233 Mo. 391 | Mo. | 1911
Lead Opinion
From a decree in • the Buchanan Circuit Court at its September term, 1908, overruling the several motions of defendants to revoke an order appointing a temporary receiver for the Merchants’ Improvement .and Investment Company, a corporation (hereinafter, for convenience, called the -M. I. & I. Co.),- finding the allegations of plaintiff’s petition to be true, decreeing that the temporary receiver be made permanent for the purpose of winding up the affairs of the M. I. & I. Co. and distributing its assets, dissolving the M. I. & I. Co., restraining defendants and each of them from collecting debts or receiving payments thereon belonging to said M. I. & I. Co., or from paying out or in any manner interfering with or delivering to any person, except the receiver, any of its moneys, properties or effects, and requiring the receiver to take possession of and sequester its real and personal-property, taking an account of its assets and property and reporting to the next term of the court (the court retaining jurisdiction to make such further necessary orders to carry into effect and execute the . decree, to wind up the business of the corporation and
The suit was begun by Lucinda B. Ashton as plaintiff. The Ashton Investment Company, a corporation, intervened, joined in the prayer and asked to have its alleged right to certain shares of stock, held by Mrs. Ashton in the M. I. & I. Co., determined, and that it be allowed to share in final distribution in accordance with its interest as so determined.
The scope of the assignments of error seeks a summary of the pleadings and facts.
The petition need not be reproduced in totidem verbis. Shortly stated, it charges that the assets of the M. I. & I. Co. consist of personal property and real estate of the value of $25',000'; that it has abandoned and ceased to exercise its charter rights and purposes (setting them forth), except in maintaining and renting its buildings; that its capital stock is $10,000 divided into 100 shares, of which Mrs. Ashton owns forty-nine, Mrs. Penfield forty-nine and Mrs. Smith two shares; that three persons constitute its board of directors; that A. H. Penfield (the husband of Mrs. Penfield) has always been secretary, treasurer and manager of the company; that Mrs. Ashton acquired her stock through the will of her husband Thomas, who died in July, 1906; that Mrs. Smith acquired hers in aid of a conspiracy through a pretended assignment from A. H. Penfield; that A. H. Penfield is a person of bad reputation for veracity and for honesty in business; that Mrs. Penfield, Mrs. Smith, and A. EL Penfield (Mrs. Smith being a sister of Mrs. Penfield) fraudulently conspired and confederated together to so use the corporate property as to secure to themselves its profits and funds for their own personal use and to deprive Mrs. Ashton of any income, dividend or profit from her stock. It then goes on to charge that with knowledge
The petition was verified by the affidavit of Mrs. Ashton, and on the 28th day of May, 1908, the court appointed a temporary receiver pending the final determination of the cause, who was ordered to take charge of the corporation, all its assets, collect outstanding accounts, preserve its properties and assets, take necessary steps to protect the business affairs of the corporation, pay its legal debts — all under the direction of the court — and to give a $10,000 bond for the faithful performance of his duties.
Presently the M. I. & I. Co. filed a motion to revoke the order, and the other defendants filed theirs directed to the same end.
Presently, at the same term, the M. I. & I. Co. filed a general and special demurrer. Demurring generally because the petition did not state facts sufficient to constitute a cause of action, and specially because plaintiff had no legal capacity to sue and because several causes of action are improperly united in the petition.
At-the same term the other defendants filed a motion to strike out certain parts of the petition. At the same term the motion to strike out was overruled.
At the nest term said movents filed an answer denying every allegation in the petition and alleging that if plaintiff has a cause of action she has a complete and adequate remedy at law. At the same term
The motions to revoke the order appointing a receiver were taken below with the case on the merits. They appear in the record proper, bnt do not appear • in the bill of exceptions, nor is there any call for them in that bill. As part of its decree the court overruled those motions and the bill shows an exception saved.
The scope of the decree appears heretofore sufficiently. '
It will serve no appellate purpose to go in this opinion into the va’st details of the testimony of this long record. I have read every line of it. Experts were appointed to state an account from the books of the M. I. & I. Co., to state one between the M! I. &■ I. Co. and a bank, referred to in the petition as the Bank of Commerce, to state oné between that bank and Penfield on certain personal and special accounts involving the affairs of the M. I. & I. Co., and between the Ashton Investment Co. and the M. I. & I. Co. These accounts, together with pass books, and excerpts from the corporate books present a conglomeration of figures and items nearly all of which, disconnected from the testimony, could only be understood, if at all, by an expert bookkeeper. The trial chancellor had the advantage of them together with explanations made by experts on the stand with the books in hand. There were erasures, mutilations, interpolations and changes shown by the books and actually under his eye during the trial, which the silent printed record does not disclose to us. It results therefrom that a court of review does not occupy as good a position as the trial court in weighing discriminatingly many items shown by the books and in grasping the significance of bookkeeping methods evidenced thereby. Accordingly, we shall omit figures in detail (except in one instance hereinafter appearing), and state our understanding of the material facts disclosed.
' At a certain time, say in 1900', the M. I. & I. C'o. was incorporated with $10,000 capital stock,. divided into 100 shares. It was located in St. Joseph. Its charter life was fifty years. Its charter purposes were to purchase real estate in the county of Buchanan, subdivide the same, if advisable, into lots and blocks,, dedicate streets and alleys, to erect houses on such lots or tracts to sell the same, to loan money to assist persons in buying property and improving the same, to negotiate loans on real estate and personal security, and to borrow money pledging its property as security, and to do such acts and things as may be necessary to effectuate such purposes. Penfield was, and Ashton was not, a stockholder at that time. There were three directors, Penfield one of them. Its by-laws show its officers were president, vice-president, treasurer and secretary — the last two combined. That .the
Going back a little. In 1904 the Ashton Investment. Company was incorporated — its charter life fifty years, its capital stock, $15,000, divided into 150 shares of $100 each. In that corporation Thomas Ashton owned 148 shares, Penfield one and: a Mr. Sheridan’ (another son-in-law of Ashton) one. Its charter objects were “to buy, own, hold, improve and sell real' estate in Missouri and elsewhere in the United States, to negotiate loans and buy and sell negotiable securities, loan money on real estate and personal security, and to'pro secute any other lawful business in which the directors may decide to engage for profit.”
