§ 462. Requisites of bill.

It is laid down that the bill must lay the foundation for the appointment of a receiver, by stating the facts which show its necessity or propriety.24 It is said that, properly to authorize an application for a receiver before the hearing, the bill must In practice, however, before decontain a prayer for one.25 cree, a receiver may be applied for by petition. After a decree, the court may appoint a receiver, although a receiver is no part of the relief prayed, and by motion, notwithstanding all matters are reserved by the decree.26 It is stated by a high authority on this subject that it is not regarded as necessary to the appointment that the facts upon which the application is based be set forth in the pleadings, but it is sufficient if they are presented to the court by affidavit on the hearing of the motion, and that this seems to follow from the very nature of the appointment, which is usually treated as an auxiliary proceeding, and not as the ultimate object of the action.27

§ 463. Form of bill for receiver.

[Title of court and address to court.]

county and Now comes your orator, E. S. D., of the city of state aforesaid, and respectfully represents unto the court the following:

(1) That there now is existing, and for years continuously last past there has existed, a copartnership, the sole members of which are your , who is made defendant to this orator and R. B., of said city of bill; that said copartnership now conducts, and during all of said years conducted, its business under the firm name of E. S. D. & Co., in said city of -; that the said copartnership now is, and during all of its said existence has been, engaged in the banking, mortgage loan, and investment business, under a copartnership agreement in writing; that the said copartnership exists only by virtue of the terms of said agreement, and that, under said agreement, your orator and said B. were to, and do, share equally in the profits and losses made and suffered in

24 1 Barbour, Ch. Pr. 658, 659; High, Receivers, §§ 17, 83; Wilson v. Maddox, 46 W. Va. 641, 33 S. E. 775.

25 1 Barbour, Ch. Pr. 659; Cooke v. Gwyn, 3 Atk. 689.

26 1 Barbour, Ch. Pr. 659; High, Receivers, § 83.

27 High, Receivers, § 88; Elk Fork Oil & Gas Co. v. Foster, 99 Fed. 495.

said business; that said copartnership was formed to continue for no particular or fixed period of time, and is terminable at the will of either party thereto.

(2) That, in the course of said business, said copartnership has accumulated and is now possessed of large assets, and has created and now owes considerable liabilities; that, as near as your orator can ascertain, the present assets of said copartnership have value and ought to realize, if carefully and economically disposed of, about the sum of dollars; that the total liabilities of said copartnership at the present time are about the sum of dollars; that the assets of said copartnership consist principally of real estate, improved and unimproved, real-estate mortgages, bonds, stocks, notes, and accounts receivable; that the liabilities of said copartnership are evidenced principally by open accounts, certificates of deposit, and notes; that, as near as your orator can estimate and ascertain the same, the assets of said copartnership now exceed its liabilities by about lars.

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(3) That at the present time there prevails in said city of and elsewhere a great depression in the value of real estate, which forms a large part of the said assets of said copartnership; that there also exists at the present time in said city, as well as elsewhere, a great depression in the value of securities of the kind which, as aforesaid, constitute and form a part of the assets of said copartnership; that, if the assets of said copartnership are sold and disposed of in other than a conservative and careful manner, the same will entail a great loss upon and sacrifice to said copartnership and its said members.

(4) That your orator has notified said R. B. that your orator wished to terminate said copartnership forthwith; that said B. has accepted said notice, and agreed that said copartnership shall be forthwith terminated, but that said B. and your orator are unable to agree (though frequent efforts in that direction have been made by both of said parties) upon the method to be pursued in winding up and liquidating said copartnership and its said business and assets, and are also unable to agree upon the accounts existing by and between the parties hereto, and their connection with and relation to said copartnership; that said agreement of copartnership does not provide in any way how said copartnership shall be liquidated at its termination; that, in view of the fact that your orator and said B. cannot agree as to who shall liquidate said copartnership and its said business and assets, or as to the course to be pursued in such liquidation, your orator invokes the aid of this court for the purpose of winding up said copartnership, adjusting the accounts between your orator and said B., distributing the assets of said copartnership among its creditors and those entitled thereto, and dividing the surplus by and between your orator and said B., as their respective interests may appear in the premises, and of taking and ascertaining an account between them; that your orator's Interests in said assets remaining after the payment of the liabilities

of said firm and the costs of administration are considerably larger than those of said B., and are in the proportion of about two to one.

Wherefore, the premises considered, and inasmuch as your orator is without remedy, save in a court of equity, in matters of this kind, your orator prays that R. B. may be made defendant hereto; that he may make answer unto this bill, but not under oath, his answer under oath being hereby waived; that a receiver may be appointed by this court to take possession of all the property, assets, and effects of said copartnership, and, under the order of this court, to convert said assets into cash, and distribute the same among the creditors of said copartnership, and the excess remaining among the parties hereto, as their interests may appear; that such receiver may have the usual and general powers vested in receivers of courts of chancery; that an accounting may be had by and between your orator and said B., and their rights, one as against the other, in the premises, be ascertained and adjudged; that an injunction may be issued, enjoining and restraining any and all parties from interfering or attempting to interfere with the assets of said copartnership, and with the rights of the receiver in the premises, and that said defendant, as well as your orator, may be restrained from using, except by leave of court, the said copartnership name for any purpose or purposes whatsoever; and that your orator may have such other and further relief in the premises as to equity may seem proper.

