As we have already seen, the court appointing a receiver will not permit him to sue or engage in litigation unless authorized so to do by the court to which he owes his appointment, and not then unless his right appears clear, and favorable results are most probable, or the statute expressly empowers him to sue. The purpose of this rule is to secure an economical administration of the estate, a speedy winding up of the litigation, and a fair and equitable adjustment of the rights of all parties in interest. Where all conflicting interests can be drawn to the same jurisdiction, a much more comprehensive and intelligent adjudication can be had and entire justice to all parties can be secured thereby. Much stronger reasons exist in regard to suits against a receiver, or the property in his charge, or any interference with or molestation of his administration of the estate, as to the control which the court will exercise over litigation affecting the receivership property. Courts are jealous, and rightfully so, in regard to their possession through the receiver, of the funds or property which they are called upon to administer and distribute, or adjudicate and determine the rights of parties thereto. It would not be conducive to justice or good government, or in harmony with the fundamental principles of equity jurisprudence if the possession of a court of competent jurisdiction could be harrassed and interfered with at the whim or will of litigants, in their unseemly scrambles for advantage. § 83. Order of court necessary. Unless expressly authorized by statute a suit cannot be brought against a receiver without the permission of the court which appointed him.' The court in granting leave to sue must be satis 1Moran v. Sturges, 154 U. S. 275, 38 L. ed. 987; Re Swan, 150 U. S. 648, 37 L. ed. 1209; Porter v. Sabin, 149 U. S. 473, 37 L. ed. 815; Ex parte Tyler, 149 U. S. 181, 37 L. ed. 694; Texas & P. R. Co. v. Cox, 145 U. S. 593, 36 L. ed. 829; Reynolds v. Stockton, 140 U. S. 254, 35 L. ed. 464; Union Nat. Bank v. Bank of Kansas City, 136 U. S. 236, 34 L. ed. 346; Thompson v. Phenix Ins. Co. 136 U. S. 297, 34 L. ed. 413; Savannah v. Jesup, 106 U. S. 565, 27 L. ed. 276; Barton v. Barbour, 104 U. S. 126, 26 L. ed. 672; Southern Exp. Co. v. Western N. C. R. Co. 99 U. S. 191, 25 L. ed. 319; Davis v. Gray, 83 U. S. 16 Wall. 203, 21 L. ed. 447; Wiswall v. Sampson, 55 U. S. 14 Wall. 52, 14 L. ed. 322; Avery v. Boston Safe Deposit & T. Co. 72 Fed. Rep. 700; Werner v. Murphy, 60 Fed. Rep. 772; Central Trust Co. v. East Tennessee, V. & G. R. Co. 59 Fed. Rep. 523, 528; The St. Nicholis, 49 Fed. Rep. 676; Missouri P. R. Co. v. Texas P. R. Co. 41 Fed. Rep. 311; Olyphant v. St. Louis, Ore. & S. Co. 28 Fed. Rep. 729; Palmer v. Scriven, 21 Fed. Rep. 354; Kennedy v. Indianapolis C. & L. R. Co. 3 Fed. Rep. 99; Jordan v. Wells, 3 Woods, 527; Young v. Montgomery & E. R. Co. 2 Woods, 619; Thompson v. Scott, 4 Dill. 508; Barton v. Barbour, 3 McArth. 219; Farmers' Loan & T. Co. v. Central R. Co. 2 McCrary, 181; Andrews v. Smith, 19 Blatchf. 103; Perego v. Bonesteel, 5 Biss. 69; Blake v. Alabama & C. R. Co. 6 Nat. Bankr. Reg. 332; Talladega Mercantile Co. v. Jenifer Iron Co. 102 Ala. 259; Ex parte Printup, 87 Ala. 148; Carlin v. Jones, 55 Ala. 624; Pacific R. Co. v. Wade, 91 Cal. 449, 13 L. R. A. 754; Phelan v. Ganebin, 5 Colo. 14; DeGraffenried v. Brunswick & A. R. Co. 57 Ga. 22; Henderson v. Walker, 55 Ga. 481; Martin v. Atchison, 2 Idaho, 590; Mulcahey v. Strauss, 151 Ill. 70; Smith v. United States Exp. Co. 135 Ill. 279; Wyatt v. Ohio & M. R. Co. 10 Ill. App. 289; Andrews v. Stanton, 18 Ill. App. 163; Wayne Pike Co. v. State, 134 Ind. 672; Davis v. Ladoga Creamery Co. 128 Ind. 222; Elkhart Car Works Co. v. Ellis, 113 Ind. 215; Keen v. Breckenridge, 96 Ind. 69; Fort Wayne, M. & C. R. Co. v. Mellett, 92 Ind. 538; Moriarty v. Kent, 71 Ind. 601; Garver v. Kent, 70 Ind. 428; Herron v. Vance, 17 Ind. 595; Allen v. Central R. Co. 42 Iowa, 683; Conwell v. Lowrance, 46 Kan. 83; Meredith Village Sav. Bank v. Simpson, 22 Kan. 414; St. Joseph & D. C. R. Co. v. Smith, 19 Kan. 225; Spalding v. Com. 88 Ky. 138; Hazelrigg v. Bronaugh, 78 Ky. 62; Porter v. Kingman, 126 Mass. 141; Day v. Postal Teleg. Co. 66 Md. 369; Citizens Sav. Bank v. Person, 98 Mich. 173; Kenney