St. Louis Car Co. v. Stillwater Street Ry. Co.

54 N.W. 1064, 53 Minn. 129, 1893 Minn. LEXIS 286

• Court: Supreme Court of Minnesota
• Decided: April 27, 1893
• Status: Published

Opinion

Mitchell, J.

This action was brought by the plaintiff, as judgment creditor, for the appointment of a receiver of the defendant corporation, under the provisions of 1878 G. S. ch. 76.

A receiver had previously been appointed in a foreclosure suit brought by one Curtis against the same defendant

The plaintiff having made a motion in the present action, the defendant appeared by attorney, the appearance being stated to be special, and objected to “any further proceedings, or any proceedings, in the action looking towards the appointment of a receiver thereof,” upon the grounds — First, that “there is a receiver already appointed therein, under and by virtue of an order of this court in an action already pending therein;” second, because the plaintiff has never acquired “jurisdiction in this action of either subject-matter or of the person of the defendant corporation.”

Giving counsel the benefit of the assumption that by “plaintiff” is meant “court,” we still think that this amounted to a general appearance, which gave the court jurisdiction of the defendant. The rule is that an appearance for any other purpose than to question the jurisdiction of the court is general.

The first ground of objection to plaintiff’s application for the appointment of a receiver did not go to the jurisdiction of the court, either over the subject-matter or over the person of the defendant, and did not purport to be made as such, but merely as a defense on tbe merits to plaintiff’s motion, to wit, that a receiver had been already appointed in another action.

2. The fact that a receiver bad already been appointed in the foreclosure suit constituted no reason why a receiver should not be appointed under 1878 Cr. S. ch. 76.

A receivership in a suit to foreclose a mortgage is only for the purposes of the foreclosure, and, however general the language of the appointment, affects only the property covered by the mortgage. Its purpose is to preserve the mortgaged property for the benefit of the mortgagee. Lowell v. Doe, 44 Minn. 144, (46 N. W. Rep. 297.)

On tbe other band, tbe object of a receivership of an insolvent corporation under 1878 G-. S. cb. 76, is to sequestrate all its property for tbe benefit of all its creditors.

The powers of the receivers in the two cases are entirely different. There are various classes of property that can be reached by a receiver under chapter 76 which could not be reached by a receiver appointed in a foreclosure suit. Tbe former has substantially all tbe powers and functions of an assignee in bankruptcy. Everything becomes assets in bis bands which are assets as to creditors, although not assets asi to the corporation, as, for example, property conveyed in fraud of creditors, capital withdrawn without provision for the payment of corporate debts, the personal liability of stockholders, etc. Minnesota Thresher Mfg. Co. v. Langdon, 44 Minn. 37, (46 N. W. Rep. 310.)

Of course, an appointment of a receiver under 1878 G. S. ch. 76, would not necessarily supersede tbe receivership in tbe foreclosure suit. If tbe court should be of tbe opinion that tbe interests of tbe mortgagee could not be otherwise properly protected, both receiver-ships might coexist; that under chapter 76 being subordinate, as to tbe property covered by tbe mortgage, to the receivership in tbe foreclosure suit.

And as- it would be eminently desirable, if possible, that the entire property should be under tbe control of one officer of tbe court, there would be nothing improper in tbe court appointing tbe same person receiver in both cases, provided there is no conflict of interest between tbe mortgagee and tbe other creditors of tbe defendant.

But these are matters for the consideration of the District Court. Order reversed, and cause remanded for further proceedings.

Vanderburgh, J., absent, took no part.

(Opinion published 54 N. W. Kep. 1064.)