Veith v. Ress

• Decision Date: 21 March 1900
• Docket Number: 9,158
• Citation: 82 N.W. 116,60 Neb. 52
• Parties: WILLIAM VEITH, APPELLEE, v. NICHOLAS RESS ET AL. APPELLEES, IMPLEADED WITH GRAINGER BROTHERS ET AL. APPELLANTS
• Court: Nebraska Supreme Court

82 N.W. 116

60 Neb. 52

WILLIAM VEITH, APPELLEE, v. NICHOLAS RESS ET AL. APPELLEES, IMPLEADED WITH GRAINGER BROTHERS ET AL. APPELLANTS

No. 9,158

Supreme Court of Nebraska

March 21, 1900

APPEAL from the district court of Lancaster county. Heard below before HALL, J. Reversed.

REVERSED AND REMANDED.

F. H Woods, for Grainger Bros. appellants.

Willard E. Stewart, for Helena Lau, appellant.

Stevens & Cochran, for John Kranz, appellant.

Broady & Pettis, for William Veith and Nicholas Ress, appellees.

F. A Boehmer, also appeared for appellants.

OPINION

SULLIVAN, J.

William Veith and Nicholas Ress were retail grocers doing business in the city of Lincoln under the firm name of Veith & Ress. The business had not prospered, and on December 4, 1895, the partnership being insolvent, an action was instituted by Veith against Ress to obtain a dissolution, an accounting and a distribution of assets among creditors. The defendant waived notice and appeared voluntarily. By consent of the parties, Henry Schaal was appointed receiver and entered upon the execution of his trust. He received and adjusted the claims of creditors, and, in due time, made a report of his doings in that behalf to the court. To this report the appellants, who are creditors, filed objections, and in various ways invoked the action of the court, and obtained rulings and orders on the theory that the court was properly invested with jurisdiction of the cause, and authorized to administer the estate of the insolvent firm. During the pendency of the case instituted by Veith against Ress, Hans P. Lau, notwithstanding the fact that his claim had been allowed by the receiver and approved by the court, sued the partners in the county court and recovered judgment against them. Proceeding then by garnishment, he obtained, in the county court, an order on the clerk of the district court directing him to pay this judgment in full out of funds which had come into his hands as a result of a sale by the receiver of the partnership property. The garnisher afterwards filed a pleading in this case denying the jurisdiction of the court and claiming a first lien on the partnership assets.

It is contended that the court had no power to appoint a receiver, because the statutory notice had not been given. Originally the only parties to the suit were Veith and Ress. The property embraced in the receivership belonged to them, and they were entitled, of course, to make any lawful disposition of it. The plaintiff asked to have it put into the hands of a receiver, and the defendant consented. This he had a right to do. The provision of the statute with respect to notice was for his benefit, and it was therefore competent for him to waive notice. It was so decided in Farmers' & Merchants' Bank v. German Nat. Bank, 59 Neb. 229, 80 N.W. 820.

It is next contended that the petition does not state facts sufficient to warrant the court in taking cognizance of the cause. We think it does. It shows insolvency, dissension between the partners, probability of waste and necessity for an accounting and dissolution. This surely was enough. 15 Ency. Pl. & Pr. 1054; 2 Bates, Partnership, secs. 583, 593, 993; 3 Pomeroy, Equity Jurisprudence, sec. 1333.

The district court having obtained jurisdiction of the cause, and having, by its receiver, laid hold of the partnership property, the garnishment proceeding was ineffective; it accomplished nothing. The rule is that when partnership property is in the hands of a receiver, it is in the custody of the law and is to be administered by the court for the benefit of all the firm creditors. 2 Bates, Partnership, sec. 1006; Jackson v. Lahee, 114 Ill. 287, 2 N.E. 172; Holmes v. McDowell, 76 N.Y. 596. The possession of the receiver is the possession of the court by which he has been appointed, and he can not be sued, or summoned, as garnishee, in respect to property in his possession by virtue of his trust. 14 Am. & Eng. Ency. Law [2d ed.], 821. "The court," remarked Romilly, M. R. in De Winton v. Brecon, 28 Beav. 200, 203, "never allows any person to interfere either with money or property in the hands of its receiver, without its leave, whether it is done by the consent or submission of the receiver or by compulsory process against him."

But it is further contended in behalf of Lau that the action by Veith against Ress was collusively brought; that it was designed to hinder and delay creditors, and that, therefore, the court should have renounced jurisdiction and established his judgment as a prior lien on the partnership assets. It is also argued that the appointment of the receiver was an equitable assignment and void for want of conformity with the statute regulating voluntary assignments. All of these matters were submitted to the trial court, and we are not prepared to say that its decision sustaining the receivership is contrary to the evidence. It may be that the suit was not instituted for the purpose disclosed by the petition, but rather for the purpose of evading the assignment law and to obstruct creditors in the...