v. Ranney, 96 Mich. 617; People, Tremper, v. Brooks, 40 Mich. 333; Harding v. Nettleton, 86 Mo. 658; Heath v. Missouri, K. C. & T. R. Co. 83 Mo. 617; Palys v. Jewett, 32 N. J. Eq. 302; Little v. Dusenberry, 46 N. J. L. 614; Re Christian Jensen Co. 128 N. Y. 550; Walling v. Miller, 108 N. Y. 177; Rogers v. Wheeler, 43 N. Y. 604; Chautauque County Bank v. Risley, 19 N. Y. 369; James v. James Cement Co. 8 N. Y. S. R. 490; Read v. Brayton, 72 Hun, 633; Preston v. Loughran, 58 Hun, 210; Re Loos, 50 Hun, 67; Riggs v. Whitney, 15 Abb. Pr. 388; Taylor v. Baldwin, 14 Abb. Pr. 166; Miller v. Loeb, 64 Barb. 454; Merritt v. Merritt, 16 Wend. 405; DeGroot v. Jay, 30 Barb. 483; Re Merritt, 5 Paige, 129; Noe v. Gibson, 7 Paige, 513; Parker v. Browning, 8 Paige, 388; Skinner v. Maxwell, 68 N. C. 400; Olds v. Tucker, 35 Ohio St. 584; Robinson v. Atlantic & G. W. R. Co. 66 Pa. 160; Wray v. Hazlett, 6 Phila. 155; Chafee v. Quidnick Co. 13 R. I. 442; Payne v. Baxter, 2 Tenn. Ch. 517; Ellis v. Vernon Ice, L. & W. Co. 86 Tex. 115; Re Merrill, 54 Vt. 200; Reed v. Axtell, 84 Va. 231; Melendy v. Barbour, 78 Va. 544, Davis v. Snead, 33 Gratt. 705; Brown v. Ranch, 1 Wash. 500; Garden City Bkg. & T. Co. v. Geilfuss, 86 Wis. 622; Littlejohn v. Turner, 73 Wis. 124; Jones v. Browse, 32 W. Va. 444; Russell v. East Anglian R. Co. 3 Macn. & G. 104; Ex parte Cochrane, L. R. 20 Eq. 282; Searle v. Choate, L. R. 25 Ch. Div. 723; Lane v. Capsey [1891] 3 Ch. 411; Evelyn v. Lewis, 3 Hare, 472; Ward v. Swift, 6 Hare, 312; Parr v. Bell, 9 Ir. Eq. 55; Re Persee, 8 Ir. Eq. 111; Tink v. Rundle, 10 Beav. 318; Swaby v. Dickon, 5 Sim. 629; Angel v. Smith, 9 Ves. Jr. 335; Randfield v. Randfield, 3 DeG. F. & J. 776. The rule of not allowing suits against receivers without leave applies to United States courts, and will be maintained in those courts where the receiver has been appointed in a state court, even though the state court has refused to permit the receiver to sue or be made a defendant. Porter v. Sabin, 149 U. S. 473, 37 L. ed. 815. And the rule applies to an action for personal injuries received on a railroad in the hands of a receiver; the recovery of a money demand, damages, or for the recovery of the property in the receiver's possession. Barton v. Barbour, 104 U. S. 126, 26 L. ed. 672. And where the action is on a money demand, the complaint must allege leave of court obtained. Keen v. Breckenridge, 96 Ind. 69. It also applies to an action in tort where the permission is asked to pursue redress in an action at law. Palys v. Jewett, 32 N. J. Eq. 302. This is based on the ground that a chancery court will not try questions of tort. Where a receiver appointed by the supreme court dies, a purchaser from one of the litigants pending the litigation will not be allowed to interfere with the possession of a new receiver by an independent suit, without leave of court first had and obtained by permission pro interesse suo. Brien v. Paul, 3 Tenn. Ch. 357. Any title such purchaser might acquire at a tax sale of the property would inure to the successful litigant. Brien v. Paul, supra. The rule that leave should be granted by the court appointing a receiver, before bringing suit against him, is sufficiently complied with where such leave is granted by the judge in vacation and the suit is afterwards tried by him in term time. Wade v. Ringo, 62 Mo. App. 414. A service of summons on a receiver will be set aside where the plaintiff has not obtained permission of the court to maintain the action. Malaney v. Atkins 1 Lack. L. News, 252. Permission of the court appointing a receiver must be obtained before fied that there is a prima facie case established against the receiver,' and the petition can only be entertained by the court of equity making the appointment,' but where the court has once granted permission to sue it is a breach of judicial discretion to revoke such an order when costs have accrued in pursuance of such order by the person to whom permission is given.' Where the leave of court is asked permission will not be denied unless the claim is manifestly unfounded and vexatious. It is the duty of the court to enquire into the facts before action is taken on the petition for leave. The claimant must present his claim in the nature of a formal bill or petition containing