sion of and selling the goods and chattels, embraced in the sev-
eral mortgages and deeds of trust, referred to in the bill of
complaint in said cause, and shall pass an order authorizing the
sale of said goods and chattels, either together with the leases of
the hou'Se and appurtenances, known as the "McCardel House, ^'
in the city of Chicago, as a whole, or separately from said leases,
and either at public or private sale, as the said receiver shall
deem most advantageous for all parties concerned, and may sell
for cash or on short credit, as he may deem most expedient, and
that the proceeds of said sale of said goods and chattels, after
the payment of such liens as are undisputed, and such demands
and liabilities against said "McCardcl House," as it has been or
may be necessary to incur and pay, in order to keep the said house
in operation, shall be paid into the said Cook County Court of
Common Pleas, to abide such decision as the said court may
make in the premises.
It is also further agreed, that the said receiver be authorized
to pay the mortgage debt, and costs and expenses incurred, of
Henry Ln Wilson, and that the same shall be deducted from
the proceeds of the sale of said goods and chattels, before the
same are paid into court.
Provided, that before said receiver shall sell said property at
private sale, he shall obtain the consent thereto of the mort-
gage creditors, their agents or attorneys.
Provided, also, if it is deemed best to sell both the leases and
goods and chattels as a whole, that the mortgage debt held by
Ashley Gilbert, secretary to the Commercial Exchange Company,
1 Hooper v. Winston, 24 111. 353, for the purpose of carrying out its
355. terms, and on hearing, the couri
After the filing of this stipula- passed an order in conformity to
tion, a petition or motion was pre- it. No objection was made to the
pared and presented to the court form of the stipulation.
shall be paid out of the proceeds of said sale, and not paid into
court, if the same are sufficient.
§ 831. Answers Admitting or Denying Necessity for Receiver.
[Omitting formal parts.] ^
The defendant, the United States Encaustic Tile Company,
for answer to the complaint in the above cause, admits the alle-
gations thereof and confesses that a receiver ought to be ap-
[Omitting formal parts.] ^
For a partial answer to so much of said complaint as asked
for the appointment of a receiver herein, the defendant, Wil-
liam B. Hutchinson, assignee of the Hopper Lumber and Manu-
facturing Company, says that he admits the execution of the
mortgage to the plaintiff, set out and exhibited with the com-
plaint : and that James S. Hopper, president of said Hopper
Lumber and Manufacturing Company, pretended to execute
Avhat purported to be a chattel mortgage to the Sutton Manu-
facturing Company, upon a large amount of personal property
belonging to said defendant corporation, including the machinery
in said complaint mentioned and described; and that said Sut-
ton Manufacturing Company gave notice that it intended to sell
said personal property under said pretended chattel mortgage;
but he denies that he has ever permitted or intended to permit
said Sutton Manufacturing Company, or any person acting in
its behalf, to take possession of any of the property claimed by
the plaintiff under its mortgage, or that he ever intended to
permit said Sutton Manufacturing Company, or any person
acting in its behalf, to sell or dispose of said property, but, on
the contrary, he avers the fact to be, that before the applica-
tion of the plaintiff for the appointment of the receiver herein,
he had refused to permit said Sutton Manufacturing Company
1 This answer is set out in one to which this answer was filed, on
of the pleadings in First Nat. Bank the ground that it was made in
of Mauch Chunk v. United States vacation. The court refused to
Encaustic Tile Co., 105 Ind. 227, vacate the order of appointment.
4 N. E. 846. 2 Hutchinson v. First Nat. Bank,
The object of that suit was to 133 Ind. 271, 278, 36 Am. St. Rep.
vacate the order appointing a re- 537, 30 N. E. 952.
ceiver asked for in the complaint
2196 LAW OF RECEIVERS.
to take possession of any portion of the property under said
chattel mortgage, which fact would have been made known to
the plaintiff upon inquiry.
