien upon the debtor's property as to en- 
 title them to the aid of equity and to the protection of a re- 
 ceiver. For example, when persons have advanced money 
 for effecting repairs upon a vessel, and for furnishing supplies, 
 and have received from the master of the vessel an assignment 
 of all the freight money and earnings of the vessel upon her 
 voyage, and all lien and interest which he as master had there- 
 on on account of such advances or his liability therefor, such 
 creditors are entitled to an injunction to prevent any interfer- 
 ence with the collection of the freight money, and a receiver 
 to collect it, upon showing that the owners of the vessel are 
 insolvent, and that the relief is necessary to protect their lien 
 acquired by assignment from the master."*^ 
 
 41 LaCliaise v. Lord, 10 How. Pr., 42 Jackson v. Sheldon, 9 Ab. Pr., 
 
 461; Levy v. Ely, 15 How. Pr., 395. 127. 
 
 See, also, Jackson v. Sheldon, 9 Ab. 43 Sorley v. Brewer, 18 How. Pr., 
 
 Pr., 127. 276.
 
 CHAP. XII.] CREDITORS. 597 
 
 § 409. Receiver over effects of married woman doing 
 business as trader, in action to charge her individual prop- 
 erty. In Wisconsin, it is held to be competent for a court 
 of general equity jurisdiction to appoint a receiver over the 
 property and effects of a married woman, doing business as a 
 trader, in an equitable action by her creditors to charge her 
 individual property with the payment of her liabilities, when 
 there is danger of the assets being wasted or put beyond the 
 reach of creditors. Such a proceeding, it is held, bears a close 
 resemblance to a creditor's bill for the enforcement of a judg- 
 ment, and there would seem to be no impropriety in granting 
 an injunction and a receiver, upon the same grounds as in 
 cases of creditors' bills. ^'* 
 
 § 410. Creditor holding annuity which is a charge on 
 real estate may have receiver when annuity is in arrears. 
 It is also held that a creditor holding an annuity, which is a 
 charge upon real estate, may have the aid of a receiver when 
 his annuity is in arrears and he is without legal remedy for 
 its enforcement, although he can not have the receiver con- 
 tinued when his arrears are paid off.'^^ And when a debtor has 
 conveyed a life estate in certain leasehold premises, in trust 
 for the purpose of securing his creditors by payment annually 
 out of the rents and profits until the indebtedness shall be ex- 
 tinguished, when the property is to be reconveyed, the creditors 
 have such an interest as to entitle them to a receiver, when 
 the payments are long in arrear, even though they do not oc- 
 cupy the position of mortgagees and have no power to sell the 
 > property.'*^ 
 
 § 411. Fraudulent assignment by debtor ground for re- 
 ceiver; appointment of receiver does not determine rights 
 of assignee. Fraudulent assignments of his property by 
 a judgment debtor, for the purpose of hindering and defeating 
 
 44 Todd V. Lee, 15 Wis., 365. 46 Taylor v. Emerson, 4 Dr. & 
 
 45 Sankey v. O'Maley, 2 Mol., 491. War., 117. 
 See, also, Beamish v. Austen, Ir. 
 
 Rep., 9 Eq., 361.
 
 598 RECEIVERS. [chap. XII. 
 
 his creditors, are frequently made the foundation for proceed- 
 ings in equity for the appointment of a receiver in behalf of 
 judgment creditors.'*'^ And when it is shown upon a cred- 
 itor's bill that the judgment debtor has made an assignment 
 of all his property in fraud of his creditors, to an assignee 
 w'ho is known to be insolvent, such a breach of trust is pre- 
 sented as to warrant the court in appointing a receiver of the 
 property assigned. Especially will the relief be granted, in 
 such case, when the debtor himself continues in possession of 
 the property and exercises acts of ownership, there being no ac- 
 tual change of possession. ^^ But while it is regarded as a 
 sufhcient prima facie case for the appointment of a receiver, 
 to show an assignment of his property by the debtor to hinder 
 and delay his creditors, to an assignee who is irresponsible and 
 insolvent, yet when defendant satisfactorily shows to the court 
 by affidavit that the plaintiff is in error as to the pecuniary 
 condition of the assignee, the court will not by a receiver take 
 the property out of the hands of the assignee before the rights 
 of the parties are finally determined.*^ So when the allega- 
 tions of fraud in the assignment by the debtor are fully denied 
 by answer, and it is not shown that the assignee is insolvent, 
 or that there is danger of loss or injury to the property pend- 
 ing the litigation, it is improper to appoint a receiver in the 
 first instance.^^ And the appointment of a receiver in behalf 
 of judgment creditors, over the property of their debtor, does 
 not of itself preclude or determine the rights of an assignee 
 of the debtor claiming his assets under an assignment from 
 him, and the property can only be recovered by an action 
 
 47 See Connah v. Sedgwick, 1 although the plaintiff was not a 
 
 Barb., 210; Goodyear v. Betts, 7 judgment creditor. 
 
 How. Pr., 187; Shainwald v. Lewis, 48 Connah v. Sedgwick, 1 Barb., 
 
 7 Sawyer, 148; Hirsch, Elson & Co. 210; Hirsch, Elson & Co. v. Israel, 
 
 V. Israel, 106 Iowa, 498, 76 N. W., 106 Iowa, 498, 76 N. W., 811. 
 
 811; Clark v. Bradley Co., 6 App. 49 Goodyear v. Betts, 7 How. Pr., 
 
 D. C, 437. See, also, Stern v. 187. 
 
 Austern, 120 N. C, 107, 27 S. E., 50 Pdzer v. Hughes, 27 S. C, 408. 
 31, where a receiver was appointed
 
 CHAP. XII.] CREDITORS. 599 
 
 brought by the receiver; since the court can not determine a 
 disputed question of title in passing upon the appHcation for a 
 receiver, especially when the assignee is not a party to the pro- 
 ceeding.^! B^t in an action brought by a judgment creditor 
 to set aside a conveyance of land made by the debtor with 
 intent to defraud his creditors, the grantees being made par- 
 ties, and the conveyance being found to be fraudulent as against 
 the judgment creditor, it is proper to appoint a receiver to 
 sell and convey the property.^2 go when a decree in equity 
 is obtained against defendant requiring him to pay to com- 
 plainant certain funds obtained by fraud and collusion, upon 
 the return of execution unsatisfied, complainant is entitled to a 
 receiver, upon a bill alleging that defendant has disposed and 
 is about to dispose of his property with intent to evade the de- 
 cree and to hinder and delay complainant in its enforcement. 
 And in such case, it is not necessary to specifically describe 
 the property which it is sought to reach by the creditor's bill.^^ 
 So when a judgment debtor has disposed of a large amount of 
 his stock in trade, without accounting for the proceeds, and 
 leaving a large amount of indebtedness unpaid, a receiver has 
 been appointed in a creditor's suit, although the debtor denied 
 any fraudulent disposition of his property, a receiver being 
 necessary to institute the proper suits to determine what dispo- 
 sition was made of the property.^"* 
 
 § 412. Receiver granted to carry out assignment by 
 debtor for benefit of creditors, on refusal of assignee to 
 act, or on his misconduct ; right to receiver not affected by 
 subsequent assignment by debtor. Courts of equity will 
 also extend the aid of a receiver for the protection of creditors 
 
 51 Journeay v. Brown, 2 Dutch., 53 Shainwald v. Lewis, 7 Sawyer, 
 111. And see this case for the 148. And see this case for an ex- 
 practice in New Jersey in appoint- haustive discussion of the jurisdic- 
 ing receivers in behalf of judgment tion of equity by creditors' bills to 
 creditors. reach the assets of a judgment 
 
 52 Shand v. Hanley, 71 N. Y., 319. debtor, and of the right to a re- 
 And see this case as to the effect of ceiver in such cases. 
 
 a receiver's sale upon prior liens. 54 Strong v. Goldman, 8 Biss., 552.
 
 600 RECEIVERS. [CIIAP. XII. 
 
 under assignments made by the debtor in good faith and with- 
 out fraud for the benefit of his creditors, when the assignee 
 refuses to accept of the trust created by the assignment, or 
 when he does not act in good faith in carrying out its terms. ^^ 
 Thus, in the case of a general assignment by a debtor for the 
 benefit of his creditors, upon the refusal of the trustee named 
 in the deed of assignment to proceed with the execution of the 
 trust, a receiver may be allowed upon a bill filed by creditors 
 for whose benefit the assignment was made.^^ And when an 
 assignment is made to trustees for the benefit of creditors, a 
 judgment creditor of the assignor, who files his bill in behalf 
 of himself and other creditors in interest, is entitled to a re- 
 ceiver to take charge of the effects assigned, upon showing 
 gross mismanagement on the part of the trustees, and a fail- 
 ure on their part to comply with the requirements of the 
 trust, and that there is imminent danger of the assets being 
 wasted and diverted from the purposes for which they were 
 assigned.^"^ So where real estate is conveyed by a debtor, in 
 trust to be sold for the payment of his debts, the rents to be 
 applied for the same purpose, and the trustee has been in pos- 
 session a number of years without paying, a creditor may have 
 a receiver appointed until answer, when the trustee resides 
 beyond the jurisdiction of the court and has not appeared to 
 the action.58 But where an action for a receiver has been in- 
 stituted by a judgment creditor, the right to the appointment 
 
 55 Suydam v. Dequindre, Harring. applied for a receiver of the debts 
 (Mich.), 347. And see Malcolm v. due the business, Lord Eldon held 
 Montgomery, 2 Mol., 500. that the case was such that if the 
 
 56 Suydam v. Dequindre, Harring. vice-chancellor, before whom the 
 (Mich.), 347. And where a share in application was pending, was about 
 the profits of a business had been to appoint a receiver to collect the 
 assigned to a person in considcra- assets, he would not interfere, 
 tion of money advanced for the Candler v. Candler, Jac, 225. 
 purpose of carrying on the busi- 57 Jones v. Dougherty, 10 Ga., 
 ness, and a subsequent assignment 273. 
 
 was made to a third party, of a 58 ]\Ialcolm v. Montgomery, 2 
 
 share of the profits in the same Mol., 500. 
 business, and the prior assignee
 
 CHAP. XII.] CREDITORS. 601 
 
 of the receiver can not be defeated by a general assignment 
 subsequently made by the debtor for the benefit of his cred- 
 itors. ^^ 
 
 § 413. No bar to the relief that property is claimed by 
 adverse claimants ; or beyond jurisdiction of court. In pro- 
 ceedings supplementary to execution, under the New York code 
 of procedure, it is no sufficient objection to placing the prop- 
 erty and effects of a judgment debtor in the hands of a re- 
 ceiver, that the property sought to be reached is claimed by 
 adverse claimants, and is such as may be taken on execution, 
 and is accessible for purposes of seizure and sale, if the court 
 is satisfied that the title to the property may be tried with as 
 little expense in an action by the receiver, as in a suit brought 
 by the adverse claimants. ^^ And in such proceedings a re- 
 ceiver may be appointed over real property of the debtor and 
 he may be required to convey such property to the receiver, 
 although it is situated beyond the jurisdiction of the court 
 and in another state.^^ And a receiver will be appointed in 
 such case, notwithstanding the debtor has made an assignment 
 for the benefit of his creditors under the insolvent laws of the 
 state, the assignment being made after the granting of an 
 injunction in the creditor's suit to restrain the debtor from 
 making any disposition of his property. ^^ Nor does the fact 
 that the bill does not specifically describe the property or in- 
 
 59 Monarch Co. v. Bank, 103 Ky., 380. See, also, Bailey v. Ryder, 10 
 276, 44 S. W., 955, 46 S. W., 700. N. Y., 363. But see, contra, Amy 
 Where a statute provides that a re- v. Manning, 149 Mass., 487, 21 N. 
 ceiver may be appointed where a E., 943, where it is held that, in 
 corporation is dissolved or is in- the absence of statutory authority, 
 solvent, a creditor of the corpora- a court of equity will not, under its 
 tion can not be deprived of his right general equity powers, at the suit of 
 to such appointment by a prior as- a judgment creditor, appoint a re- 
 signment by the corporation for the ceiver to collect debts and choses in 
 benefit of its creditors. Olcson v. action due to the debtor from per- 
 Bank, 15 Wash., 148, 45 Pac, 734. sons residing in foreign jurisdic- 
 
 60 Todd V. Crooke. 4 Sandf., 694. tions. 
 
 61 Towne v. Campbell, 35 Minn., 62 Tomlinson & Webster M. Co. 
 231, 28 N. W., 254; Tomlinson & v. Shatto, 34 Fed., 380. 
 
 Webster M. Co. v. Shatto, 34 Fed.,
 
 602 RECEIVERS. [chap. XU. 
 
 terests of the debtor which it is sought to reach, when the 
 same are not definitely known to complainant, afford a vaHd 
 objection to the reHef.*^^ 
 
 § 414. Answer denying property no bar to reference to 
 master to appoint ; receiver not appointed to attack fraud- 
 ulent assignment which creditor can set aside. It has al- 
 ready been shown, that the denial by defendant in a creditor's 
 bill that he has any property or effects of any kind, of which 
 a receiver could take possession if appointed, is no bar to the 
 exercise of the jurisdiction in behalf of the creditor in a proper 
 case.^^ And in conformity with the same principle, it is held 
 that the fact of the debtor having filed his answer, denying that 
 he has any property or effects of any kind, presents no suffi- 
 cient objection to a motion for an order of reference to a mas- 
 ter to appoint a receiver, and requiring the debtor to transfer 
 his effects to such receiver under oath.^^ So it would seem 
 to be no objection to the appointment of a receiver of the ef- 
 fects of a judgment debtor, that he has no other property 
 than an equity of redemption in real estate, which he has al- 
 ways been willing to have sold on execution. ^^ But it has 
 been held improper to appoint a receiver, in proceedings sup- 
 plementary to execution, merely for the purpose of attacking 
 an alleged fraudulent assignment made by the debtor, when 
 the judgment creditor himself has a right of action to set aside 
 such assignment.^"^ 
 
 § 415. Practice on reference to master to appoint un- 
 der New York system; assignment to receiver; examina- 
 tion of debtor, purpose and extent of. Under the practice 
 of the New York Court of Chancery, it was customary, upon 
 applications for receivers in aid of creditors' bills, to refer 
 
 63 Dutton V. Thomas, 97 Mich., 65 Fuller v. Taylor, 2 Halst. Ch., 
 93, 56 N. W., 229. 301. 
 
 64 See Browning v. Bettis. 8 66 Bailey v. Lane, 15 Ab. Pr., 373, 
 Paige, 568; Bloodgood v. Clark, 4 note. 
 
 Paige, 574. But see Dollard v. 67 Bollard v. Taylor, 33 N. Y. 
 
 Taylor, 33 N. Y., Supr. Ct. R., 496. Supr. Ct. R., 496.
 
 CHAP. XII.] CREDITORS. 603 
 
 the case to a master in chancery to make the appointment. And 
 it was held that the order of reference should authorize the 
 master to appoint a receiver of all the property, equitable in- 
 terests, things in action and effects belonging to the debtor, 
 or in which he had any beneficial interest when the suit was 
 instituted, except such articles of personal property as were 
 by law exempt from sale on execution, and should require 
 the master to take from the receiver the requisite security for 
 the faithful performance of his trust. It should also require 
 the defendant to assign to the receiver, under the direction of 
 the master, all his property and effects, and should give the 
 plaintiff leave to examine the debtor, or any other person, on 
 oath before the master for any of the purposes of the refer- 
 ence.^^ Under such an order of reference, however, the plain- 
 tiff was not authorized to examine the defendant, or any other 
 person, as to matters not connected with the receivership, or 
 with ascertaining the possession, nature, value or character of 
 the property which was to be assigned to the receiver. Plain- 
 tiff could not, therefore, examine the debtor merely for the 
 purpose of determining whether he had made a fraudulent as- 
 signment of his property previous to the commencement of 
 the action, when such property was no longer in his posses- 
 sion. ^^ The chief purpose of such an examination was to as- 
 certain what property the debtor had under his control and in 
 his possession, in order that it might be delivered to the re- 
 ceiver for the benefit of the creditor. The receiver was not 
 » authorized, by virtue of his appointment, to seize such proper- 
 ty as he might upon his own judgment deem that of the debt- 
 or, but this was to be determined by the examination before the 
 master, it being the receiver's duty simply to take such prop- 
 
 68 Green v. Hicks, 1 Barb. Ch., also, as to the practice on such ex- 
 
 309. And see this case as to the aminations, Dickerson v. Van Tine, 
 
 practice under such orders of refer- 1 Sandf., 724. 
 
 ence, and as to the extent and scope 69 Green v. Hicks, 1 Barb. Ch., 
 
 of the examination of the debtor 309. 
 permitted under the reference. See,
 
 604 RECEIVERS. [chap. XII. 
 
 erty as might be specified by the master, thus avoiding colli- 
 sions between the receiver and adverse claimants. '^'^ 
 
 § 416. Courts averse to interfering when contest is as 
 to title of real estate claimed by third persons. While, as 
 we have thus seen in the preceding sections, courts of equity 
 are inclined to a liberal exercise of their jurisdiction by grant- 
 ing receivers over the estate of a debtor in behalf of his judg- 
 ment creditors, this extraordinary power is exercised with a 
 considerable degree of caution when the contest is as to the title 
 to real estate, which is in possession of and claimed by third 
 parties. Indeed, courts of equity are always averse to any in- 
 terference with the legal title in limine, and when a creditor's 
 judgment is not of itself a lien upon lands which have been 
 conveyed by the debtor to third parties, and the only equity 
 of the judgment creditor is a right to resort to the lands by 
 setting aside the conveyance from the debtor, the party in pos- 
 session under what purports to be the legal title will not be 
 deprived of his possession by the appointment of a receiver, 
 unless upon a strong case of danger to the property and in- 
 ability to respond to a decree because of insolvency,''^! And 
 
 70Dickerson v. Van Tine, 1 Rose, Freem. Ch., 718, to the effect 
 
 Sandf., 724. that the plaintiff must show a clear 
 
 "i^i Vause V. Woods, 46 Miss., 120. right to the property, or that he 
 This was an appeal from an order has some lien upon it, or that the 
 of the chancellor, appointing a re- property constitutes a special fund, 
 ceiver upon a creditor's bill, to take to which he may resort for satis- 
 into possession lands alleged to faction, or that the property is ex- 
 have been conveyed in fraud of posed to loss or waste. It was said * 
 plaintiff, an administrator, and of by Lord Eldon, in Jones v. Pugh, 8 
 his intestate in his life-time. The Ves., 71, that if real estate is as- 
 court, Simrall, J., say, p. 128: "As sets, and the court can not avoid 
 against the legal title, the interpo- seeing that it and the rents and 
 sition is with reluctance ; it will profits must be responsible, it will 
 only be done in case of fraud put a receiver on the estate. Walker 
 clearly proved, and danger to the v. Denne, 2 Ves. Jr., 170. By the 
 property. Lloyd v. Passingham, laws of this state, the property of 
 16 Ves. Jr.. 68, which was a case a decedent is chargeable with his 
 between two claimants of the title. debts, primarily the personalty, 
 A summary of the doctrine is and, secondarily, the lands ; not, 
 stated by the chancellor in Mays v. however, in the sense that creditor?
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 605 
 
 when a judgment creditor had obtained a conditional order 
 for a receiver over certain real property, alleged to belong to 
 the debtor, but it was shown that the debtor had no such estate 
 in the lands as was claimed by the creditor in his petition, hav- 
 ing at the most but an equitable interest in some portion of 
 them, it was regarded as sufficient cause for refusing to make 
 the order for the receiver absolute, the order having covered 
 the entire property.'^^ 
 
 § 417. Buildings erected by debtor with his own funds, 
 receiver appointed over rents. Where, however, a debtor 
 has a life interest in certain real estate, upon which he has 
 
 have a specific lien, but in the 
 sense that creditors can subject 
 both to their debts. The descent 
 to the heir, or the right of the 
 devisee, is Hable to be divested, if 
 the real estate is required to pay 
 debts. The gravamen of the bill 
 is, that the deeds, or other instru- 
 mentalities by which the real es- 
 tate of William G. Vause was 
 passed to, and vested in, the de- 
 fendants, or some of them, was 
 prompted by covin and fraud, to 
 evade the debt due to the com- 
 plainant's intestate; and, therefore, 
 said real estate is as much bound 
 for the debt as though such con- 
 veyances had never been made. 
 The judgment conferred no lien on 
 these lands. The equity of the 
 complainants is a right to resort to 
 the lands, by setting aside these 
 conveyances. The title of the de- 
 fendants is a valid, legal title, as 
 against all others than the creditor. 
 If the property were worth more 
 than the debt, there would be no 
 reason to put the estate in the cus- 
 tody of a receiver, unless the de- 
 fendants were committing waste, 
 and deteriorating its value. The 
 court will not interpose for a mort- 
 
 gagee, except upon the ground that 
 the property is insufficient to pay 
 his debt, and, therefore, he should, 
 pending litigation, have the rents 
 and income. Ligon v. Bishop et al., 
 43 Miss., 527. Nor will a receiver 
 be appointed against an executor, 
 on slight grounds. There must be 
 abuse of the trust, or danger of in- 
 solvency. Middleton v. Dodswell, 
 13 Ves., 266. The jurisdiction is 
 exerted as part of the preventive 
 justice of the court, mainly in order 
 that the fund or property exposed 
 to spoliation, and danger of loss, 
 pending the litigation, may be taken 
 charge of by the court, so as to 
 abide the litigation. Where the 
 contest is over the title, the defend- 
 ant, if he has apparently and osten- 
 sibly the legal title, will not be de- 
 prived of possession unless upon a 
 very strong case of risk of loss of 
 the property, and inability to re- 
 spond from insolvency to the de- 
 cree. We have thought it proper 
 to refer to these general principles 
 which govern the jurisdiction of 
 the court." 
 
 72 Tredennick v. Graydon, 1 Dr. 
 & War., 316.
 
 606 RECEIVERS. [chap. XII. 
 
 with his own funds erected a building and receives the rents 
 thereof, upon a bill by a judgment creditor the court may ap- 
 point a receiver of the rents to apply them in payment of the 
 judgment, although the real estate itself is held by trustees and 
 the judgment is no lien thereon, since equity will not permit a 
 debtor to thus evade the payment of his just obligations."^^ 
 Nor will the courts permit a judgment debtor who occupies 
 the position of a cesHii que trust of lands, under a trust created 
 for his own benefit, to invest his individual property by build- 
 ing upon the land, and thus create a trust in his own property 
 for his own benefit, to the prejudice of his creditors.'^^ 
 
 § 418. Receiver allowed over realty in first instance un- 
 der EngHsh practice ; infant heirs ; rights of judgment cred- 
 itors in possession not affected. It was the doctrine of the 
 English Court of Chancery, that upon a bill by creditors claim- 
 ing satisfaction out of both the real and personal estate of 
 their debtor, if it appeared probable from defendant's answer 
 that there was no personal estate, and both the realty in de- 
 fendant's possession and its rents and profits must become 
 responsible for such demands, the court might allow a receiver 
 in the first instance, although the power was recognized as a 
 delicate one."^^ And upon a bill by creditors for satisfaction 
 out of the personal assets, and, if these should prove insuffi- 
 cient, out of realty which had descended to an infant heir, a 
 receiver has been allowed over the real estate.'^^ So upon a 
 bill by creditors for a sale of real estate for the payment of 
 their demands, the heir at law being an infant, a receiver was 
 granted on application of the plaintiffs. "^"^ But when an in- 
 cumbrancer seeks the aid of equity by a receiver over real es- 
 tate of a defendant, and there are judgment creditors of the 
 
 73 Johnson v. WoodruflF, 4 Halst. 75 Jones v. Pugh, 8 Ves., 71. 
 Ch., 120. affirmed on appeal to the 76 Sweet v. Partridge, Dick., 696. 
 Court of Errors and Appeals, id., 77 Sweet v. Partridge, 1 Cox, 433. 
 729. 
 
 74 Johnson v. Woodruff, 4 Halst. 
 Ch., 120.
 
 CHAP. XII.] CREDITORS. 607 
 
 defendant in possession, the appointment will be made without 
 prejudice to the rights of such judgment creditors. '^^ And 
 a judgment creditor in possession will not be ordered to attorn 
 to a receiver subsequently appointed."^^ 
 
 § 419. Receiver not appointed on creditors' bill, as 
 against mortgagee in possession; different mortgages; in- 
 adequate security. It will hereafter be shown, in discuss- 
 ing the subject of receivers over mortgaged premises, that the 
 courts are always reluctant to interfere w^ith the title of a mort- 
 gagee, the general rule being that a mortgagee in possession, 
 to whom anything is due, will not be disturbed by a receiver, 
 the rule being based upon the reluctance of courts of equity 
 to interfere with the legal title.^*^ And as against a mortgagee 
 in possession of the premises, holding them as security for 
 the payment of his debt, the court will not appoint a receiver 
 of the rents and profits, upon a creditor's bill by a judgment 
 creditor of the mortgagor, when the mortgagee has not been 
 paid the amount due him and is able to account and respond 
 for whatever he may receive.^! So when a mortgagee or trus- 
 tee of certain property, which has been mortgaged to him by 
 the debtor to secure debts due to the mortgagee and other cred- 
 itors, is proceeding properly in the discharge of his trust by 
 selling the property and applying the proceeds in payment of 
 the mortgage indebtedness, a court of equity will not inter- 
 fere by interposing a receiver, upon a creditor's bill filed 
 against the debtor and the mortgagee.^2 gyf \^ ^j^ action by a 
 judgment creditor to subject the debtor's property to the pay- 
 ment of his debts, if the property is incumbered by numerous 
 mortgages and judgments which are to be ascertained and 
 their priorities determined, and the real estate is insufficient 
 to pay the indebtedness, a receiver may be appointed to take 
 
 78 Davis V. Duke of Marlborough, see Brundage v. Home S. & L. 
 
 1 Swans., 74. Assn., 11 Wash., 277, 39 Pac, 666. 
 7J> Davis V. Duke of Marlborough, 81 Qninn v. Brittain, 3 Edw. Ch., 
 
 2 Swans., 118. 314. 
 
 80 See chapter XV, post. And 82 Furlong v. Edwards, 3 Md., 99.
 
 60S RECEIVERS. [CIIAP. XII. 
 
 possession of and to rent the property, and to collect the past 
 due rents. ^'^ 
 
 § 420. Receiver in aid of judgment creditors as against 
 mortgagee of chattels. As against mortgagees of chattels, 
 equity will extend the aid of a receiver upon the application of 
 judgment creditors, if by reason of the fraudulent conduct of 
 the mortgagee, or otherwise, such interference is necessary to 
 protect the rights of all parties in interest.84 For example, 
 when creditors have reduced their demands to judgment and 
 have levied upon a stock of goods in the debtor's possession, 
 they are entitled to an injunction and a receiver to take charge 
 of the stock, as against the debtor and a third person claiming 
 the goods as mortgagee, upon a bill alleging that the goods 
 claimed to be covered by the mortgage are more than sufficient 
 to pay the mortgage debt, and that the debtor has no other 
 property out of which the judgment may be satisfied ; the bill 
 also alleging that the mortgagee has permitted the debtor to 
 use and dispose of the goods mortgaged, and that a portion of 
 tlie stock levied upon is not covered by the mortgage.^^ So 
 when a mortgagee of chattels in possession, having sold a part, 
 and occupying as to the residue the position of a trustee for 
 other creditors, is about to dispose of the residue to the preju- 
 dice of a judgment creditor of the mortgagor or original 
 debtor, a receiver may be appointed to take the proceeds of 
 the unsold property, for the purpose of protecting the rights 
 of all parties in interest. ^^ But, under a statute authorizing 
 a receiver when the property is in danger of being lost or ma- 
 terially injured or impaired, a debtor having executed a chat- 
 tel mortgage of his stock of merchandise to creditors having 
 claims nearly equal in amount to the value of the stock, and 
 the mortgagees having taken possession by their agent, who 
 
 83 Smith v. Butcher, 28 Grat, 144. 85 Rose v. Bevan, 10 Md., 466. 
 See. also, Grantham v. Lucas, 15 86 Gouthwaite v. Rippon, 8 L. J, 
 W. Va., 425. N. S. Ch., 139. 
 
 84 Rose V. Bevan, 10 Md., 466. 
 And see Gouthwaite v. Rippon, 8 
 L. J., N. S. Ch., 139.
 
 -CHAP. XII.] CREDITORS. 609 
 
 is selling- the goods in the usual course of trade, an attaching 
 -creditor who has garnished such agent is not entitled to a 
 receiver over the property, when it is not shown that it will 
 not be properly accounted for, or that plaintiff's interest in 
 the proceeds is liable to be impaired. ^'^ 
 
 § 421. Judgment creditors may maintain action to set 
 aside fraudulent mortgage ; rights of judgment creditor in 
 England. When judgment creditors have, by their judg- 
 ments, obtained a lien upon the real estate of their debtor, 
 but a receiver is subsequently appointed over his effects and 
 estate, such creditors may, notwithstanding the receivership, 
 themselves maintain an action to set aside as fraudulent and 
 void a mortgage which had been previously given by the 
 •debtor, and to apply the proceeds of the property in satisfac- 
 tion of their judgments, especially when it is alleged that the 
 receiver neglects to act in the premises. But in such case, it 
 is proper to make the receiver a party defendant to the ac- 
 tion brought by the creditors, since he has an interest in the 
 land subject to the lien of the judgments, and is entitled to the 
 surplus avails of a sale of the land, if any, after satisfaction of 
 the judgments which were liens thereon. ^^ And in England, 
 when a mortgagee of the rates and tolls of a corporation has 
 obtained a receiver in aid of the enforcement of his mortgage, 
 a judgment creditor, although subsequent to the mortgage, 
 may issue an elegit upon his judgment, but without prejudice 
 to the rights of the receiver already appointed, or of any other 
 receiver who may be appointed by the mortgagee.^^ But a 
 judgment creditor in possession will not be ordered to attorn 
 to a receiver subsequently appointed in behalf of an incum- 
 brancer.9*^ 
 
 § 422. Real estate in receiver's possession can not be 
 sold under another judgment. Real estate in possession of 
 
 87 Silverman v. Kulin, 53 Iowa, ingham Canal Navigation Co.. Kay, 
 436. 142. 
 
 88 Gere v. Dibble, 17 How. Pr., 31. 90 Davis v. Duke of Marlborough, 
 
 89 Potts V. Warwick and Birm- 2 Swans., 118. 
 
 Receivers — 39.
 
 610 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 a receiver, appointed upon a bill by a judgment creditor to 
 have property of the debtor applied in satisfaction of his judg- 
 ment, is regarded as being strictly in custody of the court, to 
 abide the final decree which may be rendered in the cause. 
 And in order that the court may be enabled properly to ad- 
 minister the fund, no sale of the property will be allowed on 
 execution under another judgment, without leave of the court 
 first obtained for that purpose. And when such sale was at- 
 tempted without leave of court, it was held void, and that it 
 passed no title to the purchaser.^l 
 
 91 Wiswall V. Sampson, 14 How., 
 52. Air. Justice Nelson, delivering 
 the opinion, observes as follows, p. 
 65 : "When a receiver has been ap- 
 pointed, his possession is that of the 
 court, and any attempt to disturb 
 it, without the leave of the court 
 first obtained, will be a contempt 
 on the part of the person making 
 it. This was held in Angel v. 
 Smith, 9 Ves., 335, both with respect 
 to receivers and sequestrators. 
 When, therefore, a party is preju- 
 diced by having a receiver put in 
 his way, the course has either been 
 to give him leave to bring an eject- 
 ment, or to permit him to be ex- 
 amined pro interesse suo. 1 J. & 
 W., 176, Brooks v. Greathed; Dan- 
 iell's Pr., ch. 39, § 4. And the doc- 
 trine that a receiver is not to be 
 disturbed extends even to cases in 
 which he has been appointed ex- 
 pressly without prejudice to the 
 rights of persons having prior legal 
 or equitable interests. And the in- 
 dividuals having such prior interests 
 must, if they desire to avail them- 
 selves of them, apply to the court 
 either for liberty to bring eject- 
 ment or to be examined pro inter- 
 esse suo: and this though their right 
 to the possession is clear. 1 Cox, 
 
 422; 6 Ves., 287. The proper course 
 to be pursued, says Mr. Daniell, in 
 his valuable Treatise on Pleading 
 and Practice in Chancery, by any 
 person who claims title to an es- 
 tate or other property sequestered, 
 whether by mortgage or judgment, 
 lease or otherwise, or who has a 
 title paramount to the sequestration, 
 is to apply to the court to direct the 
 plaintiff to exhibit interrogatories 
 before one of the masters, in order 
 that the party applying may be ex- 
 amined as to his title to the estate. 
 An examination of this sort is called 
 an examination pro interesse suo; 
 and an order for such examination 
 may be obtained by a party inter- 
 ested as well where the property 
 consists of goods and chattels, or 
 personalty, as where it is real es- 
 tate. And the mode of proceeding 
 is the same in case of the receiver. 
 6 Ves., 287; 9 id., 336; 1 J. & W., 
 178; Daniell's Pr., ch. 39, § 4. A 
 party, therefore, holding a judg- 
 ment which is a prior lien upon the 
 property, the same as a mortgagee, 
 if desirous of enforcing it against 
 the estate after it has been taken 
 into the care and custody of the 
 court to abide the final determina- 
 tion of the litigation, and pending
 
 CHAP, XII.] 
 
 CREDITORS. 
 
 611 
 
 § 423. Priority as between purchasers of real estate at 
 receiver's sale and at sheriff's sale. When a debtor makes 
 an assig-nment of all his property, real and personal, for the 
 benefit of his creditors, and upon a judgment subsequently 
 obtained against him and a creditor's bill filed thereon, the as- 
 signment is set aside as fraudulent and void, and the debtor 
 and his assignees are directed to assign and deliver all the 
 property to the receiver appointed under the creditor's bill, up- 
 on compliance with such order the title to the realty becomes 
 vested in the receiver. A judgment, therefore, obtained 
 against the debtor, after the assignment from him to the re- 
 
 that litigation, must first obtain 
 leave of the court for this purpose. 
 The court will direct a master to 
 inquire into the circumstances, 
 whether it is an existing unsatisfied 
 demand, or as to the priority of the 
 lien, etc., and take care that the 
 fund be applied accordingly. . . . 
 It has been argued that a sale of 
 the premises on execution and pur- 
 chase, occasioned no interference 
 with the possession of the receiver, 
 and hence no contempt of the au- 
 thority of the court, and that the 
 sale, therefore, in such a case, 
 should be upheld. But, conceding 
 the proceedings did not' disturb the 
 possession of the receiver, the ar- 
 gument does not meet the objection. 
 The property is a fund in court, to 
 abide the event of the litigation, and 
 to be applied to, the payment of t!ie 
 judgment creditor, who has filed his 
 bill to remove impediments in tlie 
 way of his execution. If he has 
 succeeded in establishing his right 
 to the application of any portion of 
 the fund, it is the duty of the court 
 to see that such application is made. 
 And in order to effect this, the 
 court must administer it independ- 
 ently of any rights acquired by third 
 
 persons, pending the litigation. 
 Otherwise, the whole fund may 
 have passed out of its hands be- 
 fore the final decree and the litiga- 
 tion become fruitless. It is true, 
 in administering the fund, the court 
 will take care that the rights of 
 prior liens or incumbrances shall 
 not be destroyed ; and will adopt 
 the proper measures, by reference 
 to the master or otherwise, to as- 
 certain them, and bring them before 
 it. Unless the court be permitted 
 to retain the possession of the fund, 
 thus to administer it, how can it 
 ascertain the interest in the same 
 to which the prosecuting judgment 
 creditor is entitled, and apply it 
 upon his demand? . . . As we 
 have already said, it is sufficient for 
 the disposition of this case, to hold, 
 that while the estate is in the cus- 
 tody of the court, as a fund to abide 
 the result of a suit pending, no sale 
 of the property can take place, 
 either on execution or otherwise, 
 without the leave of the court for 
 that purpose. And upon this 
 ground, we hold that the sale by 
 the marshal on the two judgments 
 was illegal and void, and passed no 
 title to the purchaser."
 
 612 RECEIVERS. [chap. XII, 
 
 ceiver, does not become a lien upon the land. And in a con- 
 test between purchasers at a sheriff's sale under such subse- 
 quently acquired judgment, and purchasers at a sale of the 
 same property by the receiver, the latter will be held to have the 
 title, since the lien of the judgment never having attached up- 
 on the property, its sale under execution could confer no title 
 upon the purchaser.^2 
 
 § 424. The same; receiver acquires real property sub- 
 ject to judgment liens. The rule is otherwise, however, 
 when the purchaser at the sheriff's sale purchases under a judg- 
 ment recovered against the debtor prior to his assignment of 
 his property to the receiver, even though such judgment be of 
 a later date than that on which the creditor's bill was filed and 
 the receiver appointed. And in such a case, as between the 
 purchaser at the sheriff's sale, and a purchaser under the re- 
 ceiver, the former will acquire the title. The reason for the 
 distinction is found in the fact that the purchaser at the re- 
 ceiver's sale derives his title, not under the judgment on which 
 the receiver was appointed, but from the debtor's own convey- 
 ance of his property to the receiver and the subsequent sale by 
 that officer. And since the debtor can only convey his proper- 
 ty to the receiver subject to the lien of existing judgments, a 
 sale under an existing judgment confers a better title than can 
 be derived through the debtor and the receiver. The conclu- 
 sion, therefore, to be drawn from the cases, would seem to be 
 that a receiver can not acquire title to real property of the 
 debtor free from the liens of other judgment creditors, when 
 such liens had attached before the assignment of his real es- 
 tate by the debtor to his receiver.^^ 
 
 § 425. Discharge in bankruptcy, when no defense to 
 creditors' bill seeking receiver. It would seem that a dis- 
 charge of the debtor in bankruptcy is not a sufficient defense 
 to a creditor's bill seeking a receiver for the enforcement of a 
 
 92 Chautauque County Bank v. 93 Chautauque County Bank v. 
 
 White, 6 N. Y., 236, reversing S. C, Risley, 19 N. Y., 369. See, also, 
 6 Barb., 589. Shand v. Hanley, 71 N. Y., 319.
 
 CHAP. XII.] CREDITORS. 613 
 
 judgment acquired after the discharge was granted, when the 
 defendant appeared and contested the action in which the 
 judgment was obtained and did not plead his discharge in bar, 
 and when no apphcation has been made by the debtor to have 
 the execution set aside because issued upon a judgment re- 
 covered subsequent to his discharge. Under such circum- 
 stances, the debtor having neglected to avail himself of his 
 opportunity to take advantage of the discharge at the proper 
 time, he will not be allowed to urge it against the appointment 
 of a receiver upon the judgment remaining in full force.^^ 
 
 § 426. Receiver under English bankrupt act of 1861. 
 Under the English bankrupt act of 1861, when an insolvent 
 debtor has executed a deed of inspectorship for the benefit 
 of his creditors, covenanting to deal with his property accord- 
 ing to the directions of the inspectors, upon a bill filed by 
 them alleging that he is violating such covenants and hinder- 
 ing the settlement of his affairs with his creditors, and that 
 he is receiving and applying funds to his own use, a receiver 
 will be appointed on the ground of preventing irreparable mis- 
 chief to the creditors. And under such circumstances, the court 
 may properly interfere by a receiver, even though the property 
 may ultimately have to be distributed in bankruptcy, and al- 
 though the bankrupt court might possibly afford the same re- 
 lief.95 
 
 § 427. Receiver refused on creditors' bill when his ap- 
 pointment would interfere with administration of estate 
 of deceased. Equity will not lend its aid by a receiver 
 when the granting of the relief would have the effect of inter- 
 fering with the administration of the assets of a deceased debt- 
 or, against whom judgment was obtained in his life-time. 
 
 9'* Steward v. Green, 11 Paige, selected, to appoint a receiver for 
 535. the temporary custody of the hank- 
 y's Riches v. Owen, L. R., 3 Ch. rupt's estate, and as to the rights of 
 App., 820. As to the power of a action of such a receiver, see Lan- 
 court of bankruptcy, after an adju- sing v. Manton, 14 Bank. Reg., 127. 
 dication and before an assignee is
 
 614 RECEIVERS. [chap. XII. 
 
 Thus, in the case of a judgment obtained and creditor's bill 
 filed thereon during the debtor's life-time, and after his death 
 the creditor's suit is revived against his administrator, the 
 court will not grant a receiver of the effects of the deceased 
 upon the application of plaintiff in the creditor's suit, since the 
 property is to be disposed of in due course of administration 
 according to law, and any priority which plaintiff may have 
 gained by filing his bill dies with the death of defendant.^^ 
 
 § 428. Relief granted against judgment debtor doing 
 business in name of wife; error to pay creditors before 
 priority determined. When a judgment debtor is conduct- 
 ing a business in the name of his wife, and ostensibly as her 
 agent, in w^hich he is aided by his sons who are minors, the 
 business being wholly conducted and managed by the debtor 
 and his sons, his interest is regarded as sufficient to warrant 
 a court of equity in appointing a receiver to collect and preserve 
 the assets, upon a bill by a judgment creditor showing that 
 defendants are winding up the business, selling the property 
 and collecting the credits. But it is error, in such a case, to 
 direct the receiver to pay the creditors of defendants out of 
 collections and sales made by him, before it is finally deter- 
 mined whether they are entitled to priority of payment out of 
 the funds ; since, even if they are entitled to priority, it is pre- 
 mature to direct the payment before their claims have been as- 
 certained and allowed by the court. And before such direction 
 is given, an account should be taken and an opportunity afford- 
 ed to prove the claims of creditors upon the one hand, and to 
 contest them upon the other.^"^ 
 
 96 Sylvester v. Reed, 3 Edw. Ch., possession to the executor or ad- 
 
 296; Mathews v. Neilson, id., 346. ministrator, but would apply the 
 
 But in the latter case, it is said that fund in payment of the judgment, 
 
 if a receiver had already been ap- due regard being had, however, to 
 
 pointed and had obtained possession the statutory rights of other crcdit- 
 
 of property or money of the debtor ors. 
 
 before his death, the court appoint- ^"^ Penn v. Whiteheads, 12 Grat., 
 
 ing him, having possession through 74. 
 its officer, would not part with that
 
 CHAP. XII.] CREDITORS. 615 
 
 § 429. Discretion of court as to amount of defendant's 
 property over which receiver will be extended; discretion 
 as to sale ; receiver extended for other creditor. Courts of 
 equity sometimes exercise a discretionary power as to the 
 amount of the debtor's property over which a receiver shall 
 be appointed, or as to ordering an immediate sale for the pur- 
 pose of satisfying the demands of judgment creditors. And 
 when a receiver was appointed of the effects of a defendant 
 debtor in several creditors' suits, the entire amount of the 
 judgments being about $1,000, and the receiver took possession 
 of the debtor's property, amounting to about $60,000, the court 
 was of opinion that it would be proper for the receiver to for- 
 bear selling at public auction, and he was directed to stay such 
 sale until further order of the court. ^^ And when, under an 
 act of parliament authorizing receivers of the property of a 
 judgment debtor in aid of his creditors for the enforcement of 
 their judgments, the court is vested with a discretion in limit- 
 ing the quantity of the estate over which the receiver shall be 
 extended, it will not appoint a receiver, for the enforcement of 
 a small demand, over the whole of a large estate, but only over 
 a portion sufficient to satisfy the indebtedness within a reason- 
 able period. And under such a statute, when a receiver has 
 been appointed over a part of defendant's estate, he may be 
 extended over the remainder in behalf of another creditor who 
 comes in for protection, thus saving the expense of a new ap- 
 pointment, and such extension will be regarded as, in effect, 
 an original appointment.^^ 
 
 § 430. Creditor not entitled to priority over interest due 
 on mortgages prior to his judgment. As regards priority 
 of right between a judgment creditor and a mortgagee of the 
 debtor, it is held, where the judgment is only a lien upon the 
 
 98Wardell v. Leavenworth, 3 right to the rents as between judg- 
 
 Edw. Ch., 244. But see Billing v. ment creditors and mortgagees in 
 
 Foster, 21 S. C, 334. such a case, Abbott v. Stratten, 3 
 
 99 Corbet v. Mahon, 2 Jo. & Lat., Jo. & Lat., 603. 
 671. And see, as to priority and
 
 616 RECEIVERS. [CIIAP. XII. 
 
 lands of defendant to the extent of such estate or interest as 
 defendant had in them, that the judgment creditor is not en- 
 titled to payment out of funds received by the receiver, in 
 preference to interest due upon mortgages of the land which 
 are prior to his judgment.^ 
 
 § 431. Appointment after bill dismissed on demurrer. 
 When a fund has already come into the hands of the court 
 through the medium of a receiver, but the bill on which the 
 appointment was made is afterward dismissed upon demurrer, 
 a judgment creditor is entitled to a receiver upon a bill show- 
 ing a judgment and levy upon the property, and that it is 
 the only property of defendant within the jurisdiction of the 
 court out of which his judgment can be satisfied, and that there 
 are conflicting claims thereto which may defeat his ultimate re- 
 covery unless the fund is placed in the hands of a receiver.^ 
 
 § 432. Nature of property subject to receivership ; rings 
 and jewelry ; notes and interest in firm ; benefice of clergy- 
 man ; seats in stock and produce exchange. As regards the 
 nature or specific kind of property over which a receiver may 
 be appointed for the protection of judgment creditors, it would 
 seem from the general scope and tenor of the decisions, that 
 such a receivership may properly extend to property of any 
 nature, real or personal, in which the debtor has such an inter- 
 est as may avail his creditor. In New Jersey, it has been held 
 that a receiver under a creditor's bill may be appointed to take 
 charge of rings and jewelry of the defendant, since these are 
 articles usually worn upon the person, and it might be out of 
 the sheriff's power to levy on and take possession of them.^ 
 And seats in a stock exchange and in a produce exchange, al- 
 though their ownership is coupled with conditions and restric- 
 tions, are property which may be subjected to the claims of 
 creditors. It is, therefore, proper upon proceedings supple- 
 mentary to execution to appoint a receiver over such seats be- 
 
 1 Holland v. Cork & Kinsale R. 3 Frazier v. Barnum, 4 C. E. 
 Co., Ir. Rep., 2 Eq., 417. Green, 316. 
 
 2 Field V. Jones, 11 Ga., 418.
 
 CHAP. XII.] CREDITORS. 617 
 
 longing to the judgment debtor, and to direct the debtor to as- 
 sign them to the receiver and to order their sale by him in sat- 
 isfaction of the judgment.^ And in New York, on proceed- 
 ings supplementary to execution under the code of procedure, 
 when the debtor upon examination disclosed certain property 
 consisting of notes in an insolvent firm, and an interest in an 
 existing firm of which he was a member, the court regarded 
 it as an eminently proper case for a receiver to take charge of 
 the debtor's effects and to collect what was due to him.^ In 
 England, a judgment creditor of a beneficed clergyman, whose 
 judgment is, under acts of parliament, a lien upon the benefice 
 of living of the clergyman, is entitled to the aid of equity by 
 a receiver to collect the rents and emoluments pertaining to 
 such living.^ 
 
 § 433. Relief refused where answer alleges nothing due 
 to plaintiff; delay to determine regularity of proceedings. 
 A receiver will not be appointed of the effects of a defendant, 
 upon a bill filed by one claiming to be a creditor, when the 
 answer positively alleges that there is nothing due from de- 
 fendant to plaintiff, and when no other creditors appear in 
 support of the application."^ And when the court has reason- 
 able ground to suspect irregularities in the judgment or execu- 
 tion on which the creditor's bill is founded, it may delay the 
 application for a receiver for a sufficient time to enable the ir- 
 regularity to be determined in the court where the judgment 
 was rendered, with leave to renew the application at a future 
 time.8 So the relief will be denied when the bill contains no 
 distinct charges of fraud, and when it does not appear clearly 
 and distinctly that there is any property or thing in action to 
 be preserved for the benefit of the judgment creditor.^ But 
 when the bill charges that the judgment debtor has choses in 
 
 4 Habenicht v. Lissak, 78 Cal., '^ Fogarty v. Burke, 1 Con. & 
 351, 20 Pac, 874. Law, 565. 
 
 5 Webb V. Overmann, 6 Ab. Pr., 8 Bank of Wooster v. Spencer, 
 92. Clarke Ch., 386. 
 
 6 Hawkins v. Gathercole, 1 Sim., ^ First National Bank v. Gage, 79 
 N. S., 63. Ill-, 207. See, contra, Gage v.
 
 618 RECEIVERS. [chap. XII. 
 
 action and property which should be subjected to the payment 
 of his indebtedness, and it is taken as confessed against the 
 debtor, it is not error to appoint a receiver. ^^ 
 
 § 434. Waiver of answer under oath no ground of ob- 
 jection. The fact that plaintiff in a creditor's bill, seeking 
 the appointment of a receiver, sees fit to waive the answer of 
 defendant under oath, affords no sufficient objection to grant- 
 ing a receiver in the action, and to making an order of refer- 
 ence for the examination of defendant on oath before a master 
 in chancery, with respect to the property which he is required 
 to assign to the receiver. ii 
 
 § 435. When defendant directed to pay fund into court. 
 When a defendant in a creditor's bill, filed by a receiver of the 
 estate of a deceased person, admits by his answer a balance of 
 money in his hands belonging to the estate of the deceased, he 
 should be directed to pay the fund into court without waiting 
 for a final decree. And such fund may either be kept in the 
 custody of the court, or invested under its special direction, as 
 the court may see fit.^^ 
 
 § 436. Courts averse to interfering on ex parte applica- 
 tion. It is to be observed that courts of equity are al- 
 ways averse to appointing receivers upon an ex parte applica- 
 tion, and without due notice to defendants whose rights are to 
 be affected. And a receiver will not be appointed ex parte 
 upon a creditor's bill, when it is not shown that defendant has 
 any property of a perishable nature, or choses in action which 
 are in danger of being lost unless immediately collected; or 
 that any other special circumstances exist, which render it 
 necessary to put a receiver in immediate possession of the debt- 
 or's property.l^ « 
 
 Smith, 79 111.. 219. where it is held 10 Runals v. Harding, 83 111., 75. 
 
 that the appointment of a receiver H Root v. Safford. 2 Barb. Ch., 
 
 upon such a bill is almost a matter 33. 
 
 of course, as under the former 12 Rutherford v. Jones, 26 Ga., 
 
 chancery practice in New York un- 150. 
 
 der similar legislation concerning i^ Sandford v. Sinclair, 8 Paige, 
 
 creditors' bills. 373, affirming S. C, 3 Edw. Ch., 393.
 
 CHAP. XII.] CREDITORS. 619 
 
 § 437. Prior creditors protected, notwithstanding dis- 
 missal of bill. When there are prior creditors, parties to 
 the cause, having claims upon an estate which is placed in the 
 hands of a receiver, although the plaintiff on whose applica- 
 tion the receiver is appointed subsequently dismisses his bill and 
 consents to the receiver's discharge, the court will yet protect 
 the rights of such prior creditors by continuing the receiver; 
 and it may require them to file a bill forthwith, as a condition 
 of thus affording them protection.!^ 
 
 § 438. Receiver in divorce proceedings to enforce de- 
 cree for alimony. Upon supplementary proceedings under 
 the code of procedure in Wisconsin, to enforce a judgment or 
 decree for alimony rendered in an action for a divorce, the 
 court may appoint a receiver to take possession of the effects 
 of defendant in the divorce proceeding; and the sheriff's re- 
 turn of nulla bona upon the execution for alimony, if made and 
 signed before the supplementary proceedings are instituted, 
 is sufficient foundation therefor, although the execution is not 
 filed with the clerk until after such proceedings are begun. 
 And the receiver thus appointed may maintain an action to set 
 aside a fraudulent conveyance of his real estate, made by the 
 defendant to defeat the decree for alimony.^^ And under the 
 provisions of the code of California, the court may appoint a 
 receiver over the property of the defendant either for the pur- 
 pose of enforcing payment of alimony and expense money pre- 
 viously ordered to be paid, or for the purpose of enforcing a 
 previous order requiring the furnishing of security for such 
 payment, or for the purpose merely of providing such se- 
 curity. ^^ 
 
 § 439. Relief granted when only security for judgment 
 is a life estate. A receiver has been allowed in the Irish 
 
 14 Murrough v. French, 2 Mol., perior Court 111 Cal., 488, 44 Pac, 
 497. 177; Huellmantel v. Huellmantel, 
 
 15 Barker 7'. Dayton, 28 Wis., 367. 124 Cal., 583, 57 Pac, 582; Mc- 
 See Goff v. Goff, 54 West Va., 364, Aneny v. Superior Court, ISO Cal., 
 <^ S. E.. 177. 6, 87 Pac, 1020. 
 
 '"'' Pc'.nlnma Savings Bank v. Su-
 
 620 RECEIVERS. [chap. XII. 
 
 Court of Chancery, in aid of a judgment creditor who had 
 obtained a judgment in another court, the security for which 
 was only a hfe estate which might lapse at any moment, there 
 being also large prior incumbrances, and the defendant hav- 
 ing sold his stock and furniture and gone abroad to avoid 
 payment of the judgment.!'^ /^j-j^ ^ judgment creditor may 
 have a receiver over the share of personal estate to which 
 the debtor is entitled as one of the next-of-kin of a deceased 
 intestate, no administration of the estate having been had.i^ 
 § 439a. Supreme Court of Judicature Act in England. 
 In England, notwithstanding the Supreme Court of Judicature 
 Act of 1873, which authorizes the appointment of a receiver 
 "in all cases in which it shall appear to the court to be just or 
 convenient that such order should be made," a receiver will 
 not be allowed over personal property, demands and choses 
 in action of a judgment debtor, when no obstacles or impedi- 
 ments exist to the enforcement of the judgment in the usual 
 course by levying an execution upon such property and by at- 
 taching the debts due to the debtor.^^ Nor, under this act, 
 will a receiver be allowed over future earnings or salary of the 
 debtor, which have not been by him assigned or charged with 
 payment of the judgment debt.20 And it is held that to jus- 
 tify the relief under the act, in aid of a judgment creditor, the 
 circumstances must be such as would have warranted the ap- 
 pointment of a receiver by the Court of Chancery before the 
 passage of the act.^i And when a judgment debtor dies pend- 
 ing proceedings against him by a judgment creditor for a re- 
 ceiver, the court has no power to grant the relief, the action 
 not having been revived against the representatives of the es- 
 tate of the deceased debtor.22 But where it is sought to reach 
 
 17 AlcCraith v. Quin, Ir. Rep., 7 ris v. Beauchamp Brothers, (1894) 
 Eq., 324. 1 Q. B., 801. 
 
 18, T 1, Ai, oo T T5 T 20 Holmcs •y. Millagc, ( 1893) 1 Q. 
 
 18 Mullane v. Ahern, 28 L. R., Ir. & . v / >* 
 
 105 ^■' 
 
 21 Harris v. Beauchamp Brothers, 
 
 19 Manchester & L. D. B. Co. v. (1894) 1 Q. B., 801. 
 
 Parkinson, 22 Q. B. D., 173; Har- 22 /„ re Shephard, 43 Ch. D., 13L
 
 CHAP. Xn.] CREDITORS. 621 
 
 by garnishment funds belonging to non-resident defendants, 
 and it appears probable that the defendants will withdraw the 
 funds thus owing them beyond the jurisdiction of the court, 
 a receiver is properly appointed under the provisions of the 
 act.23 
 
 § 439&. No preference allowed as between creditors of 
 the same class. Where a court of equity has appointed a 
 receiver over the estate of an insolvent debtor and the receiver 
 has taken possession of his property, no creditor will be al- 
 lowed, by obtaining judgment against the insolvent after the 
 receiver has taken possession, to obtain a preference over other 
 creditors of the same class, and this is true even though the ac- 
 tion in which the judgment was recovered was instituted be- 
 fore the receiver actually took possession of the property.24 
 
 23 Goldschmidt v. Oberrheinische 343, 28 S. E., 860. And see, post, 
 Metallwerke, (1906) 1 K. B., 373. § 461. 
 
 24 Lang V. Macon C. Co., 101 Ga.,
 
 622 RECEIVERS. [chap. XII. 
 
 II. Of the Receiver's Title. 
 
 § 440. Appointment of receiver does not divest previously acquired 
 liens; receiver takes no better title than that of debtor. 
 
 441. Receiver acquires no title to property of debtor which is 
 
 exempt from execution. 
 
 442. Exemption extended to proceeds of insurance; also to judg- 
 
 ment for damages for seizing exempted property. 
 
 443. Assignment by debtor to receiver not necessary as to personal 
 
 property and choses in action; receiver may recover prop- 
 erty without assignment; levy by sheriff a contempt of court. 
 
 444. Assignment passes only property in which debtor has bene- 
 
 ficial interest; need not except property held in trust or 
 previously assigned; should except exempted property; right 
 of action for tort does not pass. 
 
 445. Irregularities in appointment of receiver no justification for 
 
 refusal to make assignment and submit to examination. 
 
 446. Formal assignment necessary, though defendants swear they 
 
 have no property; assignment resembles mortgage; no re- 
 assignment necessary. 
 
 447. No assignment to receiver necessary under New York code; 
 
 receiver acquires only right of action as to property previ- 
 ously transferred in fraud of creditors. 
 
 448. Receiver's title prior to that of judgment creditor subsequent- 
 
 ly levying execution; title not defeated by delay in taking 
 possession; preference over assignment; date of receiver's 
 title. 
 
 449. Title to choses in action as between receiver and purchaser; 
 
 title acquired by receiver under code of procedure; lis 
 pendens. 
 •J-50. Receiver takes no title to income of inalienable trust fund 
 accruing after appointment. 
 
 451. Receiver takes estate by curtesy in New York, and may re- 
 
 cover rents. 
 
 452. Efifect of debtor's death before appointment actually made. 
 
 § 440. Appointment of receiver does not divest pre- 
 viously acquired liens; receiver takes no better title than 
 that of debtor. In considering the nature of the title to 
 the debtor's property and estate, which is acquired by a re- 
 ceiver appointed in behalf of judgment creditors, the first 
 principle to be observed is that the appointment of the receiver 
 does not operate to divest liens previously acquired on the 
 property of the debtor by other creditors acting in good faith.
 
 CHAP. XII.] CREDITORS. 623 
 
 The appointment is regarded as being made subject to such 
 rights and liens as may have been previously acquired by 
 other judgment creditors, who will not be divested of their 
 liens by virtue of the subsequent receivership.25 For example, 
 a judgment creditor is entitled to the enforcement of his lien 
 against the personal property of his debtor, and to the fruits 
 of a levy made thereon, notwithstanding the subsequent ap- 
 pointment of a receiver of the debtor's effects in a creditor's 
 suit; since, until such appointment is actually made, there is 
 no such lien by virtue of the creditor's suit upon the personal 
 property of the debtor, as to prevent a levy and sale under exe- 
 cution.26 So when a sheriff has made a valid levy upon the 
 debtor's property under a judgment against him, and a re- 
 ceiver is subsequently appointed over the debtor's estate, the 
 receiver takes title subject to the rights acquired under the 
 levy. And in such a case, when the receiver agrees with the 
 sheriff, that if the latter will desist from sale under his levy 
 and will permit the receiver to sell, he will pay the plaintiff in 
 execution, or the sheriff for his use, the amount of such execu- 
 tion, if it shall be determined that plaintiff's levy was a prior 
 lien, such agreement may be enforced by action against the re- 
 ceiver.27 So creditors, who have by their judgments acquired 
 a lien upon their debtor's real estate prior to the appointment 
 of a receiver over his estate, may maintain an action to set 
 aside a fraudulent mortgage executed by the debtor; since the 
 receiver's appointment, being subsequent to the lien of their 
 judgments, does not divest them of their right of action. 28 
 And, in general, it may be said that a receiver over a debtor's 
 property occupies the same relation toward the proceeds or 
 
 25 Becker v. Torrance, 31 N. Y., 26 Davenport v. Kelly, 42 N. Y., 
 
 631 ; Davenport v. Kelly, 42 N. Y., 193. And see Van Alstyne v. Cook, 
 
 193 ; Gere v. Dibble, 17 How. Pr., 25 N. Y., 489. 
 
 31 ; Cohen v. Gold Creek M. Co., 27 Becker v. Torrance, 31 N. Y., 
 
 95 Fed., 580. And see Van .Alstyne 631. 
 
 V. Cook, 25 N. Y., 489. See, ante, -8 Gere v. Dibble, 17 How. Pr., 
 
 § 138. 31.
 
 624 RECEIVERS. [chap. XII. 
 
 fund derived from the property as the debtor himself.^^ If, 
 at the time of the receiver's appointment, the property is in 
 the possession of a sheriff, under writs of attachment levied 
 in behalf of attaching creditors, the receiver's title and right 
 to possession are subordinate to those of such attaching cred- 
 itors, who may, when necessary, be protected by a writ of pro- 
 hibition to prevent the court from interfering with their pos- 
 session.2^ And a receiver can not acquire a better or greater 
 title than that of the debtor,^!^ nor can he assert rights with 
 respect to the receivership property which the debtor himself 
 would have been estopped from asserting.^^ Thus, where a 
 debtor is estopped to assert that a transfer of property is void 
 as being in fraud of creditors, the receiver of the debtor will 
 likewise be estopped. ^^ So where a corporation is precliided 
 by the conduct of its officers from maintaining an action 
 against a subscriber for the amount of his stock subscription, 
 the receiver of the corporation will be unable to maintain the 
 action. 24 
 
 § 441. Receiver acquires no title to property of debtor 
 which is exempt from execution. As regards property of 
 the debtor which is exempt by law from levy and sale under 
 execution, the doctrine established by the courts of New York 
 is that a receiver appointed on proceedings supplementary to 
 execution under the code, in the nature of an ordinary cred- 
 itor's bill under the former chancery system, acquires no title 
 
 29 Crine v. Davis, 68 Ga., 138. N. E., 1076 ; Foster v. Rincker, 4 
 
 30 State V. Superior Court, 7 Wyo., 484, 35 Pac, 470; First Na- 
 Wash., 77, 34 Pac, 430; State v. tional Bank v. Cook, 12 Wyo., 492, 
 Superior Court, 8 Wash., 210, 35 76 Pac, 674, 78 Pac, 1083. 
 
 Pac, 1087, distinguished in State v. 32 Gottlieb v. Miller, 154 111., 44, 
 
 Superior Court, 11 Wash., 63, 39 39 N. E., 992; Great Western Tele- 
 
 Pac, 244. And see Cherry v. W. graph Co. v. Loewenthal, 154 111., 
 
 W. I. E. Co., 11 Wash., 586, 40 Pac, 261, 40 N. E., 318. 
 136. 33 Gottlieb v. Miller, 154 111., 44, 
 
 31 Gottlieb V. Miller, 154 111., 44, 39 N. E., 992. 
 
 39 N. E., 992; Great Western Tele- 34 Great Western Telegraph Co. 
 
 graph Co. v. Loewenthal, 154 111., v. Loewenthal, 154 111., 261, 40 N. 
 
 261, 40 N. E., 318; Chicago Title & E., 318. 
 Trust Co. V. Smith, 158 111., 417, 41
 
 CHAP. XII.] CREDITORS. 625 
 
 by virtue of his appointment to such property."^ And the rule 
 holds good, even though the order of appointment is in gen- 
 eral terms, without excepting exempted property; since such 
 order, however broad in its language, must be understood as 
 limited in its operation, by the statute exempting the property 
 from execution, and the law attaches to the order and becomes 
 a part of it. A judgment debtor may, therefore, maintain an 
 action against his receiver, for property taken by the latter 
 which is exempt from sale under execution. ^6 
 
 § 442. Exemption extended to proceeds of insurance; 
 also to judgment for damages for seizing exempted prop- 
 erty. The doctrine as stated in the preceding section is 
 not limited in its application to the property itself which is ex- 
 empted by law from sale under judicial process, but extends 
 also to the proceeds of insurance realized upon the property 
 when destroyed by fire.^'^ And when property of the debtor, 
 which is exempt by law from sale under execution, is destroyed 
 by fire subsequent to the appointment of the receiver, the right 
 of action for the insurance does not vest in the receiver, and he 
 has no interest therein.^^ And a receiver of a judgment debtor 
 will not be allowed an order," directing the debtor to assign to 
 him a policy of insurance upon furniture of the defendant, 
 which was exempt from execution and which has been des- 
 troyed by fire ; since, in such case, the debtor has not voluntarily 
 parted with or waived his right to the exempted property. ^^ 
 The doctrine is also extended to the case of a judgment for 
 damages, recovered by the debtor against a creditor who had 
 seized and sold property which was exempt from execution, the 
 judgment being regarded as representing the property, for the 
 value of which it was recovered. A receiver, therefore, who 
 
 35Finnin v. Malloy, 2,Z N. Y. 524; Sands v. Roberts, 8 Ab. Pr., 
 
 Supr. Ct. R., 382; Cooney v. Coon- 343. 
 
 ey, 65 Barb., 524. See, also, Tillot- "^^ Sands v. Roberts, 8 Ab. Pr., 
 
 son V. Wolcott, 48 N. Y., 188. 343. 
 
 36 Finnin v. Malloy, 33 N. Y. 3-.) Cooney v. Cooney, 65 Barb., 
 Supr. Ct. R., 382. 524. 
 
 37 Cooney v. Cooney, 65 Barb., 
 
 Receiver?, — 40.
 
 626 RECEIVERS. [chap. XII. 
 
 has collected such a judgment, will be ordered to release it in 
 favor of the debtor.^^ 
 
 § 443. Assignment by debtor to receiver not necessary 
 as to personal property and choses in action; receive-- may 
 recover property without assignment; levy by sheriff a 
 contempt of court. Under the former chancery practice 
 in New York, it was customary, upon the appointment of a 
 receiver in aid of a creditor's bill, to require the defendant 
 to execute an assignment to the receiver of all his property and 
 effects, and a similar practice has been followed in other states 
 retaining the chancery system. While there was some doubt, 
 under the New York decisions, as to whether such an as- 
 signment was not really necessary to vest in the receiver the 
 title to real estate of the debtor,^! yet as regards personal 
 property, choses in action, and equitable interests of the debtor, 
 the assignment was regarded merely as a matter of conve- 
 nience, the established doctrine being that as to all such proper- 
 ty and interests the title passed to the receiver by virtue of his 
 appointment, without the intervention of or any necessity for 
 a formal assignment from the debtor.^^ Especially was this 
 the case with regard to equitable interests and choses in ac- 
 tion in favor of the debtor, as to which it was held 
 that an assignment could transfer no additional or higher 
 right than the receiver had by virtue of his appointment.'*^ 
 And when a receiver was appointed over the estate of three 
 defendants in a creditor's bill, only two of whom joined in an 
 assignment of their property to the receiver, he was held to 
 be invested with the title to the personalty, so as to maintain an 
 action of trover therefor. Such a receiver was held to have a 
 clear priority over purchasers of the same property, under exe- 
 
 40 Tillotson V. Wolcott, 48 N. Y., 6 Barb., 542. See, also, Mann v. 
 188. Pentz, 2 Sandf. Ch., 272. Albany 
 
 41 See Wilson v. Wilson, 1 Barb. City Bank v. Schermerhorn, Clarke 
 Ch., 594. Ch., 297. 
 
 42 Storm v. Wacldell, 2 Sandf. 4.3 Iddings v. Bruen, 4 Sandf. Ch., 
 Ch., 505; Iddings v. Bruen, 4 252. 
 
 Sandf. Ch., 252; Wilson v. Allen,
 
 CHAP. XII.] CREDITORS. 627 
 
 cution on a judgment recovered subsequent to the appointment 
 of the receiver, and to be entitled to recover the property from 
 such purchasers.^4 And the property being thus under the 
 control of the court, through its officer the receiver, the court 
 would not permit judgment creditors to levy thereon for the 
 satisfaction of their judgments, and a sheriff making such a 
 levy was held in contempt of court.'*^ 
 
 § 444. Assignment passes only property in which debtor 
 has beneficial interest; need not except property held in 
 trust or previously assigned; should except exempted 
 property; right of action for tort does not pass. As re- 
 gards the property which passes to the receiver by virtue of an 
 assignment from the debtor, under an order of court appoint- 
 ing a receiver of the money, property, things in action and ef- 
 fects of the defendant, nothing passes under the general words 
 of assignment, except property or things in action in which the 
 defendant has some beneficial interest at the time of making 
 such assignment. It is not necessary, therefore, that it should 
 contain an express reservation of property which the debtor 
 holds merely in the character of trustee for others, under a 
 valid and subsisting trust, and in which he has no beneficial 
 interest. Nor is it necessary to expressly except from the op- 
 eration of the assignment property which the debtor had before 
 assigned to the receiver, who had been appointed in a previous 
 creditor's suit. Such an assignment, however, should contain 
 an exception reserving to the debtor such property as he is 
 entitled to hold exempt from levy and sale under execution ; 
 and this should be done, even though the order appointing the 
 receiver and directing the debtor to assign and deliver over 
 his property is expressed in general terms, without excepting 
 any exempted property.^^ But a mere right of action in favor 
 of a debtor for a personal tort, since it can not be reached by 
 plaintiff in a creditor's bill, is not an asset which will pass to 
 
 44 Wilson V. Allen, 6 Barb., 542. 40 Caggcr v. Howard, 1 Barb. Ch., 
 
 45 Albany City Rank v. Scber- 368. 
 merhorn, Clarke Ch., 297
 
 628 RECEIVERS. [CIIAP. XII. 
 
 a receiver appointed on such bill, by virtue of the assignment 
 made by the debtor to the receiver.'*'^ 
 
 § 445. Irregularities in appointment of receiver no jus- 
 tification for refusal to make assignment and submit to 
 examination. The fact that there were irregularities in 
 the appointment of a receiver upon a creditor's bill in aid of a 
 judgment at law, affords no justification upon a motion for an 
 attachment against the defendant, for not appearing before a 
 master in chancery to make an assignment of his property to 
 the receiver, and to submit to an examination. The proper 
 course for a defendant, desiring to take advantage of such 
 irregularities, is to move to set aside the appointment, and for 
 an order staying the proceedings before the master in the mean- 
 time.^^ Nor do such irregularities afford any valid objec- 
 tion to an examination of the debtor touching his assets as re- 
 quired by the order appointing the receiver.'*^ 
 
 § 446. Formal assignment necessary, though defend- 
 ants swear they have no property; assignment resembles 
 mortgage; no re-assignment necessary. When a receiver 
 is appointed upon a creditor's bill, and defendants are ordered 
 to assign to him all their property, assets, and choses in ac- 
 tion, they will be conjpelled to make a formal assignment to the 
 receiver to enable him to test the validity of any disposition 
 which they may have made of their property, and to bring suits 
 in relation thereto, even though they have sworn that they have 
 no property.^^ In such event, however, nothing will be re- 
 quired beyond a formal assignment, un4ess it is made to ap- 
 pear by other testimony that the debtors have sworn falsely 
 as to their property and effects.^^ And it has been held that 
 an assignment of his effects by a judgment debtor to a receiver 
 appointed on a creditor's bill, partakes of the nature of a mort- 
 
 47 Hudson V. Plets, 11 Paige, 180. ^0 Chipman v. Sabbaton, 7 Paige, 
 
 48 Howard v. Palmer, Walk. 47. 
 
 (Mich.), 391. 51 Chipman v. Sabbaton, 7 Paige, 
 
 49 Thomas v. Gartner, 97 Mich., 47. 
 608, 57 N. W., 188.
 
 CHAP. XII.] CREDITORS. 629 
 
 gage for the payment of the judgment and costs, and when 
 this purpose is attained the assignment has no further force, 
 and that no re-assignment to the debtor is necessary.^^ 
 
 § 447. No assignment to receiver necessary under New 
 York code; receiver acquires only right of action as to 
 property previously transferred in fraud of creditors. Un- 
 der the New York code of procedure, upon the appointment of 
 a receiver of the effects of a judgment debtor upon proceedings 
 supplementary to execution, no assignment is necessary to in- 
 vest the receiver with the title to the debtor's personal proper- 
 ty or choses in action ; since such title vests at once in the re- 
 ceiver by virtue of his appointment, and no subsequent act or 
 assignment by the debtor to a third party can divest the lien 
 thus acquired in the creditor's suit.^^ The rule prevails also 
 with regard to real estate of the debtor, although the contrary 
 was formerly held,^^ and it is now the recognized rule that the 
 receiver, by virtue of his appointment, becomes vested with 
 all the title to the debtor's property, both real and personal, 
 without the execution of any assignment from the debtor, no 
 distinction being made between realty and personalty.^^ The 
 
 52 Anderson v. Treadwell, Ed- It was, therefore, held that where 
 mond's Select Cases, 201. the debtor had sold and conveyed 
 
 53 Porter v. Williams, 5 How. real estate to a purchaser in good 
 Pr., 441 ; People v. Hulburt, id., faith and for value, although after 
 446; S. C, 1 Code R., N. S., 75. the receiver was appointed, the 
 And See Fessenden v. Woods, 3 debtor not having made an assign- 
 Bosw., 550. As to the title of a re- ment to the receiver, the latter 
 ceiver in proceedings supplementary could not maintain an action of 
 to execution to policies of insur- ejectment against the purchaser, 
 ance upon the life of the judgment And to the same effect is Scott v. 
 debtor, see Reynolds v. Aetna Life Elmore, 10 Hun, 68. It is believed, 
 Ins. Co., 160 N. Y., 635, 55 N. E., however, that the doctrine of these 
 305. cases is entirely overthrown by 
 
 54 See Moak v. Coats, 33 Barb., Porter v. Williams, 9 N. Y., 142. 
 498, where it was held that the title 55 Porter v. Williams, 9 N. Y.. 
 to the personalty only passed to the 142; Wing v. Disse, 15 Hun, 190; 
 receiver by virtue of his appoint- Manning v. Evans, 19 Hun, 500. 
 ment, and that the title to the realty And see Fessenden v. Woods, 3 
 did not vest in him until an assign- Bosw., 550. 
 
 ment was executed by the debtor.
 
 630 RECEIVERS. [chap. XII. 
 
 doctrine, however, would seem to be limited to property actual- 
 ly in the possession of the debtor, and it is held that the ap- 
 pointment does not invest the receiver with title to property 
 previously transferred or assigned by the debtor in fraud of 
 his creditors. As to such property, it is held, he can acquire 
 no title by succession to the rights of the debtor, since the 
 transfer is valid as to him, and the fraudulent assignee ac- 
 quires a good title to the property as against the debtor and all 
 other persons, except the creditors of the debtor. As to such 
 property, therefore, the receiver's only right is a right of ac- 
 tion, as trustee for the creditors, to set aside the fraudulent 
 transfer and to recover the property, for the benefit of the 
 judgment creditors at whose suit he was appointed. ^^ And 
 if, in such case, the receiver takes no steps to set aside such 
 assignment until after the debtor is adjudicated a bankrupt 
 and an assignee of his estate is appointed, the receiver can not 
 then maintain an action to set aside the assignment and to re- 
 cover the assets.^"^ 
 
 § 448. Receiver's title prior to that of judgment creditor 
 subsequently levying execution; title not defeated by de- 
 lay in taking possession ; preference over assignment ; date 
 of receiver's title. Since a receiver, in proceedings supple- 
 mentary to execution, acquires title to the debtor's property 
 by virtue of his order of appointment, which order divests 
 all the title and interest of the debtor and vests it in the re- 
 ceiver, his title takes precedence over that of a judgment cred- 
 itor who levies an execution subsequent to the receiver's ap- 
 pointment. The receiver may, therefore, maintain an action 
 for the recovery of property so levied upon and sold, and may 
 
 ^'6 Bostwick V. Menck, 40 N. Y., N. J. Eq., 291 ; Bergen v. Littell, 41 
 
 383; Olney v. Tanner, 10 Fed., 101, N. J. Eq., 18, 2 Atl., 614. But see 
 
 affirmed on appeal, 21 Blatchf., 540. Skinner v. Terhune, 45 N. J. Eq., 
 
 And a receiver, under the statutes 565, 19 Atl., Zll ; Boid v. Dean, 48 
 
 of New Jersey, may file a bill in his N. J. Eq., 193, 21 Atl., 618. 
 
 own name to set aside a fraudulent 57 Olney v. Tanner, 10 Fed., 101, 
 
 transfer of the judgment debtor's affirmed on appeal, 21 Blatchf., 540. 
 propertj'. Miller v. Mackenzie, 29
 
 CHAP. XII.] CREDITORS. 631 
 
 recover its value with interest from the date of sale. Nor is 
 the receiver's title to the property, or his right of action for 
 its recovery, defeated because of his delay in taking possession 
 until after levy of the execution, when no fraud or collusion 
 is shown, and when there is no evidence that the delay of the 
 receiver in taking possession was by the consent or direction 
 of the creditors at whose instance he was appointed. ^^ So 
 after the appointment of a receiver in behalf of the creditors 
 of an insolvent debtor, such debtor can not make a valid as- 
 signment of his property in the receiver's possession by way of 
 preference to certain creditors, since, the property or fund 
 being in the possession of the court for equitable distribution, 
 the debtor has no power to interfere therewith. ^^ And imder 
 the statutes of North Carolina, it is held that a receiver in this 
 class of cases becomes vested with the title of the judgment 
 debtor as of the date of service of a restraining order upon 
 the debtor, or, in the absence of such order, from the date of 
 filing and recording the order appointing a receiver.^^ 
 
 § 449. Title to choses in action as between receiver and 
 purchaser; title acquired by receiver under code of pro- 
 cedure; lis pendens. As regards the title to choses in action 
 of the debtor, as between the receiver and an assignee or pur- 
 chaser from the debtor, who purchases subsequent to the filing 
 of the creditor's bill and with notice thereof, it was held, under 
 the former chancery practice in New York, that the title ac- 
 quired by the receiver was superior to that of the purchaser, and 
 would prevent the latter from maintaining a bill in equity for 
 the enforcement of the chose in action. ^i Under the code of 
 procedure, it would seem that a receiver, appointed in supple- 
 mentary proceedings, acquires title to such property only of 
 the debtor as belonged to him at the time the proceedings were 
 
 SSFessenden v. Woods, 3 Bosw., 60 Rose v. Baker, 99 N. C, 323, 
 
 550. 5 S. E., 919. 
 
 •'>9 McGowan v. Myers, 66 Iowa, ^i Weed v. Smull, 3 Sandf. Ch., 
 
 99, 23 N. W., 282. 273.
 
 632 RECEIVERS. [chap. XII. 
 
 instituted.<52 And it is held in Rhode Island, that the filing of 
 a petition in eqnity for the appointment of a receiver, under the 
 insolvent law of the state, operates as lis pendens as to all prop- 
 erty and assets of the defendant debtor. When, therefore, af- 
 ter the filing and during the pendency of such a petition against 
 a copartnership, one member of the firm assigns his individual 
 property to a third person, the court may require such partner 
 and his assignee to convey the property so assigned to the re- 
 ceiver.^3 
 
 § 450. Receiver takes no title to income of inalienable 
 trust fund accruing after appointment. An order appoint- 
 ing a receiver in a creditor's suit does not invest him with title 
 to any part of the income of a trust fund, to accrue to the 
 debtor after the date of the receiver's appointment, which fund 
 is devised to the debtor and is inalienable in his hands.^^ And 
 in New York, a receiver appointed in proceedings supple- 
 mentary to execution can not maintain an action in the nature 
 of a creditor's suit to recover the interest of the judgment 
 debtor as a beneficiary in a trust fund, the trust having been 
 created by a person other than the debtor, nor can the receiver 
 reach the surplus of such fund, beyond what is required for the 
 support of the beneficiary.^^ 
 
 § 451. Receiver takes estate by curtesy in New York, 
 and may recover rents. In New York, where the common- 
 law estate by curtesy is still recognized, it is held that the es- 
 tate thus acquired by the husband upon the death of his wife 
 intestate after issue born, is such an estate or interest as 
 will pass to a receiver of the husband, on proceedings against 
 him by a judgment creditor. And the receiver is entitled to 
 recover the rent due on account of such estate at the period 
 
 62 Campbell v. Genet, 2 Ililt., 290. 65 Campbell v. Foster, 35 N. Y., 
 
 63 Petition of Arnold, 15 R. I., 361; McEwen v. Brewster, 17 Hnn, 
 15, 23 Atl., 31. 223. See, also, Manning v. Evans, 
 
 64 Graff V. Bonnett, 31 N. Y., 9, 19 Hun, 500. 
 :..ffirming S. C, 2 Rob. (N. Y.), 
 
 54.
 
 CHAP. XII. J 
 
 CREDITORS. C33 
 
 of his appointment, and all rent accruing afterward and until 
 the expiration of his receivership. ^^ 
 
 § 452. Effect of debtor's death before appointment ac- 
 tually made. Under the code of procedure in North Caro- 
 lina, when a receiver is appointed in supplementary proceed- 
 ings in aid of a judgment creditor, but the debtor dies before 
 the appointment is actually made, the receiver does not acquire 
 title to the debtor's effects, and the judgment creditor does 
 not become entitled to any priority therein, the laws of the 
 state having fixed the distribution of the assets of a deceased 
 among his creditors.^*^ 
 
 66 Beamish v. Hoyt, 2 Rob. (N. 67 Rankin v. Minor, 72 N. C, 424. 
 
 Y.), 307.
 
 634 RECEIVERS. [chap. XII. 
 
 III. Of the Receiver's Functions and Rights of Action. 
 
 § 453. Functions and duties fixed by order of court; what usually in- 
 cluded. 
 
 454. Receiver a trustee for creditors; may sue to set aside fraudu- 
 
 lent transfers; parties defendant in such suit; may remove 
 cloud; may not enforce trust; when fraudulent conveyance 
 not set aside. 
 
 455. Receiver's rights of action limited to extent necessary to 
 
 satisfy judgments; can not unite rights of subsequent 
 creditors with former action. 
 
 456. Receiver estopped by estoppel of creditor. 
 
 457. Receiver can not take forcible possession of property assigned 
 
 to third person; rights of property to be determined by 
 action. 
 
 458. In action by receiver to recover property assigned, when as- 
 
 signees allowed to retain possession; when receiver refused 
 injunction and receiver. 
 
 459. Allegations necessary in action by receiver to set aside fraudu- 
 
 lent assignment; debtor a proper party defendant; effect of 
 order. 
 
 460. Receiver can not recover property assigned in trust for pay- 
 
 ment of debts, when trust partly fulfilled. 
 
 461. Priority as between different judgment creditors. 
 
 462. Receivers in aid of proceedings in bankruptcy. 
 
 463. Receiver of corporation appointed in creditor's suit can not 
 
 enforce subscription by shareholder. 
 
 464. In action by receiver on notes, defendant can not set off judg- 
 
 ment against receiver on note of debtor. 
 464a. Receiver entitled to letters patent; effect of sale; membership 
 in exchange. 
 
 465. Receiver may maintain action for proceeds of note in hands 
 
 of third parties, applied on judgment against debtor. 
 
 466. Interest devised to testator can not be divested on mere petition 
 
 or application. 
 
 467. Action against debtor for conversion of property; mortgage of 
 
 chattels; receiver can not maintain action for money received 
 by debtor after appointment. 
 
 468. Action by receiver to recover usurious payments. 
 
 469. Acquiescence in sheriff's sale by creditor, effect of on action 
 
 by receiver. 
 
 470. Appointment of receiver can not be questioned in action by 
 
 receiver; rents received from sub-tenants of debtor by re- 
 ceiver should go to landlord. 
 
 471. Receiver appointed by one federal court can not sue in another 
 
 to recover securities belonging to debtor. 
 471c. Effect of death of parties or of receiver; practice in such case.
 
 CHAP. XII.] CREDITORS. 635 
 
 § 453. Functions and duties fixed by order of court; 
 what usually included. In appointing receivers over the 
 property and effects of a debtor, upon the application of his 
 judgment creditors, it is usual for the order of appointment to 
 fix in general terms the functions and duties of the receiver, 
 and these are subject to modification or enlargement by fur- 
 ther order of court, from time to time, as the exigencies of the 
 case may demand. These functions usually embrace the re- 
 ceiving of whatever property and effects may belong to the 
 debtor; the collection of debts and demands due to him, and 
 the prosecution of suits for this purpose when necessary; and 
 the payment into court of the proceeds, to be applied in satis- 
 faction of the judgment in aid of which he was appointed. 
 And under the rules of court prevailing under the former chan- 
 cery practice in New York, a receiver appointed in aid of a 
 creditor's bill was vested with a general power to sue for all 
 demands due to the debtor. And it would seem that he might 
 institute such actions siw motii, merely obtaining the consent 
 of the creditors for his own protection as to the question of 
 costs. ^^ 
 
 § 454. Receiver a trustee for creditors; may sue to 
 set aside fraudulent transfers; parties defendant in such 
 suit; may remove cloud; may not enforce trust; when 
 fraudulent conveyance not set aside. As regards the gen- 
 eral functions and rights of action of a receiver in proceedings 
 supplementary to execution under the New York code of pro- 
 cedure, and in other states which have adopted the same prac- 
 tice, the established doctrine is, that such receiver is not the 
 mere agent or representative of the debtor, but occupies the 
 relation of a trustee for the creditors in whose behalf he is 
 
 68 Green v. Bostwick, 1 Sandf. maintain an action for the partition 
 
 Ch., 185. As to the right of a re- of real estate of the judgment 
 
 ceiver appointed in proceedings sup- debtor, see, Dubois v. Cassidy, 75 
 
 plementary to execution, under the N. Y., 298. 
 New York code of procedure, to
 
 636 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 appointed.^^ He is, therefore, entitled to enforce the rights of 
 such creditors to the extent necessary for the satisfaction of 
 their demands.''^ And for this purpose, he may institute ac- 
 tions in his own name to set aside fraudulent assignments or 
 transfers of his property, made by the debtor with a view of 
 defeating his creditors, and may recover the property so trans- 
 ferred for the purpose of applying it in satisfaction of the 
 judgments.'^^ So the receiver may maintain an action to set 
 aside a void chattel mortgage or to recover the property or 
 
 69Bostwick V. Menck, 40 N. Y., 
 383. See Same v. Same, 4 Daly, 68, 
 reversing S. C, 8 Ab. Pr., N. S., 
 169; Farmers' Loan & Trust Co. v. 
 Minneapolis Engine & Machine 
 Works, 35 Minn., 543, 29 N. W., 
 349. In Porter v. Williams, 9 N. 
 Y., 142, it is said that such a re- 
 ceiver is a "trustee for all parties," 
 but the language would seem to be 
 too broad, in view of the decision 
 in Bostwick v. Menck, which limits 
 the receiver's functions to those of 
 a representative or trustee for the 
 creditors, in whose behalf he was 
 appointed, excluding others who had 
 not joined in the proceedings. And 
 see, post, § 539a. 
 
 70 Bostwick V. Menck, 4 Daly, 68, 
 reversing S. C, 8 Ab. Pr., N. S., 
 169; Manley v. Rassiga, 13 Hun, 
 288. 
 
 71 Porter v. Williams, 9 N. Y., 
 142; Bostwick v. Menck, 40 N. Y., 
 383; Mandeville v. Avery, 124 N. 
 Y., 376, 26 N. E., 951; Manley v. 
 Rassiga, 13 Hun, 288; Hamlin v. 
 Wright, 23 Wis., 491 ; Hill v. West- 
 ern & A. R. Co., 86 Ga., 284, 12 S. 
 E., 635; Prescott v. Pfeiffer, 57 
 Mich., 21, 23 N. W., 477; Walsh v. 
 Byrnes, 39 Minn., 527, 40 N. W., 
 831; Pender v. Mallett, 123 N. C, 
 57, 31 S. E., 351. And see Cham- 
 
 berlain V. O'Brien, 46 Minn., 80, 
 48 N. W., 447. But see, contra, 
 Higgins V. Gillesheiner, 26 N. J. 
 Eq., 308. And see, ante, § 320. The 
 earlier doctrine of the supreme 
 court of New York was directly 
 the reverse, and it was held that 
 the receiver's functions were lim- 
 ited to the control of property of 
 which the debtor had possession, 
 either actual or constructive, at the 
 time of appointment, and that he 
 could not maintain an action to set 
 aside a fraudulent assignment made 
 by the debtor prior to the receiver- 
 ship, or to recover the property so 
 assigned, and that the remedy must 
 be sought in an action by the judg- 
 ment creditor himself. Seymour 
 V. Wilson, 16 Barb., 294; Hayner v. 
 Fowler, 16 Barb., 300. Seymour v. 
 Wilson was, however, reversed by 
 the court of appeals on other 
 grounds (14 N. Y., 567), the court 
 not passing upon any of the points 
 decided below. And the opinion 
 of the court of appeals in Porter v. 
 Williams, 9 N. Y., 142, may be re- 
 garded as setting the question at 
 rest in New York, and firmly es- 
 tablishing the doctrine enunciated 
 in the text. The court, Willard, 
 J., say, p. 150: "The act which the 
 receiver seeks to avoid, in this case,
 
 CHAP. XII.] CREDITORS. 
 
 637 
 
 its value.'^2 And in such case, the pendency of the supple- 
 mentary proceedings is no bar to the receiver's action to set 
 aside the fraudulent conveyance, since the object of the former 
 proceeding is to reach such property of the judgment debtor as 
 is not claimed adversely, while the purpose of the latter is to 
 reach property claimed adversely and which can not be reached 
 by the supplementary proceedings. And in such an action, it 
 is proper to join all the fraudulent grantees as defendants, since 
 the fact of their being accessory to the debtor's fraudulent at- 
 tempt to place his property beyond reach of his creditors, gives 
 them such a common connection with the subject-matter of the 
 suit that they may all be joined as defendants, although they 
 purchased at different times, and each is charged with the 
 fraud in his own purchase only.'^^ Such a receiver may also 
 maintain an action to remove a cloud upon the title of the 
 judgment debtor, and to sell the property on execution under 
 the judgment upon which the receiver was appointed.'^^ ^or 
 is it necessary to enable the receiver to maintain an action 
 to set aside a fraudulent transfer of his property by the debtor 
 that the receiver should be invested with the legal title to such 
 property, since, for the purposes of the action, he stands in 
 the place of and represents the judgment creditor. The right 
 
 was an illegal act of the debtor. He stands, in this respect, in the 
 The object of the action is to set same condition as the receiver of an 
 aside an assignment made by the insolvent corporation, or as an exec- 
 debtor with intent, as alleged, to utor or administrator, and like 
 defraud the creditor under whose them can assail the illegal and 
 judgment and execution the plain- fraudulent acts of the debtor whose 
 tiff was appointed receiver, and the estate he is appointed to adminis- 
 other creditors of the assignor. ten" 
 
 Such conveyance was void at com- '^~ Stephens v. Perrine, 143 N. 
 
 mon law, and is expressly forbidden Y., 476, 39 N. E., 11. And see 
 
 ty the statute. It is void as against Richards v. Haliday, 92 Fed.. 798. 
 
 the creditors of the party making 73 Hamlin v. Wright, 23 Wis., 
 
 it, though good as between him and 491. 
 
 his grantee. The plaintiff, repre- "^4 Wright v. Nostrand, 94 N. Y., 
 
 senting the interest of the creditors, 31. And see this case as to the 
 
 has a right to invoke the aid of the requisite proof of the receiver's ap- 
 
 court to set aside the assignment. pointment in such case.
 
 638 RECEIVERS. [CKAP. XII. 
 
 to maintain such an action does not depend upon any succes- 
 sion by the receiver to the title of the debtor, but upon the 
 equity of the creditor to have a conveyance set aside which 
 is invahd as to him, aUhough effectual as a cloud to prevent 
 the application of the property to the satisfaction of his judg- 
 ment. "^^ Nor is the receiver's right of action confined to set- 
 ting aside the fraudulent transfer, but he may follow the fund 
 or proceeds of the sale of the property thus transferred and 
 may reclaim it as against any person other than a bona fide 
 holder.''^ And when, under the laws of the state, any cred- 
 itor of a defendant in attachment may intervene in the suit 
 and contest the grounds for attachment, a receiver of such a 
 defendant, appointed in a judgment creditor's suit, is regard- 
 ed as a representative of creditors to the extent that he may 
 intervene in their behalf in like manner as the creditors them- 
 selves.'^^ But while the right of action of a receiver in a judg- 
 ment creditor's suit to set aside fraudulent transfers of his 
 property by the debtor is well established, he is, like any other 
 suitor, limited to the appropriate remedies, and he may not 
 maintain a bill in equity for this purpose when full relief may 
 be had at law.'^^ But the receiver is not the representative of 
 the creditor for the purpose of enforcing a trust created by 
 statute in favor of the creditors of a debtor who pays t.he con- 
 sideration for lands which are conveyed to another, since, in 
 such case, the debtor acquires no legal or equitable interest in 
 the land, and the creditor may proceed directly to enforce the 
 trust.79 
 
 § 455. Receiver's rights of action limited to extent nec- 
 essary to satisfy judgments ; can not unite rights of subse- 
 quent creditors with former action. It is further to be ob- 
 served, with reference to the functions of receivers in the class 
 
 75 Dunham v. Byrnes, 36 Minn., "SPrescott v. Pfeiffer, 57 Mich., 
 
 106, 30 N. W., 402. 21. 23 N. W., 477. 
 
 'J'S Mandeville v. Avery, 124 N. "^9 Underwood v. Sutcliffe, 77 N. 
 
 Y., 376, 26 N. E., 951. V., 58. 
 
 "" Paine v. Holliday, 68 Miss., 
 298, 8 So., 676.
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 639 
 
 of actions under consideration, and their right of action to 
 set aside fraudulent assignments made by the debtor, that the 
 receiver is regarded as a trustee for the creditors only in 
 whose behalf he has been appointed, and that he can maintain 
 his action only to the extent necessary to satisfy their judg- 
 ments, and no further. His rights of action in this respect are 
 precisely such as the creditors themselves might have main- 
 tained, and no more; and since he succeeds to their rights of 
 action, he can maintain a suit to set aside assignments in fraud 
 of their rights, only to the extent necessary to satisfy their de- 
 mands and costs, and has no right to interfere with the trans- 
 fer beyond this.^^ And when the receiver, after instituting an 
 action to set aside a fraudulent conveyance made by the debtor, 
 
 SOBostwick V. Menck, 40 N. Y., 
 383. See, also, Olney v. Tanner, 
 10 Fed., 101, affirmed on appeal, 21 
 Blatchf., 540; Goddard v. Stiles, 90 
 N. Y., 199; Righton v. Pruden. 7Z 
 N. C, 61 ; Young v. Clapp, 147 Til., 
 176, 32 N. E.. 187, 35 N. E., 372; 
 Russell V. Chicago Trust & Sav- 
 ings Bank, 139 111., 538, 29 N. E., 
 37; Holbrook v. Ford, 153 111.. 633, 
 39 N. E., 1091, 27 L. R. A., 324, 46 
 Am. St. Rep., 917. Bostwick v. 
 Menck, 40 N. Y., 383, was an ac- 
 tion brought by a receiver appointed 
 in behalf of a judgment creditor to 
 set aside a fraudulent assignment 
 of the debtor's property. The judg- 
 ment on which the receiver was ap- 
 pointed was for about $200, and the 
 decree directed the defendant to 
 pay over to the receiver all the 
 avails of the assigned property, 
 amounting to $15,000, except such 
 as he had distributed under the as- 
 signment before the suit was 
 brought. The judgment was re- 
 versed on appeal, Grover, J., hold- 
 ing as follows, p. 385 : ". . . The 
 only right of the receiver is, there- 
 
 fore, as trustee of the creditors. 
 The latter have the right to set 
 aside the transfer and to recover 
 the property from the fraudulent 
 holder, and the receiver is, by law, 
 invested with all the rights of all 
 (he creditors represented by him in 
 this respect. It is clear that the 
 right of the receiver representing 
 the creditors, and acting in their 
 behalf, is no greater than that of 
 the creditors. What, then, are the 
 legal and equitable rights of a cred- 
 itor as to property fraudulently 
 transferred? Manifestly only to 
 treat as void and set aside such 
 transfer, so far as shall be neces- 
 sary to satisfy his debt and costs. 
 He has no right to interfere with 
 (he transfer beyond this. When his 
 debt and costs are paid, the transfer 
 is as valid as to him as to other per- 
 sons. If this be the extent of the 
 rights of a single creditor, and all 
 that can be conferred upon a re- 
 ceiver appointed by law to act as his 
 trustee, it is clear that the right is 
 not enlarged by the appointment 
 of the same person as receiver for
 
 640 RECEIVERS [chap. XII. 
 
 is appointed receiver of the estate of the same debtor in sub- 
 sequent proceedings by other judgment creditors, he can not 
 unite the rights of such subsequent creditors with the former 
 action by a supplemental bill or complaint.^i So the receiver 
 being appointed only for the benefit of the judgment creditor 
 instituting the proceeding, his right of action to recover the 
 debtor's property terminates when the judgment upon which 
 he was appointed is paid, and he then becomes functus ofHcio.^^ 
 And it is improper to direct the receiver to pay other judg- 
 ments than those upon which he was appointed, without no- 
 tice to the debtor, and with no opportunity to him to be heard, 
 since the receiver does not represent the debtor as to such other 
 judgments. ^^ 
 
 § 456. Receiver estopped by estoppel of creditor. The 
 functions and powers of the receiver, as regards rights of ac- 
 tion to set aside fraudulent transfers made by the debtor, be- 
 ing limited to such rights of action as the judgment creditor 
 might himself have maintained, he can not effect a result which 
 
 several creditors. The receiver is was not the purpose of this provi- 
 
 then trustee for all, clothed with sion of the code to seize upon and 
 
 power to set aside transfers fraudu- sequestrate the judgment debtor's 
 
 lent as against the demands repre- estate for the benefit of all his crcd- 
 
 sented by him, only to an extent itors. Its purpose was to furnish a 
 
 sufficient to satisfy such demands cheap and easy mode of discover- 
 
 and costs. When this is done his ing the concealed property of a 
 
 duties, and consequently his powers judgment debtor, and applying it 
 
 and right to act further in behalf to the satisfaction of the judgment 
 
 of the creditors, cease as to prop- or judgments in which proceedings 
 
 erty that has been transferred by were taken. When property enough 
 
 the debtor. As to property owned to satisfy such judgment or judg- 
 
 by the debtor at the time of the ments is reached, the purpose of 
 
 appointment, we have seen that the the appointment of a receiver is 
 
 rule is different; that, as to such accomplished; that officer owes 
 
 property, the appointment vests the no duty to other creditors of the 
 
 legal title to the whole in the re- debtor." 
 
 ceiver, and he may consequently 81 Bostwick v. Menck, 4 Daly, 68, 
 
 assert his title thereto without re- reversing S. C, 8 Ab. Pr., N. S., 
 
 gard to the amount of the judg- 169. 
 
 ments upon which he has been 82 Righton v. Pruden, 73 N. C, 61. 
 
 appointed." And Mr. Justice James, 83 Goddard v. Stiles, 90 N Y., 199. 
 in the same case, p. 389, says : "It
 
 CHAP. XII.] CREDITORS. 641 
 
 the creditor himself could not have effected; since he stands 
 in the place of the judgment creditor, and is limited by any acts 
 ■or conduct on his part which would have barred proceedings 
 by the creditor himself. And when the creditor is estopped 
 by his own act from proceeding against the debtor or his as- 
 signee, to set aside a fraudulent assignment of the debtor's 
 property, such estoppel applies equally as against the receiver, 
 appointed in aid of such creditor. For example, when a debtor 
 purchases property with the intention of assigning it to de- 
 fraud the vendor, and carries this intention into execution, if 
 the vendor, instead of disaffirming the sale and suing for the 
 wrongful conversion, elects to affirm the contract and sues 
 for the purchase price, after judgment thereon and the appoint- 
 ment of a receiver in aid of the judgment, the receiver will 
 not be allowed to maintain an action to set aside the fraudulent 
 assignment.^'* 
 
 § 457. Receiver can not take forcible possession of prop- 
 erty assigned to third persons; rights of property to be 
 determined by action. Since the receiver, in this class of 
 cases, is vested with the same rights of action to set aside 
 fraudulent transfers by the debtor as the creditors whom he 
 represents, he can not take, or authorize others to take, forcible 
 possession of property previously assigned by the debtor to a 
 third person, when the property was actually transferred under 
 a sale valid as between the debtor and the vendee. The only 
 right of the receiver, in such a case, is a right of action to set 
 aside the transfer; and it constitutes no defense to an action 
 of trespass, brought by the purchaser of the property from 
 the debtor, that the defendants, who had taken forcible posses- 
 sion of the property, acted under the direction of the debtor's 
 receiver.SS fhe receiver can not question such a transfer as 
 
 84 Kennedy v. Thorp, 51 N. Y., Richards v. Allen, 3 E. D. Smith, 
 174. And see as to the doctrine of 399. 
 
 ■estoppel in actions by a receiver, 85 Brown v. Gilmore, 16 How. .Pr.. 
 
 527. 
 
 Receivers — 41.
 
 642 RECEIVERS. [chap. XII. 
 
 representing the debtor, since the debtor himself can not im- 
 peach his own completed act, however fraudulent as against 
 creditors. Nor can the receiver authorize the forcible taking 
 possession of the property as representing the judgment cred- 
 itors, since the property, even though transferred to delay and 
 hinder such creditors, does not for that reason belong to them, 
 or to their representative, so as to give a right to its imme- 
 diate and absolute control, before action brought to set aside 
 the transfer.^^ So when the debtor is in possession of proper- 
 ty, belonging to or claimed by a third person under a title ap- 
 parently valid, and which is held by the debtor as his agent, 
 it is improper by order of court to direct the delivery of such 
 property to the receiver, since the courts will not thus sum- 
 marily dispose of or determine the title to property claimed 
 by third parties, but will leave the parties to the appropriate 
 mode of recovering the property, in an action by the receiver 
 against the person claiming title.^"^ So where the property of a 
 debtor upon which apparently valid liens are asserted by third 
 persons is claimed by a receiver, the court should not sum- 
 marily order such property to be delivered to the receiver but 
 he should be required to resort to the appropriate action for 
 its recovery. ^^ And where a receiver has been appointed in a 
 federal court, he is not entitled thereby to maintain a petition 
 in the receivership proceeding in the nature of a plenary suit 
 in equity for the recovery of purely legal demands against a 
 person not a party to the receivership proceeding but his rem- 
 edy in such case should be at law.^^ And when the court is 
 fully authorized to appoint a receiver of the debtor's estate, 
 who might bring an action to test the title to property in the 
 hands of a third person, claiming title from the debtor, it is 
 improper to determine such disputed cjuestion of title upon a 
 
 SG Brown v. Gilmore. 16 How. Pr, 12 Wyo., 492, 76 Pac, 674, 78 Pac, 
 
 527. 1083. 
 
 8" Rodman v. Henry, 17 N. Y., 80 Whelan v. Enterprise T. Co., 
 
 482. 164 Fed., 95. 
 
 88 First National Bank v. Cook,
 
 CHAP. XII.] CREDITORS. 643 
 
 summary application, the remedy by the appointment of a re- 
 ceiver being the appropriate course to pursue.^^ 
 
 § 458. In action by receiver to recover property as- 
 signed, when assignees allowed to retain possession ; when 
 receiver refused injunction and receiver. When the re- 
 ceiver of a judgment debtor brings an action to set aside an 
 assignment made by the debtor for the benefit of his creditors, 
 it is proper for the court to permit the assignees to continue 
 in possession, and to dispose of the property and collect the 
 debts, holding the proceeds subject to the order of the court, 
 when no fraud is shown as against the assignees, and when 
 they are perfectly solvent and able to respond to any liability 
 on account of the property assigned. The assignees, under 
 such circumstances, will be regarded in the light of special re- 
 ceivers, and bound to abide by such further order as the court 
 may make in the premises. ^i And when the receiver insti- 
 tutes an action for the recovery of property assigned by the 
 debtor, under a voluntary assignment for the benefit of his 
 creditors, he is not entitled to an injunction and a receiver of 
 the assigned property, if he fails to show that the assignment 
 was made to delay, hinder or defraud the creditors. ^2 
 
 § 459. Allegations necessary in action by receiver to 
 set aside fraudulent assignment ; debtor a proper party de- 
 fendant; effect of order. To entitle the receiver to main- 
 tain an action to set aside an assignment of the debtor's prop- 
 erty for the benefit of his creditors, it is not sufficient to allege 
 in his pleadings merely that he was appointed receiver in the 
 creditor's suit, but the judgment and other facts necessary to 
 sustain the creditor's suit should be set forth. In other words, 
 the receiver must state the equities of the parties whom he rep- 
 resents, in order to maintain such an action, since he is only 
 clothed with the same rights of action which might have been 
 
 90 Teller v. Randall, 40 Barb., 242. 92 Bostwick v. Elton, 25 How. Pr., 
 
 91 Spring v. Strauss, 3 Bosw., 607. 362.
 
 644 RECEIVERS. [chap. XII. 
 
 maintained by the creditors whose representative he is.^^ And 
 in an action by the receiver to remove a cloud from the title of 
 property of the debtor and to subject it to execution, the pro- 
 duction of an order appointing the receiver, made by a court 
 of competent jurisdiction and reciting the facts necessary to 
 give the court jurisdiction, affords conclusive evidence of the 
 regularity of the order and prima facie evidence of the facts 
 necessary to confer jurisdiction. ^"^ And in an action brought 
 by such a receiver, to set aside an alleged fraudulent assign- 
 ment and conveyance of the debtor's property to a third per- 
 son, the debtor himself is a proper party defendant.^^ 
 
 § 460. Receiver can not recover property assigned in 
 trust for payment of debts, when trust partly fulfilled. 
 It has been held that where a debtor assigns his property to one 
 of his creditors, upon condition that he shall deduct his own 
 demand out of the proceeds, and then apply the balance in 
 payment of the other creditors, and the assignee sells and 
 transfers the property to a third person upon the same condi- 
 tion and subject to the same trust, and such purchaser fulfills 
 the duty in part, a receiver of the debtor's effects, appointed in 
 behalf of a judgment creditor, can not maintain an action 
 against the purchaser for a balance of the fund remaining in 
 his hands. In such case, it being the plain duty of the pur- 
 chaser to distribute the fund among the creditors, the receiv- 
 er acquires no right of action for its recovery.^^ 
 
 § 461. Priority as between different judgment creditors. 
 As between different judgment creditors of the same debtor, 
 one of whom, by his superior diligence, obtains possession of . 
 or a charge upon the debtor's property, equity will not inter- 
 fere in behalf of a more dilatory creditor to disturb such pos- 
 session. ^"^ And this is equally true, even though the judgment 
 
 93 Coope V. Bowles, 42 Barb., 87; 96 Smith v. Woodrufif. 1 Hilt., 462. 
 S. C, 28 How. Pr., 10. 97 Bates v. Brothers, 2 Sm. & G., 
 
 94 Wright v. Nostrand, 94 N. Y., 509. See, also. Parks v. Sprinkle, 
 31. 64 N. C, 637. And see, ante, § 439&, 
 
 95 Palen v. Bushnell, 18 Ab. Pr., 
 301 ; Allison v. Weller, 3 Hun, 608.
 
 CHAP. XII.] CREDITORS. 645 
 
 cf the creditor obtaining such priority is later in date than 
 the others. ^8 It is held, therefore, in a race of dihgence be- 
 tween judgment creditors for the property of their debtor, that 
 the one who first institutes a creditor's suit and procures a 
 receiver therein takes priority, and is entitled to the property 
 of the debtor not previously levied upon, as against a creditor 
 who has not yet obtained a receiver.^^ But when judgment 
 creditors claim a lien upon a fund in the hands of the receiver 
 of their debtor, and petition the court for an order appropriat- 
 ing the fund in payment of their judgment, the court will not 
 grant such order in limine and before the other creditors in- 
 terested in the fund can be heard. It is, however, proper to 
 restrict the receiver from paying out the fund, in such case, 
 without notice to the creditors claiming the lien. And the 
 creditors claiming such lien may be authorized to institute an 
 action against the receiver to establish their rights.^ So when, 
 pending an attachment suit, a creditor's bill is filed against 
 the defendants, under which receivers are appointed over their 
 effects, plaintiffs in the attachment, after obtaining judgment, 
 can not, by a summary rule against the receivers, compel pay- 
 ment in full of their demand out of funds of the receivership, 
 before a full hearing as to the priorities of all parties in in- 
 terest.2 
 
 § 462. Receivers in aid of proceedings in bankruptcy. 
 Under the English practice, receivers are sometimes appointed 
 in aid of creditors who have instituted proceedings in bank- 
 ruptcy against a debtor; and a receiver thus appointed, upon 
 the application of any one creditor, is regarded as appointed 
 equally for the benefit of all. Such a receiver, therefore, can 
 not rightfully permit a payment to be made to the creditor 
 
 ^8 Bates V. Brothers, 2 Sm. & G., New York code against their 
 
 509. debtor, in property which the 
 
 9^ Parks V. Sprinkle, 64 N. C, 637. debtor had assigned to a third 
 
 And see, as to the relative rights party, Conger v. Sands, 19 How. 
 
 and liens of different judgment Pr., 8. 
 
 creditors who have instituted sup- 1 Hubbard v. Guild, 2 Ducr, 685. 
 
 plementary proceedings under the 2 Lowe v. Stephens, 66 Ga., 607.
 
 646 RECEIVERS. [chap. XII. 
 
 on whose application he was appointed, in preference to the 
 remaining creditors, and such a payment will be held fraudu- 
 lent and void as against the trustee of the creditors in the 
 proceedings in bankruptcy.^ 
 
 § 463. Receiver of corporation appointed in creditor's 
 suit can not enforce subscription by shareholder. It has 
 been elsewhere shown, in discussing the subject of receivers 
 of insolvent corporations appointed for winding up their affairs 
 under the statutes of various states, that such receivers are fre- 
 quently vested with the power of making assessments for and 
 collecting unpaid balances due from delinquent shareholders 
 upon their subscriptions to the capital stock of the corpora- 
 tion.^ But this power or right of action is derived wholly from 
 statute, and does not exist in the absence of statutory author- 
 ity. And it is held in New York, that a receiver of a corpora- 
 tion appointed on a creditor's bill, and vested with only the 
 ordinary powers of receivers in creditors' suits, can not, by 
 virtue of his appointment, maintain a bill in equity against a 
 shareholder to enforce payment of a balance due upon his sub- 
 scription to the capital stock of the corporation.^ 
 
 § 464. In action by receiver on notes, defendant can not 
 set off judgment against receiver on note of debtor. In an 
 action by the receiver of an insolvent debtor to recover upon 
 notes due to the debtor's estate, the maker of such notes can 
 not set off against the action a judgment which he has obtained 
 against the receiver upon a note executed by the judgment 
 debtor; since, to allow such set-off, would be to give the de- 
 fendant a preference over other creditors. His judgment 
 against the receiver is regarded only as a legal determination 
 of the amount and validity of his claim, and not an adjudica- 
 tion giving it preference over others.^ 
 
 3 Ex parte Jay, L. R., 9 Ch. App., corporation appointed in behalf of 
 133. a judgment creditor under the 
 
 4 See § 324, ante. laws of New York, Angell v. Sils- 
 
 5 Mann v. Pentz, 3 N. Y., 41.S. bury, 19 How. Pr., 48. 
 
 And see, as to the functions and G Clark ^. Brockway, 3 Keyes, 13; 
 
 powers of a receiver of a moneyed S. C, 1 Ah. Ct. Ap. Dec, 351.
 
 CHAP. XII.] 
 
 CREDITORS. 
 
 647 
 
 § 4(i4a. Receiver entitled to letters patent; effect of 
 sale; membership in exchange. A receiver over an insol- 
 vent debtor, under the statutes of Rhode Island, is entitled. 
 by virtue of his appointment, to letters patent owned by the 
 debtor, and the court may order the debtor to make a convey- 
 ance to the receiver, if necessary to fully invest him with title 
 thereto.'^ But, in the absence of such a conveyance, it is held 
 that a sale and assignment by a receiver of the interest of the 
 judgment debtor in letters patent confers no title upon the pur- 
 chaser, such an assignment not being a wa'itten instrument 
 signed by the owner of the patent, as required by the act of 
 
 Clark V. Brockway was an action 
 by the receiver of the estate of one 
 Sherman, to recover upon notes 
 executed by defendant to the as- 
 signees of Sherman, and which had 
 passed from the assignees to the 
 receiver on the assignment being 
 set aside as void against creditors. 
 Defendant had obtained a judg- 
 ment on a note of Sherman's held 
 by him, and a further judgment 
 against the receiver, directing the 
 latter to pay such judgment out of 
 the assets in his hands. The court 
 below denied the right of set-off 
 and gave judgment for the receiver 
 for the amount of the notes, and 
 the judgment was affirmed on 
 appeal. Hunt, J., says, p. 14: 
 "The defendant, in his suit against 
 the present plaintiff, as receiver, 
 and others, recovered a judgment 
 directing the receiver to pay the 
 amount of the notes held by him, 
 $345.48, with the costs, and he 
 claims that judgment to be deci- 
 sive of the present suit. In this, I 
 think, he errs. His judgment is a 
 legal determination of the validity 
 of his claim, but it does not deter- 
 mine when it shall be paid, or 
 
 what, if any, shall be its preference 
 over other debts. By obtaining an 
 offset against the notes in suit, the 
 defendant would at once obtain 
 payment of his claim to that 
 amount, and this without regard 
 to the amount of debts or assets 
 applicable to the general settlement 
 of Wm. Sherman's affairs. He 
 might thus obtain a large propor- 
 tion or the whole of his debt, wiiile 
 others, equally entitled, might be 
 compelled to accept a much smaller 
 proportion. This the law does not 
 allow. Equality in the payment of 
 debts by a receiver is the rule of 
 law, unless, by diligence or for 
 some special reason, a preference 
 is declared of one creditor or of one 
 class over creditors generally. No 
 such circumstance exists in this 
 case, and the judgment is to be re- 
 garded as determining simply the 
 validity of the plaintiff's claim on 
 the notes held by him. His debt is 
 adjudged to be valid, but it must 
 take its chances of payment with 
 other valid debts in the general ad- 
 ministration of the estate of Wm. 
 Sherman." 
 7/m re Kcnch, 14 R. I., 571.
 
 648 RECEIVERS. [chap. XII. 
 
 congress, but a mere assignment by operation of law, and with- 
 out the action of the patentee or owner.^ But a receiver in 
 proceedings supplementary to execution, in New York, suc- 
 ceeds to the title of the judgment debtor in a certificate of mem- 
 bership in the New York Cotton Exchange, and may maintain 
 a suit to redeem such certificate from one to whom it has been 
 pledged.^ 
 
 § 465. Receiver may maintain action for proceeds of 
 note in hands of third parties, applied on judgment against 
 debtor. When a receiver of the efifects and estate of a 
 judgment debtor, appointed in different creditors' suits, be- 
 comes vested with the title to all the debtor's property imme- 
 diately upon the filing and recording of his order of appoint- 
 ment, he may maintain an action for the proceeds of a note 
 due to tht estate in the hands of third parties, notwithstand- 
 ing they have, subsequent to the appointment, procured an ex 
 parte order of court directing the note to be applied upon a 
 judgment which they hold against the debtor; since the title 
 to the note having vested in the receiver, it is not in the power 
 of the court to divest his title on an application to which he is 
 not a party.l^ 
 
 § 466. Interest devised to testator can not be divested 
 on mere petition or application. A receiver of a judgment 
 debtor can not, by mere motion or application to the court, 
 reach an interest in property of an inalienable nature, which is 
 vested in the debtor as cestui que trust, or devisee under a will. 
 And when a testator has devised his property to executors, in 
 trust to convert it into money and to divide it in certain shares, 
 one of which is to go to the debtor, the court will not grant 
 the receiver an order for the sale of such interest, upon a mere 
 application or petition for that purpose. If the creditors are 
 to derive any benefit from the provisions of the will, in such 
 
 8 Gordon v. Anthony, 16 Blatchf., 10 Rogers v. Corning, 44 Barb., 
 234. 229. 
 
 9 Powell V. Waldron, 89 N. Y., 
 3,28.
 
 CHAP. XII.] CREDITORS. 649 
 
 case, it must be by a proceeding to which the executor is a 
 party.ll 
 
 § 467. Action against debtor for conversion of proper- 
 ty ; mortgage of chattels ; receiver can not maintain action 
 for money received by debtor after appointment. A re- 
 ceiver appointed in a judgment creditor's suit would seem to 
 have the same rights of action against the debtor himself, for 
 the conversion of his property, as against strangers, and he 
 may, therefore, maintain an action for such conversion by the 
 debtor. But he acquires only such title as the debtor had at 
 the time of appointment, and if the debtor's title was a mere 
 equity of redemption in mortgaged chattels, and the receiver 
 neglects to redeem the property by paying off the mortgage, 
 until the right of the mortgagee becomes absolute, neither the 
 debtor, nor the plaintiff as his receiver, has any interest in the 
 property which can be the subject of a conversion, or sustain 
 an action by the receiver.12 And the receiver is not by virtue 
 of his appointment, invested with any title to property which 
 may be afterward acquired by the debtor ; he can not therefore, 
 maintain an action for the recovery of money received by the 
 debtor subsequent to the appointment.^^ 
 
 § 468. Action by receiver to recover usurious payments. 
 In New York, it is held that a receiver in a creditor's suit 
 may maintain an action for the recovery of usurious payments 
 made by the debtor to a third person ; since the receiver is the 
 representative, not merely of the debtor, but of the creditors, 
 and his title is, therefore, sufficient to maintain such an action. 
 And the judgment debtor is not a necessary party to such an 
 action. 1^ 
 
 § 469. Acquiescence in sheriff's sale by creditor, effect 
 of, on action by receiver. A receiver of a judgment debtor 
 can not maintain an action to recover back the value of prop- 
 
 11 Scott V. Nevius, 6 Duer, 672. 14 Pakn v. Bushnell, 18 Ab. Pr., 
 
 12 Gardner v. Smith, 29 Barb., 68. 301. 
 
 13 Graff V. Bonnett, 25 How. Pr., 
 470.
 
 650 RECEIVERS. [CIIAP. XII, 
 
 erty which has been sold at a sheriff's sale under executions 
 against the debtor, when the creditor, in whose behalf the re- 
 ceiver was appointed, was present by his attorney and request- 
 ed and acquiesced in the sale by the sheriff, but afterward pro- 
 cured the appointment of a receiver, on failing to obtain the 
 proceeds of such sale, which were diverted to the payment of 
 other executions in the hands of the sheriff.^^ 
 
 ^ 470. Appointment of receiver can not be questioned 
 in action by receiver; rents received from sub-tenants of 
 debtor by receiver should go to landlord. When a debtor 
 voluntarily appears in court, and consents to a receiver being 
 appointed over his estate and effects for the benefit of his 
 creditors, in an action instituted by such receiver to recover 
 upon a demand due to or for property owned by the debtor, the 
 defendant can not object to the irregularity in the receiver's 
 appointment, since, the party against whom the receiver was 
 appointed having consented to the proceeding and waived all 
 irregularities therein, it does not lie in the mouth of his debtor 
 or of third persons to question the regularity of such proceed- 
 ings.l^ Nor can the validity of the receiver's appointment be 
 assailed, collaterally, as in a suit brought by him against third 
 parties, if sufficient jurisdictional facts w^ere shown in the origi- 
 nal proceeding for his appointment to warrant the court in 
 the exercise of its jurisdiction ; since the judgment debtor being 
 concluded so long as the order is unreversed, third persons are 
 also concluded. 1'^ When a receiver over a judgment debtor re- 
 ceives rents from sub-tenants of the debtor, for the rental of 
 premises of which the debtor held a lease, such funds are 
 not subject to distribution among the creditors generally, but 
 are reserved for the landlord of the premises, wdiose equity is 
 superior to that of all other creditors. And in such a case, 
 
 15 Richards v. Allen, 3 E. D. 89 N. Y., 328; Green v. Bookhart, 
 Smith, 399. 19 S. C, 466. 
 
 16 Tyler v. Willis, 33 Barb., 327; i ' Whiulesey v. Frantz, 74 N. Y„ 
 S. C, sub nom. Tyler v. Whitney, 456. 
 
 12 Ab. Pr., 465 ; Powell v. Waldron,
 
 CHAP. XII.] CREDITORS. 651 
 
 the receiver will be directed to pay the money to the landlord, 
 or to his representative, upon petition showing the facts. ^^ 
 
 § 471. Receiver appointed by one federal court can not 
 sue in another to recover securities belonging to debtor. 
 
 It is held that a receiver appointed on a creditor's bill in a cir- 
 cuit court of the United States, having no right or authority 
 except such as is conferred upon him by the order of his ap- 
 pointment, can not maintain an action in a federal court in an- 
 other district to compel the surrender of certain securities of 
 the debtor held by defendant, to be applied in satisfaction of the 
 judgment in aid of which the receiver was appointed. Such a 
 receiver, it is held, has no extra-territorial jurisdiction or 
 rights of action, and the federal court by which he was ap- 
 pointed is treated, for the purposes of such a case, as a court 
 of local and limited jurisdiction. Nor is his right of action, 
 under such circumstances, enlarged by the fact that, under 
 the statutes of the state in which he was appointed, receivers 
 on creditors' bills are vested with full title, and have full au- 
 thority to maintain suits; since the laws of the state can not 
 enlarge or alter the effect of the order of the federal cour^, 
 nor enlarge the jurisdiction of that court.^^ 
 
 18 Riggs V. Whitney, 15 Ab. Pr., ferred by an order of the circuit 
 388. court of the United States, for the 
 
 19 Brigham v. Luddington, 12 eastern district of Wisconsin, can 
 Blatchf., 237. This was a bill filed not maintain this suit in this dis- 
 in the circuit court of the United trict. The opinion of the supreme 
 States, for the southern district of court in Booth v. Clark, 17 How- 
 New York, by a receiver appointed ard, 322, seems to me fully to sus- 
 on a judgment creditor's bill in the tain this objection. That was an 
 circuit court of the United States, action in the circuit court for the 
 for the eastern district of Wiscon- District of Columbia, by a receiver 
 sin, seeking a recovery of certain appointed under a creditor's bill 
 securities of the judgment debtor, filed in a court of equity of the state 
 and to apply them in satisfaction of of New York. He was held not 
 the judgment. Mr. Justice Wood- entitled to sue. The suggestion of 
 ruff says, p. 242: "I notice, with- counsel, that the circuit court for 
 out enlarging upon the stibject. a this district and the circuit court 
 further objection, viz., that the for the eastern district of Wiscon- 
 complainant, having no right or sin, derive their authority from the 
 authority, except such as was con- same government and the same
 
 652 
 
 RECEIVERS. 
 
 [chap. XII. 
 
 § 471i/. Effect of death of parties or of receiver; prac- 
 tice in such case. When a receiver is appointed in a cred- 
 itor's suit instituted to reach the property and equitable inter- 
 ests of judgment debtors, and to subject them to the payment 
 of the judgment, and tlie debtors assign their property to the 
 receiver, the receiversliip does not terminate by the death of 
 the receiver, or by the death of the judgment debtors. And 
 while the creditor's suit abates by the death of the judgment 
 debtors, the title to their property is regarded as vested in the 
 court itself. It is, therefore, competent for the court to ap- 
 point a new receiver, who ma}'^ institute actions to recover the 
 estate of the debtors. 20 So the death of a receiver appointed 
 to wind up the affairs of a partnership does not abate the re- 
 ceivership, and it is proper for the court in such case to appoint 
 another receiver.^i And upon the death of a receiver, a rule to 
 show cause is the proper procedure to continue the action in the 
 
 federal laws, does not meet the 
 difficulty. The decision did not 
 proceed upon the sole ground that 
 the jurisdiction of New York was 
 foreign to that of the federal courts ; 
 but on the ground that such a re- 
 ceiver could not sue in another ter- 
 ritorial jurisdiction. The circuit 
 court for this district and the cir- 
 cuit court for the eastern district of 
 Wisconsin each exercises a local 
 and limited jurisdiction, and I am 
 not able to withdraw this case 
 from the operation of the decision 
 of the supreme court above cited. 
 (See on this subject, Hope Mutual 
 Life Ins. Co. v. Taylor, 2 Robert- 
 son, 278.) To the suggestion of 
 counsel, that, by the statutes of 
 Wisconsin, receivers appointed on 
 creditors' bills are vested with full 
 title, and have full authority, to 
 maintain suits, which this court 
 ought to recognize, it must suffice 
 
 to say: (1) This receiver was ap- 
 pointed under and by virtue of the 
 general power of courts of equity, 
 and with such efifect only as is due 
 to the order of the court making 
 the appointment. He was not ap- 
 pointed under or by virtue of any 
 statute. (2) The statutes of the 
 state of Wisconsin can not enlarge 
 or alter the effect of an order or 
 decree of the circuit court of the 
 United States, nor enlarge or mod- 
 ify the jurisdiction of that court or 
 its efficiency. Payne v. Hook, 7 
 Wal., 425. These views render it 
 wholly unnecessary to consider the 
 merits of this suit or the various 
 matters ably discussed on the hear- 
 ing. I am constrained to conclude 
 that the bill should be dismissed." 
 
 20 Nicoll V. Boyd, 90 N. Y., 516. 
 
 21 Smith V. Harris, 135 Ind., 621, 
 35 N. E., 984.
 
 CHAP. XII.] CREDITORS. 653 
 
 name of his successor, and if the defendant wishes to contest 
 the fact of the death of the former receiver, the issue should 
 be raised in the return to the rule.22 
 
 22 Pickett V. Fidelity & C Co., 60 S. C, 477, 38 S. E., 160, 629.
 
 CHAPTER XIII. 
 
 OF RECEIVERS OVER PARTNERSHIPS. 
 
 I. Principles on Which the Relief is Granted § 472 
 
 II. Receiver Upon Dissolution of the Firm 509 
 
 III. Exclusion from Firm as Ground for Receiver 522 
 
 IV. Receiver Upon Death of Partner 530 
 
 V. Functions and Duties of the Receiver 538 
 
 I. Principles on Which the Relief is Granted. 
 
 § 472. The jurisdiction well established; doctrine of Lord Eldon; 
 probability of decree for dissolution. 
 
 473. Courts proceed with extreme caution; beneficial nature of the 
 
 relief. 
 
 474. Receiver granted on same ground as injunction; actual abuse 
 
 necessary; dissolution; quarrel between partners. 
 
 475. Court does not determine ultimate rights of the parties. 
 
 476. There must be an actual partnership inter se; employee, though 
 
 nominal partner, can not have receiver. 
 
 477. Right to participate in profits the test; burden of proof on 
 
 plaintifif. 
 
 478. Defendant permitted to give security to account to plaintiff, in 
 
 lieu of receiver. 
 
 479. Denial of partnership by defendant not alone sufficient to pre- 
 
 vent receiver. 
 
 480. Not the province of the court to superintend the business. 
 
 481. Receiver may manage business pendente lite; running steam- 
 
 boat; horses and carriages; political paper; borrowing 
 money. 
 
 482. Courts will interfere only in clear cases; and where there is 
 
 mismanagement. 
 
 483. Breach of duty must be shown; irreconcilable disagreement; 
 
 fraud; probability of loss. 
 
 484. Want of confidence as a ground for receiver. 
 
 485. Failure to co-operate in managemant of business no groimd 
 
 for receiver; unprofitable business no ground for relief. 
 
 486. Appointment not a matter of course; confidence between part- 
 
 ners. 
 
 654
 
 CHAP. XIII.] PARTNERSHIPS. 655 
 
 § 487. Defendant resolved to break up business; impossibility of con- 
 tinuing advantageously. 
 
 488. Dispute as to firm property; insolvency and bad faith of de- 
 
 fendant; bankruptcy. 
 
 489. Violation of agreement for dissolution; exclusion from books; 
 
 embittered feeling. 
 
 490. Partner in possession can not have receiver. 
 
 491. Receiver not granted when equities of bill denied by answer. 
 
 492. Refused when plaintiff's right is not questioned or disturbed. 
 
 493. Receiver in behalf of outgoing partner. 
 
 494. Receiver on judgment creditor's bill after dissolution. 
 
 495. Appointment prevents preference to creditor; does not inter- 
 
 fere with rights or liens of creditors already acquired. 
 
 496. Failure to contribute to capital stock; sale of interest; insol- 
 
 vency; exclusion by purchaser. 
 
 497. Not sufficient to allege large sums of money in defendant's 
 
 hands ; misapplication of funds ; agreement for arbitration. 
 
 498. Receiver refused over shares of stock constituting entire assets 
 
 of firm. 
 
 499. Use of firm effects by remaining partners after dissolution. 
 
 500. Partnership for sawing lumber; failure to take timber from 
 
 land of one partner. 
 
 501. When court may direct issue to be tried by jury. 
 
 502. Courts averse to interfering ex parte. 
 
 503. Jurisdiction over foreign partnerships. 
 
 504. Partnership in working farm; deficiency in profits. 
 
 505. Priority by attaching creditors before final decree. 
 
 506. Injunction auxiliary to receivership continued to hearing. 
 
 507. Receiver granted as between purchasers or assignees of differ- 
 
 ent partners. 
 
 508. Limited partnerships. 
 
 508a. Effect of denial of motion in former suit. 
 
 § 472. The jurisdiction well established; doctrine of 
 Lord Eldon; probability of decree for dissolution. The 
 
 appointment of receivers in actions between partners for an 
 accounting and a settlement of their partnership affairs, to 
 take charge of the assets, collect the debts and wind up the 
 business of the firm, is a legitimate exercise of the jurisdiction 
 of courts of equity, and one which is clearly sustained by the 
 authorities.^ And the power of thus appointing a receiver in 
 an action for the dissolution of a partnership and the settlement 
 
 1 See Saylor v. Mockbie, 9 Iowa. 209 ; Jordan v. Miller, 75 Va., 442.
 
 656 RECEIVERS. [chap. XIII. 
 
 of the firm business, is regarded as essential to the object sought 
 by such suit, and falls within that class of incidental powers 
 which the courts having jurisdiction over such cases have 
 full authority to exercise.^ The doctrine of the English Court 
 of Chancery, as laid down by Lord Eldon, was, that the court 
 would not take a partnership business into its own hands by 
 the appointment of a receiver, unless the suit was so framed that 
 a decree could be made at the hearing, either that the business 
 be carried on according to the terms of some instrument, which 
 by agreement between the parties was to regulate the manner of 
 conducting the business, or that it be wholly ended and the part- 
 nership dissolved.^ And while the tendency of the latter deci- 
 sions, especially in this country, has been averse to the con- 
 tinuance and management of a partnership business by a re- 
 ceiver, the other element in the rule as laid down by Lord El- 
 don, viz., the probability of a decree for a dissolution, is still 
 recognized as a controlling element in determining whether a 
 receiver shall be appointed. ^ 
 
 § 473. Courts proceed with extreme caution; beneficial 
 nature of the relief. The determination of an application 
 for a receiver, upon a bill seeking the dissolution of a partner- 
 ship, is justly regarded as a matter of extreme delicacy, and one 
 which requires the most careful consideration upon the part of 
 the court; since, if the application is granted, its effect is to 
 terminate the partnership contrary to the wishes of the defend- 
 ant partner, while, if, refused, it leaves defendant to continue 
 the business at the risk of great loss and prejudice to plaintiff's 
 rights.^ But, while the courts proceed with extreme caution 
 in exercising their power of appointing receivers in this class 
 of cases, the jurisdiction is regarded as an extremely beneficial 
 
 2 Gridley v. Connor, 2 La. An., 87. These considerations are well ex- 
 
 3 Const V. Harris, Turn. & R., 517. pressed by Lord Langdale, Master 
 
 4 For the application of the doc- of the Rolls, in the latter case, 
 trine in Alabama, see Gillett v. Hig- p. 500, as follows: "It must be ad- 
 gins, 142 Ala., 444, 38 So., 664. mitted that when an application is 
 
 5 New V. Wright, 44 Miss., 202; made for a receiver in partnership 
 Madgwick v. Wimble, 6 Beav., 495. cases, the court is always placed in
 
 CHAP. XIII.] PARTNERSHIPS. 657 
 
 one, !;ince cases frequently arise of disputes in the settlement 
 of partnership affairs, where the interests of both parties can 
 only be properly secured by the intervention of equity through 
 the appointment of a receiver.*^ 
 
 g 474, Receiver granted on same ground as injunction ; 
 actual abuse necessary ; dissolution ; quarrel between part- 
 ners. It may be said, generally, that substantially the same 
 conditions are requisite to warrant the extraordinary aid of 
 equity by appointing a receiver in partnership cases, as are 
 necessary to induce the court to interfere by injunction. Some 
 actual abuse of the partnership property, or of the rights of a 
 copartner, must appear, and not a mere temptation to such 
 abuse, and the grounds relied upon should usually be such as to 
 authorize a decree for a dissolution of the firm. When the dis- 
 solution has already taken place, or when it is apparent that it 
 will be decreed upon the ground of some breach of duty by one 
 of the partners, a receiver may be appointed, but the court will 
 not interfere merely because of a quarrel between the partners, 
 
 a position of very great difficulty. 472. Frick, J., very forcibly oh- 
 On the one hand, if it grants the serves, with reference to the power 
 motion, the effect of it is to put an of appointing receivers, as follows, 
 end to the partnership which one of p. 476 : "It is a high power, never ex- 
 the parties claims the right to have ercised where it is likely to produce 
 continued; and on the other hand, irreparable injustice or injury to 
 if it refuses the motion, it leaves private rights, or where there exists 
 the defendant at liberty to go on any other safe or expedient remedy, 
 with the partnership business, at While in a variety of instances, es- 
 the risk, and probably at the great pecially in partnership transactions, 
 loss and prejudice, of the dissent- where the parties, after dissolution 
 ing party. Between these difficul- of their connections, can not agree 
 ties, it is not very easy to select the upon the adjustment, and the prop- 
 course which is best to be taken, erty or funds in dispute are in the 
 but the court is under the necessity hands of one partner alone, each 
 of adopting some mode of proceed- having an equal right to the con- 
 ing to protect, according to the best trol of the property, cases must 
 view it can take of the matter, the necessarily arise where the interest 
 interests of both parties, and it has of both can only be properly se- 
 accordingly interfered in many cured by the intervention and ap- 
 such cases." pointmcnt of a receiver." 
 6 See Speights v. Peters, 9 Gill, 
 Receivers — 42.
 
 658 
 
 RECEIVERS. 
 
