Joseph Dry Goods Co. v. Hecht

Decision Date17 February 1903
Docket Number1,210.
Citation120 F. 760
PartiesJOSEPH DRY GOODS CO. et al. v. HECHT.
CourtU.S. Court of Appeals — Fifth Circuit

C. A Turner and Geo. S. Jones (Isaac Hardeman and B. M. Davis, on the brief), for appellants.

John I Hall and Olin J. Wimberly, for appellee.

John P Ross, for receiver.

This is a suit in equity, brought by Robert Hecht, the appellee against the appellants and J. R. Fried. The bill appears in the record, and contains 21 sections, embracing 14 closely printed pages. It is not deemed necessary to give a summary of the contents of the bill, as the averments, so far as material to the decision to be made, will appear in the opinion. The purpose of the bill was to collect a debt, enforce the specific performance of a contract, and secure the issuance of an injunction and the appointment of a receiver.

Before PARDEE and SHELBY, Circuit Judges, and BOARMAN, District Judge.

SHELBY Circuit Judge.

On October 22, 1902, the bill having been presented to one of the judges of the Circuit Court, he made an order, without notice to the defendants, appointing a temporary receiver, who was directed to demand and take possession of the moneys, books, papers, and other property of the Joseph Dry Goods Company. The receiver took possession as directed by the order of the court. The defendants were required to show cause on October 31st why a permanent receiver should not be appointed. The dry goods company, sworn petition, applied to the judge who made the order, seeking a revocation or modification of the order. This application was set down for hearing on the 24th of October, 1902, and notice given plaintiff's attorneys. The attorneys filed a writing addressed to the judge, stating that other professional engagements prevented their presence before the court, and giving grounds of objection to the revocation of the order appointing the receiver. The following order was entered October 24, 1902:

'Upon hearing the application of the Joseph Dry Goods Company for an order to dissolve or modify the order granted on the 22nd day of the present month appointing Walter J. Grace, Esq., temporary receiver, and it appearing to the court that said temporary receiver, from his statement in open court, has in hand, of the property of said Joseph Dry Goods Company, six thousand five hundred and sixty and 49/100 dollars, besides a large amount of personal property, consisting of a stock of merchandise, choses in action, and the books of said Joseph Dry Goods Company, it is, after hearing and considering said application, and the argument of counsel in behalf thereof, counsel for the complainant being absent in attendance upon Pulaski superior court, and not heard except in a letter, and written by them in resistance to said application, it is ordered that the application to give bond and have said order dissolved is refused and denied, but said order of Oct. 22nd inst. is so far modified as that the said Walter J. Grace, Esq., shall retain in his hands the cash received by him except that he shall pay therefrom a check given by the said Joseph Dry Goods Company to R. N. Lamar for sixty-five dollars and seventy cents, insurance on said property, and shall pay to A. Damo one dollar as watchman for guarding said property last night. The stock of merchandise, notes, and accounts, choses in action, and other property of said Joseph Dry Goods Company, and the books in the hands of said temporary receiver, the said Walter J. Grace, Esq., shall at once return to said Joseph Dry Goods Company, and said defendants are restrained from making any changes in the books or records of said company, or either of the defendants.'

The defendants, the company and Joseph, applied to one of the judges of the Circuit Court for an order allowing an appeal from the two decrees-- the one of October 22d appointing the receiver, and the one of October 24th refusing to revoke, but modifying, the first decree-- and the appeal was allowed. It is assigned here, with proper specifications, that the court below erred in the two decrees rendered.

1. The appellee, plaintiff below, moves to dismiss the appeal because the decrees appealed from were rendered ex parte and not 'upon a hearing in equity,' and that motion raises the first question to be considered.

