The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1892-03-09

the appointment of q receiver Is an
auxiliary proceeding, incidental to a
main action. High On Receivers says:
Except in rare cases a suit will not be
entertained which seeks, as its primary
and principal object, the appointment of
a receiver" In the French Bank case.
SD CAL, 495. Chief-justice Wallace, de-
lvering the opinion of the court, said:
"There is. of course, no such thing as an
action brought distinctively for the
mere appointment of a receiver. Such
an appointment, when made, is auxiliary
to or in aid of the action brought. Its
purpose is to preserve the property
pending the litigation, so that the relief
awarded by the judgment, if any, may
be secure"
1t has been held in California and
Colorado that there is no such thing
known to the practice as an independent
proceeding to have a receiver appointed,
and that the relief can only be granted
as auxiliary to the main relief which the
plaintiff seeks. In Gluck and Becker
on Receivers of Corporations 1t is said:
cit is, of course, essential to the juris-
diction of the court thata cause be pend
ing and that the corporation over which
it is proposed to extend the receiver
ship be party thereto" No writer on
receiverships, no textbook and no re-
ported case recognizes the right of q
court to appoint receiver except as in
cidental to a main action and for the
purpose of preserving property or pro-
tecting rights, pending the litigation.
In this respect, therefore. the action Of
Judge Taylor is without precedent.
A much greater departure from all
presidents is in the nature of the appli-
cation in tho present case and the
grounds on which the receiver was APP
pointed. All writers and reported cases
agree that receiver for a corporation
can only be appointed on the applica-
ton of q real party in interest, as q
creditor. a stakeholder, bondhOlder, q
mortgage. or something of that kind.
Being a remedy to preserve property it
can only be applied on the application Of
ton of the property. To quote again
from High on Receivers:
A receiver will be appointed whenever 1t
is made to appear that it is necessary,
eIthcr to preserve the estate of the corpora
tlOn after 1t has been abandoned by the
management and there Is no competent
person authorized to take possession and
control it. or that the agents or other per-
sons so authorized are misusing or misap-
81 - 3s~ o. IS
creditors or are about to place 1t beyond
the courts Jurisdiction.
The came author says: "a receiver
pendente lite is appointed only for the
benefit OF such of the parties to the
cause as shall appear to be entitled to
the fund in controversy, and not for the
benefit Of strangers to the SUIT" Again
he says: cit is important to observe
that courts Of equity lend their ex-
traordinary aid by the appointment of
receivers only in behalf of those who
have used due diligence in the assertion
of their rights" This implies that the
appointment of receiver must be aux
Hilary to a main suit; that the applicant
for receiver must have property rights
| entitled to protection, and that he must
have exercised due diligence in INSERT
! ing those rights before asking for a re-
| ceiver.
In the present case the receiver was
not appointed to preserve property PEN
dente lite, nor was he appointed on the
| application of a person who had any
property rights in the case. How very
widely Judge Taylor's action departed
from these principles appears in his own
statement. He says the appointment
was made "tO restore the car service for
the benefit of the citizens of Indianap-
oils and those generally requiring it."
There is nothing in the books like this
or resembling it, even remotely. To
justify the action of the court Judge
Taylor finds that contract existed be-
tween the city and the railroad
company which any citizen was entitled
to have enforced by the appointment of
a receiver. This may be good law, but
It is strictly new. In the entire range
| give color to it.
| We conclude, first, that Judge Taylor's
action violates every established princi-
pie of the law of receiverships and
establishes a new precedent; second,
that his action may possibly be justified
on broad grounds of public policy; third.
that the principles involved are of such
Importance that they ought to be passed
upon and definitely settled by court OF
| last resort