Pressly v. Harrison

• Decision Date: 16 May 1885
• Citation: 1 N.E. 188,102 Ind. 14
• Parties: Pressly v. Harrison and others.
• Court: Indiana Supreme Court

102 Ind. 14

1 N.E. 188

Pressly

v.Harrison and others.

Supreme Court of Indiana.

Filed May 16, 1885.

Appeal from Marion superior court.

F. Winter, for appellant.

Harrison, Miller & Elam, for appellee.

Mitchell, J.

From the complaint in this case, the following facts appear: Alfred and John C. S. Harrison were partners, doing business as bankers in the city of Indianapolis, and were the owners of real and personal property, some of which was partnership property, and some the individual property of the several partners.

On the eighteenth day of July, 1884, Alfred Harrison filed, in the office of the clerk of the Marion superior court, a petition, in which John C. S. Harrison was described as defendant. It was averred in the petition that the plaintiff and defendant were partners; that, on account of insolvency, they were unable to continue their partnership business. It was also averred that, as a firm, they were possessed of real and personal property, and that they were owing debts; that the partnership ought to be dissolved, and its affairs wound up.

The prayer was that a receiver should be appointed to take charge of the assets of the firm, etc.

With the petition Alfred Harrison also filed the following paper:

“ Alfred Harrison v. John C. S. Harrison.

The defendant John C. S. Harrison admits the allegations of the complaint herein to be true. John C. S. Harrison.”

It is averred that no process was issued or served upon John C. S. Harrison, and that he did not appear to said petition, either in person or by attorney. Immediately upon the filing of the foregoing papers, Alfred Harrison presented them to the Honorable Lewis C. Walker, one of the judges of the Marion supreme court, at chambers, in vacation, without any other proceedings having been taken thereon, and asked for the appointment of a receiver. Thereupon the judge made an order placing the assets of the firm in charge of the sheriff of Marion county, and held the matter of the appointment of a receiver under advisement.

It is further averred that on the nineteenth day of July, 1884, being still in vacation, Alfred Harrison filed in the clerk's office and presented to the judge at chambers a supplemental petition, wherein he showed that both he and his partner were the owners of certain individual property, real and personal, which they were each willing to surrender for the benefit of their creditors, and praying that an order should be made turning their individual property over to a receiver to be appointed.

It is also alleged that no process was issued upon this supplemental complaint, and that John C. S. Harrison did not appear thereto, either in person or by attorney, but that, at the time it was filed and presented, Alfred Harrison filed and presented with the supplemental petition the following paper, purporting to be executed by John C. S. Harrison:

“The State of Indiana, Marion County-ss.

Alfred Harrison v. John C. S. Harrison. (No. 32,604.)

answer to supplemental complaint.

John C. S. Harrison, defendant in the above-entitled cause, says that he admits the allegations of the supplemental complaint of the plaintiff herein, and consents to the surrender of all of his individual property, in the manner and for the purpose mentioned in said complaint.

John C. S. Harrison, Defendant.”

Without any further proceedings, Robert W. Lamb was thereupon appointed receiver. He qualified, took, and continued in possession of all the partnership and individual property of the Harrisons.

At the time the proceedings above recited took place, the appellant, Pressly, was a creditor of the firm, and on the twenty-fifth day of August, 1884, recovered a judgment against its members for $9,929.02, in the Marion circuit court. On this judgment execution was issued, which, at the commencement of this suit, on the thirtieth day of August, 1884, remained in the hands of the sheriff. After reciting in detail facts of which the foregoing is the substance, the complainant charges that the appointment of the receiver in the manner stated was without the jurisdiction of the judge, and therefore void. The relief prayed is that the lien of the appellant's judgment and execution should be decreed to be prior to the claim and right of the receiver, and that he be directed to pay the claim of the appellant as a preferred lien. A demurrer was sustained to the complaint, and the correctness of this ruling is the only question in the record.

The case has been ably and elaborately argued on both sides. On be-half of the appellant it is contended that no receiver could be appointed until an action was pending, and that because no process was issued, and no appearance was entered for the defendant before the receiver was appointed, no action was pending, and that, therefore, the appointment was void.

The contention of the appellee is, substantially, that a party against whom the appointment of a receiver is asked may appear before the judge at any time and plead to the application, resist or consent to the appointment; and that, therefore, the papers filed by Alfred Harrison, who was the plaintiff in the petition, for John C. S. Harrison, the defendant, was such an appearance and answer as gave the judge jurisdiction to make the appointment. It is conceded on all hands that an action is not commenced until process has issued, or an appearance has been entered by the defendant. The power which a judge may exercise in vacation is such special statutory power as is prescribed. Whatever, it is asserted, may be done by him, except in term, authority therefor must be found in the statute. If not found there, it may be assumed it does not exist. Taylor v. Moffatt, 2 Blackf. 305.

Under the Code of 1852, in which it was provided that “a receiver may be appointed by the court” in certain cases, it was held that an appointment made by a judge in vacation was void. Newman v. Hammond, 46 Ind. 119.

The act of 1875 (2 Rev. St. 1876, p. 115) provided, substantially, as the chancery practice did, “that receivers shall not be appointed by any court, in any case, until the adverse party shall have appeared and answered in the action pending, or shall have had reasonable notice of the pendency of the action and the application for such appointment.” May v. Greenhill, 80 Ind. 124.

By the Code of 1881, § 1221, it is provided: “A receiver may be appointed by the court, or the judge thereof in vacation, in the following cases: * * * Second. In actions between partners, or persons jointly interested in any property or fund.” It will be seen, from the statute above quoted, that a receiver may now be appointed by the courts or judge in vacation in actions between partners. As to the time when the appointment may be made the statute is silent. A receiver may be appointed “in actions,” etc., is the provision of the statute. By the ancient practice of the court of chancery in England, a receiver was not appointed until after the coming in of the defendant's answer; but it is now settled, both in this country and in England, that the appointment may be made before answer, provided a special necessity therefor is shown to exist. High, Rec. 105, 106.

Unless, under extraordinary circumstances, as where the defendant had left the state to avoid process, or the like, the rule seems to have been that a court could get no jurisdiction to appoint a receiver until after service of process and notice of the motion. Whitehead v. Wooten, 43 Miss. 523; Edw. Rec. 13, 14.

This was, in effect, the provision of the statute of 1875. We think this rule prevails without substantial modification under existing statutes. We know of no decided case, except where the court was authorized by statute to preserve the estates of infants and lunatics, in which a receiver was appointed before a suit was pending. If an immediate necessitytherefor is shown to exist, the application for a receiver may be entertained when the action is commenced, which, under the rule here, is when process is issued, or an appearance to the action is entered in the manner recognized; but as the appointment of a receiver in any case is a provisional remedy, auxiliary to the action, or the relief prayed for therein, neither the court in term nor judge in vacation can acquire jurisdiction to appoint a receiver until there is an action pending. The application for a receiver is an interlocutory proceeding in a pending suit. Brinkman v. Ritzinger, 82 Ind. 358;Dale v. Kent, 58 Ind. 584;Merchants' & Manuf'rs' Bank v. Kent Circuit Judge, 43 Mich. 292;S. C. 5 N. W. Rep. 627. Unless it is shown that on account of absence, or for some other cause, process cannot be served on the defendant, the application should not be entertained until after service and notice.

The action pending is the principal thing. The application for and appointment of a receiver is a mere incident to preserve the subject of litigation until the decree is given and effectuated; and, as necessary to the incident, the principal-the action pending-must exist. Such applications are...