Bros v. Mairs
| Decision Date | 03 March 1890 |
| Citation | 33 W.Va. 655 |
| Court | West Virginia Supreme Court |
| Parties | Ruffner Bros, v. Mairs & Bro. Deecided |
A court of equity should exercise extreme caution in the appointment of receivers on ex parte applications, and be careful that a proper case is presented before adopting this extraordinary procedure, and it should not be done without notice to the party whose property is to be affected, except in cases of the greatest emergency demanding the immediate interference of the Court.
A case which did not authorize the appointment of a receiver, and in which notice of the application should have been given to the defendants.
Brown & Jackson for appellants.
W. A. McCorkle and H. C. & L. K McWhorter for appellees.
This was a suit in equity brought in the circuit court of Kanawha county by A. L. Ruffner and M. P. Ruffner, partners in trade as Ruffner Bros., and others against W. B. Mairs and M. W. Mairs late partners in trade under the firm name of W. B. Mairs &Bro., Frank Noyea, trustee, and and others, alleging the insolvency of said firm of W. B. Mairs & Bro., and that on the 3d day of June, 1889, said firm executed an assignment to Frank Noyes trustee conveying all of their dry goods and groceries in the store-house on Lovell street, and all their accounts due said firm in trust to secure various amounts of money therein designated to different creditors of said firm therein named preferring, first, John W. Mairs in the sum of $500.00; second, James Bibby & Bro. in the sum of $500.00; and third, P. II. Noyes & Co. in the sum of $3,964.10, and providing for Ruffner Bros, and several other firms in different amounts to be paid pro rata, and farther providing that said trustee should take possession of said goods and sell them as soon as convenient, which trust-deed was duly recorded, and farther alleging that said trust-deed is fraudulent and void, for the reason the same was intended to hinder, delay and defraud the creditors of said W. B. Mairs & Bro., that the said John W. Mairs is the brother of the defendants W. B. Mairs & Co., and that they do not owe him the said sum of $500.00; that the said W. B. Mairs k Bro. are not indebted to the said James Bibby & Bro. in the sum of $500.00 and the same is set up in said trust-deed to defeat complainants in the collection of their debts, that the said sum of $3,964.10 set out as due P. II. Noyes & Co. is amply secured on a large number of railroad ties and other lumber, and plaintiffs have no other security for their said indebtedness; that said P. H. Noyes & Co. should be compelled to resort to said staves and ties, and reserve the property set out in said trust-deed for the satisfaction of plaintiffs' claims; that said trust-deed is a fraud upon them and if P. II. Noyes & Co., John W. Mairs and Bibby & Bro. or either of them are satisfied out of the proceeds of said property before plaintiffs, nothing will be left to satisfy them, said W. B. Mairs & Co. being insolvent.
The plaintiffs also allege that said assignment is void on its face, for the reason that the sale being left entirely to the discretion and convenience of the trustee great injustice may result to complainants as well as to other creditors of W. B. Mairs & Bro.; that Frank Noyes, the trustee aforesaid, is a brother to one of the firm of P. H. Noyes & Co., the largest of the preferred creditors in said trust-deed, and it would be to the interest of the other creditors that some other party be selected as trustee; that said trust is fraudulent and void, and that the same for the reasons aforesaid should be set aside and held for naught and that a receiver should be appointed, and that the property mentioned in said trustdeed should be sold by him and applied to plaintiff's indebtness; that said Frank Noyes is in charge of said store and the contents of it and is selling the goods and applying the proceeds to the said debts as is set out in said deed of assignment which is wrong; and they pray that said P. H. Noyes & Co. be confined to their security outside of the assignment, that said trust-deed be held void, that said Frank Noyes be enjoined from selling said goods and applying the proceeds according to the terms of said trust-deed, that a receiver be appointed to take charge of said stock of goods and said accounts, and that he dispose of the same and pay into court the proceeds of said sales, and that said proceeds be paid to complainants prior to till others in proportion to the amount of their bills.
This bill was sworn to, and on the 10th day of June, 1889, the circuit court of said county made an order appointing C. C. Gebhart special receiver and ordering him to take into his possession the property set out in the bill and exhibits in the cause, and directing him to sell the same at private sale for the space of thirty days, and the remainder at public auction excepting the claim set out in said assignment, and directing him to collect that as soon as possible, and to report his proceedings to court, and recjuiring bond with good security to be given by said receiver in the penalty of $1,000.00.
On the 19th day of June, 1889, the defendants demurred to plaintiff's bill, and moved to discharge the receiver appointed in said cause, which demurrers and motions were overruled, and the defendants answered and the plaintiffs replied generally, and the defendants renewed their motions to discharge the receiver, and said motions were set for hearing on the 12th day of July 1889. From these decrees the defendants Frank-Noyes trustee, John W. Mairs, James Bibby &Bro. and W. B. Mairs Bro. applied for and obtained an appeal to this Court.
Counsel for the appellees contend that the appeal in this case was improvidently awarded and should be dismissed; that the order appealed from is not a final order, and that there is no clause of section 1 of chapter 135 of the Code that would confer appellate jurisdiction upon this Court. The seventh clause of said section however, provides that" In any case in chancery wherein there is a decree or order dissolving or refusing to dissolve an injunction or requiring money to be paid or real estate to be sold, or the possession or title of the property to be changed, or adjudicating the principles of the cause " A party to a controversy in any circuit court may obtain from, the Supreme Court of Appeals or a judge thereof in vacation, an appeal from a decree or order of such circuit court.
Counsel for the appellees rely on the case of Harris v. Hauser, reported in 26th W. Va. 595 to support their position; but upon examination of that case it will be found that Judge Green in delivering the opinion of the Court says, speaking of the lumber in controversy," As this lumber had not been thus placed upon the cars when this last order was made directing W. B. Hankinsas receiver to take possession of it and make sale thereof, it is obvious that Hauser was in possession of it, and not only consented to but asked this order to be made, of course he could not complain of it. Harris, the plaintiff, can not appeal from it because this order does not change his possession of this property he never having had possession of it." It will be perceived that in that case the Court was of opinion that the possession of the property had not been changed and the question of jurisdiction was decided against the appellant for that reason, and not because personal property alone was involved in the suit. And although Judge Green in delivering the opinion of the Court in the case of Hutton v. Loekridge, 27 W. Va. 435, referring to his opinion in the case of Harris v. Hauser, supra, says: "I thought it questionable whether the order of a circuit court appointing a receiver of personal property could be appealed from under chapter 157 section 1 of the Acts of 1882, (which is the same as section 1 of chapter 135 of the Code), only as requiring the possession or title of the property to be changed, a ground for an appeal under the seventh paragraph of said section; and I was by no means...
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