 [chap. XIII. 
 
 since this does not, of itself, constitute sufficient ground for a 
 dissolution."^ But a receiver is properly appointed at the in- 
 stance of one of the partners where it appears that the partner- 
 ship is insolvent and that there are serious dissentions among" 
 
 " Henn v. Walsh, 2 Edw. CIi., 129. 
 The principles governing the courts 
 in the appointment of receivers in 
 partnership cases are well stated by 
 McCoun, Vice-Chancellor, in this 
 case, as follows, p. 130: "A part- 
 nership agreement, like any other, 
 is binding upon the parties, and they 
 must adhere to its terms. Neither 
 partner is at liberty to recede from 
 it against the will of the other with- 
 out a sufficient cause. Mere dis- 
 satisfaction by one partner will not 
 justify him in filing a bill for a dis- 
 solution, where, by their express 
 agreement, it is to continue for a 
 definite term; and this court will 
 not interfere to dissolve the con- 
 tract upon such ground. Here, 
 there was a five-years partnership, 
 with the privilege of dissolving it 
 at the end of two years. The com- 
 plainant has become dissatisfied; 
 and he makes various charges in 
 his bill, showing prima facie cause 
 enough for a dissolution before the 
 stipulated time. But his allega- 
 tions are positively and fully de- 
 nied in the answer. As the mat- 
 ter now stands, the complainant's 
 case fails, and he would not be en- 
 titled, on the hearing, to a decree 
 for a dissolution— consequently, not 
 to an injuncti-)n or receiver in the 
 meantime. If there be any breach 
 of covenants by one partner which, 
 in its consequences, would be so im- 
 portant as to authorize the party 
 complaining to call for a dissolu- 
 tion before the copartnership could 
 be dissolved by the efflux of time. 
 
 the complainant may then have an 
 injunction. There must be some 
 actual abuse of the partnership 
 property or of the rights of a co- 
 partner, and not a mere temptation 
 to such abuse, which will induce 
 this court to interfere. The same 
 rules apply in respect to the ap- 
 pointment of a receiver. It must 
 appear to be such a case as would 
 authorize a decree for dissolution. 
 In thus interposing, the court gen- 
 erally looks to the winding up of 
 the affairs, and not to the continu- 
 ation of a trade under its author- 
 ity. Where a dissolution has 
 already taken place, or it is appar- 
 ent that it will be decreed on the 
 ground of some breach of duty or 
 contract by one of the partners, 
 there a receiver will be appointed. 
 But if partners quarrel, a receiver 
 will not be appointed merely on 
 such an account, because it may 
 not, of itself, be a sufficient ground 
 for severing the connection be- 
 tween them. In the present case, 
 the complainant produces affidavits 
 to show a breach of the articles of 
 the partnership by the defendant's 
 withdrawing more than the stipu- 
 lated twenty-five dollars per month. 
 The affidavits are not positive on 
 the subject. They speak merely 
 from what appears by entries in 
 the books, coupled with what is 
 believed; while on the other hand 
 the denials of the defendant are 
 positive. I can not at present, in 
 the face of all this, interfere. It 
 may be an unfortunate connection
 
 CHAP. XIII.] PARTNERSHIPS. 659 
 
 the partners and a probability of waste and the necessity for 
 an accounting and dissolution.^ 
 
 § 475. Court does not determine ultimate rights of the 
 parties. Upon applications for receivers of partnership 
 assets, in actions for a dissolution and a settlement of the 
 affairs of the firm, the court does not determine the ultimate 
 rights of the parties, and will refuse to pass upon those rights 
 upon such preliminary applications. The duty of the court, in 
 such cases, is merely to protect the property pendente lite, for 
 the benefit of whoever may ultimately be determined to be en- 
 titled thereto, when the court shall have before it all the evi- 
 dence necessary to a full and complete determination of the 
 questions involved. And the court does not, on the preliminary 
 application, pretend or assume to say which of the partners is 
 entitled to the firm assets.^ But when the case is ready for final 
 hearing upon the pleadings and proofs, it is error to appoint 
 a receiver over a partnership without first adjudicating the 
 merits upon which the right to such relief depends, and without 
 any showing of urgency or of an immediate necessity for the ap- 
 pointment. ^^ 
 
 § 476. There must be an actual partnership inter se; 
 employee, though nominal partner, can not have receiver. 
 It is important to observe, that, as regards the parties them- 
 selves, a court of equity will not lend its extraordinary aid by 
 appointing a receiver unless an actual partnership inter se 
 be shown to have existed. It is, therefore, in all cases, essential 
 to the exercise of the jurisdiction, that there should actually be 
 an existing partnership, either admitted by defendant or estab- 
 
 which the complainant has formed. v. Perkins, 13 Mont., 143, 32 Pac, 
 
 Still, he entered into it advisedly; 653. 
 
 and he must endure it until the 8 Veith v. Ress, 60 Neb., 52. 82 
 
 contract allows of a withdrawal, N. W., 116. 
 
 unless he can overthrow the de- 9 Blakeney v. Dufaur, 15 Beav., 
 
 nials of the defendant by superior 40. 
 
 evidence. The injunction must be 10 Morey v. Grant, 48 Mich., 326, 
 
 dissolved, and the motion for a re- 12 N. W., 202. 
 
 ceiver denied." And see Mcintosh
 
 660 RECEIVERS. [chap. XIII. 
 
 lished by satisfactory proof, since otherwise the individual 
 property of a defendant might be taken from him by a receiver, 
 and in the end it might appear that plaintiff had no right.^l 
 When, therefore, the existence of a partnership is directly in 
 dispute, and is denied by defendant, in an action for an ac- 
 counting, the court will not appoint a receiver in limine, es- 
 pecially when there is no allegation of defendant's insolvency, 
 or of his inability to respond in the event of a final recovery 
 against him.^^ And when the partnership is only a nominal 
 one, the parties using a firm name, but under an agreement 
 that one shall be employed as a clerk or employee of the other, 
 receiving as compensation a share of the profits, either with or 
 without additional salary, the agreement expressly stating 
 that they are not partners, and that no partnership relation was 
 intended to be formed, the person thus employed can not main- 
 tain a bill against the other for an injunction and a receiver, 
 since he has no such lien upon the assets as to warrant the 
 interposition of a court of equity in his behalf.^^ And this is 
 true, even though the parties by their conduct have become lia- 
 ble as partners to third persons, the rights of third persons or 
 of creditors not being involved in the litigation.^* 
 
 § 477. Right to participate in profits the test; burden of 
 proof on plaintiff. In the application of the general rule 
 which limits the relief to cases of existing partnership between 
 the parties, it must satisfactorily appear that the partnership 
 was actually completed so far as to entitle the parties to a par- 
 ticipation in profits ; since the right to participate in the profits, 
 and the danger which one partner might sustain by being ex- 
 cluded therefrom, pending an action for a dissolution, consti- 
 
 iiGoulding v. Bain, 4 Sandf., Irwin v. Everson, 95 Ala., 64, 10 
 
 716; Kerr v. Potter, 6 Gill, 404; So., 320; Wood v. Wood, 50 West 
 
 Irwin V. Everson, 95 Ala., 64, 10 Va., 570. 40 S. E., 416; Rowland v. 
 
 So., 320; Nutting v. Colt, 3 Halst. Auto Car Co., 133 Fed., 835. 
 
 Ch., 539. See, also, Hobart v. 13 Kerr v. Potter, 6 Gill, 404; 
 
 Ballard, 31 Iowa, 521; Popper v. Nutting v. Colt, 3 Halst. Ch.. 539. 
 
 Scheider, 7 Ab. Pr., N. S., 56. 14 Kerr zk Potter, 6 Gill, 404 
 
 12 Goulding v. Bain, 4 Sandf., 716 ;
 
 CHAP. XIII.] PARTNERSHIPS. 661 
 
 tiite the principal reason for the appointment of receivers in 
 this class of actions. And the burden of showing the exist- 
 ence of a partnership at the time of the application for a re- 
 ceiver rests upon the plaintiff. When, therefore, the consum- 
 mation of the relation to the extent of a right to participate in 
 the profits is not shown, there being only a contract which 
 might ripen into a partnership upon payment of certain money, 
 being in the nature of an executory agreement to form a part- 
 nership, a receiver should not be allowed.!^ 
 
 § 478. Defendant permitted to give security to account 
 to plaintiff, in lieu of receiver. When plaintiff, in an action 
 for the dissolution of a partnership, has obtained an injunc- 
 tion and a receiver, but the partnership relation is denied by de- 
 fendants, and it is apparent that plaintiff's interest in the firm, 
 if any, is very small, and that by continuing the receiver the 
 business will be greatly imperiled and perhaps ruined, it is 
 proper for the court to modify the order for the injunction 
 and receiver, by permitting defendants, in lieu thereof, to give 
 security for the payment to plaintiff of any sum which may be 
 found due him upon a final settlement. In such a case, the 
 court, proceeding upon equitable principles, will mold and 
 adapt its remedy so as to attain substantial justice, without 
 compromising the rights of any of the parties.!^ And where 
 
 15 Hobart t'. Ballard, 31 Iowa, 521. stead, to permit the defendants to 
 
 16 Popper V. Scheider, 7 Ab. Pr., file security to pay the plaintiff any 
 N. S., 56. McCiinn, J., says, p. 58: sum that may be found due him on 
 ". . . This action is in the nature a final settlement of the partner- 
 of a suit in equity, in which the re- ship accounts. In view of the facts 
 lief demanded is the dissolution of that a partnership between the 
 an alleged copartnership, and an plaintifif and defendants is posi- 
 adjustment of the partnership ac- tively denied; that a very small 
 counts, and in which provisional proportion of the partnership cap- 
 relief is sought by an injunction ilal was contributed by the plain- 
 and the appointment of a receiver. tiff, if, indeed, any were contributed 
 I allowed an interlocutory order for by him in the character of partner; 
 an injunction and the appointment that by the allowance of an injiuic- 
 of a receiver. The motion now is tion and the appointment of a re- 
 to modify the order of injunction ceiver the partnership business, 
 and appointing a receiver; and, in- which is very large and flotu^ish-
 
 662 RECEIVERS. [chap. XIII. 
 
 it appears that the appointment of a receiver in an accounting 
 between partners will result in great injury and loss to both 
 parties which can easily be avoided by the giving of a proper 
 bond, the court may deny the appointment of a receiver upon 
 the filing of such a bond>'^ And under a statute which pro- 
 vided that a receiver should not be appointed if the defendant 
 should offer a proper bond to hold plaintiff harmless, and it 
 appeared that such a bond had been tendered, it was held 
 that a receiver should not be appointed. ^^ 
 
 § 479. Denial of partnership by defendant not alone 
 sufficient to prevent receiver. While it is true, as has thus 
 been shown, that, in cases of doubt as to the existence of a 
 partnership, courts of equity will not interfere by a receiver, 
 yet if, from the affidavits presented upon the application, it 
 satisfactorily appears that there is a partnership and that 
 defendant is in possession of most of the assets, denying the 
 other partner access thereto, the court may properly grant the 
 aid of a receiver, although defendant by affidavits denies the 
 existence of a partnership. In other words, the mere denial by 
 the defendant partner of the e:>:istence of a partnership is not 
 sufficient to prevent the appointment, when the court is satis- 
 fied from the evidence in support of the application that the 
 partnership relation exists.^^ 
 
 ing, will be arrested, and perliaps visional remedy is only auxiliary 
 
 ruined; and that by the modifica- to ultimate relief, and should never 
 
 tion proposed, the plaintiff will be usurp or anticipate the office and 
 
 abundantly secured in all his effects of a trial on the merits." 
 
 rights, absolute or contingent, I 17 Cary Bros. v. Dalhoff C. Co., 
 
 can not doubt but the equity of 'che 126 Fed., 584. To the same effect,^ 
 
 case requires a rescission of the Mann v. Gaddie, 88 C. C. A., 1, 158 
 
 order of injunction and receiver- Fed., 42, reversing S. C, 147 Fed., 
 
 ship, and the substitution of an 955. And see, ante, §§ 9, 124, 308. 
 
 order to the effect suggested. It is 18 Roberts v. Pipkin, 63 S. C, 252, 
 
 thus that a court of equity molds 41 S. E., 300. 
 
 and adapts the remedial relief it 19 Hottenstein v. Conrad, 9 Kan., 
 
 accords, so as to reach the ends of 435. Brewer, J., says, p. 440: "It 
 
 substantial justice, without com- would be opening the door to a 
 
 promising the rights or interest of great deal of wrong to hold that 
 
 any party to the litigation. A pro- by simply denying the existence of
 
 CHAP. XIII.] 
 
 PARTNERSHIPS. 
 
 663 
 
 § 480. Not the province of the court to superintend the 
 business. It is important to bear in mind, in considering 
 the subject of receivers in partnership cases, that it is not the 
 province of a court of equity to conduct the business of a co- 
 partnership, and while a receiver may be directed to continue 
 the business a sufficient length of time to enable the court to 
 determine the rights of the parties Htigant, it is not the prov- 
 ince of the court to become the superintendent and manager of 
 the private business of parties.^^ Indeed, this necessarily fol- 
 lows from the very object and purpose contemplated by the 
 court in appointing a receiver upon a bill for the dissolution of 
 a partnership, such purpose being the preservation of the firm 
 property until the cause can be determined, the court, through 
 
 a partnership, a party in possession 
 of large amounts of partnership 
 property could hold that possession 
 until, after the delay of a suit, the 
 verdict of a jury had established 
 the partnership. It would often re- 
 sult in real victory to the wrong- 
 doer. A court having the right to 
 hear testimony as to a fact, upon a 
 motion, has a right to find the ex- 
 istence of that fact. Wherever an 
 application for a receiver in a part- 
 nership case is made, the court has 
 to hear some testimony as to the 
 existence of the partnership. Or- 
 dinarily, there is on this point no 
 ■counter testimony ; yet the court 
 finds on the testimony presented 
 on the motion that there was a 
 partnership. Without such find- 
 ing, it could not appoint a receiver. 
 Having power to make such a find- 
 ing, that power is not taken away 
 by the introduction of counter tes- 
 timony. It must still find as to the 
 fact. If there be much contradic- 
 tion in the testimony, it may re- 
 quire proof of additional facts, such 
 as the insolvency of the defendant. 
 
 before making any appointment. 
 But still, its power to examine the 
 testimony, and determine as to 
 the fact, remains. Whatever a 
 court may examine into on motion, 
 it may also determine. Its deter- 
 mination, for the purposes of the 
 motion, establishes the fact." 
 
 20 Allen V. Hawley, 6 Fla.. 164; 
 Wolbert v. Harris, 3 Halst. Ch., 
 605 ; First National Bank v. Cook, 
 12 Wyo., 492, 76 Pac, 674, 78 Pac, 
 1083. See, also. Marten v. Van 
 Schaick, 4 Paige, 479; Jackson v. 
 De Forest, 14 How. Pr., 81. And 
 see, ante, § 36. In Allen v. Hawley, 
 6 Fla., 164, Mr. Justice Dupont ob- 
 serves : "As it is not the province 
 of the court to create a copartner- 
 ship, so it is equally foreign from 
 its functions to conduct its business. 
 It never could have been contem- 
 plated that a court of chancery 
 should become the superintendent 
 of the private affairs of individuals. 
 Its legitimate province is to adjust 
 the rights and settle the disagree- 
 ments of parties growing out of 
 such transactions."
 
 664 RECEIVERS. [chap. XIII. 
 
 its officer the receiver, having charge of the firm assets, not in 
 hehalf of either party, but for the common benefit of all. 21 
 Nor will a receiver be appointed over a partnership for the 
 purpose of carrying out a proposed settlement or compromise 
 of an indebtedness due to the firm, which neither partner under 
 the articles would be empowered to carry out, since the court 
 can not clothe its receiver with larger powers in this regard 
 than might be exercised by the partners themselves. ^2 
 
 ^ 481. Receiver may manage business pendente lite; 
 running steamboat; horses and carriages; political paper; 
 borrowing money. While, as is thus seen, courts of 
 equity will not sanction the permanent or continued manage- 
 ment of a partnership business in the hands of a receiver, he 
 may, in a proper case, be allowed to continue the management 
 of the business pending legal proceedings for a dissolution, 
 in order that the good-will may be preserved to the ultimate 
 purchaser, and its full value be realized by the partners at a 
 final sale, and to prevent great loss to the parties. 23 Thus, when 
 two persons are interested as partners in a steamboat, upon a 
 bill for a dissolution and an accounting it is proper to appoint 
 a receiver, and to direct him to operate the boat during the con- 
 tinuance of the litigation, and until the rights of the parties 
 can be finally determined.24 So when the partnership property 
 is of such a nature that it is liable to injury by remaining idle, 
 and it is for the obvious benefit of all parties that it should be 
 employed until a sale may be effected, as in the case of horses 
 and carriages, when profits might accrue from their hire and 
 the expense of their keeping is a serious charge upon the re- 
 ceiver, the court may permit him to let and hire the property 
 for the benefit of the partnership fund, until a favorable sale is 
 
 21 V^olbert v. Harris, 3 Halst. 479 ; Jackson v. De Forest, 14 How. 
 Ch., 605. Pr., 81 ; Heatherton v. Hastings, 5 
 
 22 Niemann v. Niemann, 43 Cli. Hun, 459. And see Gwynne v. 
 D., 198. Memphis A.-A. Co., 93 Tenn., 603, 
 
 23 Allen V. Hawley, 6 Fla., 164; 30 S. W., 23. 
 
 Marten v. Van Schaick, 4 Paige, 24 Allen v. Hawley, 6 Fla., 164.
 
 CHAP. XIII.] PARTNERSHIPS. 665 
 
 effected. 2^ And when, upon the dissolution of a manufac- 
 turing firm, the partners are unable to agree among them- 
 selves as to the manner of closing out the business and there are 
 outstanding contracts which should be completed, the court 
 may appoint a receiver and may authorize him to complete such 
 contracts and to continue the business with a view of selling it 
 as a going concern. ^^ And it has been held, where a large por- 
 tion of the assets of a partnership consisted of material in the 
 process of manufacture and notes taken in the course of the 
 business of the firm which could be made available only by a 
 temporary and limited continuance of the business, that the 
 receiver might be authorized to continue the business to a 
 limited extent and to borrow money for that purpose which 
 should be given a preference over prior mortgage liens. 27 But 
 the court will not assume the responsibility of continuing the 
 publication of a political paper, which constitutes the partner- 
 ship assets, any longer than is absolutely necessary for the 
 preservation of the property; and until a sale can be effected 
 by the receiver, the partners owning the paper may be allowed 
 to continue its editorial management, the publication being 
 managed under the receiver's direction. 28 
 
 § 482. Courts will interfere only in clear cases; and 
 where there is mismanagement. Courts of equity are 
 averse to the dissolution of partnerships and the appointing of 
 receivers, when it is apparent that this course will result disas- 
 trously to the interests of the parties, and when the defendant 
 partner protests against a dissolution. And it may be said 
 generally, that the courts will not lend their aid by receivers, in 
 this class of cases, except in cases falling clearly within the 
 principles laid down by the authorities.29 And while the gen- 
 eral rule is well established, that if upon the dissolution of a 
 
 25 Jackson v. De Forest, 14 How. Paige, 479. But see Meridian N. & 
 Pr., 81. P. Co. V. Diem & W. P. Co., 70 
 
 26 Taylor v. Neate, 39 Ch. D., 538. Miss.. 695, 12 So., 702. 
 
 2T Blythe v. Gibbons, 141 Incl., 29 See Paige t^. Vankirk, 1 Brews., 
 
 332. 35 N. E., 557. 290; Heflebower v. Buck, 64 Md., 
 
 28 Marten ?/. Van Schaick, 4 15, 20 Atl., 991.
 
 666 RECEIVERS. [chap. XIII. 
 
 partnership the partners can not agree upon the disposition to 
 be made of the firm assets, and one of the partners prevents or 
 seeks to exckide the other from participation in the management 
 of the firm effects, a receiver will be appointed, yet it must 
 clearly and satisfactorily appear that there is a conflict of inter- 
 est, and that one partner is seeking to deprive the other of his 
 right to manage the business. When, therefore, it does not 
 appear that the defendant partner, against whom a receiver is 
 sought, has offered any opposition to plaintiff's participa- 
 tion in settling the firm business, and the answer denies that 
 defendant is proceeding against the rights or contrary to the 
 interests of his copartner, and denies that he has made any 
 demand upon plaintiff for any of the firm assets, a receiver will 
 be refused. The court will not, under such circumstances, in 
 the absence of proof of mismanagement on the part of defend- 
 ant, permit him to be deprived of all control over the settle- 
 ment of the business. ^^ 
 
 § 483. Breach of duty must be shown; irreconcilable 
 disagreement ; fraud ; probability of loss. The general rule 
 is, that to warrant a receiver in partnership cases, there must 
 be some breach of duty on the part of one of the partners, 
 or a violation of the articles of copartnership.^^ And when- 
 ever, by reason of dissensions or disagreements between part- 
 ners, the intervention of a court of equity becomes necessary 
 to effect a settlement and winding up of their affairs, a re- 
 ceiver will be allowed upon a bill by one partner showing a 
 breach of duty or a violation of the copartnership agreement 
 by the other.32 Thus, wilful acts of fraud by the defendant, 
 
 30 Terrell v. Goddard, 18 Ga., 664. ever the intervention of a court of 
 And see Warwick v. Stockton, 55 equity becomes necessary, in con- 
 N. J. Eq., 61, 36 Atl., 488. sequence of dissensions or disagree- 
 
 31 New V. Wright, 44 Miss., 202. ments between the partners, to 
 
 32 Allen V. Hawley, 6 Fla., 164. effect a settlement and closing of 
 Mr. Justice Dupont observes, p. 164: the partnership concerns, upon bill 
 "From the examination which we filed by any of the partners, show- 
 have made of the authorities on ing either a breach of duty on the 
 this subject, we think the law may part of the other partners, or a vio- 
 be considered as settled, that when- iation of the agreement of partner-
 
 CHAP. XIII.] PARTNERSHIPS. 667 
 
 such as misappropriation of firm funds, making false and im- 
 proper entries upon the firm books, and depriving complain- 
 ant of access to the books, and concealing from him the true 
 condition of the business, afford sufficient ground for appoint- 
 ing a receiver.^2 Sq when the pleadings disclose a serious 
 and apparently irreconcilable disagreement between the part- 
 ners, both as to the control and disposition of their effects 
 and as to their respective demands against each other, the 
 granting an injunction and a receiver is regarded as a provident 
 exercise of the powers of a court of equity, sanctioned alike by 
 authority and by the exigencies of the case.^^ It should, how- 
 ever, clearly appear that on account of the dissensions and dis- 
 agreements complained of, serious injury will result to the 
 parties unless a receiver is appointed, and such dissensions, 
 without fault of defendant, will not justify the summary in- 
 terposition of a receiver, unless it is clearly shown that the 
 parties will suffer loss by continuing in possession of the prop- 
 erty.^^ 
 
 § 484. Want of confidence as a ground for receiver. The 
 fact that a partner's conduct has been such as to destroy the mu- 
 tual confidence which ought to subsist between partners, is an 
 important element influencing the court in granting relief by 
 an injunction and a receiver.36 And when one of two partners 
 has exclusive control of the firm business, and so mismanages 
 it that the firm speedily becomes insolvent, and all friendship 
 and confidence between the partners are destroyed, the ap- 
 pointment of a receiver may be regarded as the only practi- 
 cable method of speedily and peaceably winding up the affairs 
 
 ship, a receiver will be appointed 36 Smith v. Jeyes, 4 Beav., 503 ; 
 
 as a matter of course." Todd v. Rich, 2 Tenn. Ch., 107. See, 
 
 33 Barnes v. Jones, 91 Ind., 161; also, Boyce v. Burchard, 21 Ga., 74; 
 Shannon v. Wright, 60 Md., 520. Williamson v. Wilson, 1 Bland, 418; 
 
 34 Whitman v. Robinson, 21 Md., Sutro v. Wagner. 8 C. E. Green, 
 30. And see Smith v. Brown, 44 388; White z;. Colfax, 33 N. Y. Supr. 
 West Va., 342, 30 S. E., 160. Ct. R., 297. 
 
 35 Loomis v. McKenzie, 31 Iowa, 
 425,
 
 668 RECEIVERS. [chap. XIII. 
 
 of the firm. The rehef will be granted, in such a case, even 
 though the plaintiff in the bill may have acted in an unwarrant- 
 ed and illegal manner, in himself attempting to exclude defend- 
 ant from possession and control of the assets after filing his 
 bill. 2'^ So when it is apparent from the bill and answer that 
 neither partner has confidence in the other, and it is admitted 
 by both that the firm is in a condition of insolvency, and each 
 partner charges the other with intent to waste the joint proper- 
 ty and to give an undue preference to certain creditors, it is pe- 
 culiarly fitting and proper that a receiver should be appointed, 
 as a means of winding up the firm business for the benefit of 
 all concerned. Under such circumstances, the relief is grant- 
 ed primarily for the benefit of the firm creditors, that they may 
 come in pari passu and share in the proceeds according as their 
 respective priorities may be shown. ^^ 
 
 § 485. Failure to co-operate in management of business 
 no ground for receiver; unprofitable business no ground 
 for relief. It is to be observed, however, that the mere 
 want of co-operation by one partner in managing the business, 
 thus leading the other to act upon his own responsibility, is 
 not sufficient ground for the interference of equity by a re- 
 ceiver, when the defendant has not interfered with the man- 
 agement of the business by the plaintiff. And when one mem- 
 ber of the firm occupies the relation of managing partner, 
 having practically the sole management and control of the 
 business, the mere fact that the other refuses to co-operate with 
 him affords no sufficient ground for a receiver.39 Nor does the 
 fact that the partnership business has been unprofitable, or 
 that it should be discontinued and the firm dissolved, warrant 
 a court in taking the property out of defendant's hands, to be 
 administered by a receiver.^^ 
 
 37 Boyce v. Burchard, 21 Ga., 74. ing receivers in partnership cases. 
 
 38 Williamson v. Wilson, 1 Bland, 30 Roberts v. Eberhardt, Kay. 148. 
 418. And see this case for an ex- 40 Moies v. O'Neill, 8 C. E. Green, 
 tended discussion of the principles 207; Shoemaker v. Smith, 74 Ind., 
 governing courts of equity in grant- 71.
 
 CHAP. XIII.] PARTNERSHIPS. 
 
 669 
 
 § 486. Appointment not a matter of course ; confidence 
 between partners. The appointment of a receiver, upon a 
 bill for an accounting of partnership affairs, is not a matter of 
 course, since the granting of such applications as of course 
 would frequently work great hardship and injustice. And 
 when no disqualification is shown on the part of the defendant 
 partner, the bill alleging no facts showing the necessity for a 
 receiver, and merely alleging in general terms that plaintiff is 
 on principles of equity entitled to the interposition of the court 
 and the aid of a receiver, the court will refuse to interfere, 
 the confidence reposed by one partner in another being a suffi- 
 cient objection to the appointment of a receiver under such 
 circumstances.^! 
 
 § 487. Defendant resolved to break up business; im- 
 possibility of continuing advantageously. When the con- 
 duct of the defendant partner has been such as to satisfy the 
 court that he has deliberately resolved to break up and ruin 
 the firm business, and the personal relations between the part- 
 ners are such that they can never carry on the business advan- 
 tageously, a fit case is presented for an injunction and a re- 
 ceiver.*-^ 
 
 § 488. Dispute as to firm property ; insolvency and bad 
 faith of defendant; bankruptcy. Although there may be 
 some dispute as to whether property in possession of the de- 
 fendant partner, in an action for an accounting between part- 
 ners, is really firm property, yet when it appears that it was re- 
 ceived in part payment for a sale of firm property, and plain- 
 tiff shows that defendant is insolvent, and that he has acted 
 in bad faith and has disposed of part of the property with in- 
 tent to defraud creditors, sufficient cause is shown for an in- 
 junction and a receiver, leaving defendant to show if he can, 
 in the further stages of the cause, that the property in question 
 
 41 Opinion of Gould, J., in Tom- 42 Sutro v. Wagner, 8 C. E. Green, 
 
 linson v. Ward, 2 Conn., 396. 388.
 
 670 RECEIVERS. [chap. XIII. 
 
 was his individual property.^^ But when the articles provide 
 that upon the deatli or bankruptcy of either partner he shall 
 be deemed to have ceased to be a member of the firm, but that 
 his share in its capital shall remain as a loan to the surviving 
 or continuing members during the residue of the term, to be 
 secured by their bond, upon the bankruptcy of some of the 
 partners their trustees in bankruptcy are entitled to a receiver 
 over the firm, notwithstanding such provision in the articles, 
 the relief being granted for the protection of creditors of the 
 bankrupt partners. In such case the solvent partner may prop- 
 erly be appointed receiver and manager upon giving adequate 
 security.4^ 
 
 § 489. Violation of agreement for dissolution ; exclusion 
 from books; embittered feeling. When, upon the dissolu- 
 tion of a partnership, the members enter into an agreement 
 fixing the terms of dissolution, and the retiring partner trans- 
 fers the entire partnership property to the remaining part- 
 ners, retaining only an equity to compel them to pay the firm 
 liabilities, the courts will be exceedingly jealous in guarding the 
 retiring partner's rights, and in enforcing performance of their 
 agreement by the other partners. And if they violate and de- 
 part from the terms of such agreement in important particu- 
 lars, and deny the retiring partner's right to have access to the 
 books, to which he is entitled under the terms of the dissolu- 
 tion, sufficient cause is shown for a receiver to wind up the 
 partnership affairs. And the fact that such an embittered state 
 of feeling exists between partners, with reference to the wind- 
 ing up of their affairs, as to render it r .nifest that the right 
 of supervision by one partner can not be exercised without 
 great unpleasantness, is an additional ground for granting re- 
 lief by a receiver.45 But when the partners, upon a dissolution 
 of the firm, enter into an agreement as to the method of collect- 
 ing and disposing of their outstanding accounts and of closing 
 
 43 Saylor v. Mockbie. 9 Iowa, 209. 45 White v. Colfax, 33 N. Y. Supr. 
 
 44 Collins V. Barker (1893), 1 Ch., Ct. R., 297. 
 578.
 
 CHAP. XIII.] PARTNERSHIPS. 671 
 
 up the firm business, a receiver should not be appointed when 
 defendants are responsible, and when no danger is shown as 
 likely to result from awaiting the final disposition of the case 
 upon its merits. ^^ 
 
 § 490. Partner in possession can not have receiver. As 
 between the partners themselves, a receiver is appointed only 
 for the protection of the party complaining against the adverse 
 possession of the other partner. There is, therefore, no ground 
 for a receiver upon the application of a partner who is himself 
 in possession, since he is fully authorized to sell the firm assets, 
 subject to his liability to account to the other partner for his 
 share. And if the defendant partner does not object to the 
 control of the property by plaintiff, the latter, being in posses- 
 sion, will not be allowed a receiver-^"^ So when a partnership 
 expires by limitation, a receiver will not be appointed upon 
 the application of one partner, in the absence of any showing of 
 mismanagement by the defendant partner in possession, who 
 offers to surrender the assets to plaintiff for final adjustment of 
 their affairs. Nor will the court in such case interfere be- 
 cause the plaintiff partner lacks the requisite experience to wind 
 up the business, or because of a disagreement between the 
 parties as to the construction of the partnership articles.^^ 
 
 § 491. Receiver not granted when equities of bill de- 
 nied by answer. Upon application for the extraordinary 
 aid of equity by a receiver in cases of partnership, the relief 
 will usually be denied when the equities of the plaintiff's case 
 are fully met and negatived by defendant's answer.49 Thus, 
 in an action for an accounting of the firm affairs and for 
 a receiver of its assets, when the defendant partner denies by 
 his answer the principal allegations of the bill, and denies that 
 he has excluded plaintiff from participating in the business, 
 
 46 Simon V. Schloss, 48 Mich., 233, 49 Parkhurst v. Muir, 3 Halst. Ch., 
 12 N. W., 196. 307; Williamson v. Monroe, 3 Cal., 
 
 47 Smith V. Lowe, 1 Edw. Ch., ZZ. 383 ; Coddington v. Tappan, 26 N. 
 48Bnfkin v. Boyce, 104 Ind., S3, J. Eq., 141. See, also, Rhodes v. 
 
 3 N. E., 615. Lee, 32 Ga., 470.
 
 672 RECEIVERS. [chap. XIII. 
 
 or from ha\ing access to the books, and also denies that he 
 has refused to account with the plaintiff concernins^^ the tirm 
 business, a receiver will not be allowed. ^^ So when the alle- 
 gations of the bill are so general in their nature that an indict- 
 ment for perjury could not be founded upon them if false, 
 and the equities of plaintiff's case are fully denied by the an- 
 swer, defendant denying that he has been guilty of any waste 
 or improper expenditure or misappropriation of the partnership 
 fund as charged in the bill, although plaintiff may be entitled 
 to an accounting, no sufficient ground is presented to justify 
 withdrawing the property from the hands of a defendant part- 
 ner who is fully acquainted with the business, and placing it in 
 the hands of a receiver.^^ And if the equities of the bill are 
 all successfully met and contradicted by the answer, it is proper 
 for the court to dissolve a preliminary injunction granted upon 
 filing the bill, and to refuse the appointment of a receiver.^^ 
 
 § 492. Refused when plaintiff's right is not questioned 
 or disturbed. As between partners themselves, a receiver 
 will not be appointed to take possession of property which the 
 plaintiff partner claims to belong to himself, as his individual 
 property, transferred to him by the firm, when it is not alleged 
 that his right as individual owner of the property is questioned, 
 or his possession disturbed. ^^ 
 
 § 493. Receiver in behalf of outgoing partner. Where, 
 upon the dissolution of a partnership, the outgoing partner as- 
 signs his entire interest in the firm assets to the remaining 
 partner, upon condition of the latter assuming all the debts of 
 the firm, and agreeing to save the retiring partner harmless 
 on account thereof, the relation thus established between the 
 parties is analogous to that of principal and surety, the con- 
 tinuing partner having the clear legal title to the property, 
 and there being no joint ownership. And while a receiver is 
 
 50 Parkhurst v. Miiir, 3 Halst. 52 Rhodes v. Lee, 32 Ga., 470. 
 
 Ch., 307. 53 Buchanan v. Comstock, 57 
 
 •"1 Williamson v. Monroe, 3 Cal., Barb., 579. 
 383.
 
 CHAP. XIII.] PARTNERSHIPS. 673 
 
 not ordinarily allowed as against a clear legal title, when there 
 is no lien or acknowledged trust, yet upon a bill by the surety 
 or outgoing partner, showing that the continuing partner is 
 fraudulently acting in disregard of his covenants, and sending 
 his money beyond the state, and that plaintiff is being sued for 
 the firm debts, a receiver may be appointed to take charge of 
 such an amount of the firm assets as will suffice to discharge 
 the joint indebtedness and relieve the surety. ^^ 
 
 § 494. Receiver on judgment creditor's bill after disso- 
 lution. When, upon the dissolution of a partnership, one 
 partner assumes payment of all the firm indebtedness, and a 
 creditor's bill is afterward filed upon a judgment against the 
 firm, on which a receiver is sought, the application for a receiv- 
 er should not be confined merely to the individual property of 
 the partner as to whom the firm indebtedness has been assumed 
 by his copartner, but should extend to and cover the partnership 
 effects, as well as the separate property of the defendant who 
 is the real debtor.^^ 
 
 § 495. Appointment prevents preference to creditor; 
 does not interfere with rights or liens of creditors already 
 acquired. Upon a bill for an accounting between partners, 
 and for a settlement of their affairs after a dissolution, the 
 appointment of a receiver has the effect of preventing one 
 partner from giving a preference to any creditor by a warrant 
 of attorney to confess judgment for a firm indebtedness. And 
 a creditor thus obtaining judgment acquires no such lien as 
 entitles him to satisfaction of his judgment out of the fund in 
 the receiver's hands, in preference to the other partnership 
 creditors.5^ So when, upon a bill to wind up an insolvent firm, 
 a receiver is appointed and is in charge of the firm assets, and 
 an order is made for creditors to prove their demands, credit- 
 ors can not by obtaining judgment and filing a creditor's bill 
 obtain priority over the general creditors out of the funds in 
 the receiver's hands. Especially are such judgment creditors 
 
 54 West V. Chasten, 12 Fla., 315. 56 Waring v. Robinson, Hoffm., 
 
 55 Henry v. Henry. 10 Paige, 314. 524. 
 
 Receivers — 43.
 
 674 RECEIVERS. [chap, XIII. 
 
 estopped from claiming priority when they have proven their 
 claims before the master, and when they have shared in a divi- 
 dend paid by the receiver.^''^ But the jurisdiction of equity over 
 the affairs of insolvent partnerships, by the appointment of re- 
 ceivers, will not be exercised in such manner as to interfere with 
 the rights of creditors, which have ripened into liens upon the 
 firm property by the use of diligence, before the receiver's ap- 
 pointment. And the levy of an execution by a judgment credit- 
 or of the firm, upon partnership property, before the order 
 appointing a receiver, will not be overreached by such order, 
 and the subsequent appointment of the receiver will not de- 
 prive the execution creditor of the rights acquired by his levy.^^ 
 If, however, a receiver is already appointed and is in possession 
 of the firm assets for the benefit of all the creditors, no creditor 
 will be permitted to levy upon and sell the property for his own 
 benefit.^^ 
 
 § 496. Failure to contribute to capital stock ; sale of in- 
 terest; insolvency; exclusion by purchaser. The fact that 
 one partner fails to contribute his portion of the capital stock 
 of the firm, as fixed by the articles of copartnership, and that 
 he sells his interest in the firm to a third person, without the 
 knowledge or consent of the other partner, coupled with his 
 insolvency and refusal to pay any portion of the partnership 
 indebtedness, and the fact that the purchaser has taken posses- 
 sion of the firm property and threatens to exclude the other 
 partner therefrom, are sufficient grounds for granting an in- 
 junction and a receiver to take charge of the assets. ^^ 
 
 § 497. Not sufficient to allege large sums of money in 
 defendant's hands ; misapplication of funds ; agreement for 
 arbitration. It is not sufficient ground for appointing a re- 
 ceiver, upon a bill for the settlement of partnership affairs, that 
 
 57 Jackson v. Lahee, 114 111., 287, port v. Kelly, 42 N. Y., 193. 
 
 2 N. E., 172. 59 Knode v. Baldridge, 73 Ind.. 54. 
 
 58 Van Alstyne v. Cook, 25 N. Y., 60 Heathcot v. Ravenscroft, 2 
 489; Hoffman v. Schoyer, 143 III., Halst. Ch., 113. 
 
 598, 28 N. E., 823. .\nd see Daven-
 
 CHAP. XIII.] PARTNERSHIPS. 675 
 
 the defendant partner has large sums of money belonging to 
 the firm in his hands, when it is not shown that there is any 
 danger of the money being ultimately lost to the plaintiffs, and 
 no allegation is made that defendant is insolvent and unable to 
 respond for the amount due.^^ But the withdrawal by a part- 
 ner of large sums from the firm to meet his individual losses 
 sustained in stock speculations has been held to constitute suffi- 
 cient ground for a receiver. And the relief has been allowed in 
 such case, notwithstanding a provision in the articles of part- 
 nership for the submission to arbitration of all differences be- 
 tween the partners, since the jurisdiction of equity to grant a 
 receiver in such case is not ousted by an agreement of the par- 
 ties to submit to arbitration. ^2 
 
 § 498. Receiver refused over shares of stock constitut- 
 ing entire assets of firm. In an action between partners, 
 a receiver will not be appointed to take charge of and sell cer- 
 tain shares of stock in an incorporated company, which consti- 
 tute the entire assets of the firm, when it is not determined how 
 much of the stock belongs to each partner, the question de- 
 pending upon the state of th'eir accounts ; and when it is not 
 alleged that the defendant partner is insolvent, and he denies by 
 his answer the equities of plaintiff's case and consents that one- 
 half the stock may be transferred to plaintiff, and offers to give 
 such security as the court may require to indemnify the plaintiff 
 partner for any balance which may ultimately be found in his 
 favor.^^ 
 
 § 499. Use of firm effects by remaining partners after 
 dissolution. The fact that, after the dissolution of the 
 partnership, the remaining partners continue to carry on the 
 business on their own account, with the partnership effects, is 
 sufficient ground to warrant the interference of equity by a re- 
 ceiver. 
 
 64 
 
 61 Wellman v. Harker, 3 Ore., 520. 63 Buchanan v. Comstock, 57 
 
 62 Pini V. Roncoroni (1892), 1 Barb., 568. 
 
 Ch., 6.33. ®^ Harding v. Glover, 18 Ves., 281.
 
 676 RECEIVERS. [CHAF. Xlli. 
 
 § 500. Partnership for sawing lumber; failure to take 
 timber from land of one partner. In case of a partnershii) 
 formed for the purpose of sawing lumber, where by the arti- 
 cles of copartnership the partner having charge of the business 
 was to take the timber used for the business from land belong- 
 ing to the other partner, a violation of this part of the contract 
 has been held a sufficient breach of duty to warrant an injunc- 
 tion and a receiver, when the business was shown to be in a de- 
 clining condition and the firm indebtedness increasing.^^ 
 
 § 501. When court may direct issue to be tried by jury. 
 When the appointment of a receiver of a partnership estate, 
 in an action for an accounting between the partners, is de- 
 pendent upon whether it was a partnership at will or for a term 
 of years, and if at will whether it has actually been dissolved, 
 the court will not determine the question upon a motion for a 
 receiver, but may direct an issue to be tried at law as to whether 
 there was a subsisting partnership between the parties.66 So 
 if, upon an application for a receiver on a bill for the settlement 
 of partnership affairs, there is doubt as to whether plaintiff is 
 entitled to an interest in the profits, the court may direct an issue 
 to be tried by a jury, as to whether plaintiff is entitled to profits, 
 and, if so, in what amount.^^ And when the existence of the 
 partnership is denied, a receiver will not be appointed in aid 
 of an execution over the effects of the firm until the question 
 of the existence of the partnership is determined.^^ 
 
 § 502, Courts averse to interfering ex parte. The courts 
 are averse to appointing receivers in controversies between 
 partners, without notice to the defendant partner and without 
 service of process, especially when an injunction has already 
 been granted which is ample to protect the property from loss 
 until the motion for a receiver may be regularly heard. ^^ 
 
 65 New V. Wright, 44 Miss., 202. 69 McCarthy v. Peake, 18 How. 
 
 66 Fairburn v. Pearson, 2 Mac. & Pr., 138 ; Mann v. Gaddie, 88 C C. 
 G., 144. A., 1, 158 Fed., 42, reversing S. C, 
 
 67 Peacock v. Peacock, 16 Ves., 49. 147 Fed., 955. 
 
 68 Guild V. Meyer, 56 N. J. Eq., 
 183, 38 Atl., 959.
 
 CHAP. XIII.] PARTNERSHIPS. 677 
 
 § 503. Jurisdiction over foreign partnerships. As re- 
 gards the jurisdiction of equity in cases of foreign partner- 
 ships, it is held, in Massachusetts, that a receiver will not be ap- 
 pointed against a non-resident purchaser of the interest of one 
 partner, conducting the business in another state, although it 
 would seem that as against such partner, if within the juris- 
 diction of the court, a receiver may be had.'^^ And when an 
 association in the nature of a partnership was formed in Eng- 
 land, for the purpose of conducting mining operations in 
 Brazil, and the property of the association in Brazil was vested 
 in a trustee for management, upon a bill by a member of the 
 association in England, in behalf of himself and all others, 
 for an accounting and distribution of profits, the trustee hav- 
 ing clandestinely left the country, and having threatened to sell 
 the property of the association, the court allowed a receiver 
 and granted an injunction to restrain the trustee from selling, 
 the relief being justified by the necessity of protecting the 
 property.*^! 
 
 § 504. Partnership in working farm; deficiency in prof- 
 its. Where plaintiffs, the owners of a farm, have entered 
 into an agreement with defendant in the nature of a part- 
 nership, for working the farm and dividing the profits, with a 
 provision that plaintiffs may terminate the partnership on six 
 months' notice, if the profits shall not reach a certain amount, 
 upon showing that the profits have not reached the amount 
 agreed upon, plaintiffs have been allowed an injunction and a 
 receiver. "^2 
 
 § 505. Priority by attaching creditors before final de- 
 cree. As regards the effect of a receivership in partner- 
 ship cases upon the rights of creditors, it is held, in California, 
 that the filing of a bill by one partner for a dissolution and an 
 accounting, and the appointment of a receiver thereon, will 
 not prevent a general creditor of the firm from proceeding by 
 attachment and judgment, and thus gaining a priority over 
 
 70 Harvey v. Varncy, 104 Mass., 72 Dunn z'. McNaught, 38 Ga., 179. 
 436. 
 
 71 Shcppard v. Oxenford, 1 Kay 
 & J., 491.
 
 678 RECEIVERS. [chap. XIII. 
 
 other creditors, at any time before a final decree dissolving the 
 firm. Until a dissolution of the partnership, it is held, it can 
 not be known that the firm is insolvent or that the court will 
 administer its assets, and it would, therefore, be unjust to deny 
 a creditor not a party to that litigation the right to prosecute 
 an action at law for the recovery of his demand.'^^ 
 
 § 506. Injunction auxiliary to receivership continued to 
 hearing. When, upon a bill for the settlement of partner- 
 ship affairs and for a receiver, an injunction is granted and a 
 receiver appointed, if, under the circumstances of the case, the 
 injunction is regarded as a proper auxiliary to the receiver- 
 ship, upon overruling a motion to rescind the appointment of 
 the receiver, the injunction will be continued until the hearing 
 or further order of the court.'^'* 
 
 § 507. Receiver granted as between purchasers or as- 
 signees of different partners. The right to invoke the aid 
 of equity by the appointment of a receiver of partnership effects, 
 in an action to wind up the firm affairs, is not limited to the 
 parties themselves, and the jurisdiction may, under proper cir- 
 cumstances, be exercised in favor of the assignees of the part- 
 ners who have succeeded to their interests in the firm. For 
 example when both partners have assigned and transferred 
 their respective interests in the firm, upon a bill by the pur- 
 chaser or assignee under one of the partners against the as- 
 signees of the other, alleging their possession of the property 
 as well as their insolvency and refusal to allow plaintiff to be 
 let into possession, a proper case is presented for appointing a 
 receiver, upon the general principles which govern the juris- 
 diction as between partners themselves.'^^ 
 
 § 508. Limited partnerships. In cases of limited part- 
 nerships, the courts of New York allow the appointment of re- 
 
 73 Adams v. Woods, 8 Cal., 152; 74 Williamson v. Wilson, 1 Bland, 
 
 Naglee v. Minturn, id., 540; Adams 428. 
 
 V. Woods, 9 Cal., 24. And see 75 Maynard v. Railey, 2 Nev., 313. 
 
 opinion of Burnett, J., in Adams v. 
 Hackett, 7 Cal., 187.
 
 CHAP. XIII.] 
 
 PARTNERSHIPS. 
 
 C79 
 
 ceivers upon the insolvency of the firm, for the protection of all 
 the creditors, and will not permit any creditor to obtain a pref- 
 erence in the satisfaction of his demand. It is held, in that 
 state, that upon the insolvency of such a partnership its assets 
 immediately become a trust fund to be divided equally among 
 all the creditors, and it is the duty of the general partners to 
 place this fund in the hands of a trustee for equal distribution 
 among the creditors. And when the general partners neglect 
 the performance of this duty, the court will appoint a receiver, 
 who becomes entitled to the entire assets of the firm as they 
 existed at the date of insolvency, and discharged of all liens 
 suffered or created by the partners after that date."^^ 
 
 76 Jackson v. Sheldon, 9 Ab. Pr., 
 127. See, also, Lottimer v. Lord, 
 4 E. D. Smith, 183. In Jackson v. 
 Sheldon, 9 Ab. Pr., 127, the defend- 
 ants in the case had formed a spe- 
 cial or limited partnership under 
 the statute of New York. Insolv- 
 ency ensued, and judgments hav- 
 ing been recovered against the 
 partners by default, under which 
 their stock was levied upon and 
 partly sold, they made an assign- 
 ment for the benefit of their cred- 
 itors. Jackson, who was a creditor 
 at large of the firm, brought this 
 action to set aside the judgments 
 and vacate the sales, and for the 
 appointment of a receiver to take 
 the assets and apply them for the 
 benefit of all the creditors. The 
 court, Davies, J., say, p. 133, after 
 a review of the New York author- 
 ities : "These cases, therefore, fully 
 sustain the proposition that as soon 
 as the special partnership becomes 
 insolvent, it is the duty of the gen- 
 eral partners to place the assets of 
 the firm in the hands of a compe- 
 tent trustee, to divide the same 
 equally among its creditors. The 
 
 question presented in this case is, 
 whether, having neglected that 
 duty, the court will permit them, 
 by reason of such omission, to ac- 
 complish indirectly what they are 
 prohibited from doing directly — 
 give a preference among their cred- 
 itors. I think clearly not. The 
 moment the firm became insolvent 
 their effects became trust funds, to 
 be divided equally among all their 
 creditors. No one creditor could 
 obtain a preference over another 
 for payment out of this fund, by 
 reason of any act of omission or 
 commission on the part of these, 
 whose duty it was immediately to 
 place the funds and assets in the 
 hands of a competent trustee. On 
 the happening of insolvency, the 
 assets of a limited copartnership, 
 equally with those of a moneyed 
 corporation, have attached to them 
 the character of trust funds, in 
 which all creditors are entitled 
 equally to participate, and in which 
 no one can share to the disadvan- 
 tage of the others. . . The gen- 
 eral partners of this special part- 
 nership, not having discharged the
 
 680 
 
 RECEIVERS. 
 
 [chap. XIII. 
 
 § 508^-. Effect of denial of motion in former suit. The 
 
 appointment of a receiver in an action for the settlement of 
 partnership affairs being merely ancillary to the principal re- 
 lief sought, it constitutes no bar to the relief that a similar 
 motion was denied in a former suit brought by the plaintiff 
 partner for a settlement of the firm business, which suit was 
 dismissed by plaintiff of his own motion. Such dismissal being 
 without prejudice to plaintiff's rights, he is at liberty to bring 
 another action witli all its rights and incidents, including the 
 right to apply for a receiver.'^'^ 
 
 duty which the law casts upon 
 them, on the happening of the in- 
 solvency of the partnership, by 
 placing the trust funds in the hands 
 of a competent trustee, for equal 
 distribution among all the credit- 
 ors, it is entirely competent for this 
 plaintiff to invoke the aid of this 
 court to accomplish the same re- 
 sult. It is the duty of this court 
 to appoint a receiver for that pur- 
 pose, who will be entitled t(3 take 
 charge of and possess himself of 
 all the assets, funds and effects of 
 said partnership as they existed at 
 
 the time of its insolvency, dis- 
 charged of all liens suffered or 
 created since the happening of that 
 event, and to collect in the same, 
 and to distribute the same equally 
 among all the creditors of the part- 
 nership. The injunction and re- 
 ceiver as prayed for in the com- 
 plaint should have been granted, 
 and the order appealed from deny- 
 ing the same must be reversed with 
 costs." 
 
 "^7 Anderson v. Powell, 44 Iowa, 
 20.
 
 CHAP, XIII.] ■ PARTNERSHIPS. 681 
 
 II. Receiver Upon Dissolution of the Firm. 
 
 § 509. English rule denying receiver unless plaintiff is entitled to a 
 dissolution. 
 
 510. English rule followed in this country; receiver does not neces- 
 
 sarily follow injunction; disagreement on dissolution; right 
 to use retiring partner's name. 
 
 511. Ground for dissolution not necessarily ground for receiver; re- 
 
 lief refused when defendant has advanced entire capital; in- 
 solvency of defendant. 
 
 512. Relief refused purchaser of one partner's interest at sheriff's 
 
 sale. 
 
 513. Departure from agreement, when ground for receiver in case 
 
 of theater. 
 
 514. Court should be careful to preserve the business; relief not 
 
 granted when it would destroy value of business without 
 benefit to either party. 
 
 515. Relief granted on exclusion from firm; refused when answer 
 
 denies bill. 
 
 516. Receiver granted against partner authorized to close up firm. 
 
 517. Assignment of assets by insolvent partners for benefit of their 
 
 creditors, ground for relief. 
 
 518. General assignment for benefit of all creditors, when receiver 
 
 refused. 
 
 519. Partnership at will, receiver almost of course; funds applied 
 
 ratably, and without preference. 
 
 520. Appointment on final decree; failure to give bond. 
 
 521. Usually appointed on interlocutory application; injunction also 
 
 granted. 
 
 § 509. English rule denying receiver unless plaintiff is 
 entitled to a dissolution. It is the established doctrine in 
 England, that a receiver in partnership cases will only be al- 
 lowed when the relief is ancillary to a dissolution of the firm. 
 And when the court can not foresee that it will ultimately 
 decree a dissolution, or when the object of the suit is not to 
 obtain a dissolution, but on the contrary to continue the part- 
 nership, the bill praying the establishment of the firm and the 
 specific performance of the partnership articles, equity will 
 not lend its extraordinary aid by a receiver. '^^ And while, 
 under the English practice, it is almost a matter of course to 
 
 78 Hall z: Hall, 3 Mac. & G., 79 ; Roberts v. Eberhardt, Kay, 148.
 
 6S2 
 
 RECEIVERS. 
 
 [CITAP. XIII. 
 
 appoint a receiver upon a bill for the dissolution of a firm, if 
 the case presented is such as to entitle plaintiff to a dissolu- 
 tion, the court will not interfere and take the conduct of a 
 partnership into its own hands, if upon the case ao presented it 
 is doubtful whether plaintiff is entitled to a dissolution.'^^ 
 The rule may be stated in general terms, that to warrant a re- 
 ceiver in partnership cases, such a state of facts must be 
 shown by the party complaining as, if proven at the hearing, 
 will entitle him to a dissolution. ^0 And in considering wheth- 
 er the conduct of one partner has been such as to entitle the 
 other to a dissolution, for the purpose of determining an ap- 
 plication for a receiver, the court will consider not merely the 
 specific terms of the partnership articles, but also the duties 
 and obligations implied in every contract of partnership. And 
 when it is obvious that the conduct of the defendant partner 
 
 "9 Goodman v. Whitcomb, 1 Jac. 
 & W., 589; Chapman v. Beach, id., 
 594. The doctrine is well stated in 
 Goodman v. Whitcomb, by Lord 
 Eldon, as follows: "This is a bill 
 filed for the purpose of having a 
 dissolution of the partnership de- 
 clared, and if the court can now see 
 that that must be done, it follows 
 very much of course that a receiver 
 must be appointed. But if the case 
 made stands in such a state that 
 the court can not see whether it 
 will be dissolved or not, it will not 
 take into its own hands the conduct 
 of a partnership which only may be 
 dissolved. It may be a question 
 whether the court will not restrain 
 a partner, if he has acted improp- 
 erly, from doing certain acts in 
 future, but if what he has done 
 does not give the other party a 
 ■ right to have a dissolution of the 
 partnership, what right has the 
 court to appoint a receiver, and 
 make itself the manager of every 
 
 trade in the kingdom? Where part- 
 ners differ, as they sometimes do, 
 when they enter into another kind 
 of partnership, they should recollect 
 that they enter into it for better 
 and worse, and this court has no 
 jurisdiction to make a separation 
 between them because one is more 
 sullen or less good-tempered than 
 the other. Another court, in the 
 partnership to which I have alluded, 
 can not, nor can this court in this 
 kind of partnership, interfere, un- 
 less there is a cause of separation 
 which, in the one case, must 
 amount to downright cruelty, and 
 in the other must be conduct 
 amounting to an entire exclusion 
 of the partner from his interest in 
 the partnership. Whether a disso- 
 lution may ultimately be decreed I 
 will not say, but trifling circum- 
 stances of conduct are not sufficient 
 to authorize the court to award a 
 dissolution." 
 80 Smith V. Jeyes, 4 Beav., 503.
 
 CHAP. XIII.] PARTNERSHIPS. 683 
 
 has been so injurious to the firm, and so inconsistent with his 
 duties as a partner, as to entitle plaintiff to a dissolution, a re- 
 ceiver will be appointed. ^^ 
 
 § 510. English rule followed in this country; receiver 
 does not necessarily follow injunction; disagreement on 
 dissolution; right to use retiring partner's name. The 
 English rule as above stated has been followed in this country, 
 especially in the courts of New York, where the doctrine is 
 well settled that a receiver will not be appointed over a sub- 
 sisting partnership, unless it satisfactorily appears that plain- 
 tiff will ultimately be entitled to a decree for a dissolution 
 and the winding up of the firm business. ^^ The grounds re- 
 lied upon by the courts in granting receivers are, the neces- 
 sity of winding up the affairs of the firm and dividing the 
 surplus, and they do not interfere for the purpose of continu- 
 ing or managing the business, this being a responsibility which 
 the courts will not usually assume.^^ And although a prelim- 
 inary injunction has been granted, ex parte, upon a bill by a 
 partner seeking a dissolution of the firm, it does not necessa- 
 rily follow that a receiver will be appointed ; and if the court 
 is satisfied that no such case is presented as to entitle plaintiff 
 to a final dissolution, it will refuse a receiver, leaving the in- 
 junction to be dissolved in due time upon proper motion. ^^ 
 But when, upon the dissolution of a partnership, the mem- 
 bers of the firm can not agree upon the mode of adjusting its 
 affairs, it is the usual practice of the courts, with a view to 
 protect the rights of all parties in interest, to exclude the 
 partners from participating in the adjustment of the firm busi- 
 ness, and to appoint a receiver for that purpose, and to grant 
 
 81 Smith V. Jeyes, 4 Beav., 503. of defrauding creditors, see Metcalf 
 
 82Garretson v. Weaver, 3 Edw. v. Moses, 161 N. Y., 587, 56 N. 
 
 Ch., 385; Jackson v. DeForest, 14 E., 67. 
 
 How. Pr., 81. As to the appoint- 83 Jackson v. DeForest, 14 How. 
 
 ment of a receiver in an action Pr., 81. 
 
 brought for the dissolution of a ^'^ Garretson v. Weaver, 3 Edw. 
 
 partnership as a part of a fraudu- Ch., 385. 
 
 lent scheme devised for the purpose
 
 684 RECEIVERS. [ClIAP. XIII. 
 
 an injunction as a necessary adjunct of the receivership.^^ 
 So when a partnership at will is dissolved, there being no pro- 
 vision in the articles as to the division of the property or as 
 to the manner of closing up the firm affairs, the partners be- 
 ing unable to agree upon such matters, and the defendant 
 partner claiming the entire interest in the lease and good- 
 will, a proper case is presented for appointing a receiver.^^ 
 And where a firm has been dissolved by mutual agreement and 
 part of the assets have been placed in the hands of one of the 
 partners and part in the hands of the other for the purpose 
 of winding up the affairs of the firm and liquidating the as- 
 sets, and afterward the partners are unable to agree as to the 
 manner in which the property shall be sold, a receiver is prop- 
 erly appointed to close up the affairs of the firm under the 
 direction of the court.^'^ And where, upon the dissolution of 
 a firm by mutual agreement, the retiring partner had given 
 the remaining partner the right to continue the use of the 
 former's name as a part of the firm name upon the condition 
 that the defendant partner should incur no liability under such 
 name, and the defendant partner, who was insolvent, was vio- 
 lating this agreement and had incurred liabilities in excess of 
 the value of the partnership property, a proper case was pre- 
 sented for the appointment of a receiver to dispose of the 
 stock under the order of the court.^^ 
 
 § 511. Ground for dissolution not necessarily ground 
 for receiver; relief refused when defendant has advanced 
 entire capital; insolvency of defendant. While it is thus 
 seen that courts of equity, both in England and in America, 
 rarely interfere by a receiver in partnership cases unless 
 it is apparent that plaintiff will ultimately be entitled 
 to a dissolution of the firm, it is to be borne in mind 
 that the mere fact of the case as presented being suffi- 
 
 85 Van Rensselaer v. Emery, 9 87 Bennett v. Smith, 108 Ga., 466, 
 How. Pr., 135. And see Fleming v. 34 S. E., 156. 
 
 Carson, 37 Ore., 252, 62 Pac, 374. Ǥ Josclove v. Bohrman, 119 Ga., 
 
 86 McElvey v. Lewis, 76 N. Y., 204. 45 S. E., 982. 
 373,
 
 CHAP. XIII.] PARTNERSHIPS. 685 
 
 cient to warrant a decree for a dissolution does not of 
 itself constitute sufficient ground for a receiver, in the ab- 
 sence of improper conduct or breach of duty by the defend- 
 ant partner.89 And when a partnership is dissolvable by 
 mutual consent, or determinable at the will of either party, 
 equity will not, as of course, assume control of the business by 
 placing it in the hands of a receiver, although the party com- 
 plaining is entitled to an immediate dissolution, but a re- 
 ceiver will be withheld unless the relief appears to be neces- 
 sary to protect and preserve the interests of the parties-^" 
 The reason for the doctrine as here stated is found in the 
 manifest injustice which would necessarily result if, in case 
 of a partnership determinable at will, a court of chancery 
 would as of course, and for no other reason than that such 
 was the wish of one member of the firm, assume control of 
 the business and place it in the hands of a stranger to the 
 firm.91 Especially will the court refuse to interfere by a re- 
 ceiver when, by the articles of copartnership, the defendant 
 partner was required to advance and has advanced the entire 
 capital, the business being conducted by him in his own name 
 and owned by him individually, the plaintiff's interest in the 
 property upon a dissolution being only a share of the profits, 
 and no suggestion of defendant's insolvency or irresponsibility 
 being made, and no proof of fraud appearing.92 When, how- 
 
 89 Harding v. Glover, 18 Ves., 281. 91 Birdsall v. Colie, 2 Stockt., 63. 
 "I have frequently disavowed," ^2 Cox v. Peters, 2 Beas., 39. "The 
 says Lord Eldon in this case, "as a true principle," says Green, Chan- 
 principle of this court, that a re- cellor, p. 41, "is that adopted by 
 ceiver is to be appointed merely on Chancellor Williamson, viz., that 
 the ground of a dissolution of a where a partnership is dissolved by 
 partnership. There must be some mutual consent, or determined by 
 breach of the duty of a partner, the will of either party, a court of 
 or of the contract of partnership." chancery will not as of course as- 
 See, also. Cox z/. Peters, 2 Beas., 39; sume the control of the business, 
 Renton v. Chaplain, 1 Stockt., 62; or place it in the hands of a re- 
 Birdsall v. Colie, 2 Stockt., 63 ; Wil- ceiver. A receiver will be ap- 
 son V. Fitchter, 3 Stockt., 71. pointed only where it appears 
 
 90 Cox V. Peters, 2 Beas., 39; necessary to protect the interest of 
 Birdsall v. Colie, 2 Stockt., 63. the parties." And see Renton v.
 
 086 RECEIVERS. [CIIAP. XIU. 
 
 ever, in addition to the fact of a dissolution, or a right to 
 dissolve the firm, the plaintiff partner shows that the defend- 
 ant is insolvent and that there is danger of loss if the firm 
 assets are intrusted to his charge, sufficient ground is present- 
 ed to entitle plaintiff to the aid of a receiver.^^ 
 
 § 512. Relief refused purchaser of one partner's interest 
 at sheriff's sale. When the partnership interest of one 
 member of a firm is sold at sheriff's sale under execution 
 against him, the purchaser at such sale stands in no better 
 position than the partner himself, and a court of equity will 
 not in behalf of such purchaser interfere with the other part- 
 ner, by appointing a receiver to wind up the firm business, un- 
 less his gross misconduct calls for such interference. Espe- 
 cially will the court be justified in withholding relief, in such 
 a case, when the bill does not allege insolvency of the defend- 
 ant partner, and it does not appear that he is unable to respond 
 for any interest to which the purchaser may be entitled on 
 completion of the accounts, and when it is not shown that the 
 purchaser ever called upon the defendant for an accounting.^'* 
 
 § 513. Departure from agreement, when ground for re- 
 ceiver in case of theater. While the aid of a receiver in 
 partnership matters is usually confined to cases where the 
 party aggrieved appears to be entitled to a dissolution, there 
 are instances where a departure from the terms of the agree- 
 ment between the partners for the management of their busi- 
 ness has been considered sufficient ground for a receiver, even 
 though the case as presented would not justify a dissolution 
 and none was sought. Thus, when the proprietors of a thea- 
 ter had executed an agreement regulating the management of 
 their business, and providing that the profits should be de- 
 voted exclusively to certain purposes, and that the treasurer 
 should be directed so to apply them, but by a subsequent agree- 
 
 Chaplain, 1 Stockt., 62; Birdsall v. 94 Renton v. Chaplain, 1 Stockt., 
 
 Colie, 2 Stockt., 63. 62. 
 
 93 Randall v. Morrell, 2 C. E. 
 Green, 343. And see Jones v. Weir, 
 217 Pa. St., 321, 66 Atl., 550.
 
 CHAP. XIII.] PARTNERSHIPS. 687 
 
 ment the parties, then entitled under the original proprietors 
 to seven-eighths of the theater, contracted for a different ap- 
 plication of the profits, and otherwise affected or varied the 
 rights of the owner of the remaining one-eighth interest, who 
 had refused to become a party to the new agreement, a receiver 
 was appointed upon a bill by the latter to enforce a specific 
 performance of the covenants contained in the original agree- 
 ment.^^ 
 
 § 514. Court should be careful to preserve the business ; 
 relief not granted when it would destroy value of business 
 without benefit to either party. In the case of a valuable 
 partnership business which has been built up by the joint la- 
 bors and contributions of all the partners, upon a bill for a 
 dissolution and a receiver, the court should be careful to pre- 
 serve the business itself, if possible, and to put all parties upon 
 a fair and equal footing with regard to it. And if it is appar- 
 ent that the appointment of a receiver to direct a sale of the 
 entire business, and to wind up the concern, would destroy 
 its value without benefit to either party, the relief will be de- 
 nied. And this is true, even though the dissensions which have 
 sprung up between the partners are such as to make it manifest 
 that the business can not be carried on advantageously, and 
 although the case presented is otherwise sufficient to warrant 
 a dissolution.^^ 
 
 § 515. Relief granted on exclusion from firm; refused 
 when answer denies bill. When both partners are desirous 
 of a dissolution of the firm, and the circumstances of the case, 
 as disclosed by bill and answer, are such as seem to require a 
 dissolution, the bill charging and the answer admitting that 
 plaintiff is excluded from the partnership premises, sufficient 
 cause is presented for a receiver to collect the firm debts and 
 take charge of the assets.^'^ But when plaintiff relies for a 
 
 95 Const V. Harris, Turn. & R., "^ Wolbert v. Harris, 3 Halst. Ch., 
 
 496. 605. 
 
 96Slemmer's Appeal, 58 Pa. St., 
 168.
 
 688 RECEIVERS. [chap. XIII. 
 
 dissolution and a receiver upon the fact that defendant has 
 drawn from the business in excess of the sum stipulated in 
 the copartnership articles, and this is denied by defendant's 
 answer, which denies all l' c charges of the bill, the court will 
 refuse an injunction and a receiver.^^ 
 
 § 516. Receiver granted against partner authorized to 
 close up firm. When, upon the dissolution of a partner- 
 ship, one partner is authorized, by agreement between the 
 parties, to close up the firm business, and its property and as- 
 sets are turned over to him, upon his agreeing to hold the 
 other partners harmless, notwithstanding his right, under the 
 contract, to exclusive possession, if the bill shows that he is 
 wasting or misapplying the funds, or that there is danger to 
 the remaining partners from his insolvency or fraudulent ^con- 
 duct, a sufficient case is stated to justify a receiver.99 But in 
 case of such an agreement the court will not, by appointing 
 a receiver, take the control and winding up of the business 
 from the hands of the partner to whom it has thus been in- 
 trusted by stipulation of the parties, in the absence of a clear 
 showing of fraud or misconduct and danger to the assets.^ 
 
 § 517. Assignment of assets by insolvent partners for 
 benefit of their creditors, ground for relief. In case of a 
 partnership dissolvable at the pleasure of either of the part- 
 ners, and which does, in fact, become dissolved by the insol- 
 vency of certain members of the firm, an attempt by the in- 
 solvent partners to appropriate the firm assets to the payment 
 of their private indebtedness by an assignment thereof for 
 the benefit of their creditors, is sufficient to entitle the other 
 partners to an injunction and a receiver. And in such case, 
 the receivership and the injunction should extend to and cov- 
 er all of the firm assets in the hands of the defendant part- 
 
 98 Henn v. Walsh, 3 Edw. Ch., charged on the coming in of defend- 
 129. ant's answer, denying the equities 
 
 99 Drury v. Roberts, 2 Md. Ch., of the bill. 
 
 157. But the receiver was dis- 1 Heflebower v. Buck, 64 Md., 15.
 
 CHAP. Xlir.] PARTNERSHIPS. 689 
 
 ners and their assignee, in order to prevent their misappro- 
 priation.^ 
 
 § 518. General assignment for benefit of all creditors, 
 when receiver refused. When, upon the dissoUttion of a 
 partnership, the partners sign and pubhsh a notice of the dis- 
 solution, giving one partner the exclusive right to wind up and 
 settle the affairs of the firm, the fact that such partner makes 
 a general assignment of all the firm assets for the benefit of 
 all the firm creditors, equally and without preference, will 
 not of itself be deemed sufficient cause for a receiver, when no 
 ground is shown for believing that the fund in the hands of 
 the assignee is in danger, and when he is abundantly able to 
 respond in damages.^ 
 
 § 519. Partnership at will, receiver almost of course; 
 funds applied ratably, and without preference. When 
 either member of a partnership has the right to dissolve the 
 firm at will, and the articles make no provision for closing up 
 the concern, the appointment of a receiver on a bill for that 
 purpose, in the event of a disagreement between the partners 
 as to closing up the firm business, is almost a matter of course.'* 
 And in such a case, the court will direct the receiver to apply 
 the partnership property and funds in payment of all debts 
 of the firm ratably, without preference to the favorite creditors 
 of either partner.^ 
 
 § 520. Appointment on final decree ; failure to give bond. 
 It is competent upon the final judgment, in an action for the 
 dissolution of a partnership, to appoint a receiver as part of 
 the decree or judgment of the court, and to direct him to take 
 possession of the firm property and sell the same, and to col- 
 lect the outstanding debts and distribute the proceeds among 
 the partners according to their respective shares. And it is 
 not sufficient ground for reversing such a judgment or de- 
 
 2 Davis V. Grove, 2 Rob. (N. Y.), 4 Law v. Ford, 2 Paige, 310; Mar- 
 134; Same v. Same, id., 635. ten 7'. Van Schaick, 4 Paige. 479. 
 
 3 Hayes v. Heyer, 4 Sandf. Ch., 5 Law v. Ford, 2 Paige, 310. 
 485. 
 
 Receivers — 44.
 
 690 RECEIVERS. [chap. XIII. 
 
 cree, that the receiver thus appointed was not required to give 
 bond, it being regarded as the fault of the defendant in not 
 asking for a bond.^ And in an action for the dissolution and 
 winding up of the firm, the plaintiff partner being himself one 
 of the principal creditors, upon a decree dissolving the firm 
 and establishing plaintiff's rights as a creditor, it is error to 
 give to the defendant partner, who is insolvent, sole control of 
 winding up the business, to the exclusion of plaintiff, and a 
 receiver should be appointed for that purpose.*^ 
 
 § 521. Usually appointed on interlocutory application; 
 injunction also granted. While, as is thus seen, the aid of 
 a receiver may be granted as part of the final decree in the 
 cause, the relief is usually granted upon an interlocutory ap- 
 plication on filing a bill for a dissolution and an accounting. 
 And it is frequently the case that the court, as a necessary ad- 
 junct to the relief sought by the bill, will also grant an inter- 
 locutory injunction to restrain defendant from interfering with 
 the management of the business, pending the proceedings for 
 a dissolution. 
 
 6 Shulte V. Hoffman, 18 Tex., 678. 7 Watson v. McKinnon, 7Z Tex., 
 
 210, 11 S. W., 197.
 
 CHAP. XIII.] PARTNERSHIPS. 691 
 
 III. Exclusion from Firm as Ground for Receiver. 
 
 § 522. Exclusion from management of business strong ground for re- 
 lief. 
 
 523. Assignment by one partner and exclusion from firm. 
 
 524. Employment with share of profits, when a partnership; re- 
 
 ceiver granted on exclusion from profits. 
 
 525. Exclusion and impossibility of adjusting disagreements. 
 
 526. Receiver appointed in behalf of purchaser of partner's interest. 
 
 527. Dissolution by proceedings in bankruptcy; status of assignees; 
 
 exclusion. 
 
 528. Partnership in vessel ; exclusive profit. 
 
 529. Exclusion from books, and fraudulent conduct. 
 
 § 522. Exclusion from management of business strong 
 ground for relief. In actions for the dissolution of part- 
 nerships and the winding up of their affairs, the fact that one 
 partner has excluded the other from participation in the profits 
 of the business, or from his share in its management and con- 
 trol, has always been regarded as one of the strongest grounds 
 for equitable relief by the appointment of a receiver.^ And 
 it was said by Lord Eldon, that the most prominent considera- 
 tion on which the court acts in appointing a receiver of a 
 partnership business is the circumstance of one partner hav- 
 ing taken upon himself the right to exclude another from as 
 full a share in the management of the firm business as he who 
 assumes that power himself enjoys.^ And it was said by the 
 same authority, that, as in the ordinary course of trade, if 
 
 8 See Gowan v. Jeffries, 2 Ashm., 628; Whipple v. Lee, 46 Wash., 
 296 ; Wilson z;. Greenwood, 1 Swans., 266, 89 Pac, 712. See Bryant v. 
 471 ; Const v. Harris, 1 Turn. & R., Fitzsimmons, 106 Md., 421, 67 Atl., 
 525 ; Kirby v. Ingersoll, 1 Doug. 356, for the appointment of a re- 
 (Mich.), 477; Katsch v. Schenck, 18 ceiver to take possession of a race- 
 L. J., N. S. Ch., 386; Wolbert v. horse which was held to be partner- 
 Harris, 3 Halst. Ch., 605 ; Katz v. ship property but which was in the 
 Brewington, 71 Md., 79, 20 Atl., 139; exclusive possession of one of the 
 Gillett V. Higgins, 142 Ala., 444, 38 partners. 
 
 So., 664; Fink v. Montgomery, 162 9 See observations of Lord Eldon 
 
 Ind.. 424, 68 N. E., 1010; Redding in Const v. Harri.s, Turn. & R., 525. 
 V. Anderson, 37 Wash.. 209, 79 Pac,
 
 692 RECEIVERS. [chap. XIII. 
 
 one partner seeks to exclude another from his due share in 
 the business, the court will grant a receiver, so in the course 
 of winding- up the partnership affairs the court will, when 
 necessary, interpose on the same principle. ^'^ And where one 
 partner is fraudulently mismanaging the affairs of the partner- 
 ship and is excluding the other from the business, and it ap- 
 pears that a dissolution must ultimately be granted, a receiver 
 is properly appointed although there is no allegation that the 
 defendant partner is insolvent.^^ 
 
 § 523. Assignment by one partner and exclusion from 
 firm. In illustration of the general doctrine of exclusion 
 from the firm as ground for a receiver, it is held, that where 
 one partner, without the knowledge or consent of his copart- 
 ner, assigns and transfers all the firm effects, with the evident 
 purpose of shutting out the other partner from any participa- 
 tion in the settlement of the firm business, the assignment hav- 
 ing the effect of discontinuing the business and of excluding 
 the other partner from examining the books or controlling the 
 firm property, a sui^cient case is presented to warrant the in- 
 terposition of equity by a receiver. And in such case, the as- 
 signee can have no claim, even as to the interest of the as- 
 signing partner, sufficient to defeat the application. ^^ 
 
 § 524. Employment with share of profits, when a part- 
 nership ; receiver granted on exclusion from profits. When 
 defendant had entered into a contract with plaintiff that he 
 would pay him a given sum as salary for his services in de- 
 fendant's business, and in addition thereto would give him a 
 certain proportion of the net profits of all new business ob- 
 tained through him, the agreement was regarded as constitut- 
 ing a partnership; and defendant having excluded plaintiff 
 from all participation in the profits of the business, upon a bill 
 
 10 Wilson V. Greenwood, 1 Pac. 153. overruling Wales v. Den- 
 Swans., 471. nis, 9 Wash., 308, 37 Pac, 450. 
 
 11 Cole V. Price, 22 Wash., 18, 60 12 Kirby v. Ingersoll, 1 Dong. 
 
 (Mich.), 477.
 
 CHAP. XIII.] PARTNERSHIPS. 693 
 
 for a dissolution and an accounting, a receiver was allowed. 
 In such a case, the plaintiff, being entitled to a share in the 
 profits, has an interest in seeing that the business out of which 
 the profits arise is properly disposed of, and upon being ex- 
 cluded therefrom, he is entitled upon principle to have a re- 
 ceiver when the parties can not come to an amicable adjust- 
 ment of their differences.^^ 
 
 § 525. Exclusion and impossibility of adjusting dis- 
 agreements. In the application of the doctrine of exclusion 
 as a ground for appointing a receiver in partnership cases, it is 
 not absolutely necessary that the court should be satisfied 
 that the partnership fund is in peril. And when the fund 
 in dispute is prima facie the proceeds of the partnership, and 
 the defendant refuses to allow his copartner to participate 
 therein, and excludes him from all participation in the profits, 
 so that the rightful ownership of the fund can not be de- 
 termined until a final adjustment of their affairs, it is proper 
 to continue a receiver in possession. Under such circum- 
 stances, the inability of the partners to come to an adjust- 
 ment of their interests would seem to render it a provident ex- 
 ercise of the powers of a court of equity to continue in charge 
 of the property until it can finally determine the rights of the 
 parties.14 
 
 § 526. Receiver appointed in behalf of purchaser of part- 
 ner's interest. When a partner sells his interest in the busi- 
 ness to a third person, although such sale in effect works a dis- 
 
 13 Katsch V. Schenck, 18 L. J., N. presumptive title in the defendant, 
 
 S. Ch., 386. the court would interfere with 
 
 1* Speights V. Peters, 9 Gill, 472. great reluctance, and only where 
 
 Mr. Justice Frick observes, p. 479 : the property was in danger of being 
 
 "It is assumed by the appellant materially injured or lost. But in 
 
 that the court, as preliminary to respect to a fund which is claimed 
 
 the appointment of a receiver, must and is prima facie the proceeds of 
 
 also be further satisfied that the a partnership, it is but a provident 
 
 property is in imminent peril. This, exercise of equity power to place 
 
 however, is not always a necessary the property under the care of the 
 
 condition of the action of the court. court." 
 .^gainst the legal title, or a strong
 
 594 RECEIVERS. [chap. XIII. 
 
 solution of the firm, the remaining partner is not entitled to 
 the exclusive use and possession of the property, and if he 
 excludes the purchaser from participation therein, denying 
 not only his rights but the rights of the partner from whom 
 he purchased, and sets up an adverse title to the property, suf- 
 ficient cause is shown for appointing a receiver.!^ 
 
 § 527. Dissolution by proceedings in bankruptcy ; status 
 of assignees; exclusion. In case of the dissolution of a 
 partnership by proceedings in bankruptcy against one member 
 of the firm, the assignees of the bankrupt partner become, as 
 to his interest, tenants in common with the solvent partner. 
 And in such a case, upon an application for a receiver on the 
 ground of exclusion, a court of equity will proceed upon the 
 same principles by which it is governed in all cases where some 
 members of a firm seek to exclude others from that share in 
 the management of the business to which they are entitled.!^ 
 
 § 528. Partnership in vessel; exclusive profit. Where 
 there were several partners jointly interested in a vessel, and 
 the defendant partners had been in possession, acting as ships- 
 husbands and brokers, and had acted in fraud of the plaintiffs 
 by clandestinely making a profit from the employment of the 
 vessel for their own exclusive benefit, upon a bill for an ac- 
 counting, it was held a sufficient case to warrant the appoint- 
 ment of a receiver ad interim, to take possession of the ves- 
 sel's machinery, which had been removed for repairs, and of 
 which defendants had possessed themselves to the exclusion of 
 plaintiffs. ^'^ 
 
 § 529. Exclusion from books, and fraudulent conduct. 
 A receiver will be appointed upon a bill by one partner for a 
 settlement of the partnership affairs, when it is alleged that 
 defendant refuses to make any settlement and denies plaintiff 
 
 15 Seibert v. Seibert, 1 Brews., don in Wilson v. Greenwood, 1 
 531. Swans., 482, 483. 
 
 16 See observations of Lord El- 17 Brenan v. Preston, 2 De G., M. 
 
 & G., 813.
 
 CHAP. XIII.] PARTNERSHIPS. 695 
 
 access to the firm books, and that he has failed to pay the firm 
 indebtedness, and has fraudulently appropriated the partner- 
 ship funds to his own use and diminished the firm assets. Such 
 a case is regarded as presenting such elements of fraud and 
 imminent danger, as to clearly warrant the extraordinary aid 
 of the court.i^ 
 
 iSHaight V. Burr, 19 Md., 130. 161; Shannon v. Wright, 60 Md., 
 See, also, Barnes v. Jones, 91 Ind., 520.
 
 696 RECEIVERS. [chap. XIII. 
 
 IV. Receiver Upon Death of Partner. 
 
 § 530. English doctrine; receiver upon death of both partners. 
 
 531. Death of one partner no ground for relief unless survivor guilty 
 
 of mismanagement. 
 
 532. Mismanagement of survivor; relief granted on bill by adminis- 
 
 trator of deceased. 
 
 533. When administrator entitled to the relief; may himself be re- 
 
 ceiver; the decree. 
 
 534. Rights of the receiver. 
 
 535. Legatee of deceased partner, when entitled to relief. 
 
 536. Receiver allowed, notwithstanding appointment of executor; 
 
 authority to sue. 
 
 537. Relief allowed when answer admits facts alleged in bill. 
 
 § 530. English doctrine; receiver upon death of both 
 partners. The jurisdiction of equity in appointing receiv- 
 ers in partnership cases is sometimes called into exercise by 
 reason of the death of one or both partners. It was the doc- 
 trine of the English Court of Chancery, established at an early 
 date, that upon the death of both members of a copartnership, 
 a receiver would be appointed. And the grounds for the re- 
 lief in such case were, that no such confidence exists as be- 
 tween the representatives of the deceased partners, as exist- 
 ed between the partners themselves.^^ 
 
 § 531. Death of one partner no ground for relief unless 
 survivor guilty of mismanagement. Ordinarily, in case of 
 the death of a single member of a copartnership, since the sur- 
 viving partner has a legal right to possession of the firm assets 
 and to wind up the business, he will not be deprived of this 
 right by a receiver, unless upon proof of mismanagement or 
 of danger to the partnership effects.^O And while it is true 
 
 19 Phillips V. Atkinson, 2 Bro. C. confidence between the representa- 
 
 C, 272. "Where the^ is a co- lives, and therefore the court will 
 
 partnership," says Lord Kenyon, appoint a receiver." 
 
 "there is confidence between the 20 Connor v. Allen, Harrinsr. 
 
 parties, and if the one dies the con- (Mich.), 371; Walker v. House, 4 
 
 fidence in the other partner re- Md. Ch., 39; Dickens v. Dickens, 
 
 mains, and he shall receive; but 154 Ala., 440, 45 So., 630. To the 
 
 Vvhen both are dead, there is no same effect, see Comstock v. Mc-
 
 CHAP. XIII.] PARTNERSHIPS. 697 
 
 that equity interferes by a receiver with much less rehictance 
 when the partnership has been dissolved, than when it is still 
 in existence, yet where the proceedings are instituted against 
 a surviving partner by the representatives of a deceased mem- 
 ber of the firm, the court will not interfere without being first 
 satisfied, by the mismanagement or improper conduct of the 
 survivor, that the confidence reposed in him was misplaced.^i 
 And where a surviving partner has disposed in a valid and 
 binding manner of all the partnership assets before the filing 
 of a bill for a receiver by a creditor of the firm, it is improper 
 to appoint a receiver, since there is no property for him to take 
 and administer. 22 
 
 § 532. Mismanagement of survivor; relief granted on 
 bill by administrator of deceased. If, however, the surviv- 
 ing partner is guilty of mismanagement and of improper con- 
 duct in his control of the firm business, a different case is pre- 
 sented, and courts of equity are, under such circumstances, in- 
 clined to a somewhat liberal exercise of their extraordinary 
 jurisdiction, in behalf of the representatives of a deceased 
 partner.23 And in case of the death of one member of a firm, 
 in the absence of any partnership articles, or of any provision 
 for a continuance of the business by the administrators or rep- 
 resentatives of a deceased partner, if the survivor refuses to 
 proceed within a reasonable time to close up the firm business, 
 and continues to manage it in his own name, and for his own 
 benefit, equity will grant an injunction against its continu- 
 ance and will appoint a receiver, upon a bill filed by the ad- 
 ministrator of the deceased partner. 24 In such a case, the 
 survivor is regarded as a trustee for the creditors and repre- 
 sentatives of the deceased partner. And the laws of the state 
 requiring an executor or administrator to close up the estate 
 
 Donald, 113 Mich., 626, 71 N. W., 2.3 Holdcn's Adtn'rs v. McMakin, 
 
 1087. Par. Eq. Cas., 270; Madgwick v. 
 
 21 Walker v. House, 4 Md. Ch., Wimble, 6 Beav., 495; Miller v. 
 39. Jones, 39 111., 54. 
 
 22 Havens & Geddes Co. v. Har- 24 Holden's Adm'rs v. McMakin, 
 ris. 140 Tnd., 387, 39 N. E., 49. Par. Eq. Cas., 270.
 
 698 RECEIVERS. [chap. XIII. 
 
 of the deceased within one year, the same rule was held ap- 
 pHcable by analogy to the surviving partner, and he having 
 delayed and refused a settlement for a period of fourteen 
 months, using the firm property during this entire period for 
 his own benefit, it was held that there had been such improper 
 delay as to warrant the interposition of equity.^^ So when, 
 by the terms of the partnership articles, it is provided that in 
 case of the death of either partner, the option shall be given 
 his representatives of continuing the business, but upon the 
 death of one partner the survivors insist that they are entitled 
 to continue the firm with the funds of the deceased, and to 
 compel his representatives to be partners therein, they are en- 
 titled to a receiver as against the surviving partners.26 
 
 § 533. When administrator entitled to the relief; may 
 himself be receiver; the decree. The administratrix of a 
 deceased partner has a sufficient interest in the firm property, 
 as the personal representative of the deceased, to entitle her to 
 the appointment of a receiver over the interest of the deceased 
 in the firm assets, upon a bill for the settlement of the partner- 
 ship affairs.2'' And while the administrator of a deceased part- 
 ner primarily has nothing to do with the collection of firm 
 debts or with the management of firm assets, it being the duty 
 of the survivors to settle the partnership affairs, yet if there 
 should be an unreasonable delay in the performance of this 
 duty, or if the survivors are wasting the partnership property, 
 it becomes the right and duty of the administrator to insti- 
 tute proceedings against the survivors for an accounting and 
 a receiver, in order that the affairs of the partnership may be 
 properly adjusted. In such case, the administrator may him- 
 self, if otherwise a proper person, be appointed receiver, the 
 court, however, requiring him to give an additional bond with 
 satisfactory security.^S The proper decree in such a case is, 
 that the receiver be appointed upon giving the required bond, 
 
 25 Holden's Adm'rs v. McMakin, 27 Clegg v. Fishwick, 1 Mac. & G., 
 Par. Eq. Cas., 270. 294. 
 
 26 Madgwick v. Wimble, 6 Beav., 28 Miller v. Jones, 39 111., 54. The 
 495. principles by which courts of equity
 
 CHAP. XIII.] PARTNERSHIPS. 699 
 
 and that the surviving partners pay over to him such money 
 as has cx)me to their hands, and has not been expended by them 
 in the payment of partnership debts and in the legitimate ex- 
 penses of the business. They should also be required to de- 
 liver to the receiver all evidences of debt and choses in ac- 
 tion against debtors of the firm, and all personal property, if 
 any. belonging to the firm, and should be enjoined from the 
 collection of any debts due to the partnership.^^ 
 
 § 534. Rights of the receiver. In the class of cases un- 
 der consideration, when the administrator or representative of 
 the deceased partner procures the appointment of a receiver 
 of the partnership effects, the receiver by virtue of his appoint- 
 ment is invested with all the rights and equities of the de- 
 ceased partner, for the purposes of the trust with which he is 
 clothed. And he completely represents the equitable rights of 
 the administrator and of the deceased, for the purpose of ad- 
 ministering the assets of the firm and applying them in pay- 
 ment of the partnership indebtedness.^*^ And upon the ap- 
 pointment of a receiver for the settlement of partnership af- 
 fairs, after the death of a partner, he becomes fully invested 
 
 are governed, in this class of cases, administrator. If, however, there 
 are very clearly stated in the opin- is an unreasonable delay on the part 
 ion of the court by Mr. Justice of the surviving partners in closing 
 Lawrence, p. 60, as follows : "The the affairs of the partnership, or if 
 law governing the relations of the they are wasting the partnership 
 administrator of a deceased partner property, it is then the right and 
 to the surviving partner, so far as duty of the administrator, if the 
 concerns any questions involved in partnership creditors remain inac- 
 this case, is well settled. Prima- tive, to file a bill, as in the present 
 rily, the administrator has nothing instance, calling the survivors to ac- 
 to do with either the partnership count and praying for an appoint- 
 assets or the partnership debts. ment of a receiver and the complete 
 The surviving partners take the ex- adjustment of the partnership af- 
 clusive legal title to the former for fairs. The administrator himself, 
 the payment of the latter. If any if a proper person, may be made re- 
 assets remain in their hands after ceiver, but in that event the court 
 payment of all liabilities, they should require him to give a new 
 should account to the administrator bond as such." 
 for the distributive share of the 29 Miller v. Jones, 39 111., 54. 
 tlcccased, which then becomes, for "0 Tillinghast i'. Champlin, 4 R. I., 
 the first time, assets in his hands as 173.
 
 700 RECEIVERS. [chap. XIII. 
 
 with the possession and control of the assets, the surviving 
 partner having no further authority to adjust the affairs of 
 the firm. In such case, a judgment recovered by a former 
 creditor for services rendered, in a suit against the surviving 
 partner to which the receiver was not a party, is not binding or 
 conchisive as against the receiver, and the court may re-inves- 
 tigate the merits of such demand, and may determine for it- 
 self the amount which is justly due to such creditor.^l 
 
 § 535. Legatee of deceased partner, when entitled to 
 relief. When a legatee of a deceased partner was entitled 
 to his share of the profits accruing from the partnership busi- 
 ness, and continued the business with the surviving member 
 of the firm for a long period of years, being treated as a part- 
 ner and receiving his share of the profits, and he afterward 
 filed a bill for a dissolution, and defendant denied his right to 
 an accounting or to any relief, upon the ground that plaintiff, 
 being a minister, was incapacitated under an act of parliament 
 from engaging in any trading business, defendant also claim- 
 ing the entire property for himself, a receiver was allowed. ^2 
 
 § 536. Receiver allowed, notwithstanding appointment 
 of executor; authority to sue. In Louisiana it is held, that 
 a court having jurisdiction of an action for the settlement of 
 partnership affairs, has power to appoint a receiver, notwith- 
 standing the death of one partner and the appointment of 
 an executor or administrator of his estate ; and that such ap- 
 pointment is of itself sufficient authority for the receiver to 
 institute an action to recover money due to the firm.^^ 
 
 § 537. Relief allowed when answer admits facts alleged 
 in bill. When a bill in equity is filed by creditors of a part- 
 nership against the surviving members of the firm, for the set- 
 tlement of the firm accounts and for a receiver, and the answer 
 admits all the material facts alleged in the bill, it is proper to 
 appoint a receiver to take charge of the partnership assets.^^ 
 
 31 Kirkpatrick v. McElroy, 41 N. 33 Helme v Littlejohn, 12 La. An., 
 J. Eq.. 539, 7 Atl., 647. 298. 
 
 32 Hale v. Hale, 4 Beav., 369. ^^ Dick v. Laird, 4 Cranch C. C, 
 
 667.
 
 CHAP. XIII.] PARTNERSHIPS. 701 
 
 V. Functions and Duties of the Receiver. 
 
 § 538. Duty to collect debts; entitled to assets; will not be enjoined; 
 rights of third persons. 
 
 539. Takes whole equitable title to firm property; may bring suit, 
 
 suo motu, to obtain possession; choses in action; when re- 
 ceiver can not recover individual property of partner. 
 539a. Extent of receiver's title. 
 
 540. Selection; partner allowed to act without salary; holds funds 
 
 as officer of court. 
 
 541. Court will aid receiver in obtaining assets in hands of surviv- 
 
 ing partners. 
 
 542. Partner acting as receiver can not withhold funds as due to 
 
 him personally. 
 
 543. Sale not allowed by receiver of inferior court, pending appeal 
 
 as to its jurisdiction. 
 
 544. Receiver required to produce books and accounts for examina- 
 
 tion. 
 
 545. Payment of partnership debts. 
 
 546. Appointed to collect debts which defendants are enjoined from 
 
 collecting; payment to plaintiff. 
 
 547. Insane hospital; sale of lease and good-will; injunction against 
 
 continuing same business. 
 
 548. Receiver over husband on bill for divorce, not entitled to part- 
 
 nership property. 
 
 549. Receiver over brewing business, functions of. 
 
 550. Retiring partner compelled to pay notes, may have action 
 
 against receiver of new firm. 
 
 551. Purchaser of partner's interest not allowed to interfere with re- 
 
 ceiver. 
 
 552. Funds in receiver's hands not subject to garnishment. 
 552a. When receiver not required to pay deposit in full. 
 
 § 538. Duty to collect debts; entitled to assets; will not 
 be enjoined; rights of third persons. Upon the appoint- 
 ment of a receiver in an action for the dissolution of a part- 
 nership, it is his duty to proceed without delay to collect 
 the outstanding debts.^^ And when a receiver of part- 
 nership effects is appointed in proceedings under judgments 
 against the firm, and the appointment has become perfected 
 by his giving the requisite security, he becomes at once en- 
 
 35 Jackson v. De Forest, 14 How. Pr., 81.
 
 702 RECEIVERS. [chap. XIU. 
 
 titled to possession of the firm assets, which are regarded as 
 being- in the custody of the court, and not to be disposed of 
 without a hearing- of all i)artics in interest. And it is improp- 
 er, in such case, to enjoin the receiver from the management 
 of the property or fund, since this would be in effect equiv- 
 alent to restraining the court itself from disposing of the 
 funds which may come into the hands of its officer.^^ But 
 the appointment of a receiver, in an action for an accounting 
 and settlement of partnership affairs, will not be extended so as 
 to include and direct the taking possession of specific property 
 alleged to belong to the firm, when the question of whether it 
 is or is not partnership property is directly in issue by the 
 pleadings, and is one of the points in controversy in the liti- 
 gation.^^ And upon an application for a receiver in partner- 
 ship cases, the court will not undertake to determine what is 
 and what is not partnership property, as between members of 
 the firm and third persons, and if disputes arise with refer- 
 ence to any particular property claimed by third persons, the 
 proper course is to determine the controversy by an action 
 either for or against the receiver.^^ 
 
 § 539. Takes whole equitable title to firm property; 
 may bring suit, suo motu, to obtain possession ; choses in 
 action; when receiver can not recover individual property 
 of partner. A receiver of the effects of a partnership, ap- 
 pointed in an action for the settlement of the firm business, 
 is regarded as vested with the whole equitable title to the part- 
 nership property, without any assignment for that purpose, 
 and in an action to obtain possession of the property he repre- 
 sents the interests therein of all parties to the suit in which 
 he was appointed. And it is held, that to enable him to prop- 
 erly discharge his trust, he may, suo motu, and without special 
 leave of the court, bring an action to possess himself of the 
 
 36 Van Rensselaer v. Emery, 9 -^8 Higgins v. Bailey, 7 Rob. (N. 
 
 How. Pr., 135. Y.), 613. 
 
 •^7 Gregory v. Gregory, 1 Sweeny, 
 613.
 
 CHAP. XIII.] PARTNERSHIPS. 703 
 
 property to which he is officially entitled, incurring no risk 
 thereby except as to costs, and, least of all, have the persons 
 against whom he brings such action the right to object that 
 he brings suit without leave of court. ^^ The appointment of a 
 receiver upon the insolvency of the firm operates, in effect, as 
 an assignment of the firm assets, with all securities incident 
 thereto, for the benefit of firm creditors."*^ But since a re- 
 ceiver's authority is conferred by law, and is not like that of a 
 voluntary assignee of the parties, a receiver of a partnership 
 succeeds, not only to the legal title of the partners as joint 
 tenants, but also to the equitable rights and remedies of the 
 firm and of its beneficiaries. '^^ Ordinarily, however, the re- 
 ceiver is not entitled to sue for the recovery of debts due to 
 the firm without leave of court.'^^ B^t in an action brought 
 by the receiver to foreclose a vendor's lien upon real estate 
 which has been sold by him, it constitutes no defense that one 
 of the partners was not a party to the suit in v^hich the re- 
 ceiver was appointed, when it is not shown that such partner 
 was then alive and within the jurisdiction of the court, or that 
 he had a substantial interest in the partnership.^^ And when 
 the receiver is authorized to sell all the property, choses in ac- 
 tion and effects of the firm within the jurisdiction of the court, 
 a purchaser at such sale will acquire a good title to choses in 
 action and accounts due to the firm from persons resid- 
 ing beyond the limits of the state, the partners themselves 
 residing within the state and the court having full jurisdiction 
 over them. In such case, the members of the firm can not 
 afterward maintain an action against the purchaser to compel 
 
 30 Tillinghast v. Champlin, 4 R. recover firm goods which have been 
 
 I.^ 173. seized under a chattel mortgage 
 
 40Winslow V. Wallace, 116 Ind., executed by one member of the firm 
 
 317, 17 N. E., 923. after the other partner has become 
 
 41 Wallace v. Yeager, 4 Phila. R., insolvent and assigned his interest 
 251 ; Pearce v. Gamble, 72 Ala., 341. for the benefit of his creditors, Og- 
 
 42 Fincke v. Fnnke, 25 Hun, 616. den v. Gregg. 29 Hun. 146. 
 
 And see as to the right of such a 43 Stclzer v. La Rose, 79 Ind., 
 
 receiver to maintain an action to 435.
 
 704 RECEIVERS. [chap. XIII. 
 
 him to account for the proceeds which he has collected from 
 parties resithiig" beyond the state."^^ But since the receiver 
 takes only the firm assets and collects only the debts due to the 
 firm, it is improper for the court to direct him to collect for 
 the benefit of firm creditors from an assignee of an individual 
 partner, not indebted to the firm, the surplus which may re- 
 main in the hands of such assignee after payment of the in- 
 dividual creditors of such partner."*^ For the same reason, a 
 receiver appointed to take charge of the property of an insol- 
 vent partnership can not maintain a bill to set aside a convey- 
 ance made by a member of the firm of his individual property 
 which had been conveyed by him to defraud the creditors of 
 the firm. 4 6 
 
 § 539(7. Extent of receiver's title. It has been shown 
 elsewhere that a receiver appointed in a judgment creditors' 
 suit is regarded as a trustee and representative of the creditors 
 and that he may accordingly maintain all necessary actions 
 to set aside fraudulent conveyances and transfers executed by 
 the debtor prior to the receivership.'*'^ Where, however, the 
 receiver is appointed for the settlement of the affairs of a 
 partnership, not at the instance and for the benefit of creditors 
 but upon the application of one of the partners against the 
 other, such receiver is in no sense a representative of the cred- 
 itors of the firm and he accordingly occupies no better posi- 
 tion than the firm with respect to its property, and he can as- 
 sert no greater right or title with reference to the business 
 and property of the partnership than could the members of 
 the firm themselves. ^^ Thus, a receiver appointed in such a 
 
 44Loney v. Penniman, 43 Md., seniles v. Dunn, 61 N. J. Eq., 
 
 130. 391, 48 Atl., 315. 
 
 45 Wallace v. Milligan, 110 Ind., "^^ % ASA, ante. 
 
 498, 11 N. E., 599. See, as to the 48 Security Title & Trust Co. v. 
 
 liability of a co-partnership for a Schlender, 190 111., 609, 60 N. E., 
 
 loan made to the firm by one of its 854; Weber v. Weber, 90 Wis., 467, 
 
 members out of funds held by him 63 N. W., 757. 
 as a receiver, R3'an z*. Morrill, 83 
 Ky., 352.
 
 CHAP. XIII.] PARTNERSHIPS. 705 
 
 proceeding can not maintain an action to set aside a fraudulent 
 conveyance made by the partnership prior to the receivership.^^ 
 § 540. Selection; partner allowed to act without salary; 
 holds funds as officer of court. As regards the selection of 
 a proper person to be appointed receiver over a copartnership, 
 upon the dissolution of the firm, the general principles gov- 
 erning in the selection of receivers are applicable, and these 
 have been elsewhere discussed.^^ A plaintiff partner, in an 
 action for a dissolution of the firm, has sometimes been ap- 
 pointed receiver, although the practice in this country is an 
 unusual one, and only to be justified upon the implied condi- 
 tion that he will discharge the duties of his trust free of charge. 
 Such a receiver will not, therefore, be allowed any compensa- 
 tion for his services in managing the property intrusted to his 
 charge.^l But if the partners having a three-fourths interest 
 in the firm agree upon one of their number as receiver, and 
 the principal creditors of the firm unite in the application for 
 his appointment, he being otherwise well qualified for the posi- 
 tion, it is proper to appoint him upon his undertaking to act 
 without compensation.^^ fhe English practice seems to be to 
 give each of the partners liberty to propose himself to act as 
 receiver without salary.^^ But the partner who may be ap- 
 pointed no longer acts in the capacity or sustains the relation 
 of a partner, but is an officer of the court, having given due 
 security to account for the moneys which he may receive in 
 his official capacity, and being responsible directly to the court 
 for his conduct.^"* When, therefore, the defendant partner is 
 appointed receiver, in an action for the settlement of partner- 
 ship affairs, and uses a part of the firm assets in private spec- 
 ulations for his own benefit, the other partner can not main- 
 tain a bill in equity for a division of the profits realized out of 
 
 4fi Weber v. Weber, 90 Wis., 467, 52 Todd v. Rich, 2 Tenn. Ch., 107. 
 
 63 N. W., 757. 53 Blakeney v. Diifaur, 15 Bcav., 
 
 50 See chapter III, ante, Of Selec- 40: Sargant v. Read, 1 Ch. D., 600. 
 tion and Eligibility. •'^"^ Blakeney v. Dufaur, 15 Beav., 
 
 51 Brien v. Harriman, 1 Tenn. 40. 
 Ch., 467. 
 
 Receivers — 45.
 
 706 RECEIVERS. [chap. XIII. 
 
 the speculation, the defendant holding the funds not in the 
 capacity of a partner, but as a receiver and officer of the 
 court. 55 
 
 § 541. Court will aid receiver in obtaining assets in 
 hands of surviving partners. A receiver in partnership 
 cases is entitled to and will be allowed by decree of court the 
 possession of all money in the hands of the surviving partners, 
 as well as all evidences of indebtedness and choses in action 
 due to the firm, and all assets and personal property of the 
 firm. And the court may, if necessary, enforce its decree for 
 the delivery of such assets by the surviving partners to the re- 
 ceiver, by process of attachment. 56 
 
 § 542. Partner acting as receiver can not withhold funds 
 as due to him personally. When, pending an action for 
 the dissolution of a firm and the settlement of its affairs, one 
 of the partners is appointed receiver, he will not be allowed, 
 by virtue of his appointment, to withhold partnership funds, 
 collected in his capacity as receiver, upon the ground that they 
 are due to him personally, since to allow such an application 
 of the funds would necessarily defeat the very object of his 
 appointment, and would constitute a flagrant breach of trust. 
 And the partner acting as receiver has no greater right to the 
 control of funds collected by him in that capacity than have 
 his copartners, the entire fund being under the control and 
 subject to the disposal of the court.57 
 
 55 Whitesides v. Lafferty, 3 tween a receiver and a party to a 
 Humph., 150. The court, Turley, suit, as makes him liable for profits 
 J., say, p. 151 : "There is no pre- made by a use of the money dur- 
 tense for saying that complainant ing the continuance of his receiver- 
 is entitled to this division, upon the ship; he is an officer appointed by 
 ground that it was a partnership the court, responsible to the court 
 transaction; the relation of part- for the discharge of his duties, and 
 ners did not exist between the par- personally liable for any loss of the 
 ties at the time; it had been dis- funds in his hands." 
 solved, and defendant held the 56 Miller v. Jones, 39 111., 54. 
 moneys, not as partner, but as re- 57 Gridley v. Conner, 2 La. An., 
 ceiver. We know of no principle 87. Eustis, C. J., says, p. 89: 
 which creates such a relation be- "... We deem it proper to
 
 CHAP. XIII.] 
 
 PARTNERSHIPS. 
 
 707 
 
 § 543. Sale not allowed by receiver of inferior court, 
 pending appeal as to its jurisdiction. When proceedings 
 are pending in a court of inferior common-law jurisdiction for 
 the settlement of partnership affairs, and a receiver has been 
 appointed, but the question of the jurisdiction of the inferior 
 court is in doubt, it is improper for that court, pending an 
 appeal for the determination of its jurisdiction, to direct its 
 receiver to sell the partnership property, and such sale should 
 be held in abeyance until the question of jurisdiction is prop- 
 erly determined. 58 And it is improper, upon an interlocutory 
 order and in advance of a final hearing, to direct a sale by the 
 receiver of property as assets of the firm, when its title to such 
 
 state what we conceive to be the 
 law in relation to the obligations of 
 a partner, who, pending a suit for a 
 settlement anrf liquidation of a part- 
 nership, collects money belonging to 
 the partnership under the appoint- 
 ment from the court. A partner so 
 receiving it has no right to withhold 
 it from the action and control of the 
 court, under any plea or pretense 
 personal to himself. He can not be 
 permitted to defeat the very object 
 of his appointment, by violating or 
 evading his trust. If receivers, 
 partners or others are thus permit- 
 ted to retain the fund from credit- 
 ors, and as the cause progresses, in- 
 volving them in new litigation, how 
 can the partnership be settled in 
 the presence of these hydra preten- 
 sions? The retention of funds col- 
 lected under the authority of the 
 court is a flagrant breach of trust, 
 and the power to compel their im- 
 mediate subjection to its control it- 
 self unquestionable; and without 
 the vigilant and eflficient exercise of 
 this power on all proper occasions, 
 
 the judicial settlement of the con- 
 cerns of a partnership would be- 
 come a mere farce. After the dis- 
 solution of a partnership, and pend- 
 ing its liquidation, a partner is not 
 permitted to do any act, still less 
 make use of the partnership funds 
 in a manner inconsistent with the 
 purpose of a just and proper settle- 
 ment; and it has been held that, 
 where a partner has collected part- 
 nership money under circumstances 
 from which an agreement on his 
 part not to receive it can be inferred, 
 and where his receiving it was 
 contrary to good faith, he may be 
 held to pay the money into court. 
 In this case Conner was permitted 
 to retain as a partner the money 
 he has collected as receiver, and 
 confound it with the partnership 
 affairs. We think the money thus 
 collected ought to have been paid 
 into court, and that Conner had no 
 more right over it than his copart- 
 ners had." 
 
 58McNab V. Noonan, 28 Wis., 
 434.
 
 708 RECEIVERS. [chap. XIII. 
 
 property is denied by answer, and is one of the issues to be 
 determined in the action. ^^ 
 
 § 544. Receiver required to produce books and accounts 
 for examination. A receiver of a partnership may be re- 
 quired by order of court, upon the apphcalion of defendants 
 in the cause, to produce for examination before a master in 
 chancery all books of accounts relating to his management of 
 the firm business, or to receipts and payments made by him in 
 and about the business; but the court will not order him to 
 submit to an inspection of the books upon his own premises, 
 since it can not order that defendants may enter another man's 
 house.^^ 
 
 § 545. Payment of partnership debts. In Louisiana, it 
 has been held that the payment of partnership debts by a re- 
 ceiver appointed by consent of the partners, out of funds col- 
 lected by him in his official capacity, constitutes a sufficient 
 answer to a rule upon the receiver to show cause why he 
 should not pay the money into court, the receiver being treated 
 as the agent of the parties for the purposes of such payment. 
 It was accordingly held to be error, on the hearing of the rule 
 to show cause, to reject testimony offered by the receiver to 
 prove that he had paid the firm debts and that they were just- 
 ly due.61 
 
 § 546. Appointed to collect debts which defendants are 
 enjoined from collecting; payment to plaintiff. Upon a 
 bill by one member of a firm for a dissolution, a receiver 
 should be appointed to collect such debts as the remaining 
 partners are enjoined from collecting; and the receiver thus 
 appointed may be required, by order of court, to pay over to 
 plaintiff such proportion of the collections as he is entitled 
 to receive.^2 
 
 59 Brush V. Jay, 113 N. Y., 482, 62 Maher v. Bull, 44 Ifl., 97. As 
 21 N. E., 184. to the right of the partners to a 
 
 60 Maund v. Allies, 4 Myl. & Cr., participation in the profits realized 
 503. by the receiver during his contin- 
 
 61 Kellar v. Williams, 3 Rob. nance of the business, see McMahon 
 (La.), 321. V. McCIernan, 10 W. Va., 419.
 
 CHAP. XIII.] PARTNERSHIPS. 709 
 
 § 547. Insane hospital; sale of lease and good-will; in- 
 junction against continuing same business. When the 
 chief value of a partnership business is its good-will, which 
 has been built up by the joint efforts of all the partners, and 
 the business is of such a nature that it is impossible for a re- 
 ceiver to conduct it, as in the case of a partnership for carry- 
 ing on an insane hospital and lazaretto for foreign immigrants, 
 it is proper for the court to direct the receiver to sell the lease 
 of the premises where the business is conducted, together with 
 the good will. And in such case, for the purpose of giving 
 efficacy to the sale of the good-will, the court will permit either 
 of the parties to become a purchaser, and will enjoin the re- 
 maining parties from conducting the same business in that 
 locality. ^^ 
 
 § 548. Receiver over husband on bill for divorce, not 
 entitled to partnership property. When, upon a bill for 
 divorce, filed by the wife against her husband who has ab- 
 sconded, a receiver is appointed to take charge of the hus- 
 band's effects, his appointment does not divest the husband's 
 title to partnership property, and the receiver has no right to 
 dispossess the other partner. If, therefore, he has taken pos- 
 session of the firm property under a misapprehension of his 
 rights and duties, he will be required to make restitution there- 
 of to the other partner.^^ 
 
 § 549. Receiver over brewing business, functions of. 
 A receiver appointed over a partnership stock in trade, in the 
 business of brewing, has been directed to act as clerk in the 
 trade, and to collect in debts according to the course of the 
 business, to pay excise duties and other charges, and to bring 
 actions in the name of the partners. ^^ 
 
 § 550. Retiring partner compelled to pay notes, may 
 have action against receiver of new firm. When, upon dis- 
 solving a partnership, it is agreed between the partners that 
 the firm notes shall be paid by the members continuing in 
 
 63 Williams v. Wilson, 4 Sandf. 64 Hamill v. Hamill, 27 Md., 679. 
 
 Ch., 379. cr, skipp v. Harwood, Dick., 114
 
 710 RECEIVERS. [chap. XIII. 
 
 business under a new partnership, a part of the consideration 
 for such agreement being the sale of the retiring partner's in- 
 terest, who is afterward compelled to pay the notes, he has the 
 same remedy against a receiver of the assets of the new firm 
 to recover the amount paid, that he would have had against 
 the new firm itself before the appointment of a receiver, and 
 may maintain an action against the receiver to recover the 
 amount paid.^^ 
 
 § 551. Purchaser of partner's interest not allowed to in- 
 terfere with receiver. Where, in an action to dissolve a 
 partnership and to wind up its affairs, a receiver is appointed 
 and takes possession of the firm property, a subsequent pur- 
 chaser of one partner's interest in the firm can not, as assignee 
 or purchaser of such interest, interfere with the rights and du- 
 ties of the receiver, or with any property in his hands, since 
 he acquires by his purchase only such interest as his vendor 
 might have had in the partnership assets, after all liabilities 
 of the finn were discharged.^*^ 
 
 § 552. Funds in receiver's hands not subject to garnish- 
 ment. A receiver appointed on a bill for the dissolution of 
 a partnership, being an officer of court, and the funds in his 
 hands being in custody of the law, it has been held that such 
 funds are not subject to attachment or garnishment by the 
 firm creditors, and can only be disposed of by direction of the 
 court, not being subject to the action of the parties to the liti- 
 gation or of their creditors.^^ 
 
 66 Allyn V. Boorman, 30 Wis., until a dissolution of the partnership 
 684. has been judicially declared and a 
 
 67 Noonan v. McNab, 30 Wis., receiver ordered to make a pro rata 
 277. distribution of the assets among the 
 
 68 Receiver of Adams & Co. v. creditors, they are not prevented 
 Roman, unreported, cited in opin- from resorting to adverse proceed- 
 ion of Terry, J., in Adams v. Hack- ings, and may thereby gain a pref- 
 ett, 7 Cal., 187; Longstaff v. Hurd, erence over less diligent creditors. 
 66 Conn., 350. 34 Atl., 911. But see And see Adams v. Woods, 8 Cal., 
 opinion of Burnett, J., in Adams v. 152; Same v. Same, 9 Cal., 24; Nag- 
 Hackett, 7 Cal., 187, holding that, lee v. Minturn, 8 Cal., 540.
 
 CHAP. XIII.] PARTNERSHIPS. 711 
 
 § 552fl. When receiver not required to pay deposit in 
 tull. The receiver of an insolvent copartnership will not be 
 required to pay in full a balance due from such firm to cred- 
 itors who had deposited money with the firm from time to 
 time as security for advances, the deposit not being a special 
 one, or of any specific money, and neither the firm nor the re- 
 ceiver having any specific fund upon which such creditors 
 have a charge or lien.^^ 
 
 69 Butler z.. Sprague. 66 N. Y., Continental Life Insurance Co., 71 
 oyj. bee, also, Attorney-General v. N. Y., 325.
 
 CHAPTER XIV. 
 
 OF RECEIVERS OVER REAL PROPERTY. 
 
 I. Principles Upon Which the Relief is Granted § 553 
 
 II. Receivers as Between Tenants in Common 603 
 
 III. Receivers as Between Vendors and Purchasers 609 
 
 IV. Functions of the Receiver 618 
 
 I. Principles Upon Which the Relief is Granted. 
 
 § 553. The jurisdiction well established, but cautiously exercised; 
 courts averse to interfering in limine with possession under 
 title. 
 
 554. English doctrine of interference only in aid of equitable title; 
 
 distinction as to personalty and realty; conflicting claimants, 
 heirs at law. 
 
 555. Relief refused when there is adequate remedy at law. 
 
 556. Appointment does not affect title of either party; does not pre- 
 
 vent statute of limitations from running. 
 
 557. Receiver rarely granted against defendant in possession, claim- 
 
 ing under legal title; the general rule stated. 
 
 558. Exceptions to the rule based on probability that plaintiff will 
 
 prevail, and upon danger to the property. 
 
 559. Receiver refused when plaintiff's right is doubtful and no dan- 
 
 ger is shown. 
 
 560. Probability of plaintiff's success not sufficient, as against long 
 
 acquiescence, and when no danger is shown. 
 
 561. Not granted when notice of lis pendens will protect plaintiff's 
 
 rights. 
 
 562. The rule applied to case of lessor and lessee. 
 
 563. Danger to property an important element; dissensions in re- 
 
 ligious society. 
 
 564. Distinction between appointing receivers, and continuing those 
 
 already in possession. 
 
 565. Departure from rule; fraud by defendant in obtaining posses- 
 
 sion; inadequate consideration and undue influence. 
 
 566. Title shown by plaintiff, none by defendant; prevention of 
 
 vexatious litigation; abuse of trust and insolvency of de- 
 fendant; receiver of rents and profits pending litigation in 
 another state. 
 
 712
 
 CHAP. XIV.] REAL PROPERTY. 713 
 
 § 567. Appointed on bill by creditors when no personalty shown; 
 rights of judgment creditors in possession not prejudiced; 
 probable title in plaintiff and danger to rents. 
 
 568. Receiver in proceedings to determine widow's dower; receiver may 
 
 compel assignment of dower. 
 
 569. Receiver in proceedings to establish will, or to execute trusts 
 
 of will. 
 
 570. When granted in contest between heir-at-law and devisee un- 
 
 der will. 
 
 571. Appropriation of rents and profits as against heirs; objection 
 
 to administration by pretended heirs. 
 
 572. When granted as against tenant for life; devise to wife; set- 
 
 tlement upon daughter. 
 
 573. Vendor not allowed relief because of vendee's insolvency and 
 
 commission of waste. 
 
 574. When granted for protection of annuitants. 
 
 575. Relief generally refused in actions of ejectment. 
 
 576. When granted in ejectment, for preservation of rents and 
 
 profits pendente lite. 
 
 577. Plaintiff allowed receiver after recovery of lands, when neces- 
 
 sary to preserve rents and profits. 
 
 578. When granted over leasehold interest. 
 
 579. Assignee of lease not entitled to receiver. 
 
 580. Not granted over house on leased ground because of in- 
 
 solvency of defendant in possession. 
 
 581. Landlord may re-enter on expiration of term; discharge of re- 
 
 ceiver. 
 
 582. When same receiver extended to subsequent applications. 
 
 583. Right to rents as afifected by order extending receiver. 
 
 584. Receiver in behalf of cestui que trust as against trustees. 
 
 585. Relief granted for protection of rent charge. 
 
 586. Denied plaintiff in suit to enforce mechanic's lien. 
 
 587. Granted in aid of proceedings in bankruptcy. 
 
 588. Granted in action to apply trust property in payment of debts 
 
 equal in priority. 
 
 589. Nature of defendant's interest in real property; benefice of 
 
 clergyman. 
 
 590. When refused over ungathered crop; when allowed. 
 
 591. Refused in cases of marriage settlements; when allowed after 
 
 divorce. 
 
 592. Difficulty in collection of rent no ground for receiver. 
 
 593. Plaintiff's acquiescence, and participation in fraud, a bar to 
 
 relief. 
 
 594. Granted when property has escheated to state. 
 
 595. Refused on defendant paying rents and profits into court. 
 
 596. One not party to the cause can not object; remainder-man and 
 
 tenants can not restrain receiver from turning them out of 
 possession.
 
 714 RECEIVERS. [chap. XIV. 
 
 § 597. Practice in placing receiver in possession; who responsible for 
 loss by owner remaining in possession. 
 
 598. When granted before answer. 
 
 599. Effect of appointing receiver over corporation upon title to its 
 
 real estate. 
 
 600. Order should state precisely over what property receiver is ap- 
 
 pointed; appointment may be over part only. 
 
 601. When plaintiff entitled to funds in receiver's possession. 
 
 602. Real estate subject to judgment and execution on termination 
 
 of receiver's functions. 
 602a. When receiver allowed against plaintiff suing in forma pauperis. 
 
 § 553. The jurisdiction well established, but cautiously 
 exercised ; courts averse to interfering in limine with pos- 
 session under title. The power which is exercised by- 
 courts of equity in appointing receivers over real property, for 
 its better protection and to secure the rents and profits pen- 
 dente lite, although well established both in England and in 
 America, is yet regarded as an extremely delicate branch of 
 equity jurisdiction, and one whose exercise should be guard- 
 ed with the utmost caution. It will hereafter be shown that 
 the courts are exceedingly averse to any interference in limine 
 with the possession of real estate by a defendant, claiming 
 under legal title, and that equity will only interpose a receiv- 
 er, as against such possession, in cases of great emergency, 
 the general rule being that conflicting questions of title should 
 be determined in courts of law.l And while, as will be shown, 
 there are frequent cases where the relief is granted, upon spe- 
 cial circumstances of an equitable nature appealing strongly 
 to the conscience of the court, such cases will be found upon 
 investigation to illustrate and strengthen the general tendency 
 already indicated. 
 
 § 554. English doctrine of interference only in aid of 
 equitable title; distinction as to personalty and realty; 
 conflicting claimants, heirs at law. It was the established 
 doctrine of the English Chancery, that the court would never 
 exercise its extraordinary powers by appointing a receiver 
 over real property, in behalf of a claimant out of possession, 
 
 iSee, post, § 557.
 
 CHAP. XIV.] REAL PROPERTY. 715 
 
 except in aid of an equitable title.2 And a broad distinction 
 is recognized between interfering with the possession of real 
 estate by a receiver, and cases where the relief is extended for 
 the preservation of personal property pendente lite; since in the 
 case of personalty it is the whole property, the corpus, which 
 equity is called upon to protect by a receiver, and which may 
 be lost without the interference of the court, while in the case 
 of real property the court is only asked to preserve the rents 
 and profits, which are merely the proceeds of the property 
 de anno in annum, and which do not, therefore, demand the 
 same summary interference.^ When, therefore, there are sev- 
 eral conflicting claimants to an estate asserting their title as 
 heirs-at-law of the deceased owner, and no impediment is 
 shown to a trial of their rights at law, equity will not enter- 
 tain jurisdiction of the controversy by appointing a receiver 
 in behalf of one of the claimants not in possession who pre- 
 sents no equitable title, but a mere legal title or right which 
 may be asserted and established in a court of law. Nor does 
 the fact that there are outstanding terms, in such case, pre- 
 sent any additional ground for relief in equity by a receiver.^ 
 
 2 Carrow v. Ferrior, L. R., 3 Ch. three claimants, none of whom has 
 App., 719. established his title as heir-at-law. 
 
 3 Carrow v. Ferrior, L. R., 3 Ch- There is no privity or contract be- 
 App., 719. And see opinion of tween them. There is nothing bind- 
 Vice-Chancellor Wood in Talbot v. ing any of them to take any other 
 Hope Scott, 4 Kay & J., 132. course than that of standing on his 
 
 4 Carrow v. Ferrior, L. R., 3 Ch. strict rights, and we are asked to 
 App., 719. This was a contest be- decide that one of them can come 
 tween three claimants as heirs-at- here and ask the court to put a re- 
 law of a deceased lunatic, two of ceiver in possession, though there 
 the heirs having filed separate bills, is no allegation of any impediment 
 alleging the existence of outstand- to a trial at law beyond the exist- 
 ing terms, and praying for a re- ence of outstanding terms. I con- 
 ceiver of the real estate until the sidered this point much in Talbot 
 question of heirship could be deter- v. Hope Scott, 4 K. & J., 96, but 
 mined, the third claimant proceed- do not regret having heard it re- 
 ing by a petition in lunacy. The argued, though considering the vast 
 right to a receiver was denied. Lord amount of property involved in 
 Justice Wood observing as follows, that case, and the hostile feeling bc- 
 p. 728: "In this case there are tween the parties, the fact of there
 
 716 
 
 RECEIVERS. 
 
 [chap. XIV. 
 
 § 555. Relief refused when there is adequate remedy at 
 law. It necessarily follows from the doctrines above con- 
 sidered, as well as from the general principles governing the 
 extraordinary jurisdiction of courts of equity, that the aid of 
 an injunction and a receiver will not be granted in a contest 
 concerning the possession of real property, when adequate 
 redress may be had at law in the usual forms of action appro- 
 
 having been no appeal is significant. 
 I then came to the conclusion that 
 there was no jurisdiction to appoint 
 a receiver on the application of a 
 claimant who was out of possession 
 and did not claim by an equitable 
 title, and I am still of the same 
 opinion. The plaintiflF's case was 
 there rested on the ground of the 
 court's jurisdiction to interfere for 
 the protection of property pending 
 litigation, but that question had 
 been fully discussed in Jones v. 
 Jones, 3 Meriv., 161, which seemed 
 to me to have so settled the law 
 that I ventured to say there had 
 been no case for twenty years in 
 which a person claiming by a dry, 
 legal title as heir-at-law, and out of 
 possession, had ever attempted to 
 obtain the appointment of a re- 
 ceiver. The question as to the ef- 
 fect of outstanding terms is dis- 
 posed of by Bainbrigge v. Baddeley, 
 3 Mac. & G., 413. The vice-chan- 
 cellor has observed, upon this de- 
 cision, as being the reversal by the 
 lord chancellor of a decision by a 
 judge having much greater expe- 
 rience than himself in courts of 
 equity, but I can only look at it 
 as a judgment of a lord chancellor 
 differing from an inferior judge. 
 It was held in that case that the 
 existence of outstanding terms 
 makes no difference as to the ap- 
 pointment of a receiver, the course 
 
 of the court being merely to put the 
 outstanding terms out of the way, 
 and not to treat them as introducing 
 any new equities. It was urged that 
 this was not a case where the court 
 is asked to turn any one out of pos- 
 session, but a case where the pos- 
 session is vacant, and that the court 
 will interfere to protect the prop- 
 erty as it does to protect personal 
 estate pending a litigation as to 
 probate. I had occasion to consider 
 this in Talbot v. Hope Scott, 4 K. & 
 J., 96, and I observed that the two 
 cases were different. It may be 
 true, on the highest general prin- 
 ciples, that there ought to be no 
 difference in this respect between 
 real and personal property, but our 
 law clearly regards them very dif- 
 ferently, and looks upon the person 
 in possession of real estate as en- 
 titled to ke^ it till some one else 
 shows a better title. Unless the 
 person in possession of real estate 
 is affected by some equity, this 
 court will not interfere. The con- 
 sideration is not unimportant that 
 personal estate may be made way 
 with altogether, if this court does 
 not interfere, but only the rents of 
 real estate can be lost. But, in my 
 opinion, the leading principle gov- 
 erning the case is that this court 
 does not interfere as to real estate 
 unless there is an equity."
 
 CHAP. XIV.] REAL PROPERTY. 
 
 717 
 
 priate to such end; and in all such cases, equity will leave the 
 parties aggrieved to pursue their legal remedy. Thus, upon 
 a bill by a devisee of real estate, claiming title and right of 
 possession, and alleging that defendant has unlawfully intrud- 
 ed n.to possession, and has continued to hold without right 
 or authority, receiving the products and depriving plaintiff of 
 all means of support, the bill seeking an injunction and a re- 
 ceiver and to quiet and declare plaintiff's title, no sufficient 
 cause is presented to warrant the aid of equity, even though 
 it is alleged that the defendant in possession is insolvent. In 
 such a case, plaintiff, claiming the legal title, should assert 
 that title in a court of law by some appropriate action, and 
 equity will not interfere.^ 
 
 § 556. Appointment does not affect title of either party; 
 does not prevent statute of limitations from running. In 
 actions affecting the title to real property, when a receiver is 
 sought to take charge of the property, and to preserve the rents 
 and profits pending litigation, the appointment of the receiv- 
 er in no manner affects the title of either party to the litiga- 
 tion, although the relief will be granted only in behalf of one 
 having an acknowledged interest, or when there is a strong 
 probability of his ultimate recovery. The receiver is appoint- 
 ed for the benefit of the person making the application, and 
 for any other parties in interest who may choose to avail them- 
 selves of the proceedings. The primary object in making 
 such appointment is the preservation of the property, or of 
 Its rents and profits, from waste and destruction, while the 
 ulterior objects had in view are those contemplated by the 
 suit itself. And if plaintiff ultimately succeeds in establishing 
 his title to the entire property, the appointment may be re- 
 garded as having been entirely for his benefit.^ And it would 
 seem that the appointment of a receiver does not so alter the 
 possession of the estate in controversy, in the person who 
 may finally be adjudged to have been entitled thereto at the 
 
 5 Pfeltz V. Pfeltz, 14 Md., 376. 6 Chase's Case, 1 Bland, 206.
 
 718 RECEIVERS. [CIIAP. XIV. 
 
 time of the appointment, as to prevent the operation of the 
 statute of hmitations dnring the controversy.'^ 
 
 § 557. Receiver rarely granted against defendant in pos- 
 session, claiming under legal title ; general rule stated. It 
 has ah'eady been shown, that equity is extremely averse to 
 any interference with the possession of real property, by a de- 
 fendant claiming under a legal title. And it may be laid 
 down as a general proposition, supported by an overwhelming 
 array of authority, both in England and in America, that 
 courts of equity proceed with extreme caution in granting re- 
 ceivers as against a defendant in possession, and will rarely 
 interfere with such possession by appointing a receiver in lim- 
 ine, upon a mere legal title asserted by plaintiff. And when- 
 ever the contest is simply a question of disputed title to the 
 property, plaintiff asserting a legal title in himself, against 
 a defendant in possession and receiving rents and profits un- 
 der claim of legal title, equity refuses to lend its extraordinary 
 aid by interposing a receiver, just as it refuses an injunction 
 under similar circumstances, leaving the plaintiff to assert his 
 title in the ordinary forms of procedure at law. And while, as 
 will hereafter be shown, there are special circumstances of 
 fraud or of imminent danger of loss or of irreparable injury, 
 which may sometimes warrant a departure from the general 
 rule, yet in the absence of any such controlling circumstances, 
 the courts insist upon its rigid enforcement, and refuse to de- 
 prive a defendant of his possession, under claim of title, until 
 plaintiff's right is established at law.^ A departure from the 
 
 7 Anonymous, 2 Atk., IS. & Cr., 162 ; Municipal Commission- 
 
 8 Lloyd V. Passingham, 16 Ves., ers of Carrickfergus v. Lockhart, 
 59; S. C, 3 Meriv., 697; Mordaunt Ir. Rep., 3 Eq., 515; Parkin v. Sed- 
 V. Hooper, Amb., 311; Owen v. Ho- dons, L. R., 16 Eq., 34; Foxwell v. 
 man, 3 Mac. & G., 378, affirmed by Van Grutten, (1897), 1 Ch., 64; 
 the House of Lords, 4 H. L. Rep., Vause v. Vl'^oods, 46 Miss., 120; 
 997; Bainbrigge z;. Baddeley, 3 Mac. Schlecht's Appeal, 60 Pa. St., 172; 
 & G., 413 ; Talbot v. Hope Scott, 4 W^illis v. Corlies, 2 Edw. Ch., 281 ; 
 Kay & J., 96 ; Lancashire v. Lan- Gregory v. Gregory, 33 N. Y. Supr. 
 cashire, 9 Beav., 120; Skinners Ct. R., 1; Clark v. Rtdgely, 1 Md. 
 Company v. Irish Society, 1 Myl. Ch., 70; Chicago & Allegheny Oil
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 719 
 
 rule can only be justified upon strong grounds of judicial ne- 
 cessity, or in case of fraud clearly proven, or of imminent dan- 
 ger unless immediate possession is taken by the court.9 And 
 the burden rests upon complainant to make out a clear case to 
 justify the relief, and the court should be reasonably satisfied 
 that he will finally recover and that the benefit of such recovery 
 will be lost to him without a receiver, before it will interfere; 
 and an affidavit upon information and belief is not sufficient 
 ground for interposing. lO Nor will defendant be deprived 
 of his possession by a receiver, unless it is made to appear 
 that there is great risk of ultimate loss to the property, and of 
 insolvency on the part of defendant, so that he will be unable 
 to respond to a final decree. ^ And in the absence of fraud, 
 or of any privity between the parties, or of any equities touch- 
 ing the conscience of defendants in possession, equity inva- 
 riably refuses to extend the aid of a receiver, until plaintiff has 
 established his title at law.i2 And where a defendant in eject- 
 
 & Mining Co. v. U. S. Petroleum 
 Co., 57 Pa. St., 83; S. C, 6 Phila. 
 521 ; Cofer v. Echerson, 6 Iowa, 
 502; Emerson and Wall's Appeal, 
 95 Pa. St., 258 ; De Walt v. Kinard, 
 19 S. C, 286; Rollins v. Henry, 77 
 N. C, 467; Twitty v. Logan, 80 N. 
 C, 69; Bryan v. Moring, 94 N. C, 
 694; Sengfelder v. Hill, 16 Wash., 
 355, 47 Pac, 757, 58 Am. St. Rep., 
 36; Spokane v. Amsterdanisch T. 
 K., 18 Wash., 81, 50 Pac, 1088; Kel- 
 ly V. Steele, 9 Idaho, 141, 72 Pac, 
 887; Ryder v. Bateman, 93 Fed., 
 16. See PulHs v. Pullis, 157 Mo., 
 565, 57 S. W., 1095 ; Freer v. Davis, 
 52 West Va., 35, 43 S. E., 172, 94 
 Am. St. Rep., 910. As to the right 
 to a receiver over real property and 
 the circumstances which will justify 
 the relief, under the code of pro- 
 cedure of North Carolina, which 
 provides that a receiver may be ap- 
 pointed "before judgment, on the 
 
 application of either party, when he 
 establishes an apparent right to 
 property, which is the subject of the 
 action, and which is in the posses- 
 sion of an adverse party, and the 
 property or its rents and profits 
 are in danger of being lost, or mate- 
 rially injured or impaired," see Mc- 
 Nair v. Pope, 96 N. C, 502, 2 S. E., 
 54. As to the appointment of a re- 
 ceiver at the instance of the holder 
 of a tax certificate covering prem- 
 ises involved in a foreclosure suit, 
 see Walker v. Fitzgerald, 69 Neb., 
 52, 95 N. W., 32. 
 
 9 Lloyd V. Passingham, 16 Ves., 
 59. And see S. C, 3 Meriv., 697, 
 where a subsequent application for 
 a receiver was also refused. 
 
 10 Davis V. Reaves, 2 Lea, 649. 
 
 11 Vause V. Woods, 46 Miss., 120. 
 
 12 Talbot V. Hope Scott, 4 Kay & 
 J., 96, a leading case, in which the 
 English authorities are carefully
 
 720 
 
 RECEIVERS. 
 
 [chap. XIV. 
 
 ment succeeds in the trial court in establishing his defense 
 that he is in possession as a purchaser and not as a tenant of 
 the plaintiff, as claimed by the latter, the court will refuse a 
 receiver for the rents and profits pending an appeal from the 
 judgment of the trial court. ^^ 
 
 § 558. Exceptions to the rule based on probability that 
 plaintiff will prevail, and upon danger to the property. The 
 grounds of the exceptions to the general rule, as above stated, 
 
 reviewed. Vice-Chancellor Wood 
 observes, p. Ill : "With regard to 
 the first part of the relief prayed 
 by the bill, namely, the receiver, 
 which is really the substantial part 
 of the case, I apprehend that, as to 
 the settled estates, it is too clear 
 for any contention at the present 
 day, that this court will not inter- 
 fere at the instance of a person 
 alleging a merely legal title in him- 
 self against other persons in pos- 
 session of the estates, to grant a 
 receiver and put them out of pos- 
 session. In Lord Fingal v. Blake, 2 
 Moll., 78, and in the subsequent 
 case of Lloyd v. Lord Trimleston, 
 id., 81, there are some observations 
 of Sir A. Hart, which seem to have 
 a leaning in favor of such interfer- 
 ence, and to which I shall refer 
 presently; but there is no decision 
 which in the least bears out the 
 proposition that the court will in- 
 terfere under such circumstances, 
 for it is manifest that, in the first 
 of these cases, the receiver was 
 granted by consent. That there 
 may be a possible case in which 
 this court would interfere to pre- 
 vent absolute destructive waste, 
 where the value of the property 
 would be destroyed if no steps were 
 taken, I can understand ; but I have 
 found nothing that bears any re- 
 semblance to the doctrine con- 
 
 tended for, that at the instance of 
 a person alleging a mere legal title, 
 this court will interfere against an- 
 other who is in possession, to de- 
 prive him of that possession. I 
 have known, and everybody must 
 have known, numerous instances 
 where ejectment has been brought 
 for very valuable property, upon a 
 merely legal title; yet I think I 
 may say that, for the last twenty 
 years, if not for longer, no one has 
 ever dreamt of approaching this 
 court, however heavy the litigation 
 between the parties, for the pur- 
 pose of obtaining a receiver, until 
 he had established his right at law 
 to possession of the estates. The 
 ground of the rule adopted by the 
 court, in this respect, I conceive to 
 be extremely sound ; the general 
 ground being that the court can 
 not interfere with a legal title of 
 any description, unless there be 
 some equity by which it can affect 
 the conscience of the defendant. 
 Where there is an entire want of 
 privity between the plaintiff and 
 the defendant, and the defendant is 
 simply a wrong-doer at law, this 
 court does not take upon itself to 
 interpose, unless in very exceptional 
 cases." 
 
 13 Corbin v. Thompson, 141 Ind., 
 128, 40 N. E., 533.
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 721 
 
 will be found, upon examination, to resolve themselves into 
 two general conditions, both of which must combine to war- 
 rant a court of equity in granting a receiver as against a de- 
 fendant in possession. These conditions are, first, that plain- 
 tiff must show a strong ground of title, with a reasonable 
 probability that he wall ultimately prevail; and second, that 
 there is imminent danger to the property, or to its rents and 
 profits, unless the court shall interpose.^^ Especial importance 
 is attached by the courts to the first of the conditions here 
 named, and when the parties are litigating the right to real 
 property, and the litigation depends upon questions to be de- 
 cided at law, defendant beiag in possession and standing on 
 his legal title, it is regarded as an indispensable condition to 
 the exercise of the jurisdiction of equity by a receiver, that a 
 reasonable probability be shown to the court that the par- 
 ties claiming to disturb the possession will ultimately estab- 
 lish their title to the property.i^ And when this question is 
 
 14 Mordaunt v. Hooper, Amb., 
 311 ; Bainbrigge v. Baddeley, 3 Mac. 
 & G., 414; John v. John, (1898), 2 
 Ch., 573; Ryder v. Bateman, 93 
 Fed., 16. See, also. Mayo v. Mc- 
 Phaiil, 71 Ga., 758. In Mordaunt 
 V. Hooper, Amb., 311, Lord Hard- 
 wicke stated that a motion for a 
 receiver was very uncommon where 
 the matters in dispute depended on 
 a mere legal title, although a case 
 might be so circumstanced as to in- 
 duce the court to grant it. And 
 both the grounds stated in the text 
 being fully made out by affidavit and 
 by defendant's answer, a receiver 
 was allowed. But the reporter 
 adds, that "it was a very strong 
 case, and almost all the facts in- 
 sisted on by defendant in his answer 
 were denied by affidavits." In 
 Whyte V. Spransy, 19 App. D. C, 
 450, a receiver was held properly 
 appointed to collect the rents and 
 Receivers — 46. 
 
 profits of real estate pending an ac- 
 tion of ejectment to recover the 
 possession of the property, where it 
 appeared that the plaintiff, who had 
 made to the defendants a loan upon 
 the property secured by a trust deed, 
 had purchased the property at fore- 
 closure sale upon default in the pay- 
 ment of Interest and taxes by the 
 defendants, who were insolvent and 
 were refusing to deliver up pos- 
 session of the property and were 
 converting the rents and profits 
 thereof to their own use, thereby 
 compelling the plaintiff to resort 
 to an action of ejectment which, ow- 
 ing to the crowded condition of the 
 dockets of the courts, could not be 
 tried for a year. 
 
 15 Bainbrigge v. Baddeley, 3 Mac. 
 & G., 414. See, also, Gofer v. 
 Echerson, 6 Iowa, 502 ; Gregory v. 
 Gregory, 33 N. Y., Supr. Ct. R., 1. 
 Bainbrigge v. Baddeley, 3 Mac. &
 
 722 
 
 RECEIVERS. 
 