And this defendant further shows that as such assignee he
has filed his certain suit in equity in the United States Circuit
court for the District of Indiana against said Sutton Manufac-
turing Company to have said pretended chattel mortgage de-
creed null and void, and has procured from said court a restrain-
ing order enjoining and restraining said Sutton Manufacturing
Company from proceeding with said proposed sale; that, at all
times since his acceptance of said trust, he has retained pos-
session and control of all of the property of every nature and
description which has come into his hands as such trustee under
such assignment, and he intends to continue to retain the pos-
session thereof, and the same to dispose of and administer for
the benefit of all the bona fide creditors of said Hopper Lumber
and Manufacturing Company according to their several and re-
spective rights therein, as they may be decreed and determined
by the proper courts having jurisdiction thereof, and at all
times subject to the direction of this honorable court in the
Wherefore, he says that there was no just ground for the ap-
plication to this court for the appointment of a receiver herein ;
and such receiver having been appointed without notice to him,
or opportunity afforded to him to make any showing why such
receiver should not be appointed, said receiver ought now to be
discharged, and all costs made upon said application, and grow-
ing out of said appointment, ought to be taxed against the
plaintiff, and he prays the judgment of this court accordingly.
§ 832. Notice of Motion for Appointment of Receiver.^
[Omitting formal parts.]
Take notice that upon the verified complaint herein — a copy of
which is hereto annexed and served upon you — the undersigned
1 Booth V. Smith, 79 Hun 384, 29 preme Sitting, etc., v. Baker, 134
N. Y. Supp. 790. Ind. 293, 20 L. R. A. 210, 33 N. E.
It is the general practice to 1128; Naylor v. Sidener, 106 Ind.
make application for the appoint- 179, 6 N. E. 345; Pressley v. Harri-
ment of a receiver by motion. Su- son, 102 Ind. 14, 1 N. E. 188; Pou-
will move this court at a Special Term thereof, to be held at the
court house in the city of Poughkeepsie, on the 23)'d day of De-
cemher, 1893, at ten o'clock a. m., for an order appointing a
receiver of all the partnership property of the firm of M. Vassar
(& Co. (not including real estate) as set forth in the complaint
herein, and for such relief as may be just.
der V. Tate, 96 Ind. 330; Barnes v.
Jones, 91 Ind. 161; Bitting v. Ten
Eyck, 85 Ind. 357; Hottenstein v.
Conrad, 9 Kan. 435; Walker v.
House, 4 Md. Ch. 39; Dutton v.
Thomas, 97 Mich. 93, 56 N. W. 229;
Rankin v. Rothschild, 78 Mich. 10,
43 N. W. 1077; State v. Egan, 62
Minn. 280, 64 N. W. 813; Simmons
V. Henderson, Freem. (Miss.) 493;
Ladd V. Harvey, 21 N. H. 514;
Coddington v. Tappan, 26 N. J. Eq.
141; Tibbals v. Sargeant, 14 N. J.
Eq. 449; Waterbury v. Merchant's
Union Express Co., 50 Barb. (N.
Y.) 157; Browning v. Bettis, 8
Paige (N. Y.) 568; Marten v. Van
Schaick, 4 Paige (N. Y.) 479; Wal-
ker V. Trott, 4 Edw. (N. Y.) 38;
West V. Swan, 3 Edw. (N. Y.) 420;
In re Hybart, 119 N. C. 359, 25 S.
E. 963; Pearce v. Elwell, 116 N. C.
595, 21 S. E. 305; Davis v. Reaves,
2 Lea (Tenn.) 649; Henshaw v.
Wells, 9 Humph. (Tenn.) 568;
Cameron v. Groveland Imp. Co., 20
Wash. 169. 72 Am. St. Rep. 26, 54
Pac. 1128; Brundage v. Home Sav.,
etc., Assoc, 11 Wash. 277, 39 Pac.
666; Schreiber v. Carey, 48 Wis.
208, 4 N. W. 124; Morris v. Bran-
chaud, 52 Wis. 187, 8 N. W. 883;
Beecher v. Bininger, 7 Blatchf. (U.
S.) 170, Fed. Cas. No. 1222;
Haines v. Carpenter, 1 Woods (U.
S.) 262, Fed. Cas. No. 5905.
An application being made for
the appointment of a receiver, it
is the practice for the defendant
to oppose the application by
counter-affidavit. Irwin v. Ever-
son, 95 Ala. 64, 10 So. 320; Micou
V. Moses, 72 Ala. 439; Leeds v.
Townsend, 74 111. App. 444; Press-
ley V. Harrison, 102 Ind. 14, 1 N.