appropriate allegations so that issues may be formed thereon." Leave to serve the receiver of a corporation does not determine that the cause of action is a good one against the receiver, or that the receiver is liable. A motion for leave to sue cannot be made in one judicial district while a general order made by the court in another district restraining all interference with the receiver is in force; the general order must first be vacated or modified; nor will the court grant leave to sue its receiver out of its jurisdiction.' Where property has passed into the actual possession of the receiver, commencing an action against him. Melaney v. Atkins, 4 Pa. Dist. R. 644. The receivers of a railroad company located in another state may be sued in the courts of New York where leave is granted by the court appointing them. Carrey v. Spencer, 5 Inters. Com. Rep. 636, 72 N. Y. S. R. 108. 'Jordan v. Wells, 3 Woods, 527; Hills v. Parker, 111 Mass. 508. Palmer v. Scriven, 21 Fed. Rep. 354; Martin v. Atchison, 2 Idaho, 590. Conwell v. Lowrance, 46 Kan. 83. Palys v. Jewett, 32 N. J. Eq. 302; Lane v. Capsey [1891] 3 Ch. 411; Randfield v. Randfield, 3 DeG. F. & J. 766. Lehigh Coal & Nav. Co. v. Central R. Co. 38 N. J. Eq. 175. "Talladega Mercantile Co. v. Jenifer Iron Co. 102 Ala. 259; Renfro v. Goetter, 78 Ala. 314; Cowles v. Andrews, 39 Ala. 130. In Ex parte the court say: Printup, 87 Ala. 148, "When a person not a party to a pending suit between 8 Wilkinson v. North River Const. Co. 66 How. Pr. 423. 'Central Trust Co. v. Wabash, St. L. & P. R. Co. 23 Fed. Rep. 858. leave to sue is necessary, even though the corporation for whose property the receiver is appointed obtained and retained possession wrongfully.' Leave will not be granted to establish a lien where the receiver has been appointed to prevent a multiplicity of suits and to determine all claims." As illustrating the extreme jealousy with which the court guards the possession of the receiver, and protects him from interference it has been held that where a judgment creditor obtained a judg ment prior to the receiver's appointment, and levied on real estate and sold it afterwards without leave of court the deed issued on such sale was void, for the reason that the land being in the custody of the receiver was in gremio legis and no rights were obtained by the purchaser,' though it is proper to state, in this connection, that the authorities upon the doctrine are not uniform. § 84. Exceptions to the rule. To the foregoing rule requiring from the court appointing the receiver permission to sue the receiver, there are the following exceptions: (a) By act of Congress March 3, 1887, corrected by act of March 13, 1888, and known as the "Judiciary Act," it is 'Re Christian Jensen Co. 128 N. Y. 550. 'Re Herbst, 63 Hun, 247. An original bill against a receiver by a party to the suit in which the receiver is appointed is unwarranted and a contempt of court. Payne v. Baxter, 2 Tenn. Ch. 517. Dugger v. Collins, 69 Ala. 324; to the same effect are Wiswall v. Sampson, 55 U. S. 14 How. 52, 14 L. ed. 322; Robinson v. Atlantic & G. W. R. Co. 66 Pa. 160; Martin v. Davis, 21 Iowa, 535; Bentley v. Shrieve, 4 Md. Ch. 412. v. Schermerhorn, 9 Paige, 372. But see Albany City Bank In Wiswall v. Sampson, supra, the court says: "The settled rule also appears to be that where the subjectmatter of the suit in equity is real estate and which is taken into the possession of the court pending the litigation, by the appointment of a receiver, or by sequestration the title is bound from the filing of the bill; and any purchaser pendente lite, even if for a valuable consideration comes in at his peril," citing Crofts v. Oldfield, 3 Swanst. 278 note; Bird v. Littlehales, 3 Swanst. 299 note; Anon. 6 Ves. Jr. 287 (where a cause was referred to a master to determine whether the parties would be benefited by directing the receiver to defend in an action of ejectment); Angel v. Smith, 9 Ves. Jr. 335. Where permission is given to sue the receiver and after suit was brought the party to whom permission was granted took proceedings to remove the cause to the United States court it was held the court granting such permission could revoke the order and dismiss the suit. Meredith Vil lage Sav. Bank v. Simpson, 22 Kan. 414. |