The statute to be considered, as first passed in 1891, allowed appeals from interlocutory orders granting or continuing an injunction 'upon a hearing in equity.' Judiciary Act March 3, 1891, Sec. 7, 26 Stat. 826, 828 (U.S. Comp. St. 1901, pp. 546, 550). At that time there had been in force for many years equity rule 55, which provides (that special injunctions shall be grantable only upon due notice to the other party by the court in term or by a judge thereof in vacation after a hearing which may be ex parte if the adverse party does not appear at the time and place ordered. ' There was also in force at that time, and now, a statute enacted in 1872, which, when notice was given of a motion for an injunction, conferred on the circuit or district court, or a judge thereof, power to grant an order restraining the act sought to be enjoined until a decision was had on the motion. Rev. St. Sec. 718 (U.S. Comp. St. 1901, p. 580). Further as to issuing injunctions out of the circuit court, see Rev. St. Sec. 719 (U.S. Comp. St. 1901, p. 581). It may be that the Congress, in using the words 'upon a hearing in equity,' had in view equity rule 55 and this statute allowing the temporary restraining order. The temporary restraining order is, in effect, an injunction intended to operate till the 'hearing' on the question of granting the injunction, notice of the motion to grant the same having been served contemporaneously with the service of the order. The injunction being granted after such notice would be 'upon a hearing in equity,' within the meaning of the statute. The statute as first enacted did not allow an appeal from the appointment of a receiver. It related to injunctions only. It was construed not to allow an appeal from an interlocutory order appointing a receiver, even in a case where the order required the defendant to turn over property to a receiver, the order being in the nature of a mandatory injunction. Highland Ave. R.R. v. Equipment Co., 168 U.S. 627, 18 Sup.Ct. 240, 42 L.Ed. 605. After such construction was placed on it, it was amended June 6, 1900, so as to read as follows:

'Sec. 7. That where, upon a hearing in equity in a district court or in a circuit court, or by a judge thereof in vacation, an injunction shall be granted or continued or a receiver appointed, by an interlocutory order or decree, in a cause in which an appeal from a final decree may be taken under the provisions of this act to the circuit court of appeals, an appeal may be taken from such interlocutory order or decree granting or continuing such injunction, or appointing such receiver to the circuit court of appeals: provided, that the appeal must be taken within thirty days from the entry of such order or decree, and it shall take precedence in the appellate court; and the proceedings in other respects in the court below shall not be stayed, unless otherwise ordered by that court, or by the appellate court or a judge thereof, during the pendency of such appeal: provided further, that the court below may in its discretion require as a condition of the appeal an additional bond. ' Act June 6, 1900, c. 803, 31 Stat. 660 (U.S. Comp. St. 1901, p. 550).

The material change was to insert the words 'or a receiver appointed,' thereby allowing an appeal from an interlocutory order appointing a receiver. The plain intention of the Congress by the amendment was to allow the defendant, who was by such order deprived of the possession of his property, to have the decree reviewed by the circuit court of appeals. If the act had been written allowing an appeal from the appointment of a receiver as an original and separate act, the words 'upon a hearing in equity' might well have been omitted, for there was no statute allowing such appointment (as in the case of restraining orders) without a hearing. The words when used in the act when it related to injunctions only, were useful in distinguishing the temporary restraining order from the injunction granted at the hearing after notice. Orders granting injunctions and orders appointing receivers are, in the understanding of the legal profession, entirely independent. The distinction between the two is recognized in the text-books and in the Reports. But the words in question may have some significance when applied to orders appointing a receiver. Such orders are, in a certain sense, rendered on a hearing in equity. The mode of seeking the appointment of a receiver in equity is on motion, based on the averments and prayer of the bill, or on motion or petition filed in the pending case, where the bill does not show all of the facts necessary to the relief. Such motion or petition is heard by the court before making an order either granting or denying it. There is a hearing in equity, although it is ex parte. A 'hearing in equity' technically is the trial of the case, including the introduction of evidence, the argument of the solicitors, and the decree of the chancellor. 10 Enc.Pl. & Pr. 8. It is clear that the words are not used in such technical sense, for the statute applies to interlocutory orders and decrees only. It is true the statute does not say on an ex parte hearing, nor does it say on the hearing of both parties, nor on an adversary...

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    ...of the case, including the introduction of evidence, the argument of the solicitors, and the decree of the chancellor." [Joseph Dry Goods Co. v. Hecht, 120 F. 760, 763, citing 10 Ency. Pl. & Pr. 8; Babcock v. Wolf, Iowa 676, 679, citing 1 Bouv. Law Dict. 745.] Such is a final hearing. [Mill......
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