fixed by the charter. If plaintiff is estopped in this case, we see no reason why he would not be if the common council attempted to reduce his salary without any color or pretense of authority at all. And, if this is true, it will only be necessary in any case for the city council to take action purporting to reduce the salary of any city official or employee below that fixed by the charter, and any one afterwards accepting the office or employment will be estopped from claiming any more than the amount to which the council so attempted to reduce the salary. The city council cannot override the city charter in this manner. We are of the opinion that no such doctrine of estoppel can be applied to this case. Order affirmed.

J. E. FLINT v. F. D. ZIMMERMAN and Others.1

December 8, 1897.

Nos. 10,692-(148).

Supplementary Proceedings-Receiver-G. S. 1894, 5492-Discretion of Court.

The application under G. S. 1894, § 5492, for the appointment of a receiver in proceedings supplementary to execution is addressed to the sound discretion of the court, to be exercised as an auxiliary to the attainment of the ends of justice, exactly as it was prior to the amendment, Laws 1889, c. 106, § 3.

Same-Appointment-When Proper.

To require or to warrant such an appointment, it is not necessary that it appear with certainty that the judgment debtor has property which should be applied on the judgment. But it should appear that there is reasonable ground to believe that he has.

Plaintiff recovered a judgment for $5,060 in the district court for Hennepin county. Execution thereon having been returned unsat isfied, H. C. Peterson, one of the judgment debtors, was examined in supplementary proceedings. From an order, Russell, J., denying 1 Reported in 73 N. W. 175.

a motion to appoint a receiver for Peterson, plaintiff appealed. Affirmed.

H. D. Stocker and H. D. Stocker, Jr., for appellant.

Robert Christensen, for respondent.

COLLINS, J.

Upon disclosures made by the respondent, H. C. Peterson, and Adeline M. Peterson, his wife, in proceedings supplementary to an execution issued upon a judgment against the former, counsel for appellant creditor moved the court for the appointment of a receiver. The motion being denied, the creditor appealed.

A judge of the district court is authorized to appoint receivers in proceedings supplementary by virtue of G. S. 1894, § 5492, which reads as follows:

"The judge may in accordance with and subject to the rules of courts of equity, appoint a receiver of the property of the judgment debtor not exempt from execution, or forbid a transfer or other disposition thereof, or any interference therewith until his further order therein."

Prior to 1889 this section read thus:

"The judge may also, by order, appoint a receiver of the property of the judgment debtor not exempt from execution, or forbid a transfer or other disposition thereof, or any interference therewith." G. S. 1878, c. 66, § 343.

And under this section it was held that the appointment of a receiver was a matter resting in the sound discretion of the court before whom the proceedings supplementary had been instituted. Flint v. Webb, 25 Minn. 263.

The query now is, has the court been deprived of the right to exercise its discretion in the matter by the amendment which provides that appointments may be made in accordance with and subject to the rules of courts of equity?

Prior to the amendment the statute conferred the power of appointment of these receivers in a general way, and in no manner was the power restricted or regulated by statute. Evidently the object of the amendment was to regulate the subject by pointing out and prescribing what rules should be followed in proceedings

supplementary, namely, those already observed in judgment creditors' actions in courts of equity.

These rules not only control when the courts are considering the rights of the litigants upon the main question of the appointment, but also when ascertaining the qualifications and when selecting receivers. See Beach, Rec. § 609 et seq., where the rules in equity are discussed. But these rules do not attempt to interfere with or govern the exercise of a sound discretion on the part of the court when passing upon the application for the appointment of receivers in actions brought by judgment creditors and the application is still one addressed to the sound discretion of the court, to be exercised as an auxiliary to the attainment of the ends of justice. The appointment is not a matter of absolute right. 20 Am. & Eng. Enc. 19, and cases cited; Willard, Eq. Jur. 332.

The amendment has not changed the rule laid down in Flint v. Webb, supra. This was undoubtedly the view taken of section 5492, when, in Bean v. Heron, 65 Minn. 64, 67 N. W. 805, that case was cited to the proposition that the appointment of a receiver is a matter resting in the sound discretion of the court.

The remaining question is whether the court below failed to exercise this sound discretion when it made the order appealed from. We are confident that it did not. From the record of the examinations, not very thorough or searching, it might be suspected or surmised that the debtor had some interest in the business carried on by his wife or that she owed him for services rendered in and about that business. While to require or to warrant the appointment of a receiver it is not necessary that it should appear with certainty that the debtor has property which should be applied on the judg ment, it should appear that there is a reasonable ground to believe that he has. Colton v. Bigelow, 41 N. J. L. 266; Coates v. Wilkes, 92 N. C. 376. Mere suspicion or surmise falls far short of what is required to justify the exercise of a power which should be sparingly used.

