funds confided to his care are in custodia legis, and these it is his duty to guard and preserve with scrupulous care.' This position of trust and independence he continues to occupy until the litigation is brought to an end, and it is judicially ascertained to whom the property or its possession rightfully belongs, after which he becomes the representative of such successful party; or where the property is sold for the benefit of creditors, he is the hand of the court and the agent of the creditors in the distribution of the proceeds. He is in no sense, however, the representative of those who are not parties to the suit, or become such during its progress. Neither is he, without the direction of the court, to interfere with or meddle in the litigation of the parties. 3 num Wire & Iron Works, 60 Mich. 487; Union Nat. Bank v. Bank of Kansas City, 136 U. S. 223, 34 L. ed. 341; Lottimer v. Lord, 4 E. D. Smith, 183; Snow v. Winslow, 54 Iowa, 200. He is not to be controlled by the representatives of any party to the suit. Iddings v. Bruen, 4 Sandf. Ch. 417. His powers and duties are measured by the order of court making the appointment and the established rules and practice of such court. Battle v. Davis, 66 N. C. 252. See also Skinner v. Maxwell, 66 N. C. 45, 68 N. C. 400; Booth v. Clark, 58 U. S. 17 How. 322, 15 L. ed. 164; Green v. Bostwick, 1 Sandf. Ch. 185; Hunt v. Wolfe, 2 Daly, 303; Van Rensselaer v. Emery, 9 How. Pr. 135; Corey v. Long, 43 How. Pr. 497; Devendorf v. Dickinson, 21 How. Pr. 275; Kaiser v. Kellar, 21 Iowa. 95; Snow v. Winslow, 54 Iowa, 200; Hooper v. Winston, 24 Ill. 353; Ellicott v. Warford, 4 Md. 80; Williamson v. Wilson, 1 Bland, Ch. 418; Coburn v. Ames, 57 Cal. 201. Where property is placed in the hands of a receiver, upon a decree for the plaintiff, the receiver's duties, as such, are at an end, and he holds merely as trustee for the plaintiff, and the goods can be levied on in his hands, for the plaintiff's debts. Very v. Watkins, 64 U. S. 23 How. 469, 16 L. ed. 522. And see Lottimer v. Lord, 4 E. D. Smith, 183; Re Colvin's Estate, 3 Md. Ch. 278; Ellicott v. Warford, 4 Md. 80; King v. Cutts, 24 Wis. 627; Meier v. Kansas P. R. Co. 5 Dill. 476. 1 Ashurst v. Lehman, 86 Ala. 370; Gayle v. Johnson, 80 Ala. 388; Skinner v. Maxwell, 66 N. C. 45, 68 N. C. 400; Battle v. Davis, 66 N. C. 252; Corey v. Long, 43 How. Pr. 497; Devendorf v. Dickinson, 21 How. Pr. 275; Hunt v. Wolfe, 2 Daly, 303; Coburn v. Ames, 57 Cal. 201; Hooper v. Winston, 24 Ill. 353. ? See note 1'above. Howell v. Ripley, 10 Paige, 43. In a case where a creditor's bill is filed in behalf of the complainants therein, and not in behalf of other creditors, the receiver is not necessarily a trustee for the benefit of all creditors, but for the benefit of those creditors in whose behalf he is appointed. Young v. Clapp, 147 Ill. 176; Russell v. Chicago Trust & Sav. Bank, 139 Ill. 533, 17 L. R. A. 345; Bostwick v. Menck, 4 Daly, 68; Manley v. Rassiga, 13 Hun, 288. (c) CARE AND CUSTODY OF THE PROPERTY. The receiver, occupying the peculiarly responsible position that he does, both in his attitude to the court and the parties before the court, is required to exercise great care and circumspection over the funds or property entrusted to him, or whatever other interests that may come to him as receiver. Except in a few exceptional cases, he is selected not only because of his ability, honesty and integrity, but because of his not being interested in any manner in the subject-matter of the litigation. Neither will he be permitted to become interested in the property in his charge as receiver during the progress of the litigation, nor use such property or funds for purposes of his own personal gain, and all interest and profits derived from the funds or property must be strictly accounted for. However proper his intentions may be, he is liable for loss or waste growing out of the careless management of his trusts. $7. Effects of appointment. The primary and proximate effects that follow the appointment of a receiver are: (a) PLACES PROPERTY in custodia legis. The property, funds, or whatever may be the subject-matter of the litigation that come to the hands of the receiver are in custodia legis, and being so, will not be permitted to be interfered with, either by the parties to the suit, strangers to the suit, or other courts of co-ordinate jurisdiction. The underlying reasons for this rule are apparent