White Pine news weekly mining review. [volume] (East Ely, Nev.) 1910-1920, 1911-08-20
Continued from page one.)

tfcfpafe IN Suen reorganization
scheme, and that a court of equity
has inherent power to issue an in
junction and appoint a receiver
pendente lite to preserve the proper
tv. Defendant contends that a
court of equity has no inherent power
to appoint a receiver of a corpora
ton; that such power can only be
exercised pursuant to statute, and
that Section 3241, Cuttings Compil-
ed Laws of Nevada does not give
this power TO Courts of equity. The
only portion of that section which Ii
is claimed is applicable here reads
that a receiver may be appointed II
such cases "as are in accordance
with the practice of courts of equity
Jurisdiction"
In considering the case at bar we
must keep continually in mind the
difference between the carrying out,
in good faith. by the officers of the
corporation of a business policy. and
the commission of the acts which
amount to a fraud upon the stock
holders. because neither the carrying
out in good faith of a business policy,
or the exercise of judgment and dis
erection. can be controlled by the
courts, while on the other hand.
fraud is peculiarly a matter of equity
Jurisdiction.
In support of the position taken
by defendant IL is contended that
the case of NEAL VS.. Hill, 16 Cal,
las. is controlling, because, as IL Is
urged, there was a statute in Cali
fornia at the time hat case was de-
eided which is indentical to ours-in
fact-that our statute was adopted
from California after the decision in
the Neall-Hill Ease was decided. and
that the construction of the court in
that case was adopted by the legis-
lature of Nevada in enacting our
statute. While IL is rue that there
was a similar statute in California at
the time the Neall-Hill ease was de-
cided, II vas not ever alluded TO by
the court in that case. which. to the
mind of this court is significant. 1t
signifies that the real burning ques-
ton In that case vas not the appoint
ment of a receiver. but the winding
up of the corporation. and that the
appointment of the receiver was
simply an incident to the main pur-
pose of the suit-a means TO an end,
in other words. This must be clear
from a careful reading of the case.
On page 147 of the volume mention
ed, the court says: bib prayed that
Hill be removed from office and for
an accounting, sale of stock, and
winding up of the affairs of the cor
p%oration," and again on page 14S
the court says: THE action was
brought TO compel an account and
obtain a settlement of the affairs of
the corporation So. taking the in
depreciation put upon the complaint
in that case. by the court which de-
cided the case. as to the real purpose
of the suit, II is clear that II was one
TO wind up the company, and the APP
pointment of the receiver was sought
as a means to accomplish that end.
The suit at bar was not brought to
wind up the AFFAIRS of the company,
nor does II appear from the COM
plant that such a result would fol-
low. Quoted from an English case
the California court in the Neall-
all case recites: 1T cannot be
concealed that to decree the prayer
of the compliments bill would be
to decree a dissolution of the cor
poration. In this respect. chat is,
that It would be decreeing a disso-
lution) il differs materially o
bills which have frequently been en-
tertained by courts of equity, at the
instance of stockholders, against di-
rectors of a corporate company, to
compel them to account for the I'M
proper use of funds, or to restrain
them from violating their trust.
That a court of equity, as such has
no jurisdiction or power over cor
porate bodies, for the purpose OF re-
straining their operations or wind
ing up their concerns, is. j think,
well settled by various authorities
BY restraining their operations" the
English court may have meant that II
had no Jurisdiction TO control the
discretion of the officers OF the cor
poration and certainly 1t II not