Sweeny v. Mayhew

• Decision Date: 30 January 1899
• Citation: 56 P. 85,6 Idaho 455
• Parties: SWEENY v. MAYHEW, JUDGE
• Court: Idaho Supreme Court

56 P. 85

6 Idaho 455

SWEENY v. MAYHEW, JUDGE

Supreme Court of Idaho

January 30, 1899

CERTIORARI-JURISDICTION-RECEIVER.-Certiorari will lie to review an order appointing a receiver, so as to determine from the case as presented to the lower court whether jurisdiction existed in such court, in the particular case made to appoint a receiver.

SECTION 4329 OF THE REVISED STATUTES CONSTRUED.-It is error to appoint a receiver in any of the class of cases mentioned in section 4329 of the Revised Statutes of Idaho, where the equities of the complaint are fully denied by the answer and the evidence introduced by plaintiff on the hearing of the application for the appointment of such receiver is fully met and overcome by counter evidence introduced by the defendant.

PLEADING-EQUITIES DENIED BY ANSWER-APPOINTMENT OF RECEIVER.-Plaintiff applied for appointment of a receiver; defendants filed their sworn answer denying every equity, and material allegation set forth in the complaint; on the hearing of the application the pleadings, the affidavit of plaintiff and one witness in his behalf, the affidavits of three witnesses on behalf of the defendants, were considered by the district judge; it was not alleged or proven that the defendants were insolvent or unable to respond to the plaintiff in damages. Held, that under such showing, the order made by the district judge was without authority, and should be annulled on certiorari.

(Syllabus by the court.)

Original proceeding by certiorari.

Judgment entered annulling that certain order reviewed, with costs to the petitioners.

W. B Heyburn, E. M. Heyburn and L. A. Doherty, for Petitioner.

The jurisdiction exercised by courts of equity in administering relief by the extraordinary remedy of a receiver pendente lite is a branch of the general preventive jurisdiction, being intended to prevent injury to the thing in controversy and to preserve it for the security of all parties in interest, to be disposed of as the court may finally direct. Its effect, temporarily at least, is to deprive the party of his property before a final judgment or decree is reached by the court determining the rights of the parties. It is not to be exercised doubtingly, but the court must be convinced that the relief is needful, and it should not be granted except in a clear case, and never unless the plaintiff would otherwise be in danger of suffering irreparable loss. (High on Receivers, 3d ed., secs. 3, 7.) The probability that plaintiff will ultimately be entitled to a decree in his action is a material element to be considered by the court. And when upon the entire record this is a matter of much doubt, the court is justified in its discretion in refusing a receiver. (High on Receivers, sec. 8; Owen v. Homan, 3 Macn. & G. 378; Wilkenson v. Dobbie, 12 Blatchf, 298, Fed. Cas. No. 17,670.) An important principle of general application in the exercise of this branch of the extraordinary jurisdiction of equity is that the plaintiff is never entitled to a receiver when the equities of his case are fully and fairly denied by the sworn answer of the defendants. The question is no longer regarded as one addressed to the discretion of the court, but it is judicial error to appoint a receiver when the allegations of the bill are thus denied. (High on Receivers, sec. 24; Henn v. Walsh, 2 Edw. Ch. 129; Fairbairn v. Fisher, 4 Jones Eq. 390; Crombie v. Order of Solon, 157 Pa. St. 588, 27 A. 710; Thompson v. Diffenderfer, 1 Md. 489.) While, ordinarily, an appellate court will not review a discretionary act of the lower court, the rule is that where the action of the court performed in the exercise of such discretion affects a substantial right of the defendant, as to the enjoyment of property, the appellate court will review the discretion so exercised. (Dollard v. Taylor, 33 N.Y. Super. Ct. Rep. (1 Jones & S.) 496; Grant v. Webb, 21 Minn. 39; Knight v. Nash, 22 Minn. 452; McCord v. Weil, 33 Neb. 868, 51 N.W. 300; Ruffner v. Mairs, 33 W.Va. 655, 11 S.E. 5.) In an action between partners for a dissolution and an accounting, where the complaint contains no allegation of the insolvency of defendants, who are not actively carrying on the business, and the answer alleges that they are solvent, and able to respond in damages, and denies the equities of the complaint, a receiver should not be appointed before the final hearing of the cause. (Wales v. Dennis, 9 Wash. 308, 37 P. 450.)

