Westgate v. Larsen

Boyles, J. This case arises ont of the receivership pending under the decree of divorce in Westgate v. Westgate, 291 Mich. 18. The appointment of the receiver was upheld by this court in Westgate v. Westgate, 294 Mich. 88; Westgate v. Drake, 294 Mich. 116; and Westgate v. Drake, 294 Mich. 120. The situation in the instant case is somewhat similar to that considered by us in Westgate v. Adams, 293 Mich. 559. For a complete understanding of the facts and circumstances, see the above opinions. In the case at bar, an order to show cause in the pending receivership was served upon defendant Larsen February 21, 1939, directing him to show cause why the lease under which he held a gasoline station should not be cancelled, or, in lieu thereof, he be required to follow the instructions of the receiver and recognize the receiver’s control in the operation of such station to the exclusion of West-gate and associates. This was a part of the receivership proceedings wherein the receiver had been ordered to collect, take possession of, conserve and control certain filling stations and other property of Westgate and associates. Larsen did not appear or answer in court in response to this order. On March 16, 1939, the circuit judge before whom receivership was pending entered a temporary order on the show cause hearing, directing the receiver to continue the operation of the Peter Larsen station at Greenville, appointed Larsen the custodian of the assets, and directed him to account for the same to the receiver. The order further provided that if Larsen failed to perform certain conditions, the receiver was authorized to take possession of the station. *436 Tbe obvious purport of this order was to put tbe receiver in the place of Westgate and associates, as applied to tbe Greenville station. It was substantially tbe same as tbe order referred to in Westgate v. Adams, supra, tbe essential difference, however, being that in the Adams Case tbe defendant appeared and consented, while, in tbe case at bar, Larsen elected not to appear. We consider that Larsen had tbe opportunity for bis day in court although be chose to ignore it. He took no further notice of tbe effect of tbe order until after a writ of assistance issued by tbe court August 21, 1939, finding that Larsen bad not complied with tbe order and directing tbe sheriff to remove Larsen from tbe premises and to put tbe receiver in possession thereof. On September 29, 1939, Larsen filed in this court an application for leave to appeal from tbe order of March 16th and perfected bis appeal in November. Defendant claims that tbe court bad no jurisdiction to make tbe order of March 16th, that be was not properly made a party thereto. He bad notice by service of tbe order to show cause, and we consider that bis failure to appear and answer leaves him in the same situation as in Westgate v. Adams, supra. This is a receivership matter and tbe court has jurisdiction. Defendant further claims that be has not bad an opportunity to be heard upon tbe merits of bis claims. In tbe order of March 16th, the court said: “Nothing in this order shall be construed as a final determination of any issues pertaining .to title or property claims other than temporary possessory rights, and tbe entry and operation of this order is deemed to be imperatively necessary only because of tbe emergency disclosed by tbe testimony taken *437 herein and the fact as established by snch testimony that only by extending said temporary receivership to all of the alleged properties can the rig;hts and interests of all parties be conserved, pending disposition on the merits. All snch issues pertaining to title or property claims or rights are hereby reserved until hearing on the merits.” The court further protected the right of Larsen to a hearing upon the merits in the same order by including therein the following provision: “The above-named operator (Larsen) shall be made a party to the receivership proceeding by the plaintiff, through proper amendment .to her petition or supplemental bill and through service of proper process herein, and shall be permitted to answer said petition and bill and to be heard fully on the merits, and such cause shall proceed to hearing upon the merits promptly after becoming at issue.” In pursuance of the above, on March 18th the plaintiff filed a supplemental petition as to a number of defendants, including Larsen, stating: ‘ ‘ 11. That as to the balance of said defendant station operators, namely, * * * Peter C. Larsen, * * * while they have been and are operating stations as a part of the Direct Refinery Stations business, your petitioner does not know what, if any, claims they are making or may make with reference to the leasehold interests in said stations or their possessory rights in connection therewith, but that your petitioner feels if their rights are not determined herein, that they may at a later time take a position adverse to your petitioner and your receiver, such that it might be necessary at a later date to repeat all of these proceedings, that in order to determine finally the rights of all of the said station operators in connection with this receivership it is necessary now *438 that their rights in connection with this receivership be determined by order of this court.” On May 27th Larsen filed an answer to the above supplemental petition, raising certain issues, stating he was willing to make an accounting, et cetera, and that he was ready and willing to abide by the orders of the court with respect to the operation of the station. He asked that his status be definitely determined by the court. It is conceded that no hearing has- been held upon this supplemental petition and answer. The defendant is entitled to have his day in court on the issues raised therein. We must assume that his rights will be fully considered and protected by the court on such hearing. Defendant’s petition for mandamus to set aside the order of March 16, 1939, and the writ of assistance issued thereunder on August 21,1939, is denied, without prejudice to defendant’s right to a hearing under the supplemental petition and answer. Plaintiff may have costs of this court. Sharpe, C. J., and Btishnell, Chandler, North, McAllister, Wiest, and Butzel, JJ., concurred.