Vieth v. Ress
| Decision Date | 21 March 1900 |
| Citation | 82 N.W. 116,60 Neb. 52 |
| Parties | VIETH v. RESS ET AL. |
| Court | Nebraska Supreme Court |
1. A court has power to appoint a receiver where the parties to the suit waive the statutory notice and consent to the appointment.
2. A petition which shows that a partnership is insolvent, and that there is dissension between the partners, probability of waste, and necessity for an accounting and dissolution, states facts sufficient to warrant the court in taking cognizance of the case.
3. In such case the court may appoint a receiver to take charge of the partnership assets.
4. 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.
5. In such case the receiver cannot be sued or summoned as garnishee in respect to the property in his possession by virtue of his trust.
6. And a creditor who enters his appearance in the receivership case, and invokes the powers of the court in his behalf with respect to the execution by the receiver of his trust, cannot afterwards be heard to object to the jurisdiction of the court.
7. An attorney representing parties interested in the property being administered by a receiver is not a proper person to be appointed or to act as the legal adviser of the receiver where the interests involved are, or are likely to be, conflicting.
8. Evidence examined, and found sufficient to sustain the findings of the court.
Appeal from district court, Lancaster county; Hall, Judge.
Action by William Vieth against Nicholas Ress and others for dissolution of a partnership and appointment of a receiver. From a decree fixing liens on firm property in the hands of the receiver, interveners Grainger Bros. and others appeal. Reversed.F. H. Woods, Willard E. Stewart, and Stevens & Cochran, for appellants.
E. F. Pettis, for appellee.
William Vieth and Nicholas Ress were retail grocers doing business in the city of Lincoln under the firm name of Vieth & Ress. The business had not prospered, and on December 4, 1895, the partnership being insolvent, an action was instituted by Vieth 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 Vieth 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 Vieth 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 of Holstein v. German Nat. Bank of Lincoln, 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 Enc. Pl. & Prac. 1054; 2 Bates, Partn. §§ 583, 593, 993; 3 Pom. Eq. Jur. § 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, Partn. § 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 cannot be sued or summoned as garnishee in respect to property in his possession by virtue of his trust. 14 Am. & Eng. Enc. Law (2d Ed.) 821. “The court,” remarked Romilly, M. R., in De Winton v. Mayor of Brecon, 28 Beav. 200, “never allows any person to interfere 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...
To continue reading
Request your trial