p. 127proper. Upon the hearing of the petition before the vice chancellor, the solicitor of Lott Merritt and attorney of the receiver, upon whom notice of the application was served, appeared, and counsel was heard in opposition to the petition; but no evidence or affidavit was produced to contradict or explain any of the allegations contained therein. The application, however, was denied, and the petition was dismissed. And the petitioners were ordered to pay to Lott Merritt or his solicitor the costs of opposing the same.
J. V. L. Pruyn, for the appellants.
This court will interpose, and direct and control its receiver in regard to his trust, as to the bringing of actions, distraining for rent, &c„ See the cases collected in Chitty’s Equity Digest, 1134. Among the cases there referred to, is that of Dacie v. John, (1 M’Clel Re p. 575.) In that case it is said the court will not empower a receiver to sue for debts due to the estate, where the proceeding would be oppressive to creditors, or where it is not probable that any advantage will be derived from it. In Wynne v. Lord Newborough, (1 Ves. jun. 164,) a motion was made by a remote remainder-man, and the tenants, to restrain the receiver from ejecting the tenants; which motion was refused, with costs, upon the ground that their interest was not sufficient to authorize them to make the motion. But the refusal was not put upon the ground that such an application was not proper, if the interest of the applicants had been sufficient. The receiver is not ordinarily authorized to bring suits, or to distrain, without the sanction of the court; and although a receiver appointed upon a creditor’s bill, under the 192d rule of this court, is allowed a larger discretion, yet the cases not coming within that rule, shew botja the right and the propriety of a strict supervision of the receiver by the court. In the present case, the court, by its officer the receiver, is prosecuting a groundless and vexatious suit, between two other parties not before this court, to the certain loss and injury of both. The court should interfere and prevent such oppression.A question has arisen as to the entitling.of the petition. This is a technical objection, which ought not to turn the petitioners out of court. The object of entitling the peti=
p. 128tian is, to give such a character to the proceeding, that, if the statements therein should be wilfully false, the party who has sworn to it may be indicted for perjury; and that the petition may not be presented to the court without any responsibility. These are the principal and almost the sole objects of the title. (2 Glyn & Jameson, 44.) An indictment for perjury may be sustained on any petition presented to a court of chancery in relation to matters within its jurisdiction, if wilfully false. It is not necessary, for this purpose, that the petition be entitled. In many cases the title is a matter of indifference— as in proceedings on attachments, where the papers are sometimes in the name of the people, and sometimes in the name of the parties. (1 Hoffman's Pr. 449.) It was not proper here to entitle the papers in any suit. The petitioners were not parties to the suit in this court, and therefore had no right to act in the suit. The supreme court has decided, that on a motion for a mandamus to a court of common pleas, in regard to a suit pending there, the papers must not be entitled. (Haight v. Turner, 2 John. Rep. 371 .)L. Hoyt, for Lott Merritt and the receiver.
Neither of the petitioners are parties to the suit in chancery, in which they ask relief, nor are they in any way connected with it. They have no interest or claim upon monies which the receiver may collect. The court may undoubtedly interfere and restrain a receiver from prosecuting a suit; but it must be a case where the prosecution would injure the fund, and upon the complaint of some person who has an interest in the fund.The only complaint which D. Merritt makes, is, that the suit against Lyon is prosecuted in his name, without his consent and against his wish. He does not pretend that he has sustained any injury, or that L. Merritt and the receiver are not abundantly able to respond for any damages he may hereafter sustain. Again, he has a full and perfect remedy by an application to the supreme court; which court has the power to direct the suit to be discontinued, or to direct security to be given to indemnify him against any damage he may sustain by his name being used. But this court ought not and will not, upon petition, direct a perpetual injunction.