Thereafter, in the same year Ashton in consideration of $1 conveyed by warranty deed to the Ashton Investment Company supdry and divers tracts and parcels of real estate in the city of St. Joseph, Missouri, together with whatever personalty was transferred by this clause, viz.: “Also all stocks, bonds, mortgages and all personal property of every descrip- • tion, including household furniture, horses, wagons and farm implements,” appearing in the body of the deed. This deed was spread of record the day after its execution and the testimony runs to the effect that Ashton used the Ashton Investment Company thenceforward as a convenience, a vehicle to carry his business ventures and affairs.
In 1878 Ashton made his will, giving all his property to Mrs. Ashton for life, donating to her power to take possession and to exclusively control and manage the same for the enjoyment, use and benefit of herself and for educating and raising- the three youngest children. directing that no final distribution be made until hig wife cease to be his widow or should die and giving her full power and authority to control, manage, sell or convey absolutely any or all of his estate on such terms as she may see fit and convenient, to control,
Singular as it may seem, defendants (barring their plea) .'stood mute at the trial and introduced no evidence tending to break the force of plaintiff’s testimony, to be presently referred to, sustaining the charges of fraud and mismanagement made in the petition, thereby practically confessing the same. That testimony tends to show that the only property .owned by the M. I. & I. Co. is a brick building at the corner of King Hill and. Missouri Avenues, in the city of St. Joseph, plus the ground on which it stands and certain furniture and fixtures appurtenant thereto. It is three-story structure. The ground floor has three or more business rooms. The second is cut into offices. The third has a hall for lodge purposes and offices. The building is valued at from $25,000 to $28,000, and the ground at, say, $6000. The ground-floor business rooms are severally rented to a clothing man, a drug man and a bank. The offices are rented by pro
If the M. I. & I. Co. ever used any of its charter powers outside of building said business house and. renting and maintaining the same, it is not disclosed. Certainly there is no trace of such úse of its franchises for the years just preceding* this suit. There was uncontrádicted testimony that its simple affairs could be well attended to by any responsible real estate and rent collecting agency for five per cent of its income— say, ten to fifteen dollars, per month. This would include looking after repairs, insurance and taxes, but it would not include a janitor — janitor service having always been provided extra at thirty dollars per month. For this service, when the corporation was paying no dividends and its affairs had been put in confusion, Penfield’s wife and sister-in-law, as said, allowed him, in 1907, for the first time in its history, to be employed as secretary at a salary of fifty dollars per month. He is a note broker and loan agent now, apparently was such broker and agent.while managing the Bank of Commerce and the M. I. & I. Co. He was, as such note
There are other phases of this case not to be overlooked. Mrs. Ashton though recognized as a stockholder, -either in her own right .or as trustee under the will of Ashton, was refused access to the corporate books and the right to investigate them and was com
A matter throwing a flood of light on the relations of the parties owning this family corporation is seen in another suit pending at the time of the trial wherein Mrs. Penfield sues her mother and other distributees of the Ashton estate to set aside a contract evidencing an advancement to her in the sum of $22,000, which contract she alleges was procured by duress and threats of criminal prosecution against her husband for converting to his own use various sums of money belonging to the Ashton estate, aggregating that amount. Light on that phase of the situation is further thrown from the evidence indicating that Penfield used large amounts of bis father-in-law’s funds to conceal or make good his own overdraft in his own bank when it was under examination by the State authorities in 1905. There is also evidence that having, charge of his father-in-law’s bank pass book at the time of his death and before, and having been repeatedly asked to deliver it over when his father-in-law was sick, and to executrix after his death, he on one excuse- or another did not do so. The pass book was lost or destroyed, and simulated or contradictory copies thereof were after-wards furnished by him, which did not agree with the bank books, the original pass book- or with each other.
We mention these things merely to show the deep-seated suspicion and dissension existing, and finding voice, in the corporate management.
There was testimony that a small block of stock in a bank, now a.tenant of the M. I. & I. Co., had been bought with its funds. Put this ultra vires act is not shown to have resulted in’any loss and is a matter easily corrected.
STATEMENT OP CASH .INCOME, CASH EXPENSES AND DIVIDENDS PAID IN CASH TO STOCKHOLDERS.
1901.
Rents, year 1901, March to December, inclusive .................... $ 2,578.43
Interest .........................$ 838.22
Insurance .................... 347.60
Taxes ............................ 88.88
Other Expenses ................... 224.63 1,499.13 $ 1,079.30
1902.
Rents ........................... $ '3,043.94
Interest..........................$ 794.70
Insurance ........................ 73.95
Taxes ............................ 86.70
Other Expenses ................... 487.40 $ 1,442.75 $ 1,528.39
1903.
Rents ............................ $ 3,614.88
Interest..........................$ 286.80
Insurance ........................ 58.05
Taxes ............................ 159.50
Other Expenses ................... 1,081.75
1904.
Dividends '........................$1,150.00 $ 2,736.10 $ 878.78-
Rents ............................ $ 3,065.21
Interest..........................$ 84.78
Insurance..................... 449.13
Taxes ........................... 78.30
Other Expenses ................... 896.19 ■
Dividends ........................ 450.00 $ 1,958.40 $ 1,106.81
*415 1905.
Rents ......... $ 3,047.20
Interest ....... ! 80.50
Insurance ..... "516.05
Other Expenses 1,160.83
Dividends ..... 300.00. $ 2,057.38 989.82
1906.
Rents ................... .....$3,022.00
Interest on hills receivable ..... 12.85 $ 3,034.85
Insurance ............... $ 149.08
Taxes ....-............... 562.86 -
Other Expenses .......... 1,640.68 $ 2,352.62 $ 682.23
1907.
Rents ................... .....$3,608.54
Interest on bills receivable ..... 19.80 $ 3,627.74
Insurance ............... $ 530.93
Taxes ................... 563.81
Salary, A. H. Penfield, Secy. 300.00
Other Expenses ........... 1,155.26 $ 2,550.00 $ 1,077.74
1908.
Rents .................. .....$ 561.50
Interest on bills receivable ..... 7.77 $ 569.27
Salary, A. H. Penfield .., 100.00
Other Expenses .......... 169.26 $ 269.26 $ 300.01
Total Income ................. $22,581.52
Total Expenses ................ 12,965.64
Excess of Income.............. 9,615.88
Total Dividends Paid .......... 1,900.00
Part of trial balance from Secretary’s hook under date of February 29, 1908:
PROPIT AND LOSS.
Insurance ..........$ 2,124.59
Taxes............... 1,540.05
Interest ............ 2,085.00
Other Expenses ...... 7,216.00
Bal. Surplus Account.. 10,515.88
$23,481.52
Rents ..............$22,541.70
Interest ............ 39.82
Discount Notes ....... 500.00
Discount Notes ....... 400.00
• $23,481.52
SURPLUS.
