Gammon v. First Dominion Development Corp.

My review of the law following the plaintiff's application for appointment of a receiver made yesterday morning has caused me to change my decision announced then to you upon the requirement for a bond. The law seems clear that such a bond and security is necessary. Deckert v. Ches. Western Co., 101 Va. 804, 812 (1903). See also 45 Am. Jur., Receivers, Section 94, p. 83. Therefore a receiver's bond and security for the faithful discharge of his duties will be required by the court in this siiit.

In addition, this review of the law raises in my mind the question of whether Messrs. Blanton and Gambill, or either of them, should be appointed as receivers, or receiver as the case may be. While it has been held that it is not an abuse of discretion for the court to appoint an attorney for one of the parties as a receiver, the general rule is that such receiver ought to be a person "who is without interest in [the] cause and who stands indifferent between the parties.” 45 Am. Jur., Receivers, Section 124, p. 105. Moreover, it has been said that it has not been the practice to appoint anyone who has been intimately and closely connected to the mismanagement of an insolvent company. 15 M.J., Receivers, Section 3. Since Mr. Gambill has been closely connected with the affairs of the defendant and since Mr. Blanton and Mr. Gambill are *103counsel for the respective parties, it seems to me that some disinterested third person, possibly one of the commissioners in chancery of this court, ought to be appointed as receiver.

Furthermore, there are a number of other limited partners who have received no notice of this application for the appointment of a receiver. Such notice seems to be required of "all other parties having a substantial interest ... in the subject matter" by Code Section 8-735. Why should not notice be given to the remaining limited partners before a receiver is appointed?

I would like to confer with you further about these matters.