23 only rely upon the admissions in the answer; 20 but now a sworn answer is given upon such a motion little more effect than an ordinary affidavit, and may be contradicted by affidavits in support of the bill." The appointment is usually only made upon notice, and is very rarely granted ex parte." Less than one day's notice has been held to be insufficient. A receiver may, however, be appointed ex parte, if that is the only way to preserve the property from destruction or serious injury, or removal beyond the jurisdiction of the court.24 It has been said that a receiver of the assets of a railroad company will rarely be appointed in a suit to which no stockholders or bondholders are actually parties." Where the officer of a corporation who had been served with notice of a motion for the appointment of a receiver fraudulently concealed that fact from his associates, and did not oppose the motion, although no collusion with the plaintiff was shown, a motion to vacate the appointment was entertained.26 A delay of one month after knowledge of the appointment of a receiver, who had expended in the improvement of the property money furnished him by others, was held such acquiescence as to estop a party from moving to vacate the order of appointment for irregularity because granted without notice to him. Except in an extraordinary case, a receiver will not be appointed over property in the possession of a stranger to the suit.28 20 Daniell's Ch. Pr. (2d Am. ed.) 1976. See Goodman v. Whitcomb, 1 J. & W. 589; Kershaw v. Mathews, 1 Russ. 361. D. C. 421, 437. In Buchanan v. Bay 21 Allen v. Dallas & W. R. Co., 3 ary evidence. In a later case Judge Woods, 316, 332. 22 Blondheim v. Moore, 11 Md. 365; People v. Norton, 1 Paige (N. Y.), 17; Sandford v. Sinclair, 8 Paige (N. Y.), 373; Miltenberger v. Logansport Ry. Co., 106 U. S. 286. 23 St. Louis, K. C. & C. Ry. Co. v. Dewees, 23 Fed. R. 691. 24 Gibson v. Martin, 8 Paige (N. Y.), 481; Johns v. Johns, 23 Ga. 31; Triebert v. Burgess, 11 Md. 452; Gibbons v. Mainwaring, 9 Sim. 77; Miltenberger v. Logansport Ry. Co., 106 U. S. 286; Barley v. Gittings, 15 App. Kirkpatrick in U. S. C. C. D., N. J., appointed a receiver ex parte. Brady v. Bay State Gas Co., 106 Fed. R. 584. 25 Overton v. Memphis & L. R. Co., 10 Fed. R. 866. But see Central T. Co. v. Texas & St. L. Ry. Co., 24 Fed. R. 153. 26 Allen v. Dallas & W. R. Co., 3 Woods, 316. 27 Ibid. 28 Searles v. Jacksonville, P. & M. R. Co., 2 Woods, 621. See also Davis v. Gray, 16 Wall. 203, 218. § 253. Who may apply for the appointment of a receiver. A receiver is usually appointed upon the application of the plaintiff. Before a decree it seems that one defendant cannot move for a receiver, unless he has filed a cross-bill praying for one. After a decree, however, he may, in a proper case, obtain a receiver of the property of a co-defendant upon petition,3 but not usually over the property of the plaintiff without a cross-bill.1 1 § 254. Manner of the appointment of a receiver.- By the English practice, which was followed in New York before the passage of statutes altering it, when an application for the appointment of a receiver was granted, the selection of the receiver was referred to a master in chancery, whose action was subject to the confirmation of the court. The same master usually exercised supervision over contracts made by the receiver and the adjustment of his compensation.2 In the Federal courts, however, it is the customary practice for the judge to appoint and often to supervise a receiver himself, without the aid of a master, except when the accounts are passed.3 § 255. Who should be appointed receiver. As a general rule no one should be appointed receiver of property who has any interest therein,' or is in any way connected with the liti § 253. 1 Robinson v. Hadley, 11 Beav. 614; Leddel's Ex'r v. Starr, 19 N. J. Eq. (4 C. E. Green), 159. But see Sargant v. Read, L. R. 1 Ch. D. 600; Henshaw v. Wells, 9 Humph. (Tenn.) 568. 2 Grote v. Bury, 1 W. R. 92; Robinson v. Hadley, 11 Beav. 614; Kerr on Receivers (2d Am. ed.), 153, 154. 3 Barlow v. Gains, 8 Beav. 329; Hiles v. Moore, 15 Beav. 175; Kerr on Receivers (2d Am. ed.), 154. 4 Grote v. Bury, 1 W. R. 92; Robinson v. Hadley, 11 Beav. 614; Kerr on Receivers (2d Am. ed.), 153, 154. § 254. Creuze v. Bishop of London, Dick. 687; Thomas v. Dawkin, 1 Ves. Jr. 452; In re Eagle Iron Works, 8 Paige (N. Y.), 385; High on Receivers, 90; Daniell's Ch. Pr. (2d Am. ed.) 1976. 2 Thornhill v. Thornhill, 14 Simons, 600. 