Majority
p. 434Micklethwaite and others v. Rhodes. Wilkinson v. The Same. Ward v. The Same. Smith v. The Same. October 21st, 1846 ; and again, January 6, 1847.
Headnote
A consignor may file a bill and have an injunction and a receiver against bis factor? in case of misconduct or insolvency of the latter, whereby his property is endangered. And this too, though the consignment be to sell on a commission del credere.One surety is sufficient in a bond for security for costs in behalf of a non-resident complainant, although the bond be not executed by the complainant or his agent* It is not a valid ground of exception to a surety in such a bond, that he is the solicitor for the complainant.
The defendant is entitled to move for security, after demurring to the bill.
Where a defendant after serving a petition for security for costs, and before the day on which he proposes to move, receives notice that security has been filed, with a copy of the surety’s affidavit of justification, he should countermand his petition ; if he persist in moving, he will be charged with costs.
October 21st, 1846. The complainants in these cases,.moved for a receiver of their goods, severally consigned to the defendant as a factor, to be sold ; and of the proceeds remaining of' such as had been sold. The complainants had- made a formal demand of the goods and proceeds, and the defendant had refused to surrender any part of them. The bill charged that he was insolvent. The motion was opposed on an affidavit of the defendant, and on grounds which were adverted to in the vice-chancellor’s decision.
C. Edwards, for the complainants.
J. Cook and J. L. White, for the defendant.
The Vice-Chancellor, in disposing of the motion, made the following observations. It is evident that this consignee is
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insolvent; and his conduct, judging from the bill and his own affidavit, is clearly fraudulent. His proceedings in respect of the goods of these parties, and the avails of those sold, show a necessity for taking them out of his hands, to protect them.
As to the objections made to the appointment of a receiver. 1. There is danger that the property will be wasted, which answers the claim made upon the defendant’s right as consignee. 2. It is said, in some of the suits, that there is no property or estate of the complainants, in his hands. .The affidavit is, in this respect, highly improbable. If it be true, it discloses flagrant bad faith and fraud in the defendant. A receiver can do no harm, if it turn out that there is no fund. The suits adverted to are not cases of del credere commission, so that there is nothing in the point that the defendant is the sole debtor to the consignor, and the purchasers of the goods debtors to the factor only. 3. The court does interfere in this mode before answer, where there is danger of loss and an established breach of trust. 4. The injunction, is not in this case an adequate protection to the parties. The possession of the property can alone protect them, against a man so reckless as the defendant appears to be by his own statement, in connection with the bill. 5. As to the point that the remedy is at law; that remedy is of doubtful efficiency, and there being fraud, equity has concurrent jurisdiction. In the case of Cotterill v. Jee, in which I made the final decree, as assistant vice-chancellor, the late vice-chancellor, and the chancellor on appeal from him, sustained the jurisdiction of this court to entertain a bill by a consignor against his factor, to recover the property consigned, where there is misconduct or insolvency. 1 may also refer to 1 Story’s Equity Jurisprudence, for the same doctrine. (§§ 462, 463.)
In the suit of Smith against Rhodes, the case of Cotterill v. Jee, is decisive, for that was an instance of a consignment del credere. There must be a receiver in all the suits. Of course, this will be without prejudice to the defendant’s rights, as they may ultimately appear.
Order accordingly.
January 6th, 1847.—After the orders for a receiver were made,,
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the defendant put in demurrers to the several bills, which are still pending.[1] All the complainants in the four suits, reside in England. The bills were filed in October, and the defendant at that time entered his appearance.
In the three first named suits, the complainants’ solicitor, on the 9th of December, on an intimation that the defendant would require security for costs, filed a bond as such security, pursuant to the statute, executed by the solicitor himself as surety, with a justification in the requisite amount indorsed on it; and on the same day, notice of filing the bonds was served on the defendant’s solicitor. On the 18th of December, the latter served a notice in each of the three suits, excepting to the sufficiency of the surety, and excepting to the bonds because the solicitor was the surety. With that notice he also served in each suit a petition for security for costs, with notice of moving- therefor at the next special term.
The complainants’ solicitor, on the 19 th of December, made and filed a new affidavit of justification in each suit, and served a copy thereof on the defendant’s solicitor. The latter, nevertheless, moved on his petitions.
In the suit of Smith v. Rhodes, the petition and notice of motion for security for costs, were served on the 18th of December, before any security had been filed. But on the 19th of December, the complainants’ solicitor filed the requisite bond as security for costs, executed by two sureties, one of whom (the solicitor,) justified. On the same day, notice of filing the bond was served, and previous to the special term, a copy of the affidavit of justification was also served on the defendant’s solicitor.
The petitions in the four suits were moved and heard together.
J. Cook, for the defendant.
C. Edwards, for the complainants.
In the case of Smith, the defen
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dant was regular in petitioning for security. His appearing in the suit, opposing the appointment of a receiver, and demurring to the bill, do not prevent him from enforcing his right under the statute. He is mistaken, however, in supposing that the surety, being the solicitor for the complainant, furnished a ground, of exception. The rule as to bail in the courts of law, has never been adopted in this court in respect of security required by statute. In Studwell v. Palmer, 5 Paige, 57, this was so held by the chancellor, upon an appeal bond. Nor is it necessary that there should be two sureties, where the bond is not executed by the complainant. The statute is express, that it may be given with one surety, and from the nature of the case, it is not expected that the complainant will join in its execution. It is because he is not a resident, that the security is required. Upon the bond being given in Smith’s suit, and the affidavit of justification served, the defendant should have countermanded his motion; and if it were not that the point raised has never been decided, I should feel bound to charge him with costs.
In the other three suits, there was no excuse for moving at all. On receiving notice of the filing of the bonds, the defendant should have excepted, if he were dissatisfied and waited the result. He was not warranted in petitioning, until the end of the twenty days allowed for the justification of the surety:
The motions in all the cases must be denied, without costs in-Smith’s suit, and with $20 costs in the aggregate in the other three suits. One order will suffice, entitled in all the causes.