Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1871-08-06
THE CITY GAS COMPANY CASE
Chancellor Temple Appoints Receiver

| NOSSANeAy " NAO0NNi
in the Chancery Court Room, as previously
announced in the CHRONICLE.
We publish the opinion to meet the
public interest in the case, and invite the
attention of the Bar of East Tennessee to
the very full and able presentation of legal
principles governing this class of cases, as
they are collated by the learned Chancel-
lOr. The opinion is Uerbdtine as follows ::
r. r. SwEPsoN IT. S. WEBB, Admir-, &c.
| rs.
GEO. NJ. BRANNER, and others.
Motion for the appointment Of Receiver.
The oath OF defendants is waived by the
bill in this case. The answer of Geo. NJ.
Branner, alone and individually, is on file.
1t is not sworn to. 1t was filed after the
motion for the Appointment of a Receiver
was made by complainants, and after most
of the affidavits were read and the motion
was taken up. r.rE-
The answer, not being under oath, can
net be treated, for the purpose Of this mo-
ton, either as an answer or a counter affi-
davit. The motion, then, must be con-
sidered alone, by the Court, in the absence
of counter affidavits, on the bill which is
| sworn to. the affidavits and the exhibits of
complainant. 3d Daniel Oh. Pr, 1876.
For this purpose, in the absence of de-
4 NAL, under oath, either by answer or Aft
davits or both, the bill, affidavits and eX-
hibits of complainant are to be treated as
prinld .fIcjG true.
The exercise of the powers of appointing
Receivers is one that is of ancient date,
and of unquestionable authority in proper
| cases. ra.... ...
| Says Story, quoting the language of
| Lord Hardwick at is q discretionary
power, exercised by the Court with as
great utility to the subject, as any authority
which belongs to it.n Story's Equity
sec. S3l.
The appointment of a Receiver is q mat
ter resting in the sound discretion of the
Court Sd Daniel Oh. Pr, 1910; E'd1OdrdS
2; MOry'S Eq., S3l. A Receiver appointed
by the Court is appointed on behalf of all
parties, ana not of the complainant or of
the defendant only. Ed1UardS 8.
Courts will in no instance appoint Re-
ceivers because it will do no harm. Ed
| 1UdrdS 2
The general principles controlling Courts
in the appointment of Receivers appear to
be these: the party applying must show
before he succeeds strong probability of
success in his suit, and that q Receiver is
necessary to preserve the property or fund
in question from waste, misrepresentation,
removal destruction, deterioration or loss
pending the litigation. Story, Daniel, Ed
yards, dc. .
The Court will appoint Receiver at the
instance of parties beneficially interested,
even where there is no fraud or SpoliatiOn.
provided it can be satisfactorily establish
ed that there is danger to the estate or
fund, unless such step is taken, as in the
case of an executor, who has wasted the
effects, or otherwise miscOnducted himself.
Sd Daniel, 1856, and Note, /.
The same grounds which will induce
the Courts to deprive an executor of pos
session, by the appointment of a Receiver,
will induce them to interfere in the case of
any party clothed with the character of
trustee, and that whether he is a mere
trustee or trustee having an interest in
the estate or fund. 3d Daniel, 1858.
In the cases of misconduct by trustees,
either n1isfcdsancc nOnfeasance, the Court
will appoint a Receiver Same 1859.
If, in the breach of moral obligation,
one partner uniustly take possession, and
refuses to give security to his CO. partner for
his share of the stock, moneys, and securi-
ties or if he in any respect behaves I'M
righteOusly against the interest of the
other partner, "A Receiver will be appointed.
Sd Daniel, Pr, 1868.
But there must be a strong, special
ground to induce the Court to appoint
Receiver before answer. Edwards, Is. |
Daniel 3d. 1873, note i. However, in
cases of urgency Receiver will not only |
be appointed before appearance and ans
wer, but even without notice. Daniel, |
1875, and Note 3.
These general principles have often been
applied to private corporations. The cases
referred to in defendants bIief, which |
seem to be in conflict with this view, are |
believed to be exceptional. 1t is well set
tied that the officers of a private corpora
ton have no franchise in their offices, but |
are the mere ministering agents of the |
corporation to conduct it's business for the |
benefit and under the authority of the cor
poration. A66ottS Dig, 545, sec. l. They
are not above the law, but subject to the
law Any efforts on their part to destroy
the rights of the cOrporatOrs. will invoke
the strong arm of the law.
The directors of a corporation are the
persons selected to manage the affairs of
the company for the benefit of the share
holders. 1t is an office Of trust, which, if
they undertake, it is their duty to perform
fully and entirely. 1b6ott'S Dig, p. 279,
sec. "a.
Directors of public company are trus-
tees for the shareholders and their private
interests must yield to their public duty
whenever they are conflicting. Ibid, p.
800, sec. %.
Directors to whom the entire manage
ment of the company is intrusted, and who
receive remuneration for their services
out of the funds of the company, are under
an obligation to the shareholders at large
to use their best erertiOnS IN all matters
WIich relate to the affairs Of the company.
And withoutany stipulation to that effect,
the duty results from the employment, not
to make any profit out of the employment,
beyond their compensation, and not to ac-
quire adverse interest, while they are i'll
Office Ibid, page 279, sec. %. These and
similar authorities might be multiplied al
most indefinitely.
THE CASE IN POINT.
The question alone remains to be consid-
cred whether the facts justify their appli-
cation to this case. Many points are raised
in the bill, and the answer of George NJ.
Branner, and have been discussed in argu-
ment which | need not notice at this time.