Building ............$27,996.26
Bal. Dividend Account. 3,751.85
$31,748.11
Balance.............$10,515.88
Stockholders........21,218.63
Material Sold... 13.60
$31,748.11
*416 DIVIDEND ACCOUNT.
Paid Ashton .........$ 931.00
Paid Penfield ........ 969.00
Credited Ashton ..... 891.50
Credited Penfield ..... 919.71
Balance............. 40.64
$ 3,751.85
Balance ............$ 3,751.85
$ 3,751.85
STATEMENT OF CASH RECEIVED FOR RENTS AND CASH PAID FOR EXPENSES FROM MARCH, 1901, TO FEBRUARY, 1908, INCLUSIVE:
years. 1901. 1902. 1903. 1904. 1905.
Rents Received ....$2,578.43 $3,043.94 $3,614.88 $3,065.21 $ 3,047.20
Expenses Paid ..... 1,499.13 1,442.75 1,586.10 1,508.40 1,757.38
Excess of Rents over Expenses........ 1,079.30 1,601.11 2,028.78 1,556.81 1,289.82
Average Monthly-Rents .......... 157.84 253.66 301.24 255.43 253.93
Average Monthly Expenses ........ 149.91 120.23 132.17 125.70 146.44
Ratio of Expenses to Rents .......... 58.14 47.40 43.87 49.20 57.66
years. 1906. 1907. 1908. totals.
Rents Received ____$3,022.00 $3,608.54 $ 561.50 $22,541.70
Expenses Paid...... 2,352.62 2,550.00 269.26 . 12,965.64
Average Monthly Rents ........... 251.83 300.71 • 280.75 268.35
Excess of Rents Over Expenses........ 669.38 1,058.54 292.24 9,576.06
Average Monthly Expenses........ 196.05 212.50 134.63 154.35
Ratio of Expenses to Rents ........... 77.86 70.66 47.86 57.52
Any other vital facts will appear in the course of the opinion.
On such record, error is assigned, for that
(1). The court appointed a receiver for a solvent and going corporation on a petition stating no cause of action (and herein of whether the petition is sufficient foundation for any relief).
(2). Overruled the motion to revoke the order appointing a receiver.
.(3). Entered a decree dissolving the M. I. & I. Co.
(5). Permitted the Ashton Investment Co. to file an intervening petition while the case was under advisement.
I. Of the secondary assignments of error.
Before reaching main propositions, it is better to clear up the case by disposing of minor assignments of error — the 2d, 4th and 5th.
(a). Was there error in holding that Lucinda B. Ashton had legal capacity to sue? The question has several points of view, viz.:
(1). Her legal capacity to sue was challenged only by the demurrer of the M. I. & I. Co. That is regularly the way to raise the question when (and only when) the petition shows on its face her legal incapacity. [Sec. 1800, R. S. 19091.] The second statutory ground of demurrer, as set forth in that section, is: When it shall appear on the face of the petition “that the plaintiff; has not legal capacity'to sue.” In this petition there are no facts stated that either directly or by necessary implication show any legal incapacity-in her to sue; hence that ground of demurrer is not well laid.
(2). Moreover, -when defendant corporation subsequently filed its answer, as it did, it thereby waived its demurrer in that particular. By filing an answer raising issues of fact, and invoking a trial thereon, it is good and stiff doctrine that a defendant is held to waive all defects — barring two capital ones, viz., that the petition does not state facts sufficient to constitute a cause of action and jurisdiction of the subject-matter. [Hanson v. Neal, 215 Mo. l. c. 277, and cases cited.] Defects of the kind in hand become mere burnt powder after answer made, and a call to hark back to them falls on unheeding ears in a court of dernier ressort.
On such premises, the point must be ruled against defendants.
(b). Was there error in permitting the Ashton Investment Company to file its intervening petition-while the case was under advisement? If the dates in defendants’ abstract control, this intervening petition was filed after judgment and after motions for a new trial. But there is internal evidence in that abstract of mistake in dates. One of the points made in the motions for a new trial was the permission to file the intervening petition. That point involves an impossibility, an anachronism, if that petition was filed after the motion. Coming events cannot so cast their shadows before as to be dealt with as facts in praesenti in pleas under rules of scientific pleading. The situation is cleared up by an additional' abstract of plaintiffs, showing the intervening petition filed before judgment.
The point up- is quite delicate. It is evolved from the theory that Ashton’s stock in the M. I. & I. Co. passed by his deed to the Ashton Investment Company and became merged in the assets of that company, thereby making it a holding company with the legal title. That subsequently the will of Ashton in favor of Mrs. Ashton, giving her the life ownership of all his property, was operative to convey his then stock in the Ashton Investment Company, which latter stock, by operation, of law, took with it all the legal or equitable rights and benefits of the stock in the M. I. & I. Co.
We take the point, as one without present substance and to be reserved. We so rule.
(c). We also rule the second assignment against defendants. This because, error in overruling the motion to revoke the order appointing the temporary receiver is not regularly here for consideration. Error in such ruling can be reviewed only when the motion itself is part of the bill of exceptions, or where it appears in the record proper (as here) and a call is made in the bill for the motion itself. [Bank v. Bank, 169 Mo. 74; Cantwell v. Lead Co., 199 Mo. l. c. 41; Hendricks v. Calloway, 211 Mo. l. c. 555, et seq., and cases cited.] The matter is crystallized into and regulated by statute. [Vide, Sec. 2083, R. S. 1909.] And defendants do not bring themselves within that statute.
II. The main propositions are related and naturally fall into subdivisions under one head.
(a). Does the petition state a'cause of action foi the appointment of a receiver and for other relief? The
But we are not able to- bring ourselves to the view that this petition states no cause of action except for the dissolution of the M. I. & I. Co. It dealt with a situation having several angles. One declared object of the petition was to preserve and conserve- the corporate property by taking it out of mismanaging, wasteful and fraudulent hands, and putting it in the care of the court. Another is the righting of property wrongs suffered a-t the hands of those in charge. Allegations directed to such relief abound. The prayer is broad enough to include such relief, and both allegations and proof imperatively call for it if it may go on equity principles. Attending to those principles, I think the general doctrine is that however reluctantly equity moves in lifting the affairs of a corporation from its officers and board of directors, yet it does move, and that in a known orbit and with vigor. It has large power in that behalf in emergencies appealing to conscience. Corporate insolvency may be a factor worth considering, when present, but actual insolvency is not necessary (as will presently appear) to the exercise of equitable jurisdiction and the supervision -of a chan
It is urged that such relief is at law, not in equity, aud we are referred by counsel to certain sections of the statutes for the cure of corporate ills. But those statutes are not preclusive and do not oust the ancient and settled jurisdiction of equity, absent express provision to that effect. Apposite to that view of it, this court said in Greeley v. Provident Savings Bank, 103 Mo. 222: “But the circuit court, independent of section 2193, Revised Statutes 1889, had the authority to appoint a receiver in vacation and to subsequently confirm that provisional appointment by an order made on the assembling of court. The section referred to does not shorten the arm of a court of equity in this particular; since no words of preclusion are used in that section. [Cox v. Volkert, 86 Mo. 511.]"
