Clark v. Brown

119 F. 130, 57 C.C.A. 76, 1902 U.S. App. LEXIS 4651

• Court: Court of Appeals for the Eighth Circuit
• Decided: November 26, 1902
• Docket: No. 1,715
• Status: Published

Opinions

LOCHREN, District Judge,

áfter stating the case as above, delivered the opinion of the court.

Counsel for appellant, in their brief, assert and reiterate, as the principal ground for sustaining all of their assignments of error, that “the order appointing the receiver was void,” and therefore the defendant was at all times entitled to a return to him of the property intact, and undiminished by any expense of the receivership, because, they say, “the bill contains no allegation justifying equitable cognizance.” But whether it did or did not was a question to be determined by the court, and its adjudication," even if erroneous, was not void. Mellen v. Iron Works, 131 U. S. 352, 367, 9 Sup. Ct. 781, 33 L. Ed. 178. The bill, however, contained ample averments to invoke equitable relief, and warrant the appointment of a receiver, in its allegations that the complainant was entitled to one-half of the crop of flax, and that defendant was engaged in removing the whole beyond the jurisdiction of the court, and disposing of it, while the party liable to the complainant on contract was insolvent. High, Rec. § 9. Moreover, notwithstanding the recital in the stipulation for the sale of the flax by the receiver that he had been appointed “over the objection and opposition of the defendant,” it fully appears from the record that, while defendant did not directly consent to the appointment, he made no objection to it having color of seriousness or force. His answer to. the order to show cause why a receiver should not be appointed was irrelevant. It was merely a statement that he was willing to pay complainant what the court should find him entitled to. on a contract with another for sale of the land, if complainant would execute to defendant a warranty deed of the land. This in no way met the allegations of the bill on which the right to the appointment was claimed. That the amended bill was not verified was an irregularity which might have defeated' the application at the time, had it been called to the attention of the court. But no objection on that or any other ground was made. Defendant answered the amended bill, and never made any motion to. have the appointment revoked or the receiver discharged. And although, in the stipulation mentioned, it was recited that it should be “without prejudice to the right of said defendant to a review upon appeal of the order of the circuit court appointing said receiver,” it appears from the assignment of errors.on the appeal which followed to this court, and which are set forth in the present record, that no question was raised or presented on that appeal as to the appointment of the receiver. As the appointment of the receiver was a proceeding in the cause prior to that appeal, the failure to question it upon that appeal was an acquiescence in the receivership, and no dispute as to the propriety or regularity of the appointment when made could afterwards be considered. As before stated, the decision of this court upon that appeal did not rest upon the sufficiency or insufficiency of the averments of the bill, but on a determination of the merits of the cause as disclosed by the proofs.

The defendant was not entitled to interest on the money for which, the property was sold during the time that money was held by the receiver. The money in the hands of the receiver was in the custody of the court (Radford v. Folsom, 55 Iowa, 276, 7 N. W. 604), and it was held by the receiver in accordance with defendant’s written stipulation that it should be so held.

The amount of compensation to be allowed a receiver for services and expenditures, and whether the same should be paid from the fund accumulated in the receivership or charged in whole or in part to the party who procured the appointment are matters to be determined upon equitable considerations. Here the appointment of the receiver was proper, when made. No showing to the contrary was attempted by the defendant, whose proceedings and conduct showed acquiescence in the receivership throughout. The receiver acted honestly, prudently, and efficiently in caring for the property, preparing it for market, removing it to a better market in season to avoid a considerable charge of taxes, and in the sale of the property; realizing, as the court found, after the deduction of all of his charges and claims for compensation, a much larger sum than would have been obtained by the defendant had he sold the property as he had purposed when stopped by the receivership. No reason appears why the receiver’s fair compensation and just expenditures should'not be paid from the fund obtained from the sale of the property, the value of which and amount realized was so increased by his services and expenditures, instead of being charged to the complainant, even though the latter failed to recover in the suit. High, Rec. § 796; Hembree v. Dawson, 18 Or., 474, 23 Pac. 264; Jaffray v. Raab, 72 Iowa, 335, 33 N. W. 337. The defendant was not damaged, but actually benefited, by the receivership, and the court modified, reduced, and disallowed the receiver’s charges to as great an extent as the evidence warranted.

The decree appealed from is affirmed, with costs.