140 P. 221 | Utah | 1914
The plaintiff, an incorporated building and loan association of Utah, commenced this proceeding in this court against the district court of Salt Lake County to prohibit that court from passing upon an application for, and from appointing a receiver in a certain action commenced against, the plaintiff in said court.
One Albert C. Fisher, as a member or shareholder of the plaintiff, commenced an action in the district court aforesaid to recover the withdrawal value of his shares, stating specifically the value thereof. While said action was pending in said court a number of other shareholders of plaintiff intervened therein for the purpose of recovering from it the withdrawal value of their shares. After said shareholders had intervened Fisher dismissed his complaint, and he is no longer interested in the action. The interveners, in their complaints in intervention, in substance alleged that the affairs of the plaintiff have been grossly mismanaged; that it is about to wrongfully divert certain property and assets to another corporation to the detriment and prejudice of its shareholders, including the interveners, and that it has been guilty of gross extravagance in paying salaries, and is insolvent and unable to further conduct its business as a building and loan association. The interveners, therefore, prayed judgment for the withdrawal value of their shares, and in their complaints further prayed “that an immediate order be issued directing and requiring the defendant corporation (plaintiff) to appear ... to show cause . . . why a receiver . . . should not be appointed to take charge of the assets of the defendant corporation and to wind up its business, and that at such hearing the court do appoint some suitable and discreet person to take charge of all the assets of said corporation, to convert the same into money and under the direction of the court to distribute the same among those found to be lawfully entitled thereto, and to do all things usual, necessary and proper to be done in matters of receivership.” The plaintiff appeared in the action, and by demurrer challenged the sufficiency of the complaints in intervention, and in view of our statute, also challenged the power of the district court to hear the application for the appointment of a receiver or to appoint one. The district court overruled the demurrer, whereupon the plaintiff invoked the aid of this court upon an application duly made, wherein it asks us to prohibit the district court from
All the parties in interest appeared in this court, and, in a most commendable spirit fully submitted the whole matter of whether, under the statute, the district court upon the application of a shareholder has the power to appoint a receiver for the purposes prayed for by the interveners. It was conceded at the hearing that those who are seeking for the receiver constitute about four or five per cent, of the entire number of shareholders or members of the plaintiff. The sole question which we are called on to determine in this proceeding is whether, under our statute, the district ■court at the instance of a shareholder may, over the objection of the plaintiff, and without its consent, appoint a re-ceiver to take charge of its assets, convert them into cash, and distribute them among its shareholders and thus terminate and wind up its business affairs. The powers conferred and -duties imposed on building and loan associations, domestic and foreign, are found in Comp. Laws 1901, sections 392 to 402, inclusive. Under section 392 building and loan asso■ciations may be incorporated as are other corporations for profit, and, except as otherwise provided in the sections just referred to, are governed by the general statute relating to ■such incorporations. What we are now specifically concerned with are the provisions of the statute which specially relate to domestic building and loan associations. Section 391 provides that before doing any business in this state all foreign building and loan associations must make out and file with, the Secretary of State a verified statement, containing the matters specified in the statute, and if such statement is in all respects satisfactory to the Secretary of State, and is in ■compliance with the statute, he is required to issue a certifi- ■ cate authorizing such building and loan association to do business in this state. Section 398 provides that on or before the first day of March in each year every building and loan association, whether domestic or foreign, shall file with the ■ Secretary of State the statement required in section 397,
Section 399 provides:
“If any domestic building and loan association shall refuse to submit to examination by the bank examiner, the Secretary of State shall advise the Attorney-General, who shall proceed to wind up its affairs; and if any foreign association refuse, the Secretary of State shall revoke its certificate of authority.”
Section 400 reads as follows:
“When, in the opinion of the Secretary of State, any such corporation is conducting its business illegally or in violation of its articles of incorporation or by-laws, or is practicing deception upon its members . . . or if he is satisfied that its affairs are in an unsafe condition, he shall notify its directors or managers, and if it shall not immediately amend its course or put its affairs upon a safe basis, he shall in the case of a domestic corporation advise the Attorney-General thereof, who shall take the necessary steps to wind up its affairs, and in the case of a foreign corporation, he shall revoke its certificate of authority.”
Section 401 is not material here.
Section 402 makes a failure to comply with the provisions of sections 391, 398, and 390, supra, a misdemeanor, and punishable as such.
8 The right to dissolve a corporation and wind up its affairs for any cause against its consent belongs to the sovereign state alone, and in the absence of an express statute to that effect the courts have no power to bring about that result at the instance of an individual ■ suitor.
We are of the opinion that a peremptory writ as prayed-for by the plaintiff should issue. Such is the order.