Before existing heads and subjects of equity jurisdiction are lopped off, the lawmaker must evince such beheading purpose so unmistakably that there can be no' fair two ways about it. [Baldwin v. Davidson, 139 Mo. l. c. 126-7, and cases cited; Arnett v. Williams, 226 Mo. l. c. 118-9.]
The matter was in judgment in another case, Thompson v. Greeley, 107 Mo. l. c. 586, et seq., and the doctrine of the Greeley case was reaffirmed. After discussing the general doctrine in High and Beach in their works on receivers, to the effect that courts of equity will not ordinarily take over the management of the affairs of a corporation from its own officers and entrust it to a receiver, Macfablane, J., in the Thompson case, points out that the general statement of those authors is qualified by certain exceptions arising from cases of extreme necessity. “These authors,” he says, “place the want of jurisdiction- on the ground that a forfeiture of the corporate franchises can only be de
In State ex rel. v. Bank, 197 Mo. l. c. 593, et seq., the question was approached, hut plowed round, and not decided. However, Cantwell v. Lead Co., 199 Mo. 1, was a suit to appoint a receiver and for relief flowing from such appointment. The, Lead Company was not insolvent but there were allegations of extreme mismanagement, 'fraud, waste, impending danger to the corporation and internal feuds and dissensions standing in the way of harmonious and wise action. The question, in judgment was: Did the petition state a case for the appointment of a receiver? We unanimously ruled it did. The doctrine of that case has not been exploded, and should he reckoned with. In the face of contentions made in briefs and at the bar by learned counsel for defendants that case may best speak for itself, thus: “Courts have hesitated to lift the affairs and assets of a corporation out of the hands of its board of directors and administer them through receivers, and have flatly said so, and given cogent reasons for this hesitancy. . . . But when all this has been said, it may further be said that this court has never denied power in a chancellor to prevent a scheme of irreparable injury and wrong, merely because, the
In State ex rel. v. Foster, 225 Mo. 171, we issued our writ of prohibition restraining the enforcement of a decree in certain particulars because it went too far. But, observe, in that case we did not interfere with the receivership itself — contra, we said this (p. 203): “The court upon the facts as disclosed by the record in that proceeding, had full power to appoint a receiver to take charge-of the assets of the .corporation. ” This ruling was our answer to the contention that we should lay a judicial ax at the very root of the case.
And in State ex rel. Sanitol Chem. Lab. Co. v. Geo. H. Williams, Judge (a case in which no* opinion
The doctrine of the Cantwell case finds strong support in standard authority.
In Gluck and Becker's Rec. of Cor. (2 Ed.), p. 53, is this: "The inherent power of a court of equity to appoint a receiver of the property of a corporation at the instance of one or more stockholders, charging fraud and mismanagement on the part of the officers 'in charge, to the imminent danger of the interests of such stockholders, is now too well settled to admit of question.” The text is put on the ground that the corporate property “is not safe in the hands of corrupt and irresponsible officials.”
In 1 Foster's Fed. Prac. (4 Ed.), pp. 768-9, the sum of the matter is announced thus: 11 Independently of statutory authority, a court of equity will ordinarily appoint a receiver of the property of a corporation in •only eight classes of cases: Firstly, .... Secondly, .... Thirdly, at the suit of persons interested in the property, whether as stockholders or creditors, . . . where there is a breach of duty by the directors, and an actual or threatened damage of a serious. nature, although there is no insolvency. Fourthly, . . . Fifthly, . .' . Sixthly, where the governing body is so divided and engaged in such mutual contentions, that its members cannot act together ..."
And in a very late edition of an approved work (3 Cook, Cor. [6 Ed.], bottom pp. 2490, et seq.), the general doctrine is put in this way: “A court will not appoint a receiver merely because some of the stockholders disapprove of the management. A receiver will not be appointed at the instance of a stockholder, even though mismanagement is charged, there being
Smith states one of the rules to be (Smith on Rec., p. 359), that a receiver will be appointed “where upon application of a stockholder it is shown that the directors and officers of the corporation are mismanaging its affairs, as for their own personal advantage and gain.”
Morawetz (Pri. Cor., sec. 399) holds to the view that the appointment of a receiver of a solvent corporation must be considered a strong remedy to be justified only in 'a strong ease. [See Alderson, Rec., sec. 347.]
In the leading case of Hawes v. Oakland, 104 U. S. 450, speaking for all his learned brethren, Mr. Justice Miller said: ‘ ‘ That the vast and increasing proportion of the active business of modern life which is done by corporations should call into exercise the beneficent powers and flexible methods of courts of equity, is neither to be wondered at nor regretted; and this is especially true of controversies growing out of the relations between the stockholder and the corporation of which he is a member. The exercise of this power in protecting the stockholder against the frauds of the governing body of directors or trustees, and in preventing their exercise, in the name of the corporation, of powers which are outside of their charters or articles of association, has been frequent, and is most beneficial, and is undisputed.” In discussing the true foundation for a suit by stockholders, in that case,
The trend of the doctrine of many courts is the same way. For example: Ponca Mill Co. v. Mikesell, 55 Neb. 98; Haywood v. Lincoln Lumber Co., 64 Wis. 639; Davies v. Light Co., 107 La. 145; Sternberg v. Wolff, 56 N. J. Eq. 389; Stevens v. Davison, 18 Gratt. 819; Miner v. Ice Co., 93 Mich. 97; Wayne Pike Co. v. Hammons, 129 Ind. 368; Duncan v. Treadwell Co., 82 Hun 376; Cameron v. Groveland Improvement Co., 20 Wash. 169; Jasper Land Co. v. Wallis, 123 Ala. 652; Griffing v. Griffing Co., 96 Fed. 577. In Tompkins v. Catawba Mills, 82 Fed. 780, stress was laid on a deep-seated division in the board of directors which could not be healed. [Towle v. American B. & L. & I. Soc., 60 Fed. 131; Arents v. Tobacco Co., 101 Fed. 338; Red Bud Realty Co. v. South, 131 S. W. (Ark.) 340; Davis v. Hofer, 38 Ore. 150; O'Connor v. Knoxville Hotel Co., 93 Tenn. 708.]
