Anderson v. Matthews

• Citation: 58 P. 898,8 Wyo. 513
• Parties: ANDERSON v. MATTHEWS, ET AL
• Decision Date: 13 November 1899
• Court: United States State Supreme Court of Wyoming

58 P. 898

8 Wyo. 513

ANDERSON v. MATTHEWS, ET AL

Supreme Court of Wyoming

November 13, 1899

ERROR to the District Court, Sweetwater County, HON. DAVID H CRAIG, Judge.

The material facts are stated in the opinion.

Reversed.

E. E Enterline and D. A. Reavill, for plaintiff in error.

A receiver can not be appointed until the action is pending. (Smith on Receivers, 35, 602; Beach on Rec., 50; High on Rec., 17; 2 Beach Mod. Eq., 931, 970; 20 Ency. L., 24; Bank v. Kent, 43 Mich. 296; Jones v Schall, 45 id., 379; Pressly v. Harrison, 102 Ind. 18; State v. Bank (Ind.), 44 N.E. 585; Jones v. Bank (Colo.), 17 P. 272; Min. & Smelt'g Co. v. Holleman (Ida.), 27 id., 413; Guy v. Doak (Kan.), id., 968; Seibert v. Switzer, 35 O. St., 661; Ry. Co. v. Sloan, 31 id., 1.)

A receiver is not a party to the suit in which he is appointed, nor is he permitted to resist an application for another receiver. (20 Ency. L., 227; In re Calvin, 3 Md. Ch. 302; Engle v. Ry. Co., 14 Fla. 266.)

The prior mortgagee, a party to the suit, made the statutory showing entitling him to a receiver.

John H. Chiles and John F. Mail, for defendant in error Matthews.

A summons need not be issued to authorize the appointment of a receiver or the granting of an injunction. (R. S., Secs. 2935, 2921, 2924.) The action is not required by the statute to be commenced or pending before the order is made. Again, the appointment is not perfected until the bond is filed and oath taken. (R. S. 2937; Smith Rec., 73, 74; Re Schuyler, etc., 136 N.Y. 169; Re Eagle Iron Works, 8 Paige, Ch. 383; Noyes v. Rich, 52 Me. 115.)

An application for the vacation of an order appointing a receiver must be made in apt time, or it comes too late. (Smith Rec., 69; Palen v. Bushnell, 13 N.Y.S. 785; Battershall v. Davis, 31 Barb. 323; Manhattan T. Co. v. Seattle, 16 Wash. 499; Burton v. Schilbach, 45 Mich. 504; Skinner v. Lucas, 68 id., 432; 20 Ency. L., 109; Guy v. Doak, 27 P. 968; 64 N.W. 395; 13 Abb. Pr., 12; 65 Ala. 174.)

The removal of a receiver rests in the sound discretion of the court. (Smith Rec., 559.)

POTTER, CHIEF JUSTICE. CORN, J., concurs. KNIGHT, J., did not sit.

OPINION

POTTER, CHIEF JUSTICE.

It appears by the pleadings in this case, that on the 24th day of July, 1895, Charles H. Bussey and wife made and executed a first mortgage to John H. Anderson to secure the sum of four thousand dollars, and a second mortgage to Hannah Matthews to secure the sum of one thousand and ninety-nine dollars; both mortgages covering the same real estate, situated in the town of Rock Springs. The debt secured in each case was to become due in one year after date.

On the 29th day of January, 1897, Hannah Matthews filed in the office of the clerk of the district court a petition setting up the note given for the debt due her, and the mortgage securing it, and praying for judgment against Bussey and wife for the sum due, and a foreclosure of the mortgage by a sale of the mortgaged premises. It is alleged in the petition that default has occurred in the conditions of the mortgage, in that no part of principal and interest has been paid; and further that the mortgaged premises are wholly insufficient to satisfy the first mortgage held by Anderson, and that held by the plaintiff; that the mortgagors are wholly insolvent, and are non-residents of this State; that there are rents and profits arising from the property amounting to ninety dollars per month; and that plaintiff has no way of realizing upon her claim except through the rents and profits of the mortgaged premises. The tenants occupying the property, and John H. Anderson, are made parties defendants, and the appointment of a receiver is prayed for to collect the rents and profits "for the use and benefit of this plaintiff."

