Polk v. Johnson

• Decision Date: 25 November 1902
• Citation: 65 N.E. 536,35 Ind.App. 478
• Parties: POLK et al. v. JOHNSON.
• Court: Indiana Appellate Court

35 Ind.App. 478

65 N.E. 536

POLK et al.

v.JOHNSON.¹

Appellate Court of Indiana, Division No. 2.

Nov. 25, 1902.

Appeal from circuit court, Johnson county; Vinson Carter, Special Judge.

Exceptions by James T. Polk and others to amended final report of Grafton Johnson as receiver of the property and estate of said James T. Polk. From a judgment in favor of the receiver, James T. Polk and others appeal. Reversed.

L. J. Hackney, C. F. Coffin, and Eldridge & Barker, for appellants. G. M. Overstreet, E. L. Branigin, Miller & Barnett, and E. A. McAlpin, for appellee.

ROBY, C. J.

The proceedings out of which this appeal arises were had in the lower court upon exceptions filed by the appellant James T. Polk to the amended final report of Grafton Johnson, the appellee, as receiver of the property and estate of said Polk; said Johnson having been theretofore appointed such receiver by the Johnson circuit court in a cause therein pending. The appellee in such report claimed an allowance of $20,000 for his services, and was allowed upon hearing $9,500 therefor.

Subdivision 1 of exception 2 was as follows: “It is shown to the court: That the property and business of the estate of said receivership have at all times been located at the town of Greenwood, whose population was, when the receiver herein was appointed, about 1,000, and was to a considerable degree supported by said business. That said Johnson and his family, when this proceeding was instituted, owned vast properties in and about said town, consisting of business houses and rental dwellings and farming lands, the rental value and rentals of which depended in a great measure upon the continued operation of said business; the said business employing the principal part of the labor of said community. That, in addition to said interests of said Johnson in the prosecution of Polk's business, he was conducting a banking business which was patronized by said Polk, and said Johnson at said time was a creditor of said Polk in a large sum, the success of which credit, in a measure, depended upon the value of the plant and business of said Polk, and said value depended almost wholly upon the continued prosecution of said business. In view of the foregoing facts, the said Johnson, well knowing that the court, or the judge thereof, would probably not appoint a receiver of said property and business who was objectionable to said Polk, the said Johnson sought said Polk and importuned him to make no objection to his (said Johnson's) appointment as receiver, and to consent to and to request the court to appoint him such receiver. That to induce and persuade said Polk to so withhold objection, and to consent and request, said Johnson urged that his above-named interests in the business of said Polk, and its successful operation and his personal friendship for said Polk, were such that he could and would, if appointed receiver, discharge the duties of the trust with diligence and fidelity, and without allowance or compensation other than he would receive from the advantages to the said properties to the said banking business and to the amount so owing to him. That by reason of the said interests of the said Johnson in the success of the business, and by reason of his said promise to discharge the duties of receiver without allowance as aforesaid, the said Polk did not object to said Johnson's appointment as receiver, but consented to such appointment, and requested the court and the judge thereof that said Johnson, by reason of his said promises, be appointed receiver of said property and business. That, in addition to his said consent and request for the appointment of said Johnson, other persons interested, personally and as creditors of said Polk, requested the court and the judge thereof to appoint said Johnson, because of the economy to said estate in conducting the receivership without salary, fees, or allowances. That in view of the facts aforesaid, and of the further facts that the said Johnson was well qualified for the duties, he was appointed and acted as receiver of said estate. And of each and all of the foregoing facts the said Polk offers to make proof.” Upon appellee's motion, this subdivision of the exception was stricken out; appellant excepting thereto. At the trial, appellant Polk took the witness stand, and certain questions were propounded to him, intended to elicit evidence similar in import to the statements of the exception. Objections were sustained to these questions, and the rulings thereon saved.

It may be premised that the appointment of the receiver and the fixing of his compensation are judicial acts; that the court could in no wise be bound by contracts between individuals as to what it should or should not do. Lichtenstein v. Dial, 68 Miss. 54, 8 South. 272. Appellee argues that the agreement set up in the exception falls within this principle, and was against public policy and void, and that there was therefore no consideration for his promise. It is not, however, averred that any attempt was made to prevent the exercise of the fullest judicial discretion in making the appointment. It is averred that the appellant Polk was solicited to consent to the appointment of appellee as receiver, and request the court to make such appointment and to make no objection thereto. All this he might lawfully do. Suggestions and recommendations in such matters by the parties interested therein are not improper, and are often desired by the court. They can be in the nature of things, nothing except suggestions and recommendations, but they are not forbidden by consideration of public policy or otherwise Addison v. Bowie, 2 Bland, 609; Williamson v. Wilson, 1 Bland, 418; Gowan v. Jeffries, 2 Ashm. 296; Bate v. Bate, 11 Bush, 643; Hanorer Fire Ins. Co. v. Germania Fire Ins. Co. 33 Hun, 539, High, Rec. §§ 63-65; Beach Rec. §§ 30, 31; Smith, Rec. p. 62. Withholding such objection and recommending the appointment at the request of appellee was a sufficient consideration for the promise to relieve the estate from a large item of that expense which makes receiverships onerous and not infrequently destructive, assuming that the things requested to be done and omitted were not illegal. Wolford v. Powers, 85 Ind. 294, 44 Am. Rep. 16;Society v. Brumfiel, 102 Ind. 146, 1 N. E. 382, 52 Am. Rep. 657;Keller v. Orr, 106 Ind. 406. 7 N. E. 195. The policy of the law is expressed as follows: “No party or attorney or other person interested in an action shall be appointed receiver therein.” Section 1237, Burns' Rev. St. 1901. The receiver represents the court, occupies a trust relation toward the parties, and ought always to be indifferent between them. The appointment of a creditor who has or may have a private interest to serve is of doubtful propriety, at least, and it may be safely assumed that such appointment would not have been made by the court below over the objection of appellant. In a recent case cited by both parties, it was held that where a person solicited the appointment as receiver for real estate, and promised the mortgagee thereof to look to the rents alone for compensation, he could not, after the cause was dismissed and the property had passed out of his hands, recover from the mortgagee the amount of an allowance made by the court to him. If this action were...