CHAPTER V.

APPOINTMENT OF RECEIVER, AND OTHER PROVISIONAL

REMEDIES.

In the Codes of 1848 and 1849, the subject of minor provisional remedies was left unprovided for, except by a general reservation of the existing powers of the court. On the amendment of 1851, however, these matters, and the subject of receiverships in particular, were made matter of special provision by sec. 244, and that section has since been further altered on the recent revision, and now reads as follows:

§ 244. A receiver may be appointed:

1. 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 possession of an adverse party; and the property, or its rents and profits, are in danger of being lost or materially injured or impaired.

2. After judgment, to carry the judgment into effect.

3. After judgment, to dispose of the property according to the judgment, or to preserve it during the pendency of an appeal, or when an execution has been returned unsatisfied, and the judgment debtor refuses to apply his property in satisfaction of the judgment.

4. In the cases provided in this code, and by special statutes, when a corporation has been dissolved, or is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights.

5. In such other cases as are now provided by law, or may be in accordance with the existing practice, except as otherwise provided in this act.

When it is admitted by the pleading or examination of a party, that he has in his possession, or under his control, any money or other thing capable of delivery, which, being the subject of the litigation, is held by him as trustee for another party, or which belongs or is due to another party, the court may order the same to be deposited in court, or delivered to such party, with or without security, subject to the further direction of the court.

Whenever, in the exercise of its authority, a court shall have or

dered the deposit, delivery, or conveyance of money or other property, and the order is disobeyed; the court, besides punishing the disobedience as for contempt, may make an order, requiring the sheriff to take the money or property, and deposit, deliver, or convey it, in conformity with the direction of the court.

When the answer of the defendant admits part of the plaintiff's claim to be just, the court, on motion, may order such defendant to satisfy that part of the claim, and may enforce the order, as it enforces a provisional remedy.

The practice in respect to the appointment and duties of receivers is, as will be seen, rather defined than altered by these provisions, and remains substantially the same as before. The elementary and other works upon that subject, and in particular, the Treatise of M. Edwards, should, accordingly be carefully consulted; and the following observations will be confined simply to a short citation and consideration of the decisions which have taken place under the Code, in relation to this remedy, in the order pointed out by the section itself, as now amended.

The first subdivision of that section is, in fact, the principal point to be looked into, in the present connection, bearing, as it does, more peculiarly the stamp of a provisional remedy. Subvisions 2 and 3, are, on the contrary, more properly provisions consequent on a judgment or decree, and as such, have been heretofore considered.

A

An application for a receiver, in general, unless forming part of the judgment in the cause, must, in all cases, be grounded on the usual notice to the adverse party, (see Kemp v. Harding, 4 How. 178, and Dorr v. Noxon, 5 How. 29,) and must be brought on as a motion, on affidavits in the usual manner. form of notice of motion will be found in the Appendix. The affidavits on which it is grounded, must state the facts of the case, and must clearly bring it within the terms of the section as above cited. A primâ facie right to the property claimed, and a reasonable apprehension of its being lost or injured, must, in all cases, be fully established, or the application will not be granted. The motion may, as has been seen, be made at any time before judgment, and by either party; but, of course, it cannot be made until after the action has been duly commenced by service of process. If immediate injury be apprehended, an injunction may be applied for collaterally, and on the same pa

pers; and, if the risk be imminent, the application may be shaped in the form of an order to show cause, with an interim injunction, until it is brought on and disposed of in due course.

Security must be given by the receiver when appointed, as under the former practice.

Where the application for a receiver forms part of the relief originally contemplated at the outset of the suit, it should be formally prayed for in the complaint, and the subsequent application must be grounded upon that prayer. Where, however, two parties have an equal interest in the same fund, and an injunction has been granted on the application of one, a motion for an injunction and receiver, will be so on the part of the other, almost as of course, although a prayer to that effect may have been omitted in the complaint.-McCracken v. Ware, 3 Sandf. S. C. R. 688; 1 C. R. (N. S.) 215.

A primâ facie case for the granting of this remedy being shown as above, the merits of the action will not otherwise be inquired into; the proceeding being merely for the preservation of the property in controversy, and not for any adjudication as to the ultimate rights of the parties.-Sheldon v. Weeks, 1 C. R. Conro v. Gray, 4 How. 166. See, also, Todd v. Crooke, 1 C. R. (N. S.) 324, below cited.

A motion for a receiver will not be granted to restrain the due use of joint property, where no abuse can reasonably be apprehended, and where full security has been given for the due accounting for mesne profits.-Dunham v. Jarvis, 8 Barb. S. C. R. 88.