E. 188; Pouder v. Tate, 96 Ind.
330; Clark v. Raymond, 84 Iowa
251, 50 N. W. 1068; Rankin v.
Rothschild, 78 Mich. 10, 43 N. W.
1077; Turnbull v. Prentiss Lumber
Co., 55 Mich. 387, 21 N. W. 375;
Prouty V. Hallowell, 53 Minn. 488,
55 N. W. 623; Ladd v. Harvey, 21
N. H. 514; Kean v. Colt, 5 N. J.
Eq. 365; Willis v. Corlies, 2 Edw.
(N. Y.) 281; Whitehead v. Hale.
118 N. C. 601, 24 S. E. 360; Pearce
V. Elwell, 116 N. C. 595, 21 S. E.
305; Cameron v. Groveland Imj).
Co., 20 Wash. 169, 72 Am. St. Rep.
26, 54 Pac. 1128; Finch v. Hough-
ton, 19 Wis. 149.
In some jurisdictions the answer
has been treated as a counter-
affidavit. Rankin v. Rothschild, 78
Mich. 10, 43 N. W. 1077; Ladd v.
Harvey, 21 N. H. 514; Browning v.
Bettis, 8 Paige (N. Y.) 568; Pearce
v. Elwell, 116 N. C. 595. 21 S. E.
305; Ryder v. Bateman, 93 Fed. 16.
See, also, Wilson v. Maddox, 46 W.
Va. 641, 33 S. E. 775.
LAW OF RECEIVERS.
§ 833. Order to Show Cause Why Receiver Should Not be
[Omitting formal parts.]
Ordered by the court this 24th day of May, 1834, that injunc-
tion issue, as prayed, upon the complainant's filing bond, with
security to be approved by the judges of this Court, in the
penalty of twenty thousand dollars, to indemnify the defendants
against all costs and damages from said injunction. And it is
further ordered by the Court, that the defendants show cause
on Tuesday next at 10 o'clock, why a receiver should not be
appointed to take charge of all the effects of the defendants, and
administer the same according to justice and equity, provided
a copy of this order be served on the president of the said com-
pany, or on the board of directors of said company, or left at
the office for doing business of said company, before 3 o'clock
of this day.
§ 834. Order Appointing a Receiver.^
[Omitting formal parts.]
And now, this cause coming on to be heard upon the applica-
tion of the plaintiffs for the appointment of a receiver, the
plaintiffs appearing by C C. & C. L. Noiirse, their attorneys,
1 Hall V. United States Ins. Co.,
5 Gill. (Md.) 484.
Notice to the opposite party of an
application for the appointment of
receiver may be by an order or
rule to show cause. Moritz v. Mil-
ler, 87 Ala. 331, 6 So. 269; Prouty
V. Hallowell, 53 Minn. 488, 55 N.
W. 623; Coddington v. Tappan, 26
N. J. Eq. 141; Rheinstein v. Bixby,
92 N. C. 307; Phcenix Mut. L. Ins.
Co. V. Grant, 3 MacArthur (D. C.)
1 Worthington v. Oak, etc.. Park
Imp. Co., 100 Iowa 39, 40, 69
N. W. 258.
For orders for receivers of cor-
porations, see: State v. Scarritt,
128 Mo. 331, 332, 30 S. W. 1026 (to
administer assets) ; People v. Em-
pire Loan, etc., Co., 15 App. Div.
69, 44 N. Y. Supp. 308; Dickerson
v. Cass County Bank, 95 Iowa 392,
64 N. W. 395 (to wind up affairs);
State V. Commercial State Bank,
28 Neb. 677 (to wind up bank un-
der statutory provisions).
Hayes v. Brotzman, 46 Md. 520;
American Water Works Co. v.
Farmers' Loan & T. Co., 20 Colo.
203, 46 Am. St. Rep. 285, 25 L. R. A.
338, 37 Pac. 269.
For order appointing receiver in
dissolution proceedings of insur-
ance company, see Alexander v.
Relfe, 74 Mo. 495.
