Court Opinion

ID: 7048207
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:57:16.432654+00
Date Added: 2024-06-11T16:11:37.460854
License: Public Domain

Dissenting Opinion.
Mitchell, J. —
Unable to concur with the majority, the following are some of the reasons upon which my dissent is based :
That an action must be pending before either a court in term or a judge in vacation can acquire jurisdiction to appoint a receiver, unless in exceptional cases expressly provided for by statute, has, I think, never been the subject of judicial controversy. Upon this the authorities are everywhere in accord. Dale v. Kent, 58 Ind. 584; Brinkman v. Ritzinger, 82 Ind. 358; Pressley v. Harrison, 102 Ind. 14; Merchants’, etc., Bank v. Kent, 43 Mich. 292; Hardy v.McClellan, 53 Miss. 507.
The remedy is merely an auxiliary to, and an incident of, a pending suit. Hottenstein v. Conrad, 9 Kan. 435; Chicago, etc., Mining Co. v. U. S. Petroleum Co., 57 Pa. St. 83; Bufkin v. Boyce, 104 Ind. 53.
A receiver is only resorted to in any case to preserve property in statu quo, pending a contest. The case pending must *192be a suit in equity, involving the property in controversy. Schlecht’s Appeal, 60 Pa. St. 172; Emerson & Wall’s Appeal, 95 Pa. St. 258; Cincinnati, etc., R. R. Co. v. Sloan, 31 Ohio St. 1.
The statute applicable in that respect provides that “ receivers may be appointed by the court or judge thereof * * * in actions between parties, or persons jointly interested in any property or fund.”
As requisite to the pendency of an action in which a receiver may be appointed, it is essential that a written complaint or petition exhibiting something in the nature of a controversy or cause of action of equitable cognizance shall have been filed.
This is required by the statute, as well as by the course of judicial procedure recognized everywhere, to the end that a subject-matter shall be brought within the jurisdiction of the court. Two things are indispensable before the intervention of any court can be invoked to pronounce judgment inter partes: 1. A controversy of some kind between parties involving legal or equitable rights. 2. That the matter in controversy shall be presented in such manner that the court may act judicially in the premises. Without these, a court can not proceed to give judgment, even with the consent of the parties. These being absent, nothing is pending before the court.
In Morrow v. Weed, 4 Iowa, 77, it was said : “ If there be a petition, or the proper matter of that nature, to call into action the power or jurisdiction of the court, the sufficiency of it can not be called in question collaterally.” City of Terre Haute v. Beach, 96 Ind. 143.
Admitting to the fullest extent that where a receiver has been appointed in a pending action, the sufficiency of the complaint in that action can not be drawn in question collaterally, the difficulty in this case still remains, that in the proceeding in which the receiver was appointed, it affirmatively appears *193that no complaint at all, nothing in the nature of a complaint, was filed.
While it is not necessary, for the protection of a purchaser from a receiver, that the proceedings and appointment should appear to be regular, the rule is that three things are essential: 1. He must see that a suit in equity was pending in which a receiver was appointed. 2. That the receiver was authorized by the court to sell the property in controversy. 3. That a sale was actually made under such authority. Koontz v. Northern Bank, 16 Wall. 196.
If there was no suit in equity, inter partes, when the receiver was appointed, the appointment was a nullity and would be disregarded whenever it came in question, unless by acquiescence, an estoppel intervened. People v. Judge, 31 Mich. 456.
It is settled that a judgment in a case requiring adversary proceedings is void whenever it appears on its face, or may be shown by evidence, to have been rendered without jurisdiction of a subject-matter. Horner v. Doe, 1 Ind. 130; McCormack v. First Nat’l Bank, 53 Ind. 466.
To my mind, the complaint which is set out in the opinion •of the court exhibits nothing in the nature of a controversy of any kind between the partners. It states no facts tendering any kind of an issue or upon which a judgment of any kind could have been pronounced. Nothing is complained of, except that the depositors of the bank have demanded their money with such persistency that the bank has become insolvent. It informed the court that in order to prevent a multiplicity of lawsuits and secure an equal distribution among creditors, it was important that the court should take control of the business of the firm by appointing a receiver. No disagreement between the partners appearing, or other reason why the end desired could not be accomplished by resorting to the statutory method, the intervention of a ■court was neither necessary nor proper to accomplish a vol*194untary assignment, which was all that was asked for by this, so-called complaint. High Receivers, section 10.
