C.R.C.P. 66

History

Source: (d) amended and effective September 12, 1991. Cross references: For appointment of receivers for dissolution of corporations, see § 7-114-303, C.R.S. ANNOTATION I. General Consideration. II. When Appointed. I. GENERAL CONSIDERATION. Law reviews. For article, ‘‘Notes on Pro- posed Amendments to Colorado Rules of Civil Procedure’’, see 27 Dicta 165 (1950). For ar- ticle, ‘‘Injunctions and Receivers: Rules 65 and 66’’, see 23 Rocky Mt. L. Rev. 594 (1951). For article, ‘‘Amendments to the Colorado Rules of Civil Procedure’’, see 28 Dicta 242 (1951). For article, ‘‘Use of Receivers in Real Estate Fore- closures’’, see 16 Colo. Law. 988 (1987). For article, ‘‘The ABCDs of Equitable Receiver- ship’’, see 48 Colo. Law. 24 (June 2019). Annotator’s note. Since this rule is similar to § 180 of the former Code of Civil Procedure, which was supplanted by the Rules of Civil Procedure in 1941, relevant cases construing that section have been included in the annota- tions to this rule. A receiver is an officer of the court. Casserleigh v. Malone, 50 Colo. 597, 115 P. 520 (1911); McClain v. Saranac Mach. Co., 94 Colo. 145, 28 P.2d 1009 (1934). This rule does not authorize a receiver to practice law on behalf of the receivership estate in federal court. This rule makes a re- ceiver accountable to the state court that ap- pointed the receiver. In re Shattuck, 411 B.R. 378 (B.A.P. 10th Cir. 2009). His possession of property in his official capacity is the possession of the court and not of the party at whose instance he is appointed. McClain v. Saranac Mach. Co., 94 Colo. 145, 28 P.2d 1009 (1934). One who interferes with receivership prop- erty in the custody of the law, without permis- sion of the court in whose custody it is, is guilty of contempt. Clear Creek Power Dev. Co. v. Cutler, 79 Colo. 355, 245 P. 939 (1926). Receiver has only right and title of owner. A receiver holds the property coming into his hands by the same right and title as the person for whose property he is receiver, subject to liens, priorities, and equities existing at the time of his appointment. Tolland Co. v. First State Bank, 95 Colo. 321, 35 P.2d 867 (1934). A stranger has right to have receiver insti- tute suit to try title. While the court which appoints a receiver exercises general control over the property that comes into the possession of the receiver as such, this power of control does not deprive a stranger, who claims by paramount title, of the right to have a suit or proceeding instituted by the receiver to try the question of title. Pomeranz v. Nat’l Beet Har- vester Co., 82 Colo. 482, 261 P. 861 (1927). The better practice is for the receiver to bring an independent adverse suit in the tri- bunal where the defendant has the right to have the controversy decided. Pomeranz v. Nat’l Beet Harvester Co., 82 Colo. 482, 261 P. 861 (1927). The plaintiffs have established their en- titlement to an evidentiary hearing relative to the appointment of a receiver. It need not appear from the movant’s request for appoint- ment that any imminent insolvency result only from fraud. Diaz v. Fernandez, 910 P.2d 96 (Colo. App. 1995). For the power of receiver to administer assets, see Flint v. Powell, 18 Colo. App. 425, 72 P. 60 (1903). For the duties as to management of rail- road property, see Frank v. Denver & Rio Grande Ry., 23 F. 757 (D. Colo. 1885). A court cannot appoint a receiver to man- age or operate a medical or retail marijuana business unless the receiver has the proper medical or retail marijuana license. Y ates v. Hartman, 2018 COA 31, 488 P.3d 348. Applied in State ex rel. Colo. Dept. of Health v. I.D.I., Inc., 642 P.2d 14 (Colo. App. 1981). II. WHEN APPOINTED. This rule does not apply to any case in which an action is not pending. Jones v. Bank of Leadville, 10 Colo. 464, 17 P. 272 (1887). Action is ‘‘pending’’ under section (a) of this rule after it is commenced under C.R.C.P. 3, by either filing a complaint with the court or by the service of a summons. Johnson v. McCaughan, Carter & Scharrer, 672 P.2d 221 (Colo. App. 1983). The plain intent of this rule is that there shall be a controversy between two or more adverse parties moved in the court, involving some conflicting and hostile claims to property that is, at least in part, the subject matter of the litigation in the mind of the general assembly it is necessary to this jurisdiction that there should be some party in all these proceedings who is adverse to the defendant and whose right to certain property are to be protected and adjudi- cated. Jones v. Bank of Leadville, 10 Colo. 464, 17 P. 272 (1887). Appointment of receiver is discretionary. Whether a receiver will or will not be appointed upon a preliminary hearing is a matter which ordinarily rests in the sound discretion