Court Opinion

ID: 6573239
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:31:56.128831+00
Date Added: 2024-06-11T15:56:59.011370
License: Public Domain

Gob id, J.
I concur in the opinion, that that part of the decree, which relates to the appointment of a receiver, ought to be reversed. Such an appointment, in cases of this sort, is, by no means, a matter of course: if it were, great inconvenience and injustice would often ensue. A partner, however solvent, and without any imputation upon his integrity, ór competency, might be dispossessed of his property, for an indefinite period, to the great derangement of his affairs, and even to his own ruin. The rule, therefore, is, that where either of the original partners is defendant in the bill, and no particular disqualification is shown against him, the confidence, reposed in him, precludes the appointment of a receiver. Philips v. Atkinson, 2 Bro. Ch. Ca. 272. Read v. Bowers, 4 Bro. Ch. Ca. 441. In the present case, no disqualification, on the part of the plaintiff in error, appears ; *401and tSic finding, upon which the whole decree is founded, being special, none certainly can be presumed.
In this view of the first error assigned, there is no occasion for considering the second. For, if upon the facts dis--■losed, no receiver ought to have been appointed ; the mode, in which the appointment has been made, cannot affect the judgment to be given here.
In the third assignment, the power of the court below, to appoint distributors, is not questioned : but it. is objected, first, that, by the terms of the decree, they are not required to act under oath ; and secondly, that they are not directed to make return of their doings. If an oatli were admitted to be necessary, the first branch of the exception could not prevail. For the objection is not taken to any proceedings of the distributors ; but to the form, in wdfich their powers are conferred : and that form is the same, as has obtained, in all analogous cases. In assigning auditors, in the action of account, it is never directed, by the court, either in the English practice, or our own, that they act under oath ; and the same observation applies to our mode of appointing referees, in actions at law, and committees upon bills in equity. To allow the objection, would, therefore, be virtually to impeach the established form, in which similar appointments have always been made. In the instances, just mentioned, auditors, referees and committees are left, precisely as the distributors, in the present instance, have been, to conform to the law, without any particular direction from the court. If the law requires them to act under oath, it surely cannot be presumed, that they will act without oath, And if they deviate, in this respect, from the course, which the law prescribes ; the objection must be taken, if at all, in a different stage of the proceedings. Whether an oath, in this particular instance, is necessary, or not, we cannot, therefore, now, judicially determine. I acknowledge, for myself, however, that I am, at present, unapprized of any law, or usage, of the state, requiring it. And I do not know, that our courts of justice, have ever framed, or sanctioned, an oath, unless some authority could be found for it, either in statute-law, or precedent. To the second branch of ¡he exception, (that the distributors are not directed to make return of their doings.) it has been justly replied, at the bar, that it is always in the pow er of the court below, to enforce a return ; *402And if any unnecessary delay occurs, on the part of the distributors ; an order, for that purpose, may, at any time, be made.
In relation to the charge of 450 dollars, allowed against the plaintiff in error, for extra interest, and the allowance of which is the subject of the fourth error assigned, I am unable to discover any plausible ground of exception. That allowance is clearly warranted, by the fact, that the company has been obliged to pay the same rate of interest, and at least, to the same amount, for the sole benefit of the plaintiff in error.
Under the fifth error assigned, some confusion has been introduced into the argument, by the different views, which have been taken by the counsel, of the finding of the committee. It has been contended, that the company have sustained no loss, in consequence of the course, pursued by the plaintiff in error, in relation to their accounts with Frost, and with Victory Tomlinson; because credit was given to the company, on their own books against Frost, equal to the amount, endorsed upon the note, which the plaintiff in error held against Frost: and it is added, that this sum was never charged over, by the plaintiff in error, to the company. It would have been extraordinary, indeed, if it had been so charged over: such a charge would have subjected the company to a double loss of the amount, charged to Frost. For the debt, apparently due to him, upon the company books, was altogether fictitious ; it having been raised, by giving him a credit, which ought to have been given to Victory Tomlinson. Of what use, then, was the diminution of this ideal credit, to the company ? Clearly of none at all. On tin contrary, it is impossible for the court not to see, that the operation in question, was, in effect, an application of partnership-funds, to the use of the plaintiff in error — or, in other words, of property received by the company, in pay inent of a debt against Victory Tomlinson, to a debt due from Frost to the plaintiff in error. The charging to Frost, on the company-books, and the indorsing upon his note to the plaintiff in error, of a sum which ought to have been passed to the credit of Victory Tomlinson, in payment of the company’s debt against him, were essentially, without any charge of that sum to the company, an appropriation of partnership funds, to the same amount, to the private debt, w hich the *403plaintiff in error held against Frost. And this unauthorized appropriation has resulted in the entire loss» to the company» of the debt due to them, from Victory Tomlinson. The whole proceeding, (to express it in a few words») is this : The plaintiff in error has misapplied, to a debt, due from Frost, to himself, funds received in satisfaction of a company debt against Victory Tomlinson; and in consequence of this misapplication, the latter debt is entirely lost. But he now resists the claim of his partner, to be indemnified for this loss, by endeavouring to convert that misapplication of the partnership funds, into payment of a company debt to Frost, to whom no debt was due. But further : if the debt originally due to the company, from Victory Tomlinson were not barred ; he might still compel an application to his credit, of the property, delivered to the company, for that purpose, or subject them, for the value of the property : so that, even upon this supposition, the loss to the company would, upon the principles of the plaintiff in error, be the same ; since they would be charged, in the one form or the other, with property which has been appropriated to the individual benefit of the plaintiff in error.
The last error assigned is urged, only as a ground of objection to the costs allowed, by the court below. In our chancery proceedings, the allowance of costs is, in strictness, discretionary; though, in practice, our rule is, generally, much the same, as at law. The question, therefore, is not stricti juris: and I see no sufficient reason, in this case, for rejecting the allowance.
I» therefore, concur in the opinion, that the decree, except so much of it, as relates to the appointment of a receiver, ought to be affirmed.