Case Name: Cook v. The Citizens National Bank
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1881-05
Citations: 73 Ind. 256
Docket Number: No. 7861
Parties: Cook v. The Citizens National Bank.
Judges: 
Reporter: Indiana Reports
Volume: 73
Pages: 256–261

Head Matter:
No. 7861.
Cook v. The Citizens National Bank.
Contempt. — Receiver.—Collateral Attack. — Mortgage.—Growing Crop.— Pleading. — Practice.—On report of a receiver appointed in an action to foreclose a mortgage on real estate, proceedings were instituted against A. for contempt in refusing to yield possession of the wheat ready to be cut, growing on the mortgaged land. A. answered,besides denying that such receiver had ever qualified, that he had not resisted said receiver, but that, on his failure to take possession, he had, under the employment of B., who had actual possession of the wheat under a chattel mortgage made prior to the commencement of the foreclosure suit, and who was not a party thereto, harvested and marketed said wheat, intending no contempt, etc.
Held, that, if the appointment of a receiver was erroneous, it was not void, and could not be collaterally attacked.
Held, also, that A. was not in contempt.
Held, also, that the sufficiency of the complaint in the foreclosure suit can not be questioned collaterally.
Same. — Appeal.—Interlocutory Order. — Under section 576 of the code, an appeal to the Supreme Court maybe had from an order to bring money into court.
From the Hendricks Circuit Court.
E. G. Hogate and R. B. Blake, for appellant.
L. M. Campbell, for appellee.

Opinion:
Woods, J.
— On the 10th day of June, 1878, the appellee obtained in the Hendricks Circuit Court a decree of foreclosure of a mortgage of real estate in said county, against Joseph L. Cook and wife and Martha ICinkead, and, in connoetion with the decree, an order appointing James W. Thompson a receiver in said cause, and directing him to take possession of said lands and receive and collect the rents and profits, and hold the same, subject to the order of said court, to be applied upon the ifiaintiffi's debt, if said lands should fail to sell for the full amount thereof. This decree was rendered upon default, after due service of process, and in accordance with the prayer of the complaint.
On the 23d day of January, 1879, said Thompson, as re ceiver, made Ms report to said court under oath, showing an attempt, on his part, to take possession of said mortgaged lands and the growing crops thereon, consisting of wheat just ready to cut, and growing corn, and that the defendant Joseph L. Cook had abandoned said land and crops; but that one Samuel Cook, in defiance of the receiver and the order of the court, refused to yield the possession of the wheat, but had cut and threshed and hauled the same out of the county, to the value of $160, one-half of which was due and belonging to said Joseph L. Cook; that said receiver had realized only nine dollars from the proceeds of said land ; and that there is about $100 and interest due the plaintiffs, over the amount for which said land sold; and that there is no property or afesets now to be had by the receiver. Wherefore he submits this report to the court, for the direction and action of the court, with reference to the interference of said Samuel Cook.
Thereupon the court entered a rule against said Samuel Cook to show cause why he should not be punished as for contempt of said court'; and on January 29th, 1879, said Cook filed a sworn answer, setting forth the said order of appointment of said receiver, the subsequent issue of a copy of said decree to the sheriff, whereby, on the 10th day of August, 1878, said real estate was sold; that said Thompson never qualified or gave bond as such receiver, nor was any copy of his appointment ever issued to him, showing his authority to act; that said Joseph L. Cook had in cultivation on said land about eighteen or twenty acres of wheat, which, on the 16th day of January, 1878, he mortgaged to Marion Porter, by chattel mortgage, which was duly recorded on the 24th of January, 1878; that, on or about May 30th, 1878, said Joseph L. Cook left this State and moved to Kansas,, turning said wheat over to said Porter under said mortgage; that affiant gathered said field of wheat, mentioned in the report, but as the agent of said Porter, who was entitled to,, and had, actual possession of said field by virtue of said mortgage, at the time he so harvested the same ; that, a few days before July 3d, when affiant commenced to harvest said wheat, said Thompson came to affiant, where he was in his own field, and inquired concerning the field in controversy, and affiant notified him of his employment by Porter to cut said wheat, when said Thompson, without showing' any authority, informed affiant that he was receiver to collect the rents and profits of said real estate, and was going to take half of said Avheat, whereupon affiant told him if he had any interest in said Avheat to take and cut the same, and that he, affiant, would have nothing to do Avith it; that said Thompson then Avent away and returned no more, and affiant, under his employment from said Porter, cut said Avheat and took care of the same as aforesaid; that, at that time, affiant had no actual notice that said Thompson had been appointed receiver as aforesaid, having only Thompson's statement to that effect; that the above conversation is the only thing done or said by him to the hindrance of said receiver, if he Avas such, in the discharge of his duties; and affiant says that he intended no contempt, etc., and he asks to be discharged. Thereupon the court ordered said Samuel to report the proceeds of the Avheat, mentioned in his answer, to the court on or before the first day of the ensuing March term, to which order the appellant excepted at the time.
