Court Opinion

ID: 6518977
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:29:19.839416+00
Date Added: 2024-06-11T15:55:06.035692
License: Public Domain

TYSON, J.
This appeal is prosecuted from a decree refusing to dissolve an injunction on motion. The motion is predicated upon two grounds; the first, on the denials in the answer, and the other for want of equity in the petition, upon which the writ was granted.
The petition was for an injunction pendente lite 'to prevent rendering ineffectual the decretal order directing a reference by the register to state an account between the complainant and the respondents growing out of mismanagement and misappropriation of funds belonging to the complainant corporation by one of the respondents, its president. The bill in the cause, in which this decretal order was entered and in which this petition was filed, sought to have Robert E Coxe, its president, to make a settlement of the business affairs of the complainant company under the orders and directions of the chancery court from the date he assumed management and control of its affairs; and to that end prayed a statement of an account by the court between him and the company, charging him with ail the amounts with which, he was properly chargeable, and crediting him with all amounts for which he was entitled to be credited, and a decree be rendered against him for the balance ascertained to be due to complainant, and that the complainant be declared to have a lien for its payment on the capital stock of respondent,' which by a certain instrument was assigned by him to his corespondents, and that the assignment be declared null and void as against said lien. We will refrain from setting out further the purposes of the bill. A full synopsis of it and a determination of its equities may be found by reference to the case as reported in 106 Ala. 373.
“It is clearly within the competency of a court of equity and a proper exercise of its jurisdiction, to interfere and preserve property rights in issue in statu quo until a hearing on the merits, without expressing, and indeed without 'having the means of forming a final opinion as to such rights. And in order to sustain an injunction for the protection of property, pen-dente lite, it is not necessary to decide in favor of plain*501tiff upon tbe merits, nor is it necessary that be sbould present such a case as "will certainly entitle him to a decree upon the final hearing, since he may be entitled to an interlocutory injunction, although his right to relief may ultimately fail.” — 1 High on Injunctions, § 5; 10 Am. & Eng. Ency. Law (1st ed.), 784; 10 Ency. PL & Pr., 878.
“It is true the court will not so interfere if it thinks that there is no real question between the parties; but, seeing that there is a substantial question to be decided, it will preserve the property until such question can be regularly disposed of. In order to support an injunction for such purpose, it is not necessary for the court to decide upon the merits in favor of the plaintiffs. * * * There are two points'on which the court must satisfy itself. First, it must satisfy itself, not that the plaintiff has certainly a right, but that he has- a fair question to raise as to the existence of such a right. The other is whether interim interference, on a balance of convenience or inconvenience to the one party and to the other, is or is not expedient.”—Flippin v. Knaffle, 2 Tenn. Chan. 242; Great Western R. Co. v. Birmingham R. Co., 2 Ph. 602; Glascott v. Lang, 3 Myl. & Cr., 455; Andreae v. Redfield, 12 Blatch. (U. S.) 425; Helm v. Gilroy, 20 Oregon 517; Pelzer v. Hughes, 27 S. C. 408. And it is of no consequence, that the cause was in this court by appeal so far as the right and power of the lower court is involved to preserve the status in quo of the parties. — New Brighton & New Castle R. R. Co. v. Pittsburgh, Y. & C. R. R. Co., 105 Pa. 13.
To permit the respondents to vote the stock in a stockholders’ meeting, upon which, the complainant was seeking to fasten a lien, called for the purpose of electing a board of directors subservient to their will and to defeat the complainant in its effort to make its president account to it for moneys alleged to have been misappropriated etc. by him, would be to place the further prosecution and management of the suit in the hands of the respondents, — a predicament not likely to result in benefit to complainant, but most likely to its irreparable damage. It is no answer to say that the directors *502who might be elected and used by the respondents for the purpose of thwarting the rights of the corporation in its suit, would be personally liable for their misconduct in this respect. It is more probable that they would institute a suit against themselves to repair the wrong’s committed by them, than that they would prosecute the present suit against their friends whom they were chosen to serve.
The answer of the respondents to the petition is ciearly evasive. It maj'- be said, that by- its failure to deny in an unmistakable way, the direct charge brought against the respondent, R. E. Coxe, that it was his purpose to have elected at the meeting of stockholders proposed to be called, by him, a board of directors who will be su’bsexwient to the respondents and who will leave the management and conduct of the business of the complainant corporation under his control, and the further purpose to use the stock to control and direct the management of this suit so as to result in its dismissal or to enable R. E. Coxe to avoid a full and correct accounting and to prevent a bona ficle enforcement of his liability to the corporation, that such was the purpose and intention of the respondents, the execution of which would have practically destroyed the right of the complainant to have the accounting and to have disarmed the court of the power to give effect to its decree of reference. In our opinion, the court committed no abuse of its discretion in denying the motion to dissolve the injunction and in retaining it as a means of restraint upon the respondents to preserve the rights in issue in statu quo, until a hearing can be had on the merits of the cause.
Affirmed.