Case ID: ohio-cir-dec_8/html/0177-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CREDITOR’S BILL — RECEIVERS.
    [Erie Circuit Court,
    May 8, 1897.]
    King, Haynes and Parker, JJ.
    
      Benjamin F. and Harriet O. Dwelle v. Thos. Hinde et al.
    1. Suit in the Nature of a Creditor’s Bide, May be Brought Where.
    A suit in the nature of a creditor’s bill to reach equities of a debtor, may bt brought in the court of common pleas of a county where property in which the debtor has equitable interests is situated and where persons in possession of such property or holding credits that may be reached by such suit may reside, and the judgment debtor may be made a party defendant and required to answer to such suit, though he may be a resident of another county and may be served with summons in such other county.
    2. Jurisdiction of Court Over Read Estate in Such Action. »
    Whether in such action rightly brought as to such property the court may also exercise jurisdiction over real estate situate in the county of the residence of the judgment debtor, and outside the county where the suit is brought. Quare ?
    
    3. Appointment of Receiver Without Notice to Defendant.
    When a judge has appointed a receiver to take charge of the property ot a defendant without notice to the defendant, but upon a petition which states facts showing that irreparable loss will result to the plaintiff if notice shall be given before the appointment, and the order is based upon a general finding that the receiver ought to be appointed, it will be presumed that the judge found the particular facts which would justify his action. The specific finding of such facts need not affirmatively appear to give the court jurisdiction make the order.__
    
      4. Construction or Secs. 5035 and 5587, Rev. Stat., as to the Appointment or a Receiver.
    A cause cannot be “pending” within the purview of sec. 5587, Rev. Stat., so as to authorize the appointment of a receiver therein before it has been “commenced” as provided in sec. 5035, Rev. Stat., and the appointment of a receiver in a cause where a petition has been filed but before a summons has been issued is invalid.
    Error to the Court of Common Pleas of Erie county.
    
      
      TMs case was dismissed by tbe Supreme Court November 9,1897.
    
   Parker, J.

In this case a proceeding in error is brought to reverse an order of the court of common pleas overruling a motion to discharge a receiver.

The action was begun below by Thomas J. Hinde to reach certain equitable interests of Benjamin F. Dwelle in real estate situated in Ottawa county, in real estate situated in this county, and in personal property, including stock in a private corporation, and his interest as partner in a firm carrying on business in this county. The action is in the nature of a creditor’s bill, and there are a great many parties defendant, the debtor being the defendant, Benjamin F. Dwelle.

On motion of the plaintiff below, a receiver was appointed to take charge of all this property including the real estate situated in Ottawa county. A motion was made by the defendants, Benjamin F. Dwelle and Harriet O. Dwelle, to quash the service of summon on the ground that the court could not rightfully exercise jurisdiction over them in this action, they being residents of Ottawa county. That motion was overruled and thereupon these defendants filed this motion: “Now come the said defendants, Benjamin F. Dwelle and Harriet O. Dwelle, for the purpose of this motion only, and disclaiming any and all intentions or purpose of making or entering an appearance upon the merits of this case or for any other purpose save that contained in this motion, and move that the. order heretofore made and entered appointing a receiver herein be vacated and set aside and the Receiver discharged for the following reasons:

That the court has no jurisdiction of the person of these defendants, for at the commencement of this action, and ever since, the said defendants, Benjamin F. Dwelle and Harriet O. Dwelle, have resided in the county of Ottawa and state of Ohio, and the only service of summons in this action was served upon these defendants in the said county of Ottawa.”

The fact that they are residents of Ottawa county and that they were served with summons in this action in Ottawa county by the sheriff of Ottawa county is undisputed. That motion was overruled, and. the defendants, plaintiffs in error here, excepted, and they bring this proceeding, as I have stated, to reverse that order of the court. The motion and petition in error seem to, and we think do attack the original order of the judge appointing the receiver in such a way as to require us to look beyond the particular reason assigned in this motion for discharging the receiver, and to enquire whether for any reason the appointment should not stand.

It is contended upon the part of the plaintiffs in error that the receiver should not have been appointed and that he should have been discharged upon this motion for the reason that a part of the real estate over which the court undertakes to exercise jurisdiction in this case is situated in Ottawa county; that though the action might have been instituted in this county to reach those equitable interests that are in this county, and in the hands of certain of the defendants who reside in this county, and these principal defendants living in Ottawa county might be required to answer as to these persons and as to these interests in this county, they cannot be required to answer as to the lands situate in Ottawa county, that such lands cannot be brought in; and it is shown that the defendants residing in this county controlling these equitable interests in this county, had not been served with process at the time this motion was filed to discharge the receiver, and it is urged that therefore the court has not obtained and could not exercise jurisdiction to appoint a receiver even with respect to these equities, or, at all events, that the receiver should be discharged.

