62 N.W. 594 | N.D. | 1895
This is an appeal from an order appointing a receiver to take charge of all of the property of the defendant, and devote it to the payment of the defendant’s debts. The action is in the nature of a creditor’s bill, and the receiver was asked for upon the grounds that the plaintiff had in a former action obtained a judgment against the defendant, and caused execution to be issued thereon, and such execution had been returned wholly unsatisfied; that defendant was insolvent, and its securities were scattered throughout the state, and liable to be lost and wasted; that the business of the defendant had been mismanaged by its president and directors; that it was indebted to a large amount; and that, unless a receiver was appointed, the property would be wasted and squandered. The defendant was alleged to be a corporation organized under the laws of this state, and doing business at Fargo. This application was presented to the court ex parte, and an order was made thereon appointing a temporary receiver, enjoining defendant from disposing of its
It is obvious that it would be highly unjust'to a debtor should a creditor be allowed to issue execution upon a judgment to the sheriff of some county remote from the debtor’s residence, where he had no place of business, and where he pretended to have no property, and then, by simple return of such judgment unsatisfied, the creditor should thereby become entitled to prosecute a proceeding in equity, and have a receiver appointed, and the property of the debtor sequestered, when, at the same time, the issuance of an execution in the county of the residence of the debtor may have disclosed ample property for the satisfaction of the debt. It has been in some cases held sufficient, under exceptional circumstances, if the execution were issued to the sheriff of the county wherein the judgment was obtained, or if issued to the sheriff of any county wherever the debtor had any established place of business. But an examination of the complaint in this case develops the fact that it is not stated where defendant’s residence is, it is not stated in what county judgment was obtained; the whole extent and scope of the allegation being that the defendant was a corporation created by the laws of this state, and that at the time of the filing of the complaint in this case it was doing business in Fargo. It is further stated that the judgment was obtained in the Third Judicial District. In what county of that district is not designated. That the execution was issued to the sheriff of Cass County, and returned unsatisfied. It will be noticed that this complaint contains no allegation of the residence of defendant; no allegation that the defendant had any place of business in the county to which execution was issued at the time that the same was issued, and no allegation that the judgment was obtained in the county to which the execution was issued. We think that, in the absence of these allegations, plaintiff has failed to present facts that authorize a court of equity to grant him any relief through a receivership, and we reach this conclusion the more readily in this case because of the fact that the
We are clear that the court was not authorized in making the order from which the appeal was taken. A fortiori, was it without authority to make the original ex parte order. But the order making the receivership permanent terminated and extinguished the ex parte order, and the order making the receivership permanent is reversed, but without prejudice to another application for a receiver, should plaintiff be so advised. The District Court will direct the receiver to return to defendant all property of every character received by him as such receiver, and, when all property is thus accounted for, the receiver will be discharged.
Reversed.