Case Name: Kendal S. Johnson, plaintiff in error, v. Horace E. Powers, defendant in error
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1887-01
Citations: 21 Neb. 292
Docket Number: 
Parties: Kendal S. Johnson, plaintiff in error, v. Horace E. Powers, defendant in error.
Judges: The. other judges concur.
Reporter: Nebraska Reports
Volume: 21
Pages: 292–297

Head Matter:
Kendal S. Johnson, plaintiff in error, v. Horace E. Powers, defendant in error.
1. Receiver. All order appointing a receiver in a ease brought for the forelosure of a mortgage without notice served on the defendant, or his solicitor, as required by section 267 of the code of civil procedure, Held, to be void.
2. -: liability for money collected. Money collected by a receiver acting under a void appointment, as such, maybe recovered from him by the party entitled to it in an action for money bad and received to the use of the plaintiff.
Error to the district court for "Washington county. Tried below before Neville, J.
John Lothrop, for plaintiff in error.
W C. Walton, for defendant in error.

Opinion:
Cobb, J.
This action was brought in the district court of Washington county by the plaintiff in error against the defendant in error for certain moneys alleged to have been collected ' and received by said defendant for the rent of property belonging to the plaintiff by virtue of his appointment as receiver by the said court in a certain action then pending therein, such appointment being claimed to be void. As the cause was disposed of in the district court upon demurrer I copy the petition at length:
"1st. Plaintiff for cause of action says that he is owner of lots three, four,-and five in block No. 30 in the city of Blair, Washington county, Nebraska, and has been such owner continuously for the last past three years, and that all of said time he has been in peaceable, undisputed possession of the same, either in person or by tenant, up to the 27th day of June, 1885.
" That there has been for more than two years immediately before filing this petition, and there is now on said lots costly and valuable improvements consisting of a good brick two-story dwelling house in good repair and condition, and a good two-story • frame barn, wells, cisterns, fruit trees, and shrubbery and all other necessary buildings and improvements for to make said premises very valuable as a family residence; that the rental value of said premises is and has been for the last year two hundred dollars a year', payable in advance.
"That on or about the 3d day of April, 1885, the Omaha Savings Bank commenced an action in this court to foreclose a mortgage on said premises and made this plaintiff defendant as mortgagor, and A. Castetter, E. H. Monroe, and Palmer & Ryan defendants as subsequent purchasers or incumbrancers; that on the 27th day of June, 1885, at an adjourned term of this court, the defendant, A. Castetter, made application to said court for the appointment of a receiver to collect the rents and profits of said premises. Such application was supported by affidavit, filed on said 27th day of June, 1885. That on said day the court appointed this defendant receiver of said rents and profits.
" This plaintiff further alleges that he had no knowledge or notice of said application and proceedings until several days after the receiver was appointed; that his attorney had no notice until said proceeding came up for hearing; that plaintiff was a resident of this county, and that no notice by publicátion was made in any .manner; that he did not appear in said proceedings either in person or by attorney? and alleges that no notice was issued or served as is required by law, and that no notice whatever was issued or served on any of the parties or their solicitors; that for the want of notice as is required by law this court had no power to appoint this defendant receiver or to make any appointment, and that said pretended appointment is void and óf no effect; that this plaintiff had a good and valid defense to said proceedings, as he believes and has been advised by counsel; that he would have made said defense had he been served with notice as is required by law.
"2d. That on the said 27th day of June, 1885, and all the time since, this defendant has been in possession and exercised control over said premises under said proceedings. This plaintiff alleges that this pretended receiver has not filed in the office of the clerk of this court the bond required by law, and that no bond whatever has at any time been filed in said proceedings; that on the 27th day of June, 1885, this defendant, without authority, urged and persuaded the tenant then on said premises to pay the rent for the future use of said premises to this supposed receiver, which has been done, and by such payment this defendant has received of such rent the sum of" two hundred and twenty dollars; that on the 6th day of March, 1886, this plaintiff demanded of defendant the said rent, and defendant refused to pay the same or any part thereof.
"Therefore plaintiff asks judgment against said defendant for the said sum of two hundred and twenty dollars, and cost of this action, and that defendant cease to act as such receiver, and for such other and further relief as this case may require."
Defendant filed a demurrer to the petition for the reason it does not state facts sufficient to constitute a cause of action.
On April 13th, 1885, the cause came on for hearing on demurrer, and the court sustains the demurrer and dismisses the case.
Assignments of error are: 1st. The court erred in sustaining demurrer. 2d. The court erred in dismissing the case.
Before the adoption of the code and the abolition of the difference in the systems of practice in courts of law and of equity, it was the practice of the latter courts to appoint receivers in proper cases on motion at any time after the service of subpoena and the appearance of the defendant, without notice to the opposite party other than such as might be given in open court. Then, there was usually no statute regulating the practice, which was left to the discretion of the judge or chancellor. Now, the whole matter of the appointment of receivers is regulated by statute, and the principal question involved in the case at bar is whether the method prescribed is to be deemed as exclusive of all others, . .
Section 266 of the civil code points out the several cases in which receivers may be appointed, among others: " In an action for the foreclosure of a mortgage, when the mortgaged property is in danger of being lost, removed, or materially injured, or is probably insufficient to discharge the mortgage debt."
Section 267 provides as follows: "No receiver shall be appointed except in a suit actually commenced and pending, and after notice to all parties to be affected thereby, of the time and place of the application, the names of the proposed receiver and of his proposed securities, and of the proposed securities of the applicant. Such notice shall state upon what papers the application is based, and be served upon the adverse party or his solicitor, at least five days before the proposed hearing, and one additional day for every thirty miles of travel from the place of serving the notice to the place where the application is to be made, by the usually traveled route; or shall be published in the same manner as notice of the pendency of suit to nonresidents."
Section 274 provides that "Every order appointing a receiver without the notice provided for herein, shall be void," etc.
Considering these two sections together, there can be no doubt, even if there could have been upon the language of see. 267 alone, that it was the intention of the framers of the statute that the form and method there prescribed for the appointment of receivers by a court should be exclusive of all others, and that all orders for the appointment of receivers made by any court, without the notice therein prescribed, should be not merely voidable but void.
The allegations of the petition being for the purposes of this opinion assumed to be true, and the defendant having had no .authority'to act as receiver, his appointment as such being absolutely void, he must be held to have possessed himself of the rent money of the plaintiff by his own voluntary and unauthorized act, and to be liable therefor as for money had and received.
Defendant in error contends, that even if it be held that his appointment as receiver was null and void, that nevertheless the judgment of the district court in sustaining the demurrer was right; that in that case the tenant is not discharged of his obligation to pay the plaintiff by reason of his having already paid the rent to the defendant in his assumed character of receiver, so that the plaintiff's remedy is still against the tenant.
While it is possible that the plaintiff might maintain an action against the tenant for the rent of the premises, and that the latter would be unable to maintain the defense, that he had already paid the same to the defendant as receiver, yet the defendant is entitled to avail himself of no such • consideration. Should the plaintiff collect the rents from the tenant the latter would certainly have a cause of action against the defendant for the money paid him, so that this would lead but to a multiplicity of actions Avhich the law as well as equity abhors. • The action of assumpsit was sometimes called "the equitable action of the common law," because it can generally be maintained by the party entitled to a fund against one who has no right to retain it.
The judgment of the distriot court is reversed and the cause remanded for further proceedings in accordance with law.
Reversed and remanded.
The. other judges concur.