Pearson v. Kendrick

• Citation: 21 So. 37,74 Miss. 235
• Court: Mississippi Supreme Court
• Decision Date: 14 December 1896
• Parties: L. L. PEARSON ET AL. v. S. R. KENDRICK ET AL

21 So. 37

74 Miss. 235

L. L. PEARSON ET AL. v. S. R. KENDRICK ET AL

Supreme Court of Mississippi

December 14, 1896

October 1896

FROM the chancery court of Bolivar county HON. A. H. LONGINO Chancellor.

The opinion states the case.

Judgment reversed and cause remanded.

Moore &amp Clark and Brame & Alexander, for the appellants.

1. The right of the beneficiary of a deed of trust to foreclose in pais in nowise prejudices his right to do so in equity, and his rights to a receiver pendente lite is coextensive with that of a mortgagee, when the property is insufficient to pay the debt and the incumbrancer is insolvent. Phillips v. Eiland, 52 Miss. 721; Myers v. Estill, 48 Ib., 372. The rule is the same whether the incumbrance be a mortgage, a trust deed, or a vendor's lien.

2. A decree discharging a receiver appointed under §§ 574, 575, code 1892, is clearly appealable, for, upon a revocation of the appointment, the complainant becomes at once liable on the bond required by the latter section for all damages resulting to the defendant from the appointment, and, no matter how erroneous the decree of discharge may have been, he would be remediless if denied the right of appeal. The case of Hanon v. Weil, 69 Miss. 476, which apparently conflicts with this view, rests upon the different provisions of the code of 1880, under which the discharge of the receiver and his compliance with the order relieved him on his bond as receiver of all liability, and therefore a restoration of the property completely restored the status quo, and no one could appeal. Under §§ 576, 578, code of 1892, the giving of a preliminary bond to secure the appointment is assimilated in some measure to the matter of a preliminary injunction. The judge, in one case as in the other, may look to the averments of the bill, and, if he thinks it a proper case, may award the injunction in the one case or grant the receivership in the other, without notice, but upon the execution of a sufficient bond conditioned as the law requires. The court, by § 578, is also authorized to take from the defendant a bond in lieu of appointing a receiver in the first instance. This right the court had in the absence of a statute, but the section further provides that, in cases where complainant has given a bond, and thus incurred liability for damages, the court may still, on an application to remove the receiver, remove him upon the execution and filing of such bond. These are radical changes in the law, and affect not only the remedy or procedure, but give the parties substantial rights. Formerly the receiver was an arm of the court, which appointed or removed him at will, but now, for the protection of the defendant who had no notice, complainant must give bond, and, if the receiver is discharged, he becomes liable thereon for damages, to be awarded either in that suit or an independent suit.

Butt & Butt, for the appellees.

1. The decree discharging the receiver is not one from which an appeal lies. Hanon v. Weil, 69 Miss. 476; code 1892, § 34; code 1880, § 2311.

2. The receiver was properly discharged; indeed, he should never have been appointed. The record shows nothing in the way of affidavits, etc., to satisfy the mind of the chancellor who made the appointment that an immediate appointment was necessary or that any cause existed for not giving notice. The beneficiary of a deed of trust upon land has not the right to a receiver of the rents and profits that is recognized in mortgagees upon the insolvency of the debtor and the insufficiency of the property as a security. Counsel also discussed at length the evidence touching the state of accounts between the parties, and cited the following authorities: High on Receivers, §§ 12, 17, 19, 24, 35, 108, 111, 112, 113, 115, 553, 555, 590, 600, 639, 824; Whitehead v. Wooten, 43 Miss. 523 (20 Am. & Eng. Enc. L., 18, and notes); Meridian, etc., Co. v. Paper Co., 70 Miss. 695.

Argued orally by C. H. Alexander, for the appellants.

OPINION

STOCKDALE, J.

