Title: In Re Weisser Finance Company
Citation: 169 N.W.2d 420
Docket Number: 8540
State: north-dakota
Issuer: north-dakota Supreme Court
Date: June 30, 1969

169 N.W.2d 420 (1969) In the Matter of the dissolution and liquidation of WEISSER FINANCE COMPANY, by change of name from Weisser Loan, Inc., and sometimes known as Weisser Finance Inc., a North Dakota Corporation. No. 8540. Supreme Court of North Dakota. June 30, 1969. *421 Stokes, Vaaler, Gillig, Warcup &amp; Woutat, Grand Forks, for M. J. Kapus, appellant. Letnes, Murray &amp; Marshall, Grand Forks, for First National Bank in Grand Forks as Administrator of the will annexed of the Estate of William C. Weisser, deceased, respondent. ERICKSTAD, Judge. By instrument dated November 16, 1968, Norma E. Weisser and Karen Weisser Layton petitioned the District Court of Grand Forks County to appoint a receiver to take charge of all the assets of Weisser Finance Company, hereafter called the Company. The petition alleged that before August 11, 1968, 330 shares of common capital stock of the Company were owned by the following named persons in the following proportions: William C. Weisser, 328 shares; Norma E. Weisser, 1 share; Karen Weisser (now Karen Layton), 1 share. It further asserted that William C. Weisser died on August 11, 1968; that the First National Bank in Grand Forks, hereafter called the Bank, was appointed administrator with the will annexed of his estate; that the Company was insolvent; and that legal actions were pending against the Company. The prayer for relief asked that the court appoint a receiver to take charge of all the assets of the Company, and that the court proceed with the Company's dissolution and liquidation. By instrument dated November 19, 1968, the Bank, as administrator of Mr. Weisser's estate, joined in the petition to the district court for the appointment of a receiver and the dissolution and liquidation of the Company's assets. On November 20, 1968, the district court, through an ex parte order, appointed the Bank as the receiver of the Company and ordered that within 30 days the receiver notify all known creditors of the Company of a creditors' meeting to be held before the court for the purpose of determining whether the receivership should be continued. When notice of this order was served upon Mr. M. J. Kapus, a creditor of the Company, Mr. Kapus moved to set aside the order appointing the receiver. A hearing was held on this motion, and thereafter, by order dated February 18, 1969, the district court denied the motion. It is from that order that Mr. Kapus now appeals. The Bank contends first that the order is not appealable; however, we are of the view that it is appealable under subsections 3 and 7 of N.D.C.C. § 28-27-02. As the appointment of a receiver is a provisional remedy under § 32-01-10, had the order appointing a receiver been made upon notice, it would have been appealable. Because the order appealed from was rendered after a hearing had upon notice and is one which refuses to set aside an order which was made without notice but which would have been appealable had it been made upon notice, it is an appealable order. Having determined that the order is appealable, we must now consider Mr. Kapus's appeal on its merits. It is the contention of the Bank that the court acted properly to appoint a receiver, either under the provisions of N.D.C.C. ch. 32-10 or under those of ch. 10-21. The Bank contends that a receiver was properly appointed under § 32-10-01, the pertinent part of which reads: Mr. Kapus, however, argues that before a receiver may be appointed under any subsection of § 32-10-01, there must be an action pending, so that the appointment of a receiver is only ancillary to a main action. In response to this argument, the Bank contends that the words "or by a judge thereof" permits the appointment of a receiver when there is no action pending. We are of the view that the proper construction of that section is that a receiver may be appointed by the court in which an action is pending, or by a judge of the court in which an action is pending. In other words, an appointment of a receiver may only be made ancillary to an action brought. Section 32-10-01 of the Century Code, which provides for the appointment of receivers, is equivalent to our earlier law, starting with § 219 of the Code of Civil Procedure of 1877. Before amendment in 1933 the introductory part of § 564 of the California Code of Civil Procedure, relating to the appointment of receivers, read nearly the same as the introductory part of § 32-10-01, "A receiver may be appointed by the court in which an action is pending or by a judge thereof," the major difference being California's use of the word the instead of the word a before the word judge. See Cal.Code Civil Proc., historical note to § 564, at 788 (West 1954). *423 In California Jurisprudence we note the following: It is interesting that, although our legislature retained the language of our early law in N.D.C.C. § 32-10-01, which is equivalent to Cal.Code Civil Proc. § 564 before 1933, and in §§ 32-10-02, 32-10-03, 32-10-04, and 32-10-05, which are equivalent to California's §§ 566, 567, 568, and 569, respectively, it did not retain § 220 of our Code of Civil Procedure of 1877, which was equivalent to California's § 565, a section not substantially changed since 1872: Even under § 565 the California court required that dissolution must have occurred before a receiver could be appointed. In that respect California Jurisprudence says: In 6A California Jurisprudence, a volume which supersedes the article on corporations contained in volumes 6 and 7, we note the following: California Jurisprudence, in making the above statement, refers no fewer than three times to the case of Elliott v. Superior Court, 168 Cal. 727, 145 P. 101 (1914). In Elliott the court said: (Title 6, referred to in the preceding quotation, related to voluntary dissolution of corporations. It was superseded by Stats. 