p. 129iLyon does not pretend that he has paid the note, orany part of it; but. he insists that the suit ought not to be prosecuted against him because Townsend paid the note to Peck; and that he paid B. Merritt a valuable consideration, and received -a release from his liability on the note. If the note had actually been paid by Townsend, then Lyon did not want a release ; or, if he wished one for his protection, he Was entitled to it without paying for it. By paying a valuable consideration for the release, he negated the pretence of payment by Townsend, and admitted his liability on the note. If the release was given after the judgment against Peck, B. Merritt had no right to release the note ; and the release, being intended as a fraud upon the rights of Peck, is void. Lyon has also a complete defence at law in relation to all the matters of which he complains. He has set up that defence in the suit brought against him in the name of B. Merritt; and this court will not, upon petition, try and decide a matter which properly belongs to a jury to pass upon.From the facts stated in this petition, it is evident that the receiver, at the instigation of Lott Merritt, is prosecuting an unjust, vexatious and oppressive suit, in the supreme court, in the name of one of these petitioners against the other, without the least shadow or pretence of right to commence such a suit in the name of B. Merritt. And when these facts are taken in connection with the very singular decree which appears to have been agreed upon by the parties in the chancery suit, I think there is some reason to apprehend that the suit in the supreme court is the result of an improper combination, between the parties in the chancery suit, to prosecute an action at law against Lyon in such a way as to deprive him of the testimony of B. Merritt, the .only witness, not interested, who could explain the endorsement on the back of the sealed note; and thereby to shut out the defence. I presume, therefore, that this petition must have been dismissed on the sole ground that the vice chancellor supposed he had not jurisdiction to interfere, in such a case, in .behalf of persons who were not parties to the suit in this
p. 130court. The objection that the petition was not entitled in the suit in which the receiver was appointed, was very properly waived by the counsel for (he respondents, on the argument, as that suit is sufficiently referred to in the body of the petition.
It is not necessary to refer to any authority, to show that one person has no right to institute a suit in the name of another, without his consent, either express or implied ; or that, the person in whose name such suit is instituted, is entitled to have the proceedings stayed, upon an application to the appropriate tribunal. And even where the bringing such a suit is proper, as where this court directs a receiver to bring a suit at law in the name of another person, the uniform practice of the court is, to require the party who brings such suit, to give security to indemnify the nominal plaintiff against the costs. (Green v. Winter, 1 John. Ch. Rep. 60. Ex parte Little, 3 Moll. Ch. Rep. 67.) Where the person bringing the suit in the name of another has no legal or equitable light to institute such suit, the person in whose name it is brought is not bound to lie by and suffer it to proceed, even upon the tender of an adequate indemnity. On the contrary, if he is satisfied his name is improperly used for the purpose of harrassing or oppressing the defendant, it is his duty, as an honest man, to interfere, where he lias a right to do so. In ordinary cases, where a suit is instituted in the name of another without his consent and without authority, the remedy of the party in whose name it is brought, is by an application to the court in which the suit is instituted, to stay the proceedings, and to punish the person, by whom it is instituted, for an abuse of the process of the court. And the remedy of the defendant against whom such a suit is commenced is by indictment, or by a suit for the penalty given by the statute in such cases. (2 R. S. 550, § 1.) In this case, if the court of chancery should not interfere to restrain the petitioners from proceeding in that manner against the receiver who is its officer and is supposed to act under its authority and by its direction, these remedies would be open to them. It does not follow, however, that the cóurt is to lose all jurisdiction over its officer, or over
p. 131its suitors, because those who may be injured or oppressed by the proceedings of a receiver, may possibly have a remedy by an application to another tribunal. Where this court directs a receiver to bring a suit at law in the name of another person, upon giving the usual indemnity, it will interfere by injunction to restrain the nominal plaintiff from discontinuing or releasing the action, or from applying to the court of law to stay the proceedings. The court will also, in its discretion, restrain third persons from instituting proceedings at law against its officers, acting under its direction, although the persons by whom such proceedings are instituted are not parties to the suit in this court.
(Ex parte Clarke, 1
Russ. & My. 563.
Batchelor v. Blake,
Hogan’s Rep. 98.
Nugent v.
Nu-gent, Smith’s Office of Receiver, 104,
note; 2
Molloy’s Rep. 372,
S. C. Aston v. Heron, 8
Legal Obs. 218.
Wardle v. Lloyd, 3
Moll. R. 388.) If this court can interfere in this summary manner, against persons who are not parties to the suit, to protect a receiver or other officer acting under its direction, it may also interfere in the same manner to protect third persons against an abuse of power, attempted to be exercised by another under pretence of an authority derived from this court as an officer thereof. The possession of a receiver or a sequestrator is considered as the possession of the court by whom he is appointed. And if a third person claims adversely, he must apply here for leave to bring a suit at lavv to try his title; or he may ask to come in and be examined
pro inleresse suo to establish his title in this court. For the same reason, a suit brought by a receiver is to be considered as brought under the authority of this court; and if brought in the name of a third person, without his authority and without any foundation or pretence of right, as in the present case, the parties to such suit may apply here for protection against the unjust and unauthorized proceedings of the receiver.
The order of the vice chancellor, dismissing the petition, with costs, must therefore be reversed, with costs to be paid by the respondents. The receiver must also be directed to •discontinue the suit at law, and to pay to Lyon his costs therein, so as to indemnify D. Merritt against such costs j
p. 132and'' the note must be delivered up to be cancelled,¡and the receiver is to be perpetually enjoined from instituting or prosecuting any süit thereon.