Marion Mortgage Co. v. Edmunds, No. 6818.

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: BRYAN, FOSTER, and SIBLEY, Circuit
• Citation: 64 F.2d 248
• Parties: MARION MORTGAGE CO. et al. v. EDMUNDS et al.
• Decision Date: 07 April 1933
• Docket Number: No. 6818.

64 F.2d 248 (1933)

MARION MORTGAGE CO. et al.
v.
EDMUNDS et al.

No. 6818.

Circuit Court of Appeals, Fifth Circuit.

April 7, 1933.

64 F.2d 249

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64 F.2d 250

Edward E. Fleming, Richard H. Hunt, D. H. Redfearn, and Mitchell D. Price, all of Miami, Fla., for appellants

Henry K. Gibson, Bart A. Riley, and S. P. Robineau, all of Miami, Fla., for appellees.

Before BRYAN, FOSTER, and SIBLEY, Circuit Judges.

SIBLEY, Circuit Judge.

Without any notice, general receivers were appointed for all the assets of ten corporations and one individual. Ten days later the defendants who are appellants moved to vacate the order and gave notice for a hearing. At the hearing they presented a full answer under oath and motions to dismiss the bill. The court clarified the former order so as to exclude from its operation two defendants not appealing, and by consent dismissed the bill as to a third one. An order was then passed, which recited that the court found it impossible to hear the matter completely at that time, and that it was satisfied that no one would suffer before the return about a month later of the other District Judge, and "ordered and decreed that said case be continued until the return of Judge Ritter from his vacation." No injunction of any sort was granted. An appeal was taken from the order appointing the receivers, and also from that last referred to, and supersedeas was granted.

It is moved to dismiss the appeal on the ground that neither order is one from which an appeal lies under 28 USCA § 227, the first because ex parte and not upon a hearing, and the second because a mere order of continuance. The pertinent part of section 227 reads: "Where, upon a hearing in a district court, or by a judge thereof in vacation, an injunction is granted, continued, modified, refused, or dissolved by an interlocutory order or decree, or an application to dissolve or modify an injunction is refused, or an interlocutory order or decree is made appointing a receiver, or refusing an order to wind up a pending receivership or to take appropriate steps to accomplish the purposes thereof, such as directing a sale or other disposal of property held thereunder, an appeal may be taken from such interlocutory order or decree to the circuit court of appeals." Whether an ex parte order appointing a receiver is one "upon a hearing" so as to be appealable has not been authoritatively settled. An affirmative answer is given in Joseph Dry Goods Co. v. Hecht (C. C. A.) 120 F. 760, and Haight & Freese Co. v. Weiss (C. C. A.) 156 F. 328, 334, and a negative one in Pacific Northwest Packing Co. v. Allen (C. C. A.) 109 F. 515, and Root v. Mills (C. C. A.) 168 F. 688. An appeal from such an order was upheld in Re McKenzie, 180 U. S. 536, 21 S. Ct. 468, 45 L. Ed. 657, with no discussion of its ex parte character, but there was also an order refusing to vacate the receivership which is said in Pacific Northwest Packing Co. v. Allen to be necessary to render the ex parte order appealable. We incline to think that the nature of the order is important. If it grants on emergency a temporary receivership and provides for an early hearing touching its permanency, the order is but tentative, and does not represent the settled action of the court, and like a temporary restraining order is not appealable. But, if it appoints permanent receivers deliberately and finally with no provision for a hearing, there is a refusal in advance to hear which may well be considered sufficient to justify an appeal. The present order is an unqualified appointment of receivers with instruction to take immediate possession of all property of the defendants, requires reports each sixty days, authorizes the employment and discharge of laborers and agents, the doing of business, and the defense of suits against the defendants. It concludes with a provision that "each defendant is allowed ten days from service of a copy of this order to show cause why the receivership should not be made permanent," but it does not order service nor appoint any time or place for a hearing. We need not and do not decide whether this order was at once appealable. If it was not, because the parties affected had not sufficiently exhausted their means of relief in the lower court, the later order removed that deficiency. The appellants were then present, offering to be heard. The judge, after a partial hearing, refused to complete it and continued the

64 F.2d 251

case to be resumed at an unfixed time in the future and before another judge who was not expected to return for a month. The necessary and direct effect was to keep the receivers in office and to confirm their appointment for an indefinite period. An appeal cannot be prevented by thus creating the receivership ex parte and then refusing to complete the hearing of a motion to vacate it. An unappealable temporary restraining order is by Equity Rule 73 (28 USCA § 723) and by 28 USCA § 381 guarded against abuse by strict limitation of its life and by requiring the hearing on it to be given precedence over all business except older matters of the same character. A receivership which without a hearing takes property from its possessor is more drastic, and, if wrongful, is of more disastrous consequence, than a restraining order, and should be even more jealously safeguarded. The order here was not merely...