 [chap. XIV. 
 
 involved in much obscurity, and is dependent upon the con- 
 struction of deeds, which is attended with doubt and difficulty, 
 the court may properly refuse to interfere.^^ 
 
 G., 414, was an action to set aside 
 a will, under which defendant 
 claimed title to, and was in posses- 
 sion of, the property in dispute. 
 The Master of the Rolls having ap- 
 pointed a receiver of the property 
 upon the application of plaintiff, the 
 order was discharged on motion 
 before the lord chancellor. Lord 
 Truro observes, p. 417: "It is ad- 
 mitted that, if the will of 1818, 
 under which the defendant claims, 
 can be substantiated as a valid will, 
 the plaintiff has no case. The valid- 
 ity of the will is a question which, 
 from its nature, must be decided at 
 law. . . . Now, it appears to 
 me that the jurisdiction of the 
 court to grant a receiver can not be 
 denied, nor do I understand it to 
 be denied. There are few cases that 
 can be stated in which the court 
 has not jurisdiction when it is es- 
 sential to the justice of the case to 
 interfere to preserve the property 
 for the party entitled. But that 
 jurisdiction is governed by circum- 
 stances applicable to the different 
 stages of proceedings, and to differ- 
 ent cases; but when the parties are 
 litigating the right to property, and 
 the litigation depends upon ques- 
 tions then to be decided at law, 
 what are the circumstances in which 
 the jurisdiction is to be exercised 
 and is properly applicable in grant- 
 ing a receiver? There are, I appre- 
 hend, two grounds, and two only; 
 first, that there is a reasonable prob- 
 ability of success on the part of the 
 plaintiff; and secondly, that the 
 property, the subject of the suit, is 
 in danger. This motion, however, 
 
 is made against a party who is in 
 possession; that possession is not 
 shown to have been obtained by 
 violence or by wrong, using the 
 word 'wrong' in the sense of being 
 without color of title, but under the 
 sanction of the court. What, under 
 such circumstances, is it proper for 
 me to presume? What is the prima 
 facie case, as far as concerns his 
 title? Am I warranted in presum- 
 ing that the will under which he 
 claims is bad or good? I apprehend 
 I ought to presume, until I have the 
 case so before me as to enable me 
 judicially to form an opinion upon 
 the subject, that the will is good. 
 This court ought not, in any case, 
 to disturb the possession of a party 
 who stands upon his legal title, 
 without a reasonable probability 
 that the plaintiff will ultimately 
 succeed. I consider, therefore, that 
 one indispensable ground for the 
 exercise of the jurisdiction is the 
 reasonable probability shown to 
 the court that the parties claim- 
 ing to disturb the possession will 
 ultimately establish a title to it. I 
 do not see any such reasonable 
 probability here; not at all using 
 that expression to prejudice the 
 plaintiff's title, or to express any 
 opinion upon it. His case may be 
 the strongest that ever was pre- 
 sented ; it may, when it comes to 
 be laid before the proper tribunal, 
 entitle him to a verdict without 
 any doubt or hesitation; but I have 
 not the materials before me to war- 
 rant me in coming to that conclu- 
 sion." 
 16 Owen V. Homan, 3 Mac. & G.,
 
 CHAP. XIV.] REAL PROPERTY. 723 
 
 § 559. Receiver refused when plaintiff's right is doubt- 
 ful and no danger is shown. As illustrating the general 
 doctrine already stated, it is held that when the defendant is 
 in possession, having the legal estate, without fraud, and also 
 claims to be the equitable owner, there being a doubt as to 
 the question of right between the parties, and no danger al- 
 leged or shown as to the rents and profits, the court will refuse 
 a receiver.!''' So when the contest before the court is merely 
 as to the right of possession, and plaintiffs show no peculiar cir- 
 cumstances or immediate danger to the property, requiring 
 the intervention of a receiver, the only ground relied upon be- 
 ing the alleged insolvency of defendant in possession, equity 
 will not interfere, especially if there is doubt as to plaintiff's 
 right to recover.l^ 
 
 § 560. Probability of plaintiff's success not sufficient, 
 as against long acquiescence, and when no danger is shown. 
 While the probability that plaintiff will ultimately succeed in 
 establishing his title is an important element in determining 
 whether a receiver shall be allowed as against a defendant in 
 possession, yet such probability is not of itself sufficient ground 
 for interfering, when defendant's possession has been acqui- 
 esced in for a long series of years, and no danger to the prop- 
 erty is shown from a continuance of such possession. ^^ And 
 when the property in controversy has been held and managed 
 and its proceeds have been applied by a corporation, in a par- 
 ticular manner and for a long period of years, equity will not 
 disturb such possession by a receiver and an injunction, upon 
 the ground that such application is a breach of trust, unless 
 the court is perfectly satisfied that defendant in possession 
 
 378, affirmed on appeal to the House growing upon it, see Smith v. Liisk, 
 
 of Lords, 4 H. L. Rep., 997. See, 119 Ala., 394, 24 So., 256. 
 
 also, Cofer v. Echerson, 6 Iowa, 18 Cofer v. Echerson, 6 Iowa, 502. 
 
 502. 19 Municipal Commissioners of 
 
 17 Lancashire v. Lancashire, 9 Carrickfcrgus v. Lockhart, Ir. Rep., 
 
 Beav., 120. As to the right to a re- 3 Eq., 515. 
 ceiver over real estate the chief 
 value of which consists of timber
 
 724 RECEIVERS. [chap. XIV. 
 
 is a mere naked trustee, without any right or discretion in 
 the management of the property.^O 
 
 § 561. Not granted when notice of lis pendens will 
 protect plaintiff's rights. It has already been shown that 
 equity will not disturb the possession of a defendant holding 
 under claim of legal title, by appointing a receiver when ade- 
 quate redress may be had at law. In accordance with this 
 principle, it is held where plaintiff shows no probable cause 
 for his ultimate recovery, and where it is apparent that the 
 filing of a notice of lis pendens, in accordance with the prac- 
 tice of the state, will operate effectually to prevent a transfer 
 of the lands in controversy pendente lite, and will protect 
 plaintiff's equitable interest therein, if any, that a receiver will 
 not be granted. 2^ 
 
 § 562. The rule applied to case of lessor and lessee. The 
 general rule already stated, denying the aid of a receiver in a 
 contest as to title as against a defendant in possession, is ap- 
 plicable to the case of a lessor and lessee of real estate, and 
 equity rarely interferes with the lessee's possession by grant- 
 ing a receiver. The lessee, being clothed with title and posses- 
 sion under his lease, and being in the enjoyment of rights ap- 
 parently legal, will not be deprived of his possession by a re- 
 ceiver, unless under very urgent and peculiar circumstances. 
 And to entitle him to relief in such a case, the plaintiff or lessor 
 must show a clear right, with such attending circumstances 
 of danger or of probable loss as will move the conscience of a 
 chancellor. Thus, in the case of a lease of certain premises, 
 conferring upon the lessee the right to bore for and take oil 
 therefrom, the lessee returning as rent one-fourth of the product 
 to the lessor, in an action by the latter in equity for an account- 
 ing and an injunction against the lessee, in aid of an action at 
 law for the forfeiture of the lease, equity will refuse an injunc- 
 
 20 Skinners Company v. Irish So- Supr. Ct. R., 1 ; Spokane v. Amster- 
 ciety, 1 Myl. & Cr., 162. danisch T. K., 18 Wash., 81, 50 Pac. 
 
 21 Gregory v. Gregory, 33 N. Y. 1088.
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 725 
 
 tion and a receiver of the lessee's portion of the proceeds.22 
 But in an action by a lessor against lessees for the recovery of 
 possession after the expiration of the term, the title being- in 
 plaintiff and possession being wrongfully withheld by defend- 
 
 22 Chicago & Allegheny Oil & 
 Mining Co. v. The United States 
 Petroleum Co., 57 Pa. St., 83; S. C, 
 6 Phila., 521. The court, Agnew, J., 
 say, in the case as reported in 
 57 Pa. St., at p. 89: "The orig- 
 inal bill, in this case, prayed for a 
 decree of forfeiture of the lease 
 held by the defendants, and for the 
 appointment of a receiver for the 
 lessee's share of the oil. The 
 amended bill avers breaches of the 
 covenant in the lease, and a forfei- 
 ture thereby; states that an action 
 at law has been brought to enforce 
 the forfeiture, and that this bill is 
 in aid thereof; and then prays for 
 an account of all the oil, and for the 
 appointment of a receiver as be- 
 fore, and in the meantime that the 
 defendants shall be restrained from 
 taking and disposing of any oil ob- 
 tained upon the land. The prayer 
 for an account being withdrawn, 
 the relief prayed for is the appoint- 
 ment of a receiver of the defend- 
 ants' portion of the oil, and an in- 
 junction to restrain the defendants 
 in the meantime, that is, until the 
 suit at law is determined. . . . 
 What, then, are we called upon to 
 do? Simply to appoint a receiver 
 to take into custody and to deprive 
 the lessee of his share of the prod- 
 uct until the plaintiffs can see 
 whether they will be successful in 
 obtaining a judgment of forfeiture 
 in a doubtful case. No receiver is 
 asked for the landlord's portion, 
 and plainly because as to it the 
 purpose is to require delivery with- 
 
 out interruption. The actual pur- 
 pose is to take into custody that 
 which will be mesne profits in the 
 event of establishing the forfeiture. 
 Took at the case in any direction, 
 and all that is in it is to obtain our 
 assistance in giving effect to an 
 alleged forfeiture, and to restrain 
 the defendants from the exercise of 
 their legal rights under the lease, 
 while the plaintiffs are engaged in 
 experimenting at law for the for- 
 feiture. It is not for the protection 
 of a clear and well defined right, 
 and to prevent an irremediable in- 
 jury which may ensue if we do not 
 intervene, nor is it the ordinary case 
 of one who shows an equitable 
 right in the subject of custody, and 
 asks the court to interfere for its 
 security until the termination of 
 litigation. The appointment of a 
 receiver is the exercise of a power 
 in aid of a proceeding in equity, 
 and is the subject of sound discre- 
 tion. The court must be convinced 
 that it is needful and is the appro- 
 priate means of securing a proper 
 end. Such an appointment is a 
 strong measure, and not to be ex- 
 ercised doubtingly. Where a party 
 is clothed with title and possession 
 such as are conferred by a lease in 
 writing, and is in the enjoyment of 
 rights apparently legal, a receiver 
 will not be appointed unless under 
 urgent and peculiar circumstances. 
 The plaintiff must show a clear 
 right in such a case, or a prima 
 facie, with such attending circum- 
 stances of danger or probable loss
 
 726 RECEIVERS. [chap. XIV. 
 
 ants, who are insolvent, a receiver may properly be appoint- 
 ed.23 
 
 § 563. Danger to property an important element; dis- 
 sensions in religious society. Upon an application for a 
 receiver to take charge of real estate and receive the rents and 
 profits, pending a litigation as to the right of conflicting claim- 
 ants, a vital point of inquiry, as already indicated, is, as to 
 whether there is danger to the property by suffering it to re- 
 main in possession of the party controlling it. Or, in other 
 words, are there any special circumstances rendering it neces- 
 sary for the better preservation of the property, pendente lite, 
 that it should b«i taken under custody of the court. And when 
 no such circumstances are shown, the court will not exercise 
 its summary jurisdiction by a receiver. For example, when an 
 unincorporated religious society holds certain real estate, the 
 legal title to which is vested in trustees for the use of the so- 
 ciety, and a dissension occurs resulting in the withdrawal of 
 one portion of the society from the other, and the members 
 withdrawing claim to hold the original faith of the society 
 and to be entitled to the realty, upon a bill filed by them to 
 establish their right to the property as against the trustees in 
 possession, a receiver will not be granted when there is neither 
 proof nor allegation before the court of danger to the proper- 
 ty from waste or destruction by defendants, and no apprehen- 
 sion of injury in consequence of the property remaining in 
 their possession, or under their control, pending the litiga- 
 tion.24 
 
 as will move the conscience of a (1902) 1 Ch., 387; Leney v. Cal- 
 
 chancellor to interfere. Finding lingham, (1908) 1 K. B., 79. 
 
 no such elements in this case, the 24 Willis v. Corlies, 2 Edw. Ch., 
 
 bill is dismissed, and the costs or- 281. McCoun, Vice-Chancellor, 
 
 dered to be paid by the plaintiffs." says, p. 286: "The defendants, as 
 
 23 Nesbitt V. Turrentine, 83 N. C, trustees and as such committee, have 
 
 535. As to the right of the lessor the present possession, and assume 
 
 of a hotel to a receiver for the li- the exercise of rights in those ca- 
 
 cense and for the rents and profits, pacities. Believing themselves to be 
 
 see Charrington & Co. v. Camp, the rightful trustees and managers.
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 727 
 
 § 564. Distinction between appointing receivers, and 
 continuing those already in possession. While courts of 
 equity, as is thus shown, are extremely averse to interfering 
 by a receiver with the possession of real property held by de- 
 fendants under a claim of legal title, and will not ordinarily 
 interpose unless there be some clear equity afifecting the con- 
 science of the party in possession, yet when the property is ac- 
 tually in possession of the court by its receivers, and a propo- 
 sition is pending for a com])romise and a division of the prop- 
 erty between the different claimants, it is proper for the court 
 to continue its custody of the property already assumed, until 
 the rights of the parties may be adjusted. The question pre- 
 sented, in such case, is not the creation but the continuance of 
 the receivership, and the burden falls, not upon the applicant 
 to continue, but upon those who seek to rescind the action of 
 the court. It is proper, therefore, under such circumstances, 
 to continue the receiver until further order.25 
 
 they take care to preserve the prop- 
 erty as their own; and there is 
 neither proof nor allegation before 
 me of the danger to it from acts 
 of waste or destruction by defend- 
 ants, or any apprehension of injury 
 in consequence of the property 
 being in their possession or under 
 their control pending the litiga- 
 tion. Nor is it alleged that the 
 defendants are irresponsible men, 
 and unable to make good the loss 
 of rents to the complainants, if 
 they, the defendants, should be de- 
 creed to account for rents which 
 they may in the meantime receive. 
 Under circumstances like these, it 
 appears unnecessary to appoint a 
 receiver, nor would such appoint- 
 ment be consistent with the prin- 
 ciples by which this court is gov- 
 erned. . . After all, it comes 
 back to the only inquiry which I 
 apprehend can be made in this 
 
 stage of the cause: is there danger 
 to the property? In other words, 
 is there evidence of fraud in ob- 
 taining the possession, or any spe- 
 cial circumstances to render it nec- 
 essary for the preservation of the 
 property pendente lite, or proper in 
 the exercise of a sound discretion 
 for the interference of the court in 
 this summary manner? As there 
 is scarcely a color of pretense for 
 this application on any of the above 
 grounds, I must refuse it with 
 costs." 
 
 25 State V. Allen, 1 Tenn. Ch., 512. 
 The distinction is clearly stated 
 by Cooper, Chancellor, as follows, 
 p. 514: "If this application was to 
 have a receiver for the first time 
 upon property in possession of the 
 defendants under an adverse claim 
 as heirs and devisees of W. P. 
 Downs, I should probably refuse it. 
 The court is very slow to appoint a
 
 728 
 
 RECEIVERS. 
 
 [chap. XIV. 
 
 § 565. Departure from rule; fraud by defendant in ob- 
 taining possession ; inadequate consideration and undue in- 
 fluence. Having thus considered the general doctrine of 
 courts of equity, denying the aid of a receiver as against a de- 
 fendant in possession, in a contest concerning the legal title, 
 it remains to examine those cases where a departure from the 
 rule has been allowed, upon grounds of a purely equitable 
 nature, appealing strongly to the conscience of a chancellor. 
 The element of fraud in obtaining possession by a defendant 
 has been treated by the courts as an important feature in 
 cases where a departure from the general rule has been sanc- 
 tioned. And when it is sought to annul a conveyance of real 
 
 receiver of realty in the peaceable 
 possession of defendants under a 
 claim of right, and when the con- 
 test is between claimants of the 
 legal title. For the court can not 
 interfere with the legal title, unless 
 there be some equity by which it 
 can affect the conscience of the 
 party in possession. And such in- 
 terference is, to a certain extent, 
 giving relief, and upon a prelimi- 
 nary motion, depriving the defend- 
 ant of a present use and enjoyment 
 of the estate, and pro tanto and 
 pro tempore, giving a decision 
 against him. The property was 
 not, however, at the filing of this 
 bill, in the peaceable possession of 
 the defendants. On the contrary, 
 it was in the custody of this court, 
 by its receivers, at the instance of 
 several of these defendants setting 
 up adverse claims to each other. 
 If now, in this attitude of affairs, 
 the claimants choose, in view of a 
 claim hostile to all of them, to 
 agree upon a division of the prop- 
 erty among themselves by a com- 
 promise, and not by a judicial 
 decision of their respective rights, 
 
 the question of the appointment of 
 a receiver could scarcely be said 
 to turn upon peaceable possession 
 under a legal title. The previous 
 litigation and the previous receiv- 
 erships demonstrate that no one of 
 the claimants is yet in peaceably 
 under legal right. The very fact 
 that each of these claimants has 
 been able, as against the other, to 
 have a receiver appointed, proves 
 the existence of some equity to af- 
 fect the conscience of each, and 
 authorizes the appointment of a re- 
 ceiver, not to deprive them of a 
 previous legal possession, but to con- 
 tinue the custody already assumed 
 by the court until the rights of the 
 parties can be adjudicated. The 
 question is not the creation but the 
 continuance of the receivership; 
 not the deprivation of an existing 
 right, but the prevention of the ac- 
 quiring a new right, it may be by 
 collusion. The burden is not upon 
 the applicant to continue, but upon 
 those who seek to rescind the re- 
 ceivership. The present receiver 
 will be continued until further 
 order."
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 729 
 
 estate made by plaintiff, upon the ground of fraud and undue 
 influence in obtaining the conveyance, if upon bill and answer 
 there is a strong probability of plaintiff maintaining his cause 
 and ultimately obtaining the relief sought, a receiver may be 
 appointed in the first instance. ^6 And when, in such an action, 
 the bill shows that the grantor was a person of weak intel- 
 lect; young and inexperienced, of constant habits of intoxica- 
 tion, and ignorant of the real value of the property conveyed ; 
 that the consideration paid was grossly inadequate to the value 
 of the property and that he was persuaded to execute the deeds 
 
 26 Huguenin v. Baseley, 13 Ves., 
 105; Sthwell v. Williams, 6 Madd., 
 49, 1st American Edition, 38, af- 
 firmed by the lord chancellor, sub 
 nom. Stilwell v. Wilkins, Jac, 280. 
 In Huguenin v. Baseley, 13 Ves., 
 105, Lord Erskine observes, p. 106: 
 "Two distinct questions arise : 1st, 
 whether so strong a probability of 
 title appears upon this bill and an- 
 swer, as will induce the court, upon 
 the principles on which it acts, to 
 consider this plaintiff as having a 
 strong interest to have the estate 
 secured, in case she should obtain 
 a decree ; 2dly, whether this de- 
 fendant, having the legal estate by 
 adverse title, not being a trustee by 
 his admission, a receiver ought to 
 be appointed by interlocutory order 
 on motion. . . I admit, I am 
 not in this way to decide or preju- 
 dice this cause. All that it is nec- 
 essary to say is, that there is a very 
 strong probable title in the plaintiff 
 to call back this estate, upon such 
 terms as may seem proper at the 
 hearing, which she appears to have 
 conveyed under such circum- 
 stances, reserving only an interest 
 for life. The question then is, 
 whether, whatever may be my 
 opinion of the complexion of this 
 
 case upon the bill and answer, I 
 ought to interfere by appointing a 
 receiver. A very strong case has 
 been produced in favor of that. 
 In Vann v. Barnett, 2 Bro. C. C, 
 158, the defendant had the legal 
 estate in trust to pay himself. But, 
 as one of the ruling principles of 
 this court is that there must be 
 some evil actually existing, or some 
 evidence of danger to the property 
 if the court should not interfere, to 
 induce it to act in this stage of a 
 cause, as in the instance of waste, 
 though I have a strong inclination 
 to grant a receiver, I will look into 
 the authorities before I determine." 
 Upon a subsequent day Lord Er- 
 skine observed : "Under all the 
 circumstances of the case, I have 
 no doubt of the jurisdiction to ap- 
 point a receiver. But, in order to 
 avoid the expense of that, the 
 plaintiff being entitled for her life 
 to an annuity, admitted to be very 
 near, if not quite, equal to the 
 rents, I propose an inquiry what 
 arrears of the annuity are due; 
 the defendant to pay the amount 
 forthwith, to give security for the 
 future payments, and to account 
 for the rents and profits." The 
 order was drawn up accordingly.
 
 730 RECEIVERS. [chap. XIV. 
 
 under the impression that he was conveying only a life estate, 
 an appropriate case is presented for a receiver, when the an- 
 swers of defendants in possession merely allege their igno- 
 rance of the facts charged in the bill, without denying those 
 facts.2' So the relief has been granted in an action to set aside 
 a conveyance alleged to have been procured by fraud and un- 
 due influence exercised over the grantor, a person of weak 
 intellect, and the grantee being insolvent aside from the prop- 
 erty in question. 28 
 
 § 566. Title shown by plaintiff, none by defendant; pre- 
 vention of vexatious litigation; abuse of trust and insol- 
 vency of defendant; receiver of rents and profits pending 
 litigation in another state. When plaintiff shows an equi- 
 table title to a part of the property in controversy, and a legal 
 and equitable title to the remainder, and defendant shows no 
 title, either legal or equitable, a receiver may be appointed 
 pending the litigation. And an additional ground for the relilf 
 is presented, in such case, where it appears that the interfer- 
 ence of equity may prevent vexatious litigation, there being a 
 great number of tenants of the property, and a probability of 
 prolonged litigation, unless the matter is determined by a court 
 of equity.29 So an abuse of trust by the party in possession, 
 by which the safety of the property is endangered, coupled 
 with his insolvency and consequent insecurity of the rents 
 and profits, will warrant the court in extending the aid of a re- 
 s' Stilwell V. Wilkins, Jac, 280. than probable that it is true, the 
 affirming S. C, sub nom. Stitvvell inadequacy was so monstrous, the 
 V. Williams, 6 Madd., 49, 1st Amer- situation of the young man and 
 ican Edition, 38. In the case as the state of his intellect were such, 
 reported in Jac, 280, Lord Eldon that it is hardly possible to suppose 
 says, p. 283: "I am ready to admit that the transaction can stand; and 
 that I do not remember any in- I think, therefore, that this is a 
 stance of a receiver being so ap- case where such an order may be 
 pointed, but still the question is, made, though it is not the general 
 whether there may not be a case habit of the court." 
 where it ought to be done. If the 28 Mitchell v. Barnes, 22 Hun, 194. 
 
 case stated be true, and it is more 29 Cole v. O'Neill, 3 Md. Ch., 174.
 
 CHAP. XIV.] REAL PROPERTY. 731 
 
 ceiver.30 And where complainant, in whom, in an action of 
 ejectment, the title to certain realty had been adjudged to be, 
 had been enjoined by the court of another state from taking 
 possession of the land and the defendant who was hopelessly 
 insolvent was proceeding to collect the rents and profits arising 
 from the property, a receiver was properly appointed to collect 
 the rents and profits until the final determination of the litiga- 
 tion in the other state.^^ 
 
 § 567. Appointed on bill by creditors when no per- 
 sonalty shown ; rights of judgment creditors in possession 
 not prejudiced; probable title in plaintiff and danger to 
 rents. It was the doctrine of the English Court of Chan- 
 cery, that upon a bill by creditors claiming satisfaction against 
 both the real and personal estate of the debtor, if it appeared 
 probable from defendant's answer that there was no personal 
 estate, and that both the realty in defendant's possession and 
 the rents and profits thereof must become responsible for the 
 demands, the court might appoint a receiver in the first in- 
 stance, although the power was recognized as a delicate one.^^ 
 But when an incumbrancer seeks the aid of equity by a re- 
 ceiver over defendant's real estate, and there are judgment 
 creditors of the defendant in possession, the appointment will 
 be made without prejudice to the rights of such creditors.^^ 
 And in the Irish Court of Chancery, the doctrine is held that the 
 court has full jurisdiction to grant a receiver, even against a 
 defendant in possession of real property, in an action for the 
 recovery of lands, when plaintiff shows a probable title and 
 danger of the rents being lost.^* But the relief will not be 
 granted to the owners of real estate merely because of the diffi- 
 culty of collecting rents from their tenants. ^^ 
 
 30 Chase's Case, 1 Bland, 213. 32 Jones v. Pugh, 8 Ves., 71. 
 
 31 Atlas Savings & Loan Assn. v. 3.3 Davis v. Duke of Marlborough, 
 Kirklin, 110 Ga., 572, 35 S. E., 772. 1 Swans., 74. 
 
 And see Fisher v. Graham, 113 Ga., 34 Scott v. Scott, 13 Ir. Eq., 212. 
 
 851, 39 S. E., 305. 35 /„ re Madden, 3 L. R., Ir., 172.
 
 7Z2 RECEIVERS. [chap. XIV. 
 
 § 568. Receiver in proceedings to determine widow's 
 dower; receiver may compel assignment of dower. The 
 
 aid of equity by a receiver is sometimes invoked for the pro- 
 tection of dower interests in the estate of a deceased husband. 
 And in a proceeding by a widow to have her dower set aside, 
 if it is shown that the property is in possession of and con- 
 trolled by a person who is insolvent, and who has taken the 
 benefit of the state insolvent laws pending the litigation, and 
 that the rents and profits are exposed to imminent danger or 
 to inevitable loss, a receiver may be allowed. ^^ But upon a bill 
 by an heir-at-law and devisee of a deceased person to determine 
 the widow's dower, in order to warrant an injunction against 
 the disposal of the property, and a receiver of the rents and 
 profits, it is not sufficient merely to allege that the rents are in 
 jeopardy, but it must be shown how they are jeopardized. And 
 when there is no allegation that the rents and profits of the real 
 estate, which is supposed to be subject to the dower interest, 
 will be lost by reason of insolvency of those receiving them, 
 or that plaintiff has not an adequate remedy at law for such 
 of the rents as he may be entitled to, a receiver should not be 
 granted. ^'^ But where a widow has fraudulently and without 
 consideration and in order to hinder her creditors, released 
 her dower right to her children, a receiver is properly ap- 
 pointed, who may, in the name of the widow compel her 
 dower to be assigned for the purpose of ripening the dower 
 right into an estate and applying it to the payment of her 
 debts. ^^ 
 
 § 569. Receiver in proceedings to establish will, or to 
 execute trusts of will. The jurisdiction of equity by the 
 appointment of a receiver is sometimes invoked for the pro- 
 tection of heirs or devisees, or for the enforcement of trusts 
 created by the ancestor's will. And upon a bill by children of 
 a testator to establish his will, and to enforce the performance 
 
 36 Chase's Case, 1 Bland, 206. ^^ Tenbrook v. Jessup, 60 N. J. 
 
 37 Knighton v. Young, 22 Md., 359. Eq., 234, 46 Atl, 516.
 
 CHAP. XIV.] REAL PROPERTY. 733 
 
 of certain trusts in favor of plaintiffs upon which the testator 
 devised his property, and for an account of rents and profits, 
 a receiver has been allowed of the rents and profits, when it 
 was manifest that the testator's intentions had been disre- 
 garded.^9 And a receiver has been granted upon a bill filed 
 by parties interested in the execution of the trusts of a will, 
 alleging that rents had not been collected, and that incum- 
 brancers were threatening to take possession of the estate or 
 otherwise proceed for the recovery of their mortgage debts, 
 unless a receiver should be appointed. ^^ When, however, the 
 heir-at-law is in possession, equity will not ordinarily grant a 
 receiver in an action to carry into execution the trusts of the 
 will of a deceased testator, until the will has been proven, 
 when it is not admitted by answer, since the court will not dis- 
 place the possession of the heir-at-law until his title has been 
 displaced. ^1 So in a proceeding to establish a will, the con- 
 troversy being as to which of two instruments is the last will 
 of the testator, it is improper to appoint a receiver to take pos- 
 session of the lands of the testator, especially when it is not 
 shown that the defendant in possession is insolvent, or unable 
 to respond to final judgment in the cause.^^ -q^^ \^ jg held, 
 when the heir-at-law, disputing the will of his ancestor, enters 
 into possession of the devised estates, and a court of equity 
 directs an issue to be tried at law as to the validity of the will, 
 devisavit vel non, upon a bill by the executors against the 
 heir to establish the will, that the court may properly appoint 
 a receiver against the heir in possession, and may enjoin him 
 from committing waste.^^ But a legatee under a will, whose 
 legacy is a charge upon the estate of the testator, subject to 
 prior mortgages and other charges, is not entitled to a receiver 
 over the estate, because the rents and proceeds are being ap- 
 plied to keep down the interest on such charges."** 
 
 89 Podmore v. Gunning, 5 Sim., ^2 Bryan v. Moring, 94 N. C. 694. 
 
 485. 4SFingal v. Blake, 1 Mol., 11.1 
 
 40 Hart v. Tulk, 6 Hare, 611. 44 Faulkner v. Daniel, 3 Hare, 204. 
 
 41 Dobbin v. Adams, 8 Ir. Eq., 157. note.
 
 734 RECEIVERS. [chap. XIV. 
 
 § 570. When granted in contest between heir-at-law 
 and devisee under will. As between the heir-at-law and a 
 devisee under the will of the ancestor, pending litigation con- 
 cerning the relative rights of the parties, equity does not in- 
 terfere as of course by appointing a receiver of the estate 
 against a devisee in possession ; and in the absence of any spe- 
 cial circumstances of mismanagement or danger to the estate, a 
 receiver will be refused, and the parties will be left to pursue 
 their remedy at law.'*^ In such cases, the court proceeds upon 
 the principle that the heir, if he recovers at all, must recover 
 upon the strength of his title at law, and the possession of the 
 devisee under the will is regarded as a lawful possession, which 
 the court will not disturb by a receiver.^^ Nor will a receiver 
 be granted upon the application of one claiming as a devisee 
 under a will, upon a bill against other devisees and an heir-at- 
 law to establish the will and enforce its trusts, when its validity 
 is disputed and it is not shown that the property is exposed 
 to any danger by remaining in possession of defendants. ^"^ But 
 as between an heir-at-law in possession and a devisee under 
 the will of the ancestor, which is being contested by the heir, 
 equity may interpose for the protection of the devisee in a 
 strong case by granting a receiver of the rents and proceeds, 
 when the court is satisfied that the heir is entirely shut out 
 from inheriting by the terms of the will. But such a state of 
 facts is not to be regarded as affecting the right of an heir 
 from whom the testator has not taken away the legal estate.^^ 
 And when, in such a case, the heir-at-law has obtained a ver- 
 dict against the will, he will be regarded as entitled to posses- 
 sion of the estate, and equity will refuse to disturb his posses- 
 sion by appointing a receiver in behalf of a devisee under the 
 will, notwithstanding a new trial has been directed in the action 
 to test the validity of the will.^^ 
 
 4o Schlecht's Appeal, 60 Pa. St., 47 Clark v. Drew, 1 Russ. & M., 
 
 172; Knight v. Dnplessis, 1 Ves., 103. 
 
 324. See S. C, 2 Ves., 360. 48 Fingal v. Blake, 2 Mol., SO. 
 
 46 Knight v. Duplessis, 2 Ves., 360. 49 Lloyd v. Trimleston, 2 Mol., 81.
 
 CHAP. XIV.] REAL PROPERTY. 735 
 
 § 571. Appropriation of rents and profits as against 
 heirs; objection to administration by pretended heirs. 
 When a conveyance of real estate is made in trust for the 
 benefit of the grantor's wife during her hfe, with remainder to 
 his children equally, to receive the rents and profits for life, 
 and after the wife's death the grantor takes possession and ap- 
 propriates the rents and profits to his own use, no sufficient 
 ground is presented for a receiver, when it is not shown that 
 the person alleged to be in wrongful possession is insolvent, 
 or that the rents and profits are in danger of being lost to the 
 heirs.50 Nor is it sufficient ground for appointing a receiver 
 over the estate of a deceased person, upon a bill by the next of 
 kin, that the defendants, pretending to be heirs of the deceased, 
 are opposing plaintiff's application for letters of administra- 
 tion, when the bill states no grounds of opposition on the part 
 of defendants, and nothing appears to show that plaintiff may 
 not in due course obtain the administration. A demurrer, 
 therefore, to such a bill for want of equity will be sustained. ^^ 
 
 § 572. When granted as against tenant for life; devise 
 to wife; settlement upon daughter. Where plaintiffs were 
 entitled, as younger children of a deceased ancestor, to certain 
 portions allowed them in the settlement of his estate, raised 
 out of a term of years, and had obtained a decree for a sale of 
 the term for that purpose, but the tenant for life obstructed 
 the enforcement of the decree, a receiver of the rents and 
 profits was allowed as against the tenant for life.^^ And where 
 the holder of the life estate rented the premises, and, after her 
 death, the tenant continued in possession, claiming to own the 
 premises as heir, upon a bill against the tenant for an account- 
 ing and payment of the rents accruing after the death of the 
 owner of the life estate, and for a receiver, the case was re- 
 
 50 Clark v. Ridgely, 1 Md. Ch., 70. St. Paul Trust Co. v. Mintzer, 65 
 
 51 Jones V. Frost, 3 Madd., 1st Minn., 124, 67 N. W., 657, 32 L. 
 American Edition, 9. R. A., 756, and note, 6 Am. St. 
 
 52 Brigstocke v. Mansel, 3 Madd., Rep., 444. 
 1st American Edition, 32. And see
 
 7o6 RECEIVERS. [CHAP. XIV. 
 
 garded as an appropriate one for the relief, and a reference 
 was made to a master to appoint a receiver. ^-^ But when by 
 his will a husband directed the appropriation of so much of 
 the rents and income of certain real property to the support of 
 his widow as might be necessary for that purpose, a receiver of 
 the rents was refused at the suit of a judgment creditor of 
 the widow,^* And when a father conveyed to his daughter 
 for life an undivided one-half interest in certain real property, 
 with the right to a specified share of the rents, but reserving 
 to himself the control and management of the property during 
 his life, a receiver was refused in an action by the daughter 
 against the father to establish her rights, defendant not being 
 shown to be insolvent, or unable to respond for the rents col- 
 lected.55 
 
 § 573. Vendor not allowed relief because of vendee's 
 insolvency and commission of waste. The owner of land, 
 who has contracted for its sale, and executed a bond for title, 
 conditioned upon the payment of vendee's notes for the pur- 
 chase-money, can not, on the ground of vendee's insolvency 
 and commission of waste, obtain a receiver to hold the property 
 pending an action to rescind the contract ; since, however im- 
 prudent the contract of sale may have been, the vendor can 
 not, because of his own imprudence, obtain such relief, and 
 must be left to pursue his remedy at law.^^ 
 
 53 Anonymous, Amb., 311, note 1. the vendor, on the ground of that 
 
 54 Barnett v. Montgomery, 79 Ga., insolvency, simply, ask for the ap- 
 726, 4 S. E., 874. pointment of a receiver who shall 
 
 55 Crockett v. Crockett, 75 Ga., hold the property until a decree 
 202. can be had cancelling the contract 
 
 56 Jordan v. Beal, 51 Ga., 602. of sale? There was no fraud 
 The court, Trippe, J., say, p. 604: charged. The charge as to waste, 
 "All questions were eliminated etc., was denied by the answer and 
 from the case at the hearing by the by affidavits. No authority was 
 answer of defendants and the sup- referred to showing that such a 
 pletory affidavits, but one. That remedy exists, and we can see 
 question is, can the vendee of lands, much danger and unlimited trouble 
 who sells and gives a bond for title that would be given to the courts 
 to an insolvent vendor, one who if the principle contended for were 
 has no property, and so known to a correct one. The owner of prop-
 
 CHAP. XIV.] REAL PROPERTY. IZl 
 
 § 574. When granted for protection of annuitants. The 
 
 aid of equity by a receiver is sometimes extended in behalf of 
 annuitants, or creditors whose demands are an annual charge 
 upon the real estate of their debtor, the efifect of such appoint- 
 ment being virtually to attach the rents due from tenants of 
 the premises on which the annuity is charged.^^ And upon a 
 bill for an accounting of arrears of an annuity charged upon 
 defendant's real estate, equity may grant a receiver in limine, 
 to take charge of the rents until the rights of the parties can 
 be finally ascertained, when it is shown that the annuity is in 
 arrears, and the premises are an insufficient security.^^ So 
 when an annuity is a charge upon the benefice of a clergyman, 
 in the nature of an equitable mortgage, the annuitant is en- 
 titled to a receiver of the income from the benefice, in prefer- 
 ence to later judgment creditors.^^ And where plaintiff 
 claimed an annuity which defendant had by deed charged upon 
 certain of his property by name, and generally upon all other 
 of his property, and plaintiff, upon a bill to raise the arrears 
 of his annuity, had obtained a receiver over a portion of de- 
 fendant's premises, the value of which was insufficient to satis- 
 fy the annuity, and plaintiff subsequently discovered other 
 
 erty thus selling it does so with his made, as is invoked by complain- 
 
 eyes open. He takes the risk. He ants, under the facts as they ap- 
 
 reserves the title as security. His peared at the hearing before the 
 
 lien is higher than any other. A chancellor, every vendor of land 
 
 specific remedy is given him by who makes a rash or imprudent 
 
 statute: Code, sees. 3684, 3886. No sale would at once seek the rem- 
 
 fraud in the contract is practiced edy, and there would be a harvest 
 
 upon him. He has simply made an of suits for relief from one's own 
 
 imprudent bargain, or comes to the improvidence or error. This would 
 
 conclusion he has, as his debtor, work a greater evil than is the 
 
 the purchaser, does not pay him at hardship of waiting six months on 
 
 the time agreed on, and then asks a suit at law and a sale as provided 
 
 a court of equity to take the land by law." 
 
 at once out of the possession of the 57 Hayden v. Shearman, 2 Ir. Cli., 
 
 purchaser and hold it for him until N. S., 137; Beamish v. Austen, Ir. 
 
 he can have a decree to set aside Rep., 9 Eq., 361. 
 
 the whole bargain, and then to ■''>8 Kelly v. Butler, 1 Ir. Eq.. 435. 
 
 give him back his land. If this ^9 Eattersby v. Homan, 2 Ir. Ch., 
 
 were the rule, or if a holding were N. S., 232. 
 Receivers — 47.
 
 738 RECEIVERS. [chap. XIV. 
 
 prop^ty belonging to defendant, the receiver was extended to 
 such other property. ^'^ But, in conformity with the general 
 principle denying the aid of a receiver when the party ag- 
 grieved has an adequate remedy at law, an annuitant, whose 
 annuity is a charge upon real property, will not be allowed a 
 receiver because his annuity is in arrears, if he has the power 
 of distraining upon the land ; since the remedy by distraint is 
 ample, and equity will not grant a receiver in behalf of one 
 who does not need such aid.^^ And when a testator has by his 
 will charged an annuity upon real property, a court of equity 
 will not, pending a controversy as to the validity of the will, 
 appoint a receiver in behalf of the annuitant, while there appear 
 to be prior charges and incumbrances upon the property, which, 
 in the event of the will being declared valid, must be first paid 
 out of the property.^2 g^t if an annuity charged upon real 
 property is in arrears, and there is doubt as to the remedy at 
 law, a receiver may be appointed, the jurisdiction in equity, in 
 such cases, being regarded as concurrent with the jurisdiction 
 at law.^^ And upon a bill by a father against his children to 
 set aside conveyances to the latter, upon the ground that they 
 were fraudulently obtained, and that defendants had refused 
 to pay the father an annuity charged upon the premises con- 
 veyed, the case was regarded as a proper one for a receiver, 
 unless defendants would, without delay, pay the amount of the 
 annuity.^"* 
 
 § 575. Relief generally refused in actions of ejectment. 
 As regards the appointment of receivers in aid of actions of 
 ejectment, or suits for the recovery of real property, there is 
 some apparent conflict in the decisions of the courts, which 
 may be harmonized only by keeping in view the general prin- 
 
 60 Lyne v. Lockwood, 2 Mol., -IQS. 62 D'Alton v. Trimleston, 2 Dr. & 
 
 But in this case, a reference was or- War., 531. 
 
 dcred to a master, to report whether 63 Beamish v. Austen, Ir, Rep., 9 
 
 any other creditors were entitled to Eq., 361. 
 
 priority. 64 Probasco v. Probasco, 30 N. J. 
 
 6lSollory V. Leaver, L. R., 9 Eq., Eq., 108. 
 22.
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 739 
 
 ciples already established as governing applications for receiv- 
 ers over real property pendente lite. The better doctrine un- 
 doubtedly is, that in ordinary actions of ejectment, or suits 
 for the recovery of real property in the nature of ejectment at 
 common law, when no especial equities exist in favor of plain- 
 tiff, the contest being merely as to the legal title of the premises 
 in dispute, a receiver of the rents and profits will not usually 
 be appointed pendente lite. Unless, therefore, some equitable 
 grounds are made to appear, entitling plaintiff to the rents and 
 profits as such, or unless it is shown that their sequestration is 
 essential to his protection, equity will refuse to lend its aid by 
 a receiver, since the interference would, in effect, amount to a 
 complete ouster of the defendant, by taking away from him the 
 subject-matter of the litigation, without trial or judgment.^^ 
 And in such case, a valid legal title in the plaintiff is not of it- 
 self a sufificient ground for the relief.^^ 
 
 § 576. When granted in ejectment, for preservation of 
 rents and profits pendente lite. When, however, the plain- 
 tiff, in an action for the recovery of real estate, shows an ap- 
 
 65 People v. Mayor of New York, 
 Supreme Court, General Term, 10 
 Ab. Pr., Ill, reversing S. C, Su- 
 preme Court, Special Term, 8 Ab. 
 Pr., 7; Thompson v. Sherrard, 35 
 Barb., 593; S. C, 22 How. Pr., 155; 
 Corey v. Long, 12 Ab. Pr., N. S., 
 427; Whitworth v. Wofford, 73 Ga., 
 2.S9; Davis v. Taylor, 86 Ga., 506, 
 12 S. E., 881 ; Rollins v. Henry, 77 
 N. C, 467; Mapest;. Scott, 4 Bradw., 
 268; State v. District Court, 13 
 Mont., 416, 34 Pac, 609; Foxwell 
 V. Van Grutten, (1897) 1 Ch., 64. 
 And see to the same effect, under 
 the code of civil procedure in Cali- 
 fornia, Bateman v. Superior Court, 
 54 Cal., 285. .And see, also, San 
 Jose Safe Deposit Bank v. Bank of 
 Madera, 121 Cal., 543. 54 Pac, 85. 
 .As to the right to a receiver of the 
 rents and profits of real property, 
 
 pending an action of ejectment, un- 
 der the statutes of North Carolina, 
 see Kron v. Dennis, 90 N. C, 327. 
 In Smith v. White, 62 Neb., 56, 86 
 N. W., 930, it was held, under a 
 statute providing for the appoint- 
 ment of receivers ". . . in all other 
 cases where receivers have hereto- 
 fore been appointed by the usages 
 of courts of equity," that a receiver 
 should not be appointed in an action 
 of ejectment before judgment. And 
 the same rule has been announced 
 in New Jersey under the statute of 
 that state. Oehme v. Rucklchaus, 
 50 N. J. Law, 84, 11 Atl., 145. 
 
 66 People V. Mayor of New York, 
 Supreme Court, General Term, 10 
 Ab. Pr., Ill, reversing S. C. Su- 
 preme Court, Special Term, 8 .\b. 
 Pr., 7.
 
 740 RECEIVERS. [chap. XIV. 
 
 pareiitly good title, and, in addition thereto, that there is immi- 
 nent danger of loss of rents and profits because of the misman- 
 agement and insolvency of defendant in possession, a different 
 case is presented, and a receiver may be granted for the better 
 preservation of the rents and profits pendente litc.^'^ And 
 when, pending his action of ejectment, plaintiff files a bill show- 
 ing a good legal title to the premises, which is not successfully 
 controverted by the answer, and it is shown that plaintiff is 
 in great danger of losing the rents and profits, by reason of 
 defendant's negligent and wasteful management, and that the 
 property is depreciating in value and not paying interest on its 
 incumbrances, because of the bad management of defendant, 
 who is himself in insolvent circumstances, a fitting case is pre- 
 sented for the aid of equity by a receiver. In such a case, de- 
 fendant being regarded as holding over as against his own 
 deed, and not being responsible for mesne profits or permissive 
 waste, by reason of his insolvency, the aid of equity is neces- 
 sary to protect the holder of the legal title.^^ And in an equi- 
 table action to recover real estate, upon the ground that the 
 proceedings by which plaintiff's ancestor had been divested of 
 the title were void for fraud, mistake and want of jurisdiction 
 in the court in which the proceedings were had, an injunction 
 and a receiver have been allowed when it was shown that 
 defendants in possession were irresponsible and were collect- 
 ing the rents, and that the premises were in a ruinous condi- 
 tion and would continue to deteriorate if left to defendant's 
 possession pending the litigation, such a case being distin- 
 guished from an ordinary action of ejectment. ^^ And a re- 
 ceiver has been allowed to take charge of the rents and profits 
 of coal mines pendente lite, even without allegations of mis- 
 management or insolvency, where there was no attempt to 
 
 6" Payne v. Atterbury, Harring. 68 Payne v. Atterbury, Harriiig. 
 
 (Mich.), 414; Ireland v. Nichols, 37 (Mich.), 414. 
 
 How. Pr., 222; S. C, 1 Sweeney, 69 Rogers v. Marshall, 6 Ab. Pr., 
 
 208; Vizard v. Moody, 117 Ga, 67, N. S., 4^57. 
 43 S. E., 426. See, also, Rogers v. 
 Marshall, 6 Ab. Pr., N. S., 457.
 
 CHAP. XIV.] REAL PROPERTY. 741 
 
 take the possession of the land away from the defendant but 
 the action was merely ancillary to a pending action of eject- 
 ment brought to determine the title. "^^ g^t the appointment 
 of a receiver, in an action to recover possession of real prop- 
 erty, is not regarded as a special proceeding or an independent 
 action in itself, but rather as a part of the original action and 
 auxiliary thereto, having no independent existence of its ownJ^ 
 § 577. Plaintiff allowed receiver after recovery of lands, 
 when necessary to preserve rents and profits. After 
 plaintiff, in an action for the recovery of lands, has recovered 
 a verdict and judgment in his favor, his right to a receiver of 
 the rents and profits would seem to be based upon stronger 
 grounds, and there are frequent cases where the relief has been 
 extended under such circumstances, when necessary to pre- 
 serve the rents and proceeds from loss.'^2 Thus^ in an action 
 to recover possession of lands on which are located valuable 
 mineral springs, the chief value of the land consisting in the 
 proceeds derived from sales of these waters, after verdict and 
 judgment for plaintiff, and pending a motion for a new trial, 
 it is proper to appoint a receiver upon satisfying the court 
 that the relief is necessary to protect the plaintiff's rights in 
 the property, and that defendant is wasting the waters and 
 otherwise impairing the value of plaintiff's interest therein, 
 and that he is insolvent and unable to respond to a judgment 
 in damages.'^^ And when defendants are in possession of land, 
 under a contract for its purchase made with plaintiff's intestate, 
 but fail to make the necessary payments, and plaintiff brings 
 his action and recovers judgment for the return of the land 
 upon payment of a specified sum, upon a bill by plaintiff for an 
 
 ''^ Ulman v. Clark, 75 Fed., 868. collected by a receiver appointed in 
 
 71 Whitney v. Buckman, 26 Cal., aid of an action of ejectment, after 
 
 447. judgment for plaintiff and pending 
 
 '^- Frisbee v. Timanus, 12 Fla., an appeal, see Garniss v. Superior 
 
 300; Collier v. Sapp, 49 Ga., 93; Court, 88 Cal., 413, 26 Pac, 351. 
 
 Whitney v. Buckman, 26 Cal., 447. 73 Whitney v. Buckman, 26 Cal., 
 
 As to the right to rents and profits 447.
 
 742 RECEIVERS. [chap. XIV. 
 
 accounting- of the rents and profits of the land durint^ defend- 
 ants' occupancy, the bill alleging that defendants are insolvent, 
 a receiver may be appointed until the determination of the ques- 
 tions involved.'^'* So when plaintiff in ejectment recovers judg- 
 ment in a state court, and defendant obtains a writ of certiorari 
 to remove the proceedings to the United States court, and the 
 state court, to prevent a conflict of jurisdiction, suspends exe- 
 cution of the judgment in ejectment, plaintiff is entitled to a re- 
 ceiver of the rents and profits, upon a bill against the adminis- 
 trators of the defendant in ejectment, alleging that they are re- 
 ceiving the rents and profits ; that the property is depreciating 
 in value; that there is no judge of the United States court in 
 office, and that the proceedings in certiorari are merely a pre- 
 tense to maintain a harassing litigation for the purpose of 
 keeping possession of the premises and enjoying the rents. 
 Such a state of facts presents a case requiring that the rents 
 and profits shall be held by some indifferent person, under 
 security, until the title can be determined and the rights of the 
 respective parties adjusted. And the case is regarded as fall- 
 ing within that class of cases in which a court of equity will 
 interpose for the protection of parties when no adequate remedy 
 exists at law^'^^ 
 
 § 578. When granted over leasehold interest. The ju- 
 risdiction of equity by the appointment of receivers of the rents 
 and profits accruing from real property is not confined to cases 
 where the estate or interest sought to be protected is the fee 
 simple, but extends also to leasehold interests, over which a 
 receiver may be granted in proper cases. And when a leasehold 
 interest in lands is conveyed to a trustee in trust to secure an in- 
 debtedness due to creditors of the lessee or assignor, but such 
 trustee declines to undertake the performance of the trust, a 
 receiver may be appointed in behalf of the creditors to carry 
 into execution the trusts of the deed under the direction of the 
 court. "^^ And a receiver may be appointed, before answer, 
 
 74 Collier v. Sapp, 49 Ga., 93. 76 Taylor v. Emerson, 6 Ir. Eq., 
 
 75 Frisbee v. Timanus, 12 Fla., 224. 
 300.
 
 CHAP. XEV.] REAL PROPERTY. 743 
 
 over a leasehold interest of a minor, when there is danger of 
 eviction for non-payment of rents due to the landlord, and 
 when it is manifestly for the minor's benefit that the relief 
 shall be granted."^"^ So where one has advanced money, with 
 the consent of the owner of a leasehold, to redeem the lands 
 from eviction under a judgment, he acquires an equitable 
 lien, and may have a receiver for its protection when there is 
 danger of eviction by the landlord for non-payment of rent 
 due."^^ And on a bill against a tenant for life, to restrain the 
 disposal of the property and to keep down assessments and 
 taxes thereon, it is proper for the court, on being satisfied that 
 the tenant for life in possession has permitted the taxes to be 
 in arrears, to appoint a temporary receiver of so much of the 
 rents and income as may be necessary to pay off the taxes due 
 and in arrear, unless defendant shall within a specified time 
 pay such taxes. '''^ 
 
 § 579. Assignee of lease not entitled to receiver. Not- 
 withstanding the aid of a receiver is thus freely granted for 
 the preservation of leasehold interests, in proper cases, an as- 
 signee of the lease is not entitled to a receiver, although en- 
 titled to the rents accruing from the demised premises, since he 
 acquires no lien by virtue of the assignment, and has no interest 
 or title in the land sufficient to warrant the aid of equity. Nor 
 is the right of such an assignee to have a receiver strengthened 
 by the fact that he also claims to be the owner of the estate 
 in remainder, since no legal or equitable claim to have the rents 
 sequestered and put into the hands of a receiver can arise 
 from an accidental union of the ownership of the term for 
 years and the estate in remainder in the same person. ^^^ 
 
 § 580. Not granted over house on leased ground be- 
 cause of insolvency of defendant in possession. When the 
 
 77 Whitelaw v. Sandys, 12 Ir. Eq., vails in Michigan. See Jenks v. 
 393. Horton, 96 Mich., 13, 55 N. W., 372. 
 
 78 Fetherstone v. Mitchell. 9 Ir. 80 Huerstcl v. Lorillard, 7 Rob. 
 Eq., 480. (N. Y.), 251, affirming S. C, 6 Rob. 
 
 79 Cairns v. Chabert. 3 Edw. Ch., (N. Y.), 260. 
 312. But a different doctrine pre-
 
 744 RECEIVERS. [chap. XIV, 
 
 litigation concerns the title to a chattel real, as in the case of a 
 house standing upon leased ground, it is not sufficient cause 
 for putting the property into the hands of a receiver, that the 
 defendants, who are in possession under claim of title, are al- 
 leged to be insolvent, and that they have suffered the ground 
 rent to fall greatly in arrear.^i 
 
 § 581. Landlord may re-enter on expiration of term; 
 discharge of receiver. When a receiver has been appoint- 
 ed over a leasehold interest in lands, on the expiration of the 
 term for which the lands were demised the landlord is at liberty 
 to re-enter into possession without obtaining leave of court 
 for that purpose.^2 g^t when, in such a case, a motion is made 
 to discharge the receiver as to that portion of the premises the 
 lease of which has expired, defendant in the action should be 
 served with notice of such motion. ^^ 
 
 § 582. When same receiver extended to subsequent ap- 
 plications. A court of equity will not, ordinarily, appoint 
 different receivers over the same real estate, the proper course 
 being, where one is already appointed and subsequent applica- 
 tions are made for a receiver over the same estate, to extend 
 the former receiver to the subsequent applications. And upon 
 being so extended, he will be required to give additional se- 
 curity, or, in default thereof, he will be removed and another 
 appointment made.^* And when different receivers have been 
 appointed, on the application of different creditors, over the 
 
 81 Kipp V. Hanna, 2 Bland, 26. turned out of possession, but must 
 
 Bland, Chancellor, says, p. 31 : "A see some imminent danger to the 
 
 receiver may be appointed against property and the intermediate rents 
 
 the legal title in a strong case of and profits, from not acting rather 
 
 fraud, combined with danger to the prematurely, and if the property 
 
 property. In such case, the court should not be taken under the care 
 
 may, on affidavits, interfere before of the court." And see Horner v. 
 
 the hearing. But the court inter- Bell, 105 Md., 113, 66 Atl., 39. 
 
 poses by appointing a receiver 82 Britton v. M'Donnell, 5 Ir. Eq., 
 
 against the legal title with reluct- 275. 
 
 ance. It must not only be morally 8.3 Johnston v. Henderson, 8 Ir. 
 
 sure that at the hearing the party Eq., 521. 
 
 would upon those circumstances be 84 Wise v. Ashe, 1 Ir. Eq., 210.
 
 CHAP. XIV.] REAL PROPERTY. 745 
 
 same estate and property of defendant, the hardship and ex- 
 pense of such a state of facts, as against the owner of the estate, 
 are sufficient grounds to warrant the court in removing all the 
 receivers but one, and extending him over the entire estate.^^ 
 But, while a receiver over real property, appointed for the pro- 
 tection of creditors, is frequently extended in aid of other cred- 
 itors, this will not be done before answer merely upon consent 
 of defendant, when the effect of thus extending the receiver 
 would be to prejudice rights of the creditors first obtaining a 
 receiver of the rents of the premises.^^ 
 
 § 583. Right to rents as affected by order extending re- 
 ceiver. When a receiver over the real property of a de- 
 fendant debtor is thus extended, for the benefit of other parties 
 claiming an interest in the debtor's estate, the extension, as re- 
 gards the parties on whose application it is made, is deemed a 
 new appointment, and rents received before the extending order 
 are for the benefit of those only who are entitled to relief in the 
 proceeding in which the receiver was acting when such rents 
 came to his hands. The extending order, therefore, attaches 
 only the rents thereafter received, for the benefit of parties ob- 
 taining relief in the proceeding to which the receiver is extend- 
 ed.87 
 
 § 584. Receiver in behalf of cestui que trust as against 
 trustees. When real estate has been conveyed to trustees, 
 to hold and manage and receive the rents for the benefit of the 
 cestui que trust, a child of the grantor, if disputes and dis- 
 sensions arise among the trustees as to the management of the 
 property, in consequence of which the rents are not collected, 
 the cestui que trust is entitled to a receiver to secure the re- 
 covery of arrears of rent due, and the punctual payment of the 
 accruing rents. ^^ But when plaintiff seeks the appointment 
 
 85 Kelly v. Rutledge, 8 Ir. Eq., nauze v. Belfast, Holywood & 
 228. Bangor R. Co., id., 454. 
 
 86 Brown v. Nolan, 10 Ir. Eq., 57. »8 Wilson v. Wilson, 2 Keen, 249. 
 
 87 Agra & Masterman's Bank v. As to the circumstances which will 
 Barry, Ir. Rep., 3 Eq., 443; La- warrant a receiver npon a bill to
 
 746 RECEIVERS. [chap. XIV. 
 
 of a receiver over property in the hands of defendants, aheging 
 that they hold it in trnst for him, a denial of the trnst does not 
 of itself render it necessary to appoint a receiver on the estab- 
 lishment of the trust. Under such circumstances, if no ground 
 of apprehension is shown that loss may occur by permitting 
 the property to remain in its appropriate use in the occupancy 
 of defendant, and his ability to respond for its use is admitted, 
 and he has already been ordered by the court to account for the 
 rents and prohts that he may have received, a receiver will be 
 refused. ^^ 
 
 § 585. Relief granted for protection of rent charge. Re- 
 ceivers are sometimes granted over real property for the pro- 
 tection of equitable .incumbrancers, or creditors whose de- 
 mands are a charge upon the property, when the aid of equity 
 is necessary for the protection of their rights. And when 
 plaintiff in an action to raise the arrears of a rent-charge, due 
 him out of defendant's real estate, obtains a decree for a sale 
 of the property, but defendant obstructs the decree, and does 
 not comply with the requirement of court to produce his deeds, 
 thus preventing a sale of the property, a receiver may be al- 
 lowed. ^0 So it would seem, where a person takes a conveyance 
 of a legal estate, subject to certain prior equitable interests 
 consisting of rent-charges thereon, if he refuses to satisfy such 
 claims, that a receiver may be appointed upon application of 
 the person entitled to the rent-charges.^l And when a re- 
 ceiver is sought of the rents and profits of real property, by an 
 equitable creditor or incumbrancer, having a charge upon the 
 property, but having no right of entry or possession, if the 
 court is satisfied in the preliminary stage of the cause that the 
 relief sought by the bill will be given when the final decree is 
 pronounced, it will not expose parties claiming such relief to 
 
 set aside a deed of trust executed by v. Edsall. 3 Halst. Ch., 298; S. C, 4 
 
 an incompetent person, over whose Halst. Ch., 141. 
 
 affairs a guardian has been ap- f>0 Shee z;. Harris, 1 Jo. & Lat., 91. 
 
 pointed, see Hodges ?'. McDuff. 69 ^1 Pritchard V. Fleetwood, 1 
 
 Mich.. 76. 36 N. W., 704. Meriv., 54. 
 89 Hamburgh Manufacturing Co.
 
 CHAP. XIV.] REAL PROPERTY. 747 
 
 the danger of losing the rents by not appointing a receiver. 
 But when, in such case, the amount due plaintiff from defend- 
 ant is tendered and accepted, the receiver previously appointed 
 will be discharged. ^2 
 
 § 586. Denied plaintiff in suit to enforce mechanic's lien. 
 In New York, it is held that the plaintiff in an action for the 
 foreclosure of a mechanic's lien, under the laws of the state, 
 is not entitled to a receiver of the rents and profits of the 
 property pendente lite, even though it is alleged that the owner 
 of the premises is insolvent and is collecting the rents, and that 
 there are prior incumbrances on the property, the interest on 
 which the owner neglects to pay.^^ 
 
 § 587. Granted in aid of proceedings in bankruptcy. A 
 special receivership for the purpose of collecting rents accruing 
 out of real estate, is sometimes necessary in aid of proceedings 
 in bankruptcy. And although the courts seem to be averse 
 to appointing receivers in such proceedings, yet if it is manifest 
 that the apparent titles to property, in which the bankrupt 
 estate is interested, are on their face such that the rents can 
 not, under the usual warrant in bankruptcy, be efficiently and 
 successfully collected, a receiver will be allowed.^* And a cir- 
 cuit court of the United States, upon a bill for that purpose by 
 the assignee in bankruptcy, will appoint a receiver to take 
 charge of the real estate owned by the bankrupt to which there 
 are conflicting claims and liens, which are before the court for 
 
 92 Davis V. Duke of Marlborough, Stone v. Taylor, 173 111., 147, 50 N. 
 
 2 Swans., 138. E., 688, it was held that in the ab- 
 
 03 Meyer v. Seebald, 11 Ab. Pr., sence of statutory authority the 
 N. S., 326, note. But see, contra, plaintiff in a proceeding to foreclose 
 Webb V. Van Zandt, 16 Ab. Pr., a mechanic's lien was not entitled to 
 314, note, which was a case in the a receiver and that the act of June 
 New York Common Pleas, holding 26, 1895, which provided for rcceiv- 
 that an injunction and a receiver ers in such proceedings, had no ap- 
 might be granted in such an action, plication to an action instituted be- 
 but that if plaintiff had instituted fore the passage of the act although 
 another action to recover the same the action might be pending at the 
 indebtedness, he would be allowed a lime of its passage, 
 receiver only upon condition of his ^4 Kcenan v. Shannon, 9 Bank. 
 tliscontinuinG; such other action. In Reg., 441.
 
 74S RECEIVEKS. [chap. XIV. 
 
 adjustment, such a case being- regarded as an eminently propcr 
 one for a receiver to take charge of the property, until the 
 validity of the liens may be determined, in order that the in- 
 terests of all creditors may be properly secured.^s And in 
 England, the assignee of an insolvent debtor, who is prevent- 
 ed from recovering an estate owned and in possession of the 
 debtor by reason of former proceedings in bankruptcy against 
 him, may maintain a bill in chancery to recover the property, 
 upon which he may procure a receiver of the rents pendente 
 lite.^^ 
 
 § 588. Granted in action to apply trust property in 
 payment of debts equal in priority. When the purpose of 
 the litigation is to apply certain trust property in payment of 
 an indebtedness secured by deed of trust upon the property, 
 and there are conflicting claims to be satisfied, which are of 
 equal justice and merit in themselves, so that the question 
 presented is as to who is entitled to prior satisfaction in the 
 event of the property proving insufficient for all, a proper case 
 is presented to warrant a receiver for the management of the 
 property. ^''^ 
 
 § 589. Nature of defendant's interest in real property; 
 benefice of clergyman. With regard to the nature or ex- 
 tent of a defendant's interest in realty necessary to warrant a 
 court of equity in appointing a receiver thereof, at the suit 
 of an incumbrancer, it is held in England, that where defend- 
 ant's right or estate is such that his creditors may have execu- 
 tion against it by writs of elegit, a sufficient interest is shown to 
 justify the appointment of a receiver.^^ And under the former 
 practice in England, receivers were allowed over the benefice 
 of a clergyman of the established church, when he had made the 
 debt on which the proceedings were instituted a charge upon 
 his benefice.^^ 
 
 ^5 }kIcLean v. Lafayette Bank, 3 98 Davis v. Duke of Marlborough, 
 
 McLean, 503. 1 Swans., 74. 
 
 OGHollis V. Bryant, 12 Sim., 492. 99 White v. Bishop of Peterbor- 
 
 9" Hamberlain u Marble, 24 Miss., cugh, 3 Swans., 109; Silver v. 
 
 586. Bishop of Norwich, id., 112, note.
 
 CHAP. XIV.] REAL PROPERTY. 749 
 
 § 590. When refused over ungathered crop; when al- 
 lowed. As regards the right to a receiver of crops grown 
 upon leased premises, it is held that a mere contract between 
 the owner of land and a tenant, providing for the working 
 of the land by the tenant for a specified time, and compensation 
 to be paid the owner out of the crops raised thereon, does not 
 give the owner such equities as to entitle him to an injunction 
 against the removal of the crops by the tenant, or a receiver 
 to manage the land and take possession of the ungathered 
 crop.i But when by the terms of the lease the parties are, in 
 effect, tenants in common of the crop, and the lessee denies the 
 right of the lessor to any portion thereof and threatens to re- 
 move and dispose of it for his own use, such facts, coupled with 
 the insolvency of the lessee, will justify a receiver at the suit 
 of the lessor. 2 And when the litigation concerns the title to 
 land, which is claimed by both parties, both also claiming to- 
 be in possession, and when they are interfering with each other 
 in harvesting the crops grown by each respectively and threat- 
 ening each other with assaults and with forcible resistance, 
 an appropriate case is presented for a receiver until the rights 
 of the parties can be finally determined.^ 
 
 § 591. Refused in cases of marriage settlements; when 
 allowed after divorce. When, upon her marriage, certain 
 moneys are settled upon a wife for her separate use and benefit, 
 being vested in trustees for that purpose, to be by them invested 
 in securities, and the husband afterward induces the trustees, 
 in violation of their trust, to invest the money in realty, upon 
 which he expends money in improvements and repairs, the 
 husband will not be allowed a receiver of the rents and profits 
 on a bill filed by him against the wife and the trustees, to re- 
 imburse him for his outlay."* And when plaintiff's rights were 
 under a marriage settlement, whereby he claimed his wife's 
 fortune to be a charge upon the fee of defendant's estate, and 
 
 1 Williams v. Green, 37 Ga., 37. 3 Hlawacek v. Bohman, 51 Wis., 
 
 2 Baughman v. Reed, 75 Gal., 319, 92, 8 N. W., 102. 
 
 17 Pac, 222. 4 wiles v. Cooper, 9 Beav., 294.
 
 750 RECEIVERS. [chap. XIV. 
 
 defendant had neglected to pay the interest due, it was held 
 not to be such a case as to justify a receiver; since, if plaintiff 
 should establish at the hearing that his claim was a charge upon 
 the fee, he would be entitled to sell the inheritance, and the fund 
 not being shown to be insufficient, the court refused to interfere 
 i)i limine.^ But when husband and wife entered into an agree- 
 ment that they should mutually enjoy and share certain real 
 estate, and the wife afterward procured a divorce from the 
 husband, upon a bill by her alleging that the husband was in 
 the sole occupancy of the property and enjoying all the rents, 
 and that he was insolvent and unable to respond in damages, 
 a receiver was granted, and was directed to pay half the rents 
 to the husband and to retain the other half to await the final 
 decree.^ 
 
 § 592. Difficulty in collection of rent no ground for re- 
 ceiver. It has already been shown that a defendant's pos- 
 session of real property, under claim of title, will not be dis- 
 turbed by a receiver when adequate relief may be had in the 
 usual forms of procedure at law. And the mere fact of diffi- 
 culties existing in the way of enforcing the ordinary legal rem- 
 edies to compel payment of rent due upon premises demised, 
 is not, of itself, sufficient to give a court of equity jurisdiction 
 to appoint a receiver, when those remedies are still open to the 
 party aggrieved.'^ 
 
 § 593. Plaintiff's acquiescence, and participation in 
 fraud, a bar to relief. It is in all cases essential that a 
 plaintiff, seeking the aid of a receiver over real property, 
 should use due diligence in the assertion of his rights, since 
 long acquiescence in defendant's possession may suffice to bar 
 him from the relief to which he might otherwise be entitled. 
 And when a shareholder in a corporation seeks a receiver over 
 
 5 Drought V. Percival, 2 Mol., 502. ceeding for alimony, see Holmes v. 
 
 6 Baggs V. Baggs, 55 Ga., 590. As Holmes, 29 N. J. Eq., 9. 
 
 to the circumstances under which 7 Cremen v. Hawkes, 8 Ir. Eq., 
 
 a receiver may be allowed over 153, affirmed on appeal, id., 503. 
 property of the husband in a pro-
 
 CHAP. XIV.] REAL PROPERTY. 751 
 
 real property held by a defendant, alleging it to be the property 
 of the corporation, but plaintiff has acquiesced in defendant's 
 possession and use of the property for a number of years with- 
 out question or remonstrance, and shows no danger on the 
 ground of defendant's responsibility, he will not be allowed a 
 receiver. And when, in such a case, it appears that the proper- 
 ty over which a receiver is sought was accumulated through 
 fraud on the part of the corporate authorities, of which plain- 
 tiff, as a shareholder, was fully cognizant, and in which he had 
 acquiesced without complaint for several years, his applica- 
 tion is properly refused.^ 
 
 § 594. Granted when property has escheated to state. 
 A receiver may be appointed of the rents and profits of real 
 estate which is found to have escheated to the state, upon a 
 proceeding instituted by the state for that purpose, when it is 
 shown that the relief is necessary for the purpose of collecting 
 the rents forthwith, which would otherwise be lost.^ 
 
 § 595. Refused on defendant paying rents and profits 
 into court. It would seem to be proper, on an application 
 for a receiver over real property, when the defendant, against 
 whose possession the receiver is sought, consents to pay the 
 rents and profits into court, to refuse the application for a re- 
 ceiver. ^^ 
 
 § 596. One not party to the cause can not object; re- 
 mainder-man and tenants can not restrain receiver from 
 turning them out of possession. One who is not a party to 
 the action, although claiming certain lands which are subject 
 to the receivership, can not be heard to show cause against 
 making a conditional order for the receiver absolute, his 
 proper method of redress being by application to the court to 
 remove the receiver as to such lands as he claims.^ And a 
 motion by a remainder-man and by tenants of premises, which 
 had been placed in the hands of a receiver, to restrain him from 
 
 SHager v. Stevens, 2 Halst. CIi., ^^Prcbble v. Boglnirst, 1 Swans., 
 
 374. 309. 
 
 9 People V. Norton, 1 Paige, 17. ^1 Creed v. Mootq, 4 Ir. Eq.. 684.
 
 752 RECEIVERS. [chap. XIV. 
 
 turning- them out of possession, was refused on the ground 
 that their interest Avas insufticient to sustain the application. ^^ 
 
 § 597. Practice in placing receiver in possession; who 
 responsible for loss by owner remaining in possession. 
 When a receiver is appointed over real property in the posses- 
 sion of the owner, the proper course is to make application to 
 the court for an order directing the owner to surrender pos- 
 session to the receiver, since the latter can not distrain upon 
 the owner in possession, who is not a tenant of the receiver. 
 If, therefore, a loss occurs by reason of the receiver allowing 
 the owner to remain in possession, it will be regarded as the 
 fault of the parties in interest in the cause in not applying for 
 an order upon the owner to deliver up possession.^^ 
 
 § 598. When granted before answer. A receiver of the 
 rents of real property may be appointed upon bill and affidavits 
 in support thereof, before answer, in a case of emergency re- 
 quiring the immediate interference of the court for the protec- 
 tion of plaintiff's equities.^'* But the appointment will not be 
 made when the person in possession is not a party to the cause 
 and not before the court. ^^ 
 
 § 599. Effect of appointing receiver over corporation 
 upon title to its real estate. As regards the effect of the 
 appointment of a receiver over a corporation upon the title to 
 its real estate, it would seem that when the appointment is 
 merely pendente lite, and no assignment is executed by the 
 corporate body to the receiver, the title is not divested, the 
 proceedings being regarded as inchoate, and the right of the 
 receiver as only a possessory right for the purposes of the 
 suit.^^ Where, however, a receiver is appointed upon the dis- 
 solution of a corporation, it is held that the title to its realty 
 vests in the receiver, for the benefit of creditors and share- 
 holders.l''' 
 
 12 Wynne v. Lord Newborough, 1 15 Mays v. Wherry, 3 Tenn. Ch., 
 Ves. Jr., 164. 34. 
 
 13 Griffith V. Griffith, 2 Ves., 400. 16 Montgomery v. Merrill, 18 
 i^Woodyatt v. Gresley, 8 Sim., Mich., 338. 
 
 180. 17 Owen v. Smith, 31 Barb., 641.
 
 CHAP. XIV.] REAL PROPERTY. 753 
 
 § 600. Order should state precisely over what property 
 receiver is appointed ; appointment may be over part only. 
 
 It is important that the order appointing a receiver over real 
 property should state distinctly and clearly the particular prop- 
 erty over which he is appointed. And when it is so indefinite 
 in this respect that it does not appear what property is subject 
 to the receiver's control, the court will not enjoin the real 
 owner from interfering with the property or collecting its 
 rents. 18 But cases are sometimes met with in the books, where 
 a receiver has been appointed over a portion of the real estate 
 in controversy, and not over the whole.^^ 
 
 § 601. When plaintiff entitled to funds in receiver's pos- 
 session. When a receiver is appointed to take charge of 
 the proceeds arising from real estate, pending litigation con- 
 cerning the right thereto, and judgment is finally rendered for 
 plaintiff, he is entitled to an order of court directing the re- 
 ceiver to deliver the funds into his possession. And upon an 
 application for such order, the court will not presume that the 
 receiver transcended his authority, and will not grant a refer- 
 ence to a jury or referee, to determine how much of the fund 
 rightfully belongs to plaintiff, or to ascertain who is entitled 
 to the money in the receiver's hands. ^^ 
 
 § 602. Real estate subject to judgment and execution 
 on termination of receiver's functions. Since the right of 
 a receiver can not outlast the action in which he was appointed, 
 nor be used for any purpose not justified thereby, it is held that, 
 upon the termination of the receiver's functions, when no as- 
 signment was made of his real estate by the defendant to the 
 receiver, the real estate is subject to the lien of a judgment and 
 execution against the defendant to the same extent as if there 
 had been no receivership.^i 
 
 18 Crow V. Wood, 13 Beav., 271. 21 Montgomery v. Merrill, 18 
 And see, ante, § 87. Mich., 338. 
 
 19 Calvert v. Adams, Dick., 478. 
 
 20 Whitney v. Buckman, 26 Cal., 
 447. 
 
 Receivers — 48.
 
 754 RECEIVERS. [chap. XIV. 
 
 § 602(7. When receiver allowed against plaintiff suing 
 in forma pauperis. The power of a court of equity to take 
 possession, through a receiver, of property which is hable to 
 waste and irremediable loss, if suffered to remain in the pos- 
 session of a defendant pending a litigation as to its title, may 
 also be exercised against a plaintiff who has taken possession 
 from defendant and whose possession threatens similar injury 
 to the property. And when plaintiff, suing in forma pauperis 
 for the recovery of land, during the pendency of the action 
 takes possession of a portion of the premises and resists their 
 reoccupation by defendants claiming tide thereto, a receiver 
 may be had upon the application of defendants to take pos- 
 session of the usurped premises and to secure their rents until 
 the determination of the cause. 22 
 
 22 Horton v. White, 84 N. C. 297.
 
 CHAP. XIV.] REAL PROPERTY. 755 
 
 II. Receivers as Between Tenants in Common. 
 
 § 603. Courts averse to interfering as between tenants in common; 
 ill-will and hostility. 
 
 604. Exclusion of co-tenants by insolvent tenant in possession, 
 
 ground for relief. 
 
 605. When receiver allowed over part of joint property; injunction 
 
 allowed; receiver in default of security by defendant. 
 
 606. Receiver granted over colliery because of difficulty between 
 
 joint tenants as to its management; gold mine. 
 
 607. When granted in suits for partition. 
 
 608. Notice to under-tenants not to pay rents to co-tenants entitled 
 
 thereto, no ground for receiver. 
 
 § 603. Courts averse to interfering as between tenants 
 in common; ill-will and hostility. As between tenants in 
 common or joint owners of real property, courts of equity 
 manifest the same aversion to the appointment of receivers as 
 in other cases where the jurisdiction is invoked against a de- 
 fendant in possession, under claim of title, in a controversy con- 
 cerning the right to the disputed property. And it may be stat- 
 ed as a general rule, that a receiver will not be appointed, as 
 between tenants in common of realty, unless a case is presented 
 amounting to an exclusion by the defendant of his co-tenants 
 from the enjoyment or possession of the property.23 And when 
 the application for a receiver was founded on an affidavit of 
 improper management by the defendant, and of a reservation 
 of the profits not amounting to an exclusion of his co-tenants, 
 which was met by counter-affidavits of a balance due to de- 
 fendant on an unsettled account, and an agreement for a refer- 
 ence to arbitration, the charges of improper management be- 
 ing also denied, it was held that no case was presented for a 
 receiver.24 So a feeling of ill-will and hostility between ten- 
 ants in common will not justify the appointment of a receiver 
 where it does not result in depriving one or the other of the 
 proper use and enjoyment of the property.^s 
 
 23 Milbank v. Revett, 2 Meriv., 24 Milbank v. Revett, 2 Meriv., 
 
 405 ; Vaughan v. Vincent, 88 N. C, 405. 
 
 116; Cassetty ?7. Capps, 3 Tenn. Ch., 25 Lamaster v. Elliott, 53 Neb., 
 
 524. And see Heinze v. Klein- 424, 73 N. W., 925. 
 Schmidt, 25 Mont., 89, 63 Pac, 927.
 
 756 RECEIVERS. [chap. XIV. 
 
 § 604. Exclusion of co-tenants by insolvent tenant in 
 possession, ground for relief. Where, however, one ten- 
 ant in common is in possession of the property and in receipt 
 of the entire rents and profits, exchiding his co-tenants from all 
 participation therein, a stronger case is presented for relief in 
 equity, especially when the defendant in possession is insolvent 
 and unable to respond in damages ; and in such cases, the 
 right to a receiver in behalf of the tenant excluded is regarded 
 as well established. 26 Thus, where a tenant in common of 
 valuable mill property, who, in addition to his interest as a co- 
 tenant, also claims a vendor's Hen for a portion of the property 
 sold by him to defendants, shows by his bill that the defend- 
 ants, his co-tenants, are in possession and receiving the profits, 
 which they refuse to share with the plaintiff, and that they are 
 managing the property in so careless a manner that the mills 
 are losing much of their custom, and that they are wholly in- 
 solvent, except as to their interest in the property in question, 
 a clear case is presented for the aid of a receiver. In such a 
 case, the relief is based largely upon the inadequacy of the 
 remedy at law for the protection of plaintiff in his right to the 
 profits, while the property remains in defendant's possession. ^^ 
 
 26 Williams v. Jenkins, 11 Ga., in an undivided one-eighteenth of 
 
 595. And see Street v. Anderton, certain oil lands was entitled to a 
 
 4 Bro. C. C, 414; Sandford v. Bal- receiver pending a proceeding 
 
 lard. 30 Beav., 109. But see Tyson brought to determine plaintiff's 
 
 V. Fairclough, 2 Sim. & St., 142, rights to the property, 
 
 where a doubt is expressed as to 27 Williams v. Jenkins, 11 Ga., 
 
 whether even an actual exclusion of 595. Mr. Justice Warner for 
 
 one tenant in common by another the court says, p. 598: "Do 
 
 constitutes ground for a receiver, the allegations in this bill show 
 
 since if the exclusion amounts to an that the discretion of the chan- 
 
 ouster at law, the party aggrieved cellor in the appointment of a 
 
 may assert his legal title at law; receiver was properly exercised? 
 
 and if not such an exclusion, the The complainant is the owner 
 
 court would compel the tenant in of one-third part of valuable 
 
 common in receipt of the rents to property consisting of a saw and 
 
 account to his co-tenant. In Hig- grist mill, as a tenant in common 
 
 gins Oil & Fuel Co. v. Snow, 51 with the defendants, who are in 
 
 C. C. A., 267, 113 Fed., 433, it was possession of the same, which is of 
 
 held that the owner of a life estate the annual value of one or two
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 757 
 
 § 605. When receiver allowed over part of joint prop- 
 erty ; injunction allowed ; receiver in default of security by 
 defendant. As regards the extent of the receivership, in 
 the class of cases under consideration, it is held that a plain- 
 tiff, claiming a moiety of an estate as a tenant in common with 
 defendant, may have a receiver of the rents and profits of such 
 
 thousand dollars. The complain- 
 ant alleges the bad management of 
 the mills by the defendants; their 
 intention to defraud him, as mani- 
 fested by their various acts, which 
 the complainant specifically alleges, 
 and that they are insolvent, except 
 as to their interest in the mill prop- 
 erty ; that there is now due the 
 complainant for the original pur- 
 chase-money of said mills, from the 
 defendants, the sum of $3,716. 
 Assuming the original price paid 
 for the property to be its true value, 
 (to wit) $5,500, the two-thirds 
 thereof, which the defendants now 
 own, is worth about the sum of 
 $3,666, which is less than the 
 amount of the original purchase- 
 money now due the complainant, 
 so that when the original purchase- 
 money shall be paid to the com- 
 plainant (for which he asserts his 
 vendor's lien), the defendant will 
 have nothing to pay him for his 
 share of the annual rents and 
 profits thereof. The defendants 
 are in the possession and enjoy- 
 ment of the property, and refuse to 
 allow the complainant to partici- 
 pate in the same, in any manner 
 whatever. The complainant shows 
 that he has offered to take posses- 
 sion of the mills, and give bond 
 and security to the defendants, to 
 account to them for their share of 
 the profits; or to let them continue 
 in possession on their doing the 
 
 same, to account to him for his 
 share of the profits, which they 
 have refused. The plaintiff in error, 
 however, insists that a court of 
 equity will not interfere, and ap- 
 point a receiver, at the instance of 
 one tenant in common against an- 
 other, who is in possession, because 
 the party complaining may relieve 
 himself at law, by a writ of parti- 
 tion. Concede that the complain- 
 ant in this case might have a writ 
 of partition at law, for his share of 
 the property, what adequate rem- 
 edy has he at law, in the mean- 
 time, for the profits of the mills, 
 while in the possession of the de- 
 fendants, who are insolvent? We 
 entertain no doubt that a court of 
 equity has jurisdiction to appoint 
 a receiver, at the instance of one 
 tenant in common against his co- 
 tenants, who are in possession of 
 undivided valuable property, re- 
 ceiving the whole of the rents and 
 profits and excluding their com- 
 panion from the receipt of any por- 
 tion thereof, when such tenants are 
 insolvent. 2 Story's Equity, § 833; 
 Street v. Anderton, 4 Brown's 
 Chan. Rep., 415; Milbank v. Revett, 
 2 Merivale. 405. The discretion of 
 the chancellor in appointing a re- 
 ceiver, in this case, was, in our 
 judgment, properly exercised ; there- 
 fore, let the judgment of the court 
 below be affirmed."
 
 758 RECEIVERS. [CIIAP. XIV. 
 
 moiety, when defendant is in possession of the whole; and 
 he may also have an injunction to restrain defendant from 
 receiving the rents of such moiety, as well as an order upon the 
 tenants of that part of the estate to attorn to the receiver.28 
 So it has been ordered that a tenant in common in possession 
 should give security to his co-tenant for the portion of rents 
 due him, or in default thereof that a receiver be appointed. 29 
 And in the case of equitable tenants in common of realty, the 
 legal title to which is in a trustee for the benefit of the co-ten- 
 ants, the fact that the trustee has put one of the co-tenants in 
 possession will justify a receiver in behalf of the other tenants 
 over their own shares, but not over the entire property, since 
 the tenant in possession is entitled to the possession of his own 
 share of the property.^O But when the conduct of the defend- 
 ant in possession is such as to amount to an exclusion of his co- 
 tenants, they are entitled upon the hearing to a receiver of the 
 whole property.^l 
 
 § 606. Receiver granted over colliery because of diffi- 
 culty between joint tenants as to its management; gold 
 mine. While, as has already been shown, equity is gener- 
 ally averse to extending the aid of a receiver, as between joint 
 owners or tenants in common, yet in cases of mining property 
 or collieries, there would seem, from the nature of the property, 
 to be stronger reasons why the relief should be allowed 
 when there is a disagreement as to the management of the 
 property, than in cases of ordinary real estate. And where 
 there are a large number of persons interested and owning 
 shares in mining property, as in a colliery, upon a difficulty 
 between them as to the management of the property, a receiver 
 may be allowed, although the owners are tenants in common, 
 
 28 Hargrave v. Hargrave, 9 Beav., 29 Street v. Anderton, 4 Bro. C. 
 
 549. See Hoppe v. Fountain, 104 C, 414. 
 
 Cal., 94, 37 Pac, 894, as to the ap- 30 Sandford v. Ballard, 30 Beav., 
 
 pointment of a receiver over real 109. 
 
 property in an action brought to 31 Sandford v. Ballard, 33 Beav., 
 
 foreclose a mortgage given by a co- 401. 
 tenant of his undivided interest.
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 759 
 
 the relief being granted to prevent the destruction of the sub- 
 ject-matter.32 So in an action brought by plaintiffs claiming 
 to be the sole owners of a gold mine, averring that defendants 
 have unlawfully entered upon a mine and are taking away the 
 gold, defendants claiming an interest as co-tenants, while the 
 court may refuse to enjoin the working of the mine upon 
 grounds of public policy and because of the peculiar nature of 
 the property, a receiver may be allowed pendente lite, the de- 
 fendants being of doubtful responsibility.^^ 
 
 § 607. When granted in suits for partition. The aid of a 
 receiver is sometimes granted in actions for the partition of 
 real estate between tenants in common, when it is apparent to 
 the court that the relief is necessary to protect all parties in 
 interest.24 And in such an action, when defendants not only 
 
 32 Jefferys v. Smith, 1 Jac. & W., 
 298; Ames v. Ames, 148 IH., 321, 36 
 N. E., 110; Heinze v. Butte & B. 
 C. M. Co., 61 C. C. A., 63, 126 Fed., 
 1. And see Higgins Oil & Fuel Co. 
 V. Snow, 51 C. C. A., 267, 113 Fed., 
 433. In Jefferys v. Smith, 1 Jac. & 
 W., 298, supra, Lord Eldon, refer- 
 ring to a note of a case before Lord 
 Hardwicke, in which he held that 
 a colliery was in the nature of 
 a trade, persons owning different 
 interests in which were to be re- 
 garded as in the nature of partners, 
 and that the difficulty of manage- 
 ment gave a court of equity juris- 
 diction as to mesne profits which it 
 would not assume with regard to 
 other lands, observes: "On this 
 ground, and on account of the pe- 
 culiarity of this species of produce, 
 the court gives an iniunctinn 
 against trespassers, and allows a 
 party to maintain a suit for the 
 profits, which, in other cases, it 
 would not do. Here there arc 
 twenty shares; and if each owner 
 may employ a manager and a set 
 
 of workmen, you destroy the sub- 
 ject altogether; it renders it impos- 
 sible to carry it on. It appears to 
 me, therefore, upon general princi- 
 ples, without reference to the par- 
 ticular circumstances of any case, 
 that where persons are concerned 
 in such an interest in lands as a 
 mining concern is, this court will 
 appoint a receiver, although there 
 are tenants in common of it. Take 
 the order for a receiver, and let 
 every owner be at liberty to pro- 
 pose himself as manager before the 
 master." 
 
 33 Parker v. Parker. 82 N. C, 
 165. But see Stith v. Jones, 101 N. 
 C, 360. 8 S. K, 151; Thomas v. 
 Nantahala M. & T. Co., 7 C. C. A.. 
 330, 58 Fed., 485. As to the pro- 
 priety of the court's directing a 
 receiver of a coal mine appointed 
 pendente lite, to work the mine ac- 
 tively, see Bigbee v. Summerour, 
 101 Ga.. 201. 28 S. E., 642. 
 
 34 Pignolet v. Bushc, 28 How. Pr., 
 9; Duncan v. Campau, 15 Mich., 
 415; Weise v. Welsh. 30 N. J. F.q.,
 
 760 RECEIVERS. [chap. XIV. 
 
 deny plaintiff's title, but have endeavored to entangle the whole 
 title, and are not disposed to account for the rents and profits, 
 equity may interfere by a receiver.^^ And when, in an action 
 for partition, it is shown that a portion of the property can not 
 be rented, in consequence of the refusal of one of the tenants 
 in common to unite with the others, and that the rents of the re- 
 maining portions can not be collected because of the interfer- 
 ence of such co-tenant, a receiver may be appointed to pre- 
 serve the property from loss pendente lite.^^ But a receiver 
 will not be appointed merely because of the occupancy of the 
 premises by the defendant, a tenant in common, since the right 
 of possession is one of the incidents of such tenure.^"^ 
 
 § 608. Notice to under-tenants not to pay rents to co- 
 tenants entitled thereto, no ground for receiver. When 
 one of several co-tenants has entered into an agreement with 
 the others, whereby they are authorized to receive all the rents 
 of the premises until they have repaid an amount due them, 
 the fact that such co-tenant afterward notifies the tenants of 
 the premises to pay their rents to him, and not to his co-ten- 
 ants, affords no ground for interfering by the appointment of 
 a receiver, such a notice not being regarded as equivalent to an 
 exclusion. 38 
 
 431; Goodale v. Fifteenth District -"'S Duncan v. Campau, 15 Mich., 
 
 Court, 56 Cal., 26; Mesnager v. 415. 
 
 DeLeonis, 140 Cal., 403, 73 Pac, 36 pignolet v. Bushe, 28 How. 
 
 1052; Ames v. Ames, 148 111., 321, Pr., 9. 
 
 36 N. E., 110; Heinze v. Butte & 37 Varnum v. Leek, 65 Iowa, 751. 
 
 B. C. M. Co., 61 C. C. A., 63, 126 23 N. W., 151. 
 
 Fed., 1. And see Higgins Oil & 38 Tyson v. Fairclough, 2 Sim. & 
 
 Fuel Co. V. Snow, 51 C. C. A., 267, St., 142. 
 
 113 Fed., 433.
 
 CHAP. XIV.] REAL PROPERTY. 761 
 
 III. Receivers as Between Vendors and Purchasers. 
 
 § 609. When vendor entitled to receiver in action for specific perform- 
 ance. 
 
 610. When vendee so entitled. 
 
 611. Vendor allowed receiver in suit to recover possession on show- 
 
 ing defendant's insolvency and commission of waste. 
 
 612. Purchasers allowed receiver as against settlement made by 
 
 husband upon wife after marriage. 
 
 613. When purchaser at sheriff's sale granted a receiver. 
 
 614. When purchaser of gold mine allowed a receiver. 
 
 615. When granted over colliery or mine; what required of the re- 
 
 ceiver; when discharged; operation of mine by receiver. 
 
 616. Bill not entertained which will affect interest of purchasers not 
 
 made parties. 
 
 617. When receiver required to return purchase-money and counsel 
 
 fees. 
 
 § 609. When vendor entitled to receiver in action for 
 specific performance. The aid of equity by a receiver is 
 sometimes necessary as between vendors and purchasers of real 
 property, either in connection with proceedings to compel a 
 specific performance of the contract of sale, or for the protec- 
 tion of the rights of a purchaser after sale. And the vendor 
 of real estate, upon a bill against the vendee for a specific per- 
 formance of the contract of purchase, may have a receiver in 
 aid of his action when it is shown that the defendant is in- 
 solvent, and that all his property, real and personal, includmg 
 the estate which is the subject of the contract, is about to be 
 conveyed to trustees for the benefit of his creditors. The re- 
 lief, under such circumstances, is warranted upon the ground 
 that, if the contract can be enforced, the vendor has a lien upon 
 the property for the unpaid purchase-money; while, if it can 
 not be enforced, the purchaser has a lien to the extent of the 
 amount already paid by him on account of his purchase; and 
 upon the further ground that the purchaser's insolvency and 
 attempt to convey the estate would embarrass the title. ^^ So 
 
 39 Hall V. Jenkinson, 2 Ves. & this case, the purchaser had never 
 Bea., 125. It is to be noticed that in been let into exclusive possession
 
 762 RECEIVERS. [CIIAP. XIV. 
 
 when a person has contracted for the purchase of real estate, 
 but is dissatisfied with the title, and refuses on that ground 
 to conclude the purchase, in an action against him to enforce a 
 specific performance of the contract, a receiver may be ap- 
 pointed for the management of the property, pending a refer- 
 ence to determine the validity of the title.^o When a receiver 
 is appointed in aid of a bill against the purchaser for specific 
 performance of his agreement, if defendant is compelled by 
 the court to carry out the agreement and to complete his pur- 
 chase, the receiver will be considered as his receiver, and the 
 receiver's possession as his possession. ^i But since, in such an 
 action, the receivership is merely ancillary to the principal re- 
 lief sought, if the principal remedy is prematurely invoked, 
 there being no default which would entitle the vendor to a sale, 
 the order appointing a receiver should be revoked. ^^ And in 
 Tennessee, the courts refuse the aid of a receiver, in an action 
 to enforce a vendor's lien, upon the ground that it is no part 
 of the contract of sale, either expressed or implied, that the 
 vendor shall appropriate anything but the land itself by a sale 
 to satisfy the unpaid purchase-money, and because by the con- 
 tract the purchaser is entitled to possession until the land is sold 
 in satisfaction of the debt.^s But in the same state, after a 
 decree in favor of the vendor seeking to subject the land to the 
 payment of the purchase-money, from which decree defendant 
 has appealed, the failure of defendant to pay taxes has been 
 held to be sufficient ground for a receiver pending the appeal. ^^ 
 § 610. When vendee so entitled. The relief, in the class 
 of cases under consideration, is not confined to actions for 
 specific performance, brought by a vendor against the vendee, 
 but the jurisdiction is also exercised in behalf of the vendee 
 
 of the premises, the possession hav- ^2 Jones v. Boyd, 80 N. C, 258. 
 
 ing been partly in the vendor and 43 Morford v. Hamner, 3 Baxter, 
 
 partly in the purchaser. 391. 
 
 40 Boehm v. Wood, 2 Jac. & W., 44 Darusmont v. Patton, 4 Lea, 
 236. 597. 
 
 41 Boehm v. Wood, Turn. & R., 
 332.
 
 CHAP. XIV.] REAL PROPERTY. 763 
 
 instituting such an action. And upon a bill by the vendee to 
 compel specific performance of the contract of sale, a receiver 
 may be appointed to secure the property pendente lite, v^dien 
 the vendor has fraudulently repossessed himself of the prop- 
 erty.'*^ And the relief has been granted in such case although 
 there was no showing of the insolvency of the defendant.^^ 
 
 § 611. Vendor allowed receiver in suit to recover pos- 
 session on showing defendant's insolvency and commission 
 of waste. When a vendor of real estate, who has never 
 parted with the legal title, having merely given the purchaser 
 a title bond, sues to recover possession because of nonpayment 
 of purchase-money, and seeks to have the property sold and 
 its proceeds applied in payment of the purchase price, it is 
 proper to appoint a receiver to take charge of the property, 
 upon allegations of defendant's insolvency, and that he is com- 
 mitting waste by cutting off the timber, w^hich constitutes the 
 chief value of the property.^"^ But the appointment of a re- 
 ceiver, in such a case, does not in law have the effect of chan- 
 ging the possession, but only suspends the right of actual en- 
 joyment pending the litigation. ^^ And when the vendor of 
 real estate, having given a bond or contract to convey, upon de- 
 fault of the purchaser, files a bill for the specific performance of 
 the contract and for a sale of the land, if the premises are an 
 
 45 Dawson v. Yates. 1 Beav., 301. cutting down and removing of 
 
 46 Mead v. Burk, 156 Ind., 577, valuable timber from the land in 
 60 N. E., 338. controversy, and especially where 
 
 47 McCaslin v. State, 44 Ind., 151. defendant only claimed the title 
 The court, Buskirk, J., say, p. 174: and possession of such land under 
 "Nor do we think the court ex- a title bond, the purchase-money 
 ceeded its power in appointing a being unpaid, and it being alleged 
 receiver. The third clause of sec- and proved that the defendant was 
 tion 199, 2 G. & H. (statutes), 152, insolvent, would be such material 
 authorizes the appointment of a re- injury as would justify the court in 
 ceiver 'in all cases when it is shown appointing a receiver to take charge 
 that the property, fund, or rents of and preserve such land during 
 and profits in controversy is in the litigation." But see Guernsey 
 danger of being lost, removed, or v. Powers, 9 Hun, 78. 
 materially injured.' There seems 48 McCaslin z/. State, 44 Ind., 151. 
 to be no room to doubt that the
 
 764 RECEIVERS. [CIIAP. XIV. 
 
 inrulequate security for the unpaid pnrchase-moncy and the 
 vendee is insohent, the vendor is entitled to a receiver of the 
 rents and profits pendente lite, upon the same ground that a 
 mortgagee is entitled, under like circumstances, to a receiver 
 in aid of a foreclosure.'*^ So when the vendee is in possession 
 under a bond to convey title, and receives the rents and profits 
 for several years, permitting the premises to deteriorate in 
 value through want of repairs and improper cultivation, so 
 that they are insufficient to pay the amount due, and the vendee 
 becomes insolvent and is adjudicated a bankrupt, a receiver 
 of the rents and profits will be appointed until the final hearing, 
 no part of the purchase-money, principal or interest, having 
 been paid.^^ But the mere insolvency of the vendee, if known 
 to the vendor at the time of sale, will not warrant a receiver 
 upon a bill to rescind the contract of sale and for an accounting 
 of rents, no fraud being charged in the bill, and the allegations 
 of waste being fully denied. ^^ Nor, in such case, will a receiver 
 be allowed when it is not shown that defendants were less 
 solvent and able to pay when the debt for purchase-money 
 matured than when it was created, and when it does not ap- 
 pear that the depreciation in value, which is relied upon as a 
 ground for relief, was caused by the waste or mismanagement 
 of the purchasers.^2 And when it is not shown that the vendee 
 is insolvent, and the amount of the indebtedness is disputed 
 and undetermined, a receiver should not be appointed. ^^ But 
 in Kentucky, the general doctrine under consideration does not 
 prevail, and it is there held that when the vendor conveys real 
 estate and delivers possession to his vendee, reserving a lien 
 for the purchase-money, the lien attaches to the land and not 
 to the rents and profits. The vendee, therefore, having the 
 legal title and the right to the use and occupancy of the proper- 
 
 49 Phillips V. Eiland, 52 Miss., 51 Jordan v. Beal, 51 Ga, 602. 
 721 ; Smith v. Kelley, 31 Hun, 387. 52 Tnmlin v. Vanhorn, 77 Ga., 
 
 50 Tufts V. Little, 56 Ga., 139. 315, 3 S. E., 264. 
 
 See, also, Gunby v. Thompson, 56 53 Hughes v. Hatchett, 55 Ala., 
 
 Ga., 316; Chappell v. Boyd, 56 Ga., 631. 
 578 ; Worrill v. Coker, 56 Ga., 666.
 
 CHAP. XIV.] REAL PROPERTY. 765 
 
 ty, a receiver will not be appointed in an action to enforce tlie 
 lien, in the absence of waste or improper cultivation, although 
 it is shown that the vendee is insolvent and that the land is 
 not worth more than the amount of the indebtedness.^^ 
 
 § 612. Purchasers allowed receiver as against settle- 
 ment made by husband upon wife after marriage. Pur- 
 chasers of real estate, as against an adverse party in posses- 
 sion claiming a paramount title, have been allowed the pro- 
 tection of a receiver upon a bill to perfect their title against 
 such adverse claimant ; although the relief is proper only when 
 it is apparent that the purchaser seeking the aid of the court 
 has a good equitable title, against which defendant's title can 
 not prevail, and that the purchaser can compel the perform- 
 ance of his contract of purchase. Thus, purchasers for value 
 from a husband have been allowed a receiver, as against a 
 voluntary settlement made by the husband upon his wife after 
 marriage, upon the ground that such settlement gave no title 
 as against the purchasers, who were, therefore, entitled to a 
 specific performance of their contract. And the receiver may 
 be appointed, under such circumstances, before answer.^^ 
 
 § 613. When purchaser at sheriff's sale granted a re- 
 ceiver. A purchaser of lands at a judicial sale, who ob- 
 tains a sheriff's deed therefor, upon the expiration of the stat- 
 utory period of redemption, is entitled to possession of the 
 lands, and of the crops growing thereon as an incident to the 
 realty. He may, therefore, in an action to obtain such posses- 
 sion, have a receiver to take charge of the growing crops with 
 a view to properly harvesting and preparing them for market, 
 and holding the proceeds subject to the final order of the court, 
 defendants being alleged to be in a condition of insolvency.^^ 
 
 54 Collins V. Richart, 14 Bush, 621. quired the title to the land, and the 
 
 55 Metcalfe v. Pulvertoft, 1 Ves. defendants are properly restrained 
 & Bea., 180. from selling or incumbering the 
 
 56 Corcoran v. Doll, 35 Cal., 476. land, till the rights of the parties 
 Sawyer, C. J., for the court, says, can be determined. So, also, we 
 p. 479: "If the facts stated in the think the record shows a proper 
 complaint are true, plaintiffs ac- case for restraining an appropria-
 
 766 RECEIVERS. [chap. XIV. 
 
 And it is an appropriate exercise of the jurisdiction to appoint 
 a receiver in aid of the possession of a purchaser at a sheriff's 
 sale, under judgment, upon a bill alleging that the defendant 
 debtor has fraudulently conveyed his real estate with a view 
 to delay and defeat his creditors. Such a state of facts, it is 
 held, would clearly warrant a receiver in aid of the judgment 
 creditor himself, and the right of a purchaser at a sale under 
 the judgment to the same relief is deemed equally clear-^*^ 
 
 § 614. When purchaser of gold mine allowed a receiver. 
 While the courts are usually averse to taking possession of 
 lands by a receiver pending litigation between conflicting claim- 
 ants, it is held, in California, that the working of gold mines 
 and the extraction of gold therefrom are something more 
 than the ordinary use of real estate by one in possession, re- 
 quiring more than the usual remedies for the protection of a 
 purchaser. Such a use of the realty constitutes a waste or de- 
 struction of the very property itself, or all that is of essential 
 value. It is, therefore, held that a purchaser at a mortgage 
 sale of an interest in a mining claim may have a receiver, 
 when the mortgagor is still in possession, working the claim 
 and refusing to pay the purchaser his interest in the dividends, 
 it being alleged that the mortgagor is insolvent, and that the 
 claim will be worked out and exhausted before the statutory 
 period for redemption expires.^^ 
 
 tion of the crops and for a receiver. pretended tenant in possession, as 
 It is not a question of rents and well as the other defendants, was 
 profits merely, during the time for a party. We think there is clearly 
 redemption. That time had already a cause of action stated, both for 
 expired, and the plaintiffs had ob- an injunction and a receiver. If 
 tained the sheriff's deed and were the tenant in possession is entitled 
 entitled to the possession of the to anything for his services in cul- 
 land. The growing crops belonged tivating the land during the time 
 to the plaintiffs as a part of the for redemption, he is a party to the 
 land. The principal parties are al- suit, and his equities can be ad- 
 leged to be insolvent, and all the justed when the affairs of the re- 
 transactions on the part of the de- ceivership are settled up." 
 fendants, on the theory of ihe com- 57 Mays v. Rose, Freem. (Miss.), 
 plaint, constitute a scheme to de- 703. 
 fraud the plaintiffs, to which the 58 Hill v. Taylor, 22 Cal., 191. It
 
 CHAP, XIV.] REAL PROPERTY. 767 
 
 § 615. When granted over colliery or mine; what re- 
 quired of the receiver ; when discharged ; operation of mine 
 by receiver. The aid of a receiver is sometimes granted in 
 cases of mines or collieries pending a litigation which is to de- 
 termine the title and rights of the parties, when, from the pe- 
 culiar nature of the property, it is necessary that it should be 
 kept in operation and preserved pendente lite. Thus, where 
 purchasers of a colliery file a bill to set aside their purchase 
 and to enjoin their notes given for purchase-money, on the 
 ground of fraudulent representations made by defendants to 
 induce them to purchase, if, on the case presented, there is 
 much doubt as to the ownership of the colliery, and it is of 
 importance that it should be worked to prevent flooding and 
 other injury, and also to prevent a forfeiture to the landlord, a 
 fit case is presented for the appointment of a receiver pendente 
 lite. And the relief, in such a case, is founded upon the ne- 
 cessity of preserving the property pending the controversy, in 
 order that, when it is finally determined to whom it belongs, 
 full and complete justice may be done. And plaintiffs may 
 be required to supply the means of carrying on the colliery, re- 
 serving the ultimate question of expense for future determina- 
 tion. The receiver thus appointed will be required to keep the 
 colliery going, and out of its receipts to pay all outgoings; 
 and if the receipts are insufficient, plaintiffs may be required 
 to supply him with the necessary funds for that purpose.^^ 
 
 is to be observed that the Practice and profits are in danger of being 
 
 Act of California, § 143, provides lost or materially injured or im- 
 
 that a "receiver may be appointed paired." 
 
 by the court in which the action is 59 Gibbs v. David, L. R., 20 Eq., 
 
 pending, or by a judge thereof, 373. The doctrine of the text is 
 
 first before judgment, provision- very clearly stated in the opinion 
 
 ally, on the application of either of Vice-Chancellor Malins as fol- 
 
 party, when he establishes a prima lows, p. 375: "As far as I know 
 
 facie right to the property, or to of the case at present, although the 
 
 an interest in the property which precise circumstances certainly 
 
 is the subject of the action, and have not occurred before, I can 
 
 which is in possession of an adverse not help thinking that, upon prin- 
 
 party, and the property or its rents ciple, I shall not much err if I
 
 768 
 
 RECEIVERS. 
 
 [chap, XIV. 
 
 But when the effect of appointing a receiver in a controversy 
 as to the right to mining- property is to suspend the operation 
 of the mines, the receiver having no funds with which to meet 
 the necessary outlays, the appointment will be regarded as 
 improvident, and the receiver will be discharged, when it is 
 not alleged that defendants in possession are insolvent, or that 
 they are unable to account for the mesne profits, or that the 
 
 accede to the application of the 
 plaintiffs. The question brought 
 before the court is a very remark- 
 able one. The two plaintiffs, Mr. 
 Gibbs and Mr. Joachim, are, it is 
 stated, merchants in the city of 
 London, and their case is this : 
 that, by representations made to 
 them by the defendant Webb, they 
 have been induced to purchase a 
 colliery in South Wales. They al- 
 lege that the representations made 
 by Webb were entirely false, and 
 that if they had known the false- 
 hood of such representations they 
 would not have purchased the col- 
 liery. The persons from whom the 
 colliery was bought are Mr. Cot- 
 ton's clients, Charles William 
 David and John Sloper, and, of 
 course, if it turns out that, what- 
 ever representations were made by 
 Webb, they were made without 
 the knowledge of these two defend- 
 ants, they will not be answerable, 
 and the suit will fail. But the bill 
 alleges that, in point of fact, Webb 
 was the bribed agent of these de- 
 fendants to make these false repre- 
 sentations; and if this turns out to 
 be the truth, and is established at 
 the hearing, the contract will be 
 set aside, the suit will succeed, the 
 plaintiffs will be entitled to be re- 
 lieved from all further payments, 
 and will take out of court all the 
 moneys paid in and all that may 
 
 be hereafter brought in. In other 
 words, the contract will be undone. 
 But the property is a colliery, and 
 a going colliery, and both sides ad- 
 mit that it must be kept going or 
 the lease will be forfeited; and 
 moreover, if it is not kept going, it 
 will be drowned out, and, therefore, 
 it is absolutely necessary it should 
 be worked. In this state of things, 
 I think it is clearly uncertain to 
 whom the colliery belongs. If the 
 plaintiffs are right in their allega- 
 tions on the bill, the colliery does 
 not belong to them, but to David 
 and Sloper. If, on the other hand, 
 the allegations are erroneous, then 
 the colliery belongs to the plain- 
 tiffs, and David and Sloper have 
 nothing to do with it. It is accord- 
 ing to the practice of the court to 
 keep property in security until the 
 right is decided, and therefore, it 
 being totally uncertain •to which of 
 these two parties this colliery be- 
 longs, it does seem to me, in ac- 
 cordance with practice and princi- 
 ple, that the property shall, as far 
 as possible, be kept in security. 
 Then, it is asked, why should this 
 be done? The plaintiffs are in pos- 
 session ; they say that they were 
 fraudulently induced to take pos- 
 session, and, being in possession, 
 they are incompetent to deal with 
 the property in its present position, 
 and if they should succeed in this
 
 CHAP. XIV.] 
 
 REAL PROPERTY. 
 
 769 
 
 property is being injured under their management. ^'^ And a 
 receiver of a coal mine should ordinarily not be authorized to 
 operate the mine and carry on a general mining business, and 
 where he has so operated the mine and has incurred large in- 
 debtedness in so doing, it is error to charge up such obligations 
 as preferred claims prior to mortgage liens upon the property.^! 
 § 616. Bill not entertained which will affect interest of 
 purchasers not made parties. Equity will not entertain a 
 bill for a receiver of the rents and profits of real property 
 which will affect the interests of purchasers of the property 
 
 suit they will have a demand 
 against the defendants for all mon- 
 eys properly expended in working 
 the colliery. It is of very great 
 importance that the colliery should 
 be so worked as to leave as little 
 doubt as possible whether it was 
 properly or improperly worked. If 
 the court appoints an officer com- 
 petent to manage a colliery, and 
 he says, 'I have carried on the col- 
 liery and made a gain,' then the 
 gain will belong to the party to 
 whom the mine belongs. If, on 
 the other hand, he says, 'I have 
 been obliged to carry on the col- 
 liery at a loss,' that loss will have 
 to be borne by the plaintiffs, if they 
 fail in their suit, and by the defend- 
 ants if the plaintiffs succeed. Now 
 I will assume, in favor of the de- 
 fendants, that all these charges are 
 unfounded and that the suit will 
 fail, and I will continue to act upon 
 that assumption until the contrary 
 is approved. If, therefore, the suit 
 does fail, and a receiver is ap- 
 pointed, and he is supplied with 
 the means of carrying on the col- 
 liery by the plaintiffs, what dam- 
 age will be done to the defendants? 
 It is impossible that they can be 
 damaged to the extent of a farthing. 
 Receivers — 49. 
 
 If, on the other hand, the suit 
 should succeed, then a very mate- 
 rial benefit may arise to the plain- 
 tiffs in the manner I have pointed 
 out, on its being ascertained in this 
 way what is the proper expenditure 
 in carrying on the colliery. There- 
 fore I shall do what this court is 
 constantly in the habit of doing 
 when property is in dispute, and as 
 was done in Boehm v. Wood, 2 
 Jac. & W., 236. ... It seems to 
 me, in this case, that the court 
 should appoint a protector or man- 
 ager of the estate, in order that, 
 when it is decided to whom it be- 
 longs, justice may be done. There- 
 fore, upon principle, and, I think, 
 upon authority, I shall accede to 
 the application that a receiver be 
 appointed. The plaintiffs must 
 supply the means of carrying on 
 the colliery, and, as in Bochm v. 
 Wood, 2 Jac. & W., 236, the ques- 
 tion at whose expense the receiver 
 is to be appointed and the colliery 
 is to be carried on will be reserved. 
 If the suit succeeds, it will be at 
 the expense of the defendants." 
 
 00 Carter v. Hoke, 64 N. C. 348. 
 
 SlDalliba v. Winschell, 11 Idaho, 
 364, 82 Pac, 107, 114 Am. St. Rep., 
 267.
 
 770 RECEIVERS. [chap. XIV. 
 
 who are not made parties to the action, since all parties direct- 
 ly interested in the subject-matter must be brought before the 
 court. And when this is not done, a demurrer to the bill for 
 want of proper parties will be sustained. ^^ 
 
 § 617. When receiver required to return purchase-mon- 
 ey and counsel fees. Where a receiver sold real estate at 
 auction under an order of court, and the purchasers afterward 
 refused to complete the purchase on the ground of an alleged 
 defect of title, but the court ordered them to complete the pur- 
 chase, and the receiver afterward consented that the order 
 should be held void and that the purchase might be annulled, 
 the receiver was required by the court to return the purchase- 
 money, together with counsel fees to the purchasers for ex- 
 amining the title and in resisting the proceeding to have the 
 purchase perfected.^^ 
 
 62Lumsden v. Fraser, 1 Myl. & 63 Drake v. Goodrich, 6 Blatchf., 
 
 Cr., 589, affirming S. C, 7 Sim., 555. 531.
 
 CHAP. XIV.] REAL PROPERTY. 771 
 
 IV. Functions of the Receiver. 
 
 § 618. Control over rents and profits; tenants required to attorn to 
 receiver; English practice. 
 
 619. Arrears of rent; future rents; Irish practice. 
 
 620. Motion to compel tenants to attorn; costs. 
 
 621. At what time liability of tenant to receiver attaches; when pay- 
 
 ment to third person treated as payment to receiver. 
 
 622. Receiver's right to distrain, decisions unsettled; order of court 
 
 to distrain. 
 
 623. Receiver not allowed to distrain when plaintiff still proceeds 
 
 with his action. 
 
 624. Notice to tenant of appointment necessary before receiver can 
 
 sue. 
 
 625. Attachment against tenant for failure to pay rent to receiver. 
 
 626. Attachment must be discharged before receiver can distrain, 
 
 and vice versa. 
 
 627. Disputed title not determined by attachment; attachment not 
 
 granted pending abatement of suit by death of plaintiff. 
 
 628. Order authorizing receiver to collect rents through defendant, 
 
 effect of; not appealable. 
 
 629. Receiver should move to invest rents; rights of claimants. 
 
 630. Right to rents in case of receiver over corporation. 
 
 631. Receiver continued after sale until conveyances are executed. 
 
 632. Receiver of leasehold premises bound to pay head-rent. 
 
 633. Right to make repairs. 
 
 634. Duty of receiver in case of waste; injunction against waste. 
 
 635. Sale of property free from all liens. 
 
 636. What purchaser at receiver's sale bound to see; his title not 
 
 affected by irregularities if court had jurisdiction. 
 
 637. Receiver may enjoin tenant from using premises for purpose 
 
 prohibited by lease. 
 
 638. Leave to lease property; lease will not bind infant remainder- 
 
 man. 
 638a. Rent due third parties; dilapidations. 
 
 § 618. Control over rents and profits; tenants required 
 to attorn to receiver ; English practice. The most impor- 
 tant function of a receiver over real estate is the control of the 
 rents and profits accruing from the property pending the re- 
 ceivership, the right to such rents being generally vested in the 
 receiver by his order of appointment. And in appointing a re- 
 ceiver over real property of a defendant, the correlative rights 
 of landlord and tenant subsisting between the defendant and
 
 172 RECEIVERS. [chap. XIV. 
 
 his tenants are not changed. The court, through its receiver, 
 takes upon itself the possession previously existing in defend- 
 ant, and while the court has additional and larger powers for 
 enforcing the landlord's rights, the rights themselves remain 
 unaltered.^'* In New York, it is held that the court may au- 
 thorize its receiver to lease the premises for the customary term 
 for which such premises are ordinarily leased, even though the 
 term should extend beyond the termination of the litigation, 
 and that such authority may be granted to the receiver upon 
 an ex parte application. The court may, however, modify or 
 vacate such order and annul the lease, in which event lessees 
 who have taken the lease in good faith, relying upon the or- 
 der of the court, are entitled to indemnity out of the funds 
 arising from a sale of the premises in a partition suit in which 
 the receiver was appointed. ^^ It was the practice of the Eng- 
 lish Court of Chancery, on appointing a receiver of the rents 
 and profits of realty, to direct that the tenants attorn to the re- 
 ceiver, and if they refused so to do the proper course was to 
 move that they be required to attorn, thus enabling them to 
 be heard before the court as to whether they were actually 
 tenants of the premises in controversy. And if no cause was 
 shown by the tenants against such motion, the court would 
 grant an order requiring them to deliver up possession to the 
 receiver.66 When a tenant of a portion of the property under 
 a former lease attorns to the receiver, and for a time pays him 
 the rent, upon his subsequent refusal to pay rent to the re- 
 ceiver the court will grant an order compelling him so to do.^"^ 
 § 619. Arrears of rent; future rents; Irish practice. 
 Under the practice of the Irish Court of Chancery, the receiver 
 is entitled to all arrears of rent unpaid at the time of the order 
 
 64 Commissioners v. Harrington, 575. As to the right to set off im- 
 11 L. R., Ir., 127. provements, taxes and repairs paid 
 
 65 Weeks v. Weeks, 106 N. Y., for by one in possession of premises 
 626, 13 N. E., 96. over which a receiver is appointed, 
 
 66 Reid V. Middleton, Turn. & R., against rents due to the receiver, 
 455. see Jefferson v. Edrington, 53 Ark., 
 
 67 Hobson V. Sherwood, 19 Beav., 545, 14 S. W., 99, 903.
 
 CHAP. XIV.] REAL PROPERTY. 17^ 
 
 of reference for his appointment.^S And although the ten- 
 ants are only responsible from the service of the order requir- 
 ing them to pay to the receiver, yet the person entitled to re- 
 ceive the rent and arrears is bound from the date of the order 
 of reference to appoint, when he has had notice of such order.^^ 
 And when a receiver is appointed over the property of a judg- 
 ment debtor, upon the application of his creditors, the debtor 
 is not entitled to interfere with the receipt of rents after the 
 order of appointment is made absolute.'^^ So where, as under 
 the Irish practice, the functions of a receiver of rents and profits 
 of real property have reference, not only to the future rents, 
 but to rents already due and in arrears, a trustee, previously 
 charged with the management of the estate, will not be held 
 responsible for arrearages of rent at the date of appointment, 
 since all control over and power of collecting them are taken 
 away from the trustee by the appointment of the receiver.'^^ 
 When a receiver is appointed in aid of a foreclosure suit, to 
 take possession of, manage and rent the mortgaged premises, 
 a tenant under the mortgagor, with constructive notice of the 
 pendency of the action, may be required to attorn and pay his 
 rent to the receiver, even though he may have paid rent to the 
 mortgagor for the same period. '''^ 
 
 § 620. Motion to compel tenants to attorn; costs. When 
 a motion was made that tenants of a portion of the real estate 
 in controversy be required to attorn to the receiver, and to pay 
 him their arrears of rent, which was opposed by the tenants 
 
 68 McDonnell v. White, 11 H. L. is discharged as to a part before the 
 
 Rep., 570; Hollier v. Hedges, 2 Ir. termination of the entire receiver- 
 
 Ch., N. S., 370. As to the power of ship, see Beechey v. Smyth, 11 L. 
 
 a court of equity to abate rent re- R., Ir., 88. 
 
 served on a lease made before the 69 Hollier v. Hedges, 2 Ir. Ch., 
 
 receivership over the lessor's estate, N. S., 370. 
 
 see Harrison v. Fitzgerald, Ir. Rep., 70 M'Loughlin v. Longan, 4 Ir. 
 
 10 Eq., 394. As to the apportion- Eq., 325. 
 
 ment of rent between that part of ^1 McDonnell v. White, 11 H. L. 
 
 the premises over which the re- Rep.. 570. 
 
 ceiver is continued and that part as "^2 Gaynor v. Blewett, 82 Wis., 
 
 to which he is discharged, when he 313, 52 N. W., 313.
 
 774 RECEIVERS. [chap. XIV. 
 
 upon the ground that an action had been brought against them 
 to recover the rent, which was still pending, and that if such 
 action should be sustained they would, by attorning, subject 
 themselves to payment of the arrears twice over, the motion 
 was ordered to stand over until the action was tried. And the 
 action being tried and plaintiffs being nonsuited, the motion 
 to compel the tenants to attorn was allowed. But, under the 
 English practice, costs were not allowed against tenants on 
 granting such a motion. "^^ 
 
 § 621. At what time liability of tenant to receiver at- 
 taches ; when payment to third person treated as payment 
 to receiver. The service of an order of court upon ten- 
 ants, requiring them to pay their rents to the receiver appoint- 
 ed in the cause, attaches all rents then in their hands, and all 
 thereafter to become due. And until such order is revoked, 
 or set aside by an order discharging the receiver, the tenant 
 can not rightfully pay rent to any person other than the re- 
 ceiver, and the death of the receiver will not justify the ten- 
 ant in paying any other person before the appointment of an- 
 other receiver. '^^ But when tenants have paid rent properly 
 due the receiver to a third person, he having no authority or 
 right to receive it, it will be treated as paid to such person 
 for the receiver, and the party entitled thereto, under the first 
 appointment of the receiver, will be allowed the money, al- 
 though the receiver has been subsequently extended in behalf 
 of another creditor.'^^ 
 
 § 622. Receiver's right to distrain, decisions unsettled; 
 order of court to distrain. As regards the receiver's right 
 to distrain for unpaid rent, it is difficult to deduce any settled 
 rule from the decided cases, and the decisions are far from 
 harmonious upon this subject. Thus, it has been held, when 
 the tenant has already attorned to the receiver, that he may 
 
 T^ Hobhouse v. Hollcombe, 2 75 O'Callaghan v. O'Callaghan, 3 
 
 De G. & Sm., 208. Ir. Ch., N. S., 376. 
 
 74 Russell V. Baker, 1 Hog., 180.
 
 CHAP. XIV.] REAL PROPERTY. 775 
 
 distrain without obtaining leave of court for that purpose.*^^ 
 So it is held that a tenant who has leased from a receiver may 
 not question the right of his lessor to bring an action for the 
 rent, and that such action may be maintained without special 
 authority of the court therefor. '^'^ And it has been held, gen- 
 erally, that a receiver may distrain whenever he deems it nec- 
 essary, without applying for leave of court, since this would in 
 many cases afford the tenant an opportunity to remove his 
 goods from the premises before the order could be obtained.'^^ 
 Again, it is said that the receiver may distrain at his own dis- 
 cretion for rent in arrear within the year, but if in arrear more 
 than a year, he should obtain an order of court before distrain- 
 mg.'^^ If, however, there is doubt as to who has the legal 
 right to the rent in question, the receiver should obtain an or- 
 der of court before proceeding, since he must distrain in the 
 name of the person having the legal right.^^ When permis- 
 sion is given the receiver to distrain, it is regarded as indefinite 
 in its operation, and not confined to any particular act or time.^^ 
 And it is not necessary that the receiver should first procure 
 the discharge of an order to distrain against tenants, before 
 moving the court for leave to proceed in ejectment against the 
 tenants for non-payment of rent.^^ 
 
 § 623. Receiver not allowed to distrain when plaintiff 
 still proceeds with his action. When plaintiff, after pro- 
 curing the appointment of a receiver in equity, still proceeds 
 by action at law concerning the same subject-matter, and the 
 receiver takes no steps to restrain him from so doing, the latter 
 will not be granted leave to distrain for rent due from the 
 premises subject to his receivership. But upon plaintiff under- 
 taking to proceed no further with his action at law, the re- 
 
 76 Raincock v. Simpson, cited in 79 Brandon v. Brandon, S Madd., 
 note to Shelly v. Pelham, Dick., 120. 473, 1st American edition, 287. 
 
 77 Pouder v. Catterson, 127 Ind., 80 Pitt v. Snowden, 3 Atk., 750. 
 434 26 N E 66 ^^ Anonymous, 1 Hog., 335. 
 
 78 Pitt V. Snowden, 3 Atk., 750. «2 Sturgeon v. Douglas, 1 Hog., 
 
 400.
 
 776 RECEIVERS. [chap. XIV. 
 
 ceiver's application for leave to distrain may properly be grant- 
 ed.83 
 
 § 624. Notice to tenant of appointment necessary be- 
 fore receiver can sue. As a general rule, to entitle a re- 
 ceiver to sue for and recover rents accruing from property of 
 a debtor over whose estate he is appointed, he must give notice 
 of his appointment to the tenant, and without such notice he 
 can not maintain an action for the rent. The object of the no- 
 tice is of a twofold nature : first, to protect the estate from pay- 
 ment to the wrong person, and second, to prevent the tenant 
 from dealing with the former owner in ignorance of the re- 
 ceiver's appointment.^'* 
 
 § 625. Attachment against tenant for failure to pay rent 
 to receiver. The proper method of enforcing obedience to 
 an order of court directing a tenant to pay rent to the receiver is 
 by attachment. And upon the refusal or neglect of a tenant to 
 comply with such order, an attachment may issue to compel 
 obedience to the mandate of the court.^^ But before an at- 
 tachment will issue against a tenant for non-payment of rent 
 to the receiver, it should appear that he has been served with 
 an order requiring him to make such payment.^^ If, however, 
 the tenant has once paid his rent to the receiver, a personal de- 
 mand by the receiver of the rent due is not necessary to lay 
 the foundation for an attachment against the tenant for non- 
 payment, and a demand by letter or by a third person is suffi- 
 cient.^'^ And when, after appearance in the action or matter 
 in which the receiver was appointed, a party to the cause in- 
 terferes with the rents due the receiver, an order for an attach- 
 ment against the person thus interfering may be made absolute 
 in the first instance.^^ 
 
 83 Mills V. Fry, 19 Ves., 277; S. 86 Pope v. Pope, 2 Hog., 335. 
 
 C, Coop., 107. 87 Brown v. O'Connor, 2 Hog., 77. 
 
 84 Hunt V. Wolfe, 2 Daly, 298. 88 Thomas v. Thomas, Flan. & K., 
 
 85 Armstrong v. Southwell, 1 If. 621. 
 Eq., 32.
 
 CHAP. XIV.] REAL PROPERTY. TT7 
 
 § 626. Attachment must be discharged before receiver 
 can distrain, and vice versa. When the receiver has ob- 
 tained an order for an attachment against a tenant for non- 
 payment of rent, this order must be discharged before the re- 
 ceiver can be allowed to proceed by distress for the collection 
 of the rent.^9 So when the receiver has first proceeded by 
 distraint, the order to distrain must be discharged before he 
 will be allowed to attach. ^<^ 
 
 § 627. Disputed title not determined by attachment; 
 attachment not granted pending abatement of suit by 
 death of plaintiff. The court will not by a proceeding for 
 attachment against a tenant, for not paying rent to the re- 
 ceiver, determine the rights of a third person, not a party to 
 the cause, to whom the tenant has paid his rent.^^ And when 
 a person has been in possession of premises, paying rent there- 
 for to a receiver for several years, and afterward disputes his 
 liability to pay the receiver, on the ground of holding under 
 another title, the receiver should not proceed by attachment 
 against the tenant, since a question of disputed title can not be 
 tried by an attachment for contempt, but must be tried in an 
 action at law for that purpose.^2 ^^d when a receiver has re- 
 ceived rent from an assignee of the tenant, he can not attach 
 the tenant himself for non-payment, his only remedy against 
 him being by proceedings at law.^^ Nor will the court issue 
 an attachment against a party to the cause, for non-payment 
 of rent to the receiver, pending the total abatement of the suit 
 by the death of the sole plaintiff.^* 
 
 § 628. Order authorizing receiver to collect rents 
 through defendant, effect of; not appealable. When, in an 
 action to determine the right to real property, a receiver of the 
 rents and profits has been appointed, and he is authorized by 
 
 89 Nugent v. Nugent, 1 Hog., 169. 92 Pread v. Lewis. 2 Mol., 369. 
 
 90 Eyre v. Eyre, 1 Hog., 252. 93 Cane v. Bloomfield, 1 Hog., 345. 
 
 91 Nason v. Blennerhassett, 1 94 Brennan v. Kenny, 2 Ir. Ch., 
 Hog., 402. N. S., 579.
 
 //i 
 
 RECEIVERS. [chap, XIV, 
 
 the court to permit the defendant to collect the rents until fur- 
 ther order, upon giving bond with satisfactory surety for pay- 
 ment to the receiver of all rents collected by him, such order 
 will be construed as merely regulating the receiver's conduct, 
 without affecting the rights of the parties. The fund is re- 
 srarded as being still under control of the court as much as be- 
 fore, the receiver collecting the rents by proxy instead of in 
 person, and defendant being simply the receiver's agent, for 
 the benefit of the fund under control of the court. An appeal, 
 therefore, will not lie from such an order, since it does not af- 
 fect the rights of the parties.^^ 
 
 § 629. Receiver should move to invest rents; rights of 
 claimants. A receiver over real property should not re- 
 tain the money arising from rents, but should move to have it 
 laid out and invested for the benefit of the parties entitled there- 
 to. ^^ But when a receiver is appointed of the rents and profits 
 of real estate pendente lite, the court will not usually order him 
 to pay over or account for the rents to a person claiming them, 
 when the land itself is not charged with payment of the de- 
 mand. Claimants must, therefore, to entitle themselves to 
 the rents and profits at the receiver's hands, show that they had 
 a right to proceed against the land itself for satisfaction of 
 their demands.^"^ And persons claiming liens upon rents col- 
 lected by a receiver are entitled to intervene in the cause, in 
 order that their rights may be determined. ^^ 
 
 § 630. Right to rents in case of receiver over corpora- 
 tion. In New Jersey, it is held that the statute author- 
 izing the appointment of receivers over insolvent corpora- 
 tions, and the appointment under the statute, operate as a 
 conveyance of all the corporate property to the receiver, for 
 the benefit of creditors, and to be distributed in accordance 
 
 95 Garr v. Hill, 1 Halst. Ch., 639. by agreement of the parties, Ford 
 
 96 Foster v. Foster, 2 Bro. C. C, v. Rackham, 17 Beav., 485. 
 
 616. See, as to liability of a re- 97 City of Baltimore v. Chase, 2 
 
 ceiver of rents and profits of realty G. & J., 376. 
 
 to account, who has been appointed 98 McNair v. Pope, 104 N. C., 350, 
 
 10 S. E.. 252.
 
 CHAP. XIV.] REAL PROPERTY. 779 
 
 with the statute. It is held, therefore, that rents accruing 
 from the corporate property subsequent to its sale by the re- 
 ceivers belong to the purchaser at such sale, while rents ac- 
 cruing after the appointment and before the sale belong to 
 the receivers, for the benefit of creditors of the corporation.^^ 
 
 § 631. Receiver continued after sale until conveyances 
 are executed. When a receiver of the rents accruing; from 
 real property has been appointed, and a decree is subsequently 
 made for a sale of the premises, the receiver will be continued 
 until the conveyances are executed, in order to collect arrears 
 of rent, and the tenants will be compelled to pay arrears to 
 the receiver.^ 
 
 § 632. Receiver of leasehold premises bound to pay 
 head-rent. The primary duty of a receiver of leasehold 
 premises is to pay the head-rent, or principal rent due to the 
 landlord of the premises, and this he is bound to do without 
 any special order of court to that effect, and without com- 
 pelling the landlord to resort to any proceedings for the pur- 
 pose of enforcing payment.2 And when the title to leasehold 
 premises becomes vested in a receiver, who continues in pos- 
 session of and sub-lets the same, the lessor may recover the 
 rent in an action against the receiver.^ So where a receiver 
 has taken possession of real property under an order of court 
 fixing the amount to be paid by him as rent, and he has con- 
 tinued in possession for a considerable time paying the rental 
 specified until the lessor has become insolvent, and has re- 
 tained possession after such insolvency and while proceedings 
 were pending to determine to whom the rental should be pay- 
 able, he will be required to pay as rental for such period the 
 rent specified in the order of court, and he can not insist that 
 the party entitled thereto shall be limited to what he may be 
 
 99 Corrigan v. Trenton Delaware 1 Q"in v. Holland, Ca. temp. H., 
 
 Falls Co., 3 Halst. Ch., 489. See, 295. 
 
 also. Fish v. Potts, 4 Halst. Ch., 2 Balfe v. Blake, 1 Ir. Ch.. N. S., 
 
 277, affirmed on appeal, id., 909, 365 ; Walsh v. Walsh, 1 Ir. Eq., 209. 
 
 upon the question of rents in such 3 Wells v. Higgins, 132 N. Y., 459, 
 
 case. 30 N. E., 861.
 
 780 RECEIVERS. [chap. XIV. 
 
 able to show is a reasonable rental value of the premises in 
 question.'* 
 
 § 633. Right to make repairs. Upon the question of the 
 receiver's right to make repairs, after recovery of the premises 
 in ejectment, it has been held unnecessary for him to first ap- 
 ply for leave of court to expend a part of the fund in his hands 
 for repairs, prior to letting the premises; but that he is war- 
 ranted in the first instance in laying out what he may deem 
 necessary for repairs, and his disbursements, if reasonable and 
 proper, will be allowed in passing his accounts. ^ But in an 
 early English case, upon a bill by an administrator against a 
 tenant for life, praying a decree that the tenant for life in pos- 
 session should repair the premises, or that a receiver be ap- 
 pointed with directions to repair, the master of the rolls re- 
 fused the relief on the ground that there was no precedent for 
 such an exercise of jurisdiction.^ And in New York it is held 
 that a receiver in a foreclosure suit has no power, without the 
 authority of the court, to make repairs, and that the allowance 
 of claims for repairs made by a third person seeking repay- 
 ment at the hands of the receiver is entirely within the discre- 
 tion of the court, and that no appeal lies from its order re- 
 fusing such an allowance.*^ 
 
 § 634. Duty of receiver in case of waste; injunction 
 against waste. Under the Irish chancery practice, the 
 appropriate course for a receiver to adopt, when waste is com- 
 mitted on lands subject to his control, is to apply to the court 
 for a reference to a master, to inquire and report what pro- 
 ceedings shall be taken by the receiver touching the waste. 
 Or, if the case is so pressing as to admit of no delay, he may 
 file a bill for an injunction to stay waste, and, at the same time 
 with moving for the injunction, he may move for a reference 
 to a master to inquire and report whether it is necessary that 
 
 4BlackalI v. Morrison, 170 111., 6 Wood t/. Gaynon, Amb., 395. 
 
 152. 48 N. E., 705. 7 W^yckoflf v. Scofield, 103 N. Y., 
 
 5 Macartney v. Walsh, Hayes, 29, 630, 9 N. E., 498. 
 note b.
 
 CHAP. XIV.] REAL PROPERTY. 781 
 
 he should have adopted that proceeding, and whether it shall 
 be continued.^ And the court may, upon the receiver's mo- 
 tion, grant a conditional order restraining tenants from com- 
 mitting waste, without requiring a bill to be filed for that pur- 
 pose, leaving the case to be decided upon showing cause against 
 the order. ^ 
 
 § 635. Sale of property free from all liens. When a re- 
 ceiver is in possession of real estate under and by virtue of 
 his appointment, and proceedings are instituted in another court 
 by parties claiming a lien upon the property, the court appoint- 
 ing the receiver will entertain a bill filed by him for leave to 
 sell the real estate free from all liens claimed by other parties, 
 and to have so much of the proceeds of the sale set apart as 
 shall be sufficient to pay the alleged liens, if they are finally sus- 
 tained.lO But when a receiver is appointed over real estate in 
 an action for the rescission of a contract, it is improper to 
 authorize him to sell any part of the property in controversy 
 for the benefit of plaintiff, before a final hearing upon the mer- 
 its.ll A purchaser, however, from a receiver, who has given 
 his note for the purchase money, having received and retained 
 possession under the receiver's deed, may not, in the absence of 
 fraud or mistake, deny the validity of the receiver's appoint- 
 ment, in an action brought against him to enforce a vendor's 
 lien for the unpaid purchase money.^^ And when liens upon 
 
 8 Mangle v. Lord Fingall, 1 Hog., while his right to possession and to 
 142 receive the rents remains unqnes- 
 
 9 Cronin v. McCarthy, Flan. & tioned, he has no concern with the 
 ^ 49 legal title and can not maintain a 
 
 10 De Visser v. Blackstone. 6 suit to set aside a conveyance al- 
 Blatchf., 235. ^eged to have been fraudulently 
 
 11 Eslerlund v. Dye, 56 Ga., 284. made by the husband after the re- 
 Under a New York statute au- ceiver was appointed, or to set 
 thori/ing a receiver in an action by aside an alleged fraudulent assign- 
 a wife for divorce, it is held that ment by the husband of a mort- 
 the receiver acquires no title to gage received upon such convey- 
 property of the defendant, but is ance. or to restrain the foreclosure 
 only entitled to possession as of such mortgage. Foster v. Town- 
 against the defendant and all per- shend. 68 N. Y., 203. 
 
 sons claiming under him. And 12 Stelzcr t;. La Rose, 79 Tnd., 435.
 
 7S2 RECEIVERS. [chap. XIV. 
 
 real estate are sought to be enforced in equity, and as a means 
 of making the security available the land is placed in the hands 
 of a receiver, the rents and profits received by him are the pri- 
 mary fund which must first be applied to the extinguishment 
 of the liens in the order of their priority.!^ 
 
 § 636. What purchaser at receiver's sale bound to see; 
 his title not affected by irregularities if court had jurisdic- 
 tion. As regards the rights acquired by a purchaser of 
 real property at a receiver's sale under order of court, it is 
 sufficient for the purchaser to see that there was a suit in which 
 the court appointed a receiver of the property ; that he was au- 
 thorized by the court to sell, and that he sold in pursuance of 
 such authority ; that the sale was confirmed by the court, and 
 that the deed accurately recites the property sold. The title 
 then passes to the purchaser, and he is not bound to inquire 
 whether any errors occurred in the action of the court, or 
 whether there were any irregularities in the action of the re- 
 ceiver.^^ The court having properly acquired jurisdiction of 
 the subject-matter, and having ordered its receiver to sell the 
 
 13 Milhous V. Dunham, 78 A!a., 48. would in that case pass to the pur- 
 
 14 Koontz V. Northern Bank, 16 chaser. He is not bound to inquire 
 Wal., 196. "A purchaser under a whether any errors intervened in 
 deed from a receiver," say the the action of the court, or irregu- 
 court, Mr. Justice Field delivering larities were committed by the re- 
 the opinion, "is not bound to ex- ceiver in the sale, any more than a 
 amine all the proceedings in the purchaser under execution upon a 
 case in which the receiver is ap- judgment is bound to look into the 
 pointed. It is sufficient for him to errors and irregularities of a court 
 see that there is a suit in equity, or on the trial of the case, or of the 
 was one, in which the court ap- officer in enforcing its process. If 
 pointed a receiver of property; that the receiver in the one case, or the 
 such receiver was authorized by sheriff in the other, omit to perform 
 the court to sell the property; that his Avhole duty, by which the par- 
 a sale was made under such au- ties are injured, or commit any 
 thority; that the sale was con- fraud upon the court, and the 
 firmed by the court, and that the rights of third parties have so far 
 deed accurately recites the property intervened as to prevent the court 
 or interest thus sold. If the title from setting the proceedings aside, 
 of the property was vested in the the injured parties must seek their 
 receiver by order of the court, it remedy personally against those
 
 CHAP. XIV.] REAL PROPERTY. 783 
 
 real estate, no mere errors or irregularities in the exercise of 
 the jurisdiction thus acquired can affect the title of a pur- 
 chaser from the receiver, in a collateral proceeding. Thus, 
 when a bill is filed in behalf of creditors against an adminis- 
 trator to establish a lien upon the estate of the deceased, and 
 on this bill a decree is had adjusting and fixing the rights of 
 the creditors, removing the administrator and appointing a re- 
 ceiver to wind up the estate, the court has full jurisdiction to 
 order its receiver to sell the realty, and his deed in pursuance 
 of such order will convey a good title. The court, in such 
 case, having properly acquired jurisdiction for the purpose of 
 settling the administration of the estate, retains its jurisdic- 
 tion until the matter is fully and properly adjusted and the 
 property sold.^^ It is held in Texas that a receiver, selling 
 by order of the court, may convey the title of the defendant 
 to the purchaser, although no conveyance had been executed 
 by the defendant to the receiver, and that the title thus derived 
 under the sale and conveyance by the receiver will prevail over 
 that derived from a sale under a judgment against the defend- 
 ant.l6 
 
 § 637. Receiver may enjoin tenant from using premises 
 for purpose prohibited by lease. In case of the appoint- 
 ment of a receiver over premises which are held by a tenant 
 under a lease, with covenants against the use of the demised 
 premises for a particular purpose, as for a shop, on pain of for- 
 feiting the lease for a breach of the covenants, the receiver is 
 entitled to the aid of an injunction to restrain the tenant from 
 using the premises for the forbidden purpose.^*^ 
 
 § 638. Leave to lease property; lease will not bind in- 
 fant remainder-man. It is a common practice for receivers 
 
 officers, or on their official bonds. 15 Walker v. Morris, 14 Ga., 323. 
 