If any doubt had remained as to the purpose of this so-called complaint, it must have been dissipated when the supplemental complaint was filed. In this it was averred that the partners were possessed of a large amount of individual real and personal property which they were willing to surrender for the benefit of their creditors, and which the court, was' asked to take control of. The whole proceeding was,, without any disguise whatever, an appeal to a judge in vacation to take the individual and firm property of the Harrisons under the shelter of the court.
To my mind, it was of no more legal force than if they had made the same appeal to any other individual. See Shoemaker v. Smith, 74 Ind. 71. As was said in Sage v. Memphis, etc., R. R. Co., 18 Fed. Rep. 571: “ It is also apparent that this is not an adversary proceeding, but one in which the parties complainant and defendant have acted in concert.”
I do not understand that a court of equity can acquire jurisdiction to take upon itself the administration of the affairs of a bank or the distribution of the private estates of bankers, on request, simply because the bank has become unprofitable: or insolvent and a source of annoyance to its owners.
The rule was forcibly stated in Overton v. Memphis, etc., R. R. Co., 10 Fed. Rep. 866, thus: “ It is not the province of a court of equity to take possession of the property, and conduct the business of corporations or individuals, except where-the exercise of such extraordinary jurisdiction is indispensably necessary to save or protect some clear right of a suitor, which would otherwise be lost or greatly endangered, and which can not be saved or protected by any other action or mode of proceeding.”
To characterize a paper like that set out as a complaint, or bill in equity, is to disregard the substance and grasp at that which is less substantial than a shadow. Either it must be-conceded that a receiver may be appointed upon request of *195on© «psarfener, without the existence of any controversy or dis- ■ agreement whatever between the partners, upon the’ mere ! showing of insolvency, or it must follow, as it seeffiS'tOome, • that there was lacking in this case the first essential element; <of a suit, i. e., the statement in writing of something in the' nature of a complaint. R. S. 1881, section 338.
If, however, it be conceded that there was a sufficient complaint to call into action the jurisdiction of the court over aisubject-matter, it was nevertheless necessary to the pendency ■of an action that process should have been issued, or that the' defendant should have appeared in some- manner known- to the law, so as to give the court jurisdiction of his person.
It has heretofore been well settled in this State that a court can acquire jurisdiction of the person- of a defendant in no other way than through its process or by a voluntary appearance in the case entered of record in open- court in term time.
That no summons was issued is conceded, and that no other appearance by the defendant was made in the case except to go before the judge at chambers and present his written consent that a receiver might be appointed,, is also admitted. In the prevailing opinion this is held to have been such an appearance in court to the case as constituted it an action pending at the time the receiver was appointed.
The scope and effect of the holding, is that a judge-sitting in vacation, exercising special statutory powers, such as are involved in the appointment of a receiver, etc., becomes the. court of which he is the judge, and that such proceedings before him are proceedings in such court; that an appearance before a judge so sitting is such an appearance in court as confers original jurisdiction over the person of the defendant, and without any other process or appearance makes the matter upon which the judge acts a case pending in court. It seems to be implied, too, that to the proceedings of a judge so acting all the presumptions which attach to the proceedings of courts of general jurisdiction will be indulged when they are drawn in question collaterally. With deference to the *196opinion of the court, this view seems to me untenable in the nature of things, and entirely unsupported by authority. In my opinion, both reason and authority support the view that a judge so sitting constitutes a special tribunal of limited statutory power, and, like all special tribunals, no presumptions are indulged in favor of his jurisdiction; that facts or conditions necessary to confer jurisdiction must affirmatively appear; that he does not constitute the court of which he is the judge, and that his proceedings are no part of the proceedings of the court, and do not become part of its record. His sitting in vacation is confined to no time or place ; the law provides for no record of his proceedings, and he can Peep none, and, as a consequence, anything which in the course of judicial procedure is required to be proved by the record, such as an- appearance of a party in court, a ruling or decision upon any question of law, can not occur before him.
