NOTES TO RULE 66
HISTORY: (Amended Mar. 19, 1948; Oct. 20, 1949)
Notes of Advisory Committee on 1948 Amendments to Rules.
The title of Rule 66 has been expanded to make clear the subject of the rule, i. e., federal equity receivers.
The first sentence added to Rule 66 prevents a dismissal by any party, after a federal equity receiver has been appointed, except upon leave of court. A party should not be permitted to oust the court and its officer without the consent of that court. See Civil Rule 31(e), Eastern District of Washington.
The second sentence added at the beginning of the rule deals with suits by or against a federal equity receiver. The first clause thereof eliminates the formal ceremony of an ancillary appointment before suit can be brought by a receiver, and is in accord with the more modern state practice, and with more expeditious and less expensive judicial administration. 2 Moore's Federal Practice, 1938, 2088--2091. For the rule necessitating ancillary appointment, see Sterrett v Second Nat. Bank, 1918, 248 US 73, 63 L Ed 135, 39 S Ct 27; Kelley v Queeney, WD NY 1941, 41 F Supp 1015; see also McCandless v Furlaud, 1934, 293 US 67, 79 L Ed 202, 55 S Ct 42. This rule has been extensively criticized. First, Extraterritorial Powers of Receivers, 1932, 27 Ill L Rev 271; Rose, Extraterritorial Actions by Receivers, 1933, 17 Minn L Rev 704; Laughlin, The Extraterritorial Powers of Receivers, 1932, 45 Harv L Rev 429; Clark and Moore, A New Federal Civil Procedure--II, Pleadings and Parties, 1935, 44 Yale L J 1291, 1312--1315; Note, 1932, 30 Mich L Rev 1322. See also comment in Bicknell v Lloyd-Smith, CCA 2d, 1940, 109 F2d 527, cert den, 1940, 311 US 650, 85 L Ed 416, 61 S Ct 15. The second clause of the sentence merely incorporates the well-known and general rule that, absent statutory authorization, a federal receiver cannot be sued without leave of the court which appointed him, applied in the federal courts since Barton v Barbour, 1881, 104 US 126, 26 L Ed 672. See also 1 Clark on Receivers, 2d ed, § 549. Under 28 USC § 125 leave of court is unnecessary when a receiver is sued "in respect of any act or transaction of his in carrying on the business" connected with the receivership property, but such suit is subject to the general equity jurisdiction of the court in which the receiver was appointed, so far as justice necessitates.
Capacity of a state court receiver to sue or be sued in federal court is governed by Rule 17(b).
The last sentence added to Rule 66 assures the application of the rules in all matters except actual administration of the receivership estate itself. Since this implicitly carries with it the applicability of those rules relating to appellate procedure, the express reference thereto contained in Rule 66 has been striken as superfluous. Under Rule 81(a)(1) the rules do not apply to bankruptcy proceedings except as they may be made applicable by order of the Supreme Court. Rule 66 is applicable to what is commonly known as a federal "chancery" or "equity" receiver, or similar type of court officer. It is not designed to regulate or affect receivers in bankruptcy, which are governed by the Bankruptcy Act and the General Orders. Since the Federal Rules are applicable in bankruptcy by virtue of General Orders in Bankruptcy 36 and 37 [following section 53 of Title 11, USC] only to the extent that they are not inconsistent with the Bankruptcy Act or the General Orders, Rule 66 is not applicable to bankruptcy receivers. See 1 Collier on Bankruptcy, 14th ed by Moore and Oglebay, paras. 2.23--2.36.
Notes of Advisory Committee on 1949 Amendments to Rules.
The amendment effective October 1949 deleted a sentence which formerly appeared immediately following the first sentence and which read as follows: "A receiver shall have the capacity to sue in any district court without ancillary appointment; but actions against a receiver may not be commenced without leave of the court appointing him except when authorized by a statute of the United States."