Where, however, there is any doubt as to the safety of the fund, the application will be granted, almost as of course.

In Dillon v. Horn, 5 How. 35, an injunction and receiver were granted at the suit of a general creditor of insolvent general partners, on complaint and answer, the debt not being denied.

The granting of receiverships, under subdivisions 2 and 3, have been heretofore fully considered under the heads of Judg ment, and proceedings supplementary to Execution, and particularly the latter. See that chapter and the cases of Kemp v. Harding, 4 How. 178; Corning v. Tooker, 5 How. 16; Dorr v. Noxon, 5 How. 29; Porter v. Williams, 5 How. 441, 9 L. O. 307; 1 C. R. (N. S.) 144; The People v. Hulburt, 5 How. 446; McCracken v. Ware, 3 Sandf. S. C. R. 688; 1 C. R. (N. S.)

215; Todd v. Crooke, 1 C. R. (N. S.) 324; Gouverneur v. Warner, 2 Sandf. S. C. R. 624, and other decisions there cited.

The statute law on the subject of receiverships of the property of insolvent or dissolved corporations, will be found in articles II. and III. of title IV. chap. VII. part III. of the Revised Statutes, 2 R. S. 466 to 472. See, also, chapter II. title XIII. of the Code, part II., and in particular, see 444 of that chapter. In Conro v. Gray, 4 How. 166, a long discussion will be found as to the circumstances under which a receiver will be appointed in these cases, and various cases under the old practice are cited.

A receiver of such a corporation cannot impeach or disaffirm its lawful or authorized acts. "For most, if not all purposes, he takes the place, and stands as the representative of the company. He is as much bound by a settlement which the company were authorized to make, as the company itself.". Hyde v. Lynde, 4 Comst. 387.

The works as to the former practice, may be consulted as to the different cases saved by subdivision 5.

The duties of receivers in general remain as under the late practice; those of receivers under proceedings supplementary to execution, are prescribed by rule 81 of the supreme court,

and have been heretofore considered.

In Porter v. Williams, 5 How. 441, 9 L. O. 307, 1 C. R. (N. S.) 144, although the case is one of receivership in proceedings supplementary to execution, the doctrine is laid down in general terms that, when a receiver has been duly appointed, he becomes, by virtue of his office, legally entitled to the possession of the debtor's estate, and that, though usual, no assignment was necessary to divest the latter's title to personal property, and to vest that property in him. He also becomes thereupon entitled to the rents and income of the debtor's real estate, but the title to such real estate itself, can only be divested by sale on execution. The same doctrine is also laid down in The People ex rel. Williams v. Hulburt, 5 How. 446.

In the case in Re Paddock, 6 How. 215, it was held that, although the court may remove trustees or receivers for insolvency, it is not absolutely bound to do so; and, in that case, an application for such purpose was refused, the fund not ap

pearing to be in danger, and the insolvency of the receiver having been known to the parties, before his appointment.

In Bennett v. Chapin, 3 Sandf. S. C. R. 673, the following principles are laid down, in reference to the duties and powers of a receiver, when appointed:

1. He cannot make rests in his accounts, with a view to his commission, which must be calculated on the aggregate of his receipts and payments.

2. In cases where the fund is for the joint benefit of parties, without the existence of adverse interests between them, he may employ the counsel of one of such parties; but not, if the reverse be the case.

3. He is entitled to charge commission on choses in action actually in his hands, and delivered over by him to the parties before realization, on a final settlement of his accounts.

Before bringing or defending an action on behalf of the estate, a receiver must apply to and obtain the consent of the court; and, if he fail to do so, he will be personally liable for the costs.-Phelps v. Cole, 3 C. R. 157.

In Gouverneur v. Warner, 2 Sandf. S. C. R. 624, it was decided that a plaintiff in a creditor's suit, who had obtained a receiver over the defendant's property, could not afterwards levy an alias execution on personal property covered by such receivership.

By this section as it stood in the Code of 1851, all other provisional remedies then existent, were saved. In relation to those remedies, see the works on the old practice. The questions as to the writ of ne exeat have been already considered under the head of Arrest. The writ of supplicavit, it seems, had not ceased to exist as a provisional remedy, under the Code of 1849.-Forrest y. Forrest, 5 How. 125.

How far the total omission of this reservation, from the section as recently amended, may affect the question as to the future existence of the remedies last alluded to; and what may be the exact construction of this provision henceforth, remains to be settled by judicial construction. See this subject heretofore alluded to.

The remedies provided by the latter part of the section, in relation to funds or property admitted by a defendant to be in