The extent to which any court has gone in respect of upholding the jurisdiction of a court under like circumstances, so far as I can discover, is, to hold that where it appears in an order appointing a receiver, by the recitals in the order, that an action was pending, such recital constituted prima facie evidence of the pendency of the action. Such recitals are not conclusive, and may be contradicted. Potter v. Merchants’ Bank, 28 N. Y. 641.
It is the rule in the Federal court, and many of the States, that where a court of general jurisdiction exercises 'a special statutory power, which was not according to the course of the common law, its jurisdiction, both as to the subject-matter and the person, must affirmatively appear, and everything will be presumed to be without its jurisdiction which is not affirmatively shown to be within it. Galpin v. Page, 18 Wall. 350.
The argument on which the prevailing opinion rests is, that the appointment of a receiver is the exercise of a judicial function, and that as under the Constitution judicial power can only be conferred upon courts, a judge while ap*197pointing a receiver is exercising judicial power, and is, therefore, the court of which he is the judge.
It is difficult to see in what respect the exertion of judicial power is involved, where, as in this case, the sole purpose of the appointment of a receiver appears to be to effect an assignment for the benefit of creditors. In my opinion it might as well be said that such an assignment was a judicial act, and could only be made by the intervention of a court. That the power to pronounce a judgment which determines or finally adjudicates upon the rights of persons or the title to property is a judicial function which can only be conferred upon courts, is well settled. There are, however, many orders made in cases pending and many proceedings had in matters temporarily affecting property, the making of which are not regarded as the exercise of judicial functions. Thus in the case of Carey v. Giles, 9 Ga. 253, the question was directly made whether the appointment of a receiver was the exercise of judicial power. Lumpkin, J., delivering the judgment of the court, said: “Was the appointment of a receiver a judicial act? If so, it is very clear that it could not be made by the Legislature, without violating an express provision of the Constitution. But it does not seem to us to be of this description of power. It was not a case of controversy between party and party; nor is there any decree or judgment affecting the title to property; it determines no right, legal or equitable. The receiver is merely to collect, hold and disburse the assets of the bank for the benefit of all concerned; and it is in the power of the courts to direct and control him in the proper execution of his duties.” So, also, in an analogous case, Foote v. Forbes, 25 Kan. 359, it was held that orders made by a judge at chambers, in granting and dissolving a temporary restraining order, were not judicial acts. The court there said: “ It is not an adjudication that can affect anything further than the granting or dissolving of the injunction; and except for the granting or dissolving of the injunction, it is no adjudication at all.” See, also, Toledo, *198etc., R. W. Co. v. Dunlap, 47 Mich. 456; United States v. Ferreira, 13 How. 40.
Under an act of Congress the comptroller is authorized to appoint receivers in certain cases, and his authority in that regard has often been maintained in the courts.
To the foregoing might be added many other cases of like import, but as I should not feel inclined, without further consideration, to go to the extent of holding that the appointment of a receiver or granting an injunction under our statute was not in such sense a judicial act as that the power to make such appointments could only be conferred upon a judicial officer, who while exercising such power, constituted a special tribunal or court in a limited sense, I pursue the inquiry no further. That quasi judicial powers may be conferred upon tribunals which are not courts, in the strict sense of the term, there can be no doubt. Shoultz v. McPheeters, 79 Ind. 373; United States v. Ferreira, supra. Such are the powers which are Conferred by statute upon a judge in vacation, and such a court is constituted when a judge acts in obedience to the powers thus conferred.
The power of a judge in vacation was the subject of judicial consideration at a very early period in the history of this court, and his power and jurisdiction, and the relation which he occupied to the court of which he was the judge, were defined in a manner consistent with the whole course of legislation and judicial interpretation since. Newman v. Hammond, 46 Ind. 119; Ferger v. Wesler, 35 Ind. 53; Batten v. State, 80 Ind. 394; Cain v. Goda, 84 Ind. 209.
