Case ID: pr-fed_7/html/0567-01.html
Source: Caselaw Access Project
Author: {"author": "HamxltoN, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HESSE, NEWMAN, & COMPANY v. G. LEDESMA Y CIA. ET AL.
    San Juan,
    Equity,
    No. 951.
    Discharging a Receivership.
    Receivership — How Long in Court.
    1. A ease is in court absolutely for all purposes until it is taken out of court by a judgment or decree. This may be upon a motion to dismiss 'the bill or other proper pleading, but until dismissed and costs and expenses are paid, the receivership property will be kept in court.
    Local Court — Foreclosure of Mortgage.
    2. Where the Federal court has taken jurisdiction of property in the custody of the local marshal, it will in a proper case direct the marshal to proceed, although it may retain jurisdiction of the property for the purposes of adjusting costs and expenses.
    Receivership — Ob j ect.
    3. The object of the receivership is not to aid or to injure any party, but to keep the property intact until the determination of the right of the ease. It will not, even on final decree, release the property until payment or securing of costs and expenses.
    Opinion filed March 23, 1915.
    
      
      Mr. Jorge Dominguez for complainant.
    
      Mr. H. G. Molina for Westphaling & Company.
    
      Mr. Charles Harizell for defendant.
   HamxltoN, Judge,

delivered the following opinion:

Here is a motion made by defendant G. Ledesma y Cia., not verified, but reciting certain facts, asking that, as more than ten days have elapsed since the entry of the decision of this court and no amended bill has been filed, the court close up said receivership without delay, discharging the said receiver and dismissing the cause. The motion is not in terms one to dismiss the bill. It is to discharge the receiver and incidentally dismiss the cause. The question comes up, What should be the action of the court upon this, the petition not being supported by any verification? What has been said in argument, of course, the court is glad to hear, but there are no facts before the court, no evidence or anything, except simply the record.

1. In the first place, as to the jurisdiction of this court as the matter stands at present, the court does not think that its jurisdicion is at an end. So far as the court knows, some parties lhay take the case higher, but whether that is so or not, a case is in court absolutely, for all purposes, until it is taken out of court, and that can only be done by a judgment or decree of some sort. In this case it would be a decree or an order of dismissal. Until that is entered, no matter what the views of the court are as to what it will do, the case is in court for all purposes. I think this must be held to be the situation at present. That being so, under the previous opinion of this court, a. motion to dismiss the bill will be entertained. The complainant not having amended the bill, and the court having decided, that the bill as it stands is without equity, a motion to dismiss, will be proper. In fact I think I can go further and treat this-motion as practically one to dismiss te bill. That is not its exact wording, but it seems to be its intention,- — winding up-everything that is in court and dismissing the cause. I will take this, then, as a motion to dismiss, based upon the previous order showing what the opinion of the court was in the matter. That is before the court, then. What should be done about it ? The motion must at some time be granted, either now or at some other time. The court has already decided that. Shall the court grant the motion at once, that is, take the.matter under submission and receive authorities, or shall it keep the property in court, shall it maintain the receivership for the present ?' This is the exact question before the court.

2. The next thing to be considered is, supposing that the-motion is granted at present, What is the effect upon the property in the custody of the court? Whether it was a bill containing equity or not, the court took jurisdiction of it, and until it dismisses the bill has jurisdiction of the property-through its receiver. What is the effect of that upon the local proceeding to foreclose by a sale ? The law seems to be that the local marshal, theoretically at least, takes possession of the-property and sells it under the order of the local court, and under the order of the court turns over the possession to the-purchaser. Now in point of fact this court has interfered with-that. The marshal certainly has not possession of the property at present; this court has through its receiver. Shall the court release its bold so as to enable tbe proceeding, wbicb is for tbe ■time being enjoined, to continue in a lawful manner, or shall it maintain its bold, for its own purposes ? As to that, in tbe first place, tbis seems clear, tbat tbis court should and does authorize tbe local marshal to proceed in all respects according to law. Tbat is to saj, it does not pretend, of course, to authorize in tbe sense of giving him any rights wbicb tbe law ■does not give him, but tbis court does bold and does declare that, whatever its decision on tbis motion would be, tbis is not to interfere with tbe proceeding of tbe marshal in carrying out bis duties under tbe law. For instance, if tbe court should determine to bold possession for tbe time being, tbe marshal is pi’oceeding simply subject to tbat one condition. Otherwise tbe property is to be considered as subject to tbe jurisdiction of tbe local court in every respect.

3. In tbe next place, it is claimed on tbe one side tbat tbis ■court must release entirely because there is a controversy as to canes, and dismissal will enable one party to take what steps be thinks proper under bis view of bis rights to tbe cane. It is said on tbe other side tbat tbe court should keep possession until tbe day before tbe sale, so as to prevent tbat very thing, tbe determination of tbe right to tbe possession of tbe cane by one party. As to tbat I think tbe proper rule would be tbis: Apart from tbe fact there are no facts before tbis court relative to tbat one way or tbe other, if those facts were properly in evidence, tbe court could probably not proceed on them. Tbe object of a receivership is not to aid or to injure any party. It is to keep tbe property intact until tbe determination of tbe case, and that is, as stated above, when there is a final decision; but there is tbis tbat occurs to me. In tbe Yannina Case [ante, 39] some time ago tibe point was raised that this court had no jurisdiction in equity under the facts of the case. It had two receivers, hut the point was raised that the court had no constitutional right, and was not for the purposes of that case a court of equity. This court did not agree with that view of it, hut did go on to say that even if that was so, the court had come into possession of certain property, whether rightly or wrongly, and it was as a court in possession of that property for all purposes until the ease was dismissed, and it would maintain its possession accordingly. I think the same principle applies here. Until everything connected with this case is at an end or provided for in some other way, this court ought to hold possession. The court has no right to take possession of property, put in a receiver, and incur expenses connected with the receivership, and then let go of everything out of which the expenses of the receivership could be paid. It would be acting the part of King Lear, turning over everything to somebody else, and just living on charity. A court cannot do that way. A receivership must be respected until it is wound up, or until a bond or something of the sort is given to cover the expenses that have been incurred.

So it seems to the court that it must refuse this motion so far as it is a motion to dismiss the bill, but the motion is granted to the extent that the receiver is directed to file as soon as practicable an account current or a written statement of his proceedings as receiver, and report upon the condition of the property as he found it, and as it is now, with a view to winding up this receivership at the earliest date possible, and that just as soon as that is done and the expenses are provided for, the case will be dismissed. It may be dismissed sooner than that if a bond or any way of getting at the payment of the costs of the receivership shall he provided for in the meantime. It seems to me that I cannot do anything more than this. The case is in court and everything connected with the receivership must be-wound up or provided for before it can get out of court, but, subject to that condition, the court has no wish to hold possession of the property at all, and will recognize any sale or the action of the local marshal.