Case Name: WESTERN ELECTRIC CO. v. NATIONAL AUTOMATIC ELECTRICAL SUPPLY CO.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1914-03-16
Citations: 135 La. 559
Docket Number: No. 20338
Parties: WESTERN ELECTRIC CO. v. NATIONAL AUTOMATIC ELECTRICAL SUPPLY CO.
Judges: 
Reporter: Louisiana Reports
Volume: 135
Pages: 560–566

Head Matter:
(65 South. 741)
No. 20338.
WESTERN ELECTRIC CO. v. NATIONAL AUTOMATIC ELECTRICAL SUPPLY CO.
(March 16, 1914.
On the Merits, May 25, 1914.)
(Syllabus by the Court.)
On Motion to Dismiss Appeal.
1. Appeal and Error (§ 801*) — Motion to Dismiss — Determination.
On a motion to dismiss the appeal on the ground of acquiescence in the judgment, based on a telegram sent by the appellant, which the latter avers was sent under a misapprehension of the facts, the court will not pass on the motion without being fully advised as to all the facts connected with the case, but will refer the motion to dismiss to the merits.
[Ed. Note. — For other cases, see Appeal and Error, Cent. Dig. §§ 3161-3164; Dec. Dig. § 801.*]
On the Merits.
2. Corporations (§§ 556, 557*) — Receivers— Appointment.
The matter of the appointment of receivers for corporations is governed by act No. 159 of 1898, and there is nothing in that act which confers upon a board of directors the authority to provoke, or upon a court to make such appointment at the instance of a board of directors. The only authority which such a board possesses in that connection is to declare, “by resolution, that the corporation is unable to meet its obligations as they mature, and that a _ receiver is xxecessax’y to preserve and administer the assets, for the benefit of all,” in which case, “at the instance of a creditor,” whether the resolution be adopted before or after the filing of his petition, a receiver may be appointed. The application for the appointment must, however, be made by petition to the court, verified by the affidavit of the creditor or his attorney, and a copy of the. petition must be served on the corporation, together with the order of court requiring it to show cause, on a day fixed, and the delay allowed must not be less than 10 days, unless, in the judgment of the court,'a shorter delay is required.
• [Ed. Note. — For other cases, see Corporations,’ Cent. Dig. §§ 2219-2228, 2230-2236; Dec. Dig. §§ 550, 557.*]
3. Corporations (§ 557*) — Receivers—Appointment.
The effect of appointing a receiver being to take the property of the corporation out of the hands of those to whom the stockholders have intrusted it, the courts proceed with extreme caution in the exercise of that power, and the statutes under which it is exercised are strictly construed, and the methods prescribed required to be strictly followed.
[Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 2227, 222S, 2230-2236; Dec. Dig. § 557.*]
Appeal from Civil District Court, Parish of Orleans; Fred D. King, Judge.
Action by the Western Electric Company against the National Automatic Electrical Supply Company. From a judgment appointing a receiver for defendant company, the Rome Wire Company appeals.
Reversed.
Johnson & Fernandez and Edgar M. Cahn, all of New Orleans, for appellant Rome Wire Co. l'eter Stiff and Meyer S. Dreifus, both of New Orleans, for appellee receiver.

Opinion:
BREAUX, C. J.
Appellee, George F. Schminke, receiver of the National Automatic Electrical Supply Company (for brevity hereafter the National Company) moved to dismiss the appeal on the ground that appellants have acquiesced in the judgment of the lower court, appointing appellee receiver, lie alleged that lie has a telegram from the Rome Wire Company, the only appellant acquiescing in the judgment and consenting to the appointment of a receiver, that it waived and abandoned the appeal as made to appear by the dispatch, as shown by "annexed affidavits."
The appellant, the Rome Wire Company, does not admit that it acquiesced in the judgment, but that, on the contrary, it avers that it most positively opposes the appointment as illegal and unnecessary. It alleged, through counsel, that when Schminke found that his appointment was opposed by the Western Electric Company, the plaintiff in the suit wherein his appointment was 'made, and also by an intervener and a-member of the board of directors and a creditor for a large amount — the ground of intervener was the unfitness of Schminke to act as a receiver — he, Schminke, sent telegrams to foreign creditors; among them was the appellant, who were ignorant of the state of affairs, leading them to think he was indorsed by all local creditors, and that he had been regularly appointed; that its dispatch, owing to misrepresentations, was sent in error without advice of its counsel.
Immediately after they were informed of the right facts, they recalled their dispatch.
A copy of the dispatch is annexed to the answer.
Counsel for the Rome Wire Company, appellant, wrote to counsel for the receiver, tiie appellee, that they had been directed by their client, the Rome Wire Company, to proceed with the appeal. Counsel for the receiver then notified appellant's counsel that they would seek to hold the appellant bound by the first dispatch, by which they aver that the appellant is bound despite its endeavor to avoid its effect.' Counsel for appellant insists that the appointment of the receiver was illegal and null; that, even if this first telegram could be construed as an acquiescence in the appointment, it could not be an acquiescence in an appointment absolutely illegal; that the appointment was neither asked for nor solicited by any creditor as required by paragraph 8, Act 159 of 1898.
It follows from the foregoing, if true, that a serious question is presented for decision, but we do not think on this motion for the dismissal of the appeal that we should be concerned with the truthfulness or untruthfulness of the allegation referred to above. It can be properly considered when the case will be before us for decision on the merits.
Without further evidence, we do not choose to dismiss appellant's appeal, nor to overrule appellee's motion to dismiss.
There is a right here upon which there should be further light before deciding for or against the point before us for decision.
We cannot pass now upon questions of incompetency, illegality, and irregularity in the proceedings. They will have to abide their time. If 'upon further examination we find that we can decide the questions presented, the decision will be rendered. If not, and we arrive at the conclusion that further evidence is needed, the case may be remanded.
For reasons stated, it is ordered, adjudged, and decreed that the motion to dismiss the appeal be, and the same is hereby referred to the merits to be acted upon upon reaching the merits.