Court Opinion

ID: 7054117
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:04:06.870732+00
Date Added: 2024-06-11T16:11:53.557103
License: Public Domain

Jordan, J.
Appellees applied for and secured by an interlocutory order of the lower court the appointment of a receiver pendente lite. This appeal is prosecuted upon the grounds that, under the facts, the trial court abused its discretion in awarding to appellees the right for the appointment of a receiver. By their complaint in the principal action appellees seek to enforce a specific performance of a written contract executed by and between them and appellants on May 13, 1899, whereby the latter sold and agreed to convey to the former a certain electric light plant together *578with, the real estate, buildings, machinery, equipments, etc., thereunto belonging, all situated in the city of Marion, Grant county, Indiana. The facts, in brief, appear to be as follows: By the terms of the contract for the sale of this plant appellants agreed to accept as a consideration for the sale the sum of $25,000 in money, and $23,500 in paid up capital stock of the Marion Electric Company; the money and stock were to be deposited by appellee at the Marion bank for .the use and benefit of appellants within five days from the-date of the contract, appellants agreeing thereunder to deliver to said bank within said period of five days, for the use and benefit of appellees, proper deeds of conveyance to-them of the said plant or property. Appellees, upon their part, as it appears, complied with the terms and requirements of the contract, and deposited with the bank, within the time njentioned, both the money and stock as provided, but- appellants have wholly failed and refused to execute any deed of conveyance or transfer of the property in question to appellees, as under the contract they had' agreed to do. After the filing of an answer by appellants, the - court, heard the application for the appointment of a receiver upon the pleadings and affidavits presented pro and con by the parties, and thereupon entered an order appointing a receiver to have the possession and to take charge of the property’involved in the suit pending the litigation. The verified facts presented upon the part of appellees by the complaint and affidavits go to show that appellees, as previously stated, have, performed and complied upon their part with the terms of the written contract, which is in evidence, but, upon the contrary, appellants have wholly failed and refused to.comply with its terms upon their part, but continue, to hold the possession of the property in question, and to control and operate the same. There seems to be no dispute, so far as the evidence is concerned, in respect-to the fact that appellees, within the time fixed by the contract, deposited with the bank in question for the sole use *579and benefit of appellants tbe entire consideration to be paid for the property, namely, $48,500, part of wbicb, as stated, was -to- be in money, and tbe remainder in tbe capital stock mentioned. Tbe income arising from tbe said electric plant amounts to about $2,000 per month, which, as disclosed by tbe affidavits, appellants refuse to pay over to appellees and are converting tbe same to tbeir own use, and tbat sucb income is being wasted. It further appears tbat appellants have failed and refuse to carry any insurance against fire upon tbe property, and tbat tbe risk is a hazardous one, and tbat said plant is in danger of being destroyed by fire, and thereby wholly lost to appellees. It is further disclosed tbat appellants are making extensions to tbe plant by adding thereto machinery, and tbat they are making other additions and improvements, none of wbicb seem to be provided for or required under the terms of tbe aforesaid contract. Tbe general charge- is also made by some of tbe affiants tbat tbe property is liable to- be injured and damaged if it is longer, allowed to remain in tbe possession of appellants.
Counsel for tbe -latter contend tbat tbe evidence as it appears -in tbe record is wholly insufficient to justify tbe lower court in appointing a receiver, or, in other words, tbe gist of tbeir contention seems to be tbat because there is an entire absence of evidence to show tbe insolvency of appellants, or tbat tbeir character or circumstances are sucb as ■ to render them wholly irresponsible, tbat, therefore, tbe court was not warranted in wresting from them, pending tbe litigation, tbe possession and control of tbe property in dispute.
It is further insisted tbat inasmuch as the facts in tbe case were presented wholly to tbe lower, court by .the means of written or documentary evidence, therefore, this court on. appeal should consider itself in as good a position or attitude to weigh tbe evidence as was tbe trial court.
We are not unmindful of tbe rule for wbicb appellants contend, tbat the appointment of a receiver is an extraor*580dinary or harsh, remedy, and the right thereto, as a general rale, does not follow as a matter of course, but is lodged in the sound discretion of the trial court and is not awarded in a case where the remedy at law is complete or adequate. The exercise of this judicial discretion, however, under a well settled rule, is subject to review on appeal to a higher court.
• The principal grounds, other than fraud, as the authorities assert, which are sufficient to warrant a court in exercising'its power in the appointment of a receiver, are to the effect that in each particular case it must be made to appear that the person seeking such relief has at least a probable right or interest in the property or fund involved in the litigation, and' that such property or fund, or the income thereof; is in danger of loss or injury from the neglect, misconduct, or insolvency of the defendant. As a general rule, where the property in dispute appears to be exposed to danger and loss, and- the person in possession or control thereof has not a clear legal title or right thereto, the court, on the application of a person interested therein, will interpose and appoint a receiver for the security or preservation of the property pending the litigation. High on Rec. (3rd ed.); §11; Smith on Rec., §5.
