Thurman v. Morgan

Lewis, P.,

delivered the opinion of the court:

By a decree of the circuit court of Wythe county, entered at its September term, 1878, in the chancery cause therein pending of “ Henderlite, trustee, against Thomas and others,” Geo. W. Henderlite was appointed receiver with authority to collect a certain bond and invest the proceeds. The decree required the receiver, before proceeding to act under it, to enter into a bond before the clerk of the court, with good security, in the penalty of $8,000, conditioned according to law. Henderlite executed the required bond with the appellants as his sureties. He after-wards died, having made no report of his acting as receiver, and at the December term, 1882, one V. S. Morgan, the appellee, was appointed receiver as his successor. At the same term a rule was awarded against the administrator of Henderlite to report to the court at its next term what had been “ the dealings ” of Henderlite as receiver. At the following March term, the administrator, in answer to the rule, reported that no part of the fund had come into his hands, and that he was unable to report what steps had been taken by Henderlite in respect thereto. At the same term William H. Bolling was appointed a commissioner to take certain accounts, who, having taken the same, reported that the sum due from Henderlite, “ commissioner or receiver,” was $3,683.53, with interest thereon from September 3d, 1878. The report was confirmed, and a decree entered against Henderlite’s administrator and the sureties on his receiver’s bond for the sum so ascertained to be due, and directing execution to issue for the same. At a subsequent day of the term so much of the decree as authorized execution to issue against the sureties was set aside, and the receiver, V. S. Morgan, was authorized, in the' event of the failure of the administrator to pay the said sum, with interest, within thirty days, to withdraw his predecessor’s bond for suit, or, “ at his option, a rule ” was awarded him against the sureties, to show cause at the next term why a *372 decree should not be entered against them for the said sum with interest and costs. The receiver elected to take a rule, and accordingly the sureties were summoned to appear and show cause why a decree should not he entered against them as aforesaid. They appeared and moved to quash the rule, but the motion was overruled and a decree entered against them for the sum of $3,663.53, with interest and costs.

This decree is plainly erroneous. In no just sense were the sureties parties to the suit or officers of the court by reason of their suretyship. There was no fund in their hands, or which ought to have gone into their hands, subject to the order of the court, and they could not, therefore, he summarily proceeded against by a rule to show cause. Their liability, if any, grows out of their undertaking as sureties on the bond, and can he ascertained and enforced only by suit on the bond in a common law court, where full opportunity for making defence and the constitutional right of trial by jury can he had. The circuit court was as plainly without jurisdiction to decree against them upon a rule to show cause as in the same proceeding to have condemned them to he hanged. Such a departure from the established mode of procedure renders the decree not only erroneous, but void. The case of Nulton and others v. Isaacs and others, 30 Graft. 726, is an authority in point. There certain .judgments against debtors of certain hanks in the hands of a receiver, obtained on summary rules to show cause in the chancery suit in which the receiver was appointed, were held to he invalid. Judge Moncure, delivering the opinion of the court, said: “We are of opinion that where, as in this case, the creditors, instead of proceeding by the common law action of debt to recover their claims, obtain an order for their payment on a mere summary rule to show cause, such' an order, though no defence he made to the rule, has not the force and effect of a judgment. The order is void on its face. The defendant is entitled to the benefit of a common law action, in which he can *373 regularly mate his defence and have the benefit of a trial by jury. An order might, no doubt, have been made in that suit for the collection of debts due the defendant and liable to the claim of the plaintiff. But such collection, if it could not be made without legal proceedings, would have to be made by action at common law.” The decree is reversed.

Decree reversed.