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But the receiver should have an assignment so as not to claim alone under the appointment.
lle can receive in the foreign jurisdiction a voluntary delivery, and this gives him lawful possession even though it were coerced by the order of the court or by fear of proceedings for contempt; but if a question arises, in the courts of such other jurisdiction, between him and third persons claiming there adversely, neither his appointment nor an involuntary assignment to him will preclude the courts of such jurisdiction from giving a preference to the claims of creditors and others within their own territory ;30 and such proceedings in the foreign jurisdiction will be respected by the courts of the jurisdiction in which the receiver was appointed. 31
5. Common-law and statutory receivers distinguished.] – The character of the receivership must be determined by the terms of the judgment or order, and the nature of the action in which it was created. 32
The term “ statutory receiver” in New York practice is used to designate a receiver who is vested with the powers and subject to the duties of trustees under insolvent assignments made under the Revised Statutes.33 These powers are for the most part de
" But there is also another class of cases in which it is held that a receiver appointed in one State will be permitted to take possession of property in another (Bank I'. McLeod, 38 Ohio St. 174, 184; Hurd v. City of Elizabeth, 41 New Jersey L. 1).
“ The principal ground of distinction between the two classes of cases appears to be this: Where there are creditors, or other persons having claims upon the property, residing within the State where it is situated, the courts of that State will not permit the foreign receiver to take possession, preferring the rights of its own citizens to those of the people of another jurisdiction, but if there be no party within such State, claiming an interest in the property, the courts thereof will permit, and in a proper case will assist, the re ceiver appointed by the courts of the State where the owners reside to take possession."
See also Patterson . Lynde, 112 III. 196; mem. 20 Cent. L. J. 217, and articles in 22 Am. Law Reg. 289, 7 South. L. J. 233; Lycoming Fire Ins. Co. t. Wright, 55 Vt. 526.
30 Matter of Waite, 99 N. Y. 433, limiting the reasoning but not the conclusion in Booth r. Clark, 17 How. U. S. 322, where territorial limits to a re ceiver's power were strongly insisted on; but it was only held that a New York receiver in a creditor's action, who took no assignment from the debtor, could not in the courts of another jurisdiction, recover as against creditors there, the proceeds of a foreign claim.
31 O'Callaghan t'. Fraser, 37 Hun, 483. 32 Badger r. Sutton, 30 App. Div. 294, 52 N. Y. Supp. 16. And see, also, Nat. Cn. Bank r. Riger, 38 App. Div. 123, 56 N. Y. Supp. 545.
33 Rev. St., Part II, chap. 5.
fined in great detail.34 The main distinctions are, that a statutory receiver is, by force of the statute, an assignee and vested with title without the formality of an assignment; that it is his duty to advertise for claims, and he has statutory powers to discover and coerce delivery of the assets; to call meetings of creditors; to refer or compromise disputed claims; to allow set-off; and to make distribution. In a general sense, a receiver, any of the important powers of whom are defined by statute, is sometimes spoken of as a statutory receiver, but the technical meaning of the phrase is in its application, in the law of corporate litigation, to the permanent receiver [i. e., a receiver appointed by final judgment] in an action to sequester the assets of a corporation, and to distribute them among creditors, or to dissolve a corporation and to distribute the assets, or to forfeit or vacate charters, and to receivers appointed in the special proceedings provided by law for the voluntary dissolution of a corporation.35 The court may confer on a temporary receiver, in a proceeding for the voluntary dissolution,36 or in an action to sequester the property of a corporation and to distribute it or to dissolve or forfeit its charter,37 the powers of a stautory receiver, except that no distribution can be made by him without an order of the court 38
6. Powers of common-law receivers.] — Under the old practice a common-law receiver was simply what his name indicated, an officer to get in assets and hold and preserve them, until it should be time to deliver over; he was merely a custodian.39 When he held property it was by possession, not by title; when he sued to recover property or debts due the party, he sued in the name of the party of whose property he was receiver. If it became desirable for him to take any active step not directed in the order appointing him, some party to the cause must move the court; it
34 2 N. Y. R. S., 39-51, art. 8. (Birdseye's Rev. Stat. 3d ed., pp. 3866–3875.)
35 N. Y. Code Civ. Pro., $ 2419. Such a statutory receiver is so vested with the property rights of the dissolved corporation, that even the receiver's discharge will not divest him of a right of action which the corporation could have enforced. Michel v. Betz, 108 App. Div. 241, 95 N. Y. Supp. 844.
36 N. Y. Code Civ. Pro., $ 2423. 37 Id., 88 1788, 1789. 38 See extensive note on the subject of statutory receivers in 19 Abb. N. C.
39 See Larsen v. U. S. Mortg. & T. Co., 104 App. Div. 76, 93 N. Y. Supp. 610; Badger v. Sutton, 30 App. Div. 294, 52 N. Y. Supp. 16,
was not the receiver's function to act without directions nor to ask leave or directions to do anything.
Successive statutes enlarged the powers of such receivers, by enabling them to sue in their own names, 40 to take and hold title to real and personal property, 41 to disaffirm, treat as void, and resist acts done in fraud of creditors, 42 and to recover assets and damages from fraudulent transferees ; 43 and the rules of court have conferred some incidental powers stated below, such as otherwise would need to be repeated in every order of appointment, or in subsequent instructions.
