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COLLINS v. MCDONALD

January 8, 1937

COLLINS
v.
McDONALD



The opinion of the court was delivered by: ADKINS

Plaintiff brings this suit as receiver, appointed by the United States District Court for the Northern District of Florida, of the National Construction Company, a Florida corporation. The bill prays that defendant be required to pay over to plaintiff a fund realized by defendant by cashing a check made by the United States government to said Construction Company.

Defendant moves to dismiss on the ground, among others, that the receiver may not bring such suit outside of the court appointing him.

 1. Defendant has the right to move to dismiss after denial of his motion to quash.

 The objection relied on in the motion to quash depended on facts not appearing of record, and the order overruling the motion to quash expressly held that the objection was properly made by the motion to quash. Therefore the motion to strike is denied.

 2. The receiver was appointed in a suit filed by a judgment creditor of the National Construction Company seeking to reach the assets of said company.

 There were two decrees, in each of which the receiver was vested with the title to all property, real and personal, belonging to the corporation. The second and final decree finds that defendant is utterly and hopelessly insolvent and directs that the assets of the corporation be liquidated and the proceeds divided equitably among its creditors.

 The final order directs said National Construction Company and its officers to assign to the receiver all the property and assets of the corporation wherever situate, but it does not appear that such assignment was executed.

 Defendant contends that plaintiff has only the rights of a receiver appointed in ordinary chancery proceedings and that under the settled rule announced by the Supreme Court such receiver has no right to sue in a court beyond the territorial jurisdiction of the court making the appointment.

 This rule, announced in Booth v. Clark, 17 How. 322, 329, 15 L. Ed. 164, has been adhered to since. See Hale v. Allinson, 188 U.S. 56, 57, 23 S. Ct. 244, 47 L. Ed. 380; Great Western Mining Co. v. Harris, 198 U.S. 561, 25 S. Ct. 770, 49 L. Ed. 1163; Sterrett v. Second National Bank, 248 U.S. 73, 39 S. Ct. 27, 63 L. Ed. 135; Lion Bonding Co. v. Karatz, 262 U.S. 77, 87, 43 S. Ct. 480, 483, 67 L. Ed. 871; Clark v. Williard, 292 U.S. 112, 120, 54 S. Ct. 615, 618, 78 L. Ed. 1160; McCandless v. Furlaud, 293 U.S. 67, 55 S. Ct. 42, 45, 79 L. Ed. 202; 3 Beale Conflict of Laws (1935) § 564, p. 1584.

 The language of the opinion in the lastmentioned case seems decisive on the point here involved.

 McCandless was appointed receiver in the Federal Court for the Western District of Pennsylvania. He thereupon filed a petition in the Federal Court in the Southern District of New York for appointment as ancillary receiver, and having been appointed, brought his suit in the latter court to recover from certain defendants residing in that jurisdiction.

 The validity of his appointment as ancillary receiver was first attacked on appeal. The Supreme Court held that was too late. In discussing the question the court said: "He [the receiver] lacked title because the order appointing him did not, and could not, transfer to him the assets involved in the litigation. For that reason, a bill in the federal court for Southern New York brought by the primary receiver, alleged to have been duly appointed in Pennsylvania and authorized to bring this suit, would have been bad on demurrer. But this bill by the anciallary receiver, ...


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