 The interest of parties in the con- 16 Russell v. Texas & Pacific R. 
 
 troversy will generally induce such Co., 68 Tex., 646. 
 
 attention to the proceedings as to 17 Mason v. Mason, Flan. & K., 
 
 prevent great irregularities from 429. 
 
 occurring, without being brought 
 
 to the notice of the court."
 
 784 RECEIVERS. [chap. XIV. 
 
 in charge of real property, to apply to the court for leave to 
 lease the premises under their control. And when an order is 
 sought authorizing the receiver to let the property, it must be 
 clearly shown who is in the actual possession, since otherwise a 
 party in possession might be ejected without notice.^^ But a 
 receiver will not be permitted to make a lease of real estate 
 which will bind an infant remainder-man. ^^ 
 
 § 638a. Rent due third parties; dilapidations. When 
 receivers enter into possession of and receive the rents of real 
 estate belonging to third persons not parties to the cause, but 
 which had been held by defendants under lease, they may be 
 required by petition in the cause in which they were appoint- 
 ed to pay to the owners the rent due thereon. They may also 
 be required, upon like petition, to reimburse such owners for 
 dilapidations to the property, the lease requiring the lessee to 
 keep the premises in the condition in which they were de- 
 mised.2^ 
 
 18 Sealy v. Munns, 1 Ir. Eq., 332. affirming S. C, 15 Sim., 450. But 
 
 19 Gibbins v. Howell, 3 Madd., 1st see Brocklebank v. East London 
 American edition, 242. Railway, 12 Ch. D., 839. 
 
 20 Neate v. Pink, 3 Mac. & G., 476,
 
 CHAPTER XV. 
 
 OF RECEIVERS IN CASES OF MORTGAGES. 
 
 I. Principles Governing the Relief o ^^q 
 
 II. Inadequacy of Security and l^^soLvz^cvoTMoRiGAooK' ':.[''' 666 
 
 III. Receivers as Between Different Mortgagees ] g^ 
 
 I. Principles Governing the Relief. 
 
 § 639. The jurisdiction well established, but cautiously exercised; 
 strong grounds must be shown. 
 
 640. English rule denying receiver to mortgagee having legal title 
 <Ai a/" "^ *° possession; recognized in this country 
 
 641. Mortgagee having legal estate may have receiver if unable to 
 
 take possession; mortgage executed by one as surety; refusal 
 of trustee. 
 641a. When receiver refused. 
 
 642. Rents and profits pendente life; receiver refused when security 
 
 adequate; refused when mortgage not yet due; refused when 
 property already in custodia legis; refused when improvements 
 destroyed by fire. 
 
 643. When mortgagee entitled to receiver of rents and profits; 
 
 mortgagee's right to rents as against assignee in bank- 
 ruptcy; express pledge of rents; when insolvency of mort- 
 gagor immaterial; insurance and taxes; past-due rents. 
 
 644. Equitable lien of mortgagee upon unpaid rents. 
 
 645. Loss by embezzlement or waste on part of receiver. 
 
 646. Receiver of crops pendente lite; right to severed crops. 
 
 647. Mortgages of chattels. 
 
 648. Receivers allowed over mortgaged premises in foreign country. 
 
 649. Relief granted to secure interest alone; payments of interest by 
 
 receiver to mortgagee, effect of. 
 
 650. Receiver the representative of all parties in interest; the rule 
 
 applied to corporation in bankruptcy. 
 
 651. Duties of mortgagee appointed receiver; order to lease prem- 
 
 ises, when revoked. 
 
 652. Mortgagee authorized by mortgagor to appoint receiver; status 
 
 of receiver thus appointed; statute of Victoria authorizing 
 receivers when mortgage is in arrears. 
 652a. Supreme Court of Judicature Act; rights of debenture holders. 
 Receivers— 50. 785
 
 786 RECEIVERS. [chap. XV. 
 
 653. Receiver not allowed in contravention of statute; statute pro- 
 
 hibiting sale of soldier's property. 
 
 654. When appointed in behalf of mortgagor; possession of mortga- 
 
 gee rarely interfered with; relief refused on creditor's bill 
 against debtor and mortgagee; when receiver appointed 
 against mortgagee in possession. 
 
 655. When receiver allowed after decree. 
 
 656. Receiver appointed in suit to execute trusts of mortgagor's 
 
 will, how discharged; mortgagor not entitled to accruing 
 rents after discharge. 
 
 657. Mortgagor's right to discharge of receiver on payment of in- 
 
 debtedness, or on sale for full amount; when owner of equity 
 of redemption entitled to rents collected by receiver. 
 
 658. Equitable mortgages; deposit of deeds as mortgage; municipal 
 
 loans secured on rates and assessments. 
 
 659. Liquidator of corporation appointed receiver in behalf of equi- 
 
 table mortgagee. 
 
 660. Application should show who is in possession; amount due 
 
 should be shown. 
 
 661. Receivers in foreclosure of railway mortgages. 
 
 662. Receiver appointed in aid of judgment creditor, extended in 
 
 behalf of mortgagee. 
 
 663. Need not be extended over whole estate; limited to mortgaged 
 
 premises. 
 
 664. Defense of usury. 
 
 665. Mortgage of leasehold interest; when appointment made ex 
 
 parte. 
 665o. Receiver allowed against administrator of mortgagor; receiver 
 pending appeal. 
 
 § 639. The jurisdiction well established, but cautiously 
 exercised; strong grounds must be shown. The jurisdic- 
 tion of equity by the appointment of receivers over mortgaged 
 premises, for the protection of mortgagees, or in aid of actions 
 for the foreclosure of mortgages, is well established, and has 
 long been exercised by courts of equity, both in England and 
 in America. It is, however, exercised with extreme caution, 
 and the relief will not be allowed when other adequate remedy 
 exists, and when no imperative reasons are shown for this 
 extraordinary species of relief.^ Stated in general terms, the 
 
 1 Morrison v. Buckner, Hemp., under the statutes of Indiana, and 
 442. As to the right to a receiver as to the extent of the receivership 
 in an action to foreclose a mortgage and the practice and procedure, see
 
 CHAP. XV.] MORTGAGES. 787 
 
 rule is, that in actions for the foreclosure of mortgages, equity- 
 will not interfere by the appointment of a receiver unless it is 
 clearly shown that the security is inadequate, or that there 
 is imminent danger of the waste, destruction, or removal of 
 the property. And there must, in all cases, be a strong, spe- 
 cial ground for the relief shown.2 In other words, the courts 
 do not interfere by a receiver as a matter of course in aid of 
 foreclosure proceedings, when it is not alleged that there will 
 be any deficiency, and when plaintiff is at liberty to obtain a de- 
 cree of sale.^ When the mortgagor is the holder of the legal 
 title and entitled to the possession of the mortgaged premises, 
 his possession under the legal estate will not be disturbed by 
 the appointment of a receiver, except in a clear case of fraud, 
 or of great danger to the rights of the mortgagee if the es- 
 tate is not taken under the protection of the court. And the 
 court will not interfere in behalf of the mortgagee, unless it 
 clearly appears to be its duty to take charge of the estate to 
 protect a "clear, strong claim against it." If, therefore, doubt 
 exists as to the amount actually due under the mortgage, and 
 the plaintiff's allegations of the inadequacy of the security are 
 denied by the answer, the court will not interfere with the 
 mortgagor's possession.* 
 
 Hursh V. Hursh, 99 Ind., 500. As Whitehead v. Hale, 118 N. C, 601, 
 
 to the right of a mortgagee to a re- 24 S. E., 360. In Collins v. Gross, 
 
 ceiver of the rents and income of 51 Wash., 516, 99 Pac, 573, it was 
 
 the mortgaged premises under the held proper to appoint a receiver for 
 
 Kentucky code, see Douglass v. the rents and profits of the mort- 
 
 Cline, 12 Bush, 608; WooIIey v. gaged premises where it appeared 
 
 Holt, 14 Bush, 788. As to the ap- that the defendant had abandoned 
 
 pointment of a receiver pending the property and had departed for 
 
 proceedings to foreclose a mortgage parts unknown. 
 
 upon premises which are occupied 2 Morrison v. Buckner, Hemp., 
 
 as the family residence of the mort- 442; Callanan v. Shaw, 19 Iowa, 
 
 gagor and which embrace his home- 183. 
 
 stead exemptions, see Sanford v. 3 Hackett v. Snow, 10 Ir. Eq., 220. 
 
 Anderson, 69 Neb., 249, 95 N. W., 4 Callanan v. Shaw, 19 Iowa, 183. 
 
 632. As to the appointment of a And in this case, grave doubts are 
 
 receiver in aid of a foreclosure of intimated as to whether, in any 
 
 a mortgage upon a newspaper, see case, a receiver should be allowed
 
 788 RECEIVERS. [chap. XV. 
 
 § 640. English rule denying receiver to mortgagee hav- 
 ing legal title and right to possession; recognized in this 
 country. Under the practice of the English Court of Chan- 
 cery, a distinction was always observed, in the appointment 
 of receivers, between legal and equitable mortgages, the for- 
 mer vesting the legal estate at once in the mortgagee, with the 
 right of immediate entry, and the latter conveying no legal 
 title, but a mere equity. And while, as will hereafter be shown, 
 the jurisdiction has been frequently exercised in behalf of 
 equitable mortgagees,^ as, for example, in behalf of subsequent 
 mortgagees when there were several incumbrancers, all sub- 
 sequent to the first being regarded, under the English system, 
 as equitable mortgagees, yet the rule is well settled that a legal 
 mortgagee, i. e., one having the legal estate with an immediate 
 right of entry, is not entitled to the aid of equity by the ap- 
 pointment of a receiver.^ The reason for the rule, as stated 
 by Lord Eldon, by whom it was first firmly established, is 
 found in the fact that the legal mortgagee, being entitled to 
 immediate possession, stands in no need of the aid of equity, 
 since he may at once protect his interests by himself taking 
 possession.'^ Nor does the fact that the tenants of the mort- 
 gaged premises are numerous, and that there is difficulty in 
 collecting the rents, vary the application of the rule, and the 
 mortgagee, in such case, will still be left to his remedy by tak- 
 ing possession.^ The English doctrine has been recognized, 
 although not generally followed, in this country, and it has 
 been held, on a bill to foreclose a legal mortgage and for an 
 injunction and a receiver to prevent the defendant from re- 
 ceiving the rents, that equity will not interfere as against the 
 
 to take possession of the mortga- "^ See observations of Lord Eldon 
 
 gor's homestead, pending proceed- in Berney v. Sewell, 1 Jac. & W., 
 
 ings for the foreclosure of a mort- 647. See, also, observations of Lord 
 
 gage thereon. Romilly, Master of the Rolls, to the 
 
 5 See Meaden v. Sealey, 6 Hare, same effect, in Ackland v. Gravener, 
 620. 31 Beav., 482. 
 
 6 Berney v. Sewell, 1 Tac. & W., 8 Sturch v. Young, 5 Beav., 557. 
 647; Ackland v. Gravener. 31 Beav., 
 
 482; Sturch v. Young. 5 Beav., SS7.
 
 CHAP. XV.] MORTGAGES. 789 
 
 mortgagor in possession, such interference being regarded as 
 inconsistent with the estabHshed practice of courts of equity.^ 
 § 641. Mortgagee having legal estate may have receiv- 
 er if unable to take possession; mortgage executed by one 
 as surety; refusal of trustee. While, as we have thus seen, 
 a mortgagee in England, having the legal estate, is not entitled 
 to the intervention of equity by the appointment of a receiver 
 in aid of his foreclosure suit, since he is usually in a position 
 to take possession himself, without the aid of the court, yet if 
 he is unable to take possession, the reason for the rule fails, 
 and he may, in such case, be entitled to the relief. Thus, in 
 the case of a mortgage executed by one as surety to the original 
 indebtedness, in addition to the mortgage given by the principal 
 debtor himself, and providing that the mortgagee shall not have 
 recourse to the surety's estate until the estate primarily charged 
 shall prove an insufficient security, in an action for a foreclosure 
 by the mortgagee, a receiver may be appointed over the surety's 
 estate.io So when the mortgagee is forcibly prevented by the 
 
 9 Oliver V. Decatur, 4 Cranch C. conveniences which arise from ex- 
 C-, 458. ercising that power. But, though 
 
 10 Ackland v. Gravener, 31 Beav., the court refuses to grant the re- 
 482. Lord Romilly, Master of the ceiver in cases where there is no 
 Rolls, observes, p. 484: "I must question and the mortgagee can 
 grant the receiver in this case, take possession at once, there being 
 which is a peculiar one. The rule no defense whatever to his actfon 
 undoubtedly is, that where a mort- of ejectment, still, if the mortgagee 
 gagee files a bill to foreclose, if he can not take possession, as if, for 
 has a legal estate and can take pos- instance, there is a prior mortgagee 
 possession at once by ejectment, this who refuses to take possession, then, 
 court will not grant him a receiver, at the instance of the second mort- 
 and for this plain reason : that he gagee, the court does grant a re- 
 may, if he think fit, take possession ceiver. In this instance, the case is 
 without the help of the court. It peculiar, for, though I think the 
 is true that, by taking possession as legal estate is in the plaintiff by the 
 mortgagee, he is subject to have terms of the deed, yet it contains a 
 the account taken against him with proviso that the plaintiff shall not 
 a greater degree of severity than have recourse to the surety's estate, 
 any other case, but he is not to gain or be at liberty to sell it, until the 
 the advantage of having a receiver estate primarily charged shall prove 
 when he can take possession him- an insufficient security." 
 
 self, though subject to all the in-
 
 790 RECEIVERS. [chap. XV. 
 
 mortgagor from taking possession after default in the payment 
 of principal and interest, the mortgagee is entitled to a receiv- 
 evM And when a deed of trust, in the nature of a mortgage, 
 authorizes the trustee to take possession of the mortgaged 
 premises upon default in the payment of principal and interest, 
 upon such default and the refusal of the trustee to take posses- 
 sion at the request of the bondholders secured by the mortgage, 
 a court of equity may appoint a receiver upon a bill by the 
 bondholders. And in such case, the relief may be granted to 
 enforce the right to immediate possession of the mortgaged 
 premises, independent of any question of loss or depreciation 
 of the property.l2 But a covenant in the mortgage that, in 
 the event of default, the mortgagee may take possession, does 
 not afford sufficient ground for a receiver, after foreclosure 
 sale, to hold the premises during the period of redemption, as 
 against a lessee of the mortgagors, when it is not shown that 
 the mortgagors are insolvent and unable to respond for a de- 
 ficiency.^^ 
 
 § 641a. When receiver refused. Under the statutes of 
 Michigan, it is held that the mortgagor is entitled absolutely 
 to possession until the mortgagee's title under the foreclosure 
 becomes absolute. It is, therefore, held that the mortgagee is 
 not entitled to the rents pending a foreclosure, or to a receiver 
 to collect such rents.^'* So under a similar statute of Oregon 
 it is held that a receiver should not be appointed over the rents 
 and profits of the mortgaged estate, although there is an express 
 provision in the trust deed or mortgage for the appointment of 
 a receiver upon default by the mortgagor. ^^ And when the 
 
 11 Truman v. Redgrave, 18 Ch. M. & P. R. M. Co., 40 Mich., 307; 
 D., 547. Union M. L. I. Co. v. Union M. P. 
 
 12 Warner v. Rising Fawn Iron Co., 37 Fed., 286. 
 
 Co., 3 Woods, 514. 15 Conper v. Shirley, 21 C. C. A., 
 
 13 Swan V. Mitchell, 82 Iowa, 307, 288, 75 Fed., 168, 44 U. S. App., 586. 
 47 N. W., 1042. The statute in question provided 
 
 14 Wagar v. Stone, 36 Mich., 364 ; that: "A mortgage of real prop- 
 Hazeltine v. Granger, 44 Mich., 503, erty shall not be deemed a convey- 
 7 N. W., 74. See, also, Beecher v. ance so as to enable the owner of
 
 CHAP. XV.] MORTGAGES. 791 
 
 mortgagee sells under a power of sale contained in the mort- 
 gage and becomes the purchaser, upon a bill by him to remove 
 uncertainties as to his title and for a confirmation of the sale, 
 he can not have a receiver of the rents and profits, the suit be- 
 ing in the nature of an action to remove a cloud from the title, 
 and the mortgagee having a remedy at law to recover posses- 
 sion.i6 So when the mortgage provides in express terms that 
 the mortgagor shall retain possession until foreclosure, it is 
 error to appoint a receiver in behalf of the mortgagee in a suit 
 to foreclose, as the consideration for a continuance of the cause 
 requested by defendant, when it is not shown that the relief is 
 necessary for the preservation of the property.!'^ And where 
 a trust deed provides that the trustee therein may, upon default, 
 enter upon and take possession of the premises, the remedy thus 
 provided is regarded as ample and a receiver will not be ap- 
 pointed. ^^ But it is held, in Minnesota, that a statute declaring 
 that a mortgage of real property shall not be deemed a convey- 
 ance, so as to enable the mortgagee to recover possession with- 
 out foreclosure, has the effect only of changing the common- 
 law rights and remedies of the mortgagee, without affecting his 
 equitable remedies. The right, therefore, of a mortgagee to a 
 receiver for the preservation of his security, upon proper cause 
 shown, is in no manner impaired by such a statute.!^ And the 
 same doctrine has been announced by the supreme court of 
 Nebraska under a statute providing that, in the absence of 
 stipulations to the contrary, the legal title and right to the pos- 
 session of real estate shall remain in the mortgagor.^o 
 
 the mortgage to recover possession 18 Eastern Trust & B. Co. v. 
 
 of the real property, without a fore- American Ice Co., 14 App. D. C, 
 
 closure and sale according to law." 304. 
 
 1 Hill's Ann. Laws of Oregon, (2nd 19 Lowell v. Doe, 44 Minn., 144, 
 
 ed.), p. 383, § 326; General Laws 46 N. W., 297. 
 
 of Oregon, 1845-64, p. 228, § 323. 20 Philadelphia M. & T. Co. v. 
 
 16 McLean v. Presley's Adminis- Coos, 47 Neb., 804, 66 N. W., 843. 
 trator, 56 Ala., 211. 
 
 1''' Chadbourn v. Henderson, 2 
 Baxter, 460.
 
 792 RECEIVERS. [chap, XV. 
 
 § 642. Rents and profits pendente lite ; receiver refused 
 when security adequate; refused when mortgage not yet 
 due; refused when property already in custodia legis; 
 refused when improvements destroyed by fire. As regards 
 the rents and profits of mortgaged premises, pending an 
 action for a foreclosure, the general rule, in the absence of 
 any especial equities, is, that the mortgagee, as against the 
 mortgagor in possession and those deriving title under him sub- 
 sequent to the mortgage, is not entitled to a receiver of the 
 rents and profits pendente lite, and a court of equity will usual- 
 ly leave the mortgagee to his action at law to recover posses- 
 sion, and for the rents and profits.2i If, therefore, the mort- 
 gaged premises are an adequate security for the payment of the 
 indebtedness, there is no ground for the appointment of a re- 
 ceiver of the rents and profits. And in determining as to the 
 adequacy of the security for the purposes of an application of a 
 receiver of the rents, the best criterion as to the value of the 
 security would seem to be the rental itself.22 A^d if the 
 property is sufficient security, the fact that at some future time 
 it may become insufficient is no ground for the appointment of a 
 receiver even though the mortgagor is insolvent.23 It is to be 
 observed, also, that a receiver will not be appointed of the rents 
 and profits when the mortgage indebtedness is not yet due, 
 and when the mortgagee has neglected to take a pledge of the 
 rents and profits of the whole premises to keep down the ac- 
 cruing interest.24 So where the security is adequate and there 
 is an ample remedy under the statute, a receiver will not be 
 appointed.25 So the mortgagee is not entitled to rents which 
 have been collected by a receiver in another suit, notwithstand- 
 
 21 Williams v. Robinson, 16 23 Holbert v. Chilvers, 58 Neb., 
 Conn., 517. And see Fifth National 665, 79 N. W., 623. 
 
 Bank v. Pierce, 117 Mich., 376, 75 24 Bank of Ogdensburgh v. Ar- 
 
 N. W., 1058; Dubois v. Bowles, 30 nold, 5 Paige, 38. 
 
 Colo.. 44, 69 Pac, 1067. 2.5 Nathans v. Steinmeyer, 57 S. 
 
 22 ShotweU V. Smith, 3 Edw. Ch., C, 386, 35 S. E., 733. 
 588.
 
 CHAP. XV.] MORTGAGES. 793 
 
 ing he may have given notice to the tenants of the receiver 
 to attorn to him.26 And when the mortgagee files a general 
 creditor's bill, for the benefit of himself and other creditors, 
 but does not set up his mortgage or seek its foreclosure, and a 
 receiver is appointed, but the bill is afterward dismissed, the 
 mortgagee is not entitled to the rents collected by such re- 
 ceiver, even though he afterward files his bill for a foreclo- 
 sure.2'^ And when the mortgaged property is ample security 
 for the indebtedness, a receiver of the rents and profits will be 
 denied, although the mortgage expressly provides that the 
 mortgagee shall be entitled to the rents and profits after de- 
 fault.28 And where there has been a foreclosure sale for a 
 sum not sufficient to satisfy the amount due under the mort- 
 gage but there is no proof that the mortgagor is insolvent or 
 the property is inadequate security, a balance in the hands of 
 the receiver on account of rents and profits is properly paid 
 to the mortgagor and not applied on the deficiency.29 And 
 where a railway mortgage provided that until default the 
 mortgagor should remain in possession, exercise its franchises 
 and collect and use the revenues of the property, and the bill 
 for a receiver constituted the first demand for the possession 
 of the road on account of the default, it was held that the re- 
 ceiver was not entitled to the rents and profits which were 
 earned prior to the filing of the bill, although they were not 
 paid until after the appointment of the receiver.^^ Nor is the 
 mortgagee entitled to a receiver of the rents and profits where 
 the property is already in custodia legis, being in the possession 
 of the administrator of the deceased mortgagor who is collect- 
 ing the rents and profits.^^ And a receiver will not be appointed 
 where the improvements upon the mortgaged premises have 
 
 26 Coddington v. Bispham, 36 N. Carey, 52 C. C A., 174, 114 Fed., 
 J. Eq., 574. 288. 
 
 27 Scott V. Ware, 65 Ala., 174. ^ Hook v. Bosworth, 12 C. C. A., 
 
 28 Aetna Life Ins. Co. v. Broeker, 208, 64 Fed., 443, 24 U. S. App., 341. 
 166 Ind., 576, 77 N. E., 1092. 31 St. Louis National Bank v. 
 
 29 Southern B. & L. Assn. v. Field, 156 Mo., 306, 56 S. VV., 1095.
 
 794 RECEIVERS. [chap. XV. 
 
 been destroyed by fire and there are consequently no rents and 
 profits arising from the property.^^ 
 
 § 643. When mortgagee entitled to receiver of rents 
 and profits ; mortgagee's right to rents as against assignee 
 in bankruptcy; express pledge of rents; when insolvency 
 of mortgagor immaterial; insurance and taxes; past-due 
 rents. But when the mortgage is actually due, and the 
 proceeds of the mortgaged premises are not likely to prove 
 sufficient for the payment of the debt and costs, and the mort- 
 gagor or other person who is personally liable for the deficiency 
 is insolvent, the mortgagee may apply for a receiver to secure 
 the rents and profits which have not yet been collected. And 
 in this way he may obtain a specific lien upon the rents to pay 
 such deficiency.^^ When, therefore, a mortgagee, upon pro- 
 ceedings for a foreclosure, obtains a receiver of the rents and 
 profits, if the amount obtained upon a sale of the premises 
 proves insufficient to pay the mortgage indebtedness, he is en- 
 titled to so much of the rents in the receiver's hands as will 
 make up the deficiency. And this is so, even though the mort- 
 gagor's rights in the premises have passed to his assignee in 
 bankruptcy, and have been sold by him ; since the mortgagee, 
 who procures a receiver to be appointed for the protection of 
 his lien, is entitled to the rents in preference to the assignee or 
 purchaser at his sale.^** And where a mortgage gives an ex- 
 press lien upon the rents and profits and a foreclosure sale has 
 resulted in a deficiency, the mortgagee is entitled to a receiver 
 
 32 Eastern Trust & B. Co. v. See, also, Post v. Dorr, 4 Edw. Ch., 
 American Ice Co., 14 App. D. C, 412; Lofsky v. Maujer, 3 Sandf. 
 304. Ch., 69; Ecklund v. Willis, 42 Neb., 
 
 33 Astorz/. Turner, 11 Paige, 436; 737, 60 N. W., 1026; Philadelphia 
 Kountze v. Omaha Hotel Co., 107 M. & T. Co. v. Oyler, 61 Neb., 702, 
 U. S., 378, 395, 2 Sup. Ct. Rep., 911, 85 N. W., 899; Boyce v. Continental 
 926; Grant v. Phoenix Life Ins. Co., Wire Co., 60 C. C. A., 508, 125 Fed., 
 121 U. S., 105, 7 Sup. Ct. Rep., 841 ; 740. 
 
 Shepherd v. Pepper, 133 U. S., 626, 34 Post v. Dorr, 4 Edw. Ch., 412. 
 
 652, 10 Sup. Ct. Rep., 438, 447 ; Oak- And see Pepper v. Shepherd, 4 
 ford V. Robinson, 48 111. App., 270. Mackey, 269.
 
 CHAP. XV.] MORTGAGES. 795 
 
 of the rents and profits during the period of redemption.35 
 And in such case it is no objection that the decree of sale failed 
 to provide for such a receiver, since, until a sale was had, it 
 was impossible to ascertain whether or not there would 
 be a deficiency requiring the appointment of a receiver.36 And 
 where the mortgage expressly pledges the rents and profits and 
 it appears that the mortgagor is insolvent and the security in- 
 adequate, a receiver is properly appointed during the period of 
 redemption.3'^ And where the mortgage or deed of trust thus 
 expressly pledges the rents and profits as security for the in- 
 debtedness, and it appears to be necessary to enforce the lien 
 thus created for the payment of the mortgage debt, the court 
 may appoint a receiver of the rents and profits without regard 
 to the question of the solvency or insolvency of the mortga- 
 gor.38 And it is held that a statute which provides that a mort- 
 gage of real property shall not be deemed a conveyance so as to 
 enable the owner of the mortgage to recover possession of the 
 property without foreclosure and sale does not deprive a mort- 
 gagee of his right, under the general rules of equity, to a re- 
 ceiver of the rents and profits during the period of redemption 
 where the mortgagor is insolvent and the security is inadequate 
 and the premises are being subjected to waste. ^^ And where 
 the mortgagor has agreed to keep the mortgaged premises in- 
 sured for the benefit of the mortgagee and to pay all taxes and 
 assessments levied against the property, rents collected by a re- 
 
 35 First National Bank v. Illinois 38Bagley v. Illinois T. & S. Bank, 
 Steel Co., 174 111., 140, 51 N. E., 199 111., 76, 64 N. R, 1085; Ball v. 
 200; Moncrieff v. Hare, 38 Colo., Marske, 202 111., 31, 66 N. E., 845; 
 221, 87 Pac, 1082, 7 L. R. A. (N. Oakford v. Robinson, 48 111. App., 
 S.), 1001. 270. 
 
 36 First National Bank v. Illinois 39 Moncrieff v. Hare, 38 Colo., 
 Steel Co., 174 111., 140, 51 N. E., 221, 87 Pac, 1082, 7 L. R. A. 
 200. (N. S.), 1001; Elmira Mechanics' 
 
 37 Moncrieff v. Hare, 38 Colo., Society v. Stanchfield, 87 C. C. A., 
 221, 87 Pac, 1082, 7 L. R. A. CN. 585, 160 Fed., 811. 
 
 S.), 1001; Hubbell v. Avenue In- 
 vestment Co., 97 Iowa, 135, 66 N. 
 W., 85.
 
 796 RECEIVERS. [chap. XV. 
 
 ceiver appointed in foreclosure proceedings are properly applied 
 to the payment of taxes and insurance premiums. ^^ And when 
 the receiver collects rents after a foreclosure sale and pending 
 the statutory period of redemption, the fact that he acquires title 
 to the premises, subject to the rights of the purchaser, will not 
 entitle him to such rents, nor will he be permitted to question 
 an order of the court directing their payment to such purchaser, 
 the premises having sold for less than the mortgage indebted- 
 ness and the mortgage r being insolvent.'*^ But as regards past- 
 due rents, the receiver only acquires title to such as remain un- 
 paid at the time of his appointment, and he is not entitled to 
 rents which have been collected by an assignee in bankruptcy 
 of the mortgagor prior to the receivership. ^2 And a mortgagee 
 who procures a receiver in aid of his foreclosure proceeding, 
 thereby acquires only an equitable lien upon the unpaid rents. 
 Until such appointment, the owner of the equity of redemption 
 is entitled to receive the rents and can not be compelled to ac- 
 count for them, even though the motion for a receiver is pend- 
 ing when such rents are collected. ^^ But in an action brought 
 by the receiver to recover rents, the inadequacy of the mort- 
 gage security and the default in payment of the mortgage in- 
 debtedness can not be questioned by defendant, he having been 
 a party to the suit in which the receiver was appointed, and 
 such issues having been determined in that suit they will be 
 regarded as res judicata^ 
 
 § 644. Equitable lien of mortgagee upon unpaid rents. 
 The lien thus obtained by a mortgagee who uses the necessary 
 diligence in the assertion of his rights is not confined to the 
 rents actually paid. And when, upon the maturing of the 
 
 40 American National Bank v. 43 Rider v. Bagley, 84 N. Y., 461, 
 Northwestern M. Life Ins. Co., 32 As to the right of a receiver in 
 C. C. A., 275, 89 Fed., 610, 60 U. S. foreclosure proceedings to lease the 
 App.. 693. mortgaged premises and as to the 
 
 41 Herrick v. Miller, 123 Ind., 304, duration of such leases, see Shreve 
 24 N. R, 111. V. Hankinson, 34 N. J. Eq.. 413. 
 
 42 Rider v. Vrooman, 12 Hun, 44 Goodhue v. Daniels, 54 Iowa, 
 299. 19, 6 N. W., 129.
 
 CHAP. XV.] MORTGAGES. 797 
 
 indebtedness, the security being inadequate, the mortgagee files 
 his bill for a foreclosure, and procures the appointment of a 
 receiver, he thereby obtains an equitable lien upon the unpaid 
 rents, and will be entitled thereto to the extent of any de- 
 ficiency in the security. For example, when the mortgagor, 
 previous to the foreclosure suit and the appointment of a re- 
 ceiver, conveys the premises subject to the mortgage, and his 
 grantee rents a portion of the premises, receiving a note, se- 
 cured by chattel mortgage, for the rent, the receiver in the fore- 
 closure suit is entitled to the sum secured by the chattel mort- 
 gage, it being subject to the equitable lien acquired by the 
 mortgagee.^^ 
 
 § 645. Loss by embezzlement or waste on part of re- 
 ceiver. Upon the question of the liability for loss of rents 
 and profits after they have come to the hands of the receiver, 
 it was intimated, although not decided, in a case before Lord 
 Thurlow, that if a receiver is appointed upon the application 
 of a mortgagee or other incumbrancer, and he afterward em- 
 bezzles or otherwise wastes the rents and profits, the loss 
 should fall upon the mortgagor.^^ And in New Jersey, in a 
 well considered case, it has been held that the plaintiff in a 
 mortgage foreclosure who nominates and procures the ap- 
 pointment of his solicitor and agent to receive the rents and 
 profits of the mortgaged premises pending the receivership 
 must bear the loss caused by the defalcation of the receiver 
 and the insufficiency of his sureties.'*'^ 
 
 § 646. Receiver of crops pendente lite ; right to severed 
 crops. A mortgagee of a growing crop, or his assignee, 
 although he may not be authorized to appropriate the property 
 
 45Lofsky V. Maujer, 3 Sandf. 46 See observations of Lord Thur- 
 
 Ch., 69. As to the right of a mort- low in Rigge v. Bowater, 3 Bro. C. 
 gagee, through a receiver, to the C, 365. And see, ante, § 270. 
 rents collected by the mortgagor ^"^ Sorchan v. Mayo, 50 N. J. Eq., 
 
 pending the foreclosure suit and be- 288, 23 Atl., 479. 
 fore decree, see Silverman v. North- 
 western Mutual Life Insurance 
 Company, 5 Bradw., 124.
 
 79S RECEIVERS. [CIIAP. XV. 
 
 to himself, is nevertheless entitled to have it protected, and 
 may, therefore, have a receiver of the crop pcndint^ litigation 
 concerning his rights under the lien claimed by him.^^ But 
 when a receiver is appointed in behalf of a mortgagee to man- 
 age the mortgaged estate and receive the rents and profits, 
 he is not entitled, by virtue of his appointment, to the proceeds 
 of crops raised upon the premises which have been severed by 
 him and consigned to parties from whom he had received ad- 
 vances, the crops having been removed and consigned by the 
 mortgagor before the receiver was appointed. '^^ So the mort- 
 gagor in possession is entitled to crops grown upon the prem- 
 ises, and if such crops are sold upon execution against him 
 before a receiver is appointed in the foreclosure suit, the re- 
 ceiver acquires no title thereto as against the purchaser.^^ 
 And where parties agree to become sureties for a defaulting 
 debtor, upon being secured for their liability by his conveying 
 to them certain real estate in trust, with a covenant that the 
 crops and produce of the property shall be consigned to them 
 for a term of years after the reimbursement of what they may 
 advance as sureties, upon a bill filed against the sureties for an 
 accounting, a receiver will not be appointed when it is not 
 shown that defendants have made any oppressive use of the 
 deed. 51 But when the mortgage covers the rents, issues and 
 profits of the premises, and a receiver is appointed upon the 
 ground of insolvency of the mortgagor and inadequacy of the 
 security, and the receiver grows and harvests a crop upon the 
 premises, the proceeds of the sale of such crop may be applied 
 in payment of a deficiency due to the mortgagee, the proceeds 
 of the foreclosure sale having been insufficient to satisfy the 
 indebtedness. 52 
 
 § 647. Mortgages of chattels. When a mortgagee of 
 chattels, who is in possession, having sold a part and occupy- 
 
 48 Simpson v. Robert, 35 Ga., 180. 51 Bunbury v. Winter, 1 Jac. & 
 
 49 Codrington v. Johnstone, 1 W., 255. 
 
 Beav., 520. 52 Montgomery v. Merrill, 65 
 
 50 Favorite v. Deardoflf, 84 Ind., Cal., 432, 4 Pac, 414. 
 
 555.
 
 CHAP. XV.] MORTGAGES. 799 
 
 ing as to the residue the position of trustee for other creditors, 
 is about to dispose of the residue to the prejudice of a judg- 
 ment creditor of the mortgagor, a receiver may be appointed 
 of the proceeds of the remaining property for the better pro- 
 tection of the rights of all parties in interest.^^ And a re- 
 ceiver has been allowed in behalf of a mortgagee of chattels 
 v^hich have been seized under writs of attachment which were 
 subordinate to the lien of the mortgage, the relief being neces- 
 sary for the prevention of waste and loss until the rights of all 
 parties could be determined.^^ And a receiver may be appointed 
 in an action to foreclose a chattel mortgage where it appears 
 that the security is wholly inadequate and that the mortgagor 
 is insolvent and there is no defense to the action upon the 
 merits. 55 And it is held that an attachment and sale of mort- 
 gaged chattels can not avail against the prior and paramount 
 lien of the mortgage so as to prevent the appointment of a re- 
 ceiver in an action brought to foreclose the mortgage. ^6 But 
 a receiver will not be appointed in behalf of a mortgagor of 
 chattels, to take charge of the property in the hands of the mort- 
 gagee, merely upon the ground of the mortgagor's apprehen- 
 sion that defendant may part with the property to a bona fide 
 purchaser, when he himself admits an indebtedness to be still 
 due to the mortgagee.^^ And in a suit by a judgment creditor 
 to set aside a mortgage executed by his debtor upon a stock 
 of goods, upon the ground that it was intended to defraud 
 creditors, if the fraud is denied by defendants a receiver will not 
 be appointed in limine, when it is not shown that the mortgagee 
 is insolvent or unable to respond in case the mortgage shall 
 finally be declared invalid. ^8 So when plaintiff sues to estab- 
 lish his interest in personal property covered by a mortgage 
 and for a sale of the property, it is not error to refuse a re- 
 
 53 Gouthwaite v. Rippon, 8 L. J., 56 Cooper v. Berney National 
 N. S. Ch., 139. Bank, 99 Ala., 119, 11 So., 760. 
 
 54 Crow V. Red River County 57 Bayaud v. Fellows, 28 Barb., 
 Bank, 52 Tex., 362. 451. 
 
 55 Euphrat v. Morrison, 39 Wash., 58 Rheinstein v. Bixby, 92 N. C, 
 311, 81 Pac, 695. 307.
 
 800 RECEIVERS. [chap. XV. 
 
 ceiver when defendants deposit in court a sufficient amount to 
 secure plaintiff in whatever judgment he may obtain against 
 them. 5^ Nor will a receiver be appointed over personal prop- 
 erty upon which complainant claims a lien, as against purchas- 
 ers, when full relief may be had at law by an action of replevin 
 for the recovery of the property.^^ But when a manufacturer 
 sells goods upon credit, the purchaser agreeing to deliver to the 
 manufacturer all notes which he may receive upon the sale 
 of the articles to his customers, to be held as collateral security 
 to the purchaser's notes for the purchase price, a refusal to de- 
 liver such notes by the purchaser, coupled with his insolvency, 
 will warrant a receiver for their collection.^! 
 
 § 648. Receivers allowed over mortgaged premises in 
 foreign country. It is not essential to the exercise of the 
 power of equity by the appointment of receivers over mort- 
 gaged property, that the property itself should be within the 
 jurisdiction of the court, and receivers have been appointed, 
 in proper cases, although the mortgaged estates were in a for- 
 eign country. ^2 Thus, a mortgagee of West Indian estates 
 
 59 Welch V. Henry, 32 Kan., 425, 61 McKinnon v. Pike County 
 4 Pac, 814. As to the right of a Guano Co., 94 Ala., 521, 10 So., 344. 
 mortgagee of chattels to a receiver As to the effect of laches of persons 
 under the statutes of Iowa, and as claiming a lien upon mortgaged 
 to the circumstances which will chattels, which have passed into the 
 warrant the relief, see Maish v. hands of a receiver and have been 
 Bird, 59 Iowa, 307, 13 N. W., 298. sold by him and the proceeds paid 
 In Merchants and Manufacturers to the mortgagee, see Sullivan v. 
 National Bank v. Kent Circuit Miller, 106 N. Y., 635, 13 N. W., 
 Judge, 43 Mich., 292, 5 N. W., 627, 772. In Washington, under a stat- 
 it is held that when a receiver is ute giving a lien upon vessels for 
 allowed over personal property in a materials and labor used in their 
 suit to foreclose a chattel mortgage, construction, in a suit to establish 
 a third person, not a party to the and foreclose such lien a receiver 
 cause, having a right of action in may be appointed to take charge of 
 replevin to recover the property, the property pendente lite. Wash- 
 should not be restricted by the ington I. W. Co. v. Jensen, 3 Wash., 
 court to suing in trover, but should 584, 28 Pac, 1019. 
 
 be permitted to proceed with his 62 Davis v. Barrett, 13 L. J., N. S. 
 
 action of replevin. Ch., 304; Langford v. Langford, 5 
 
 60 Brown v. Ring, 77 Mich., 159, L. J., N. S. Ch , 60. 
 43 N. W., 770, 1152.
 
 CHAP. XV.] MORTGAGES. 801 
 
 was appointed in England receiver of the property, and without 
 requiring the usual security for the faithful performance of his 
 trust. 63 But the court will not interfere, in this class of cases, 
 when the parties in interest, and who really represent the 
 mortgaged property in the foreign country, are not before the 
 court or within its jurisdiction.64 
 
 § 649. Relief granted to secure interest alone ; payments 
 of interest by receiver to mortgagee, effect of. It would 
 seem that the aid of a receiver for the protection of a mortgagee 
 is not limited to cases where it is necessary for the security of 
 the principal sum due, but may, in certain cases, be allowed for 
 the purpose of securing the interest as well. Thus, a mortgagee 
 has been allowed a receiver to keep down the interest on his 
 mortgage, although not entitled to a foreclosure, he having 
 covenanted with the mortgagor that the principal of the in- 
 debtedness should not be called in until after the mortgagor's 
 death. 65 As regards payments of interest to a mortgagee by a 
 receiver appointed at his instance, such payments are treated 
 as having been made by the mortgagor himself; since the re- 
 ceiver, although an officer of the court, is not a stranger to the 
 mortgagor, and may be regarded as his agent to the extent of 
 making such payments of interest due.66 
 
 § 650. Receiver the representative of all parties in in- 
 terest; the rule applied to corporation in bankruptcy. It 
 is also to be noticed, with reference to the position and func- 
 tions of a receiver appointed in aid of an action of foreclosure, 
 that he represents, not merely the mortgagees in whose behalf 
 he may have been appointed, but is equally the representative 
 of all parties in interest. And when the mortgagor, a corporate 
 body, has been thrown into bankruptcy, pending the proceed- 
 ings for a foreclosure in which the receiver was appointed, the 
 
 63 Davis V. Barrett, 13 L. J., N. S. Lat, 521 ; S. C, 8 Ir. Eq., 482. And 
 Ch., 304. see Newman v. Newman, cited in 2 
 
 64 Shaw V. Shore, 5 L. J., N. S. Bro. C. C, 92, note 6. 
 
 Ch., 79. 66 Chinnery v. Evans, 11 H. L. 
 
 65 Burrowes v. Molloy, 2 Jo. & Rep., 115. 
 
 Receivers — 51.
 
 802 RECEIVERS. [chap. XV. 
 
 receiver is to be deemed as much the representative of the as- 
 signees in bankruptcy and the creditors and shareholders of 
 the corporation, as of the mortgagees themselves. The court 
 will not, therefore, order a sale of the property which would be 
 in hostility to and would dispose of the rights of those interest- 
 ed in the equity of redemption, since such a sale would be di- 
 rectly hostile to the rights of the receiver who holds possession 
 for them.^"^ 
 
 § 651. Duties of mortgagee appointed receiver; order to 
 lease premises, v^^hen revoked. When the person select- 
 ed for the office of receiver also occupies other and different 
 relations toward the mortgaged property, his functions and 
 duties as receiver are considered as paramount to all others. 
 For example, when a mortgagee of property, occupying the po- 
 sition of a trustee of the equity of redemption, is also appointed 
 receiver of the mortgaged premises and accepts the trust, his 
 relations and interest as mortgagee will not be permitted to in- 
 terfere with his duties as receiver, nor with the purposes nor in- 
 terests for which he was appointed. In such case, it is his plain 
 duty as receiver to increase the surplus revenues of the property, 
 beyond what may be found due to him as mortgagee, by ob- 
 taining the largest possible rental. And upon his application 
 to the court for authority to lease the mortgaged premises, it is 
 his duty to lay before the court all the information within his 
 possession, or which by reasonable diligence he might acquire, 
 as to the situation and value of the property. And when he has 
 been ordered by the court, upon his own application, to lease 
 the premises to a particular person, but it is afterward appar- 
 ent that the application was not made by him in good faith, 
 and that he was controlled by a motive and purpose incon- 
 sistent with his duties as receiver, the order will be reversed. ^^ 
 
 67 Sutherland v. Lake Superior suit and an assignee in bankruptcy 
 
 Ship Canal R. & I. Co., 9 Bank. of the mortgagor, see Hayes v. 
 
 Reg., 307. As to the right to the Dickinson, 9 Hun, 277. 
 
 rents of mortgaged premises as be- 68 Bolles v. Duff, 54 Barb., 215; 
 
 tween a receiver in a foreclosure S. C, 27 How. Pr., 162.
 
 CHAP. XV.] MORTGAGES. 803 
 
 § 652. Mortgagee authorized by mortgagor to appoint 
 receiver ; status of receiver thus appointed ; statute of Vic- 
 toria authorizing receivers when mortgage is in arrears. 
 
 There are some cases to be met with in the Enghsh reports, 
 where the mortgagor has covenanted with and authorized the 
 mortgagee to appoint a receiver, in case of default, of the rents 
 and proceeds of the mortgaged estate, for the better security 
 of the mortgage debt and the interest thereon, and where the 
 mortgagor has attorned to the receiver thus appointed.^^ In 
 such cases, it would seem that the receiver, being appointed 
 by the mortgagee under the power contained in the mortgage, 
 is in possession of the premises as agent, not of the mortgagee, 
 but of the mortgagor; since the mortgagee himself acts in the 
 capacity and sustains the relation of agent of the mortgagor 
 in making the appointment."^^ And where the mortgagor at- 
 torns to the receiver, the relation of landlord and tenant would 
 seem to be established between them.'^^ The practice of thus 
 providing in the mortgage itself for a receiver, in case of de- 
 fault by the mortgagor, seems to have been quite prevalent in 
 England, and doubtless gave rise to the important statute of 
 23d and 24th Victoria, which provides that mortgagees may 
 have receivers of the mortgaged premises in all cases when the 
 payment of principal is in arrear one year, or the interest six 
 months, or after any omission to pay any premium or insur- 
 ance due upon the property. The receiver thus appointed is 
 deemed the agent of the person entitled to the property subject 
 to the mortgage, who is solely responsible for his conduct, and 
 the statute regulates the manner of appointment and removal, 
 as well as the various functions and duties of this class of re- 
 ceivers.''^^ 
 
 69 See Jolly r. Arbuthnot, 4 DeG. 634; Jefferys v. Dickson, L. R., 1 
 & J., 224; Jefferys v. Dickson, L. Ch. App., 183. 
 
 T. 1^, / io, T ry 71 Jefferys v. Dickson, L. R., 1 
 
 R., 1 Ch. App., 183 ; Law v. Glenn, ^ ^^^^ 
 
 L. R., 2 Ch. App., 634. 72 23 & 24 Victoria, ch. CXLV. 
 
 70 See opinion of Rolt, L. J., in (August 28. 1860), 100 English 
 Law V. Glenn, L. R., 2 Ch. App., Statutes at Large, 782.
 
 804 RECEIVERS. [chap. XV. 
 
 § 652a. Supreme Court of Judicature Act; rights of de- 
 benture holders. Under the English Supreme Court of 
 Judicature Act of 1873, it is provided that a receiver may be 
 appointed by an interlocutory order in all cases in which it shall 
 appear to the court to be just or convenient that such order 
 shall be made. Under this act the mortgagee may have a re- 
 ceiver to relieve himself from the necessity or burden of tak- 
 ing possession of the mortgaged premises. And the relief may 
 be allowed, although the mortgagee has been in possession and 
 has received from the rentals more than sufficient to pay the 
 interest due and costs.'^^ So when debenture holders in the 
 nature of mortgagees have power under the terms of their 
 debentures to appoint a receiver over the property of the debtor, 
 and have exercised this power, the court may recognize such ap- 
 pointment and may direct an official liquidator, in proceedings 
 for winding up the corporation, to deliver possession to the 
 receiver thus appointed by the debenture holders.'^'* 
 
 § 653. Receiver not allowed in contravention of stat- 
 ute; statute prohibiting sale of soldier's property. A re- 
 
 73 Mason v. Westoby, 32 Ch. D., Lloyd's, Barnett's & Bosanquet's 
 
 206. But see In re Prytherch, 42 Bank, (1891) 1 Ch., 136, note; In re 
 
 Ch. D., 590. As to the right of the Stubbs, (1891) 1 Ch., 475; Whitley 
 
 mortgagee to rents accruing in the v. Challis, (1892) 1 Ch., 64; Strong 
 
 hands of the receiver during the v. Carlyle Press, (1893) 1 Ch., 268; 
 
 period allowed for redemption un- British Linen Co. v. South Amer- 
 
 der the English practice, see Jenner- ican & M. Co., (1894) 1 Ch., 108, 
 
 Fust V. Needham, 31 Ch. D., 500; As to the right of debenture hold- 
 
 S. C, on appeal, 32 Ch. D., 582; ers or mortgagees to a teceiver for 
 
 Hoare v. Stephens, 32 Ch. D. 194. the protection of the property of the 
 
 74/^ re Pound, 42 Ch. D., 403. debtor as against judgment credit- 
 
 And see Strong v. Carlyle Press, ors, before the maturity of the in- 
 
 (1893) 1 Ch. 268. As to the right debtedness, see Wildy v. Mid-Hants 
 
 of debenture holders or mortgagees, R. Co., 16 W. R., 409; Edwards v. 
 
 under the modern English practice, Standard Rolling Stock Syndicate, 
 
 to a receiver for the purpose of (1893) 1 Ch., 574. As to the right 
 
 managing and continuing the busi- of such debenture holders to a re- 
 
 ness of the debtor, see Peek v. ceiver upon the insolvency of the 
 
 Trinsmaran Iron Co., 2 Ch. D., 115; debtor and before default in inter- 
 
 Makins v. Percy Ibotson & Sons, est, see McMahon v. North Kent I. 
 
 (1891) 1 Ch., 133; Campbell v. Co., (1891) 2 Ch., 148.
 
 CHAP. XV.] MORTGAGES. 805 
 
 cciver will not be appointed over mortgaged premises in con- 
 travention of the spirit and purpose of a legislative enactment 
 which prohibits the sale of a certain class of mortgaged prop- 
 erty. Thus, where a statute of the state provides that the 
 pro])erty of volunteer soldiers, in the military service of the 
 United States, shall be exempt from levy and sale under or by 
 virtue of any deed of trust or mortgage, or by virtue of any 
 execution or order of sale issued on any judgment or decree, 
 plaintiffs in a foreclosure suit, who obtain judgment of fore- 
 closure against the property of such a soldier, are not entitled 
 to a receiver to take charge of the property and receive the 
 rents and profits, since this would be, in effect, an infraction 
 of the spirit and object of the statute. "^^ 
 
 § 654. When appointed in behalf of mortgagor; posses- 
 sion of mortgagee rarely interfered with ; relief refused on 
 creditor's bill against debtor and mortgagee ; when receiv- 
 er appointed against mortgagee in possession. A receiver 
 has been appointed, at the instance of one of several mortga- 
 gors, to keep down interest on the incumbrance, although the 
 mortgagee opposed the application, when he had not taken pos- 
 session of the premises under the mortgage.''^ But when a 
 mortgagee is in possession under the mortgage, the courts in- 
 terfere with his possession with great reluctance, and will not 
 extend their aid by appointing a receiver, unless in cases of 
 fraud or of imminent danger.*^*^ And when a debtor has mort- 
 gaged property for the security of his creditors, and the mort- 
 gagee is in possession and proceeding properly in the discharge 
 of his trust, selling the property and applying the proceeds in 
 payment of the indebtedness, a receiver will not be appointed 
 to divest him of the possession, upon a creditor's bill filed 
 against the debtor and mortgagee. "^^ And as against a mort- 
 gagee lawfully in possession, in the absence of any proof of 
 
 7r. Adair t;. WriKht, 16 Iowa, 385. 99; Brnndage v. Home S. & L. 
 
 70 Newman v. Newman, cited in Assn., 11 Wash., 277, 39 Pnc, 666. 
 
 2 Bro. C. C, 92, note 6. "^^ Furlong v. Edwards, 3 Md., 
 
 77 Furlong v. Edwards, 3 Aid., 99.
 
 806 RECEIVERS. [chap. XV. 
 
 waste or mismanagement, the court will not divest his posses- 
 sion by appointing a receiver in a suit for divorce and alimony- 
 brought by the wife against the mortgagor.'^^ But a receiver 
 may be appointed as against a mortgagee in possession where 
 it appears that the mortgagee is insolvent or that the rents and 
 profits w^ill be lost or that he is committing waste upon the 
 property resulting in serious injury to it.^^ 
 
 § 655. When receiver allowed after decree. While re- 
 ceivers in aid of actions for the foreclosure of mortgages are 
 usually applied for and obtained before final decree of fore- 
 closure, yet in cases of emergency it is competent for the court 
 to entertain an application and to appoint a receiver after final 
 decree, when great injury might result from withholding the 
 relief.^l And while the power to grant the relief, after decree 
 and pending the statutory period of redemption from foreclo- 
 sure sales, is one wdiich is to be exercised with extreme caution, 
 its existence is well established, and circumstances of fraud and 
 bad faith upon the part of the mortgagor, coupled with his in- 
 solvency and the inadequacy of the security, may justify the 
 court in the exercise of the power. Indeed, the necessity for 
 appropriating the rents to the payment of the mortgage debt 
 by the aid of a receiver may frequently not appear until after 
 a decree of sale, since the amount of the mortgage debt is often 
 disputed and can only be determined by final decree, and the 
 amount for which the premises will sell can only be ascertained 
 
 79Cummings v. Edwards, 75 Cal., son, 48 111. App., 270; Connelly v. 
 
 434, 17 Pac, 442. Dickson, 76 Ind., 440; Brinkman v. 
 
 80 Harding v. Garber, 20 Okla., Ritzinger, 82 Ind., 358; Harris v. 
 11, 93 Pac, 539. United States S. F. & I. Co., 146 
 
 81 Thomas v. Davics, 11 Beav., Ind., 265, 45 N. E., 328; Russell v. 
 29; Haas v. Chicago Building So- Bruce, 159 Ind., 553, 64 N. E., 602. 
 ciety, 89 111., 498; First National 65 N. E., 585; Schreiber v. Carey, 
 Bank V. Illinois Steel Co., 174 III, 48 Wis., 208, 4 N. W., 124; Bidwell 
 140, 51 N. E., 200; Roach v. Glos, v. Paul, 5 Baxter, 693. And see 
 18l' 111., 440, 54 N. E., 1022; Bo- Smith v. Tiffany, 13 Hun, 671; Sel- 
 gardus \. Tyloses, 181 111., 554, 54 lers v. Stoffell, 139 Ind., 468, 39 N. 
 N. E., 984; Ball v. Marske, 202 111., E., 52. 
 
 31, 66 N. E., 845; Oakford v. Robin-
 
 CHAP. XV.] MORTGAGES. 807 
 
 with certainty by the sale itself.^^ Sq ^ receiver of the rents 
 of the mortgaged property has been allowed, after decree of 
 foreclosure, as against a tenant in possession for more than 
 nineteen years, but who was not a party to the suit, the exigency 
 of the case requiring the interposition of the court to prevent 
 the tenant in possession from setting up his adverse possession 
 for twenty years. ^^ And pending an appeal from a judgment 
 of foreclosure, a receiver has been appointed when it was shown 
 that the premises were an inadequate security, that the mort- 
 gagor had died insolvent, that the rents were being misappro- 
 priated, and that the premises had been sold for unpaid taxes. ^^ 
 So when an appeal is prosecuted in forma pauperis from a de- 
 cree of foreclosure, a receiver may be allowed, the security be- 
 ing inadequate.^^ And the relief is proper after decree when 
 the mortgagor has paid neither the interest nor any part of the 
 principal, and the property is an inadequate security, the mort- 
 gagor being insolvent and having permitted the property to 
 be sold for unpaid taxes. ^^ And a receiver having been ap- 
 pointed in aid of foreclosure proceedings, the court has power, 
 notwithstanding an appeal from the foreclosure decree, to make 
 such orders as are necessary for the preservation of the prop- 
 
 82 Haas V. Chicago Building So- redeem from the sale, the rents col- 
 ciety, 89 111., 498; First National lected by the receiver to be paid to 
 Bank v. Illinois Steel Co., 174 III., the mortgagor should he redeem, 
 140, 51 N. E., 200. See, also, but otherwise to the mortgagee, 
 Schreiber v. Carey, 48 Wis., 208, 4 the premises having been sold for a 
 N. W., 124; Bagley v. Illinois T. & sum insufficient to satisfy the mort- 
 S. Bank, 199 111., 76, 64 N. E., 1085. gage indebtedness. Connelly v. 
 
 83 Thomas v. Davies, 11 Beav., Dickson, 76 Ind., 440. See. also, 
 29. Travelers Insurance Co. v. Brouse, 
 
 84 Brinkman v. Ritzinger, 82 Ind., 83 Ind., 62; Buchanan v. Berkshire 
 358. Life Insurance Co., 96 Ind., 510. 
 
 85 Bidwell v. Paul, 5 Baxter, 693. But see Sheeks v. Klotz, 84 Ind., 
 But see Hoge v. Hollister, 8 Baxter, 471, as to the effect of subsequent 
 533. And in Indiana, the relief legislation in Indiana upon the 
 has been granted after a sale under point under consideration, 
 foreclosure, when the premises were 86 Schreiber v. Carey, 48 Wis., 
 in possession of a tenant who had 208, 4 N. W., 124; Harris v. United 
 failed to pay rent and the mortga- States S. F. & I. Co., 146 Ind., 265, 
 gor was insolvent and unable to 45 N. E., 328.
 
 SOS RECEIVERS. [chap. XV. 
 
 erty pending the appeal.^''' The courts, however, proceed with 
 extreme caution in granting the rehef after final judgment of 
 foreclosure, the practice being regarded as an unusual one, 
 and only to be entertained upon a strong showing of probable 
 injury. And when it appears that the property in question is 
 in a good state of preservation, and that it is not being wasted 
 and is in no need of repairs, a receiver will be refused after 
 decree, especially when plaintiffs have other and adequate se- 
 curity for their debt in an approved bond given by defendants 
 on appealing the foreclosure suit.^^ So when the mortgagee 
 neglects for several years after maturity of the indebtedness to 
 institute foreclosure proceedings, and after foreclosure decree 
 he neglects for several months to sell, and afterward applies for 
 a receiver, the emergency must be great and the necessity im- 
 perative to warrant the court in interfering. And if, in such 
 case, the evidence as to the inadequacy of the security is con- 
 flicting, the court will decline to interfere.^^ And upon a bill 
 by mortgagor against mortgagee for redemption of the mort- 
 gaged premises, after a decree directing the redemption, the 
 court will not, on the application of defendant and without no- 
 tice to plaintiff, direct the appointment of a receiver, such a 
 practice being regarded as without precedent or authority.^^ 
 And under the modern English practice, after judgment for 
 foreclosure absolute, the court will not appoint a receiver over 
 the mortgaged premises, since the action is then regarded as at 
 an end.^^ 
 
 87 Grant v. Phcenix Life Insur- from the rents received by him 
 
 ance Co., 121 U. S., 118, 7 Sup. Ct. during the pendency of the suit. 
 
 Rep., 849. Pending an appeal from Grant v. Phoenix Life Insurance 
 
 a decree in a foreclosure suit, a re- Co., 120 U. S., 271, 7 Sup. Ct. Rep., 
 
 ceiver having been appointed by 586. 
 
 the court below who was in receipt 88 Adair v. Wright, 16 Iowa, 385. 
 
 of the rents of the mortgaged prem- 89 Cone v. Combs, 5 McCrary, 
 
 ises, the mortgagor and appellant in 651. 
 
 the appeal, being unable to pay the 90 Barlow v. Gains, 8 Beav., 329. 
 
 necessary costs and expenses of 91 Wills v. Luff, 38 Ch. D., 197. 
 
 prosecuting his appeal, the receiver As to the right of the mortgagee, 
 
 was ordered to make such payment who has purchased the premises at a
 
 CHAP. XV.] MORTGAGES. 809 
 
 § 656. Receiver appointed in suit to execute trusts of 
 mortgagor's will, how discharged ; mortgagor not entitled 
 to accruing rents after discharge. When a receiver of 
 mortgaged premises is appointed in an action to carry into exe- 
 cution the trusts of the mortgagor's will, a mortgagee, who 
 was not a party to the suit, can not divest the possession of the 
 receiver, by mere notice to the tenants of the premises to pay 
 their rents to him, his proper course, in such case, being to ap- 
 ply to the court for the discharge of the receiver. And, on the 
 granting of such discharge, the mortgagor is not entitled to 
 rents which have accrued during the possession of the receiver, 
 and which have been paid into court by him.^2 
 
 § 657. Mortgagor's right to discharge of receiver on 
 payment of indebtedness, or on sale for full amount ; when 
 owner of equity of redemption entitled to rents collected 
 by receiver. The right of a mortgagor, over whose prop- 
 erty a receiver has been appointed in an action for a foreclosure, 
 to pay the mortgage indebtedness and to have the receiver dis- 
 charged, is regarded as an absolute right, and in no manner de- 
 pendent upon the discretion of the court. For example, when 
 upon a bill to foreclose a mortgage given by a railway company 
 to secure its bonds, a receiver has been appointed, and has 
 taken possession of the road, if the owner of the equity of re- 
 demption offers to pay the mortgage debt, or so much as is 
 due, upon condition that the property be released and the re- 
 ceiver discharged, the right to the discharge is not a matter 
 resting in the discretion of the court, but is a clear legal right, 
 the denial of which is judicial error.93 And since the sole ob- 
 
 sale under a power in the mort- 92 Thomas v. Brigstocke, 4 Russ., 
 
 gage, to a receiver over the rents 64. 
 
 accruing after such purchase, as 93 Milwaukeee & Minnesota R. 
 
 against the mortgagor and his ten- Co. v. Soutter, 2 Wal., 510. See S. 
 
 ants who refuse to attorn to the C, Woolworth's C. C, 49. The 
 
 purchaser, see American Mortgage doctrine is stated by Mr. Justice 
 
 Co. V. Turner, 95 Ala., 272, 11 So., Miller in the opinion of the court, 
 
 211; Hendrix v. American F. L. M. in 2 Wal., at p. 521, as follows: 
 
 Co., 95 Ala., 313, 11 So., 213. "The complainants are seeking a
 
 810 
 
 RECEIVERS. 
 
 [CIIAP. XV. 
 
 ject of a receiver at the instance of a mortgagee is to preserve 
 the security of the trust deed or mortgage and to apply the 
 rents and profits to the payment of the indebtedness, it follows 
 that where the mortgaged property has been sold at the fore- 
 closure sale for the full amount of the debt, interest and costs, 
 the necessity for the receiver ceases and he should at once be dis- 
 charged and the possession of the property turned over to the 
 owner of the equity of redemption ; 9^ or in case the receiver 
 is retained after the sale and during the period of redemption, 
 the rents and profits collected by him during such period are 
 for the benefit of the owner of the equity of redemption, and in 
 
 foreclosure of a mortgage with a 
 view to make their debt. The own- 
 er of the equity of redemption in 
 the mortgaged premises comes for- 
 ward and offers to pay this debt, 
 or all of it that is due, provided his 
 property, which is in the custody 
 of the court, shall then be restored 
 to his possession. The right of the 
 owner to this order is, under ordi- 
 nary circumstances, very clear, and 
 a refusal by the court to give him 
 this right would seem to call for 
 the revisory power of this court, 
 when the whole case is before it on 
 the record brought here by appeal 
 from a final decree. The only 
 doubt which the court could have on 
 the question arises from the princi- 
 ple that the appointment and dis- 
 charge of a receiver are ordinarily 
 matters of discretion in the circuit 
 court, with which this court will not 
 interfere. As a general rule, this 
 proposition is not denied. But we 
 do not think it applicable to the case 
 before us. While the parties to 
 this suit were fiercely litigating the 
 amount of the mortgage debt, and 
 questions of fraud in the origin 
 of that debt, the appointment or 
 
 the discharge of a receiver for the 
 mortgaged property very properly 
 belonged to the discretion of the 
 court in which the litigation was 
 pending. But when those questions 
 had been passed upon by the cir- 
 cuit court, and by this court, also, 
 on appeal, and the amount of the 
 debt definitely fixed by this court, 
 the right of the defendant to pay 
 that sum and have a restoration of 
 his property by discharge of the 
 receiver is clear, and does not de- 
 pend on the discretion of the cir- 
 cuit court. It is a right which the 
 party can claim; and, if he shows 
 himself entitled to it on the facts in 
 the record, there is no discretion in 
 the court to withhold it. A refusal 
 is error, judicial error, which this 
 court is bound to correct when the 
 matter, as in this instance, is fairly 
 before it. That the order asked 
 for by appellants should have been 
 granted seems to us very clear." 
 
 04 Davis V. Dale, 150 111., 239. 37 
 N. E., 215; Roach v. Glos. 181 111., 
 440, 54 N. E., 1022; Bogardus v. 
 Moses, 181 111., 554. 54 N. E.. 984; 
 Haigh %'. Carroll, 209 111., 576, 71 
 N. E., 317.
 
 CHAP. XV.] MORTGAGES, 811 
 
 such case it makes no difference that the purchaser at the sale 
 is the plaintiff in the foreclosure and not a stranger to the trust 
 deed. ^5 And where a foreclosure sale has resulted in a defi- 
 ciency decree which is afterward paid by the receiver out of 
 the rents and profits of the property, the holder of the equity 
 of redemption is entitled to the balance of the rents accruing 
 during the period of redemption, and the purchaser is not en- 
 titled in such case to have such rents applied upon a prior en- 
 cumbrance for which the owner of the equity of redemption 
 is personally liable.^^ And where the mortgaged property has 
 thus been sold for the full amount of the debt, interest and costs, 
 the receiver should not be retained for the purpose of paying 
 off a tax which the owner of the equity of redemption was not 
 legally bound to pay until after the expiration of the period of 
 redemption. 9"^ And where the mortgaged property in such case 
 consists of a leasehold estate, the receiver should not be re- 
 tained for the purpose of paying rent due under the lease, al- 
 though such payment may be necessary for the protection of 
 the interests of the purchaser and of the owner of the equity of 
 redemption.98 And where the original mortgagor has sold 
 the equity of redemption, the purchaser not assuming the pay- 
 ment of the mortgage indebtedness, and a deficiency decree has 
 been rendered against the original mortgagor, rents collected 
 by the receiver during the period of redemption should be paid 
 to the purchaser of the equity of redemption and not to the 
 holder of the certificate of sale, notwithstanding a provision in 
 the trust deed by which the grantor waives all claim upon the 
 rents during the foreclosure proceedings and agrees that the 
 receiver shall pay the income to the person entitled to a deed 
 under the certificate of sale.^^ And in a proceeding to enforce 
 
 95 Davis V. Dale, 150 III, 239, 37 97 Bogardus v. Moses, 181 III., 
 N. E., 215; Stevens v. Hadfield, 554. 54 N. E., 984. 
 
 178 111., 532, 52 N. E., 875 ; Stevens 98 Haigh v. Carroll. 209 III., 576. 
 
 V. Hadfield, 196 111., 253, 63 N. E., 71 N. E., 317. 
 
 633. 90 Standish v. Mnsgrove, 223 III., 
 
 96 Stevens v. Hadfield, 178 III, 500, 79 N. E., 161. 
 532, 52 N. E., 875.
 
 812 RECEIVERS. [CIIAP. XV. 
 
 Statutory liens upon property, over whicli a receiver is appointed 
 f'L-iuh'iitc life, after a sale of all the property and the approval 
 and settlement of the receiver's accounts, his functions are ter- 
 minated and the court has no power at a subsequent term to 
 make an allowance for expenditures by the receiver and to de- 
 cree such allowance to be a prior lien upon the premises.^ 
 
 § 658. Equitable mortgages; deposit of deeds as mort- 
 gage; municipal loans secured on rates and assessments. 
 The jurisdiction of equity to grant receivers over mortgaged 
 premises is not confined to cases where a mortgage has actually 
 been executed between the parties, but extends to cases of equi- 
 table mortgages, such as the deposit of title deeds as security 
 for loans or advances. And when two tenants in common of 
 real estate, in equal moieties, deposit their title deeds as secur- 
 ity for loans to one of them, with an agreement to execute a 
 legal mortgage when required, upon a bill by the equitable 
 mortgagee for a foreclosure, a receiver of the rents and pro- 
 ceeds may be appointed. And the relief may properly be 
 granted in such a case, although only one of the defendants is 
 before the court, he being in possession and in receipt of the 
 whole of the rents. ^ But when the authorities of a munici- 
 pal corporation have been authorized by act of parliament to 
 levy rates or assessments and to borrow money on the security 
 thereof, for purposes of public improvement, holders of the 
 bonds and obligations given by the municipal officers for such 
 loans and secured on such rates or assessments are not entitled 
 to a receiver, when there has been no default in the payment 
 either of principal or of interest.^ 
 
 § 659. Liquidator of corporation appointed receiver in 
 behalf of equitable mortgagee. When a private corpora- 
 tion is being wound up under the supervision of the court, and 
 a liquidator has been placed in possession of its effects, an 
 equitable mortgagee, on filing his bill for an accounting of what 
 
 1 Bassick M. Co. v. Schoolfield, 3 Preston v. Corporation of Great 
 15 Colo., 376, 24 Pac, 1049. Yarmouth, L. R., 7 Ch. App., 655. 
 
 2 Holmes v. Bell, 2 Beav., 298.
 
 CHAP. XV.] MORTGAGES. 813 
 
 is due him, is entitled to a receiver. And in such case, the offi- 
 cial liquidator should be appointed, when there is no personal 
 objection to him, and it is manifest that his appointment will 
 be a saving of great expense in closing up the affairs of the 
 corporation.^ 
 
 § 660. Application should show who is in possession; 
 amount due should be shown. The petition or application 
 for a receiver in aid of an action for a foreclosure should show 
 who is in possession of the premises, since the court is only 
 warranted in appointing a receiver of mortgaged premises 
 when a party to the suit is in possession, either by himself or 
 by his tenants. The court must, therefore, be apprised that the 
 person in possession is a defendant in the action, and that he 
 has had due notice of the application, unless he is in default 
 for not appearing.^ And an additional reason for requiring 
 the application to show who is in possession of the premises is 
 that if a party to the foreclosure suit is in possession by his 
 tenant, but the tenant is not himself a party to the litigation, 
 his possession will not be disturbed by the appointment, and 
 he will only be directed to attorn to the receiver, and to pay 
 the rent to him instead of his former landlord.^ And when the 
 plaintiff, in an action for the foreclosure of a mortgage, moves 
 for a receiver upon a decree pro confesso, he should show by 
 affidavit the amount due for principal, interest and costs, after 
 all just credits are allowed, and that the defendant is in pos- 
 session.'^ 
 
 § 661. Receivers in foreclosure of railway mortgages. 
 The jurisdiction of equity by appointing receivers over rail- 
 ways, in actions to foreclose mortgages of their corporate 
 property, is discussed at length in another chapter of this work.^ 
 
 4 Perry v. Oriental Hotels Co., L 6 Sea Insurance Co. v. Stebbins, 8 
 
 R., 5 Ch. App., 420. But see Boyle Paige, 565. 
 
 V. Bettws Llantwit Colliery Co.. 2 7 Rogers v. Newton, 2 Ir. Eq., 40. 
 
 Ch. D., 726. 8 See chap. XI, ante, §§ 376 et seq. 
 
 ^ Sea Insurance Co. v. Stebbins, 8 
 Paige, 565. See, also, Rogers v. 
 Newton, 2 Ir. Eq., 40.
 
 814 RECEIVERS. [chap, XV. 
 
 It is sufficient here to remark, that while the courts are averse 
 to taking possession of a railway by a receiver in behalf of 
 mortgagees, unless a strong case is presented,^ they proceed, 
 in the exercise of this branch of their jurisdiction, upon the 
 usual principles governing them on applications for receivers 
 in the foreclosure of ordinary mortgages, and the inadequacy 
 of the security and insolvency of the mortgagor are regarded 
 as sufficient grounds for the relief. ^^ 
 
 § 662. Receiver appointed in aid of judgment creditor, 
 extended in behalf of mortgagee. When a judgment cred- 
 itor of the owner of the equity of redemption in mortgaged 
 premises has obtained a receiver in aid of his judgment at law, 
 the mortgagee may have such receiver extended for his pro- 
 tection under the mortgage, upon showing the insufficiency of 
 the estate for payment of the mortgage indebtedness.^^ 
 
 § 663. Need not be extended over whole estate ; limited 
 to mortgaged premises. In appointing a receiver over 
 mortgaged premises, it is not imperative upon the court to ex- 
 tend the appointment over the entire estate, and the receiver 
 may be limited in the first instance to such portion of the lands 
 as is primarily liable for the payment of the mortgage indebted- 
 ness.^2 But the order should be limited strictly to the premises 
 embraced in the mortgage and should not extend to other prop- 
 erty of the mortgagor.i^ j^^^ when, in an action to foreclose 
 a mortgage upon mining property, a receiver is appointed, 
 who enters upon and extracts ore from mining property of 
 the mortgagor not covered by the mortgage, he will be liable 
 to the general creditors of the mortgagor for the profits derived 
 
 9 See Ruggles v. Southern Minne- H Trye v. Earl of Aldborough, 1 
 sota Railroad, U. S. Circuit Court, Ir. Ch., N. S., 666. 
 
 District of Minnesota, 5 Chicago 12 Trissilian v. Caniffe, 4 Ir. Ch., 
 
 Legal News, 110. N. S., 399. 
 
 10 Ruggles V. Southern Minnesota 13 Staples v. May, 87 Cal., 178, 
 Railroad, supra; Keep v. Michigan 25 Pac, 346; Wormser v. Mer- 
 Lake Shore R. Co., U. S. Circuit chants National Bank, 49 Ark., 117, 
 Court, Western District of Mich- 4 S. W., 198. 
 
 igan, 6 Chicago Legal News, 101.
 
 CHAP. XV.] MORTGAGES. 815 
 
 from such operation.!^ So property or funds of the mortgagor, 
 not embraced in the mortgage, but which have come into the 
 receiver's possession, may be subjected to the payment of judg- 
 ments against the mortgagor in the order of their priority, 
 and without diminution for allowances to the receiver or costs, 
 since his possession is wrongful as to such judgment credit- 
 ors.i5 
 
 § 664. Defense of usury. It has been held, in New 
 York, in the case of a foreclosure of a mortgage containing 
 a stipulation that the mortgagees should be entitled, under cer- 
 tain circumstances, to a receiver, when the defense alleged was 
 usury, but the usury was sworn to only upon information and 
 belief, that the order appointing the receiver should be af- 
 firmed on appeal. 1^ 
 
 § 665. Mortgage of leasehold interest; when appoint- 
 ment made ex parte. The aid of a receiver is sometimes 
 granted in an action to foreclose a mortgage of a leasehold 
 interest in realty. And in such a case, the relief may be al- 
 lowed before answer or process against the defendant mort- 
 gagor, upon showing that the landlord is threatening an evic- 
 tion because of the non-payment of rent-^"^ 
 
 § 665(7. Receiver allowed against administrator of mort- 
 gagor; receiver pending appeal. Under a statute authoriz- 
 ing the appointment of a receiver in an action of foreclosure 
 when the mortgaged property is in danger of being lost, re- 
 moved, or materially injured, or when the property is probably 
 insufficient to discharge the indebtedness, it is proper to grant 
 the relief in a foreclosure suit brought against the administra- 
 tor of a deceased mortgagor.!^ And under the same statute 
 
 14 Staples V. May, 87 Cal., 178, 17 Barrett v. Mitchell, 5 Ir. Eq., 
 25 Pac, 346. 501. 
 
 15 Wormser t;. Merchants Nation- 18 Jacobs v. Gibson, 9 Neb., 380, 
 al Bank, 49 Ark., 117, 4 S. W., 198. 2 N. W., 893. As to the right to an 
 
 16 Knickerbocker Life Insurance appeal and stay of proceedings from 
 Co. V. Hill, 5 N. Y. S. C. (Thomp. an order appointing a receiver over 
 & Cook), 694. mortgaged premises pending a
 
 816 RECEIVERS. [chap. XV. 
 
 it is held that a receiver may be appointed to collect the rents 
 and profits after decree and pending an appeal.^^ 
 
 foreclosure in Wisconsin, see i^ Philadelphia M. & T. Co. v. 
 
 Northwestern Mutual Life Insur- Goos, 47 Neb., 804, 66 N. W., 843; 
 
 ance Co. v. Park Hotel Co., 37 Wis., Buck v. Stuben, 63 Neb., 273, 88 N. 
 
 125. W., 483.
 
 CHAP. XV.] MORTGAGES. 817 
 
 II. Inadequacy of Security and Insolvency of Mort- 
 gagor, 
 
 § 666. The general rule stated. 
 
 667. Satisfactory proof of inadequacy and insolvency required; in- 
 
 adequacy limited to particular mortgage. 
 
 668. Grounds for receiver in Irish Court of Chancery. 
 
 669. General rule not followed in New Jersey. 
 
 670. Grounds of the relief in New Jersey; fraud, bad faith and mis- 
 
 management; assignment to insolvent person; transfer to 
 wife of mortgagor. 
 
 671. The doctrine in Mississippi. 
 671a. The rule in Minnesota. 
 
 672. Unpaid taxes and Insurance as ground for relief; contest as to 
 
 whether property is covered by mortgage; assignment by 
 mortgagor. 
 672a. Mortgage of hotel propertj\ 
 
 673. The doctrine in Nevada; when relief extended to purchasers 
 
 under foreclosure sale. 
 
 674. The doctrine in California; mortgagee not allowed receiver be- 
 
 cause of inadequacy and insolvency; the doctrine in Iowa. 
 674a. The doctrine in South Carolina; receiver not allowed. 
 
 675. When relief allowed although indebtedness only partly due; 
 
 not allowed when there is doubt as to amount due, and bill is 
 denied by answer. 
 
 676. When allowed over leasehold premises mortgaged; mortgage 
 
 of chattels. 
 
 677. Possession by tenant of mortgagor no bar to relief. 
 
 678. Bonds issued by canal company, when treated as mortgage and 
 
 receiver allowed. 
 678a. When receiver allowed in behalf of wife. 
 678^. Exemption of rents. 
 
 § 666. The general rule stated. The principal ground 
 on which courts of equity are called upon to lend their extra- 
 ordinary aid by the appointment of receivers over mortgaged 
 property, is the inadequacy of the security for the payment of 
 the mortgage indebtedness. This inadequacy, within the mean- 
 ing of the rules governing this branch of the subject, consists 
 of two elements, viz., the insufficiency of the mortgaged prem- 
 ises per se as a fund for the payment of the debt, and the in- 
 solvency of the mortgagor or other person primarily lial)le for 
 the indebtedness, whose duty it is to make good any deficiency 
 Rccciver.s — S2
 
 818 
 
 RECEIVERS. 
 
 [CIIAP. XV, 
 
 in the security. Stated in general terms, the well-established 
 rule, deducible from the clear weight of authority, is, that in 
 all cases where the rents of the property are not specifically 
 pledged as security for the debt, to entitle a mortgagee to a re- 
 ceiver of the mortgaged premises, and of the rents and profits^ 
 he must show, first, that the property itself is an inadequate se- 
 curity for the debt with interest and costs of suit ; and second, 
 that the mortgagor or other person who is personally liable 
 for the payment is insolvent, or beyond the jurisdiction of the 
 court, or of such doubtful responsibility that an execution 
 against him for the deficiency would prove unavailing. And 
 this being shown, the courts will generally interpose and ap- 
 point a receiver.20 And Jt has been held that the aid of a re- 
 
 20 Quincy v. Cheeseman, 4 Sandf. 
 Ch., 405; Brown v. Chase, Walk. 
 (Mich.), 43; Hyman v. Kelly, 1 
 Nev., 179; Ruggles v. Southern 
 Minnesota Railroad, U. S. Circuit 
 Court, District of Minnesota. 5 Chi- 
 cago Legal News, 110; Keep v. 
 Michigan Lake Shore R. Co.. U. S. 
 Circuit Court, Western District of 
 Michigan, 6 Chicago Legal News, 
 101 ; Kountze v. Omaha Hotel Co., 
 107 U. S., 378, 395, 2 Sup. Ct. Rep., 
 911, 926; Grant v. Phoenix Life 
 Ins. Co., 121 U. S., 105, 7 Sup. Ct. 
 Rep., 841 ; Shepherd v. Pepper, 133 
 U. S., 626, 652, 10 Sup. Ct. Rep., 
 438, 447; American National Bank 
 V. Northwestern M. Life Lis. Co., 
 32 C. C. A., 275, 89 Fed., 610, 60 
 U. S. App., 693; Central Trust Co. 
 V. C, R. & C. R. Co., 36 C. C. A., 
 241, 94 Fed., 275, affirming S. C, 
 89 Fed., 388; Southern B. & L. 
 Assn. V. Carey, 52 C. C. A., 174, 
 114 Fed., 288; Boyce v. Continental 
 Wire Co., 60 C. C. A., 508, 125 Fed., 
 740; Hill v. Robertson, 24 Miss., 
 368; Sea Insurance Co. v. Stebbins, 
 8 Paige, 565; Schreiber v. Carey, 
 
 48 Wis., 208, 4 N. W., 124; Winkler 
 V. Magdeburg, 100 Wis., 421, 76 N. 
 W., 332; Commercial & Savings 
 Bank v. Corbett, 5 Sawyer, 172; 
 Buchanan v. Berkshire Life Insur- 
 ance Co., 96 Ind., 510; Harris v. 
 United States S. F. & L Co., 146 
 Ind., 265, 45 N. E., 328; Sweet & 
 Clark Co. v. Union National Bank, 
 149 Ind., 305, 49 N. E., 159; Russell 
 V. Bruce, 159 Ind., 553, 64 N. E., 
 602, 65 N. E., 585; Kerchner v. 
 Fairley, 80 N. C, 24; Oldham v. 
 Bank, 84 N. C, 304; Durant v. 
 Crowell, 97 N. C, 367, 2 S. E., 541 ; 
 dictum in First National Bank v. 
 Illinois Steel Co., 174 III., 140, 51 
 N. E., 200; Cross v. Will County 
 Natl. Bank, 177 111., 33, 52 N. E., 
 322; Jackson v. Hooper, 107 Ala., 
 634, 18 So., 254; Farmers' National 
 Bank v. Backus, 64 Minn., 43. 66 N. 
 W., 5. See, also, Dunlap v. Hedges, 
 35 West Va., 287, 13 S. E., 656; 
 Warren v. Pitts. 114 Ala., 65, 21 
 So., 494; Bristow v. Home B. Co., 
 91 Va., 18, 20 S. E., 946. And the 
 jurisdiction to appoint receivers, in 
 this class of cases, upon the grounds
 
 CHAP. XV.] 
 
 MORTGAGES. 
 
 819 
 
 ceiver should be granted or withheld, according as it may or 
 may not be an essential means to pay the indebtedness secured 
 by the mortgage, and there can be no necessity for the rehef, if 
 the mortgagor is solvent and able to pay any deficiency.^! 
 
 § 667. Satisfactory proof of inadequacy and insolvency 
 required; inadequacy limited to particular mortgage. It 
 is to be observed that, in the apphcation of the rule as above 
 stated, the courts require satisfactory proof, both as to the in- 
 adequacy of the security and insolvency of the mortgagor or 
 other person liable for the debt. And unless both these condi- 
 tions are shown to exist, no sufficient cause is presented to war- 
 rant the interference of equity.22 When, therefore, it does not 
 sufficiently appear that the mortgaged premises are an inade- 
 quate security for the payment of the indebtedness, the relief 
 will be refused, even though it is shown to the satisfaction of 
 the court that the mortgagor is insolvent. ^3 And by inade- 
 quacy of security, within the meaning of the rule, is to be un- 
 
 stated in the text, is not impaired 
 by the code of procedure in New 
 York. Hollenbeck v. Donnell, 94 
 N. Y., 342, affirming S. C, 29 Hun, 
 94. And see Herbert v. Greene, 3 
 Ir. Ch., N. S., 274; Warner v. Gou- 
 verneur's Ex'rs, 1 Barb., 36; Astor 
 V. Turner, 2 Barb., 444. But see, 
 contra, Cortleyeu v. Hathaway, 3 
 Stockt., 39; Frisbie v. Bateman. 9 
 C. E. Green, 28, approving and fol- 
 lowing Best V. Scherniier, 2 Halst. 
 Ch., 154. And see, contra, Horner 
 V. Dey, 61 N. J. Eq., 554, 49 M\., 
 154. As to the right to a receiver 
 in foreclosure proceedings under 
 the statute of South Dakota, see 
 Roberts v. Parker, 14 S. Dak., 323, 
 85 N. W., 591. 
 
 21 Myers v. Estell, 48 Miss., 403. 
 And see this case for an application 
 of the principles governing relief 
 by receivers in cases of mortgages, 
 to cases of deeds of trust. 
 
 22 Sea Insurance Co. v. Stebbins, 
 8 Paige, 565 ; Morris v. Branshaud, 
 52 Wis., 187. And see Meyer v. 
 Thomas, 113 Ala., Ill, 30 So., 89. 
 
 23 Brown v. Chase, Walk. 
 (Mich.), 43. The doctrine is very 
 clearly stated in the opinion of the 
 court in this case as follows : "A 
 receiver of the rents and profits of 
 mortgaged premises is sometimes 
 appointed on the petition of the 
 mortgagee, after he has filed his 
 bill to foreclose the mortgage. The 
 court must be satisfied, before mak- 
 ing the appointment, that the mort- 
 gaged premises are insufficient to 
 pay the mortgage debt, and that 
 the mortgagor or other party to the 
 suit who is personally liable for its 
 payment, is insolvent, or out of the 
 jurisdiction of the court, so that an 
 execution against him for the bal- 
 ance that should remain due after 
 the sale of the mortgaged premises
 
 820 
 
 RECEIVERS. 
 
 [CIIAP. XV. 
 
 derstood inadcfiuacy as to the particular mortgage which is 
 being foreclosed, and not as to other and subsequent mort- 
 gages. If, therefore, the premises are shown to be a suffi- 
 cient security for the mortgage which is in process of foreclo- 
 sure, although an inadequate security for other and later mort- 
 gages and liens, no sufficient ground for a receiver is presented, 
 even though the mortgagor is plainly insolvent and unable to 
 respond for a deficiency.^^ And the burden of proof rests upon 
 plaintiff to establish the inadequacy of the security, and if he 
 fails in this the relief will be denied.25 g^t when the income, 
 rents and profits of the premises are pledged by the mortgage, 
 less stringency of proof is required to warrant the court in 
 granting a receiver.26 And where the debt is past due and the 
 taxes and insurance are unpaid and the mortgagor refuses to 
 surrender the property, the court will not strictly scrutinize, for 
 
 would be unavailing. Chase, the 
 mortgagor, who is personally liable 
 for the payment of the debt, has 
 been decreed a bankrupt on his own 
 petition. So far, the complainants 
 have made out their case; but they 
 have failed to satisfy the court that 
 the mortgaged premises are insuf- 
 ficient to pay the mortgage debt. 
 The security was one of their own 
 taking, and the presumption is that 
 it is sufficient, until the contrary 
 appears." 
 
 24 Warner v. Gouverneur's Ex- 
 ecutors, 1 Barb., 36. "The rule in 
 these cases," says Edmonds, J., p. 
 38, "where the mortgagee has not 
 taken care to keep down the accru- 
 ing interest, by securing a lien on 
 the rents and profits, is to interfere 
 with the mortgagor's possession 
 prior to a decree of foreclosure, and 
 appoint a receiver of the rents and 
 profits, when the premises are an 
 inadequate security for the debt 
 secured by the mortgage, and the 
 mortgagor, or other person in pos- 
 
 session, who is personally liable for 
 the debt, is not of sufficient ability 
 to answer for the deficiency. In 
 this case, there seems to be no doubt 
 of the mortgagor's insolvency, but 
 there does seem to be a good deal 
 of doubt as to the inadequacy of 
 the security of the mortgaged prem- 
 ises. The allegation is, that they 
 are not an adequate security for 'all 
 just incumbrances' on them. All 
 of the just incumbrances, it would 
 seem, amount to near $70,000, 
 while the claim of the defendants is 
 not more than half that sum. And 
 while the defendants do not say 
 whether the premises are or are not 
 adequate security for the amount 
 due to them, the mortgagor, on the 
 other hand, avers that they are suf- 
 ficient for that amount. There is, 
 therefore, no ground for the ap- 
 pointment of a receiver." 
 
 25 Burlingame z: Parce, 12 Hun, 
 144. 
 
 26Des Moines Gas Co. v. West, 
 44 Iowa, 23.
 
 CHAP. XV.] MORTGAGES. 821 
 
 the mortgagor's benefit, conflicting affidavits upon the question 
 of the vakie of the property.^"^ And when the court has ap- 
 pointed a receiver in a foreclosure suit because of the inade- 
 quacy of the security, an appellate court will be reluctant to 
 disturb the finding of the court below as to the fact of such 
 inadequacy.^^ If, however, only a part of the mortgage in- 
 debtedness is due and the premises are divisible into two nearly 
 equal parts, which may be sold separately without injury, so 
 that the mortgagee is only entitled to foreclose as to one of such 
 parcels, he will not be allowed a receiver as to that part of the 
 debt not yet due, or as to that portion of the premises as to 
 which his right to foreclose has not yet accrued. ^^ 
 
 § 668. Grounds for receiver in Irish Court of Chancery. 
 Under the practice of the Irish Court of Chancery, in actions 
 for the foreclosure of mortgages, or to raise a charge affecting 
 lands by sale thereof, a receiver will be appointed only under 
 the following circumstances : first, Avhen interest is due on the 
 security, the court usually requiring an affidavit that at least 
 one year's interest is due. Second, when the property itself is 
 in danger, as if the lands are held under a lease, and the rental 
 due thereon has been permitted to remain in arrears. Third, 
 when there is reason to apprehend that the sum which may be 
 realized upon a sale of the lands will be insufficient to satisfy 
 the incumbrances or charges thereon.^^ 
 
 § 669. General rule not followed in New Jersey. Not- 
 withstanding the clear weight of authority in support of the 
 rule as stated, allowing receivers of mortgaged premises in 
 aid of a foreclosure when the security is inadequate and the 
 mortgagor insolvent, the courts of New Jersey were formerly 
 averse to the interference upon this ground, and it was held that 
 the conditions mentioned were not sufficient cause for relief in 
 
 27 Jackson v. Hooper, 107 Ala., 29 Hollenbcck v. Donnell, 94 N. 
 634, 18 So., 254. And see, post, § Y., 342. 
 
 672. 30 Master of the Rolls in Herbert 
 
 28 Pouder v. Tate, 96 Ind., 330. v. Greene, 3 Ir. Ch., N. S.. 274.
 
 822 RECEIVERS. [chap. XV. 
 
 equity by a receiver.^^ The grounds upon which the courts of 
 that state based their refusal to follow the general rule were, 
 that when one takes a mortgage security and permits the mort- 
 gagor to remain in possession, if there is a default in payment 
 the mortgagee must appropriate the property in the usual way 
 to the payment of his debt. If he has a first mortgage and 
 wishes possession, he must take his legal remedy by ejectment. 
 If he is a second incumbrancer, he takes his security with that 
 disadvantage.^^ 
 
 § 670. Grounds of the relief in New Jersey; fraud, bad 
 faith and mismanagement; assignment to insolvent per- 
 son; transfer to wife of mortgagor. The courts of New 
 Jersey have, however, recognized other circumstances, when 
 coupled with inadequacy of the security and insolvency of the 
 mortgagor, as sufficient foundation for relief in equity. And 
 it is laid down as a general doctrine, that a receiver may be al- 
 lowed when, in addition to the insolvency of the mortgagor and 
 inadequacy of the security, any act has been done by the mort- 
 gagor, or tenant in possession, which shows fraud or bad faith 
 in appropriating the rents and profits for other purposes than 
 keeping down the interest on the incumbrances.^^ So it is said 
 that a receiver may be allowed if the circumstances have mate- 
 rially changed after the giving of the security, 'as if the build- 
 ings have burned down or been permitted to decay, or if waste 
 has been committed, or if the property has depreciated in value 
 through the fault or negligence of the mortgagor, or tenant in 
 possession. And when, in addition to the inadequacy of the 
 security and the mortgagor's insolvency, he had transferred the 
 property to a third person, also insolvent, who paid no por- 
 tion of the purchase money and failed to carry out his agree- 
 ment to pay a portion of plaintiff's mortgage, by reason of 
 
 31 Cortleyeu v. Hathaway, 3 32 Cortleyeu v. Hathaway, 3 
 
 Stockt., 39; Frisbie v. Bateman, 9 Stockt., 39. 
 
 C. E. Green, 28, approving and fol- 33 Cortleyeu v. Hathaway, 3 
 
 lowing Best v. Schermier, 2 Halst., Stockt., 39. 
 Ch., 154.
 
 CHAP. XV.] MORTGAGES. 823 
 
 which agreement the mortgagee had delayed the enforcement 
 of his demand, the circumstances were deemed sufficient to war- 
 rant a receiver of the crops growing upon the premises, unless 
 the defendant would give adequate security for any deficiency 
 which might result.^^ And when the mortgagee files a bill to 
 foreclose, showing that he has no personal security for his debt, 
 that the premises are an inadequate security, and that the mort- 
 gagor who is in possession and in receipt of the rents has not 
 kept down the interest and taxes, thereby permitting a lien for 
 taxes to be created paramount to that of the mortgage, he is 
 entitled to a receiver.^^ So when an action of ejectment is 
 brought by the mortgagee to recover possession, and upon a bill 
 to foreclose he applies for a receiver in aid of the action at law, 
 he is entitled to the relief when the mortgagor is insolvent and 
 the security inadequate, the mortgagor having removed from 
 the premises and delivered possession to one who is permitted 
 to retain possession without payment of rent, the mortgagor 
 having also committed waste and threatening future waste.36 
 But the fact that the mortgagor in possession had made an as- 
 signment, according to law, of all his interest in the premises 
 for the benefit of his creditors, under which assignment the as- 
 signees had sold the mortgagor's interest, and the purchaser 
 had voluntarily transferred his purchase to the wife of the 
 mortgagor, was held not to constitute any strong ground for 
 the appointment of a receiver of the profits of the growing 
 crops, in behalf of a first mortgagor, the case being regarded as 
 standing upon the same ground as if there had been no assign- 
 ment, and the application were made against the mortgagor in 
 possession. ^"^ 
 
 § 671. The doctrine in Mississippi. In Mississippi, while 
 the mortgagor's insolvency and the inadequacy of the security 
 
 34 Cortleyeu v. Hathaway, 3 36 Brasted v. Sutton. 30 N. J. Eq., 
 
 Stockt., 39. ^62. 
 
 SSMkhon V. Crothers, 28 N. J. 37 Frishie v. Batcman, 9 C E. 
 
 Eq., 567 ; Chetwood v. Coffin, 30 N. Green, 28. 
 J. Eq., 450.
 
 824 RECEIVERS. [CIIAP. XV. 
 
 are recognized as sufficient grounds for a receivership, the relief 
 is also based upon another ground. And it is held, in that state, 
 that upon maturity of the debt and a failure to pay, the legal 
 title becomes absolute in the mortgagee, which draws with it the 
 right of possession, and that in appointing a receiver, in such 
 case, the court merely confers upon him such rights and powers 
 as a court of law would have conferred upon the mortgagee, 
 where his title was sufficient to give him the possession and con- 
 sequent use of the property. ^^ g^^j.^ unless the mortgagee has 
 contracted to have the rents and income after default made, he 
 is not entitled to them, nor to the aid of a receiver to get them 
 in, unless the mortgaged property is insufficient to satisfy the 
 debt.39 
 
 § 671a. The rule in Minnesota. In Minnesota, where, 
 under the statute, the legal title remains in the mortgagor, 
 the rule is established that the mortgagee is not entiled 
 to a receiver of the rents and profits except where it becomes 
 necessary to appoint one upon equitable considerations, such as 
 to prevent waste or to preserve the premises ; and, further, that 
 the insolvency of the mortgagor or the insufficiency of the se- 
 curity or both combined are not sufficient to justify the appoint- 
 ment, although insolvency and the insufficiency of the security 
 might be very material considerations in passing upon the pro- 
 priety or necessity of appointing a receiver for the purpose of 
 preserving the property.^^ 
 
 § 672. Unpaid taxes and insurance as ground for relief; 
 contest as to whether property is covered by mortgage; 
 assignment by mortgagor. In addition to the two prin- 
 cipal elements already mentioned as the usual ground upon 
 which receivers are allowed in this class of cases, the fact that 
 
 38 Hill V. Robertson, 24 Miss., Cady, 75 Minn., 241, 77 N. W., 831 ; 
 368. National Fire Ins. Co. v. Broadbent, 
 
 39 Whitehead v. Wooten, 43 77 Minn., 175. 79 N. W., 676: Esch 
 Miss., 523. V. White, 82 Minn., 462, 85 N. W., 
 
 40 Marshall & Ilslcy Bank v. 238, 718; Farmers Trust Co. v. 
 Cady, 76 Minn., 112, 78 N. W., Q7S. Prndden, 84 Minn., 126, 86 N. W., 
 And see Marshall & Ilsley Bank v. 887.
 
 CHAP. XV.] MORTGAGES. 825 
 
 the taxes upon the mortgaged property have been suffered to 
 remain unpaid, that a sale for unpaid taxes has been had, and 
 that the insurance upon the buildings covered by the mortgage 
 has been neglected, presents strong grounds for the interference 
 of equity by a receiver.^i And when the mortgagor has failed 
 to comply with his covenant to keep the premises insured and 
 to pay the taxes, the mortgagee having been compelled to pay 
 insurance and taxes, and it is shown that the premises are great- 
 ly in need of repairs, the court will not closely scrutinize the 
 proof as to the insufhciency of the security before granting the 
 relief.^2 go where the mortgagor who was insolvent had made 
 a general assignment and his assignee was in possession of the 
 premises receiving the rents and profits, but the taxes and in- 
 surance were allowed to remain unpaid, a proper case was pre- 
 sented for the appointment of a receiver pending the foreclo- 
 sure.^^ So, too, the existence of a contest as to whether a large 
 portion of the property, constituting the chief value of the se- 
 curity, is covered by the mortgage, is an additional ground for 
 the relief in such case.'*^ But the breach by the mortgagor of 
 his covenant to keep the mortgaged property insured will not 
 constitute ground for a receiver where the risk is so great that 
 the rates would be prohibitive, especially where the mortgage 
 provides that if the mortgagor fails to insure, the mortgagee 
 may do so himself and charge the amounts up as part of the 
 mortgage indebtedness.^^ 
 
 41 Wall Street Fire Ins. Co. v, 
 Loud, 20 How. Pr., 95; Finch v. 
 
 Houghton, 19 Wis., 149; Schreiber discharge plaintiff's lien. Ray v. 
 
 V. Carey, 48 Wis., 208, 4 N. W., 124 
 Eslava v. Crampton, 61 Ala., 507 
 Harris v. United .States S. F. & I 
 
 though it is charged that the land 
 alone will not be sufficient to fully 
 
 Carlisle, 125 Ga., 316. 
 
 42 Eslava v. Crampton. 61 Ala., 
 507. And see, ante, § 667. 
 
 Co., 146 Ind., 265, 45 N. E., 328; 43 Winkler v. Magdeburg, 100 
 
 Southern B. & L. Assn. v. Carey, Wis., 421, 76 N. W., 332. 
 
 52 C. C. A., 174, 114 Fed., 288. 44 Wall Street Fire Ins. Co. v. 
 
 Where plaintiff claims a mechanic's Loud. 20 How. Pr., 95. 
 
 lien upon property, the failure of 45 Eureka Mining, S. & P. Co. v. 
 
 the defendant to keep the building Lcwiston N. Co., 12 Idaho, 472, 86 
 
 insured constitutes no ground for a Pac, 49. 
 
 receiver of the rents and profits, al-
 
 326 RECEIVERS. [chap. XV. 
 
 § 672a. Mortgage of hotel property. When the mort- 
 gaged premises consist of a hotel, and the mortgagors are in- 
 solvent, and have neglected to pay taxes upon the premises, 
 and have discontinued the operation of the hotel, thereby im- 
 pairing the value of the security, sufficient cause is shown for a 
 receiver in an action to foreclose the mortgage.'^^ But in case 
 of a mortgage upon a building used for hotel purposes, the busi- 
 ness itself or its good will not being embraced in the mortgage, 
 either expressly or by necessary implication, while a receiver 
 may be appointed in aid of a foreclosure, the court will not 
 direct him to manage the hotel business, since this is not a part 
 of the mortgage security.'*'^ 
 
 § 673. The doctrine in Nevada; when relief extended 
 to purchasers under foreclosure sale. In Nevada, under 
 the statutes and code of procedure of that state, a mortgagee 
 has but one remedy against the mortgagor in case of default, 
 viz., the ordinary equitable remedy by foreclosure and sale, 
 and is neither entitled to bring ejectment at law, nor to a strict 
 foreclosure and sale. For this reason, inadequacy of the secu- 
 rity and the mortgagor's insolvency are held to be sufficient to 
 warrant the appointment of a receiver in aid of foreclosure 
 proceedings; especially when the mortgagor has pledged the 
 rents and profits arising from the mortgaged premises to keep 
 down the interest on the mortgage, and when he afterward 
 diverts the rents from this purpose. And when, in such case, 
 the mortgagees themselves become the purchasers at the fore- 
 closure sale, and under the statute a period of six months must 
 intervene between the sale and the time when the purchasers are 
 entitled to a deed and to the possession of the premises, the 
 court will extend the protection of a receiver to the purchas- 
 ers.48 
 
 46 Lowell V. Doe, 44 Minn., 144, 4S Hyman v. Kelly, 1 Nev., 179. 
 46 N. W., 297. 
 
 47 Whitley v. Challis, (1892) 1 
 Ch., 64.
 
 CHAP. XV.] MORTGAGES. 827 
 
 § 674. The doctrine in California; mortgagee not al- 
 lowed receiver because of inadequacy and insolvency ; the 
 doctrine in Iowa. In California, however, under a statute 
 similar to that of Nevada, limiting the mortgagee's remedy to 
 the ordinary foreclosure, a contrary doctrine prevails, and it is 
 held that the same reasons for the interference of equity do 
 not exist as under the English practice, in the appointment of 
 receivers to collect the rents of the mortgaged premises pen- 
 dente lite. The mortgage being considered only as a security 
 for the debt, the estate remains that of the mortgagor as owner, 
 and must continue so to remain until, by foreclosure and sale, 
 a new owner is substituted. Hence the mortgagee is not en- 
 titled to the aid of a receiver, even though the bill alleges the 
 insolvency of the mortgagor and inadequacy of the security.^^ 
 So the purchaser at a foreclosure sale will not be allowed a re- 
 ceiver over the mortgaged premises and the growing crops 
 thereon as against the mortgagor remaining in possession dur- 
 ing the period of redemption.^^ And a stipulation in the mort- 
 gage providing for the appointment of a receiver will not 
 justify the appointment where there is no showing that the 
 mortgaged premises are insufficient security; and in such case, 
 a general allegation that the mortgaged premises are insuffi- 
 cient security is a mere conclusion and as such insufficient as 
 the basis for a receiver.^^ And in Iowa, the mortgagor being 
 entitled to possession until the expiration of a year from the 
 foreclosure sale, and entitled to the crops during such period, 
 the mortgagee will not be allowed a receiver because of inade- 
 quacy of the security and insolvency of the mortgagor,^^ ^j. 
 though it is averred that the mortgagor has fraudulently dis- 
 posed of other property upon which the mortgagee has no 
 lien.^^ 
 
 ■*9 Guy V. Ide, 6 Cal., 99. 52 American Investment Co. v. 
 
 50 West V. Conant, 100 Cal., 231, Farrar, 87 Iowa, 437, 54 N. W., 361. 
 34 Pac, 705. 53 Wliite 7'. Griggs, 54 Iowa, 650, 
 
 51 Bank of Woodland v. Stephens, 7 N. W., 125. 
 144 Cal., 659, 79 Pac, 379.
 
 828 RECEIVERS. [chap. XV. 
 
 § 674(7. The doctrine in South Carolina; receiver not 
 allowed. In South Carolina, under a statute enacted in 
 1791, a mortgage of real estate is not regarded as a conveyance 
 of any estate, but as a mere contract creating a lien upon the 
 premises as security for the payment of an indebtedness. The 
 mortgagor still remains, even after a condition broken, the 
 owner of the premises, retaining all rights incident to such own- 
 ership, including the right to receive the rents and profits. 
 Equity will not, therefore, upon the application of the mort- 
 gagee in a suit for foreclosure appoint a receiver of the rents 
 and profits when they have not been pledged by the mortgage, 
 even though it is shown that the mortgagor is insolvent and 
 the security inadequate.^* If the rents and profits are not 
 pledged by the mortgage, they remain the property of the mort- 
 gagor, who may dispose of them by assignment. And when 
 the mortgagor makes a general assignment for the benefit of 
 his creditors of all his property, including mortgaged lands, 
 the mortgagee will be denied a receiver of the rents and 
 profits, although he alleges the insolvency of the mortgagor and 
 the inadequacy of the security. ^^ 
 
 § 675. When relief allowed although indebtedness only 
 partly due ; not allowed when there is doubt as to amount 
 due, and bill is denied by answer. While, as a general rule, 
 the courts will not interfere by appointing receivers in aid of 
 mortgagees when the indebtedness is not yet due,^^ yet there 
 may be circumstances sufficient to justify a partial departure 
 from the rule. And when, from the nature of the mortgaged 
 premises, it is apparent that they are so indivisible as to render 
 it necessary to sell them as an entirety upon a decree in foreclo- 
 sure, a receiver will be allowed, although only a portion of the 
 mortgage indebtedness is due, if it is satisfactorily shown to 
 the court that the premises are an inadequate security for the 
 debt, and that the mortgagor is personally irresponsible for the 
 
 54 Hardin v. Hardin, 34 S. C, 11. 56 Bank of Ogdensburgh v. 
 
 55 Seignious v. Pate, 32 S. C, Arnold, 5 Paige, 38. 
 134.
 
 CHAP. XV.] MORTGAGES. - 829 
 
 deficiency in tlie secnrity.^'^ If, however, there is doubt as to 
 the amount actually due, and the plaintiff's allegations as to 
 the inadequacy of the security are denied by the answer, the 
 court will not interfere with the possession by appointing a re- 
 ceiver.^^ 
 
 § 676. When allowed over leasehold premises mort- 
 gaged; mortgage of chattels. The interference of courts 
 of equity by appointing receivers over the mortgaged estate 
 upon the principal grounds already discussed, is not confined to 
 mortgages of the fee, but may also be allowed in case of a mort- 
 gage of a leasehold interest in the premises. And upon a bill 
 to foreclose a mortgage of a leasehold, when the mortgagor is 
 in insolvent circumstances and has transferred his equity of 
 redemption in the premises, a receiver may be appointed, and 
 the assignee of the mortgagor in possession will be directed to 
 attorn to the receiver. The relief is regarded as peculiarly ap- 
 propriate in such case, since without it the owner of the equity 
 of redemption might, by protracting the litigation until the ex- 
 piration of the lease, render the security utterly valueless. ^^ 
 So insolvency of the mortgagor of chattels, coupled with in- 
 adequacy of the security and danger of removal of the prop- 
 erty beyond the jurisdiction of the court, will warrant the 
 appointment of a receiver in a suit to foreclose the mortgage. ^^ 
 
 § 677. Possession by tenant of mortgagor no bar to re- 
 lief. In an action for the foreclosure of a mortgage, when 
 a receiver is sought by the mortgagee upon the ground of in- 
 adequate security and the mortgagor's insolvency, it is no 
 sufficient objection to the interference of the court, that the 
 premises are in possession of a tenant of the mortgagor, when 
 the tenant is before the court as a party to the suit; since, if 
 such possession by the tenant were to be recognized as a bar to 
 relief in equity by a receiver, it would be in the power of a 
 
 5" Quincy v. Cheeseman, 4 Sandf. ^*^ Astor v. Turner, 2 Barli.. 444. 
 
 Ch., 405. See, also, Buchanan v. CO Reynolds v. Quick, 128 Ind., 
 
 Berkshire Life Insurance Co., 96 316, 27 N. E., 621. And see, ante, 
 
 Ind.. 510. § 647. 
 
 58Callanan v. Shaw. 19 Iowa. 183.
 
 830 RKCKIVERS. [CHAi-. XV. 
 
 mortgagor to greatW jeopardize the seciirit}' and rights of the 
 mortgagee, simply by placing the property in the possession of 
 a tenant.^i So persons who have taken possession of the 
 mortgaged premises under contract with the mortgagor, after 
 default in payment of the mortgage indebtedness and with 
 knowledge of the mortgagor's insolvency and of the condition 
 of the property, may be required to surrender possession to 
 the receiver, or to pay a reasonable rental for the premises. ^^ 
 § 678. Bonds issued by canal company, when treated as 
 mortgage and receiver allowed. When a corporation of a 
 quasi public nature, as a canal company, issues bonds for the 
 completion of its undertaking, pledging all its property, real 
 and personal, for the payment of the bonds and interest, and 
 making them a first lien upon the assets of the company, the 
 bonds will be regarded as in the nature of a mortgage, to the 
 extent of authorizing a receiver in behalf of the bondholders, 
 to take charge of the affairs of the company upon a bill alleg- 
 ing non-payment, and that the corporation is insolvent and its 
 property going to ruin.^^ 
 
 61 Keep V. Michigan Lake Shore jection to the appointment of a re- 
 
 R. Co., U. S. Circuit Court, West- ceiver, to whom the tenant could 
 
 ern District of Michigan, 6 Chicago be required to attorn and pay over 
 
 Legal News, 101. This was an ap- the rents, instead of paying them 
 
 plication for a receiver, upon a bill to the mortgagor, but without pow- 
 
 for foreclosure filed by trustees in er in such receiver to molest the 
 
 a mortgage given by a railway possession of the tenant. When, 
 
 company to secure its bonds, the however, the tenant is a party be- 
 
 mortgagor having delivered pos- fore the court, a receiver of the 
 
 session of the property to a tenant. mortgaged premises may be ap- 
 
 The court, Withey, J., say, p. 102; pointed. Any other view would 
 
 "The objection is made to appoint- place it in the power of a mort- 
 
 ing a receiver because the Conti- gagor, by leasing the mortgaged 
 
 nental Improvement Co. is in pos- property, to greatly jeopardize the 
 
 session as tenant of the mortgagors, security and interests of a mort- 
 
 and it is claimed the extent a court gagee." 
 
 will go, in such case, is to order the 62 Mutual Life Insurance Co. v. 
 
 tenant to attorn to the mortgagee. Spicer, 12 Hun, 117. 
 If the tenant was not a party be- 63 White Water Valley Canal Co. 
 
 fore the court, that would be no ob- v. Vallette, 21 How., 414.
 
 CHAP. XV.] MORTGAGES. 831 
 
 § 678a. When receiver allowed in behalf of wife. The 
 right to the aid of a receiver in a foreclosure suit is not limited 
 to the mortgagee or his assigns, and the relief may be granted 
 in behalf of other parties to the action when necessary for the 
 protection of their interests in the subject-matter of the litiga- 
 tion. Thus, when a wife has joined in the execution of a mort- 
 gage upon lands of the husband to secure his indebtedness, 
 and her inchoate interest is afterwards set off and allotted to 
 her in a portion of the lands absolutely, under a statute of the 
 state, if the remainder of the premises is insufficient to pay the 
 debt and the husband is insolvent, a receiver may be appointed 
 over such remainder upon the application of the wife upon a 
 cross-bill by her seeking to have the remainder first sold and 
 applied in satisfaction of the mortgage debt.^^ 
 
 § 678^. Exemption of rents. When a mortgagee seeks 
 the aid of a receiver to collect the rents and apply them in 
 payment of the mortgage indebtedness, upon the ground of in- 
 adequate security and insolvency of the mortgagor, the proper 
 time for the mortgagor to assert his right to the rents as being 
 exempt under the exemption laws of the state is upon the hear- 
 ing of the application for the receiver. And when the receiver 
 has been appointed and directed to apply the rents in payment 
 of the debt, the mortgagor can not, by a subsequent action, re- 
 cover such rents from the receiver upon the ground that they 
 are exempted from seizure, the order appointing the receiver, in 
 such case, being regarded as res judicata upon the question of 
 the rio^ht to the rents. ^^ 
 
 64 Main v. Giuthert, 92 Ind., 180. «3 Storm v. Ermantrout, 89 Ind., 
 
 214.
 
 S32 RECEIVERS. ICTIAP. XV. 
 
 IIT. Receivers as Between Different Mortgagees. 
 
 § 679. Receiver not granted as against prior mortgagee in possession. 
 
 680. The rule applied against judgment creditors, and against heirs- 
 
 at-la\v. 
 
 681. Relief granted when nothing appears to be due prior mortgagee 
 
 in possession. 
 
 682. Subsequent mortgagees may have receiver when prior mort- 
 
 gagee not in possession; consent of prior mortgagee not 
 necessary. 
 
 683. Annuitants allowed receiver when prior mortgagees have not 
 
 taken possession. 
 
 684. Right to relief when mortgagor is beyond jurisdiction of court. 
 
 685. Appointment made without prejudice to prior equities. 
 
 686. Receiver granted to mortgagee of corporate property. 
 
 687. When judgment creditor denied relief as against a puisne 
 
 mortgagee in possession. 
 
 688. Right to rents; mortgagee first obtaining receiver entitled to 
 
 priority; subrogation; payment according to priority. 
 
 689. Contrary doctrine in Virginia. 
 
 690. Prior mortgagee denied receiver of rents which have been as- 
 
 signed by mortgagor to junior mortgagee. 
 
 691. Receiver allowed on bill by junior mortgagee for foreclosure 
 
 and to compel prior mortgagee to exhaust another mortgage; 
 tenants required to attorn to receiver. 
 691a. Consolidation of actions to foreclose different mortgages. 
 
 § 679. Receiver not granted as against prior mortgagee 
 in possession. Under the English practice, when there are 
 several mortgages of different priority upon the same premises, 
 the first mortgagee, being vested with the legal title and the 
 right to immediate possession, is called the legal mortgagee, 
 and all others are equitable mortgagees or incumbrancers. And 
 the doctrine of the English Court of Chancery, announced in 
 strong terms by Lord Eldon, and which has also been recog- 
 nized and enforced in this country, was that as against a prior 
 mortgagee in possession of the property under his mortgage, 
 a receiver would never be granted in behalf of subsequent mort- 
 gagees, while anything remained due to the prior mortgagee 
 under his incumbrance. In such cases, the only remedy open 
 to the second or equitable mortgagee is to pay off the prior in- 
 cumbrancer and redeem from the lien of his mortgage. The
 
 CHAP. XV.] 
 
 MORTGAGES. 
 
 833 
 
 rule is based upon the unwillingness of courts of equity to inter- 
 fere with the legal title or with possession under it, and their 
 disinclination to substitute another security for that for which 
 the mortgagee contracted. The courts refuse, therefore, to 
 grant a receiver in this class of cases, or to interfere with the 
 receipt of the rents and profits by the prior mortgagee in posses- 
 sion, since such interference would virtually have the effect 
 of dispossessing him.^^ And upon motion for a receiver against 
 a mortgagee in possession, who insists by his answer that he 
 has not been fully paid, the court will not, by affidavits upon the 
 
 66 Bemey v. Sewell, 1 Jac. & W., 
 647; Rowe v. Wood, 2 Jac. & W., 
 553; Hiles v. Moore, 15 Beav., 175; 
 Trenton Banking Co. v. Woodruff, 
 2 Green Ch., 210. See, also, Cod- 
 rington v. Parker, 16 Ves., 469; 
 Faulkener v. Daniel, 10 L. J., N. S. 
 Ch., 2)2 ; Quinn v. Brittain, 3 Edw. 
 Ch., 314. In Berney v. Sewell, 1 
 Jac. & W., 647, the rule was stated 
 by Lord Eldon as follows: "If a 
 man has a legal mortgage, he can 
 not have a receiver appointed ; he 
 has nothing to do but to take pos- 
 session. If he has only an equi- 
 table mortgage, that is, if there is a 
 prior mortgagee, then, if the prior 
 mortgagee is not in possession, the 
 other may have a receiver without 
 prejudice to his taking possession; 
 but, if he is in possession, you can 
 not come here for a receiver ; you 
 must redeem him, and then, in 
 taking the accounts, he will not be 
 allowed any sums that he may 
 have paid over to the mortgagor 
 after notice of the subsequent in- 
 cumbrance. If you recollect, in 
 Mr. Beckford's case, I went to the 
 very utmost ; I said then that if 
 Mr. Beckford would swear that 
 there was sixpence due to him, I 
 would not take away the possession 
 
 Receivers — 53. 
 
 from him. If there is anything 
 due, I can not substitute another 
 security for that which the mort- 
 gagee has contracted for. I know 
 no case where the court has ap- 
 pointed a receiver against a mort- 
 gagee in possession, unless the 
 parties making the application will 
 pay him off, and pay him off ac- 
 cording to his demand as he states 
 it himself. I can not appoint the 
 receiver against these defendants, 
 unless you can bring me their con- 
 fession that they are paid off, or 
 their refusal to accept what is due 
 to them. The rule about receivers 
 is very clear; a mortgagee who has 
 the legal estate can not have a 
 receiver; an equitable mortgagee 
 may, but he can not if the first is 
 in possession. I remember a case 
 where it was much discussed 
 whether the court would appoint a 
 receiver when it appeared by the 
 bill that there was a prior mort- 
 gagee who was not in possession. 
 
 1 have a note of that case. There 
 Lord Thurlow made the appoint- 
 ment without prejudice to the first 
 mortgagee's taking possession, and 
 that was afterward followed by 
 Lord Kenyon." See Rowe v. Wood, 
 
 2 Jac. & W., 553.
 
 834 RECEIVERS. [CIIAP. XV. 
 
 hearing of tlie motion, try the question as to whether any bal- 
 ance is still due to the mortgagee.^'^ Nor will the court inter- 
 pose, even though the priority of the first mortgagee in posses- 
 sion is contested by the other mortgagee, when he does not 
 show that the mortgagee in possession is insolvent and unable 
 to respond in case it should be determined that he has not a 
 priority of lien.^^ 
 
 § 680. The rule applied against judgment creditors, and 
 against heirs-at-law. The rule as laid down in the preceding 
 section is not confined to cases where the subsequent claimant is 
 strictly a mortgagee, but is sometimes extended to cases where 
 the claim or right asserted as against the estate is of another 
 nature. Thus, it is held that, as against a mortgagee in pos- 
 session, holding the premises as security for his debt, a court of 
 equity will not appoint a receiver of the rents and profits on a 
 creditor's bill filed by a judgment creditor of the mortgagor, 
 when the mortgagee has not been paid the amount due him 
 and is fully able to respond for what he may receive. ^^ So, 
 too, as against mortgagees in possession, whose mortgage and 
 other charges upon the estate have not been fully satisfied, the 
 heirs-at-law of the testator, upon a bill against the mortgagees 
 for an account, are not entitled to a receiver of the mortgaged 
 premises. And in such case, it is a sufficient answer to the appli- 
 cation for a receiver that the mortgage and other charges upon 
 the estate prior to the claim of the heirs have not been dis- 
 charged. "^^ 
 
 § 681. Relief granted when nothing appears to be due 
 prior mortgagee in possession. In the application of the 
 rule under discussion, denying a receiver as against a first 
 mortgagee in possession, it must clearly appear that something 
 remains actually due to such mortgagee.'^! And when the 
 
 67Rowe V. Wood, 2 Jac. & W., 314. See, also, United States v. 
 
 553. Masich. 44 Fed., 10. 
 
 68 Trenton Banking Co. v. Wood- 70 Faulkener v. Daniel, 10 L. J., 
 ruff, 2 Green Ch., 210. N. S. Ch., 33. 
 
 69 Quinn v. Brittain, 3 Edw. Ch., 71 See Codrington v. Parker, 16
 
 CHAP. XV.] MORTGAGES. 835 
 
 mortgagee in possession had been so negligent in keeping his 
 accounts, that it could not be determined what was due under 
 his mortgage, the court allowed the motion for a receiver to 
 stand over in order that defendant might show by affidavit how 
 much was due him, and directed that, if he failed to give such 
 information, a receiver should be allowed.'^2 g^ ^^.^g^ ^ t|-,jj.(j 
 mortgagee took possession of the premises, and afterward 
 bought up a first mortgage with a view to tacking the securi- 
 ties, and remained in possession several years, receiving con- 
 siderable sums of money from the premises, a receiver was al- 
 lowed as against him upon the application of the second mort- 
 gagee, when it did not satisfactorily appear that anything was 
 due under the first mortgage. The interference of the court, 
 under such circumstances, rests upon the necessity of protecting 
 the rents and profits of the estate for the benefit of those who 
 shall ultimately be found entitled to them.'^^ 
 
 § 682. Subsequent mortgagees may have receiver when 
 prior mortgagee not in possession; consent of prior mort- 
 gagee not necessary. It has been shown in the preceding 
 sections, that the doctrine of non-interference as against prior 
 mortgagees is strictly limited to cases where the mortgagee 
 has actually taken possession of the premises under his mort- 
 gage, and has no application to cases where the prior mort- 
 gagee is out of possession. And the rule is well settled, that 
 when the first mortgagee has not taken possession of the prop- 
 erty, equity may properly interfere in behalf of subsequent 
 mortgagees or equitable incumbrancers and creditors, and may 
 appoint a receiver for their protection, but without prejudice to 
 the rights of the first mortgagee.'^'* The only doubt which 
 seems to have existed as to the propriety of the doctrine has 
 
 Ves., 469; Hiles v. Moore, 15 Beav., flicting mortgagees, where a re- 
 
 175. ceiver is sought of the rents and 
 
 ■72 Codrington v. Parker, 16 Ves., profits. 
 
 469. 74 Bryan v. Cormick, 1 Cox, 422; 
 
 73 Hiles V. Moore, 15 Beav., 175. Dalmer v. Dashwood, 2 Cox, 378; 
 
 And see this case as to the practice Tanfield v. Irvine, 2 Russ., 149. 
 in determining the rights of con-
 
 836 RECEIVERS. [chap. XV. 
 
 been upon the question of the necessity of first obtaining con- 
 sent of the prior mortgagee before interfering by a receiver. 
 And in a case decided by Lord Thurlow in 1783, the rule was 
 stated to be, that a second mortgagee could not have a receiver 
 without the consent of the first, since the court could not pre- 
 vent the first mortgagee from bringing an action of ejectment 
 against the receiver immediately upon his appointment.'^^ Sub- 
 sequently, however, the same learned chancellor seems to have 
 become convinced that the consent of the prior mortgagee was 
 not necessary to confer jurisdiction, and in a case decided by 
 him in 1788, a receiver was allowed of mortgaged premises 
 in behalf of subsequent equitable creditors, although it was ob- 
 jected on the part of mortgagees that the court never appointed 
 a receiver of a mortgaged estate without the consent of the 
 mortgagee.'^^ And the court will not permit the prior incum- 
 brancer to prevent the appointment of a receiver by anything 
 short of a personal assertion of his legal right, and the taking 
 possession himself.'^'^ And in an action to foreclose a second 
 
 75 Phipps V. Bishop of Bath, Dick., ship said he could see no reason, 
 608. This was an application on if a mortgagee had not thought 
 behalf of a second mortgagee for proper to take possession, why the 
 a receiver, and that he might apply court should not put a receiver on 
 the rents in keeping down the in- the estate, so as that it should be 
 terest of a mortgage, and of an- without prejudice to the mort- 
 other charge upon the estate, and gagee's right to obtain the posses- 
 pay the surplus rents into bank. sion. Where a receiver has been 
 The first mortgagee had declined appointed of a mortgaged estate, 
 any steps to get possession. Lord the mortgagee not being brought 
 Thurlow held as follows: "A sec- before the court, the mortgagee 
 ond mortgagee, the mortgagor liv- must apply to the court for liberty 
 ing, can not have a receiver with- to bring an ejectment, which is of 
 cut the consent of the first mort- course. So here, if the receiver is 
 gagee, because the court can not appointed without prejudice to the 
 prevent the first mortgagee from mortgagee's right, there could be 
 bringing an ejectment against the no objection to it. And his lord- 
 receiver as soon as he is appointed." ship ordered that the receiver 
 
 76 Bryan v. Cormick, 1 Cox, 422. should be appointed without preju- 
 Lord Thurlow asked if the mort- dice," etc. 
 
 gagees were in possession, "and it 77 Silver v. Bishop of Norwich, 3 
 
 appearing they were not, his lord- Swans., 112, note.
 
 CHAP. XV.] MORTGAGES. 837 
 
 mortgage it is proper to appoint a receiver of the rents and prof- 
 its, when the mortgagor is insolvent and the premises are an 
 inadequate security for both mortgages, and when the pur- 
 chaser of the equity of redemption of the mortgagor refuses to 
 keep down the interest upon the first incumbrance.'^^ But 
 when receivers are appointed in behalf of second-mortgage 
 bondholders and sell the mortgaged property for their benefit, 
 it is improper to charge the commissions and compensation of 
 the receivers against first-mortgage bondholders.'^^ 
 
 § 683. Annuitants allowed receiver when prior mort- 
 gagees have not taken possession. As illustrative of the 
 rule allowing receivers, in behalf of subsequent equitable mort- 
 gagees or incumbrancers, upon the grounds already stated, it 
 is held that annuitants whose annuities are chargeable upon 
 real estate which has been previously mortgaged to different 
 mortgagees, are entitled to the aid of equity by a receiver of 
 the rents of the mortgaged premises, when the prior mort- 
 gagees have not yet taken possession. And in such a case, it 
 is not necessary that the prior incumbrancers should be made 
 parties to the action, but the order for the receiver will be made 
 without prejudice to their rights.*^^ 
 
 § 684. Right to relief when mortgagor is beyond juris- 
 diction of court. There is some conflict in the English de- 
 cisions in this class of cases, as to whether the subsequent in- 
 cumbrancer or mortgagee is entitled to a receiver of the rents 
 and profits, in a case otherwise sufficient for the relief, when the 
 mortgagor is beyond the jurisdiction of the court, and has not 
 been served with process. The better-considered doctrine ap- 
 pears to be, that the court may properly interfere in such a case 
 and that it ought not to permit the rights of a subsequent in- 
 cumbrancer to be lost, by the circumstance that the mortgagor 
 has not entered an appearance, and can not be compelled to ap- 
 
 78Haugan v. Netland, 51 Minn., so Dalmer v. Dashwood, 2 Cox, 
 
 552, 53 N. W., 873. 378. 
 
 79 Tome v. King, 64 Md., 166, 21 
 Atl., 279.
 
 838 RECEIVERS. [chap. XV. 
 
 pear because beyond the jurisdiction of the court. ^^ But a con- 
 trary doctrine was held in another case, and a receiver was re- 
 fused in behalf of an equitable mortgagee, upon a bill against 
 the mortgagor and a subsequent equitable incumbrancer, when 
 the mortgagor resided beyond the jurisdiction of the court and 
 had not appeared to the suit. And the refusal to interfere was 
 based upon the ground that the court had no jurisdiction, for 
 the purposes of an application for a receiver, against the posses- 
 sion of a party who was not before the court to defend him- 
 self.82 
 
 § 685. Appointment made without prejudice to prior 
 equities. While, as has thus been shown, courts of equity 
 may, in proper cases, interfere by appointing receivers 
 in aid of subsequent equitable incumbrancers or creditors, they 
 yet proceed in the exercise of this branch of their jurisdiction 
 with much caution. And the established rule is, that the court 
 will only grant a receiver in behalf of an equitable creditor or 
 incumbrancer, by making the order without prejudice to per- 
 sons having prior interests or estates in the property. If their 
 prior estates are legal estates or interests, the court by its ap- 
 pointment does not prevent them from proceeding to obtain 
 possession under their legal title, if they think proper. If they 
 are equitable estates, the court takes care, in the appointment of 
 its receiver, not to disturb any prior equities, and for this pur- 
 pose directs inquiries to determine priorities among the differ- 
 ent equitable incumbrancers.^^ And the appointment of a re- 
 ceiver, in cases where there are incumbrancers or mortgagees 
 
 81 Tanfield v. Irvine, 2 Russ., 149. the High Court of Chancery. And 
 
 82 v. Chadvvick, 4 L. J., additional doubt is thrown upon 
 
 Ch., 67. In this case, a bailiff of the its weight as authority by a note 
 
 mortgagor received the rents of of the reporter, who adds : "It is 
 
 the estate and remitted them to supposed by some of the most ex- 
 
 the mortgagor residing in a for- perienced king's counsel, that the 
 
 eign country. The decision, how- lord chancellor has appointed re- 
 
 ever, being in the vice-chancellor's ceivers in similar cases." 
 
 court, can hardly be regarded as of 83 Davis v. Duke of Marlborough, 
 
 equal authority with Tanfield v. Ir- 2 Swans., 137, 138, 165. 
 vine, 2 Russ., 149, which was before
 
 CHAP. XV.] MORTGAGES. 839 
 
 interested ad\ersely to the plaintiff obtaining the receiver, is 
 for the benefit of such incumbrancers only so far as expressed 
 to be for their benefit, or so far as they choose to avail them- 
 selves of it, since a court of equity will not interfere to deprive 
 them of the advantage of their legal rights.84 
 
 § 686. Receiver granted to mortgagee of corporate 
 property. When it is satisfactorily made to appear to the 
 court, that a receiver in behalf of the mortgagee of the prop- 
 erty of a corporation is necessary to protect the mortgagee's in- 
 terests, it is no sufficient objection to granting the relief that a 
 large number of other mortgagees of the same property are 
 satisfied with the management of the corporation, which is in 
 the hands of a manager or trustee for the benefit of the mort- 
 gagees. And the court will grant a receiver, in such case, 
 although the mortgagee seeking the relief represents only one- 
 ninth of the mortgage indebtedness. ^^ 
 
 § 687. When judgment creditor denied relief as against 
 a puisne mortgagee in possession. Under the practice of 
 the Irish Court of Chancery, a receiver will not be appointed on 
 the application of a judgment creditor, after his debtor is ad- 
 judicated a bankrupt, as against a puisne mortgagee in posses- 
 sion. ^^ 
 
 § 688. Right to rents ; mortgagee first obtaining receiv- 
 er entitled to priority ; subrogation ; payment according to 
 priority. The question of the right to rents and profits of 
 the mortgaged estate, upon the appointment of receivers, when 
 there are different mortgagees, is one of considerable import- 
 ance and deserving of special notice. The general rule is that 
 a junior mortgagee, who obtains a receiver of the rents and 
 profits, in aid of a bill to foreclose his mortgage, is entitled to 
 the rents and profits at the hands of such receiver, up to the 
 
 84 Gresley v. Adderley, 1 Swans., 86 Ryan v. Lefroy, 3 Ir. Ch., N. 
 573. S., 351. 
 
 85 Fripp V. The Bridgewater Co., 
 11 Hare. 239; S. C, 17 Jur., 887, 22 
 L. J.. 1084.
 
 840 RECEIVERS. [chap. XV. 
 
 time of appointing a receiver upon a bill by a prior mortgagee, 
 not a party to the original suit. And the prior mortgagee is 
 entitled to have of the receiver only such rents and profits as 
 accrue after the appointment in aid of such prior mortgagee, al- 
 though one and the same person is appointed in both cases. The 
 rule is based upon the consideration that, until the elder mort- 
 gagee sees fit to assert his right to the rents and income, a junior 
 incumbrancer has a right so to do, and the first mortgagee not 
 being a party to the former suit, and having no lien on the rents 
 and profits, and no right to recover the back rents, he can only 
 assert his right thereto, as against the receiver, from the date of 
 appointment in his own suit.^^ The proper course, therefore, 
 for an incumbrancer to take who is desirous of having the bene- 
 fit of a receiver already appointed, is to file a bill for that pur- 
 pose and obtain an order extending the receiver to his incum- 
 brancers In such case, the extension of the receiver is regarded 
 as a new appointment, and the rents theretofore received by him 
 are treated as by-gone rents which the mortgagee last asserting 
 his right has suffered other claimants to realize, and the order 
 extending the receiver for the benefit of the prior mortgagee 
 will attach only to the rents thereafter received.89 And until 
 
 87 Howell V. Ripley, 10 Paige, 43 ; comes in and makes a motion for the 
 Ranney v. Peyser, 83 N. Y., 1; discharge of the receiver or, in the 
 Washington Life Insurance Co. v. alternative, to be let into the pos- 
 Fleischauer, 10 Hun, 117; Goddard session of the rents and profits, the 
 V. Clarke, 81 Neb., 373, 116 N. W., first mortgagee is entitled to rents 
 41. And see Post v. Dorr, 4 Edw. paid to the receiver after the date 
 Ch., 412; Sanders v. Lord Lisle, Ir. of the service of the notice of his 
 Rep., 4 Eq., 43; Agra & Master- motion and not merely those paid 
 man's Bank v. Barry, Ir. Rep., 3 to him after the motion is subse- 
 Eq., 443; Lanauze v. Belfast, Holy- quently granted. Preston v. Tun- 
 wood & Bangor R. Co., id., 454; bridge W. O. H.. (1903) 2 Ch., 323. 
 Miltenberger v. Logansport Rail- 88 Sanders v. Lord Lisle, Ir. Rep., 
 way Co., 106 U. S., 286, 1 Sup. Ct. 4 Eq., 43. 
 
 Rep., 140. And where a second 89 Agra & Masterman's Bank v. 
 
 mortgagee has procured the appoint- Barry, Ir. Rep., 3 Eq., 443 ; Lanauze 
 
 ment of a receiver of the rents and v. Belfast, Holy wood & Bangor R. 
 
 profits in an action to which the Co., id., 454. But see Beverley v. 
 
 first mortgagee was not a party, Brooke, 4 Grat., 187. 
 and afterward the first mortgagee
 
 CHAP. XV.] MORTGAGES. 841 
 
 this course is pursued, the incumbrancer upon whose applica- 
 tion the receiver was originally appointed is entitled to have the 
 rents received applied in satisfaction of his demarfd, irrespective 
 of any question of priority, since such rents are realized by his 
 superior diligence. Hence the court will refuse to direct the 
 receiver already appointed to pay out of the rents and profits 
 the arrears due to the mortgagee or incumbrancer who has not 
 yet filed his bill or obtained an order extending the receiver for 
 his protection, since such order would deprive the mortgagee 
 first obtaining a receiver of all benefit or advantage gained by 
 his diligence.^^ But when the receiver is appointed in a suit to 
 foreclose the first mortgage, the second mortgagee being a 
 party, and the first mortgage is satisfied out of the proceeds of 
 the foreclosure sale, leaving a surplus which is applied to the 
 payment of the second mortgage, if such surplus is insufficient 
 to pay the second mortgage in full, resort may be had for the 
 deficiency to the rents collected by the receiver. In such case, 
 the first mortgagee having procured the receiver and having the 
 right to satisfy his debt, either out of the proceeds of sale or 
 out of the rents collected by the receiver, if he elects to take 
 the proceeds of sale, the second mortgagee is entitled to be sub- 
 rogated to the rents. ^1 So where the mortgaged property is 
 sold for only enough to satisfy the first mortgage and a de- 
 ficiency decree has been entered in favor of the junior mort- 
 gagee and it appears that the property is insufficient security 
 and the mortgagor is insolvent, the junior mortgagee is en- 
 titled to a receiver of the rents and profits during the period of 
 redemption, and the relief will be granted in such case although 
 the second mortgage does not expressly pledge the rents and 
 profits.92 And where the junior of three mortgagees is in law- 
 ful possession of the mortgaged premises and is receiving the 
 
 90 Sanders v. Lord Lisle, Ir. Rep., 92 Roach v. Glos, 181 111., 440, 54 
 4 Eq., 43; Ranney v. Peyser, 83 N. N. E., 1022. 
 
 Y., L 
 
 91 Keogh V. McManus, 34 Hun, 
 521.
 
 842 RECEIVERS. [chap. XV. 
 
 rents therefrom during the period of redemption from a sale 
 in satisfaction of the first mortgage indebtedness, and is after- 
 ward deprived of such possession by the improper appointment 
 of a receiver made at the instance of the second mortgagee, 
 such junior mortgagee is entitled, as against such second mort- 
 gagee, to the net rentals collected by the receiver during the 
 period of his appointment.^^ Sq when the first mortgagee files 
 a bill to foreclose against the mortgagor and a second mort- 
 gagee, and the first mortgage is decreed to be released and dis- 
 charged, and a sale of the premises in satisfaction of the second 
 mortgage proves insufficient by more than the amount of the 
 rents collected by the receiver to discharge the second mortgage, 
 such rents should be paid to the second mortgagee, rather than 
 to the mortgagor.^'* But the rule as thus announced as to the 
 right of a junior mortgagee to a receiver of the rents and 
 profits applies only where the holder of the prior mortgage is 
 not a party to the proceeding brought by the junior mortgagee 
 and where the order appointing the receiver is for the sole bene- 
 fit of the junior mortgagee. Where, therefore, the appointment 
 is made upon the application of a junior mortgagee in an action 
 to which all the prior mortgagees are made defendants, and the 
 appointment is not limited to or made in behalf of the junior 
 mortgagee, but is general in its nature, the fund collected by 
 the receiver is applicable to the payment of the different mort- 
 gages in the order of their priority.^^ But where the receiver 
 is appointed at the instance of the junior mortgagee in a pro- 
 ceeding to which the first mortgagee is a party defendant but 
 the appointment is expressly limited to the use and benefit of the 
 plaintiff, the latter is entitled to the rents and profits until the 
 first mortgagee pursues the proper course for the enforcement 
 of his rights. ^^ And where a receiver has been appointed to 
 
 93 Ruprecht v. Muhlke, 225 111., St., 682 ; Cross v. Will County Natl. 
 18a 80 N. E., 106. Bank, 177 111., 2,i, 52 N. E,, 322. 
 