3 Miltenberger v. Logansport Ry. Co., 106 U. S. 286; Buck v. Piedmont & A. L. Ins. Co., 4 Fed. R. 849; Frank v. Denver & R. G. Ry. Co., 23 Fed. R. 757. But see Taylor v. Phila. & R. R. Co., 7 Fed. R. 379; s. c., 9 Fed. R. 1; Cowdrey v. Railroad Co., 1 Woods, 331, 341. § 255. Wiswell v. Starr, 48 Me. 401. Thus, a stockholder, Wiswell v. Starr, 48 Me. 401; Atkins v. Wabash, St. L. & P. Ry. Co., 29 Fed. R. 161; but see People v. Illinois B. & L. Ass'n, 56 Ill. App. 642; officer or director of a corporation should rarely be ap pointed a receiver of its assets, Atty. Gen. v. Bank of Columbia, 1 Paige (N. Y.), 511; Buck v. Piedmont & A. L. Ins. Co., 4 Fed. R. 849; Atkins v. gation in the course of which the appointment is made, or is nearly related to,3 or is in the employ of, any of the parties thereto, or who, if he should receive the appointment, would occupy two inconsistent positions; nor a person who is not familiar with the management of similar property, and able Wabash, St. L. & P. Ry. Co., 29 Fed. R. 161; Baker v. Backus, 32 Ill. 79; Finance Co. of Pa. v. Charleston, C. & S. C. R. Co., 45 Fed. R. 436; Olmstead v. Distilling & C. F. Co., 67 Fed. R. 24; but see Farness L. & Tr. Co. v. No. Pac. R. Co., 61 Fed. R. 546; but see People v. Illinois B. & L. Ass'n, 56 Ill. App. 642; State Tr. Co. v. Nat. Land Imp. & Mfg. Co., 72 Fed. R. 575; or the son or brother of a party to a cause, Williamson v. Wilson, 1 Bland (Md.), 418; Taylor v. Oldham, Jac. 527; but see Shainwald v. Lewis, 8 Fed. R. 878; over property which is the subject of the litigation. Nor should the next friend of an infant, whose duty it is to protect his interest, be appointed receiver over his estate, Stone v. Wishart, 2 Madd. 64; nor an active trustee over the trust estate, Sutton v. Jones, 15 Ves. 584; - v. Jolland, 8 Ves. 72; although a mere dry trustee may be thus appointed, Sutton v. Jones, 15 Ves. 584; nor should a master in chancery, whose duty it is to pass receivers' accounts, be appointed a receiver, Ex parte Fletcher, 6 Ves. 427. It has also been said in England, "that the receivergeneral of taxes for a county cannot be appointed a receiver; for having given, as such, security to the crown, if he were to become indebted to the crown and to the estate, the crown might, by its prerogative process, sweep away all his property." Dan iell's Ch. Pr. (2d Am. ed.) 1973. See Atty. Gen. v. Day, 2 Madd. 246, 254. And Lord Eldon held that a peer could not be a receiver, because, "in many instances, a receiver may be committed." Atty. Gen. v. Gee, 2 V. & 5 B. 208. It was held improper to appoint as assignee in bankruptcy of a corporation one who had been appointed by a State court receiver of its assets. In re Stuyvesant Bank, 5 Ben. 566; s. c., 6 N. B. R. 272. But it was subsequently held eminently proper to appoint as receiver of the assets of an insolvent corporation one who by the laws of the State that chartered it was the official custodian of its assets in case of its insolvency, even though that State was in another circuit from the one in which the suit for a receiver was brought, and the officer did not reside within the jurisdiction of the court. In this case it was made a condition of the appointment that the receiver should pay into the registry of the court the proceeds of all assets collected within its jurisdiction, but he was allowed to give sureties who were residents of the State where he dwelt. Taylor v. Life Ass'n of Am., 3 Fed. R. 465. 2 Baker v. Backus, 32 Ill. 79; Garland v. Garland, 2 Ves. Jr. 137; State Tr. Co. v. Nat. Land & Mfg. Co., 72 Fed. R. 575; Wood v. Oregon Dev. Co., 55 Fed. R. 901. 3 Williamson v. Wilson, 1 Bland (Md.), 418. 4 Baker v. Backus, 32 Ill. 79; Atty. Gen. v. Bank of Columbia, 1 Paige (N. Y.), 511; Buck v. Piedmont & A. L. Ins. Co., 4 Fed. R. 849. 5 Stone v. Wishart, 2 Madd. 64; Ex parte Fletcher, 6 Ves. 427. 6 Lupton v. Stephenson, 11 Ir. Eq. 484. But it was held that a person was not disqualified from appointment as receiver of a railroad because 12 to give sufficient attention to the management of his trust." The court may, however, under special circumstances appoint as receiver a trustee, a person interested in the subject of the suit, or even a party to the suit," or his near relation." This, however, should rarely be done unless by consent, or possibly when it clearly appears to be for the interest of all concerned; 1 and in such a case by the English practice the receiver was usually obliged to act without compensation if he accepted the trust. When a party to the cause