without the previous leave of the court in which such receiver or manager was appointed; but such suit shall be subject to the general equity jurisdiction of the court in which such receiver or manager was appointed, so far as the same shall be necessary to the ends of justice." 18 This dispossesses receivers appointed by a Federal court of any right which they might otherwise have to remove suits brought against them from the State to the Federal courts, where no difference of citizenship exists and no Federal question is involved.19 It has been held that this statute makes the judgment in the State court in such an action conclusive as to the right of the plaintiff therein to recover damages, and as to the amount of the recovery; 20 that the receiver has the right to appeal from the judgment of the State court, and that the Federal court should not, as a condition of such appeal, oblige him to execute a supersedeas bond; 21 but that judgment in such a suit cannot be enforced by execution against the property;" that the time and manner of payment must be determined by the court that appointed a receiver; that the statute does not authorize the interference by the State court with property in the possession of the receiver, by an action of unlawful detainer," a suit to recover 23 18 25 St. at L., p. 436; 24 St. at L, p. 554. See Croy v. Marshall, 21 Ohio W. L. B. 489; Atkin v. Wabash Ry. Co., 41 Fed. R. 193, 194. properly applicable thereto. Empire 19 Gableman v. Peoria, D. & E. Ry. The holder of a common-law claim Co., 179 U. S. 335. 20 Dillingham v. Hawk (C. C. A.), 60 Fed. R. 494; St. Louis S. W. Ry. Co. v. Holbrook (C. C. A.), 73 Fed. R. 112. But see Mo. Pac. Ry. Co. v. Texas Pac. Ry. Co., 41 Fed. R. 311, 314. 21 Central Tr. Co. v. St. Louis, A. & T. Ry. Co., 41 Fed. R. 551, 555, 556. 22 Ibid.; Dillingham v. Hawk (C. C. A.), 60 Fed. R. 494; St. Louis S. W. Ry. Co. v. Holbrook (C. C. A.), 75 Fed. R. 112; Mo. Pac. R. Co. v. Texas Pac. R. Co., 41 Fed. R. 311; Gableman v. Peoria, D. & E. Ry. Co., 179 U. S. 335, 339. A petition to the Federal court for the payment of a claim should show that the receiver holds assets who intervenes in the Federal court in the first instance waives his right to a trial by jury; and if the court submits to a jury the issues that arise thereupon, the verdict is merely advisory. Flippin v. Kimball (C. C. A.), 87 Fed. R. 258. Cf. Atkin v. Wabash Ry. Co., 41 Fed. R. 193. For a case where the claimant did not lose any rights by delay till after a dividend had been paid, and the State rule requiring a surrender of collateral was not followed, see London & S. F. Ry. Co. v. Willamette S. M. L. & Md. S. Co., 80 Fed. R. 226. 23 Comer v. Felton (C. C. A.), 61 Fed. R. 731; Stateler v. Cal. Nat. 24 Comer v. Felton (C. C. A.), 61 Fed. R. 731. 27 29 title or possession to property,25 or garnishment," or condemnation proceedings, nor prevent an injunction against the interference by the creditors of the assets in the hands of a receiver of a national bank,28 nor authorize a stockholder of a corporation to enforce a corporate cause of action by a suit against a debtor to the corporation, when the receiver refuses to sue. The proper remedy in all such cases but the last is usually a petition of intervention.30 It has been further held that the statute applies to receivers appointed before its enactment; that it applies to suits against a receiver for liabilities incurred by his predecessor in office; " that it applies to receivers appointed by the courts of the Territories over the property of corporations created by acts of Congress; 33 that non-resident receivers may be served in the same manner as the corporations over which they were appointed; and that an order of a Federal court which discharged a railroad receiver, restored the property to the defendant company and required that all claims against the receiver be presented by intervention to that court before a given date, did not prevent the subsequent recovery in a State court of a judgment against the company for damages Bank, 77 Fed. R. 43; J. I. C. Plow Works v. Finks (C. C. A.), 81 Fed. R. 524, 529. For a remarkable exertion of Federal power, see Louisville Tr. Co. v. Cincinnati I. P. Ry. Co., 78 Fed. R. 307. 