Moritz v. Miller

• Decision Date: 23 May 1889
• Citation: 6 So. 269,87 Ala. 331
• Parties: MORITZ ET AL. v. MILLER ET AL.
• Court: Alabama Supreme Court

6 So. 269

87 Ala. 331

MORITZ ET AL. v. MILLER ET AL.

Supreme Court of Alabama

May 23, 1889

Appeal from city court of Montgomery; THOMAS M. ARRINGTON, Judge.

The bill in this case was filed by the appellees, Miller, Schram & Co., against the appellants, Moritz & Weil and others, and sought to have a certain transfer of the books, accounts etc., of the defendants Moritz & Weil set aside on the ground of fraud, and a receiver appointed. The facts of the case are sufficiently stated in the opinion. The decree appointing a receiver is here assigned as error.

Graves & Blakey and Tompkins & Troy, for appellants.

Rice & Wiley, for appellees.

CLOPTON J.

As receivers are ordinarily appointed without requiring of the applicant a bond indemnifying the other party against damages which may be caused by a wrongful appointment, the utmost care and circumspection should be observed in administering this extraordinary remedy. The court should ever be reluctant to summarily take property from the possession of a defendant claiming right or title thereto, and put it into the control and management of an appointee of the court, without affording the claimant and possessor opportunity to be heard in opposition. When the most provident care is used, it not infrequently happens that great injustice, and sometimes irreparable injury, is occasioned. In view of these probable evils, and for the purpose of avoiding, as far as practicable, an improper and injudicious exercise of this jurisdiction, the statute provides: "Receivers may be appointed by the chancellor in term-time or vacation, and by the register in vacation, upon application in writing; and when the application is made in vacation, reasonable notice of the time of such application, and the person to whom it will be submitted, must be given, or a good reason shown to the chancellor or register for the failure to give the same." Code 1886, § 3534. The complainants, who are simple contract creditors of the firm of Moritz & Weil, seek by the bill to set aside a transfer of their books, notes accounts, and other choses in action to the other defendants, on the alleged ground that the transfer was made upon a simulated and fictitious consideration, with intent to hinder, delay, or defraud complainants and the other creditors of the firm. The equity of the bill may be conceded. The question on this appeal is not solely whether the bill makes a prima facie case for the appointment of a receiver,-a case in which it does not seem reasonable that the assets should be left in the possession of the defendants pending the litigation. A decision as to the propriety and necessity of appointing a receiver would be premature, in advance of a showing by defendants against it, or an opportunity to make such a showing. The receiver being appointed without notice, and before service of process, the material question is whether a good reason is shown for the failure to give notice. By the established practice, independent of statute, courts of equity, being averse to interference ex parte, will entertain, in ordinary cases, an application for the appointment of a receiver only after notice or rule to show cause. The exceptional cases are when the defendant is beyond the jurisdiction of the court, or cannot be found, or some urgent emergency is shown rendering interference,...