Order affirmed.

Insolvent Bank — Liability of Stockholders Enforcement by Receiver- G. S. 1894, c. 76.

The provisions of G. S. 1894, c. 76, are applicable where a receiver of an insolvent banking corporation, appointed such receiver by virtue of Laws 1895, c. 145, § 20, institutes proceedings to enforce the individual liability of stockholders, as empowered to do by said section. The proceeding, when so instituted, is a step in the main action, precisely as it has heretofore been when taken by a creditor, and is governed by the same rules of practice and procedure. It is not necessary to allege in the petition or complaint, or to prove upon the trial, that an order of the court has first been obtained, authorizing the institution of the proceeding.

Same-Action by Receiver-How Entitled.

All actions brought or proceedings instituted by a receiver of an insolvent banking corporation should be brought or instituted by the receiver as such, and in his own name.

Same-Parties-Complaint.

Held, that there was no defect of parties plaintiff in this proceeding, and that the complaint stated a cause of action against defendant stockholders.

Action in the district court for Hennepin county by the receiver of the insolvent Washington Bank against the stockholders of the bank for the purposes stated in the opinion. Andrew C. Haugan and certain other defendants demurred to the complaint. From an order overruling their demurrer, Russell, J., they appealed. Affirmed.

Arctander & Arctander and Horton & Denegre, for appellants.

All four assignments of error involve the construction of Laws 1895, c. 145, § 20. A receiver appointed by a court must obtain an order of the court authorizing him to sue before he has the legal right so to do, and his authority must be pleaded. High, Rec. §§ 201, 208; Wynn v. Lord, 3 Brown, Ch. 88; Green v. Winter, 1 Johns. Ch. 60; Battle v. Davis, 66 N. C. 252; Screven v. Clark, 48 Ga. 41; 1 Reported in 73 N. W. 169.

70 349

70 356 70 376 70 421

71 500

Beach, Rec. § 650; Ward v. Swift, 6 Hare, 309; In re Merritt, 5 Paige, 125; Merritt v. Lyon, 16 Wend. 405, 410; Davis v. Snead, 33 Grat. 705, 710; Swaby v. Dickon, 5 Sim. 629; Conyers v. Crosbie, 6 Ir. Eq. 657; Glenn v. Busey, 3 Cent. Rep. 283, note; Smith, Rec. §§ 30, 71; Davis v. Ladoga, 128 Ind. 222; Keen v. Breckenridge, 96 Ind. 69; Moriarty v. Kent, 71 Ind. 601; Garver v. Kent, 70 Ind. 428; Harrell v. Kent, 71 Ind. 602; Herron v. Vance, 17 Ind. 595; Coope v. Bowles, 28 How. Pr. 10.

The statute, upon which rests the receiver's authority, if he has any, to bring this action, has been copied, as far as the matter herein is concerned, from the national bank act. Laws 1895, c. 145, § 20; National Bank Act, § 50. The national bank act has been construed in Kennedy v. Gibson, 8 Wall. 498; Welles v. Stout, 38 Fed. 67; Boone, Bank. § 433.

The receiver must bring the action in the name of the parties directly interested, and who possess the legal or equitable right. Beach, Rec. § 688; High, Rec. § 209; Yeager v. Wallace, 44 Pa. St. 294; Justice v. Kirlin, 17 Ind. 588; Manlove v. Burger, 38 Ind. 211; King v. Cutts, 24 Wis. 627; Freeman v. Winchester, 18 Miss. 577; Battle v. Davis, supra; Garver v. Kent, supra; Moriarty v. Kent, supra;. Harrell v. Kent, supra; Smith, Rec. §§ 72, 391.

A. Ueland, for respondent.

This action is governed by G. S. 1894, c. 76, and not by the national bank act or Laws 1895, c. 145. Chapter 76 provides the only remedy for enforcing the statutory liability of stockholders. Allen v. Walsh, 25 Minn. 543. Laws 1895, c. 145, bears on this case only in that it permits a receiver, appointed under it, to bring the action, while before the suit could be brought by a creditor only. Minneapolis v. City Bank, 66 Minn. 441. The national bank act, as construed in Kennedy v. Gibson, 8 Wall. 498, empowers the comptroller of the currency to make arbitrary assessments on the stockholders of insolvent national banks. Under such a statute the essential element in the cause of action is the action of the comptroller, rather than the fact that the assets of the bank are insufficient. Hence that action must be alleged. Under our statute the situation is different.