Neeves v. Boos

PiNNEY, J. 1. The plaintiff has secured the appointment of a receiver, who, as such, is an officer of the court, exercising his functions for the common benefit of all the parties, and his custody and control is the custody and control of the court for their benefit and subject to its orders and directions. The order appealed from is plainly a discretionary one, and will not be reversed unless the court in making it has abused its discretion. ¥e think, in view of the circumstances and the frame and purpose of the action, that the court was fully justified in making the order. It is evident that the action and complaint in it are not framed so that a judgment can be given foreclosing the mortgage, and the action is not, therefore, calculated to do entire justice to all the parties; for, after the expense and delay of this action, whatever its result may be, the owner will have been prevented from foreclosing his mortgage in the mean time by reason of the receivership, and in the end [318] will be subjected to the delay and expense of another action for that purpose. The plaintiff, so far from paying into court the money admitted to be due on the mortgage for interest, has also failed to respond to the receiver’s demand of payment of the $3,600, the principal sum of one of the notes, which became due January 1, 1893. The order appointing the receiver, obtained by the plaintiff, provides “that the receiver collect the sums due or that may fall due upon the said notes and mortgage from time to time, and account tfierefor;” and the order directing the receiver to foreclose the mortgage unless the plaintiff should pay the amount due on it within twenty days is certainly no hardship to the plaintiff, for he can assert in such action, by way of defense or counterclaim, all his rights in the premises, and the rights of the different claimants may also be adjudicated. It is said that Gregory does not want the mortgage foreclosed. In this respect the plaintiff entirely agrees with him, but the matter has been placed by the receivership under the control of the court for the benefit of all the parties in interest, and neither the plaintiff nor the defendant Gregory has the right to dictate in the premises. We do not think that in point of discretion the order appealed from is fairly subject to criticism. 2. It is said that the order appointing the receiver was made without notice to the defendant Gregory. The order would not on that account be void, but merely erroneous and subject to be set aside on application to the court; and if the court improperly denied the application an appeal would lie. Gibson v. Martin, 8 Paige, 481. The defendant Gregory appeared and answered before the order directing the receiver to sue was made, and was heard in opposition to it, but has taken no steps to vacate or avoid the order appointing the receiver. The regularity of the receiver’s appointment cannot be collaterally questioned, but must be impeached, if at all, in a' direct proceeding for that pur [319] pose. In a suit by the receiver in relation to matters connected. with his trust, the order of appointment will be conclusive. High, Receivers, § 203; Vermont & C. R. Co. v. V. C. R. Co. 46 Vt. 792; Attorney General v. Guardian Mut. L. Ins. Co. 77 N. Y. 272. For these reasons we hold that the order of the circuit court must be affirmed, and the cause remanded for further .proceedings according to law. By the Court.- — ■ It is ordered accordingly.