At the next term of the court, on the 11th day of March, 1879, the appellant, on oral examination, answered that the gross proceeds of said Avheat Avere $198.75, but the net sum realized, over the expense of cutting and marketing, Avas $74.20. Thereupon the court ordered "that said Samuel Cook pay into court $74.20, together with the costs of this proceeding," to Avliich order the. appellant excepted, and prayed an appeal therefrom, Avhich appeal Avas duly perfected.
By the first to the sixth assignment of errors, inclusive, the appellant seeks to question the sufficiency of the complaint in the foreclosure suit to warrant the appointment of a receiver.
The appellant was not a party to that action, and can not, in the prosecution of his appeal from the order made against him be allowed to assign error on the record of the foreclosure suit. Whether the action of the court in appointing a receiver was according to law, we need not decide. If the appointment ivas erroneous, it was not void, and can not, in a collateral proceeding, be assailed, even by the parties thereto, and certainly not by strangers in the attitude of the appellant.
"It is immaterial," says Kerr on Receivers, p. 166, "that the order appointing a receiver may have been improper or erroneous. It is not competent for any one to interfere with the possession of a receiver on the ground that the- order appointing him ought not to have been made. It is enough that it be a subsisting order."
Other assignments of error bring in question the rulings of the court in requiring the appellant to accouut for the proceeds of the wheat harvested by him, and in making the order for the payment of said sum of money into court. In these respects the court was in error. The procedure was against the appellant for an alleged contempt of court in refusing to yield to the receiver appointed by the court possession of the wheat, which stood ready to be cut on the mortgaged land, of which the receiver was directed to take possession. - The ansAver of the appellant to the rule to shoiv cause, besides denying that said Thompson had qualified as receiver, shoAved that the appellant did not resist, but rather encouraged, the said Thompson to take possession, and that, upon his failure to do so, the appellant, under the employment of Porter, Avho had actual possession under his chattel mortgage, made before the- commencement of the foreclosure suit, and AAho avrs not a party to that suit, proceeded to harvest and market said Avlieat, intending no contempt of the court's authority.
Whether the order to bring the money into court was proper, conceding- that the appellant was shoAvn to have acted in contempt of the court's authority, we need not decide. On the facts stated the appellant was not in contempt..
From Kerr on Receivers we extract the-following propositions, which we deem to be pertinent and. accurate statements of the law:
"The rents and profits of the estate over which a receiver-has been appointed are, as far as respects parties to the suit;, bound from the date of the order for the appointment." P. 164.
"A receiver is entitled to all the rents in arrear at the-date of his appointment, and to all the rents which.accrue-during the continuance of his receiver-ship." P. 186.
"A receiver duly appointed by the Court of Chancery is,, from the date of his appointment, .an officer and representative of the court; but he is not legally clothed with that character, nor able to perform its duties until his recognizances are perfected." P. 157.
"The effect of the appointment of a receiver is to remove the parties to the suit from the possession of the property. If at the time a receiver is appointed, a party claiming a right in the same subject-matter under a title paramount to that under which the receiver, is appointed, is in possession of the right which he claims, the appointment of the receiver - leaves him in possession." Page 158..
"The rule that the possession of a receiver may not be disturbed without leave, does not, however, apply, as far .at least as third parties are concerned, until a receiver has been, ¡actually appointed, and is in actual possession. It is not enough that an order has been made directing the appointment of a receiver. Until the .appointment has. been perfected, ,and the receiver is actually in possession, a creditor is not debarred from proceeding to execution. The order appointing a receiver is for the benefit of parties to the suit. It does not affect third parties until the appointment is completed and perfected." Pages 168, 169.
The. appellee insists there was no final judgment from. which an. appeal .could be had to this courtbut,. by .section. 576 of the code, an appeal is granted from an interlocutory order of the circuit court, "for the payment of money;" and it is settled that an order for the bringing of money into court is within the meaning of the provision. McKnight v. Knisely, 25 Ind. 336.
The judgment is reversed, with costs and with instructions to set aside the orders requiring the appellant to account for, and bring into court, the proceeds of the sale of the wheat, and for further proceedings in accordance with the law.