Kent Ave. Grocery Co. v. Geo. Hitz & Co.
| Decision Date | 08 November 1918 |
| Docket Number | No. 23222.,23222. |
| Citation | 120 N.E. 659,187 Ind. 606 |
| Parties | KENT AVENUE GROCERY CO. v. GEO. HITZ & CO. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Vigo County; Charles L. Pulliam, Judge.
Action by Geo. Hitz & Co. against the Kent Avenue Grocery Company. From an interlocutory order appointing a receiver, without notice, to take charge of defendant's stock, defendant appeals. Order reversed, with instructions to the trial court to vacate it.
Orph M. Hall, of Terre Haute, for appellant. Stimson, Stimson, Hamill & Davis, of Terre Haute, for appellees.
This is in appeal from an interlocutory order appointing a receiver without notice to take charge of stock of groceries owned by appellant. The action in which the receiver was appointed was brought on an open account alleged to be due appellee from appellant for merchandise sold to appellant and used in the conduct of its business.
As showing the necessity for the appointment of a receiver and the emergency which required such appointment without notice to appellant, the complaint states that appellant was a corporation engaged in the retail grocery and produce business in the city of Terre Haute, Ind., and that its only assets consisted of a stock of groceries and produce and the furniture and fixtures used in connection with the business. It is alleged that appellant corporation was insolvent, and that its president and general manager, with full knowledge of such insolvency, had closed appellant's place of business on the 12th day of February, 1917, and that on the day the complaint was filed he was engaged in removing and secreting all of appellant's property and tangible assets with the fraudulent intent and purpose of placing them beyond the reach of plaintiff and the other creditors of the corporation. It appears that the complaint was filed in the Vigo Circuit Court on the 15th day of February, 1917, and that the receiver was appointed on the same day without notice to appellant.
By proper assignments of error appellant calls in question the action of the trial court in making the appointment of the receiver in the absence of notice to appellant. It is asserted that the showing made by the verified complaint did not show such an emergencyas to justify the court in making the appointment without notice. As no affidavits were filed in support of the application, the court can look only to the allegations of the verified complaint in determining the sufficiency of the showing to dispense with the necessity of notice. Sullivan Electric, etc., Co. v. Blue (1895) 142 Ind. 407, 41 N. E. 805.
Our statute provides that receivers shall not be appointed, either in term or vacation, in any case, until the adverse party shall have appeared, or shall have had reasonable notice of the application for such appointment, except upon sufficient cause shown by affidavit. Section 1288, Burns' 1914. It is apparent from the statute that it must be made to appear, either in the verified complaint or by affidavit filed at the time of the application, not only that there was cause for the appointment of a receiver, but also that an emergency existed requiring such appointment without notice. If sufficient reason for the failure to give reasonable notice is not shown by affidavit, the appointment is forbidden by statute and is erroneous. Henderson v. Reynolds (1907) 168 Ind. 522, 81 N. E. 494, 11 L. R. A. (N. S.) 960, 11 Ann. Cas. 977.
Courts of equity exercise extreme caution in the appointment of receivers ex parte. They are adverse to dispossessing a party of property prima facie his own, and placing it in the hands of a receiver without notice, and such action should not be taken, except in cases of the greatest emergency, demanding the immediate interference by the court. High on Receivers (2d Ed.) §§ 111, 112; Henderson v. Reynolds, supra; Ryder v. Shæ (1914) 183 Ind. 15, 108 N. E. 104.
It has been held that a receiver will not be appointed without notice, when a court, as in this state, has authority to grant a temporary restraining order without notice, and...
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