O'Donnell v. First National Bank of Rock Springs
| Decision Date | 04 April 1901 |
| Citation | 64 P. 337,9 Wyo. 408 |
| Parties | O'DONNELL v. FIRST NATIONAL BANK OF ROCK SPRINGS |
| Court | Wyoming Supreme Court |
ERROR to the District Court, Sweetwater County, HON. JESSE KNIGHT Judge.
A receiver pendente lite was appointed in this action brought to foreclose a real estate and a chattel mortgage given to secure the same sum of money. The defendant moved for the discharge of the receiver on the ground that no notice of the application had been given him. The motion was denied, and the defendant prosecuted error.
Affirmed.
D. A Preston, and John H. Chiles, for plaintiff in error.
Upon the facts in this case the judge was not authorized to appoint a receiver without notice to the defendant. The order should have been vacated on the defendant's motion. (Smith, 69; Bank v. Griffith, 10 Paige Ch., 519; Beach, 794.)
No appearance for defendant in error.
POTTER, CHIEF JUSTICE. CORN, J., concurs. KNIGHT, J., having decided the case below. did not sit.
One question only is presented in this case, viz.: The authority of the district court or judge to appoint a receiver pendente lite, without notice to the defendant.
On September 20, 1897, the First National Bank of Rock Springs filed its petition in the district court of Sweetwater County, for the recovery of $ 5,800, and interest due upon certain promissory notes, and the foreclosure of a real estate mortgage and a chattel mortgage given to secure the payment of said indebtedness. September 21, 1897, summons was duly issued in the action. On the same day, pursuant to a prayer therefor in the petition, a receiver pendente lite was appointed to take possession of the mortgaged property, and all books of accounts containing the account of sales of the mortgaged chattel property, with authority to collect the accounts, and to hold all moneys so collected and all property coming into his hands subject to the orders of the court.
October 1, 1897, the defendant, appearing specially, moved the discharge of the receiver upon the sole ground that no notice of the application for a receiver had been served upon him. An affidavit of defendant was attached to the motion showing that he had received no notice of the application, and that on the day the petition was filed, he was in the county all day, until evening, when he went to Diamondville, in Uinta County, returning September 23; that upon his return he found in possession of a member of his family, the summons and order appointing the receiver. The order was made by the judge, in his district, but at Evanston, in Uinta County. Evanston and Diamondville, it may be remarked, are widely separated, considering the ordinary means of travel to reach the one place from the other. None of the facts set up in the petition as reasons for a receiver were denied or adverted to in the motion or affidavit attached thereto. No evidence other than the motion and affidavit was produced or heard upon the application to vacate the appointment. The motion was denied, to which defendant excepted, and he prosecutes error.
Our statute regulating the appointment of receivers is silent upon the subject of notice. As a general rule, a receiver should not be appointed until after notice to the defendant or other interested parties. In Smith on Receiverships the rule is stated as follows: "The court will not appoint a receiver until the defendant, or party in possession of the property, has been heard, or has had an opportunity to be heard, in response to the application." Sec. 5, p. 14. See also 17 Ency. Pl. & Pr., 717. But there are certain well-defined exceptions to that rule, which are thus summarized by the author above named: (1) Where the appointment is prayed for as a measure of final relief. (2) Where all parties are before the court consenting to the appointment. (3) Where the defendants, or parties in interest, have absconded, or are beyond the jurisdiction of the court, or cannot be found. (4) Where there is imminent danger of loss, or great damage, or irreparable injury, or the gravest emergency. Smith on Receiverships, pp. 16, 17; 17 Ency. Pl. & Pr., 719, and cases cited; Railway Co. v. Jewett, 37 Ohio St. 649; Dwelle v. Hinde, 18 Ohio C. C. 618.
The statute authorizes a receiver in an action to foreclose a mortgage, when it appears that the mortgaged property is in danger of being lost, removed, or materially injured, or that the condition of the mortgage has not been performed, and the property is probably insufficient to discharge the mortgage debt. R. S., Sec. 4054. The petition in this case alleged the nonperformance of the conditions of the mortgage, and the insufficiency of the property to discharge the indebtedness.
It is clear that the question raised is not jurisdictional. The order would not be void on account of the absence of notice; but, if made upon an insufficient showing, merely erroneous, and subject to be vacated on application. Neeves v. Boos, 86 Wis. 313, 56 N.W. 909; Dwelle v. Hinde, 18 Ohio C. C. 618. Although the motion stated but one ground for the discharge of the receiver, viz., no notice to defendant, it probably presented to the district court, and presents to this court, the question whether the facts alleged for the appointment were sufficient to authorize it, without affording defendant an opportunity to be heard in the first instance. At the outset, it may be remarked, the matter of appointment of receivers pendente lite is one resting largely in the sound discretion of the court; and the action of the court in the premises should not be set aside unless there appears to have been a plain abuse of judicial discretion.
By reference to the petition and exhibits attached to it, it appears that the chattel mortgage...
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