Court Opinion

ID: 3996038
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:54:22.398086+00
Date Added: 2024-06-11T09:36:21.426074
License: Public Domain

This decision permits a departure from hitherto recognized jurisdiction to appoint receivers. This proceeding is not based on any statutory authority. Prior to the judicature act, English courts had no authority, in law actions, to appoint receivers, either before or after judgment. Jurisdiction to appoint receivers was vested solely in courts of equity, and could be invoked only by a creditor's bill. In Smith v. Cowell, 6 L.R. (Q.B. Div.) 75, it is said:
"In this case the plaintiff has recovered judgment and sued out a writ of elegit, but the defendant has no property to which resort can be had to satisfy that judgment, except an equity of redemption. Now if this case had arisen before the Judicature Act, the plaintiff's course would have been clear; he would have had to file a bill in Chancery, claiming to have it declared that by virtue of his judgment he was entitled *Page 387 
to a charge upon the defendant's equity of redemption to the amount of such judgment; and then, upon an application for a receiver being made in the course of such suit, a receiver would have been appointed."
Again, in Salt v. Cooper, 16 L.R. (Ch. Div.) 544, it is said:
"The present motion raises points of great importance . . .
"The first question is, whether, in an action brought in the High Court of Justice, where judgment has been obtained against a debtor . . ., the Court . . . in which the action is brought can give what is called equitable execution, that is, can grant a receiver, on motion only in the original action; . . .
"The question really depends, in my opinion, upon the construction to be put on the Judicature Act of 1873; . . ."
In Kinnear v. Clyne, 13 Ontario Weekly Reporter 1138, it is said:
"Before the Judicature Act this relief was obtained through an independent suit in Chancery; since then it may be summarily obtained by application in the original action wherein judgment has been given."
So in this country, prior to the enactment of the codes, jurisdiction for the appointment of receivers was vested solely in equity. High on Receivers (4th ed.), §§ 399, 400, 401; 1 Clark on Receivers (2d ed.), § 216. The latter, quoting from Neate v.Duke of Marlborough, 3 My.  Cr. 407, says:
"`What gives a judgment creditor a right against the estate of the defendant, is only the act of Parliament, for independently of that he has none. . . . The effect of proceeding under the writ, that is under ordinary execution, is to give to the creditor a legal title, which if no impediment prevents him, he may enforce at law by ejectment.'"
Further on in the section, the author says:
"In all these cases by ordinary execution process the plaintiff could not get satisfaction of his judgment, *Page 388 
could not get possession of the property because it did not legally belong to the defendant, or was not in his possession. In other words there were legal impediments. Therefore plaintiff comes into a chancery court or a court having chancery jurisdiction not to obtain a greater benefit than the law has given him, but to have the same benefit by the process of the court of chancery which he would have at law if no legal impediment had intervened."
High, in § 401, says:
"Under the New York code of procedure, as well as in many of the states which have adopted the code practice from New York, provision is made for the appointment of receivers on proceedings by judgment creditors `supplementary to execution,' which proceedings have taken the place of the former creditors' bill."
The sum and substance of the authorities, both decisions and text writers, is that jurisdiction to appoint receivers in such cases is to be found only in the inherent powers of a court of equity (to be invoked by a creditor's bill) or in statutory authority, such as the judicature act or supplementary proceedings such as is provided by the codes. In none of our own cases that I have found has any other procedure been approved.
I cannot agree that the matter of jurisdiction is a matter of form rather than substance. Simply because what is sought here could be gained under supplementary proceedings, is not sufficient to create jurisdiction. As stated in 1 Clark on Receivers, § 216, supra: "What gives a judgment creditor a right against the estate of the defendant, is only the act of Parliament, for independently of that he has none."
The power to appoint receivers is drastic and subject to grave abuse. When a creditor invokes it, he should be required to proceed either by bill in equity *Page 389 
or by supplementary proceedings, where the debtor is assured of a full hearing. The creditor in this case not having so proceeded, the writ of prohibition should issue.
MAIN, J., concurs with BLAKE, J.