50 S.E. 592 | N.C. | 1905
This action, in the nature of a bill in equity, was originally instituted at February Term, 1904, of GUILFORD, by plaintiff as administratrix of B. J. Fisher and certain creditors, against the children and heirs at law of her intestate. The plaintiffs named in the summons, other than the administratrix, declining to permit the use of their names or to prosecute the action, were by an order made in the cause at the same term made parties defendant, and there was an order that summons issue to them returnable to the next term. Thereafter, it appearing that summons had been duly served on the infant defendants without general guardian, E. J. Justice, Esq., was duly appointed guardian ad litem of said infants. At February Term, 1904, the plaintiff administratrix (92) filed her complaint against the infant defendants, setting forth that B. J. Fisher died on 15 April, 1903, in the city of New York, leaving a last will and testament which was duly admitted to probate before the Surrogate of New York County. That said Fisher devised his entire real and personal estate to his wife, the plaintiff, for life, remainder to his children, the infant defendants. That the executor named in said will renounced his right to qualify and the plaintiff was duly appointed administratrix with the will annexed. That thereafter said will was duly admitted to probate before the Clerk of the Superior Court of Guilford, and the plaintiff was duly appointed and qualified as administratrix with the will annexed in this State. That said Fisher was at the time of his death the owner of much valuable real estate in and adjacent to the city of Greensboro in said county and State, a full description of which is set out in the complaint. That said real estate was encumbered with large indebtedness secured by mortgages and deeds of trust amounting to about $45,000, much of which was past due, including unpaid interest. That the rents accruing from said real estate amount to about $3,000 per annum. That said Fisher left but a small quantity of personal estate, entirely insufficient to pay even the interest on his debts. That the plaintiff and her children, the infant defendants, resided in the city of New York, the ages of said children ranging from eight to eighteen years. That the plaintiff had no means of support other than the estate of said Fisher. That one of the creditors holding a mortgage on a part of said real estate securing an indebtedness of $10,000, demanded payment of his debt and threatened to foreclose his mortgage. That other creditors having deeds of trust demanded payment of interest. That if said mortgages and deeds of trust were forclosed, property of the value of more than $10,000 would be sacrificed to pay an indebtedness of less than (93) one-half that amount. That by reason of plaintiff's residence in New York and the attention demanded by her family, it was impracticable for her to give proper attention to said real estate. That *69 she was advised that she could not sell the real estate without the orders of the court. That she had no means with which to pay the indebtedness of her late husband otherwise than by a sale of said real estate. That she desired the appointment of a receiver with power to take charge of and administer the said estate and to protect the interests of the plaintiffs and defendants as well as the creditors and mortgagees. That said receiver be empowered to lay off a portion of said unimproved real estate into lots, to advertise the same for sale, to sell the buildings, and do all such other things necessary and proper in the premises. That A. L. Brooks, Esq., being attorney for said estate and plaintiff's trusted legal advisor, would be a proper person to name as receiver, etc. This complaint is not verified. The guardian ad litem at the same term filed his answer, admitting all of the allegations in the complaint and joining the plaintiff in her prayer that a receiver be appointed. This answer was filed 25 February, 1904, unverified. That at said term an order was made appointing A. L. Brooks, Esq., commissioner and receiver of both real and personal estate situate in the county of Guilford belonging to the estate of said Fisher, to manage, control, and direct the affairs of same; to survey and lay off unimproved real estate; to advertise and sell same either at public or private sale and to sell at public or private sale the Planters Hotel. "That if for any reason sales of sufficient property cannot be made to satisfy the outstanding interest and principal indebtedness which creditors may demand the payment of, then, and in that event, the said receiver is hereby authorized, empowered, and directed to borrow such sum or sum of money as may be necessary to satisfy such claims, and to execute and deliver to the lender receiver certificates or notes, and to secure the same, (94) if desired by such lender, by executing a mortgage or mortgages upon any and so much of the property belonging to the estate of the said B. J. Fisher as may be necessary for such purpose. That the said commissioner and receiver is hereby authorized and empowered to collect and receive any and all rents, obligations, and dues owning and belonging or hereafter becoming due to the said estate, and to execute receipts therefor; to make report to this court of all sales of land and loans secured by him, either in term or at chambers, and to execute deeds therefor or receiver certificates and notes, as the case may require. And the said commissioner and receiver is hereby further directed, within sixty days from this term of court, to advertise for all parties holding claims against the same to make proof thereof for payment; and that the commissioner and receiver herein appointed shall from time to time make report to this court, either at chambers or at the term, of all his dealings and transactions with the said estate; and this cause is retained for further orders and directions." *70