25 J. I. C. Plow Works v. Finks, 81 Fed. R. 529. So held of a suit to foreclose a lien when the receiver was a defendant. Am. L. & Tr. Co. v. Central Vt. R. Co., 84 Fed. R. 917. Cf. Grand Trunk Ry. Co. v. C. Vt. R. Co., 88 Fed. R. 622. So a Federal court refused to entertain a suit to foreclose a lien, Am. L. & Tr. Co. v. Central Vt. R. Co., 84 Fed. R. 917; nor to set aside a fraudulent conveyance of property in the hands of a State receiver. Werner v. Murphy, 60 Fed. R. 769. Cf. supra, § 9. For a case where the Federal court appointed a trustee to protect the rights of lienors, see Risk v. Kansas Tr. Co., 58 Fed. R. 45. 26 Central Tr. Co. v. East Tenn., V. & G. Ry. Co., 59 Fed. R. 523. For the practice by the receiver in such a case, see In re Barnard, 61 Fed. R. 531. For the remedy by a State receiver when property is attached by a United States marshal, see Remington P. Co. v. Louisiana P. & Pub. Co., 56 Fed. R. 287. 27 Hayes v. Columbus, L. & M. Ry. Co., 67 Fed. R. 630. 28 Stateler v. Cal. Nat. Bank, 77 Fed. R. 43. 29 Swope v. Villard, 61 Fed. R. 417.” Cf. Werner v. Murphy, 60 Fed. R. 769. 30 Winchester v. Davis Pyrites Co. (C. C. A.), 67 Fed. R. 45; Minot v. Mastin (C. C. A.), 95 Fed. R. 734. 31 Texas & Pac. Ry. Co. v. Cox, 145 U. S. 593. 32 McNulta v. Lochridge, 141 U. S. 327; State v. Port Royal & A. Ry. Co., 84 Fed. R. 67. But see Jones v. Schlapbeck, 81 Fed. R. 274. 33 Wheeler v. Smith, 81 Fed. R. 319. 34 Eddy v. Lafayette, 163 U. S. 456, 464. 36 on account of personal injuries caused by the negligent operation of the railroad by the employees of the receiver before his discharge.35 A Circuit Court of the United States will rarely, if ever, enjoin a proceeding in admiralty in a Federal District Court against property in the hands of one of its receivers. A judgment in a suit thus prosecuted can only be collected out of the property in the hands of the receiver in his official capacity. A receiver appointed under a creditor's bill is not a proper party to an ancillary foreclosure suit.38 An independent suit to recover a simple contract debt incurred by him cannot be maintained in equity.39 The creditor must sue at law or bring a petition of intervention in the original suit. A suit begun before the appointment of a receiver may subsequently be prosecuted to judgment, and the judgment so obtained establishes, as against the receiver, the rightful amount of the demand." A party who, pending such a suit, files his claim against the receiver in the suit in which the receiver was appointed, does not thereby make an election of remedies and lose his right to prosecute the suit. In such a case it was held that the claimant thereby lost his right to costs in the original action.43 It has been held that leave from a State court need not be obtained before suing a receiver appointed by it for the infringement of a patent." A receiver is personally liable to strangers for trespass," fraud," or other 39 Nash v. Ingalls, 79 Fed. R. 510. 40 Ibid. 35 Texas & Pac. Ry. Co. v. Johnson, 151 U. S. 81. Where the receivers remained in possession a few days after the delivery of the deed to the purchaser, a cause of action for negligence then arising is a liability of the receivership enforceable under such a clause of the decree. Fidelity L., Tr. & S. D. Co. v. Norfolk & W. R. Co., 88 Fed. R. 815. 36 Paxson v. Cunningham, 63 Fed. R. 132. Cf. The St. Nicholas, 49 Fed. R. 671. 37 Farmers' L. & Tr. Co. v. Central R. Co. of Iowa, 2 McCrary, 181; s. c., 7 Fed. R. 537; Barton v. Barbour, 104 U. S. 126; Mo. Pac. Ry. Co. v. Texas Pac. Ry. Co., 41 Fed. R. 310. 38 Continental Tr. Co. v. Toledo, St. L. & K. C. R. Co., 82 Fed. R. 642. 41 Pine Lake Iron Co. v. Lafayette Car Works, 53 Fed. R. 853. 42 Ibid. See Zacher v. Fidelity Tr. & S. D. Co. (C. C. A.), 106 Fed. R. 593. 43 Ibid. 44 Hupfeld v. Automatic Piano Co., 66 Fed. R. 788. Cf. Curran v. Craig, 22 Fed. R. 101. 45 In re Young, 7 Fed. R. 855; Olney v. Tanner, 10 Fed. R. 101; Barton v. Barbour, 104 U. S. 126, 134. For a case where a receiver was held not liable for malicious prosecution, see Widmeyer v. Felton, 95 Fed. R. 926. 