This cause is here on appeal from the decree of the chancery court of Bolivar county, rendered on September 18, 1896, discharging the receiver, C. T. Bell, theretofore appointed in this cause. Complainants, J. T. Wright, trustee, L. D. Nickles, trustee, and Leland L. Pearson exhibited their sworn bill of complaint in the chancery court of Bolivar county, on August 11, 1896, setting forth that on January 27, 1891, defendants, S. R. Kendricks, and his wife, Charlotte Kendricks, executed their joint note of that date, payable to Burbridge & Houston, on December 1, 1891, for $ 3, 075, with interest from date at 10 per centum per annum, and secured it by deed of trust to J. T. Wright, trustee, on 160 acres of land and three mules and a wagon and crop of that year said deed of trust reciting that Burbridge & Houston were to furnish defendants supplies during that year; that on March 5, 1892, defendants executed another note, for $ 1, 018.89, payable to the order of Burbridge & Houston, November 1, 1892, with 10 per centum per annum interest from March 1, 1892, and secured it, as well as the first note of $ 3, 075, mentioned in the former deed of trust, making this second deed secure a debt, evidenced by said two notes, of $ 4, 093.84. This deed conveyed the same property as the former deed. That on April 7, 1894, defendants executed a third note, payable to the order of Burbridge & Houston, on November 1, 1894, with 10 per cent. interest from April 1, 1894, for $ 1, 888.65, and secured same by deed of trust to L. D. Nickles, trustee, conveying same land as the other two deeds, and two other mules and a gin stand, and Burbridge & Houston agreeing to furnish defendants supplies during 1894. The bill alleges that all these notes were regularly transferred to complainant, Leland L. Pearson, and he was the owner, and no part of them, or either of them, had been paid, but the whole sum was due him--about $ 6, 000. The bill also alleges that defendants are collecting rents and disposing of them, and are insolvent, and letting the lands go to waste, etc., and that the value of the property is not more than $ 3, 250, and wholly inadequate to pay the debt, and prays for a foreclosure and a receiver. The answer of defendants, also sworn to, though not regularly filed in the cause, was offered and read in evidence, with other proofs, on the hearing of said motion to discharge the receiver, and filed in the cause immediately after said hearing. It denies seriatim all the material allegations of the bill. Admitting the execution of the three several promissory notes, it denies, with emphasis, that the $ 3, 075 note of January 27, 1891, ever had any legal or equitable existence, but was obtained by fraud, and without consideration; alleges that the second and third notes were fully paid long before any transfer of them was made to anyone; denies that Pearson is the owner of said notes; denies insolvency; denies that any waste is being allowed; denies collecting and misapplying rents; and denies selling cotton, except one bale, to pay a debt and repair the gin. The record shows that complainants notified defendants to appear at Greenville, Washington county, on August 24, to contest a motion before the honorable chancellor, A. H. Longino, of the seventh district; and the next thing that appears in the record is an order appointing C. T. Bell receiver, by Chancellor B. T. Kimbrough, of the third district, at Batesville, said to be 200 miles from Bolivar county courthouse, on August 25, 1896, without any notice to defendants, authorizing said receiver to take possession of all the property, real and personal, described in the bill--complainants having first given bond in substantial compliance with § 575 of the code of 1892. On the hearing of the said motion to discharge receiver, by agreement of counsel on both sides, it was admitted, for the purposes of that hearing, that complainant, Pearson, was the legal owner of the deeds of trust and notes in controversy, and that certain affidavits and proofs be introduced and read. The defendants in the bill introduced their own affidavit, setting forth that they owed nothing on said notes, the same being void; deny insolvency; deny that they are collecting and misapplying rents, or putting them or cotton out of the reach of creditors; deny mismanagement, and assert that they are improving the land; say they had not and have not attempted to collect rents; and deny all the equities of the bill. By affidavit of Robert Webley they prove that they have greatly improved the land. Complainants introduced the affidavit of complainants Pearson and Nickles, and that of R. P. Houston, one of the firm of Burbridge & Houston. Pearson reasserts the allegations of the bill, and asserts that the amount of all three of said notes, about $ 6, 000, is due him. R. P. Houston swears that the $ 3, 075 note of January 27, 1891, was to secure an old debt of $ 2, 700, and the balance to secure supplies to be furnished defendants during the year 1891. He says, also, that the balance unpaid on said note, for $ 1, 018.84, of March 5, 1892, was merged in the $ 1, 888.65 note of April 7, 1894, and was thereby extinguished, and delivered to S. R. Kendrick and wife. The answer of defendants to the bill was in evidence. The honorable chancellor, upon consideration of the proofs, papers, and affidavits on file in said cause, decreed that the receiver be discharged; and complainants appeal from that order.

Appellees move to dismiss the appeal, assigning causes: (1) This court has no jurisdiction of the appeal; (2) the court below had no jurisdiction to grant the appeal, citing code 1892, § 34; (3) because the appeal was improvidently granted. In support of the motion, counsel for appelle...