House v. St. Clair

• Decision Date: 16 January 1906
• Citation: 58 W.Va. 565,52 S.E. 660
• Parties: BALTIMORE BARGAIN HOUSE. v. ST. CLAIR et al.
• Court: West Virginia Supreme Court

52 S.E. 660

58 W.Va. 565

BALTIMORE BARGAIN HOUSE.

v.ST. CLAIR et al.

Supreme Court of Appeals of West Virginia.

Jan. 16, 1906.

1. Appeal — When Lies — Appointment of Receiver.

A decree or order in a chancery ease appointing a receiver, and thereby changing the possession, of personal property, is appealable.

[Ed. Note.—For cases in point, see vol. 2, Cent. Dig. Appeal and Error, § 683.]

2. Receivers—Appointment—Discretion of Court.

The appointment of a receiver is not a matter of right. The power to appoint is a discretionary one, to be exercised with great circumspection. The discretion is not arbitrary or absolute, but sound and judicial.

[Ed. Note.—For cases in point, see vol. 42, Cent. Dig. Receivers, § 14.]

3. Same—Notice of Application.

There is no principle of the law of receivership of greater wisdom and more firmly established than that requiring notice of the application.

[Ed. Note.—For cases in point, see vol. 42, Cent. Dig. Receivers, § 54.]

4. Same.

A receiver of personal property may be appointed in vacation, without notice of the application, before service of process in the suit, in cases in which to require notice would be unreasonable, or would likely defeat the purpose for which a receiver is necessary, and in cases of great emergency; these cases constituting exceptions to the general rule requiring notice.

[Ed. Note.—For cases in point, see vol. 42, Cent. Dig. Receivers, §§ 55, 56.]

5. Same—Failure to Give Notice.

Where notice is not given, the bill should, in addition to showing the necessity for the appointment of a receiver, set out the grounds which excuse failure to give notice; or they must at least appear by the affidavits filed in support of the application.

[Ed. Note.—For cases in point, see vol. 42, Cent. Dig. Receivers, §§ 57, 62.]

6. Trusts—Equity—Removal of Trustee.

Equity, by virtue of its general jurisdiction over the administration of trusts, has power to remove trustees for cause.

[Ed. Note.—For cases in point, see vol. 47, Cent. Dig. Trusts, §§ 216-218.]

7. Assignment for Benefit of Creditors-Removal of Trustee—Bill in Equity.

A bill brought to remove a trustee to whom personal property has been assigned for the benefit of creditors, and to appoint a receiver for the trust property, to be sufficient, must contain full and precise allegations showing the necessity for the removal, and that there is danger of loss or misappropriation of the trust property.

[Ed. Note.—For cases in point, see vol. 4, Cent. Dig. Assignments for Benefit of Creditors, §§ 696, 697.]

8. Receivers—Appointment.

A receiver may only be appointed in a pending case. A suit does not lie for the sole purpose of appointing a receiver, but the court must have jurisdiction of the suit on some other ground before it can make the appointment.

[Ed. Note.—For cases in point, see vol. 42, Cent. Dig. Receivers, §§ 5-11.]

9. Same.

The appointment of a receiver cannot be made in vacation any more than in term, except in a pending case.

10. Injunction—Bill—Verification.

A bill of injunction may be sworn to by the agent or attorney of the plaintiff, but, if so, it must appear from the verification that the person verifying the bill knows the contentt thereof; otherwise, the verification is fatally defective.

[Ed. Note.—For cases in point, see vol. 27, Cent. Dig. Injunction, §§ 263, 265.]

(Syllabus by the Court.)

Appeal from Circuit Court, Taylor County.

Action by the Baltimore Bargain House against John G. St. Clair, trustee, and others. Decree for plaintiff, and defendants appeal. Reversed.

W. R. D. Dent and J. G. St. Clair, for appellants.

Ira E. Robinson and Hugh Warder, for appellees.

COX, J. Mary L. Bell and Fanny E. Bell, partners in the mercantile business in the city of Grafton, under the firm name of "Bell's Racket Store, " by deed dated and recorded on the 25th of July, 1904, made an assignment of all their stock of store goods to John G. St. Clair, trustee, for the benefit of their creditors. Two days previous to this assignment Fanny E. Bell, by deed of record, assigned her one-half interest in this stock of store goods to Hugh Warder, trustee, to secure and save harmless certain individual indorsers. On the 29th day of July, 1904, process was issued in this suit in chancery, brought in the circuit court of Taylor county by the Baltimore Bargain House, a corporation, against St. Clair, trustee, Mary L. Bell, Fanny E. Bell, Hugh Warder, trustee, and the creditors and indorsers secured bythe two deeds of assignment. The suit is for the purpose of removing St Clair trustee, and appointing receivers to sell and dispose of the stock of store goods and collect the accounts, and for the ascertainment and payment of the partnership debts. Before process was served, and without notice, in vacation, on the 20th of July, 1004, the judge of the circuit court of Taylor county, upon presentation of the bill and exhibits, entered an order appointing John G. St. Clair and Hugh Warder special receivers of said stock of store goods, and directing them to take possession thereof and sell the same after executing bond, and enjoining St. Clair trustee from selling or disposing of the trust property and from collecting the accounts. On the 23d of August, 1904, St. Clair trustee and Mary L. Bell, before the judge in vacation, after notice, moved the dissolution of the injunction, which motion was overruled, and St. Clair trustee and Mary L. Bell appeal.

