105 Ala. 225 | Ala. | 1894
On a former appeal in this case it was held that the receiver, being appointed in a suit pending between the landlord and the lessee of a hotel, and authorized “to conduct and run the hotel, and for that purpose to make such purchases as may be necessary,” and no provision being made for him to raise money, had the implied authority to purchase necessary supplies to carry on the hotel business on credit; and that debts thus incurred by the receiver constituted charges, first on the income of the property, and then upon the corpus.—Thornton v. Highland Avenue & Belt R. R. Co., 94 Ala. 353.
That construction was put upon the order of the chancellor upon the consideration that “when the order was made the court knew its own officer (the receiver) had no money, audit made no provision for raising any.” How, on these facts, the court asks, “was the receiver to perform his duty, unless he purchased on a credit?” And concludes : “We are of opinion that the order gave the power and the discretion to the receiver tomakepurchases, if necessary, upon a credit.” It is now insisted for the appellant that this construction of the order was erroneous for that it is now shown, the claim is, that the considerations upon which the construction was arrived at do mot and did not exist; that, in other words, the chancery court did not know the receiver had no money, because the fact was that he did have funds to carry on the hotel; and, therefore, it is said, that court could not have intended to have authorized purchases on credit, and there is no basis for supplying such authority by implication. We do not think this position can be sustained. The order must be considered from the point of view held by the chancellor when it was made, and not with reference to unforeseen subsequent develop
It may be conceded that it was the receiver’s duty to pay for supplies as he purchased them when he had funds belonging to the trust in his hands ; and that, coming into funds after purchasing on credit, it was then his duty to pay the bills thus made. But it does not follow, if having funds he nevertheless purchased on credit, or having made bills he fails to pay them when he is afterwards in funds, that persons to whom he thus becomes indebted have no recourse against the estate in his hands. Primarily, such persons are charged with such knowledge of the receiver’s powers as is imparted by the order of his appointment and other orders in the premises made from time to time by the court, and they may deal with him on that basis, without responsibility, or liability to loss, so long as those powers are not exceeded, unless they know as matter of extraneous fact, or are put upon notice, that his acts, though upon their face within his official competency, are in reality in violation of his trusts. Here, for illustration, the receiver was authorized to make 'such purchases as should be necessary to carry on the hotel business. If he made purchases of supplies which were suitable to the uses the order directed him to subserve, and instead of devoting them to those uses, he converted them to his own use, or if they were not in fact necessary to the carrying on of the business in that its requirements had already been met, the seller, unless he had knowledge or notice of the perversion of the receiver’s authority, would not be prejudiced thereby. The receiver in such case has some discretion, and necessarily so, in respect of what is necessary to cax'ry on the business, and third persons dealing with him may, so long as they act in good faith, rely upon the presumption that as his acts are prima facie within the competency of his office, his discretion is being properly exercised. The duty of detex'mining what quantities of suitable supplies the receiver shall purchase can not be put at their peril on strangers : that
And upon these considerations, the decree of the chancery court is affirmed.