Applying the foregoing propositions to the facts and pleadings, our conclusion is that the petition states a cause of action for the appointment of a receiver and other relief falling short of the capital event of dissolution, and that the facts are of such sort as to make the case a typical one to be settled by equity principles. The conspiracy charged is proved in its scope and ultimate purpose. Fraud and extravagant and corrupt mismanagement for personal and by-ends, long persisted in and still existing, whereby the rights of shareholders have been grievously hurt, make up the miserable story of the life of this corporation. Its affairs and books have been put and kept in confusion. The truth is hid away in bad bookkeeping. Mrs. Ash-ton having a right to see into its affairs was arbitrarily fenced off and denied the right to look. Either an ingrained inability or lack of disposition to protect the corporation from being used as a personal convenience
We rule the present assignment of error against defendants.
(b). The remaining question is: Did the decree go too far in dissolving the corporation, theréby end
That question has two sides. It has been held in respectable cases that where the situation is so crying as to show the purposes or business of the corporation have been abandoned, or where performance of the corporate purpose is clearly impracticable, or where the trouble is so radical, deep-seated and dominating as to point to inevitable corporate disease, a crippled and non-paying corporate life, equity will wind up its affairs and dissolve it, absent statutory authority. [Arents v. Tobacco Co., 101 Fed. 338, and cases and authorities cited; O’Connor v. Knoxville Hotel Co., 93 Tenn. 708; Miner v. Ice Co., 93 Mich. 97; Gluck and Becker on Rec. (2 Ed.), pp. 54, 55.] But the doctrine of this court runs counter to that and our doctrine accords with the overwhelming weigh! of authority elsewhere. The rule in this jurisdiction is that a court of equity is without any jurisdiction in any extreme case put to dissolve a corporation and make distribution of its assets. [State ex rel. v. Foster, 225 Mo. 171.] I did not agree to that ruling when made, but was of mind then that the reason of the rule no longer existed in full vigor because of changed business conditions. But there was no call then or now to give voice to con- • trary views. The matter is settled. Stare decisis. On the authority of the Foster case we hold the decree erroneous in the above particular,
Accordingly, the decree should be reversed and the cause remanded with directions that the court enter a decree confirming the appointment of a receiver, overruling the motions to revoke the order appointing him; that the receiver should be kept in charge until such time in the future as the court may find full equity done and that it should then lift its hand and retire, otherwise proceeding in accordance with this opinion, reserving the right to itself in said decree to make such further and other orders and judgments from
Dissenting Opinion
DISSENTING OPINION.
The plaintiff, Lucinda B. Ashton, on May 21,1908, filed her bill in equity against the defendants, having for its object the dissolution of the defendant, the Merchants’ Improvement and Investment Company, a corporation existing under the laws of this State; the vacation .of its offices and directorship; the appointment of a temporary receiver to take charge of its books, property, papers and effects, collect the rents, pay off existing obligations; and to have A. H. Penfield account for his official conduct in the management of the property, and restore all moneys, property and effects of the company taken or misplaced by him as secretary and treasurer thereof; pay the rents of the office occupied by him as an officer of the company, and all other sums lost by reason of misconduct, neglect or bad management; and upon final decree a prayer was made for the distribution of the assets of the company among its stockholders, etc.
A trial was had in the circuit court of Buchanan county, which resulted in a decree in favor of plaintiffs, as hereinafter set forth, dissolving the corporation, and ordering that the appointment of the receiver be made permanent.
Just prior to the rendition of the decree, on motion duly presented, the court permitted the Ashton Investment Company to file an intervening petition in order that its right in the premises might be adjudicated at the same time, which was more or less interested in the matters and things stated in the plead
After moving unsuccessfully for a new trial and in arrest of judgment, the defendants duly appealed the cause to this court.
The record is unusually long; the defendants’ abstract thereof covers about 350' pages of printed matter, and the plaintiffs’ abstract covers about fifty pages. The petition also is unusually long, covering thirteen pages of printed matter. It will be necessary, therefore, in order to bring the statement of the case within reasonable bounds that a general abridgment ' of the pleadings and evidence be made.
The bill alleged that plaintiff was the owner of forty-nine shares of the capital stock of the Merchants ’ Improvement and Investment Company, and Effie McDonald Smith was the owner of two shares, and Annie A. Penfield the owner of forty-nine shares, this being the total capital stock of the company. She further alleged that Arthur H. Penfield was employed as sec- ' retary of the defendant company. After alleging the incorporation of the Merchants’ Improvement and Investment Company, the material allegations of the petition are substantially as follows:
The corporation had ceased to exercise its rights under its charter, except maintaining and renting building owned by it.
That Thomas Ashton, husband of Lucinda B. Ash-ton, purchased forty-nine shares of the capital stock on January 6, 1902, and from that time until the date of his death, July 5, 1906, was a stockholder and director of the Merchants’ Improvement and Investment Company. That Thomas Ashton, by his last will and testament, gave Lucinda B. Ashton the stock in the Merchants’ Improvement and Investment Company for life. That Annie A. Penfield and Effie McDonald
The value of the real estate owned by Merchants’ Improvement and Investment Company was alleged to be twenty-five thousand dollars, and there is no allegation that it was indebted in any sum whatever to any person.
It is further alleged that A. IT. Penfield was interested in the Bank of Commerce, located in the Merchants’ Investment and Improvement Company’s building, and that as secretary of Merchants’ Improvement and Investment Company, and managing officer of said bank, he was enabled to and did use the funds of the Merchants’ Improvement and Investment Company to bolster up the bank and his own credit, to the injury and detriment of the Merchants’ Improvement and Investment Company.
It is alleged that A. H. Penfield, by virtue of his relations to Annie A Penfield, his wife, and Effie McDonald Smith, his sister-in-law, and by virtue of the fact that he is adviser, business agent, manager and . director of said last named defendant, is enabled to and does control their votes and directs their acts in all things pertaining to- the company wherein Lucinda B. Ashton’s interests are involved, and that the Pen-fields and Mrs. Smith are hostile to Lucinda B. Ash-ton.