John R. McBride and C. W. Beale, for Defendant.

No brief filed.

QUARLES, J. Huston, C. J., and Sullivan, J., concur.

OPINION

QUARLES, J.

October 17, 1898, Kennedy J. Hanly, as plaintiff, filed his complaint in the district court of Shoshone county against Charles Sweeny, F. Lewis Clark, and the Empire State-Idaho Mining and Developing Company, a corporation, defendants, for the purpose of setting aside and having declared null and void a deed made by the said plaintiff conveying to the said defendants Sweeny and Clark an undivided one-eighth interest in and to the Skookum lode mining claim, situated in Shoshone county, Idaho to have an accounting for the proceeds of ores extracted from said mining claim by defendants, and for the appointment of a receiver to take possession and control of the property in dispute during the pendency of the action and for other relief. The theory set forth in the complaint as the basis of this action is that said deed was procured by the defendants through fraud, in two particulars, to wit: 1. That at the time of the making of said deed said defendants had opened and discovered large bodies of rich ore in the said Skookum claim, which fact was unknown to the plaintiff, and fraudulently concealed from him by the defendants. 2. That said defendants fraudulently obtained possession of said deed in the following manner, to wit: That the plaintiff, being the owner of an eleven twenty-fourths interest in and to said Skookum claim, and also to one hundred thousand shares of stock in the Chemung Mining Company, a corporation, did on the thirtieth day of April, 1898, enter into two separate options or escrow contracts, under, by and through which he placed said shares of stock in one envelope, and deposited the same in escrow with the Exchange National Bank of Spokane, Washington, with instructions indorsed thereon, directing and authorizing said escrow holder to deliver said envelope and its contents to the defendants Charles Sweeny and F. Lewis Clarke upon their payment to said bank for the credit of plaintiff of the sum of $ 18,000, to be paid on or before August 1, 1898; that in another envelope the plaintiff deposited the deed in question, conveying to the defendants Sweeny and Clark, from the plaintiff, an undivided one-eighth interest in and to said Skookum claim, and also another deed conveying from plaintiff to said defendants an undivided one-third interest in and to said Skookum claim, upon which envelope the plaintiff indorsed instructions to said escrow holder to deliver said envelope to said defendants upon their payment into said bank, to the credit of plaintiff, the sum of $ 10,000, on or before the first day of August, 1898; that on June 7, 1898, said defendants paid $ 2,000 on said stock transaction, and on same day the plaintiff, by writing indorsed on each of said envelopes, respectively, extended the time of making such payments until September 20, 1898. It is alleged by the plaintiff that, some time between their deposit in escrow as aforesaid, the deed conveying the one-eighth interest from plaintiff to said defendants was extracted from the envelope in which it was placed, and put into the envelope containing the shares of stock, and that on September 19, 1898, said defendants paid into said bank the balance of the purchase price on the stock transaction, $ 16,000, and received from said bank said stock and the deed conveying said one-eighth interest in said mining claim, and immediately thereafter fraudulently-placed said deed upon record in the office of the county recorder in and for Shoshone county. Every material allegation in the complaint has been specifically denied by the answer of the defendants, which answer fully meets and denies each and every equity set forth in the complaint. The answer affirmatively sets forth the following facts: That on April 30, 1898, the defendants Clarke and Sweeny entered into a contract with plaintiff whereby the plaintiff was to and did put into one envelope, and place in escrow with said Exchange National Bank, said one hundred thousand shares of stock in the Chemung Mining Company, and the deed conveying from said plaintiff to said defendants an undivided one-eighth interest in and to said Skookum claim, and indorsed upon said envelope directions to said bank to deliver the same to said defendants upon their making the payment above set forth; that at said time said plaintiff placed in escrow, in a separate envelope, a deed conveying from plaintiff to said defendants an undivided one-third interest in and to said Skookum mining claim, upon which envelope directions were indorsed, signed by plaintiff, authorizing said escrow holder to deliver said last-named envelope to said defendants upon their payment into said bank, for the...