Whilden v. Chapman
Whilden v. Chapman
Opinion of the Court
The opinion of the Court was delivered by
The facts in this case are thus stated in the decree of the Circuit Judge, Hon. Ernest Gary,: “This matter comles before me on' a motion for the appointment of a receiver, and a counter motion for the setting aside of a temporary injunction issued by Hon. R. C. Watts, Circuit Judge, on the 23d day of March, 1907.
“It appears from’ the pleadings that upon the filing of the complaint a rule was issued, returnable before Judge Aldrich', at Charleston, on the day of June, 1906. Counsel for the defendant, W E. Murphy, filed hisi return to said rule, and a petition for intervention and a return was also filed by Mrs. Sarah V. Murphy, as well as the answer of the defendant, Joseph P. Chapman. The answer of the defendant Chapman admits the allegations of the complaint and joins in the prayer thereof. The intervention and *86 return of Mrs. S. V. Murphy alleges that she is the largest creditor of the partnership concern, and is also the owner of the interest therein of W. F. Murphy, by reason of the breach of the conditions of a certain chattel mortgage. She alleges, as does the defendant, W. F. Murphy, that the said partnership is not insolvent, and that there are no suits at law pending or threatened.
“The papers were read before Judge Aldrich', and counsel were asked to file written arguments for the consideration of the Court. Thereafter, and before the filing of arguments, counsel agreed upon the terms of an order, to be signed by Judge Aldrich, and after some delay consent thereto was withheld by counsel for W. F. Murphy and Mrs.'S. V. Murphy, who refused to confirm: said agreement.
“No written arguments were submitted to Judge Aldrich, 'who had in the meantime left the Circuit, and the subsequent proceedings shoiwl that all parties in interest considered the hearing of the return before Judge Aldrich abandoned.
“Thereafter, on the September term', 1906, of the Court of 'Common Pleas for Union County, Mrs. S'. V. Murphy, by 'her counsel of record herein, secured an uncontested judgment against the partnership of Chapman-Murphy Company for the full amount of her alleged claim, of which said proceeding Joseph P. Chapman, one of the co-partners of the defendant company, was not advised, and, therefore, had no opportunity to require 'Strict proof.
“Being advised of the judgment obtained by Mrs. Murphy, plaintiff’s counsel obtained from Judge Watts, presiding in the Ninth Circuit, on the 23d day of March, 1907, a rule to show cause and a restraining order, particularly enjoining Mrs. Murphy from proceeding under her judgment against the partnership assets. Judge Watts left the Circuit before the time set for the return tO' the rule and no hearing was had thereon. Subsequently motions were noticed before me at Beaufort, on 22d day of May, 1907, which said motions, by agreement of counsel, were heard *87 before 'me at chambers in the city of Charleston, on 4th day of June, 1907, all of the parties being represented by counsel.”
The only important fact necessary to add is that the answer of Joseph. P. Chapman, one of the members of the defendant copartnership, Murphy-Chapman Company, alleges waste and mismanagement by the other partner, Murphy, who was ini charge of the business, to such extent that the business has entirely ceased; and he further alleges in an affidavit the failure of Murphy to make any response to frequent demands for a statement of the condition of the firm affairs, and collusion between Murphy and his mother, by which she has obtained a large judgment against the partnership without notice to him.
The Circuit Judge held he had jurisdiction to hear the matter at chambers in the Ninth Circuit, ordered that Mrs. Murphy be made a party in accordance with the prayer of her petition, appointed a receiver of the partnership, and enjoined Mrs. Murphy and other creditors from taking any steps to collect their claims 'except in this cause. W. P. Murphy, and Mrs. S. V. Murphy, his mother, appeal. The grounds of appeal will be considered without setting out the exceptions in detail.
It seems manifest from this that both- parties regarded the hearing unfinished when Judge Aldrich left the'Circuit, and thus lost jurisdiction to hear the motion. Therefore, when Judge Watts granted a rule to show cause and a temporary restraining order on 23d March, 1907, Judge Aldrich had lost jurisdiction and the matter, except as to his restraining order, stood for hearing just as if he had never entertained it.
The appeal can not be sustained on the ground that the Circuit Judge undertook to grant at chambers' a permanent injunction, decisive of the case. The injunction must be regarded, as it was no doubt intended, not permanent but a temporary injunction pending the hearing of the cause on the merits.
The complaint of the creditors in this case does not allege the insolvency of the members of the firm, and for that reason, if no other, the injunction and the appointment of a receiver could not be sustained on the complaint alone.
*91 Tlhe Court having jurisdiction of the subject matter, and having before it all parties interested, will not dismiss the action until it has adjudged the equities that any party plaintiff or defendant has against any other. Though the plaintiff be not entitled to the injunction and the appointment of a receiver, yet the Court will sustain the injunction and the appointment of a receiver in 'behalf of the co-partner, Chapman, if the misconduct of waste and miis.mia.nagement and of collusion between Murphy and his mother primea facie appear. The Court in that case should not do the idle thing of turning the parties out of court and requiring Chapman to -bring a separate action. We think a prima facie 'case of waste, mismanagement and collusion, and probably loss to Chapman, has been made out. The defendant Murphy admits the machinery of the firm has not been in operation for some time for the lack of timber, the necessary raw material; that he and 'Chapman are antagonistic; and that, though dealing with his partner -at arms’ length, he allowed his own mother to obtain a judgment by default against the firm for twelve hundred dollars by service of summons on himself alone, and that be gave Chapman no notice of the pendency of her suit. These admitted facts, we think, made out a prima facie oase, entitling -Chapman to a temporary injunction and the appointment of a receiver.
The judgment of this Court is, that the judgment of the Circuit Court be-affirmed.
Reference
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- Whilden v. Chapman.
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- Syllabus
- 1. Jurisdiction — Chambers. — A judge holding court in a circuit in which one copartner resides, in which circuit action has been brought by a creditor against the copartnership in another circuit, and the copartner, asking for appointment of receiver, has jurisdiction at chambers to grant order appointing receiver. 2. Ibid. — Receiver. — A judge before whom motion papers for appointment of a receiver were read and argument heard, and who requested further written arguments, but who was informed before leaving the circuit a consent order had been agreed on, which was never completed or presented to him, loses jurisdiction of the motion by leaving the circuit, and succeeding judge is free to hear same. 3. Estoppel. — One volunarily intervening by petition, asking leave to show cause why an injunction should not be granted and a receiver appointed will not afterwards be heard to say the court erred in allowing and requiring him to appear and show why the relief he opposed should not be granted. 4. Receiver. — A creditor for a copartnership can not maintain an action for appointing a receiver for copartnership assets until he has exhausted his remedies at law, except where assignment acts apply. 5. Ibid. — The court will appoint a receiver for copartnership assets upon showing by a partner defendant of waste, mismanagement and collusion between his copartner and his mother against the co-partnership, on a complaint by a creditor which does not state facts sufficient to warrant such appointment, but which gives the court jurisdiction of the subject matter.