In the case of Taylor v. Moffatt, 2 Blackf. 305, after defining the jurisdiction and power of a judge, sitting in term, the court said: “But when he is acting in vacation his situation is different: his jurisdiction is special and limited. He can not be strictly said to be acting as a court of chancery.” So, again, in the case of City of Columbus v. Hydraulic, etc., Co., 33 Ind. 435, in which it was held that the judge of the common pleas court had power to issue an injunction in a *199■case pending in the circuit court, it was said: “The judge of the common pleas is not in vacation the court of common pleas, and so of the circuit judge. But each exercises in vacation whatever power in this respect is conferred by statute as an officer clothed with the special authority, having for that purpose the power which the proper court would have in term, and being, in a certain limited sense, that court for the time being. * * * The judge in vacation is not the court, though for certain purposes he possesses its powers, and is for that reason called a court.”
That a judical officer may be clothed with certain limited ■statutory powers of a judicial character, can not be questioned, and that in a certain limited sense he is, while exercising those powers, a court, may be admitted, but it does not follow that he thereby becomes the court of which he is the judge, or that he has any jurisdiction beyond the express letter of the statute. Upon this subject the Supreme Court of California said, in the case of Spencer Creek Water Co. v. Vallejo, 48 Cal. 70: “It is beyond question that the county judge is not the county court, and although the Legislature may authorize the judges of the several courts to perform certain duties, at chambers, in respect to proceedings in a cause, yet some court has jurisdiction of the cause, and the judge, in chambers, whether of the same or another court, acts as a commissioner, or in some other capacity, merely in aid of and .subordinate to the court having jurisdiction of the cause.”
In the case in which the appellee in this case was appointed receiver there was no action pending in court, in aid of whose jurisdiction the judge at chambers acted. The question is, could the judge, by taking jurisdiction over a defendant who came before him to consent to the appointment of a receiver, thereby constitute the case in which the receiver was appointed an action pending ? Could he, by taking original jurisdiction over a defendant in a matter not pending in any ■court, acquire a jurisdiction which he could only exercise in a pending cause?
*200The only conclusion which in my opinion is justified upon authority and precedent, is that he could not. That a judge in vacation may be, and under the statute is, invested with, special authority to make such orders in a case pending, in aid of the jurisdiction of the court in which the action is pending, is thoroughly settled; but that he is not and can not, be made the medium through which original jurisdiction can be acquired in such a case, is equally well settled. A judge, sitting in vacation, is not a court of record; he has neither clerk, seal nor record. He has in vacation no more authority or control over, or right to enter anything upon the records of the court, unless expressly authorized by statute to do so, than any other citizen. That an appeal is provided for from orders made by a judge in vacation determines nothing as to the extent of his authority, nor does that fact constitute him a court. There are many proceedings had before inferior officers and municipal bodies from which an appeal may be taken to the circuit courts, but this does not constitute such officers or bodies courts. ■
Under section 7, Acts 1883, p. 180, an appeal may be taken from the action of a township trustee in a drainage case, but that fact does not constitute the trustee a court.
While sitting in vacation, a judge does not come within any known definition of a court as ordinarily understood. While holding court in one county, he may, upon proper application, make an order appointing a receiver, or grant an injunction, in a case pending in any other county in his circuit. This practice prevails uniformly, and has been upheld in this court.. Thus it might often happen that one judge might at the same time have the circuit court of two counties open for appearances and proceedings, and in that manner constitute the circuit court in two counties during the same period.
A judge sitting a hundred miles from the county seat,, without any record before him, might nevertheless take proceedings and enter the appearance of a defendant in a cause not yet commenced. It would thus result that the evidence *201of an appearance in court, or of pleadings filed and rulings had in the circuit court, would rest in the memory of the judge, or be preserved in such temporary orders as might be made wherever the judge might chance to be found.
It was said in Blair v. Reading, 99 Ill. 600: “ It is a fundamental principle that courts can exercise judicial functions only at such times and places as are fixed by law, and that the judges of courts can enter no orders in vacation except such as are expressly authorized by statute.”