On 3 March, 1904, the plaintiff in her own behalf filed a petition in the cause setting forth that she lived with her husband and their children in the city of New York. That at the time of his death her husband owned no personal estate except furniture. That they had lived under the impression that her husband was a wealthy man, and their expenses were in keeping with such impression. That her children were attending school in New York, and that to maintain them in the social condition in which they lived required considerable income. That one of her children is an invalid. That they had no income whatever. That since the death of her husband she had paid out of her personal estate an indebtedness against her husband secured by mortgage of over $5,000; that she had also paid funeral expenses, attorney's fees, support of herself and children, (95) amounting in all to $8,250. That she is now in need of money with which to maintain and support her family and is compelled to have money from the estate of her husband for such purpose, etc. She prays that the receiver be directed to issue to her a receiver's certificate for $8,250. She files with her petition a statement showing the purposes for which said expenditures were made, doctor's bill, funeral expenses, mourning clothing, attorney's fees, mortgage debt, etc. That thereupon and at the same time the said receiver filed the following petition: "I beg leave to call the court's attention to the annexed petition and affidavit of Isabella Fisher and W. S. Jessup, showing that Mrs. Fisher has advanced to the estate of the late B. J. Fisher, out of her separate personal estate, over $9,000, of which she desires to be repaid; and also the urgent necessity for some money provision for the maintenance and support of herself and children, and for the education of her children. The petitioner desires that the court direct him as commissioner and receiver to issue to her a receiver's certificate for $8,250 upon said claim. If the court shall be of opinion that such an order should be made, and that I as receiver . . . should so execute a certificate for said amount, I respectfully request that the court will direct me in the premises, as it may appear to be just," etc. Whereupon on 10 March, 1904, an order was made, reciting the facts set forth in said petition and directing "That A. L. Brooks, receiver, etc. . . . be and is hereby directed to issue to said Isabella Fisher a receiver's certificate against the property of the estate of the late B. J. Fisher in the sum of $8,250 and deliver the same to her, and of his actions . . . make report to the next term of the Superior Court of Guilford or . . . at chambers in the meantime, should such a course be necessary."
On 19 August, 1904, plaintiff filed her complaint against defendant Southern Loan and Trust Company, adopting the allegations in *71 the original complaint, and further alleging that her intestate (96) prior to his death entered into a contract with the said company by which he turned over to it for sale, upon the conditions therein set forth, certain real estate described in said contract, and being the same real estate described in her complaint. That by the terms of said contract the company was authorized, and it agreed, to expend $5,000 on the improvement of said property, which was to be repaid from the proceeds of the first sale thereof. The said company further undertook as agent of said Fisher to sell the property at such prices as might be named by said Fisher, the said Fisher agreeing to execute to the purchasers a good and sufficient deed with full warranty, etc. For making sales the company was to receive a commission of one-third of the proceeds. The said Fisher covenanted with the company for himself, his heirs, executors, administrators, and assigns, to carry out and perform his part of said contract. Plaintiff further alleged that the defendant company, relying upon the provisions of said contract, claimed that it had the right and power to sell said property, and that such claim on the part of the said company prevented the sale of said property by herself or by the commissioner appointed by the court. She further alleged that the said contract or power of attorney terminated upon the death of the said Fisher. She prayed that the said contract should be declared null and void and delivered for cancellation. At September Term, 1904, defendant company filed its answer, admitting a portion of said complaint, alleging that it had no sufficient knowledge or information to form a belief as to other allegations, admitting the execution of the contract, and alleging that the death of the said Fisher did not operate to revoke the powers conferred therein, and alleging that it had expended large sums of money, a great amount of time and labor in preparing the said land for sale under said contract, and in otherwise proceeding under said contract, and had a vested right to perform its powers thereunder, and further alleging that it had sold a portion of said lands and would have sold more but for an agreement (97) with the said Fisher that it was best to postpone the sale of the lots until the city had proceeded further with the proposed lines of sewer, etc. Defendant denied necessity for appointment of receiver and alleged that the estate should be settled in accordance with the statutes in force in this State providing for settlement of estates of deceased persons. The defendant demanded that the order theretofore made appointing a receiver be revoked and that the receiver be discharged, for such other and further relief, etc.
