Carson City daily appeal. [volume] (Carson City, Nev.) 1907-1930, 1908-06-27
RECEIVER OF STATE BANK
CANNOT LI0UIDATE BY LAW

directors in trust for its creditors.
and for the payment of i.s debts. Or
der appointing receiver of a cor
poration at the instance Of the state,
and after Judgment of forfeiture
has been entered against such col
pOratiOr, and in the absence of any
application for such appointment on
behalf Of any of its creditors or stock
holders is void
This decision has never been Ques-
toned; but on the contrary has been
affirmed by that court and cited as
authority in New York and New Jer-
sey and various other supreme courts
The reason is plain. The state has
no interest in the assets. The only
persons who are interested are the
creditors and stockholders, and the
law specially provides in this state,
that the directors in office shall have
full control. in these words: "The
directors, or the governing body by
whatever name it may be called, shall
be trustees thereof, with full power
to settle the affairs, collect the out
standing debts. sell and convey the
property, real and personal. and de-
VIE the moneys and other property
among the stockholders, after paying
its debts
1t will thus be seen that the or
ganic law Of corporations in this
state provides how corporations shall
wind up their affairs. and any law
changing this rule in some independ-
ent proceeding upon the part of the
state would be a law imparing the
contract of the stOckhOlder. and to
this end unconstitutional. and as held
| in People V. O'Brien. II N. Y, l.
that such a law would impair OBJ
| legations OF a contract. and the learn
ed court of appeals says: "Creiitors
contractors and stockholders have a
r.gnt to rely upon the promise of the
state that the annulment of the cor
porate charter shall not effect the
remedies existing in their favo,
against the corporation; and this
promise is a contract protected by the
provisions Of the federal constitution
! Therefore any, law giving the state
through the attorney genera pow6a
to bring an action and have a receiv
er appointed. to take the place o
the board of directors of the corpor
alton. would be an unconstitutiona
law, because creditors of the corpor
alton become creditors upon the Law
under which the corporation is form
ed. and the state has no right to in
terfere in the premises. except t.
cause tn death of the corporation
and when that is done the state
power ends. The court of Appeals o
New York further says: when, b
reason of the dissolution Of a COZ
poration. its property vests in its di
!. rectors. in trust for its stockholder
|, and creditors. the legislature has n
power to consequently provide for tn
, appointme' of a receiver and tn
, transfer of the corporate assets t
him.
!, ut viii thus be seen N) that tn
law Of 1907 is subsequent to the in
corporation of the State. Bank an
\ Trust company, and therefore tn,
r law is applicable to that corporation
: law is inapplicable to that corporation
J. and cannot be made retroactive s
. as to apply to a corporation alreaj
o existing, and that the appointme1
8 of the receiver herein is without a,
i thority Of law; (2) that the authors
; to wind UP the affairs of a corpor
+ tion belongs solely and exclusively
: the directors, and such authority c:
IS not be taken away in a suit by IL
state, and the court in such suit c,
T. not appoint a receiver except to no
: the property temporarily; and
q that the assets of the corporation a
:" a trust fund for the benefit of t
10 creditors and -credito
= nrst and stockholders. second-a
a that the only means of putting t
s. corporation in the hands of a receiy
70 VINO can wind up the affairs of t
,e insolvent bank and take control aw
Or from the directors is by bill in ca,
IN ty through the creditors. BY q,
a. a. means the public can and will KIN
or how the bank stands, where its ass
It's
r.