 94 Hitz V. Jenks, 123 U. S., 297, 96 Anderson v. Matthews, 8 Wyo., 
 8 Sup. Ct. Rep., 143. 513, 58 Pac, 898. 
 
 95 Williamson v. Gerlach, 41 Ohio
 
 CHAP. XV.] MORTGAGES. 843 
 
 collect the rents and profits for the benefit of the junior mortga- 
 gee, the senior mortgagee who is a party to the suit and who 
 does not object to the receivership for the benefit of the junior 
 mortgagee, can not, after a sale and deficiency, have the order 
 so modified as to secure to himself the benefit of the rents and 
 profits collected under such order.97 And where one division 
 of a railroad which has been in the possession of a receiver has 
 been sold at a foreclosure sale subject to the lien of a senior 
 mortgage and afterwards a bill is filed to foreclose the latter 
 mortgage and the former receiver is continued in possession 
 under the latter proceeding, the purchaser at the sale who makes 
 his bid subject to the prior mortgage is not entitled to the net 
 income of the division which has accumulated in the hands of 
 the receiver subsequently to his appointment in the second suit 
 but such income passes to the senior mortgage bondholders 
 under the conditions of their mortgage.^^ 
 
 § 689. Contrary doctrine in Virginia. Notwithstanding 
 the rule as stated in the preceding section, as to the right to 
 rents in the hands of a receiver, where there are different mort- 
 gagees, is supported by the clear weight of authority, a some- 
 what different doctrine has been established in Virginia. And 
 it is there held, as between different incumbrancers of the same 
 property, whose rights are conflicting and who are seeking to 
 gain priority by different suits in the same court, that the ap- 
 pointment of a receiver in behalf of the plaintiff in one of the 
 suits is for the benefit of all parties in interest ; and that when 
 the plaintiff in another suit succeeds in maintaining his priority 
 of right, he is entitled to a decree for an account of the rents 
 and proceeds in the hands of the receiver appointed in the other 
 action, and an appropriation of so much thereof as may be 
 necessary for the satisfaction of his debt. The appointment of 
 a receiver, as against the mortgagor and a prior mortgagee, 
 is also held to be in the nature of an injunction defeating the 
 
 97 Goddard v. Clarke, 81 Neb., Trust Co., 24 C. C. A., 500, 79 Fed., 
 373, 116 N. W., 41. 215, 52 U. S. App., 79. 
 
 ®8 Downs V. Farmers' Loan &
 
 844 RECEIVERS. [chap. XV. 
 
 mortgag^ee's right of election to take possession of the property, 
 so that he can not afterwards take possession if he would, the 
 court having taken possession for him, and maintaining it until 
 his right is determined. And this is held to be equally true, 
 whether his right be impeached in an adverse suit brought 
 against him, or if, not being a party to the litigation, he obtains 
 leave to be examined therein pro inter esse siio. But the two 
 cases are regarded as distinguishable in this, that in the former 
 he has only to await the decision of the controversy, and re- 
 ceive the proceeds from the hands of the court; while in the 
 latter it is his duty to come forward within a reasonable time, 
 since if he suffers the fund to be paid over to the mortgagor or 
 to subsequent incumbrancers, he will be too late.^^ The Vir- 
 ginia doctrine, however, while ingenious in theory, lacks the 
 support of authority, and is clearly opposed to the English 
 rule, that the appointment of a receiver in behalf of a junior 
 incumbrancer is always without prejudice to the rights of an 
 elder mortgagee.^ 
 
 § 690. Prior mortgagee denied receiver of rents which 
 have been assigned by mortgagor to junior mortgagee. 
 It has already been shown, that the courts of New Jersey have 
 always been averse to extending the aid of receivers to mort- 
 gagees, when the mortgagor is in possession of the premises, 
 and the usual grounds of insolvency of the mortgagor and in- 
 adequacy of the security, upon which the relief is generally 
 based, are not recognized in that state as sufficient cause for 
 a receiver.2 It is also held, in that state, that as between prior 
 and subsequent mortgagees of the same premises, upon a bill 
 by the piior mortgagee for a foreclosure, the court will not 
 grant a receiver of the rents and profits of the premises, when 
 
 99 Beverley z;. Brooke, 4 Grat., 187. Stockt., 39; Frisbie v. Bateman, 9 
 
 1 See Bryan v. Cormick, 1 Cox, C. E. Green, 28, approving and fol- 
 422; Dalmer v. Dashwood, 2 Cox, lowing Best v. Schermier, 2 Halst. 
 378; Tanfield v. Irvine, 2 Russ., 149. Ch., 154. 
 
 2 Cortleyeu v. Hathaway, 3
 
 CHAP. XV.] MORTGAGES. 845 
 
 they have been assigned by the mortgagor to the junior mort- 
 gagee as additional security for his indebtedness.^ 
 
 § 691. Receiver allowed on bill by junior mortgagee for 
 foreclosure and to compel prior mortgagee to exhaust an- 
 other mortgage; tenants required to attorn to receiver. 
 Upon a bill for a foreclosure by a junior mortgagee against 
 the mortgagor and a prior mortgagee, the bill also seeking to 
 compel the prior mortgage to first exhaust another mortgage 
 held by him upon other property for the same indebtedness, 
 it is proper that a receiver should be had to collect the rents, 
 upon satisfying the court of the insufficiency of the security. 
 And this course is deemed preferable to that of compelling the 
 first mortgagee to bring ejectment to obtain possession, to be 
 followed by an action for the mesne profits. It is also held, that, 
 in such a case, it is proper to appoint the receiver upon motion 
 of the defendant, the first mortgagee, as against his co-defend- 
 ant, the mortgagor. And, upon appointing a receiver of mort- 
 gaged premises, the court has the right to compel the tenants 
 of the premises to attorn to the receiver.* So when a second 
 mortgagee obtains a decree of foreclosure, but a sale of the 
 property is stayed at the suit of a third person assailing the title 
 to the mortgage, such mortgagee is entitled to a receiver until 
 the determination of the controversy, the mortgagor in posses- 
 sion being insolvent, the taxes and insurance being unpaid, and 
 there being doubt as to the adequacy of the security. ^ But if 
 the rents are being applied in payment of the mortgage indebt- 
 edness, taxes, insurance and care of the property, a receiver wall 
 not be allowed at the suit of junior mortgagees, the senior 
 mortgagees being content with the management of the property, 
 
 3 Best V. Schermier, 2 Halst. Ch., gagor was entitled to the rents 
 
 154. And the chancellor observed while in possession by his tenants. 
 
 that he had uniformly declined ^ Henshaw v. Wells, 9 Humph., 
 
 applications for a receiver of rents 568. 
 
 on the filing of foreclosure bills, 5 Warwick v. Hammell, 32 N. J. 
 
 upon the ground that the mort- Eq., 427.
 
 846 RECEIVERS. [chap. XV. 
 
 and not desiring a receiver, even though it is charged that the 
 security is inadequate and the mortgagor insolvent.^ 
 
 § 691(7. Consolidation of actions to foreclose difEerent 
 mortgages. Where a receiver has already been appointed 
 in an action brought to foreclose a first mortgage and subse- 
 quently a bill is filed for the foreclosure of a junior incum- 
 brance, the proper practice is to extend the first receivership 
 to the second proceeding and have the two causes consoli- 
 dated.7 
 
 6 Myton V. Davenport, 51 Iowa, ply the rents in payment of ground 
 
 583, 2 N. W., 402. As to the duty rent and taxes upon the premises, 
 
 of a receiver, appointed in a su't see Ranney v. Peyser, 20 Hun, 11. 
 
 for the foreclosure of a junior mort- 7 Lloyd v. Chesapeake, O. & S. 
 
 gage of a leasehold interest, to ap- W. R. Co., 65 Fed., 351.
 
 CHAPTER XVI. 
 
 OF RECEIVERS IN CASES OF TRUSTS. 
 
 I. Principles Governing the Relief § 692 
 
 II. Receh'ers Over Executors and Administrators 706 
 
 III. Receivers Over Estates of Infants 725 
 
 IV. Receivers Over Estates of Lunatics 7Z2> 
 
 I, Principles Governing the Relief. 
 
 § 692. Principles referred to general jurisdiction of equity over trusts; 
 scope of the present chapter. 
 
 693. Equity averse to displacing trustee under express trust. 
 
 694. Testamentary trusts; relief granted when trustees under will 
 
 refuse to act. 
 
 695. Court will only consider probability of trust estate being wast- 
 
 ed; bad habits and unfitness of trustee, when not sufficient 
 ground. 
 
 696. Trust for management of public lands vested in state officers; 
 
 court reluctant to interfere. 
 
 697. Receiver appointed pendente lite in action to remove trustee for 
 
 unfitness; fraud; misconduct; breach of trust. 
 
 698. Mingling funds by trustee, when not sufficient ground; relief 
 
 not granted because productive of no harm. 
 
 699. Receiver granted heir-at-law over lands fraudulently conveyed 
 
 by trustee. 
 
 700. When devisee of personal property entitled to relief as against 
 
 husband of a deceased wife. 
 
 701. Litigation to revoke probate of will no ground for receiver. 
 
 702. Refused as against trustee of persons interested under contract 
 
 for public works. 
 
 703. Courts averse to appointing as receivers persons occupying 
 
 fiduciary relations; when departure from rule permissible. 
 
 704. When management of estate transferred from receiver to new 
 
 trustees. 
 
 705. When granted over pension. 
 
 § 692. Principles referred to general jurisdiction of 
 equity over trusts; scope of the present chapter. The ap- 
 pointment of receivers is frequently necessary in cases of trusts, 
 
 847
 
 848 RECEIVERS. [chap. XVI. 
 
 either express or implied, as against trustees and persons oc- 
 cupying fiduciary relations, and the principles governing this 
 branch of the subject may be appropriately referred to the 
 general jurisdiction of courts of equity over trusts. Strictly 
 speaking, many of the cases in which relief is granted by ap- 
 pointing a receiver over corporations are dependent to a con- 
 siderable degree upon the doctrine of trusts, the officers of a 
 corporation occupying a fiduciary relation toward its sharehold- 
 ers and creditors, and the abuse of their trust constituting a 
 frequent ground for the interference of equity by a receiver. 
 The principles governing the relief, in such cases, have been 
 elsewhere treated,^ and it is proposed, in the present chapter, 
 to consider the subject only in its application to cases of express 
 trust, such as those created under wills, cases of executors and 
 administrators, of infancy and of lunacy. 
 
 § 693. Equity averse to displacing trustee under express 
 trust. It may properly be observed, at the outset, that 
 the courts are averse to the displacement by a receiver of a 
 trustee under an express trust, unless for good cause shown. ^ 
 And equity will not, at the instance of one of several parties 
 interested in an estate, displace a competent trustee in whom the 
 estate has been vested by a testator, and take the possession 
 from him and place it in the hands of a receiver, unless he wil- 
 fully or ignorantly permits the property to be placed in a condi- 
 tion of insecurity, which might be prevented by due care.^ So 
 when a trustee has been in possession of the property in con- 
 troversy in the administration of his trust for many years, upon 
 a bill for his removal the court will not appoint a receiver be- 
 fore answer when it is not shown that there is any great or 
 impending danger to the property or fund, or that plaintiff will 
 
 1 See chapter X, ante. 3 Barkley v. Lord Reay, 2 Hare, 
 
 2 Barkley v. Lord Reay, 2 Hare, 306. And see Poythress v. Poy- 
 306; Hatcher v. Massey, 66 Ca., 66; thress, 16 Ga., 406; Orphan Asylum 
 Latham v. Chafee, 7 Fed., 525 ; v. McCartee, Hopk. Ch., 429. 
 Etowah Mining Co. v. Wills Valley 
 
 M. & M. Co., 106 Ala., 492, 17 So., 
 522.
 
 CHAP. XVI.] TRUSTS. 849 
 
 suffer irreparable loss by delay.^ And in an action to set aside 
 an assignment of his goods by a debtor to a trustee for the ben- 
 efit of creditors, upon the ground of fraud, a receiver will not be 
 appointed over the property held by such trustee pending a de- 
 termination as to the good faith of such assignment, the fraud 
 being denied and the trustee being solvent and able to respond 
 to any judgment v^hich may be recovered against him.^ But 
 if, in such a case, the defendants are insolvent, and there is 
 probable ground for believing that the goods will be fraudu- 
 lently disposed of before a hearing upon the merits, a receiver 
 may be allowed, if plaintiff shows a reasonable probability that 
 he will ultimately succeed in his action.^ 
 
 § 694. Testamentary trusts; relief granted when trus- 
 tees under will refuse to act. When a trust created by a 
 will, to receive the rents and profits of real estate belonging to 
 the testator, devolves upon a court of chancery, there being no 
 person to manage the trust, one of the trustees having died and 
 the others refusing to act, a proper case is presented for the ap- 
 pointment of a receiver to take charge of the rents and profits 
 of the realty, upon a bill filed by an heir-at-law and devisee 
 under the will to have the question of its validity and of his 
 rights thereunder determined. Under such circumstances, a 
 receiver becomes necessary for the preservation of the rents and 
 profits, in order that a proper decree may be made as to their 
 disposition upon the final determination of the suitJ And 
 when property, real and personal, has been devised to trustees, 
 to be held upon certain trusts declared in the will, and some of 
 the trustees refuse to act, a receiver may be appointed when all 
 parties in interest are before the court and consent to the ap- 
 pointment.^ 
 
 § 695. Court will only consider probability of trust es- 
 tate being wasted; bad habits and unfitness of trustee, 
 when not sufficient ground. Upon a bill filed by the 
 
 4 Latham v. Chafee, 7 Fed., 525. 7 McCosker v. Brady, 1 Barb. Ch., 
 
 5 Levenson v. Elson, 88 N. C, 182. 329. 
 
 6 Ellett V. Newman, 92 N. C, 519. 8 Brodie v. Barry, 3 Moriv., 695. 
 
 Receivers — 54.
 
 850 RECEIVERS. [chap. XVI. 
 
 cestui que trust against a testamentary trustee, seeking an ac- 
 count of his trust and a receiver to take charge of the property 
 ad interim, the only ground for rehef which the court will con- 
 sider is, whether the trust estate is likely to be wasted before the 
 termination of the litigation. And when this is not shown, the 
 alleged bad habits of the trustee, and his unfitness to execute 
 the trust devolved upon him by the testator's will, are not suffi- 
 cient to warrant a court of equity in the exercise of its extra- 
 ordinary powers by the appointment of a receiver.^ 
 
 § 696. Trust for management of public lands vested in 
 state officers; court reluctant to interfere. In the case of 
 a trust created by an act of legislature and vested in certain 
 public officers, who hold their trust ex officio, a portion of the 
 duties required of them being of a public nature, equity is ex- 
 tremely averse to interfering by a receiver, and it must be a 
 very strong case which will justify the court in taking the 
 property oyt of the control in which it has been placed by the 
 legislature, and putting it into the hands of its own officers. 
 Thus, when the legislature of a state has vested certain public 
 lands belonging to the state in the governor and other state 
 officers as trustees, to constitute an internal improvement fund, 
 and to serve as a guaranty of bonds to be issued by certain rail- 
 way companies, and the trustees are authorized to fix the prices 
 of the lands, and to make provision for their drainage, settle- 
 ment and cultivation, the court will not interfere by a receiver 
 except for the most cogent reasons, nor until every other reme- 
 dy has been tried in vain.^^ 
 
 9 Poythress v. Poythress, 16 Ga., the property out of their hands and 
 406. put it into the hands of its own 
 
 10 Vose V. Reed, 1 Woods, 647. officers. The legislature has seen 
 Mr. Justice Bradley observes, p. 651, fit to intrust the chief officers of 
 as follows : "Now these public and the state with these important du- 
 political objects of the trust make ties, and it would show a great dis- 
 it extremely fitting th?,t the chief respect to this co-ordinate branch 
 executive officers of the state should of the government for the judiciary, 
 administer the fund. And it must on light grounds, to displace these 
 be a very strong case, indeed, officers from the trust, and to put 
 which will induce the court to take appointees of its own in their stead.
 
 CHAP, XVI.] 
 
 TRUSTS. 
 
 851 
 
 § 697. Receiver appointed pendente lite in action to re- 
 move trustee for unfitness; fraud; misconduct; breach of 
 trust. Notwithstanding the aversion already indicated, 
 which courts of equity entertain toward the appointment of re- 
 ceivers to displace trustees except for good cause shown, it has 
 been held, when the object of the action was the removal of a 
 trustee from his trust on the ground of unfitness, that the court 
 might properly appoint a receiver pendente lite, the propriety 
 of the relief, in such a case, being regarded as a matter resting 
 in the discretion of the court to which the application was ad- 
 dressed.ii And when land is devised to a trustee, to hold and 
 manage it and to pay the rents and income to certain benefi- 
 ciaries, the insolvency of the trustee and his misapplication of 
 the proceeds of sales of the property, and his failure to apply 
 the income in accordance with the terms of the trust, and his ap- 
 
 If they are guilty of breach of 
 duty they can be enjoined; they 
 can be made personally responsible; 
 the fund can be followed in the 
 hands of persons getting hold of it 
 in a fraudulent manner. It would 
 be very strange if the courts could 
 not in some way secure the rights 
 of parties having an interest in the 
 fund, without removing from the 
 trust those official personages to 
 whose administration it has been 
 intrusted by the legislature. The 
 court will not shut its eyes to the 
 fact that these officers are con- 
 stantly being changed by the suf- 
 frages of the people of the state and 
 the constituted power of appoint- 
 ment; and it would be very incon- 
 venient and awkward for the court, 
 by the appointment of a receiver, to 
 withhold the property from the 
 possession and management of new 
 state officers, fresh from the confi- 
 dence of the people, and against 
 whom no charges of incapacity or 
 
 want of integrity have been made. 
 To my mind it seems to be a case 
 in which, if a receiver can be ap- 
 pointed at all, the appointment 
 ought not to be made until every 
 other remedy has been tried in 
 vain. Besides, looking at the pecu- 
 liar and important duties attaching 
 to the trust, how could a receiver, 
 how could a court, without the 
 greatest embarrassment, adminis- 
 ter the trust? How could the court 
 take cognizance of the require- 
 ments of a vast political territory 
 in reference to drainage, develop- 
 ment, pre-emption and population? 
 It would be a Herculean task for a 
 court, or the receiver of a court, to 
 perform. I do not feel that I ought 
 to take the trust fund out of the 
 hands of the state officers, in this 
 case, and place it in the hands of a 
 receiver. The motion for a receiver 
 is therefore denied." 
 
 11 Janeway v. Green, cited in note 
 to Darrow v. Lee, 16 Ab. Pr, 215.
 
 852 RECEIVERS. [chap. XVI. 
 
 propriation of such income to his own use, constitute sufficient 
 ground for an injunction and a receiver in an action by the 
 beneficiaries for an accounting.i^ So the failure of trustees, 
 to whom leasehold property is devised upon certain specified 
 trusts, to keep the premises in proper repair, and thereby to 
 prevent a forfeiture of the leasehold, has been held to be suffi- 
 cient ground for appointing a receiver of the rents for the pur- 
 pose of applying them to needed repairs. ^^ And when a trustee 
 violates the express conditions of his trust by loaning funds 
 contrary to the provisions of the instrument by which the trust 
 is defined, and by loaning a portion of such funds to a bankmg 
 firm of which he is a member, and which soon afterward be- 
 comes insolvent, sufficient ground is afforded to justify the ap- 
 pointment of a receiver. Nor can the conduct of the trustee, in 
 such case, be justified by the fact that he took securities for the 
 loan which he regarded as good and sufficient at the time.^* So 
 when lumber is sold to be used in a building upon particular 
 premises, the seller being ignorant that such premises are held 
 in trust by the purchaser, but believing them to be his indi- 
 vidual property, and the building erected with such lumber 
 proves beneficial to the trust estate, adding to its permanent 
 value and increasing its rentals, if the trustee is insolvent, a re- 
 ceiver may be appointed to collect the rents, nothing having 
 been paid for the material or for the erection of the building.^^ 
 So the withholding of trust funds by defendant is sufficient 
 ground for a receiver upon a bill by the beneficiary for an ac- 
 counting as to such funds. 16 And under the Supreme Court of 
 Judicature Act in England, when a defaulting trustee has been 
 ordered to pay money into court which is due from him in 
 respect to an alleged breach of trust, and he has gone beyond the 
 jurisdiction of the court, so that the order can not be enforced 
 
 12 Albright v. Albright, 91 N. C, 15 Malone v. Buice, 60 Ga., 152. 
 220. 16 Hagenbeck v. Hagenbeck Z. A. 
 
 13 In re Fowler, 16 Ch. D.. 723. Co., 59 Fed., 14. 
 
 14 North Carolina R. Co. v. Wil- 
 son, 81 N. C, 223.
 
 CHAP. XVI.] TRUSTS. 853 
 
 by attachment, the appointment of a receiver over his property 
 is an appropriate remedy for enforcing the order.^'^ 
 
 § 698. Mingling funds by trustee, when not sufficient 
 ground ; relief not granted because productive of no harm. 
 Where by his will a testator devises real estate to trustees for 
 the purpose of carrying out the provisions of the will, it is not 
 sufficient ground for appointing a receiver to take the property 
 from the custody of the trustees, that one of them has mingled 
 the trust fund with his own private funds, when it is not al- 
 leged that the fund is in danger, and when it is not denied that 
 he keeps a proper account of the fund. And the court will not, 
 in such a case, appoint a receiver merely upon the ground that 
 it can be productive of no harm.^^ i 
 
 § 699. Receiver granted heir-at-law over lands fraudu- 
 lently conveyed by trustee. Upon a bill by an heir-at-law 
 as cestui que trust, against a trustee and others to whom the 
 trustee has conveyed real estate in which the plaintiff claims an 
 equitable interest, the object of the bill being to set aside the 
 conveyance as a fraud upon the cestui que trust, it is proper for 
 the court to decree that defendants convey the property to a re- 
 ceiver to be appointed by the court, and that such receiver be 
 authorized to sell and convey the lands, and out of the proceeds 
 to pay the amount due to the plaintiff under a former decree 
 against the trustee. And while such a remedy may justly be 
 regarded as a summary one, it is yet a proper exercise of the 
 discretionary powers of a court of equity as against a wrong- 
 doer, and the court will not compel the cestui que trust to resort 
 to a sale by execution.!^ 
 
 § 700. When devisee of personal property entitled to 
 relief as against husband of a deceased wife. When per- 
 sonal property has been bequeathed to defendant's wife, with 
 an executory devise over to plaintiff upon the death of defend- 
 
 17 /n re Coney, 29 Ch. D., 993. 18 Orphan Asylum v. McCartce, 
 
 See, also, Stanger Leathes v. Stan- Hopk. Ch., 429. 
 
 ger Leathes, Weekly Notes, 1882, 19 Gunn v. Blair, 9 Wis., 352. 
 p. 71.
 
 854 RECEIVERS. [chap. XVI. 
 
 ant's wife without issue, and upon such death defendant, the 
 husband, takes possession of the property, the devisee is en- 
 titled to a receiver, in an action for an accounting and to re- 
 cover possession of the property, upon showing that the de- 
 fendant in possession is irresponsible, having conveyed away 
 his real estate and having no property subject to execution. 
 Under such circumstances, the danger to the fund in contro- 
 versy is regarded as sufficient ground for the interposition of 
 a court of equity pendente lite.^^ 
 
 § 701. Litigation to revoke probate of will no ground 
 for receiver. While there are frequent instances where 
 the English Court of Chancery allowed receivers, pending liti- 
 gation as to the probate of a will, when the relief was necessary 
 for the preservation of the estate, the fact that, after a will has 
 been duly admitted to probate, litigation is instituted to recall 
 or revoke the probate, does not of itself constitute sufficient 
 ground to justify a court of equity in interfering by a receiver 
 with the possession of the parties entitled thereto under the 
 probate.21 
 
 § 702. Refused as against trustee of persons interested 
 under contract for public works. Where there are differ- 
 ent parties in interest in the profits of a contract for the per- 
 formance of certain public work, and a trustee has been ap- 
 pointed to receive the money due thereon and to pay it over 
 to the parties in interest, a receiver will not be appointed to 
 take charge of the contract upon the application of one only 
 of the parties, who holds but a small interest, when it is mani- 
 fest to the court that the appointment may result in destroy- 
 ing the value of the contract, and when no misconduct is shown 
 against the trustee.^^ 
 
 20Ladd V. Harvey, 21 N. H., 514. 21 Newton v. Ricketts, 10 Beav., 
 
 As to the circumstances which will 525. 
 
 justify a court in appointing a re- 22 Devlin v. Hope, 16 Ab. Pr., 
 
 ceiver over real estate held in trust 314. 
 for a wife who is entitled to a por- 
 tion of the annual income there- 
 from, see Robert v. Tift, 60 Ga., 566,
 
 CHAP. XVI.] TRUSTS. 855 
 
 § 703. Courts averse to appointing as receivers persons 
 occupying fiduciary relations; when departure from rule 
 permissible. Courts of equity have always been extremely 
 averse to the appointment as receivers of persons occupying 
 fiduciary relations toward the property or estate forming the 
 subject-matter of the receivership, and as a general rule a trus- 
 tee of an estate will not be appointed receiver for its manage- 
 ment.23 fhg reason for the rule is found in the fact that the 
 court- expects a trustee to watch the proceedings with an ad- 
 verse eye, to see that the receiver does his duty.24 Where, 
 however, considering the trustee's knowledge of the estate, 
 it seems advisable and for the best interests of the estate that 
 he should be appointed, a departure from the rule is allowable, 
 but only upon condition that he shall receive no compensation 
 for his services as receiver.^s 
 
 § 704. When management of estate transferred from re- 
 ceiver to new trustees. When real estate has been de- 
 vised to trustees upon certain specified trusts, and a receiver of 
 the estate is appointed upon the ground of their misconduct 
 and incapacity, it is proper, upon the appointment of new 
 trustees, that the management of the estate should be trans- 
 ferred from the receiver to such new trustees, and the court 
 will so order, if satisfied that it may be done without injury 
 to the legatees under the will, and when it is apparent that it 
 will result to the advantage of the estate by doing away with 
 the expense of the receivership.-^ 
 
 § 705. When granted over pension. A receiver has been 
 appointed over a government pension, which had been paid 
 through a trustee, when the trustee had refused payment, and 
 had put a stop to the pension and had then gone beyond the 
 
 23 V. JoHand, 8 Ves., 72; Sykes v. Hastings, 11 Ves., 363. 
 
 Sykes V. Hastings, U Ves., 363; See. also, Newport v. Bury, 23 
 
 Sutton V. Jones, 15 Ves., 584. Beav.. 30. 
 
 24 Sykes z;. Hastings, 11 Ves., 363. 26 Bainbrigge v. Blair, 3 Beav., 
 
 25 Hibbert v. Jenkins, cited in 421.
 
 856 RECEIVERS. [chap. XVI. 
 
 jurisdiction of the court. 2" And a receiver has been allowed 
 in behalf of a judgment creditor over a civil-service pension 
 due to the debtor in monthly instalments.^^ And a receiver 
 has been appointed by way of equitable execution upon be- 
 half of a judgment creditor over the pension of a retired 
 officer of the Royal Irish Constabulary.29 But a receiver 
 was refused over a pension granted by the government to de- 
 fendant, when he had conveyed his interest therein, with oth- 
 er property, to secure an annuitant.^^ 
 
 2" Noad V. Backhouse, 2 Y. & C. 30 Davis v. Duke of Marlborough, 
 
 C. C, 529. 1 Swans., 74; S. C, 2 Wils. Ch., 
 
 28 Molony v. Cruise, 30 L. R., In, 130. See S. C, 2 Swans., 113. 
 99. 
 
 29 Manning v. MuIIins, (1898) 2 
 L. R. Ir., 34.
 
 CHAP. XVI.] TRUSTS. 857 
 
 II. Receivers Over Executors and Administrators. 
 
 § 706. Courts averse to interference; doctrine of quia timet; imminent 
 danger must be shown. 
 
 707. Executor not displaced upon slight grounds; nor upon charges 
 
 made on information and belief; must be shown to be irre- 
 sponsible. 
 
 708. Serious waste and mismanagement ground for relief; inca- 
 
 pacity of husband of executrix; breach of trust. 
 
 709. Receiver not allowed because of executor's poverty; nor when 
 
 charges of bill are denied by answer. 
 
 710. Misconduct in addition to insolvency ground for relief; re- 
 
 ceiver may act with solvent executor; executors required to 
 surrender books and assets. 
 
 711. Actual bankruptcy ground for receiver. 
 
 712. Removal of executor from state sufficient cause. 
 
 713. Receiver allowed by English Court of Chancery over foreign 
 
 executors or estates. 
 
 714. Receiver granted in England pending litigation in ecclesiasti- 
 
 cal court concerning probate or administration. 
 
 715. When receiver allowed judgment creditors of estate as against 
 
 executor. 
 
 716. Not allowed when it would interfere with administration. 
 
 717. Receiver of administratrix in personal capacity not entitled to 
 
 rents due in representative capacity; action to recover such 
 rents. 
 
 718. Death of one executor and refusal of another to act, ground 
 
 for receiver; misunderstanding between executors not 
 ground. 
 
 719. Plaintifif equitably interested in real estate devised to executors 
 
 may have receiver to effect sale. 
 
 720. Court will not look into executor's account rendered to probate 
 
 court. 
 
 721. Surety on administrator's bond can not have receiver on default 
 
 of administrator to secure him; surety for intestate. 
 
 722. When receiver allowed in behalf of ward against administrator. 
 
 723. On removal of receiver from country, executors may again act. 
 
 724. Appointment of receiver does not remove executor. 
 
 § 706. Courts averse to interference; doctrine of quia 
 timet; imminent danger must be shown. The jurisdiction 
 of equity by the appointment of receivers over executors and 
 administrators, upon the ground of an abuse of their trust, 
 although well established, is nevertheless exercised with ex-
 
 858 RECEIVERS. [chap. XVI. 
 
 treme caution, and the courts are exceedingly averse to grant- 
 ing the reHef unless in pressing cases, since it is for the tes- 
 tator to say in whom the management of his estate shall be 
 vested after his decease.^! And while courts of equity have 
 unquestioned power, in a proper case, to take the adminis- 
 tration of the estate of a decedent out of the hands of his 
 administrator or executor, and to manage it by a receiver, 
 this summary relief should only be granted in cases of mani- 
 fest danger of loss, destruction or material injury to the es- 
 tate. It is only under extraordinary circumstances that equity 
 will thus wrest the administration from the hands of the legal 
 representative, and place it in the hands of a receiver, and the 
 interference can be justified only by evidence of gross mis- 
 conduct or personal disability.^^ And the principle on which 
 the relief is granted, in this class of cases, is said to rest on 
 the doctrine of quia timet, the interference being justified for 
 the prevention of a future and probable injury, and not to 
 redrsss a grievance which has already occurred.^^ It is, 
 therefore, necessary that a strong case should be shown of 
 imminent danger to the estate unless a receiver is appointed. 
 And when the bill fails to show any immediate danger of 
 waste, or of any wrong which the probate court may not ef- 
 fectually prevent, and the charges of the bill are wanting in 
 certainty, a court of equity will not interpose its extraordi- 
 nary aid by appointing a receiver.34 
 
 "1 See Powell z>. Quinn, 49 Ga., Dougherty v. McDougald, 10 Ga., 
 
 523; Harrup v. Winslet, 37 Ga.,655; 121; Brooker v. Brooker, 3 Sm. & 
 
 Dougherty v. McDougald, 10 Ga., G., 475. See, also, Shannon v. 
 
 121 ; Stairley v. Rabe, McMul. Eq., Davis. 64 Miss., 717, 2 So., 240. 
 
 22; Brooker v. Brooker, 3 Sm. & 33 Dougherty v. McDougald, 10 
 
 G., 475; Hervey v. Fitzpatrick, Ga., 121. See, also, Perrin v. Lep- 
 
 Kay, 421 ; Middleton v. Dodswell, per, 56 Mich.. 351, 23 N. W., 39. 
 
 13 Ves., 266; Kendall v. Kendall, 1 34 Powell v. Quinn, 49 Ga., 523; 
 
 Hare, 152; Steele v. Cobham, L. K., Wanneker v. Hitchcock, 38 Fed., 
 
 1 Ch. App., 325 ; Haines v. Carpen- 383. In Powell v. Quinn, 49 Ga., 
 
 ter, 1 Woods, 262; West v. Mercer, 523, McCay, J., observes, p. 529: 
 
 130 Ga., 357, 60 S. E., 859. "It ought to be a very strong case 
 
 32 Harrup v. Winslet, 37 Ga., 655 ; indeed to justify a chancellor in
 
 CHAP. XVI.] TRUSTS. 859 
 
 § 707. Executor not displaced upon slight grounds ; nor 
 upon charges made on information and belief; must be 
 shown to be irresponsible. An executor, duly appointed 
 by the will of a testator, who has qualified in the proper court 
 and given bond for the faithful performance of his duties, 
 and who has entered upon the performance of his trust and 
 is in possession of the estate, will not be displaced upon slight 
 grounds, and a strong case must be made out to warrant 
 equity in interfering if the executor is willing to act. It does 
 not follow, because a suit is instituted against him by a per- 
 son claiming an interest in the estate, that the trust created 
 by the testator is to be set aside. And when a devisee, claim- 
 ing an interest in the estate, files a bill against the executor, 
 to enforce the trusts of the will, and seeks a receiver upon the 
 ground of the executor's incompetency and mismanagement, 
 and alleges that he is endeavoring to defeat the bequest to 
 plaintiff, and that he has confederated with others to insti- 
 tute fictitious suits against the estate to swallow up the assets, 
 the court will not appoint a receiver if these charges are made 
 only upon information and belief, and are not supported by 
 
 appointing a receiver and taking or of any wrong which the ordi- 
 
 the assets of an estate out of the nary may not effectually grapple 
 
 hands of an administrator duly ap- with and prevent. The charges in 
 
 pointed by the court of ordinary. the bill are wanting in certainty, 
 
 The ordinary has constitutional ju- and it would be dangerous to use 
 
 risdiction over the subject-matter, the extraordinary power of ap- 
 
 and special reasons should appear pointing a receiver on such allega- 
 
 why that jurisdiction does not an- tions. Fraud is charged, and mis- 
 
 swer the ends of justice. The or- representation in obtaining the 
 
 dinary may discharge an adminis- letters, but no specification is made, 
 
 trator and appoint another; he no facts detailed. This is entirely 
 
 may require new security, and he too loose and indefinite." But see 
 
 may compel the delinquent admin- Knight v. Knight, 75 Ga., 386. For 
 
 istrator to account and deliver up circumstances which justify the 
 
 the property as well as a court of appointment of a receiver over 
 
 chancery can do it. There is no property which an administrator 
 
 charge in this bill, as far as the as- seeks to administer, the title to 
 
 sets of Mrs. Victoria Quinn's estate which is in another, see Hill v. 
 
 are concerned, that shows any im- Arnold, 79 Ga., 367, 4 S. E., 751. 
 mediate imminent danger of waste,
 
 860 
 
 RECEIVERS. 
 
 [chap. XVI. 
 
 affidavits. And even though a danger to the trust property 
 is estabhshed, that alone will not suffice, but it must also ap- 
 pear that the defendant executor in possession is irresponsible.^^ 
 § 708. Serious waste and mismanagement ground for 
 relief ; incapacity of husband of executrix ; breach of trust. 
 W'hile, as is thus seen, a strong case of abuse of trust or mis- 
 management must be made out to warrant a court of equity 
 in granting a receiver, as against an executor of an estate 
 
 35 Haines v. Carpenter, 1 Woods, 
 262. The principles governing, in 
 such case, are very clearly stated in 
 the opinion of Mr. Justice Woods, 
 as follows, p. 265: "The party in 
 possession of the property for which 
 a receiver is asked is the executor 
 named in the will of the testatrix, 
 who has qualified in the probate 
 court and given bond for the faith- 
 ful discharge of his trust. Under 
 these circumstances, the court 
 should not displace him upon light 
 grounds. And though a suit be in- 
 stituted by a party having an inter- 
 est in the estate, it does not follow 
 that the trust created by the testator 
 is to be set aside. A strong case 
 must be made out to induce the 
 court to dispossess a trustee or ex- 
 ecutor who is willing to act. The 
 grounds upon which this court is 
 asked to dispossess the executor and 
 turn over the property of the suc- 
 cession to a trustee, are that Car- 
 penter, the executor, is unfit and in- 
 competent to manage and success- 
 fully control the estate; that he has 
 only cultivated a part of the land 
 susceptible of cultivation, when, in 
 the opinion of the complainants, all 
 of it should have been cultivated; 
 that he is endeavoring to defeat the 
 bequest to the said Baptist church 
 by depreciating the value of the es- 
 tate, and that he is confederating 
 
 with said Elias S. Dennis to insti- 
 tute fictitious suits against the es- 
 tate, in order to sweep away its 
 assets. These charges are not di- 
 rectly made, but are stated on the 
 information and belief of complain- 
 ants, and they are not supported by 
 a single affidavit to any fact. The 
 application to appoint a receiver 
 must be supported by evidence 
 showing that the appointment is 
 necessary. There is absolutely no 
 testimony to support the applica- 
 tion in this case. It is true that one 
 of the complainants swears to the 
 bill, but in doing so he only swears 
 that he has been informed of and 
 believes certain statements in his 
 bill. This is not evidence, and gives 
 no support to the application. The 
 fact is that the court is asked to 
 appoint a receiver, in this case, on 
 mere rumor, without any proof 
 showing the necessity of the ap- 
 pointment. But even if the fact 
 were established that the trust 
 property was in danger, that, of 
 itself, would not be sufficient. It 
 must be further shown that the 
 party in possession is irresponsible. 
 There is no proof that the executor 
 is irresponsible, or his bond insuffi- 
 cient, nor is there any averment in 
 the bill to that effect. The motion 
 for a receiver must, therefore, be 
 overruled."
 
 CHAP. XVI.] TRUSTS. 861 
 
 designated by the testator's will, yet when the abuse of the 
 trust is manifest, and it is plainly apparent that there have 
 been serious waste and misappropriation of the funds, equity 
 may properly interfere by a receiver.36 Especially is this 
 true when the mismanag-ement is shown not in a single in- 
 stance, but from an habitual course of dealing, involving the 
 property in danger, and when the other executors consent to 
 the appointment. The court, in such case, treats an executor 
 like any other trustee, and will take from his hands the man- 
 agement of the trust if he has been guilty of waste and gross 
 mismanagement. And in such case, the appointment may be 
 made before defendant has answered.^"^ So when, after the 
 death of a testator, his widow becomes executrix under the 
 will, and she afterward marries and intrusts the management 
 of the estate to her husband, who is incapable of properly con- 
 ducting it, and under whose supervision the funds are mis- 
 appropriated, and the estate is involved in debt, an appropriate 
 case is presented for a receiver upon application of the minor 
 heirs of the deceased.^^ And when an executor has, upon his 
 own admission, wasted and misappropriated the trust funds 
 in his hands, and refuses to disclose how and where he has 
 done so, and has permitted a co-executor also to misappro- 
 priate the funds, such a breach of trust is shown as to clearly 
 require the court to take the management of the estate out 
 of the executor's hands by placing it in the hands of a receiver. 
 In such case, the assets of the estate will be delivered to the 
 receiver, and the debts will be paid to him, but this only ex- 
 tends to assets and property within the state and debts due 
 from residents of the state, or secured upon property therein. 39 
 So if the conduct of an administrator is such as to hinder 
 and impede the collection of the debts due to the estate, a re- 
 
 36 Middleton v. Dodswell, 13 Ves., 37 Middleton v. Dodswell, 13 Ves., 
 
 266; Stairley v. Rabe, McMnl. Eq., 266. 
 
 22; Harmon v. Wagener, 33 S. C, 38 Stairley v. Rabe, McMul. Eq., 
 
 487, 12 S. E., 98. And see Thomp- 22. 
 
 son V. Orser, 105 Ga., 482, 30 S. E., 39 Price's Executrix v. Price's 
 
 626. Executors, 8 C. E. Green, 428.
 
 862 RECEIVERS. [chap. XVI. 
 
 ceiver may be appointed to collect and liold the assets, and the 
 court, in such case, may retain jurisdiction for the purpose of 
 finally settling the estate.'*^ And when an executor converts 
 both the real and personal estate into money and notes, thus 
 giving rise to a reasonable apprehension that the estate is not 
 sufficiently secured, in an action against him for an account- 
 ing and settlement of his trust, the court may properly order 
 that he give a bond for the protection of the estate, and to 
 secure the performance of whatever decree may be finally re- 
 covered against him, or, in default thereof, that a receiver be 
 appointed.^^ 
 
 § 709. Receiver not allowed because of executor's pov- 
 erty ; nor when charges of bill are denied by answer. Equi- 
 ty will not interfere by a receiver with the management of 
 an estate in the hands of executors merely upon the ground 
 of their poverty, or because they are not in affluent circum- 
 stances, when no suggestion is made of improper conduct, 
 especially when this was the condition of the executor at the 
 time of his appointment; since the interference upon such 
 ground would have the effect of changing the trust created 
 by the will, although no misbehavior is shown. Unless, there- 
 fore, some misconduct or negligence is shown on the part of 
 the executor, or some danger of a loss for which he will not 
 be able to respond by reason of his poverty, the court will not 
 transfer the management of the estate from his hands to 
 those of a receiver.'*^ Nor will a receiver be allowed over an 
 
 40 Du Val V. Marshall, 30 Ark., other property than an annuity of 
 230. £20, given to her by the testator. 
 
 41 Gray v. Gaither, 74 N. C., 237. Sir William Grant, Master of the 
 
 42 Knight V. Duplessis, 1 Ves., 324 ; Rolls, observes, p. 5 : "There is no 
 Howard v. Papera, 1 Madd., 141, doubt that in several instances, as 
 1st American edition, p. 86; Fair- if the executor has wasted the 
 bairn v. Fisher, 4 Jones Eq., 390; effects, or in other respects misoon- 
 Johns V. Johns, 23 Ga., 31; Anony- ducted himself, this court will in- 
 mous, 12 Ves., 4 The case last terfere; but has the court ever 
 cited was a motion made before taken the disposition out of the 
 answer for a receiver, upon the hands of the executor on account 
 ground that the executrix had no of his mean circumstances; for it
 
 CHAP. XVI.] TRUSTS. 863 
 
 estate in the hands of executors because of their right to re- 
 tain assets in satisfaction of a mortgage indebtedness due to 
 them from the testator to the prejudice of general creditors, 
 when it is not shown that the executors have been guilty of 
 waste or improper conduct in the management of the estate."*^ 
 And when the charges of the bill, as to insolvency and mis- 
 management of the business by the defendant executor, are 
 fully and completely denied by his answer, a receiver should 
 not be allowed.^"* 
 
 § 710. Misconduct in addition to insolvency ground for 
 relief; receiver may act with solvent executor; executors 
 required to surrender books and assets. Where, however, 
 in addition to insolvency, serious misconduct is shown on the 
 part of the executor, as well as danger of loss to the estate, 
 a different case is presented, and the court may properly in- 
 terfere by a receiver to prevent the assets from being wasted. 
 Thus, upon a bill filed in behalf of the heirs of an estate, 
 showing great and unnecessary delay by the executors in 
 settling the estate; that some of the heirs have received large 
 sums in excess of their just proportion ; that some of the ex- 
 ecutors have misapplied funds; and that three of the four 
 executors are insolvent, a fitting case is presented for the in- 
 terference of equity by a receiver. Under such circumstances, 
 the receiver is appointed in lieu of the insolvent executors, 
 to act with the solvent executor if the latter will consent so 
 to act; otherwise he is appointed generally, to act in lieu of 
 them all. And the executors will be required to deliver over 
 
 comes to that? You must prove but at present no case is made for 
 
 the unfitness of the person. In a receiver." See as to the effect of 
 
 this case, the only ground is that an executor having engaged in a 
 
 she is not a person of property. hazardous business as ground for a 
 
 . . . The allegation goes no fur- receiver pendente lite, Bowling v. 
 
 ther than this executrix is in mean Scales, 2 Tenn., Ch., 63. 
 
 circumstances. If any miscon- 43 /„ r? Wells, 45 Ch. D., 569. 
 
 duct, waste, or improper disposi- 44 Fairbairn v. Fisher, 4 Jones 
 
 tion of the assets were shown, the Eq., 390. 
 court would instantly interfere;
 
 864 RECEIVERS. [chap. XVI. 
 
 to the receiver, under oath, all books, vouchers, securities, title 
 deeds, property and money belonging to the estate.*^ 
 
 § 711. Actual bankruptcy ground for receiver. While, 
 as already shown, mere insolvency of an executor is not of 
 itself sufficient ground for a receiver, an actual adjudication 
 in bankruptcy presents much stronger ground for the relief. 
 And where a sole executor and trustee of the estate of a de- 
 ceased testator has been adjudged bankrupt, upon his own pe- 
 tition, and assignees of his estate have been appointed, a re- 
 ceiver may be allowed on the ground that there is no person 
 to protect the assets, the assignees of the bankrupt executor 
 having no power to interfere with the trust estate. And it 
 is not a sufficient objection to the relief, in such a case, that 
 the assignees have not been brought before the court.^^ So 
 where an executor had become bankrupt, a receiver was ap- 
 pointed of the rents and profits of the real estate, but without 
 prejudice to an application by the next of kin for a receiver 
 of the personalty when the will should be proven. ^"^ 
 
 § 712. Removal of executor from state sufficient cause. 
 The removal of an executor from the state, leaving both his 
 cestui que trust and the trust estate within the state, is suffi- 
 cient ground for the interference of equity by a receiver, upon 
 the application of the cestui que trust. The court proceeds, 
 in such a case, upon the ground that there is an abandonment 
 of his trust on the part of the executor, and as his removal 
 places him beyond the jurisdiction of the court and out of 
 reach of its process, he is no longer liable to account. It is, 
 therefore, the duty of the court to see that such removal or 
 abandonment does not prejudice the beneficiaries of the estate, 
 and for this purpose to grant them the aid of a receiver.^^ 
 
 45 Jenkins v. Jenkins, 1 Paige, 243. a. See, also, Langley v. Hawk, 5 
 
 46 Steele v. Cobham, L. R., 1 Ch. Madd., 46, 1st American edition, 36. 
 App., 325. 48 Ex parte Galluchat, 1 Hill Eq., 
 
 47 Gladdon v. Stoneman, 1 Madd., 148. The court, O'Neall, J., say, 
 141, 1st American edition, 86, note p. 151: "As long as the executor
 
 CHAP. XVI,] TRUSTS. 865 
 
 § 713. Receiver allowed by English Court of Chancery 
 over foreign executors or estates. The aid of a receiver 
 was sometimes granted by the EngHsh Court of Chancery, 
 as against executors or administrators of an estate situated in 
 a foreign country. Thus, when a person claiming to be the 
 administrator of an estate situated in a foreign country had 
 come within the jurisdiction of the court of chancery, and had 
 brought with him a portion of the estate, a receiver was ap- 
 pointed pendente lite, upon a bill by the English administrator 
 to prevent the removal of the assets beyond the jurisdiction 
 of the court, although no misconduct was alleged against the 
 <iefendant.49 So an executor residing in England, the assets 
 of the deceased being in India, and a co-executor in India 
 having died, was allowed a receiver of the property in India, 
 but was required to giv^e sureties resident in England. ^^ And 
 when the devisee in trust and the executors of the will of a 
 deceased testator resided beyond the jurisdiction of the court, 
 but all of the realty and part of the personalty were in Eng- 
 
 remains within the jurisdiction of the benefit of the estate, the court 
 the court, the court would not, un- would not interfere to prevent the 
 less under very extraordinary cir- attorney of an executor who has 
 ■cumstances, deprive him of the removed from the state, from man- 
 management of the trust; yet aging the trust estate. But gener- 
 when he removes from the state, ally, when an executor removes 
 will the court permit him, either to from a state, leaving both his cestiii 
 remove the trust estate, or manage que trust and the trust estate in 
 it? His removal places him beyond the state, it is the duty of the court 
 the process of the court, and he is of equity, on the application of the 
 no longer liable to account to it. cestui que trust, to appoint a re- 
 His removal of the trust estate ceiver. For there would, in such 
 -might enable him to defeat the a case, be an abandonment of the 
 trust, and his management of it by trust, voluntary it is true, on the 
 attorney might place it in irrespon- part of the executor, and which can 
 sible hands and have the same not, therefore, benefit him, but 
 effect. In some cases, as when the which the court will take care shalj 
 ■executor and his cestui que trust not prejudice the cestui que trust." 
 remove together, the court would 49 Hervey z;. Fitzpatrick, Kay, 421. 
 permit him to remove the trust cs- ^^ Cockburn v. Raphael, 2 Sim. & 
 tate, and it may be that, imder cir- St., 453. 
 -cumstances showing that it was for 
 Receivers — 55.
 
 866 RECEIVERS. [chap. XVI. 
 
 laml. a devisee and legatee under the will resident in Eng- 
 land was alUnved a receiver to take charge of the estate/'^ 
 
 § 714. Receiver granted in England pending litigation 
 in ecclesiastical court concerning probate or administra- 
 tion. Under the practice of the English Court of Chan- 
 cery, receivers were sometimes appointed for the preservation 
 of an estate, pending a contest in the ecclesiastical courts over 
 the probate of the estate and the right to administer.52 And 
 while that court proceeded with extreme caution in granting 
 a receiver as against an executor in possession, when it was 
 not yet apparent who had the actual right to administer the 
 estate, yet when there was a bona fide litigation pending in 
 the ecclesiastical court to determine the right to probate or to 
 administer, the court of chancery would properly interfere by 
 a receiver, not because of the contest over the probate, but be- 
 cause there was no proper person, pending such contest, to 
 receive the assets.^^ Thus, upon a bill by one claiming to be 
 an executor, showing that a contest was pending in the ecclesi- 
 astical courts as to whether the deceased left any testamentary 
 disposition of his property, and that, pending such contest, 
 there was no person legally entitled to receive any part of the 
 effects of the deceased, the court would grant a receiver-^"* 
 The main question, in such case, was, whether it was neces- 
 sary for the protection of the interests of all persons con- 
 cerned that there should be a receiver, and the jurisdiction of 
 equity for this purpose being clear, it afforded no objection 
 to the exercise of that jurisdiction that there was no person 
 in whose name an action might be brought to recover the 
 property. Nor was it a sufficient objection to the motion for 
 a receiver, that the bill was, to a considerable extent, a bill 
 
 •"-1 Smith v. Smith, 10 Hare, Ap- ^>^' Rendall v. Kendall, 1 Hare, 
 
 pendix, Ixxi. 152; Wood v. Hitchings, 2 Beav., 
 
 52 See Rendall v. Rendall, 1 Hare, 289. See S. C, 3 Beav., 504. 
 
 152; Wood v. Hitchings, 2 Beav., 54 Wood v. Hitchings, 2 Beav., 
 
 289 ; Anderson v. Guichard, 9 Hare. 289. See S. C, 3 Beav.. 504. 
 275.
 
 CHAP. XVI.] TRUSTS. 867 
 
 for discovery. ^5 g^j^ when a controversy was pending be- 
 tween different executors of the same estate, and the right to 
 probate the estate was in contest in the proper court, and an 
 apphcation was made for a receiver pendente lite, who was 
 appointed, it was held that there was no necessity for bring- 
 ing such apphcation to a final hearing, and that such a prac- 
 tice was without precedent.^^ 
 
 § 715. When receiver allowed judgment creditors of es- 
 tate as against executor. The aid of a receiver is some 
 times invoked in belialf of judgment creditors against execu- 
 tors. And when judgment creditors of the estate of a de- 
 ceased person show by their bill that the executor, who has 
 been removed from his trust, has, by false and fraudulent repre- 
 sentations, possessed himself of a large fund belonging to the 
 estate, which he has misapplied, and that he is wholly irre- 
 sponsible and insolvent, they are entitled to a receiver to take 
 charge of the fund. Such a case is regarded as presenting 
 strong grounds for the interposition of equity under its gen- 
 eral power over trusts and trust estates, in the exercise of 
 which power a receiver is frequently indispensable.^''^ And 
 when a judgment creditor of a deceased debtor files a bill 
 against the executor, showing that he has given no security, 
 
 55 Wood V. Hitchings, 2 Beav., for the appointment of a receiver, 
 289. See S. C, 3 Beav., 504. as against an executor, yet where 
 
 56 Anderson v. Guichard, 9 Hare, it is coupled v^-ith other facts or 
 275. circumstances, showing that he has 
 
 57 £;r parte Walker, 25 .Ma., 81. proceeded not in accordance with 
 "Nothing is more common in chan- law (as where he has made private 
 eery practice," say the court, Chil- sales of the property of the estate, 
 ton, C. J., p. 104, "than the ap- or is dealing with it on his private 
 pointment of receivers in suits account), especially where it is 
 against executors, where there is doubtful whether he is, in fact, llic 
 danger to the fund without such legal representative, or is not shorn 
 appointment ; so, also, if he has of his authority by removal, the 
 wasted the effects, or in other re- court, in all such cases, should 
 •spects has misconducted himself. promptly secure the effects by 
 Although mere poverty, of itself, placing them in the hands of a 
 may not furnish sufficient ground receiver."
 
 868 RECEIVERS. [chap. XVI. 
 
 that he is insolvent and of extravagant habits, and that he is 
 mismanaging the estate and is about to leave the country, and 
 praying an injunction and a receiver, it is error to dismiss the 
 bill, no answer being filed and its equities not being denied.^S 
 
 § 716. Not allowed when it would interfere with admin- 
 istration. Where, however, a judgment is obtained against 
 a debtor and a creditor's bill is filed thereon during his life- 
 time, and after his death the creditor's suit is revived against 
 his administrator, a receiver will not be appointed over the 
 effects of the deceased on the application of plaintiff in the 
 creditor's suit. In such case the assets are to be disposed of 
 in due course of administration, according to the laws of the 
 state, and the priority which plaintiff may have gained by fil- 
 ing his bill dies with the defendant, and a receiver, in such 
 case, is both unnecessary and would interfere with the due 
 course of administration.59 But it is held that if a receiver 
 had already been appointed, and had obtained possession of 
 property or money belonging to the debtor, before his death, 
 the court appointing him, having possession through its offi- 
 cer, would not part with that possession to the executor or 
 administrator, but would apply the fund in payment of the 
 debt, due regard being had to the statutory rights of other 
 creditors. ^^ 
 
 § 717. Receiver of administratrix in personal capacity 
 not entitled to rents due in representative capacity ; action 
 to recover such rents. When a judgment is obtained 
 against an administratrix in her personal capacity, and a re- 
 ceiver is appointed over her effects in aid of the judgment 
 creditor, such receiver is not entitled to the rents due to the 
 administratrix in her representative capacity. And in such 
 case, tenants of the estate have a right of action to recover back 
 money thus improperly paid, and having assigned such right 
 
 58 Chappell r. Akin, 39 Ga., 177. 60 Mathews v. Neilson, 3 Edw. 
 
 59 Sylvester v. Reed, 3 Edw. Ch., Ch., 346. 
 296; Mathews v. Neilson, id., 346.
 
 CHAP. XVI.] TRUSTS. 869 
 
 of action to the administratrix, she may maintain the action 
 for the benefit of the estate.^! 
 
 § 718. Death of one executor and refusal of another to 
 act, ground for receiver; misunderstanding between ex- 
 ecutors not ground. The death of one of two executors, 
 and the refusal of the other to act, afford sufficient ground 
 for the interference of equity by appointing a receiver to take 
 charge of the assets, upon the appHcation of persons beneficial- 
 ly interested in the estate.^^ g^^- ^j^g rnere fact of a misun- 
 derstanding existing between two executors, as to the man- 
 agement of the estate intrusted to their charge, is not suffi- 
 cient ground for a receiver to take the control of the estate 
 out of their hands.^^ If, however, a receiver is appointed up- 
 on the ground of the misconduct of one of two executors, his 
 co-executor not having qualified as such until after such mis- 
 conduct, but before the appointment of the receiver, the man- 
 agement of the estate will not be restored to such co-execu- 
 tor when he has acquiesced in the appointment without ob- 
 jection or appeal.^'* 
 
 § 719. Plaintiff equitably interested in real estate de- 
 vised to executors may have receiver to effect sale. A 
 receiver has been allowed for the purpose of effecting a sale 
 of real estate of a deceased person, which he had devised to 
 his executors, but in which plaintiff was equitably interested 
 under an agreement with the deceased for a proportion of the 
 profits arising from a sale of the premises. And in such a case, 
 the ground for relief would seem to be, that the executors 
 occupy to a certain extent a possession adverse to that of the 
 plaintiff, rendering it necessary that an impartial person be 
 appointed to make the sale.^^ 
 
 61 Barker v. Clark, 12 Ab. Pr., 64 Praser v. City Council, 19 S. 
 N. S., 106. C, 384. 
 
 62 Palmer v. Wright, 10 Beav., 65 Marvine v. Drexcl's Executors, 
 234. 68 Pa. St., 362. 
 
 63 Fairbairn v. Fisher, 4 Jones 
 Eq., 390.
 
 870 RECEIVERS. [chap. XVI. 
 
 § 720. Court will not look into executor's account ren- 
 dered to probate court. Upon a bill filed against an execu- 
 tor for a receiver, upon the ground of his alleged waste and 
 mismanagement of the estate, it is not competent for the court 
 to look into the accuracy of the executor's account rendered 
 to the probate court, with a view to support the grounds made 
 by the bill for a receiver. In such case, the probate court be- 
 ing the appropriate tribunal to act upon the executor's ac- 
 count, a court of chancery will not base any action upon such 
 account, having no control or jurisdiction in the premises. ^^ 
 
 § 721. Surety on administrator's bond can not have re- 
 ceiver on default of administrator to secure him ; surety for 
 intestate. Equity will not entertain a bill in behalf of a 
 surety upon the official bond of an administrator, to compel 
 the administrator to give security to plaintiff for his obliga- 
 tion of suretyship, or in default thereof that a receiver be ap- 
 pointed of the estate in the administrator's hands. Such a 
 case presents no ground for the aid of a receiver, unless the 
 relief should become necessary for the protection of minor 
 heirs of the estate upon the refusal of the probate court to 
 appoint guardians of such minors. ^^ And a surety for a debt 
 due from one who has died intestate can not maintain an ac- 
 tion for a receiver to collect the assets and to administer the 
 estate of the deceased, against persons improperly controlling 
 or managing the assets, without authority. ^^ 
 
 § 722. When receiver allowed in behalf of ward against 
 administrator. When a ward, through her guardian, files 
 a bill against the administrator of the estate, showing that she 
 is entitled, under a previous decree, to a specific interest in 
 certain lands held by the administrator, a receiver may be ap- 
 
 66 Simmons v. Henderson, Freem. which has once been sold by an 
 
 (Miss.), 493. administrator, upon a bill by sure- 
 
 ST Delaney v. Tipton, 3 Hayw. ties upon a bond given for the piir- 
 
 (Tenn.), 14. chase-money at such sale, the ad- 
 
 68 Walker v. Drew. 20 Fla., 908, ministrator being insolvent and in 
 
 As to the circumstances which will possession of the land, see Sten- 
 
 warrant a receiver over real estate house v. Davis, 82 N. C, 432.
 
 CHAP. XVI.] TRUSTS. 871 
 
 pointed to take charg-e of the land, the bill showing that the 
 administrator is committing- waste, and that he and his sur- 
 eties are wholly insolvent.^^ But a receiver will not be al- 
 lowed over an estate in the hands of an administrator mere- 
 ly because of alleged misconduct of the deceased touching the 
 property in his life-time, in the absence of any showing of 
 waste or improper conduct by the administrator."^^ 
 
 § 723. On removal of receiver from country, executors 
 may again act. When a receiver had been appointed be- 
 cause of the refusal of executors to act under the will of the 
 testator, but he subsequently removed from the country, and 
 the executors w^ere willing to act, instead of appointing a new 
 receiver the court ordered the executors to act, and directed 
 the receiver to pass his accounts. "^^ 
 
 § 724. Appointment of receiver does not remove execu- 
 tor. While a court of equity, as has been shown, may, in 
 proper cases, enjoin an executor from proceeding further with 
 his duties, and may appoint a receiver to take charge of the 
 
 G^ Ware z^. Ware, 42 Ga., 408. The difficulties to refuse now to e.xam- 
 conrt, Lochrane, C. J., say, p. 411: ine the jurisdiction invoked and 
 "The decree gives a specific inter- interposed by proper process to 
 est in this property to the com- compel a settlement of the interest 
 plainant to the amount of $2,850, by decree vested in this ward, 
 and operates as a conveyance to And we therefore reverse the juds- 
 that effect. The character of the ment of the court below dismissing 
 litigation now develops just such a the bill for want of equity, and 
 case as belongs particularly to a direct him to appoint a proper re- 
 court of equity to take jurisdiction ceiver, who shall take custody of 
 of and determine. This ward may the property, protect the same 
 be delayed in the recovery of her from waste and injury, and that 
 rights, after adjudication by the all parties in interest be cited to 
 courts, interminably by the intro- appear, and be made parties to this 
 duction of new matters arising out bill, and the property sold for the 
 of the facts disclosed by the record, purpose of division among the 
 unless the chancellor lays his hands claimants." 
 
 on this property and compels all ''^ Perrin 7'. Lepper. 56 Mich., 
 
 parties in interest to come forward 351. 23 N. W., 39. 
 
 and present their respective claims 71 Davy v. Gronow, 14 L. J., N. 
 
 for adjudication and settlement. S. Ch., 134. 
 Tt would end in a multiplicity of
 
 872 RECEIVERS. [chap. XVI. 
 
 estate, to be administered under the direction of the court, 
 such appointment does not have the effect of removing the 
 executor, since the power of removal is not within the juris- 
 diction of equity, but rests in the probate courts.'^^ And a 
 receiver appointed over the estate of a deceased person has no 
 authority to interfere with suits pending against the executor 
 at the time of such appointment, unless authorized by the 
 court so to do ; and, in the absence of such authority, he will 
 be treated as a stranger to such suits.'^^ 
 
 72 Leddel's Executor v. Starr, 4 '^3 Gadsden v. Whaley, 14 S. C.» 
 
 C. E. Green, 159. 210.
 
 CHAP. XVI.] TRUSTS. 873 
 
 III. Receivers Over Estates of Infants. 
 
 § 725. Jurisdiction founded on general doctrine of trusts; misappro- 
 priation of funds by husband of executrix ground for re- 
 ceiver. 
 
 726. Relief under the English practice; infant tenant in tail allowed 
 
 receiver on absconding of executor. 
 
 727. Refusal of one of several trustees to act no ground for re- 
 
 ceiver; may be allowed on refusal of one of two. 
 
 728. When receiver allowed on behalf of infant as against mort- 
 
 gagee in possession of infant's store. 
 
 729. Trustee of infant ineligible as receiver; next friend ineligible; 
 
 when executor allowed to act. 
 
 730. When receiver of infant's estate chargeable with interest on 
 
 failing to invest funds. 
 
 731. When receiver authorized to expend money for relief of ten- 
 
 ants. 
 
 732. Receiver not discharged on one infant coming of age before 
 
 the other. 
 
 § 725. Jurisdiction founded on general doctrine of 
 trusts; misappropriation of funds by husband of execu- 
 trix ground for receiver. The appointment of receivers 
 for the protection of the property rights of infants, as against 
 executors or other persons occupying fiduciary relations to- 
 ward the infant's estate, rests upon the general doctrine of 
 trusts already discussed, and is governed by the same general 
 principles. And while courts of equity are averse to inter- 
 fering with the management of estates by executors, even in 
 behalf of infants, a receiver will be granted in a clear case of 
 mismanagement and misappropriation of the funds, or of 
 hazard to the infant's estate. Thus, when an executrix in- 
 trusts the control of the estate to her husband, who is in- 
 capable of properly managing the trust, and under whose 
 supervision the funds are misappropriated and the estate is 
 involved in debt, a fitting case is presented for a receiver upon 
 the application of minor heirs of the deceased testator.'''* 
 
 74 Stairley v. Rabe, McMul. 'Rq., of a receiver over (he estate of a 
 22. As to the powers and functions ward upon the removal of a guard-
 
 874 RECEIVERS. [CH,\P. XVI. 
 
 § 726. Relief under the English practice; infant tenant 
 in tail allowed receiver on absconding of executor. The 
 
 relief, in this class of cases, has been more frequently grant- 
 ed under the English practice than in this country, and the 
 jurisdiction has been well settled in that country from an 
 early period. And upon a bill by an infant tenant in tail of 
 an estate which had been in possession of an executor, it ap- 
 pearing that the executor had absconded for a period of over 
 two years, and that there was danger of the property being 
 lost for want of management, it was regarded as a strong 
 case for a receiver.'^-^ 
 
 § 727. Refusal of one of several trustees to act no 
 ground for receiver; may be allowed on refusal of one of 
 two. \\'hen a testator has devised his property to sev- 
 eral trustees to carry out certain trusts specified in his will, 
 a receiver of the estate will not be appointed in behalf of in- 
 fant heirs merely because one of the trustees has disclaimed 
 or refused to act, since the court will not presume misconduct 
 on the part of the other trustees. '^^ But where there were two 
 trustees of an estate, one of whom had never acted and de- 
 clined so to do, a receiver was appointed of the rents and 
 profits in behalf of infant cestuis que trnstcnt, although the 
 other trustee was desirous of acting.''"^ 
 
 § 728. When receiver allowed on behalf of infant as 
 against mortgagee in possession of infant's store. The 
 necessity of protecting an infant's property and estate, when 
 it is not vested in a trustee, but is in the adverse possession 
 of a person hostile to the infant's interests, may afford suffi- 
 
 ian, under the statutes of North receiver of the rents and profits of 
 
 Caroh'na, see Temple v. Williams, an infant's estate, when there was 
 
 91 N. C, 82. no bill depending in court; but that 
 
 '^^ Pitcher v. Helliar, Dick., 580. if it were only filed, there might be 
 
 And Lord Thurlow observed, in this an application for a receiver on be- 
 
 case, that he would have ordered a half of the infants. See, also, Ex 
 
 receiver, even if there had been no parte Whitfield, 2 Atk., 315. 
 
 bill filed. But in Anonymous, 1 70 Browell v. Reed, 1 Hare, 434. 
 
 Atk., 489, it was said that there 77 Tait v. Jenkins, 1 Y.'& C. C. 
 
 was no instance of appointing a C, 492.
 
 CHAP. XVI.] TRUSTS. 875 
 
 cient gToiind for the interference of equity by a receiver. 
 Thus, when an infant has purchased a stock of goods for pur- 
 poses of trade, and has mortgaged them to secure payment 
 of a portion of the purchase-money, and the mortgagee upon 
 defauh takes possession of all the goods in plaintiff's store, 
 including other goods not covered by the mortgage, in an 
 action by the infant to disaffirm the contract, although the 
 mortgagee is entitled to the goods which he had sold to the 
 infant, yet there being a mixture of the property, and de- 
 fendant being in possession and claiming a right to sell the 
 whole for his own benefit, a receiver may be allowed until the 
 respective rights of the parties can be ascertained.'^^ 
 
 § 729. Trustee of infant ineligible as receiver; next 
 friend ineligible; when executor allowed to act. As re- 
 gards the selection of a proper person to be appointed receiver 
 of an infant's estate, it is generally held that one who sustains 
 a relation of trust toward the infant is ineligible as receiver, 
 the two characters being incompatible.'^^ Thus, when a bill 
 is filed by the next friend of infants against the executors of 
 an estate for an accounting and a receiver, the next friend is 
 not regarded as a proper person to be appointed, since it is his 
 duty to watch the accounts and conduct of the receiver, and 
 the two characters are incompatible, and can not be united in 
 the same person. 80 So a trustee and executor of an estate 
 devised to an infant is not ordinarily eligible as receiver of 
 the estate; and this is so, regardless of whether he is a sole 
 trustee, or whether there are others joined with him as co- 
 trustees.81 g^^t where a testator had appointed as trustee and 
 executor of his will a person who had for many years acted 
 as receiver of a portion of his property, he was regarded as a 
 
 78 Skinner v. Maxwell, 66 N. C, «" Stone v. Wishart, 2 Madd.. 63. 
 45. See S. C, 68 N. C, 400. 1st American edition. .174. 
 
 79 Stone V. Wishart, 2 Madd., 63, 81 v. Jolland, 8 Vcs., 72. 
 
 l.st American edition, 374; See, also, Sykes v. Hastings. 11 
 
 V. Jolland, 8 Ves.. 72. See, also, Ves., 363. 
 
 Sykes v. Hastings, 11 Ves., 363.
 
 876 RECEIVERS. [chap. XVI. 
 
 proper person to be continued as receiver for the protection 
 of an infant tenant for life.^^ 
 
 § 730. When receiver of infant's estate chargeable with 
 interest on failing to invest funds. When a receiver is ap- 
 pointed over the estate of an infant during- liis minority, the 
 infant having no guardian, and the receiver is directed by the 
 decree to place the surplus rents and profits during infancy 
 at interest, as fast as they amount to a sufficient sum for in- 
 vestment, if he fails thus to invest the funds he will be liable 
 for interest. And in such a case, the fact that the infant, im- 
 mediately on coming of age, has a settlement with the re- 
 ceiver, and, after looking over the accounts, admits the bal- 
 ance in the receiver's hands to be correct, and receives it with- 
 out objection, is no bar to charging the receiver with the in- 
 terest.^^ 
 
 § 731. When receiver authorized to expend money for 
 relief of tenants. In the Irish Court of Chancery, a re- 
 ceiver of a minor's estate has been authorized by order of 
 court to expend money belonging to the estate for the relief of 
 tenants who were in destitute circumstances, and where, ow- 
 ing to the failure of their crops, they were in an impoverished 
 condition. ^^ 
 
 § 732. Receiver not discharged on one infant coming of 
 age before the other. A receiver appointed for the protec- 
 tion of the estate of infants will not be discharged until the 
 object of his appointment has been fully attained. Thus, as 
 between tenants in common of real estate, two of whom are 
 infants, when a receiver is appointed for the protection of the 
 infants, with directions to pay to the adults their share, he 
 will not be discharged upon the application of one of the in- 
 fants on his coming of age, the other not yet having attained 
 his majority.^5 
 
 82 Newport v. Bury, 23 Beav.. 30. 84 Jackson v. Jackson, 2 Hog., 
 
 83 Hicks V. Hicks, 3 Atk., 274. 238. 
 
 85 Smith v. Lyster, 4 Beav., 227.
 
 CHAP. XVI.] TRUSTS. 877 
 
 IV. Receivers Over Estates of Lunatics. 
 
 § 733. Jurisdiction unquestioned, but seldom exercised; when receiver 
 appointed on death of lunatic; must surrender to adminis- 
 trator. 
 
 734. Relief a matter of discretion; when refused, there being rival 
 
 heirs. 
 
 735. Solicitor under commission of lunacy ineligible as receiver. 
 
 736. When receiver ordered to account; reference to master to 
 
 ascertain condition of property and income. 
 
 § 733. Jurisdiction unquestioned, but seldom exercised ; 
 when receiver appointed on death of lunatic ; must surren- 
 der to administrator. A receiver is sometimes necessary 
 for the preservation of the estate of a lunatic, and while there 
 are but few reported cases bearing upon this subject, the power 
 of a court of equity to thus interfere is unquestioned.^^ Up- 
 on the death of a lunatic or insane person whose property 
 has been managed by a trustee or committee appointed by the 
 court in conformity with the laws of the state, since the trus- 
 tee's functions terminate with the death of the lunatic, it is 
 proper for a court of chancery to appoint a receiver to take 
 charge of the assets and estate until it may be determined 
 who is entitled thereto. ^"^ But the object of the appointment, 
 in such case, being the protection of the estate until it rt^y 
 be determined who is properly entitled to possession, the re- 
 ceiver will be continued only while such necessity exists. And 
 when the proper court of probate has acquired jurisdiction 
 over the estate of the deceased, and has appointed an admin- 
 istrator pendente lite, the court of chancery will surrender 
 the possession of its receiver, and will deliver the property 
 to the administrator pendente lite.^^ 
 
 § 734. Relief a matter of discretion ; when refused, there 
 being rival heirs. The relief, in this class of cases, would 
 
 86 See as to facts held to consti- 87 /,i re Rachel Colvin, 3 Md. Ch., 
 
 tute a prima facie case for the ap- 288. 
 
 pointment of an interim receiver 8S /« re Rachel Colvin, 3 Md. Ch., 
 
 over the estate of a lunatic, In re 288. 
 Fountain, 37 Ch. D., 609.
 
 878 RECEIVERS. [chap. XVI. 
 
 seem to be largely a question of judicial discretion. And 
 after the death of a lunatic, whose estate had been in her life- 
 time managed by a committee, there being two rival claim- 
 ants as heirs of the estate, each of whom filed a bill for a re- 
 ceiver of the estate pending the litigation as to their rights, 
 the English Court of Chancery declined to interfere by the 
 exercise of its original jurisdiction for the appointment of 
 a receiver, treating the case as if there had been no lunacy, 
 and allowing the application to be made in the first instance 
 before the vice-chancellor.^^ 
 
 § 735. Solicitor under commission of lunacy ineligible as 
 receiver. One who sustains such a relation toward the es- 
 tate of a lunatic as to make it his duty to call the receiver to 
 an account is not, upon general principles of equity, eligible 
 as a receiver. Hence a solicitor under a commission of lun- 
 acy should not be appointed receiver of the lunatic's estate. ^^ 
 
 § 736. When receiver ordered to account; reference to 
 master to ascertain condition of property and income. In 
 the case of a receivership over the estate of a lunatic, when 
 the receiver has never made a full or complete report of the 
 income and disbursements of the estate committed to his 
 charge, any party to the cause is entitled to move for such an 
 account, which it is the receiver's plain duty to make in his 
 capacity as an officer of the court. And the court may there- 
 upon order a full account to be taken msfantcr on proper no- 
 tice. And it may also order a reference to ascertain and re- 
 port as to the situation of the lunatic's property ; the liens, if 
 any, upon it; the existing debts; the probable income for the 
 ensuing year, and the probable charges thereon. The refer- 
 ence may also be directed to ascertain what amount of the 
 income from the estate will be needed for the comfortable 
 support of the lunatic, whose interests are to . be first 
 giiarded.^^ 
 
 89 /„ re Ferrior, L. R., 3 Ch. "0 Ex parte Pincke, 2 Meriv.. 452. 
 
 App., 175. See Carrow v. Ferrior, 91 Lowe v. Lowe, 1 Tenn. Ch.. 515. 
 
 id.. 719.
 
 CHAPTER XVII. 
 
 OF RECEIVERS IN CONNECTION WITH INJUNCTIONS. 
 
 I. The Remedies Compared § 737 
 
 II. The Remedies as Applied to Corporations 749 
 
 III. Creditors' Suits 755 
 
 IV. Partnerships 760 
 
 V. Real Property 772 
 
 I. The Remedies Compared. 
 
 § 1Z7. Points of resemblance; both remedies branches of the preventive 
 jurisdiction of equity; neither changes title; discretionary nature. 
 
 738. Auxiliary nature of the remedies; do not determine ultimate 
 
 rights of parties. 
 
 739. Principal difference consists in effect on possession. 
 
 740. Provisional remedies under Nev\r York code; when injunction 
 
 a bar to receiver in another court. 
 
 741. Neither remedy granted vt-hen relief may be had at law. 
 
 742. Long acquiescence a bar to either form of relief. 
 
 743. Distinct nature of the remedies; one not a necessary incident 
 
 of the other; no receiver where injunction affords ample 
 protection. 
 
 744. Neither remedy applicable to determine disputed questions of 
 
 title to public offices. 
 
 745. Either may be granted although property in a foreign coun- 
 
 try. 
 
 746. Conflict of jurisdiction between state and federal courts a 
 
 ground for both remedies. 
 
 747. Injunctions to protect receiver's possession, 
 
 748. When receiver enjoined from litigation. 
 
 § 737. Points of resemblance; both remedies branches 
 of the preventive jurisdiction of equity; neither changes 
 title; discretionary nature. The dLscussion of the law of 
 receivers, as thus far developed, has shown many strikinof 
 points of resemblance between this branch of the extraordinary 
 jurisdiction of equity, and that which is invoked in the "grant- 
 ing- of preliminary or interlocutory injunctions. The two 
 
 879
 
 880 RECEIVERS. [chap. XVII. 
 
 remedies are alike branches of the general preventive jurisdic- 
 tion of courts of equity, and are prospective rather than re- 
 trospective in their operation, being invoked on suitable occa- 
 sions for the prevention of future injuries, rather than for the 
 redress of grievances already committed. Thus, the object 
 of an interlocutory injunction is to preserve the subject in 
 controversy in its then condition, and, without determining 
 the questions of right involved, it seeks to prevent the fur- 
 ther perpetration of wrong, or the doing of any threatened 
 act which may result in injury to the rights of the party 
 complaining.! go the object sought in appointing a receiver 
 pendente lite is to prevent injury to the thing in controversy, 
 the res, and to preserve it unimpaired for the security of all 
 parties in interest, that it may be disposed of in accordance 
 with the final decree of the court. 2 Both are extraordinary 
 remedies in the strict sense of the term, as distinguished from 
 the usual and accustomed modes of procedure at law and in 
 equity, since they seize upon and control the subject-matter of 
 the litigation in limine, and without awaiting the final deter- 
 mination of the court, or its final process. Neither remedy 
 has the effect of changing the title, or of creating any special 
 lien upon the property, their common object being only to se- 
 cure its preservation, until the rights of all parties in inter- 
 est may be fully ascertained and judicially determined.^ And 
 both remedies rest, to a considerable extent, in the sound ju- 
 dicial discretion of the court to which the application is ad- 
 dressed, to be governed by a consideration of all the circum- 
 stances of the case.'* 
 
 1 See Murdock's Case, 2 Bland, tory injunctions, United States v. 
 461; Bosley v. Susquehanna Canal, Duluth, 1 Dillon's C. C, 469; Red- 
 3 Bland, 63. dall v. Bryan, 14 Md., 444; Hay- 
 
 2 Mays V. Rose, Freem. (Miss.), wood v. Cope, 25 Beav., 151. See, 
 703. as to the application of the same 
 
 3 Ellis v. Boston, Hartford & Erie doctrine to applications for receiv- 
 R. Co., 107 Mass., 1. ers, Owen v. Homan, 3 Mac. & G., 
 
 4 See, as to this element of discre- 378, affirmed on appeal to the House 
 tion on applications for interlocu- of Lords, 4 H. L. Rep., 997; Ham-
 
 CHAP. XVII.] INJUNCTIONS. 881 
 
 § 738. Auxiliary nature of the remedies; do not deter- 
 mine ultimate rights of parties. Another point of resem- 
 blance between these extraordinary equitable remedies, when 
 invoked in limine, is that they are of a provisional or auxiliary 
 nature, and frequently employed merely as an adjunct to the 
 principal relief sought by the action, and not always or neces- 
 sarily the ultimate or principal object of the action. And the 
 granting of either species of relief, upon an interlocutory ap- 
 plication, is not a final determination of any questions of 
 right or title which may be involved in the litigation ; and the 
 court, in passing upon the application, in no manner antici- 
 pates its ultimate judgment upon the rights of the parties, 
 the fundamental idea upon the preliminary application be- 
 ing only to preserve the. fund or property in litigation in statu 
 quo, for the benefit of whoever may finally be determined 
 to be entitled thereto. The court, in granting the relief, only 
 recognizes that sufficient cause is presented to warrant its 
 summary interference in limine, and until a final hearing 
 on the merits, without expressing, and frequently without 
 having the means of forming an opinion as to the ultimate 
 rights of the parties.^ Indeed, upon an interlocutory ap- 
 plication for a receiver, if plaintiff shows an apparent title 
 to the thing in controversy, and presents a prima facie case, 
 and if the court is satisfied that there is imminent danger of 
 loss unless it shall interpose the aid of a receiver, it may 
 grant the relief without further investigation into the mer- 
 
 burgh Manufacturing Co. v. Edsall, 80; Blakeney v. Dufaur, 15 Beav., 
 
 4 Halst. Ch., 141; Pullan v. Cincin- 40; Leavitt v. Yates, 4 Edw. Ch., 
 
 nati & Chicago R. Co., 4 Bisscll, 162; Brown z-. Northrup, 15 Ab. Pr., 
 
 47; Mays v. Rose, Freem. (Miss.), N. S., 333; Ex parte Walker, 25 
 
 703 ; Whelpley v. Erie Railway Co., Ala., 104. The doctrine is very 
 
 6 Blatchf., 271. clearly expressed by McCoun, Vice- 
 
 5 See this doctrine applied to in- Chancellor, in Leavitt v. Yates, 4 
 
 tcrlocutory applications for receiv- Edw. Ch., 162. For its application 
 
 ers, in Hottenstein v. Conrad, 9 to cases of preliminary injunctions, 
 
 Kan.. 435; Cooke v. Gwyn, 3 Atk., see Great Western R. Co. v. Bir- 
 
 6S9; Huguenin v. Baseley, 13 Vcs., nnngham h Oxford Junction R. 
 
 105; Ellicott V. Warford, 4 Md., Co., 2 Ph., 597. 
 
 Receivers — 56.
 
 SS2 RECEIVERS. [CIIAP. XVII. 
 
 its.^ And since the court is bound to express its opinion on- 
 ly so far as to show the grounds upon which it determines 
 the apphcation, it will usually confine itself to the point which 
 it is called upon to decide, without going into the merits of 
 the case at large. "^ 
 
 § 739. Principle difference consists in efEect on posses- 
 sion. In instituting a comparison between these principal 
 extraordinary remedies of equity, the most striking point of 
 difference between them is found in their effect or operation 
 upon the possession of the fund or property in litigation. An 
 injunction never operates to change possession ; a receiver 
 always and necessarily has this direct and immediate effect. 
 An injunction can not be used to take property out of the 
 custody and control of one party and place it in the posses- 
 sion of another ; ^ while in appointing a receiver, a court of 
 equity at once wrests possession from the defendant ; assumes 
 and continues by its officer the entire management and con- 
 trol of the property or fund ; frequently changes its form, or 
 absolutely disposes of it, and usually retains this exculsive 
 possession until the rights of all persons in interest are final- 
 ly adjusted. An injunction merely restrains action, and aims 
 at preserving the subject-matter, as well as the attitude of 
 all parties in interest thereto, m statu quo; while a receiver- 
 ship changes at once the attitude of all parties toward the 
 subject-matter of the litigation; divests defendant's posses- 
 sion, and interposes the officer of the court as a custodian of 
 the property or fund, for the common benefit of all parties 
 concerned. 
 
 § 740. Provisional remedies under New York code; 
 when injunction a bar to receiver in another court. Under 
 the code of procedure prevailing in New York, the granting 
 
 SLeavitt v. Yates, 4 Edw. Ch., 8 Murdock's Case, 2 Bland., 461; 
 
 162; Brown v. Northrup, 15 Ab. Bosley v. Susquehanna Canal, 3 
 Pr., N. S., 333. Bland, 63. 
 
 ~ Skinners Company v. Irish So- 
 ciety, 1 Myl. & Cr., 162.
 
 CHAP. XVII.] INJUNCTIONS. 883 
 
 of injunctions and the appointment of receivers, in limine, are 
 known as provisional remedies, and are treated by the courts 
 of that state as of equal weight and importance. And while 
 the two remedies are frequently administered in one and the 
 same action, the granting of an injunction by a court of com- 
 petent jurisdiction operates as a bar to the appointment of a 
 receiver, in a subsequent proceeding between the same parties 
 in another court. The jurisdiction of the court, and its con- 
 trol over all subsequent proceedings, being regarded as attach- 
 ing upon the service of process, or the allowance of a provi- 
 sional remedy, when the court first moving has acquired ju- 
 risdiction by the granting of an injunction, another court will 
 decline to interfere.^ 
 
 § 741. Neither remedy granted when relief may be had 
 at law. From the points of resemblance between these 
 remedies, which have been already indicated, it necessarily fol- 
 lows that certain well-defined and elementary principles by 
 which courts of equity are governed in the exercise of their 
 extraordinary jurisdiction, are equally applicable in determin- 
 ing applications for both species of relief. A controlling prin- 
 ciple of this class, and one which is believed to be of general 
 application, is, that the existence of an adequate remedy at 
 law is ahvays a bar to the aid of equity by granting either of 
 the remedies under consideration. Courts of equity will al- 
 ways refuse to lend their aid for the protection of rights, or 
 for the prevention of wrongs, when the ordinary legal rem- 
 edies are adequate to afford redress ; and when it does not ap- 
 pear that the remedy at law is insufficient, or that the party 
 aggrieved is entitled to more speedy relief than may be had 
 by the ordinary and accustomed modes of procedure at law, 
 an injunction will be refused. ^^ Legal rights are left to the 
 
 J' McCarthy v. Peake, 18 How. v. Seldcn, I Barb., 316; Sliernian v. 
 
 Pr., 138; S. C, 9 Ab. Pr., 164. Ciark, 4 NdV., 138; Mullen v. Jen- 
 
 lOCoughron J/. Swift, 18 111., 414; niiiKs. 1 Slockt., 192; Hart v. 
 
 Winkler v. Winkler, 40 111.. 179; MarMiall, 4 Minn., 294; Wooden v. 
 
 Poage V. Boll, 3 Rand., 586; Web- Wooden, 2 Green Ch., 429. 
 ster V. Couch, 6 Rand., 519; Akrill
 
 S84 RECEIVERS. [chap. XVII. 
 
 decision of a legal forum, and in the absence of special cir- 
 cumstances warranting- the interposition of the extraordinary 
 aid of courts of equity by an injunction, such courts will not 
 interfere for the protection of a strictly legal right which may 
 be properly tried at \awM And upon similar principles, equity 
 refuses to extend the aid of a receiver in all cases where the 
 persons aggrieved may obtain ample redress in the usual 
 course of proceedings at law, or where courts of law afford 
 a safe and expedient remedy for the particular grievance.^*^ 
 And when the person aggrieved has had ample opportunity of 
 asserting his rights in an action at law, but has negligently 
 omitted so to do, he is barred from obtaining relief in equity 
 by an injunction.!^ So, too, when a person having an ade- 
 quate remedy at law for the redress of a particular grievance, 
 loses that remedy by his own laches, he can not come into a 
 court of equity and obtain a receiver upon the same grounds 
 which should have been asserted in the action at law.^^ 
 
 § 742. Long acquiescence a bar to either form of relief. 
 It is also to be noticed, that long acquiescence in a particular 
 grievance, without effort to redress it, is usually held to be a 
 complete bar to relief in equity either by a receiver or an in- 
 junction. And plaintiffs, who have quietly acquiesced in de- 
 fendant's possession of property for a long period of years, 
 without attempting to assert their rights to the property, and 
 who then seek to change such possession by a receiver, will 
 be denied the aid of the court in limine. '^^ And when the ap- 
 plication for a receiver is based upon the alleged misconduct 
 of defendant, but it is shown that the state of affairs com- 
 plained of has existed for many years, with full knowledge of 
 plaintiffs and without their objection, equity will refuse to 
 
 11 Wooden v. Wooden, 2 Green How. Pr., 497; S. C, 12 Ab. Pr., 
 Ch., 429. N. S., 427. 
 
 12 Sollory V. Leaver, L. R., 9 Eq., 13 Tapp v. Rankin, 9 Leigh, 47& 
 22; Cremen v. Havvkes, 2 Jo. & Lat., 14 Drewry v. Barnes, 3 Riiss., 94. 
 674; Parmly v. Tenth Ward Bank. 15 Gray v. Chaplin, 2 Russ., 126. 
 3 Edw. Ch., 395 ; Corey v. Long, 43
 
 CHAP. XVII.] INJUNCTIONS. 885 
 
 lend its aid by a receiver.i^ The same principle prevails in 
 administering relief by interlocutory injunction, and the courts 
 have almost uniformly held that long-continued acquiescence 
 by the plaintiff in any particular grievance or violation of his 
 rights, which he afterward seeks to redress by the preventive 
 aid of an injunction, operates as a bar to relief in equity, and 
 courts of equity will decline to interfere in behalf of persons 
 thus negligent in the assertion of their rights. ^"^ 
 
 § 743. Distinct nature of the remedies; one not a neces- 
 sary incident of the other ; no receiver where injunction af- 
 fords ample protection. From the points of resemblance 
 already indicated between these remedies, and from the appli- 
 cation of certain fundamental principles of equity in admin- 
 istering both, it is not to be inferred that the appointment 
 of a receiver necessarily follows the granting of an injunction 
 in all cases, or that an injunction is a necessary incident to a 
 receivership, or that the two remedies are always inseparable. 
 And while there are cases where an injunction follows a re- 
 ceivership almost as of course,!^ or where a receiver is a nec- 
 essary incident to an injunction; ^^ and while it frequently 
 happens that the courts are called upon to administer both 
 remedies in one and the same action and at one and the same 
 time, it by no means follows that the one is a necessary in- 
 cident of the other, and the two are to be regarded as separate 
 and independent remedies. In other words, while both are 
 branches of the extraordinary preventive jurisdiction of equi- 
 ty, they are yet distinct and separate branches, used for the 
 attainment of different results, and a court of equity may prop- 
 erly refuse a receiver, although an appropriate case is pre- 
 
 16 Skinners Company v. Irish So- N. S., 91 ; Maythorne v. Palmer, 11 
 ciety, 1 Myl. & Cr., 162. Jnr., N. S.. 230. 
 
 17 Wood V. Sutcliffe, 2 Sim., N. 18 See Seigliortncr v. Wcisscn- 
 S., 163; Payne v. Paddock, Walk. born, 5 C. E. Green. 172. 
 rivrich.). 487; Jacox v. Clark, id., 19 Sec Penn v. Whiteheads, 12 
 249 ; Powell v. Allarton, 4 L. J. Ch., Grat., 74.
 
 886 RECEIVERS. [chap. XVII. 
 
 sented for an injunction.^O So the appointment of a receiver 
 is properly denied where an injunction will afford ample pro- 
 tection for the rights of the plaintiff.^l So, upon the other 
 hand, it is regarded as proper to appoint a receiver, if the 
 facts showing the necessity for the relief and the proper par- 
 ties are before the court, although the application was made 
 for an injunction, and did not specify the appointment of a 
 receiver.22 But if the injunction is a mere adjunct of the re- 
 ceivership, the reversal of the order appointing the receiver 
 will also operate as a reversal of the in j unction. ^^ 
 
 § 744. Neither remedy applicable to determine disputed 
 questions of title to public offices. Neither of the remedies 
 under consideration is regarded as an appropriate means, nor 
 is a court of equity the proper forum, for determining dis- 
 putes or controversies concerning the title to public offices, 
 all such questions properly pertaining to courts of law, to be 
 determined by proceedings in quo warranto, or other appro- 
 priate remedies prescribed by law for that purpose. And 
 while there are cases where both receivers and injunctions have 
 been allowed in aid of litigation to determine the right to the 
 fees or emoluments of public offices, considered merely as 
 property and when only contract rights have been involved,^* 
 equity will refuse to lend its extraordinary aid, either by an 
 injunction or by a receiver, for determining controversies con- 
 cerning the title to public offices, and will leave all such ques- 
 tions to the decision of courts of law, to which forum alone 
 they properly pertain. ^5 
 
 20 Rawnsley v. Trenton Mutual 23 Merrell v. Pemberton, 62 Ga., 
 Life & Fire Insurance Co., 1 Stockt., 29. 
 
 347; Oakley v. Paterson Bank, 1 24 palmer v. Vaughan, 3 Swans., 
 
 Green Ch., 173. And see, ante, % 16. 173; Cheek v. Tilley, 31 Ind., 121. 
 
 21 Empire Hotel Co. v. Main, 98 25 Tappan v. Gray, 9 Paige, 507. 
 Ga., 176, 25 S. E., 413; Tarvin v. And see People v. Draper, 24 Earb., 
 Walker's Creek C. & C. Co., 109 265; Stone v. Wetmore, 42 Ga., 601, 
 Ky.. 579, 60 S. W., 185. 
 
 22 Whitney v. Buckman, 26 Cal., 
 447.
 
 CHAP, XVII.] INJUNCTIONS. 887 
 
 § 745. Either may be granted although property in a 
 foreign country. It is not essential to the exercise of either 
 branch of the extraordinary jurisdiction of equity under con- 
 sideration, that the property constituting the subject-matter of 
 the litigation should be within the jurisdiction of the court, 
 provided the parties are within its control and amenable to its 
 process. And there are frequent cases where injunctions have 
 been granted against parties within the jurisdiction of the 
 court, although the subject-matter in controversy was beyond 
 reach of its process.^^ So there are frequent instances where 
 equity has appointed receivers, although the estate or property 
 which it was sought to protect was beyond the jurisdiction of 
 the court, being situated in a foreign country, the parties in 
 interest, however, being within its control and subject to its 
 process. 27 And it would seem to be competent for a court 
 of equity, in one country, to grant an injunction and appoint 
 a receiver in aid of the enforcement of a decree rendered in a 
 foreign country.28 g^t the exercise of such a power is re- 
 garded as improper when it is doubtful, upon the record, 
 whether plaintiffs will be ultimately entitled to a decree in the 
 second action. ^9 
 
 § 746. Conflict of jurisdiction between state and federal 
 courts a ground for both remedies. The existence of a 
 conflict of jurisdiction between state and federal courts has 
 been made the foundation for relief in equity, both by grant- 
 ing an injunction and by appointing a receiver over the prop- 
 erty in controversy. Thus, when there were actions pending 
 in both tribunals between adverse claimants to certain prop- 
 
 26 Bunbnry v. Bunbury, 1 Beav., 27 Davis v. Barrett, 13 L. J., N. S. 
 
 320; Beckford v. Kemble, 1 Sim. Ch., 304; Langford v. Langford, 5 
 
 & Stu., 7. See, also, Cranstown v. L. J., N. S. Ch., 60; Sheppard v. 
 
 Johnston, 3 Ves., 182; Porlarling- Oxenford, 1 Kay & J., 491; v. 
 
 ton V. Soiilby, 3 Myl. & K.. 104; Lindsey, 15 Ves., 91. 
 
 Dehon V. Foster, 4 Allen, 545; Vail 28 Ronlditch v. Lord Donegal, 8 
 
 V. Knapp, 49 Barb., 299; Vermont Bligh (N. S.), 301. 
 
 & Canada R. Co. v. Vermont Cen- 29 Houlditch v. Lord Donegal, 
 
 tral R. Co., 46 Vt., 792. Beat., 146.
 
 888 RECEIVERS. [chap. XVII. 
 
 erty of a perishable nature, and there was a probabihty of a 
 bitter and long-continued litigation, as well as imminent dan- 
 ger of collision between the executive officers of the two courts 
 in the enforcement of the process of their respective courts, 
 the case was regarded as an appropriate one for an injunction 
 and a receiver, the property being liable to become entirely 
 valueless unless taken possession of and sold.^^ 
 
 § 747. Injunctions to protect receiver's possession. The 
 aid of an injunction is sometimes a necessary adjunct to a 
 receivership for the purpose of protecting the receiver's pos- 
 session, and to prevent any unauthorized interference, by suit 
 or otherwise, with the property or fund intrusted to his care. 
 Indeed, so jealous are courts of equity of any unauthorized 
 interference with the possession of their receivers, that they 
 usually require all adverse claimants to come in and assert 
 their rights in the action in which the receiver was appointed. 
 And when parties asserting a right to property which is sub- 
 ject to a receivership attempt any unauthorized interference 
 therewith, or institute actions for its recovery against the re- 
 ceiver, without first obtaining leave of the court by which he 
 was appointed, that court may enjoin them from proceeding", 
 and thus compel them to assert their rights in the same forum 
 in which the receiver was appointed. ^^ And this may be done, 
 even though the claimant has an apparently clear right to the 
 property, since he can not be permitted to disturb the receiver's 
 possession until he has established his right by appropriate 
 
 30 Crane v. McCoy, 1 Bond C. C. of the receiver of the corporation to 
 422. resort to an ancillary bill and the 
 
 31 Tink V. Rundle, 10 Beav., 318; aid of an injunction for the purpose 
 Attorney-General v. St. Cross Hos- of protecting his possession, see, 
 pital, 18 Beav., 601 ; Johnes v. ante, § 342a. As to the right of a 
 Ciaughton, Jac, 573 ; Evelyn v. receiver of an insolvent corporation 
 Lewis, 3 Hare, 472; Woodburn v. to enjoin the enforcement of a judg- 
 .■^mith, 96 Ga., 241, 22 S. E., 964; ment against the corporation where 
 Virginia, T. & C. S. & I. Co. v. he has no remedy by certiorari or 
 Bristol Land Co., 88 Fed., 134. And by motion to vacate, see Rogers v. 
 see. ante, § 140. As to the right Haines, 114 Ala., 50, 21 So., 411.
 
 CHAP. XVII.] INJUNCTIONS. 889 
 
 proceedings for that purpose. ^2 Sq ^ receiver's possession 
 may be protected by injunction, although the party enjoined 
 is proceeding in the exercise of a statutory right, as in the 
 case of a railway company attempting to condemn land in 
 accordance with statute for the use of its road, but without 
 obtaining leave of the court by which a receiver has been 
 appointed over the land.^s So a person asserting a right of 
 common, in real estate in a receiver's possession, was enjoined 
 from trespassing upon the property when the alleged right 
 of common had been abandoned for several years, although 
 leave was given to be examined before a master, pro interessc 
 siw, as to the right claimed. ^^ So, too, a receiver who was en- 
 titled to possession of and to collect wharfage from a wharf 
 or landing upon a river, connected with the property intrusted 
 to his care, was allowed to maintain a bill for an injunction 
 against the authorities of a municipal corporation, who were 
 interfering with his possession and attempting to collect the 
 wharfage.^s And when tenants of premises subject to a re- 
 ceivership have, without leave of court, instituted actions of 
 trespass or of replevin against the receiver, who has dis- 
 trained for rent due from such tenants, they may be enjoined 
 from proceeding with such actions. ^^ It is held, however, 
 that an action against a receiver in his official capacity will 
 not be enjoined, on the receiver's application, upon the ground 
 that the matters in controversy have been determined by the 
 court in other proceedings, since this would be a complete de- 
 fense to the action which the receiver seeks to enjoin, and he 
 should avail himself of it in that action. ^"^ 
 
 § 748. When receiver enjoined from litigation. It has 
 been shown in the preceding section, that courts of equity 
 frequently interfere by injunction to prevent the prosecution 
 
 32 Evelyn v. Lewis, 3 Hare, 472. 36 /„ re Persse, 8 Ir. Eq., Ill; 
 
 33 Tink V. Rundle, 10 Beav, .318. Parr v. Bell, 9 Ir. Eq., 55. 
 
 34 Johnes v. Claiighton, Jac, 573. •"'" Jay's Case, 6 Ab. Pr., 293. 
 3-"> Grant v. City of Davenport, 18 
 
 Iowa, 179.
 
 890 RECEIVERS. [chap. XVII. 
 
 of unauthorized suits against their receivers, such rehef being 
 necessary for the protection of the receiver's possession, which 
 is, in fact, the possession of the court itself. It is also to be 
 observed, that the receiver himself may be enjoined from pros- 
 ecuting unauthorized suits against third persons, under pre- 
 tense of authority derived from the court. And when a re- 
 ceiver brings an action in the name of a third person, without 
 his authority and without the sanction of the court, the par- 
 ties to such suit are entitled to the aid of the court by an in- 
 junction to restrain such unauthorized proceedings.^^ If, how- 
 ever, the receiver has been duly authorized by the court to 
 bring a particular action, it will not permit him to be enjoined 
 from proceeding, the proper course for persons who may be 
 dissatisfied being to apply to the court appointing him for re- 
 lief, instead of seeking to enjoin him in another suit.^^ 
 
 38 In re Merritt, 5 Paige, 125. 39 Winfield v. Bacon, 24 Barb., 154.
 
 CHAP. XVII.] INJUNCTIONS. 891 
 
 II. The Remedies as Applied to Corporations. 
 
 § 749. Tendency of legislation; receiver over corporation does not 
 necessarily follow^ injunction. 
 
 750. Injunction may be granted as an adjunct of a receivership. 
 
 751. Application of the remedies to proceedings in quo warranto 
 
 in New York. 
 
 752. Injunctions in actions by receivers to recover unpaid subscrip- 
 
 tions and illegal dividends. 
 
 753. Injunctions in aid of receivers over railways; mortgagees of 
 
 tolls of turnpike; injunction on behalf of receiver of national 
 bank against illegal taxes; receiver may enjoin unfair compe- 
 tition. 
 
 754. Receiver over railway entitled to injunction against diversion 
 
 of earnings. 
 
 § 749. Tendency of legislation; receiver over corpora- 
 tion does not necessarily follow injunction. Questions of 
 considerable interest have sometimes arisen as to the extent 
 to which the remedies of an injunction and a receiver may be 
 appHed, in connection with each other, in cases affecting civil 
 corporations and the rights of shareholders and creditors. It 
 frequently happens that the extraordinary aid of equity is in- 
 voked against corporate bodies, under circumstances such as 
 to warrant an injunction against the corporation or its officers, 
 while the court is not justified in extending the aid of a receiv- 
 er. Indeed, the general jurisdiction exercised by courts of 
 equity over corporations, independent of statute, does not ex- 
 tend to the power of dissolving the corporation and destroying 
 its franchise, or of sequestrating the corporate property for 
 the benefit of creditors and shareholders. The tendency of 
 modern legislation, however, has been toward an enlargement 
 of the powers of courts of equity in this regard, and in many of 
 the states the power of appointing receivers over corporations 
 has been expressly conferred by legislative enactment. But, 
 in the absence of statutory authority, the courts frequently 
 decline to assume control by a receiver over the affairs of a 
 corporation, upon a bill by a shareholder alleging fraud and 
 mismanagement on the part of its officers, and limit the relief
 
 892 RECEIVERS. [chap. XVII. 
 
 to the granting of an injunction.'*^^ Even though the jurisdic- 
 tion of tlie court, as enlarged by statute, extends to appointing 
 a receiver over a corporation in a proper case, it by no means 
 follows, because an injunction has been granted against the 
 corporation, that a receiver should be allowed; since the cir- 
 cumstances of the case may be such as to justify a suspension 
 of the business of the corporation, while its officers are not in 
 fault and are the most proper persons to wind up its affairs. 
 And if it is apparent to the court that a receiver is not required 
 to protect the interests either of shareholders or of creditors, 
 and that a stranger to the corporate business and affairs can not 
 wind them up as satisfactorily as the directors, a receiver will 
 not be appointed and the management will be left in the hands 
 of the directors. ^1 
 
 § 750. Injunction may be granted as an adjunct of a 
 receivership. While, as is thus seen, courts of equity are 
 generally more reluctant to interfere with the management of 
 a corporation by a receiver than by an injunction, j^et when a 
 receiver has been appointed, an injunction may follow as a nec- 
 essary adjunct to the relief already granted. And upon ap- 
 pointing a receiver of all the assets and effects of a corporation, 
 in a proceeding to sequestrate its property and wind up its 
 affairs, the court may, in connection with such receivership 
 and as a part of its order, enjoin the officers and directors 
 from disposing of or incumbering any of the property, and from 
 collecting any demands due to the corporation, such an injunc- 
 tion being treated as a necessary adjunct or incident of the 
 receivership.42 Indeed, the appointment of a receiver over a 
 
 40 Waterbury v. Merchants Union Perry Patent Arm Co., 3 Stockt., 
 Express Co., 50 Barb., 157; Neall 126. As to the power of the court 
 V. Hill, 16 Cal, 145 ; Howe v. Deuel, to appoint a receiver for the pur- 
 43 Barb., 504; Belmont v. Erie R. pose of compelling obedience to its 
 Co., 52 Barb., 637. injunctions, see Stockton v. Central 
 
 41 Rawnsley v. Trenton Mutual R. R. Co., 50 N. J. Eq., 489, 25 Atl., 
 Life and Fire Insurance Co., 1 942. 
 
 Stockt., 347 ; Oakley v. Paterson 42 Morgan v. New York & Alba- 
 
 Bank. 1 Green Ch., 173 ; Nichols v. ny R. Co., 10 Paige, 290.
 
 CHAP. XVII.] INJUNCTIONS. 893 
 
 corporation is frequently equivalent to a suspension of its 
 corporate functions, and to an injunction against its agents and 
 officers, restraining them from intermeddling with the property 
 or with its management.^^ 
 
 § 751. Application of the remedies to proceedings in 
 quo warranto in New York. Under the code of procedure 
 in New York, in proceedings by the attorney-general of the 
 state in the nature of a quo ivarranto, having for their object 
 the dissolution of a corporation and the forfeiture of its fran- 
 chises, while the court may properl} grant an injunction to 
 restrain the corporation from disposing of its funds, or from 
 doing any illegal act, it will not appoint a receiver before judg- 
 ment of forfeiture.^* 
 
 § 752. Injunctions in actions by receivers to recover 
 unpaid subscriptions and illegal dividends. Under the 
 statutes of some of the states, receivers appointed to wind up 
 the affairs of insolvent corporations are empowered to collect 
 from delinquent shareholders the amounts due for unpaid sub- 
 scriptions to capital stock. When a receiver, in the discharge 
 of this duty, has obtained a decree against a shareholder for 
 the payment of a balance due on account of his subscription, 
 such shareholder is not entitled to an injunction against the 
 receiver to restrain him from collecting the amount until all 
 the debts can be ascertained, and the amount due from each 
 shareholder be determined, since such objection should have 
 been urged in defense of the action brought by the receiver, 
 and will not avail after a decree in that action.'*^ But when a 
 receiver of a corporation, occupying for the purposes of such 
 suit the position of a trustee for all its creditors, institutes an 
 action to recover back from the shareholders illegal dividends, 
 which they have received from the corporation while it was in 
 a state of insolvency, such shareholders are entitled to the pro- 
 
 43 Gravenstine's Appeal, 49 Pa. 4.5 Pentz v. Hawley, 1 Barb. Ch., 
 St., 310. 122. 
 
 44 People v. Washington Ice Co., 
 18 Ab. Pr.. 382.
 
 894 RECEIVERS. [chap. XVII. 
 
 tection of an injunction against individual creditors of the cor- 
 poration, to restrain them from prosecuting Hke actions. "^^ So 
 a receiver of a corporation, who is invested with a right of ac- 
 tion against dehnquent shareholders for the recovery of their 
 unpaid subscriptions to the capital stock may enjoin the credi- 
 tors of the company from proceeding with separate actions of 
 the same nature for satisfaction of their individual demands. '^'^ 
 And when the receiver of an insolvent bank is proceeding in 
 equity concurrently and in the same action with some of its 
 creditors to enforce an additional liability of the stockholders 
 under the charter of the bank for the benefit of all creditors 
 entitled thereto, the court may enjoin individual creditors 
 from pursuing separate actions at law to enforce such liability 
 for their own benefit. ^^ 
 
 § 753. Injunctions in aid of receivers over railways; 
 mortgagees of tolls of turnpike; injunction on behalf of 
 receiver of national bank against illegal taxes; receiver 
 may enjoin unfair competition. The aid of an injunction 
 is sometimes necessary in behalf of a receiver, as an adjunct 
 to the original action in which he was appointed, and for the 
 purpose of more effectually preserving the subject-matter over 
 which his appointment extends. For example, when a receiver 
 is appointed over a railway company, and is empowered by 
 the order of court to secure and protect the assets, franchises 
 and rights of the company, and a land grant to which it is 
 entitled from the state, he may maintain a bill in equity to en- 
 join the state officers from granting the same lands to other 
 persons. Such an action is regarded as an adjunct of the 
 original suit, and is analogous to a petition by the receiver to 
 the court, asking that it protect his possession and the property 
 under his control. ^^ So when a receiver is appointed over a 
 
 46 Osgood V. Laytin, 3 Keyes, 521. 48 Eames v. Doris, 102 111., 350. 
 affirming S. C, 48 Barb., 464. 40 Davis v. Gray, 16 Wal., 203, af- 
 
 47 Calkins v. Atkinson, 2 Lans., firming S. C, 1 Woods, 420. 
 12; Rankine v. Elliott, 16 N. Y., 
 
 377.
 
 CHAP. XVII.] INJUNCTIONS. 895 
 
 railway company in behalf of its mortgage bondholders, in 
 proceedings for foreclosure when the security is inadequate to 
 the payment of the mortgage indebtedness and the corporation 
 is shown to be insolvent, it is proper to accompany the receiv- 
 ership with an injunction against the railway company and its 
 agents, to prevent any interference with the receiver, or with 
 the property intrusted to him.^^ And as between different 
 mortgagees of the tolls of a turnpike company, all of whom 
 are entitled to payment out of the tolls pari passu, and without 
 priority, a mortgagee who receives the entire tolls, and applies 
 them in discharge of his own demand, may be enjoined and a 
 receiver of the tolls may be appointed on the application of an- 
 other mortgagee.^l And a receiver of a national bank appoint- 
 ed by the comptroller of the currency may maintain a bill to 
 enjoin the collection of taxes illegally assessed against the bank 
 where the case is one which otherwise justifies the interposition 
 of equity by injunction.^2 go a receiver of an insolvent cor- 
 poration may have an injunction to protect the business under 
 his control against injuries resulting from unfair competi- 
 tion.^2 
 
 § 754. Receiver over railway entitled to injunction 
 against diversion of earnings. A receiver of a railway 
 company, who is directed to operate and manage the road sub- 
 ject to the orders and direction of the court, is entitled to an 
 injunction to prevent an improper diversion of the earnings 
 or an attempt to divest the receiver's control over them, since 
 his successful management of the road depends upon his con- 
 trol over its income and earnings. And the injunction may be 
 granted, although the attempt to divert the earnings is made 
 
 50 Ruggles V. Southern Minnesota corporation to resort to an ancil- 
 Railroad, U. S. Circuit Court, Dis- lary bill and the aid of an injunc- 
 trict of Minnesota, 5 Chicago Legal tion for the purpose of protecting 
 News, 110. his possession from the assertion of 
 
 51 Dumville z/.Ashbrooke, 3 Russ., hostile and conflicting claims, see, 
 99. note c. ante. § 342(j. 
 
 52 Brown :;. French, 80 Fed., 166. 53 Brookficld v. licckcr, 118 Fed., 
 As to the right of the receiver of a 942.
 
 896 RECEIVERS. [chap. XVII. 
 
 by suit in another state, the parties, however, being- within the 
 jurisdiction of the court by which the receiver was appointed, 
 and whose aid he seeks by injunction. The court, under such 
 circumstances, does not attempt by its injunction to operate 
 upon the court in the other state, but only acts in personam 
 upon the parties within its own jurisdiction, in accordance with 
 well-estabhshed principles of equity, and restrains them from 
 interfering with or diverting the earnings to which the receiv- 
 er is entitled. 5^ 
 
 64 Vermont & Canada R. Co. v. Vermont Central R. Co., 46 Vt., 792.
 
 CHAP. XVII.] INJUNCTIONS. 897 
 
 III. Creditors' Suits. 
 
 •§ 755. Creditors without judgment not entitled either to injunction 
 or receiver. 
 
 756. Exception to the rule in partnership cases. 
 
 757. Lien upon vessel; action by creditors of married woman to 
 
 charge her individual property. 
 
 758. Judgment creditors entitled to both remedies; former practice 
 
 under New York chancery system. 
 
 759. When receiver denied injunction and receiver in action to set 
 
 aside assignment by debtor. 
 
 § 755. Creditors without judgment not entitled either 
 to injunction or receiver. Courts of equity are frequently 
 called upon to interfere, both by a receiver and an injunction, 
 for the protection of judgment creditors seeking the enforce- 
 ment of their judgments out of the property and equitable as- 
 sets of the debtor. Neither remedy, however, will be adminis- 
 tered in behalf of mere general creditors, without lien upon the 
 debtor's property, and whose rights have not been judicially 
 established by a judgment. Any interference with the prop- 
 erty of the citizen, or with his right to manage and dispose of 
 it, before judgment recovered against him, is beyond the ju- 
 dicial power, and courts of equity will not enlarge or extend 
 their extraordinary jurisdiction beyond the well-defined limits 
 iixed by law. And whatever hardships or embarrassments 
 may result to creditors from the enforcement of the doctrine, 
 by reason of the slow procedure in courts of law or otherwise, 
 are regarded as evils which should properly be redressed by 
 legislative rather than by judicial authority.^^ And the rule 
 is applied even where the bill alleges gross fraud upon the 
 
 55Uhl V. Dillon, 10 Md., 500; Stockt., 465; Phelps v. Foster, 18 
 
 Blondheim v. Moore, 11 Md., 365; 111., 309; Bigelow v. Andress, 31 
 
 Nusbaum v. Stein, 12 Md., 315; 111., 322. See contra, Haggarty v. 
 
 Hubbard v. Hubbard, 14 Md., 356; Pittman, 1 Paige, 298; Cohen v. 
 
 Bayaud v. Fellows, 28 Barb., 451; Meyers, 42 Ga., 46; Thompsen v. 
 
 Wiggins V. Armstrong, 2 Johns. Diffcnderfer, 1 Md. Ch., 489; Ros- 
 
 Ch., 144; Holdrege v. Gwynne, 3 enberg z/. Moore, 11 Md., 376. 
 C E. Green, 26; Young v. Frier, 1 
 
 Receivers — 57.
 
 898 . RECEIVERS. [chap. XVII. 
 
 part of the debtor, and that he has transferred his effects to 
 defrand his creditors, and that plaintiff has bronght suit upon 
 his demand, but can not obtain judgment and execution before 
 defendant's assets are wasted. ^^ 
 
 § 756. Exception to the rule in partnership cases. Un- 
 der the New Ygrk code of procedure, however, a departure 
 from the rule is allowed in proceedings for the enforcement 
 of demands due from partnership debtors. And it is held, in 
 such cases, when the insolvency of the firm and of its individual 
 members is conceded, and the indebtedness is admitted to be 
 justly due, that a creditor of the firm, even before judgment, 
 may have an injunction and a receiver, as against the partners 
 and third persons to whom they have attempted to assign their 
 property for the purpose of hindering their creditors. In such 
 cases, there being no advantage to be derived from a prelimi- 
 nary judgment and execution, the courts extend all the relief 
 sought in one and the same action, without compelling the 
 creditor to submit to the delay of obtaining judgment by a 
 separate suit.^'^ 
 
 § 757. Lien upon vessel; action by creditors of married 
 woman to charge her individual property. So a creditor 
 may have such a special or equitable lien upon the debtor's 
 property as to entitle him both to a receiver and an injunction, 
 although his demand is not yet reduced to judgment. Thus, 
 persons advancing money for supplies and repairs of a vessel, 
 and receiving from the master an assignment of all the earn- 
 ings of the vessel upon her voyage, and of all lien or interest 
 which he as master has therein, are entitled to an injunction 
 against any interference with the collection of the earnings, 
 as well as a receiver to collect them, upon showing the insolv- 
 ency of the owners and that such relief is necessary to protect 
 their lien.^^ So in an equitable action by creditors of a mar- 
 
 56 Rich V. Levy, 16 Md. 74. How. Pr., 461; Jackson v. Sheldon, 
 
 57 Mott V. Dunn, 10 How. Pr., 9 Ab. Pr., 127. 
 
 225. And see Levy v. Ely. 15 How. 58 Sorley v. Brewer, 18 How. Pr., 
 
 Pr.. 395; La Cliaise v. Lord, 10 276.
 
 CHAP. XVII.] INJUNCTIONS. 899 
 
 ried woman who is doing business as a trader, the creditors 
 seeking to charge her individual property with the payment of 
 her debts, it has been held proper to appoint a receiver and 
 grant an injunction, when it is apparent that there is danger of 
 the assets being wasted or placed beyond reach of the creditors, 
 the relief, in such cases, being based upon the same grounds as 
 in ordinary cases of creditors' bills for the enforcement of 
 judgments. ^^ 
 
 § 758. Judgment creditors entitled to both remedies; 
 former practice under New York chancery system. After 
 creditors have established their demands against a debtor by 
 judgment, and have thus acquired a lien upon his property, 
 they may properly invoke the aid of equity both by a receiver 
 and an injunction, as a necessary means of enforcing payment 
 of their judgments, and preventing the debtor from Avasting 
 or disposing of his assets until their judgments are satisfied. 
 For example, creditors who have obtained judgment and levied 
 upon a stock of goods in their debtor's possession may have an 
 injunction and a receiver, as against the debtor and a third per- 
 son claiming the goods as mortgagee, upon a bill alleging that 
 the goods are more than sufficient to pay the mortgage indebt- 
 edness ; that a portion of the stock is not covered by the mort- 
 gage; that the debtor has no other property out of which to 
 satisfy the judgment, and that the mortgagee has permitted 
 the debtor to use and dispose of the goods covered by the mort- 
 gaged^ And under the former chancery practice in New York, 
 receivers and injunctions were allowed almost as of course 
 upon creditors' bills, after return of execution against the 
 debtor nulla bona. And it was held to be the duty of the judg- 
 ment creditor, after filing his bill and obtaining an injunction 
 to restrain the debtor from interfering with his assets, to 
 apply to the court within a reasonable time for a receiver over 
 the assets, to prevent them from being wasted or destroyed, 
 and to secure the collection of debts due the defendant.^l In 
 
 59 Todd V. Lee, 15 Wis., 365. '"'l Bank of Monroe v. .Schcrmer- 
 
 60 Rose V. Bevan, 10 Md., 466. horn, Clarke Ch., 214; Osborn v.
 
 900 RECEIVERS. [chap, XVII. 
 
 such cases, the courts proceed upon the theory that the defend- 
 ant debtor, after being enjoined from interfering with or dis- 
 posing of his property, can have no honest motive in resisting 
 the appointment of a receiver; and that if he has property it 
 is for his own interest that it should be preserved pendente lite, 
 while if he has none, no harm can result from the appointment, 
 and plaintiff proceeds at the risk of his costs.^^ 
 
 § 759. When receiver denied injunction and receiver in 
 action to set aside assignment by debtor. When a receiv- 
 er in a creditor's suit institutes an action to recover property 
 transferred by the debtor, under a voluntary assignment for 
 the benefit of his creditors, he is not entitled to an injunction 
 and a receiver as to the property assigned, if he fails to show 
 that the transfer was made to hinder or defraud creditors.^s 
 
 Heyer, 2 Paige, 342. And see 63 Bostwick v. Elton, 25 How. 
 
 Bloodgood V. Clark, 4 Paige, 574. Pr., 362. 
 
 62 Fitzburgh v. Everingham, 6 
 Paige, 29.
 
 CHAP. XVII.] INJUNCTIONS. ' 901 
 
 IV. Partnerships. 
 
 § 760. The remedies dependent upon the same conditions; case as 
 presented must warrant a dissolution. 
 
 761. Actual partnership must be shown; when defendant allowed to 
 
 give security in lieu of injunction and receiver. 
 
 762. Grounds for injunction and receiver in partnership cases; want 
 
 of confidence; irreconcilable disagreement; defendant's in- 
 solvency and fraud. 
 
 763. Injunction and receiver do not necessarily follow dissolution; 
 
 defendant's insolvency after dissolution. 
 
 764. Violation of articles ground for relief; lumber business; courts 
 
 averse to appointing receiver ex parte. 
 
 765. Partnership in farm; mining business in foreign country. 
 
 766. Receiver does not necessarily follow injunction; when in- 
 
 junction dependent on fate of receivership. 
 
 767. Denial by answer a bar to relief. 
 
 768. Assignment by insolvent partners after dissolution ground for 
 
 relief. 
 
 769. Receiver and injunction on death of partner. 
 
 770. Receiver allowed when defendants enjoined from collecting 
 
 debts; receiver not enjoined from managing fund. 
 
 771. Sale of good-will by receiver and injunction against con- 
 
 tinuing business in same locality. 
 
 § 760. The remedies dependent upon the same condi- 
 tions; case as presented must warrant a dissolution. In 
 
 actions for the dissolution of partnerships and for an account- 
 ing between partners, courts of equity are frequently called 
 upon to administer relief both by granting an injunction and 
 appointing a receiver, in one and the same action. Substan- 
 tially the same conditions are necessary, in this class of cases, 
 to justify the interposition of a receiver, as are requisite to 
 warrant an injunction. The relief will not be granted merely 
 because of a quarrel between partners, but there must be some 
 actual abuse of partnership property, or of the rights of a 
 member of the firm, and a mere temptation to such abuse will 
 not suffice. And to warrant a court in granting either of these 
 remedies, the case as presented must appear to be such as to 
 justify a decree for a dissolution of the firm, since, in interpos- 
 ing its extraordinary aid, equity generally looks to the winding
 
 902 RECEIVERS. [chap. XVII. 
 
 up of the business, and not to its continuation or management 
 by the court. If, therefore, a dissokition has actually taken 
 place, or if it is apparent that it will be decreed because of a 
 breach of contract or of duty by one partner, equity may proper- 
 ly interfere.^"^ And when, upon the dissolution of a partner- 
 ship, the partners are unable to agree upon the adjustment of 
 its affairs, the courts will usually appoint a receiver, with a 
 view to protecting the rights of all parties in interest, and will 
 grant an injunction as a necessary adjunct of the receivership.^^ 
 But when the allegations of the bill on which a preliminary in- 
 junction has been granted are fully and positively denied by the 
 answer of the defendant partner, the injunction will be dis- 
 solved and a motion for a receiver will be denied. ^^ 
 
 § 761. Actual partnership must be shown ; when defend- 
 ant allowed to give security in lieu of injunction and re- 
 ceiver. It is also to be borne in mind, that it is indispens- 
 able to the granting either of an injunction or of a receiver in 
 partnership cases, that there should actually be an existing part- 
 nership between the parties, since, otherwise, the individual 
 property of a defendant might be interfered with, and it might 
 appear in the end that plaintiff had no right. When, therefore, 
 the partnership is merely nominal, the parties acting under an 
 agreement that one shall be employed by the other, his com- 
 pensation to be paid by a share of profits either with or without 
 additional salary, the contract expressly stating that they are 
 not partners, although using a firm name, the person thus em- 
 ployed has no such lien upon the assets as to warrant a court of 
 equity in entertaining a bill in his behalf for an injunction and 
 a receiver, 6'^ even though the conduct of the parties has been 
 such as to render them liable as partners to third persons, 
 the rights of third persons or of creditors not being involved 
 
 64Henn v. Walsh, 2 Edw. Ch., 6G Rhodes v. Lee, 32 Ga., 470; 
 
 129. Henn v. Walsh, 2 Edw. Ch., 129. 
 
 65 Van Rensselaer v. Emery, 9 67 Kerr v. Potter, 6 Gill. 404; 
 
 How. Pr., 135. Nutting v. Colt. 3 Halst. Ch., 539.
 
 CHAP. XVII.] INJUNCTIONS. 903 
 
 in the litigation. ^^ And when the plaintiff partner, in an action 
 for the dissolution of a firm, has obtained a receiver and an in- 
 junction, but defendants deny the existence of a partnersliip, 
 and it is apparent to the court that plaintiff's interest in the 
 firm, if any, is very small, and that the business will be greatly 
 endangered, if not ruined, by continuing the receiver, it is prop- 
 er to permit defendants, in lieu of the injunction and receiver, 
 to give plaintiff security for any sum to which he may ulti- 
 mately be found entitled. ^^ 
 
 § 762. Grounds for injunction and receiver in partner- 
 ship cases; want of confidence; irreconcilable disagree- 
 ment; defendant's insolvency and fraud. It has already 
 been shown that equity will not extend the aid of an injunction 
 and a receiver in partnership cases because of a mere quarrel 
 between the partners, but that some actual abuse or injury must 
 be shown. '^'^ But the fact that a partner's conduct has been 
 such as to destroy that feeling of mutual confidence which 
 should exist between co-partners may properly be taken into 
 consideration by the court, and is an important element in de- 
 termining whether plaintiff is entitled to an injunction and a 
 receiver.'^^l And when, by reason of the improper conduct of 
 one of two partners, such a want of confidence exists between 
 them as to justify the court in dissolving the firm, a receiver 
 may be appointed and an injunction granted, the injimction 
 following the receiver almost as of course, under such circum- 
 stances.'^2 /^^d when the case, as presented upon the pleadings, 
 discloses a serious and apparently irreconcilable disagreement 
 between the partners as regards the control and disposition of 
 their assets and their respective claims against each other, a 
 court of equity may properly grant an injunction and a receiver, 
 
 68 Kerr v. Potter, 6 Gil!, 404. Green, 388; Williamson v. Wilson, 
 
 69 Popper V. Sclieider, 7 Ab. Pr., 1 Bland, 418; Boyce v. Burchard, 
 N. S., 56. 21 Ga.. 74. 
 
 70 See § 760, anlc. "- Sieghorfncr v. Weissenborn, 5 
 
 71 Smith V. Jeyes, 4 Bcav., 50."?. C. E. Green, 172. 
 See, also. Sutro v. Wagner, 8 C. E.
 
 904 RECEIVERS. [CIIAP. XVII. 
 
 the relief, in such a case, being regarded as a provident exer- 
 cise of the extraordinary jurisdiction of equity 7^ So when 
 plaintiff shows that the defendant partner is insolvent and has 
 disposed of part of the property with intent to defraud credit- 
 ors, an injunction and a receiver may be allowed, although 
 there is a dispute as to wiiether property in defendant's posses- 
 sion is firm property, if it appears that it was received as part 
 payment upon a sale of property belonging to the firm.'^* So, 
 too, a failure by one partner to contribute his portion of the 
 capital stock as agreed upon by the partnership articles, cou- 
 pled with his insolvency and refusal to pay any portion of the 
 firm debts, and the sale of his interest to a third person with- 
 out the knowledge or consent of his partner, afford sufficient 
 grounds for an injunction and a receiver, when such purchaser 
 has taken possession of the firm property and threatens to ex- 
 clude the other partner therefrom. '^^ 
 
 § 763. Injunction and receiver do not necessarily follow^ 
 dissolution; defendant's insolvency after dissolution. As 
 has already been shown, equity will seldom lend its aid by a 
 receiver and an injunction in partnership matters, unless such 
 a case is presented as to justify a dissolution of the firm. But 
 it is not to be inferred from this general doctrine, that be- 
 cause a firm has been dissolved and plaintiff is entitled to an 
 accounting, he is necessarily entitled to an injunction and a 
 receiver ; and there must, in all cases, be some actual abuse of 
 partnership rights, or of partnership property, to warrant a 
 court of equity in interfering.'^^ when, however, in an action 
 between partners for a settlement of their firm affairs after 
 dissolution, defendant is shown to be insolvent, the court may 
 properly grant an injunction and a receiver for the protection 
 of plaintiff's rights, the insecurity of the partnership assets, 
 
 73 Whitman v. Robinson, 21 Md., "^5 Heathcot v. Ravenscroft, 2 
 
 30. Halst. Ch., 113. 
 
 '4 Saylor v. Mockbie, 9 Iowa, "6 Renton v. Chaplain, 1 Stockt, 
 
 209. 62.
 
 CHAP. XVII.] INJUNCTIONS. _ 905 
 
 if left to the control of an insolvent defendant, affording strong 
 ground for relief in equity.'^'^ 
 
 § 764. Violation of articles ground for relief; lumber 
 business; courts averse to appointing receiver ex parte. 
 Violations of the copartnership articles are sometimes made 
 the foundation for an injunction and a receiver in controver- 
 sies between partners. Thus, when a partnership is formed* 
 for the purpose of sawing lumber, and by the articles of agree- 
 ment the partner intrusted with the management of the busi- 
 ness is to take the necessary timber for use in the business from 
 land belonging to his copartner, a violation of this part of the 
 contract has been held to constitute sufficient ground for a re- 
 ceiver and an injunction, the firm being shown to be in a de- 
 clining condition and its indebtedness increasing. '^^ But when 
 an injunction has already been granted in a controversy be- 
 tween partners, which affords ample protection from loss until 
 a motion for a receiver can be regularly heard, the court will 
 decline to appoint a receiver without notice to defendant and 
 before service of process. "^^ 
 
 § 765. Partnership in farm; mining business in foreign 
 country. Where plaintiffs, who were the owners of a farm, 
 had entered into an agreement with defendant in the nature 
 of a partnership for working the farm and for a division of the 
 profits, plaintiffs reserving the right to terminate the partner- 
 ship on six months* notice if the profits should not reach a speci- 
 fied amount, they were allowed an injunction and a receiver, 
 upon showing that the profits had not reached the prescribed 
 amount.80 And when an association in the nature of a partner- 
 ship was organized in England, to conduct the business of 
 mining in a foreign country, and the property of the associa- 
 tion in the foreign country was vested in a trustee for manage- 
 ment, a member of the association in England, upon a bill in 
 behalf of himself and all others for an accounting and a dis- 
 
 77 Randall v. Morrell, 2 C. E. 7ft McCarthy v. Peake. 18 How. 
 
 Green 343. ^''■- ^■^^• 
 
 78 New V. Wright, 44 Miss., 202. 80 Dunn v. McNaught, 38 Ga., 179.
 
 906 RECEIVERS. [chap. XVII. 
 
 tribution of the profits, was allowed a receiver and an injunc- 
 tion to restrain the trustee from selling, the trustee having ab- 
 sconded and having threatened to sell the property.^l 
 
 § 766. Receiver does not necessarily follow injunction; 
 when injunction dependent on fate of receivership. Al- 
 though a preliminary injunction is granted upon an ex parte 
 ►application, on a bill by one partner seeking a dissolution of the 
 tirm, it does not necessarily follow that a receiver must be 
 appointed. And if the court is satisfied, upon the case as pre- 
 sented, that plaintiff is not entitled to a dissolution, it will re- 
 fuse to appoint a receiver and will leave the injunction to be 
 dissolved upon motion for that purpose.^^ g^^t the continuance 
 of an injunction which has been granted to preserve partner- 
 ship property from waste pending an application for the ap- 
 pointment of a receiver, is dependent upon the fate of such 
 application, and if the receiver is denied the injunction must 
 be dissolved.8^ If, however, the court has appointed a re- 
 ceiver, and has also allowed an injunction as a necessary ad- 
 junct to the receivership, under the circumstances of the case, 
 upon overruling a motion to rescind the appointment of the 
 receiver it will continue the injunction until the hearing, or 
 until the further order of the court. ^"^ 
 
 § 767. Denial by answer a bar to relief. A full denial 
 by defendant's answ^er of all the equities of plaintiff's bill 
 will usually operate as a bar to relief by an injunction and a 
 receiver, in partnership as in other cases. And w^hen the plain- 
 tiff partner seeks a dissolution, upon the ground that de- 
 fendant has drawn from the business more than the sum to 
 which he w^as entitled under the partnership articles, but the 
 answ^er denies this and denies all the allegations of the bill, 
 the court will not grant either an injunction or a receiver.^^ 
 
 81 Sheppard v. Oxen ford, 1 Kay 84 Williamson v. Wilson, 1 Bland, 
 & J., 491. 428. 
 
 82 Garretson v. Weaver, 3 Edw. 8.5 Henn v. Walsh, 2 Edw. Ch., 
 Ch., 385. 129. 
 
 83 Walker v. House, 4 Md. Ch., 
 39.
 
 CHAP. XVII.] INJUNCTIONS. 907 
 
 § 768. Assignment by insolvent partners after dissolu- 
 tion ground for relief. When a partnership is dissolvable 
 at the will of either partner, and does, in fact, become dissolved 
 by the insolvency of some members of the firm, an assignment 
 of the firm assets by the insolvent members for the payment 
 of their private debts, is sufficient ground for a receiver and 
 an injunction, which should extend to all the firm assets in 
 the hands of the defendants and of their assignee. ^^ 
 
 § 769. Receiver and injunction on death of partner. In 
 case of the deatl]_ of one partner, there being no partnership 
 articles, and no provision for continuing the business by repre- 
 sentatives of the deceased partner, if the survivor refuses to 
 close up the business within a reasonable time, but continues to 
 manage it for his own benefit and in his own name, the court 
 \vill enjoin him from continuing and will appoint a receiver, 
 upon a bill by the administrator of the deceased partner, equity, 
 under such circumstances, regarding the survivor as a trustee 
 for the creditors and representatives of the deceased.^" And 
 upon appointing a receiver, upon a bill by the administrator of 
 a deceased partner against the survivors, the court will require 
 them to deliver to the receiver all unexpended money in their 
 hands, with all personal property, evidences of debt, and choses 
 in action, and will enjoin them from collecting any debts due 
 to the firm.^^ 
 
 § 770. Receiver allowed when defendants enjoined from 
 collecting debts; receiver not enjoined from managing 
 fund. Upon a bill by a partner for a dissolution of the 
 firm, when the defendant partners have been enjoined from 
 collecting debts, the court should appoint a receiver to collect 
 the debts.89 And when a receiver is appointed over partrier- 
 ship effects, in proceedings under judgments against the firm. 
 it is improper to enjoin him from the management of the 
 
 86 Davis V. Grove, 2 Rob. (N. 88 Miller z'. Jones, 39 111.. 54. 
 Y.), 134; Same v. Same, id., 635. 89 Mahcr v. Bull, 44 111., 97. 
 
 87 Holden's .Administrators V. 
 McMakin, Par. Eq. Cas.. 270.
 
 908 RECEIVERS. [CHAr. XVII. 
 
 fund or property, since this would be equivalent to enjoining 
 the court itself from disposing of the funds which may come 
 into the hands of its officer, the receiver.^^ 
 
 § 771. Sale of good-will by receiver and injunction 
 against continuing business in same locality. When the 
 business of a partnership is of such a nature that it is impos- 
 sible for a receiver to conduct it, and the court, therefore, di- 
 rects a sale of the lease and good-will of the firm, it is proper, 
 for the purpose of giving efficacy to the sale of the good-will, 
 to permit either party to purchase, and to enjoin the others 
 from conducting the same business in the same locality.^^ 
 
 90 Van Rensselaer v. Emery, 9 ^i Williams v. Wilson, 4 Sandf. 
 
 How. Pr., 135. Ch., 379.
 
 CHAP. XVII.] INJUNCTIONS. 909 
 
 V. Real Property. 
 
 § 772. Equity averse to interfering by injunction and receiver with 
 possession of real property under claim of title. 
 nZ. Long acquiescence in possession may bar relief. 
 
 774. Injunction and receiver refused in proceeding by lessor against 
 
 lessee. 
 
 775. Refused heir-at-law and devisee on bill to determine widow's 
 
 dower. 
 
 116. Purchaser at judicial sale allowed both remedies. 
 
 111. Receiver my enjoin waste; may enjoin breach of covenant by 
 tenant. 
 
 778. When receiver and injunction granted in equitable action to 
 recover realty; tenant for life permitting taxes to be in ar- 
 rears; contract between owner and tenant. 
 
 119. Remainder-man and tenants not allowed to enjoin receiver 
 from dispossessing them. 
 
 780. The relief as between tenants in common. 
 
 § 772. Equity averse to interfering by injunction and 
 receiver with possession of real property under claim of 
 title. In considering the appHcation of the extraordinary 
 remedies under consideration in cases affecting real property, 
 the most noticeable feature to be observed is the extreme aver- 
 sion manifested by courts of equity to any interference in 
 limine with the possession of real estate, as against a defendant 
 in possession and claiming under a legal title. Indeed, it may 
 be asserted as a general proposition, sustained by both the 
 English and American authorities, that in a controversy con- 
 cerning the title to real property, in which plaintiff asserts a 
 legal title in himself, against a defendant who is in possession 
 under claim of legal title, and in receipt of the rents, courts of 
 equity decline to lend their extraordinary aid either by a re- 
 ceiver or by an injunction in limine, and leave the rights of the 
 parties to be determined by a court of law. And while there 
 may be special circumstances of fraud or of imminent danger, 
 sufficient in extreme cases to warrant a departure from the 
 rule, the general doctrine as here stated remains unquestioned, 
 and equity will decline to interfere by the exercise of either 
 branch of its extraordinary jurisdiction, before plaintiff has es-
 
 910 RECEIVERS. [chap. XVII. 
 
 tablished his title at law.^- Indeed, the rule as stated necessa- 
 rily follows from the established doctrine that equity will not 
 interfere when adequate relief may be had at law. Hence 
 courts of equity will refuse to grant an injunction and to ap- 
 point a receiver, in a contest concerning the possession of real 
 property, when redress may be had at law by the usual methods 
 of procedure, and will leave the parties aggrieved to pursue 
 their legal remedy. For example, a devisee of realty, claiming 
 by his bill the title and right of possession, and that defendant 
 has unlawfully usurped possession and continues to hold with- 
 out right, receiving income and depriving plaintiff of his means 
 of support, can not have the aid of an injunction and a re- 
 ceiver in liininc, even though he alleges the insolvency of de- 
 fendant in possession, but will be left to assert his title by pro- 
 ceedings at law.^^ 
 
 § 773. Long acquiescence in possession may bar relief. 
 It may also be a sufficient objection to disturbing the posses- 
 sion of real property by an injunction and a receiver, that such 
 possession has been long acquiesced in and has remained undis- 
 turbed for many years. And when the property in controversy 
 has been held and managed and its proceeds have been applied 
 by a corporation in a particular manner for a long term of 
 years, the possession will not be disturbed by an injunction 
 and a receiver upon the ground that such application of the 
 proceeds is a breach of trust, unless the court is satisfied that 
 defendant is a mere naked trustee, without right or discretion 
 as to the management of the property.^^ 
 
 92 Lloyd V. Passin-ham, 16 Ves., 93 pfdtz v. Pfeltz, 14 Md., 376. 
 
 59; S. C, 3 Meriv., 697; Schlecht's 94 Skinners Company v. Irish So- 
 
 Appeal, 60 Pa. St., 172; Pfeltz v. ciety, 1 Alyl. & Cr., 162. See, also, 
 
 Pfeltz, 14 Md., 376. See, also, Clark Municipal Commissioners of Car- 
 
 V. Ridgely, 1 Md. Ch., 70; Willis v. rickfergus v. Lockhart, Ir. Rep., 3 
 
 Corlies, 2 Edw. Ch., 281 ; Owen v. Eq., 515. 
 Homan, 3 Mac. & G., 378, affirmed 
 on appeal to the House of Lords, 
 4 H. L. Rep., 997.
 
