Hershy Chocolate Co. v. Sharpe

SOMERVILLE, J. — The petitioner herein recovered a judgment by nil dicit against one Yates, as receiver of the Wiley [22] Candy Company, and the surety on his receiver’s bond; and within 30 days thereafter the defendants filed and presented to the trial court their motion to set aside and vacate the judgment. This motion was granted, and the judgment accordingly set aside. One ground of the motion — the one upon which the court seems to have based its action — was that the complaint did not state a •cause of action. On the theory that the action of the trial court was unauthorized and void, the plaintiff now seeks by mandamus to compel the vacation of the order setting aside the judgment, and the reinstatement of the judgment. (1) Section 5730 of the Code authorizes a suit against any receiver or manager of property, appointed by any court, “in respect to any act or transaction of his in carrying on the business connected with such property in this state, without the previous leave of the court in which such receiver or manager was appointed. A judgment thus obtained becomes an ascertained charge upon the property in gremio legis, subject to the orders and decrees of the court to which the receivership is attached. — 34 Cyc. 447 (B). But a suit against a receiver and the sureties on his bond is a wholly different matter, and the right to maintain such a suit is not within the purview of the statute referred to. (2) “Before any resort can be had to. the sureties on a receiver’s bond, all the remedies available against the receiver must be exhausted. Therefore as a rule the liability of the sureties on a receiver’s bond cannot be enforced until a default has been ascertained, on the final settlement of the receiver’s accounts, and there has been a decree establishing the receiver’s inability to pay.” — 34 Cyc. 508, 2, and cases cited. The case is analogous to that of an administrator, upon whose bond no action lies until there has been a final decree in the probate court. —State v. Germania Bank, 103 Minn. 129, 114 N. W. 651. “The regular course of procedure * * * is to proceed against the receiver in the first instance, and, if he shall fail in the proper discharge of his duty within the scope of his bond, then to obtain leave of the court to sue upon his bond.” — State v. Gibson, 21 Ark. 140; Atkinson v. Smith, 89 N. C. 72; Black v. Gentery, 119 N. C. 502, 26 S. E. 43. Tested by these well-settled rules, the complaint in question did not exhibit any cause of action on the bond; for it does not [23] allege that there has been any settlement of the receiver’s accounts, nor any order or decree ascertaining his liability in the premises, nor does it show any authority from the receiver’s court to sue upon the bond. We hold therefore that the action complained of was proper, and that the petitioner is not entitled to the relief here sought. Petition dismissed. Anderson, C. J., and Mayfield and Thomas, JJ., concur.