Southern Granite Co. v. Wadsworth

HARALSON, J. Mr. High in his work on receivers, —section 5, — states a generally accepted rule in respect to receivers to be, that, ‘ ‘ A receiver being appointed for the preservation of the fund or property penciente lite, and for its ultimate disposal according to the rights and priorities of the parties entitled, the remedy is regarded as in the nature of a sequestration, rather than as an attachment of the property, and it ordinarily gives no advantage or priority to the person at whose instance the appointment is made, over other parties in interest. Nor does it change the title to or create any lien upon the property; its purpose in this respect being rather like that of an injunction pendente lite, to preserve the subject-matter until the rights of all the parties may be judicially determined.” The same doctrine is expressed by the Supreme Court of the United States as follows : “ A receiver derives his authority from the act of the court appointing him, and not from the act of the parties at whose suggestion he is appointed; and the utmost effect of his appointment is to put the property from that time into his custody as an officer of the court, for the benefit of the party ultimately proved to be entitled, but not to change the title, or even the right of possession, in the property.”—Union Bank of Chicago v. [573] Kansas City Bank, 136 U. S. 223 ; Talladega M. Co. v. Jenifer Iron Co., 102 Ala. 259. Mr. High states another rule so sanctioned by authority as not to be questioned, that “A receiver being an officer of the court, acting under its direction, and in all things subject to its authority, it is contrary to the established doctrine of courts of equity to permit them to be made a party defendant to litigation, unless by consent of the court appointing him. And it is in all cases necessary that a person desiring to bring suit against a receiver in his official .capacity, should first obtain- leave of the court by which he was appointed, since the courts will not permit the possession of the receiver to be disturbed by suit or otherwise, without its consent or permission. The rule is established for the protection of receivers against unnecessary and expensive litigation, and in most instances a party aggrieved may have ample relief by application on motion to the court appointing the receiver. And when an action is instituted against a receiver in his official capacity, without first obtaining leave of the court, the plaintiff in such action is guilty of a contempt of court and will be punished accordingly.” — High on Receivers, § 254. It is true that Congress by act of March 3, 1887, as revised and corrected August 13, 1888, (see act quoted in High on Receivers, p. 222), provided for the bringing of suits against receivers appointed by any of the courts of the United States, in respect of any act or transaction of his in carrying on the business connected with such property, without previous leave of the court in which such receiver or manager was appointed, which suit shall be subject to the general equity jurisdiction of the court in which such receiver or manager was appointed, so far as the same is necessary to the ends of justice. The effect of this act, as has been held, is to allow such suits in all matters growing out of the management of the property in the charge of receivers, to the extent of allowing the establishment of a debt by the judgment of another court against the receivership, leaving the matter of its payment and the adjustment of all equities between different claimants interested in the property, to the determination of the court which appointed the receiver, and that no court can interfere with the custody of property held by another court through a receiver. High on Receivers, § 3956, and authorities there cited. [574] It is shown in this case, that under the decree of the United States Circuit Court, defendant was appointed receiver for Chapman, Reynolds & Co., and as such, “was ordered to take charge of all the property of Chapman, Reynolds & Co., and [he] did take charge and possession of the stone in this suit under such order, and claims the same [as] in his possession as such receiver; that, no order or leave has been granted by the court appointing defendant as receiver of Chapman, Reynolds & Co. to bring this suit.” It was also shown, that the “defendant, as receiver, applied to the United States Court for an order to sell this stone with other stone in his hands as such receiver, and the order has been granted by the judge of the United States Court for the Northern Division of the Northern District of Alabama.” Under the pleadings in this case as interposed, it is manifest, that this suit was not rightly instituted against the defendant as receiver. This difficulty was sought to be remedied by plaintiff, by striking out, by leave of the court, the words, “as receiver,” following the name of the defendant in the complaint, with the view of making it a suit'against the defendant individually, and not against him as receiver. These pleas are in the case as presented, with the evidence directed to the issues raised by them, and to show that the title to the stone was in the appellant at the institution of this suit, and that Chapman, Reynolds & Co. were not the owners of the property when the receiver was appointed, or at any other time. The evidence, however, fully establishes the fact, that the defendant did not, at the institution of the suit or previously, take possession of, or have anything to do with the property involved, in his individual capacity, or otherwise, except as receiver. The United States Court had certainly assumed control oí this property, and at the commencement of this action it was in its custody by its receiver. It had ordered it to be sold. Whether the title to the property had passed out of the plaintiff and became invested in the firm of Chapman, Reynolds & Co. at'the time the plaintiff began this action, or not, does not alter the fact that the court did assume possession and control of the propex’ty. Whether it did so xhghtfully or not, we need not inquire. By that act, the title, to whomsoever it may beloxxg, has not been disturbed, and the question of ownership is one [575] which the United States court is fully competent to decide. The plaintiff was not prevented to go into that tribunal, to claim its rights ; and all the relief sought in the present- case, if the plaintiff is entitled thereto, may as well be obtained by its intervention on petition in that court. That mode of procedure is commended by consideration of a wise judicial policy, in not allowing the jurisdiction of one court, once attached, to be interfered with by that of another.—Gay, Hardie & Co. v. Brierfield C. & I. Co., 94 Ala. 308. We do not enter upon the question of title, — in whom it may rest, — which counsel have so elaborately urged ; for, under our view of the case, that question is one over which we have no jurisdiction. It belongs to the Federal court. — 12 Am. & Eng] Encyc. of Law, 367. The cause was tried by the court without a jury, and its judgment is affirmed.' Affirmed.