For order appointing receiver of
mortgaged property, see Worthing-
and the defendants, the Oak and Highland Park Improvement
Company and Highland Park Normal College by E. J. Goode,
their attorney, and 0. H. Longwell by Barcroft & McCaughan,
his attorneys, and L. M. Mann in person, and all parties con-
ton V. Oak, etc., Park Imp. Co.,
100 Iowa 39, 40, 69 N. W. 258.
For orders appointing receiver
over a partnership, see: Gowan
V. Jeffries, 2 Ashm. (Pa.) 296;
Williamson v. Wilson, 1 Bland.
(Md.) 418; West v. Chasten, 12
Fla. 315; Fobernheimer v. Wheeler,
45 N. J. Eq. 614, 18 Atl. 234; Rus-
sell V. White, 63 Mich. 409, 411,
29 N. W. 865.
The order appointing the re-
ceiver may contain a clause au-
thorizing him to sue generally.
Comer v. Bray, 83 Ala. 217, 3 So.
554; Taylor v. Canaday, 155 Ind.
671, 57 N. E. 524, 59 N. E. 20; Hat-
field v. Cummings, 142 Ind. 350, 39
N. E. 859; Frank v. Morrison, 58
Md. 423; Hayes v. Brotzman, 46
Md. 519; Fogg v. Supreme Lodge,
etc., 156 Mass. 431, 31 N. E.
289; Boyd v. Royal Ins. Co., Ill
N. C. 372, 16 S. E. 389; Lathrop v.
Knapp, 37 Wis. 307; Schultz v.
Phenix Ins. Co., 77 Fed. 375. But
in Witherbee v. Witherbee, 17
App. Div. 181, 45 N. Y. Supp. 297,
it was held in a partnership pro-
ceeding that an order of appoint-
ment which authorized the re-
ceiver to prosecute and defend,
without the further order of the
court, all actions brought or about
to be brought against copartners
or any of them, pertaining to such
copartnership business, was too
broad, because it authorized in ad-
vance the commencement of suits
without any knowledge of what
they were for or of the necessity
In Comer v. Bray, 83 Ala. 217,
3 So. 554, a receiver was "author-
ized and directed to institute such
suits in law or equity as in his
judgment may be necessary,
against all persons who are in-
debted to said bank, or against
whom debts are claimed by said
bank, and who fail or refuse to
pay without suit; . . . and said
receiver is also further authorized
to defend any suits at law or in
equity affecting the assets of said
bank in his charge, which may be
instituted in any court in this
state; and for pi-osecuting and de-
fending such suits, he is hereby
authorized and empowered to em-
ploy competent counsel, at reason-
able rates for the service to be
performed in each such cases."
It was held that the receiver
could properly file a bill for the
foreclosure of a mortgage given to
The order may direct a sale of
property, both real and personal,
pending the action, in a proper
case. Forsaith Mach. Co. v. Hope
Mills Lumber Co., 109 N. C. 576, 13
S. E. 869.
The order may contain an in-
junction against interference, by
the debtor or other person inter-
ested, with the possession of the
receiver of, or the prosecution of
suits involving, the property. Col-
lins V. Colley (N. ,1. 1887), 11 Atl.
nS: Hilton Bridge Constr. Co. v.
