Court Opinion

ID: 6639379
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:44:10.986867+00
Date Added: 2024-06-11T15:59:11.037285
License: Public Domain

Per Curiam.
The principal question presented by this record is as to whether the District Court had jurisdiction to appoint a receiver in the case of J. D. Thomas et al. against the Thornton-Thomas Mercantile Company, under the circumstances disclosed.
It is not disputed that the District Court appointed the receiver without notice to the corporation. Counsel contend that no notice was required by law.
Section 951, Code of Civil Procedure 1895, is as follows: ‘ ‘Notice of an application for the appointment of a receiver, in an action, before judgment therein, must be given to the adverse party, unless he has failed to appear in the action and the time limited for his appearance has expired; or unless it shall appear to the court that there is immediate danger that the property or fund will be removed beyond the jurisdiction of the court, or lost, materially injured, destroyed or unlawfully disposed of. The word ‘property,’ used in this chapter, includes the rents, profits or other income, and the increase of real or personal property. ’ ’
It cannot be contended that the original complaint filed in the District Court in said cause stated an/ facts that would constitute a cause of action. It was virtually a blank paper. But counsel who defend the action of the District Court contend that the amended complaint does state a cause of action, and, further, that it takes effect, not from the filing thereof, but from the time of the filing of the original complaint, and consequently supports the action of the court in all respects. But what does the amended complaint allege that is not contained in the original that would supersede the necessity of giving notice of the application for the appointment of a receiver? In addition to the averments in the original complaint, the amended pleading charges that the stockholders of the defendant corporation, at their regular meeting, in August, 1896, determined and directed, by proper resolution, to wind up the corporation’s business, because it was losing money, but that the officers in charge refused to wind up the business in accordance with said resolution, and were wrong. *288fully, fraudulently, and wilfully carrying on and continuing the same, in violation of said resolution, in order that they might convert the proceeds of the business to their own benefit. But the officers of the corporation had been doing this for more than a year, in violation of the resolution of August, 1896. The amended complaint does not state any facts that would show the property of the company was in any more “immediate danger” of being lost, or removed beyond the jurisdiction of the court, destroyed or unlawfully disposed of on the day the suit was commenced, than at any time since August, 1896.
The amended complaint shows nothing that would authorize the court to hear the application and appoint a receiver without notice. The question of appointing a receiver to take charge of and wind up the business of a person or corporation is too important and serious a matter to be attempted by any court without notice to the parties interested, unless the facts are so clearly emergent as to imperiL the property or estate involved. The circumstances showing immediate danger of peril should be clear and conclusive to authorize the court to appoint a receiver without notice. No such facts and circumstances appear in this record. Besides, the facts show that the receiver was appointed without notice before service had been had on the defendant. The defendant had made no default by failing to appear.
But there are some facts and circumstances shown by this record that are remarkable, and call for the animadversion of this court. The receiver was, in our opinion, appointed without any authority of law. There was nothing before the court to authorize it. But the haste and want of judicial deliberation that characterized the appointment; the expedition with which the receiver took possession of the corporation’s property; the facility with which plaintiffs obtained all their orders and rulings of the court; the delays which were permitted by the court to obstruct and defeat any request of the defendant company for bonds and for hearing; the order of sale of the goods made at chambers, without notice, when the goods were *289in the hands of the receiver, and could not be lost, injured or deteriorated in value, as far as shown, and directing the payment of claims against the corporation alleged to be preferred and owing, without proof or trial of any sort as to such claims, —were all wrong, and must be unqualifiedly disapproved by this court. All these facts and circumstances go to show that the court disposed of the case in an inconsiderate, hasty, arbitrary and most injudicial manner. The order of the District Court in appointing a receiver is reversed, and all orders of the court made subsequent thereto are vacated.

Reversed.'