and need not be elaborated in this connection. See "Receiver's Possession." (b) RECEIVER NOT PERMITTED TO BE SUED. Neither will the court permit its receiver to be sued or harrassed by litigation without its express permission, to be granted only in exceptional cases for judicious and special reasons. The Walker v. Morris, 14 Ga. 323; Henry V. Kaufman, 24 Md. 1; State v. Gibson, 21 Ark. 140; Devendorf v. Dickinson, 21 How. Pr. 275; Salway v. Salway, 2 Russ. & M. 215; Iddings v. Bruen, 4 Sandf. Ch. 417; Reynolds v. Battaile v. Fisher, 36 Miss. 321. court first obtaining jurisdiction and appointing a receiver retains that jurisdiction, as a rule, for all purposes, settling and adjusting, in the same suit, all conflicting interests of whatsoever nature between the parties that grow out of or relate to the subject matter in controversy.' It may, however, permit a jury to be called to pass upon disputed questions of fact, or may refer the matter to a common law court and jury for settlement and adjudication, but, in such case, the court retains the property or funds under its control. (c) DETERMINES NO RIGHTS AND AFFECTS NO LIENS. The custody of the receiver is that of the law, and in its nature is provisional and suspensive, leaving the rights of all parties concerned to be controlled by the ultimate judgment of the court. The appointment, in and of itself, determines the rights of no one, and does not disturb, or in any wise affect the legal or equitable standing of any party to the suit, or strangers thereto. And while the custody of the property, or fund, may be transferred, all liens upon or rights therein remain unchanged, and, if the property be sold prior to the final determination of the respective rights therein the status of the parties to the proceeds is preserved and protected. 1 "By the order of appointment the court takes the whole subject into its own hands; and ultimately disposes of all questions, whether legal or equitable, growing out of the proceeding." Beverley v. Brooke, 4 Gratt. 187. That the court will not permit the possession of its receiver to be interfered with without its permission, see Vermont & C. R. Co. v. Vermont C. R. Co. 46 Vt. 792; Russell v. East Anglian R. Co. 3 Macn. & G. 104; Ex parte Cochrane, L. R. 20 Eq. 282; Spinning v. Ohio L. Ins. & T. Co. 2 Disney, 368; Fort Wayne, M. & C. R. Co. v. Mellett, 92 Ind. 535; Skinner v. Maxwell, 68 N. C. 400; Potter v. Spa Springs Brick Co. 47 N. J. Eq. 442; Jacobson v. Landolt, 73 Wis. 142; Riggs v. Whitney, 15 Abb. Pr. 388; Brien v. Paul, 3 Tenn. Ch. 357; Woerishoffer This is accomplished by suit v. North River Const. Co. 99 N. Y. 398; Miller v. Bowles, 58 N. Y. 253; Myers v. Estell, 48 Miss. 372; Central Trust Co. v. Wabash, St. L. & P. R. Co. 30 Fed. Rep. 344; Union Nat. Bank v. Kansas City Bank, 136 U. S. 223, 34 L. ed. 341; Skip v. Harwood, 3 Atk. 564; Anon. 2 Atk. 15; Wiswall v. Sampson, 55 U. S. 14 How. 52, 14 L. ed. 322; Ellis v. Boston, H. & E. R. Co. 107 Mass. able and proper provisions in the decree or judgment. All liens are protected and preserved, but the right to enforce such liens is suspended pending the receivership. § 8. Kinds of receivers. Receivers are sometimes designated as General Receivers, Receivers Pendente Lite, Special Receivers, Interim Receivers, Managers, Ancillary Receivers, and in England, Liquidators. The purposes in all cases being the same, though the methods of accomplishment may differ, and though the functions of the receiver may vary in different cases, no good result, but confusion rather, follows the application of the several names to the receiver, and so far as the general treatment of the subject is concerned, no nominal distinction will be observed. Receivers may be general as to property and special as to power, or vice versa. Nearly all receivers are pendente lite, and with equal propriety might be called interim, while a manager is only in the exercise of an enlarged power, for the accomplishment of the same end.' 1; Maynard v. Bond, 67 Mo. 315; Herman v. Fisher, 11 Mo. App. 275; Ex parte Dunn, 8 S. C. 207; Beverley v. Brooke, 4 Gratt. 187; Bitting v. Ten Eyck, 85 Ind. 357; Leavitt v. Yates, 4 Edw. Ch. 138; Ellicott v. Warford, 4 Md. 80. That the receiver's possession is the possession of the court, see Skinner v. Maxwell, 68 N. C. 400; Robinson v. Atlantic & G. W. R. Co. 66 Pa. 160; Day v. Postal Teleg. Co. 66 Md. 354; De Visser v. Blackstone, 6 Blatchf. 