Our first duty is to determine the extent of the appeal granted. The petition for the appeal expressly prays for an appeal from the order refusing to dissolve the injunction. It also refers by date to the order appointing receivers and enjoining the trustee, and assigns errors therein. We think the petition, fairly construed, asks an appeal from both orders, and that the appeal granted was intended as an appeal from both. So treating the appeal, are both orders appealable? The seventh paragraph of section 1, c. 135, Code 1899, expressly gives an appeal from an order or decree in chancery refusing to dissolve an injunction, and from an order or decree requiring the possession or title of the property to be changed. The language used in the opinion in Wagner v. Coen, 41 W. Va. 351, 23 S. E. 735, may be said to indicate that the provision in relation to change of possession applies only to real estate, and not to personal property. A doubt as to whether or not that provision applies to personal property is expressed in the cases of Harris v. Hauser, 26 W. Va. 595, and Hutton v. Lockridge, 27 W. Va. 435. However, the cases of Robrecht v. Robrecht, 46 W. Va. 738, 34 S. E. 801, and Ruffner Bros, v. Mairs, 33 W. Va. 655, 11 S. E. 5, hold that a decretal order appointing a receiver for personal property, and thereby changing the possession thereof, is appealable. See, also, Shannon v. Hanks, 88 Va. 338, 13 S. E. 437; Barry v. Briggs, 22 Mich. 205; Lewis v. Campau, 14 Mich. 458, 90 Am. Dec. 245. It seems clear that the provision permitting an appeal from an order or decree in chancery, where the possession of the property is changed, applies to personal property as well as to real estate.

Both orders being appealable, the question to be decided is: Were the appointment of receivers and the awarding of an injunction against the trustee proper? The receivers were appointed without notice, before service of process in this suit, by the judge in vacation. The statute (section 28, c. 133, Code 1899) permits the appointment of a special receiver in any proper pending case, where there is danger of loss or misappropriation of the property involved, and expressly requires notice of the application for a receiver of real estate, or the rents, issues, and profits thereof. Therefore what we shall hereafter say in this opinion will relate to the appointment of receivers of personal property. The statute is silent as to notice of the application for a receiver of personal property. In Ruffner Bros. v. Mairs, supra, it is said that in the light of the authorities the better practice is to require notice to be given to the defendant before passing upon the application for a receiver, unless it be in cases of the greatest emergency and imperative necessity. In the case of Oil Co. v. Gale, 6 W. Va. 527, Judge Haymond, in delivering the opinion of the court, said: "It is true as a general rule, though not universal, that notice is, or should be, required of the time and place of making the application for the appointment of a special receiver. The authorities cited in support of this general rule show that there are recognized exceptions. These exceptions are such cases as that immediate action is or may be necessary to prevent great injury." Universally, so far as we have been able to examine, the authorities recognize that there are certain well-established exceptions to the general rule requiring notice of the application. Fredenheim v. Rohr, 87 Va. 764, 13 S. E. 193, 266; Page on Receivers, 148-150; Moritz v. Miller, 87 Ala. 331, 6 South. 269; Hogg's Eq. Prin. § 141; Smith on Receiverships, § 5; High on Receivers, § 117; note to Cameron v. Imp. Co., 72 Am. St. Rep. 36, and cases cited; 17 Enc. Pl. & Pr. 717; Anderson on Receivers, §§ 121, 122, and 123. Classifications of exceptions to the general rule are given in 17 Enc. Pl. & Pr. 719, and in Hogg's Eq. Prin. § 141, and in Smith on Receiverships, § 5. It is clear from the authorities that in cases where to require notice would be unreasonable, or would likely defeat the very object for which a receiver is necessary, or where a great emergency exists, a receiver may be appointed without notice. It may be agued that our case of Bat-son v. Findley, 52 W. Va. 343, 43 S. E. 142, requires notice in all cases of ex parte or vacation applications. We do not so interpret that decision. The first point of the syllabus would seem to go that far, but, when read in the light of the opinion, it does not do so. In the opinion, on page 354 of 52 W. Va., and page 146...