22 Mich. 201 | Mich. | 1871
An appeal was taken in this case from an order óf the Circuit Court for St. Joseph county, directing the appointment of a receiver to take charge and dispose of all the property held by defendant as surviving partner of a firm in which John S. Barry was interested during his life. The bill was filed by Barry’s executor.
A motion is now made to dismiss this appeal, on the ground that the order appealed from is neither a decree nor a final order.
The decision recently made in Kingsbury v. Kingsbury, in which the various kinds of orders and decrees which have been passed upon by this court were collected and compared, renders it unnecessary to report the classification' at length. It may be said in brief, that the nature of any order, as a decree or final order, or as not final, depends entirely on the effect produced by the adjudication upon the rights and interests of parties; and that the usual distinction between interlocutory and other orders depending on the stage of the 'cause in which they are made, is not
The bill is filed by the executor of a deceased partner against the only surviving partner, who appears by the bill to have had general management of the business and to have conducted it under his own name, but for the joint benefit, during Governor Barry’s life. The assets are averred to be large, and defendant is shown to have a beneficial interest in them. The object of the bill is to have the assets taken from his charge and put into the hands of a receiver, and the business wound up under the direction of the court.
The order appealed from was made upon a motion noticed for hearing at chambers seven days after the bill was sworn to. The time for appearing had not elapsed, and the motion was founded on the bill and the affidavit of a son of the complainant. Treated in the order of time, it is clearly an interlocutory order. But considered in reference to its substance, it will become necessary to look at it in another point of view.
It operates to divest the defendant entirely of all the assets; and it directs and empowers the receiver to collect all claims, and to sell all the property and convert it into cash. It requires all the books and documents and all papers and vouchers to be turned over to the receiver, and authorizes him to examine defendant on oath concerning the entire business. Defendant is restrained from in any, way interfering with the property or interests, and is com
This being the scope of the order, the question next arises, What would have been defendant’s rights had no such order been made? As sole surviving partner he had .the entire legal title to all the assets. He had the right to dispose of them as he pleased, to settle all debts to or against the concern, to make any compromises deemed necessary, and to turn the assets into an available and distributable form. His duty was to act honestly, and to use reasonable discretion and diligence.
His position being not purely one of individual interest, but involving duties to a considerable extent of a fiduciary nature, a court of equity could interfere to prevent any irreparable injury to the other beneficiaries, when the danger of such a result should be clearly made to appear, but not otherwise.
The effect of this order is to divest the entire legal estate of defendant in property over which he had this exclusive control as well as exclusive title, and in which he was equitably as well as legally interested, and in which no one else had any rights except to receive the amount which might belong to the deceased partner’s estate after the accounts should be closed and the fund converted. The specific property and its disposal belonged to defendant. A certain share of 'the net proceeds would belong to the executor. The order divests the whole body of the property, and puts its management, as well as ownership, into other hands. It does very nearly all that could be done under the bill by a decree upon the hearing. The striking of balances, and the final distribution, although not universally, are quite frequently subsequent steps to the principal -decree; and .in the .present .case the principal object of the bill is to transfer the trust into new hands,
An adjudication which produces such important effects, and which actually transfers the entire estate from the defendant, is to all intents and purposes equivalent to a decree as far as it goes. Whether it is competent for a court to divest a title of this kind, except upon a final hearing on pleadings and proofs, is a point which will more properly arise on the merits of the appeal. In the case of the People v. Simonson, 10 Mich. R., 335, in which we reversed a conviction for contempt in asserting an existing possession against an injunction which was sought to be used as a means of ouster, we indicated some views on the effect of an interlocutory order operating upon vested rights. And in the case of Lewis v. Campau, before referred to, we held that an appeal would lie from such a preliminary order, when it operated to divest the legal control of property. We consider the present case as fully as strong an illustration of such an effect as was furnished by the facts there.
It would be a very singular thing if a court could, by anticipating the proper date of a decree which would be appealable, produce all the consequences of a decree and yet deprive a party of his right to a review. The statutes regulating appeals have regard to the rights of parties, and not to senseless formalities. And tbe practice in this state, as well as elsewhere, has always been to apply them to that end.
The appointment of receivers is, like many other judicial functions, governed in part by discretion, and in part by rules of right. No court could have unlimited discretion to put private estates into the hands of receivers. There are, many cases of recognized equity jurisdiction, where receivers may be appointed at a preliminary stage of the
There is no analogy between receiverships in ordinary partnership cases, or in tenancies in common, as in Duncan v. Campau, 15 Mich. R., 415, and receiverships in cases like the present. In both of those classes of cases, there is no one who has any exclusive right to control or manage the property;, and when the parties cannot agree to act together, the interposition of some other agency is necessary to secure any care of the property whatever. Between tenants in common there is no divestiture of any title, and none of any lawful exclusive possession. As between quarreling partners the interference is one of' absolute necessity to preserve and manage. the fund for any purpose. But a sole surviving partner has all the right at law which exists any where, and he cannot be at variance with himself. If any occasion arises for interfering with him, it can only be from his grievous misconduct or incapacity, and not from any ordinary necessity to provide a custodian of property remaining masterless. Whether even in partnership cases and tenancies in common there may not be cases where an appeal will lie from the appointment of a receiver, may be a question to be considered! when there is occasion for it. In Kirly v. Ingersoll, 1 Doug., 477, where an
We think the order in the case before us is appealable, because it divests defendant’s estate.
The motion must be denied, with ten dollars costs.