235; Re Buler's Estate, 13 Ir. Ch. N. S. 456; Re Merchants' Ins. Co. 3 Biss. 165; Mays v. Rose, Freem. Ch. (Miss.) 703; Angel v. Smith, 9 Ves. Jr. 335. That he takes the property subject to all liens thereon, see Bowling Green Sav. Bank v. Todd, 64 Barb. 146; Rich v. Loutrel, 18 How. Pr. 121; Gere v. Dibble, 17 How. Pr. 31; Re North American Gutta Percha Co. 17 How. Pr. 549; Smith v. New York Consol. Stage Co. 18 Abb. Pr. 419, 432; Conley v. Deere, 11 Lea, 274; Von Roun v. Super. Ct. 58 Cal. 358; Union Trust Co. v. Weber, 96 Ill. 346; Lorch v. Aultman, 75 Ind. 162. And while the liens are not suspended or in any manner interfered with, yet the right to enforce such liens by ordinary process is suspended. Ellis v. Vernon Ice, L. & W. Co.86 Tex. 109. And see also Walling v. Miller, 108 N. Y. 173; Robinson v. Atlantic & G. W. R. Co. 66 Pa. 160; Thompson v. McCleary, 159 Pa. 189; Dugger v. Collins, 69 Ala. 324. See further Chap. II, § 17. As we have seen, a liquidator is a statutory receiver, with enlarged powers conferred by Act of Parliament. See ante, § 3. And may be appointed generally or for a special purpose. Re Langham Skating Rink Co. L. R. 6 Ch. Div. 102. A receiver pendente lite is a mere temporary officer and does not possess the power of a permanent receiver, or any legal power except such as is specifically conferred upon him by the 9. At what stage appointed. (a) It is a prerequisite that there shall be at the time of making application a suit actually pending.' (b) And there must be a strong special ground to induce the courts to appoint a receiver before answer." (c) After decree and sale a receiver may be appointed if it is necessary to secure complete justice to the parties." court. His functions are limited to the care and preservation of the property. Decker v. Gardner, 124 N. Y. 334, 11 L. R. A. 480; Herring v. New York, L. E. & W. R. Co. 105 N. Y. 372; Keeney v. Home Ins. Co. 71 N. Y. 396. In cases of danger or loss the court may appoint an interim receiver until such time as a receiver may be appointed in due course of law. Taylor v. Eckersley, L. R. 2 Ch. Div. 302, 45 L. J. Ch. 527; 34 L. T. 637. A manager appears to be a person appointed to carry on a business pendente lite. Smith v. New York Consol. Stage Co. 18 Abb. Pr. 419, 433. The purpose is to enable the company's business to be sold as a going concern, the current expenses, wages, etc., being provided for by the plaintiff. Makins v. Ibotson [1891] 1 Ch. 133, 60 L. J. Ch. 164, 63 L. T. 515; Peek v. Trinsmaran Iron Co. L. R. 2 Ch. Div. 115. And it seems that such a manager will be appointed where it is necessary to preserve the security though the business is not mortgaged. Campbell v. Lloyd's Bank, 58 L. J. Ch. 424. The appointment of a receiver prior to filing a bill is a nullity. Jones v. Schall, 45 Mich. 379; Merchants & M. Nat. Bank v. Kent, 43 Mich. 292; Guy v. Doak, 47 Kan. 236; Hardy v. McClellan, 53 Miss. 507; Jones v. Bank of Leadville, 10 Colo. 464; Kimball v. Goodburn, 32 Mich. 10; Baker v. Backus, 32 Ill. 79; Davis v. Flagstaff Silver M. Co. 2 Utah, 92. Baker v. Backus, 32 Ill. 79; Weis v. Goetter, 72 Ala. 259; Hugonin v. Basely, 13 Ves. Jr. 105; Micou v. Moses, 72 Ala. 439. 3 Connelly v. Dickson,76 Ind. 440. In this case the court say: The debtor who remains in possession after the sale of his land certainly owes some duties to the purchaser. He has charge of the property and without doubt may be restrained from committing actual waste; but mere permissive waste may be no less harmful. Sometimes, too, injunction does not afford adequate relief against waste. . . . Under our statute the judgment debtor or owner in possession holds the land itself conditionally for the purchaser, that is to say, as trustee for him; and for the reasonable rents and profits is conditionally accountable or liable to him.... Our decision is that where it is shown that the property is in the hands of a tenant who is under contract to pay a stipulated rent which has not been paid to the judg ment debtor or to the owner of the land and that the latter is insolvent and cannot redeem, the court may appoint a receiver to collect such rents and to hold the same until the end of the year, if a redemption is not sooner made, to be paid over to the debtor if he redeems and otherwise to the purchaser." And after decree a receiver may be appointed though not prayed for in the bill. Shannon v. Hanks, 88 Va. 338. |
