Nusbaum v. Locke & Huleatt

Per Curiam. This is an appeal from an interlocutory order appointing a receiver. The statute authorizing such appeals was designed to provide a speedy and summary method of reviewing interlocutory orders in relation to injunctions and receivers. We have therefore given the case precedence, as required by the act, and will briefly state the conclusion we have reached. The order was made without notice to the appellant, whose rights were seriously affected, and as a result valuable property was taken out of Ms hands and placed in the control of the receiver who was authorized and required to convert the same into money for the benefit of the creditors of Reich-man, from whom appellant acquired it. The well settled rule is that notice of the application must be given unless it is clearly necessary to act without notice. Ro such necessity appeared. It is true the bill alleged, in general terms, that the rights of complainants were in imminent danger of being wholly lost unless the order was made without notice. This was but the conclusion of the pleader. The facts upon which the conclusion was based should have been stated so that the court could see that the apprehension was well founded. If there was really danger that the property would be wasted or removed from the jurisdiction, and that a temporary injunction would not answer the purpose, then it might have been proper to place the property in the hands of a receiver upon the ex parte application. The only fact stated in the bill tending to show such necessity was, that Reichman, who was in charge of the goods and selling the same, was insolvent. This might have warranted a temporary injunction to prevent further sales until the court could, upon satisfactory proof, ascertain whether the fundamental allegations in the bill were probably true. It is not requiring too much to put the complainant to specific averment of facts (upon which perjury may be assigned if falsely made) showing clearly the necessity for such interference with the property rights of the defendant. A further objection urged is that the order as entered seems to be a substantial adjudication of the controlling matters alleged in the bill, and we think the objection is well taken. A reading of the order will show that it is not merely an appointment of a receiver for the temporary purpose of preserving the property until the rights of the parties could be ascertained and determined, but it proceeds to adjudicate those rights without proof, save the affidavit attached to the bill. There was no hearing and no default; indeed, the parties named as defendants were not before the court; and yet the order, as it appears in the record, finds the bill in all its material allegations to be true, and requires the receiver to take possession of the goods, convert the same into cash for the best price obtainable, and to collect the notes, accounts and all choses in action due the said Reichman, and to bring the money arising from these sources into court for such disposition as might thereafter be ordered in the premises. This, of course, was erroneous, and no doubt it was inadvertent. The order appointing the receiver will be reversed and the cause remanded.