It results that under the present practice a common-law receiver, as well as a statutory receiver, is an officer with active duties, who after his appointment is not to wait for the parties to set him in motion. His powers are defined by the court (so far as necessary in addition to these statutes and rules of court) according to the necessities of each case, the guiding principle being that the power to appoint a receiver includes all that is reasonably necessary for conserving and realizing upon the assets. But he is still a mere custodian, without any title to the assets until assignment or statutory investiture.**
7. Sequestrator.]-A sequestrator is in American practice a receiver, 45 and may be either a common-law or a statutory receiver, according to the case. The appointment of a receiver who takes possession is a sequestration.
8. Action necessary.] — Under the code procedure the appointment cannot, except by express statutory authority, 46 be made, unless an action is brought or about to be brought."7 It cannot
40 N. Y. L., 1845, chap. 112, & 2.
46 As in case of voluntary dissolution of a corporation under N. Y. Code Cir. Pro., & 2419, etc., or in some cases of moneyed corporations, specially regulated.
47 See supra, p. 82, paragraph 18, note 51. apare People v. Norton, 1 Paige, 17; McCarthy v. Peake, 9 Abb. Pr. 164.
In Pressly r. Harrison, 102 Ind. 14, 1 N. E. Rep. 188, Mitchell, J., delivering the opinion of the court, on holding that appointment of a receiver on the written consent of a defendant not served nor appearing was illegal, says: “We know of no decided case, except where the court was authorized by statute to preserve the estates of infants and lunatics, in which a receiver was appointed before a suit was pending. If an immediate necessity therefor is showa
be made on petition when no action is contemplated; nor in a special proceeding: 48 When it is a part of the final relief, a complaint should be presented; but the court have jurisdiction to grant it like any other provisional remedy, on the issue of the summons, and in anticipation of its service, and when so granted it is deemed to be granted in the action, and the court has jurisdiction from the time of making the order, provided service of summons is made in due course.
9. The practice; application to court.]—Application must be made to the court, not to a judge out of court,50 except in those instances where, as in the case of supplementary proceedings under the New York statute, the power is expressly given to a judge. 51 Even a general provision allowing a judge out of court to hear and decide motions does not necessarily include the power to appoint a receiver ;52 but such an appointment by a judge in vacation, if afterward confirmed by the court in term, will be deemed to have been made by the court itself.53
But the court may delegate the power of appointment to a referee, 54 except in supplementary proceedings.
order to show cause.] — A judge out of court may make an order to show. cause why a receiver should not be ap
to exist, the application for a receiver may be entertained when the action is commenced, which, under the rule here, is when process is issued, or an appear. ance to the action is entered in the manner recognized; but as the appointment of a receiver in any case is a provisional remedy, auxiliary to the action, or the relief prayed for therein, neither the court in term nor judge in vacation can acquire jurisdiction to appoint a receiver until there is an action pending. The application for a receiver is an interlocutory proceeding in a pending suit. Brinkman v. Ritzinger, 82 Ind. 358; Dale v. Kent, 58 Ind. 584; Merchants' & Manufacturers' Bank v. Kent Circuit Judge, 43 Mich. 292, 5 N. W. Rep. 627. Unless it is shown that on account of absence, or for some other cause, process cannot be served on the defendant, the application should not be entertained until after service and notice.”
48 Matter of Hancock, 27 Hun, 575, holding that the fact that an appeal to the Supreme Court, from an order of a surrogate vacating probate, is pending, does not bring the administration into the Supreme Court so as to give that court jurisdiction to appoint a receiver of the estate, on motion.
49 N. Y. Code Civ. Pro., $ 416.
50 N. Y. Code Civ. Pro., 88 713, 1810; Pressly v. Harrison, 102 Ind. 14, I N. E. Rep. 188; Ireland v. Nichols, 7 Robt. 476.
51 N. Y. Code Civ. Pro., & 2464.
54 N. Y. Code Civ. Pro., $ 827, preserves the old power in this respect in those cases where a receiver can be appointed by the court.
pointed by the court,56 and why an injunction should not be granted; and if injunction is sought, the judge may (except in the corporation cases stated in par. 12, below), by the same ex parte order, enjoin meanwhile. 56 · 11. --- when.) - Under the old practice the motion was usually made upon the coining in of the answer, but on grounds of emergency was allowed before answer. Under the present practice it is usual to apply at the commencement of the action in cases of insolvency, and in other cases either before or after answer, according to the necessity of the case.
12. - injunction.] - Unless an injunction is granted, the creditors are not restrained by the appointment of a temporary receiver from continuing their pending actions, and enforcing judgments against attached property. If the action is by a judgment-creditor to sequestrate the property of a corporation, or by the attorney-general, either for dissolution of an insolvent or suspended corporation, or to vacate a charter, etc.,' or in any action if the injunction is one “suspending the general and ordinary business of a corporation, or of a joint-stock association, consisting of seven or more persons, or suspending from office, or restraining from the performance of his duties, a trustee, director, or other officer thereof,” 61 the restraining order or injunction under the New York statute cannot be granted by a judge, even pending a motion for receiver; except of course in the first judicial district, where a judge may make an order that the court might.“
If the injunction restrains proceedings by creditors, it has no extra territorial effect.63
13.- in what county.] - Under the New York statute the motion for a receiver of a corporation in an action to sequestrate all its property, or dissolve it, and for distribution, must be made
55 See paragraph 13 (below), and supra, p. 128.