Atwood v. Knowlson

Mr. Justice Sears delivered the opinion of the court. We are of opinion that the court erred in entering that part of the decree which required plaintiff in error to furnish a bond for costs upon a prospective appeal from the decree. There is no provision of the statute for requiring any such bond. Bor are we aware of any rule of practice which would authorize it. Bo such appeal had been prosecuted and there were no parties to an appeal at the time of the entering of the decree. It was a provision for an appeal which might or might not be prosecuted. We think the order was erroneous. The various sums paid out by the receiver, defendant in error, were paid without any order or permission of the court. Under the rule once obtaining he could not be allowed anything for sums thus expended. But under the later and more liberal rule, it is permitted the receiver to show to the court that the sums thus expended without direction of the court were in the interest of the receivership estate and beneficial to it, and that the cost was not unreasonable, whereupon the court may, in its discretion, allow such expenditures. Kerr on Receivers (2d Ed.), p. 217; Beach on Receivers, Sec. 749; Hooper v. Winston, 24 Ill. 353; Brown v. Hazlehurst, 54 Md. 26; Tempest v. Ord, 2 Merivale, 55; Blunt v. Clitherow, 6 Ves. Jr. 799; Atty. Gen. v. Vigor, 11 Ves. Jr. 563. Of the items claimed by the receiver to havé been properly expended by him in the interest of the estate, and which were disallowed by the court, some, we think, should have been allowed. The amount paid for taxes was a proper expenditure, for the taxes had became a lien upon the property before the decree and sale in the foreclosure proceeding. The amount paid out for insurance, if it had been shown to have been a reasonable cost of insurance, should have been allowed. High on Receivers, Sec. 798; Brown v. Hazelhurst, supra. So, too, the items for repairs were matters fop which the receiver might properly expend the funds of th^> estate, and’ have the expenditures allowed upon a showing that the repairs were necessary and the cost reasonable; The difficulty here is that while the insurance, and some rppairs^seem from the evidence to have been necessary, yet ¡it does not appear that the sums expended were a reasonable cost of the same. We are unable to see why a fair amount should not be allowed as commissions for the services of the receiver. So far as the cross-error assigned in relation to [the rights and interests of the purchaser at the foreclosure sale, and the owner of the mortgage debt foreclosed, in the receivership fund, is concerned, it is sufficient to say thát however clear it may be that he was entitled to have the deficiency decree paid out of the fund if enough remained gfter necessary expenditures were allowed, yet he is not a pjirty to this proceeding and the receiver is not in a position to assert his rights. The objection urged, that the record fails to show by certificate of evidence that all the evidence is presented, is not tenable. The hearing was before a master in chancery, and his report contained the evidence heard by him. Ho certificate of evidence was necessary. For the error in that part of the decree requir ng a bond of plaintiff in error, and for the error in disallowing the item for taxes paid by the receiver and disallowing all ' claim for receiver’s commissions, the decree is reversed and the cause is remanded. Upon further hearing it may be shown what was the reasonable cost of insurance and necessary repairs and a fair allowance may be made for commissions to the receiver. Reversed and remanded.