The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1900-05-01

So the case presents it9eii
| companv is seriously threatened with
| certain disaster in the near 1uture- u
interests of 90 per cent OF the ~stockhoio-
or are greatly in peril from the threat
oaod oction of one stakeholder. ms
~s4ockbolder has declared that he VIII not
nart with his stock. that he holds II LOT
ono nurDose only. and that is the destruc-
| lion If the company and embarklng II on
the sea of politics. This stockholuel -
| not an obscure Individual without lnnu-
onca or ability. He is a leader among
bis noople. a man of character and a
biob order of ability. with great ana
deserved influence in a strong polltlcal
nartv. His threat means and guarantees
action.
whilst the general rule as to the jurls-
diction of a court of equity over solvent
| poing corporations is as stated supra. yet
if is equally true that a court OF chah-
carv Will always grant equitable reIlel
against such a corporation whenever d
sufficient case for relief is shown upon
| the ordinary principles of equity lurls-
prudence. Republican Mountain Silver
| Mines Us. Brown. 10 L. s. Reports above).
recognized ground Of relief in equity
is when the affairs Of the corporation
are not satisfactory, when it is in the
| midst of. or is threatened with disaster,
when further prosecution of its business
will lead to loss and insolvency. Ilayden
VS.. official Hotel. etc. AZ Fed. Rep. 81.
Treadwell VS.. Mfg. Co. Z Gray 1893.
Private trading corporations like this at
bar are created for the purposes Of gain.
the production of income and when they
| cease to be profitable or are exposed 10
danger of insolvency, the stockholders
who have large interests at stake are
not obliged to continue the business. AS
is we'll said in Treadwell VS.. Mig. Co.
| supra. by accepting q charter they DO
not undertake to carry on the business
for which they are Incorporated lndet-
niteIy. and without any regard to the
| condition of their corporate property.
| Public policy does not require them to go
on at a loss. On the contrary it would
seem very clearly for the public welfare,
| as we'll as for the interest of stockholders.
that they should cease to transact bus1-
ness as soon as in the exercise OF sound
Judgment it is found that it cannot be
Drudently continued. If this be not so,
we do not see that any limit could be
put to the business of q trading corpora
| ton short of the entire loss or destruc-
ton of its property
To the same effect is Conner vs.. Hotel
Co. IS Tenn, 116.
ne JCAl "IlltIS ututCS III SAINT bOhN
clusion from their examination Of the
| cases. Beach in his work on Private
| Corporations, vol. 2. sec. ISL, says: when
a minority of stockholders oppose a sur
render, it cannot be forced upon them
by the majority, unless it be a case where
it is plain that a continuation Of the bust
ness to the expiration of the time fixed
by the act of incorporation for corporate
| existence, would result only in financial
catastrophe or in the failure OF the object
for which the corporation was created.
IN that event a majority only of the
stockholders may surrender the charter
| and take steps to have the business wound
up. See also section 7S3.
Spelling in his work on Corporations.
vol. /, sec. 373, after stating the general
rule, adds this qualification: But if the
corporation is an Improbable or failing
enterprise. then it seems it may make a
sale of all the corporate property, with a
view to dissolution
Mr.. Thompson in his exhaustive work
on Corporations, vol. 4. sec. 4,443. quot
ing the remark Of an eminent lawyer sit
ting as a master III chancery that "the
contract between the parties in a corpora
ton is that so long as the affairs of a
company are prosperous it shall go on,
unless all consent to the contrary" adds:
but it is believed that this dictum is
unsound when applied to a case where a
majority Of the stockholders elect to vino
UP the affairs of the corporation and dis
tribute its assets; because, although the
affairs of the corporation may at the par
ticular time be prosperous. yet circum-
stances may exist rendering it probable
that this prosperity will not continue; and
whether such circumstances do exist, or
are Likely to supervene, is a question
committed exclusively to the judgment of
the majority. 1t is believed that no case
can be found in which a court of equity
has granted an injunction, at the suit
of a minority stakeholder against the ma
iority. to prevent them from discontin-
uing the business Of the corporation and
winding up its affairs. The exercise Of
such a power would be most eXtraordi-
nary. 1t would be tantamount to COMPEL
ing the specific performance of an agree
ment to form and carry on a corporation.
extending over an indefinite period of
time. and when, in the judgment of the
majority, On a question Of mere economy
and prOpriety. on which their judgment
ought to be conclusive it has been found
more eXpedient to discontinue the bust
ness
Considering only the question of ap-
pointing a receiver it is
ordered that Percival S. Hill, Esq.
heretofore appointed temporary receiver
in this cause, be now appointed perma-
nent receiver, with all the duties. powers
and responsibilities to said position per-
tanning: and that he conduct the business
of the Blackwells Durham Tobacco Com
| panv until the further order of this
court.
And it appearing that the replication
has been fled in the cause and that the
| same is at issue. it is further
Ordered that this case be referred to
the Standing Master Shepherd. and that
he take ties. imony on the matters of
fact alleged in the bill and not admitted
by the answer, and that he report the
same with all convenient speed to this
court.
APPOINTMENT OF A RECEIVER.
The order appointing Percival S.
Hill as permanent receiver sets out:
That said receiver shall manage. con
duct and operate the business formerly