New York Cent, etc.. R. Co., 145
N. Y. 390, 40 N. E. 86; Morgan v.
New York, etc., R. Co., 10 Paige
2200 LAW OF RECEIVERS.
senting thereto, it is ordered and adjudged that L. M. Mann be,
and he is hereby, appointed receiver of the property described
in the mortgage, with full authority to take possession thereof,
and receive, manage, and control the rents and income arising
therefrom. It is further ordered that the said receiver have
authority, and he is hereby directed, to continue to operate the
said college, as an institution of learning, affording like facili-
ties as heretofore, and to operate the dormitories and boarding
departments of said college in connection therewith, and to
make all contracts for professors, teachers, servants, helpers, and
assistants he may find necessary to the successful operation and
continuance thereof. Said receiver is also hereby authorized to
employ the present president, 0. E. Long well, to take charge of
the educational department of said college, upon such terms as
he may agree upon with the said Long well, and also to recognize
and adopt any contracts now outstanding made by the said
Longwell for the employment of professors for help for the
ensuing year, or for printing and advertising for the ensuing
year, and for work and labor and supplies for the ensuing year,
so far as the said receiver may deem the same necessary and ad-
vantageous to the successful operation of the college. The re-
ceiver is also authorized to effect an insurance of the property,
and to pay all taxes and assessments against the same. And
the receiver is further authorized to issue receiver's certificates
in payment of, or to raise money for the employment or pur-
chase of work and labor, material, or supplies, as above author-
(N. Y.) 290, 40 Am. Dec. 244; the control and management of
Temple v. Glasgow, 80 Fed. 441, the receivers over and with the
25 C. C. A. 540, 42 U. S. App. 417. same.
And all persons who are or claim
In Temple v. Glasgow, 80 Fed
441, 25 C. C. A. 540, 42 U. S. App
to be creditors of the said com-
pany are hereby enjoined and re-
417, that part of the order appoint- ^^^^.^^^ ^^.^^^ instituting any suit
ing a receiver which related to or suits against the said company;
an injunction was as follows: and in case any such suit or suits
"The officers and agents of the has or have been heretofore in-
said company are hereby enjoined stituted against the said company,
and restrained from exercising any the further prosecution of the
rights or control over the prop- same is or are hereby enjoined
erty, assets, books and papers of and restrained."
said company, and from interfer- No objection was made to the
ing in any manner whatever with form of this injunction.
ized, and the same shall be a first lien upon any funds coming
into his hands by virtue of his receivership ; and the receiver has
leave to apply to the court for such further order, or direction,
as he may deem necessary from time to time to carry out the
above orders. And it is further ordered that the said L. M.
Mann give bond in the penal sum of twenty thousand dollars
($20,000), with sureties to be approved by the clerk of this
court, conditioned as required by law, for the faithful perform-
ance of his duties.
§ 835. Order of Appointment Directing Operation of Business.^
[Omitting formal and parts not bearing on this point.]
The said receiver is hereby fully authorized and directed to
take immediate possession of all and singular the property above
1 Sager Mfg. Co. v. Smith, 45
App. Div. 358, 60 N. Y. Supp. 849.
It was held that the above or-
der authorized the receiver to com-
plete any contracts which the
cycle company had entered into
and which were partially per-
formed, to the end that the con-
tract price might become due and
See Jacob v. Uncle Sam Plant-
ing & Mfg. Co., 144 La. 1006, 81
So. 604, for form of order author-
izing operation of a plantation and
borrowing of money for that pur-
See, also: Rickman v. Rick-
man, 180 Mich. 224, Ann. Cas.
1915C, 1237, 146 N. W. 609; and
Hains v. Buckeye Wheel Co., 224
Fed. 289, 139 C. C. A. 525, for
forms of orders directing continu-
ance of the business.
For orders appointing receivers
over railroads with directions for
their operation, see: Rutherford
V. Pennsylvania Midland R. Co.,
178 Pa. St. 38, 35 Atl. 926; Union
Trust Co. v. Illinois Midland R.
Co., 117 U. S. 434, 29 L. Ed. 963,
6 Sup. Ct. 809; Walker v. Green,
60 Kan. 20, 55 Pac. 281; Union
Trust Co. V. Souther, 107 U. S.
591, 27 L. Ed. 488, 2 Sup. Ct. 295;
Louisville, etc., R. Co. v. Wilson,
138 U. S. 501, 34 L. Ed. 1023, 11
Sup. Ct. 405; Scott v. Farmers'
Loan & Trust Co., 69 Fed. 17, 16
C. C. A. 358, 32 U. S. App. 468,
note; Wallace v. Loomis, 97 U. S.
146, 24 L. Ed. 895; Central Trust
Co. V. South Atlantic, etc., R. Co.,
57 Fed. 3; Shields v. Coleman, 157
U. S. 168, 39 L. Ed. 660, 15 Sup. Ct.
570; Chicago Deposit Vault Co. v.
McXulta, 153 U. S. 554, 38 L, Ed.
819, 14 Sup. Ct. 915; Pope v.
Louisville, etc., R. Co., 173 U. S.
573, 43 L. Ed. 814, 19 Sup. Ct. 500;
Skiddy v. Atlantic, etc., R. Co., 3
Hughes 320, 334, Fed. Cas. No.
12.922; Kennedy v. St. Paul, etc..
R. Co., 2 Dill. 448, 454, Fed. Cas.
Xo. 7706: Bankers' Trust Co. v.
