Garden Homes v. United States

• Decision Date: 16 December 1952
• Docket Number: No. 4702.,4702.
• Citation: 200 F.2d 299
• Parties: GARDEN HOMES, Inc. et al. v. UNITED STATES et al.
• Court: U.S. Court of Appeals — First Circuit

200 F.2d 299 (1952)

GARDEN HOMES, Inc. et al. v. UNITED STATES et al.

No. 4702.

United States Court of Appeals First Circuit.

December 16, 1952.

Angus M. MacNeil, Boston, Mass., for appellants.

Robert D. Branch, Asst. U. S. Atty., Concord, N. H. (John J. Sheehan, U. S. Atty., Concord, N. H., on the brief), for United States.

William H. Craig and Craig & Craig, Manchester, N. H., for Harry M. Bickford, receiver, appellee.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

WOODBURY, Circuit Judge.

These are consolidated appeals from three orders entered by the United States District Court for the District of New Hampshire in the course of a proceeding brought to foreclose a mortgage covering real property situated in the City of Manchester in the District. Federal jurisdiction in the premises is conferred by Title 28 U.S.C. § 1345. One of the appeals is from an order appointing a receiver with broad general powers to manage and operate the mortgaged property pending foreclosure in addition to power to collect its rents and profits during that time. This order, although interlocutory, is appealable under Title 28 U.S.C. § 1292(2). The other two appeals are, respectively, from an order denying a motion to dismiss the complaint, and from an order directing the defendant to turn over to the receiver certain books of account, inventories, leases, agreements and so forth. There is no statute giving this court jurisdiction to entertain appeals from these latter orders. The appeals therefrom will therefore be dismissed.

Aside from its contention that there has been no prima facie showing of a default, which we find lacking in merit, the debasic contention with respect to the appealable order appointing the receiver is that the court below erred in the broad scope of the power it gave the receiver over the mortgaged property. It concedes that under the terms of the mortgage the court below in the event of a default could without notice appoint a receiver to collect the rents, issues and profits due and becoming due during the pendency of a suit to foreclose. But it says that neither under the terms of the mortgage, nor under the complaint herein, nor upon the proofs adduced in support thereof at the hearing, has the court any legal right to appoint a receiver not only to collect rents and profits but also generally to manage, operate and control the property pending foreclosure.

Although a receivership is not an end in itself, there can be no doubt that a court of equity has power to appoint a receiver when the appointment is "ancillary to some form of final relief which is appropriate for equity to give." Gordon v. Washington, 1935, 295 U.S. 30, 38, 55 S.Ct. 584, 588, 79 L.Ed. 1282. But a receiver is not appointed as ancillary relief as a matter of course. "Even when the bill of complaint states a cause of action in equity, the summary remedy by receivership, with the attendant burdensome expense, should be resorted to only on a plain showing of some threatened loss or injury to the property, which the receivership would avoid." Id. 295 U.S. at page 39, 55 S.Ct. at page 589, 79 L.Ed. 1282.

Thus it is well established that a court of equity has power to appoint...