Egan v. North American Loan Co.

76 P. 774, 45 Or. 131, 1904 Ore. LEXIS 74
CourtOregon Supreme Court
DecidedMay 16, 1904
StatusPublished
Cited by7 cases

This text of 76 P. 774 (Egan v. North American Loan Co.) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Egan v. North American Loan Co., 76 P. 774, 45 Or. 131, 1904 Ore. LEXIS 74 (Or. 1904).

Opinion

Mr. Chief Justice Moore,

after stating the facts in the foregoing terms, delivered the opinion of the court.

1. It is contended by defendants’ counsel that plaintiff, having alleged that Graves was appointed receiver of the defendant corporation, neglected to aver that she had secured leave of court to institute proceedings against him, and, this being so, the complaint failed to state facts sufficient to constitute a cause of suit, and an error was committed in overruling the motion. Our statute, in defining the office of a receiver and prescribing the duties devolving upon him,* is as follows : “A receiver is a person appointed by a court or judicial officer to take charge of property during the pendency of a civil action, suit, or proceeding, or upon a judgment, decree, or order therein, and to manage and dispose of it as the court or officer may direct”: B. & C. Oomp. § 1080. It is the court, by its agent, the receiver, that takes possession of the property in controversy pendente lite, or after judgment or decree, for the benefit of the persons entitled thereto, when it does not deem it proper that either party should have control thereof: Beach, Receivers (Alderson’s ed.), § 2. “The possession of the receiver,” says Mr. Justice Baldwin, in Beverley v. Brooke, 4 Grat. 187, “ is that of the court, and any attempt to disturb it without leave first specially granted will be a contempt, and may be punished as such.” Mr. Justice Thayer, in Thompson v. Holladay, 15 Or. 34 (14 Pac. 725), in speaking of the right of creditors to institute actions against a receiver, says: “They may bring and maintain suits against the receiver in his official capacity almost as a matter of course, and obtain judgments against him [135]*135binding the estate, subject to the equities of other parties interested in it. They are compelled, it is true, to obtain leave of the court having custody of the property to bring their suits against the receiver, hut that requirement is imposed to prevent vexation and confusion; and they may maintain suits against the debtor in any forum as a matter of right, but the judgment recovered in such case will not bind the receiver, or compel him to do anything in aid of its enforcement.” Further in the opinion it is observed : “There is no principle better established than that, where property in litigation is taken into the custody of the court, through the intervention of a receiver, a party interested cannot go into another forum and establish any claim to it. The court which first takes cognizance of the controversy is entitled to retain jurisdiction to the end of the litigation, and, incidentally, to take possession and control of the subject-matter of the suit, to the exclusion of all interference from other courts of concurrent jurisdiction. The principle grows out of a spirit of comity, which has the highest aim for the public good, and without the observance of which conflicts of a serious nature would be likely to arise.” The several states of the Union are independent, and, as to each other, foreign, governments, from which it results that the,laws of one state and the judgments and decrees of courts rendered in pursuance thereof have no binding force or effect beyond its borders: 23 Am. & Eng. Enc. Law, (2 ed.) 1108.

Where no vested or accrued rights of the citizens of a state have intervened, the principle of comity prevails by which a receiver appointed by a court of another state may, by appropriate proceedings, be permitted to take possession of a debtor’s property in the latter state: Gilman v. Ketcham 84 Wis. 60 (54 N. W. 395, 23 L. R. A. 52, 36 Am. St. Rep. 899); Hunt v. Columbian Ins. Co. 55 Me. 290 (92 Am. Dec. 592). This is usually accomplished by [136]*136an ancillary suit in which a foreign receiver is permitted by a court of another state to take possession of property involved in the litigation that is situated within its jurisdiction, thereby investing him with the measure of power delegated: Rust v. United Waterworks Co. 70 Fed. 129 (17 C. C. A. 16). No rule of comity, however, requires a court in which a debtor’s property is situated to abdicate its jurisdiction of the res when the rights of its citizens would be thereby prejudiced: City of Fort Dodge v. Minneapolis & St. L. Ry. Co. 87 Iowa, 389 (54 N. W. 243); Holbrook v. Ford, 153 Ill. 633 (39 N. E. 1091, 27 L. R. A. 324, 46 Am. St. Rep. 917); nor can a foreign receiver, without the court’s permission, sue to recover the possession of such property: Booth v. Clark, 58 U. S. (17 How.) 321. In deciding that case Mr. Justice Wayne, in speaking of a receiver, said: “ If he seeks to be recognized in another jurisdiction, it is to take the fund there out of it, without such court having any control of his subsequent action in respect to it, and without his having even official power to give security to the court, the aid of which he seeks, for his faithful conduct and official accountability. All that could be done upon such an application from a receiver, according to chancery practice, would be to transfer him from the locality of his appointment to that where he asks to be recognized, for the execution of his trust in the last, under the coercive ability of that court; and that it would be difficult to do, where it may be asked to be done, without the court exercising its province to determine whether the suitor, or another person within its jurisdiction, was the proper person to act as receiver.” But, as was said by Mr. Justice Danforth in Hibernia Nat. Bank v. Lacombe, 84 N. Y. 367 (38 Am. Rep. 518), in speaking of the right of commissioners, appointed by a court in Louisiana, to enforce in New York the payment of a claim of their insolvent debtor: “Once properly in [137]*137court and accepted as a suitor, neither the law nor court administering the law will admit any distinction between the citizens of its own state and that of another.” If, under such, rule of comity, Graves had been appointed or recognized as the receiver of the defendant corporation by a court of this State, so that leave to prosecute the suit could have been secured, a different question might be presented, and a variant rule applied.

2. The suit was instituted to cancel a lien on the ground that the debt secured thereby was paid, which was tantamount to the removal of a cloud from the title to' real property, requiring a trial of that cause in the forum where the premises were situated. The rules of law do not impose upon a party the performance of vain things, and, this being so, no necessity existed for applying to the Minnesota court for leave to institute a suit in the courts of this State, in which the right involved could only be enforced. The receiver, Graves, undoubtedly was the holder of the promissory note given by Egan, and was also the assignee of the mortgage, which was an incident thereof; but he was not in, nor entitled to, the possession of the mortgaged lots, and a complaint in a suit against a receiver to recover real property which does not show that he is in possession thereof is not subject to demurrer: Fort Wayne, etc. R. Co. v. Mellett, 92 Ind. 535. We think the complaint stated facts sufficient to entitle plaintiff to the relief demanded, for, Graves not being in the actual or constructive possession of the property, it was not in custodia legis, and hence it was not necessary to secure leave of court to institute the suit, or to allege su$h fact in the complaint.

3.

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Cite This Page — Counsel Stack

Bluebook (online)
76 P. 774, 45 Or. 131, 1904 Ore. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/egan-v-north-american-loan-co-or-1904.