 CHAP. XVII.] INJUNCTIONS. 911 
 
 § 774. Injunction and receiver refused in proceeding by 
 lessor against lessee. The general rule already stated, de- 
 nying the aid of a receiver and an injunction as against a de- 
 fendant in possession under claim of title, is applicable as be- 
 tween a lessor and his lessee, the latter being clothed with a le- 
 gal title and a right to possession thereunder. And when the 
 -owner of premises executes a lease thereof, under which the 
 lessee is authorized to bore for and take oil from the premises, 
 returning one-fourth of the product as rental, equity will re- 
 fuse an injunction and a receiver in a proceeding by the lessor 
 in aid of an action at law for a forfeiture of the lease.^^ 
 
 § 775. Refused heir-at-law and devisee on bill to deter- 
 mine widow's dower. When an heir-at-law^ and devisee 
 under a will files a bill to determine a widow's dower in the 
 estate, and prays an injunction to prevent a transfer of the 
 property and a receiver of the rents and profits, the court will 
 not interfere merely upon an allegation that the rents are in 
 jeopardy, but it must appear how they are endangered. And 
 when the bill does not allege that the rents and profits will be 
 lost by reason of insolvency of the persons who are receiving 
 them, or that plaintiff has not an adequate remedy at law for 
 whatever portion of the rents he may be entitled to, the relief 
 will be refused. ^^ 
 
 § 776. Purchaser at judicial sale allowed both remedies. 
 A purchaser of lands at a judicial sale, who has obtained a 
 sheriff's deed of the premises upon the expiration of the 
 statutory period of redemption, has been allow'ed a receiver 
 and an injunction in aid of an action to obtain possession. 
 And when, in such an action, it was alleged that defendants 
 were insolvent and were endeavoring to defraud plaintiff 
 of his rights, the court granted an injunction and appoint- 
 ed a receiver to take charge of the growing crops, in order 
 
 «^> Chicago & Allegheny Oil & "« Knighton v. Young, 22 Md., 
 
 Mining Co. v. The United States 359. 
 Petroleum Co., 57 Pa. St., 83 ; S. C, 
 6 Phila., 521.
 
 912 RECEIVERS. [chap. XVII. 
 
 that they might be harvested and prepared for market, and 
 tlie proceeds held subject to the final order of the court. ^"^ 
 
 § 777. Receiver may enjoin waste; may enjoin breach 
 of covenant by tenant. A receiver may be allowed the aid 
 of an injunction, in a proper case, to restrain the commission of 
 ■.vaste on premises subject to his control. And it is held under 
 the Irish practice, that the receiver may, in a pressing case, file 
 his bill to enjoin the waste, and that at the same time with 
 moving for the injunction he may move a reference to a master 
 to report as to the necessity of such proceeding and whether it 
 shall be continued. ^^ So it has been held proper for the court, 
 upon motion of the receiver, to grant a conditional restraining 
 order against the commission of waste by tenants, without any 
 bill being filed for that purpose, leaving the question to be 
 determined by the court when cause is shown against the re- 
 straining order.^^ So when premises subject to a receivership 
 are held by tenants under a lease, with a covenant against their 
 use for a particular purpose, as for a shop, on pain of forfeiture, 
 in case of a breach of the covenant, the receiver may have the 
 aid of an injunction to restrain a tenant from using the prem- 
 ises for the purposes prohibited by the covenant.^ 
 
 § 778. When receiver and injunction granted in equit- 
 able action to recover realty; tenant for life permitting 
 taxes to be in arrears ; contract between owner and tenant. 
 In an equitable action for the recovery of real property, upon 
 the ground that the proceedings by which plaintiff's ancestor 
 had been divested were void by reason of fraud and mistake, 
 and also for want of jurisdiction in the court in which such 
 proceedings were had, it is proper to allow a receiver and an 
 injunction, when it appears that defendants in possession and 
 collecting the rents are irresponsible, and that the premises are 
 in a ruinous condition and will continue to deteriorate if left 
 
 97 Corcoran v. Doll, 35 Cal., 476. 1 Mason v. Mason, Flan. & K., 
 
 98 Mangle v. Lord Fingall, 1 429. 
 Hog., 142. 
 
 99Cronin v. McCarthy, Flan. & 
 K., 49.
 
 CHAP. XVII.] INJUNCTIONS. 913 
 
 in defendant's possession during the litigation. ^ And on a 
 bill against tenant for life, seeking an injunction to restrain 
 him from disposing of the property, if the tenant for life in 
 possession has permitted the taxes to be in arrears, the court 
 may appoint a temporary receiver of so much of the rents and 
 income as will suffice to pay the taxes due and in arrear, un- 
 less defendant shall pay them within a specified time.^ But 
 a mere contract between the owner of land and a tenant, pro- 
 viding for the working of the land by the tenant for a given 
 time, the owner to receive compensation out of the crops 
 grown thereon, does not entitle the owner to an injunction 
 to restrain the tenant from removing the crops, or to a re- 
 ceiver to manage the land and take possession of the ungath- 
 ered crop.* 
 
 § 779. Remainder-man and tenants not allowed to en- 
 join receiver from dispossessing them. When property 
 has been placed in the hands of a receiver, a remainder-man 
 and tenants of the premises have been refused an injunction 
 to restrain the receiver from turning them out of possession, 
 the court holding that their interest was insufficient to sustain 
 such an application.^ 
 
 § 780. The relief as between tenants in common. While 
 courts of equity are usually averse to the exercise of their ex- 
 traordinary jurisdiction as against tenants in common of real- 
 ty, there are cases where the relief is proper upon the ground 
 of exclusion of his co-tenant by a tenant in possession, who 
 is in insolvent circumstances.^ And a plaintiff, claiming a 
 moiety of an estate as tenant in common with defendant who 
 was in possession of the whole, has been allowed a receiver of 
 the rents and profits of such moiety, and an injunction to re- 
 strain defendant from collecting the rents thereof.'^ 
 
 2 Rogers v. Marshall, 6 Ab. Pr., 6 See Wiljiams v. Jenkins, 11 Ga., 
 Isf_ s., 457. 595; Street v. Anderton, 4 Bro. C. 
 
 3 Cairns v. Cliahert, 3 Edw. Ch., C, 414; Sandford v. Ballard. .30 
 312. Beav., 109. 
 
 4 Williams v. Green, 37 Ga.. Z7. "^ Hargrave v. Hargravc, 9 Beav., 
 
 5 Wynne v. Lord Newborough, 1 549. 
 Ves. Jun., 164. 
 
 Receivers — 58.
 
 CHAPTER XVIII. 
 
 OF THE RFXEIVER'S COMPENSATION. 
 
 § 781. Compensation regulated by court in the absence of legislation; 
 court may act on own knowledge. 
 
 782. English practice; no settled rule; reference to master to deter- 
 
 mine. 
 
 783. No fixed rule in this country; compensation dependent upon 
 
 circumstances of case; no compensation after reversal of ap- 
 pointment; court may hear evidence; final compensation; 
 practice as to partial compensation ; compensation after removal. 
 
 784. The rule in Massachusetts; reasonable pay for person of ordi- 
 
 nary ability allowed; rule in Maryland. 
 
 785. Receivers sometimes allowed same rates as guardians, execu- 
 
 tors or administrators; commissions on receipts and disburse- 
 ments; New York doctrine. 
 
 786. Receivers in lieu of executors allowed same compensation. 
 787.' Receiver over railway allowed more liberal compensation than 
 
 in ordinary cases. 
 
 788. Entitled to compensation for work performed by others; 
 
 farms managed by overseers; commission on receipts and 
 disbursements. 
 
 789. When receiver allowed to make rests. 
 
 790. Extra compensation; receiver's mismanagement ground for re- 
 
 fusal of compensation. 
 
 791. When receiver of insurance company allowed commissions on 
 
 premium notes surrendered. 
 
 792. Payment into court to avoid receiver's compensation. 
 
 793. Receiver over minor denied extra compensation for attending 
 
 survey of estate. 
 
 794. Doctrine of the Irish Chancery; receiver appointed bv consent. 
 
 795. Partner appointed receiver not allowed compensation. 
 
 796. Receiver can not have judgment against the parties on motion; 
 
 practice in fixing compensation; part of compensation taxed 
 as costs against plaintiff; chargeable on fund; compensation 
 should not be allowed without notice; where compensation not 
 subject to set-off. 
 
 796a. Appeals from allowance or refusal of compensation. 
 
 796b. Right of receiver to retain compensation out of fund before 
 surrendering it to trustee in bankruptcy. 
 
 914
 
 CHAP. XVIII.] 
 
 COMPENSATION. 
 
 915 
 
 § 796c. Agreement by party to pay receiver's compensation against 
 public policy; agreement by receiver to serve without com- 
 pensation. 
 
 § 781. Compensation regulated by court in the absence 
 of legislation; court may act on own knowledge. The 
 
 power of courts of equity to fix the compensation of their 
 own receivers is well established, and results necessarily from 
 the relation which the receiver sustains to the court, he being 
 its officer or agent, deriving his functions only from that 
 source. In the absence, therefore, of any legislation regu- 
 lating the receiver's salary or compensation, the matter is 
 left entirely to the determination of the court from which he 
 derives his appointment.^ And in making an allowance, the 
 court is not confined to evidence formally introduced but may 
 
 1 Gardiner v. Tyler, 3 Keyes, 505 ; 
 S. C, 2 Ab. Ct. Ap. Dec, 247; 
 Baldwin v. Eazler, 34 N. Y. Supr. 
 Ct, 275 ; Magee v. Cowper- 
 thwaite, 10 Ala., 966; Stretch v. 
 Govvdey, 3 Tenn. Ch., 565; Martin 
 V. Martin, 14 Ore, 165, 12 Pac, 
 234; Union National Bank v. Mills, 
 103 Wis, 39, 79 N. W, 20; Crum- 
 lish's Adm'r v. Shenandoah V. R. 
 Co., 40 West Va, 627, 22 S. E., 
 90; Kilpatrick v. Horton, 15 Wyo, 
 501, 89 Pac, 1035. See, also, Unit- 
 ed States V. Church, 6 Utah, 72; 
 Preston National Bank v. Smith M. 
 P. Co., 102 Mich., 462, 60 N. W., 
 981 ; Simmons v. Allison, 119 N. C, 
 556. 26 S. E., 171 ; Strain v. Palmer, 
 86 C. C. A., 618, 159 Fed., 628. As 
 to the allowance of compensation 
 to a surviving receiver after the 
 death of his co-receiver, see Bur- 
 roughs V. Bunnell, 70 Md., 18, 16 
 Atl., 447. As to the allowance to 
 a receiver of an insolvent bank for 
 his own compensation, for clerk 
 hire, expenses of receivership and 
 on account of moneys collected and 
 
 misappropriated by an attorney, see 
 Union Bank Case, 37 N. J. Eq., 420, 
 affirmed on appeal sub nom. Sand- 
 ford V. Clarke, 38 N. J. Eq., 265. 
 As to the commissions allowed to 
 receivers of insolvent life and fire 
 insurance companies under the laws 
 of New York, the basis upon which 
 such commissions are computed, 
 and the liability of such receivers 
 to pa3'ment of interest upon their 
 balances, see Attorney-General v. 
 North America Life Insurance Co., 
 26 Hun, 294. See, also, Attorney- 
 General V. Continental Life Insur- 
 ance Co, 27 Hun, 524; In re Se- 
 curity Life Insurance & Annuity 
 Co., 31 Hun. 36; In re Common- 
 wealth Fire Insurance Co, 32 Hun, 
 78. As to the allowance to a re- 
 ceiver for carrying on a hotel busi- 
 ness, see Cake v. Mohun, 164 U. 
 S, 311, 17 Sup. Ct. Rep, 100. af- 
 firming Cake V. Woodbury, 3 App. 
 D. C. 60, and distinguished in In- 
 ternational Trust Co. V. Llnited 
 Coal Co., 27 Colo, 246. 60 Pac, 
 621. .\s to the lia1)ility of defend-
 
 916 
 
 RECEIVERS. 
 
 [chap. XVIII. 
 
 act on its own knowledge and judgment as to the reasonable- 
 ness of the charge in connection with what has been done by 
 the receiver in the discharge of his duties. ^ And in passing 
 upon the compensation of a receiver, an appellate court will 
 ordinarily defer much to the judgment of the court below by 
 which the receiver was appointed, that court having had the 
 supervision of his conduct.^ 
 
 ants for a receiver's compensation 
 and that of his counsel in an ac- 
 tion brought by the receiver against 
 the shareholders of a corporation 
 to recover their unpaid stock sub- 
 scriptions, see Berry v. Rood, 209 
 Mo., 662, 22 S. W., 108. As to 
 facts held to constitute a waiver 
 of the right to object to a receiv- 
 er's compensation, see Dillingham 
 V. Moran, 26 C. C. A., 596, 81 Fed., 
 759, 52 U. S. App., 425. The de- 
 cree of the court of appeals in the 
 case last cited was afterward set 
 aside by the supreme court of the 
 United States upon the ground 
 that one of the judges before whom 
 the case was heard in the court of 
 appeals was not qualified to sit in 
 the case. Moran v. Dillingham. 174 
 U. S., 153, 19 Sup. Ct. Rep., 620. 43 
 L. Ed., 930. As to the right of a 
 leceiver to compensation under a 
 void order of appointment, see 
 Tabor v. Bank of Leadville, 35 
 Colo., 1, 83 Pac, 1060. In Davy v. 
 Scarth, (1906) 1 Ch., 55, it was 
 held that a partner who was ap- 
 pointed receiver of the firm assets 
 was entitled to his compensation 
 and expenses out of the funds in 
 his hands although he was indebted 
 to the estate and unable to pay <:ucH 
 obligation. In Campau v. Detroit 
 Driving Club, 144 Mich., 80, 107 N. 
 W., 1063, it was held that a receiver 
 appointed on a creditors' bill should 
 
 be denied compensation where he 
 discovered no property or assets of 
 the debtor which could not have 
 been reached by execution. Where 
 a receiver has recovered a judgment 
 for the amount due him as compen- 
 sation and also for an indebtedness 
 for which he has incurred individ- 
 ual liability, upon his death such 
 judgment passes to his personal 
 representative and may be enforced 
 by the latter. Cake v. Mohun, 
 164 U. S., 311, 17 Sup. Ct. Rep., 100, 
 affirming Cake v. Woodbury, 3 App. 
 D. C, 60, and distinguished in In- 
 ternational Trust Co. V. United 
 Coal Co., 27 Colo., 246, 60 Pac, 
 621. 
 
 2 State V. Nebraska S. & E. Bank, 
 61 Neb., 496, 85 N. W., 391 ; In re 
 State Bank, 57 Minn., 361, 59 N. 
 W., 315. 
 
 3 Morgan v. Hardee, 71 Ga., 736; 
 Hinckley v. Railroad Co., 100 U. 
 S., 153; Cake v. Mohun, 164 U. S., 
 311, 17 Sup. Ct. Rep., 100, affirm- 
 ing Cake V. Woodbury, 3 App. D. 
 C, 60, and distinguished in Inter- 
 national Trust Co. V. United Coal 
 Co., 27 Colo., 246, 60 Pac, 621; 
 Northern Alabama Ry. Co. v. Hop- 
 kins. 31 C. C. A., 94, 87 Fed., 505, 
 59 U. S. App., 74; Wilkinson v. 
 Washington Trust Co., 42 C. C. A., 
 140, 102 Fed., 28; Braman v. Farm- 
 ers' L. & T. Co., 51 C. C. A. 644, 
 114 Fed., 18; Heffron v. Rice, 149
 
 CHAP. XVIII.] 
 
 COMPENSATION. 
 
 917 
 
 § 782. English practice; no settled rule; reference to 
 master to determine. Under the practice of the English 
 Court of Chancery, there seems to have been no settled or 
 established rule as to the amount of compensation to be allowed 
 receivers for their services. In an early case in that court, 
 it was ordered by the terms of the decree appointing the re- 
 ceiver, that he should be allowed a reasonable salary for his 
 care and trouble in the management of the estate, such salary 
 to be determined by the master in chancery.'* And the usual 
 practice seems to have been to leave the matter to the deter- 
 mination of a master, and these officers were governed in 
 their allowance by the degree of difficulty or labor involved 
 in the case, increasing the compensation when there was ex- 
 traordinary difficulty in collecting the funds, or diminishing 
 it if there was any extraordinary facility in their collection. ^ 
 
 111., 216, 36 N. E., 562, 41 Am. St. 
 
 Rep., 271 ; Culver v. Allen Medical 
 
 Assn., 206 111., 40, 69 N. E., 53; 
 
 Baxter v. Hewes, 45 La. An., 1065, 
 
 13 So., 864 ; State v. People's U. S. 
 
 Bank, 197 Mo., 605, 95 S. W., 867 ; 
 
 First National Bank v. Oregon 
 
 Paper Co., 42 Ore., 398, 71 Pac, 
 144, 971 ; State v. Nebraska S. & E. 
 
 Bank, 61 Neb., 496, 85 N. W., 391 ; 
 
 Union National Bank v. Mills, 103 
 Wis., 39, 79 N. W., 20. And see 
 Graham v. Cnrr, 133 N. C, 449, 45 
 S. E., 847. 
 
 4 Carlisle v. Berkley, Amb., 599; 
 Special Bank Commissioners v. 
 Franklin Institution, 11 R. I.. 557. 
 And when a receiver was appointed 
 for the management of real estate, 
 and to collect the rents during the 
 minority of an infant tenant for 
 life, and the rental was stated to be 
 about £2,000 per year, the receiver's 
 compensation was fixed by the court 
 at a salary of i60 per year. New- 
 port V. Bury, 23 Beav., 30. 
 
 5 Day V. Croft, 2 Beav., 488. The 
 considerations involved in deter- 
 mining the amount of compensa- 
 tion to be allowed receivers, under 
 the English practice, are very clear- 
 ly stated in this case by Lord Lang- 
 dale, Master of the Rolls, as fol- 
 lows, p. 491 : "Various representa- 
 tions having been made at the bar, 
 as to the principle and the practice 
 adopted in the offices of the differ- 
 ent masters in respect of receiver's 
 allowances, I thought it right, be- 
 fore disposing of the case, to in- 
 quire of the masters what were the 
 principles upon which they acted, 
 and the practice adopted on this 
 point in their several offices. The 
 masters have each of them been 
 good enough to furnish me with a 
 certificate, and I find that there is 
 no general rule, which universally 
 prevails, as to the allowance of a 
 receiver. Where the receipts consist 
 of rents of freehold and leasehold 
 estates, 5/. per cent, upon the
 
 918 
 
 RECEIVERS. 
 
 [ClIAl'. XVllI. 
 
 But it is competent for the court at any time to summarily 
 order all proceedings before the master or referee to cease, 
 although unfinished, and to order a report to be made forth- 
 with and to conclude the entire matter itself in a summary 
 way.^ 
 
 § 783. No fixed rule in this country; compensation de- 
 pendent upon circumstances of case ; no compensation aft- 
 er reversal of appointment; court may hear evidence; 
 final compensation; practice as to partial compensation; 
 compensation after removal. In this country, as in Eng- 
 land, no established rule has been fixed for determining the 
 amount of compensation to be allowed receivers, and it is 
 from the nature of the case quite impracticable to establish 
 an inflexible rule. The compensation is, therefore, usually de- 
 termined according to the circumstances of the particular case, 
 rather than by any fixed principles or established rate of per- 
 
 amount received is most frequently 
 allowed. If there be any special 
 difficulty in collecting the rents, on 
 account of the sums being extreme- 
 ly small, or of the payments being 
 very frequent, as weekly payments, 
 then the allowance is increased ; on 
 the other hand, if there should be 
 very great facility in receiving the 
 rents, then less than 5/. per cent, is 
 allowed. One of the masters has 
 certified to me a case, where, after 
 consideration, he allowed only 41. 
 per cent, for the receipts of rents 
 and profits of freehold and lease- 
 hold estates. Another master has 
 certified to me a case in which the 
 sum paid to the receiver amounted 
 to 300/. a year for the first year; 
 the receiver was afterward allowed 
 150/. only for a succession of years, 
 which was afterwards reduced to 
 50/. a year, for the receipt of the 
 same rents. It can not, therefore, 
 be considered as an universal or gen- 
 
 eral rule, that 5/. per cent, should be 
 allowed even upon the receipts of 
 rents and profits. It may be in- 
 creased if there be any extraordi- 
 nary difficulty, or diminished if 
 there be any extraordinary facility 
 in the collection. With respect to 
 other receipts, each master consid- 
 ers himself bound to have regard to 
 the degree of facility or difficulty 
 there may be in receiving them. 
 They have sometimes allowed two 
 and one fourth per cent., but for 
 gross sums of money this has been 
 very much reduced, and one and ' 
 one-fourth per cent, has been al- 
 lowed upon many occasions. It ap- 
 pears, therefore, that the masters, 
 as they ought, consider upon each 
 occasion, what is fit or proper to be 
 allowed, having regard to the de- 
 gree of difficulty or facility experi- 
 enced by the receiver." 
 
 6 Harrigan v. Gilchrist, 121 Wis., 
 127, 414, 99 N. W., 909, 1000.
 
 CHAP. XVIII.] 
 
 COMPENSATION. 
 
 919 
 
 centage."^ It may be said in general terms, that a receiver's 
 compensation should correspond with the degree of business 
 capacity, integrity and responsibihty required in the man- 
 agement of the affairs intrusted to him, and that a reasonable 
 and fair compensation should be allowed according to the 
 •circumstances of the particular case.^ And when a statute 
 
 "^ Abbott V. Baltimore & Rappa- 
 hannock Steam Packet Co., 4 Md., 
 Ch., 310; Schwartz v. Keystone Oil 
 ■Co., 153 Pa. St., 283, 25 Atl., 1018; 
 Lichtenstein v. Dial, 68 Miss., 54, 
 ■8 So., 272 ; Tompson v. Huron L. 
 Co., 5 Wash., 527, 32 Pac, 536; In 
 re Sheets Lumber Co., 52 La. An., 
 1337, 27 So., 809 ; Hickey v. Parrott 
 S. & C. Co., 32 Mont, 143, 79 Pac, 
 698; Crumlish's Adm'r v. Shenan- 
 doah V. R. Co., 40 West Va., 627, 
 22 S. E., 90; Harrigan v. Gilchrist, 
 121 Wis., 127, 435, 99 N. W., 909, 
 1007; Boston Safe-Deposit & T. 
 Co. V. Chamberlain, 14 C. C. A., 
 363, 66 Fed., 847, 25 U. S. App., 
 251 ; Montgomery v. Petersburg S. 
 & I. Co., 17 C. C. A., 360, 70 Fed., 
 746, 30 U. S. App., 511. And see 
 French v. Gifford, 31 Iowa, 428; 
 Cowdrey v. The Railroad Co., 1 
 Woods, 331 ; Martin v. Martin, 14 
 Ore., 165, 12 Pac, 234; In re An- 
 gell, 131 Mich., 345, 91 N. W. 611; 
 Berry v. Rood, 209 Mo., 662, 22 S. 
 W., 108. See Davis v. Atkinson, 
 75 Ark., 300, 87 S. W., 432, where, 
 upon the particular facts of the case, 
 the court refused to allow a re- 
 ceiver any compensation. See Drey 
 V. Watson, 71 C. C. A., 158, 138 
 Fed., 792, where the compensation 
 of a receiver and of his counsel 
 were held excessive. 
 
 8 French v. Gifford, 31 Iowa, 
 428; Jones v. Keen, 115 Mass., 170; 
 Stuart V. Bouhvare, 133 U. S., 78, 
 
 10 Sup. Ct. Rep., 242; Tompson v. 
 Huron L. Co., 5 Wash., 527, 32 
 Pac, 536; Central Trust Co. v. 
 Wabash, St. L. & P. R. Co., 32 
 Fed., 187 ; Heflfron v. Rice, 149 111., 
 216, 36 N. E.. 562, 41 Am. St. Rep., 
 271 ; Culver v. Allen Medical Assn., 
 206 111., 40, 69 N. E., 53 ; Union Na- 
 tional Bank v. Mills, 103 Wis., 
 39, 79 N. W., 20. In French v. Gif- 
 ford, 31 Iowa, 428, supra, the case 
 came up on exceptions to the re- 
 port of a referee fixing the amount 
 of compensation to be allowed the 
 receiver of a banking institution. 
 Mr. Justice Miller, delivering the 
 opinion, says : "While we concede 
 that the receiver should receive a 
 compensation corresponding to the 
 high degree of business capacity, 
 integrity and responsibility required 
 in cases of this character, and which 
 was secured in the person of the 
 receiver in this case, yet we feel it 
 our duty to allow only such sum as 
 will be such reasonable compensa- 
 tion. There can be no reasonable 
 grounds to doubt that the receiver 
 in this case, or some other person 
 possessing equal qualifications, 
 could have been employed by pri- 
 vate contract to perform the serv- 
 ices rendered in this case for half 
 the amount allowed by the referee. 
 This, it seems to us, is the fair and 
 reasonable test by which the amount 
 of compensation to be allowed 
 should be determined. While it
 
 920 RECEIVERS. [chap. XVIII. 
 
 under which a receiver is appointed authorizes the payment 
 of a reasonable compensation, it is held that such compensa- 
 tion may be best determined, not by a percentage upon his re- 
 ceipts, but by considering the responsibility assumed, the skill 
 and labor expended, and the amounts usually paid for similar 
 services. It is also proper to allow the receiver compensation 
 from time to time before^ the close of his receivership, without 
 requiring him to wait until its determination. But the allow- 
 ance for one year's services is not necessarily a precedent for 
 a subsequent year, and in proportion as his responsibility is 
 lightened and the degree of skill and labor required of him is 
 diminished, should his compensation be decreased.^ Upon the 
 other hand, although his compensation may have been fixed 
 by a salary, yet if his duties prove to be more arduous and 
 onerous than originally expected either by the receiver or by 
 the court, it is proper to grant him an allowance in addition 
 to his salary.lO The controlling considerations in fixing a 
 receiver's compensation are the fair value of the time and labor 
 required in the perfDrmance of his duties, as measured by or- 
 dinary business standards, and the degree of activity, integ- 
 rity and dispatch with which the work has been performed.^! 
 
 may be true that an individual of of the litigation was settled by an 
 the required qualifications, if en- agreement of the parties by which 
 gaged in a lucrative private busi- each was to pay one-half of the 
 ness, could not be induced to fees, costs and expenses of the re- 
 abandon such business for a tern- ceivership, the defendant would not 
 porary appointment of this char- be heard to say that the receiver 
 acter without extraordinary com- was not entitled to compensation 
 pensation, yet one of wealth and because his original appointment 
 leisure may readily be found (as in was improper. 
 
 this case), who would undertake 9 Special Bank Commissioners v. 
 
 the trust for a reasonable and ordi- Franklin Institution, 11 R. I., 557. 
 
 nary compensation. We would not 10 Farmers' Loan & Trust Co. v. 
 
 be warranted in allowing extraordi- Central Railroad, 8 Fed., 60. 
 
 nary compensation, unless in a case H Schwartz v. Keystone Oil Co., 
 
 of imperative necessity." In Kim- 153 Pa. St., 283, 25 Atl., lOlS; 
 
 merle v. Dowagiac Mfg. Co., 105 Hickey v. Parrott S. & C. Co., 32 
 
 Mich.. 640, 63 N. W., 529, it was Mont., 143, 79 Pac, 698. 
 held that where the subject-matter
 
 CHAP. XVIII.] COMPENSATION. 921 
 
 If there has been delay in closing his accounts, inattention to 
 his duties, and the use of funds of the receivership in his 
 personal business, his compensation may be reduced accord- 
 ingly.l2 And a receiver should not be allowed compensation 
 for work performed by him after the reversal of the order of 
 appointment and the filing of the mandate in the lower court, 
 since it is his duty in such case to immediately present his 
 final account and ask for his discharge. ^^ And in fixing his 
 compensation, the court should consider the responsibilities 
 assumed by the receiver and the labor actually involved, due 
 regard being had to the prices usually paid for similar serv- 
 ices.l^ And in determining the amount of his compensation, 
 the court should consider not the value of his services in 
 larger and more important affairs but their value in connec- 
 tion with the particular business of which he has charge. ^^ 
 And it has been held that in the matter of compensation, the 
 standard to be followed should be that of public and not of 
 private service, and that all doubts should be resolved in favor 
 of the trust.l^ And if the court is in doubt as to what will 
 be a reasonable allowance, he should take the testimony of 
 persons of experience in such matters and from their own 
 testimony and his own knowledge of the situation, should fix 
 the proper amount of compensation. ^'^ Final compensation 
 should be allowed only at the termination of the receivership, 
 and it is improper before such final determination to set aside 
 a sum to cover all past and future services of the receiver. 
 And where a receiver has been appointed to wind up the af- 
 fairs of an insolvent corporation with all reasonable and con- 
 
 12 Schwartz v. Keystone Oil Co., 1^ Speiser v. Mcrcliants' Ex- 
 
 153 Pa. St., 283, 25 Atl., 1018. change Bank, 110 Wis., 506, 86 N. 
 
 13Hickey v. Parrott S. & C. Co., W., 243; Harrigan v. Gilchrist, 121 
 
 32 Mont., 143, 79 Pac, 698. Wis., 127, 436, 99 N. W., 909, 1007. 
 
 14 Tompson v. Huron L. Co., 5 l" Union National Bank v. Mills, 
 Wash., 527, 32 Pac, 536. 103 Wis., 39, 79 N. W.. 20. 
 
 15 Stearns Paint Mfg. Co. v. 
 Comstock, 121 Iowa, 430, 96 N. W., 
 869.
 
 922 RECEIVERS. [CIFAP. XVIII. 
 
 venient speed, a partial or intermediate allowance for his serv- 
 ices should be considerably less than the value of the services 
 rendered up to the time of the allowance, and, upon the hnal 
 allowance, the matter should be so adjusted that the receiver 
 will receive a fair and just allowance, although the partial al- 
 lowance was inadequate considered by itself. ^^ And since a 
 receiver's compensation is regarded as part of the costs of the 
 proceeding, it is proper to give it a preference over prior liens, 
 and this is so, although the appointment was made without 
 prejudice to prior liens.l^ When the court has fixed the com- 
 pensation after the hearing of testimony and the allowance 
 made is warranted by such testimony and appears to be reason- 
 able, the exercise of the discretion of the court will not be in- 
 terfered with on appeal. 20 Especially will the action of the 
 lower court in making an allowance not be disturbed upon 
 appeal where the evidence upon which the court acted is not 
 presented to the reviewing court.^i And a receiver may pre- 
 sent his claim for compensation and for the settlement of his 
 accounts although he has been previously removed by the 
 court.22 
 
 § 784. The rule in Massachusetts; reasonable pay for 
 person of ordinary ability allowed ; rule in Maryland. It is 
 held in Massachusetts, that the governing principle in fixing 
 the compensation to be allowed receivers for services rendered 
 by them in the management of their trust is to allow them such 
 a sum as would be a reasonable compensation for the services 
 of a person of ordinary ability, and competent to perform the 
 duties of the receivership. And in fixing this amount the court 
 is not governed by the special qualifications and standing of 
 the person who may be appointed, but will only allow what 
 
 18 Maxwell v. Wilmington D. M. dent Savings Bank, 103 Mo., 212, 15 
 Co., 82 Fed., 214. S. W., 429. 
 
 19 Gallagher v. Gingrich, 105 21 Van Brocklin v. Queen City P. 
 Iowa, 237, 74 N. W., 763. Co., 21 Wash., 447, 58 Pac., 575. 
 
 ^0 Lichtenstein v. Dial, 68 Miss., 22 Young v. Irish, 104 Minn., 
 
 54, 8 So., 272; Greeley v. Provi- 367, 116 N. W., 656.
 
 CHAP. XVIII.] 
 
 COMPENSATION". 
 
 923 
 
 would be a reasonable amount for a person of ordinary abil- 
 ity performing the work, and this amount will not be fixed upon 
 the basis of a percentage or fixed commission on the amount 
 of funds collected by the receiver.23 And when a master in 
 chancery, to whom the receiver's accounts have been referred, 
 has fixed the amount to be allowed the receiver for his own 
 compensation, as well as for counsel fees, and the testimony is 
 not preserved, the court will not pass upon the question upon 
 exceptions to the master's report.24 But in Maryland, it is 
 regarded as proper to allow the same rates of compensation 
 which are fixed by rule of court on sales made by trustees, 
 under decrees and orders of the court. 25 
 
 -3 Grant v. Bryant, 101 Mass., 
 567. See, also, Jones v. Keen, 115 
 Mass., 170. And see Battery Park 
 Bank v. Western C. Bank, 126 N. 
 C, 531, 36 S. E., 39. But see Lich- 
 tenstein v. Dial, 68 Miss., 54, 8 So., 
 272. Grant v. Bryant, 101 Mass., 
 567, was the case of a receiver upon 
 a bill in equity to wind up a part- 
 nership which had been dissolved. 
 The receiver, in submitting his ac- 
 counts, charged as compensation 
 for his services a commission of two 
 and a half per cent, upon the gross 
 amount of assets coming into his 
 hands by the sale of stock, collec- 
 tions of notes and accounts, and 
 otherwise. In support of this 
 charge testimony was introduced as 
 to the usual rates of charge upon 
 commercial transactions by commis- 
 sion merchants and others, and as 
 to the experience, capacity and mer- 
 cantile standing of the receiver. 
 The court held that the compensa- 
 tion should be limited to a reason- 
 able amount for the services re- 
 quired and rendered by a person of 
 ordinary standing and ability com- 
 petent for such duties, and that it 
 
 should not be based upon the usages 
 or rates of profit in any branch of 
 commercial or other business, or up- 
 on the special qualifications and 
 standing of the person who may 
 happen to perform the services. The 
 question of compensation being re- 
 served for the full court, it was held 
 that this rule was the correct one. 
 The court, Ames, J., say, p. 570: 
 "The rule adopted as to the com- 
 pensation of the receiver was en- 
 tirely correct. The court does not 
 regulate the compensation of its 
 officers upon the basis of a fixed 
 commission upon the amount of 
 money passing through their hands, 
 but allows them such an amount 
 as would be reasonable for the 
 services required of and rendered 
 by a person of ordinary ability, and 
 competent for such duties and serv- 
 ices." But see Cowdrey v. The 
 Railroad Co., 1 Woods, 331. 
 
 24 Jones V. Keen, 115 Mass., 170. 
 
 25 Abbott V. Baltimore & Rappa- 
 hannock Steam Packet Co., 4 Md. 
 Ch., 310; Tome v. King, 64 Md., 
 166, 21 Atl., 279.
 
 924 RECEIVERS. [chap. XVIII. 
 
 § 785. Receivers sometimes allowed same rates as 
 guardians, executors or administrators; commissions on 
 receipts and disbursements; New York doctrine. In some 
 instances, the courts have seen fit to fix the compensation of 
 receivers by analogy to the cases of guardians, executors, or 
 other persons occupying fiduciary relations. Thus, in Ala- 
 bama, it has been held to be the more appropriate method of 
 determining the compensation to allow a percentage upon re- 
 ceipts and disbursements, as in the case of guardians, although 
 such allowance is not considered as fixing an imperative rule.^^ 
 And in New York, it has been held that in the absence of proof 
 as to the amount of labor performed by a receiver in the dis- 
 charge of his trust, it was reasonable and proper to fix his 
 compensation in accordance with the rates or commissions pre- 
 scribed by law for the payment of executors or administra- 
 tors, and that this course might be pursued when it did not 
 appear that there was any peculiar difficulty in the duties per- 
 formed. ^"^ And it has been held, when this method was adopt- 
 ed, that the receiver was entitled to commissions upon the value 
 of all the assets taken out of his hands and delivered to the 
 parties by an order of court settling the suit by consent of the 
 parties,28 and also entitled to commissions upon both his re- 
 ceipts and disbursements.29 The courts of New York, how- 
 ever, although sometimes following the method above indicat- 
 ed, do not consider themselves bound by the rates fixed by 
 law for executors and administrators, and still regard the 
 question as one to be determined by the court, in the absence 
 of any legislation regulating the subject.^^ 
 
 26 Magee v. Cowperthwaite, 10 28 Bennett v. Chapin, 3 Sandf., 
 
 Ala., 966; First National Bank v. 673. 
 
 Oregon Paper Co., 42 Ore., 398, 71 29 Howes v. Davis, 4 Ab. Pr., 71. 
 
 Pac, 144, 971. so Gardiner v. Tyler, 3 Keyes, 
 
 27'Muller V. Pondir, 6 Lans., 481. 505; S. C, 2 Ab. Ct. Ap. Dec, 247; 
 
 See, also, Bennett v. Chapin, 3 Baldwin v. Eazler, 34 N. Y. Supr. 
 
 Sandf., 673; Howes v. Davis, 4 Ab. Ct. R., 275. See Bennett v. Chap- 
 
 Pr., 71. in, 3 Sandf., 673.
 
 CHAP. XVIII.] COMPENSATION. 925 
 
 § 786. Receivers in lieu of executors allowed same com- 
 pensation. Where receivers have been appointed in place 
 of executors of the estate of a deceased, and have acted in 
 conjunction with a remaining executor appointed under the 
 will of the deceased, it has been regarded as a fair and equit- 
 able mode of making compensation for their services to deal 
 with them as trustees or executors under the will, having real 
 and personal estate in charge, and to allow them the same 
 rate of compensation or the same commissions upon their dis- 
 bursements as are paid to such executors.^^ And when a 
 trustee under a will is made receiver of the estate, it rests 
 wholly in the discretion of the court whether to allow him 
 compensation as receiver, and a reasonable allowance having 
 been made by the court, its discretion will not be interfered 
 with upon appeal.^2 
 
 § 787. Receiver over railway allowed more liberal com- 
 pensation than in ordinary cases. In the case of a receiver 
 over a railway company, intrusted with the management and 
 operation of the road, since his duties and responsibilities are 
 much greater than those of an ordinary receiver appointed 
 merely to take and hold money, a more liberal rate of com- 
 pensation would seem to be permissible than in ordinary cases. 
 And it is not regarded as a proper test, in such case, to inquire 
 what another competent person would have been willing to do 
 the work for, since the office is not put up at auction. The 
 amount of such a receiver's compensation will, therefore, be 
 graduated according to the peculiar duties and responsibil- 
 ities resting upon him in the control and management of the 
 road.32 And in determining the compensation to be paid to 
 
 31 Holcombe v. Executors of case, to inquire what another even 
 
 Holcombe, 2 Beas., 417. competent person would have been 
 
 32 /„ re Bignell, (1892)1 Ch., 59. willing to do the work for. The 
 
 33Cowdrey v. The Railroad Co., receiver's office is not put up at 
 
 1 Woods, 331. Mr. Justice Bradley, auction. His compensation is not 
 
 in his learned opinion in this case, fixed on that principle at all. The 
 
 says, p. 345: "It would hardly be chancellor selects a person wlmm 
 
 a proper rule for governing this he regards competent and trust-
 
 926 
 
 RECEIVERS. 
 
 [CIIAP. XVIII. 
 
 receivers of railways for their services, it is proper to con- 
 sider tlieir titness for their duties, their business and financial 
 experience, the time devoted to their trust, and the diHgence 
 
 worthy, and the amount of com- 
 pensation is graduated somewhat 
 by the duties and somewhat by the 
 responsibilities of the situation. 
 Where a receiver is a manager as 
 well as a mere receiver, his duties 
 and responsibilities are largely in- 
 creased; and the management of a 
 business like that of a railroad is 
 one of the most difficult and re- 
 sponsible duties that a receiver is 
 charged with. It requires a man 
 of first rate qualities and attain- 
 ments. Now, w-e have it in proof 
 that the railroad presidents of the 
 country receive various sums from 
 $3,000 to $20,000 a year, many of 
 $5,000. some of $10,000, a few above 
 $10,000. Most of the defendant's 
 witnesses think that $5,000 a year 
 would be ample compensation to 
 the receiver for his services, whilst 
 most of the witnesses called for the 
 receiver think that $15,000, coin, is 
 not any too much ; that he saved 
 much more than that to the road, 
 etc. The receiver's income before 
 his appointment was, by the esti- 
 mation of one witness, about $7,000 
 a year, said to be of a permanent 
 character; all of which he was 
 obliged to give up when he assumed 
 the duties of the receivership; and 
 he himself says, that he would not 
 have consented to take the office 
 for less than $15,000 a year. The 
 previous salaries given by the de- 
 fendant railroad company have been 
 referred to as being only $5,000; 
 ?.nd sometimes not so much as 
 that. In view of all this evidence, 
 
 of the assistance which the receiver 
 had around him, and of the princi- 
 ples which the law lays down with 
 regard to the compensation of a re- 
 ceiver, I am inclined to think that 
 $10,000 in coin per annum would be 
 a fair rate of compensation in this 
 case. It seems to me that $15,000 
 is large, larger than what any (ex- 
 cept two or three) of the presidents 
 of our most important railroads in 
 the country receive. It also seems 
 to me that the peculiar duties, re- 
 .sponsibilities and accountability of 
 a receiver entitle him to a larger 
 amount than would be demanded by 
 the head officer of an ordinary rail- 
 road of this size and business. Ait 
 allowance of $10,000 coin per annum 
 will, therefore, be made for the re- 
 ceiver Walker's compensation dur- 
 ing the time he was such receiver." 
 But see Central Trust Co. v. Wa- 
 bash, St. L. & P. R. Co., 32 Fed.. 
 187, where for three and one- 
 half years' services as receivers over 
 a large railway system, extending 
 through several states, Mr. Justice 
 Brewer allowed $70,000 to each of 
 two receivers in full for service? to 
 the date of the order. See, further, 
 as to allowance of compensation to 
 receivers of railways and to their 
 counsel, and to counsel for mort- 
 gage bondholders in railway fore- 
 closures and receiverships. Easton v. 
 Houston & T. C. R. Co.. 40 Fed., 
 189. And see Braman v. Farmers' 
 L. & T. Co., 51 C. C. A., 644, 114 
 Fed., 18.
 
 CHAP. XVIII.] COMPENSATION. 927 
 
 and thoroughness displayed in the discharge of their duties.^"* 
 So it is proper to allow a railway receiver additional compen- 
 sation for services rendered by him as superintendent and as 
 attorney, when he has performed such services in addition to 
 those of receiver, thereby saving the expense of employing 
 such additional services.^^ And in general it may be said, 
 that the courts are inclined to treat the compensation of a re- 
 ceiver over a railway as resting largely in the discretion of 
 the court appointing him, and when the testimony is conflict- 
 ing as to the value of his services, an appellate court is not in- 
 clined to interfere with the exercise of such discretion. ^^ If, 
 however, the receiver resides in another state and does not as- 
 sume the active excutive management of the railway, which is 
 intrusted to others, he will not be allowed the compensation 
 which is usually paid to receivers having charge of the active 
 management of such property and who devote their entire 
 time to such management.^'^ And when the same person is ap- 
 pointed receiver over a railway in two different suits brought 
 by different parties in a state court, one of which is removed to 
 the federal court, which court fixes the amount of the receiv- 
 er's compensation in that case and finds a balance due from 
 him, which he is ordered to pay into court, he is not entitled 
 to have such amount refunded to him in payment of his com- 
 pensation afterward fixed in the suit in the state court, the 
 parties to the former suit not having been heard as to the 
 amount of sucli compensation in the latter suit."^ 
 
 § 788. Entitled to compensation for v^^ork performed 
 by others; farms managed by overseers; commission on 
 receipts and disbursements. A receiver is entitled to com- 
 pensation for his services, although the actual work of mana- 
 
 34 McArthur v. Montclair R. Co., ■" Central Trust Co. v. Cincin- 
 
 27 N. J. Eq., 77. nati. J. & M. R. Co., 58 Fed.. 500. 
 
 33 Farmers' Loan & Trust Co. v. 38 /„ re Hinckley, 3 Fed., 556. 
 
 Central Railroad, 8 Fed.. 60. 
 
 36 Hinckley v. Railroad Co., 100 
 V. S.. 153.
 
 928 RECEIVERS. [chap. XVIII. 
 
 g-ing the property intrusted to him is performed by others, as 
 in the case of farms or plantations in the receiver's custody, 
 which he manages by overseers appointed and employed by 
 himself, and for whose management he is responsible.^^ But 
 if his compensation is limited by statute to a commission upon 
 his receipts and disbursements, such commission will be com- 
 puted only upon the amount actually received and disbursed 
 by him. And if, under the order of the court, he has per- 
 mitted the business to be principally conducted by the parties 
 in interest, who have transacted the business as before the re- 
 ceivership, making purchases and sales and receiving and dis- 
 bursing moneys, the receiver will not be allowed commissiofis 
 upon their receipts and disbursements.^^ So when the com- 
 pensation is fixed by statute by a commission upon receipts and 
 disbursements, a second receiver, appointed upon the death 
 of a former one, who succeeds to his duties and receives the 
 funds which were in his hands at the time of his death, is not 
 entitled to a commission thereon when such commission had 
 been paid to the former receiver. In such case, it is the service 
 or duty of collecting the fund which entitles the receiver to a 
 commission, and not the mere receipt of money from his prede- 
 cessor who had already received a commission for its collec- 
 tion.'*^ So when a receiver, by virtue of his office, holds 
 stock in a corporation and acts as its nominal president by 
 reason of such holding, the actual duties of the office being- 
 performed by a vice-president, when he has been fully com- 
 pensated for his services as receiver he will not be permitted 
 to recover for services as president of the corporation.^^ Aj^^j 
 where a corporation is appointed receiver and for its own con- 
 
 39 Price v. White, Bail. Eq., 240. 40 /„ re Woven Tape Skirt Co., 
 
 And it was held that, in such a case, 85 N. Y., 506. 
 
 receivers being paid by commis- 41 Attorney-General v. Continen- 
 
 sions, the receiver was entitled to tal Life Insurance Co., 32 Hun, 223. 
 
 the usual commissions, although 42'phompson v. Willamette S. M. 
 
 they might seem to be more than a L. & M. Co., 15 Ore., 604, 16 Pac, 
 
 reasonable compensation for the 647. ^ 
 services rendered.
 
 CHAP. XVIII.] COMPENSATION. 929 
 
 venience employs an agent to perform the duties which would 
 ordinarily fall upon the receiver himself, no extraordinary 
 compensation should be allowed such agent.'^^ 
 
 § 789. When receiver allowed to make rests. While the 
 courts, in cases where receivers have been paid by a commis- 
 sion or percentage upon the funds received, have sometimes 
 allowed them to make annual rests, and to charge their com- 
 missions upon the amounts as thus ascertained, a receiver will 
 not be allowed to make a new rest every time he makes a de- 
 posit in bank, or to begin with full commissions from the 
 date of such rest,'^'* 
 
 § 790. Extra compensation; receiver's mismanagement 
 ground for refusal of compensation. A receiver will not 
 be allowed extra compensation for his services and for ex- 
 penses incurred by him in making journeys to a foreign coun- 
 try, for the purpose of prosecuting legal proceedings to re- 
 cover money due to the estate, when such journeys have not 
 been expressly authorized by the court, even though author- 
 ized and approved by many of the parties interested in the 
 estate. And in passing upon the question of compensation 
 in such a case, the court will not consider any agreements made 
 by the parties in interest with the receiver, with regard to his 
 undertaking such journeys, or his compensation therefor.^^ 
 And where the order of appointment specifically defines the 
 powers and duties of the receiver and prescribes the amount 
 of compensation to be paid him, he will not be allowed extra 
 compensation unless he can show that extraordinary labor has 
 been required which was entirely unforeseen at the time of 
 his appointment. "i^ And extra allowances should not be made 
 to a receiver in the absence of extraordinary services render- 
 ing such allowances just and reasonable.^'^ But where a re- 
 
 43 Kimmerle v. Dowagiac Mfg. 46 Henry v. Henry, 103 Ma., 582, 
 Co., 105 Mich., 640, 63 N. W., 529. 15 So., 916. 
 
 44 Bennett V. Chapin, 3 Sandf., 47 Weigand v. Alliance S. Co., 
 673. 44 West Va., 133. 28 S. E., 803. 
 
 45 Malcolm v. O'Callaghan, 3 And see, post, § 805. 
 Myl. & Cr., 52. 
 
 Receivers — 59.
 
 930 RECEIVERS. [chap. XVIII. 
 
 ceiver, in addition to rendering his services as such, has vol- 
 untarily performed extra work outside of his duties as re- 
 ceiver which he was not bound to do and which has resulted 
 in the benetit of the estate in his possession, he is entitled to 
 extra compensation for the work thus performed by him.^s 
 But where a receiver has been guilty of gross negligence and 
 has greatly mismanaged the estate in his hands, the court may 
 properly refuse him compensation altogether.^^ 
 
 § 791. When receiver of insurance company allowed 
 commissions on premium notes surrendered. When, un- 
 der the laws of a state, the compensation of receivers is fixed 
 at a certain percentage upon their receipts and disbursements, 
 and the receiver of an insolvent insurance company holds 
 premium notes due to the company from its stockholders, in 
 trust for the double purpose of paying the creditors of the cor- 
 poration and of distributing the surplus among the stockhold- 
 ers, if he surrenders a portion of the notes to the sharehold- 
 ers by order of the court, it may be regarded as so much money 
 received and paid over for the purposes of the trust, and he 
 will be allowed his commission thereon. In such case, how- 
 ever, the commission will be allowed only upon the actual 
 value of the notes and not upon such notes as were not collect- 
 ible.50 
 
 § 792. Payment into court to avoid receiver's compen- 
 sation. It would seem that a receiver has no vested right, 
 by virtue of his appointment, to collect the entire estate over 
 which he is appointed, when persons indebted are willing and 
 offer to pay money due into court, thereby avoiding a large 
 
 ■iS Harris v. Sleep, (1897) 2 Ch., 651; United States National Bank 
 
 80. V. National Bank of Guthrie, 6 
 
 49Speiser v. Merchants' Ex- Okla., 163, 51 Pac, 124; Nowell v. 
 
 change Bank, 110 Wis., 506, 86 N. International Trust Co., — C. C. A., 
 
 W., 243; Dalliba v. Winschell, 11 — , 169 Fed., 497. And see, post, 
 
 Idaho, 364, 82 Pac, 107, 114 Am. § 805. 
 
 St. Rep., 267 ; Pangburn v. Amer- ^0 Van Buren v. Chenango Couu- 
 
 ican v., S. & L. Co., 205 Pa. St., ty Mutual Insurance Co., 12 Barb., 
 
 93. 54 Atl., 508; State v. Germania 671. 
 Bank, 103 Minn., 129, 114 N. W..
 
 CHAP. XVIII.] COMPENSATION. 931 
 
 compensation or poundage to which the receiver would be en- 
 titled if the money passed through his hands. ^^ 
 
 § 793. Receiver over minor denied extra compensation 
 for attending survey of estate. When a receiver over the 
 estate of a minor voluntarily and without an order of court at- 
 tended a survey of the estate, the expenses of which were paid 
 out of the estate, it was held that he was not entitled to any 
 extra remuneration for his own services in the matter.^^ 
 
 § 794. Doctrine of the Irish Chancery ; receiver appoint- 
 ed by consent. Under the practice of the Irish Court of 
 Chancery, it is held that if the court, in appointing a receiver, 
 does not intend that he shall receive any compensation or 
 poundage, it should be so expressly provided in the order of 
 appointment, and if not thus provided, he is entitled to his 
 compensation ex dcbito justitice.^^ But when, as is frequently 
 the practice in that court, a receiver is appointed by consent 
 of the parties, the consent should fix the amount of salary 
 which he shall receive, since otherwise the court will not al- 
 low him any compensation. ^^ 
 
 § 795. Partner appointed receiver not allowed compen- 
 sation. While there are some cases to be met with in the 
 reports in which the plaintiff partner, in an action for a dis- 
 solution of a partnership and for a receiver, has been him- 
 self appointed receiver, the practice may be regarded as an 
 unusual one, and only to be upheld on the implied condition 
 that he will discharge the duties of the office free of charge 
 to the fund or estate. Such a receiver will not, therefore, in 
 passing his accounts, be allowed any compensation for his 
 services.55 And when a surviving partner is made a receiver 
 of the firm at his own request, he is not entitled to compen- 
 sation for his services in the absence of any stipulation to 
 that effect, since his duties as receiver, in such case, are no 
 more than would have been his duties as surviving part- 
 
 51 Haigh V. Grattan, 1 Beav., 201. ^4 Burke v. Burke, Flan. & K., 89. 
 
 52 /„ re Ormsby, 1 Ball & B., 189. 55 Brien v. Harriman, 1 Tenn. 
 
 53 Bevan v. White, 8 In Eq., 675.
 
 932 RECEIVERS. [chap. XVIII. 
 
 ner, for which he would have been entitled to no compensation, 
 in the absence of any contract to that effect.^^ And when one 
 of the parties to the cause, who claims a lien upon the prop- 
 erty in controversy, is by consent of all parties made receiver, 
 with the understanding that he shall make no charge for his 
 services, and he continues to act as receiver without claiming 
 compensation until he is removed from the receivership, an 
 order of the court refusing him compensation for his serv- 
 ices will not be disturbed upon appeal.^''' 
 
 § 796. Receiver can not have judgment against the par- 
 ties on motion; practice in fixing compensation; part of 
 compensation taxed as costs against plaintiff; chargeable 
 on fund ; compensation should not be allowed without no- 
 tice ; when compensation not subject to set-off. A receiv- 
 er can not recover judgment for his services against the parties 
 to the original suit in which he was appointed, by a motion 
 made in that suit, and it is error to so enter judgment against 
 them, there being no action pending in which such a judgment 
 is proper. The appropriate method of procedure is to have 
 his compensation fixed by the court, to be allowed out of the 
 assets in his hands, and the amount thus determined to be 
 due him may be taxed as costs in the action. ^^ But, while 
 the receiver's compensation is usually paid out of the fund 
 placed in his hands, a different course may be adopted when 
 the order appointing him is revoked, and when he is directed 
 to return the property to the persons entitled thereto. And it 
 is proper, under such circumstances, for the court, in its dis- 
 cretion, to require the payment of part of the compensation 
 out of the fund in the receiver's hands, and to tax the bal- 
 ance as costs against the plaintiff, the unsuccessful party in 
 the cause.^^ The court is governed, in such case, by the con- 
 
 Ch., 467. See, also, Todd v. Rich, 58 Hutchinson v. Hampton, 1 
 
 2 Tenn. Ch., 107. Mont., 39. 
 
 56 Berry v. Jones, 11 Heisk., 206. 59 French v. GifiFord, 31 Iowa, 
 
 57 Steel V. HoUaday, 19 Ore., 517, 428; State v. People's U. S. Bank, 
 25 Pac, n. 197 Mo., 605, 95 S. W., 867; Ogden
 
 CHAP. XVIII.] 
 
 COMPENSATION. 
 
 933 
 
 sideration of the injustice of allowing a receiver his compen- 
 sation, in all cases, from the funds in his hands, regardless 
 of the legality of his appointment; since, if such a rule were 
 to be rigorously applied, innocent persons might frequently 
 sustain great loss.^*^ Thus, where a receiver has been ap- 
 pointed at the instance of an attaching creditor to take pos- 
 
 City V. Irrigation Co., 18 Utah, 
 279, 55 Pac, 385; Brundage v. 
 Home S. & L. Assn., 11 Wash., 288, 
 39 Pac, 669. And see, post, § 809a. 
 And see Crumlish's Adm'r v. Shen- 
 andoah V. R. Co., 40 West Va., 
 627, 22 S. K, 90; Tobin v. Portland 
 Flourhig Co., 42 Ore., 117, 68 Pac, 
 749; Ford v. Gilbert, 42 Ore., 528, 
 71 Pac, 971. French v. Gifford, 31 
 Iowa, 428, supra, was the case of a 
 receiver of a savings bank, whose 
 appointment had been revoked and 
 who had been ordered to deliver 
 back the money and assets received. 
 The court. Miller, J., say: "It is 
 insisted by plaintifif's counsel that 
 the compensation of the receiver 
 should be paid out of the fund of 
 which he had the custody and 
 charge, and that he should be per- 
 mitted to retain the same therefrom. 
 Numerous cases have been cited to 
 show that such is the uniform prac- 
 tice. Upon an examination of these 
 cases it will be found that, in every 
 case, there was no question made as 
 to the legality or propriety of the 
 appointment of the receiver ; that, in 
 each case, the receiver closed up the 
 business and settled his accounts in 
 pursuance of his appointment. The 
 receivership, in each case, was for 
 the benefit of those interested in the 
 fund, and he was paid therefrom, 
 which is only another method of 
 apportioning the costs upon those 
 entitled to the fund. The only case 
 
 which has been brought to our at- 
 tention, in which the order appoint- 
 ing the receiver was set aside, is 
 the case of Verplanck v. The Mer- 
 cantile Insurance Co., 2 Paige, 438, 
 and in that case the chancellor or- 
 dered the receiver to turn over all 
 the property, without allowing him 
 any commissions therefrom. We 
 think it would be an unjust and in- 
 equitable rule if, in all cases, the re- 
 ceiver should be entitled to his com- 
 pensation from the fund in his 
 hands, without reference to the le- 
 gality of his appointment. Under 
 the operation of such a rule, inno- 
 cent persons might be made to suf- 
 fer great loss. The general rule as 
 to costs, both at law and in equity, 
 is that they shall be adjudged to the 
 successful, and against the unsuc- 
 cessful, party. Rev., § 3449. And 
 they will be so adjudged, unless 
 there exists some equitable consid- 
 eration to justify a different dispo- 
 sition, or the case is otherwise pro- 
 vided for by law. In cases like the 
 one under consideration, we may ad- 
 judge the costs to one or either of 
 the parties, or apportion them." 
 The court accordingly directed that 
 the fund be charged with one-third 
 of the receiver's compensation, and 
 the plaintiff with the remaining two- 
 thirds. 
 
 60 French v. Gifford, 31 Iowa, 428. 
 And see, post, § 809,
 
 934 RECEIVERS. [chap. XVIII. 
 
 session of property which is subject to the lien of a prior 
 mortgage, which is finally held to be superior to the lien of the 
 attachment, the compensation of the receiver should not come 
 out of the proceeds of the sale of the property but he must 
 look to the plaintiff for his payment.^^ So where the appoint- 
 ment of a receiver is upon an application which is adverse to 
 the defendant and it subsequently turns out that such appoint- 
 ment was unwarranted and without authority of law, the re- 
 ceiver will be required to turn back to the defendant all funds 
 in his possession unimpaired by deductions for the receiver's 
 compensation and that of his counsel, the receiver being re- 
 quired in such case to look to the plaintiff upon whose applica- 
 tion he was appointed. ^^ And as against third persons assert- 
 ing valid liens upon the property, who were not parties to the 
 receivership proceeding and who never consented to the ap- 
 pointment, the compensation of the receiver and the expenses 
 of the receivership which have in no way inured to their ben- 
 efit should not be allowed as a proper charge upon the fund.^^ 
 And where a receiver is authorized to carry on a business and 
 to sell property of an insolvent, he will not be allowed to di- 
 minish the fund due to the creditors who are secured by prior 
 liens by retaining an allowance for his compensation and that 
 of his counsel; and in such case, he must look to the other 
 property of the insolvent.64 If, however, the appointment of 
 the receiver was proper in the first instance, even though plain- 
 tiffs do not ultimately prevail in the suit, it is within the dis- 
 cretion of the court to allow the receiver payment for his 
 services and expenses out of the proceeds of the litigation, and 
 an appellate court will not not interfere with the exercise of 
 such discretion when it has not been abused. ^^ And since a 
 
 61 Frick V. Fritz, 124 Iowa, 529, 64 Lane v. Washington Hotel Co., 
 100 N. W., 513. 190 Pa. St., 230, 42 Atl., 697 ; Moore 
 
 62 McAnrow v. Martin, 183 111., v. Lincoln P. & S. C. Co., 196 Pa. 
 467, 56 N. K, 168. St., 519, 46 Atl., 857. 
 
 63 First National Bank v. Cook, 6.5 Hembree v. Dawson, 18 Ore., 
 12 Wyo., 492, 76 Pac, 674, 78 Pac, 474, 23 Pac, 264 ; Clark v. Brown, 
 1083. 57 C. C. A., 76, 119 Fed., 130.
 
 CHAP. XVIII.] COMPENSATION. 
 
 935 
 
 receiver is the officer of the court which appoints him, it is 
 for that court to fix his compensation, and accordingly a re- 
 viewing court will not entertain an application to make him 
 an additional allowance pending the time of the appeal.^^ And 
 when a receiver obtains possession of money under an order 
 which is afterward reversed upon appeal, he may be required 
 to restore the money to the person entitled thereto, undimin- 
 ished by any claim for his own compensation or for counsel 
 fees.67 When no question is made as to the legality or pro- 
 priety of appointing the receiver, and he closes up his receiv- 
 ership in pursuance of the order appointing him, his compensa- 
 tion should be paid from the funds in his hands, and no part 
 of it should be taxed as costs against the plaintiff.^s So when 
 a court of equity takes property under its charge by appoint- 
 ing a receiver, the property itself is chargeable with the neces- 
 sary expenses of the receivership, including the compensation 
 of the receiver. And, in such case, the person who, under 
 the final decree of the court, acquires the property or its pro- 
 ceeds, acquires it cum oncre and chargeable with the amounts 
 due to the receiver for services and advances.69 But if the 
 appointment of the receiver is for the equal benefit of both 
 parties to the action, as in a suit for the settlement of partner- 
 ship affairs, the receiver's compensation should be borne by 
 both parties equally.'^^ And while his compensation is usu- 
 ally allowed out of the fund or property in the receiver's pos- 
 session, yet when he has been appointed over mortgaged prem- 
 ises, but not at the suit nor with the consent of the mort- 
 gagee, he may be refused compensation out of the proceeds 
 of a foreclosure sale of the premises.'^i And in such case it 
 
 66McKenzie v. Coslett, 28 Nev., 276, 7 N. W., 604; Jaffray v. Raab, 
 
 220, 80 Pac, 1070. 72 Iowa, 335, 33 N. W., 337. 
 
 67 Pittsfield National Bank v. 69 Beckwith v. Carroll, 56 Ala., 12. 
 Bayne, 140 N. Y., 321, 35 N. E., 70 Johnson v. Garrett, 23 Minn., 
 630; McAnrow v. Martin, 183 III, 565. 
 
 467, 56 N. E., 168. '^^ Lammon v. Giles, 3 Wash. 
 
 68 Radford I/. Folsom, 55 Iowa, Terr., 117, 13 Pac, 417; Ephraim
 
 936 RECEIVERS. [chap. XVIII. 
 
 is error to make the charge for the receiver's compensation 
 and expenses a lien upon the mortgaged premises but 
 they should be made a lien only upon the equity of re- 
 demption,'^2 jf there are no assets in his hands applicable 
 to the payment of his compensation, it is proper to discharge 
 him without making payment of his charges by the persons 
 procuring his appointment a condition precedent to his dis- 
 charge, leaving the matter for subsequent determination in 
 the cause J^ And an order allowing compensation to a re- 
 ceiver should be entered only after notice and a hearing at 
 which all parties interested may appear and contest the al- 
 lowance.''^ And where an order allowing the compensation 
 of a receiver has been made without notice to the parties in 
 interest and under an erroneous impression upon the part of 
 the court that the receiver has served for a much longer time 
 than he actually has, the order of allowance is properly set 
 aside.''^ Where the proceeds of a receiver's sale have been paid 
 by the receiver into a bank and the court afterward enters an 
 order allowing the receiver compensation for his services in 
 making the sale and authorizing him to retain from the proceeds 
 the amount of such allowance, a debt due from the receiver in 
 his individual capacity to the bank can not be set off against the 
 fee of the receiver.'''^ 
 
 § 796a. Appeals from allowance or refusal of compensa- 
 tion. While an order which merely fixes the amount of 
 a receiver's compensation is not appealable because no one can 
 be injuriously affected thereby, yet if, in addition to fixing the 
 amount, the court directs it to be paid out of the fund in the 
 receiver's hands, an appeal will lie from such an order upon 
 
 V. Pacific Bank, 129 Cal., 589, 62 74 Ruggles v. Patton, 74 C. C. A., 
 
 Pac, 177. 450. 143 Fed., 312. 
 
 72Makeel v. Hotchkiss, 190 111., "5 joralmon v. McPhee, 31 Colo., 
 
 311, 60 N. E., 524, 83 Am. St. Rep., 40, 76 Pac, 922. . 
 
 131. '6 Polk V. Carver C. & M. Co., 91 ■ 
 
 73Joslyn v. Athens C. & C. Co., Iowa, 570, 60 N. W., 111. 
 43 Minn., 534, 46 N. W., 77.
 
 CHAP. XVIII.] COMPENSATION. 937 
 
 behalf of any person interested in the fund.'^^ So creditors 
 and others interested are entitled to appeal from an order fix- 
 ing the compensation of a receiver when it is claimed the al- 
 lowance is excessive^s And where a receiver has taken pos- 
 session of the property of an insolvent debtor, the latter is 
 entitled to appeal from an order fixing his compensation and 
 directing its payment out of the fund7^ So an insolvent over 
 whose property a receiver is appointed may appeal from an or- 
 der allowing the receiver compensation in excess of the amount 
 fixed by statute. ^^ Ai-,^ ^ defendant out of whose property 
 a receiver's compensation is to be paid is entitled to appeal 
 from the order of allowance.^l So an order authorizing a 
 receiver to withdraw certain funds and pay himself at a fixed 
 rate per annum is a final order and appealable.^2 ^^d if the 
 litigation is likely to be long protracted, it is proper, upon pe- 
 tition of the receiver, to fix his compensation in whole or in 
 part, and such an order is a final one from which an appeal 
 will lie, independent of the main cause. ^^ And the receiver 
 himself is entitled to appeal from an adverse order affecting 
 
 77 Grant v. Superior Court, 106 ment in the cause has been per- 
 Cal., 324, 39 Pac, 604; Grant v. fected, a receiver has been appoint- 
 Los Angeles & P. R. Co., 116 Cal., ed to collect the rents of the prop- 
 71, 47 Pac, 872. And see City of erty involved pending the appeal, 
 Los Angeles v. Los Angeles C. W. and after the appeal is at issue, an 
 Co., 134 Cal., 121, 66 Pac, 198. order is entered by the lower court 
 
 78 Battery Park Bank v. Western allowing the receiver compensation 
 C. Bank, 126 N. C, 531, 36 S. E., and making it a first lien upon the 
 39; Ogden City v. Irrigation Co., property, such order may be brought 
 18 Utah, 279, 55 Pac, 385. And see to the reviewing court by supple- 
 In re Burguieres Planting Co., 122 mental record and may be consid- 
 La., 602, 48 So., 121. ered upon the appeal. Joralmon v. 
 
 79 Polk V. Johnson, 167 Ind., 548, McPhee, 29 Colo., 135, 66 Pac, 882. 
 78 N. E., 652, 79 N. E., 491. 82 Ruggles v. Patton, 74 C. C. A., 
 
 80 Reeves v. Hastings, 61 Minn., 450, 143 Fed., 312. 
 
 254, 63 N. W., 633. 83 Tompson v. Huron L. Co., 5 
 
 81 Forrester v. B. & M. C. C. & Wash., 527, 32 Pac, 536. To the 
 S. M. Co., 30 Mont., 181, 76 Pac, 2. same effect, see Battery Park Bank 
 Under the provisions of the code of v. Western C. Bank, 126 N. C, 531, 
 Colorado, it is held that where, 36 S. E., 39. 
 
 after an appeal from a final judg-
 
 938 RECEIVERS. [chap. XVIII. 
 
 his compensation or from an order denying him compensa- 
 tion altogether.^4 
 
 § 796/?. Right of receiver to retain compensation out of 
 fund before surrendering it to trustee in bankruptcy. 
 
 Where, after the appointment of a receiver of an insolvent 
 corporation by a state court, bankruptcy proceedings are in- 
 stituted against the corporation in the United States district 
 court and a trustee in bankruptcy is appointed, the receiver 
 is entitled to his compensation and other expenses already in- 
 curred out of the fund in his possession before surrendering 
 it to the trustee in bankruptcy, and no considerations of com- 
 ity require the state court in such case to order the entire fund 
 surrendered to the trustee in bankruptcy and to send its re- 
 ceiver to that court for his compensation.^^ 
 
 § 796c. Agreement by party to pay receiver's compen- 
 sation against public policy; agreement by receiver to 
 serve without compensation. Since a receiver is bound to 
 maintain an attitude of strict impartiality as between the par- 
 ties to the cause, any agreement which might tempt him to 
 sacrifice or jeopardize the interests of one party for the bene- 
 fit of another is contrary to public policy and void. Accord- 
 ingly, an agreement between the receiver and a purchaser at 
 the receiver's sale by which the latter undertakes to pay the 
 receiver his fees for services is void and will not be enforced 
 by the courts. The receiver, in asking for his compensation 
 
 84 Bosworth v. St. Louis Tenni- Hanson v. Stephens, 116 Ga., 722, 
 nal R. Assn., 174 U. S.. 182, 19 Sup. 42 S. K, 1028. But in State v. 
 Ct. Rep., 625, 43 L. Ed., 941, modi- German Exchange Bank, 114 'Wis., 
 fying and affirming S. C., 26 C. C. 436, 90 N. W., 570, the question 
 A., 279, 80 Fed. 969, 53 U. S. App., was held to be one resting largely 
 302; Herndon v. Hurter, 19 Fla., in the discretion of the lower court, 
 397; McAnrow v. Martin, 183 111., and they accordingly affirmed an 
 467, 56 N. E., 168; Union National order directing the receiver to turn 
 Bank v. Mills, 103 Wis., 39, 79 N. over the entire fund to the trustee 
 W., 20. And see Kilpatrick v. in bankruptcy subject to whatever 
 Horton, 15 Wyo., 501, 89 Pac, 1035. claims he might have for services 
 
 85 Mauran v. Crown C. L. Co., 23 and expenses incurred in the re- 
 R. I., 344, 50 Atl., 387. And see ceivership proceeding.
 
 CHAP. XVIII.] COMPENSATION. 939 
 
 should look to the court, and the court alone may determine the 
 amount of such compensation and by whom it shall be paid.^^ 
 But an agreement between a creditor and his debtor by which 
 the former agrees to serve as receiver without compensation 
 provided the debtor will make no objection to his appointment 
 is valid and enforcible.^'^ 
 
 86 Hall V. Stulb, 126 Ga., 521, 55 87 Polk v. Johnson, 160 Ind., 292, 
 
 S. E., 172. 66 N. E., 752, 98 Am. St. Rep., 274.
 
 CHAPTER XIX. 
 
 OF THE RECEIVER'S ACCOUNTS. 
 
 § 191. Duty of receiver to account to court; held to great strictness; 
 consent of parties to delay; required to account without proc- 
 ess of court; not entitled to jury; bill should not be dis- 
 missed without settling of account; degree of diligence re- 
 quired. 
 
 798. Not allowed to make expenditures without sanction of court; 
 
 must show vouchers; when reimbursed; reward paid to re- 
 cover assets; unauthorized payment of taxes; watching 
 property; premium of surety company on official bond; ref- 
 erence to master; when payments allowed, though unauthor- 
 ized. 
 
 799. Not allowed expenses for services which he might have per- 
 
 formed himself; should report facts to court. 
 
 800. Master's report on receiver's account and exceptions thereto; 
 
 English rule; Irish practice; New York rule. 
 
 801. Distinction between master's report on receiver's account, and 
 
 on account taken by himself; court may investigate prin- 
 ciple on which account allowed, but not details; exceptions, 
 when taken. 
 
 802. Not compelled to account by stranger; nor to a party, but 
 
 only to court; party may move for account; duty to account 
 once a year; allowance should be to receiver and not to 
 party; when otherwise. 
 
 803. Should keep funds distinct from his own; liable for interest on 
 
 mingling funds; when interest not allowed on claim of 
 creditor. 
 
 804. General liability of receivers for interest on funds. 
 
 805. When and to what extent allowed for counsel fees. 
 
 806. When allowed counsel fees paid to counsel of the parties. 
 
 807. Receiver in suit against administrator not allowed for services 
 
 rendered as solicitor for the administrator. 
 
 808. Not allowed counsel fees paid to himself; receiver, an attorney, 
 
 not bound to render legal services. 
 
 809. What costs and expenses allowed in receiver's accounts; pref- 
 
 ference for costs; allowance discretionary; expense of taking 
 care of property. 
 
 940
 
 CHAP. XIX.] ACCOUNTS. 941 
 
 § 809a. When costs and expenses charged against plaintiff. 
 
 810. When defendant in suit by receiver entitled to costs; motion 
 
 for receiver to pay judgment for costs. 
 
 811. When receiver allowed costs of unsuccessfu llitigation. 
 
 811a. Taxes on property in receiver's hands payable as expenses of 
 administration. 
 
 812. English practice as to costs. 
 
 813. When chargeable for hire of property; not allowed for pay- 
 
 ment of charges against predecessor in arrears. 
 
 814. May account pending bill of interpleader; plaintiff can not have 
 
 receiver discharged without passing accounts; court should 
 not render final judgment without passing account. 
 
 815. Plaintiff should not be delayed by litigation concerning receiv- 
 
 er's accounts. 
 
 816. Receiver irregular in accounts ordered to present account yea'-- 
 
 ly and to verify by affidavit. 
 
 817. Executors of receiver not compelled to pass his accounts; 
 
 executor denied petition for account of payment into court; 
 court should not pass account of deceased receiver without 
 notice to personal representative. 
 
 818. When salary forfeited for delay in payment into court; when 
 
 delay excusable. 
 
 819. Receiver of minor compelled to account from beginning, on 
 
 minor coming of age. 
 819a. How receiver's accounts may be questioned. 
 Sl9b. Right of appeal from order settling receiver's accounts. 
 819c. Appeal by one creditor resulting in benefit to all; entitled to 
 
 expenses and counsel fees. 
 
 § 797. Duty of receiver to account to court; held to 
 great strictness; consent of parties to delay; required to 
 account without process of court ; not entitled to jury ; bill 
 should not be dismissed without settling of account; de- 
 gree of diligence required. Receivers being officers of the 
 court appointing them, they are required to account to the 
 court for all receipts and disbursements in the course of their 
 receivership. And it is the duty of a receiver to file his ac- 
 counts when required by the court, in order that all claims for 
 compensation or disbursements out of the fund in his hands 
 may be properly considered by the court. ^ Courts of equity 
 
 1 Adams ?/.Wood, 8 Cal., 306. .See, 286. As to the presumptions to be 
 also, Mabry v. Harrison, 44 Tex., indulged in favor of the correctness
 
 942 RECEIVERS. [chap. XIX. 
 
 are disposed to hold receivers to great strictness in rendering 
 their accounts, and while it would seem to be competent for 
 a receiver to delay passing his accounts at the required time, 
 by consent of all parties in interest, when they are capable of 
 giving consent, yet if some of the parties are minors he will 
 not be justified in delaying, even with their consent. 2 And it 
 is held to be the receiver's duty to come in and account to 
 the court at the proper times, without any process or rule upon 
 him for that purpose, and the rules regulating proceedings 
 between litigant parties afford no analogy to the case of a re- 
 ceiver, the latter being an officer of the court and not a party 
 litigant.^ So a receiver being an ofiicer of the court, and 
 the fund in his hands being regarded as in the custody of the 
 court itself, he is not entitled to a jury to pass upon his ac- 
 counts.'* And where a bill is held to be without equity, it is 
 error to dismiss the bill without first requiring the receiver to 
 report and settle his accounts.^ And a receiver is bound to 
 exercise the same degree of diligence in keeping down ex- 
 penses and in caring for the estate in his possession that a pru- 
 dent man would observe in connection with his own property 
 under similar circumstances.^ 
 
 of a receiver's account, see State v. 2 Dease v. Reilly, 2 Con. & Law., 
 Nebraska S. & E. Bank, 61 Neb., 441 ; S. C, 4 Dr. & War., 284. 
 496, 85 N. W., 391. See Kirker v. 3 McBride v. Clarke, 1 Mol., 233. 
 Owings, 39 C. C A., 132, 98 Fed., And see Felton v. Felton, 47 West 
 499, in which a receiver was held Va., 27, 34 S. E., 753. 
 personally liable for certain debts 4 Akers t;. Veal, 66 Ga., 302; Tin- 
 incurred by him as receiver. See dall v. Nisbet, 113 Ga., 1114, 39 S. 
 Northern Alabama Ry. Co. v. Hop- E., 450, 55 L. R. A., 225. 
 kins, 31 C. C. A., 94, 87 Fed., 505, 5 Simmons v. Shelton, 112 Ala., 
 59 U. S. App., 74, as to an allowance 284, 21 So., 309, 57 Am. St. Rep., 39. 
 for expenses incurred by a receiver 6 State Central Savings Bank v. 
 in a trip to Europe taken at the Bail-Bearing Chain Co., 118 Iowa, 
 instigation of the parties to a suit 698, 92 N. W., 712; Ripley v. Mc- 
 and other expenses incurred while Gavic, 120 Iowa, 52, 94 N. W., 452; 
 traveling about in the interest of State v. Germania Bank, 106. Minn., 
 the property in his possession. 164, 118 N. W., 683.
 
 CHAP. XIX.] 
 
 ACCOUNTS. 
 
 943 
 
 § 798. Not allowed to make expenditures without sanc- 
 tion of court ; must show vouchers ; when reimbursed ; re- 
 ward paid to recover assets; unauthorized payment of 
 taxes; watching property; premium of surety company on 
 official bond; reference to master; when payments al- 
 lowed, though unauthorized. A receiver will not ordi- 
 narily be permitted to make any expenditures which will 
 seriously diminish the fund intrusted to his charge, with- 
 out the sanction and authority of the court, and it is 
 his duty to apply to the court for instructions as to the 
 expenditures, and to keep regular accounts of all items 
 of receipts and expenditures. He can not in these mat- 
 ters act upon his own discretion, but is held to a strict account- 
 ability to the court, and must produce satisfactory vouchers 
 and proof for all his charges against the fund intrusted to his 
 keeping."^ And even in the absence of objections by the par- 
 
 7 Hooper v. Winston, 24 111., 353; 
 Standish v. Musgrove, 223 111., 500, 
 79 N. E., 161 ; Henry v. Henry, 103 
 Ala., 582, 15 So., 916; State Central 
 Savings Bank v. Bali-Bearing Chain 
 Co., 118 Iowa, 698, 92 N. W., 712. 
 And see Schwartz v. Rosetta G. P. 
 & I. Co., 110 La., 619, 34 So., 709. 
 Hooper v. Winston, 24 111., 353, 
 supra, was a writ of error to re- 
 verse a decree regulating the dis- 
 tribution of a fund in the hands of 
 a receiver over certain hotel proper- 
 ty. The general principles regulating 
 the disbursements of receivers are 
 very clearly stated by Mr. Justice 
 Breese, as follows, p. 365 : "The 
 other claim set up by the receiver, 
 to be allowed such expenses as he 
 has chosen to set down, to keep 
 the house in operation, we are con- 
 strained to say we see no ground 
 upon which to base it. The re- 
 ceiver claims that in this matter he 
 
 was vested with a discretionary 
 power, and therefore the court had 
 no authority to examine into the 
 mode or manner of its exercise; 
 that he was merely the private 
 agent of these parties, that whole 
 subject being left to his own judg- 
 ment. We do not deny that he 
 had some discretion in this matter, 
 but it was very limited. We hold, 
 being an officer of the court, he 
 should have applied to the court 
 for leave to make these expendi- 
 tures, and he is amenable to the 
 court for the exercise of all his 
 powers. As receiver and trustee 
 for parties litigant, it was his mani- 
 fest duty to have kept regular ac- 
 counts, item by item, of all the 
 expenses of the house and of the 
 receipts arising from it, and from 
 all other sources from which money 
 might have come into his posses- 
 sion. He should show an account
 
 944 
 
 RECEIVERS. 
 
 [chap. XIX. 
 
 ties interested, the court will carefully scrutinize the receiver's 
 report.^ And where there are no vouchers and no evidence 
 as to the propriety of the items, the report should not be al- 
 lowed. ^ It does not, however, follow that in every case in 
 which he neglects to obtain an order of court authorizing a 
 particular payment out of the fund in his possession, he will 
 be denied reimbursement. And when a receiver of the effects 
 of a partnership is authorized by the court to prosecute suits 
 for the recovery of the assets, a sum paid by him as a reward 
 for the recovery of lost books of the partnership has been re- 
 garded as a necessary and appropriate expenditure, in the 
 prosecution of suits for the protection of creditors, and has 
 been allowed in his accounts.i^ So when a receiver finds the 
 
 current of the house, embracing 
 therein the stock he found on hand, 
 the purchases of every description 
 for the house, and the receipts of 
 the house. That there were large 
 receipts is unquestionable, yet no 
 account has been rendered of any. 
 That a bar furnished with more 
 than fifteen hundred dollars worth 
 of liquors should not, in Chicago, 
 produce any returns, is incompre- 
 hensible. Failing to show any ac- 
 count current, every presumption 
 ought to be against him, and for all 
 his charges against the fund in- 
 trusted to his keeping, he should 
 show satisfactory vouchers and 
 proofs. He has shown none in the 
 several reports he has made to the 
 court. His judgment was not 
 the limit of the expenditures, but 
 the court, he being one of its offi- 
 cers, has a supervisory power over 
 his acts, and he is amenable to its 
 judgment as to the necessity of 
 these expenditures, in order to keep 
 the house in operation, and he is 
 certainly accountable for the re- 
 ceipts. ... In the management 
 
 of the McCardel House, although 
 the receiver was required to keep 
 it in operation until the sale, he 
 had, as an officer of the court, but 
 very little discretion allowed him, 
 and should have applied to the 
 court, by a brief petition, setting 
 out the facts and asking for a ref- 
 erence, whether such and such ex- 
 penditures would be for the benefit 
 of the interested parties, and neces- 
 sary to keep the house in operation, 
 or for whatever other purpose the 
 expenditure may have been de- 
 sired. No single act calculated to 
 diminish seriously the fund could 
 the receiver do on his own mere 
 motion, and in the exercise of his 
 discretion." 
 
 8 Standish v. Musgrove, 223 111., 
 500, 79 N. E., 161. 
 
 9 Standish v. Musgrove, 223 111., 
 500, 79 N. E., 161. 
 
 10 Adams v. Woods, 15 Cal., 206. 
 In Heflfron v. Rice, 149 111., 216, 36 
 N. E., 562, 41 Am. St. Rep., 271, 
 it was held that where a receiver 
 had been appointed to take posses- 
 sion of, and run a hotel, and, in so
 
 CHAP. XIX.] 
 
 ACCOUNTS. 
 
 945 
 
 property insured and continues such insurance, the court, in 
 passing his accounts, may allow such insurance, if paid in 
 good faith and if necessary for the protection of the property, 
 even though such expenditure has not been authorized by any 
 order of the court.^^ So the unauthorized payment of taxes 
 upon the property in the possession of a receiver will be rati- 
 fied where it appears that the claim is a valid one against the 
 estate.i2 And a receiver is entitled to charge in his account 
 for the necessary watching of the property in his custody.^^ 
 So a receiver is entitled to a credit for the amount paid by 
 him in procuring a surety company as surety upon his offi- 
 cial bond.^'* And where a receiver, upon his own responsibil- 
 ity, incurs an expense in the discharge of his duties which 
 he shows to have been necessary and such as would have been 
 authorized by the court had application been previously made, 
 he will be reimbursed for such outlay as if previous authority 
 
 doing, had cashed a check for twen- 
 ty-five dollars for a guest, which 
 had proved to be worthless, and it 
 appeared that it was the custom of 
 hotels to cash such checks for small 
 amounts, and the receiver had acted 
 in good faith in the matter, the 
 receiver was entitled to a credit for 
 the amount lost upon the check. It 
 was further held that while a re- 
 ceiver ordinarily has no power to 
 borrow money, yet where he does 
 so for the purpose of paying a valid 
 charge against the property in his 
 possession, acting in good faith, and 
 the debtor receives the benefit of 
 such payment, he is entitled to a 
 credit for the amount of the pay- 
 ment. And it was further held that 
 while a receiver ordinarily should 
 immediately file an inventory of the 
 property coming into his possession, 
 yet where, although there has been 
 a delay in so doing, it appears that 
 Receivers — 60. 
 
 the inventory finally filed is correct 
 and there is no showing that the re- 
 ceiver has converted any of the 
 property to his own use, no sub- 
 stantial ground for complaint is 
 shown by such delay. 
 
 11 Brown v. Hazlehurst, 54 Md., 
 26. See, also, Thompson v. Phenix 
 I. Co., 136 U. S., 287, 10 Sup. Ct. 
 Rep., 1019; Rochat v. Gee, 137 Cal, 
 497, 70 Pac, 478. 
 
 12 Hamacker t;. Commercial Bank, 
 95 Wis., 359, 70 N. W., 295. 
 
 13 Howes V. Davis, 4 Ab. Pr., 71. 
 
 14 Hamacker v. Commercial Bank, 
 95 Wis., 359, 70 N. W., 295. See 
 Grabbe v. Moffit, 133 Iowa, 54, 110 
 N. W., 142, as to the compensation 
 of an expert accountant employed 
 by a receiver under the authority 
 of the court, where he exceeds the 
 receiver's instructions as to the na- 
 ture of the report to be submitted.
 
 946 RECEIVERS. [CH^P. XIX. 
 
 had been given.15 Under the English chancery practice, when 
 a receiver had laid out money without a previous order of court 
 for that purpose, the matter was referred to a master to ex- 
 amine whether the transaction was beneficial to the parties in 
 interest, and if found to be so, the receiver was allowed the 
 amount thus expended. ^^ 
 
 § 799. Not allowed expenses for services which he 
 might have performed himself; should report facts to 
 court. It may be said generally, that a court, in passing 
 upon the accounts of its receiver, will not ratify any expend- 
 iture which has not been necessarily incurred for the benefit 
 of the estate committed to his charge. And when a receiver 
 has stepped outside the order of his appointment and as- 
 sumed the role of actor, and has incurred large and unwar- 
 ranted expenses for services which he might properly have 
 performed himself, and has done this without the consent of 
 or notice to either of the parties to the action or to the court, 
 he will not be allowed such expenses.!"^ So when he has, 
 without authority from the court, appointed a deputy receiver 
 to perform duties which he himself might and should have 
 performed, he will not, in passing his accounts, be allowed 
 the compensation paid to such deputy.i^ Sq where the serv- 
 ice in question was to aid and supplement the superintendence 
 of the business of the receivership which was due from the re- 
 ceiver himself, a charge for such service should not be al- 
 lowed.19 So where a receiver of the property of a mining 
 company has incurred large expenses in the operation of the 
 mine without the authority or permission of the court, such 
 expenses are not taxable as costs in the suit, nor can the ques- 
 tion of the liability of some party to the suit therefor be liti- 
 gated in the receivership proceeding over the receiver's ob- 
 is Henry v. Henry, 103 Ala., 582, 18 Corey v. Long, 43 How. Pr., 
 15 So., 916. 504. 
 
 16 Tempest v. Ord, 2 Meriv., 55. 19 Joost v. Bennett, 123 Cal., 424, 
 
 17 Corey v. Long, 43 How. Pr., 56 Pac, 43. 
 
 504.
 
 CHAP. XIX.] 
 
 ACCOUNTS. 
 
 947 
 
 jection.20 When the receiver has paid no money for particular 
 services, but has arranged with the person performing such 
 services that he shall receive such compensation as the court 
 may allow, the facts should be so reported by the receiver in 
 his account, and parties in interest who are dissatisfied with 
 the account, in whole or in part, may appeal from the final or- 
 der of the court thereon. 21 
 
 § 800. Master's report on receiver's account and excep- 
 tions thereto ; English rule ; Irish practice ; New York rule. 
 Under the practice of the English Court of Chancery, a mas- 
 ter's report upon a receiver's account did not require con- 
 firmation by the court, and did not, therefore, admit of ex- 
 ceptions. And the court would not enter into a consideration 
 of any particular items of the account, but would, upon the 
 petition of any person aggrieved, examine any principle upon 
 which the master had proceeded which was alleged to be er- 
 
 20 Hendrie & Bolthoff Co. v. Par- 
 ry, Z7 Colo., 359, 86 Pac, 113. 
 
 21 Adams v. Woods, 8 Cal., 306. 
 "It is the duty of the receiver," says 
 Mr. Justice Burnett, p. 316, "to file 
 his accounts when required by the 
 court, and if he fail in this, the 
 court, upon application of a party 
 in interest, or upon its own motion, 
 will compel him to do so. When 
 his account is filed, all claims 
 against the fund for disbursements 
 or engagements made by the re- 
 ceiver would properly come before 
 the court for consideration. When 
 the receiver has paid no money, but 
 has made an arrangement with a 
 party to receive such compensation 
 as the court may allow, he should 
 report the facts, leaving a blank 
 for the sum that may be allowed. 
 If any of the parties employed by 
 the receiver should not be satisfied 
 with the account, in whole or in 
 part, they could then make their 
 
 objections. And if any one or more 
 of them should feel aggrieved by 
 the final order of the court, they 
 should all appeal, and all the ques- 
 tions should come up before this 
 court in one case. However ex- 
 tensive the record and numerous 
 the parties might be, the labor of 
 this court and expense to the par- 
 ties would not in this way be in- 
 creased but diminished. But if a 
 separate reference and separate ap- 
 peal were allowed in regard to each 
 separate claim upon the fund, then 
 the proceedings would be greatly 
 prolonged, to the injury of all par- 
 ties. And when the appeal should 
 be taken, it would only be necessary 
 for the court below to order the re- 
 ceiver to retain so much of the 
 fund in his hands as might be nec- 
 essary to pay the disputed items, if 
 finally allowed, and order the dis- 
 tribution of the remainder."
 
 948 RECEIVERS. [chap. XIX. 
 
 roneous.22 Under the Irish chancery practice, however, a 
 more Hberal rule prevails and the court will investigate the 
 items of the receiver's account.23 fhe English rule prevailed 
 under the New York chancery system, and when a reference 
 was had to a master for the purpose of settling the receiver's 
 accounts, no order of confirmation of the master's report was 
 required, nor were exceptions allowed to such report. And 
 if a party in interest was dissatisfied with the allowance made 
 by the master, his proper course was to apply to the court to 
 review the account in such particulars as were objectionable, 
 and the court would then consider objections as to the general 
 principles on which the master had proceeded in taking the re- 
 ceiver's accounts, but would not take cognizance of objections 
 to particular items.^^ 
 
 § 801. Distinction between master's report on receiver's 
 account, and on account taken by himself; court may in- 
 vestigate principle on which account allowed, but not de- 
 tails; exceptions, when taken. A distinction is recognized 
 between a master's report upon a receiver's account, and his 
 report containing an account taken and stated by himself, or 
 a report upon a matter referred to him for investigation. The 
 distinction is based upon the fact that the receiver is himself 
 an officer of the court, as well as the master, and that he states 
 his own account and submits it to the master for inspection 
 under order of the court, the master acting in place of the 
 
 22 Shewell v. Jones, 2 Sim. & St., counts. In re Browne's Estate, 19 
 170. affirmed 3 Riiss., 522. L. R., Ir., 132; S. C, ib., 183, af- 
 
 23 Beytagh v. Concannon, 10 Ir. firmed on appeal, ib., 423. 
 
 Eq., 351. But under the Irish chan- 24 Brower v. Brower, 2 Edw. Ch., 
 eery practice a receiver was held to 621. And see, as to the practice in 
 a strict accountability as to pay- New Jersey in regard to entertain- 
 ments of money ordered by the ing exceptions to receiver's ac- 
 court. And when, instead of pay- counts, and the time and manner 
 ing to the principal, a receiver made of presenting such exceptions, Me- 
 payment to solicitors who were not chanics Bank of Philadelphia v. 
 duly authorized to receive it, the Bank of New Brunswick, 2 Green 
 receiver was not allowed the Ch., 437; Richards v. Morris Canal 
 amounts so paid, in passing his ac- & Banking Co., 3 Green Ch., 428.
 
 CHAP. XIX.] ACCOUNTS. 
 
 949 
 
 court, and in a judicial rather than a ministerial capacity. If 
 the master adopts any erroneous principle in allowing the re- 
 ceiver's accounts, the court, on petition of the proper par- 
 ties, may refer the matter back to him for correction. And 
 in determining such question the court will investigate the 
 principles and rules adopted by the master in allowing the re- 
 ceiver's accounts, without examining the items in detail, or 
 the evidence on which they rest, the latter duty being more 
 especially within the province of the master, and being analo- 
 gous to the province of a jury upon questions of fact. If it 
 is desired to take exceptions to the master's report upon the 
 receiver's accounts, they should be first taken before the mas- 
 ter; otherwise they will not be considered by the court. The 
 object of the rule is twofold, being to afford the master an op- 
 portunity to reconsider his decision, and to enable the receiv- 
 er to sustain his accounts by additional evidence, or to make 
 such explanation as the case may require. And while the 
 rule would not deter the court from directing an account to 
 be reformed, if it contained manifest errors or improper 
 charges, yet such errors should be clearly shown to exist, and 
 their character should be such as to be shown by the proofs in 
 the case, or by their intrinsic nature.25 But a receiver is not 
 entitled to an order of reference to examine and pass upon 
 his accounts until he has presented a full and definite state- 
 ment, itemizing the various matters, and verifying the account 
 under oath. 26 
 
 § 802. Not compelled to account by stranger; nor to a 
 party, but only to court ; party may move for account ; duty 
 to account once a year; allowance should be to receiver 
 and not to party; when otherwise. A court of equity will 
 not ordinarily entertain an application from a stranger to the 
 cause to have the receiver pass his account, when no special 
 
 25 Cowdrey v. The Railroad Com- operating a railway. And see Fel- 
 
 pany, 1 Woods, 331. And see this ton v. Felton, 47 West Va., 27, 34 
 
 case as to principles governing the S. E., 753. 
 
 court in allowing a receiver's ac- 26 People v. Columbia Car Spring 
 
 counts for expenses incurred in Co., 12 Hun, 585.
 
 950 RECEIVERS. [chap. XIX. 
 
 ground is shown for such order.27 And a receiver can not 
 be compelled, pending litigation, to account to a party to the 
 suit, or to furnish him with statements of the condition of 
 his accounts. Being an officer of the court and not of the par- 
 ties litigant, he is only required to account to the court from 
 which he derives his appointment. ^8 But when the receiver 
 in a cause has never made a full or complete report of the in- 
 come and disbursements of the estate committed to his care, 
 any party to the cause may move for such an account; and it 
 IS the duty of the receiver himself, as an officed of the court, 
 to make a full report and to pass his accounts at least once 
 a year, since in no other way can the parties to the cause be 
 informed as to their rights or the court act understandingly.29 
 And ordinarily expenses incurred in the receivership should be 
 allowed directly to the receiver by the court and not to the 
 persons by whom the services were rendered. ^^ But while 
 an allowance for the costs and expenses of the receivership 
 should ordinarily be allowed directly to the receiver himself 
 and not to the person who made the advances, yet where the 
 receiver has been discharged and is no longer subject to the 
 jurisdiction of the court, the allowance may properly be made 
 directly to the person who made the advances. ^^ 
 
 § 803. Should keep funds distinct from his own; liable 
 for interest on mingling funds ; when interest not allowed 
 on claim of creditor. In the absence of any special direc- 
 tions of the court, it is the duty of a receiver to keep the fund 
 intrusted to him entirely separate and distinct from his in- 
 dividual funds. If he deposits the money in bank for safe 
 keeping, it should be deposited to a separate account in his 
 name as receiver, so that the fund may at all times be traced 
 
 27 Colburn v. Cooper, 8 Ir. Eq., of Chancery upon this subject, the 
 510. opinion of Chancellor Cooper in 
 
 28 Musgrove v. Nash, 3 Edw. Ch., this case. 
 
 172. 30 Henrdie & Bolthoff Co. v. Par- 
 
 29 Lowe V. Lowe, 1 Tenn. Ch., ry, 37 Colo., 359, 86 Pac, 113. And 
 515 ; Stretch v. Gowdey, 3 Tenn. Ch., see, post, § 805. 
 
 565. And see, as to the rules and 31 German National Bank v. Best, 
 
 orders of the English High Court 32 Colo., 192, 75 Pac, 398.
 
 CPIAP. XIX.] ACCOUNTS. 951 
 
 and identified.^2 And when, in disregard of this duty, the 
 receiver violates his trust by mixing the trust fund with his 
 own money, keeping the whole in one common bank account 
 in his own name, and using large sums as temporary loans 
 from time to time, he is guilty of such a breach of trust as to 
 render himself liable for interest upon the fund, x^nd such 
 interest will be charged him in the final settlement of his 
 accounts, regardless of whether he himself derived profit from 
 the fund or interest from the loans.^^ So if without author- 
 ity of the court he deposits funds of the receivership in his 
 own bank in his individual name, he will be charged with 
 interest upon the money thus deposited. ^^ So when he with- 
 draws funds from his account as receiver and deposits them 
 in another bank in his private account, and in the settlement 
 of his accounts he declines to explain the matter, or to state 
 what sums he has thus deposited in his individual account, he 
 is properly chargeable with interest.^^ So, too, if he deposits 
 the funds of his receivership in bank with his personal funds 
 in his private account, against which he draws his individual 
 checks from time to time, thereby deriving individual benefit 
 from the funds of the receivership, he may be charged with 
 interest. ^^ But the fact that the receiver has deposited the 
 funds of his receivership with his own private funds in bank 
 will not render him liable to pay interest thereon, when 
 it is not shown that he has used any part of the funds pertain- 
 ing to the receivership, or in any manner acquired any profit 
 therefrom. 2"^ And where delay has been occasioned in the 
 payment of the claim of a creditor because of an appeal by 
 the receiver to the court for instructions, interest on the claim 
 should not be allowed since such delay is the delay of the law 
 
 32 Utica Insurance Co. v. Lynch, 34 Schwartz v. Keystone Oil Co., 
 11 Paige, 520; Hinckley v. Railroad 153 Pa. St., 283, 25 Atl, 1018. 
 
 r- lAA TT o ic-> r /- 35 Hinckley v. Railroad Co., 100 
 
 Co., 100 U. S., 153; In re Common- ,, ^ ,_^ -^ 
 
 U. S., 153. 
 wealth Fire Insurance Co., 32 Hun, 36^^ ^^ Commonwealth Fire In- 
 
 '°- surance Co., 32 Hun, 78. 
 
 33 Utica Insurance Co. v. Lynch, 37 Radford v. Folsom, 55 Iowa, 
 11 Paige, 520. 276, 7 N. W., 604.
 
 952 RECEIVERS. [chap. XIX. 
 
 and is incidental to all litigation. ^^ It is held in Georgia, that 
 a receiver should not deposit money in bank without the au- 
 thority of the court. And if he makes such a deposit without 
 authority, although not in his individual name, and a loss oc- 
 curs through failure of the bank, he will be liable for such 
 loss.^^ 
 
 § 804. General liability of receivers for interest on funds. 
 In general it may be said that receivers will not be allowed 
 to make interest for their own benefit upon funds in their 
 hands, and will be answerable for interest upon their bal- 
 ances.^^ And a receiver is chargeable with interest upoil funds 
 derived from a sale of property, either when he receives inter- 
 est or when he might have done so.'^l If he retains funds in 
 his hands after the time when they should be paid over, he 
 may be required to pay interest thereon at the time of ren- 
 dering his next account.'*^ And when he is guilty of negli- 
 gence in not passing his accounts at the time required, he 
 will be compelled to pay interest upon the balance in his hands 
 from the time when it was his duty to account, or to pay the 
 money into court.^^ He will not usually be required, however, 
 to pay interest from the very moment of receiving the money, 
 but only from the time when it should have been paid into 
 court.^^ But in the interval between receiving the money and 
 the time of passing his accounts, he can not make interest on 
 the fund for his own benefit, and if he receives a sufficient sum 
 to be invested, he should apply for an order to have it paid 
 into court, in order that it may be made productive to the 
 
 38 Malcomson v. Wappoo Mills, 353 ; Rosenthal v. McGraw, 71 C. 
 99 Fed., 633. To the same effect, C. A., 277, 138 Fed., 721. 
 
 see Solomons v. American B. & L. 42 Harman v. Forster, 1 Hog., 
 
 Assn., 116 Fed., 676. And see, ante, 318; Speiser v. Merchants' Ex- 
 
 § 394^. change Bank, 110 Wis., 506, 86 N. 
 
 39 Ricks V. Broyles, 78 Ga., 610, 3 W., 243. 
 
 S. E., 772. 43 Fletcher v. Dodd, 1 Ves. Jiin., 
 
 40 Lonsdale v. Church, 3 Bro. C. 85; v. Jolland, 8 Ves., 72; 
 
 C, 41 ; Shaw v. Rhodes, 2 Riiss., Potts v. Leighton, 15 Ves., 273. 
 
 539. 44 Potts V. Leighton, 15 Ves., 273. 
 
 41 Hooper v. Winston, 24 111.,
 
 CHAP. XIX.] ACCOUNTS. 953 
 
 estate.^^ And where a receiver is ordered by the court to 
 make a particular investment of the funds in his hands but fails 
 to do so, he is chargeable with interest upon the fund from 
 the time when the investment should have been made, but 
 the liability in such case is not for compound interest but for 
 simple interest only.^^ When receivers have illegally appro- 
 priated a balance in their hands, they are chargeable with in- 
 terest on such balance, and if one of them has made the mis- 
 appropriation and the other has negligently permitted it, they 
 will be held jointly liable therefor in the final settlement of 
 their accounts.'*'^ And when a receiver had retained the funds 
 in his hands for a long period for his own benefit, he was 
 charged interest on his yearly balances, and the interest was 
 computed by annual rests, that is upon the balance in his 
 hands at the end of each year.'^^ So if a receiver, acting in 
 good faith, but without the direction or authority of the court, 
 loans the funds belonging to his receivership, and charges 
 himself with the amounts received for interest, no losses oc- 
 curring by reason of such loans and the estate being benefited 
 thereby, he should not be charged with interest beyond the 
 amount actually received by him.'*^ But it is improper to re- 
 quire a receiver to pay interest upon the money in his hands in 
 the absence of any evidence upon the question of his liability 
 to pay such interest. ^^ And while a receiver is not allowed 
 to make any personal profit out of his office, aside from his 
 
 45 Shaw V. Rhodes, 2 Russ., 539. compensation should be disallowed, 
 
 46 Roller v. Paul, 106 Va., 214, 55 and they should be required to pay 
 S. E., 558. interest on their balances at the rate 
 
 47 Commonwealth v. Eagle Fire of five per cent, per annum. See 
 Insurance Co., 14 Allen, 344. General Order, 15 Ves., 278. And 
 
 48 Foster v. Foster, 2 Bro. C. C, see comments thereon by Lord 
 616. In 17% a general order was Eldon in Potts v. Leighton, id., 273. 
 entered by the English Court of 49 Attorney- -General v. North 
 Chancery, requiring receivers to America Life Ins. Co., 89 N. Y., 
 pass their accounts and pay the 94, affirming in part S. C, 26 Hun, 
 balances in their hands into court 294. 
 
 annually, and it was ordered that 50 How v. Jones, 60 Iowa, 70, 14 
 
 in default thereof their salary or N. W., 193.
 
 954 RECEIVERS. [chap. XIX. 
 
 compensation, the rule will not be extended to require him to 
 account for money which he has realized, not by any act done 
 or omitted as receiver, but by reason of the opportunity afford- 
 ed by his receivership. Thus a receiver, who had been en- 
 gaged in business as a broker before his appointment, and 
 who while acting as receiver of an insolvent bank is paid by 
 mortgage debtors of the bank a commission for procuring 
 new loans with which to pay their indebtedness to the bank, 
 will not be required to account for such commissions when he 
 has acted in good faith and without neglecting his duties as 
 
 receiver 
 
 51 
 
 § 805. When and to what extent allowed for counsel 
 fees. Receivers are entitled, in the settlement of their ac- 
 counts, to payments made on account of legal services and 
 counsel fees.^^ And such fees, when paid by the receiver in 
 good faith in collecting moneys to which he is entitled, the 
 disbursements being necessary and beneficial to the parties 
 ultimately entitled to the fund, should be paid from such fund 
 in the settlement of the receiver's accounts. ^^ The allowance 
 of counsel fees is regarded as being made to the receiver as an 
 item in his account, and not directly to counsel, the allowance 
 
 51 Special Bank Commissioners v. So., 916; Berry v. Rood, 209 Mo., 
 Franklin Institution, 11 R. I., 557. 662, 22 S. W.. 108. And see Perry- 
 
 52 Howes V. Davis, 4 Ab. Pr., 71 ; Mason Shoe Co. v. Sykes, 72 Miss., 
 Cake V. Mohun, 164 U. S., 311, 17 390, 17 So., 171, 28 L. R. A., 277; 
 Sup. Ct. Rep., 100, affirming Cake Pittman v. Hopkins, 74 Miss., 563, 
 V. Woodbury, 3 App. D. C, 60, and 21 So., 606. A plaintiff at whose 
 distinguished in International Trust instance a receiver is appointed is 
 Co. V. United Coal Co., 27 Colo., not entitled to counsel fees for his 
 246, 60 Pac, 621; Boston Safe-De- attorney from a fund which, at his 
 posit & T. Co. V. Chamberlain, 14 instance, has come into the posses- 
 C. C. A., 363, 66 Fed., 847, 25 U. S. sion of the receiver to which an- 
 App., 251 ; Montgomery v. Peters- other has a superior claim, when it 
 burg S. & I. Co., 17 C. C. A., 360, appears that the bringing of the 
 70 Fed., 746, 30 U. S. App., 511; fund into court in no way operated 
 Elk Fork Oil & Gas Co. v. Foster, for the benefit of the latter. Buck- 
 39 C. C. A., 615, 99 Fed., 495; Amer- waiter v. Whipple, 115 Ga., 484, 41 
 ican Loan & Trust Co. v. South S. E., 1010. 
 
 Atlantic & O. R. Co., 81 Fed., 62 ; 53 How v. Jones, 60 Iowa, 70. 14 
 
 Henry v. Henry, 103 Ala., 582, 15 N. W., 193. But counsel fees
 
 CHAP. XIX.] 
 
 ACCOUNTS. 
 
 955 
 
 being made in his accounts in order that he may make com- 
 pensation for such services.^'^ And where the value of the 
 services rendered by counsel for the receiver of an insolvent 
 is clearly established, the court has no authority to reduce 
 the amount of such allowance upon the ground that by so do- 
 ing the amounts to be distributed among creditors will there- 
 by be increased. 55 And since counsel fees are to be regarded 
 as part of the costs of the proceeding, it is proper to give them 
 a preference over prior liens, and this is so although the ap- 
 pointment of the receiver was made without prejudice to prior 
 
 should not be allowed out of the 
 fund for an attorney who is em- 
 ployed by the debtor and represents 
 him to resist the claims of the cred- 
 itors at whose instance the receiver 
 has been appointed. Ford v. Gil- 
 bert, 44 Ore., 259, 75 Pac. 138. See 
 Stone V. Omaha Fire Ins. Co., 61 
 Neb., 834, 86 N. W., 468. As to the 
 effect of the individual interest in 
 the receivership proceeding of coun- 
 sel employed by a receiver upon the 
 amount of his fees, see Villere v. 
 New Orleans P. M. Co., 122 La., 
 717, 48 So., 162. 
 
 54 Stuart v. Boulware. 133 U. S., 
 78, 10 Sup. Ct. Rep., 242; First 
 National Bank v. Oregon Paper Co., 
 42 Ore., 398, 71 Pac, 144, 971 ; Har- 
 rigan v. Gilchrist, 121 Wis., 127, 439, 
 99 N. W.. 909, 1008; Crumlish's 
 Adm'r v. Shenanddah V. R. Co., 40 
 West Va., 627, 22 S. E., 90. As to 
 the right to counsel fees out of a 
 fund in court derived from the fore- 
 closure of a railway mortgage and 
 the operation of the road by a re- 
 ceiver, when counsel have rendered 
 ■services for bondholders and other 
 parties in interest, and as to counsel 
 fees to the receiver in such case, see 
 Hand v. Railroad Co., 21 S. C, 162. 
 And see, ante. § 802. As to the 
 
 right to counsel fees incurred in 
 resisting the application for the ap- 
 pointment of a receiver, see Com- 
 monwealth V. Penn G. B. k L. Assn., 
 204 Pa. St., 29, 53 Atl., 516. As to 
 the allowance of counsel fees for a 
 receiver appointed under a void or- 
 der of the court, see Sullivan v. 
 Gage, 145 Cal., 759, 79 Pac, 537. 
 In Barber v. International Co., 74 
 Conn., 652, 51 Atl., 857, 92 Am. St. 
 Rep., 246, it was held improper to 
 authorize a receiver, in an action in 
 which he might be plaintiff and the 
 corporation of which he was such 
 receiver a defendant, to employ 
 counsel to represent such corpora- 
 tion. In Kimmerle v. Dowagiac 
 Mfg. Co., 105 Mich., 640, 63 N. W., 
 529, it was held that where the sub- 
 ject-matter of the litigation was 
 settled by an agreement of the par- 
 ties by which each was to pay one- 
 half of the fees, costs and expenses 
 of the receivership, the defendant 
 could not be heard to say that coun- 
 sel fees should not be paid because 
 incurred in an attempt to maintain 
 the appointment which was irregu- 
 lar. 
 
 55 Stone v. Omaha Fire Ins. Co., 
 61 Neb., 834, 86 N. W., 468.
 
 956 RECEIVERS. [chap. XIX. 
 
 liens.^^ But ex parte orders for the payment of fees to the 
 counsel for the receiver, who is his law partner, such orders 
 being obtained by the receiver or by the counsel himself with- 
 out notice to the parties in interest, are not conclusive upon a 
 reference to settle the receiver's accounts, and he will still be 
 required to show that such payments were justified by services 
 rendered. ^'^ And since all administrative and executive work 
 in the handling of an estate is to be performed by the receiv- 
 er, he will be allowed counsel fees only for work requiring 
 special legal skill. ^^ And upon a petition by the attorney for 
 the receiver for an allowance for his services, the court should 
 not allow more than the amount claimed in the petition, al- 
 though there may be testimony in the case which would war- 
 rant a larger allowance. ^^ And the courts are usually indis- 
 posed to allow a receiver any payments made to counsel for 
 services when the employment has not been authorized by the 
 court.^^ And in fixing the compensation of counsel, the 
 proper consideration is not the work actually done by the attor- 
 
 56 Gallagher v. Gingrich, 105 59 Richter v. Schroeder, 110 111., 
 Iowa, 237, 74 N. W., 763. 112. 
 
 57 In re Commonwealth Fire In- 60 Corey v. Long, 43 How. Pr., 
 surance Co., 32 Hun, 78. As to 504; Dalliba t/. Winschell. 11 Idaho, 
 allowances for counsel fees out 364, 82 Pac, 107, 114 Am. St. Rep., 
 of the funds of a receivership to 267; Crumlish's Adm'r v. Shenan- 
 claimants against such funds, and doah V. R. Co., 40 West Va., 627, 
 to intervening creditors, see People 22 S. E., 90. And see Hulings v. 
 V. Security Life Insurance and An- Jones, 63 West Va., 696. In Henry 
 nuity Co., 23 Hun, 596; Attorney- v. Henry, 103 Ala., 582, 15 So., 916, 
 General v. Continental Life Insur- the court use the following lan- 
 ance Co., 27 Hun, 195 ; Attorney- guage in regard to the allowance of 
 General v. Continental Life Insur- counsel fees in cases where not 
 ance Co., 31 Hun, 623. As to the previously authorized by the court: 
 practice in fixing the amount of "In no case, except when the cestui 
 counsel fees for services rendered a que trust are sui juris and waive 
 receiver of an insolvent life insur- it, should a court suffer a credit to 
 ance company under the statutes stand, or be entered upon the ac- 
 of New York, see People v. Knick- count of any trustee, for expenses 
 erbocker Life Insurance Co., 31 incurred without a previous order, 
 Hun, 622. whether for attorney's fees or other- 
 
 58 Olson V. Bank, 72 Minn., 320, wise, until he satisfies the court by 
 75 N. W., 378. proof, 1. That the expense was a
 
 CHAP. XIX.] 
 
 ACCOUNTS. 
 
 957 
 
 ney based upon the time spent and the amount customarily 
 charged for such work, but the allowance should be based upon 
 what appears to be proper for the work which was reasonably 
 necessary for the due administration of the trust.^i And a 
 receiver is not entitled, in settling his accounts, to an allow- 
 ance for counsel fees paid by him out of a particular fund, 
 in an unsuccessful defense of an action brought against him by 
 a person entitled to that fund, and in an appeal taken in such 
 action ; especially when the original action is brought against 
 him and the appeal is prosecuted by him in his personal ca- 
 pacity, and not as receiver.62 And when a person, not in in- 
 terest in the controversy, has fraudulently procured his own 
 
 reasonably necessary one, and for a 
 service not within the ordinary du- 
 ties which the trustee should him- 
 self perform. 2. That the amount 
 claimed is the fair and reasonable 
 value of the service ; and, 3. That 
 the amount has been actually paid, 
 in good faith, by the trustee. If 
 the courts would vigorously enforce 
 this rule, trust estates would not 
 suffer, as many have suffered in the 
 past. The loose practice of execu- 
 tors, administrators, guardians and 
 other trustees, of employing coun- 
 sel, generally, without regard to 
 cost; without effort to obtain the 
 best terms practicable for the es- 
 tate; with no thought of personal 
 responsibility, or expectation of pay- 
 ment until allowance is made, but, 
 too often, upon the assumption, ex- 
 pressly or impliedly indulged by 
 both, that the attorney shall receive 
 only what he may induce the court 
 to allow from the funds in hand, 
 after the service has been rendered, 
 is fraught with evil, and should not 
 be encouraged. Under its influence, 
 estates have, not infrequently, been, 
 in large measure, swallowed up in 
 cost, and, in some instances, courts. 
 
 created to protect the helpless, ac- 
 tually brought into public disfavor. 
 We mean no reflection upon any 
 one connected with this cause. Our 
 observations are to emphasize the 
 wisdom of the rule we re-affirm. 
 We will not be understood as hold- 
 ing that when the chancery court 
 has a fund in gremio legis—s. fund 
 in the hands of its officer — it may 
 not direct a claim shown to have 
 been properly incurred by the trus- 
 tee, although without previous au- 
 thority, to be paid, from the funds 
 in court, directly to the party in 
 whose favor it was incurred. Cases 
 may arise where this course will 
 best conserve the rights of all. That 
 is a question, however, which con- 
 cerns the creditor. The trustee or 
 receiver, who has had the receipt 
 and disbursement of the funds of 
 the estate, can not complain of the 
 court's refusal to exercise this 
 power. If the claim is a proper one, 
 he should have paid it himself and 
 asked allowance for it." 
 
 61 Harrigan v. Gilchrist, 121 Wis., 
 127, 438, 99 N. W., 909, 1008. 
 
 62Utica Insurance Co. v. Lynch, 
 2 Barb. Ch., 573.
 
 958 RECEIVERS. [chap. XIX. 
 
 appointment as receiver of a fund in litigation, and has ob- 
 tained possession of the fund, in opposition to the wishes and 
 under protest of all the parties in interest and of all parties to 
 the cause, he will not be allowed to charge upon the fund pay- 
 ments made to counsel employed by him in defending his ap- 
 pointment, the order being reversed on appeal. ^^ Nor will 
 counsel fees be allowed for services rendered in resisting an 
 application for the removal of a receiver, when the applica- 
 tion is sustained. ^^ Nor will fees be allowed in such case 
 upon behalf of counsel who were employed to assist in re- 
 sisting such application by creditors and without leave of 
 court. ^^ Nor will counsel fees be allowed except for legal as- 
 sistance rendered the receiver, and they will not be allowed for 
 services which he himself was equally capable of performing.^^ 
 Nor should such fees be allowed for making a report to the 
 court which is a mere narration of his acts and an account of 
 his receipts and disbursements.^'^ And where a receiver has 
 grossly mismanaged the property in his possession resulting 
 in great loss to the estate, counsel fees will not be allowed. ^^ 
 And where a receiver has been appointed in a state court over 
 the same property as that over which a receiver is subsequently 
 appointed in a federal court, counsel fees claimed to have been 
 earned in the state court under a contract with the receiver 
 therein appointed will not be allowed as a preferred charge upon 
 the property in the federal court ; nor will such charges be al- 
 lowed among the claims of general creditors where they have 
 not been ascertained and allowed by the state court for whose 
 
 63 O'Mahoney v. Belmont, 62 N. 67 Wilkinson v. Washington Trust 
 Y., 133, affirming S. C, 37 N. Y. Co., 42 C. C. A., 140, 102 Fed., 28; 
 Supr. Ct. R., 223. Dalliba v. Winschell, 11 Idaho, 364, 
 
 64 /„ re Colvin, 4 Md. Ch.. 126. 82 Pac., 107, 114 Am. St. Rep., 267. 
 
 65 Anderson v. Fidelity & Deposit 68 State Central Savings Bank v. 
 Co., 100 Ga., 739, 28 S. E., 463. Ball-Bearing Chain Co., 118 Iowa, 
 
 66 Henry v. Henry, 103 Ala., 582, 698, 92 N. W., 712. And see, ante,] 
 15 So., 916; Saulsbury v. Lady § 790. 
 
 Ensley C, I. & R. Co., 110 Ala., 
 585, 20 So., 72.
 
 CHAP. XIX.] ACCOUNTS. 959 
 
 receiver they were rendered. ^^ But the receiver's expenses 
 and fees for counsel and witnesses, in defending himself 
 against a motion for his removal, have been allowed him when 
 the court was satisfied that he had acted with entire good faith 
 and strict integrity; and when the charges against him have 
 been withdrawn by an amicable arrangement between the 
 parties, and when he has then voluntarily surrendered his 
 trust to the courtJ^ And a receiver of a lunatic's estate may 
 be allowed proper and reasonable counsel fees, for advice and 
 assistance rendered him in the discharge of his official duty, 
 and in aiding him to protect the estate^^ And since the com- 
 pensation of the receiver forms a necessary element in his ac- 
 count, it is proper to allow counsel fees incurred in defending 
 this item of the account. "^^ And although the allowance of com- 
 pensation to a receiver and his counsel as fixed by the act of 
 appointment may generally be considered as sufficient to fully 
 compensate them for their services, the court may, in its dis- 
 cretion, grant additional allowances for extraordinary serv- 
 ices made necessary in the progress of the receivership pro- 
 ceeding.'^^ And an allowance of counsel fees will not be dis- 
 turbed upon appeal where there is nothing in the record to show 
 the reviewing court what such services or their value were, 
 since in such case it will be presumed that the lower court 
 acted properly in making the allowance.'''* In the absence of 
 settled practice or general rules to the contrary, motions for 
 the allowance of counsel fees should not be heard ex parte 
 but only upon notice to the parties in interest or their solicit- 
 ors.'^5 
 
 69 American Loan & Trust Co. v. Minn., 129, 114 N. W., 651. And 
 South Atlantic & O. R. Co., 81 Fed., see, ante, § 790. 
 
 62. '^4 St. Paul Title, I. & T. Co. v. 
 
 70 Cowdrey v. The Railroad Co., Diagonal Coal Co., 95 Iowa, 551, 
 1 Woods, 331. 64 N. W., 606. 
 
 71 In re Colvin, 4 Md. Ch. 126. 75 Merchants' Bank v. Crysler, 14 
 
 72 Baxter v. Hewes, 45 La. An., C. C. A., 444, 67 Fed., 388, 32 U. 
 1065, 13 So., 864. S. App., 187. 
 
 73 State v. Germania Bank, 103
 
 960 RECEIVERS. [chap, XIX. 
 
 § 806, When allowed counsel fees paid to counsel of the 
 parties. The courts are usually averse to allowing a re- 
 ceiver to employ as his counsel the counsel of either party to 
 the cause, when there are conflicting interests. And when 
 counsel for the plaintiff, in an action for the dissolution of 
 a partnership, had also acted as associate counsel to the re- 
 ceiver, the court refused to allow a claim for compensation 
 for such services. '^^ But where the counsel of one of the par- 
 ties has been employed by the receiver, not adversely to either 
 of the parties, but to advance the common interest of both, 
 such employment does not fall within the principle of the 
 rule prohibiting the receiver from employing the counsel of 
 either party. In such case, therefore, it is proper to allow the 
 receiver, in passing his accounts, a reasonable sum for coun- 
 sel fees.'''^ But compensation will be allowed in such case 
 only when it is entirely clear that the necessarily and proper- 
 ly prejudicial attitude of counsel can not have affected their 
 services to the receiver.'^s And in the settlement of his ac- 
 counts, a receiver has no authority to credit himself with 
 counsel fees paid for or in behalf of either of the parties to 
 the cause. If, however, upon final settlement, sufficient funds 
 remain belonging to the parties for whom he has made such 
 advances, he may be reimbursed out of such funds if the 
 amounts so advanced were reasonable and proper, or made at 
 the request of the party charged.'^^ And where it is sought to 
 have an allowance of fees upon behalf of counsel of an in- 
 tervening creditor, it must appear that the intervention re- 
 sulted in a direct benefit to the fund and to the parties in 
 interest; and such an allowance should not be made where 
 the only questions raised must inevitably have arisen without 
 the intervention, and the interests of the receiver were identical 
 
 76 Adams v. Woods, 8 Cal., 306. 78 Speiser v. Merchants' Ex- 
 And see Bennett v. Chapin, 3 change Bank, 110 Wis., 506, 86 N. 
 Sandf., 673. W., 243. 
 
 77 Bennett v. Chapin, 3 Sandf., 79 Drake v. Thyng, Z7 Ark., 228. 
 673. See Ryckman v. Parkins, 5 
 
 Paige, 543.
 
 CHAP. XIX.] ACCOUNTS. 961 
 
 with those of the intervener and it appeared that the receiv- 
 er and his counsel were entirely competent to present such 
 questions.^^ 
 
 § 807. Receiver in suit against administrator not al- 
 lowed for services rendered as solicitor for the adminis- 
 trator. When a receiver is appointed in a suit in chancery 
 against an administrator to recover property of the deceased, 
 he will not be allowed to credit himself in his account with 
 an amount due him for services which he has rendered as 
 solicitor for the administrator in defending the suit, since this 
 is properly a claim against the administrator, which should 
 be allowed by the court of probate.^^ 
 
 § 808. Not allowed counsel fees paid to himself; receiv- 
 er, an attorney, not bound to render legal services. A re- 
 ceiver, in stating his accounts, will not be allowed to charge 
 for counsel fees paid to himself for services rendered, he be- 
 ing an attorney, in addition to the legal costs properly tax- 
 able in suits prosecuted or defended by him. And it is deemed 
 as unsafe to permit a receiver to contract with and to pay 
 himself for such extra services, as it would be to permit him 
 to become a purchaser of the trust property, which it is his 
 duty to sell to the best advantage of the estate.^2 ^nd since 
 the duties of a receiver are administrative and executive, he 
 is not required, because of the fact that he is an attorney, to 
 render legal services for the estate. ^^ 
 
 § 809. What costs and expenses allowed in receiver's 
 accounts; preference for costs; allowance discretionary; 
 expense of taking care of property. The costs of the ap- 
 pointment of a receiver are entitled to priority of payment 
 out of the fund realized by him, before all other demands.^'* 
 
 80 Weed V. Central of Georgia 83 Olson v. Bank, 72 Minn., 320, 
 Ry. Co., 40 C. C. A., 319, 100 Fed., 75 N. W., 378. 
 
 162. 84 Read v. Corcoran, 1 Ir. Ch., N. 
 
 81 Battaile v. Fisher, 36 Miss., 321. S., 235. 
 
 82 Jn re Bank of Niagara, 6 Paige, 
 213. And see State v. Butler, 15 
 Lea, 113. 
 
 Receivers 61.
 
 962 RECEIVERS. [chap. XIX. 
 
 And the costs of a receivership are properly given a prefer- 
 ence over prior Hens aUhough the appointment of the re- 
 ceiver was made without prejudice to prior Hens.^^ And in 
 general it may be stated that the allowance of costs in receiv- 
 ership proceedings rests largely in the discretion of the lower 
 court and that, in the absence of a manifest abuse of such dis- 
 cretion, the action of that court in allowing or rejecting items 
 of costs will not be disturbed upon appeal.^^ If the receiver 
 permits costs to accrue which he ought to have prevented, as if 
 he neglects to pay rent due to the landlord upon premises sub- 
 ject to the receivership, he will be required to pay such costs 
 out of his own pocket.^"^ But a receiver who is discharged 
 because of his inability to procure new sureties, will not be 
 charged with the costs of appointing a new receiver.^^ And 
 when it does not appear that a receiver has been guilty of any 
 fraud or bad faith in his accounts, the costs of a reference for 
 their settlement should not be charged against him, even 
 though some items in his accounts are not allowed.^^ And 
 where a receiver was properly appointed by the court to take 
 possession of the property in controversy and operate it pend- 
 ing the determination of the proceeding, the expense of taking 
 care of the property and operating it becomes a charge upon it 
 and is properly payable out of the fund in the hands of the 
 receiver.^0 But where the appointment of a receiver is wrong- 
 
 85 Gallagher v. Gingrich, 105 see the case first cited as to the 
 Iowa, 237, 74 N. W., 763. allowance of advances made by a 
 
 86 Pennsylvania Co. v. Jackson- party to the suit and the receiver 
 ville, T. & K. W. R. Co., 13 C. C. pending the receivership. And in 
 A., 550, 66 Fed., 421, 30 U. S. App., Buster v. Mann, 69 Ark., 23. 62 S. 
 188. W., 588, it was held that where the 
 
 87 Cook z;. Sharman, Sir. Eq., 515. receiver of an insolvent concern, 
 
 88 Lane v. Townsend, 2 Ir. Ch., together with several of the cred- 
 N. S., 120. itors, had advanced money with 
 
 89 Radford v. Folsom, 55 Iowa, which to carry on the business, the^ 
 276, 7 N. W., 604. receiver was not entitled to a pref- 
 
 90 Ferguson v. Dent, 46 Fed., 88; erence over such creditors in case 
 Elk Fork Oil & Gas Co. v. Foster, of a deficiency after the sale of the 
 39 C. C. A., 615, 99 Fed., 495. And property. See, ante, § 36, as to the
 
 CHAP. XIX.] ACCOUNTS. 963 
 
 ful, only such items of expense should be allowed as would 
 necessarily have been incurred had no receiver been appoint- 
 ed.9i 
 
 § 809a. When costs and expenses charged against plain- 
 tiff. As a general rule where a plaintiff has sought and 
 procured the appointment of a receiver in a case where the 
 jurisdiction is properly exercised, persons dealing with the 
 receiver must look for their reimbursement solely to the fund 
 or property in the charge of the court without any personal 
 liability upon the part of the plaintiff. The mere inadequacy 
 of the property and its failure to realize at a sale a sufficient 
 amount to cover the costs and expenses of the receivership will 
 not render the plaintiff personally liable for such deficiency, 
 where he has been guilty of no irregularity and has properly 
 invoked the jurisdiction of the court in the first instance.^^ 
 If, however, the appointment is improperly rriade in the first 
 instance, without notice to the defendant and without suffi- 
 cient averments in the bill to warrant the relief, and the re- 
 ceiver is continued against the objections of the defendant, 
 the costs and expenses of the receivership should not be 
 charged against him, but against the plaintiff in the action, 
 by whom they were caused. ^^ So where a receiver has been 
 appointed upon a bill which contained no cause of action in 
 a case where such appointment was held improper and the 
 fund upon which the defendant held a lien has been thereby 
 depleted, it is proper for the court, in settling the receiver's 
 accounts, to allow the defendant to recover from the plaintiff 
 a part of the fees and expenses which have been allowed the re- 
 ceiver out of the property upon which the defendant held liens.^* 
 
 allowance of the expenses of the S. C, 76 C. C. A., 396, 145 Fed., 
 
 carrying on of a business by a re- 820. 
 
 ceiver. 93 Moyers v. Coiner, 22 Fla., 422 ; 
 
 9iOgden City v. Irrigation Co., Horn v. Bohn, 96 Md., 8, 53 Atl.,. 
 
 18 Utah, 279, 55 Pac, 385. 576. And see, ante, § 796. 
 
 92 Atlantic Trust Co. v. Chap- 94 Cutter v. Pollock, 7 N. Dak.,, 
 
 man, 208 U. S., 360, 28 Sup. Ct. 631, 76 N. W., 235. 
 Rep., 406, 52 L. Ed., 528, reversing
 
 964 RECEIVERS. [chap. XIX. 
 
 And where it appears that the order appointing a receiver was 
 unwarranted and without authority of law, the costs are prop- 
 erly taxed against the plaintiff upon whose application the 
 receiver was appointed.^^ So where the necessity for the re- 
 ceivership resulted from the assertion by the plaintiff of a 
 cause of action which was finally shown to be unwarranted 
 and fraudulent, the costs of the proceeding should be charged 
 against the plaintiff and are not payable out of the fund in 
 the hands of the receiver.^^ So where a receiver was appoint- 
 ed improperly and without notice and upon motion is after- 
 ward discharged, he is not entitled to recover his expenses 
 out of the fund but must look, if at all, to the person at whose 
 instance he was appointed. ^"^ So if a receiver is improperly 
 granted over property belonging to third persons, who are not 
 parties to the action and who derive no benefit from the re- 
 ceivership, as against such persons the receiver will not be 
 allowed to retain any portion of the fund derived from such 
 property in payment of his compensation and costs, and he 
 must look to the person who procured his appointment for 
 such payment.9^ And where a receiver has been appointed im- 
 properly and without authority of law, as subsequently held 
 by the court, and after exhausting all the funds in his hands, 
 there remains a balance due for rent of the premises occupied 
 for the purpose of carrying on the business of the receiver- 
 ship, the lessor to whom such balance is due is entitled, by pe- 
 tition in the receivership proceeding, to compel the payment 
 of such balance by the plaintiff upon whose application the 
 receiver was appointed. And especially is this so where the 
 plaintiff has greatly prolonged the receivership and the pos- 
 session of the lessor's property by contesting the latter's claim 
 of priority in the payment of his rent.99 And it is held that 
 
 95 McAnrow v. Martin, 183 111., 97 Couper v. Shirley, 21 C. C. A., 
 467, 56 N. E., 168; Wills Valley 288, 75 Fed., 168, 44 U. S. App., 586. 
 Mining & Mfg. Co. v. Galloway, 155 98 Howe v. Jones, 66 Iowa, 156, 
 Ala., 628, — So., — . 23 N. W., 376. 
 
 96 Highley v. Deane, 168 111., 266, 99 Link Belt Machinery Co. v. 
 48 N. K, 50. Hughes, 195 111., 413, 63 N. E., 186.
 
 CHAP. XIX.] ACCOUNTS. 965 
 
 where the plaintiff procures the appointment of a receiver, he 
 acts at his peril and is chargeable with knowledge of the 
 fact that if the fund of which the receiver takes possession is 
 not adequate to defray the costs and expenses of the receiver- 
 ship, he may be compelled to pay such expenses himself ; and 
 in such case it is not incumbent upon the persons who make 
 such advances to notify the plaintiff that they look to him 
 for payment.! -q^^ it is improper to tax the costs against the 
 unsuccessful plaintiff where no objection was made by the de- 
 fendant to the receiver's report in which he asks for compensa- 
 tion and costs.2 
 
 § 810. When defendant in suit by receiver entitled to 
 costs; motion for receiver to pay judgment for costs. In 
 an action prosecuted by the receiver of a corporation for the 
 collection of money demands, when the action is carried on 
 for the enhancement of the fund in the receiver's hands, for 
 the benefit of those who shall be finally determined to be en- 
 titled thereto, if the receiver is unsuccessful in his suit, the 
 defendant is entitled to costs. And such defendant will not 
 be required to await the final distribution of the assets and to 
 share pro rata with other creditors or parties interested, but 
 he is entitled to an immediate order for payment of the costs 
 out of any funds in the receiver's hands.^ But it has been 
 
 1 German National Bank v. Best, prosecuted by receivers for the col- 
 32 Colo., 192, 75 Pac, 398. And lection of alleged money demands, 
 see Bradford v. Cooledge, 103 Ga., instituted or carried on for the en- 
 753, 30 S. E., 579. hancement of the fund, for the 
 
 2 Harrington v. Foley, 108 Iowa, benefit of those to whom it is ulti- 
 287, 79 N. W., 64. mately to be paid, is the defendant 
 
 3 Columbian Insurance Co. v. Ste- entitled to costs to be paid to him 
 vens, 37 N. Y., 536. The action immediately, or must he stand as 
 was an ordinary suit at law by the a general creditor to await the final 
 receivers for the recovery of a administration and receive only (as 
 money demand. Defendants had the case may be) his distributive 
 judgment for their costs of suit, share of the fund pro rata, with 
 and applied by motion for an order those for whose benefit he has been 
 that the receiver pay such costs subjected to a groundless litiga- 
 out of funds in his hands. "Wood- tion? ... It was conceded on the 
 ruff, J., says, p. 537 : "In an action argument that the costs in ques-
 
 966 
 
 RECEIVERS. 
 
 [chap. XIX. 
 
 held to constitute no ground for sustaining a motion to re- 
 quire a receiver to pay a judgment for costs, that he has re- 
 cently been in possession of funds sufficient to pay the judg- 
 ment, or that he has paid other and larger demands, since the 
 receiver is not bound to render a general account of his trust 
 to each creditor who may assail him with such a motion.'* 
 
 § 811. When receiver allowed costs of unsuccessful liti- 
 gation. Under the English chancery practice, it was held 
 that while a receiver could not be allowed his costs and ex- 
 penses in defending actions without leave of court, if he failed 
 in such defense, yet if he was successful he was entitled to 
 his costs, although he had defended without the sanction of the 
 court.5 But a receiver of an infant's estate will not be allowed 
 his costs and expenses incurred in defending actions without 
 the sanction of the court, since it is improper for him to incur 
 any expense to the estate without leave of court.^ And when 
 a receiver has improvidently instituted proceedings at law in 
 a certain form of action, which he has afterward abandoned 
 
 tion are chargeable upon and are 
 to be collected out of the fund. 
 This could not well be denied, and 
 yet, in a case in which it does not 
 appear by anything stated in the 
 papers that there are other claims 
 on that fund, of any sort, except 
 the interests of the stockholders of 
 the company, it would seem to fol- 
 low, as of course, that the receiver 
 should have been directed to pay 
 those costs. Such an order is the 
 appropriate mode of reaching funds 
 in the receiver's hands. Not being 
 in form a party to the action, no 
 execution could reach the prop- 
 erty he holds, and being the custo- 
 dian of the fund as an officer of 
 the court, he is subject to imme- 
 diate direction to pay it to a party 
 entitled. . . . The receiver is, pro 
 
 hac vice, the representative of the 
 company, its creditors and stock- 
 holders. The action is prosecuted 
 for the increase of a fund which 
 is to be paid to them. It is not ac- 
 cording to any rule of justice or 
 equity toward third parties that 
 actions like the present should be 
 prosecuted by the company or such 
 representative, otherwise than at 
 the expense and risk of the fund 
 which it is sought thereby to in- 
 crease." 
 
 4 Devendorf v. Dickinson, 21 
 How. Pr., 275. See, as to liability 
 of receivers for costs under the 
 New York code of procedure, Marsh 
 V. Hussey, 4 Bosw., 614. 
 