May it please your honors to grant unto your orator the writ of summons in chancery, issuing out of and under the seal of this court, directed to the sheriff of said county, commanding him that he summon the said defendant, R. B., to be and appear before the said court on the first day of the next term thereof to be held at the court house in said city of in the county aforesaid, and then and

there to answer this bill, etc.

And may it please your honors to grant unto your orator the people's writ of injunction, to be directed to the said R. B., temporarily enjoining him and all other persons, as in and by this bill prayed, until the further order of this court, and your orator will ever pray, etc. E. S. D.

E. S. D., being first duly sworn, on oath deposes and says that he nas read the foregoing bill by him subscribed, and knows the contents thereof, and that the same is true of his own knowledge.

Subscribed and sworn to, etc.

§ 464. At what stage receiver appointed.

E. S. D.

The rule is not to appoint a receiver before answer, especially here one is not prayed for in the bill, unless it clearly appears

that there is danger to the property or fund by the insolvency of the party having possession of it, or from some other cause; but when justice requires it, and the merits fully appear, or when it appears that the complainant has an equitable claim to the property in controversy and that a receiver is necessary to preserve the same from loss, one will be appointed.28 Suits between partners are instances of this kind.29 In creditors' suits it is a matter of course to appoint a receiver of the defendant's property before answer, if the equity of the bill is not denied upon the hearing of the application.30 The court does not appoint a receiver over real estate before the hearing, unless there is evidence of fraud in obtaining possession, or special circumstances to show a necessity to preserve the property pendente lite.31 A receiver is not commonly appointed at the hearing. There must generally be a special application for that purpose, except in creditors' suits, where there is no defense, and no receiver has been previously appointed.32 After decree and sale, a receiver may be appointed, if it is necessary to prevent palpable wrong and injustice;33 or, pending appeal, to preserve the property in controversy.34

$465. How to be applied for.

A motion for a receiver is made generally on the answer of the defendant, but may be made on affidavits before answer, when the complainant can clearly satisfy the court that he has

25 Smith, Receiverships, p. 26; 1 Barbour, Ch. Pr. 667, 668; Baker v. Backus' Adm'r, 32 Ill. 79; West v. Swan, 3 Edw. Ch. (N. Y.) 420; Metcalfe v. Pulvertoft, 1 Ves. & B. 180; Bloodgood v. Clark, 4 Paige (N. Y.) 577.

29 Osborn v. Heyer, 2 Paige (N. Y.) 343.

30 1 Barbour, Ch. Pr. 668; Middleton v. Dodswell, 13 Ves. 266.

311 Barbour, Ch. Pr. 668; Willis v. Corlies, 2 Edw. Ch. (N. Y.) 281. 321 Barbour, Cr. Pr. 668.

33 Smith, Receiverships, p. 26; Connelly v. Dickson, 76 Ind. 440; Shannon v. Hanks, 88 Va. 338, 13 S. E. 437; First Nat. Bank of Joliet v. Illinois Steel Co., 174 Ill. 140, 51 N. E. 200.

34 Smith, Receiverships, p. 27; Adkins v. Edwards, 83 Va. 316, 2 S. E. 439; Beard v. Arbuckle, 19 W. Va. 145.

an equitable claim to the property in controversy, and that a receiver is necessary to preserve the same from loss.35 In creditors' suits, a complainant usually moves upon his bill. The motion may be made in other cases upon the bill and affidavits besides, and, when this is done, the defendant may use his answer as an affidavit.36 The application may also be made by petition, setting up the grounds for the appointment of the receiver.

§ 466. Form of motion.

[Title of court and cause.]

Now comes the complainant, A. B., and moves the court to appoint a receiver of the rents and profits of the estate [or of the estate, property, and effects] of the defendant, C. D., referred to in the pleadings in this cause, with the usual powers, and upon the usual directions, this motion being founded upon the pleadings in this cause, and upon the affidavits of G. H. and L. M., copies of which are hereto attached. Dated A. B., Complainant

J. E.,

Solicitor for Complainant.

§ 467. Necessity of notice.

As a general rule, an order for a receiver will not be granted ex parte until the time for the defendant's appearance has expired, and the bill has been taken as confessed against him, except where he has fraudulently withdrawn himself out of the jurisdiction of the court to avoid the service of process.3 37 It is the settled practice to require notice by the moving party to be given to the adverse party of the application for the appointment of a receiver over his property, except in cases of the gravest emergency, such as the absconding of the defendant, or of irreparable injury, and the rule requiring notice would 35 1 Barbour, Ch. Pr. 668; Metcalfe v. Pulvertoft, 1 Ves. & B. 182; Duckworth v. Trafford, 18 Ves. 283.

36 1 Barbour, Ch. Pr. 669; Kershaw v. Mathews, 1 Russ. 361. When complainant uses affidavits, defendant may also read depositions. 1 Barbour, Ch. Pr. 669; Edwards, Receivers, 66.

371 Barbour, Ch. Pr. 669; Sanford v. Sinclair, 8 Paige (N. Y.) 373; Gibson v. Martin, 8 Paige (N. Y.) 481; Verplanck v. Mercantile Ins. Co. of New York, 2 Paige (N. Y.) 438.

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