Citation Numbers: 21 How. Pr. 275
Judges: Potter
Filed Date: 6/15/1861
Status: Precedential
Modified Date: 1/12/2023
The receiver brings these actions in his representative capacity, and the judgments for costs are chargeable only upon the fund which he represents, unless the court shall direct the plaintiff personally to pay the judgment for mismanagement or bad faith in the action. (Code, § 317.) There is no evidence in the above cases that the court so ordered in the judgments themselves. In deciding these motions it becomes necessary to take a slight . review of the office and duties of this officer.
The receiver, in contemplation of law, is an indifferent person, and is appointed by the court for that reason. He is supposed to be the honest representative of all parties interested in the fund entrusted to his care; and when appointed he becomes the officer of the court, bound to obey their orders and directions; and money or estate in his hands is regarded as being in the custody of the law, for whosoever shall eventually make title to it, though the court itself, in theory, has the care of the property, for the benefit of the party or parties ultimately entitled.
The receiver, while authorized to act as a party in prosecuting and defending actions, is but the creature of the court—as the custodian or trustee of the fund. The court, however, is ever open to hear; and when complaint is made against him for misconduct, while acting under color of authority merely, they will hear and take cognizance of the complaint by motion or otherwise, and will administer justice between him and the parties interested. (Parker agt. Browning, 8 Paige, 388.) It is the duty of the receiver to protect the property entrusted to him to the best of his
If, therefore, there was any fund in the receiver’s hands, (which he denies) it would be regarded as money in coürt for the benefit of the creditors of this insolvent corporation, among whom are the judgment creditors, who make this motion. But what right or title to the moneys in court (if it was there) do these defendants show to entitle them to the order asked for by their motions ? They show no bad faith or mismanagement of the action on the part of the receiver; that he still persevered, after being beaten at special term,- and appealed to the general term, clearly is not such evidence; it is. only evidence of perseverance, and nothing more; and this, doubtless, under legal advice. It may be meritorious rather than censurable. He may still persevere and appeal to a still higher court, and, perhaps, reverse the very judgments upon which these motions are based. Should he do so, and finally succeed, our adjudication now of his had faith for perseverance would be ridiculously premature. Surely this court ought not to be asked to grant the motion on such a ground. It would be, in effect, the imposing of a penalty upon a party for disagreeing in opinion with the court, or for not yielding submissively to its first consideration of a question. Our remark, “ that he is the creature of the court,” applies to him only as the custodian or trustee of the fund; not to his independence as a party to an action. In the latter respect he is entitled to all the privileges of thought, and freedom to act, of any other -party.
The first action that happens to be determined has no superior equity upon the fund (if there shall be one,) over one Avho, perhaps, has been longer litigating, but Avhose action may be still depending; and it Avould be the highest inequity to order the receiver to pay one creditor in full, without evidence that there will ever be a fund to be divided, or sufficient means to defray the ordinary and necessary expenses incident to securing the claims noAv still in litigation. We cannot, without a precedent, convert such a motion into a creditor’s bill. Nor is the fact that the receiver has paid apparently large bills to counsel and assistants, without an order of the court, any ground for such a motion. The receiver acts in all such matters at his peril; he has given adequate security to take care of the fund; his day of reckoning will come. All persons interested in the fund can, in a proper manner, call him to account. If, during the time he is litigating, he abuses the trust, or is squandering the fund, he can be removed or
If I have rightly viewed the character of his duties, his office, and the rights of other creditors, these motions cannot be granted; they must be denied with costs.