is appointed receiver in it, he does not thereby lose his privilege of acting as party. It has been held in Tennessee, that no one, not even a clerk of the court, can be made a receiver against his will.15 14 Recent statutes provide that no clerk or deputy clerk of a Federal court shall be appointed receiver except for special reasons which must be assigned in the order of appointment; 16 and that "no person related to any justice or judge of any court of the United States by affinity or consanguinity, within the degree of first cousin, shall hereafter be appointed by such court or judge to or employed by such court or judge in any office or duty in any court of which such justice or judge may he was not a citizen of the State where the railroad was chartered and situated; nor because he was not a railroad expert and was unacquainted with the mechanical details of the railroad. Farmers' L. & Tr. Co. v. Cape Fear & Y. Val. R. Co., 62 Fed. R. 675. Contra, Wynne v. Lord Newborough, 15 Ves. 283. Non-residents are often appointed ancillary receivers. Bayne v. Brewer Pottery Co., 82 Fed. R. 391. 7 Wynne v. Lord Newborough, 15 Ves. 283; Gibbs v. David, L. R. 20 Eq. 373. 8 Sykes v. Hastings, 11 Ves. 363; Sutton v. Jones, 15 Ves. 584; Gardner v. Blane, 1 Hare, 391; Powys v. Blagrave, 18 Jur. 463; Ames v. Birkenhead Docks, 20 Beav. 332; Potts v. Warwick & B. C. N. Co., Kay, 143; Kerr on Receivers (2d Am. ed.), 136139. 9 Hoffman v. Duncan, 18 Jur. 69; Powys v. Blagrave, 18 Jur. 462; Kerr on Receivers (2d Am. ed.), 136. 10 Wilson v. Greenwood, 1 Swanst. 471; Blakeney v. Dufaur, 15 Beav. 40; Robinson v. Taylor, 42 Fed. R. 803, 812. 11 Shainwald v. Lewis, 8 Fed. R. 878. 12 Atkins v. Wabash, St. L. & P. Ry. Co., 29 Fed. R. 161; Kerr on Receivers (2d Am. ed.), 136–139. 13 Wilson v. Greenwood, 1 Swanst. 471, 483; Blakeney v. Dufaur, 15 Beav. 40; Hoffman v. Duncan, 18 Jur. 69; Powys v. Blagrave, 18 Jur. 463. But see Newport v. Bury, 23 Beav. 30. 14 Scott v. Platel, 2 Phil. 229; Cowdrey v. Railroad Co., 1 Woods, 331, 350. 15 Waters v. Carroll, 9 Yerg. (Tenn.) 102. 16 20 St. at L. 415. be a member."17 An order may provide for the appointment of a receiver in the alternative to other relief.18 256. The receiver's security. As a general rule, the order for the appointment of a receiver provides that he shall give good and sufficient security for the faithful performance of his duties. This, by the English practice, was usually a recognizance entered into by the receiver and two or more sureties, whereby they, the cognizors, acknowledged "themselves to be indebted to the cognizees (usually the Master of the Rolls and the senior Master of the Court) in certain sums of money to be paid on certain days therein mentioned; in default of which they will and agree that the said sums shall be levied and recovered of them, their heirs, executors, and administrators, and of all and singular their lands and hereditaments, goods and chattels." The recognizance, however, was subject to a condition making it void if the receiver should duly account for the rents and profits of the estate over which he was appointed. In the Federal courts no fixed rule prevails, the security required from a receiver being whatever the judge who orders his appointment thinks proper. When a receiver is appointed by consent, the court may appoint him without requiring security, or upon his own recognizance only. The sureties, when individuals, should usually be residents of the district; but under peculiar circumstances sureties residing elsewhere have been accepted. The sureties of a receiver cannot be discharged at their own request,' except under special circumstances, "as where underhand practice is proved, and the person secured shown to be connected with such practice." "For if people voluntarily make themselves bail or sureties for another, they know the terms, and will be held 8 17 25 St. at L. 554. 5 Hibbert v. Hibbert, 3 Meriv. 681; 18 Curling v. Townshend, 19 Ves. Countess of Carlisle v. Lord Berkley, 628. Amb. 599; Ridout v. Earl of Plymouth, 1 Dickens, 68. § 256. 1 Daniell's Ch. Pr. (2d Am. ed.) 1977; Mead v. Lord Orrery, 3 Atk. 235; Tomlinson v. Ward, 2 Conn. 396. 2 Daniell's Ch. Pr. (2d Am. ed.) 1977; Mead v. Lord Orrery, 3 Atk. 235; Tomlinson v. Ward, 2 Conn. 396. 3 Daniell's Ch. Pr. (2d Am. ed.) 1999. 4 Taylor v. Life Ass'n of Am., 3 Fed. R. 465.. 6 Taylor v. Life Ass'n of Am., 3 Fed. R. 465. 7 Griffith v. Griffith, 2 Ves. Sen. 400; Gordon v. Calvert, 2 Sim. 253. 8 Hamilton v. Brewster, 2 Molloy, 407. |