On the following day--January 30--the district judge upon consideration of the petition ordered that Herriot Riddle be appointed receiver, "for the purpose stated in the petition," upon his giving an undertaking in the sum of one thousand dollars to be approved by the clerk, and upon filing an oath to faithfully perform his duties as such receiver. It was further ordered that upon qualifying as aforesaid, the receiver should enter upon, and assume, the duties of such receiver, and should have power to take possession of the mortgaged property, to lease, rent, and sublet the same, and collect all rents and revenues therefrom, "that may be now due," subject to the further orders of the court.

In the same order all persons occupying the premises were required to pay to the said receiver all money due Bussey or wife for rents and profits thereof, and also all money thereafter accruing as rents and profits of said premises; and the defendants were each and all enjoined from interfering with said receiver in the discharge of his duties.

Three days after the making of the above-mentioned order, viz: the second day of February, 1897, a precipe for summons was filed in the cause, and a summons was issued, which, however, was not served upon either Bussey or his wife, as they could not be found within the county. Some months later, service was had upon them by publication. On the second day of February, also, the receiver filed his bond and oath.

Subsequently, the defendant Anderson filed an answer and cross petition. By the cross petition he sought a personal judgment upon the note, which evidenced the sum due him, and a foreclosure of his mortgage. He claimed a paramount lien upon the premises; and, without alleging any equitable ground therefor, prayed that the receiver already appointed be ordered to pay over the rents and profits for his, Anderson's, benefit.

On the twenty-fifth day of January, 1898, Anderson, by leave of court, filed an amended answer and cross petition, in which a payment of one thousand dollars upon the note held by him was alleged; and also that Bussey and wife are non-residents of Wyoming, and that Bussey, the maker of the note, is wholly insolvent. It is further alleged that the mortgaged property does not exceed in value three thousand dollars, and is insufficient to satisfy the mortgage lien held by said defendant, and that he has no way of realizing the full amount of the debt due him, except through the rents and profits to be derived from the property, together with the proceeds to come from its sale. The rents are alleged to amount to seventy dollars a month. It is also averred that he, Anderson, has paid out certain moneys for insurance upon the buildings. The prayer of the amended cross petition is for judgment and foreclosure, and in addition thereto, that a receiver be appointed, pendente lite, to collect the rents and profits for the use and benefit of said defendant Anderson; and that upon the final hearing a receiver be appointed to assume charge of the mortgaged real estate after judgment and until a deed is executed under foreclosure proceedings, and to collect the rents and profits for said defendant's use and benefit.

On the day following the filing of the amended answer and cross petition, Anderson filed a motion for the appointment of a receiver in his behalf, and for the vacation of the former order appointing Herriot Riddle as receiver. This motion was heard on the 29th day of January, 1898, and resulted in a denial of the motion, which was excepted to. A notice of hearing upon the motion was served upon the attorney of record for the plaintiff; and Anderson's co-defendants, except Bussey and wife, in writing, waived service of notice; and, as to Bussey and wife, it was shown by affidavit that they were non-residents, and out of the State, and that personal service of notice could not be had upon them. They had not appeared in the action. The controversy in the case arises solely between the two mortgagees--Anderson and Hannah Matthews. The proceedings are not questioned by Bussey or his wife, nor by anyone for them.

The order denying the motion of Anderson makes no mention of the appearance of Hannah Matthews; but it is stated that Herriot Riddle, the receiver, appeared by counsel; said counsel, it is to be noted, is the plaintiff's attorney of record.

The motion was twofold: First, to vacate the order appointing Riddle as receiver, on the ground that neither the court nor judge thereof had jurisdiction to make the order. Second, to appoint a receiver, pendente lite, for the sole benefit of said Anderson.

In this court, error is predicated upon; first, the order appointing a receiver upon the filing of the petition; and second, the order denying the motion to vacate that appointment, and refusing to appoint a receiver for the benefit of the defendant Anderson.

The objection urged to the order appointing Riddle as receiver is that it was made before the commencement of the action, and, therefore, without jurisdiction. It is insisted that, as summons had not issued when the order was made, the action had not been commenced.

We think it unnecessary, in any phase of this case, to decide whether the court or judge was without jurisdiction to make the first order appointing the receiver upon the application of the second mortgagee. The jurisdiction is attacked upon the sole ground that the action had not been commenced at the time when the order was made. It does not appear that the first mortgagee, who questions the validity of the proceedings, was in possession of the property, or that he had otherwise secured a right to the rents and profits of the mortgaged property. He was therefore not affected or prejudiced by the order, and is therefore in no position to complain of the alleged absence of jurisdiction. Again, as will more fully appear, in considering the defendant's application for a receiver for his benefit as the first mortgagee, his rights...