Hitz v. Jenks

Background

Mrs. Hitz inherited improved real estate and claimed ownership subject to a deed of trust given in favor of William P. Jenks. After a bank failure, the bank’s receiver and later Richard W. Tyler (who was both a receiver in the court case and the private trustee under a Crane deed) became involved. Tyler sold the property at public auction while the case was on appeal to the Supreme Court and after Mrs. Hitz had filed a supersedeas bond to preserve her appeal rights.

Reasoning

The core question was whether a sale under the deed of trust, carried out by Tyler while he held the property in his role as a court-appointed receiver and while an appeal with supersedeas was pending, could transfer valid title against Mrs. Hitz. The Court explained that property in the custody of the court through a receiver is held for all parties and cannot be sold by the receiver in his private capacity without special court leave. The Court held the sale conferred no title against Mrs. Hitz and reaffirmed that she could redeem the property by paying what is due under the trust after an accounting.

Real world impact

The decision prevents a receiver from defeating an owner’s pending appeal by selling property under a private trust without court authorization. The case was remanded for an accounting to determine the amount Mrs. Hitz must pay and to apply rents and expenses toward that sum.

Dissents or concurrances

Justice Brewer dissented, as noted at the end of the opinion.