Court Opinion

ID: 9864375
Source: CourtListenerOpinion
Date Created: 2023-09-25 12:55:06.69469+00
Date Added: 2024-06-11T12:10:59.312697
License: Public Domain

Hart, C. J., (concurring-). According to my view, the allegation of the complaint that the contract of sale of all the insurance assets of the defendant company with the approval of the insurance commissioner of the State of Arkansas indorsed on the back thereof, when read in connection with the charges of fraudulent conduct on the part of the officers of the company, is equivalent to an averment in pleading of the refusal of the officers, whose duty it was to bring suits like this to act in the matter; and thus gave the plaintiff, as a member of the company, the right to (bring the suit under the principles of law decided in Griffin v. Rhoton, 85 Ark. 89, 107 S. W. 380, and Gladish v. Lovewell, 95 Ark. 618, 130 S. W. 579. It seems to me that the suit is merely one for the appointment of a receiver, and it has been well said that there is neither in law nor in equity any such thing as a plain receivership action. As I read the complaint filed in the chancery court upon which the application for a receiver is based, the plaintiff seeks the appointment, not as an aid to some equitable ground of relief, but as an independent right. •Such suit cannot be mantained where the basis of equity jurisdiction alone is the appointment of a receiver, but there must be equity jurisdiction independent of the application therefor. In short, the appointment of a receiver by a court- of equity, except perhaps in rare cases arising out of insanity or infancy, is ancillary to some? other action having some definite equitable grounds of relief in view. 34 Cyc. ch. 30 ; 23 R. C. L. p. 11 ; High on Receivers (4th ed.) § 5, p. 9; Tardy’s Smith on Receivers (2d ed.) vol. 1, § 5, p. 58; District No. 21, United Mine Workers of America v. Bourland, 169 Ark. 796, 277 S. W. 546 ; and Pusey & Jones Co. v. Hanssen, 261 U. S. 491, 43 S. Ct. 454, 456, 67 L. ed. 763. As stated by Mr. Justice Brandéis in the case last cited: “Whether the debtor be ail individual or a corporation, the appointment of a receiver is merely an ancillary and incidental remedy. A receivership is not final relief. The appointment determines no substantive right, nor is it a step in the determination of such a right. It is a means of preserving property which may ultimately be applied toward the satisfaction of substantive rights.” Under the allegations of the complaint, no rights between the parties are sought to be settled. The contract of sale is not asked to be set aside; and no relief is even asked against the alleged fraudulent acts of the officers, sanctioned and approved by the insurance department. It seems to me that the appointment of a receiver is not ancillary to any ultimate relief between the parties, but that the appointment is the sole object to be accomplished, and no ground of equitable relief otherwise is stated in the complaint. Therefore, I think that the chancery court proceeded without jurisdiction and that the writ of prohibition should be granted. Mehaeey, J., dissents.