Ashby v. Yetter

• Decision Date: 10 January 1911
• Citation: 78 N.J.E. 173,78 A. 799
• Parties: ASHBY v. YETTER.
• Court: New Jersey Court of Chancery

78 A. 799

78 N.J.E. 173

ASHBY

v. YETTER.

Court of Chancery of New Jersey.

Jan. 10, 1911.

Syllabus by the Court.

Application by Winfield S. Ashby, by Jessie B. Ashby, next friend, against Frederick P. Yetter, for appointment of a receiver in aid of a decree pending appeal. Application granted on certain conditions.

Garrison & Voorhees, for the motion.

Wescott & Wescott, opposed.

WALKER, V. C. At the time the decree for accounting in this cause was presented to me to be advised, a motion was made for the appointment of a receiver of the rents and profits of the premises described in the bill, and which I had decided to be the property of the complainant and to be held in trust for him by the defendant. The decree, embodying the findings contained in the memorandum opinion recently filed, was advised, and the motion for appointment of receiver was continued. It is because the decree had not been signed at the time the notice was given of the application for the appointment of a receiver that the court is asked to make the appointment on the results reached in the opinion instead of the matters adjudicated in the decree. The complainant might better have waited until the decree was signed, which has since been done, or, anticipating the signing of the decree, have pleaded a situation created by the decree rather than by the opinion. However, no criticism is made upon this informality, and the application will be considered on its merits.

The petition for the appointment of the receiver in substance avers that the complainant is entitled to an accounting by the defendant for the transactions between the parties from the date of the conveyance of his properties by the complainant to the defendant on March 18, 1902; that the premises consist of various buildings occupied by tenants who pay rent to the defendant; that there are mortgages on some of the property; that no taxes have been paid on the property for the past two years (this has been conceded to be a mistake); that there is due to the complainant from the defendant a large sum of money; that he is a man of no means and is financially irresponsible; and that if he be permitted to collect further rents the complainant will be irreparably injured. It is conceded, I believe, that the defendant has practically no other property except that which came to him by and through the complainant, save the properties which he conveyed to the complainant and which have been held to be merely security for the faithful performance of his duties as trustee for the complainant, his property being inconsiderable in value compared to the complainant's, that is, less than $1,000 as against over $12,000. These facts are not controverted on this motion.

The defendant resists the application for the appointment of a receiver for the reason, principally, that he has appealed from the decree of this court, and he claims that the decision of the Court of Errors and Appeals in Pennsylvania R. R Co. v. National Docks Ry. Co., 54 N. J. Eq. 647, 35 Atl. 433 (Court of Errors and Appeals, 1896), operates to prevent this court from making any order in the cause until it shall have been remitted from the court above.

The question of the power of this court to make the order prayed for necessitates a determination of its power to act in a cause removed from it by appeal into the Court of Errors and Appeals, and my justification for the somewhat extended examination of this subject which I have made, and the exploitation of views which I will now make, is a desire, to group the decisions and make some observations that may be of service to the bar on this question so often arising, generally perplexing and always important.

An examination of the question presented leads me to the conclusion that the decision in the National Docks Case has not the broad and unqualified effect ascribed to it by the defendant's counsel.

It is true that it was held in the National Docks Case (at page 653 of 54 N. J. Eq., at page 435 of 35 Atl.) that:

"The entire purpose and object of the appeal is to preserve such rights and property from the ill effects of the decision that is challenged. Unless it produces such a result, the procedure is a mere form, and, in many cases, absolutely a useless form, suitor in carrying his case up asks for protection against an erroneous decree; such protection is obviously refused to him if the decree can be enforced before its legality has been tested by the superior court. In fine the very essence of the remedy by appeal is to prevent, for the time being, the appellant from this execution of the existing decree; and, this being so, it is indisputable that when the statute grants the right of appeal it grants such protection. A decree cannot be used detrimentally to the appellant, pending the appeal, for the plain reason that such a use will, for every practical purpose, defeat the appellate procedure."

