Oliver v. Bullock , 28 Ga. App. 446 ( 1922 )

Broyles, C. J.

(After stating the foregoing facts.) As we view this case it is only necessary to consider the general demurrer, for in our opinion the petition failed to set forth a cause of action. The suit was brought in a court of this State by a receiver appointed under and by virtue of a statute of a sister State — Florida — and his appointment confirmed by a court of competent jurisdiction of that State. Such a receiver is without authority to enforce his rights beyond the jurisdiction o* the court appointing him. The defendant in error contends that such is not the true rule, and cites, among other authordy, in support of this contention, section 9 of the Civil Code of Georgia (1910), which is as follows: “ The laws of other States and foreign nations shall have no force and effect of themselves within this State, further than is provided by the Constitution of the United States, and is recognized by the comity of States. The courts shall enforce this comity, until restrained by the General Assembly, so long as its enforcement is not contrary to the policy or prejudicial to the interests of this State.” We cannot agree with this contention. This court, notwithstanding this statute, has announced in plain and unambiguous language that it will not recognize the extraterritorial force of a decree of a foreign State appointing a receiver. See Seaboard Air Line Ry. v. Burns, 17 Ga. App. 1 (2) (86 S. E. 270), where it was said: “The plaintiff was a resident of Alabama. The decree rendered by the United States district court in Missouri, appointing a receiver for the defendant, had no extraterritorial force, and the plaintiff was not bound by it. Linville v. Hadden, 88 Md. 594 (41 Atl. 1097, 43 L. R. A. 222). The appointment of a receiver, of its own" force, gives the receiver the right to take possession of the property; but it confers upon him no power to compel the recognition of that right outside the ■jurisdiction of the court making the appointment. High on Eeceivers, §§ 47, 241.” (Italics ours.)

The rule is stated in 4 High on Eeceivers, § 239, p. 271, as follows: “Hpon the question of the territorial extent of a receiver’s jurisdiction and powers, for 'the purpose of instituting actions connected with his receivership, the prevailing doctrine, established by the Supreme Court of the Hnited States and sustained by the weight of authority in various states, is that the receiver has no extraterritorial jurisdiction or power of official action, and cannot, as a matter of right, go into a foreign state or jurisdiction and there institute a suit for the recovery of demands due to the person or estate subject to his receivership. His functions and powers, for the purposes of litigation, are held to be limited to the courts of the state within which he was appointed, and the principles of comity between nations and states, which recognize the judicial decisions of one tribunal as conclusive in' another, do not apply to such a case, and will not warrant a receiver in bringing an action in a foreign court or jurisdiction.” (Italics ours.)

In Booth v. Clark, 17 Howard, 322 (15 L. ed. 164), the Supreme Court of the Hnited States held: “ He [the 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, upon the principle of comity, a privilege to sue in a foreign court or other 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, who delivered the opinion in the Booth case, gave the following reasons for refusing to recognize the power of a receiver in foreign jurisdictions: “We think that a receiver could not be admitted to the comity extended to judgment creditors, without an entire departure from chancery proceedings, as to the manner of his appointment, the securities which are taken from him for the performance of his duties, and the direction which the court has over him in the collection of the estate of the debtor, and the application and distribution of them. 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.” The soundness of this ruling was recognized and it was followed in Hale v. Allison, 188 U. S. 56 (47 L. ed. 380); Great Western Mining Co. v. Harris, 198 U. S. 561, 575 (49 L. ed. 1163); Keatley v. Furey, 226 U. S. 399, 403 (57 L. ed. 273); Sterrett v. Second Nat. Bank, 248 U. S. 73 (63 L. ed. 135).

Likewise, many of the State courts refuse to recognize upon the ground of comity a foreign receiver suing upon a stockholder’s liability. In Stockbridge v. Beckwith, 6 Del. Ch. 72 (33 Atl. 620), it was held: “A receiver appointed in Maryland cannot sue in'Delaware to recover a debt due the corporation which he represents, from a resident of the latter State.” To the same effect see Hunt v. Whewell, 122 Wis. 33 (99 N. W. 599, 601); Moreau v. Dubellet, (Tex. Civ. App.) 27 S. W. 503; Ayres v. Seibel, 82 Iowa, 347 (47 N. W. 989); Murtey v. Allen, 71 Vt. 377 (45 Atl. 572); New Haven Co. v. Linden Co., 142 Mass. 349 (7 N. E. 773); Fowler v. Lawson, 146 Ill. 472 (34 N. E. 932).

However, the defendant in error contends that the decisions cited above do not apply to the instant case, because the receiver in each of those cases was a chancery receiver, whereas the receiver in the present case is a statutory one. We cannot concur in this contention. The statute (hereinbefore set out) under which the receiver in this case acts shows clearly that he is a chancery receiver, appointed by virtue of a statute. By the express terms of the statute the comptroller appoints a person to act as receiver; but a court of competent jurisdiction must confirm tbe appointment. Therefore, until the appointment is confirmed, the person named as receiver by the comptroller is not in fact a receiver. He derives his power to act from the court confirming his appointment, for the statute expressly provides that “upon the order of the court of competent jurisdiction he may sell or compound' all bad or doubtful debts;” and that “ on like order he may sell all the real and personal property of such bank . . on such terms as the court shall direct.”

A majority of the cases which we have hereinbefore cited deal with receivers similar to the one now before us. In the Sterrett case, supra, the receiver was appointed by virtue of an Alabama statute, but, under that statute, as under the statute now in question, the receiver must act under the direction of the court. In the Hale case, supra, the proceedings were instituted under a Minnesota statute.

The main (and it might be said the only real) exception to the general rule that a receiver cannot sue in a foreign jurisdiction is where he is vested with title to the assets of the insolvent corporation which he represents. But this exception applies only to statutory receivers. Title may be vested in him either by the statute under which he is appointed or by some deed or other conveyance. See Relfe v. Rundle, 103 U. S. 222 (26 L. ed. 337); Keatley v. Furey, supra; Great Western Co. v. Harris, 198 U. S. 561, supra. However, even if it be conceded that the receiver in the ease at bar is a statutory receiver, the facts of the case do not bring it within the exception. The statute under which the receiver in the instant case'was appointed does not vest in him title to the property. On the contrary, it prescribes that all money received by him shall be deposited with the State treasurer as a special deposit for the benefit of creditors. In fact, paragraph 10 of the petition expressly alleges that this suit is brought for the benefit of creditors of the insolvent bank. In Hayward v. Leeson, 176 Mass. 310 (57 N. E. 656, 49 L. R. A. 725), where it appeared that a receiver appointed by a Tennessee court for an insolvent corporation was authorized by his appointment to collect, take possession of, preserve, and care for the assets of the corporation, and dispose of the same under the order of the court, and was directed to prosecute suits in the courts of Massachusetts for the purpose of recovering from the promoters of the corporation assets which it was claimed they had unlawfully withdrawn, it was held that none of the proceedings in Tennessee operated as an assignment to the receiver of the dioses in action in litigation, and, therefore, that the receiver could not sue thereon in his own name in Massachusetts. In the instant case it is not necessary to decide whether the receiver had authority to bring the suit in his own name.

None of the other reasons advanced by the defendant in error why the judgment of the trial court overruling the general demurrer should be affirmed contain substantial merit; and it follows, from what has been said, that the court erred in refusing to dismiss the petition upon the general demurrer interposed.

Judgment reversed.-

Luke and Bloodworth, JJ., concur.