Stair v. Meissel

• Decision Date: 30 October 1934
• Docket Number: 26089
• Citation: 192 N.E. 453,207 Ind. 280
• Parties: STAIR v. MEISSEL
• Court: Indiana Supreme Court

192 N.E. 453

207 Ind. 280

STAIR v. MEISSEL

No. 26089

Supreme Court of Indiana

October 30, 1934

1. APPEAL---Decisions Reviewable---Appointment of Receiver.---Where the court appointed a receiver without notice but fixed a time for hearing after notice to determine whether the appointment should be made permanent, the order after hearing, making the appointment permanent, was a decision of the court appointing a receiver, with notice from which an appeal would lie within 10 days. p. 283.

2. EVIDENCE---Burden of Proof---Effect of Rule to Show Cause.---A rule to show cause does not have the effect of shifting the burden to defendant but merely requires him to meet the prima facie case made by the moving party's verified complaint or supporting affidavits. p. 286.

3. RECEIVERS---Appointment---Evidence---Complaint and Response to Rule to Show Cause.---Where receiver was appointed temporarily without notice on a prima facie case made by a verified complaint, and time was fixed for a hearing at which defendant was notified to appear and show cause why the receivership should not be made permanent, the court, on such hearing, was bound to consider plaintiff's evidence consisting of the verified complaint, as well as that of the defendant, consisting of his verified response to the rule to show cause. p. 287.

4. RECEIVERS---Appointment---In Mortgage Foreclosure Proceeding---Evidence---Allegations of Complaint.---A verified complaint for foreclosure of a mortgage and sale of the mortgaged property and for appointment of a receiver which set out the notes secured by the mortgage as exhibits and alleged that the mortgaged property was "insufficient of value at the time to pay and discharge the debts," was held sufficient to justify the appointment of the receiver. p. 287.

5. VENUE---Change from County---Ancillary Proceedings---Appointment of Receiver.---Application for appointment of receiver in a suit to foreclose a mortgage being an ancillary proceeding, held not a "civil action" within the venue statute, and, hence, no change from the county could be had even though a change were granted in the principal action. p. 290.

Action by Ernest Meissel against Clem Stair to foreclose a chattel mortgage and for appointment of a re- ceiver. From the order appointing a receiver, defendant appealed. Affirmed.

Wm. C. Wellborn, of Evansville, and Frank C. Dailey, of Indianapolis, for appellant.

Craig & Mitchell, of Evansville, for appellee.

OPINION

TREANOR, Judge.