It is further alleged that Lucinda B. Ashton is hot consulted in the management of the affairs of the Merchants ’ Improvement and Investment Company, and that her rights as stockholder and director are ignored, and that she has no voice in the management of ■the affairs of the company.
It is further alleged that A. PI. Penfield receives a salary of fifty dollars per month for looking after the business as secretary of the company, and that the board of directors had no authority to pay a salary under the by-laws, which is alleged to be as follows:
It is further alleged that the directors have paid' out more money than is necessary for expenses, including the fifty dollars salary, which is alleged to be exorbitant.
It is further alleged that A. H. Penfield is occupying rooms of the company as its office and that he also carries on his personal business in said rooms, without paying anything therefor.
It is further alleged that there is a janitor employed by the company to keep the offices in the building clean and this is seriously objected to by the pleader.
It is alleged that A. H. Penfield, Annie A. Penfield and Effie McDonald Smith have combined and conspired together, with the object in view of controlling the management, using up the income and securing the profits and funds of the company for their own use, and to deprive Lucinda B. Ashton of dividends and profits from stock she is alleged to own.
It is alleged that A. H. Penfield is a person of bad reputation and that he has appropriated the funds of the company to- his own use.
It is alleged that A. H. Penfield and Annie A. Pen-field have charged off upon the books of the company $1450, long past due, that is owing the company by the Bank of Commerce, and that A. H. Penfield, as secretary and manager of the company, did not present the company’s claim to the Bank of -Commerce, and that A. H. Penfield and Annie A. Penfield were stockholders in the Bank of Commerce at the time.
It is further alleged that A. H. Penfield has caused the property of the company to be insured for a sum largely in excess of its value, and .that by arrange
It is alleged'that A. H. Penfield has destroyed the cash hook of the company, thereby rendering it impossible to secure a correct accounting of the cash receipts and disbursements of the company.
It is further alleged that A. II. Penfield has caused, to be eliminated with acid, entries on the books of the company, for the purpose of juggling the accounts, and thereby rendering it impossible to ascertain the gross earnings of the company. That A. H. P’enfield has denied Lucinda B. Ashton the privilege of examining the books, and that she was compelled to apply to the court to compel Penfield to permit her to examine the books. That the board of directors purchased stock in the Citizens Bank, a corporation, organized for carrying on a banking business, and that the purchase was unauthorized. That A. EL Penfield, in violation of the by-laws, transferred his stock to Effie McDonald Smith, with the aid and assistance of Mrs. Annie A. Penfield, for the reason that Penfield could depend upon Mrs. Smith doing his bidding. That Annie A. Penfield and Effie McDonald Smith were the* tools of A. H. Penfield, and that Penfield had made his boast that Lucinda B. Ashton should not have any dividends from the company.
It is further alleged that Annie A. Penfield, A. H. Penfield and Effie McDonald Smith were not suitable persons to handle money or control their own property, and that the corporation under its present management can no longer- serve any useful or lawful purpose.
It is further alleged that Annie A. Penfield, Effie McDonald Smith and A. II. Penfield have entered into a conspiracy to defraud Lucinda B. Ashton of her property right, and that the acts of Annie A. Penfield and Effie McDonald Smith are the acts of A. II. Pen-
There are other allegations in the petition which are wholly irrelevant to the questions here presented for determination, referring solely to controversies between A. H. Penfield, Lucinda B. Ashton, Ashton InVestment Company and Bank of Commerce, in which Merchants’ Improvement and Investment Company, Annie A. Penfield and Effie McDonald Smith have no interest, knowledge or concern.
In due time defendants filed their separate motions, asking the court to set aside and revoke the order appointing a temporary receiver. It appears that the court refused to pass upon these motions until the final hearing of the cause was reached.
Thereafter the defendant company demurred to the petition, which was overruled by the court.
Defendants then moved the court to strike out certain portions of the petition, which motions were by the court overruled. .
These motions and demurrers are too lengthy to be set out here; they cover some fifteen pages.
The defendants then filed separate answers, each of which consisted of a general denial and a plea “that if plaintiffs have any cause of action same is at law which will afford plaintiffs full and adequate relief, and further there is no equity stated in the bill. ’ ’
The plaintiffs introduced evidence tending to prove the allegations of the bill; and that introduced by defendants tended to contradict those charges and to support the charges contained in the answer.
The decree of the court (formal parts omitted) • is as follows:
“Afterwards, and on November 21, 1908, same being a day of the September term of court, order and decree was entered as follows, to-wit:
“It is further ordered and adjudged that said receiver take possession of and sequester the property, real and personal, of said corporation, and to which said corporation may be entitled, and that said receiver take a true account of the assets and property of said corporation and make his report therein to the next term of this court, and now here this court retains jurisdiction of this cause for the purpose of making such further orders herein as may be necessary to carry into effect and execute the above and foregoing
I. While the decree states that the court found all the issues for the plaintiffs, however by reading the entire decree it will be seen that the court did not adjudicate any issue presented by the pleadings, save and except a dissolution of the defendant corporation, and the order appointing the temporary receiver permanent.’ There is, therefore, no question but those two here presented for review.
Since the trial of this cause in the circuit court, the identical questions here presented have been determinated by this Court in Banc in the case of State ex rel. v. Foster, 225 Mo. 171. That case is so analogous to this, we feel justified in quoting somewhat extensively therefrom.
Among other things, the bill in that case charged that:
“(3). Plaintiffs further aver that said John W. Donnell has been guilty of reckless, fraudulent and extravagant mismanagement in his conduct of the business of -said company in that he has paid .an agent, named Scritzmeier, whom he employed to devise and operate the aforesaid scheme of contracts heretofore referred to, the sum of four hundred dollars out of every one thousand dollars deposited with it or paid to the Donnell Manufacturing Company under said scheme, and the aggregate, of the sums so paid to said agent is more than forty thousand dollars. Plaintiffs further say that the services rendered by said agent Scritzmeier in procuring said contracts did not extend over or cover a period of more than .four months, and the said services are well known by the said John W. Donnell not to be worth more than one hundred
“(4). Plaintiffs further aver that said John W. Donnell, by and through his domination and control of the officers of the defendant corporation, has paid to himself, as a pretended salary for his services as the president and general manager thereof, the sum of sixtv-nine thousand dollars in excess of the amount of salary which he was lawfully authorized to draw from or be paid by said corporation.