46 Bank of Montreal v. Thayer, 7 Fed. R. 622. willful act, although performed under color of his office. So, if he by mistake, though honestly, takes possession of the property of another, he is personally liable." The fact that he does so under authority of an order of the court will not justify him as against a person who was not a party to the suit or proceeding in which the order was granted. In all of such cases it seems that he can, independently of the statute, be sued without leave of the court which appointed him."9 A person who, without having been lawfully appointed, assumes to act as a receiver, has all the liabilities of one duly appointed. It has been held that an action will not lie against a receiver for a personal injury sustained before his appointment." The discharge of a receiver until revoked relieves him from all liability to those who had an opportunity to be heard upon the motion for his discharge.52 2 § 252. Manner of applying for the appointment of a receiver. It has been held that a court has no jurisdiction to appoint a receiver, unless a cause is pending;1 and that, therefore, one will never be appointed upon petition when no suit has been begun, except in the case of lunatics. The grounds of the exception and the reasons why it does not extend to infants are not very clear. After a suit has been begun, however, a receiver may be appointed at any stage of it when a necessity is shown,- before appearance," between appearance and answer, between answer and decree,' at the decree, or afterwards, if the cause is still open. But a case of pressing 4 47 Barton v. Barbour, 104 U. S. 126, 134; Curran v. Craig, 22 Fed. R. 101. 48 Curran v. Craig, 22 Fed. R. 101. 49 Barton v. Barbour, 104 U. S. 126, 134; In re Young, 7 Fed. R. 855; Bank of Montreal v. Thayer, 7 Fed. R. 622; Curran v. Craig, 22 Fed. R. 101. But see Aston v. Heron, 2 Myl. & K. 390; Chalie v. Pickering, 1 Keen, 749. 50 Wood v. Wood, 4 Russ. 558. 51 Finance Co. of Pa. v. Charleston C. & C. R. Co., 46 Fed. R. 508. 52 Lehman v. McQuown, 31 Fed. R. 138; Davis v. Duncan, 19 Fed. R. 477. § 252. 1 In re Brant, 96 Fed. R. 257; Anon., 1 Atk. 578. See § 260. 2 In re Brant, 96 Fed. R. 257; Anon., 1 Atk. 578; Ex parte Whitfield, 2 Atk. 4 Ex parte Whitfield, 2 Atk. 315. 7 Kershaw v. Mathews, 1 Russ. 361. 8 Osborne v. Harvey, 1 Y. & C. N. R. 116. 9 Cooke v. Gwyn, 3 Atk. 689; Atty. Gen. v. Mayor of Galway, 1 Molloy, 95; Bowman v. Bell, 14 Sim. 392. necessity must exist to justify the appointment of a receiver before answer.10 An objection to the bill on account of multifariousness or a misjoinder of parties will not prevent the appointment of a receiver; nor will the pendency of a motion for leave to amend the bill," unless indeed the proposed amendment would change materially the allegations showing the necessity for a receiver. The bill should lay the foundation for the appointment by stating the facts which show its necessity and propriety,12 and should contain a prayer for a receiver.13 If, however, a state of facts subsequently arise making the appointment necessary, it may probably be made without an amendment of the original or the filing of a supplemental bill. The application for a receiver should be supported by evidence showing that the appointment is necessary.15 If the application is made before decree, the affidavits should be founded upon the allegations in the bill.16 If statements not founded on allegations in the bill and alleging facts which existed and were known before the bill was filed, are introduced into the affidavits, it seems that the court will not consider them; and even if, where the case made by the bill fails, sufficient ground for a receiver is confessed in the answer, it seems that a receiver should be denied the plaintiff, at least until he had amended his bill.18 After an application for a receiver has been once denied, a second application supported by the same papers will rarely be granted.19 The former rule was that, after answer, a plaintiff when moving for a receiver could 10 Latham v. Chaffee, 7 Fed. R. 525. See Union Mut. Life Ins. Co. v. Union Mills P. Co., 37 Fed. R. 287. that a bill praying for a receiver, sworn to "as being true to the best of affiant's knowledge and belief," is 11 Barnard v. Darling, 1 Barb. Ch. not sufficiently verified. Smith-Dim(N. Y.) 76. mick Lumber Co. v. Teague, 24 S. R. 4. 12 Tomlinson v. Ward, 2 Conn. 396; Verplanck v. Mercantile Ins. Co., 2 Paige (N. Y.), 438. But see Hottenstein v. Conrad, 9 Kan. 435. 13 Rule 21. But see Osborne v. Harvey, 1 Y. & C. N. R. 116. 14 Malcolm v. Montgomery, 2 Molloy, 500; Hottenstein v. Conrad, 9 Kan. 435. 15 Middleton v. Dodswell, 13 Ves. 266; Kerr on Receivers (2d Am. ed.), 154. It was held in a State court 16 Dawson v. Yates, 1 Beav. 301, 306; Cremen v. Hawkes, 2 Jones & La T. 674; Kerr on Receivers (2d Am. ed.), 154. 17 Dawson v. Yates, 1 Beav. 301, 306; Kerr on Receivers (2d Am. ed.), 154. 18 Cremen v. Hawkes, 2 Jones & La T. 674; Kerr on Receivers (2d Am. ed.), 154. 19 Fenton v. Lumberman's Bank, Clarke Ch. (N. Y.) 360. |