Albert Johann & Sons Co. v. Berges, No. 29650

• Docket Nº: No. 29650
• Citation: 150 N.E.2d 568, 238 Ind. 265
• Case Date: May 16, 1958
• Court: Supreme Court of Indiana

Page 568

150 N.E.2d 568 238 Ind. 265 The ALBERT JOHANN & SONS COMPANY, Inc., Appellant,
v.
E. Harold BERGES, Appellee. No. 29650. Supreme Court of Indiana. May 16, 1958.

[238 Ind. 267]

Page 569

James D. Lopp, William L. Craig, Evansville, for appellant.

Jerome L. Salm, Warren, Merrell & Combs, Evansville, for appellee.

BOBBITT, Judge.

This is an appeal from an order appointing a receiver without notice.

The statute authorizing the appointment of a receiver in Indiana provides, inter alia, as follows:

'Receivers shall not be appointed, either in term or vacation, in any case, until the adverse party shall have appeared, or shall have had reasonable notice of the application for such appointment, except upon sufficient cause shown by affidavit.' Acts 1881 (Spec. Sess.), ch. 38, § 253, p. 240, being § 3-2602, Burns' 1946 Replacement.

'This section of the Code is declaratory of the equitable practice 'to require the moving party to give due notice of the application to defendant, over whose effects he seeks the appointment of a receiver, in order that he may have an opportunity of being heard in defense, and that his property may not be summarily wrested from him upon an ex parte application.' High, Receivers, 4th Ed. § 111, p. 128.' Second Real Estate Investments, Inc., v. Johann, 1953, 232 Ind. 24, 28, 111 N.E.2d 467, 470.

'* * * the appointment of a receiver ex parte and without notice to take over one's property or property which is prima facie his is one of the most drastic actions known to law or equity; * * * it should be exercised with extreme caution, and only where great emergency or imperative necessity requires it.' 45 Am.Jur., Receivers, § 90, p. 81.

The statute does not define 'sufficient cause,' hence we must look to decisions of this court for the elements necessary to constitute sufficient cause for the appointment of a receiver without notice.

[238 Ind. 268] The following have been established in Indiana as conditions precedent to the appointment of a receiver without notice:

1. The complaint must affirmatively show (a) a probability that plaintiff will be entitled to judgment; ¹ (b) that there not only is cause for the appointment of a receiver, but that there is sufficient cause for such appointment without notice; ² and

Page 570

(c) that plaintiff's rights cannot be protected by a restraining order or other adequate remedy, and if this is shown, then it must be further shown that the emergency necessitating the appointment could not have been anticipated in time to give notice ³ or that waste or loss is threatened and delay until notice can be given will defeat the object of the suit. ⁴

2. The only evidence which is proper under § 3-2602, supra, to be considered by the trial court must be in the form of affidavits, which may include or consist of the verified complaint. ⁵

3. The facts justifying the relief sought must be shown by the affidavits or verified complaint, and mere conclusions of a plaintiff will not suffice. ⁶

[238 Ind. 269] The complaint alleges that plaintiff is the owner of 49 shares of stock in defendant corporation, which is engaged in the business of funeral directing; that one Herbert...