Nesmeth v. Halsted — 5 Sarat. Ch. Sent. 4

Majority

p. 4

JULY 2.

John P. Nesmeth et al. v. Oliver Halsted.

O. Bushnell, for appellant; J. Rhoades, for respondent.

Headnote

¾⅞⅞¾⅞ #r8^

This case catne before the chancellor upon an appeal from an order of the vice- chancellor of the first circuit, appointing a receiver upon a creditor’s bill. The complainant’s solicitor neglected to serve a copy of the 191st rule upon the defendant at the time of the service of the subpoena. The defendant having appeared by a solicitor, a copy of the rule was subsequently served on such solicitor, and within seventy days thereafter the complainants gave notice of an application for the appointment of a receiver. Upon the hearing of that application the counsel for the defendant insisted upon the irregularity in neglecting to serve a copy of the rule with the sub-pmna, as an answer to the complainant’s motion. He also contended that an order for the appointment of a receiver could not be made until the expiration of the twenty days allowed by the rule to give a written consent to take the bill as confessed, and for the appointment of a receiver.

It was undoubtedly irregular to serve the subpoena upon the defendant, without at the same time serving a copy of the 191st rule of the court; and if the defendant had applied to the court the first opportunity after the time allowed for his appearance to set aside the service of the subpoena and all subsequent proceedings for irregularity, his application should have been granted with costs. The

p. 18

object' of that part of the rule which requires a copy thereof to be served with the subpoena, was to apprise the defendant of his rights and duties,- and als'o to' save him the' useless expense of employing a solicitor where he is' willing to'make a Voluntary disclosure and surrender of his property upon á creditor’s bill and without further litigation. Serving a copy of the' rule after the defendant has been subjected to the expense of employing a solicitor, will not therefore obviate the irregularity and prevent the granting of an. order to set aside the irregular proceedings. The defendant cannot, however, avail himself of such- an irregularity as an answer to- an ap--I plication for the appointment of a receiver; but he must resort to a cross motion on his part, founded upon an affidavit of the irregularity, and due notice of such motion to the complainant’s solicitor; and the application should be made the first opportunity after the defendant’s appearance has been' entered.

Copy oCI9Tsí íule must be served with subpbena.

Serving after no tice of appear anee not suffi* went.

irregularity, how to be ob jocted to.

Receiver may tie applied for within SO days, i defendant has entered 1 is ap pearance.

The counsel for the appellant is also under a mistake in supposing that the complainants were bound to wait twenty .days after the appearance of the defendant was entered before they were authorised to give notice of the application for a receiver: The defendant has twenty days after the' entry of his appearance to give the written consent under' the 191st rule; and if he gives that consent within the twenty days, he cannot be compelled to answer the bill, although the* complainant, within the twenty days, has applied and obtained the usual order for the appointment of a receiver. The only difference to the complainant, where he applies within the’ twenty days, will be, that if the consent is given after he has obtained the usual order in such cases, he will either be obliged to abandon- that order, and procure a new one founded' upon such- consent, or lose the benefit of a discovery, except so far as the defendant is bound to answer on oath before the master as to the property which he then possesses, and which he is directed to deliver over to the receiver. The order to-appoint a receiver was therefore properly granted in this case. But as the order directs the defendant to make a much more-extensive discovery than the' complainants were entitled fc

p. 19

w hre the defendants had not given a written consent to allow the bill to be taken as confessed, the order appealed from must be reversed or modified, so as to make it conform to the usual order for the appointment of a receiver upon a creditor’s bill where the defendant objects to answer in the ordinary form, instead of consenting to allow the bill to be taken as confessed, and to make a discovery before the master under the provisions of the 191st rule of the court. Order accordingly.