Guardian Financing Co. v. Davidson

WASHBURN, J.

This was an action brought by Davidson and others asking for the appointment of a receiver for the Guardian Financing Co. The court appointed a receiver before the petition was filed, before summons was issued and before notice was served upon anyone. Such petition and journal entry were then filed with the clerk and the bond of the receiver was filed, and a summons was later issued and served. The corporation then moved to dismiss the receiver for the reason that the court had no authority to appoint a receiver, there being no suit pending at the time of such appointment, and for the further reason that the allegations of the petition were' not such as to authorize the appointment of a receiver without notice. This ■ motion was overruled. In setting aside the appointment the court of appeals held:

1. The appointment of a receiver under such circumstances, when no suit was pending, was clearly unauthorized and void and the motion to discharge the receiver should have been properly granted.

2. As the action for the appointment of a receiver was based upon the power of a court of equity independent of any statute, a showing was necessary that such extraordinary jurisdiction was indispensably necessary to save or protect some clear right of the plaintiff which would otherwise be lost or greatly endangered and which could not be saved or protected by any other action or mode of proceeding, and a full hearing with due notice thereof was proper and necessary.

3. As the petition did not allege such a threatened action by the officers and directors of the corporation, or set forth a situation or emergency which authorized the appointment of a receiver without notice and hearing, the appointment by the court was clearly improper and a gross abuse of discretion.