102 N.J. Eq. 357 | N.J. Ct. of Ch. | 1928
The above cause is one for the foreclosure of a mortgage, and in it Mr. Max Grossman was appointed receiver for the defendant corporation. Application was made to a vice-chancellor for leave to make the receiver a party defendant in a certain suit in the court of chancery between John O. Wilson, complainant, and Ventnor Gardens, Incorporated, and *358 others, defendants, and the purpose of which suit is to foreclose a mortgage given by one Sullivan covering premises, the legal title to which is the Ventnor Gardens Company, Incorporated. Before an application was made to the vice-chancellor, an appeal had been taken from the order appointing the receiver, and it was alleged before the vice-chancellor that the jurisdiction of this court was thereby ousted pending the appeal, and that he was therefore powerless to make any order in the premises. This was stated to me by both sides upon the argument, and the vice-chancellor declined to make such order. I think that the vice-chancellor misconceived the power and authority of this court to make the order applied for, notwithstanding the appeal. Similar application is made before me on notice to the complainant and the receiver.
The case of Pennsylvania Railroad Co. v. National Docks,c.,
In Ashby v. Yetter,
Now, I take it, that to permit the making of a receiver appointed by this court a party to another suit, pending an appeal from the order appointing him, is equivalent, in principle, to making an order in aid of a step in the particular proceeding in which the appeal is pending.
That an appeal does not stop the machinery of the lower court in all cases has been amply illustrated by decisions in the court of errors and appeals itself, one of which is Morton v. Beach,
In Bull v. International Power Co.,
In Bull v. International Power Co.,
And the ordinary held (In re Wandell,
If the relief now and here sought cannot be granted the mortgagee is temporarily remediless, for the jurisdiction of the court of errors and appeals is altogether appellate and not at all original. Therefore, that court cannot give the wanted relief.
In New Jersey Franklinite Co. v. Ames,
The broad general rule established by weight of authority is that a receiver appointed by judicial authority cannot, in the absence of a statute to the contrary, be subjected to suit *361
without the leave of the court whose officer he is, granted in the cause in which he was appointed. 34 Cyc. 411. The court, which has appointed a receiver, will grant permission for a suit to foreclose a mortgage on property in his possession as receiver. Massey v. Trenton and Camden Railway Co.,
In my judgment the learned vice-chancellor took too narrow a view of the case of Pennsylvania Railroad v. National Docks, and I think, upon review of all the foregoing authorities, those in the court of errors and appeals and those in this court and the prerogative court, that the chancellor has the power to make, and should make, the order applied for on this motion.
In the particular circumstances of a given case terms might be imposed in the original order without waiting for counsel to make such a motion at the end of the other suit. See Massey v.Trenton and Camden Railway Co., supra (at p. 4).
But I cannot see how the question of the propriety of the appointment of a receiver for the defendant company as an insolvent corporation in this case, has any bearing as to whether or not the money is due upon the mortgages held against the property of the defendant by Mr. Wilson. And if a person holds a mortgage upon property he is entitled to foreclose it (Davis v.Flagg,
The defendant company, however, may apply for a stay of execution in the foreclosure suit if a final decree be entered, which stay will be granted if he shows that the execution of the decree would destroy or in anywise impair the subject of the appeal in this suit.
Order accordingly. *362