Stockbridge v. Beckwith , 6 Del. Ch. 72 ( 1887 )

The Chancellor.

This case must be governed by that of Booth v. Clark, 58 U. S. 17 How. 324, 15 L. ed. 164, and the reasoning of Wayne, J., who delivered the opinion in that case.

A receiver is an officer of the court appointing him. He is appointed for the benefit of all parties who may establish rights in the cause. The money in his hands is in custodia legis for whoever can make out a title to it. It is the court itself which has the care of the property in dispute.

The receiver is but the creature of the court. He has no powers except such as are conferred upon him by the. order of his appointment, and the cause and practice of the court. A receiver’s right to the possession of the debtor’s property is limited to the jurisdiction of his appointment ; and he has no lien upon the property of the debtor except for that which he may get the possession of without suit, or for that which, after having been permitted to sue for, he may reduce into possession in that way.

A receiver has no extraterritorial power of official action ; none which the court appointing him can confer with authority to enable him to go into a foreign jurisdiction to take possession of the debtor’s property; none;which can give him, upop the principle of comity, a privilege to sue in a foreign court or another jurisdiction, as the judgment creditor himself might have done, where his debtor may be amenable to the tribunal which the creditor may seek.

Mr. Justice Wayne, in Booth v. Clarrk, says: “Our industry has been tasked unsuccessfully to find a case in which a receiver has been permitted to sue, in a foreign jurisdiction, for the property of the debtor. So far as we can find, it has not been allowed in an English tribunal. Orders have been given in the English chancery for receivers to proceed to execute their functions in another jurisdiction, but we are not aware of its ever having been permitted by the tribunals of the last.”

This was said in 1854. The case of Hurd v. Elizabeth, 41 N, J. L. 1, decided in 1879, held that a receiver appointed in a foreign jurisdiction, clothed with authority to take the designated property wherever situate, may sustain a suit for such property, in the courts of Hew Jersey; and that this was the rule whenever the creditors of the person represented by the receiver do not intervene. But this case is not at all inconsistent with the view I take of the case before me. It recognizes the case of Booth v. Clark as rightly' decided.

In speaking of that case the learned chief justice of Hew Jersey said: “But that ease belongs to a train of decisions which have been, undoubtedly, rightly decided, but which are not to be regarded as ruling the precise point now in issue. The decisions thus referred to will be found in High on Beceivers, § 239 ; and they are all cases involving a controversy between the receiver and the creditors of the person whose property has been placed under the control of such receiver. In such a posture of things it is manifest that different considerations should have force from those that are to control when the litigation does not involve the rights of creditors in opposition to the claims of the receiver. That the officer of a foreign court should not be permitted, as ■against the claims of creditors resident here, to remove from this state the assets of the debtor, is a proposition "that appears to be asserted by all the decisions.”

In the case before me creditors of the corporation represented hy the receiver have intervened,—two of these •creditors are corporations in this State. The other is res■ident in the State of Hew York ; but he has obtained a judgment in this State against the insolvent corporation -of Maryland, and a judgment against a garnishee of that •corporation, and is proceeding to collect the latter judgment. There is .no principle of law or equity that foribids his doing so.

And the rule in this case is therefore discharged.