Thornton v. Highland Ave. & B.R. Co.

• Decision Date: 26 January 1892
• Citation: 10 So. 442,94 Ala. 353
• Court: Alabama Supreme Court
• Parties: THORNTON v. HIGHLAND AVE. & B. R. CO.

10 So. 442

94 Ala. 353

THORNTON v. HIGHLAND AVE. & B. R. CO.

Supreme Court of Alabama

January 26, 1892

Appeal from chancery court, Jefferson county; THOMAS COBBS Chancellor.

The Highland Avenue & Belt Railroad Company tiled a bill in chancery to enforce the collection of a debt due for rent of an hotel; and a receiver was appointed, who managed the hotel until, with consent of all the parties to the action, a decree of the court restored the possession of the hotel to complainant. Thereafter, but during the pendency of the action, and before the discharge of the receiver, T. F Thornton filed a petition in the case, alleging a debt contracted by the receiver in the management of the hotel and praying that complainant might be required to pay the amount due petitioner, or that the hotel be sold to pay the debt on failure of complainant to do so. The demurrer of complainant to the petition was sustained, and the petition was dismissed by decree of the court. Petitioner appeals. Reversed

Cabaniss & Weakley, for appellant.

Alex T. London, for appellee.

COLEMAN J.

On the 26th day of July, 1890, the Highland Avenue & Belt Railroad Company filed its bill in the chancery court against M. Clifford to enforce the collection of a debt due for the rent of the Lake View Hotel. With other relief, the bill prayed for "a temporary injunction to restrain the said Clifford from removing any part of said personal property," and "for a receiver to take charge of the hotel property therein," etc. The court granted the temporary injunction and appointed the receiver, as prayed for in the bill, and directed M. Clifford to surrender to the said receiver the Lake View Hotel, with the personal property. The decree proceeds as follows: "And it is further ordered, adjudged, and decreed that the said receiver, until the further order of this court, is authorized to conduct and run the hotel; and for that purpose the receiver is authorized to make such purchases as may be necessary." The receiver took possession of the property under his appointment, and undertook "to conduct and run the hotel" as authorized in the decree. Having no money or cash on hand, and no provision made by the court for raising money, the receiver purchased the necessary supplies for the hotel on a credit. The debt of petitioner, Thornton, was contracted by the receiver for groceries supplied to the hotel. The petition shows that after the debt due him was contracted, by an order of the court made December, 1890, "by consent of the said parties to the cause, the possession of said hotel and other property was restored to the complainant," and "that, since the restoration of the property to the complainant, said Merrill, [who was the receiver] has remained in possession and operated the hotel as the agent of the complainant." The Highland Avenue & Belt Railroad Company interposed a demurrer to the petition. The court sustained the demurrer, and, petitioner declining to amend, his petition was dismissed out of court. From this decree dismissing the petition the present appeal is prosecuted.

The cause was submitted to this court by appellant upon the decree dismissing the petition, and, if an appeal does not lie, in the alternative, for the writ of mandamus, as a counter-motion to the motion of appellee to dismiss the appeal. This practice has been recognized for a long time in this court. Tabor v. Lorance, 53 Ala. 543. It is not denied that the decree of the court dismissing the petition ordinarily is such a final decree, as to the petition, as will support an appeal; but it is contended that petitioner Thornton, is not a party to the litigation between the original parties, has no right to make himself a party, and consequently cannot appeal. The principles of law declared in the cases of Ex parte Printup, 87 Ala. 148, 6 South. Rep. 418, and Renfro v. Goetter, 78 Ala. 313, cited in brief and argument and opinion of the chancellor, are not applicable to the question at bar. The petitioner in the present case does not seek to be let in to prosecute or defend as plaintiff or defendant in the original case. He is not interested whether plaintiff or defendant succeeds, in the matter litigated, and the determination of their respective rights in no way can affect his standing in court or his right to relief. Receivers are appointed to hold and preserve the property until it is finally determined by the court who is entitled to it, or its proceeds if sold. Until then it is in the custody of the law, and the receiver holds it as an officer of the law. Expenses more or less necessarily result from its conservation. To prevent irreparable damage and loss, sometimes it is necessary to make provision, in cases of a going business, that the business be continued. Such seems to have been the view taken by the court in the present case. Whether correct or not in this instance, we will not consider. The parties interested acquiesced in the order, and do not complain. Contracts made with a receiver in his official character, within the scope of his duties and the limits of his authority, are not binding on him personally. If such was the case, no one would accept the responsible office of a receiver. The party contracting with the receiver looks to the rem, the fund or property in gremio legis, backed by a pledge of the court that it shall be liable for all costs and expenses legitimately incurred in pursuance of its orders and decrees. Kerr v. Little, 39 N. J. Eq. 83. Any one who attempts to interfere or sue a receiver without leave, in a matter pertaining to his official duties, will be regarded as in contempt of court, and may be punished accordingly. If there is an income from the property, the current expenses should be first paid out of this; but, this failing, there is no doubt but that the corpus may be applied to such necessary expenses. Beckwith v. Carroll, 56 Ala. 12; Meyer v. Johnston, 53 Ala. 237; Union Trust Co. v. Illinois M. Ry. Co., 117 U.S. 437, 6 S.Ct. 809. Any one contracting with a receiver is charged with notice of the duties required of him, and the extent of his authority. It becomes necessary, therefore, to ascertain whether petitioner's debt was contracted within the scope of the duties and authority of the receiver. The court made no order by which the receiver was entitled to raise money to "conduct and run the hotel." By the decree appointing him, he was authorized to run the hotel, "and for this...