Court Opinion

ID: 3425930
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:53:56.06737+00
Date Added: 2024-06-11T14:03:35.459062
License: Public Domain

ON PETITION FOR REHEARING.
A petition was filed to transfer this cause after an opinion of the Appellate Court had stated *Page 310 
that (a) "Appellant has assigned as error the court's action in overruling its demurrer to the complaint. * * * The complaint was sufficient to withstand appellant's demurrer." (b) "It is contended that a court of equity has no power at the suit of an individual to decree a dissolution of a domestic corporation, and to wind up its affairs unless such extraordinary power has been conferred upon it by the terms of a statute. * * * But in the instant case the corporation was solvent, and the delinquent officers owned a majority of the stock and were excluding Craig from participation in the management, thereby making it impossible for him to protect his interest against their fraudulent acts, except by an action in equity for a receiver and for dissolution." After which that court had proceeded to decide that a receiver was properly appointed, and to affirm a judgment decreeing that the corporation be dissolved. Being convinced that the decision was wrong on both propositions this court so decided. Appellee is obviously mistaken in asserting that the Supreme Court reversed the judgment "upon grounds not * * * considered in the Appellate Court."
Counsel cite decisions to the effect that if the majority stockholders of a corporation and directors chosen by them shall fraudulently so manage a corporation as to keep it from 8.  earning an income and otherwise fulfilling its corporate purposes, or so as to absorb the income for the use and benefit of the majority stockholders, paying no dividends to the minority, such fraud will justify the appointment of a receiver. But in the case at bar there was no allegation denying that the business was successfully managed and that substantial dividends were paid, while the special findings showed that the volume of business had increased more than one third, and that substantial dividends had been paid each year. So that if it *Page 311 
be granted that the law is correctly declared by the cases which appellees have cited (as to which we decide nothing) those cases do not control the decision of this one. The mere fact that a minority stockholder is excluded from holding office in a corporation, and that the majority stockholders hold all the offices and manage the business is not cause for appointing a receiver, when the business is being managed successfully in the interest of all the stockholders. And neither are the facts, as alleged in the complaint, that the owners of a majority of the stock, holding all of the offices, have paid themselves larger salaries than they should, and have blended their private business with the business of the corporation, and failed properly to account for money of the corporation thus commingled with their own. Neither a receivership nor a dissolution is necessary to obtain an accounting on behalf of the corporation.
The petition for a rehearing is overruled.