Court Opinion

ID: 5549802
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:31:47.91176+00
Date Added: 2024-06-11T08:35:02.276921
License: Public Domain

The Vice Chancellor.
It would seem to be the duty of the complainants in a creditors bill, after obtaining an injunction restraining the disposition by the defendant of his property or the collection of his debts, to apply to the court early; and obtain the appointment of a receiver or to make some other provision for the collection of the debts, and the preservation of die property; Osborn vs. Heyer, 2 Paige, 342. This seems to me but reasonable, the injunction restrains the defendant from the collection of his; debts, and from the disposition of his property. It does not vest in the complainant the right to do either, consequently in a long litigation, the debts may become worthless, and the property he sacrificed, unless some mode is adopted to secure it for the benefit of the prevailing party in the litigation. The appointment of a receiver is the ordinary mode, and a convenient one. The Chancellor says in Bloodgood vs. Clark, 4 Paige, 577, that in cases of creditors’ bills where an injunction has been allowed, it seems to be almost a matter of course to appoint a receiver to collect and preserve the property pending the litigation ; and this will be done before the answer comes in, even though the defendant has appeared unless there is some good reason given in opposition to the-application for a receiver.
The defendants’ counsel insists that this rule applies only to the case when the judgment debtor is the sole defendant, and cannot reach assignees of the judgment debtor. It seems to me that the reason of the rule applies in the one case, as well as the other;. *216Here an injunction has gone as well against the assignees, as the judgment debtor. Both are restrained from disposing’ of the property, or collecting the debts. This promises to be a long litigation, and if some person is not authorised to take charge of the property it may be fairly presumed that there will be a ioss. an assignee in trust for creditors is but a trustee of the fund, a receiver is the same, and nothing more ; and it certainly should not be urged that a receiver appointed by this court, will not be as faithful a trustee as the assignee appointed by the debtor, especially as .the receiver gives security for the performance of his trust and the assignee does -not. The settlement of this question, i. e. the appointment of a receiver, does not settle the rights of the parties to the fund. That will remain under the control of the court to abide the final event of the litigation. The defendants again say that the time has not elapsed for them to answer, and that no receiver should be appointed until their side of the case has been heard, or until there was a default against them. It seems to me this reasoning is inconclusive. They are restrained from interfering with the property, and debts may be lost before their answer comes in. The bill makes out a prima facie case for a receiver. There is no sufficient opposition to it in the papers already presented by the defendant, and the complainants must take their motion.
It has also been urged that inasmuch as the judgment debtor now resides in the city of New York, a reference must be made to a master in that city, and a receiver there be appointed.
I apprehend the court have this matter entirely under their discretion, and that they will exercise that *217discretion for the best interests of the property. In this case, the judgment debtor resided in Monroe county at the time of the issuing and return of the execution. His family now live there. It is to be assumed that his property and assets are principally there; indeed, I may perhaps take personal knowledge aside from the papers, that such is the fact. The judgment debtor went to the city of New-York about the time of filing this bill, without any intention at the time of remaining there; but has since remained there and gone into business, leaving his family still in Monroe county. His after acquired assets are not bound by the injunction. Under such circumstances, it seems plain that the receiver should be in Monroe county. It seems clear that the interests of the estate bound up by the injunction, require that this should be the case. It is accordingly referred to a Master residing in Monroe county, to make the usual appointment of a receiver in these two causes, (a)

 The decision in these causes was affirmed on appeal to the Chancellor.