Conner v. Belden , 8 Daly 257 ( 1879 )

Van Hoesen, J.

The holding of a receiver is the holding of the court, and he has no right to ask for a review of the order removing him any more than a stranger to the cause. (Edwards on Rec. 12 ; Van Santvoord’s Eq. Pr. 375.) The parties to the cause have, however, a right to be heard upon any application for the appointment or the removal of a receiver. Their property is at stake, and they have an interest in the selection of its custodian.

Conner and Henry Belden were appointed co-receivers by consent of all parties, and they have been removed upon the application of the plaintiff alone. The charges made by Conner against Henry Belden were partly frivolous, and partly unsustained. No importance is to be attached to any accusation the grounds of which were fully known to Conner at the time he executed the consent. If Henry thought that William Belden’s pretensions were well-founded, he is guilty of no breach of duty in adhering to his views after his appointment. If he is poor, Conner, who had been his partner, knew the fact, and ought to have required security to be given. If Henry did not think it judicious to hire a new office, I see no reason why he should surrender his judgment to Conner. I think that the charge that Belden is concealing books of the firm is not sustained. With respect to the alleged indebtedness of William Belden to the firm, Conner’s path was plain and unobstructed; William was a party to the suit, and could have been, and may now be, compelled to pay over to the receivers any assets which belong to the firm and which he wrongfully withholds. A reference and an attachment will afford complete relief. (Parker v. Browning, 8 Paige, 389.) If a receiver wilfully refuses to avail himself of the process of the court, that might be good ground for removing him, but not for removing anybody else.

We have before us a case in which the sole ground on which the removal was ordered was incompatibility of temper between the two receivers. Back of that lay their conflicting interests, which made them personally hostile to each other. Their personal quarrels are of no consequence to the court. If the estate is not to suffer through their strife they ought not to have been removed. The sole object of the receivership is to protect and properly distribute the partnership funds, and the only sufficient cause for removing a receiver is loss or danger of loss to the fund. Contumacy or contempt would, of course, be punished by removal, but the court would act of its own motion in such a matter. There was nothing shown to warrant the belief that the assets have been, or are likely to be, wasted or misapplied by Henry Belden, and there was not, in my opinion, any cause for his removal. The discretion of the court is not an arbitrary or capricious discretion. Where, as in this case, the parties defendant consented to the judgment of dissolution and to the appointment of two co-receivers, of whom a defendant was one, it must be assumed that a part at least of the inducement to such consent was that the expense of an ordinary receivership might be saved, and that each party might have a hand and a voice in the winding up of the business. The defendants ought not to be deprived of those advantages without cause. I think the order removing Henry Belden should be reversed, but as it seems that Conner consented to his own removal in order to compass Henry’s displacement, and that that was his only object in expressing a willingness to give up his place, I deem it best to restore both parties to the position in which they stood before the order was made. They will then be in the position in which they agreed to stand, and to which by their stipulation they induced the court to appoint them.

The order should be reversed, with costs and disbursements of printing to be paid by the plaintiff.

Charles P. Daly, Ch. J., concurred.

Ordered accordingly.