There is no statute or precedent which authorizes an appearance to be entered before a judge sitting in vacation, nor have we any statute which prescribes what acts shall constitute an appearance. What shall constitute an appearance, therefore, rests upon the well established rule of the common law, as it has been perpetuated and declared time out of mind. According to this rule, steadily maintained and often declared by this court, an appearance is the making of some formal entry, plea, motion, or official act in open court. It is essential that this should be of record; it can be proved only by the record. Scott v. Hull, 14 Ind. 136. Moreover, it has been repeatedly ruled by this court, that whenever the law contemplates the doing of an act by or in a court, “ it is and must be understood that the court in term time may or must do it, and the judge in vacation can not, unless the power is expressly conferred upon him by law.” Newman v. Hammond, 46 Ind. 119. Ferger v. Wesler, supra; Batten v. State, supra.
Thus it was said in McCormack v. First Nat’l Bank, 53 Ind. 466 : “An appearance, according to the ancient practice, purports to be a proceeding in term time, and that theory still exists in legal contemplation.” Unless, therefore, it can bo held that a judge sitting in vacation is not only the court of which he is the judge, but that his sitting constitutes part of a term of court, an appearance can not be entered before him within any precedent that I have been able to find. The rule, forcibly and tersely announced in the language above *202quoted, has been steadily maintained and uniformly enforced through a line of decisions of this court from Shirley v. Hagar, 3 Blackf. 225, down to Pressley v. Harrison, 102 Ind. 14.
It is especially because the prevailing opinion, as it seems to me, overturns this rule thus maintained, and announces ■one which, in my judgment, is anomalous, and, so far as I have been able to discover, without precedent anywhere, that 1 am unable to yield my assent to it.
In my opinion it would be much better to hold that a receiver might be appointed without any action pending at all, than to bring about the pendency of the action by a holding which constitutes a judge in vacation, wherever he may happen to be, the court, before whom parties may enter an appearance, which has uniformly heretofore been required to be entered in term time, and proved only by the record made in open court.
The rule, as it has been strictly held by this and other courts, has been, that all business and matters which pertain to the general jurisdiction of courts can only be transacted when the court is in session in regular or special term, sitting with its clerk, record and officers as a coui’t. Business which may be transacted at any other time is exceptional, and for authority to do it express warrant must be found in the statute.
For the foregoing reasons I think an appearance can not be entered for the first time before a judge in vacation, and that pleadings in the case can not be filed with or entertained by him. The pleadings referred to in section 1225, E. S. 1881, are very clearly pleadings filed in the case in court. This is consistent with the practice of the chancery courts, in which an application for the appointment of a receiver is never entertained, unless upon an emergency shown, until the answer of the defendant to the bill is brought in.
It may be inferred from the opinion of the majority, that *203a receiver may be resorted to for the sole purpose of effectuating a voluntary assignment and placing the property of an insolvent partnership in custodia legis, to be administered for the benefit of creditors. It is suggested, too, that if there is any conflict between the statute regulating voluntary assignments and that under which receivers are appointed, the latter must prevail. My view of the matter is, the statutes in no wise relate to the same subject, and are in no manner in ■conflict. The statute regulating voluntary assignments was designed to secure to a failing debtor the opportunity to make an equal distribution of his estate among all of his creditors, and, as this court has often held, where a statute prescribes a remedy which was not known at common law, such remedy is exclusive of all others. Receiverships, on the other hand, were never designed or used for the purpose of accomplishing assignments and the distribution of property.
Filed Feb. 9, 1886.
A receiver is an adjunct of a court of chancery, an indifferent person to take charge of and preserve property which is the subject of litigation until the suit involving the title is terminated and the right to the property settled. Moreover, it is a cardinal principle, everywhere enforced, that a receiver will never be appointed by a court of chancery if there is any other expedient remedy available to accomplish the same end for which the receiver is applied for. Thus, where proceedings were instituted to wind up a banking corporation for the appointment of a receiver to wind up its affairs, but it was apparent from the bill that the matters might be remedied by following the prescribed course of law, the application was not entertained. High Receivers, sections 10, 301, 403, 555, 592.