Missouri, K. & T. Ry. Co., 251 Fed.
789, 164 C. C. A. 23.
For an order appointing a re-
ceiver of a railroad, see Kaw Val-
2202 LAW OF RECEIVERS.
de.scribed, wherever situated or found, and to collect all accounts
and sums due or to become due to the Wo7xestcr Cycle Manu-
facturing Company, and for that purpose to carry on and con-
tinue the business of said defendant company as the same is now
carried on, and so far as may be necessary to preserve its rights
under its contracts, acting in all things under the order and
direction of the court. . . . Said receiver is hereby fully
authorized to continue to operate and carry on the business of
the defendant Cycle Company, in such manner as the same is
now conducted, or in such manner as will in his judgment pro-
duce the most satisfactory results, so far as may be necessary,
for the preservation from loss of the outstanding contracts of
said defendant Cycle Company, and to collect and receive all
the income therefrom, and all the debts due said company of
all kinds, and for such purpose is hereby vested with full power,
at his discretion, to employ and discharge and fix the compen-
sation of all such officers, attorneys, managers, superintendents,
agents and employees as may be required in the discharge of his
trust, with the approval of one of the judges of this court. . . .
Said receiver shall from time to time, out of the funds coming
into his hands from the operation of the property and otherwise,
pay the expenses of operating the same and executing his trust,
and all taxes and assessments upon the said property or any part
§ 836. Order for Receiver de Bonis Non.^
[Omitting formal parts.]
The petition of Missouri, Kansas & Texas Railway Company
asking the appointment of a receiver de bonis non as successor
to George A. Eddy and H. C. Cross, former receivers, coming on
to be heard, and the court being fully advised in the premises,
ley Drainage Dist. v. Missouri Pac. i This order was set out as evi-
Ry. Co.. 99 Kan. 188, 161 Pac. 937, dence in Hutchings v. Eddy, 6
at p. 942. Kan. App. 490, 50 Pac. 944.
For form of order respecting It was made by a judge of the
payment of preferred claims in or- Circuit Court of the United States
der appointing receiver for rail- for the district of Kansas. No
road, see Gregg v. Metropolitan objection was raised to its form.
Trust Co., 197 U. S. 183. 49 L. Ed.
717, 25 Sup. Ct. 415.
and it appearing that since the entering of the decree of June 8,
1891, and the order of June 17, 1892, in this cause, the said
George A. Eddy and H. C. Cross have departed this life, and
that by the terms of the said decree of June 8, 1891, discharging
the receivers and ordering the property of the Missouri, Kansas
cf- Texas Raihcay Company to be turned over to said Company,
it was provided as follows:
"That nothing in this decree contained is intended to affect,
or shall be construed as affecting, the status of any pending or
undetermined litigation in which said receivers appear as par-
ties. Such litigation may continue to determination in the
name of the receivers, but for the use of the Missouri, Kansas
& Texas Railway Company, and at its cost and expense, and
with the right to that Company, should it be so advised, to ap-
pear and be substituted in any such litigation."
And it further appearing that there are pending and unde-
termined suits in the State and Federal courts of the states of
Missouri, Kansas and Texas and in the courts of the Indian
Territory, and in the Supreme Court of the United States,
wherein said Geo. A. Eddy and H. C. Cross, receivers, are parties :
Wherefore, it is ordered, adjudged and decreed that Henry C.
Rouse be and is hereby appointed receiver in this cause, as suc-
cessor to the receivership of said Geo. A. Eddy and H. C. Cross,
with full power and authority to be substituted as a party in all
the pending and undetermined suits wherein said receivers are
parties, and with the same power to prosecute or defend said
suits that existed in said Geo. A. Eddy and H. C. Cross, receivers,
by their original order of appointment as modified and limited
by the decrees of June 8, 1891, and June 17, 1892, and such
litigation may continue to determination in the name of Henry C.
Rouse, receiver, but for the use of the Missouri, Kansas & Texas
Railway Company, and at its cost and expense, and with the
right to that company, should it l)e so advised, to appear and
be substituted in any such litigation.
2204 LAW OF RECEIVERS.
§ 837. Order Appointing Non-resident Receiver.^
[Omitting formal and non-bearing parts.]
It it further ordered that said receivers designate, in due