 5 Bristowe v. Needham, 2 Ph., 
 190. 
 
 6 Swaby v. Dickon, 5 Sim., 629.
 
 GHAP. XIX.] ACCOUNTS. 967 
 
 under the advice of counsel, and has brought his action in 
 another form, in which he is successful, it would seem that 
 he can not be allowed the costs of the former proceeding, 
 but must bear them himself.'^ Where, however, an applica- 
 tion was made and proceedings were had against a receiver, 
 but the application was refused with costs, which the applicant 
 was wholly unable to pay, the receiver was allowed his costs, 
 as between solicitor and client, out of the fund in his hands.^ 
 
 § 811a. Taxes on property in receiver's hands payable 
 as expenses of administration. Taxes levied upon personal 
 property in the hands of a receiver become a charge upon the 
 estate, and are properly payable by the receiver as a part of 
 the costs and expenses of the administration of the trust. And 
 the fact that the tax is assessed in the name of the insolvent 
 over whom the receiver is appointed rather than in the name 
 of the receiver constitutes no objection against the validity 
 of the tax, nor will it avail against the tax that there is no 
 averment or proof that there are sufficient funds in the hands of 
 the receiver to pay the tax in question.^ 
 
 § 812. English practice as to costs. Under the English 
 chancery practice, a receiver was not allowed his costs for ap- 
 pearing in response to a petition for his final discharge, since 
 he need not have appeared, being merely an officer of the 
 court, and not a party interested. i*^ And a receiver was not 
 usually allowed to take any steps, by petition or otherwise, 
 for the satisfaction of his costs and expenses, this being left 
 to the action of the parties to the cause. If, however, the par- 
 ties had been guilty of long-continued negligence and delay 
 in moving for the taxation and payment of the receiver's costs, 
 he was held to be justified in presenting a petition himself for 
 their allowance and payment. ^^ 
 
 7 In re Montgomery, 1 Mol., 419. 10 Herman v. Dunbar, 23 Beav., 
 
 8 Courand v. Hanmer, 9 Beav., 3. 312. 
 
 9Wiswall V. Kunz, 173 111., 110, H Ireland v. Eade, 7 Beav., 55. 
 
 50 N. E., 184.
 
 968 RECEIVERS. [chap. XIX. 
 
 § 813. When chargeable for hire of property; not al- 
 lowed for payment of charges against predecessor in ar- 
 rears. When a receiver has used property intrusted to his 
 care in and about his private business, thereby deriving profit 
 to himself, he is properly chargeable in his account for the hire 
 of the property.i2 But he will not be allowed to charge in 
 his account for money advanced by him in payment of charges 
 against his predecessor in office, who was largely in arrears 
 on account of the funds intrusted to him as receiver, so that 
 he himself would not have been entitled to the credit on his 
 own account.12 
 
 § 814. May account pending bill of interpleader; plain- 
 tiff can not have receiver discharged without passing ac- 
 counts; court should not render final judgment without 
 passing account. In case of rival claimants to a fund in 
 the hands of a receiver, he may institute an action in the na- 
 ture of a bill of interpleader, to compel them to interplead and 
 determine their rights ; and pending such action he may proceed 
 to render his accounts and pay over the fund into court, to 
 abide the result of the interpleader.^^ But a plaintiff who has 
 procured the appointment of a receiver can not dismiss his bill 
 and have the receiver discharged without first requiring him 
 to pass his accounts.^^ And it is improper for the court to 
 render final judgment in the cause without passing upon the 
 receiver's account, nor should the court direct that the fees 
 and expenses of the receivership should be taxed by the clerk 
 of the court as costs. The proper practice is for the court, 
 after it has reached its conclusion and upon notice to all parties 
 in interest, to order the receiver to render his account, and, 
 having passed upon the various items in the account, to enter 
 a decree providing for the amount of the receiver's compensa- 
 
 12 Battaile v. Fisher, 36 Miss., 321. 13 Battaile v. Fisher, 36 Miss., 321. 
 
 And see as to liability of a receiver 14 Winfield v. Bacon, 24 Barb., 
 
 of rents and profits to account, 154. 
 
 when he has been appointed by 15 White v. Lord Westmeath, 2 
 
 agreement of the parties, Ford v. Hog., 33. 
 Rackham, 17 Beav., 485.
 
 CHAP. XIX.] ACCOUNTS. 969 
 
 tion and the other items of his expenses and to direct the 
 manner in which the receiver shall pay the items in the ac- 
 count.^6 
 
 § 815. Plaintiff should not be delayed by litigation con- 
 cerning receiver's accounts. A receiver being an officer of 
 the court, and neither party to the litigation being responsible 
 for his misfeasance or malfeasance, it is held that plaintiffs in 
 the action in vv^hich he is appointed should not be delayed in 
 the collection of the amounts due them, until the close of a 
 litigation concerning the receiver's accounts, which may extend 
 over a considerable period of time, since this would be a 
 manifest injustice and hardship upon plaintiffs. ^"^ 
 
 § 816. Receiver irregular in accounts ordered to pre- 
 sent account yearly and to verify by affidavit. When a re- 
 ceiver had been very irregular and careless in his accounts, so 
 that it was impossible to determine from them what were the 
 balances in his hands for which he was chargeable, it was 
 deemed proper that he should be specially ordered to bring in 
 his accounts every year within a specified time, and that he 
 verify by affidavit the amount of his receipts and disbursements 
 and the balances in his hands at the date of his reports. ^^ 
 
 § 817. Executors of receiver not compelled to pass his 
 accounts ; executor denied petition for account of payment 
 into court; court should not pass account of deceased re- 
 ceiver without notice to personal representative. In case 
 of the death of a receiver, equity has no jurisdiction, upon a 
 petition in behalf of parties interested, to order the executors 
 of the deceased receiver to bring in and pass his accounts, and 
 to pay the balance found due out of his assets. ^^ If, however, 
 the receiver dies pending proceedings against him for an ac- 
 counting, the court has power to make an order against his 
 executors reviving and continuing the accounting as against 
 
 16 Cutter V. Pollock, 4 N. Dak., 18 Bertie v. Lord Abingdon, 8 
 205, 59 N. W., 1062, 25 L. R. A., Beav., 53. 
 
 ZTJ, 50 Am. St. Rep., 644. 19 Jenkins v. Briant. 7 Sim., 171. 
 
 17 Milwaukee & Minnesota R. Co. 
 V. Soutter, 2 Wal., 510.
 
 970 RECEIVERS. [chap. XIX. 
 
 them.20 But after the death of a receiver and the appointment 
 of his successor, the court has no power to finally pass upon 
 his accounts without giving his personal representative an op- 
 portunity to be heard. 2^ But when a receiver, appointed for 
 the benefit of a tenant for life, never acted, but permitted the 
 solicitor in the cause to act as receiver and to collect all the 
 rents, and after many years the executor of the receiver was 
 compelled to pay into court the amount found to be due, not- 
 withstanding the solicitor had previously paid a portion to the 
 tenant for life, it was held that the executor could not main- 
 tain a petition for an accounting of what was paid, and for a 
 lien upon the estate for the amount which should be found due 
 upon the accounting.22 
 
 § 818. When salary forfeited for delay in payment into 
 court; when delay excusable. When a receiver, after his 
 discharge, had not paid into court the balance found due upon 
 his account within the time required, he was ordered to pay 
 the same, together with the amount which had been allowed 
 him for his salary, with interest on both sums from the date 
 first appointed for payment.23 But when a receiver had de- 
 layed passing his account in order to obtain additional rent 
 from a tenant, thereby benefiting the estate, he was allowed his 
 commission or poundage thereon and the costs of passing his 
 account ; ^4 so, also, when the receiver had delayed passing his 
 account at the request of the parties, in order to save expense 
 pending a compromised^ 
 
 § 819. Receiver of minor compelled to account from be- 
 ginning, on minor coming of age. It has been held that a 
 receiver over a minor's estate may, upon the minor coming of 
 age, be properly required to account to him from the begin- 
 ning concerning the management of his affairs, although he 
 
 20 /m r^ Columbian Insurance Co., 23 Harrison v. Boydell, 6 Sim., 
 
 30 Hun, 342. 211. 
 
 21 Overholt v. Old D. Mfg. Co., 24 Flood v. Lord Aldborough, 8 
 98 Va., 654, 37 S. E., 307. Ir. Eq., 103. 
 
 22 Gurden v. Badcock, 6 Beav., 25 Purcell v. Woodley, 10 Ir. Eq., 
 157. 422.
 
 CHAP. XIX.] ACCOUNTS. 971 
 
 has before presented his accounts from time to time to the 
 coiirt.26 
 
 § 819a. How receiver's accounts may be questioned. 
 
 When a receiver is charged with having allowed and paid, un- 
 der an order of court, claims which are fictitious and unfound- 
 ed, the proper practice for a creditor desiring to contest such 
 allowances is to apply to be made a party to the suit in which 
 the order was made and to have such order vacated. 27 But 
 when a receiver's accounts have once been passed and approved 
 by the court, they may be questioned only by a direct proceed- 
 ing or petition, calling attention to some error, fraud or mistake 
 in the accounts. And when there have been several receivers 
 in the same cause, some of whose accounts have been passed 
 and approved, and a general order is then made requiring the 
 receivers to account before the master, such order does not re- 
 quire that the accounts already approved shall be reopened. 28 
 
 § 819&. Right of appeal from order settling receiver's 
 accounts. While a receiver, being a mere officer or custo- 
 dian of the court, can not appeal from an order directing him to 
 turn over the property or money in his hands, yet, if the order 
 erroneously fixes the amount of property or money in his 
 hands, and directs him to turn over more than is in his posses- 
 sion, he is entitled to an appeal from such order.29 So he may 
 appeal from a final decree settling his accounts and fixing the 
 balance due from him, and for this purpose he occupies sub- 
 stantially the position of a party to the cause.^^ Upon the 
 
 26 Wildridge v. McKane, 2 Mol., 29 How v. Jones, 60 Iowa, 70, 14 
 
 545. N. W., 193; JMerriam v. Victory 
 
 2TSchenck v. Ingraham, 4 Hun, Mining Co., 37 Ore., 321, 56 Pac, 
 
 67; S. Q, 5 Hun, 397. 75, 58 Pac, 37, 60 Pac, 997. 
 
 28 Farmers' Loan & Trust Co. v. 30 Hinckley v. G., C. & S. R. Co.. 
 
 Central Railroad, 2 Fed., 751, 1 Mc- 94 U. S., 467; Henry v. Henry, 103 
 
 Crary, 352. As to the effect of Ala., 582, 15 So., 916; Saulsbury v. 
 
 laches upon the right of a party in- Lady Ensley C, I. & R. Co., 110 
 
 terested to set aside an order di- Ala., 585, 20 So., 72. 
 recting the payment of funds by a 
 receiver, see Lombard v. Wade, Zl 
 Ore., 426, 61 Pac, 856.
 
 972 RECEIVERS. [chap. XIX. 
 
 same principle, where an order has been entered approving a 
 receiver's report and account and finally discharging him and a 
 writ of error is sued out to review such order of discharge, the 
 receiver is a necessary party to the proceeding and it is error 
 for the reviewing court to proceed without him.^^ So the par- 
 ties to the cause in which he is appointed, and who are interested 
 in the fund in his hands, may appeal from a final decree settling 
 the receiver's accounts.^^ And where a receiver's account em- 
 braces every transaction in his trust relation and covers the 
 entire period for which he was originally appointed, an order 
 settling his account is final and therefore appealable at the in- 
 stance of any party in interest and this is so although he has, 
 by a subsequent order, been continued in his trust.^^ But an 
 order approving a receiver's accounts, which is not final and 
 which directs the receiver to continue the management of the 
 property until the further order of the court, is not appealable, 
 and an appeal therefrom will be dismissed.24 So an ex parte 
 order making an allowance of counsel fees is interlocutory and 
 is therefore not appealable.^^ 
 
 § 819c. Appeal by one creditor resulting in benefit to 
 all; entitled to expenses and counsel fees. Where a fund 
 in the hands of a receiver has been increased as the result of an 
 appeal by a particular creditor, such augmented fund belongs 
 
 31 Haigh V. Carroll, 197 III., 193, to sue out another writ of error to 
 
 64 N. E., 375. In this case the ap- which the receiver should be made 
 
 pellate court reversed the lower a party. 
 
 court and remanded the cause to 32 Hovey v. McDonald, 109 U. 
 
 that court with directions to dis- S., 150, 3 Sup. Ct. Rep., 136; Chand- 
 
 allow the expenditures made by the ler v. Gushing- Young S. Co., 13 
 
 receiver during the period of re- Wash., 89, 42 Pac, 548. 
 
 demption, and to order the payment 33 Patterson v. Ward, 6 N. Dak., 
 
 of the money collected by him to 359, 71 N. W., 543. 
 
 the owner of the equity of redemp- 34 Rochat v. Gee, 91 Gal., 355, 27 
 
 tion. Upon writ of error to review Pac, 670. And see Illinois Trust 
 
 the judgment of the appellate court, & Savings Bank v. Pacific R. Co., i 
 
 the supreme court, after holding as 99 Gal., 407, 33 Pac, 1132. 
 
 indicated in the text, reversed and 35 Wilder v. Reed, 46 Ore., 54, 78 
 
 remanded the cause to the lower Pac, 1027. 
 court without prejudice to the right
 
 CHAP. XIX.] ACCOUNTS. 973 
 
 to the creditors generally and not alone to the one who prose- 
 cuted the appeal. Such creditor, however, is entitled out of the 
 fund to all his costs and expenses incurred upon the appeal, as 
 well as to counsel fees earned in thus increasing the fund.^^ 
 
 36 Schwartz v. Keystone Oil Co., 164 Pa. St., 415, 30 Atl., 297.
 
 CHAPTER XX. 
 
 OF THE RE^IOVAL AND DISCHARGE OF RECEIVERS. 
 
 I. Removal for Cause § 82Q 
 
 II. Final Discharge 832 
 
 I. Removal for Cause. 
 
 § 820. Power of removal or discharge a necessary incident to power 
 of appointment. 
 
 821. Discretionary nature of power of removal; effect of relation- 
 
 ship to the parties as ground for removal; want of notice of 
 appointment of successor no ground for removal. 
 
 822. Receiver not removed to make way for agent of the parties. 
 
 823. Employing counsel of the parties no ground for removal. 
 
 824. Power of removal in vacation; vacating order of appointment;. 
 
 notice of motion for removal requisite; notice to creditors 
 unnecessary. 
 
 825. Removal not appealable; may be made after plaintiff is non- 
 
 suited and pending motion for new trial. 
 
 826. Analogy between removing receiver and dissolving injunc- 
 
 tion; removed when equities of bill denied by answer. 
 
 827. Removal and substitution by consent; extending one receiver 
 
 in place of several. 
 
 828. Receiver's interest as stockholder and director in plaintiff bank;. 
 
 employment of debtor by receiver in creditor's suit. 
 
 829. Required to restore fund on removal. 
 
 830. Receiver not heard on motion to vacate his appointment. 
 
 831. When defendants estopped from seeking removal. 
 831a. Diligence essential to application for removal. 
 
 § 820. Power of removal or discharge a necessary inci- 
 dent to power of appointment. The subject of the removal 
 or discharge of receivers, although to a considerable degree 
 regarded as a matter of practice and to be discussed as such, 
 is, nevertheless, deemed of sufficient importance to merit sep- 
 arate treatment. The power of a court of equity to remove or 
 discharge a receiver whom it has appointed may be regarded as 
 
 974
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 975 
 
 well settled,^ and it may be exercised at any stage of the liti- 
 gation.2 Indeed, it would seem to be a necessary adjunct of 
 the power of appointment, and to be exercised as an incident to 
 or consequence of that power ; the authority to call such officer 
 into being necessarily implying the authority to terminate his 
 functions when their exercise is no longer necessary, or to re- 
 move the incumbent for an abuse of those functions, or for 
 other cause shovvn.^ And the cases upon this branch of the sub- 
 ject will be found to resolve themselves into two classes, viz., 
 cases of removal or substitution for cause, and cases of dis- 
 charge because of the necessity for the appointment having 
 ceased to exist. 
 
 § 821. Discretionary nature of power of removal; ef- 
 fect of relationship to the parties as ground for removal; 
 want of notice of appointment of successor no ground for 
 removal. As regards the power of a court of equity to re- 
 move a receiver for cause and to substitute another in his stead, 
 it is to be observed that the exercise of the power is regarded 
 as a matter properly resting in the sound discretion of the court, 
 
 1 Ferry v. Bank of Central New attorney-general to ask for the re- 
 York, 15 How. Pr., 446. For the moval of a receiver of an insolvent 
 distinction between "vacation of or- corporation under the statutes of 
 der of appointment," "removal" and New York, and as to the practice 
 "discharge," see Pagett v. Brooks, in such cases, see Attrill v. Rock- 
 140 Ala., 257, 37 So., 263. As to the away Beach Improvement Co., 25 
 proper practice upon a petition for Hun, 509. And see S. C, 25 Hun, 
 the discharge of a receiver for cause, 376. But the removal of a receiver 
 see Farmers' Loan & Trust Co. v. over a corporation, upon the appli- 
 Northern Pac. R. Co., 61 Fed., 546. cation of its stockholders, has been 
 
 2/m re Colvin, 3 Md. Ch., 300. denied when it appeared that a 
 
 And see Crawford v. Ross, 39 Ga., majority of the directors were in 
 
 44. As to the removal of a receiver sympathy and co-operation with 
 
 appointed through collusion, and to such stockholders, upon the ground 
 
 the point that the proper method of that the stockholders might be 
 
 questioning such an order of re- heard through the corporation or 
 
 moval is by appeal, and not by its directors. Fifth National Bank 
 
 injunction to restrain the new v. P. & C. S. R. Co., 1 Fed., 190. 
 receiver from interfering with the 3 Wehrs v. Sullivan, 217 Mo., 167, 
 
 former one, see Wilson v. Barney, 116 S. W., 1104. 
 5 Hun, 257. As to the right of the
 
 976 RECEIVERS. [chap. XX. 
 
 and hence to be governed by the circumstances of the particular 
 case.^ It is difficult, therefore, to frame any definite rules 
 susceptible of general application, and the power of removal 
 for cause is referred to the broad and undefined region of the 
 discretionary jurisdiction of courts of equity. It may be re- 
 garded as settled, however, that the mere fact of relationship 
 between the receiver and the plaintiff in the action in which he 
 was appointed, is not, of itself, sufficient ground for his remov- 
 al, such relationship affording, at the most, merely a circum- 
 stance to be taken into consideration at the time of his appoint- 
 ment.5 A receiver will not, therefore, be removed solely be- 
 cause of his relationship to the plaintiff, when no improper con- 
 duct has been shown on his part, and when he is in every way 
 qualified for the office and has given ample security, especially 
 when his appointment was requested by a large majority of the 
 creditors of the fund in litigation.^ But when the person ap- 
 pointed was the brother of one of the parties to the litigation, 
 and the son of one claiming to be largely interested as a credit- 
 or, and was admitted by the plaintiff to have taken an active 
 part in the controversy as his agent and friend, he was regarded 
 as too far enlisted in the cause to permit of his being an unbiased 
 and impartial receiver, and he was, therefore, removed."^ And 
 since absolute impartiality as between the parties to the litiga- 
 tion is an indispensable qualification of a receiver, upon an ap- 
 plication for his removal the court may properly consider his 
 past relations to the parties, as well as his present sympathies. 
 And when it is shown that he was the nominee of one hostile 
 party and bitterly opposed by the other, and that he was ap- 
 
 4 Siney t;. New York Consolidated 5 Wetter v. Schlieper, 7 Ab. Pn, 
 
 Stage Co., 28 How. Pr., 481 ; S. C, 92 ; Shainwald v. Lewis, 8 Fed., 878. 
 
 18 Ab. Pr., 435; First National 6 Wetter v. Schlieper, 7 Ab. Pr., 
 
 Bank v. Barnum Wire & Iron 92. 
 
 Works, 58 Mich., 315, 24 N. W., T Williamson v. Wilson, 1 Bland, 
 
 543, 25 N. W., 202; State v. Rey- 418. 
 nolds, 209 Mo., 161, 114 S. W., 1097; 
 In re Angell, 131 Mich., 345, 91 N. 
 W., 611.
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 977 
 
 pointed under the mistaken belief that all interests had united 
 in his selection, and that by reason of his interest his efficiency 
 as an officer of the court is impaired, it is proper to remove 
 him.S But it constitutes no ground for the removal of a re- 
 ceiver that by his advice and suggestion he has favored and 
 given aid to a particular scheme of the reorganization commit- 
 tee of the insolvent concern over which he w^as appointed.^ 
 And where, upon the resignation of one receiver, the court of 
 its own motion appoints another to fill the vacancy, it is no 
 ground for the removal of such receiver that a party interested 
 in the ownership had no notice of his appointment, where 
 there is no showing of incompetence or unfitness.io And if 
 the only right of the creditor seeking the removal of a receiver 
 is to have his claim paid in full and a sufficient fund is reserved 
 in the receiver's hands, to be applied to such payment when the 
 claim shall be established, it is proper to refuse the application 
 for his removal, all other creditors being satisfied with the re- 
 
 ceiver 
 
 11 
 
 § 822. Receiver not removed to make way for agent of 
 the parties. It is to be observed that a court of equity will 
 not remove its own receivers, in order to make way for agents 
 or receivers who may be selected by private persons interested 
 in the litigation. And when the court has appointed its receiv- 
 er, who has entered upon the duties of his office, it will not re- 
 move him upon the application of another creditor of the de- 
 fendant, who is entitled, under his security, to appoint an agent 
 or receiver to collect the rents and profits of defendant's estate 
 for the payment of such creditor.^^ 
 
 § 823. Employing counsel of the parties no ground for 
 removal. While it has been held to be improper for the 
 counsel of either party to the litigation to act as counsel for 
 
 8 Wood V. Oregon Development H First National Bank v. Barnum 
 
 Co 55 Fed 901. Wire & Iron Works, 58 Mich., 315, 
 
 s'ciarke v. Central R. & B. Co., 24 N. W., 543, 25 N. W., 202. 
 
 66 Fed., 16. ^- Sanders v. Lord Lisle, Ir. Rep., 
 
 10 Fowler v. Jarvis-Conklin M. T. 4 Eq., 43. 
 Co., 66 Fed., 14. 
 
 Receivers — 62.
 
 9~8 RECEIVERS. [chap. XX. 
 
 the receiver, yet the mere fact of the receiver having employed 
 as his own counsel the counsel of one of the parties does not, of 
 itself, unless shown to be collusive, furnish sufficient ground for 
 his removal after he has entered upon the discharge of his 
 duties.^^ 
 
 § 824. Power of removal in vacation ; vacating order of 
 appointment; notice of motion for removal requisite; no- 
 tice to creditors unnecessary. It is held in Georgia that 
 courts of equity are to be regarded as being always open for the 
 purpose of removing receivers, and that the power of removal, 
 like the power of appointment, may be exercised by the court 
 upon due notice in vacation. i^ And under the statute of Con- 
 necticut it is held that the court has the power to remove its re- 
 ceiver in vacation upon due notice to him.^^ And since the 
 appointment is itself a matter resting largely in the sound dis- 
 cretion of the court to which the application is addressed, if 
 the court at a subsequent stage of the cause becomes satisfied 
 that the appointment was improvidently made, it has undoubted 
 power to vacate its order, thus in effect removing the receiv- 
 er, i^ But before the court will entertain a motion for the re- 
 moval of a receiver, due notice must be given of the motion in 
 writing, which notice should set forth specifically the grounds 
 upon which the removal is sought. And a failure to give such 
 notice will warrant the court in refusing to hear the motion. ^'^ 
 Nor will the rule requiring notice be relaxed, even though suffi- 
 cient grounds are shown for removal, and an order of removal 
 made without such notice will be reversed upon appeal. ^^ But 
 notice to every creditor who has filed his claim is not neces- 
 
 13 Bank of Monroe v. Schermer- ing Co., 31 Hun, 195; Campbell v. 
 horn, Clarke Ch., 366. Spratt, 5 N. Y. Weekly Digest, 25. 
 
 14 Crawford v. Ross, 39 Ga., 44. And a notice to the receiver of five 
 
 15 In re Premier Cycle Mfg. Co., days has been held sufficient. In re 
 70 Conn., 473, 39 Atl., 800. Premier Cycle Mfg. Co., 70 Conn., 
 
 16 Copper Hill Mining Co. v. 473, 39 Atl., 800. 
 
 Spencer, 25 Cal., 11. IS Campbell v. Spratt, 5 N. Y. 
 
 1" Dougherty v. Jones, 37 Ga., Weekly Digest, 25. 
 348; Bruns v. Stewart Manufactur-
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 979 
 
 sary.19 It is, however, proper for the court to revoke or rescind 
 its order appointing a receiver without notice to him. 2*^ 
 
 § 825. Removal not appealable; may be made after 
 plaintiff is nonsuited and pending motion for new trial. 
 Since the removal of a receiver is a matter addressed to the 
 sound discretion of the court, its decision removing the incum- 
 bent and substituting another in his stead can not ordinarily be 
 reviewed upon appeal to an appellate court.^i Nor has a re- 
 ceiver any such interest in, or title to his office as will enable 
 him to maintain an appeal from an order of removal. ^2 But 
 where the order of removal is in effect a settlement of the re- 
 ceiver's accounts and a refusal to make him proper compensa- 
 tion, an appeal will lie at the instance of the receiver.23 And 
 when, upon the final trial of the cause, judgment of nonsuit 
 is rendered against the party on whose application the appoint- 
 ment was made, the court may vacate the order of appointment, 
 thus removing the receiver, notwithstanding the pendency of a 
 motion for a new trial. ^4 
 
 § 826. Analogy between removing receiver and dissolv- 
 mg injunction ; removed when equities of bill denied by an- 
 swer. The jurisdiction of a court of equity, wdiich is ex- 
 ercised in the removal of receivers, bears a striking resemblance 
 to that which is called into action upon the dissolution of an 
 interlocutory injunction, and in both cases the power to termi- 
 
 19 In re Premier Cycle Mfg. Co., Ct. Rep., 625, 43 L. Ed., 941, modi- 
 70 Conn., 473, 39 Atl., 800. fying and affirming S. C, 26 C. C. 
 
 20 Howard v. Lowell Machine A., 279; 80 Fed., 969, S3 U. S. App., 
 Co., 75 Ga., 326. 302 ; In re Premier Cycle Mfg. Co., 
 
 21 Siney v. New York Consoli- 70 Conn., 473, 39 Atl., 800; Young 
 dated Stage Co., 28 How. Pr., 481; v. Irish, 104 Minn., 367, 116 N. W., 
 S. C, 18 Ab. Pr., 435 ; Milwaukee & 656 ; State v. Superior Court, 36 
 Minnesota R. Co. v. Soutter, 154 Wash., 80, 78 Pac, 202. And see 
 U. S., 540, 14 Sup. Ct. Rep., 1158; post, § 836. 
 
 Coolbaugh v. Herman, 221 Pa. St., 23 Young v. Irish, 104 Minn., 367, 
 
 503, 70 Atl., 830. And see Crawford 116 N. W., 656. 
 
 V. Ross, 39 Ga., 44. 24 Copper Hill Mining Co. v. 
 
 22 Bosworth v. St. Louis Termi- Spencer, 25 Cal., 11. 
 nal R. Assn., 174 U. S., 182, 19 Sup.
 
 980 RECEIVERS. [chap. XX. 
 
 nate seems to flow naturally and as a necessary sequence from 
 the power to create. And as an interlocutory injunction is us- 
 ually dissolved upon the coming in of defendant's answer, de- 
 nying under oath the allegations of the bill,^^ so in the case of 
 a receivership, if the answer under oath fully and satisfactorily 
 denies the equities of the bill, or the material allegations upon 
 which the appointment was made, and these allegations are not 
 sustained by any testimony in the case, the order of appoint- 
 ment will be reversed and the receiver will be removed.26 Nor 
 is it necessary, in all cases, to secure the removal that the 
 equities of the bill should be entirely negatived, if it be satis- 
 factorily made to appear to the court that there is no necessity 
 for its intervention. And if the court is satisfied, upon the 
 coming in of the answer, that there is no imminent danger and 
 no pressing or urgent necessity for a receiver, it is proper to re- 
 voke the appointment. 27 
 
 § 827. Removal and substitution by consent; extending 
 one receiver in place of several. It is competent for the 
 court to remove one receiver, and to substitute another in his 
 stead, by consent of all parties, when the proceedings are 
 bona Me, and when there is no attempt to traffic in the receiver- 
 ship. ^8 And when different receivers have been appointed over 
 the estate of a defendant, upon the application of different cred- 
 itors, the hardship and expense of such a state of facts, as 
 against the owner of the estate, will justify the court in remov- 
 ing all the receivers but one, and extending him over the entire 
 estate.29 But the removal of a receiver and the appointment of 
 
 25HoIIister v. Barkley, 9 N. H., 394; Kaighn v. Fuller, 1 McCart., 
 
 230 ; Armstrong z/. Sanford, 7 Minn., 419; Schoeffler v. Schwarting, 17 
 
 49; Anderson v. Reed, 11 Iowa, Wis., 30. 
 
 177; Stevens v. Myers, id., 183; 26 Voshell t;. Hynson, 26 Md., 83; 
 
 Taylor v. Dickinson, 15 Iowa, 483; Drury v. Roberts, 2 Md. Ch., 157. 
 Hatch V. Daniels, 1 Halst. Ch., 14; 27 Crawford v. Ross, 39 Ga., 44. 
 
 Washer v. Brown, id., 81 ; Suffern 28 Farran v. Morris, 1 Ir. Ch., N. 
 
 V. Butler, 3 C. E. Green, 220; Park- S., 680. 
 
 inson v. Trousdale, 3 Scam., 367; 29 Kelly v. Rutledge, 8 Ir. Eq., 
 
 Roberts v. Anderson, 2 Johns. Ch., 228. 
 202; Harris v. Sangston, 4 Md. Ch..
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 981 
 
 another in his stead does not have the effect of invalidating 
 claims against the former receivership, since the management 
 of the estate by the court is one and the same, although it be- 
 comes necessary to change the receiver.^^ 
 
 § 828. Receiver's interest as stockholder and director 
 in plaintiff bank; employment of debtor by receiver in 
 creditor's suit. It has elsewhere been shown, that the 
 courts are always averse to the appointment of receivers who 
 are in any manner interested in the cause, the office being re- 
 garded as one requiring the strictest impartiality.^! While this 
 is true, yet in a case where the fact of the receiver's interest, 
 he being a stockholder and director in the plaintiff bank, was 
 not known to the court at the time of his appointment, and he 
 had entered upon the discharge of his duties and had spent 
 much time in making himself familiar with the property intrust- 
 ed to his charge, and no objection was shown to his fidelity or 
 honesty, and no complaint was made of any improper discharge 
 of his duties, or misconduct, it was held that he should not be 
 removed immediately upon motion, and he was allowed to act 
 until a new reference could be had to a master in chancery, to 
 make a new appointment.^^ ^nd it is not sufficient cause for 
 removing a receiver of a judgment debtor, appointed in a 
 creditor's suit, that he has employed the debtor to assist him 
 in collecting a portion of the indebtedness assigned to the re- 
 ceiver, when no part of the fund has been used for the debtor's 
 benefit, and he has had no possession of or control over the 
 property after its assignment to the receiver, and when the 
 solvency of the receiver is unquestioned and his security 
 ample.^^ 
 
 § 829. Required to restore fund on removal. When a 
 person not in interest in the controversy has fraudulently pro- 
 
 30 Ex parte Brown, 15 S. C, 518. the grounds of removal, under the 
 
 31 See chapter III, ante. statutes of Ohio, Lafayette Bank v. 
 
 32 Bank of Monroe v. Schermer- Buckingham, 12 Ohio St., 419; State 
 horn, Clarke Ch., 366. See, as to v. Claypool, 13 Ohio St., 14. 
 
 the power of removing receivers of 33 Ross v. Bridge, 24 How. Pr., 
 
 insolvent banking corporations and 163; S. C, 15 Ab. Pr., 150.
 
 982 RECEIVERS. [chap. XX. 
 
 cured himself to be appointed receiver, contrary to the wishes 
 of all parties in interest, but the appointment is reversed 
 upon appeal, thus removing him from the trust, he will 
 be compelled to make restitution of the fund received by 
 him to the person rightfully entitled thereto, and will not 
 be allowed to make any deduction from such fund.^* And 
 when a receiver appointed in behalf of incumbrancers has been 
 guilty of gross negligence in the discharge of his duties, he 
 may be removed upon their application, and may be required to 
 pay interest upon the balances from time to time in his hands, 
 and to pay the costs of the proceeding for his removal. ^^ 
 
 § 830. Receiver not heard on motion to vacate his ap- 
 pointment. Upon a motion to vacate an order appointing 
 a receiver, the motion being made by defendant and assented 
 to by plaintiff, the receiver himself should not be heard in oppo- 
 sition, since he is not a party in interest, and has no standing 
 in court to oppose the motion, and can not interfere in ques- 
 tions affecting the rights of the parties or the disposition of the 
 property in his hands. ^^ 
 
 § 831. When defendants estopped from seeking re- 
 moval. When defendants in the cause have agreed with 
 plaintiffs that, upon the latter giving security in a specified 
 amount, they may have possession and management of the 
 property in controversy, and may nominate a receiver, defend- 
 ants occupy a somewhat different attitude toward the receiver 
 from that in the case of an ordinary appointment by the court. 
 And in such a case, it does not lie with defendants to object 
 to the person of the receiver and to obtain his removal, unless 
 he commits some overt act of unfaithfulness to his trust. Nor 
 will the court, under such circumstances, permit defendants to 
 go into the previous acts of the receiver in his capacity as plain- 
 
 34 O'Mahoney v. Belmont, 62 N. 35 /„ re Estate of St. George, 19 
 
 Y., 133, affirming S. C, 37 N. Y. L. R., Ir., 566. 
 
 Supr. Ct. R., 223. 36 L'Engle v. Florida Central R. 
 
 Co., 14 Fla., 266,
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 983 
 
 tiff, before his appointment as receiver, to furnish grounds for 
 his removal. ^"^ 
 
 § 831a. Diligence essential to application for removal. 
 If the removal of a receiver is sought because of informalities in 
 his appointment, as for insufficiency of the notice of the applica- 
 tion, due diligence should be used by the parties seeking such 
 removal. And when they delay making application for the re- 
 moval for a considerable period, during which the receiver 
 makes large expenditures in the completion of a railway over 
 which he is appointed, they will be held to have so far ac- 
 quiesced in the appointment as to be estopped from asking for 
 the removal upon the ground of such irregularities.^^ 
 
 STCowdrey v. The Railroad 38 Allen v. D. & W. R. Co., 3 
 
 Company, 1 Woods, 331. Woods, 316.
 
 984 RECEIVERS. [chap. XX. 
 
 11. Final Discharge. 
 
 § 832. Receiver discharged when necessity terminates; receiver of 
 estate of deceased lunatic discharged on appointment of ad- 
 ministrator. 
 
 833. Functions usually terminate with the litigation; not discharged 
 
 ipso facto by termination of suit, or reversal on appeal; when 
 jurisdiction retained notwithstanding dismissal of bill. 
 
 834. Effect of final decree as to receiver's discharge. 
 
 835. Receiver over two infants not discharged on one attaining ma- 
 
 jority. 
 
 836. Appeal from discharge not allowed; when receiver punished by 
 
 attachment. 
 
 837. Right to have receiver discharged on plaintiff's demand being 
 
 satisfied; conflict of authority; the better doctrine averse to 
 such right. 
 
 838. Receiver not entitled to discharge as of course on his own ap- 
 
 plication; must show cause; not discharged on giving bond. 
 
 839. Mortgagee may apply for discharge of receiver appointed to 
 
 enforce trusts of mortgagor's will. 
 
 840. Owner of mortgaged premises has absolute right to discharge 
 
 of receiver on paying amount due. 
 
 841. Interests of all parties kept in view; receiver of corporation 
 
 discharged when corporation shown to be solvent. 
 
 842. Receiver on creditors' bill discharged when bill denied by an- 
 
 swer. 
 
 843. Plaintiff's delay in prosecuting his suit ground for discharging 
 
 receiver. 
 
 844. Placing purchaser in possession of lands held by receiver equiv- 
 
 alent to discharge. 
 
 845. Bankruptcy of receiver as ground for discharge. 
 
 846. Defendant may move for; practice on application; costs; 
 
 notice. 
 
 847. Order of discharge not appealable in Michigan. 
 
 848. Discharge no bar to action against receiver for liability in- 
 
 curred; notice to general creditors unnecessary. 
 848a. Effect of discharge on appeal from order of appointment. 
 
 § 832. Receiver discharged when necessity terminates; 
 receiver of estate of deceased lunatic discharged on ap- 
 pointment of administrator. As regards the question of 
 the final discharge of a receiver, as distinguished from his re- 
 moval for cause, it may be laid down as a general proposition, 
 that when the necessity for the office ceases to exist, the office
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 985 
 
 itself must terminate and the receiver be discharged. And 
 when a court of equity has temporarily taken possession of 
 property by the hands of its receiver, until the proper person 
 may be determined who is entitled to take it, the court will not 
 continue such possession after this necessity ceases.^^ Thus, 
 when a receiver is appointed to take charge of the assets and 
 property of a deceased lunatic, until it may be determined who 
 is entitled thereto, upon the appointment of an administrator 
 pendente lite by the proper court of probate jurisdiction, the 
 receiver will be discharged and directed to turn over the assets 
 to the administrator pendente liteA^ And when a receiver has 
 been improperly appointed over property belonging to a person 
 not a party to the cause, the court will order the discharge of the 
 receiver, although the cause has abated by the death of the sole 
 defendant.^^ 
 
 § 833. Functions usually terminate with the litigation; 
 not discharged ipso facto by termination of suit, or re- 
 versal on appeal; when jurisdiction retained notwith- 
 standing dismissal of bill. The functions of a receiver usu- 
 ally terminate with the termination of the litigation in which he 
 was appointed. "^2 And when the bill upon which the appoint- 
 ment was made is afterwards dismissed upon demurrer, the 
 duties of the receiver cease as between the parties to the ac- 
 tion. ^^ So when defendant in the action in which the receiver 
 was appointed finally obtains judgment therein in his favor, 
 the entry of judgment would seem to have the effect of termi- 
 nating the receiver's functions, although plaintiff in the action 
 perfects his appeal to an appellate court.44 It is to be observed, 
 however, that the abatement of the action, or the entry of final 
 
 39 /m re Colvin, 3 Md. Ch., 297. Hickox v. Holladay, 12 Sawyer, 
 
 40 /n re Colvin, 3 Md. Ch., 297. 204. 
 
 41 Lavender v. Lavender, Ir. 43 Field v. Jones, 11 Ga., 413. 
 Rep., 9 Eq., 593. 44 Ireland v. Nichols, 40 How. 
 
 42 Field V. Jones, 11 Ga., 413; Pr., 85; S. C, 9 Ab. Pr., N. S., 71; 
 Ireland v. Nichols, 40 How. Pr., Harris v. Root, 28 Mont., 159, 72 
 85 ; S. C, 9 Ab. Pr., N. S., 71 ; Bev- Pac, 429. 
 
 eriey v. Brooke, 4 Grat., 220;
 
 986 RECEIVERS. [chap. XX. 
 
 judgment therein, does not have the effect of discharging the 
 receiver ipso factoA^ So the reversal of an order appointing a 
 receiver does not resuU, ipso facto, in the discharge of the re- 
 ceiver's And although as between the parties to the litiga- 
 tion his functions have terminated with the determination of 
 the suit, he is still amenable to the court as its officer until he 
 has complied with its directions as to the disposal of the funds 
 which he has received during the course of his receivership. 
 And when the bill is dismissed upon demurrer, it is the plain 
 duty of the court to direct the receiver to restore the funds re- 
 ceived to the person from whom they were taken.^'^ But an or- 
 der of discharge does not necessarily follow, in all cases, be- 
 cause of the determination of the suit, and the court may, upon 
 sufficient cause shown, either discharge or continue the re- 
 ceiver, according to the exigencies of the case.'S And where, 
 after the appointment of a receiver, plaintiff dismisses his bill 
 but the receiver is not discharged and subsequently claimants 
 to the fund in the receiver's hands intervene in the receivership 
 suit, it is proper for the court to retain jurisdiction for the 
 purpose of disposing of the fund in the receiver's hands, al- 
 though it is not the proper practice to reinstate the original 
 cause upon the application of such interveners.49 
 
 § 834. Effect of final decree as to receiver's discharge. 
 Since the final decree in the cause is generally decisive of the 
 subject-matter in controversy, and determines the right to the 
 possession of the fund or property held by the receiver, it is 
 usually the case that such decree supersedes the functions of the 
 receiver, since there is then nothing further for him to act upon, 
 although it would seem to be still necessary that a formal appli- 
 cation be made for his discharge. But when the court by its 
 
 45McCosker v. Brady, 1 Barb. 46 ElHs v. Warsaw, 92 Minn., 
 
 Ch., 346; Ireland v. Nichols, 40 444. 
 
 How. Pr., 85; S. C, 9 Ab. Pr.. N. 47 Field v. Jones, 11 Ga., 413. 
 
 S., 71; Pagett v. Brooks, 140 Ala., 48 Ireland v. Nichols, 40 How. 
 
 257, 37 So., 263. See, also. White- Pr., 85, S. C, 9 Ab. Pr., N. S., 71. 
 
 side V. Prendergast, 2 Barb. Ch., 49 Fountain z/. Mills, HI Ga., 122, 
 
 471. 36 S. E. 428.
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 987 
 
 decree does not attempt to decide the main question in contro- 
 versy, and leaves the receiver's possession undisturbed, it can 
 not be held to have the effect of operating as a discharge, or of 
 superseding his functions. ^^ 
 
 § 835. Receiver over two infants not discharged on 
 one attaining majority. In general, a receiver will not be 
 discharged until the object for which he was appointed has 
 been fully accomplished, or until the court is satisfied that the 
 exigency calling for a receiver has ceased.^^ For example, 
 where, as between tenants in common of real estate, two of 
 whom are infants, a receiver is appointed for the protection of 
 the infants, with directions to pay over to the adults their share, 
 he will not be discharged upon the application of one of the 
 infants on coming of age, the other not having attained his ma- 
 jority. In such case, the object sought by invoking the extra- 
 ordinary powers of a court of equity being the protection of 
 the property during the infancy of both, the discharge will not 
 be allowed until this object is fully accomplished.^^ 
 
 § 836. Appeal from discharge not allov<^ed; v^hen re- 
 ceiver punished by attachment. It follows from the well- 
 established doctrine that a receiver is not the agent or repre- 
 sentative of either party to the litigation, and in no manner in- 
 terested in its result, that he can not properly appeal from an 
 order of the court discharging him from his trust and direct- 
 ing him to turn over the property received to another person. 
 Being merely the officer or representative of the court, with- 
 out personal interest or personal rights in the litigation, the 
 right to discharge him rests with the court at any stage of the 
 controversy, and from the exercise of this right he can not ap- 
 peal.^2 The court will, therefore, continue to execute its or- 
 
 50 Beverley v. Brooke, 4 Grat., 52 Smith v. Lyster, 4 Beav., 227. 
 220. But see Visage v. Schofield, 53 /„ re Colvin, 3 Md. Ch., 300; 
 60 Ga., 680. Ellicott v. Warlord, 4 Md., 80; 
 
 51 Smith V. Lyster, 4 Beav., 227; Bosworth v. St. Louis Terminal R. 
 In re Long Branch & Sea Shore R. Assn., 174 U. S., 182, 19 Sup. Ct. 
 Co., 9 C. E. Green, 398. Rep., 625, 43 L. Ed., 941, modify-
 
 988 RECEIVERS. [chap. XX. 
 
 der, and will compel the receiver to turn over the property as 
 directed in the order of discharge, notwithstanding he 
 has prayed an appeal, and has filed an appeal bond. And in 
 case of refusal on the part of the receiver to comply with the 
 direction in the order of discharge as to the disposition to be 
 made of the property, the court may, if necessary, enforce obe- 
 dience by attachment.^^ And because the appointment of a re- 
 ceiver determines no rights between the parties litigant, his 
 possession being merely that of the court, a party to the cause 
 can not appeal from an order discharging a receiver.^^ 
 
 § 837. Right to have receiver discharged on plaintiff's 
 demand being satisfied; conflict of authority; the better 
 doctrine averse to such right. With reference to the 
 question of the right of a defendant, against whom a receiver 
 has been appointed, to have him discharged upon extinguish- 
 ing or satisfying plaintiff's demand, there being other parties 
 interested in having the receiver continued, a direct conflict of 
 authority exists in the reported cases. The doctrine of the 
 English Court of Chancery, as laid down by Lord Eldon, was, 
 that with the right of the plaintiff to a receiver must fall the 
 rights of all other parties to the action ; and that a receiver ap- 
 pointed in behalf of a plaintiff should be discharged when plain- 
 tiff's right to maintain the action failed, notwithstanding other 
 parties to the litigation might insist on their right to have the 
 receiver retained as their receiver.^^ The better doctrine, bow- 
 ing and affirming S. C, 26 C. C. A., he claimed to have a charge. De- 
 279, 80 Fed., 969, 53 U. S. App., 302. fendant having paid and plaintiff 
 And see, ante, § 825. having received the amount claimed 
 
 54 In re Colvin, 3 Md. Ch., 300. to be due, the receiver was dis- 
 
 55 Washington City & P. L. R. charged, although other defendflnts, 
 Co. V. S. M. R. Co., 55 Md., 153. claiming to have annuities or in- 
 
 56 Davis V. Duke of Marl- cumbrances upon the same prop- 
 borough, 2 Swans., 168. This was a erty, objected and asked to be heard 
 case where plaintiff, claiming to be against the discharge. Lord Eldon 
 an equitable creditor or incum- observes : "I apprehend that with 
 brancer of defendant, had obtained (he right of the plaintiff* to have 
 a receiver of the rents and profits of the receiver must fall the rights 
 defendant's real estate upon which of the other parties. It would be
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 989 
 
 ever, as deduced from the clear weight of authority and from 
 the better legal reasoning, is directly the reverse. And since 
 the appointment of a receiver is regarded as being made for 
 the benefit of all parties in interest in the litigation, he will not 
 be discharged merely upon the application of the party at whose 
 instance he was appointed, after his demand against the defend- 
 ant is satisfied, when the rights of other parties are involved. 
 The duty of the court being to protect the rights of all parties 
 in interest, and not merely those of the plaintiff at whose suit 
 the extraordinary aid of the court has been invoked, it will not 
 permit the receiver to be discharged upon the consent of the 
 plaintiff, when it appears that the discharge may prejudice the 
 rights of other parties to the action who do not consent there- 
 to.57 Thus, when a legatee under a will has filed a bill in behalf 
 of himself and of such other creditors and legatees as may come 
 in under the decree, to obtain satisfaction of his legacy, and has 
 joined as a defendant an incumbrancer having a charge upon 
 the estate, the receiver will not be discharged upon the consent 
 of plaintiff, without the consent of such incumbrancer.^^ So 
 where a receiver is appointed over a corporation at the in- 
 stance of a creditor, such appointment is for the benefit of all 
 creditors and the plaintiff procuring the appointment can not 
 have him discharged against the protest of any unsatisfied cred- 
 itor who might be damaged by such discharge.^9 And in any 
 event, a plaintiff who has procured the appointment of a re- 
 ceiver can not dismiss his bill and have the receiver discharged, 
 without the receiver being first required to pass his accounts.^^ 
 
 most extraordinary if, because a Largan v. Bowen, 1 Sch. & Lef., 
 
 receiver has been appointed on be- 296; Lenoir v. Linville I. Co., 117 
 
 half of the plaintiff, any defendant N. C, 471, 23 S. E., 442. 
 
 is entitled to have a receiver ap- 58 Largan v. Bowen, 1 Sch. & 
 
 pointed on his behalf. My decided Lef., 296. 
 
 opinion is that the order for the re- 59 Lenoir v. Linville L Co., 117 
 
 ceiver must be discharged, and that N. C, 471, 23 S. E., 442. 
 
 all falls together." 60 White v. Lord Westmeath, 2 
 
 5T Fay v. Erie & Kalamazoo Rail- Hog., 33 ; Hoffman v. Bank, 4 N. 
 
 road Bank, Harring. (Mich.), 194; Dak., 473, 61 N. W., 1031. 
 Bainbrigge v. Blair, 3 Beav., 421;
 
 990 RECEIVERS. [chap. XX. 
 
 § 838. Receiver not entitled to discharge as of course 
 on his own application; must show cause; not discharged 
 on giving bond. A receiver, being appointed for the inter- 
 est of the parties to the action rather than his own, is not en- 
 titled to his discharge as of course upon his own apphcation, 
 since the court will not permit the parties to be put to the ex- 
 pense and inconvenience of a change simply because the re- 
 ceiver desires to be relieved from the trust. When, therefore, a 
 receiver seeks to be relieved from his duties and to have another 
 appointed in his place, he will be required to show some reason- 
 able cause for the application, especially when his discharge and 
 the substitution of another person might result in inconvenience 
 to the parties in interest and to third parties.^^ And it will not 
 suffice to sustain such an application, that the receiver alleges 
 his inability, because of other engagements, to properly close 
 up the business of his receivership, since such reasons, while 
 sufficient to excuse him from accepting the trust in the first in- 
 stance, are not sufficient ground for discharging him from his 
 obligation after it has once been accepted. ^^ And where a claim 
 has been allowed against the fund in the hands of a receiver 
 from which an appeal is pending and undetermined, the re- 
 ceiver is not entitled to his discharge against the objection of 
 the claimant ; and in such case, the giving by the receiver of a 
 bond, with sureties, running to the clerk of the court for the use 
 of the claimant and all other persons whose claims may be ad- 
 judged valid will not justify his discharge and the releasing of 
 the fund.63 
 
 § 839. Mortgagee may apply for discharge of receiver 
 appointed to enforce trusts of mortgagor's will. When a 
 receiver has been appointed over mortgaged premises in an ac- 
 tion to enforce and carry into execution the trusts of the mort- 
 
 61 Beers v. The Chelsea Bank, 4 62 Beers v. The Chelsea Bank, 4 
 
 Edw. Ch., 277; Smith v. Vaughan, Edw. Ch., 277. 
 Ca. temp. H., 251. 63 Johnson v. Central Trust Co., 
 
 159 Ind., 605, 65 N. E., 1028.
 
 CHAP. XX.] liEMOVAL AND DISCHARGE. 991 
 
 gagor's will, it would seem that a mortgagee, who was not a 
 party to the suit, is entitled to apply for the receiver's dis- 
 charge. And this is regarded as the proper course for him to 
 pursue, since he has no power to divest the receiver's possession 
 merely by notice to the tenants of the mortgaged premises to 
 pay their rents to him.^'* 
 
 § 840. Owner of mortgaged premises has absolute right 
 to discharge of receiver on paying amount due. While the 
 propriety of discharging a receiver, like that of appointing him, 
 is to some extent a matter of judicial discretion, yet in some 
 cases the right to a discharge becomes an absolute right, which 
 the court has no discretion to refuse. Thus, when a receiver of 
 mortgaged premises is appointed and takes possession, in an 
 action for the foreclosure of the mortgage, upon the owner of 
 the equity of redemption offering to pay the mortgage indebt- 
 edness, or so much thereof as is due, his right to have the re- 
 ceiver discharged is an absolute right, the denial of which is 
 judicial error.^^ 
 
 § 841. Interests of all parties kept in view; receiver of 
 corporation discharged when corporation shown to be 
 solvent. In passing upon an application for a receiver's 
 discharge, the court should have in view the interests of all 
 parties, and if satisfied that the rights of all parties in interest 
 will be best promoted by granting the discharge, it should be 
 allowed. Thus, when a receiver is appointed over a corpora- 
 tion, under a law of the state authorizing receivers of insolvent 
 corporations, it is proper for the court to discharge him upon 
 motion of the defendant corporation, upon being satisfied that 
 it is in solvent circumstances and able to resume business, and 
 that the interests of the creditors will be best secured by this 
 
 course. 
 
 66 
 
 64 Thomas v. Brigstocke, 4 Russ., 66 Ferry v. Bank of Central New 
 64. York, 15 How. Pr., 445. 
 
 65 Milwaukee & INIinnesota R. Co. 
 V. Soutter, 2 Wal., 510; S. C, 
 Woolworth's C. C, 49.
 
 992 RECEIVERS. [chap. XX. 
 
 § 842. Receiver on creditors' bill discharged when bill 
 denied by answer. When, upon a creditor's bill filed 
 against a judgment debtor and a mortgagee to whom he has 
 mortgaged his personal property, in trust for the payment of 
 various debts, an injunction is granted and a receiver is ap- 
 pointed, upon allegations in the bill that the debtor is in pos- 
 session of the property and converting the proceeds of sales to 
 his own use, the bill also alleging the debtor's insolvency and 
 consequent danger of plaintiff losing his debt, if these charges 
 are expressly and fully denied by the answer, the court should 
 dissolve the injunction and discharge the receiver.^^ 
 
 § 843. Plaintiff's delay in prosecuting his suit ground 
 for discharging receiver. The negligence and delay of 
 a plaintiff, at whose instance a receiver has been appointed, 
 may be sufficient ground for discharging the receiver.68 Thus, 
 when the plaintiff, after moving for the appointment of a re- 
 ceiver of his debtor's property, consents that the proceedings 
 may lie dormant, and takes no further steps therein for a period 
 of over a year, and until another creditor has procured the ap- 
 pointment of a receiver, the court will not allow the one thus 
 appointed upon the subsequent application to be displaced, but 
 will discharge the other. ^^ 
 
 § 844. Placing purchaser in possession of lands held by 
 receiver equivalent to discharge. The putting a purchaser 
 into possession of lands held by the receiver in a cause, and sold 
 under the final decree, is equivalent ipso facto to a discharge of 
 the receiver, and is sufficient ground for vacating his recog- 
 nizance.'^^ 
 
 § 845. Bankruptcy of receiver as ground for discharge. 
 A receiver appointed in a cause, having filed his petition in 
 bankruptcy and compromised with his creditors, which corn- 
 er Furlong v. Edwards, 3 Md., 99. 69 National Mechanics Banking 
 68 National Mechanics Banking Association v. Mariposa Co., 60 
 Association v. Mariposa Co., 60 Barb., 423. 
 
 Barb., 423 ; Cohen t/. Gold Creek M. 70 Anonymous, 2 Ir. Eq., 416; 
 
 Co., 95 Fed., 580. Ponsonby v. Ponsonby, 1 Hog., 321.
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 993 
 
 promise was approved by the court, it was ordered that he be 
 discharged from his receivership and pass his final accounts,'''^ 
 § 846. Defendant may move for; practice on applica- 
 tion; costs; notice. A defendant in the action in which a 
 receiver has been appointed has the undoubted right to move for 
 his discharge pendente lite, and upon such motion the court will 
 not enter upon the question whether the order of appointment 
 was originally opposed by the defendant at the time it was 
 made.'^2 And when a receiver is appointed upon the application 
 of plaintiff for purposes ancillary to the action, and judgment 
 is afterward rendered for defendant from which plaintiff ap- 
 peals, the court below has jurisdiction, pending the appeal, to 
 entertain a motion by defendant for the discharge of the re- 
 ceiver. A writ of prohibition, will not, therefore, lie to pre- 
 vent the court from entertaining such motion."^^ Under the 
 English practice, the receiver, although served with the petition 
 for his discharge, need not appear upon the hearing of the peti- 
 tion, since he is merely the officer of the court. Nor will he be 
 allowed his costs when he has appeared upon such application.'^^ 
 But while it is regarded as the proper practice to notify all 
 parties in interest of an application for the discharge of a re- 
 ceiver, the fact that he has been discharged without such no- 
 tice to the defendants in the cause may be treated as a mere ir- 
 regularity, which will not justify a reversal of the order upon 
 appeal. "^5 But in Iowa, it is held that the court has no power to 
 make an order of final discharge without notice to the parties in 
 interest, and that such order, when entered, is properly set 
 aside."^^ 
 
 71 Ellard v. Cooper, 17 Ir. Ch., N. English practice upon applications 
 S., 151. to discharge receivers and vacate 
 
 72 Grenfell v. Dean and Canons their recognizances, Lawson v. Rick- 
 of V^indsor, 2 Beav., 544. etts, 11 Beav., 627. 
 
 73 Baughman v. Superior Court, 75 Coburn v. Ames, 57 Cal., 201. 
 72 Cal., 572, 14 Pac, 207. 76 Williams v. Des Moines L. & 
 
 74 Herman v. Dunbar. 23 Beav., T. Co., 126 Iowa, 22, 101 N. W., 
 312. And see generally as to the 277. 
 
 Receivers — 63.
 
 994 RECEIVERS. [chap. XX. 
 
 § 847. Order of discharge not appealable in Michigan. 
 
 It is held, in Michigan, that an order discharging a receiver 
 and providing for passing his accounts and cancehng his bond, 
 and for paying into court any surplus in his hands, and restor- 
 ing the property of which he had taken possession as receiver, 
 is not such a final order as is appealable under the laws of the 
 state.'^? 
 
 § 848. Discharge no bar to action against receiver for 
 liabiHty incurred ; notice to general creditors unnecessary. 
 When a receiver has been properly discharged and has sur- 
 rendered all assets pertaining to his receivership, the court will 
 refuse to entertain an application by a creditor for payment out 
 of the fund. In such case, the receiver being functus officio and 
 no longer the representative of the court, and having no funds 
 in his hands, the remedy of such creditor should be sought by 
 an application to vacate the order of discharge."^^ And in such 
 case the receiver may be discharged and the suit dismissed with- 
 out the necessity of giving notice to general creditors.'^^ But 
 when a receiver is discharged pending an appeal from a judg- 
 ment recovered against him, which judgment is affirmed upon 
 the appeal, his discharge is no bar to the final entry of the judg- 
 ment against him as affirmed.^^ 
 
 77 Colgate V. Michigan Lake gun against co-receivers to recover 
 Shore R. Co., 28 Mich., 288. damages for personal injuries sus- 
 
 78 New York & W. U. T. Co. v. tained by one of their employees, 
 Jewett, 115 N. Y., 166, 21 N. E., and afterward the co-receivers were 
 1036. But see, contra, Miller v. discharged and the corporation over 
 Loeb, 64 Barb., 454. which they were appointed was sub- 
 
 79 Rockwell v. Portland Savings stituted as defendant, and afterward 
 Bank, 31 Ore., 431, 50 Pac, 566. the court again took possession of 
 
 80 Woodruff V. Jewett, 115 N. Y., the property and appointed one of 
 267, 22 N. E., 156. But the court the co-receivers receiver and he was 
 decline to pass upon the question thereupon made a defendant in his 
 of the efifect of such discharge new capacity, no judgment could 
 when the receiver is finally called be rendered against him upon the 
 upon to pay the judgment. In Lee theory that his discharge was con- 
 V. Powell Bros. & Sanders Co., 122 ditional upon the payment of the 
 La., 639, 48 So., 134, it was held debts of the receivership by the 
 that where an action had been be- corporation.
 
 CHAP. XX.] REMOVAL AND DISCHARGE. 995 
 
 § 848a. Effect of discharge on appeal from order of ap- 
 pointment. When an appeal has been taken or writ of 
 error or other process sued out to review an order appointing 
 a receiver, and, pending the hearing of the appeal, it is brought 
 to the attention of the reviewing court that the receiver has 
 been finally discharged by the court of his appointment, the 
 correctness of the order of appointment thereby becomes merely 
 a moot question and the appeal should be dismissed.^^ 
 
 81 Visalia City Water Co. v. Superior Court, 120 Cal., 219, 52 Pac, 485.
 
 INDEX 
 
 A. 
 
 ACCOUNTABILITY, Section 
 
 of receiver, strictness exacted 38 
 
 ACCOUNTS, 
 
 failure of receiver to render, fixes liability on bond 129 
 
 of receiver of railway, what expenditures allowed 392 
 
 of executor, not examined on application for receiver against ... 720 
 
 receiver's accounts 797-8l9c 
 
 duty of receiver to file 797 
 
 held to great strictness 797 
 
 when delay not justifiable 797 
 
 receiver not entitled to jury to pass on 797 
 
 bill should not be dismissed without settling 797 
 
 degree of diligence required 797 
 
 expenditures must be authorized by court 798 
 
 receiver must produce vouchers 798 
 
 reward paid for lost books allowed 798 
 
 payment for necessary taxes allowed 798 
 
 procuring surety on official bond 798 
 
 when payments allowed, though unauthorized 798 
 
 entitled to charge for watching property 798 
 
 reference to master as to whether expenditure beneficial 798 
 
 not allowed expenses for services which he might have per- 
 formed himself 799 
 
 unnecessary expenses not ratified 799 
 
 refused compensation paid deputy 799 
 
 when facts of employment should be reported to court 799 
 
 master's report on 800 801 
 
 review of gQQ 
 
 courts investigate principles of, but not items 800, 801 
 
 distinction as to 801 
 
 exceptions to 801 
 
 application from stranger to pass not entertained 802 
 
 receiver not compelled to account to party 802 
 
 party may move for account 802 
 
 duty to account once a year 802 
 
 allowance is to receiver and not to person entitled thereto. .. 802 
 
 otherwise after discharge of receiver 802 
 
 997
 
 998 INDEX. 
 
 ACCOVNTS— Continued. Section 
 
 receiver's accounts ; should keep funds separate 803 
 
 liability for interest 803, 804 
 
 on mixing funds 803 
 
 on claim of creditor 803 
 
 on balances 804 
 
 on funds derived from sale 804 
 
 on failure to invest funds as ordered by court 804 
 
 from what time required to pay 804 
 
 on illegal appropriation 804 
 
 counsel fees 805-808 
 
 receivers entitled to payments for 805 
 
 preference for, allowed 805 
 
 employment of counsel should be authorized 805 
 
 not allowed for unsuccessful defense 805 
 
 for defending fraudulent appointment 805 
 
 for work requiring no legal skill 805 
 
 test as to allowance 805 
 
 allowance is to receiver and not to counsel 805 
 
 not allowed for services which could have been per- 
 formed by receiver 805 
 
 where receiver has grossly mismanaged the estate . 805 
 
 when allowed for defending motion for removal 805 
 
 allowed for defending item for fees in account 805 
 
 when allowance of, not disturbed on appeal 805 
 
 when extra compensation allowed 805 
 
 should be allowed only on notice 805 
 
 allowed receiver of lunatic's estate 805 
 
 fees to counsel for parties, when disallowed 806 
 
 when allowed 806 
 
 services by receiver as solicitor for administrator 807 
 
 not allowed counsel fees paid to himself 808 
 
 receiver, an attorney not bound to render legal services. . 808 
 
 costs ' 809-812 
 
 of appointment, entitled to priority 809 
 
 when receiver required to pay 809 
 
 when not charged with, of new appointment 809 
 
 allowance of, discretionary 809 
 
 expenses of receivership entitled to priority 809 
 
 when, and expenses charged against plaintiff 809a 
 
 when defendant in suit by receiver entitled to 810 
 
 when dependent on receiver's success 811 
 
 of unauthorized litigation, receiver not allowed 811 
 
 of improvident litigation, not allowed 811 
 
 when tax on personalty allowed as 811a 
 
 for appearing on motion to discharge, not allowed 812 
 
 when receiver may move for allowance of 812
 
 INDEX. 999 
 
 ACCOUNTS — Continued. Section 
 
 when receiver charged with hire of property 813 
 
 when not allowed payments made for predecessor 813 
 
 receiver may render, pending interpleader 814 
 
 plaintiff can not have receiver discharged without passing . . 814 
 
 court should not render final judgment without passing 814 
 
 plaintiff should not be delayed pending litigation concern- 
 ing 815 
 
 when ordered to bring in yearly and verify by affidavit 816 
 
 executors of receiver, not ordered to bring in 817 
 
 not entitled to petition for account of payments 817 
 
 entitled to notice of passing of accounts 817 
 
 when receiver deprived of salary for default in 818 
 
 when allowed commission after delay 818 
 
 receiver over minor attaining majority must account from 
 
 first 819 
 
 how receiver's accounts questioned 819a 
 
 appeal from settlement of accounts 819& 
 
 appeal by one creditor resulting in benefit to all 819c 
 
 expenses of, and counsel fees allowed in receiver's ac- 
 counts 819c 
 
 ACCOUNT BOOKS, 
 
 receiver required to produce before master 544 
 
 ACQUIESCENCE, 
 
 bars right to receiver 14 
 
 in appointment, effect of 37 
 
 bar to receiver over corporation on behalf of shareholder 295 
 
 in debtor's possession of property, when bars receiver in aid of 
 
 j udgment creditor 402 
 
 in defendant's possession of real property, bars receiver 560 
 
 iCTIONS. (See Right of Action, Suits.) 
 
 ADMINISTRATION, (See Administrator.) 
 
 receiver not granted to interfere with 427 
 
 ADMINISTRATIVE ORDERS, 
 
 court may make, to preserve property, notwithstanding appeal and 
 
 supersedeas 190a 
 
 appeal from, by receiver will not lie 264& 
 
 ADMINISTRATORS, (See Executors.) 
 
 receiver against, when order appealable 27 
 
 of receiver, when ordered to pay over 285 
 
 of deceased partner, eligible as receiver 78 
 
 when entitled to receiver as against surviving partner 532, 533 
 
 receivers over 706-724 
 
 not allowed when it would interfere with due course of ad- 
 ministration 716
 
 1000 INDEX. 
 
 ADMINISTRATORS— Con/JHMfd. Section 
 receiver of, in personal capacity, not entitled to rents in admin- 
 istrative capacity 717 
 
 receiver refused on bill by surety on bond of 721 
 
 granted in favor of ward 722 
 
 ADMINISTRATRIX. (See Administrators, Executors.) 
 
 ADMISSIONS, 
 
 receiver may make 175 
 
 ADVERSE PARTY, 
 
 receiver not an 175 
 
 AFFIDAVITS, 
 
 copies of, should be served 84 
 
 admissible for plaintifif after answer 85 
 
 for defendant before answer 85 
 
 admissible to explain doubtful passage in answer 85 
 
 must be entitled in cause 85 
 
 may be presented on hearing of motion 88 
 
 when copies of should go to appellate court 88 
 
 should be distinct and precise 89 
 
 as to insolvency of bank, need not be positive 89 
 
 of defendant, when regarded as an appearance 103 
 
 as to insolvency, receiver refused when insufficient 106 
 
 interlocutory application before answer, heard on 107 
 
 facts may be verified by affidavit of plaintifif alone 107 
 
 admissible for defendant in opposition to motion 107 
 
 of receiver, on information and belief, sufficient for attachment 
 
 for interference with rents 167 
 
 general allegations of fraud in, not sufficient to warrant receiver 
 
 over corporation 292 
 
 as to insolvency of bank on information and belief, when insuffi- 
 cient 346 
 
 when sufficient 353 
 
 when receiver required to verify account by 816 
 
 AGENT, 
 
 receiver not an 1 
 
 when agent of plaintiff 2 
 
 of receiver may conduct sale 191 
 
 AGREEMENT, 
 
 by receiver, power of court to vacate or modify 186 
 
 ALIMONY. (See Divorce.) 
 
 ANCILLARY RECEIVERSHIPS, 
 
 when not granted at instance of foreign receiver 47 
 
 when ancillary receiver not liable for tort of domiciliary receiver 47a 
 
 over private corporations 306& 
 
 over railways 375o
 
 INDEX. 
 
 1001 
 
 ANNUITANT, Section 
 not allowed receiver over a pension 31 
 
 may have receiver when annuity in arrears 410, 574 
 
 not allowed receiver when he may distrain 574 
 
 may have receiver as against prior mortgagee not in possession. . 683 
 
 ANNUITY, (See Annuitant.) 
 
 purchase of by receiver, when set aside 194 
 
 ANSWER, 
 
 denial in, bar to a receiver 24 
 
 ground for removal • °26 
 
 for discharge ^2 
 
 receiver formerly granted after 103 
 
 granted before, under modern practice 103 
 
 grounds of interference before 104, 105 
 
 strong grounds required for receiver before 106 
 
 of corporation under seal, when not decisive 355 
 
 waiver of, under oath, no bar to receiver on creditor's bill 434 
 
 denial in, in partnership cases, bar to receiver 491, 515 
 
 ground for dissolving inj unction 491 
 
 when receiver appointed over real property before coming in of. . 598 
 
 receiver in foreclosure of leasehold mortgage allowed before 665 
 
 APPEAL, 
 
 discretion of court below not controlled on 7, 25 
 
 not granted from interlocutory order appointing receiver 26 
 
 not allowed from appointment by consent 26 
 
 from temporary receivership, when properly dismissed 26 
 
 when granted in Michigan 27 
 
 from appointment of receiver against administrator 27 
 
 against surviving partner 27 
 
 as affected by legislation in various states 27 
 
 allowed if right finally determined 27a 
 
 under Court of Appeals Act 27& 
 
 effect of, on receiver's functions 29 
 
 pending, receiver may be appointed in another suit 30 
 
 want of notice as ground of 112 
 
 pending, when receiver appointed HO 
 
 effect of supersedeas pending 190 
 
 should restore property to defendant 190 
 
 court may make administrative orders pending 190a 
 
 will lie from order of sale 198 
 
 from order confirming sale 198 
 
 effect of, on receiver's possession 136, 161 
 
 by receiver, from adverse decision, not evidence of misman- 
 
 9C\7 
 agement "' 
 
 want of leave to sue receiver, availability on 254a 
 
 will not lie from order granting leave to sue receiver 254&
 
 1002 INDEX. 
 
 APPEAL — Continued. Section 
 
 receiver as party to 258 
 
 when receiver entitled to, from orders in receivership cause 246a 
 
 not entitled to, from administrative orders 264& 
 
 nor from order of distribution 264& 
 
 receiver personally liable for costs on unauthorized 264& 
 
 by receiver of railway from order directing restoration of former 
 
 wage scale 3936 
 
 on question of jurisdiction, receiver not ordered to sell pending. . 543 
 
 pending from judgment in ejectment, when receiver denied 557 
 
 will not lie from order permitting receiver to collect rents 
 
 through defendant 628 
 
 receiver of rents pending, from foreclosure decree 665a 
 
 action of lower court in fixing compensation ordinarily not dis- 
 turbed on 781, 783 
 
 compensation of receiver pending, not allowed by appellate court 796 
 
 from allowance or refusal of receiver's compensation 796a 
 
 allowance of counsel fees, when not disturbed on 805 
 
 from order settling receiver's accounts 819& 
 
 by one creditor resulting in benefit to all 819c 
 
 expenses of, allowed in receiver's accounts 819c 
 
 receiver can not maintain, from order of removal 824 
 
 nor from order of discharge 836 
 
 from appointment, effect of discharge on 848a 
 
 APPEAL BOND, 
 
 when receiver's duty to sue on, without leave 208 
 
 APPEARANCE, 
 
 receiver formerly granted only after 103 
 
 affidavit of defendant considered as 103 
 
 of counsel in suit against receiver, waiver of want of leave to 
 bring suit 261 
 
 ARREST, 
 
 when receiver exempt from 183 
 
 ASSESSMENTS, 
 
 on premium notes to insurance company, receiver's right of 
 
 action for 326 
 
 what receiver must allege and prove 327 
 
 receiver must make assessment and apportionment 328 
 
 receiver takes place of directors 329 
 
 functions of court in making 329 
 
 receiver may make new 330 
 
 approval of, by court, not a judicial act 330 
 
 form of, and proofs required 331 
 
 receiver may sue on, to pay equitable claims for losses 332 
 
 what defense denied maker 332
 
 INDEX. 
 
 1003 
 
 ASSIGNEE, (See Quasi-Assignee.) Section 
 
 of contract with receiver ^°° 
 
 of debtor, rights not determined by receivership 411 
 
 refusal to act, ground for receiver 412 
 
 mismanagement of, ground for relief 412 
 
 of partner, when entitled to receiver 507 
 
 of lease, denied receiver 5/9 
 
 of insolvent debtor, when allowed receiver of rents 587 
 
 receiver not, of term of lease 273,. 394in 
 
 ASSIGNEE IN BANKRUPTCY, 
 
 when subordinate to receiver in state court 51, 52 
 
 can not dispossess receiver over mortgaged premises appointed 
 
 by state court 
 
 52 
 
 can not have receiver over bankrupt's property held by receiver 
 
 of state court 52 
 
 actions by, to recover property held by receiver 52 
 
 of partnership, when allowed receiver against assignment for 
 
 creditors -" 
 
 receiver of debtor incompatible with T^ 
 
 when required to surrender possession to receiver 153 
 
 of one partner, exclusion from firm 527 
 
 ASSIGNMENT, 
 
 by defendant to receiver, right of action under 244 
 
 designation of plaintiff as receiver, when descriptio persona 244 
 
 by insurance company, ground for receiver 304 
 
 of chose in action of corporation by receiver 338 
 
 fraudulent, by judgment debtor, ground for receiver 411 
 
 rights under, not determined by receivership 41 1 
 
 receiver allowed, on refusal of assignee to act 412 
 
 on mismanagement by 412 
 
 after receivership does not defeat right to receiver 412 
 
 before receivership 412, note 
 
 not appointed to set aside, when it may be done by judgment 
 
 creditor 414 
 
 when title vests in receiver on setting aside 423 
 
 to receiver, effect of as to passing title 443 
 
 what passes to receiver under 444 
 
 should except exempted property 444 
 
 irregularities in appointment no justification for refusal to assign 445 
 
 debtors compelled to make, although swearing to no property 446 
 
 partakes of nature of mortgage 446 
 
 no re-assignment necessary 446 
 
 not necessary under New York code 447 
 
 fraudulent, by debtor, receiver may sue to set aside 454 
 
 should j oin all fraudulent grantees 454 
 
 limit to receiver's right of action 455
 
 1004 INDEX. 
 
 ASSIGNMENT— CoH//«M^i Section 
 
 fraudulent by debtor, can not sue when creditors estopped 456 
 
 receiver can not take forcible possession of property assigned 457 
 
 debtor proper defendant 459 
 
 for benefit of creditors 458-460 
 
 action by receiver to set aside, when assignees may retain 
 
 possession 458 
 
 when receiver denied injunction and receiver 458 
 
 what receiver must allege 459 
 
 by insolvent partners after dissolution, ground for receiver 517 
 
 by continuing partner for benefit of all creditors, not ground for 518 
 
 by one partner to exclude copartner, ground for 523 
 
 assignee can not defeat application for receiver 523 
 
 ASSISTANCE. (See Writ of Assistance.) 
 
 ATTACHMENT, 
 
 receivership compared with 5, 6 
 
 lien of, protected against foreign receiver 47 
 
 for not accounting, surety of receiver liable for costs of 131 
 
 lien of, obtained pending application for receiver not invali- 
 dated by subsequent appointment 136 
 
 possession of receiver can not be interfered with by 141 
 
 for failure to surrender property to receiver 144 
 
 receiver not subject to garnishment as to assets in possession.... 151 
 
 may be garnished when not yet in possession 151 
 
 not allowed as to property taken by receiver into foreign state or 
 
 country 162a 
 
 punishment by, for contempt of court in interfering with re- 
 ceiver's possession 163 
 
 for interference with collection of rents by receiver 167 
 
 against defendant for refusing to surrender property 168 
 
 for contempt in refusing to surrender to receiver, court the only 
 
 competent j udge 169 
 
 for interference with receiver's possession, actual disturbance 
 
 necessary 171 
 
 levy and sale by sheriff considered 171 
 
 courts averse to punishment as between different receivers.. 173 
 
 against receiver for refusing to surrender possession 174 
 
 of corporate assets, not dissolved by receivership 348 
 
 not allowed after receivership 348 
 
 against partners to deliver assets to receiver 541 
 
 funds held by receiver of firm not subj ect to 552 
 
 against tenants for refusing to pay rent to receiver 625, 626 
 
 rights of third persons not determined on 627 
 
 sale of chattels under, invalid as against prior mortgagee 647 
 
 ATTORNEY, 
 
 lien of, on fund for fees, paramount to receiver's title 138
 
 INDEX. 1005 
 
 ATTORNEY — Continued. Section 
 
 when required to deliver trust property to receiver 144 
 
 fraud of, when receiver not liable for 275 
 
 of railway company, when salary allowed preference 394d 
 
 ATTORNEY-GENERAL, 
 
 proceedings by, against insolvent corporation 53 
 
 when affidavit on information sufficient 353 
 
 AUCTIONEER, 
 
 receiver of, when entitled to funds as against customer 155 
 
 AUXILIARY REMEDY, 
 
 receivership considered as 6, 49 
 
 B. 
 
 BANK, (See Corporations, National Banks.) 
 
 creditor not entitled to receiver where remedy at law 10 
 
 insolvent, governor authorized to appoint receiver 39 
 
 officer of, eligibility as receiver 72 
 
 insolvency of, positive affidavit not required 89 
 
 oath to receivers of, omission does not vitiate proceedings 99 
 
 receiver of, right to sue in his own name 210 
 
 need not be made party to suit by receiver for foreclosure of 
 
 mortgage 210 
 
 trover by receiver of, for conversion of bonds 212 
 
 suit begun by, continued by receiver 213 
 
 need not be party to foreclosure suit by receivers 215 
 
 defense to suit by receiver of, against depositor 245 
 
 set-off in suit by receiver of, on notes 247, 248 
 
 suit to recover notes illegally transferred to a director, counter- 
 claim for amount paid not allowed 251 
 
 failure of, when receiver liable for loss of funds 274 
 
 receiver of, when Ifable to pay in full 274a 
 
 to pay draft or check 274a 
 
 not necessary party to subsequent proceedings for another 
 
 receiver 291 
 
 illegal issue of notes, receiver to take charge of securities 293 
 
 rights of action of receiver of 317 
 
 to recover against stockholders 317a 
 
 in courts of foreign state 3\7b 
 
 receiver as quasi-assignee 317c 
 
 against president of bank 320 
 
 for unauthorized transfer to director 320 
 
 note transferred by receivers of, assignee may recover on 323 
 
 contract of, after insolvency, receiver may decline to ratify 334 
 
 insolvency of, when insufficient, on information and belief, to 
 warrant receiver 346
 
 1006 INDEX. 
 
 BANK— Continued. Section 
 
 assets of, not subject to attachment after receivership 348 
 
 suit against, when not allowed after receivership 350 
 
 BANKRUPTCY, 
 
 proceedings in, in United States court, when subordinate to re- 
 ceivership in state court 51, 52 
 
 against insolvent corporation, asserted exclusively 53 
 
 appointment of receiver over partnership, when an act of 56 
 
 assignee of partnership in, when allowed receiver 57 
 
 proof of debt in, made by receiver of corporation in another state 242 
 of railway in United States court, will not interfere with prior 
 
 receiver in state court 370 
 
 discharge in, when no bar to receiver on creditor's bill 425 
 
 receiver in aid of proceedings in 426 
 
 receiver to collect rents in aid of 587 
 
 of executors, ground for receiver 711 
 
 of receiver, ground for discharge 845 
 
 BARRISTER, 
 
 eligible as receiver 70 
 
 as member of parliament 70 
 
 BENEFICE, 
 
 of clergyman, receiver over rents of 432 
 
 BIDS, 
 
 discretion of receiver as to accepting 176 
 
 BILL, 
 
 necessary to granting receiver 83 
 
 need not contain specific prayer 83 
 
 multifariousness of, no objection to receiver 86 
 
 may be dismissed by plaintiff, although receiver appointed 101 
 
 omission of prayer for receiver, not fatal 109, 110 
 
 dismissal of, does not release receiver from liability 286 
 
 not demurrable because of prayer for receiver 291 
 
 when receiver continued after dismissal of 437 
 
 BILL OF EXCEPTIONS, 
 
 when, must contain affidavits upon which application for receiver 
 
 is based 88 
 
 BOND, (See Appeal Bond.) 
 
 in lieu of receiver 9, 308,478, 761 
 
 approval by clerk when invalid 43 
 
 of non-resident receiver 69 
 
 usually required of receiver before entering upon duties 118 
 
 two sureties required under English practice 118 
 
 effect of consent to dispense with 118 
 
 recognizance of receiver alone, when sufficient 119
 
 INDEX. 1007 
 
 BOND — Continued. Section 
 
 dispensed with, when unnecessary „ . 120 
 
 when same receiver extended to different actions 120 
 
 title not acquired until receiver executes 121 
 
 failure to execute, a ground of nonsuit in action by receiver 121 
 
 when may be filed nunc pro tunc 121 
 
 informality in, effect of, in suit by receiver 121 
 
 filing of, receiver's title relates back to date of appointment 121a 
 
 failure to require, as part of final decree, no ground for reversal 122 
 
 by defendant to account as receiver, held good 124 
 
 requiring new, upon making temporary receiver permanent 126^? 
 
 liability of sureties on 127-133c 
 
 sureties strictly held to 127 
 
 bond may be vacated as to one surety 127 
 
 practice on so vacating 127 
 
 when liability becomes absolute 129 
 
 when action will lie on 129 
 
 independent action on, against surety 129a 
 
 suit on, after death of receiver 130 
 
 liable for interest 131 
 
 liable for costs of attachment for not accounting 131 
 
 not liable for violation of duties beyond scope of appointment 133& 
 
 when liable although bill is afterward dismissed 133c 
 
 when receiver seeking injunction must give 140, note 
 
 failure to execute, effect on suit by receiver 227 
 
 informality in, effect on suit by receiver 227 
 
 by defendant in lieu of receiver 9 
 
 by corporation m lieu of receiver 308 
 
 by partner in lieu of receiver 478, 761 
 
 BONDHOLDERS, (See Mortgages, Railways.) 
 
 of railway, granted receiver in United States court, notwith- 
 standing subsequent proceedings in state court 54 
 
 receivers in aid of 376-389 
 
 grounds for 376 
 
 over tolls of railway 381 
 
 to prevent land grant from lapsing 386 
 
 on application for, court will not pass on validity of bonds 387 
 
 discharge of receiver 389 
 
 of municipal corporation, secured by rates and assessments, de- 
 nied receiver 658 
 
 of canal company, allowed receiver in case of insolvency 678 
 
 BOOK-KEEPER, 
 
 of corporation, when eligible as receiver 72 
 
 BREWING, 
 
 receiver in business of, his functions and duties 549
 
 1008 INDEX. 
 
 BRIDGE COMPANY, Section 
 
 receiver over tolls and franchise of ^ . . . . 300 
 
 BUILDING ASSOCIATION, 
 
 receiver over 304 
 
 BUSINESS, 
 
 management of, by receiver 36 
 
 discretionary with court 36 
 
 preferring debts incurred in 36 
 
 may employ help in management of 175 
 
 when receiver personally liable on note given in carrying on.... 272 
 
 management of, by receiver of partnership 480, 481 
 
 of colliery, should not be carried on by receiver 615 
 
 c 
 
 CANAL COMpJJnY, 
 
 bondholders of, allowed receiver on insolvency 678 
 
 CAPITAL STOCK. (See Corporations, Subscriptions.) 
 
 CARRIAGES, 
 
 when may be let by receiver 481 
 
 CAR TRUSTS, 
 
 priorities of, in railway receiverships 394/ 
 
 CATTLE, 
 
 damages for killing, not enforced in state court against receiver 
 of United States court 397 
 
 CAVEAT EMPTOR, 
 
 applies to receiver's sales 199b 
 
 CERTIFICATES. (See Railways, Receiver's Certificates.) 
 
 CERTIORARI, 
 
 appointment of receiver not reversed on 28 
 
 CESTUI QUE TRUST. (See Trusts, Trustees.) 
 
 CHAMBERS, 
 
 application to supply vacancy, may be made in 96 
 
 CHANCELLOR, 
 
 duty of, in appointing receiver, a delicate one 3 
 
 CHATTELS, 
 
 mortgagee of, receiver as against, on creditor's bill 420 
 
 when receiver can sustain no action concerning 467 
 
 mortgage of, securing rents, when receiver entitled to 644 
 
 when receiver appointed as to 647 
 
 when relief allowed 676
 
 INDEX. 1009 
 
 CHECK, Section 
 
 when not entitled to payment in full 274a 
 
 CHOSE IN ACTION, 
 
 when sale of, not set aside 198 
 
 construction of term as applied to insolvent corporation 212 
 
 of corporation, may be assigned by receiver without corporate seal 338 
 
 of debtor, assignment to receiver not necessary 443 
 
 title to, as between receiver of debtor and purchaser 449 
 
 of partnership, receiver entitled to 541 
 
 CHURCH, (See Religious Society.) 
 
 possession of, by receiver, protected by injunction 140 
 
 CLAIMS, 
 
 of creditors not presented by receiver 175, note 
 
 brother of receiver may become purchaser of, against estate. .175, note 
 
 CLERGYMAN, 
 
 receiver to collect rents of benefice of 432 
 
 CLERK OF COURT, 
 
 receiver over fees of 22 
 
 approval of bond by, invalid 43 
 
 not necessarily a receiver 71 
 
 clerk and master ordered to act as receiver 71 
 
 liability of sureties of, when clerk appointed receiver 133a 
 
 CLOUD UPON TITLE, 
 
 when receiver may remove 454 
 
 CODE OF PROCEDURE, 
 
 of New York, receiver an incident to general jurisdiction 23 
 
 receiver in creditor's suit under 401 
 
 of North Carolina, has not changed general equity jurisdiction 
 
 as to receivers 23 
 
 COLLATERALS, 
 
 deposited by corporation, receiver may exercise option 337 
 
 COLLATERAL SUIT, 
 
 receivership can not be questioned in 39a 
 
 illustrations 39& 
 
 otherwise if court without jurisdiction 39c, 203 
 
 receiver's sale can not be questioned in 196 
 
 when want of leave to sue receiver not available in 254a 
 
 COLLEGE, 
 
 fellowship in, receiver refused over 311 
 
 COLLIERY, 
 
 receiver as between tenants in common of 606 
 
 on bill by purchaser to set aside purchase of 615 
 
 receiver should not ordinarily carry on business of 615 
 
 Receivers — 64.
 
 1010 INDEX. 
 
 COMMERCIAL PAPER, Section 
 
 receiver's possession of, not that of bona fide holder for value 159 
 
 surrender of, by receiver to third person 159' 
 
 refusal to deliver notes to receiver, when not a contempt 168 
 
 when receiver can not maintain action on premium note 204 
 
 defense to suit by receiver on stock subscription note 205 
 
 defense to suit by receiver of bank on note of depositor 245' 
 
 want of consideration and fraud, when not available in defense 
 
 of suit on note by receiver .^ 246 
 
 set-off in suit by receiver of bank on notes 247 
 
 in suit by receiver of payee against maker 249' 
 
 counter-claim allowed for services rendered receiver 249 
 
 when maker can not set off judgment against receiver 252 
 
 trover for conversion of note, by receiver of corporation 316> 
 
 canceled note for insurance, receiver can not sue on 319' 
 
 note transferred by receiver of bank, assignee may recover on.. 323 
 
 COMMON, (See Tenants in Common.) 
 
 right of, not to be exercised against receiver's possession 154 
 
 COMPENSATION OF RECEIVER, 
 
 power of courts to fix 781 
 
 court may act on its own knowledge 781 
 
 for carrying on hotel business 781, note 
 
 English practice, no settled rule 782 
 
 reference to master 782 
 
 considerations influencing 782 
 
 court may summarily end proceedings before master 782 
 
 no fixed rule in this country 783 
 
 should correspond with capacity and responsibility 783 
 
 no compensation after reversal of appointment 783 
 
 court may hear evidence 783 
 
 final compensation 783 
 
 practice as to partial compensation 783 
 
 compensation after removal 783 
 
 action of court in fixing, not ordinarily disturbed on appeal.. 781, 783 
 
 Massachusetts doctrine 784 
 
 percentage not allowed 784 
 
 when court will refuse to pass on exceptions to master's 
 
 report 784 
 
 in Maryland, same as on trustee's sales 784 
 
 in Alabama, same percentage as guardians 785 
 
 in New York, same rate as executors 785 
 
 but courts not bound by 785r 
 
 receivers in lieu of executors allowed same compensation 786 
 
 receiver of railway allowed more liberal compensation 787 
 
 considerations in determining 787 
 
 entitled to, although work performed by others 788*
 
 INDEX. 1011 
 
 COMPENSATION OF RECEIVER— Continued. Section 
 
 commissions on receipts and disbursements 788 
 
 compensation of agent of corporation acting as receiver 788 
 
 rests in accounts 789 
 
 extra compensation 790 
 
 receiver's mismanagement ground for refusal of compensation. . 790 
 receiver of insurance company allowed commissions on notes 
 
 surrendered 791 
 
 payment into court to avoid 792 
 
 extra remuneration for survey of minor's estate not allowed.... 793 
 
 receiver entitled to, unless otherwise ordered 794 
 
 when appointed by consent 794 
 
 plaintiff partner not entitled to, when appointed receiver 795 
 
 receiver can not take judgment for, against parties, on motion... 796 
 
 practice in fixing 796 
 
 may be taxed as costs 796 
 
 when part taxed as costs against unsuccessful plaintiff 796 
 
 when chargeable on fund 796 
 
 should not be allowed without notice 796 
 
 when not subject to set-off 796 
 
 reviewing court will not make allowance 796 
 
 appeals from allowance or refusal of 796a 
 
 receiver's right to retain, before surrendering fund to trustee in 
 
 bankruptcy 796& 
 
 agreement by party to pay, of receiver void as against public policy 796c 
 
 agreement by receiver to serve without 796c 
 
 when deprived of, for delay in payment 818 
 
 when allowed, although receiver has delayed accounting 818 
 
 COMPROMISE, 
 
 of claims and actions by receiver 177, 336 
 
 receiver in possession continued pending 564 
 
 COMPTROLLER OF THE CURRENCY. (See National Banks.) 
 
 CONDEMNATION. (See Eminent Domain.) 
 
 CONFIRMATION, 
 
 of receiver's sale, unnecessary 199c 
 
 when not refused 199c 
 
 what amounts to 199c, note 
 
 CONSENT, 
 
 receiver not appointed by, in improper case 7 
 
 appointed by, under Irish practice 94 
 
 to appointment waives want of notice 112 
 
 CONTEMPT OF COURT, 
 
 by receiver of United States court interfering with receiver of 
 state court 51 
 
 interference with receiver's possession punishable by attachment 163
 
 1012 INDEX. 
 
 CONTEMPT OF COURT— Continued. Section 
 
 interference by subsequent receiver punishable as a 164 
 
 by garnishing funds due receiver 164 
 
 not justifiable because of impropriety of appointment 165 
 
 liability for, not dependent on official or formal notice of ap- 
 pointment 166 
 
 in interfering with collection of rent by receiver 167 
 
 by defendant in refusing to surrender property to receiver 168 
 
 refusal to deliver possession to receiver, when not a contempt... 168 
 
 court itself only competent judge as to 169 
 
 resistance to enforcement of order for receiver in foreign country 
 
 constitutes a 170 
 
 actual disturbance of receiver's possession requisite to 171 
 
 levy and sale by sheriflf considered 171 
 
 proceedings for, receiver's title not determined in 172 
 
 when claimant required to restore property 172 
 
 courts averse to punishment for, as between different receivers.. 173 
 
 in interfering with receiver's rights under patent 174a 
 
 form of j udgment in proceedings for 174& 
 
 receiver's disobedience of writ of supersedeas constitutes a 190 
 
 suit against receiver without leave of court, constitutes a 254 
 
 refusal of receiver to pay money constitutes a 280 
 
 appropriation of money by receiver constitutes a 280 
 
 CONTRACT, (See Liabilities, Covenant.) 
 
 by receiver, court may vacate or modify 186 
 
 assignee of, bound by 186 
 
 persons making, chargeable with notice 186a 
 
 of receiver binding on co-receiver 370a 
 
 of railway not binding on its receiver 393<r, 398a 
 
 of person over whom receiver appointed, receiver not liable on 273, 394m 
 
 for public works, receiver of, refused 702 
 
 CONVENIENCE, 
 
 relative, and inconvenience considered 7 
 
 CONVEYANCE. (See Deed.) 
 
 CORPORATIONS, 
 
 governor authorized to appoint receiver over insolvent bank.... 39 
 
 positive affidavit not required 89 
 
 receiver of, how recognized in other state 47 
 
 insolvent, exclusive jurisdiction asserted by United States courts 
 
 in bankruptcy 53 
 
 selecting receiver of, officer ineligible 72 
 
 relaxation of the rule 72 
 
 stockholder as receiver 72 
 
 eligible by statute 72 
 
 another corporation eligible 73 
 
 stockholder and director of plaintiff, ineligible 80
 
 INDEX. 1013 
 
 CORPORATIONS— CoM/mM^J. Section 
 
 oath to receivers of, omission does not vitiate proceedings 99 
 
 shares of stock of, when receiver improper before answer 106 
 
 insolvent, notice necessary before appointment of receiver 115 
 
 receiver of, not subject to garnishment 151 
 
 suit by receiver of, on stock subscription note, what defense 
 
 available 205 
 
 judgment in one state, a bar to subsequent action in another 206 
 
 must be in corporate name 209 
 
 receivers of bank, suit in their own name 210 
 
 may be in name of receiver when authorized by statute ... 211 
 corporation can not recover in its own name when right of 
 
 action vested in receiver 211 
 
 suit begun by corporation, continued by receiver 213 
 
 when defendant can not object to irregularities in appoint- 
 ment 225 
 
 corporation not proper party plaintiff 225 
 
 not maintainable in other states 240 
 
 allowed in other states on principles of comity 241 
 
 when corporation dissolved 241 
 
 receiver of corporation allowed to prove debt in bankruptcy 
 
 in another state 242 
 
 when fraud no defense 246 
 
 set-offs, what admissible 247, 248 
 
 against shareholder for illegal dividends, set-off not allowed . 250 
 foreclosure of mortgage given by, when receivers need not be 
 
 made defendants 260 
 
 action against, not abated by appointment of receiver 260 
 
 when receivers should be made defendants 260 
 
 receivers over, principles governing the relief 287-312^ 
 
 jurisdiction enlarged by statute 287 
 
 not appointed under general equity powers 288 
 
 courts proceed cautiously 289 
 
 construction of statutes conferring the power 289 
 
 not necessarily result of injunction 289 
 
 corporation must be party and before the court 290 
 
 corporate functions suspended by appointment 290 
 
 delivery of corporate deed after appointment 290 
 
 receiver of bank need not be made party to subsequent pro- 
 ceedings for another receiver 291 
 
 general allegations of fraud insufficient 292 
 
 should not be appointed in absence of fraud or danger to 
 
 property 292 
 
 mere insolvency insufficient 292 
 
 difference of opinion as to management of business in- 
 sufficient 292
 
 1014 INDEX. 
 
 CORPORATIONS— Co«/niMcJ. Section 
 
 directors holding over insufficient 292 
 
 iurther illustrations 292 
 
 receivers over, failure of corporation to act 293 
 
 breach of trust by officers 293 
 
 no place of business and no officers 293 
 
 Illegal issue of bank notes 293 
 
 death of one of three directors 293 
 
 deadlock among directors 293 
 
 courts interfere cautiously in behalf of shareholders 294 
 
 ■when refused in behalf of shareholder on ex parte appli- 
 
 cation 
 
 294 
 
 former shareholder not entitled to 294 
 
 acquiescence or laches of shareholder bar to 295 
 
 in behalf of minority shareholders, when receiver not ap- 
 pointed 295a 
 
 when receiver appointed 295& 
 
 action by shareholders against directors 295?? 
 
 when demand on receiver to sue is unnecessary 295& 
 
 demand on officers and directors to proceed 295c 
 
 when demand unnecessary 295c: 
 
 when relief determined by legislation and decisions of other 
 
 state 296 
 
 refused as to new issue of stock ratified by state where 
 
 company incorporated 296 
 
 under statute on expiration of charter 297 
 
 sequestration for benefit of creditors 297 
 
 rights of attaching creditors subordinate 297 
 
 right of judgment creditor to, under statute 298 
 
 judgment creditor may file bill for, after execution returned 
 
 unsatisfied 299 
 
 creditors share alike in funds realized by 299_ 
 
 judgment creditor may have, over tolls and franchise of 
 
 bridge company 200 
 
 creditor without j udgment can not have 301 
 
 can not have when remedy at law 301 
 
 effect of receivership on judgment lien 302 
 
 does not divest title to real estate in limine 302 
 
 on dissolution, real estate vests in receiver 303 
 
 mismanagement of trust funds of insurance company, ground 
 
 for receiver 304 
 
 insolvency and assignment 304 
 
 receiver refused over foreign insurance company when no 
 
 assets in state 304 
 
 foreign corporations, receivers over, in behalf of creditors 
 
 in New York 305
 
 INDEX. 1015 
 
 CORPORATIONS— CoMh'nM^rf. Section 
 
 receiver refused over foreign corporation when no assets in 
 state 305 
 
 receivers in behalf of shareholders 306 
 
 domiciliary receiver of mutual benefit association, when en- 
 titled to possession of assets in another state 306a 
 
 court will preserve equality 306a 
 
 ancillary receiverships 306b 
 
 not allowed before judgment of forfeiture in quo warranto.. 307 
 nor upon involuntary dissolution by expiration of charter 307 
 
 bond in lieu of 308 
 
 case retained for accounting 308 
 
 no bar to suit against shareholders for subscription 309 
 
 registration of shares in hands of 310 
 
 not allowed over dividends of college fellowship 311 
 
 one corporation may be receiver over another 312 
 
 duty of officers to deliver assets to receiver 312a 
 
 receiver's certificates 3126 
 
 preferred debts 312c 
 
 weight of authority opposed to preference 3l2d 
 
 abuse of corporate franchise as ground for receiver in quo voar- 
 ranto 312^ 
 
 functions, duties and rights of action of receivers over 313-342a 
 
 legislative enactments 313 
 
 receiver represents both creditors and shareholders 314 
 
 represents corporation for purposes of litigation 315 
 
 may not plead usury when corporation could not 315 
 
 may purchase at mortgage sale 315a 
 
 may prosecute or defend suits 315a 
 
 rights of action of 316 
 
 succeeds to rights of action of corporation 316 
 
 may enforce them by same remedies 316 
 
 may maintain trover for conversion of note 316 
 
 may enforce all securities for payment of debts 316 
 
 of receiver of insolvent bank 317 
 
 individual liability of stockholders 317a 
 
 right to enforce individual liability in foreign state 317Z; 
 
 the same ; receiver as quasi-assignee 317r 
 
 not changed by receiver's appointment 318 
 
 same defenses available as in suit by corporation 318 
 
 defense to suit by receiver on premium note 318 
 
 change of corporate name 318 
 
 can not litigate questions determined against corporation 318 
 
 can not avoid lawful settlement made by corporation 319 
 
 can not sue on canceled note given for insurance 319 
 
 i not bound by illegal act of corporation 320
 
 1016 INDEX. 
 
 CORPORATIONS— Continued. Section 
 
 rights of action of, may maintain suit to set aside illegal transfer 
 
 of securities 320 
 
 to set aside void mortgage or fraudulent judgment.... 320 
 may maintain suit against president of bank for money 
 
 fraudulently disposed of 320 
 
 unauthorized transfer of notes of bank to director 320 
 
 counter-claim disallowed 320 
 
 may recover dividends improperly paid 321 
 
 functions and powers conferred by statute 322 
 
 power to dispose of and divide assets 323 
 
 presumed to have properly discharged duty 323 
 
 right of action to recover subscription to capital stock 324 
 
 rule in different states 324 
 
 defenses to such actions 324a 
 
 shareholder not entitled to injunction against 325 
 
 fraud no defense to, when all parties participated 325 
 
 right of action to recover assessments on premium notes 326 
 
 what receiver must allege and prove 327 
 
 liability not increased by receivership 328 
 
 must make assessment and apportionment 328 
 
 receiver takes place of directors 329 
 
 sanction and approval of court, effect of 329 
 
 not a judicial act 330 
 
 receiver may make new assessment 330 
 
 form of assessment and proof required 331 
 
 receiver may sue on, to pay equitable claims 332 
 
 what defense denied maker 332 
 
 set-offs, what may be allowed by receiver 333 
 
 not allowed in action to recover illegal dividends 333 
 
 discretion of, in settling claims against corporation 334 
 
 may decline to ratify contract made by corporation after 
 
 insolvency 334 
 
 can not waive express stipulations of insurance policy 334 
 
 can only allow demands recoverable by suit 335 
 
 duty to resist allowance by referees 335 
 
 may be authorized by court to compromise doubtful claims 336 
 
 may allow officers' salaries pro rata 336 
 
 may exercise option of treating deposit of collaterals as 
 
 payment 337 
 
 may assign chose in action, without seal 338 
 
 sale by, effectual without seal 338 
 
 not set aside because applied for by creditor who was also 
 
 j udge of the court 338 
 
 suit by, when defendant entitled to costs 339 
 
 action against, to collect tax, how judgment entered 340 
 
 suit by, against debtor, not act of bankruptcy 341
 
 INDEX. 1017 
 
 CORPORATIONS— Co7j/n!M^rf. Section 
 
 on bill by judgment creditors against, not required to apply 
 
 money on j udgments 342 
 
 ancillary bill by receiver to determine claims to property in his 
 
 possession 342a 
 
 inj unction 342a 
 
 receivers over insolvent corporations, jurisdiction enlarged by 
 
 statute 343 
 
 power may be conferred on executive officers 343 
 
 primary object to preserve assets 344 
 
 discretionary with court whether to allow corporation to 
 
 resume management 344 
 
 not appointed upon petition of corporation 344a 
 
 corporation not dissolved by appointment of receiver .... 344Z; 
 
 pending actions do not abate 34ib 
 
 corporation may be sued 344& 
 
 otherwise on dissolution 344& 
 
 right to appoint unquestioned 345 
 
 appointment of, pending proceedings for forfeiture, does 
 
 not revive corporate body 345 
 
 what allegations necessary as to insolvency 346 
 
 when affidavit on information and belief insufficient to 
 
 warrant 346 
 
 not appointed ex parte 346 
 
 practice on appointing 346 
 
 shareholders entitled to relief 346a 
 
 fraudulent transfers 346a 
 
 discretion of court in management 364a 
 
 inj unction as adj unct of 347 
 
 does not necessarily follow inj unction 347 
 
 lien of creditors not affected by 348 
 
 does not dissolve attachment of assets 348 
 
 assets can not be attached after appointment of 348 
 
 does not prevent creditors from suing 349 
 
 when creditor can not sue after 350 
 
 other creditors may come in 350 
 
 appointment of, operates as transfer of property 351 
 
 right to rents as affected by 351 
 
 creditors not allowed to sue for unpaid subscriptions after 
 
 appointment of 352 
 
 application by attorney-general for, under statute 353 
 
 affidavit on information sufficient 353 
 
 when corporate officers competent as 354 
 
 effect of corporate answer under seal 355 
 
 purchaser from, acquires no right of action against former 
 
 officer 356
 
 1018 INDEX. 
 
 CORPORATIONS— Co«/ni»crf. Section 
 
 receivers over insolvent corporations, when shareholder estopped 
 
 from questioning appointment of, or order for sale .... 356 
 
 when discharged on solvency of corporation 357 
 
 not when rights of other creditors have intervened 357 
 
 national banks, receivers over 358-364^ 
 
 power vested in comptroller of the currency 358 
 
 effect of " 358 
 
 title acquired by 359 
 
 not entitled to notes pledged by bank 359 
 
 assets exempt from taxation 359 
 
 regarded as agent of comptroller 360 
 
 has no control over bonds deposited to secure currency . . . 360 
 
 rights of action of 360 
 
 power to contract 360 
 
 may enforce individual liability of shareholders 360a 
 
 right of action against directors for mismanagement 360b 
 
 suits by, what must be averred 361 
 
 what must be proven 361 
 
 power of comptroller to appoint, does not exclude jurisdic- 
 tion of equity 362 
 
 judgment creditor may have 362 
 
 jurisdiction of state and federal courts over 363 
 
 property in hands of, can not be sold by creditor 364 
 
 subject to same set-off as bank 364a 
 
 railways, receivers over 365-398; 
 
 principles governing 365-37Sa 
 
 in behalf of mortgagees and bondholders 376-3S9a 
 
 functions and duties of 390-394 
 
 preferred debts 394a-394;j 
 
 actions against 395-398& 
 
 receivers' certificates 398c-398/ 
 
 equitable mortgagee of private corporation allowed receiver 659 
 
 official liquidator appointed 659 
 
 CORPUS, 
 
 when preferred debt allowed payment out of, in railway receiver- 
 ship 394; 
 
 COSTS, 
 
 of attachment against receiver for not accounting, sureties 
 
 liable for 131 
 
 liability of receiver for 229 
 
 on unauthorized appeal 2641? 
 
 receiver not entitled to, when he has not obtained leave to defend 267 
 
 in suit by receiver of corporation, when defendant entitled to 339 
 
 on motion for tenants to attorn to receiver 620 
 
 when receiver's compensation taxed as, against plaintiff 796 
 
 allowance of, in receiver's accounts 809-812
 
 INDEX. 
 
 1019 
 
 COSTS— Continued. Section 
 
 of appointment, entitled to priority 809 
 
 allowance of, when receiver required to pay 809 
 
 of new appointment 809 
 
 allowance of, discretionary 809 
 
 expenses of receivership entitled to priority 809 
 
 when costs and expenses charged against plaintiff 809a 
 
 of unauthorized or improvident litigation 811 
 
 taxes on personalty, when payable as 811a 
 
 for appearing on motion for discharge 812 
 
 when receiver may move for 812 
 
 of appeal by one creditor for benefit of all 819c 
 
 receiver not entitled to, for appearing on application for his dis- 
 charge 846 
 
 CO-TENANT, (See Tenants in Common.) 
 
 of personalty, courts averse to granting receiver 20 
 
 COUNSEL, 
 
 consultation with, by court as to selection of receiver 65 
 
 receiver entitled to and should obtain 188 
 
 must show necessity therefor 188 
 
 should not employ, of party ' 188 
 
 employment of, by receiver ; should not employ counsel of parties 216 
 
 limitation upon the rule 217 
 
 not ground for removal 823 
 
 services of, to corporation '^1 
 
 fees of 805-808 
 
 receivers entitled to payments of 805 
 
 preference for, allowed 80d 
 
 employment should be authorized 805 
 
 not allowed for unsuccessful defense 805 
 
 defending fraudulent appointment 805 
 
 for work requiring no legal skill 805 
 
 test as to allowance 805 
 
 allowance is to receiver and not to counsel 805 
 
 not allowed for services which could have been performed 
 
 by receiver 805 
 
 nor where receiver has grossly mismanaged the estate... 805 
 
 when allowed for defending motion for removal 805 
 
 allowed for defending item for fees in account 805 
 
 when allowance of, not disturbed on appeal 805 
 
 when extra compensation allowed 805 
 
 should be allowed only on notice 805 
 
 allowed receiver of lunatic's estate 80o 
 
 fees to counsel for parties, when disallowed 806 
 
 t when allowed 806 
 
 services by receiver as solicitor for administrator 807
 
 1020 INDEX. 
 
 COUNSEL — Continued. Section 
 
 fees of, receiver not allowed counsel fees paid himself 808 
 
 as a preferred claim in railway foreclosures 3946 
 
 COUNTER-CLAIM, 
 
 allowed for services rendered to receiver 249 
 
 in suit for notes illegally transferred, amount paid for notes 
 
 not allowed as a 251 
 
 by receiver of railway against preferred debt 394c 
 
 COURTS, (See Contempt of Court, Leave of Court, United 
 States Courts.) 
 
 exercising the j urisdiction 40-49a 
 
 receivers originated in English Chancery 40 
 
 favorite remedy in Irish Chancery 40 
 
 what courts grant receivers in this country 41 
 
 of original j urisdiction 41 
 
 of last resort 41 
 
 of probate, not vested with the jurisdiction 42 
 
 action by receiver appointed by, can not be maintained . . 42 
 
 when may appoint 42 
 
 appointment by, required in term time 43 
 
 property need not be within jurisdiction of 44 
 
 ecclesiastical courts, receiver pending contest in 46 
 
 of different states, receivers of, recognized only by comity. . 47 
 
 illustrations of rule 47 
 
 prior receivership in one state excludes control over receiver 
 
 by courts of another state 47a 
 
 judgment against receiver in latter state not conclusive 
 
 in former 47a 
 
 first appointing, has exclusive control 48 
 
 test as to priority 48 
 
 of New York, when injunction bars receiver 49 
 
 receivers in federal, in suits concerning allotments among In- 
 dians on reservations 49a 
 
 relative powers of state and federal 50-62a 
 
 first acquiring jurisdiction, retain it 50 
 
 not defeated by subsequent dissolution of corporation .. 50 
 
 priority acquired by receiver on creditor's bill in state court. . 51 
 
 contempt of state court by receiver of United States court.. 51 
 
 federal, generally recognize prior jurisdiction of state courts 52 
 
 the same in bankruptcy proceedings 52 
 
 federal, exclusive jurisdiction asserted 53, 54 
 
 state, will not act in foreclosure when receiver of United 
 
 States court in possession 54 
 
 federal, will not entertain bill for account against receiver of 
 
 state court 55 
 
 state and federal, conflict between as ground for receiver .... 58
 
 INDEX. 1021 
 
 COURTS — Continued. Section 
 
 state, can not enforce payment by receiver of United States court 59 
 
 when can not enjoin receiver of federal court 59 
 
 right to entertain action against receiver of United States 
 
 ; court 60 
 
 ! of federal, when jurisdiction independent of citizenship and 
 
 ' amount 60a 
 
 actions against receivers of, removable regardless of citizen- 
 
 ; ship and amount 60/? 
 
 will not grant writ of assistance against receiver of United 
 
 States court 61 
 
 of United States, receivers of, have no greater powers than of 
 
 state courts 62 
 
 Supreme Court of, may review decision of state court . . 62a 
 
 inferior, discretion in selecting receiver rarely interfered with ... 65 
 
 grounds of interference 65 
 
 may be interfered with to prevent injury and expense 66 
 
 clerk of, not ex officio a receiver 71 
 
 when application must be made in 96 
 
 of state, no jurisdiction over receiver of national bank 363 
 
 receiver of railway in state court, when not interfered with by 
 
 proceedings in bankruptcy in United States court 370 
 
 of state, can not enforce judgment against receiver of railway 
 
 in United States court 397 
 
 COVENANT, 
 
 by receiver officially, no personal liability 272 
 
 of person over whom receiver is appointed, receiver not liable 
 
 for 273, 394m 
 
 becomes liable by adopting 273a 
 
 election to adopt, of lease 273a 
 
 when not personally liable for, to pay rent 273o 
 
 not bound by, of former receiver 2736 
 
 election to adopt, rests in discretion 272>b 
 
 for rent, stipulated or reasonable rental value 273c 
 
 receiver can not impair liability of original party on 27id 
 
 receiver of railway not bound by, of company 393c, 398a 
 
 CREDITORS, (See Judgment Creditors.) 
 
 not entitled to receiver of debtor's property before judgment ... 406 
 
 of bank, denied receiver when remedy at law 10 
 
 when allowed receiver in probate court 42 
 
 when jurisdiction first acquired by federal court on creditor's 
 
 bill 50 
 
 when by state court 51 
 
 receiver in aid of, prior jurisdiction of state court paramount 51 
 
 of insolvent, eligibility of 70, 72 
 
 rehearing, when not granted in creditor's suit 92
 
 1022 INDEX. 
 
 CREDITORS— CoH/;nMt'(f. Section 
 
 receiver in behalf of, may be extended to other creditors 93 
 
 receivers usually granted before answer on creditors' bills 105 
 
 receiver extended to actions by different creditors, need not give 
 
 new security 120 
 
 priority between receiver and judgment creditor levying after ap- 
 pointment of receiver 136 
 
 claims of, not presented by receiver 175, note 
 
 equities of, should be stated by receiver suing for 234 
 
 suit by receiver for, when set-off not allowed 250 
 
 on notes due debtor, set-off refused 252 
 
 right of, to receiver over corporation, statute strictly construed.. 289 
 
 of corporations, right to receiver given by statute 298 
 
 may file bill for receiver after execution unsatisfied 299 
 
 may have receiver over tolls and franchises of bridge company 300 
 
 can not have receiver without j udgment 301 
 
 when remedy at law 301 
 
 lien of, not divested by receiver in limine 302, 348 
 
 foreign corporation may have receiver in New York 305 
 
 bond allowed in lieu of receiver 308 
 
 receiver represents both creditors and shareholders 314 
 
 not prevented from suing by receivership 349 
 
 may come in under decree 350 
 
 of national bank, may have receiver 362 
 
 of railway, not entitled to receiver when judgment may be en- 
 forced by ordinary means 365 
 
 not entitled to priority over previous mortgages 382 
 
 before j udgment, not usually allowed receiver 406 
 
 exception in partnership cases 407 
 
 in case of lien on vessel 408 
 
 in action to charge property of married woman with 
 
 her debts 409 
 
 annuitant allowed receiver when annuity in arrears 410 
 
 receiver over real estate in aid of 418 
 
 receiver in aid of, under English bankrupt law 426 
 
 of partnership, allowed to proceed at law notwithstanding re- 
 ceivership 505 
 
 when entitled to receiver against surviving partner 537 
 
 when granted receiver on bill to charge debtor's realty 567 
 
 when claims of, not entitled to draw interest 803 
 
 CREDITORS' BILLS. (See Judgment Creditors.) 
 
 CRIMINAL LIABILITY. (See Indictment.) 
 
 CROPS, 
 
 ungathered, when receiver refused 590 
 
 when allowed 590 
 
 receiver of, when mortgagee entitled to 646, 670 
 
 not entitled to severed crops 646
 
 INDEX. 1023 
 
 CURTESY, ESTATE BY, Section 
 receiver of, debtor takes title to 451 
 
 CUSTODIANS, 
 
 of funds in litigation, when similar to receivers 182 
 
 D. 
 
 DAMAGES, (See Bond, Liabilities.) 
 
 for wrongful appointment of receiver 39^ 
 
 for tort of receiver's agent, when a charge on fund 286a 
 
 DANGER, 
 
 of loss, as ground for receiver H 
 
 to fund in litigation, as ground for relief 34 
 
 ground for receiver before answer 105 
 
 to rents and profits, as ground for receiver over realty 559 
 
 DEATH, 
 
 of receiver, when successor not appointed at instance of defendant 39^ 
 
 suit continued by successor 213 
 
 of one of three directors as ground for receiver over corporation 293 
 
 effect of, of debtor before appointment actually made 452 
 
 of parties or of receiver 471a 
 
 practice in such case 471a 
 
 effect of 471o 
 
 of partner, as ground for receiver 530-537 
 
 receiver on death of both partners 530 
 
 not granted against survivor except for misconduct 531 
 
 mismanagement by survivor, ground for 532 
 
 refusal by survivor to close up business, ground for 532 
 
 when administrator of deceased may have 533 
 
 rights and functions of receiver 534 
 
 when legatee continuing business entitled to 535 
 
 appointed notwithstanding death of partner 536 
 
 receiver may sue for money due firm 536 
 
 when appointed on bill by creditors against survivor 537 
 
 of trustee, as ground for receiver 694 
 
 of executor, as ground for receiver 718 
 
 of receiver, effect of, on settlement of accounts 817 
 
 DEBENTURE-HOLDERS, 
 
 right of, to receiver 652a 
 
 DECREE, 
 
 not prejudiced by decision on application for receiver 6 
 
 no receiver on final 6 
 
 probability as to, considered on application for receiver 8 
 
 interlocutory, no appeal from 26 
 
 rule in Michigan 27
 
 1024 INDEX. 
 
 DECREE— Continued. Section 
 
 final, receiver may be appointed as part of 109 
 
 receiver may be appointed after 110 
 
 failure to require bond, no ground of reversal 122 
 
 court should not render, without passing receiver's accounts 814 
 
 when does not operate as discharge 834 
 
 of foreclosure, receiver appointed after, in case of emergency 655 
 
 DEED, 
 
 by receiver, power to make implied from power to sell 190 
 
 confirmation of, by court 199 
 
 delivery of corporate, after appointment of receiver over corpora- 
 
 tion 290 
 
 deposit of, as security, when receiver allowed 658 
 
 DEED OF TRUST. (See Trust Deed.) 
 
 DEFENSE, (See Suit.) 
 
 receiver not allowed to waive 264 
 
 when not required to make particular 264 
 
 DEFINITION, 
 
 of receiver 1 
 
 of discretion ' 
 
 of remedy at law lO 
 
 DEMURRER, 
 
 to bill, no objection to appointment when defendant does not 
 
 appear 95 
 
 on overruling of, defendant should be allowed to plead or 
 
 answer 95 
 
 when sustained for want of proper parties 616 
 
 DEPOSITARY, 
 
 bank not ineligible as, because a creditor 274 
 
 DESCRIPTIO PERSONS, 
 
 when designation of plaintiff as receiver amounts to 244, 254&, note 
 
 DETINUE, 
 
 action of, may be maintained by receiver 218 
 
 DEVISEE, 
 
 not entitled to receiver over realty when remedy at law 555 
 
 bill by, to determine widow's dower, receiver refused 568 
 
 contest with heir, when receiver refused 570 
 
 when granted 5/0 
 
 DILIGENCE, 
 
 required of plaintifY 14 
 
 degree of, required of receiver 797 
 
 DIRECTORS. (See Corporations.)
 
 INDEX. 1025 
 
 DISCHARGE, (See Removal.) Section 
 
 of receiver, on answer denying equities of bill 24 
 
 no bar to suit against him by claimant of property 268 
 
 of corporation, when 357 
 
 of railway, on payment of mortgage 389 
 
 not liable after 398/^ 
 
 distinction between, and "vacation of appointment" and "re- 
 moval" 820, note 
 
 in bankruptcy, when no bar to receiver on creditor's bill 425 
 
 of receiver 832-848a 
 
 power of court 820 
 
 receiver discharged when necessity terminates 832 
 
 in case of lunatic's estate 832 
 
 effect of termination of suit 833 
 
 does not necessarily follow termination of suit 833 
 
 nor on reversal of appointment 833 
 
 when jurisdiction retained notwithstanding dismissal of bill. . 833 
 
 when final decree does not operate as 834 
 
 receiver over infants not discharged on one coming of age.. 835 
 
 receiver can not appeal from 836 
 
 party can not appeal from 836 
 
 punished for contempt in failing to comply with 836 
 
 defendant's right to, on satisfying plaintiff's demand 837 
 
 plaintiff not entitled to, before accounting 837 
 
 receiver not entitled to, as of course, on his own application 838 
 
 giving bond not ground for discharge 838 
 
 when mortgagee may apply for 839 
 
 absolute right to, on payment of mortgage debt 840 
 
 granted when corporation able to resume business 841 
 
 granted on denial by answer of allegations of creditor's bill 842 
 
 granted on plaintiff's delay 843 
 
 putting purchaser of lands in possession equivalent to 844 
 
 granted on bankruptcy of receiver 845 
 
 payment by defendant 846 
 
 right of defendant to move for 846 
 
 receiver need not appear on hearing 846 
 
 not entitled to costs of appearing 846 
 
 notice of 846 
 
 order for, not appealable in Michigan 847 
 
 no bar to action against receiver for liabilities incurred 848 
 
 notice of, to all creditors unnecessary 848 
 
 effect of, on appeal from order of appointment 848a 
 
 DISCRETION, 
 
 appointment of receiver rests in 7 
 
 not disturbed on appeal 7, 25 
 
 definition of 7 
 
 Receivers — 65.
 
 1026 INDEX. 
 
 DISCRETION— Confrnwrrf. Section 
 
 when there is doubt as to plaintiff's recovery 8 
 
 when defendant is in possession 19 
 
 when not interfered with on appeal 25 
 
 of court in authorizing management of business 36 
 
 of master in chancery in selecting receiver, courts averse to in- 
 terference with 64 
 
 of inferior court in selecting receiver, rarely interfered with by 
 
 appellate court 65 
 
 grounds of interference with 65 
 
 of receivers in managing properly 176 
 
 in accepting or rejecting bids 176 
 
 degree of, required 176 
 
 none in application of funds 178 
 
 as to sale by bulk or in parcels 198 
 
 in settling and compromising claims 334, 336 
 
 of court in authorizing compromise of action 177 
 
 in instructing receiver 188 
 
 leave to sue receiver rests in 254b 
 
 in continuing receiver over corporation 344 
 
 in continuing corporate business 346o 
 
 of receiver of railway, as to expenditures 392 
 
 of court, in staying sale by receiver 429 
 
 in limiting quantity of debtor's estate over which to appoint 
 
 receiver 429 
 
 allowance of costs rests in 809 
 
 DISSOLUTION, 
 
 of corporation by state court, when prior jurisdiction of federal 
 
 court not divested by ^^ 
 
 when receiver may maintain action in foreign court on 241 
 
 by expiration of charter, no receiver appointed on 307 
 
 of corporation does not result from appointment of receiver 344& 
 
 same as to national bank 358 
 
 same as to railway company 370& 
 
 of partnership, as ground for receiver 509-521 
 
 DISTINCTION, 
 
 between receiver and trustee 1 
 
 receiver and trustee in bankruptcy 1, note 
 
 active and passive receiver 1. note 
 
 receiver and public officer 2 
 
 actions concerning real property 221 
 
 master's and receiver's report on account 801 
 
 "vacation of appointment," "removal" and "discharge".. 820, note 
 
 DISTRAINT. (See Rent.) 
 
 DISTRIBUTION, 
 
 receiver can not appeal from order of 264&
 
 INDEX. 1027 
 
 DIVERSION, Section 
 of income of railway, ground for preferring current debts 394c 
 
 DIVIDEND, 
 
 receiver can not make, without order of court 175 
 
 by insolvent insurance company, receiver may recover back 321 
 
 creditors enjoined from suing for 321 
 
 set-offs not allowed 333 
 
 DIVORCE, 
 
 receiver of rents pending action for 146 
 
 suit by receiver to set aside fraudulent conveyance made to de- 
 feat decree for alimony 221 
 
 receiver in proceedings to enforce alimony 438 
 
 receiver over husband pending, does not divest partnership prop- 
 erty 548 
 
 DOWER, 
 
 receiver's sale subject to 199a 
 
 when receiver granted concerning 568 
 
 when receiver may compel assignment of 568 
 
 DRAFT, 
 
 when not entitled to payment in full 274a 
 
 DUTY, (See Functions.) 
 
 of chancellor in appointing receiver, delicate nature of 3 
 
 of receiver, over railway 390 
 
 in partnership cases 538-552 
 
 E. 
 
 EASEMENT, 
 
 of railways in tunnel, receiver for management of 368 
 
 ECCLESIASTICAL COURTS, 
 
 receiver pending contest in 46 
 
 EJECTMENT, 
 
 can not be brought against receiver without leave 139 
 
 permission to bring, receiver not allowed to apply for 181 
 
 leave of court necessary before receiver can bring 208 
 
 against receiver, leave to defend 266 
 
 when receiver refused pending appeal from judgment in 557 
 
 receivers in aid of 575-577 
 
 not usually granted 575 
 
 granted to preserve rents and profits 576^" 
 
 stronger ground after verdict in 577 
 
 granted pending certiorari from state to federal court 577 
 
 ELIGIBILITY, 
 
 to office of receiver 63-81a
 
 1028 INDEX. 
 
 ELIGIBILITY— Continued. Section 
 
 as affected by relationship 67 
 
 by interest with defendant 68 
 
 of solicitor 68 
 
 of one of plaintiffs 68 
 
 person unfamiliar with property not eligible 68 
 
 distant residence as affecting 69 
 
 solicitor, under commission of lunacy, ineligible 70 
 
 in the cause, ineligible 70 
 
 master in chancery ineligible 70 
 
 barrister eligible 70 
 
 as affected by being member of parliament 70 
 
 peer of the realm ineligible 70 
 
 member of reorganization committee 70 
 
 creditor of insolvent 70, 72 
 
 of receiver of corporation, officer ineligible 72, 354 
 
 relaxation of rule 72 
 
 stockholder 72 
 
 officer eligible by statute 72 
 
 another corporation eligible 73 
 
 of trustees as receivers, generally ineligible 74 
 
 when trustee and executor eligible 74 
 
 next friend of infant ineligible 75 
 
 mortgagee and trustee eligible 76 
 
 administrator of deceased partner eligible 78 
 
 nomination in the bill 79 
 
 nomination by consent of parties 79 
 
 stockholder and director of plaintiff corporation as receiver 80 
 
 mortgagee of West India estates eligible 81 
 
 want of, how waived 81a 
 
 EMBEZZLEMENT, 
 
 when loss by, of receiver borne by plaintiff 645 
 
 EMINENT DOMAIN, 
 
 action under right of, by receiver can not be begun without leave 
 
 of court 208 
 
 in what name instituted 209 
 
 right of, not taken away by appointment of receiver 370b 
 
 EMPLOYEES, 
 
 of receiver, interference with, when enjoined 163 
 
 receiver may hire, in management of business 175 
 
 wages of, liability of plaintiff for 389a 
 
 when preferred 394d 
 
 unwarranted discharge of, by receiver of railway prevented by 
 
 court 390, note 
 
 ENGLISH CHANCERY, 
 
 receivers originated in 40
 
 INDEX. 1029 
 
 EQUITABLE INTEREST, ^^2)^ 
 of debtor as ground for receiver ^ 
 
 ESCHEAT, ^ . 
 
 when state may have receiver on, of real property ^y* 
 
 ESTOPPEL 
 
 of defendant, from denying receiver's right to sue in that capacity 235 
 of judgment creditor estops receiver 
 
 EVIDENCE. (See Proof.) 
 
 EXAMINATION, 
 
 of judgment debtor before master 
 
 EXCEPTIONS, . 
 
 to master's selection of receiver, rarely entertained o4 
 
 grounds of entertaining ^ 
 
 English practice on ^ 
 
 EXCLUSION, . 
 
 from partnership, as ground for receiver ^^^ ^^^ 
 
 EXECUTION, 
 
 appointment of receiver an equitable -'' ^ 
 
 receiver's possession can not be interfered with by 141 
 
 unauthorized levy of, on property held by receiver, a contempt 
 
 , . 163 
 
 of court 
 
 not justifiable on ground of illegal or unauthorized appointment Ibi) 
 return of nulla bona before return day, no ground for receiver 
 
 on creditor's bill •. 
 
 levy of, on partnership property, how affected by receivership. .. . 495 
 realty subject to lien of, on termination of receivership 602 
 
 EXECUTORS, 
 
 receiver pending contest between ^ 
 
 when eligible as receivers • 
 
 receiver granted against, before answer, in case of abuse of trust 1U4 
 
 receiver granted against, after decree 110 
 
 assignment of mortgage by, as security for receivership, held good 125 
 
 706-/^4 
 
 receivers over 
 
 courts averse to granting ^j^ 
 
 relief based on doctrine of quia timet 700 
 
 not allowed on slight ground 707 
 
 on information and belief 707 
 
 abuse of trust and waste, ground for 708 
 
 allowed before answer 708 
 
 poverty of, no ground for 
 
 insolvency and misconduct ground for 71U 
 
 bankruptcy ground for 
 
 removal from state ground for 71^ 
 
 allowed although estate in foreign country 713
 
 1030 INDEX. 
 
 EXECUTORS— C(7«/in«r(/. Section 
 
 receivers allowed over executors in foreign country 713 
 
 allowed pending controversy in ecclesiastical court 714 
 
 judgment creditors, when allowed receiver against 715 
 
 when denied receiver 716 
 
 not allowed to interfere with administration 716 
 
 death and refusal to act ground for 718 
 
 misunderstanding between, not sufficient 718 
 
 allowed over realty when plaintiff equitably interested with 
 
 deceased 719 
 
 court will not examine executor's account on application 
 
 for receiver 720 
 
 on removal of receiver executors again ordered to act 723 
 
 appointment of receiver does not remove executor 724 
 
 of receiver, not ordered to account 817 
 
 when entitled to petition for account of payments 817 
 
 entitled to notice of passing of accounts 817 
 
 EXEMPTIONS, 
 
 receiver in creditor's suit takes no title to exempted property 441 
 
 nor to insurance on 442 
 
 nor to j udgment for damages for seizing 442 
 
 EXPENSES, 
 
 of receivership entitled to preference 809 
 
 when charged against plaintiff 809a 
 
 EXTRA COMPENSATION. (See Compensation of Receiver, Ac- 
 counts.) 
 
 EXTRAORDINARY REMEDY, 
 
 receivership considered as 3 
 
 of receiver as compared with injunction 10 
 
 R 
 
 FARM, 
 
 partnership in, when receiver granted 504 
 
 compensation of receiver of 788 
 
 FEDERAL COURTS. (See Courts, United States Courts.) 
 
 FEES, 
 
 of office, receiver refused 21 
 
 when granted 22 
 
 FELLOW-SERVANTS, 
 
 statutes abolishing rule of 395 
 
 FELLOWSHIP. (See College.) 
 
 FINAL DECREE. (See Decree.)
 
 INDEX. 1031 
 
 FORCIBLE ENTRY AND DETAINER, Section 
 
 can not be brought in receiver's name 209 
 
 contrary doctrine recognized 210 
 
 FORECLOSURE. (See Mortgages, Trust Deed.) 
 
 FOREIGN CORPORATIONS. (See Corporations.) 
 
 FOREIGN COUNTRY, 
 
 receivers over property in 44 
 
 receiver to enforce decree in 45 
 
 contempt for resisting enforcement of order for receiver in 170 
 
 mortgaged property in, receiver allowed 648 
 
 FOREIGN RECEIVER. (See Courts.) 
 
 FRANCHISE, 
 
 of bridge company, judgment creditor may have receiver over.. 300 
 receivership of street railway to prevent forfeiture of 371 
 
 FRANCHISE TAX, 
 
 liability of receiver for 140a, note 
 
 FRAUD, 
 
 prevention of, as ground for receiver 11 
 
 general allegations of, insufficient 17 
 
 ground for receiver before answer 105 
 
 for setting aside receiver's sale \99d 
 
 as defense to suit by receiver on stock subscription note 205 
 
 when not defense in action brought by receiver of corporation 246 
 
 general allegations of, insufficient to warrant receiver over cor- 
 poration 292, 295a 
 
 plaintiff's participation in, bars relief 295 
 
 in obtaining real property, when ground for receiver 565 
 
 FUNCTIONS, (See Sales, Suits.) 
 
 of receiver, effect of appeal 29 
 
 as affected by supersedeas 29, 190 
 
 not allowed to pay money except by order of court 142 
 
 general nature of 175-190a 
 
 receiver can make no dividend without order 175 
 
 receiver not an assignee 175 
 
 nor adverse party 175 
 
 not plaintiff's agent, but represents all parties 175 
 
 may not profit at expense of trust 175 
 
 should make inventory 175 
 
 may make admissions 175 
 
 may employ assistants in business 175 
 
 need not present claim of creditor 175, note 
 
 discretion as to management of property 176 
 
 as to accepting bids 176
 
 1032 INDEX. 
 
 FUNCTIO'NS— Continued. Section 
 
 of receiver, degree of discretion required 176 
 
 no discretion in application of funds 178 
 
 must obey all orders of court as to settlement of demands. .. 177 
 
 may compromise claims and actions 177, 336 
 
 can not set off personal claims against person to whom he 
 
 is ordered to refund money 178 
 
 enlargement of 179 
 
 repairs made by receiver, rule as to 180 
 
 receiver not allowed to originate proceedings under English 
 
 and Irish practice 181 
 
 of custodians of funds in litigation, when similar to receivers 182 
 
 receiver attending court exempt from arrest 183 
 
 effect of receivership as regards statutes of limitations 184 
 
 functions not determined by abatement of cause 185 
 
 may collect rents until removal 185 
 
 court may vacate or modify contract by receiver 186 
 
 assignee of contract with receiver 186 
 
 lease of offices by receiver 186 
 
 relative functions of different receivers, second subordinate 
 
 to first 187 
 
 receiver entitled to instruction and advice of court 188 
 
 practice on applying for 188 
 
 entitled to and should obtain counsel 188 
 
 must show necessity for 188 
 
 should not employ counsel of party 188 
 
 receiver may collect money not yet due 189 
 
 receiver's functions suspended by appeal and supersedeas. .29, 190 
 
 should restore property to defendant 190 
 
 court may make administrative orders notwithstanding appeal 
 
 and supersedeas 190a 
 
 sale by receivers 191-199<? 
 
 receiver must conform to mode fixed by lav/ 191 
 
 public and private sale 191 
 
 liens not divested by 191, 199a 
 
 may be conducted by master in chancery or agent for receiver 191 
 
 court has power to sell when necessary 192 
 
 may be decreed though interests of parties not yet ascertained 192 
 
 though no petition therefor filed 192 
 
 sale of steamboat 192 
 
 receiver can not purchase for his own benefit 193 
 
 to receiver by himsel f individually 193, note 
 
 can not purchase at foreclosure or judicial sale 194 ■ 
 
 when receiver allowed to become tenant of lands subject to 
 
 receivership 195 
 
 order for sale can not be questioned collaterally 196 
 
 sale by receiver to pay taxes 197
 
 INDEX. 
 
 1033 
 
 FUNCTIONS— Continued. Section 
 
 sales by receivers, discretion allowed receiver in sale of personalty 198 
 
 sale in bulk ; private sale 198 
 
 irregular sale ; ex parte sale 198 
 
 want of notice of sale 198 
 
 order of sale appealable 198 
 
 order confirming sale of real estate appealable 198 
 
 of real property, implied power to make deed 199 
 
 confirmation of deed by court 199 
 
 subject to encumbrances and liens 199a 
 
 caveat emptor \99b 
 
 confirmation unnecessary 199(r 
 
 when, not refused 199c 
 
 what amounts to 199c, note 
 
 fraudulent sale by receiver 199^ 
 
 must take place at time designated by court 199^ 
 
 of corporate property does not need corporate seal 338 
 
 not set aside because applied for by creditor who was 
 
 also j udge 338 
 
 purchaser acquires no right of action against former officer 356 
 when shareholder estopped from questioning order of sale 356 
 
 receiver's functions limited to state where appointed 239 
 
 of receivers over corporations 313-342a 
 
 over railways 390-394 
 
 in creditors' suits 453^71o 
 
 over partnerships 538-552a 
 
 over real property 618-638a 
 
 GARNISHMENT, 
 
 property subject to, until reduced to receiver's possession 137 
 
 funds in receiver's possession, not subj ect to 151 
 
 otherwise with leave of court 151 
 
 when leave of court unnecessary 151 
 
 assets not yet in possession, subject to 151 
 
 of funds due receiver, a contempt of court 164 
 
 receiver may garnish plaintiff in suit in which he was appointed 230 
 
 GOLD MINES. (See Mines.) 
 
 GOOD WILL, 
 
 of partnership, when receiver ordered to sell with lease 547 
 
 GOVERNOR, 
 
 of state, authorized to appoint receiver 39 
 
 GRATUITY, 
 
 12 
 
 no receiver over • '■^
 
 1034 INDEX. 
 
 H. 
 
 HEIRS-AT-LAW, Section 
 
 receiver not appointed over realty in contest between 554 
 
 bill by, to determine dower, when receiver refused 568 
 
 receiver allowed in action to enforce trusts of will 569 
 
 in possession, when receiver refused 569 
 
 when granted 
 
 contest between, and devisees, when receiver refused 570 
 
 when granted 
 
 when denied receiver as against grantor 571 
 
 opposition by, to administration, no ground for receiver 571 
 
 when allowed receiver as against tenant for life 572 
 
 not allowed receiver as against mortgagee in possession 680 
 
 mav have receiver on death of one trustee and refusal of another 
 
 to act 694 
 
 HORSES, 
 
 when may be let by receiver 481 
 
 HOTEL, 
 
 mortgage of, when receiver allowed 672a 
 
 compensation of receiver for carrying on business of 781, note 
 
 HOUSE, 
 
 on leased ground, defendant's insolvency not ground for re- 
 
 con 
 ceiver over ''"" 
 
 HUSBAND, 
 
 real estate of, sale by receiver subj ect to dower I99a 
 
 doing business in wife's name, when receiver appointed 428 
 
 receiver over, pending divorce suit, does not divest title to part- 
 nership property 
 
 when denied receiver in case of marriage settlement 591 
 
 receiver against, after divorce 591 
 
 purchaser from, when allowed receiver as against settlement upon 
 wife 612 
 
 when devisee allowed receiver as agamst. 
 
 700 
 
 of executrix, mismanagement ground for receiver 708 
 
 I. 
 
