State ex rel. Red Dragon Diner, Inc. v. Superior Court of Marion County

• Decision Date: 01 May 1959
• Docket Number: No. 1,M,R,No. 29750,1,29750
• Citation: 239 Ind. 384,158 N.E.2d 164
• Parties: STATE of Indiana on the relation of RED DRAGON DINER, INC., (an Indiana Corporation), Relator, v. SUPERIOR COURT OF MARION COUNTY, Indiana, RoomWalter Bell, Judge of the Superior Court of Marion County, Indiana, Roomoy A. Pope, Judge pro tem., Respondents.
• Court: Indiana Supreme Court

Page 164

158 N.E.2d 164

239 Ind. 384

STATE of Indiana on the relation of RED DRAGON DINER, INC. (an Indiana Corporation), Relator, v. SUPERIOR COURT OF MARION COUNTY, Indiana, Room No. 1, M Walter Bell, Judge of the Superior Court of Marion County, Indiana, Room No. 1, Roy A Pope, Judge pro tem., Respondents.

No. 29750.

Supreme Court of Indiana.

May 1, 1959.

John D. Raikos, Indianapolis, for relator.

Joseph F. Quill and John G. McNutt, Indianapolis, for respondents.

Merle H. Miller, Donald F. Elliott, Jr., Indianapolis, amici curiae.

William R. Hunter, Winchester, for appellee. (Ross, McCord, Ice & Miller, Indianapolis, of counsel), amici curiae.

Buschmann, Krieg, DeVault & Alexander, Indianapolis, for General Grain, Inc.

ACHOR, Judge.

In this case the court appointed a receiver without notice, and relator has asked for a writ prohibiting respondents from taking any further action in said proceeding. A temporary writ has issued. Relator asserts among other things that the respondent court was without jurisdiction to appoint a receiver without notice for the reason that the complaint did not state facts which authorized the court to exercise this very extraordinary remedy.

Notice, giving a defendant opportunity to be informed regarding the nature of the action and reasonable opportunity to make a defense, is an essential element of due process. ¹ Our statutes ² which specifically limits the authority of the court to appoint receivers without notice is in implementation of the above constitutional guarantee. Therefore, although courts have general statutory ³ and inherent ⁴ authority to appoint receivers with notice, they now clearly have no authority to appoint receivers without notice, 'except upon sufficient cause shown by affidavit,' as now provided by statute. ⁵

This court has heretofore spelled out in specific terms the facts which must be stated and supported by affidavit in order to justify the appointment of a receiver without notice. And since the court looks only to the facts stated in the verified complaint in determining the necessity of dispensing with the giving of notice, the complaint must not only allege facts which support the plaintiff's right to the appointment of a receiver after notice, it must also state specific facts which establish the following ultimate facts: (1) That an emergency exists which renders interference necessary before there is time to give notice in order to prevent waste, destruction or loss. Albert Johann & Sons Co. v. Berges, Ind.1958, 150 N.E.2d 568; Fagan v. Clark, Ind.1958, 148 N.E.2d 407; Tormohlen v. Tormohlen, 1936, 210 Ind. 328, 1 N.E.2d 596; Bookout v. Foreman, 1926, 198 Ind. 543, 154 N.E. 387. (2) That protection cannot be afforded in any other way, as by temporary restraining order. Morris et al. v. Nixon, 1945, 223 Ind. 530, 62 N.E.2d 722; Largura Const. Co. v. Super-Steel Products Co., 1939, 216 Ind. 58, 22 N.E.2d 990; Hawkins v. Aldridge, 1937, 211 Ind. 332, 7 N.E.2d 34, 109 A.L.R. 1205; Tormohlen v. Tormohlen, supra. (3) That plaintiff could not reasonably have anticipated the injury in time to give notice. Albert Johann & Sons Co. v. Berges, supra; Fagan v. Clark, supra.

Section 3-2602, Burns' 1946 Replacement clearly and positively states that a receiver without notice '* * * shall not be appointed, * * * except upon sufficient cause shown by affidavit.' In the case before us the complaint merely alleged 'That the defendant is insolvent and owes a large amount of indebtedness and claims which it is unable to pay.' The allegation is not a statement of facts sufficient to authorize the court to appoint a receiver without notice or, in the face of the above statutory prohibition, to exercise any discretion regarding such an appointment.

Therefore the writ of prohibition heretofore issued is made permanent.

LANDIS, C. J., and ARTERBURN, BOBBITT and JACKSON, JJ., concur.

1 Art. 1, § 12 Constitution of Indiana; Amend. 14, § 1 Constitution of the United States. Nottebaum v. Leckie, 3 Cir., 1929, 31 F.2d 556; Noxon Chemical Products Co., Inc. v. Leckie, 3 Cir., 1930, 39 F.2d 318, certiorari denied 282 U.S. 841, 51 S.Ct. 22, 75 L.Ed. 747; Town of Walkerton v. New York C. & St. L. R. Co., 1939, 215 Ind. 206, 214, 18 N.E.2d 799, certiorari denied 308 U.S. 556, 60 S.Ct. 75, 84 L.Ed. 467; 5 I.L.E. Constitutional Law § 216, p. 524.

2 'Receivers shall not be appointed, either in term or vacation, in any case, until the adverse party...