of a trial court. Melville v. Weybrew, 106 Colo. 121, 103 P.2d 7, cert. denied, 311 U.S. 695 (1940); Rigel v. Kaveny, 133 Colo. 556, 298 P.2d 396 (1956); Oman v. Morris, 28 Colo. App. 124, 471 P.2d 430 (1970). There will be no interference with the ex- ercise of that discretion by an appellate court, save in a clear case of abuse. Melville v. Weybrew, 106 Colo. 121, 103 P.2d 7, cert. de- nied, 311 U.S. 695 (1940); Oman v. Morris, 28 Colo. App. 124, 471 P.2d 430 (1970). Court held not to have abused its discre- tion in making appointment. Riant Amuse- ment Co. v. Bailey, 80 Colo. 65, 249 P. 7 (1926). Courts have no jurisdiction to appoint a receiver except in a suit pending in which the receiver is desired, unless in cases of persons under disability which is a particular jurisdic- tion. Jones v. Bank of Leadville, 10 Colo. 464, 17 P. 272 (1887). A minor may by his guardian or next friend procure the appointment of a receiver for the purpose of collecting the rents and prof- its of premises deeded. Hutchinson v. McLaughlin, 15 Colo. 492, 25 P. 317, 11 L.R.A. 287 (1890). Courts of equity have no jurisdiction to appoint a receiver except in a pending action in which the receiver is desired. People ex rel. Daniels v. District Court, 33 Colo. 293, 80 P. 908 (1905). Allegations of a complaint in a receiver- ship proceeding held sufficient. Riant Amuse- ment Co. v. Bailey, 80 Colo. 65, 249 P. 7 (1926). Complaint held insufficient where indebt- edness not alleged. In a proceeding by petition for the appointment of a receiver for the pur- pose of an accounting where there is no com- plaint alleging the indebtedness and no service of process, a court has no jurisdiction to enter a judgment. Paddack v. Staley, 13 Colo. App. 363, 58 P. 363 (1899). The appointment of a receiver to impound assets of an estate to pay a claim that does not exist is a nullity. Wright v. Halley, 95 Colo. 148, 33 P.2d 966 (1934). While courts have jurisdiction to appoint receivers for corporations, the power should be exercised with the utmost caution and only where a receiver is imperatively necessary to protect property rights. Eureka Coal Co. v. McGowan, 72 Colo. 402, 212 P. 521 (1922). A receiver should not be appointed for a corporation in an action by a simple contract creditor to prevent the corporation from fraudu- lently disposing of its property, and putting be- yond its power the ability to respond to a judg- ment sought to be obtained on an unsecured debt. International Trust Co. v. United Coal Co., 27 Colo. 246, 60 P. 621 (1900). This rule does not give an equity court au- thority to appoint a receiver at the suit of an individual stockholder who complains of fraud in the management of the affairs of the corpo- ration. People ex rel. Daniels v. District Court, 33 Colo. 293, 80 P. 908 (1905). Receiver for corporation may be ap- pointed when no board of directors to man- age. Where the principal stockholders of a cor- poration are engaged in a contest over the control of the property, and the outstanding capital stock is so distributed that no board of directors can be elected to manage the affairs of the company, a receiver is properly appointed. Eureka Coal Co. v. McGowan, 72 Colo. 402, 212 P. 521 (1922). This rule does not give an equity court authority to dissolve a corporation. People ex rel. Daniels v. District Court, 33 Colo. 293, 80 P. 908 (1905). The appointment of a receiver for a corpora- tion does not work its dissolution. Steinhauer v. Colmar, 11 Colo. App. 494, 55 P. 291 (1898). Appointment of a receiver is authorized under appropriate circumstances without a pending request for dissolution of the com- pany. A member of a limited liability company has a personal property interest in the company. Diaz v. Fernandez, 910 P.2d 96 (Colo. App. 1995). Where equity will sustain a creditor’s bill, it will also grant the aid of the ancillary rem- edies of injunction and receiver. Livingston v. Swofford Bros. Dry Goods Co., 12 Colo. App. 320, 56 P. 351 (1898). The appointment of a receiver contrary to this rule is only an error, and not a jurisdic- tional question where it appears that the court had jurisdiction of the subject matter and par- ties. Riant Amusement Co. v. Bailey, 80 Colo. 65, 249 P. 7 (1926). Improper appointment cannot be consid- ered in contempt proceedings. In proceedings where a receiver is appointed to take charge of property, the improper appointment of the re- ceiver cannot be considered in contempt pro- ceedings based upon interference with the re- ceivership property. Clear Creek Power & Dev. Co. v. Cutler, 79 Colo. 355, 245 P. 939 (1926). Where there is no objection made by de- fendant to the appointment of a receiver, he is deemed to have acquiesced in the court’s action. Oman v. Morris, 28 Colo. App. 124, 471 P.2d 430 (1970).