Petition for rehearing denied December 22, 1931 ON PETITION FOR REHEARING (6 P.2d 228) The excellent argument advanced in respondents' brief, accompanying their petition for a rehearing, has caused us once more to give extended consideration to this cause. We are persuaded, however, that the statement of our conclusions should be brief. Two contentions are pressed upon us: (1) that in the absence of an allegation in the complaint averring that the suit wherein the receiver was appointed was prompted by malice and lacked probable cause, no cause of action was stated; (2) that the order appointing the receiver was not subject to collateral attack.
Although we have again considered every phase of the above contentions, we shall not again express our views upon any part of the first proposition except upon the argument which insists that no distinction in principle exists between the effect created by an order of court taking possession of a litigant's property by a receivership and the situations created by the levy of an attachment or the service of a writ of injunction. Based upon the contention that all three of these ancillary orders are in effect the same, the respondents argue that our holdings inMitchell v. Silver Lake Lodge, 29 Or. 294 (45 P. 798), andHess v. German Baking Co., 37 Or. 297 (60 P. 1011), both of which cases were considered in our previous decision, control the outcome of this action. In the first of these *Page 217 two cases a writ of attachment was involved; in the second, a writ of injunction. In both the main action failed, and in both this court held that the successful defendant must be content with statutory costs and disbursements as full compensation for the wrong imposed upon him by the unjustifiable writ unless he could allege and prove that the plaintiff, in procuring its issuance, was prompted by malice and acted without probable cause. If, in principle, all three writs are substantially alike, it would follow that the party wronged by a receivership must also be content with costs unless able to prove malice and the lack of probable cause. But we do not believe that the writs are alike in principle. From section 15, High on Receivers (4th Ed.), wherein the writer is referring to a receivership, he states: "It changes the possession as well as the subsequent control and management of the property. A court of equity by an injunction ties up the hands of defendants, and preserves unchanged not only the property itself, but the relations of all parties thereto. But in appointing a receiver the court goes still further, since it wrests the possession from the defendant and assumes and maintains the entire management and control of the property or fund, frequently changing its form, and retaining possession through its officer, the receiver, until the rights of all parties in interest are satisfactorily determined." From Clark, The Law of Receivers, section 31, we quote: "A receiver will not ordinarily be appointed when the court by the less drastic remedy of granting an injunction can adequately protect the rights of the complainants. The appointment will never be made where there is another safe remedy, or where the court can find a less stringent means of protecting the rights of the parties. A receiver should not be appointed at *Page 218 any stage of the proceedings if any other remedy will afford adequate protection to the party applying."
A receivership is unavailable where the party is entitled to a writ of attachment: American Freehold Land Mortgage Co. v.Turner, 95 Ala. 272 (11 So. 211). It is frequently said that the appointment of a receiver will not be made except in the case of imperative necessity: 34 Cyc., Receivers, page 23. The courts take notice of the fact that business institutions, especially those financial in character, rarely survive a receivership:State ex rel. v. Peoples United States Bank, 197 Mo. 574 (94 S.W. 953); Joseph Dry Goods Co. v. Hecht, 120 Fed. 760. A writ of attachment merely impresses a lien upon the defendant's property, and a writ of injunction interferes with the control which the defendant would ordinarily exercise over his property or conduct, but the purpose of a receivership is to exceed the effectiveness of both of these writs by taking the custody of property away from the defendant and placing it in charge of the court's officer.
The foregoing will have to suffice as a statement of the distinction which we believe exists between the character and effect of a writ appointing a receiver and the writs of attachment and of injunction.
As stated in our previous decision, the individual appointed receiver is no more than a trespasser when it develops that the writ which created his office and appointed him as the incumbent was a nullity. In fact, in our belief the present action is one of trespass rather than an action of malicious prosecution.
The second contention again argued by the respondents submits that, since the order appointing Guild receiver has never been set aside by the circuit court nor reversed upon appeal, it is immune from this collateral attack. In State ex rel.Nayberger v. McDonald, *Page 219 128 Or. 684 (274 P. 1104), we held that the order appointing a receiver, and naming Guild, was void because a receivership of that character was not authorized by section 32-702, Oregon Code 1930. We remain satisfied that the circuit court, although it is a court of general jurisdiction, was not granted by the statute the power to enter that order. If a court, having the necessary jurisdiction over the subject-matter, merely violates its duty and appoints a receiver when better judgment would have dictated a contrary course, the order is not void and is not subject to collateral attack, but when a court not only violates its duty but enters an order where it lacks jurisdiction, a contrary result follows. It is our opinion that, since the order which named Guild was beyond the jurisdiction of the circuit court, it is subject to collateral attack. In arriving at this conclusion, we have been much persuaded by the scholarly review of the subject in State v. District Court, 33 Wyo. 281 (238 P. 545), wherein that tribunal concluded, after an extended review of the decisions, that if the measure of the court's authority is dependent upon and limited by a statute, a judgment which by the face of the record is shown not to be in substantial compliance with mandatory provisions of the statute, but contrary to its limitations, is void and subject to collateral attack. Numerous authorities accompany the Wyoming decision. We have read many of them and believe that they, together with reason, support the conclusion. Since we are of the opinion that the order authorizing the receivership exceeded the express limitations of our statutes authorizing such relief, we remain content with the conclusion previously expressed that the order is subject to collateral attack.
It follows from the above that the petition for rehearing will be denied.
BEAN, C.J., RAND and KELLY, JJ., concur. *Page 220