The Sullivan Electric Light And Power Co. v. Blue

• Decision Date: 31 October 1895
• Docket Number: 17,349
• Citation: 41 N.E. 805,142 Ind. 407
• Parties: The Sullivan Electric Light and Power Co. et al. v. Blue
• Court: Indiana Supreme Court

41 N.E. 805

142 Ind. 407

The Sullivan Electric Light and Power Co. et al. v. Blue

No. 17,349

Supreme Court of Indiana

October 31, 1895

From the Sullivan Circuit Court.

The interlocutory order appointing a receiver is reversed, with directions to set aside said appointment.

J. S Bays, for appellants.

W. S Maple and J. Hays, for appellee.

OPINION

McCabe, J.

This is an appeal from an interlocutory order appointing a receiver for the appellant made in vacation at chambers by the judge of the circuit court. Error is assigned upon the action of the court: (1) In appointing a receiver. (2) In appointing a receiver without notice. (3) In overruling appellant's motion to vacate the order appointing the receiver, that such appointment was contrary to law and the evidence, and is not sustained by sufficient evidence. It is contended by the appellee that these assignments do not present any question as to the propriety of the appointment of the receiver, because there is no assignment that "the complaint does not state facts sufficient to constitute a cause of action.

In S. S. O. Iron Hall v. Baker (20 L.R.A 210), 134 Ind. 293, at pages 304-5, this court said: "We think there can be but little doubt as to what the true rule in this regard is. If the appointment of a receiver is but an auxiliary to a pending action, to keep intact a fund sought to be reached and applied in satisfaction of a final judgment to be rendered, or to aid in carrying out the final object of the main action, the sufficiency of the complaint will not be tested on appeal from an interlocutory order appointing a receiver, in so far as it relates to its sufficiency to entitle the party to the relief asked in the main action. In that respect, it is under the control of the trial court, and may be amended at any time before final judgment. But the court will look to the complaint, and test its sufficiency in so far as it relates to the appointment of a receiver, whether the appointment be as an auxiliary to an action, or whether the suit is being prosecuted for the sole purpose of appointing a receiver. There must be some application filed on behalf of the party seeking the appointment of a receiver and invoking the powers of the court to be exercised in that behalf. He must map out some form of pleading stating a cause for the appointment of a receiver, that the opposite party may know on what grounds the right to a receiver is claimed, and that they may know what they have to meet and defend against to prevent the appointment and the pleadings in this behalf will bound and limit the inquiry." Steele v. Aspy, Admr., 128 Ind. 367, 27 N.E. 739.

It results from the principles thus announced, that an assignment that the complaint does not state facts sufficient to constitute a cause of action in this sort of an appeal would not present any question this court could entertain, because the action is still pending in the trial court where the complaint may be amended. The appeal is not allowed in such cases for the purpose of testing any questions on the merits any farther than they or some of them may become incidentally involved in determining the correctness of the court's action in appointing or refusing to appoint a receiver. Steele v. Aspy, supra; S. S. O. Iron Hall v. Baker, supra.

On appeal from an order appointing a receiver, no questions are considered except those involved in the appointment. Main v. Ginthert, 92 Ind. 180.

An assignment of error upon the order of the court appointing a receiver was held good in Main v. Ginthert, supra.

The appointment in this case was made without notice, upon the verified complaint and oral statements of the plaintiff under oath, as the record recites.

It is contended by the appellant, that the facts stated in the verified complaint as the cause for the failure to give notice of the application are not sufficient.

The statute provides that "Receivers shall not be appointed, either in term or vacation, in any case until the adverse party shall have appeared, or shall have had reasonable notice of the application for such appointment, except upon sufficient cause shown by affidavit." R. S. 1894, section 1244; R. S. 1881, section 1230. Other sections of the statute specify causes for appointment of receivers.

Cause for the appointment is one thing, and cause for appointment without notice is another and different thing. It is contended by the appellant that no cause is shown in the complaint for the appointment independent of the question of notice, and it is also contended that no cause is shown in the verified complaint for the appointment without notice.

In view of the fact that the complaint may be amended in any respect within the general scope and purpose of the action, and so far as the appointment is concerned it may be supplemented and enlarged by the presentation of affidavits or the introduction of oral testimony in support of the application and all will be taken into consideration in determining the right to and necessity for such appointment, it necessarily results that a very liberal construction must be given to the complaint. It cannot be construed by any harsh and technical rule in these respects, but it must state at least a cause for the appointment of a receiver; and, in case of any appointment without notice, it must appear either in the verified complaint or by affidavit that there was cause for such appointment without giving notice. Otherwise such an appointment is expressly forbidden by the statute quoted.

The material facts stated in the complaint, as to the right to have a receiver appointed without notice, are, that the Sullivan Electric Light and Power Company is a corporation organized under the laws of Indiana, with its principal office and place of business in the town of Sullivan, in Sullivan county, Indiana; that it was incorporated under the statutes of this State, providing for the formation of mining and manufacturing corporations, and its articles of incorporation provide that its business and prudential affairs shall be conducted by a board consisting of ten directors to be selected by the stockholders; that the capital stock of said corporation is $ 15,000.00, divided into 600 shares of $ 25.00 each, and over 300 shares and less than 400 shares thereof has been issued; that said company was incorporated in 1888; that the plaintiff is and has been the owner of 40 shares of said stock ever since June 30, 1890; that the defendants James T. Reid, Robert H Crowder and Claude H. Crowder are also stockholders of said corporation, and this suit is brought for the use and benefit of the plaintiff and all the stockholders of said corporation not parties hereto; that the by-laws of the corporation provide that the directors shall elect one of their number president, and also elect a secretary and treasurer, and also provide further that the directors shall select an executive committee, consisting of three persons, and also provide for quarterly meetings of the directors, and that the executive committee in the interim shall have authority to act in cases of emergency, and that their acts shall be reported to the directors at the next ensuing meeting, and be subject to the approval and confirmation of the board of directors; that said by-laws further provide that the executive committee shall select a superintendent to operate and superintend the usual operation of the affairs of said corporation, the object expressed in the articles of incorporation of said company being: "The manufacture, supply and sale of electric light and power;" that about the time of the incorporation of said company a contract was procured for lighting the streets, alleys and public places of the town of Sullivan, stipulating that said company was...