154 Mo. App. 350 | Mo. Ct. App. | 1911
This appeal is from an order overruling a motion of the defendant, Billings Mercantile Company, to vacate an order appointing a receiver to take charge of the said defendant’s property, said order having been made in vacation by the judge of the circuit court of Christian county on the 8th day of October, 1910, the day the petition was filed. The petition upon which said order was made is as follows: (Caption omitted.)
“Plaintiffs state that the Billings Mercantile Company is a corporation, ■ duly organized under the laws
“Plaintiffs further state that in his lifetime, R. D. Blades was the owner of twenty shares of the capital stock of said corporation, of the par value of one hundred dollars per share; that the said E. D. Blades shortly before his death and during his last sickness, while mentally irresponsible on account of the infirmities of extreme age and from the influence of strong opiates' administered at frequent intervals for weeks prior thereto, one Joseph Meyer, the then manager and principal stockholder in the defendant company, without solicitation, or invitation so to do, from any person interested therein secretly and fraudulently wrote out and1 caused to be signed, by mark, the name of R. D.
“Plaintiffs further state that they are the heirs at law of E. D. Blades, who died intestate about December ■ — , 1901; that the estate of the said E. D. Blades has been fully administered and that there are no debts outstanding against his said estate.
“That they are the owners of the said1 shares of stock and eárnings of same; that so far as plaintiffs are informed and believe the present value of the said stock aggregates the sum of $3700.
“Plaintiffs further state that they are informed and believe that the said Joseph Meyer has paid' to the said Mary E. Blades the sum of $700 of the money of said corporation without right or warrant of law and is threatening to pay out all the assets of said corporation in violation of law, and in total disregard of the rights and interests of the plaintiffs herein.
“Plaintiffs further state that by reason of the fraudulent, invalid and void transfer of the earnings of said stock of plaintiffs, the defendant corporation has knowingly and wrongfully paid the defendant, Mary E. Blades, the sum of $2380 of the moneys of these plaintiffs.
“Wherefore, plaintiffs pray judgment against the defendant corporation and the defendant, Mary E. Blades in the sum of $2380 with interest thereon as allowed by law.
“Plaintiffs further pray that the court appoint a receiver to take charge of the business, property and effects of said corporation and to collect, sue for and recover the debts and demands that may be due and the property that may belong to said corporation, and to take charge of, lease and rent all real estate belonging to said corporation, collect rents therefor and make such disposition thereof from time to time as may be ordered by the court.
“Plaintiffs further pray for such other and further orders, decrees and judgments touching the premises herein as to the court may seem meet and proper and for such further relief as plaintiff may be entitled to in equity and good conscience.”
The order appointing a receiver was made on the allegations of the petition alone, without affidavits in its support, except the verification of the petition by one of plaintiffs’ attorneys, and the order was made without notice having been given to the appellant.
This motion was overruled and the appeal to this court was duly perfected.
Appellant’s principal contention is that the petition filed in the circuit court wholly fails to allege that respondents sought or were refused redress for their grievances within the corporation itself, or that its officers and managers were given any opportunity to make matters right, or that they failed or refused to recover the sums alleged to have been misappropriated, or to grant respondents all their rights.
The petition alleges that the stockholders passed a resolution favoring a dissolution of the corporation, but that no formal dissolution was had; that they proceeded (a) to sell and dispose of the stock of merchandise, fixtures and furniture and to close up the business, and (b) to appoint one Joseph Meyer as manager and agent to collect the debts and disburse the moneys of the corporation. Thus far, nothing unlawful is alleged. But the petition recites: “And the said Joseph Meyer is proceeding to collect the assets of said corporation and is paying out such assets to persons wholly unauthorized to receive the same by reason whereof the assets of said corporation are rapidly becoming depleted, squandered and wasted. Plaintiffs further state that they are informed that the said Joseph Meyer has paid to the said Mary E. Blades the sum of |700 of the money of said corporation without right or warrant of law and is threatening to pay out all the assets
The power to appoint a receiver is a delicate one, especially when invoked upon interlocutory ex parte applications, and should be exercised with extreme caution, and only under circumstances requiring summary relief or where the court is satisfied that there is imminent danger of loss, lest the injury thereby caused be far greater than the injury sought to be averted. It should never be exercised in a doubtful case. One of the grounds upon which a receiver may be appointed is that there is no other adequate remedy; the appointment will never be made where there is another safe or expedient remedy, or where the court can find another and less stringent means of protecting the rights of the parties, and this in' some cases has seemed to be a part of or corollary to the rule that in the exercise of judicial discretion upon the application for the appointment of a receiver, the appointment will not be made except in the case of imperative necessity. [34 Cyc. 21-25.] Judge Lamm in discussing this question in the case of State ex rel. v. Peoples’ United States Bank, 197 Mo. l. c. 598, 94 S. W. 953, quoting from another case, said:
The plaintiff’s petition in this case should have alleged that an effort was made to obtain redress within the corporation itself. In theory of courts of equity, the directors of a corporation are its trustees. [Albers v. Merchants’ Exchange, 45 Mo. App. l. c. 218.] In the case just cited, the court said: “It is, therefore, a settled principle of equity jurisprudence, that before a court of equity will open its doors to a single stockholder, although he comes, as he must, not only on behalf of himself but also in behalf of all the other stockholders, to an inquiry into grievances of this kind, he must show that there is no other road to redress; and he does not show this unless he shows that all remedies within the corporation itself have been exhausted. . . . But a request to the directors to bring the appropriate action is not the only mode by which the shareholder may obtain redress through the appropriate corporate action. In many cases it will not be enough for him to show that he has made such a. request and that it has been refused; but he must exhibit a state of facts, from which the court can conclude that he has exhausted all reasonable efforts to induce redress through an action in the corporation itself. s. . . Moreover, when he brings a suit in equity to redress grievances which ordinarily can be redressed alone in an action brought by the corporation, his bill must set forth in detail the efforts made by him to secure on the part of the corporation the desired action, or it will be
It seems to us, Under these authorities, there can be no doubt as to the duty of this court upon the showing made. The order of the trial court, refusing to vacate its order appointing the receiver, is reversed and the cause is remanded with directions to the trial court to set aside its ordter appointing the receiver.