But we are of the opinion that the court might rightfully exercise jurisdiction over the property and these equities and these persons in this county, and that it is immaterial that the defendants in possession of this property or controlling these equities were not served with summons at the time this motion to discharge the receiver was filed; that the order in which the defendants shall be served with summons or brought into court is entirely immaterial.

We entertain very grave doubts as to whether the court can exercise jurisdiction over the lands situated in Ottawa county, or whether these defendants who make this motion can be required to answer with respect to such lands and have their interests therein determined by the court sitting in this county. We incline to the opinion, that it cannot rightfully do so. But this motion is to discharge the receiver, it is not a motion to modify the order appointing the receiver, nor to discharge any particular property from the custody or control of the receiver, and therefore the court does not feel at liberty, though entertaining the opinion it does with respect to the Ottawa county lands, to modify the order of the court of common pleas with respect to those lands.

It is also urged, that the receiver should have been discharged because he was appointed without notice to these defendants, the plaintiffs in error, and it is contended that the appointment is not only irregular, but void in consequence of there having been no notice served upon them and no finding by the judge of the court of such facts as would justify him in proceeding to appoint a receiver without notice, and Railway Co. v. Jewett, 37 O. S., 649, is cited in support of this proposition.

We do not think the case cited goes that far, nor do we think that the question is so far jurisdictional as that the action of the court or a judge thereof without notice or without a finding appearing affirmatively upon the journal of facts justifying the appointment of the receiver would be void. Sheldon’s Lessee v. Newton, 3 O. S., 494.

Now, it is alleged in the petition in this, case as ground for proceeding to appoint a receiver without notice as follows :

“Plaintiff further says that good grounds exist in this action for the appointment of a receiver without notice to the defendant, Benjamin F. Dwelle, for the reason that if such notice be required or given that the said Dwelle will sell, dispose of, remove or incumber said property and assets whereby the said object and purpose of this action and the plaintiff’s rights herein would be wholly lost and defeated.”

We think that constitutes a sufficient ground to justify the judge in proceeding to the appointment of a receiver without notice. It is contended that the judge of the court of common pleas did not find, and it does not appear affirmatively from the journal that he did find that these allegations were true. But, viewing it as we do, not as a jurisdictional matter, but as action that is irregular and erroneous only, if wrong, and not void, and facts being alleged in the petition which, if true, would justify the action of the judge, and there being a general finding based upon the petition and proof that a receiver ought to be appointed as prayed for in the petition, we think that we are bound to assume that the judge found these facts so alleged, or so much thereof as may have been necessary to justify him in proceeding as he did, and that a specific finding of the particular facts alleged, as above quoted, need not affirmatively appear in the order or upon the journal. Dallas v. Ferneau, 25 O. S., 635.

Grayson Mills and Seney, Johnson and Friedman, for plaintiffs in error.

Wickham, Guerin & Starbird, for defendants in error.

In Railway Co. v. Jewett, ante, the petition contained no allegation upon which the court could have found the facts that would have authorized it to appoint the receiver without notice.

But, as I have said, we think this petition authorizes and requires us to look at the whole record and consider whether the appointment of this receiver ought to stand, and in looking into the record we find this state of facts:

The petition in this case was filed on January 9, 1897. The receiver was appointed by the judge of the court of common pleas at chambers in an adjoining county upon January 11, 1897, the order of appointment being indorsed upon the petition. Summon was not issued for either of these plaintiffs in error, or for any of the defendants below until January 12, 1897. The statute upon the subject of the appointment of a receiver is as follows, reading a part of sec. 5587, Rev. Stat.

“A receiver may be áppointed by the Supreme Court, or a judge thereof, the circuit court, or a judge thereof, the common pleas court or a judge thereof in his district, or the probate court, in causes pending in such courts respectively in the following cases,” etc.

Section 5035, Rev. Stat., is as follows :

“ A civil action must be commenced by filing in the office of the clerk of the proper court a petition, and causing a summons to be issued thereon.”

We think it is plain that a court or a judge of a court is not authorized to appoint a receiver in any case other than a case pending in the court, and that this cause at the time the receiver was appointed was not pending; that the cause or action had not been commenced by the filing of a petition and causing a summons to be issued upon it at the time the receiver was appointed, and it could not be pending before it was commenced.

To repeat; the petition was filed January 9, but no summons was then issued upon it. The receiver was appointed January 11. The first summons was issued January 12.

We think, therefore, that the order of the judge was irregular and erroneous in that it provided for the appointment of a receiver in a cause that was not pending at the time the appointment was made and that the court erred in refusing to discharge the receiver. For that we reverse the judgment of the court of common pleas and remand the cause with directions to that court to discharge the receiver.