“ (5). Plaintiffs further aver that as soon as the deposits above referred to, amounting to more than one hundred thousand dollars, had been made with the defendant corporation by the parties induced to sign said contracts, the defendant, John W. Donnell, paid to himself the sum of $20,050 out of the money so received as a pretended payment of • an indebtedness from said corporation to himself; which pretended indebtedness appears on the books of said Donnell Manufacturing Company, but plaintiffs charge and aver upon information and belief that the said pretended indebtedness was wholly fictitious and false, and that said John W. Donnell had no right to malee such payment to himself out of said funds, or any other funds or moneys belonging to the Donnell Manufacturing Company.
“(7). Plaintiffs further aver that said John W. Donnell has caused to be made upon the books of the Donnell Manufacturing Company, certain entries and items indicating that said corporation is still indebted to him in a large amount, but plaintiffs aver, upon information and belief, that said pretended indebtedness is wholly fictitious and that said corporation is not indebted to said John W. D'onnell in any sum or amount whatsoever, but that on the contrary he is largely indebted to said corporation.
“(8). Plaintiffs further aver that by reason of said misconduct and mismanagement of the business and affairs of said company, its credit has been destroyed and its business has been irreparably injured, and its reputation for honesty and fair dealing has been wholly lost, and that it will be impossible hereafter to carry on its business with profit or success with or without the use of the mails; that the capital stock of said company has become largely impaired, even if said company is not now insolvent, and that for the past year, and several years prior thereto, its
“Wherefore, the premises considered, plaintiffs pray the court to appoint a receiver for the purpose of taking charge of all the assets and business of the said Donnell Manufacturing Company and of liquidating the same; and they pray that the said John W. Donnell and his co-directors be enjoined from interfering with the management of said business by said receiver, and that the court, by its decree, declare said John W. Donnell and his co-directors, and each of them, ineligible, by reason of their conduct aforesaid, to hereafter hold the office of director in said corporation; and that said receiver, after paying the debts and obligations of said corporation, be directed to divide the amount thereafter remaining among its stockholders pro rata, and that the defendant corporation be dissolved and its existence as'a corporate organization terminated.”
It is also charged that on account of the fraudulent conduct of the defendants, the Postmaster-Greneral had issued a fraud order denying them the use of the United States mails, etc.
There was an abundance of evidence introduced tending to prove those charges; and the trial court rendered judgment against the unfaithful officers of the corporation for the sums of money which they had misappropriated, appointed a receiver and entered a decree dissolving the corporation, etc.
In discussing those questions, Judge Fox, in speaking for the court, said:
“The most satisfactory answer to that inquiry can be furnished by pointing- to the rules announced upon that subject by the text-writers, as well as to the adjudicated cases treating of that question.
“In the Cyclopedia of Law and Procedure, vol. 10, p. 1305, the rule applicable to this subject is thus stated in the text: ‘In the absence of enabling statutes, courts of chancery have no jurisdiction to decree the dissolution of a corporation; nor as a general rule can such a court, during the life of the corporation, wind up its business and sequestrate its property and effects, on the application of a shareholder as such; but when a corporation dies by reason of the expiration of its charter, or becomes substantially dead by reason of the non-user of its franchises, a court of equity has jurisdiction, under principles already elaborated, to lay hold of its assets by its receiver and distribute them among its creditors.’
“A similar rule is announced by the eminent text-writer, Mr. High, on Receivers, sec. 288, p. 249, wherein he states that ‘the general jurisdiction of equity over corporate bodies does not extend to the power of dissolving the corporation, or of winding up' its affairs and sequestrating the corporate property and effects, in the absence of express statutory authority/
“Mr. Thompson, in his Commentaries on the Law of Corporations, vol. 4, in treating of this subject, is in harmony with the rule as announced by Mr. High. He says, in section 4538, that ‘in the absence of statutes enlarging its powers, the general rule is that a
“In Wheeler v. Pullman Iron & Steel Co., 143 Ill. 197, in treating of this question, the rule was again announced that ‘in the absence of statutory authority, courts of chancery had no jurisdiction to decree a dissolution of a corporation by declaring a forfeiture of its franchise, either at the suit of an individual or of the State. [Verplanck v. Merchants’ Ins. Co., 1 Edw. Ch. 84; Doyle v. Peerless Petroleum Co., 44 Barb. 239; Folger v. Columbia Ins. Co., 99 Mass. 274; Attorney-General v. Bank of Niagara, 1 Hopk. 354; Denike v. Cement Co., 80 N. Y. 605.] The mode of enforcing a forefeiture of the charter at common law was by scire facias or quo warranto in courts of law only, and at the suit, only, of the sovereign.’ It will be observed in that case that the court pointed out that there was a statute in that State conferring upon courts of equity full power, on good cause shown, to dissolve or close up the business of any corporation, and to appoint a receiver to take charge of the assets.
“Similar statutes have been enacted in other States, but, so far as this State is concerned, we know of no statute which undertakes to authorize a court of equity to dissolve a corporation; hence, in the absence
“In Life Indemnity Assn. v. Hunt, 127 Ill. 257, it was again ruled that in the absence of statutory provisions courts of equity have no jurisdiction to decree the dissolution of a corporation by forfeiture of-its franchises, either at the suit of an individual, or at the suit of the State; citing in support of such rule Attorney-General v. Utica Ins. Co., 2 Johns Ch. 370; Slee v. Bloom, 5 id. 366; State v. Merchants’ Ins. Co., 8 Humph. 234; Attorney-General v. Bank of Niagara, 1 Hopkins’ Ch. 334; Doremus v. Dutch Reformed Church, 3 N. J. Eq. 332; Doyle v. Peerless Petroleum Co., 1 Edw. Ch. 83; Strong v. McCagg, 55 Wis. 624; 2 Morawetz on Corporations, sec. 1040. It was also pointed out in that case that in all cases holding that courts of equity have no power in the absence of a statute to decree a dissolution of a corporation, it is uniformly admitted, whenever the question has arisen, that jurisdiction to decree the dissolution of a corporation may be conferred upon courts of equity by statute.
“In Neall v. Hill, 16 Cal. 145, treating of this proposition, the law applicable to this subject was stated in this language:. £ It is well setled that a court of equity, as such, has no jurisdiction over corporate bodies for the purpose of . . . winding up their concerns. We do not find that any such power has ever been exercised, in the absence of a statute conferring the jurisdiction.’