On July 30, 1931, appellee brought suit to foreclose a chattel mortgage given by appellant to secure 65 promissory notes in the sum of $ 750 each, 14 of which were then due and unpaid. He asked for the appointment of a receiver without notice to immediately take charge of the mortgaged property consisting of the furniture and fixtures of a hotel, and being used by the defendant in the conduct of a hotel business in the city of Evansville. In the complaint appellee alleged that appellant was in default under a lease of the hotel building in which the mortgaged property was situated; that a suit was pending for possession of the premises and that the mortgaged property was about to be removed by the sheriff before notice could be given the defendant in the instant suit; that the mortgaged property would thereby be rendered less valuable and would be materially injured; and that plaintiff would suffer great and irreparable loss unless a receiver should be appointed to take charge of the property pending the termination of the foreclosure proceeding. Plaintiff alleged that he had no adequate remedy at law; that an attachment suit would not lie. He also alleged that a receiver, if appointed, could arrange to properly preserve the property, which had but little value aside from its use as hotel property. The complaint contained the following averment: 'Plaintiff further avers that an emergency exists for the appointment of a receiver herein without notice, since to await the maturity of notice before the appointment of a receiver would result in the removal of said property as a consequence of the possessory action above mentioned and thereby the damage sought to be averted would nevertheless result; that a temporary restraining order is not available to plaintiff for the reason that he has no right in the premises other than those that may be created by arrangements made through the receiver herein sought to be appointed by contract and plaintiff knows and avers as a fact that the injury to said property and to his interests can be averted if a receiver is appointed herein to take charge of said property without notice and to deal with the same under the order of this court.' The mortgaged property was alleged to be 'insufficient to value at this time to pay and to discharge the debt of this plaintiff thereby secured.' The prayer for relief asked the appointment of a receiver, as follows: '* * * that a receiver be appointed herein without notice to immediately take charge of the mortgaged property, pending the termination of this action; that notice issue to the defendant of the appointment of the receiver herein without notice, and fixing a date for a hearing herein as to whether or not the receiver herein created without notice, shall continue, pending the termination of this action; that the receiver be given the powers incident to receivers under the laws of the State of Indiana and be authorized and directed to immediately take charge of said property and to deal therewith under the orders and directions of this court * * *.' The complaint was signed by appellee and properly verified. On July 31st appellant was served with summons to appear on August 14th to answer the complaint. On July 31st the trial court found that the 'verified application charged an emergency, to avoid irreparable injury and damage to the plaintiff, for the appointment of a receiver as therein prayed, to take charge of, hold and preserve the property covered and encumbered by said chattel mortgage pending the maturity of notice.' The court thereupon appointed a receiver to take possession of the property 'pending the further order of this court' and 'pending the hearing as herein fixed as to the continuance of the receivership created hereby without notice.' The court also ordered that the defendant 'be and appear before this court on Saturday, August 1, 1931, at 10:30 A. M. at the Court House in Evansville, Indiana, then and there to show cause, if any exist, why the receivership herein created without notice should not continue.' A copy of the court's order of July 31st, on that day, was served upon appellant. The hearing upon the rule to show cause was subsequently continued until August 13th. On August 11th appellant filed a motion for change of venue from the county. Appellant's verified response was filed on August 13th, and on that day the following order was made:

'* * * this being the time fixed by the court for the defendant to show cause, if any he has, why this receivership should not be continued pending the determination of the main cause of action herein, and the defendant now files his verified response to the Rule to show cause why the Receivership herein Granted Without Notice should not be Continued, and the defendant offering no further evidence, and the court having examined said paper filed by defendant and being duly advised in the premises, now finds that the receivership herein created without notice should continue and be made permanent, pending the determination of the main cause of action herein, to which ruling of the court the defendant at the time objects and excepts.

'It is, therefore, ordered by the court that the receivership herein be and the same is hereby continued and made permanent pending the determination of the main cause of action in this cause.'

This appeal is prosecuted from the foregoing order of the court made on August 13th. It is not, nor could it be, contended that this is an appeal from the order of July 31st appointing the receiver without notice. An appeal from an order appointing, or refusing to appoint, a receiver must be taken 'within ten (10) days thereafter.' This appeal was perfected on August 22d. Our statute permits the appointment of a receiver without notice 'upon sufficient cause shown by affidavit' and an appeal from such an appointment must be taken within ten days. Section 3-2603, Burns' Ann. St. Ind. 1933, section 1302, Burns' Ann. St. Ind. 1926, Acts 1881 (Sp. Sess.) c. 38, § 254, pp. 240, 284.

If the order of August 13th can be appealed from at all, it must be because the court's action in making the receivership permanent was a 'decision of the court' appointing a receiver, within the meaning of section 3-2603, Burns' 1933, supra, from which the party aggrieved may appeal. Our statute does not require that an appointment of a receiver made without notice shall be temporary and continue only until hearing held pursuant to notice; nor is there any statutory provision for either setting the appointment aside or confirming it. However, in the instant case, by the very terms of the court's order the appointment made on July 31st was limited to the time when a hearing would be held upon the question as to whether the receivership should be continued. In its order the court set out its finding that the 'application charges an emergency, to avoid irreparable injury and damage to the plaintiff, for the appointment of a receiver as therein prayed, without notice to take charge of, hold and preserve the property covered and encumbered by said chattel mortgage, pending the maturity of notice, to be served on the defendant, fixing the time and date for a hearing as to whether or not the receivership herein created, without notice,...