Republic Supply Co. v. Del Rey Oil & Refining Co.

• Decision Date: 10 June 1931
• Citation: 50 F.2d 639
• Court: U.S. District Court — Southern District of California
• Parties: REPUBLIC SUPPLY CO. v. DEL REY OIL & REFINING CO.

50 F.2d 639 (1931)

REPUBLIC SUPPLY CO. v. DEL REY OIL & REFINING CO.

District Court, S. D. California, C. D.

June 10, 1931.

Chandler, Wright & Ward, of Los Angeles, Cal., for receiver.

D. Chase Rich, of Los Angeles, Cal., for Pacific Shore Oil Co., Ltd.

Mark F. Jones, of Los Angeles, Cal., for attaching creditors.

JAMES, District Judge.

Proceeding to determine the validity of writ of garnishment levied by the sheriff of Los Angeles county, by which funds in the hands of Mark D. Woolery, equity receiver appointed herein, and claimed to be owing Pacific Shore Oil Company, Ltd., are sought to be impounded. The writ was served on behalf of creditors of Pacific Shore Oil Company, Ltd., in a suit brought in the state court.

The receiver, in the course of his management of the business of defendant, purchased gas from the Pacific Shore Company. On the 1st of April, 1931, gas of the value of $1,516.60 had been sold and delivered to the receiver during the month immediately preceding. Under the contract of purchase, the receiver was not obligated to settle with his vendor until the 20th of the month. The levy was made on April 3, 1931.

Two questions are presented: First. Are debts due by a receiver to third parties subject to garnishment? Second. Where the amount of the debt is ascertained but time of payment, by reason of contract terms, has not arrived, irrespective of the first question just stated, may such debt be the subject of garnishment as one owing to the debtor in the attachment proceeding?

Unless otherwise changed by statute, the unvarying rule is that property in the hands of a receiver is not the subject of attachment. This for the reason that the court appointing the receiver has taken complete and exclusive control of the estate which its receiver holds and no process of a court of another jurisdiction is competent to reach it. It is not a matter of mere comity as between courts, where judicial courtesy will allow such an interference to be made. The general principle affecting that matter has been fully declared by the Supreme Court in early decisions. Speaking of the right of the court to exclude interference by the process of another court with an estate in the hands of a receiver, the Supreme Court, in Covell v. Heyman, 111 U. S. 182, 4 S. Ct. 355, 358, 28 L. Ed. 390, said: "It is a principle of right and of law, and therefore of necessity. It leaves nothing to discretion or mere convenience. These courts do not belong to the same...