“In the French Bank case, 53 Cal. l. c. 551, it was said: ‘ Of course, it is not to be doubted that the trustees of a corporation, the persons who constitute its directors, and from time to time exercise the corporate authority in the management of its affairs, are subject, to the control of courts of equity, or, as observed by Chancellor Kent, “that the persons who from time to time exercise the corporate powers, may, in their char
“In Denike v. Cement Lime Co., 80 N. Y. 599, the plaintiffs who were stockholders in such Lime Company, sought a dissolution of the corporation and the appointment of a receiver to take charge of its assets. Earl, J., speaking for the Court of Appeals of New York, in treating of the proposition as to whether the plaintiffs, as stockholders in the case, could maintain the action for the dissolution of the corporation and the appointment of a receiver, announced the conclusions of that court in this language: ‘A corporation owes its life to the sovereign power, and under what circumstances it shall forfeit or be deprived of that life, depends upon the same power. A corporation may be dissolved by forfeiture through abuse or neglect of its franchises; but such forfeiture, unless there be special provisions by statute, can only be enforced by the sovereign in some proceeding instituted in its behalf. Here there is no allegation in the complaint that this corporation had forfeited its charter, or that it had in any way become dissolved; but a portion of the relief prayed is that it be dissolved. All the stockholders uniting might undoubtedly surrender the' franchise of a corporation and work its dissolution. But can a portion of them do this, in the absence of statutory authority? There is no statute in this State which au
“In Thompson v. Greeley, 107 Mo. 577, while the proposition of the power of a court of equity to dissolve a corporation was not in judgment before the court, yet in treating of the question of the appointment of receivers and their duties, it is clear that the court fully recognized the general rule, as heretofore pointed out, applicable to that subject; and in meeting the contention in that case that there was no authority to appoint a receiver to wind up the affairs of a corporation, it'was pointed out that ‘the temporary control of an insolvent corporation by a court and a receiver does not operate as a dissolution and forfeiture of its franchises. After the debts have been paid, and the necessary capital' restored, this corporation could resume business under its original charter. ’
“In Decker v. Gardner, 124 N. Y. 334, in discuss- ’ ing this subject it was again pointed out that ‘the
“With the exception of Miner v. Ice Co., 93 Mich. 97, the rule announced by the text-writers and the adjudications of the appellate courts of the various states, has been strictly adhered to. The Michigan case, upon the facts disclosed by the record, held that the relief prayed for should be granted even though the decree had to go to the extent of dissolving the corporation; however, it was with commendable frankness conceded that ‘the general rule undoubtedly is that courts of equity have no power to wind up a corporation, in the absence of statutory authority.’
“Learned counsel for respondents upon this question direct our attention to the cases of Cantwell v. Columbia Lead Co., 199 Mo. l. c. 36-43; State ex rel. v. Bank, 197 Mo. l. c. 593; State ex rel. v. Scarritt, 128 Mo. l. c., 339. We have given those cases a very careful examination, and with the highest respect for the views entertained by learned counsel we are unable to assent to the insistence that those cases furnish any support to the contention that a court of . equity has -any power to dissolve a corporation.
“In Cantwell v. Columbia Lead Co., while it is true the petition for the appointment of a receiver did pray
“In State ex rel. v. Scarritt the proposition now under consideration was not only not involved, but was not discussed. That proceeding sought a writ of prohibition, and in treating of it this court announced the rules of law applicable to the issuance of writs of that character- — on the one hand if the trial court had no jurisdiction or was about to do acts in excess of its power and jurisdiction, that the writ would go. On the other hand, if the court had jurisdiction of the subject-matter, then it was not a question of whether -or not the petition in the proceeding to which the writ of prohibition was to apply stated a good cause of action; as to that question the court had a right to consider and rule upon the petition. In other words, it was ruled in that case that where jurisdiction over the parties and the subject of the cause is acquired, any error of the trial court in ruling on the sufficiency of the pleading forming the basis of the suit cannot be corrected by resort to a writ of prohibition. It was held in that case, and rightfully so, that the court had full power to do the act which it was invoked to do, namely, appoint a receiver of the assets of the corporation, and to determine in the first place whether the facts warranted that action of the court. Manifestly, that case has no application to the proposition now under consideration as to the power of a court of equity, in, the absence of any statute conferring such power, to dissolve a corporation.
“State ex rel. v. Bank, supra, to which our attention has been directed, does not in any way undertake
“We see no necessity for further discussing this proposition. If the rule announced by the eminent text-writers, to which we have made reference, and .the uniform holdings of practically all the courts that have treated of the subject, that the rule announced by the text-writers is sound and should be adhered to, are to be longer followed, then we see no escape from the conclusion that the chancellor in the case of Watkins et al. v. Donnell Manufacturing Company et al. exceeded his power in rendering a decree dissolving the Donnell Manufacturing Company, a corporation, and this court upon the application presented, notwithstanding the decree has been entered, may prohibit the further exercise of any unauthorized jurisdiction in attempting to enforce such decree.”
That case was carefully considered by the Court in Banc, and after a careful reconsideration of it, wb are fully satisfied with the law as there announced and the conclusions therein reached. There is nothing further that could be said upon the subject.
That case is controlling in the casé at bar; and we are, therefore, of the opinion that the judgment should be reversed and the cause remanded, with directions to the circuit court to set aside its decree and dismiss plaintiffs’ bill.
Dissenting Opinion
I dissent from the majority opinion in this ease for two reasons. First, I do not agree with my brothers as to the construction given to the petition. The petition recites a mass -of matter, but it is all recited as matters of inducement to the one ultimate desire of the pleader, and this ultimate desire was the dissolution of this corporation by and through a court of equity. To my mind therefore, the petition is purely one for the dissolution of a' corporation in this unknown and practically unheard of method. The opinion concedes that a court of equity has no such powers, but to my mind undertakes to plead for the plaintiff, and upon a pleading erected by the court announces a theory of law.
But even if the petition be as the majority opinion construes it to be (or as I think the majority opinion has ex mero'motu made it to read) yet I do not agree to the law as announced, and thus my second reason for dissenting. By the ruling in this case, the court does by indirection that which it, concedes it cannot do by direction. The court does not openly put the corporation to death, but by-indirection accomplishes the same result by slowly but surely starving it to death. When the corporation’s property is seized and confiscated, the corporation must ex necessitate decay and die.
Personally, if driven to- a choice between the two methods above indicated, I would much rather violate all precedent, and assume the power to kill and wind up a corporation in a direct method, than to undertake to do the same thing bv indirection. Personally I am opposed to the grasping desire expressed in some of the opinions of courts of equity. Up to this time, we have been reasonably conservative in reaching out the arms of equity for the mere purpose of administering the.