1931, ch. 862, p. 1763, § 1. See Cal.Code Civil Proc. §§ 1227-35 (West 1954). For voluntary dissolution under present California law, see Cal.Corp.Code §§ 4600-19 (West 1955).) We will discuss the relevance of our voluntary dissolution statute later in this opinion. Section 32-10-01(6) reads: Lest it be argued that the appointment of the receiver was proper under § 32-10-01 (6), which is equivalent to California's § 564(7) before 1933, we note the following in California Jurisprudence: Without attempting to determine the effect of adding the first paragraph and rewording the introductory part of § 564 of the California Code of Civil Procedure, we set it forth herein to note the direction the California legislature has taken. *425 Our legislature may in the future be interested in expanding the scope of our statute on the appointment of a receiver to encompass a situation in which a proceeding is pending, but we are governed by the statute as it exists. Believing that California has given its statute the proper construction, we conclude that our trial court, applying a similar statute in this case, did not have the authority under the provisions of § 32-10-01 to appoint a receiver. N.D.C.C. ch. 10-21, which provides for the dissolution of a corporation, came into our code when the 1957 session of our legislature enacted H.B. 537, which, among other things, repealed R.C.1943, ch. 10-16, dealing with the dissolution of a corporation. Sections 79 through 102 of H.B. 537 are now contained in N.D.C.C. ch. 10-21. The question now before us is whether the court, under the circumstances of this case, had the authority under ch. 10-21 to appoint a receiver. The most pertinent part of that chapter is § 10-21-02: Section 10-21-04 provides for the filing of a statement of intent to dissolve. It reads: Section 10-21-05 provides for the effect of a statement of intent to dissolve. It reads: It will be noted that in the instant case, as far as the record discloses, no statement of intent to dissolve was filed before the order appointing the receiver or even before the order denying the motion to set aside the appointment of the receiver. Section 10-21-06 provides for the procedure after filing of statement of intent to dissolve. It reads: Section 10-21-16 permits a court to liquidate the assets and business of a corporation under certain circumstances. The most pertinent part of that section reads: As no intent to dissolve was filed in this case, subsection 3 does not apply. Section 10-21-17 permits a court to appoint a receiver in proceedings to liquidate the assets and business of a corporation, and that power is given the court only when the circumstances enumerated in § 10-21-16 exist. As the provisions of ch. 10-21 have not been complied with, the appointment of the receiver is also defective under that chapter and accordingly must be set aside. Mr. Kapus further contends that since the Bank is the administrator of the estate of Mr. Weisser, who was the owner of 328 shares of stock in the Company, it is an interested party and therefore should not have been appointed receiver under any circumstances except with the written consent of the opposing parties. We need not decide that issue, as we have determined that the order of the trial court appointing the receiver should be reversed, but as it may be expected that the shareholders may proceed to comply with the provisions of ch. 10-21, we shall comment herein on the propriety of the appointment as receiver of one in the position of the Bank in this case. Sections 32-10-02 and 10-21-18 seem especially pertinent to this issue: Although § 10-21-18 does not specifically disqualify those who may be interested parties, § 32-10-02 requires the consent of opposing parties before a party interested in an action may be appointed receiver. The statutes should be construed so as to give effect to both. This is consistent with the general rule of statutory construction, that when two statutes relating to the same subject matter appear to be in conflict, they should whenever possible be construed to give effect to both statutes if this can be done without doing violence to either. Stradinger v. Hatzenbuhler, 137 N.W.2d 212, 216 (N.D.1965). As a conflict might exist between the Bank's interest as administrator of the estate of the major stockholder and its interest as receiver which might interfere with the impartial discharge of its duties as an officer of the court, the consent of opposing parties should be obtained before a person in the Bank's position is appointed a receiver. We adhere to this view, notwithstanding the Bank's argument that N.D.C.C. §§ 6-05-08, 6-05-11, 6-05-12, and 6-05-17 exempt it from the consent requirement of § 32-10-02. The trial court's order denying the motion to set aside its order appointing a receiver is therefore reversed, and the case is remanded with instructions to the trial court to vacate its order appointing a receiver. TEIGEN, C. J., and STRUTZ, PAULSON and KNUDSON. JJ., concur.