Furthermore, the learned Chief Justice in concluding the opinion in the National Docks Case (at page 655 of 54 N. J. Eq., at page 430 of 35 Atl.) uses this still broader and stronger language:

"It is likewise the opinion of this court that an appeal in all cases will have that effect given to it which shall he necessary to preserve the subject to which the appellate procedure relates, in such a condition as will enable this court to render an efficacious decree in the premises. That for this purpose an injunction decree will be suspended or continued, or a previous injunction revived, by the act of riling an appeal whenever such construction shall be necessary for the end just stated."

It will be seen that this last observation applies particularly to injunctions, and it has, I think, been regarded, as to all other matters, obiter dictum. As to injunctions, the Legislature has since intervened and by statute established the practice. Chancery act (P. L. 1902, p. 546) §§ 112, 113. See, also, Johnson v. Seabury & Johnson, 61 Atl. 563.

A perusal of the cases decided both in the Court of Errors and Appeals and in this court since the National Docks Case will, I think, tend to show that its apparently unlimited scope has been curtailed and modified.

Following the National Docks Case came that of D. L. & W. R. R. Co. v. Breckenridge, 55 N. J. Eq. 159, 35 Atl. 821 (Court of Chancery, 1896). It was an application for a stay of proceedings pending appeal from an injunction decree and for a continuance of the ad interim stay which was granted ex parte on filing the bill and which was discharged by the injunction decree made on the hearing. The decree was more limited than the ad interim stay and the difference complainant claimed was vital to the relief sought by the bill and on appeal. The opinion was by Vice Chancellor Emery and he denied the application on grounds other than those enunciated in the National Docks Case, and said at page 162 of 55 N. J. Eq., at page 822 of 35 Atl.:

"Counsel for the complainant urge, bow-ever, that the recent decision of the Court of Errors and Appeals in Pennsylvania Railroad Co. v. National Docks, etc., Co. 35 Atl. 433 (September, 1896), has established a different rule and entitles the complainant to an order of this court continuing the ad interim or preliminary stay pending appeal. In this case it was held that by the mere act of filing the notice of appeal the final decree rendered in the cause lost all its force pending an appeal, and that an appellant could not fall into contempt by resisting the execution of the decree pending appeal. The final decree here appealed from was an injunction decree, restraining the defendant from opposing the complainant in making a causeway or tunnel under the defendant's caryard, and requiring the defendant to assist this construction by removing certain of its trains in the caryard. The court was of opinion that, if this decree were carried out pending appeal, it would deprive the appellate court of the ability to render anything more than a merely nominal decree on appeal in favor of the appellant. In support of the present application counsel for the complainant relies upon the express declaration in the opinion filed in the cause as to the effect of an appeal from an injunction decree. The language is as follows: 'It is likewise the opinion of this court that an appeal in all cases will have that effect given to it which shall be necessary to preserve the subject to which the appellate procedure relates in such a condition as will enable this court to render an efficacious decree in the premises, and that for this purpose an injunction decree will be suspended or continued, or a previous injunction revived, by the act of filing an appeal, whenever such construction shall be necessary for the end just stated.'"

And at page 163 of 55 N. J. Eq., at page 822 of 35 Atl.:

"Without deciding upon the construction of the rule laid down in the opinion, it seems to me that, even if the complainant's construction be the correct one, a stay by this court to carry out this construction should not now be granted for several reasons— first, the precise point now involved is the effect of the appeal upon an injunction previously granted and which has been discharged or modified by the decree appealed from, and, so far as relates to this point, I am not clear that the opinion is not obiter, if tested by the usual rules applicable to decisions, because this point does not seem to have been necessarily involved in the decision of the case. The decision, as I understand it, establishes the rule that an appeal from an injunction decree ipso facto stays proceedings upon the decree appealed from to a certain extent and for a certain purpose, and it applied this rule to the case in hand, which was that of a decree granting an injunction, and settled the effect of an appeal from such decree. But the question as to the effect of this rule, when applied to decrees discharging or modifying injunctions, seems to be a...