Case ID: mich_163/html/0106-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

STANDART BROS. v. INGHAM CIRCUIT JUDGE.
    1. Receivers — Suit in Name of Receiver — Creditors of Dissolved Corporation.
    In proceedings for the dissolution of a corporation, for which a receiver has been appointed, the circuit court in which the proceedings are pending may exercise its discretion in permitting, or in refusing to permit, the receiver to employ the fund in litigation at the request of some creditors, and against the objection of others.
    2. Same — Discretion—Suits by Receiver.
    Such discretion may be affected by the apparent hazard of the litigation.
    3. ' Same — Equity—Expenses.
    , It is inequitable to impose a condition that the interested creditors shall give security for the costs and expenses of the proceeding without giving them the right to be first paid from the fund which may result from the litigation.
    Mandamus by Standart Brothers, Limited, to compel Howard Wiest, circuit judge of Ingham coifnty, to grant an order allowing relator to bring an action at law in the name of the receiver of an insolvent corporation.
    Submitted October 4, 1910.
    (Calendar No. 24,266.)
    Writ granted October 5, 1910.
    
      Bernard B. Belling, for relator.
    , G. P. Black, for respondent.
   Per Curiam.

The circuit court, in chancery, having control of the receiver of a corporation and of the fund in his hands, may exercise discretion in permitting, or in refusing to permit, the receiver to employ the fund in litigation desired by some of tbe creditors of the corporation and not desired by others. The exercise, of this discretion will be influenced by the apparent hazard of the litigation proposed to be carried on. We see no reason for saying that discretion was not properly exercised by the court below, in view of all the circumstances disclosed, in refusing the receiver permission to employ the fund in the litigation proposed to be carried on. But the considerations which support the ruling of the court in this respect also require the order which was made to be modified, because it is inequitable to permit the receiver to proceed only upon the condition that all costs and expenses to be made shall be secured and paid by petitioning creditors desiring the litigation, and to deny such creditors, and others who may care to contribute, the right to be first paid out of the fund, if any, which shall be the result of the litigation.

The order will be so modified as to provide that all creditors of the corporation contributing to the costs and expenses of the litigation shall be first paid, not only disbursements but their unpaid demands, out of any moneys recovered by said receiver. No costs are awarded.