Of course 'the court by its order appointing a receiver pendente libe does not thereby determine or attempt to determine any right or title of the litigants to the property in controversy, as the appointment is made for the benefit of all. The rule in ordinary practice is to appoint a receiver with the sole view of securing or preserving the property, and not to inquire into the merits of the principal action. Bitting v. Ten Eyck, 85 Ind. 357. But inasmuch as the granting of an ■ application for a receiver under-the facts in each case rests within the discretion of the trial court, the latter may, and properly so, .if deemed necessary, take into' consideration all the facts and circumstances in the case, and may thereby be influenced in its judgment by the exist*581ence of a reasonable probability that tbe plaintiff applying, for a- receiver will .ultimately succeed in bis suit upon -the merits of tbe case. 3 Pomeroy Eq. §§1331, 1336; Beacb on Rec. ( Anderson’s ed.), §1. '
It is not essential to tbe appointment, of a receiver, as counsel for appellants se.etningly contend, that tbe .defendant should be shown to be insolvent. • Tbe insolvency of .a person in tbe possession or enjoyment of tbe use of. property for which a receiver is sought, is not, as a general rule, inf dispensable to a.successful prosecution of tbe application. Tbe fact, however, of bis insolvency -or financial irresponsibility, under tbe circumstances in some cases, may be,sufficient to justify the court, in appointing a receiver to take charge of tbe property or fund in - litigation. The insolv^ ency of a defendant in possession of property involved.in litigation in any case necessarily intensifies tbe. probability of loss to tbe complainant, and will serve, at least, to show, that his remedy at law for any loss or-injury that may be sustained,would be inadequate. Tbe foregoing are some-of the general principles which influence or govern courts . of equity in tbe exercise of their'discretionary powers in tbe appointment of receivers. Some of tbe provisions ‘of our civil code upon the subject of receivers give trial courts large discretionary power in applications -thereunder. §1236 Burns 1894, provides that “A receiver may be ap-: pointed by tbe court, or tbe judge -thereof in vacation, in tbe following cases: . * ■ * * . Third. • In all. actions,. when it is shown that the property, fund, or rents and profits-in controversy is in danger of being lost, .removed, or materially- injured. * * *■ Seventh. And in such other cases as may be provided by law; pr where, in- the-discretion of the court, or tbe judge thereof in vacation, it may be necessary to secure ample justice to’the .parties.” This last provision is certainly comprehensive and somewhat sweeping in its character.1 ■ Under its authority a receiver may be appointed in any case in which, according; *582to the established rules of equity, the appointment may be necessary “to secure ample justice to the parties” without regard to the form or character of the principal action. Hellebush v. Blake, 119 Ind. 349; Connelly v. Dickson, 16 Ind. 440; Wayne Pike Co. v. Hammons, 129 Ind. 368; Goshen, etc., Co. v. City Nat. Bank, 150 Ind. 279.
There is evidence in this case to support the order of the court appointing the receiver, and when the facts- are tested by the principles and rules previously mentioned, we can not hold as a matter of law that the court thereunder abused its discretion. Prom the action of appellants in making additions and -improvements to the property -in' dispute, when such were not provided for under the contract of sale, it would appear, at least, inferentially, that they were not intending to yield- the possession of- the property to appellees except at the end of a protracted lawsuit. The probability of a fierce and long continued litigation in respect to the rights of -property will sometimes justify a court in withdrawing it from the operation of such a prolonged contest by placing it for preservation or security in charge of a receiver for the benefit of all the parties concerned therein, until there can be a full and final adjudication- of their rights. Crane v. McCoy, 1 Bond. (U. S.) 422.
The rule that this court will not weigh evidence on appeal finds no exception in suits in equity, -nor in actions or' proceedings where the evidence upon the trial or the hearing of -the matter in issue is presented to the lower court by means of depositions, affidavits, or other documentary evidence. Cabinet Makers’ Union v. City of Indianapolis, 145 Ind. 671. In order to justify this court in disturbing a judgment of the lower court in any case or proceeding, upon the evidence alone, the latter must be such as to raise a question of law, and not one merely of fact. Lee v. State, ante, 541, and cases there cited.
Under this rule,' the order appointing a receiver will not be disturbed on appeal upon the evidence alone, unless the *583appellant or complaining party cle.arly shows by it that thereby a matter of law in respect to the abuse of discretion on the part of the trial court is presented. ' As in other cases where there is evidence to sustain the qrder upon every essential point, it will not be reversed .on appeal. Pouder v. Tate, 96 Ind. 330; Naylor v. Sidener, 106 Ind. 179.
It is settled generally by the decisions of this court that where a discretionary power is invested in a lower or inferior court, there must be a plain abuse' of such power to the prejudice of the complaining party, in order to warrant the interference of this court on appeal. Gordon v. Spencer, 2 Blackf. 286; Detro v. State, 4 Ind. 200; Heberd v. Myers, 5 Ind. 94; Carlisle v. Wilkinson, 12 Ind. 91; Cooper v. Johnson, 26 Ind. 247; Ewbank’s Manual, §282.
There is evidence in this case which fully supports the order of the lower court, therefore, for the reasons stated, we cannot interfere, and the order is affirmed.