Mann v. Gaddie, 1,619.

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Citation: 158 F. 42
• Docket Number: 1,619.
• Parties: MANN v. GADDIE.
• Decision Date: 24 December 1907

158 F. 42

MANN
v.
GADDIE.

No. 1,619.

United States Court of Appeals, Fifth Circuit.

December 24, 1907

[158 F. 43]

Isaac Hardeman, Geo. S. Jones, and A. L. Miller (Miller & Jones, Hardeman & Jones, Haygood & Cutts, and W. A. Wooten, on the brief), for appellant.

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

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

SHELBY, Circuit Judge.

This is a suit brought by W. M. Gaddie, alleging that he is a citizen of North Carolina, against Frank R. Mann, Thomas J. Wooten, and C. M. wise, all citizens of Georgia, the Citizens' Bank of McRae, a corporation under the laws of Georgia, and T. P. Trigg and W. E. White, partners composing the firm of Trigg & White, citizens of Virginia. The bill alleges the making of the following contract:

'Georgia Telfair County

'This agreement made and entered into, this 29th day of November, 1904, by and between Frank Mann, Thomas J. Wooten, W. M. Gaddie and C. M. Wise, whereby the said parties are offering for sale a tract of land on the Ocmulgee river (about 17,000 acres) and the said C. M. Wise is to have the sale of said property, and in case of a sale then all parties hereto to share equally in the net profits of said sale.

F. R. Mann. 'Thomas J. Wooten. 'W. M. Gaddie. 'C. M. Wise.

'Witness: A. J. Walker, J.P.'

It is alleged that under this contract Mann and Wooten were to secure options on timber and timber lands, and that Wise and Gaddie were to secure purchasers therefor, the profits to be equally divided between [158 F. 44] the four; that Mann and Wooten secured the options, which, in some instances, consisted of escrow deeds and leases, and that these options, deeds, and leases were placed in the Citizens' Bank of McRae, which was to deliver them when the agreed purchase money was paid; that Gaddie and Mann were unable to find a purchaser, and that in 1906 Mann, in whose name the options were taken, secured a purchaser in Trigg & White, who paid $5,000 in cash, and were ready to pay the balance of the purchase money, and that Mann had excluded and ignored Gaddie and Wise, and was denying that they had any interest in the profits. Gaddie, the complainant, therefore prayed for an injunction to prevent the consummation of the trade with Trigg & White and the delivery of the options, deeds, and leases by the bank, for the appointment of a receiver for the options, deeds, and leases, and for an accounting from Mann for his interest in the contract.

After the bill was filed, orders were made granting an injunction and appointing a receiver. From the interlocutory order appointing a receiver, this appeal is taken.

The 10 assignments of error may be condensed or grouped for the purpose of this decision:

First. The court erred in appointing a receiver and in granting the injunction, and in not accepting a bond tendered by Mann.

Second. The court erred in not dismissing the case for want of jurisdiction.

1. The bill was presented to the judge and indorsed 'Filed' on June 29, 1906, and on the same day the judge made an order at chambers appointing J. A. Dunwoody 'temporary' receiver, and ordered him to take possession of the property described in the bill and all moneys arising from the sale of any property described in the bill. An injunction was also issued as prayed for. The learned judge in appointing the receiver held that the case made by the bill was one of 'urgency, and which, under the provisions of the Georgia Code, render proper the appointment of a receiver. ' No notice was given the defendants that an application would be made to appoint a receiver. The Georgia statute provides that:

'Under extraordinary circumstances a receiver may be appointed before and without notice to the trustee or other person having charge of the assets. ' Civ. Code Ga. 1895, Sec. 4904.

We have had occasion heretofore to decide that this statute is only confirmatory of a principle of equity procedure and jurisdiction. Joseph Dry Goods Co. v. Hecht, 120 F. 760, 764, 57 C.C.A. 64. In the absence of this statute, under extraordinary circumstances, a court of equity may appoint a receiver without notice. The extraordinary circumstances referred to in the statute are the exceptional cases which sometimes occur, and which make it necessary that the court should have the power to act without notice to the defendant. A defendant may be beyond the jurisdiction of the court, or cannot be found, or some urgent emergency may be shown rendering interference, before there is time to give notice, necessary to prevent waste, destruction, or loss; or a case may arise in which notice itself would jeopard the safety of the property over which the receivership is extended. Moritz v. Miller, 87 Ala. 331, 6 So. 269. [158 F. 45] The jurisdiction, without notice, should never be exercised except in cases of imperious necessity, when the complainant's right is clear and can be protected in no other way. This is the rule wherever equity is administered (Alderson on Receivers, Sec. 121), and has been enjoined and enforced by repeated decisions of this court. North American L. & T. Co. v. Watkins, 109 F. 101, 48 C.C.A. 254; Cabaniss v. Reco Mining Co., 116 F. 318, 54 C.C.A. 190; Joseph Dry Goods Co. v. Hecht, supra.

The rule is, of course, applied in receivership suits by one partner against another. McCarthy v. Peake, 18 How.Pr. 138.

Taking all the averments of the bill as true, no reason is shown for the appointment of a receiver without notice. We heartily indorse an observation of the Supreme Court of Ohio made in a case where the trial court had appointed a receiver without notice to the defendants:

'Under the circumstances of the case, the appointment of the receiver was an unwarranted exercise of judicial power, which it is the duty of this court to reverse and set aside. ' Railway Co. v. Jewett, 37 Ohio St. 649, 659.

2. Immediately after the making of the foregoing order appointing him...