Ulman v. Clark
| Decision Date | 07 September 1896 |
| Citation | 75 F. 868 |
| Parties | ULMAN et al. v. CLARK et al. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Ferguson & Flournoy, for plaintiffs.
Clark Jackson & Reynolds, for defendants.
I am asked to appoint a receiver in this cause to take charge of the royalty, rents, and profits of the land in litigation pending an action of ejectment in this court to determine the rightful title as between the claimants. The claim of the plaintiffs is that they hold the elder and a better title to the land in controversy than the title under which the defendants claim. It is not denied by the defendants that the title of the plaintiffs is the elder one, but it is denied that the title covers the land in controversy, as claimed by the defendants, which is their main defense to this motion. It is conceded by the defendants that they operate large coal mines upon the land, and are coking coal from which there is derived an annual revenue of upwards of $30,000, and that they have already mined and taken $120,000 worth of coal from the land, and that they are still actively engaged in their mining operations, whereby the value of the property is being greatly lessened, the chief value of it being its coal fields. It appears from the pleadings in the case that there is an association known as the Flat Top Coal Land Association, whereby certain parties are associated together for the purpose of acquiring and holding large tracts of land. The title to the lands of this association are held by three trustees. Under the by-laws of the association, these trustees can do no act except under the direction and by the sanction of the board of managers appointed by the shareholders of the association; and it is also provided that these trustees are not to be personally liable for any act done by them under the sanction of this board of managers. The trustees have leased this property to certain other of the defendants named in the pleadings in this cause, for the purposes of mining coal. These lessees have placed upon the disputed property a large number of coke ovens, whereby the coal is manufactured into coke. It is alleged in the bill that, in the event the plaintiffs recover in this action there is no one directly responsible to satisfy a judgment for damages against the defendant trustees, or the owners of the land; that it would involve one or more suits to recover a judgment for damages. It is also alleged that the shareholders of this association are of such a transitory character-- or, in other words, 'birds os passage'-- that it would be difficult to reach them in order to enforce a claim against them. It is therefore claimed by the plaintiffs that they are entitled to a receiver, to husband and protect the rents, issues, and profits growing out of this tract of land pending this controversy: First, because there is no direct legal responsibility upon the part of any one to respond to any action for damages that they may bring second, that the value of the property consists in its coal fields, which are being rapidly mined, and that before this litigation is disposed of a large portion of the mines may be worked out, and that the property may be greatly lessened in value, whereby imminent danger of the loss of rents and profits arise, and the revenues of the property may, to a great extent, be dissipated. In support of this motion, the plaintiffs have exhibited an apparently good title, derived under a grant from the commonwealth of Virginia, whereby the land granted became vested in the patentee, and, by several mesne conveyances from the patentee down, became vested in the plaintiffs to this action. It is claimed that, as this is the elder grant covering the land in controversy, for this reason, if no other, the plaintiffs to this action should be protected against the danger of mismanagement, loss of rents, and against the danger of an association of this character becoming insolvent. Opposed to this position, the defendant affirm that there is no danger of loss or mismanagement, and that they are in the possession of this property, and should not be disturbed.
It is laid down as a general principle by all the authorities that where a party moving for the appointment of a receiver exhibits an apparently good title to the property in controversy, and that there is an imminent danger of the loss of the profits and rents of the property, a receiver may be granted for the preservation of the rents and profits pendente lite. High, Rec. Sec. 576, and the cases there cited. And such I understand to be the law as laid down in Beach on Receivers. It is not alleged in this bill that the defendants to this action are insolvent at this time, or that there is a mismanagement of the property. On the contrary, it is conceded in the bill that there is no desire to take the property out of the hands of the parties who are operating it. The only purpose and object of this proceeding is to husband the rents and profits of this property pending this litigation, so that they may be turned over to the rightful owner of this property at the termination of it. This proceeding is in the nature of an ancillary proceeding...
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...Land Mortg. Co. 95 Ala. 313, 11 So. 213. Inability to attach is a reason for receivership. Bitting v. Ten Eyck, 85 Ind. 357; Ulman v. Clark, 75 F. 868; Whitney v. Buckman, 26 Cal. 448, 10 Mor. Min. Rep. 428; Flagler v. Blunt, 32 N.J.Eq. 518; People v. New York, 10 Abb. Pr. 111. Party cannot......
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