McAnrow v. Martin

Mr. Justice Magruder delivered the opinion of the court: By the act of June 14, 1897, providing for appeals from interlocutory orders, .granting injunctions or appointing receivers, it is enacted that, whenever an interlocutory order or decree is entered, in any suit pending in any court of this State, appointing a receiver, an appeal may be taken from such interlocutory order or decree to the Appellate Court, etc.; and, upon such appeal, the Appellate Court may confirm, modify or reverse such interlocutory order or decree, and shall direct such proceedings to be had in the court below as the justice of the case may require. The act also provides, that the order, entered upon any such appeal, shall not be reviewable, either by appeal or writ of error. (3 Starr &,Curt. Ann. Stat.— 2d ed. — p. 3171). Under and by virtue of this statute, an appeal was taken from the order appointing appellant receiver, and the Appellate Court decided that his appointment was improper, and should not have been made. (Martin v. Sexton, 72 Ill. App. 395). In view of this decision, and of the action taken under it by the trial court, appellant was not entitled to be paid for his services, as receiver, out of the funds in his hands belonging to 'the estate. In Highley v. Deane, 168 Ill. 266, we held that “where the receivership is procured under the assertion of an unjust and wrongful claim, as finally found by the court, and the receiver is authorized to take possession of the property of another on such wrongful assertion, the court can protect the injured party by returning the property, of which he was divested, without its being diminished* to pay receiver’s charges.” If the order appointing a receiver is revoked, and he is directed to return the property to the persons entitled thereto, his compensation, as a general thing, will not be paid out of the funds placed in his hands. When the appointment "of the receiver is upon an application adverse to the defendant in the cause, and is without authority of law, the receiver must look for his fees and compensation to the complainant in the suit, upon whose application he was appointed. So, when a receiver obtains possession of money or property under an order, which is afterwards reversed on appeal, and he is required to restore the money to the person entitled thereto, he cannot claim compensation out of the funds in his hands, but must look therefor to the party who secured his appointment. (Weston v. Watts, 45 Hun, 219; French v. Gifford, 31 Iowa, 428; Verplank v. Mercantile Ins. Co. 2 Paige, 438; Radford v. Folsom, 55 Iowa, 276). The trial court was, therefore, correct in holding and decreeing, that appellant was not entitled to be paid out of the fund in his hands, as receiver, for his own services, or for the services of the solicitor employed by him. But it does not necessarily follow, that, because appellant was not entitled to be paid out of the fund belonging to the estate, he was not entitled to be paid at all. Sexton, the complainant in the suit, procured the order appointing appellant receiver, and, this order having been reversed by the Appellate Court, appellant was entitled to have his costs paid by Sexton, the complainant in the suit. The decree or order, however, which was entered by the trial court, denied to him the payment of compensation from any source. We think that this ruling was erroneous. The trial court had before it testimony, from which it could easily determine what was a just compensation to be paid to the receiver for his services, and what was a reasonable fee to be allowed his solicitor for the latter’s services. Hence, the court, upon the final disposition of the cause, should have ordered the complainant in the suit to pay the receiver’s charges and disbursements, as a part of the costs in the case. The order or decree here was against appellant individually and not as receiver. Judgment should not be entered against a receiver individually. (McNulta v. Ensch, 134 Ill. 46). Perhaps this entitled the appellant to a right of appeal from the order, so entered against him. It has been held that, if the court appointing the receiver denies him all compensation for his services, he is entitled to appeal from such order. (High on Receivers, — 3d ed. —sec. 796; Herndon v. Hurber, 19 Fla. 397; Hinckley v. Gilman, 4 Otto, 467). If, however, the order of the court had been properly entered, as it should have been, so as to require the reasonable charges of the receiver to be paid by the complainant in the suit, who secured his appointment, it would have been a better practice to dispose of the question of costs upon the final decision of the case upon its merits. Costs depend upon the merits of the case, as made apparent at the final hearing. (Turley v. County of Logan, 17 Ill. 151). Upon the final determination of the whole case, the amount of the receiver’s compensation is generally held to be a part of the costs in the cause, and falls within the meaning of the term “costs,” which are awarded to the prevailing party. (City of St. Louis v. St. Louis Gas Light Co. 11 Mo. App. 241; City of St. Louis v. St. Louis Gas Light Co. 87 Mo. 223). In case of the illegality of the appointment of the receiver, and where his compensation is to be paid by the complainant who obtains such .appointment, the amount of the receiver’s compensation should be taxed against the complainant, the unsuccessful party in the cause. (High on Receivers, — 3d ed. — sec. 796; Highley v. Deane, supra; Radford v. Folsom, supra). It is claimed by the appellant, that the trial court should have first determined, whether the appellant was entitled to compensation or fees, or not, before the reference was made to the master, and that the master should not have been required to report, whether or not .appellant was entitled to compensation. It is immaterial, whether the master did or did not report upon the question of law, whether the receiver was.entitled to compensation out of the funds of the estate in view of the fact that his appointment was improperly made, inasmuch as the court decided that question, and decided it correctly in the order or decree which it entered; The receiver filed his reports, and submitted an account of his receipts and disbursements, and of his claims upon the fund. It was proper to refer his accounts, and the objections filed thereto, to the master. (Weston v. Watts, 45 Hun, 219; French v. Gifford, supra; Radford v. Folsom, supra). So far as the master’s charge is concerned no sufficient ground is pointed out for holding that the costs taxed for the master’s fees were improper. They were allowed by the court as being reasonable, and so much thereof, as included what was due to the stenographer for taking the testimony in shorthand, was agreed to by both parties. For the error above indicated, the judgment of the Appellate Court and the decree or order of the superior court of Cook county are reversed, and the cause is remanded to the latter court for further proceedings in accordance with the views herein expressed, the costs of this appeal to be -paid by complainant, P. J. Sexton. Reversed and remanded.