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Transpacific Lines, Inc, Re [1977] TTLawRp 14; 7 TTR 546 (16 September 1977)

7 TTR 546

IN RE TRANSPACIFIC LINES, INC.,
Formerly Styled: IN RE DAVID M. SABLAN, Receiver of TransPacific Lines, Inc., Petitioner

Civil Appeal No. 137

Appellate Division of the High Court

Mariana Islands District

September 16, 1977

Corporation was granted, ex parte and with no notice to persons interested in its assets, receivership upon its own request. Lower court's denial of motion to vacate appointment, made by persons interested in the assets, was appealed. The Appellate Division of the High Court, per curiam, held that the appointment was not an abuse of discretion or in violation of appellants' due process rights where there was immediate danger of loss of assets and the corporation could not function, and where appellants were granted adequate hearing upon their motion to vacate.

1. Receivership—Appeals--Refusal To Vacate Appointment

Generally, in absence of statutory authority, an order refusing to discharge, or vacate the appointment of, a receiver is not appealable, even in jurisdictions where an order appointing a receiver is appealable; but an appellant not given an opportunity to be heard prior to the original appointment may make such an appeal, for when an appointment is ex parte, the order confirming it is treated as an order appointing the receiver and it stands as if no other order had preceded it.

2. Receivership—Power To Appoint Receiver—Main Action or Desired Relief Necessary

With certain exceptions, a receivership must be ancillary to some other main relief sought; there is no such thing as a pure receivership action.

3. Receivership—Power To Appoint Receiver—Request of Financially Troubled Party

Jurisdiction to appoint a receiver may not be conferred by consent of the party whose assets are sought to be conserved.

4. Receivership—Power To Appoint Receiver—Request of Financially Troubled Party

Though receivership is not generally granted solely upon the request of the financially troubled party, where those controlling and running the business are no longer capable of preserving or protecting the corporate assets, which is the purpose of a receivership, grant of receivership upon their request may be appropriate.

5. Receivership—Power To Appoint Receiver—Notice

Appointment of a receiver without notice is entirely a matter of judicial discretion and will not be disturbed on appeal in absence of a clear abuse of that discretion.

6. Receivership—Power To Appoint Receiver—Notice

Appointment of a receiver without notice may be granted upon the request of the financially troubled party in possession of the assets if such party has a definite interest in property which is in grave and immediate danger of dissipation and it is only through the appointment that immediate or substantial injury can be prevented and complete justice done.