 INCUMBRANCES, 
 
 receiver's sale subj ect to ^99o 
 
 INDICTMENT, 
 
 against receiver of railway 393c 
 
 INDORSEMENT, 
 
 of note by receiver, plaintiff claiming through, must show appoint- 
 ment and authority 231, note
 
 INDEX. 1035 
 
 INFANTS, Section 
 
 next friend of, ineligible as receiver 75 
 
 receivers over estates of 725-732 
 
 relief based on doctrine of trusts 725 
 
 j granted in cases of mismanagement 725 
 
 granted when executor has absconded 726 
 
 I refusal of trustees to act, not granted on refusal of one of 
 
 j several 727 
 
 I granted on refusal of one of two 121 
 
 '' granted over stock of goods in possession of mortgagee 728 
 
 eligibility of receiver of, next friend ineligible 729 
 
 trustee and executor ineligible 729 
 
 when eligible 729 
 
 receiver liable for interest on funds of 730 
 
 authorized to relieve poor tenants 731 
 
 not discharged on one of two infants attaining majority 732 
 
 INFORMATION AND BELIEF, 
 
 verification on, insufficient 89 
 
 for appointment of receiver over corporation 346 
 
 INJUNCTIONS, 
 
 relief by interlocutory, bar to receiver without notice 112 
 
 receiver's possession protected by 140 
 
 against interference with receiver's employees 163 
 
 against unauthorized suits against receivers 256 
 
 courts will not grant, against their own receivers 262 
 
 remedy is in receivership cause 262 
 
 mandatory injunction against receiver 262 
 
 1 compared with remedy by receivers 737-748 
 
 points of resemblance between IZ"] 
 
 neither remedy changes title 737 
 
 both rest in j udicial discretion TZl 
 
 auxiliary nature of 738 
 
 ultimate rights not determined 738 
 
 principal difference in effect on possession 739 
 
 in New York 740 
 
 when injunction bars receiver 740 
 
 remedy at law bars either injunction or receiver 741 
 
 long acquiescence a bar to either remedy 742 
 
 one remedy not necessary incident of other 16, 743 
 
 distinct nature of 743 
 
 receiver denied where ample protection by 743 
 
 neither remedy used to determine title to public office 744 
 
 either granted to property in foreign country 745 
 
 both granted in conflict between state and federal courts 746 
 
 injunction granted to protect receiver's possession 747 
 
 J
 
 1036 INDEX. 
 
 INJUNCTIONS— Co«7nM/rrf. Section 
 compared with remedy by receiver, railway enjoined from con- 
 demning land in receiver's possession 747 
 
 unauthorized interference with realty in receiver's posses- 
 sion enj oincd 747 
 
 unauthorized suits against receiver enjoined 140, 747 
 
 by receiver enj oined 748 
 
 authorized suit by receiver not enjoined 748 
 
 in connection with receivers over corporations 749-754 
 
 courts averse to receivers over corporations in absence of 
 
 statute 749 
 
 receiver does not necessarily follow injunction 749 
 
 injunction may follow receiver over corporation as neces- 
 sary adj unct 750 
 
 receiver over corporation equivalent to injunction 750 
 
 proceedings in quo warranto, injunction allowed but receiver 
 
 refused 751 
 
 suit by receiver to collect subscriptions, sharehojder can not 
 
 enj oin 752 
 
 creditors enjoined from separate suits 752 
 
 receiver of railway, may enjoin disposal of land grant 753 
 
 railway enjoined from interfering with 753 
 
 different mortgagees of tolls, receiver and injunction allowed 753 
 
 receiver of national bank may enjoin illegal taxes 753 
 
 receiver of insolvent corporation may enjoin unfair com- 
 petition 753 
 
 receiver of railway may enjoin improper diversion of earnings 754 
 
 in connection with receivers in creditors' suits 755-759 
 
 creditors before judgment entitled to neither remedy 755 
 
 exception to rule in partnership cases 756 
 
 injunction and receiver allowed to protect lien on vessel 757 
 
 allowed against married woman doing business as trader 757 
 
 judgment creditors allowed both remedies 758 
 
 when receiver in creditor's suit denied receiver and injunc- 
 tion in action to set aside assignment 759 
 
 in connection with receivers over partnerships 760-771 
 
 same conditions necessary 760 
 
 case must warrant dissolution 760 
 
 both refused when bill fully denied by answer 760 
 
 neither granted in nominal partnership 761 
 
 when security by defendants allowed in lieu of 761 
 
 destruction of confidence, as ground for 762 
 
 irreconcilable disagreement, ground for 762 
 
 insolvency of partner coupled with fraud, ground for 762 
 
 actual abuse necessary 763 
 
 insolvency of partner after dissolution, ground for 763
 
 INDEX. 1037 
 
 INJUNCTIONS— Con/mMrrf. Section 
 in connection with receivers over partnerships, violation of part- 
 nership articles ground for 764 
 
 receiver not appointed ex parte after inj unction 764 
 
 when allowed in case of farm 765 
 
 foreign mining association 765 
 
 receiver does not necessarily follow preliminary injunction.. 766 
 
 when injunction dependent on fate of application for receiver 766 
 
 when injunction continued with receiver 766 
 
 denial by answer a bar to 767 
 
 assignment by insolvent members after dissolution, ground for 768 
 
 when allowed on death of partner 769 
 
 receiver appointed when defendant partners enjoined from 
 
 collecting debts 770 
 
 injunction against continuing business in same locality on 
 
 sale by receiver 771 
 
 in connection with receivers over real property 772-780 
 
 courts averse to granting, against possession under claim of 
 
 title 772 
 
 long acquiescence in possession as a bar to IIZ 
 
 refused, as between lessor and lessee 774 
 
 on bill by heir to determine dower 775 
 
 purchaser at judicial sale allowed injunction and receiver 
 
 over crops 776 
 
 receiver may have injunction against waste Ill 
 
 to restrain tenant from forbidden use of premises Ill 
 
 when allowed in equitable action for recovery 778 
 
 against tenant for li f e 778 
 
 contract between owner and tenant, relief refused 778 
 
 remainder-man and tenants denied injunction against receiver 
 
 dispossessing them 779 
 
 allowed as between co-tenants 780 
 
 dissolution of, compared with removal of receiver 826 
 
 INNOCENT PURCHASERS, 
 
 rights of, not determined on order to surrender possession to 
 
 receiver 33 
 
 INSANE HOSPITAL, 
 
 when receiver directed to sell lease and good will of 547 
 
 INSOLVENCY, 
 
 of defendant, as ground for receiver 11 
 
 not sufficient ground of itself 18 
 
 when receiver appointed though no showing of 18 
 
 as ground for collateral attack on appointment of receiver. .. 39c 
 
 receiver refused on insufficient affidavit of 106 
 
 of corporation not alone sufficient for receiver 292
 
 1038 INDEX. 
 
 INSOLVENCY— Continued. Section 
 
 of defendant insurance company 304 
 
 when not sufficient for receiver over real estate 559 
 
 when sufficient 566 
 
 of partnership, as ground for receiver 484 
 
 of individual partner 496, 511 
 
 of tenant in common, as ground for receiver 604 
 
 of vendor of realty, not necessary to entitle vendee to receiver. . 610 
 
 of mortgagor, as ground for receiver 666 
 
 must be clearly shown 667 
 
 when, immaterial 643 
 
 as ground for receiver in aid of mortgagee of chattels 647 
 
 in case of leasehold mortgage 676 
 
 of canal company, ground for receiver in aid of bondholders.... 678 
 
 of executor, as ground for receiver 710 
 
 INSOLVENT CORPORATION. (See Bank, Corporation, Insur- 
 ance Company.) 
 
 INSTRUCTIONS, 
 
 receiver entitled to, of court 188 
 
 discretion of court in giving, not disturbed on appeal 188 
 
 petition for, defendant not entitled to notice of 188 
 
 INSURANCE, 
 
 on exempted property, receiver of debtor not entitled to 442 
 
 on mortgaged premises, neglect of, ground for receiver 672 
 
 when not ground for 672 
 
 INSURANCE COMPANY, 
 
 receiver of, when can not sue on premium note 204 
 
 pleadings in actions by receivers of, on premium notes 236 
 
 what may be set off in such actions 247 
 
 receiver of, can not dispense with conditions of policy as to loss 264 
 
 mismanagement of funds of, ground for receiver 304 
 
 receiver refused over foreign, when no assets within state 304 
 
 receiver may sue on note given for policy 316 
 
 suit by receiver of, on premium note, defense to 318 
 
 note surrendered and canceled by, receiver can not sue 319 
 
 dividends improperly paid by, receiver may recover back 321 
 
 creditors enjoined from suing for 321 
 
 assessments on premium notes, receiver may sue for 326 
 
 may sue in foreign state 326 
 
 what receiver must allege and prove 327 
 
 receiver must make assessment and apportionment 328 
 
 receiver takes place of directors 329 
 
 sanction and approval of court 329 
 
 receiver acts ministerially, not judicially 330 
 
 may make new assessment, or re-assessment 330 
 
 approval by court not a judicial act 330
 
 INDEX. 1039 
 
 INSURANCE COMPANY— Continued. Section 
 
 assessments on premium notes, form of, when general on all notes 331 
 
 proof as to losses, what required 331 
 
 receiver may sue for, to pay equitable claims for losses 332 
 
 defense by maker, what denied 332 
 
 receiver of, power in adj usting losses 334 
 
 can not waive express stipulations of policy 334 
 
 allegations of insolvency as ground for 346 
 
 INSURANCE POLICY, 
 
 receiver can not waive express stipulations of 334 
 
 INTEREST, 
 
 of plaintiff, requisites of, to warrant receiver 12 
 
 of defendant, must be subject to execution to warrant a receiver 31 
 
 on funds due from receiver, surety liable for 131 
 
 liability for, when discretionary with court 131 
 
 non-payment of, as ground for receiver over railway 376 
 
 against receiver of railway, when disallowed 394d, 394/fe 
 
 over mortgaged premises 649 
 
 effect of payment of, by receiver to mortgagee 649 
 
 on funds of infant, when receiver liable for 730 
 
 liability of receiver for, on mingling funds 803 
 
 on claim of creditor 803 
 
 on loaning funds 804 
 
 on failure to invest funds as ordered by court 804 
 
 INTERLOCUTORY ORDER, 
 
 not appealable 26 
 
 appeals from, in Michigan 27 
 
 INTERPLEADER, 
 
 bill of, receiver may bring against different claimants 263 
 
 INTERVENTION, 
 
 allegations in petitions of 254& 
 
 practice on petitions of 254c 
 
 INVENTORY, 
 
 a receiver should make 175 
 
 IRISH CHANCERY, 
 
 receiver favorite remedy in 40 
 
 IRREPARABLE LOSS, 
 
 must be shown as ground for receiver 3 
 
 J. 
 
 JEWELRY, 
 
 receiver appointed over, on creditor's bill 432 
 
 JUDGE. (See Court.)
 
 1040 INDEX. 
 
 JUDGEMENT, (See Creditors, Judgment Creditors.) Section 
 
 in suit by receivers in one state, a bar to subsequent action in 
 
 another state 206 
 
 in action by receiver, bar to subsequent suit for same cause of 
 
 action 219 
 
 against receiver, only enforceable out of funds in his hands as 
 
 receiver 255 
 
 sale of, by receiver, with covenant, no personal liability 272 
 
 against receiver for collection of taxes, how entered 340 
 
 against receiver of railway for inj uries 395 
 
 creditors not entitled to receiver or injunction before 406 
 
 except in partnership cases 407 
 
 in case of lien on vessel 408 
 
 in action to charge property of married woman with her 
 
 debts 409 
 
 no lien on debtor's property after assignment to receiver 423 
 
 realty subject to lien of, on termination of receiver's functions.. 602 
 
 JUDGMENT CREDITORS 
 
 receivers in aid of 399-471a 
 
 principles on which the relief is granted 399-439& 
 
 inadequacy of legal remedy the leading principle 399 
 
 American law shaped by New York courts 400 
 
 former New York chancery system 400 
 
 defendant's want of property no objection 400 
 
 duty of j udgment creditor to apply for 400 
 
 no objection that defendant had not answered 400 
 
 appointed on proceedings supplementary to execution 
 
 under New York code 401 
 
 almost a matter of course 401 
 
 object of 401 
 
 remedy a cumulative one 401 
 
 creditor must use diligence 402 
 
 delay ground for refusing 402 
 
 acquiescence in debtor's possession, when ground for 
 
 refusing 402 
 
 remedy at law must be exhausted 403 
 
 not granted when plaintiff can levy execution on debt- 
 or's property 403 
 
 not granted when debtor would have paid judgment if 
 
 notified 403 
 
 granted where debtor's interest in property is purely 
 
 equitable 403 
 
 not granted to collect municipal tax 403a 
 
 not granted on execution returned nulla bona before 
 
 return day 404 
 
 when appointed over joint property of two defendants on 
 
 judgment against one 405
 
 INDEX. 1041 
 
 JUDGMENT CREDITORS— Conhnw^rf. Section 
 
 receivers in aid of, refused when not alleged that execution was 
 
 directed to sheriff's county 405 
 
 creditor before judgment not entitled to injunction or 
 
 receiver 406 
 
 when entitled to, exception in partnership cases 407 
 
 in case of lien on vessel 408 
 
 in action to charge property of married woman 
 
 with her debts 409 
 
 fraudulent assignment by debtor ground for 411 
 
 appointment of, does not determine rights of assignee 
 
 under assignment from debtor 411 
 
 allowed on refusal of assignee to act 412 
 
 on mismanagement by assignee 412 
 
 assignment after receivership does not defeat right to 
 
 receiver 412 
 
 assignment before receivership 412, note 
 
 no objection to, that property is claimed by adverse 
 
 claimants 413 
 
 denial of property no objection to reference to appoint.. 414 
 appointed, though debtor has only an equity of re- 
 demption 414 
 
 not appointed to attack fraudulent assignment which may 
 
 be done by creditor 414 
 
 reference to master to appoint 415 
 
 practice under 415 
 
 examination under 415 
 
 courts averse to granting, as against third parties claiming real 
 
 estate 416 
 
 granted over rents of debtor's building 417 
 
 when granted over real estate 418 
 
 not appointed as against mortgagee in possession 419 
 
 when appointed as against mortgagee of chattels 420 
 
 creditors may maintain action to set aside fraudulent mort- 
 gage by debtor 421 
 
 real estate in possession of, in custody of court 422 
 
 when title to realty vests in 423 
 
 purchaser at sale by, when takes title as against purchaser at 
 
 sheriff's sale 423 
 
 when subordinate to purchaser at sheriff's sale 424 
 
 takes real property subject to judgment liens 424 
 
 when discharge in bankruptcy no bar to appointing 425 
 
 not granted when it would interfere with administration of 
 
 debtor's estate 427 
 
 granted w~here husband conducting business in name of wife 428 
 
 not directed to make payments until claims allowed 428 
 
 discretion of court in ordering sale by 429 
 
 Receivers — 66.
 
 1042 INDEX. 
 
 JUDGMENT CREDITORS— Continued. Section 
 receivers in aid of, when not appointed over all of debtor's estate 429 
 may be extended over remainder in behalf of other creditor. . 429 
 payment by, priority as between j iidgment creditor and mort- 
 gagee 430 
 
 when allowed after bill dismissed on demurrer 431 
 
 nature of property over which appointed , 432 
 
 may be appointed to take charge of rings and jewelry 432 
 
 of interest in firm 432 
 
 to collect rents of benefice 432 
 
 of seats in produce and stock exchange 432 
 
 not appointed when answer alleges nothing due 433 
 
 application for, delayed to examine regularity of judgment . . 433 
 
 waiver of answer under oath no bar to 434 
 
 when defendant required to pay fund into court 435 
 
 courts averse to appointing ex parte 436 
 
 continued to protect prior creditors notwithstanding plaintiff 
 
 dismisses bill 437 
 
 appointed in proceeding to enforce decree for alimony 438 
 
 action by, to set aside conveyance made to defeat alimony 438 
 
 allowed where only security for judgment a life estate 439 
 
 Supreme Court of Judicature Act 439a 
 
 no preference allowed between creditors of same class . . . 439& 
 
 of the receiver's title 440-452 
 
 appointment does not divest prior liens 440 
 
 receiver acquires not better title than debtor 440 
 
 receiver acquires no title to exempted property 441 
 
 nor to insurance on exempted property 442 
 
 assignment to receiver 443 
 
 what passes to receiver under 444 
 
 should except exempted property 444 
 
 right of action for tort does not pass under 444 
 
 irregularities in appointment no justification for refusal to 
 
 assign 445 
 
 debtors compelled to execute, though swearing to no property 446 
 
 partakes of nature of mortgage 446 
 
 re-assignment not necessary 446 
 
 no assignment necessary under New York code 447 
 
 receiver takes only right of action as to property fraudulently 
 
 assigned 447 
 
 priority over judgment creditor subsequently levying 448 
 
 title not defeated by delay in taking possession 448 
 
 title to choses in action as between receiver and purchaser 449 
 
 when not entitled to trust fund 450 
 
 takes title to estate by curtesy 451 
 
 acquires no title when debtor dies before appointment 452 
 
 of the receiver's functions and rights of action 453-471o 
 
 functions usually fixed by order of appointment 453
 
 INDEX. 1043 
 
 JUDGMENT CREDITORS— Continued. Section 
 
 rights of action under New York chancery system 453 
 
 under code of procedure 454 
 
 receivers may sue to set aside fraudulent assignments 454 
 
 should join all fraudulent grantees 454 
 
 may remove cloud from title 454 
 
 may not enforce trust 454 
 
 when may not maintain action to set aside fraudulent mort- 
 gage 454 
 
 limit to receiver's right of action 455 
 
 can only sue to extent necessary to satisfy judgments 455 
 
 can not join rights of subsequent creditors 455 
 
 estoppel of creditor estops receiver 456 
 
 * can not take forcible possession of property assigned 457 
 
 title claimed by third parties not determined on summary 
 
 application 457 
 
 •when assignees permitted to retain possession pending action 458 
 
 when not entitled to injunction and receiver 458 
 
 suit by, to set aside assignment for benefit of creditors. .458-460 
 
 what receiver must allege 459 
 
 effect of order of appointment 459 
 
 when receiver can not maintain suit against purchaser. . 460 
 
 priority as between different j udgment creditors 461 
 
 receivers in aid of proceedings in bankruptcy 462 
 
 can not allow preference 462 
 
 rights of action, can not enforce subscription to capital stock.. 463 
 
 defendant can not set off judgment against receiver 464 
 
 receiver entitled to letters patent 464a 
 
 effect of sale of letters patent by receiver 464a 
 
 entitled to membership in exchange 464a 
 
 may sue for proceeds of note in hands of third parties 465 
 
 can not by motion reach interest of debtor as devisee under 
 
 will 466 
 
 may sue debtor for conversion of property 467 
 
 when can maintain no action concerning mortgaged chattels 467 
 can not recover of debtor money received subsequent to 
 
 appointment 467 
 
 may recover usury paid by debtor 468 
 
 when can not recover for property sold at sheriff's sale 469 
 
 defendant can not object to irregularities in receiver's ap- 
 
 pointment 
 
 470 
 
 when directed to pay rents to landlord 470 
 
 no extraterritorial rights of action 471 
 
 effect of death of parties or of receiver 471a 
 
 practice in such case 471a 
 
 not prejudiced by receiver over debtor's realty in aid of in- 
 cumbrancer 567
 
 1044 INDEX. 
 
 JUDGMENT CREDITORS— Co;!/j««r(f. Section 
 
 receiver for, may be extended to protect mortgagee 662 
 
 receiver not granted for, as against mortgagee in possession 680, 687 
 
 when allowed receiver against executor 715 
 
 when denied receiver against administrator 716 
 
 JURISDICTION, 
 
 equitable nature of 40 
 
 of courts appointing receivers in this country 41 
 
 original nature of 41 
 
 as to foreign property 44 
 
 of court first acting, exclusive nature of 48, 50 
 
 relative, of state and federal courts 50-62a 
 
 of United States courts in bankruptcy, when subordinate to 
 
 state courts 51, 52 
 
 when asserted, to exclusion of state courts, over insolvent 
 
 corporation 53 
 
 of United States courts, in foreclosing trust deed against rail- 
 road, when exclusive 54 
 
 of state and federal courts, conflict between, a ground for re- 
 ceiver 58 
 
 of receiver, as to extraterritorial rights of action 239-244a 
 
 of court, receiver not ordered to sell pending appeal concerning. . 543 
 
 JURY, 
 
 trial by, when discretionary 2S4& 
 
 not allowed on receiver's accounts 797 
 
 L. 
 
 LACHES, 
 
 bars right to receiver 14 
 
 of receiver in foreclosure 14 
 
 of j udgment creditor, when a bar to relief 402 
 
 LAND. (See Real Property.) 
 
 LAND GRANT, 
 
 to railway, injunction against disposal of 373 
 
 receiver granted to prevent lapsing of 386 
 
 LANDLORD, 
 
 can not distrain for rent when goods have passed into receiver's 
 
 possession 156 
 
 guilty of contempt in so distraining 163 
 
 when receiver directed to pay sub-rents to 470 
 
 when denied receiver as against lessee 562 
 
 LAND SURVEYOR, 
 
 eligible as receiver 69
 
 INDEX. 1045 
 
 LEASE, (See Liabilities.) Section 
 
 of receivership property 134^ note 
 
 of offices by receiver, unauthorized 186 
 
 receiver not an assignee of 273, 394?n 
 
 by receiver of railway company 390a 
 
 when receiver of partnership ordered to sell with good will 547 
 
 action to forfeit, when receiver refused 562 
 
 assignee of, denied receiver 579 
 
 LEASEHOLDS, 
 
 receivers over, when allowed 578 
 
 landlord may re-enter without leave of court 581 
 
 mortgage of, receiver allowed in foreclosure 665 
 
 when allowed before answer 665 
 
 allowed when mortgagor insolvent 676 
 
 LEAVE OF COURT, 
 
 receiver must obtain, before instituting suit 208 
 
 may be granted conditionally 208 
 
 to sue receiver, construction of order granting 141 
 
 receiver may be garnished by 151 
 
 when not necessary 151 
 
 action can not be maintained without 254 
 
 must be averred 254 
 
 exceptions to the rule 254 
 
 rule as changed by act of congress 254, note 
 
 conflict of authority whether want of, is jurisdictional 254a 
 
 presumptions as to 254a 
 
 want of, availability of, on appeal 254o 
 
 in collateral suit 254a 
 
 dismissal of action begun without 254b 
 
 granting of, discretionary 2546 
 
 no appeal from order granting 2546 
 
 revocation of order granting 254^ 
 
 when not revoked 254d 
 
 order granting, may be made conditional 254d 
 
 actions brought without, may be enj oined 256 
 
 want of, waived by appearance of receiver 261 
 
 what notice of application for, necessary 265 
 
 not necessary under act of congress 3956 
 
 construction of the act 3956 
 
 to receiver to defend ejectment against him 266 
 
 LEGATEE, 
 
 of partner, when entitled to receiver 535 
 
 under will, when denied receiver 569 
 
 LEGISLATURE, 
 
 may authorize governor to appoint receiver 39
 
 1046 INDEX. 
 
 LESSEE, Section 
 of real property, receiver refused in behalf of lessor 562 
 
 LETTERS PATENT. (See Patent Right.) 
 
 LEVY, 
 
 of execution, on property held by receiver, a contempt of court . . . 163 
 
 by sheriff, when receiver's title subject to 440 
 
 on partnership property, when not affected by receivership 495 
 
 LIABILITIES, (See Appeal Bond, Bond, Damages.) 
 
 of plaintiff for wrongful appointment 2>9d 
 
 of receivers 269-286fe 
 
 liable directly to court appointing him 269 
 
 liability to third persons enforced by court 269 
 
 improper payments 269 
 
 can not be called to account by another court 269 
 
 receiver and not plaintiff liable for injury to property in 
 
 his possession 270 
 
 liability can not be enforced without leave of court 271 
 
 not individually liable on covenant as receiver 272 
 
 when personally liable on note given in carrying on business 272 
 
 not liable on covenant of person over whom appointed 273 
 
 when liable for rent 273 
 
 becomes liable by adopting covenant 273o 
 
 election to adopt lease '. 273a 
 
 when not personally liable for rent 273a 
 
 rule further illustrated 27Zb 
 
 not bound by contract of former receiver 272)b 
 
 election to adopt rests in discretion 273& 
 
 liability for rent, stipulated or reasonable rental value 273c 
 
 receiver can not impair contract liability of original party . . . 273d 
 
 loss of funds by failure of bank 274 
 
 bank not ineligible as depositary because a creditor 274 
 
 of receiver of bank to pay in full 274a 
 
 to pay check or draft 274a 
 
 not liable for loss without his fault 275 
 
 bills of exchange of failing tradesman 275 
 
 liable for use of property in private business 276 
 
 not liable for speculative profits 276 
 
 liable for forcibly taking mortgaged property 277 
 
 liable for tort 277 
 
 to court, does not terminate until discharge 278 
 
 appointing receiver trustee in insolvent proceedings does not 
 
 relieve him from liability as receiver 278 
 
 receivers of railway liable to action in another state for 
 
 breach of duty as common carriers 279 
 
 for failing to pay money into court 280 
 
 limit should not be placed on term of imprisonment . . . 280
 
 INDEX. 1047 
 
 LIABILITIES— Continued. Section 
 
 of receivers, not liable for rent of premises to firm 281 
 
 liable for payment to wrong persons 282 
 
 when not liable for loss through real estate remaining in 
 
 owner's possession 283 
 
 for loss of rents by solicitor assuming to act as receiver 284 
 
 liability extended to administrator of receiver 285 
 
 not released by dismissal of bill 286 
 
 damages for tort of receiver's agent a charge on fund 286a 
 
 liability for wrongful conversion of estate 2S6b 
 
 enforced by supplemental bill in receivership cause 2S6b 
 
 of receiver over railway, for inj uries 395 
 
 action against, for injuries 393 
 
 j udgment against, only in official capacity 395 
 
 as common carrier, in another state 398 
 
 when liable for interest on infant's funds 730 
 
 LICENSE, 
 
 of market stall, receiver refused 32 
 
 LIEN, (See Mechanic's Lien.) 
 
 not created by appointment of receiver 5 
 
 of plaintiff, as ground for receiver 11 
 
 of creditors, not disturbed by foreign receiver 47 
 
 not divested by appointment of receiver 138 
 
 possession of receiver subj ect to 138 
 
 of judgment creditor, protected against receiver 138 
 
 of attorneys for services, receiver takes fund subject to 138 
 
 of municipality for taxes, receiver takes property subject to 138 
 
 can not be obtained on property in possession of receiver 138 
 
 not divested by receiver's sale 191, 199a 
 
 of judgment creditor on real estate of corporation, not divested 
 
 by receiver itt limine 302, 348, 349 
 
 of vendor for land sold railway, receiver in aid of 367 
 
 on freight and earnings of vessel, receiver to protect 408 
 
 receiver of debtor takes realty subj ect to 424 
 
 not divested by appointment of receiver on creditor's bill 440 
 
 of judgment creditors of partnerships, how affected by receiv- 
 ership "^^J 
 
 of judgment, realty subject to, on termination of receiver's 
 
 functions "^■^ 
 
 LIMITATIONS. (See Statute of Limitations.) 
 
 LIMITED PARTNERSHIP, 
 
 creditors of, when entitled to receiver 407, 508 
 
 LIS PENDENS, 
 
 receiver refused when notice of, sufficient to prevent transfer of 
 
 real property ^"^
 
 1048 INDEX, 
 
 LOSS. (See Irreparable Loss.) Section 
 
 LUMBER, 
 
 partnership in, when receiver allowed 500 
 
 LUNATICS, 
 
 receivers over estates of 733-736 
 
 when allowed 733 
 
 required to surrender to administrator 733 
 
 relief discretionary 734 
 
 refused where rival claimants 734 
 
 solicitor under commission ineligible as 735 
 
 when required to account 736 
 
 reference to master to ascertain condition of estate 736 
 
 M. 
 
 MANAGEMENT, 
 
 of business by receiver, principles regulating 36 
 
 discretionary with court 36 
 
 preferring debts incurred in 36 
 
 may hire employees in 175 
 
 of partnership business, not province of court 480 
 
 to what extent may be continued by receiver pending liti- 
 gation 481 
 
 MANDAMUS, 
 
 when a bar to receiver 32 
 
 refused against receiver of railway 374 
 
 MANDATORY INJUNCTION. (See Injunction.) 
 
 MARKET, 
 
 stall in, receiver refused 32 
 
 MARRIAGE SETTLEMENTS, 
 
 when receiver denied in case of 591 
 
 after marriage, when receiver allowed against 612 
 
 MARRIED WOMAN, 
 
 in suit to charge property of, with her debts, receiver granted. .. . 409 
 
 MARSHAL, 
 
 will not be directed to take property out of receiver's hands 52 
 
 MASTER IN CHANCERY, 
 
 reference to, to appoint receiver 63 
 
 selection of receiver by, courts averse to interfering with 64 
 
 grounds of interference 64 
 
 when required to revise report 64 
 
 ineligible as receiver 70 
 
 master and clerk of court, ordered to act as receiver 71 
 
 I
 
 INDEX. 1049 
 
 MASTER IN CHA'^CERY— Continued. Section 
 
 may conduct sale for receiver 191 
 
 reference to, to appoint, practice on 90 
 
 when appointment complete 90 
 
 objections to appointment 90 
 
 as to repairs by receiver 180 
 
 on creditors' bills, to appoint receiver 415 
 
 practice under 415 
 
 examination under 415 
 
 receiver required to produce books of account before 544 
 
 reference to, in case of receiver over lunatic 736 
 
 exceptions to report of, on receiver's compensation 784 
 
 report of, on receiver's accounts 800, 801 
 
 how reviewed 801 
 
 courts investigate principles of, but not items 800, 801 
 
 distinction as to 801 
 
 exceptions to 801 
 
 MATERIALS, 
 
 furnished railway, creditors not entitled to priority 379 
 
 MECHANIC'S LIEN, (See Lien.) 
 
 against property in receiver's possession 171 
 
 not divested by receiver's sale 191, 199a 
 
 when not divested by sale of railway 398^ 
 
 receiver denied in action to enforce 586 
 
 MEMBER OF PARLIAMENT, 
 
 eligibility as receiver considered 70 
 
 MERITS, 
 
 of cause, not decided on application for receiver 6 
 
 MILLS, 
 
 wharfage in front of, receiver of mills entitled to 158 
 
 receiver as between tenants in common of 604 
 
 MINES, 
 
 receiver on difficulty of managing by co-tenants 606 
 
 controversy between owners 606 
 
 purchaser of gold mine at mortgage sale, when granted receiver 614 
 purchaser of colliery allowed receiver on bill to set aside pur- 
 chase for fraud 615 
 
 receiver of, when discharged 615 
 
 MISMANAGEMENT, 
 
 by receiver ground for refusal of compensation 790 
 
 for refusal of fees of receiver's counsel 805 
 
 MORTGAGES, 
 
 receiver over mortgaged premises, not dispossessed by assignee 
 in bankruptcy 52
 
 1050 INDEX. 
 
 MORTGAGES— ro«Ymj(r(/. Section 
 
 prior jurisdiction of United States courts respected by state court 54 
 
 receiver of rents appointed after decree in foreclosure 110 
 
 when receiver refused after decree for redemption 110 
 
 assignment of, as security for receivership, held good 125 
 
 lien of unrecorded, when not valid as against receiver 138 
 
 directions as to payment, receiver not allowed to apply for 181 
 
 not due, receiver may collect and discharge 189 
 
 receiver holding equity of redemption can take no benefit by 
 
 purchasing at foreclosure sale 194 
 
 to receivers of bank, may be foreclosed by successor 215 
 
 may be foreclosed by receivers of another state 243 
 
 assignment of, to receiver, right of action under, in foreign state 244 
 appointment of receiver over one defendant in foreclosure suit, 
 
 no bar to continuing suit 259 
 
 foreclosure of mortgage given by corporation, when receivers 
 
 need not be made defendants 260 
 
 receiver liable as trespasser for forcibly taking mortgaged prop- 
 erty 277 
 
 of railway, receivers in aid of 376-389o 
 
 inadequacy of security and insolvency as ground for 376 
 
 appointment not a matter of course 377 
 
 not granted where it would cause irreparable injury Zll 
 
 proceedings for, regarded as in rem 378 
 
 right of, limited to property mortgaged 378 
 
 creditors for materials and supplies not entitled to priority 379 
 
 receiver over tolls 380 
 
 principles governing 381 
 
 right to, as between different mortgagees of tolls ..382, 385 
 
 mortgagees pari passu, not allowed preference 383, 385 
 
 granted in behalf of state holding mortgage 384 
 
 validity of bonds not determined on application for 387 
 
 relative jurisdiction of state and federal courts 388 
 
 right to discharge, on payment of mortgage 389 
 
 may pay what debts 391 
 
 to delay creditors, no ground for receiver before judgment 406 
 
 fraudulent, by debtor, creditors may set aside notwithstanding 
 
 receiver 421 
 
 of chattels, when receiver has no right of action 467 
 
 receivers in aid of foreclosure of 639-691a 
 
 principles governing the relief 639-665a 
 
 the j urisdiction cautiously exercised 639 
 
 only granted in strong case 639 
 
 legal mortgagee with right of entry not entitled to 640 
 
 may have, when can not take possession 641 
 
 refusal of trustee to take possession 641 
 
 when receiver refused 641o
 
 INDEX. 1051 
 
 MORTGAGES— Contimted. Section 
 
 receiver in aid of foreclosure of, rents and profits, mortgagee 
 
 not entitled to receiver of, when security adequate . . 642 
 
 test as to adequacy of security 642 
 
 not entitled to, when mortgage not due 642 
 
 rents and profits of railway 642 
 
 refused when property already in custodia legis 642 
 
 refused when improvements destroyed by fire 642 
 
 entitled to, when security inadequate and mortgagor in- 
 solvent 643 
 
 mortgagee entitled to rents in receiver's hands to make 
 
 up deficiency 643 
 
 express pledge of rents 643 
 
 when insolvency of mortgagor immaterial 643 
 
 insurance and taxes 643 
 
 past-due rents 643 
 
 when entitled to unpaid rents 644 
 
 liability for waste of, by receiver 645 
 
 crops on mortgaged premises, receiver over 646 
 
 receiver not entitled to severed crops 646 
 
 when refused as to crops 646 
 
 crops grown by receiver 646 
 
 when appointed as to mortgage of chattels 647 
 
 attachment sale of chattels invalid as against prior mortgagee 647 
 may be appointed though mortgaged property in foreign 
 
 country 648 
 
 allowed when interest in default 649 
 
 when allowed before default in case of railway company 371 
 
 effect of payment of interest by receiver to mortgagee 649 
 
 receiver represents all parties in interest 650 
 
 assignees in bankruptcy of mortgagor 650 
 
 mortgagee appointed, duties of 651 
 
 order to lease premises 651 
 
 mortgagee authorized to appoint by mortgage 652 
 
 receiver mortgagor's agent in such cases 652 
 
 effect of mortgagor attorning to receiver 652 
 
 English statute authorizing 652 
 
 Supreme Court of Judicature Act 652a 
 
 rights of debenture holders 652a 
 
 not appointed over property of soldiers when prohibited by 
 
 statute 653 
 
 appointed in behalf of mortgagor to keep down interest 654 
 
 mortgagee in possession not divested by receiver 654 
 
 when receiver appointed 654 
 
 may be appointed after decree in case of emergency 655 
 
 when refused after decree 655
 
 1052 INDEX. 
 
 MORTGAGES— Conh'inicd. Section 
 
 mortgagee not party, can not divest receiver's possession by notice 
 
 to tenants 656 
 
 mortgagor not entitled to rents paid into court 656 
 
 mortgagor entitled to pay debt and have receiver discharged.... 657 
 
 entitled to discharge on sale for full amount due 657 
 
 when owner of equity of redemption entitled to rents collected 
 
 by receiver 657 
 
 equitable mortgages, relief granted 658 
 
 deposit of title deeds as security 658 
 
 holders of municipal bonds secured by rates and assessments, 
 
 not entitled to 658 
 
 equitable mortgagee of private corporation allowed receiver 659 
 
 official liquidator appointed 659 
 
 petition for, should show who is in possession 660 
 
 reasons for 660 
 
 on decree pro confesso amount due should be shown 660 
 
 railway mortgages, receivers granted on same principles 661 
 
 inadequacy of security and insolvency, ground for 661 
 
 receiver in behalf of judgment creditor extended in behalf of 
 
 mortgagee 662 
 
 need not be appointed over entire estate 663 
 
 defense of usury sworn on information 664 
 
 mortgage of leasehold, receiver allowed 665 
 
 when allowed before answer 665 
 
 allowed against administrator of mortgagor 665a 
 
 receiver of rents pending appeal from foreclosure decree.... 665« 
 
 inadequacy of security and insolvency of mortgagor 666-678Z> 
 
 inadequacy principal ground for 666 
 
 elements of inadequacy 666 
 
 general rule that inadequacy and insolvency must be shown 666 
 
 satisfactory proof required 667 
 
 inadequacy confined to particular mortgage in question 667 
 
 doctrine of the Irish Chancery 668 
 
 in New Jersey, the general rule not recognized 669 
 
 fraud and bad faith ground for 670 
 
 change or depreciation in property 670 
 
 transfer to insolvent person ground for 670 
 
 assignment to creditors, when not ground for 670 
 
 the doctrine in Mississippi 671 
 
 the doctrine in Minnesota 671o! 
 
 non-payment of taxes ground for 672 
 
 of insurance, ground for 672 
 
 when not ground for 672 
 
 contest whether property covered by mortgage ground for. . . 672 
 
 of hotel property 672(r 
 
 doctrine in Nevada, general rule recognized 673
 
 INDEX. 1053 
 
 MORTGAGES — Continued. Section 
 
 Inadequacy of security and insolvency of mortgagor, doctrine 
 in Nevada, mortgagees purchasing at foreclosure sale 
 
 allowed receiver 673 
 
 doctrine in California, mortgagee not allowed receiver for 
 
 inadequacy and insolvency 674 
 
 doctrine in Iowa 674 
 
 receiver not allowed in South Carolina 674a 
 
 when allowed though only portion of debt due 675 
 
 not allowed if doubtful as to amount due and inadequacy 
 
 denied by answer 675 
 
 insolvency ground for receiver in case of mortgage over 
 
 leasehold 676 
 
 mortgage of chattels 676 
 
 no objection that premises are in possession of tenant .... 677 
 
 bondholders of canal company allowed receiver on insolvency 678 
 
 when allowed in behalf of wife 678a 
 
 exemption of rents 678b 
 
 receivers as between different mortgagees 679-691a 
 
 prior mortgagee in possession, not granted as against 679 
 
 not granted on creditor's bill as against 680 
 
 on bill by heirs-at-Iaw 680 
 
 granted when nothing appears due mortgagee 681 
 
 prior mortgagee not in possession, receiver allowed in aid of 
 
 subsequent mortgagee 682 
 
 consent of, not necessary 682 
 
 can only prevent by asserting right and taking possession 682 
 
 granted annuitants as against 683 
 
 need not be made parties 683 
 
 receiver granted though mortgagor out of jurisdiction. . . 684 
 
 appointment without prejudice to prior interests 685 
 
 for whose benefit made 685 
 
 no objection that other mortgagees are satisfied 686 
 
 that plaintiff represents only one-ninth of debt 686 
 
 not appointed for judgment creditor as against puisne mort- 
 gagee in possession 687 
 
 rents, when j unior mortgagee entitled to 688 
 
 when prior mortgagee entitled to 688 
 
 effect of extending receiver 688 
 
 subrogation 688 
 
 different doctrine in Virginia 689 
 
 assigned to junior mortgagee, prior mortgagee can not 
 
 have receiver of 690 
 
 receiver of, allowed on foreclosure by junior mortgagee 691 
 
 tenants required to attorn to receiver 691 
 
 consolidation of actions to foreclose different mortgages 691a
 
 1054 INDEX. 
 
 MORTGAGEE, (See Mortcaces.) Section 
 
 when eligible as receiver 76 
 
 of West India estates, eligible 81 
 
 appointed without security 118 
 
 in possession, receiver refused as against, on creditor's bill 419 
 
 of chattels, receiver appointed in behalf of creditors against.... 420 
 
 priority of payment as against judgment creditor 430 
 
 entitled to rents in receiver's hands to make up deficiency 643 
 
 right of, to unpaid rents 644 
 
 duty of, when appointed receiver 651 
 
 in possession, not divested by receiver 654 
 
 may have receiver for judgment creditor extended to his mortgage 662 
 
 receivers as between different mortgagees 679-691o 
 
 prior, in possession, receiver not granted against 679 
 
 not in possession, receiver allowed in aid of subsequent 
 
 mortgagee 682 
 
 of goods of infant, receiver against 728 
 
 when entitled to apply for receiver's discharge 839 
 
 MORTGAGOR, (See Mortgagee, Mortgages.) 
 
 when receiver appointed in behalf of one of several 654 
 
 entitled to pay debt and have receiver discharged 657 
 
 MOTION, 
 
 irregular to appoint receiver without 84 
 
 affidavits in support of 84 
 
 rehearing of, when allowed 91, 92 
 
 when not allowed in creditor's suit 92 
 
 demurrer to bill, when no objection on hearing of 92 
 
 may be entertained, although plea to amended bill undisposed of 95 
 
 to substitute, regularity of proceedings can not be questioned.... 97 
 
 for receiver before answer, heard on affidavits 107 
 
 defendant's affidavit admissible against 107 
 
 to take action by receiver, not usually allowed under English and 
 
 Irish practice 181 
 
 MUNICIPAL CORPORATION, 
 
 enjoined from interfering with receiver's possession of wharfage 158 
 
 creditor of, not entitled to receiver to collect tax 403a 
 
 MUTUAL BENEFIT ASSOCIATION. (See Corporations.) 
 
 N. 
 
 NAME. (See Suit.) 
 
 NATIONAL BANKS, 
 
 action by receiver of, allegations required as to his appointment 237 
 
 receivers over 358-364a 
 
 appointed by comptroller 358 
 
 effect of 358
 
 INDEX. 
 
 1055 
 
 NATIONAL BANKS— Continued. Section 
 
 receivers over, title of 359 
 
 can not avoid pledge of notes 359 
 
 assets exempt from taxation 359 
 
 regarded as agent of comptroller 360 
 
 no control over bonds deposited with United States treasurer 360 
 
 rights as to bringing suits 360 
 
 power to contract or sell 360 
 
 may enforce individual liability of shareholders 360o 
 
 right of action against directors for mismanagement 360^ 
 
 suits by, what must be averred 361 
 
 what must be proven 361 
 
 appointment of, by comptroller, not exclusive of jurisdiction 
 
 of equity 362 
 
 judgment creditor may have 362 
 
 jurisdiction of state and federal courts over 363 
 
 property in hands of, can not be sold by creditor 364 
 
 subj ect to same set-ofifs as bank 364a 
 
 NEGLIGENCE, 
 
 of receiver ground for refusing compensation 790 
 
 NEWSPAPER, 
 
 publication of, by receiver 481 
 
 receiver in aid of foreclosure of mortgage on 639, note 
 
 NEW YORK, 
 
 code of procedure, receiver under 23 
 
 compared with injunction 49 
 
 receivers on creditors' bills, under former chancery system 400 
 
 under code of procedure 401 
 
 NON-RESIDENT, 
 
 not ineligible as receiver "" 
 
 condition of bond of ^ 
 
 surety on receiver's bond may be 126 
 
 NORTH CAROLINA, 
 
 code of procedure, effect of 23 
 
 NOTES. (See Commercial Paper.) 
 
 NOTICE, 
 
 of application for receiver 111-117 
 
 courts averse to interference without HI 
 
 want of, j udicial error Il2 
 
 ground for reversal 112 
 
 how taken advantage of 112 
 
 how waived or cured 1^2 
 
 presumed on appeal 112 
 
 interference without, grounds of 113 
 
 facts must clearly appear 113
 
 1056 
 
 INDEX. 
 
 NOTICE-Contiuucd. S^^^^^^ 
 
 of application for receiver, service of process considered with . . 114 
 
 notice served immediately on filing bill, under English practice 114 
 
 necessary to appointment over insolvent corporation 115 
 
 New York chancery practice as to 115 
 
 service of 
 
 116 
 
 when sufficient on co-defendant 1 16 
 
 unnecessary, when parties appear by counsel to oppose motion... 116 
 
 when defendant has absconded 117 
 
 when he has left state and it is necessary to collect rents 117 
 
 when a trustee defendant is beyond jurisdiction 117 
 
 non-resident defendants 117 
 
 in case of partnership, when 117 
 
 in case of foreclosure, when 117 
 
 of appointment, formal notice not necessary to fix liability for 
 
 contempt 156 
 
 of filing of intervening petition 175^ note 
 
 of petition for instructions, defendant not entitled to 188 
 
 of sale by receiver ipg 
 
 of allowance of receiver's compensation 796 
 
 of application for leave to sue receiver, to whom given 265 
 
 of that of his counsel g05 
 
 receiver's executor entitled to, of passing of receiver's accounts 817 
 
 want of, of appointment of successor not ground for removal 821 
 
 of motion to remove receiver 824 
 
 to discharge receiver 846 
 
 to all creditors unnecessary 848 
 
 NUISANCE, 
 
 by receiver, when enjoined 262 
 
 O. 
 
 OATH, 
 
 to receivers under statute, omission of does not vitiate pro- 
 ceedings gg 
 
 when taking of, presumed 99 
 
 OBJECT, 
 
 of receivership 4 
 
 OFFICE, 
 
 controversies concerning, not determined in equity 21 
 
 contest over, receiver refused 21 
 
 fees of, receiver refused 21 
 
 when granted 22 
 
 salary of, receiver refused 22 
 
 OFFICER OF COURT, 
 
 receiver considered as an j
 
 INDEX. 1057 
 
 OFFICERS, Section 
 
 of corporations, eligibility of, as receivers 72 
 
 when competent as receivers 354 
 
 of state, enjoined from disposing of railroad land grant 373 
 
 equity averse to receiver when trust vested in 696 
 
 OFFSET. (See Set-off.) 
 
 P. 
 
 PARLIAMENT. (See Member of Parliament.) 
 
 PARTIES, 
 
 receiver over corporation, latter not proper party plaintifif 225 
 
 receiver holding equitable title necessary party to bill to redeem 
 
 by mortgagor against mortgagee 258, note 
 
 receiver as party to appeal 258 
 
 receiver of corporation as party defendant 260 
 
 corporation necessary party to proceeding for receiver over it 290 
 
 receiver need not be party to subsequent proceeding for another 
 
 receiver over corporation 291 
 
 receiver of railway not proper party to action for injuries suffered 
 
 prior to appointment 395 
 
 where demurrer sustained for want of proper 616 
 
 PARTITION, 
 
 receiver allowed in action for 607 
 
 PARTNERSHIPS, 
 
 interlocutory appointment of receiver over, not appealable 26 
 
 when appealable 27 
 
 non-resident, receiver refused against 44 
 
 when bill for dissolution and receiver an act of bankruptcy 56 
 
 assignee in bankruptcy of, when allowed receiver as against as- 
 signment 57 
 
 administrator of deceased, eligible as receiver 78 
 
 receiver may be appointed as part of final decree 109 
 
 real estate of, when sold subject to judgment against partner 199fl 
 
 receiver of, can not be garnished as to assets in his hands 151 
 
 can not maintain action of trover in his own name 209 
 
 allowed to sue in his own name for money due the firm 210 
 
 rent due from, can not be set ofif in action by receiver of the firm 253 
 
 when receiver not liable for rent 281 
 
 creditors of, when allowed receiver and injunction before judg- 
 ment 407 
 
 receivers over 472-552a 
 
 principles governing the relief 472-50Sa 
 
 the j urisdiction well established 472 
 
 doctrine of Lord Eldon 472 
 
 probability of dissolution a controlling element 472 
 
 Receivers — 67.
 
 1058 INDEX. 
 
 PARTNERSHIPS— Co;iM««rrf. Section 
 
 courts proceed cautiously 473 
 
 beneficial nature of the j urisdiction 473 
 
 receivers over, principles governing the relief, same conditions 
 
 necessary as for inj unction 474 
 
 actual abuse must appear 474 
 
 quarrel not sufficient 474 
 
 court does not determine ultimate rights of partners on 
 
 application for 475 
 
 duty of court only to preserve property pendente lite 475 
 
 existing partnership necessary 476 
 
 receiver refused when partnership disputed 476 
 
 not granted in nominal partnership 476 
 
 employee can not have 
 
 right to participate in profits the test 477 
 
 burden of proving partnership on plaintiff 477 
 
 relief not granted in case of executory agreement to 
 
 form partnership 477 
 
 when defendant permitted to give security in lieu of 
 
 478 
 receiver ^'° 
 
 when court satisfied of existence of partnership, mere 
 
 denial by defendant no bar to relief 479 
 
 management of business not province of court 480 
 
 may be continued by receiver pendente lite to pre- 
 serve good will 4ol 
 
 operating steamboat 481 
 
 hire of horses and carriages 481 
 
 publication of political paper 481 
 
 borrowmg money ^°^ 
 
 court only interferes in clear cases 482 
 
 conflict of interest must be shown 482 
 
 effect of denials in answer 482 
 
 breach of duty or violation of agreement must be shown 483 
 
 irreconcilable disagreement, ground for relief 483 
 
 destruction of mutual confidence 484 
 
 insolvency of firm 484 
 
 want of co-operation no ground for 485 
 
 unprofitable business no ground for 485 
 
 receiver not a matter of course 486 
 
 not granted when bill alleges no facts showing necessity 
 
 for 486 
 
 defendant resolved to ruin business, ground for 487 
 
 when granted though doubtful whether property in de- 
 fendant's possession is firm property 488 
 
 retiring partner, when entitled to 489, 493 
 
 violation of agreement for dissolution 489 
 
 exclusion from books 489 
 
 fraud by continuing partner 493
 
 INDEX. 1059 
 
 PARTNERSHIPS-Co»//»»^rf. Section 
 
 receivers over, principles governing the relief, embittered feeling 489 
 
 partner in possession not entitled to 490 
 
 not granted when equities of bill denied by answer 491 
 
 not granted over property claimed by plaintiff individ- 
 ually 492 
 
 receiver on creditor's bill, extended to what property. ... 494 
 
 appomtment of, prevents one partner giving preference 495 
 
 valid liens of creditors not interfered with 495 
 
 execution creditor not deprived of rights under prior levy 495 
 
 failure to contribute to capital stock 496 
 
 sale of interest in firm 495 
 
 insolvency and refusal to pay firm indebtedness 496 
 
 large sums of money in defendant's hands no ground 
 
 for relief in absence of danger 497 
 
 misapplication of funds 497 
 
 agreement to arbitrate differences 497 
 
 when refused over shares of stock constituting assets 
 
 of firm 49g 
 
 continuing business with firm funds after dissolution, 
 
 ground for 4pp 
 
 violation of agreement in lumber business as ground for 500 
 
 when issue as to partnership directed to be tried at law 501 
 
 when issue as to plaintiff's right to profits tried.... 501 
 
 courts averse to appointing ex parte 502 
 
 foreign partnerships, when allowed 503 
 
 when allowed in case of farm 504 
 
 does not prevent creditors from proceeding at law 505 
 
 when injunction continued as auxiliary to 506 
 
 assignees of partners, when entitled to 507 
 
 limited partnerships, when receiver allowed ,' 508 
 
 ^ effect of denial of motion in former suit 508a 
 
 dissolution of firm as ground for ' .509-521 
 
 English rule allowing receiver only when plaintiff en- 
 titled to dissolution caq 
 
 English rule followed in this country ] / 510 
 
 courts do not interfere to continue business 510 
 
 receiver does not necessarily follow injunction 510 
 
 when injunction necessary adjunct of 510 
 
 inability to agree after dissolution 5IO 
 
 right to dissolution not ground per se for 511 
 
 partnership determinable by consent or at will, receiver 
 
 not of course 5ji 
 
 relief refused when defendant has advanced entire capital 511 
 insolvency of defendant and right to dissolution ground 
 
 ^^'^ 511
 
 1060 INDEX. 
 
 PARTNERSHIPS— ConhHMed. Section 
 
 receivers over, dissolution of firm as ground for, purchaser at 
 
 sheriff's sale of partner's interest, when denied 512 
 
 departure from agreement, when ground for 513 
 
 partners in theater, when receiver appointed 513 
 
 relief denied when it would destroy business without 
 
 benefit to either party 514 
 
 receiver granted when both partners desire dissolution 
 
 and plaintiff is excluded 515 
 
 refused when answer denies equities of bill 515 
 
 on dissolution of, when granted against continuing part- 
 ner, though entitled to exclusive possession 516 
 
 dissolution by insolvency and assignment by insolvent 
 
 partners ground for 517 
 
 general assignment by continuing partner for benefit of 
 
 all creditors not ground for. 518 
 
 when appointed as of course on disagreement as to 
 
 closing up business 519 
 
 debts to be paid ratably and without preference.. 519 
 
 may be appointed on final judgment for dissolution 520 
 
 failure to give bond, effect of 520 
 
 usually granted on interlocutory application 521 
 
 injunction frequently granted as adjunct 521 
 
 exclusion from firm as ground for 522-529 
 
 exclusion strong ground for 522 
 
 doctrine of Lord Eldon 522 
 
 assignment for purpose of excluding partner ground for.... 523 
 
 assignee can not defeat application 523 
 
 exclusion from profits, ground for 524 
 
 not necessary that fund should be in peril 525 
 
 when receiver continued on ground of exclusion 525 
 
 exclusion of purchaser of partner's interest ground for re- 
 ceiver 526 
 
 doctrine of exclusion applied to assignees of bankrupt partner 527 
 
 exclusion from profits in vessel 528 
 
 exclusion from books 529 
 
 refusal to settle or to pay firm debts 529 
 
 fraudulent appropriation of funds 529 
 
 death of partner as ground for 530-537 
 
 receiver on death of both partners 530 
 
 not granted against survivor except for mismanagement . . 531 
 
 granted for improper conduct of survivor 532 
 
 refusal by survivor to close up firm business ground for.... 532 
 
 when administrator of deceased entitled to 533 
 
 administrator may be appointed 533 
 
 form of decree 533
 
 INDEX. 1061 
 
 PARTNERSHIPS— Co«/mM^rf. Section 
 
 death of partner as ground for, survivors required to deliver to 533 
 
 enj oined from collecting debts 533 
 
 rights and functions of the receiver 534 
 
 ; when legatee of deceased partner entitled to 535 
 
 receiver appointed notwithstanding death of partner 536 
 
 may sue for money due firm 536 
 
 when appointed on bill by creditors against survivor 537 
 
 receivers over, functions and duties of 538-552a 
 
 duty of, to collect debts 538 
 
 entitled to assets 538 
 
 will not be enjoined from management of fund 538 
 
 not directed to take property when doubtful whether part- 
 nership property 538 
 
 on application for, court will not determine disputes as to 
 
 ownership 538 
 
 receiver takes whole equitable title without assignment 539 
 
 may bring action to obtain possession 539 
 
 succeeds to equitable rights and remedies of firm 539 
 
 rights of action 539 
 
 when receiver can not recover individual property of partner 539 
 
 extent of receiver's title 539a 
 
 when receiver can not set aside fraudulent conveyance by 
 
 partnership 539^ 
 
 selection of 54O 
 
 partner may act as, without pay 540 
 
 partner appointed receiver no longer sustains relation of 
 
 partner 54O 
 
 entitled to money, choses in action and assets in hands of 
 
 survivors 54I 
 
 decree for delivery of, enforced by attachment 541 
 
 can not withhold partnership funds as due to him personally 542 
 
 not directed to sell pending appeal as to jurisdiction of court 543 
 
 required to produce books of account before master 544 
 
 payment of debts by, sufficient excuse for not paying money 
 
 into court . , 545 
 
 appointed to collect debts which partners are enjoined from 
 
 collecting 545 
 
 may be required to pay plaintiff his proportion of debts 
 
 collected 545 
 
 when required to sell lease and good will of insane hospital 547 
 
 either party may become purchaser 547 
 
 remaining parties enjoined from continuing business in 
 
 same locality 547 
 
 appointment over husband in divorce suit, does not divest title 
 
 to partnership property 548
 
 1062 INDEX. 
 
 FARTNERSHIFS— Continued. Section 
 
 receivers over, duties of, in brewing business 549 
 
 retiring partner compelled to pay firm notes may recovei 
 
 of receiver of new firm 550 
 
 purchaser of partner's interest after receivership can not 
 
 interfere with 551 
 
 funds in hands of, not subject to attachment or garnishment 552 
 when not required to pay deposit in full 552a 
 
 PARTY, 
 
 to the cause, ineligible as receiver 70 
 
 PATENT RIGHT, 
 
 receiver granted in suit for infringement of 34 
 
 receiver entitled to rights under 174a 
 
 PAYMENT, 
 
 of money, receiver not granted for 35 
 
 effect of, by surety to solicitor 132 
 
 receiver not directed to make, until claims determined 428 
 
 by receiver of partnership, to be made ratably 519 
 
 effect of 545 
 
 PEER, 
 
 ineligible as receiver 70 
 
 PENSION, 
 
 receiver refused over 31 
 
 when allowed 705 
 
 PERSONAL INJURIES, 
 
 judgments and claims against railway for, prior to receivership 
 
 not preferred 394« 
 
 action for, prior to receivership will not lie against receiver. .395, 397& 
 
 PERSONAL PROPERTY, 
 
 tenants in common of, courts averse to allowing receiver 20 
 
 sale of, by receiver, discretion as to sale in bulk or by parcels 198 
 
 distinction between realty and personalty as to appointing receiver 554 
 
 PETITION, 
 
 receiver not granted on 83 
 
 PLEA, 
 
 pending, to amended bill, no bar to motion for receiver 95 
 
 PLEADINGS, 
 
 general allegations in, when not sufficient 17 
 
 in actions by receivers, appointment should be alleged issuably 231 
 strictness of earlier rule as to particulars necessary to be 
 
 alleged 232 
 
 averment of appointment in general terms now sufficient.... 233
 
 INDEX. 
 
 1063 
 
 PLEADmOS— Continued. Section 
 
 in actions by receivers, receiver should state equities of judgment 
 
 creditors whom he represents 234 
 
 when defendant estopped from denying receiver's right to 
 
 sue in that capacity 235 
 
 in action by receiver on premium notes 236 
 
 in action by receiver of national bank 237 
 
 PLEDGE, 
 
 of notes by bank, receiver can not avoid 359 
 
 POLICY OF INSURANCE. (See Insurance Company.) 
 
 POSSESSION, 
 
 of defendant, divested by appointment of receiver 3, 15 
 
 of receiver, that of court 4 
 
 disturbance of, a contempt 4 
 
 acquiescence in, as a bar to receiver 14 
 
 receiver cautiously granted against 19 
 
 of receiver, when protected by foreign court 47 
 
 of receiver of state court, respected by federal court 52 
 
 when denied by federal court 53 
 
 of receiver of federal court, respected by state court 59 
 
 not disturbed by writ of assistance from state court 61 
 
 nature of receiver's possession 134-1 62rt 
 
 importance of determining 134 
 
 receiver's possession that of court 134 
 
 not adverse to either party 134 
 
 not interrupted by change in receiver 134 
 
 \ defendant in ejectment can not rely on, of receiver 134 
 
 regarded as possession of prevailing party, to what extent 135 
 
 when regarded as possession of plaintiff 135 
 
 when regarded as possession of mortgagee 135 
 
 does not affect operation of statute of limitations 135 
 
 vests back to original order of appointment 136 
 
 but not beyond ^36 
 
 effect of appeal on 136 
 
 property subject to garnishment in Maryland until reduced 
 
 to receiver s possession ^-J' 
 
 receiver acquires, subj ect to existing liens 138 
 
 lien of taxes 138 
 
 can not be disturbed without leave of court 139 
 
 practice as to obtaining leave of court 139 
 
 court may enjoin unauthorized interference with 140, 747 
 
 relief may be by petition in receivership cause even as against 
 
 140 
 stranger '■^^ 
 
 property in, not subj ect to seizure for taxes 140a 
 
 inj unction against tax 14^^
 
 1064 INDEX. 
 
 POSSESSION— Cotttinued. Section 
 
 nature of receiver's possession, property in, how taxes collected.. 140a 
 
 liability to taxation 140a ^Qte 
 
 can not be interfered with by execution or attachment 141 
 
 receiver not allowed to pay money except by order of court 142 
 can not be interfered with on ground that appointment was 
 
 improper 143^ 165 
 
 persons desiring possession must apply to court 143 
 
 receiver entitled to aid of court to obtain possession 144 
 
 practice in obtaining possession of real property by re- 
 ceiver 144^ 147 
 
 order for surrender to receiver may be enforced by attach- 
 ment 144 
 
 defendant's attorney required to deliver trust property to 
 
 receiver ^44 
 
 court reluctant to take possession by receiver as against 
 
 purchasers in good faith who are not parties 145 
 
 when receiver must institute independent suit to recover 
 
 property in possession of stranger 145, 149 
 
 persons claiming real estate held by receiver will be heard 
 
 by the court 14g 
 
 receiver allowed to take steps to procure possession of 
 
 property j4g 
 
 receiver not allowed writ of assistance as against stranger 
 
 claiming under superior title I49 
 
 duty of court to protect receiver's possession ISO 
 
 practice when receiver forcibly takes possession from party 
 
 holding under claim of right 150 
 
 funds in receiver's possession not subject to garnishment 151 
 
 exceptions to rule I5I 
 
 subject to garnishment by leave of court 151 
 
 assets not in possession subject to garnishment 151 
 
 precedence in possession as between different receivers 152 
 
 possession as between receiver and assignee in bankruptcy . . 153 
 right of common not allowed as against possession of re- 
 
 .«iver 154 
 
 right to possession as between receiver of an auctioneer 
 
 and customer I55 
 
 goods in receiver's possession, when not subject to distraint 
 
 ^o'" rent 155 
 
 receiver over property of decedent, not entitled to fund 
 
 by creditor as security I57 
 
 when receiver entitled to possession of wharf in front of 
 
 "i|"s ^ 158 
 
 receiver's possession of commercial paper, not that of bona 
 Ade holder I59
 
 INDEX. 1065 
 
 POSSESSION — Continued. Section 
 
 nature of receiver's possession, placing property in receiver's 
 
 possession relieves defendant from responsibility 160 
 
 receiver may retain possession pending appeal 161 
 
 receiver's possession that of trustee for person entitled un- 
 der final decree 162 
 
 when receiver required to deliver possession to trustee of 
 
 defendant under insolvent laws 162 
 
 receiver required to restore fund on reversal of his appoint- 
 ment 162 
 
 right of, when property taken beyond state 162a 
 
 interference with receiver's possession 163-174& 
 
 unauthorized interference a contempt of court, punishable 
 
 by attachment 163 
 
 landlord guilty of contempt in seizing property under dis- 
 tress warrant 163 
 
 duty of court to protect receiver against 164 
 
 by another receiver subsequently appointed, punished as a 
 
 contempt 164 
 
 liability for, not dependent upon propriety of appointment 143, 165 
 
 not dependent upon formal notice 166 
 
 no liability for, when appointment of receiver is void. .166c, 168, 203 
 
 collection of rents 167 
 
 refusal of defendant to surrender property to receiver 168 
 
 refusal of purchaser at sheriff's sale to surrender posses- 
 sion to receiver 168 
 
 not a contempt where order is void 168 
 
 when refusal not a contempt 168 
 
 court itself the only competent judge as to contempt 169 
 
 contempt in resisting enforcement of order for receiver 
 
 over property in foreign country 170 
 
 when not a contempt 170 
 
 actual disturbance of possession necessary to contempt .... 171 
 
 levy and sale by sheriff considered 171 
 
 receiver's title not determined on proceedings for contempt.. 172 
 
 claimant required to pay for property taken out of state 172 
 
 courts averse to punishing receiver for contempt in inter- 
 ference with other receiver 173 
 
 attachment against receiver for refusing to surrender posses- 
 sion 174 
 
 interference with rights of receiver under patent 174a 
 
 judgment in contempt proceedings, form of 174& 
 
 receiver of corporation may remove cloud upon, by ancillary bill 342a 
 
 inj unction 342a 
 
 of real property, receiver rarely granted against 557 
 
 acquiescence bars receiver 560 
 
 by lessee, receiver rarely granted against 562 
 
 fraud in obtaining possession, ground for 565
 
 1066 INDEX. 
 
 POVERTY, Section 
 
 of executor, no ground for receiver 709 
 
 POWER, 
 
 of appointing receiver, high nature of 3 
 
 inherent in courts of equity " 
 
 when may be invoked " 
 
 PRACTICE, 
 
 general rules of 82-102 
 
 divergent in different states 82 
 
 receiver appointed only on bill o-^ 
 
 not appointed on application of defendant 83 
 
 bill need not contain specific prayer for receiver 83 
 
 appointment may be made on final hearing 83 
 
 court may appoint ex suo motu 83a 
 
 motion necessary 84 
 
 affidavits, copies should be served 84 
 
 in behalf of plaintiff, admissible after answer 85 
 
 of defendant, admissible before answer 85 
 
 admissible to explain doubtful passage in answer 85 
 
 must be entitled in cause 85 
 
 multifarious bill no obj ection to motion 86 
 
 insufficient record no objection 86 
 
 order should state over what property receiver is appointed 87 
 
 facts need not be stated in pleadings 88 
 
 may be set forth in affidavits 88 
 
 facts on which receiver is asked may be presented in 88 
 
 conclusions insufficient 88 
 
 copies of, when should go to appellate court 88 
 
 should be distinct and precise 89 
 
 insufficient when on information and belief 89 
 
 when not necessary as to insolvency of bank 89 
 
 verification may be waived 89 
 
 reference to master to appoint, practice on 90 
 
 when appointment complete 90 
 
 practice in obj ecting to 90 
 
 leave granted to renew motion 91 
 
 receiver may be appointed on rehearing on new proof 91 
 
 rehearing, allowed after appointment 92 
 
 when not granted in creditor's suit 92 
 
 extending receiver, for protection of other parties 93 
 
 regarded as a new appointment 93 
 
 appointment by consent, under Irish practice 94 
 
 when consent not made a rule of court 94 
 
 demurrer to bill, no objection to appointment when defendant 
 
 does not appear 95 
 
 on overruling of, defendant should be allowed to plead or 
 
 95 
 
 answer ^*'
 
 INDEX. 1067 
 
 PRACTICE-Confinued. Section 
 
 motion entertained, although plea to amended bill undisposed of 95 
 
 when application must be heard in court % 
 
 when in chambers g^ 
 
 regularity of proceeding can not be questioned on motion to 
 
 substitute receiver 07 
 
 receiver may be appointed although application was for an in- 
 
 j unction no 
 
 omission of receiver to be sworn not fatal 99 
 
 when taking of oath presumed 99 
 
 order of appointment should not include application of proceeds 
 
 °^ '^^l •;;••: lOO 
 
 bill may be dismissed although receiver appointed 101 
 
 appointment may be made, unless defendant satisfies plaintiff's 
 
 demand , ^^ 
 
 time of appointment 103-110 
 
 formerly only after answer 103 
 
 modern practice, before answer IO3 
 
 grounds of interference before answer 104, 105 
 
 granted before answer in this country ' io5 
 
 strong ground required for receiver before answer 106 
 
 motion before answer heard on affidavits 107 
 
 defendant heard by affidavit in reply IO7 
 
 appointment will not date back by relation ,,[ 108 
 
 may be made at final hearing ' ] ] ] 109 
 
 the same, although bill does not pray receiver 109 
 
 may be made after final decree .\' ] HO 
 
 pending appeal HO 
 
 notice of application * 111-117 
 
 courts averse to interference without HI 
 
 error to appoint receiver without H2 
 
 where protection by injunction is sufficient 112 
 
 want of, ground of reversal H2 
 
 how taken advantage of H2 
 
 how waived or cured H2 
 
 appeal because of H^ 
 
 grounds of interference without H3 
 
 facts on which application is made ex parte should clearly 
 
 appear 213 
 
 service of process considered H4 
 
 notice necessary to appointment over insolvent corporation 115 
 
 practice of New York Court of Chancery as to 115 
 
 service of Hg 
 
 when sufficient on co-defendant II5 
 
 not necessary, when parties appear by counsel to resist 
 
 motion H^ 
 
 unnecessary when defendant has absconded 117
 
 1068 INDEX 
 
 FRACTICE— Continued. Section 
 
 notice of application, unnecessary, when defendant has left state 
 
 and receiver is necessary to collect rents 117 
 
 against trustee defendant beyond jurisdiction of court.. 117 
 
 on vacating bond as to one surety 127 
 
 on claiming property or fund held by receiver 139 
 
 on obtaining possession of real property by receiver 144 
 
 on proceedings in attachment for interfering with collection of 
 
 rents by receiver 167 
 
 on application by receiver for advice of court 188 
 
 on obtaining leave by receiver to bring suit 208 
 
 in continuing suit by successor of receiver 213 
 
 in appointing receiver over insolvent corporation 346 
 
 PRECEDENCE, 
 
 in possession, as between different receivers 152 
 
 PREFERENCE, 
 
 by insolvent, when set aside on application of receiver 314, 320 
 
 when not given to prior unsecured debts of railway 391, 394/i 
 
 as between different classes of receivers' certificates . . . 39Sd, 398; 
 
 receiver of partnership prevents, to creditor 495 
 
 allowed to counsel fees 805 
 
 to costs and expenses of receivership 809 
 
 PREFERRED DEBTS, (See Railways, Receivers' Certificates.) 
 
 incurred in management of business 36 
 
 claim of state for taxes as 140a, note, 394&, SUa 
 
 in case of private corporations 2l2c, 3\2d 
 
 in case of railways 394a-394H 
 
 incurred in management of partnership business 481 
 
 PRELIMINARY INJUNCTION. (See Injunction.) 
 
 PREMIUM NOTE, 
 
 when receiver can not sue on 204 
 
 pleadings in action by receiver on 236 
 
 set-offs in actions by receivers on 247 
 
 defense to suit on 318 
 
 assessments on, receiver's right of action for 326 
 
 what receiver must allege and prove 327 
 
 liability not increased by receivership 328 
 
 receiver must make assessment and apportionment 328 
 
 receiver takes place of directors 329 
 
 sanction and approval of court 329 
 
 receiver acts ministerially, not judicially 330 
 
 may make second assessment 330 
 
 approval by court not j udicial act 330 
 
 form of, when general on all notes 331 
 
 proof of losses, what required 331 
 
 receiver may sue on, to pay equitable claims 332 
 
 defense by maker, what not allowed 332
 
 INDEX. 1069 
 
 PRESIDENT, Section 
 
 of corporation, when eligible as receiver o... . 72 
 
 PRINTING OFFICE, 
 
 receiver refused as between joint owners 20 
 
 PRIORITY, 
 
 in possession, as between different receivers 152 
 
 as between j udgment creditors 439b, 461 
 
 PRIVATE SALE. (See Sale.) 
 
 PROBATE COURTS. (See Courts.) 
 
 PROBATE OF WILL. (See Will.) 
 
 PROCESS, 
 
 service of, qucsre as to necessity for, before appointing receiver 114 
 on agent of corporation in hands of receiver 260 
 
 PROFITS, 
 
 receiver can not make, at expense of trust 175 
 
 in partnership cases, right to, as test for receivership 477 
 
 when issue to be tried by j ury 501 
 
 exclusion from, ground for receiver 524, 528 
 
 PROHIBITION, 
 
 remedy by, against unauthorized appointment 43 
 
 PROMISSORY NOTES. (See Commercial Paper.) 
 
 PROOF, 
 
 degree of, on interlocutory application o 
 
 of receiver's appointment by foreign court 162a, note, 241, note 
 
 in action against principal 238 
 
 degree of, required at trial 238 
 
 receiver need not produce transcript of all proceedings in which 
 
 he was appointed 238 
 
 degree of, required to show inadequacy and insolvency in cases of 
 
 mortgages 667 
 
 PROTECTION, 
 
 of court, against interference with receiver's possession 164 
 
 receiver entitled to, in performance of duties 179 
 
 extended to custodians occupying relation of receivers 182 
 
 PROVISIONAL REMEDY, 
 
 receivership considered as a 6, 49 
 
 PUBLICATION, 
 
 of newspaper, by receiver 481 
 
 PUBLIC OFFICE. (See Office.) 
 
 PUBLIC OFFICER, 
 
 distinguished from receiver 2
 
 1070 INDEX. 
 
 PURCHASE. (See Sale.) Section 
 
 PURCHASER, (See Innocent Purchasers.) 
 
 at receiver's sale, acquires no right of action against former 
 
 officer of corporation 356 
 
 of partner's interest, when denied receiver 512 
 
 when allowed receiver 526 
 
 can not interfere with receiver 551 
 
 receivers as between vendors and purchasers of realty 609-617 
 
 allowed vendor on bill for specific performance 609 
 
 vendee on same 610 
 
 allowed vendor on bill against, to recover possession for non- 
 payment 61 1 
 
 purchaser allowed receiver on bill to perfect title 612 
 
 when purchaser at sheriff's sale allowed receiver and in- 
 junction 613 
 
 of gold mine at mortgage sale, when granted receiver 614 
 
 of colliery, entitled to receiver, on bill to set aside purchase for 
 
 fraud 615 
 
 receiver not allowed over realty against purchasers not 
 
 made parties 616 
 
 when receiver required to return purchase-money on an- 
 nulling purchase 617 
 
 at receiver's sale, title acquired by 636 
 
 what sufficient to see 636 
 
 not affected by errors 636 
 
 brother of receiver may become, of claims against estate .... 175, note 
 
 Q. 
 
 QUASI-ASSIGNEE, 
 
 receiver as, may maintain action in foreign court 241o 
 
 to enforce double liability of stockholder of corporation .... 317c 
 QUO WARRANTO, 
 
 receiver refused, pending controversy in 21 
 
 against corporation, receiver not allowed before judgment of 
 
 forfeiture 307 
 
 injunction allowed pending 307 
 
 when receiver allowed 312^ 
 
 R. 
 
 RAILROADS. (See Railways.) 
 
 RAILWAYS, 
 
 appointment of receiver over, when not appealable 26 
 
 in different states, receiver over 44 
 
 receiver in state court, bill for account not entertained by 
 United States court 55
 
 INDEX. 1071 
 
 RAILWAYS— Continued. Section 
 
 receiver of United States court, not subject to control of state 
 
 court 59 
 
 action against in state court 60 
 
 enjoined from condemning land held by receiver 140 
 
 interference with operation of, by receiver, where a contempt . . 164 
 
 receivers over, principles governing the jurisdiction 365-375a 
 
 courts reluctant to appoint 365 
 
 not appointed for creditor who can enforce his judgment 
 
 by ordinary means 365 
 
 consolidation of companies 365 
 
 appointed on bill by shareholder to set aside void lease 366 
 
 granted to protect vendor's lien 367 
 
 granted for management of common easement 368 
 
 in case of tunnel 368 
 
 when refused on bill to recover for illegal shares of stock 369 
 appointed by state court, when not interfered with by 
 
 United States court in bankruptcy 370 
 
 jurisdiction as between state and federal courts 370 
 
 two receivers not desirable 370a 
 
 contract of one binding upon the other 370a 
 
 receivership does not dissolve corporation 370b 
 
 nor suspend power to maintain condemnation proceedings 370b 
 
 injunction against company binds receiver 370b 
 
 taxes enforced 370b 
 
 appointed on failure to operate road 371 
 
 before default 371 
 
 when relieved 371 
 
 receiver appointed over street railway to prevent forfeiture of 
 
 franchise 371 
 
 vendor's rights not disturbed by 372 
 
 distraint for rent notwithstanding 372 
 
 may enjoin state officers from disposing of land grant 373 
 
 stockholders' meeting 373 
 
 appointed by state court, United States court will not enter- 
 tain bill for account against 374 
 
 mandamus refused w 374 
 
 order for, vacated, road restored to owner 375 
 
 surplus funds, when applied on j udgment 375 
 
 ancillary receiverships 375a 
 
 in aid of mortgagees and bondholders 376-389a 
 
 relief based on same principles as in foreclosure of mort- 
 
 gages 
 
 376 
 
 inadequacy of security and insolvency ground for 376 
 
 neglect to apply earnings as ground for 376 
 
 non-payment of interest and inadequacy of security as ground 
 
 for 376
 
 1072 INDEX. 
 
 RAILWAYS— CoM/mwrt/. Section 
 
 receivers over, in aid of mortgagees and bondholders, not matter 
 
 of course on default 377 
 
 not granted where it would cause irreparable injury 377 
 
 when not granted over entire system 377 
 
 proceedings for, regarded as in rem 378 
 
 right of, extends only to property mortgaged 378 
 
 may lease other lines 378 
 
 right to take possession on default 379 
 
 refusal of trustee to take possession 379 
 
 appointed after decree of foreclosure 379 
 
 receiver over tolls 380 
 
 when bondholders entitled to 381 
 
 right to, as between different mortgagees 382, 385 
 
 mortgagees pari passu, not allowed preference 383 
 
 granted in behalf of state holding mortgage 384 
 
 granted to prevent land grant from lapsing 386 
 
 validity of bonds not determined on application for 387 
 
 relative jurisdiction of state and federal courts 388 
 
 court first acquiring jurisdiction will retain it 388 
 
 jurisdiction of United States court over consolidated road.. 388fl 
 
 when president and directors regarded as receivers 388& 
 
 discharge of, on payment of mortgage 389 
 
 liability of plaintiff in foreclosure for wages of receiver's 
 
 employees 389o 
 
 functions and duties of 390-394 
 
 duties usually prescribed by order 390 
 
 what usually embraced in 390 
 
 when authorized to complete road 390 
 
 condemnation to acquire land for completion 390 
 
 discharge of employees 390, note 
 
 contracts subject to control of court 390a 
 
 may contract for transportation beyond line 390a 
 
 may make lease of company's property 390c 
 
 may take lease of another road 390a 
 
 can not prevent construction of rival line 390a 
 
 unjust discrimination not allowed 390a 
 
 pooling contract, when enforced 390a 
 
 when not allowed to pay prior debts 391 
 
 nor to adopt contract which would result in preferring prior 
 
 debts 391 
 
 discretion of, as to expenditures 392 
 
 what outlays allowed in accounts 392 
 
 entitled to protection of court 393 
 
 court will enjoin diversion of earnings from 393 
 
 receiver's joint use of another line protected by injunction .. 393 
 
 strikers punished for contempt 393a 
 
 revision of wages by court 393b
 
 INDEX. 1073 
 
 RAILWAYS— Continued. Section 
 functions and duties of, receiver not bound by joint traffic agree- 
 ment of company 393c 
 
 nor by contract to carry passengers 393c: 
 
 criminal liability of receiver for failure to comply with state 
 
 statute 393c 
 
 must enforce rights of action by appropriate remedies 394 
 
 must bring suit at law to enforce subscription 394 
 
 rights limited to property covered by mortgage 394 
 
 preferred debts 394a^394n 
 
 preference to unsecured debts indefensible on principle . . . 394a 
 
 receiver's expenses a prior charge 394b 
 
 extension of line 394& 
 
 damages 394& 
 
 rentals 394& 
 
 supplies 394& 
 
 distribution among divisions 394b 
 
 taxes on gross earnings 394& 
 
 purchase of rolling stock 394& 
 
 expenses of reorganization committee 394b, note 
 
 diversion of income ground of preference 394c 
 
 what not a waiver of right to a preference 394c 
 
 counter-claim by receiver 394c 
 
 preference independent of diversion 394d 
 
 materials furnished company and used by receiver 394d 
 
 traffic balance 394d 
 
 arrears for operating expenses 394d 
 
 wages of employees threatening to strike 394d 
 
 salary of attorney 394d 
 
 balance for terminal rental 394d 
 
 repair work on bridge 394c? 
 
 claim for cross ties 394d 
 
 coupling links, pins and steel tank 394d 
 
 claim for maintaining passenger waiting rooms 394d 
 
 materials for necessary freight cars 394d 
 
 damages to abutting property owner 394d 
 
 loss of cars 394d 
 
 rail joints and track bolts 394d 
 
 when interest not recoverable 394d, 394k 
 
 mortgagee must submit to equitable conditions 394c 
 
 assignee of debt protected 394c 
 
 claims for rolling stock, when preferred 394/ 
 
 car-trust leases 394/ 
 
 receiver may elect to be bound by 394/ 
 
 sale of rolling stock under foreclosure 394/ 
 
 use of rolling stock by receiver 394/ 
 
 right of appeal by purchaser 394/ 
 
 judgment creditors, when allowed priority 394^ 
 
 Receivers — 68.
 
 1074 INDEX. 
 
 RAILWAYS— Confinued. Section 
 
 preferred debts, general creditors not preferred 394/» 
 
 illustrations of claims which have been denied preference.. 394/» 
 judgments and claims for personal injuries prior to receiver- 
 ship not preferred 394» 
 
 when payment allowed out of proceeds of sale 394; 
 
 statutory liens preserved 394k 
 
 interest, when disallowed against receiver 394d, 394^ 
 
 construction claims 394/ 
 
 boarding-house keepers 394/ 
 
 grocers 394/ 
 
 completion of building 394/ 
 
 receiver's liability as to leased lines 394m 
 
 taxes on leased line 394m 
 
 paramount lien enforced by resale 394w 
 
 actions against receivers of 395-398& 
 
 liable to same extent as railway 395 
 
 action need not be at receiver's domicile 395 
 
 will not lie for personal injuries suffered prior to appoint- 
 ment 395, 397& 
 
 when will not lie against ancillary receiver 395 
 
 statute abolishing fellow-servant rule 395 
 
 leave of court necessary to sue 395a 
 
 practice by petition 395a 
 
 leave unnecessary under act of congress 395b 
 
 illustrations of application of act 39Sb 
 
 removal of cause by receiver to federal court 395c 
 
 New York decisions unsettled 395d 
 
 liability for inj uries 395d 
 
 rent of leased lines 395c/ 
 
 company not liable for negligence of receiver's servants .... 396 
 liability of company for failure to comply with penal stat- 
 utes of state 396 
 
 statutory liability of company, notwithstanding receivership 397 
 
 j udgment for, how enforced 397 
 
 action against company after surrender of receiver's 
 
 possession 397o 
 
 liability of receiver official not personal 397& 
 
 may be enforced against successor 397b 
 
 not liable for negligence of company prior to his 
 
 appointment 395, 397& 
 
 liable generally as common carriers 398 
 
 suit in other state 398 
 
 for right of way 398a 
 
 not liable on contract with express company 398o 
 
 not liable on covenant of company 393c, 398a
 
 INDEX. 
 
 1075 
 
 fLAIUWAYS— Continued. Section 
 actions against receivers of, liability on covenant of, after dis- 
 charge 398b 
 
 liability of purchasers 398& 
 
 receivers' certificates 398c-3yo; 
 
 unsupported by principle 3"°'- 
 
 warranted by authority 398c 
 
 not invalidated because bill is demurrable 398(; 
 
 purposes for which issued 398o 
 
 order strictly construed 398a 
 
 preference as between different classes of certificates . . 398d, 398; 
 
 not commercial paper 398^ 
 
 innocent purchasers not protected 398^ 
 
 when bondholder estopped from questioning 398/ 
 
 when not estopped 398/ 
 
 order appealable 398/ 
 
 sale subj ect to 398g 
 
 purchasers concluded 398g 
 
 when issued for construction 398/? 
 
 purchasing company liable for 39oh 
 
 case of Illinois Midland Railway 398j 
 
 priority as between, for compensation of receiver and that of 
 
 trustee 398/ 
 
 same as to counsel fees 398; 
 
 compensation of receiver of '87 
 
 considerations governing 787 
 
 RATES, 
 
 receiver refused over 3^ 
 
 REAL ESTATE. (See Real Property.) 
 
 REAL PROPERTY, 
 
 receiver appointed to collect rents of, after decree 110 
 
 receiver extended over, new security required 123 
 
 practice in obtaining possession of, by receiver 144, 147 
 
 in receiver's possession, claimants will be heard by court 146 
 
 rights of common not allowed to be exercised as against posses- 
 sion of receiver ^''^ 
 
 motion to let, should not come from receiver 181 
 
 when receiver not allowed to purchase at sale of 193 
 
 when receiver allowed to become tenant of lands subject to re- 
 ceivership ^"^ 
 
 sale of, by receiver, power to give deed implied 199 
 
 confirmation of conveyance by court 199 
 
 ejectment for, receiver must obtain leave to bring 208 
 
 receiver of, can not maintain action of forcible entry and de- 
 
 tainer in his own name 
 
 209 
 
 contrary doctrine recognized 210
 
 1076 INDEX. 
 
 REAL PROPERTY— Continued. Section 
 distinction between actions by receiver concerning title, and con- 
 cerning injury to or possession of real estate 221 
 
 action by receiver to set aside fraudulent conveyance made to 
 
 defeat decree for alimony 221 
 
 to recover balance of purchase-money 223 
 
 assignment of, receiver's right of action under 244 
 
 loss to, remaining in owner's possession, who in fault 284 
 
 long acquiescence in situation of title, bar to receiver 295 
 
 of corporation, not divested by receiver pendente lite 302 
 
 vests in receiver on dissolution of corporation in New York 303 
 
 lien of judgment creditor on, as affected by receivership .. 349 
 of debtor, claimed by third party, courts averse to interfering 
 
 by receiver on creditor's bill 416 
 
 debtor can not create trust in, to prejudice of creditors 417 
 
 when receiver appointed over, in behalf of creditors 418 
 
 in receiver's possession, regarded as in custody of court 422 
 
 of debtor, receiver takes subj ect to j udgment liens 424 
 
 when title vests in receiver 447 
 
 receivers over 553-638a 
 
 principles on which the relief is granted 553-602fl 
 
 jurisdiction well established but cautiously exercised .. 553 
 English doctrine denying receiver except in aid of equit- 
 able title 554 
 
 distinction in cases of realty and personalty 554 
 
 not appointed as between conflicting claimants to pos- 
 session 554 
 
 outstanding terms no additional ground for 554 
 
 not granted when remedy at law 555 
 
 devisee not entitled to, when he can obtain redress at law 555 
 
 • appointment does not affect title of either party 556 
 
 obj ect of the appointment 556 
 
 for whose benefit made 556 
 
 does not prevent statute of limitations from running .... 556 
 general rule denying receiver against defendant in pos- 
 session under claim of title 557 
 
 when receiver refused pending appeal from judgment 
 
 in ejectment 557 
 
 exceptions to the rule 558 
 
 probability of plaintiff prevailing 558 
 
 danger to rents and profits 558 
 
 refused when defendant claims legal and equitable title 559 
 
 refused when only ground is defendant's insolvency .... 559 
 
 effect of long acquiescence in defendant's possession . . . 560 
 not appointed when notice of lis pendens will prevent 
 
 transfer pendente lite 561 
 
 not granted against possession of lessee 562
 
 INDEX. 1077 
 
 REAL FROFERTY—Confinucd. . Section 
 
 receivers over, principles on which relief is granted, danger to 
 
 property must be shown 563 
 
 when refused in case of dissension in religious society. . 563 
 
 in possession, may be continued pending compromise ... 564 
 
 fraud in obtaining possession ground for 565 
 
 granted when plaintiff shows legal and equitable title, 
 
 and defendant none 566 
 
 prevention of vexations litigation ground for 566 
 
 defendant's abuse of trust and insolvency ground for . . 566 
 receiver of rents and profits pending litigation in another 
 
 state 566 
 
 when granted on bill by creditors to charge debtor's realty 567 
 in aid of incumbrancer, will not prejudice judgment 
 
 creditors in possession 567 
 
 granted when plaintiff shows probable title and danger 
 
 to rents 567 
 
 when granted to protect dower interests 568 
 
 when receiver may compel assignment of dower 568 
 
 for protection of heirs and devisees 568-572 
 
 granted to enforce trusts of will 569 
 
 when granted against heir-at-law in possession ... 569 
 
 when denied legatee under will 569 
 
 contest between heir and devisee, when receiver 
 
 refused 570 
 
 when granted 570 
 
 when refused heirs on grantor's taking possession 
 
 after life estate 571 
 
 opposition by heirs to administration, no ground for 571 
 
 when granted against tenant for life 572 
 
 devise to wife 572 
 
 settlement upon daughter 572 
 
 vendor seeking to rescind imprudent contract of sale not 
 
 entitled to 573 
 
 when granted in behalf of annuitants 574 
 
 granted over clergyman's benefice 574 
 
 annuitant denied receiver when he can distrain 574 
 
 pending contest as to will 574 
 
 in actions of ejectment and to recover lands 575-577 
 
 not granted in absence of equitable grounds 575 
 
 granted to preserve rents and profits 576 
 
 stronger ground for, after verdict 577 
 
 granted pending certiorari from state to federal court 577 
 
 appointed over leasehold interests 578 
 
 landlord may re-enter without leave of court 581 
 
 assignee of lease not entitled to 579
 
 1078 INDEX. 
 
 REAL PROPERTY— Cow//«Hcrf. Section 
 
 receivers over, principles on which relief is granted, insolvency 
 of defendants no ground for receiver of house on leased 
 
 ground 580 
 
 when defendant to be served with notice of motion to dis- 
 charge 581 
 
 extending same receiver to subsequent applications .... 582, 583 
 
 new security required 582 
 
 when not done before answer 582 
 
 extension deemed new appointment 583 
 
 effect of, on rents 583 
 
 dissensions among trustees, when ground for 584 
 
 denial of trust not necessarily ground for 584 
 
 granted in aid of equitable incumbrances 585 
 
 to enforce rent-charge 585 
 
 not allowed in mechanic's lien suit 586 
 
 when granted in aid of proceedings in bankruptcy 587 
 
 conflicting claims to trust property ground for 588 
 
 nature of defendant's interest in realty 589 
 
 when refused over crops 590 
 
 when allowed 590 
 
 in cases of marriage settlements 591 
 
 difficulty in enforcing remedy to collect rents no ground for 592 
 
 acquiescence in defendant's possession a bar to 593 
 
 granted when property escheated to state 594 
 
 refused when defendant consents to pay rents into court 595 
 
 only party to cause may object to 596 
 
 remainder-man and tenants can not enjoin receiver from 
 
 turning them out 596 
 
 how possession obtained by 597 
 
 loss through owner remaining in possession 597 
 
 appointed before answer in emergency 598 
 
 over corporation, title to realty not divested in limine 599 
 
 divested on dissolution 599 
 
 order should point out particular property 600 
 
 may be appointed over part of property 600 
 
 ordered to deliver funds to plaintiff obtaining final judgment 601 
 on termination of functions realty again subject to lien of 
 
 j udgment 602 
 
 receiver allowed against plaintiff suing in forma pauperis. . . 602a 
 
 tenants in common 603-608 
 
 courts averse to granting receiver 603 
 
 when refused 603 
 
 exclusion by co-tenant ground for 604 
 
 insolvency 604 
 
 receiver allowed over moiety 60S 
 
 allowed in default of defendant giving security 605 
 
 equitable tenants in common. 60S
 
 INDEX. 1^^^ 
 
 REAL VRO-PERTY-Continncd. ^^^^'^ 
 
 tenants in common, allowed in case of colliery wo 
 
 goldmine ^_ 
 
 action for partition '/■'"■a 
 
 notice to under-tenants not to pay rent to plamtiffs no 
 
 , , oU» 
 
 g'-^""^ ^"^r ..609-617 
 
 vendors and purchasers • 
 
 when vendor entitled to receiver on bill for specific per- 
 
 , ouy 
 
 formance -^^ 
 
 when vendee entitled 
 
 insolvency of vendor unnecessary 
 
 vendor entitled to, in suit to recover possession for non- 
 
 611 
 
 payment , . ^ 
 
 when allowed purchaser on bill to perfect title o j^ 
 
 when purchaser at sheriff's sale entitled to oli 
 
 purchaser of gold mine at mortgage sale allowed receiver. .. 614 
 purchaser of colliery entitled to, on bill to set aside pur- ^^^ 
 
 chase for fraud 
 
 when receiver of mine discharged ° 
 
 receiver should not carry on business oj 
 
 not allowed over realty as against purchasers not parties. .. . 616 
 when receiver required to return purchase-money on an- 
 
 nulling purchase Z' ['.MS^SSa 
 
 functions of receiver 
 
 right to rents g 
 
 tenants required to attorn to 
 
 right to rents in arrear • 
 
 motion for tenants to attorn, when ordered to stand over. ... 6^U 
 
 costs on • -„- 
 
 eflfect of order on tenants to pay receiver o^J 
 
 payment to third person 
 
 right to distrain, no settled practice • • • "^ 
 
 not allowed to distrain when plaintiff still proceeds at law 6Z3 
 
 must notify tenants of appointment before suit for rent W4 
 
 attachment for refusal to pay rent to • 
 
 must be discharged before receiver can distrain, and 
 
 626 
 
 znce versa _ 
 
 rights of third persons not determined on oZ/ 
 
 not issued pending abatement of suit by death 627 
 
 effect of authorizing defendant to collect rents 628 
 
 not appealable ^ 
 
 receiver should invest rents 
 
 rights of claimants of 
 
 who entitled to rents of corporate property 
 
 receiver continued for collection of, until conveyances ex- 
 
 6ol 
 
 ecuted ,.^2 
 
 should pay rent due landlord
 
 1080 INDEX. 
 
 REAL PROFERTY—Confmucd. Section 
 
 functions of receiver, right to make repairs .... 180, 633 
 
 duty of, when waste committed 634 
 
 inj unction 634 
 
 may file bill to sell free from liens 635 
 
 purchaser at receiver's sale, rights of 636 
 
 what sufficient to see 636 
 
 purchaser not affected by errors 636 
 
 may enjoin use of premises for forbidden purposes 637 
 
 permission of court to lease premises 638 
 
 lease not binding on infant remainder-man 638 
 
 rent due third parties 638a 
 
 dilapidations 638a 
 
 receiver ordered to surrender to new trustees 704 
 
 RECEIVERS' CERTIFICATES, 
 
 in cases of private corporations 312& 
 
 in railway foreclosures 398c-398y 
 
 unsupported by principle 398c 
 
 not invalidated because bill is demurrable 398c 
 
 sustained by authority 398c 
 
 purposes for which issued 398^ 
 
 preference as between different classes of certificates 398c/, 398; 
 
 not commercial paper 398^ 
 
 innocent purchasers not protected 398^ 
 
 when bondholder estopped from questioning 398/ 
 
 when not estopped 398/ 
 
 sale subject to 398g 
 
 when purchaser liable for 398/t 
 
 case of Illinois Midland Railway 398/ 
 
 priority as between, for compensation of receiver and that of 
 
 trustee 398/ 
 
 same as to counsel fees 398/ 
 
 RECOGNIZANCE, 
 
 usually required of receiver before entering on duties 118 
 
 two sureties required under English practice 118 
 
 of receiver alone, when allowed 119 
 
 may be filed nunc pro tunc 121 
 
 liability of sureties on 127-133 
 
 may be vacated as to one surety 127 
 
 practice on so vacating 127 
 
 on death of one surety on, new one required 128 
 
 liability on, when absolute 129 
 
 when action may be sustained on 129 
 
 suit on, after death of receiver 130 
 
 judgment on, enjoined after full amount due is paid by surety 131
 
 INDEX. 1081 
 
 REDEMPTION, Section 
 
 from receiver's sale, not allowed 199c 
 
 REFERENCE. (See Master in Chancery.) 
 
 REGISTER OF COURT, 
 
 not allowed to appoint receiver 43 
 
 REHEARING, 
 
 receiver may be appointed on 91 
 
 additional proof requisite on 91 
 
 may be allowed after appointment 92 
 
 when not granted in creditor's suit 92 
 
 RELATIONSHIP, 
 
 effect of, in selecting receiver 67 
 
 as to removal 821 
 
 RELIGIOUS SOCIETY, 
 
 dissension in, when receiver refused 563 
 
 REMAINDER-MAN, 
 
 can not enjoin receiver from turning him out 596 
 
 infant, not bound by lease by receiver 638 
 
 REMEDY AT LAW, 
 
 a bar to appointing receiver 10 
 
 defined 10 
 
 difficulty of, no ground for receiver 10, 592 
 
 when need not be exhausted 10 
 
 laches in resorting to, no ground for receiver 10 
 
 when no bar to injunction on behalf of receiver against tax.... 140a 
 
 bar to receiver in aid of creditor of corporation 301 
 
 must be exhausted before receiver appointed on creditor's bill 403 
 must be pursued by receiver of debtor to recover property claimed 
 
 by third persons 457 
 
 bars receiver over real property 555 
 
 REMOVAL, (See Discharge.) 
 
 of receiver, for cause 820-831a 
 
 power of court considered 820 
 
 distinction between, and "vacation of appointment" and "dis- 
 charge" 820, note 
 
 rests in discretion 821 
 
 relationship to parties, not ground for 821 
 
 when ground for, with other circumstances 821 
 
 when not ground for 821 
 
 want of notice of appointment of successor not ground for 821 
 
 not removed to make way for agents of parties 822 
 
 employment of counsel for parties not ground for 823 
 
 courts always open for 824 
 
 by vacating appointment 824
 
 1082 INDEX. 
 
 REMOVAL— Continued. Section 
 
 of receiver, written notice of motion required 834 
 
 notice to every creditor unnecessary 824 
 
 decision on, not appealable 825 
 
 allowed pending motion for new trial 825 
 
 analogous to dissolution of inj unction 826 
 
 removed when equities of bill denied by answer 826 
 
 substitution by consent 827 
 
 removal of several and extending one 827 
 
 of receiver of bank who was shareholder and director 828 
 
 in creditor's suit, employment of debtor to collect not 
 
 ground for 828 
 
 compelled to make restitution on 829 
 
 receiver not heard in opposition to 830 
 
 when defendants estopped from, by their own agreement.... 831 
 
 diligence necessary in application for 831a 
 
 suit continued by successor 213 
 
 REMOVAL OF CAUSE, 
 
 right to, of receiver of federal court 60&, 395c 
 
 RENTS, (See Real Property.) 
 
 receiver to collect, may be appointed after decree 110 
 
 receiver of, pending action for divorce 146 
 
 landlord can not distrain for, when goods have passed into re- 
 ceiver's possession 156 
 
 receiver to collect, his duty to move for attachment in interfer- 
 ing with 167 
 
 when party not liable for contempt in collecting 167 
 
 receiver may collect rents until removal, although cause is abated 185 
 action by receiver to recover, notice to tenant of appointment 
 
 necessary 223 
 
 when receiver liable for 273 
 
 when not personally liable for 273a 
 
 liability for stipulated, or reasonable, on adoption of lease of 
 
 principal 273c 
 
 due from firm, when receiver not liable for 281 
 
 loss of, solicitor acting as receiver without appointment liable for 284 
 
 of corporate property, right to, after receivership 351 
 
 vendor of lands to railway, when may distrain for 372 
 
 claim for, against railway when allowed preference 394b, 394J 
 
 of debtor's building, receiver allowed on creditor's bill 417 
 
 from sub-tenants, when receiver directed to pay to landlord 470 
 
 receiver over, pending ej ectment 576 
 
 after verdict for recovery of lands 577 
 
 of leasehold interests 578 
 
 assignee of lease not entitled to 579
 
 INDEX. 1083 
 
 RENTS — Continued. Section 
 
 right to, when receiver extended to other applications 583 
 
 when cestui que trust entitled to receiver over 584 
 
 receiver over, not allowed in mechanic's lien suit 586 
 
 in aid of proceedings in bankruptcy 587 
 
 denied in case of marriage settlements 591 
 
 not granted because of difficulty in enforcing legal remedy 592 
 
 granted when property escheated to state 594 
 
 appointed before answer in emergency 598 
 
 in case of exclusion by tenant in common 604 
 
 receiver allowed over moiety 605 
 
 allowed in default of defendant giving security 605 
 
 receiver's right to 618 
 
 tenants compelled to attorn to 618 
 
 right to arrears 619 
 
 motion for tenants to attorn, when ordered to stand over. . . . 620 
 
 costs on 620 
 
 effect of order on tenants to pay to receiver 621 
 
 effect of payment to third person 621 
 
 right to distrain, practice unsettled 622 
 
 not allowed to distrain when plaintiff still proceeds at law 623 
 
 must notify tenants of appointment before bringing suit for 624 
 
 attachment against tenant for refusing to pay 625 
 
 must be discharged before receiver can distrain, and 
 
 vice versa 626 
 
 rights of third persons not determined on 627 
 
 not issued pending abatement of suit by death 627 
 
 effect of permitting defendant to collect rents 628 
 
 receiver should invest rents 629 
 
 rights of claimants of 629 
 
 who entitled to rents of corporate property 630 
 
 receiver continued for collection of, until conveyances ex- 
 ecuted 631 
 
 receiver should pay rent due landlord 632 
 
 of mortgaged premises, receiver of, not allowed when security 
 
 adequate 642 
 
 of railway company 642 
 
 receiver of, refused when property already in custodia legis 642 
 
 refused when improvements destroyed by fire 642 
 
 allowed when security inadequate and mortgagor insolvent 643 
 mortgagor entitled to rents in receiver's hands to make up 
 
 deficiency 643 
 
 express pledge of rents 643 
 
 when insolvency of mortgagor immaterial 643
 
 1084 INDEX. 
 
 RENTS— Co«/!»«rrf. Section 
 
 of mortgaged premises, insurance and taxes 643 
 
 past-due rents 643 
 
 when entitled to unpaid rents 644 
 
 liability for waste of, by receiver 645 
 
 paid into court, mortgagor not entitled to, on receiver's 
 
 discharge 656 
 
 when owner of equity of redemption entitled to, collected 
 
 by receiver 657 
 
 receiver of, pending appeal 665o 
 
 right to, as between different mortgagees 688, 689 
 
 when j unior mortgagee entitled to 688 
 
 prior mortgagee entitled to 688 
 
 contrary rule in Virginia 689 
 
 assigned to junior mortgagee, prior mortgagee can not 
 
 have receiver of 690 
 
 receiver of, allowed on bill by junior mortgagee to 
 foreclose and to compel prior mortgagee to exhaust 
 
 other mortgage 691 
 
 receiver allowed over, on death of one trustee and refusal of 
 
 another to act 694 
 
 when plaintiff liable to pay, of receivership premises 809o 
 
 RENT CHARGE, 
 
 receivers allowed in aid of c 585 
 
 REORGANIZATION COMMITTEE, 
 
 expenses of, of railway 394&, note 
 
 REPAIRS, 
 
 by receiver, rule as to 180, 633 
 
 REPLEVIN, 
 
 by receiver, will not lie when property seized under paramount lien 136 
 against receiver, enjoined when brought without leave 256 
 
 RIGHTS OF ACTION, (See Suits.) 
 
 receiver succeeds to those of original party 201 
 
 not changed by appointment of receiver 204, 318 
 
 of receiver, when determined by statute 211 
 
 limited to state where appointed 239 
 
 of receiver of corporation 313-342a 
 
 over national bank 360 
 
 in creditors' suits 453-^71o 
 
 over partnerships 539 
 
 RINGS, 
 
 receiver appointed over 432
 
 INDEX. 1085 
 
 SALARY, (See Compensation of Receiver.) Section 
 
 of public officer, receiver refused 22 
 
 of school-teacher 22 
 
 of clerk of court 22 
 
 receiver appointed without, security dispensed with 118 
 
 of corporate officers, allowed by receiver pro rata 336 
 
 when not allowed for period covered by receivership 336 
 
 SALE, 
 
 application of proceeds should not be included in order of ap- 
 pointment 100 
 
 set aside for undue haste 112 
 
 by sheriff, when purchaser not in contempt for refusing to sur- 
 render possession to receiver 168 
 
 to receiver by himself individually 193, note 
 
 "ty receivers 191-199^ 
 
 set aside for fraud 191 
 
 for inadequate price 191 
 
 does not divest existing liens 191, 199o 
 
 may be conducted by master in chancery or agent for receiver 191 
 
 court vested with power to sell when necessary 192 
 
 may be decreed though interests of parties not yet ascertained 192 
 
 though no petition therefor filed 192 
 
 sale of steamboat 192 
 
 receiver not allowed to purchase for his own benefit 193 
 
 the rule independent of question of fraud 194 
 
 receiver can derive no benefit from foreclosure sale 194 
 
 nor from j udicial sale 194 
 
 when sale set aside because of purchase by receiver 194 
 
 purchase of annuity by receiver set aside 194 
 
 order for, can not be assailed in collateral action 196 
 
 fraudulent action to set aside 196 
 
 to meet taxes, evidence should be clear 197 
 
 of personal property, discretion as to sale by bulk or in parcels 198 
 
 when set aside for undue haste 198 
 
 in bulk or parcels 198 
 
 private sale 198 
 
 irregular sale 198 
 
 want of notice of 198 
 
 order of, appealable 198 
 
 confirming, appealable 198 
 
 of real estate, power to give deed implied 199 
 
 confirmation of conveyance by the court 199 
 
 subj ect to incumbrances and liens 199a 
 
 title of third person not divested by 199a 
 
 of real estate of partnership 199a
 
 1086 INDEX. 
 
 SALE— Continued. Section 
 
 by receivers, subj ect to dower interest 199o 
 
 caveat emptor 1996 
 
 confirmation unnecessary 199^ 
 
 when not refused 199^ 
 
 what amounts to 199^- j^Q^e 
 
 no redemption from igg^ 
 
 fraudulent sale by receiver 199j 
 
 must take place at time designated by court 199^ 
 
 of corporate property does not need corporate seal 338 
 
 not set aside because applied for by creditor who was also 
 
 judge 338 
 
 purchaser acquires no right of action against former officer 356 
 
 when shareholder estopped from questioning order of sale 356 
 
 by sheriff, when subject to receiver's sale 423 
 
 when prior to receiver's sale 424 
 
 when receiver directed to stay 429 
 
 by receiver, not ordered pending appeal as to jurisdiction 543 
 
 SAVINGS BANK. (See Bank.) 
 SECRETS, 
 
 concerning manufacture, not disclosed to receiver 36 
 
 SECURITY, (See Bond, Recognizance, Sureties.) 
 
 usually required of receiver in advance 118 
 
 of receiver alone, when allowed 119 
 
 may be dispensed with by court 120 
 
 dispensed with when same receiver extended to different cred- 
 
 itors' suits 
 
 120 
 
 failure to give, receiver acquires no title 121 
 
 omission to require in final decree, effect of 122 
 
 additional, required when same receiver extended over real estate 123 
 
 assignment of mortgage as, held good 125 
 
 held by creditor of deceased, receiver not entitled to 157 
 
 w^hen defendant allowed to give, in lieu of receiver and injunction 478 
 SELECTION, 
 
 of receiver 63_81g 
 
 importance attached to 53 
 
 reference to master under English practice 63 
 
 same under New York chancery practice 63 
 
 by master, courts averse to interfering with 64 
 
 grounds of interference 64 
 
 by court below, rests in judicial discretion 65 
 
 rarely interfered with by appellate court 65 
 
 grounds of interference with 65 
 
 may be interfered with to prevent injury and expense.. 66
 
 INDEX. 1087 
 
 SELECTION— Con^mM^rf. Section 
 
 of receiver, effect of relationship 67 
 
 interest with defendant 68 
 
 solicitor eligible 68 
 
 eligibility of one of plaintiffs 68 
 
 person unfamiliar with the property not eligible 68 
 
 distant residence considered as an objection 69 
 
 solicitor, under commission of lunacy, ineligible 70 
 
 in the cause, ineligible 70 
 
 master in chancery ineligible 70 
 
 barrister eligible 70 
 
 member of parliament 70 
 
 peer ineligible 70 
 
 member of reorganization committee 70 
 
 creditor of insolvent 70, 72 
 
 party to the cause 70 
 
 clerk of court not necessarily receiver 71 
 
 clerk and master 71 
 
 of receiver over corporation, delicacy of 72 
 
 officer ineligible 72 
 
 relaxation of rule 72 
 
 eligible by statute 72 
 
 stockholder 72 
 
 another corporation eligible 73 
 
 of trustees, generally ineligible 74 
 
 when trustee and executor eligible 74 
 
 next friend of infant ineligible 75 
 
 mortgagee and trustee eligible 76 
 
 in partnership cases, administrator of deceased partner eligible 78 
 
 partner eligible 540 
 
 nomination in bill 79 
 
 nomination by consent of parties 79 
 
 stockholder and director of plaintiff corporation as receiver 80 
 
 mortgagee of West India estates eligible 81 
 
 objection to, must be made in apt time 81a 
 
 how waived 81a 
 
 SEQUESTRATION, 
 
 receivership considered as a 5 
 
 of effects of corporation, not done under general equity powers 288 
 
 under statute, rights of creditors 297 
 
 right of j udgment creditors to 298 
 
 SET-OFF. 
 
 receiver not allowed to set off personal claim 178 
 
 to suit on note by receiver of bank 247 
 
 to suit by receiver of insurance company on premium note 247 
 
 in actions by receivers of insolvent corporations 248 
 
 accruing after receiver's appointment, not allowed 249
 
 1088 INDEX. 
 
 SET-OFF— Cont!nued. _ Section 
 
 not allowed in suit by receivers of corporation to recover illegal 
 
 dividends ^^^ 
 
 counter-claim not allowed for amount illegally paid for notes 251 
 
 for rent due from firm, not allowed in suit by receiver of firm 253 
 
 when allowed to suits by receivers of corporations 333 
 
 not allowed to suit by receiver to recover illegal dividends 333 
 
 against receivers of national banks 364a 
 
 defendant can not set off judgment against receiver 464 
 
 when receiver's compensation not subj ect to 796 
 
 SHAREHOLDERS, (See Corporations.) 
 
 77 
 of corporation as its receiver '^ 
 
 of plaintiff corporation as receiver 80 
 
 when receiver not appointed on behalf of 29^ 
 
 misconduct of, as ground for receiver 293 
 
 receivers for protection of, cautiously granted 294 
 
 not entitled to relief after parting with interest 294 
 
 acquiescence or laches of, a bar to receiver 295 
 
 in behalf of minority, when receiver not appointed 295o 
 
 when receiver appointed 295& 
 
 action by, against directors 295b 
 
 when demand on receiver to sue is unnecessary. 
 
 29Sb 
 
 demand on officers and directors to proceed 295c 
 
 when demand unnecessary 295c 
 
 when refused receiver as to new issue of stock 296 
 
 of foreign corporation, when allowed receiver in New York 306 
 
 suit against, for subscription, not barred by appointing receiver 309 
 
 individual liability ^^''^ 
 
 enforcement of, in foreign state 317?; 
 
 the same ; receiver as quasi-assignee • • • 317c 
 
 suit against, maintained by receiver of corporation for unpaid 
 
 subscriptions "^^^ 
 
 defenses to such actions 3_4o 
 
 will not be enj oined 325 
 
 fraud no defense to, when all parties participated 325 
 
 •when estopped from questioning receiver's appointment or order 
 
 of sale 356 
 
 of national bank, receiver may enforce liability of ^ 360a 
 
 may have receiver over railroad, on bill to set aside void lease 366 
 
 SHERIFF, 
 
 receiver compared with ^ 
 
 relative title and possession as between receiver and 136, 138 
 
 not allowed to enjoin receiver from suing for unauthorized levy 141 
 when levy and sale of property in receiver's possession not a 
 
 contempt of court ^71 
 
 receiver may move for judgment against, for money collected 228
 
 INDEX. 1089 
 
 SHERIFF— Co7itinned. Section 
 
 sale by, when purchaser at receiver's sale takes priority 423 
 
 when purchaser takes priority over receiver's sale 424 
 
 when purchaser granted receiver and injunction 613 
 
 levy by, when receiver's title subject to 440 
 
 when a contempt of court 443 
 
 when receiver can not recover value of property 469 
 
 SLAVES, 
 
 in receiver's possession, defendant not responsible for 160 
 
 SOLDIERS, 
 
 when receiver refused over mortgaged property of 653 
 
 SOLICITOR, 
 
 eligible as receiver 68 
 
 under commission of lunacy, ineligible 70 
 
 in the cause, ineligible 70 
 
 payment to, by surety, when insufficient 132 
 
 assuming to act as receiver, liable for loss in collection of rents 284 
 
 SPECIFIC PERFORMANCE, 
 
 vendor allowed receiver on bill for 609 
 
 vendee allowed receiver on bill for 610 
 
 insolvency of vendor unnecessary 610 
 
 STATUTE OF LIMITATIONS, 
 
 as against receiver 126o 
 
 possession of receiver in aid of, defendant in ejectment can not 
 
 rely on 134 
 
 operation of, not prevented by receivership 135, 184, 556 
 
 payment by receiver can not take case out of 184 
 
 effect of appointment to prevent statute from running in favor 
 
 of stranger 184 
 
 STATUTES, 
 
 enlarging jurisdiction of equity over corporations 287, 288 
 
 construction of 289 
 
 STEAMBOAT, 
 
 sale of, by receiver 192 
 
 when may be operated by receiver 481 
 
 STOCKHOLDER. (See Corporations, Shareholders.) 
 
 STRANGER, 
 
 not allowed a receiver 12 
 
 can not nominate receiver 12 
 
 receiver not appointed for benefit of 13 
 
 may apply to court pro inter esse suo 13 
 
 can not object to receiver employing counsel of parties 217 
 
 Receivers — 69.
 
 1090 INDEX. 
 
 SUBSCRIPTIONS, Section 
 
 to fund, receiver granted 35 
 
 to capital stock, must be enforced by receiver according to ex- 
 isting remedies 207 
 
 of insurance company, receiver may recover 212 
 
 unpaid, receiver's right of action to enforce 224 
 
 action against shareholder for, not barred by appointing 
 
 receiver 309 
 
 may be enforced by receiver of corporation 324 
 
 shareholder not entitled to injunction against 325 
 
 fraud no defense when all parties participated 325 
 
 by receiver of railway, must be by action at law 394 
 
 SUBSTITUTION, 
 
 of receiver in lieu of plaintiff on terms 214 
 
 what not a 214 
 
 SUCCESSOR, 
 
 to receiver, when not appointed at instance of defendant 39^ 
 
 suits to be continued by 213 
 
 not bound by covenant of former receiver 273& 
 
 fund liable for tort of receiver's agent although, appointed 286o 
 
 liability of receiver enforced against 397fe 
 
 want of notice of appointment of, not ground for removal 821 
 
 SUIT, 
 
 must be pending to warrant receiver 17 
 
 by receiver, failure to execute bond ground of nonsuit 121 
 
 on receiver's bond, when right of action accrues 129 
 
 independent, against surety on receiver's bond 129a 
 
 against receiver, leave of court necessary 139 
 
 may be enjoined for want of leave 140 
 
 independent by receiver to recover property in possession of 
 
 stranger 145, 149 
 
 by receivers, principles governing 200-230 
 
 in some states regulated by statute 200 
 
 regulated by court 200 
 
 receiver succeeds to rights of action of original party 201 
 
 what receiver must allege and show 201 
 
 must show leave of court 201 
 
 can not be maintained on obligation paid to obligee 201 
 
 will lie on note of insolvent 201 
 
 by receiver against himself individually 201, note 
 
 appointment of receiver over corporation suspends its right 
 
 of action 201, note 
 
 courts exercise strict control as to bringing 202 
 
 if unauthorized, receiver may be directed to discontinue 202 
 
 when regularity of appointment deemed conclusive in 203 
 
 rights of action not changed by appointment of receiver 204
 
 INDEX. 1091 
 
 sun— Continued. Section 
 
 by receivers, can not be maintained when not maintainable by 
 
 original party 204 
 
 same defenses available as in suits by original parties 205 
 
 on note for subscription to capital stock 205 
 
 judgment in action by, bar to subsequent action 206 
 
 freedom of action by receiver in management of case 207 
 
 appeal by receiver from adverse decision, not evidence of 
 
 bad faith 207 
 
 receiver must pursue existing remedies 207 
 
 leave necessary before bringing 208 
 
 the rule applied to actions of ejectment 208 
 
 to actions for condemnation 208 
 
 to actions to enforce stockholder's liability 208 
 
 leave may be conditional 208 
 
 on appeal bond, when receiver's duty to sue without leave 208 
 receiver must sue in name of original party in whose favor 
 
 action accrued 209 
 
 the rule applied to receiver of corporation 209 
 
 of partnership 209 
 
 over real estate 209 
 
 contrary rule in some states, receiver allowed to sue in his 
 
 own name 210 
 
 when allowed in name of receiver of partnership 210 
 
 of bank 210 
 
 to recover purchase price 210 
 
 allowed in name of receiver under statutes 211 
 
 when receiver's right of action determined by statute 212 
 
 trover by receiver of bank for conversion of bonds 212 
 
 suits by receiver of insurance company 212 
 
 on death of receiver, successor substituted 213 
 
 practice on 213 
 
 on removal of receiver, terms imposed on successor 214 
 
 what not a substitution 214 
 
 foreclosure of mortgage by successors of original receivers 215 
 employment of counsel by receivers, should not employ coun- 
 sel of parties 216 
 
 limitation upon the rule 217 
 
 receiver may maintain action of detinue 218 
 
 judgment in favor of receiver, bar to subsequent suit for 
 
 same cause of action 219 
 
 effect of amendment changing character of plaintiff from 
 
 administrator to receiver 220 
 
 distinction between suits concerning title, and concerning 
 
 injuries to or possession of real estate 221 
 
 to set aside fraudulent conveyance made to defeat decree 
 
 for alimony 221
 
 1092 
 
 INDEX. 
 
 SUIT— Continued. Section 
 
 by receivers, to recover usurious payments 222 
 
 rents, notice to tenant necessary 223 
 
 balance of purchase-money 223 
 
 to enforce unpaid subscription 224 
 
 when defendant can not object to irregularities in appoint- 
 ment 225 
 
 of corporation, latter not proper party plaintiff 225 
 
 when right of action relates back to beginning of princi- 
 pal's title 226 
 
 failure to execute bond, ground for nonsuit 227 
 
 when receiver entitled to move for judgment against sheriff 
 
 for money collected 228 
 
 liability of receiver for costs 229 
 
 receiver may garnish plaintiff in suit in which he was ap- 
 pointed 230 
 
 pleadings and proofs in suits by receivers 231-238 
 
 receiver must allege his authority in traversable terms 231 
 
 stringency of former rule as to particulars required to be 
 
 alleged 232 
 
 now sufficient to allege appointment in general terms 233 
 
 receiver should state equities of judgment creditors whom 
 
 he represents 234 
 
 when defendant estopped from denying receiver's right to 
 
 sue in that capacity 235 
 
 in actions by receivers on premium notes 236 
 
 of national banks 237 
 
 degree of proof required at trial 238 
 
 receiver need not produce transcript of all proceedings in 
 
 which he was appointed 238 
 
 suits by receivers in foreign courts 239-244a 
 
 receiver has no extraterritorial powers 239 
 
 rights of action limited to his own state 239 
 
 illustrations of rule denying receiver's right of action in 
 
 another state 240 
 
 suits allowed in another state on principles of comity 241 
 
 tendency toward more liberal doctrine 241 
 
 action maintainable when receiver has legal title or is quasi- 
 
 assignee 241a 
 
 receiver of corporation allowed to prove debt in bankruptcy 
 
 in another state 242 
 
 mortgage given to receivers of another state, may be fore- 
 closed in state where premises are located 243 
 
 assignment by defendant, right of action under 244 
 
 designation of plaintiff as receiver, when a descriptio 
 
 personcE 244 
 
 when allowed to sue for property in another state 244
 
 INDEX. 1093 
 
 SUIT — Continued. Section 
 suits by receivers, jurisdiction of foreign court, when not pre- 
 sumed 244^ 
 
 defenses to suits by receivers 24S-253a 
 
 same defenses available as if action were brought by orig- 
 inal party 245 
 
 rule applied to action by receiver of bank against depositor 245 
 want of consideration of note and fraud, when not available 245 
 
 set-offs, the general rule 247 
 
 what may be set off in suit on notes by receiver of bank 247 
 
 in suit by receiver on premium notes 247 
 
 burden of proof 247 
 
 assignment, effect of 247 
 
 in actions by receivers of insolvent corporations 248 
 
 demands accruing after receiver's appointment can not 
 
 be set off 249 
 
 counter-claim allowed for services rendered receiver 249 
 
 not allowed in suit by receivers of corporation to recover 
 
 illegal dividends 250 
 
 in suit to recover notes illegally transferred, counter- 
 claim not allowed for amount paid for notes 251 
 
 judgment against receiver, can not be set off in suit by 
 
 receiver in favor of creditors 252 
 
 suit by receiver of partnership against purchaser, set- 
 off for rent to firm not allowed 253 
 
 notes not attached in another state 253a 
 
 suits against receivers 254-268a 
 
 leave of court necessary before bringing 254 
 
 must be averred 254 
 
 exceptions to rule 254 
 
 conflict of authority as to whether leave jurisdictional 254a 
 
 presumption as to leave 254a 
 
 want of leave, availability on appeal 254o 
 
 in collateral proceeding ^ 254o 
 
 court may fix forum 254a 
 
 dismissal of action begun without leave 254/? 
 
 usual practice by petition 254b 
 
 court may grant leave to sue 2546 
 
 trial by jury ,2546 
 
 practice on petitions of intervention 254c 
 
 leave to sue receiver may be revoked 254d 
 
 may be conditional 254d 
 
 when not revoked 254d 
 
 court may permit action against receiver for injuries sus- 
 tained by his negligence 255 
 
 suit against receiver of railway, no defense that he is a 
 public officer 255
 
 1094 INDEX. 
 
 SUIT— Covtinued. Section 
 
 suits against receivers, receivers not personally liable 255 
 
 may be enjoined when brought without leave 256 
 
 suit for trespass not enj oined 257 
 
 not enjoined because matters have been passed upon in other 
 
 proceedings 257 
 
 receiver of debtor need not be joined as defendant in action 
 
 against debtor 258 
 
 but must be made party before he can take action 258 
 
 must file plea 258 
 
 as party to appeal 258 
 
 to foreclosure suit 259 
 
 receivers of corporation, joinder of as defendants 260 
 
 appearance of receiver a waiver of want of leave to bring suit 261 
 
 courts will not enjoin their own receivers 262 
 
 relief granted in receivership proceeding 262 
 
 mandatory injunction against receiver 262 
 
 receiver may bring bill of interpleader against different 
 
 claimants proceedings against him 263 
 
 receivers not allowed to waive any defense 264 
 
 when receiver not required to make particular defense 264 
 
 when receiver may appeal from orders in receivership cause 264a 
 
 can not appeal from administrative orders 264^ 
 
 nor from order of distribution 2fAb 
 
 costs against receiver personally on unauthorized appeal.... 264b 
 
 leave to sue receiver, what notice necessary 265 
 
 to defend ejectment against receiver 266 
 
 receiver not entitled to costs when he has not obtained leave 
 
 to defend 267 
 
 discharge of receiver, effect of 268 
 
 when receiver concluded by judgment 268a 
 
 by receivers of corporations 316-333 
 
 against receiver of corporation to collect tax 340 
 
 by receiver of national bank, what must be alleged 361 
 
 what must be proven 361 
 
 against receivers of railways 395-398& 
 
 independent, by receiver for property of debtor claimed by third 
 persons 457 
 
 SUPERSEDEAS, 
 
 not a matter of right 29 
 
 effect of, on receiver's functions 29, 190 
 
 on receiver's possession 136 
 
 should restore property to defendant 190 
 
 disobedience of, by receiver a contempt 190 
 
 pending appeal with, court may make administrative orders . 190a
 
 INDEX. 
 
 1095 
 
 Section 
 SUPPLEMENTARY PROCEEDINGS, (See Judgment Creditors.) 
 
 under New York code, receivers in 401 
 
 no objection that property is claimed by adverse claimants 413 
 not appointed to attack assignment which may be set aside 
 
 by creditor 414 
 
 assignment to receiver unnecessary 447 
 
 title vests in receiver on appointment 447 
 
 rights of action of receiver 454 
 
 SUPPLIES, 
 
 furnished railway, creditors not entitled to priority 379 
 
 SUPREME COURTS, 
 
 when may appoint receivers 41 
 
 SUPREME COURT OF JUDICATURE ACT, 
 
 receivers under 23 
 
 in aid of j udgment creditors 439a 
 
 mortgagees and debenture holders 652a 
 
 SURETIES, 
 
 of receiver, two required under English practice 118 
 
 approval of 126 
 
 may be non-residents 126 
 
 liability of 127-133C 
 
 held strictly to 127 
 
 bond may be vacated as to one 127 
 
 practice on so vacating 127 
 
 death of one, new one required 128 
 
 when liability becomes absolute 129 
 
 when action can be maintained against 129 
 
 independent action on bond against 129a 
 
 suit against, on death of receiver 130 
 
 ■when concluded by order on receiver 130a 
 
 not liable for default prior to bond 130a 
 
 liability for interest 131 
 
 when relieved from paying interest 131 
 
 liable to costs of attachment against receiver for not ac- 
 counting 131 
 
 surety protected by injunction after paying full amount due 131 
 
 payment by surety to solicitor, when not sufficient 132 
 
 right of surety to be reimbursed out of balance in receiver's 
 
 hands 133 
 
 when ordered to refund 133 
 
 remedy in equity against 133 
 
 of clerk of court appointed receiver 133a 
 
 liability of, to creditors not named in bond 133a 
 
 not liable for violation of duties beyond scope of ap- 
 pointment 133&
 
 1096 INDEX. 
 
 SURETIES — Continued. Section 
 
 of receiver, when liable although bill is afterwards dismissed 133c 
 
 arrangement with, for control of funds 274 
 
 of administrator, refused receiver 721 
 
 SURVEYOR. (See Land Surveyor.) 
 
 T. 
 
 TAXES, 
 
 when receiver refused over 32 
 
 lien of, not affected by appointment of receiver 138 
 
 how enforced against receiver 140a 
 
 when receiver may enjoin 140a 
 
 remedy at law not a bar 140a 
 
 liability of receiver for 140a, note 
 
 sale by receiver for pasmient of 197 
 
 when receiver can not enjoin 318 
 
 against railroad company in hands of receiver 370&, 3946 
 
 taxes on leased line, when allowed preference in railway re- 
 ceivership 394m 
 
 municipal, receiver refused for collection of 403o 
 
 on mortgaged property, non-payment ground for receiver 672 
 
 when receiver may enjoin collection of 753 
 
 unauthorized payment of, when allowed in account 798 
 
 payment by receiver gllo 
 
 TENANTS, (See Rents.) 
 
 enjoined from bringing trespass or replevin against receiver 
 
 without leave of court 256 
 
 can not enjoin receiver from turning out of possession 596 
 
 compelled to attorn to receiver 618 
 
 when receiver authorized to relieve 731 
 
 TENANTS IN COMMON, 
 
 of personalty, courts averse to appointing receiver 20 
 
 of realty, receivers as between 603-608 
 
 courts averse to interference 603 
 
 when receiver denied 603 
 
 exclusion by co-tenant, ground for 604 
 
 insolvency as ground for 604 
 
 may be allowed over moiety 605 
 
 inj unction allowed 605 
 
 allowed in default of defendant giving security 605 
 
 equitable tenants in common 605 
 
 allowed in case of colliery 606 
 
 actions for partition 607 
 
 notice to under-tenants not to pay rents to co-tenants 608
 
 INDEX. 1097 
 
 TENANT FOR LIFE, Section 
 
 receiver granted against 572 
 
 THEATER, 
 
 receiver not appointed to manage 36 
 
 partnership in, when receiver appointed 513 
 
 TIME, 
 
 of appointment, formerly after answer 103 
 
 modem practice before answer 103 
 
 grounds of interference before 104, 105 
 
 modern English practice adopted in this country 105 
 
 strong ground required for receiver before answer 106 
 
 not dated back by relation 108 
 
 may be made at final hearing 109 
 
 the same, although bill does not pray receiver 109 
 
 may be made after final decree 1 10 
 
 TITLE, 
 
 not changed by appointment of receiver 5 
 
 dispute as to, receiver reluctantly allowed 11 
 
 of receiver of state court, as affected by subsequent bankruptcy.. 52 
 
 receiver does not acquire, until bond executed 121 
 
 vests back to original order of appointment 136 
 
 does not take effect back to beginning of action 136 
 
 of receiver, not divested by order of court when he is not a party 161 
 
 not determined on proceedings for contempt 172 
 
 to real estate of corporation, not divested by receiver pendente 
 
 lite 302 
 
 vests in receiver on dissolution of corporation 303 
 
 of receiver in creditors' suits 440-452 
 
 subject to prior liens 440 
 
 not better than that of debtor 440 
 
 takes no title to exempted property 441 
 
 exemption extends to insurance 442 
 
 effect of assignment as vesting 443 
 
 what passes to receiver under assignment 444 
 
 right of action for tort does not pass 444 
 
 when debtors compelled to make assignment 446 
 
 receiver acquires title to debtor's property under New York 
 
 code by virtue of appointment 447 
 
 superior to that of judgment creditor subsequently levying 448 
 
 when not defeated by delay in taking possession 448 
 
 choses in action as between receiver and purchaser 449 
 
 trust fund, when receiver not entitled to 450 
 
 takes ntle to estate by curtesy 451 
 
 acquires no title when debtor dies before appointment 452 
 
 of third parties, not determined on summary application 457 
 
 to real property, not affected by appointment of receiver 556 
 
 receiver not allowed in contest concerning 557
 
 1098 INDEX. 
 
 TOLLS, Section 
 
 of bridge company, judgment creditor allowed receiver over .. 300 
 
 of common carrier, receiver over 380 
 
 different mortgagees of, right to receiver as between 382, 385 
 
 when not allowed preference ..383, 385 
 
 TORT, 
 
 independent suit for, against receiver 254& 
 
 joinder of parties in 254o 
 
 liability of receiver for ^'' 
 
 damages for, of receiver's agents, when a charge on fund 286a 
 
 right of action for, does not pass to receiver 444 
 
 TRESPASS, 
 
 action of, against receiver, enjoined when brought without leave 256 
 when receiver liable in, for taking mortgaged property 277 
 
 TROVER, 
 
 can not be maintained by receiver of partnership in his own name 209 
 
 by receiver of bank, for conversion of bonds 212 
 
 for promissory note, by receiver of corporation 316 
 
 TRUST DEED, 
 
 securing railroad bondholders, prior jurisdiction of United 
 
 States courts maintained 54 
 
 securing illegal bank-notes, receiver on bill to set aside 293 
 
 TRUSTEES, (See Trusts.) 
 
 distinguished from receiver 1 
 
 eligibility of, as receivers 74-76 
 
 generally ineligible '^ 
 
 when eligible '4 
 
 mortgagee, also trustee, eligible 76 
 
 in bankruptcy, incompatible with receiver of debtor '^^ 
 
 receiver may be appointed against, after decree HO 
 
 beyond jurisdiction of court, when receiver allowed without 
 
 • 117 
 
 notice ^^' 
 
 in nature of receiver, can not sue in his own name 209 
 
 may be sued without leave of court 254 
 
 under assignment for creditors, refusal to act ground for re- 
 
 412 
 ceiver ^^^ 
 
 mismanagement of, receiver granted 412 
 
 of foreign mining property, when receiver granted against 503 
 
 of religious society, receiver refused over real estate in posses- 
 sion of 5"^ 
 
 dissensions among, ground for receiver to secure rents 584 
 
 death of, or refusal to act, ground for receiver 694 
 
 bad habits of, not alone sufficient 695 
 
 action for removal of, receiver allowed pendente lite 697 
 
 fraudulent conveyance by, receiver allowed 699
 
 INDEX. 1099 
 
 TRUSTEES— Continued. Section 
 
 appointment of new, receiver ordered to surrender to 704 
 
 pension held by, receiver appointed 705 
 
 TRUST FUND, 
 
 of insurance company, mismanagement ground for receiver.... 304 
 
 when receiver of debtor not entitled to 450 
 
 TRUSTS, 
 
 receivers in cases of 692-736 
 
 principles governing the relief 692-705 
 
 referred to general jurisdiction of equity over trusts 692 
 
 receiver only appointed against trustee for good cause 693 
 death of one trustee and refusal of another to act, 
 
 ground for gg4 
 
 bad habits of trustee not alone sufficient 695 
 
 vested in state officers by law, equity averse to receiver 696 
 principles governing, receiver allowed pending action 
 
 for removal of trustee 597 
 
 fraud, misconduct, breach of trust 697 
 
 mingling trust funds with private funds, when not 
 
 ground for g9g 
 
 granted on bill by cestui que trust to set aside convey- 
 ance by trustee for fraud 599 
 
 when devisee allowed receiver as against husband of 
 
 deceased wife 7Qg 
 
 refused in case of trustee under contract for public works 702 
 appointment of trustee as receiver not usually allowed 703 
 
 when allowed 7Q3 
 
 receiver ordered to transfer estate to new trustees when 
 
 appointed 704 
 
 receiver allowed over pension paid by trustee 705 
 
 receivers over executors and administrators 706-724 
 
 courts averse to granting 7Qg 
 
 relief based on doctrine of quia timet 706 
 
 not allowed on slight ground [ " " * yQ-j 
 
 on information and belief yQy 
 
 waste and abuse of trust, ground for [ [ 708 
 
 allowed before answer 7qo 
 
 poverty no ground for 7Q9 
 
 insolvency and misconduct ground for 710 
 
 bankruptcy ground for 7I j 
 
 removal from state, ground for 7J2 
 
 allowed in England though estate in foreign country 713 
 
 executors in foreign country 713 
 
 allowed pending controversy concerning probate 714 
 
 judgment creditors, when allowed receiver against 715 
 
 when denied receiver 71g
 
 1100 INDEX. 
 
 TRUSTS— Continued. Section 
 
 receivers over executors and administrators, not allowed to 
 
 interfere with administration 716 
 
 receiver over, in personal capacity, not entitled to rents in 
 
 representative capacity 717 
 
 death and refusal to act, ground for 718 
 
 misunderstanding between, not ground for 718 
 
 allowed when plaintiff equitably interested in realty with 
 
 deceased 719 
 
 court will not examine executor's account on application 
 
 for 720 
 
 surety of administrator denied receiver against 721 
 
 allowed against administrator in behalf of ward 722 
 
 on removal of receiver executors again ordered to act 723 
 
 appointing receiver does not remove executor 724 
 
 receivers over estates of infants 725-732 
 
 relief based on doctrine of trusts 725 
 
 granted on mismanagement of estate by husband of ex- 
 ecutrix 725 
 
 granted when executor has absconded 726 
 
 refusal of trustees to act, not granted on refusal of one of 
 
 several 727 
 
 granted on refusal of one of two 727 
 
 granted over goods in possession of mortgagee 728 
 
 eligibility of receiver, next friend ineligible 729 
 
 trustee and executor ineligible 729 
 
 when eligible 729 
 
 liability of receiver for interest on funds of 730 
 
 when authorized to relieve poor tenants 731 
 
 not discharged on one of two infants attaining majority 732 
 
 receivers over estates of lunatics 733-736 
 
 when appointed 733 
 
 required to surrender to administrator 733 
 
 relief discretionary 734 
 
 refused in case of rival claimants 734 
 
 solicitor ineligible as 735 
 
 may be called to account 736 
 
 reference to master to ascertain condition of estate 736 
 
 TUNNEL, 
 
 receiver for management of, between railways 368 
 
 TURNPIKE COMPANY, 
 
 receiver over tolls of 382 
 
 as between different mortgagees 385 
 
 U. 
 
 UNFAIR COMPETITION, 
 
 when receiver may enj oin 753
 
 INDEX. 1101 
 
 UNITED STATES COURTS, (See Courts.) Section 
 
 powers of, compared with state courts 50-62a 
 
 retain jurisdiction if first acquired 50 
 
 jurisdiction in bankruptcy, subordinate to prior receiver in state 
 
 courts 51 
 
 receiver of, when guilty of contempt in interfering with receiver 
 
 of state court , 51 
 
 usually recognize prior jurisdiction of state courts 52 
 
 exclusive jurisdiction asserted in proceedings against insolvent 
 
 corporation 53 
 
 foreclosure of railroad trust deed in, when jurisdiction exclusive 54 
 will not entertain bill for account against receiver of state court 55 
 conflict between United States and state courts ground for re- 
 ceiver 58 
 
 receiver of, beyond control of state court 59 
 
 action against, in state court 60 
 
 action by, when maintainable in federal court regardless of 
 
 citizenship and amount 60a 
 
 action against, when removable regardless of citizenship and 
 
 amount 60b 
 
 receiver of state court not granted writ of assistance against 61 
 
 no greater rights of action than receiver of state courts . . 62 
 Supreme Court of United States, power to review decision 
 
 of state court 62a 
 
 over railway, judgment against, not enforcible by state court 397 
 
 on creditor's bill, can not sue in another federal court 471 
 
 USURY, 
 
 suit by receiver to recover 222 
 
 receiver of corporation can not plead, when corporation could not 315 
 
 defense of, in case of receiver in foreclosure suit 664 
 
 V. 
 
 VACANCY, 
 
 application to supply, may be made in chambers 96 
 
 VACATION OF APPOINTMENT, 
 
 distinction between, and "removaJ" and "discharge" 820, note 
 
 VENDEE. (See Purchaser, Vendor.) 
 
 VENDOR, 
 
 of real estate, denied receiver in action to rescind contract 573 
 
 receivers as between vendors and purchasers 609-617 
 
 when vendor entitled to, on bill for specific performance . . 609 
 
 when vendee entitled to 610 
 
 when vendor entitled to, in suit to recover possession for 
 
 non-payment 611
 
 1102 INDEX. 
 
 VERIFICATION, Section 
 
 on information and belief, when insufficient 89 
 
 may be waived 89 
 
 VESSEL, 
 
 lien on freight and earnings of, receiver to protect 408 
 
 exclusion from profits in, ground for receiver 528 
 
 VOUCHERS, 
 
 receiver must present, with account 798 
 
 W. 
 
 WAGES, 
 
 of receiver's employees, liability of plaintiff for 389a 
 
 revision of, by court 393& 
 
 when preferred 312c, 394d 
 
 WARD, 
 
 allowed receiver against guardian 722 
 
 WASTE, 
 
 as ground for receiver 4, 9, 11 
 
 duty of receiver on commission of 634 
 
 inj unction against 634 
 
 loss by, of receiver, when borne by plaintiff 645 
 
 by executor, ground for receiver 708 
 
 WHARFAGE, 
 
 in front of mills, receiver entitled to 158 
 
 WIDOW. (See Dower.) 
 
 WIFE. (See Husband.) 
 
 WILL, (See Devisee, Heirs-at-Law.) 
 
 receiver pending contest over 46 
 
 action to enforce trusts of, receiver appointed after decree 110 
 
 interest of devisee under, receiver can not reach by motion 466 
 
 when receiver appointed over realty in action to enforce trust of 569 
 
 litigation to revoke probate of, not ground for receiver 701 
 
 WRIT OF ASSISTANCE, 
 
 not granted to receiver of state court against prior receiver of 
 
 United States court 61 
 
 not granted to recover property in possession of stranger under 
 
 claim of title 149
 
 UC SOUTHERN REGIONAL LIBRARY FACILITY 
 
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 UNIVERSITY OF CALIFORNIA LIBRARY 
 
 Los Angeles 
 This book is DUE on the last date stamped below. 
 
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 FtB u 4 1993 
 »rig § 1978 
 
 l&w Library Rec'd 
 AUG 311978 
 
 APR 1 h Jbo^ 
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 Law Library Rec'di 
 APR ^ UiSu 
 
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