Court Opinion

ID: 6970182
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:01:01.338808+00
Date Added: 2024-06-11T09:12:10.423181
License: Public Domain

Mr. Justice Carter delivered the opinion of the court: We are of the opinion that the facts contained in this record show that there was collusion between the appellant and the eggette company, and that the creditor’s bill was filed to secure to appellant the control of the eggette company’s plant through appellant’s treasurer, who was appointed receiver and for whose benefit appellant advanced a large sum of money, trusting for re-payment to his success in managing the experiment it had entered upon with the eggette company’s property. The effect of the- whole proceeding was to hinder other creditors from asserting their rights at law, and when appellee applied to the lower court for leave to assert his rights at law his petition was denied. Although no actual fraud may have been contemplated by appellant, yet as it had not exhausted its legal remedy to satisfy its judgment at law, no bona fide attempt to collect its debt by execution against the property of the eggette company having been made, (Durand & Co. v. Gray, 129 Ill. 9; Stirlen v. Jewett, 165 id. 410;) and as the .creditor’s bill was in reality filed for the purpose of getting- control of the plant of the eggette company and shielding it from its creditors, the acts of appellant operated as a fraud on appellee, and it is immaterial whether appellant intended to injure appellee or not. (Heidenbluth v. Rudolph, 152 Ill. 316; Phillips v. Kesterson, 154 id. 572; Commercial Loan Ass. v. Trevette, 160 id. 390.) Where the receivership is procured under the assertion of an unjust and wrongful claim, as finally found by the court, the costs of the receivership may be taxed against the complainant procuring the appointment of such receiver. In Highley v. Deane, 168 Ill. 266, the complainant was ordered to pay the costs of the proceeding and costs and expenses of the receiver. In McAnrow v. Martin, 183 Ill. 467, it was said that when the appointment of the receiver is without authority of law the court should order the complainant in the suit to pay the receiver’s charges and disbursements as a part of the costs in the case. In case of the illegality of the appointment of the receiver, and where his compensation is to be paid by the complainant who obtains such appointment, the amount of the receiver’s compensation should be taxed against the complainant, the unsuccessful party in the cause. High on Receivers, (3d ed.) sec. 796; Radford v. Folsom, 55 Iowa, 276; Highley v. Deane, supra. We are of the opinion that appellant is liable to appellee for the balance remaining unpaid of his rent which accrued during the receivership, as the receiver was ordered by the court to take possession of appellee’s property and pay rent for it. If the receiver had actually paid the rent he would be entitled to recover it from appellant as part of his charges and disbursements. Besides, appellant greatly prolonged the receivership and the possession of appellee’s property by the receiver by litigating appellee’s claim of priority in the payment of his rent. But it is contended that appellee is estopped from asserting any further claim for rent because he participated in the proceeds of the receivership and virtually assented to the proceedings. Appellee came into the case as an intervenor who owned the property occupied by the receiver, alleging in his petition fraud and collusion between appellant and the eggette company, and asking leave to proceed at law for the collection of the rent for such property and to distrain therefor, which petition appellant opposed, and it was denied and he was relegated to a lien upon the funds coming into the hands of the receiver. In the order denying his petition it was recited that “said Hughes, without waiving any of his rights against said company or said receiver under the lease mentioned in his petition or accruing to him by virtue of the acts of the receiver, or which are his by virtue of any matter, cause or thing,” consented to a certain order of the court then made. In the former case between the same parties (174 Ill. 155,) an effort was made by appellant to have the proceeds of the receivership prorated, and this court expressly held that appellee’s lien was prior to all others. Appellee has throughout insisted on the priority of his claim, and has been compelled to appeal to this court to have such priority recognized. He cannot be held, under all the circumstances in this case, to have waived or forfeited any of his rights in the case, he never having in any manner consented to share with others but always insisted on his priority. There still remains the question whether appellee can recover his rent in this proceeding. It is urged that the receivership was never actually vacated and that appellee took all the proceeds, and that, as far as this proceeding is concerned, he has exhausted his remedy. A court of equity having by its receiver taken possession of appellee’s property, and having by its orders taken his rights under its protection, is bound' to protect them without driving him to a suit at law to enforce such rights. It is a familiar principle that a court of equity having once taken jurisdiction of a cause will retain such jurisdiction to administer full justice to all parties, even if the relief granted could be obtained at law. ■ The appointment of the receiver having been improvidently and illegally made at the instance of appellant, and nothing more remaining to be done than to compel payment of the balance of the rent charge incurred by the receiver, we see no reason why the necessary order may not be made and the court do full justice in the matter without vacating prior proceedings. The only purpose of the petition is to compel payment of the balance of the rent for which appellant has, by its wrongful act in the premises, become liable. The judgment of the Appellate Court is right, and it will be affirmed. Judgment affirmed.