The cause coming on for trial at September Term, 1904, upon the pleadings and exhibits the defendant company moved the court to discharge the receiver and dismiss the action. Motion denied, whereupon *72
the court rendered judgment that the contract set out in the pleadings was inoperative and of no effect by reason of the death of the said Fisher, and directed cancellation of the same, to which defendant excepted. The court thereupon made an order that the receiver proceed to sell the land, etc., and report the same to the court, to all of which the defendant duly excepted and appealed. The defendant assigns as error, (1) the refusal of the court to hear evidence or submit issues to the jury; (2) refusal to sign judgment discharging the receiver and dismissing the action, and (3) that no provision was made in the order declaring the contract void for reimbursing the defendant company for moneys expended, etc.
After stating the facts: The proceedings had in this action have been somewhat eccentric and irregular. It was originally (98) brought by the administratrix and mortgage creditors against the children of the deceased, who had under his will only a remainder after the life estate of their mother, who appears only in her representative capacity. The creditors, refusing to proceed with the cause, are made parties defendant and summons issued returnable to the September term of court. The plaintiff as administratrix proceeds to file her complaint against the children, who by their guardian ad litem at the same term file an answer admitting every allegation of the complaint. A receiver is, at the same term, and without notice to the creditors or the trustee, appointed with very extensive and unusual powers. The jurisdiction of courts of Equity to entertain administration suits, at the instance of creditors, devisees, or legatees has been uniformly recognized and frequently exercised. Such suits are less frequent since the distinction between legal and equitable assets has been abolished and full powers in the settlement of estates conferred upon courts of probate. Whatever doubt may have existed in respect to the jurisdiction after the establishment of our present judicial system was removed by the act of 1876, ch. 241, Code, sec. 1511; Haywood v. Haywood,
The defendants insist that Mr. Brooks should not have been (102) appointed receiver and commissioner because of his relation to the parties. It is undoubtedly true and abundantly sustained by authority that the court will not usually appoint as receiver persons interested in the property, or the parties to the controversy as attorney or otherwise. The selection of the person to be appointed necessarily rests in the sound judicial discretion of the court. The chancellor, under the equity practice, usually referred the question of selection to the master, and, unless good cause was shown, appointed the person nominated by him. While objection to the person appointed on the ground of relationship to the parties or interest in the property is proper to be considered upon appeal, the appellate court will not, save for strong reasons, interfere with the appointment made by the court. No suggestion is made affecting the personal fitness of the receiver, or that he will not discharge the duties of the position properly. Mr. High says: "It is not regarded as an abuse of judicial discretion to appoint as receiver the attorneys of the respective parties to the cause, and the court, in making such appointment, will not be interfered with upon appeal." High on Receivers, 69. If in the progress of the cause any conditions arise which will render it embarrassing either to the receiver or the parties for him to continue, we are quite sure that the court will either associate some one with him or appoint another in his stead. So far as we can see at this time, there is no conflict of interest in regard to management or sale of the property. The welfare of all is promoted by procuring the best possible results. We note the fact that very extensive and, we think, unusual powers are conferred upon the receiver by the order made at February Term, 1904. We do not commend the practice of appointing a receiver upon the unverified complaint and without notice to creditors and other persons interested. We note, also, that at the same term an order was made authorizing the receiver to issue certificate to the plaintiff administratix [administratrix] for a large (103) amount. We very much doubt whether it is within the power of the court in a proceeding like this to authorize the issuance of receiver's certificates. This practice which has grown up of late years is very largely confined to the Federal courts in suits for the foreclosure of mortgages and trust deeds executed by railway companies and other *76
corporations, whose property is affected by a public duty. We are not prepared to say that these certificates may not be authorized in similar suits dealing with other corporations, such as cotton or other mills, machine shops, etc., in all of which it is of vital interest to creditors and owners that their operations be continued until they can be brought to sale. If such power enlists, it should not be exercised until notice has been given to creditors. High on Receivers, 312. However this may be, we are clearly of the opinion that the reasons upon which the power is claimed and exercised do not apply to a case like this or to claims like, those for which the certificate for $8,250 was issued. JudgeGresham, in Loan and Trust Co. v. Coal Co., 55 Fed., 481, discusses the subject, and clearly limits the power to issue such certificates to suits for the foreclosure of railway mortgages and to operating expenses.Kneeland v. Trust Co.,
Modified and affirmed. *77
Cited: Settle v. Settle,
(105)
