Gaither v. Stockbridge

• Decision Date: 22 April 1887
• Citation: 9 A. 632,67 Md. 222
• Parties: GAITHER v. STOCKBRIDGE, RECEIVER.
• Court: Maryland Court of Appeals

9 A. 632

67 Md. 222

GAITHER v. STOCKBRIDGE, RECEIVER.

Court of Appeals of Maryland

April 22, 1887

Appeal from circuit court, Baltimore city.

BRYAN J., dissenting.

Wm. S. Bryan, Jr., Frank Gosnell, and G. R Gaither, Jr., for appellant.

H Stockbridge and B. Howard Haman, for appellee.

ALVEY C.J.

There are two questions presented on this appeal: (1) Whether the receiver became assignee of the term created by the lease from the appellant to the Duffy Malt Whisky Company of the warehouse and premises occupied by that company at the time of the appointment of the receiver, so as to make him liable for the rent that became due and payable on the first of December, 1886; and, (2) if the receiver has not become such assignee or tenant, and as such liable for the rent, whether the appellant had any such preferred lien or charge, for the accruing rent, upon the goods and chattels of the lessee upon the premises at the time of the appointment of the receiver, and which went into his hands, and were sold under an order of court, and taken from the premises, before the rent became due, as will entitle the appellant to be paid in full out of the proceeds of the sale of such goods and chattels.

1. The Duffy Malt Whisky Company was alleged to be utterly insolvent, and unable to pay its debts; and, upon a creditor's bill filed, the appellee on this appeal was appointed receiver on the twelfth of November, 1886. By the order of the court appointing the receiver, the latter was ordered to "take charge and possession of the goods, wares, and merchandise, books, papers, and effects," of the company so alleged to be insolvent. In pursuance of this order, the receiver did take possession of such goods and chattels found on the premises, and retained the same until the twenty-second of November, 1886, when, under an order of court, he sold such goods and chattels at auction on the demised premises, where they had remained from the time the receiver took possession thereof. After making sale of the goods and chattels, and the same had been removed from the premises by the purchasers, the receiver, on the twenty-ninth of November, 1886, tendered the key of the warehouse to the attorneys of the appellant, who refused to receive the same; and afterwards, by the direction of the court, he deposited the key with the clerk of the court for the appellant. The ordinary receiver of a court of chancery is supposed to be an indifferent person as between the parties to the cause, whose function or office it is to receive and preserve the property or fund in litigation pendente lite, when it is made apparent to the court that the rights of the parties concerned require such protection. He is an officer of the court, and the fund or property intrusted to his care is regarded as being in custodia legis, to await the ultimate disposal thereof by the court, according to the rights and priorities of the parties concerned. The court itself has the care of the property by its receiver, and that officer, being the mere creature of the court, has no powers other than those conferred upon him by the court, or derived from its established practice. His appointment does not change the title to the property, or create any lien upon the same in favor of any of the parties interested; his holding being for the benefit of the party who may be ultimately determined to be entitled. Booth v. Clark, 17 How. 322, 331; Ellicott v. Insurance Co., 7 Gill. 320; Ellicott v. Warford, 4 Md. 85.

Such, then, being the nature of the office and duty of a receiver, and his relation to the court, it is manifest that the scope of his duties and powers are very much more restricted than those of an assignee in bankruptcy or insolvency. In the case of an assignee in bankrupty, the law casts upon such assignee the legal title to the unexpired term of a lease, and he thus becomes assignee of the term by operation of law, unless, from prudential considerations, he elects to reject the term as being without benefit to the creditors. But not so in the case of a receiver, unless it be, as in New York and some of the other states, where, by statute, a certain class of receivers are invested with the insolvent's estate, and with powers very similar to those vested in an assignee in bankruptcy. Booth v. Clark, 17 How. 331, 335. The ordinary chancery receiver, such as we have in this case, is clothed with no estate in the property, but is a mere custodian of it for the court, and, by special authority, may become an officer of the court to effect a sale of the property, if that be deemed necessary for the benefit of the parties concerned. If the order of the court under which the receiver acts, embraces the leasehold estate, it becomes his duty, of course, to take possession of it. But he does not, by taking such possession, become assignee of the term in any proper sense of the word. He holds that, as he would hold any other personal property involved, for and as the hand of the court, and not as assignee of the term.

In those cases where the goods of the lessee are remaining on the demised premises at or after the time when the rent becomes due, and the landlord seeks to exercise his right to distrain, and the only impediment to the exercise of that right is the possession of the court by its receiver, it seems to be a settled rule of practice to order the receiver to pay the arrears of rent out of the proceeds of the property, or to permit the landlord to proceed...