Saylor v. Mockbie

| Iowa | Jun 27, 1859

StocktoN, J.

The District Court has power to appoint a receiver in any civil action or proceeding, on the petition of either party, showing that he has a probable right to any of the property which is the subject of the controversy, and that such property is in danger of being lost, or materially injured or impaired, if satisfied that the interests of one or both the parties will be thereby promoted, and the substantial rights of neither unduly infringed upon. Such receiver is to take charge of, and control the property, under the direction of the court. Code, section 1656. The apointment of a receiver in the settlement of an account between partners, to take charge of the partnership assets, to collect the debts, and convert the property into money, or otherwise dispose of the same as the court may direct, or the parties agree, is the legitimate and regular mode of proceeding in courts of equity, in suits like the present.

The objection taken by the defendant is, that by his answer, it is denied that the Hamilton county bonds are the property of the partnership, or that the complainant has any interest in them. On the contrary ■ thereof, he avers that they are his own property, and should not be placed in the hands of the receiver. Although this denial is made by the defendant, yet he does not deny, but admits that the stock of goods of the firm, was sold to Hyde, as alleged; and that in part payment for the same, there was received from Hyde the $1040, of the bonds of Hamilton county, which the defendant holds in his own. possession, and claims to be his own property. This claim of defendant cannot be allowed; it is not shown that the same were delivered to him, with the assent of his co-partner; and he had no right to appropriate them, on the claim that the partnership was indebted to him. But a more sufficient reason for the action of the court, appears to exist in the fact, that the defendant throughout the whole of the proceedings complained of, was in default. He was adjudged to be in contempt of court, in not complying with the rule awarded against him to deliver the books of account of the partnership to the receiver, or bringing them into court for that purpose. Until the defendant had purged himself of this contempt, by obeying the rule of the court, feade absolute against him, the court might well refuse to receive his answer to the complainant’s bill, or to consider the matters therein set up by way of excuse for his refusal to obey the same.

We think there is no error shown in the order of the court appointing the receiver, and directing the books, &c., to be' placed in his hands. The defendant will in the further progress of the cause, be permitted to show, if he can do so, that the county bonds are his own property, and not the property of the partnership; in such event, the court will direct them to be restored to him. But at present, it seems to us that the question of his right to the same, is to be determined in this suit, and is to depend upon the decision of the court in the settlement of the partnership business. The complainant shows by his bill, that these bonds are unsafe in the hands of the defendant; that he is insolvent; and that he is acting in bad faith with the property of the partnership. His answer to the rule served on him, shows that he had violated the injunction, and set at defiance the authority of the court, by disposing of a portion of the Hamilton county bonds. Under these circumstances, we think, there was ample authority for the action of the court.

The excuse made by the defendant in this court, that'the receiver had not been qualified by talcing the oath and giving the bond prescribed by the statute, was not urged in the court below, and can have no weight here.

We think the order and judgment oí the District Court should be affirmed, and the cause remanded for further proceedings.

Judgment affirmed.