Court Opinion

ID: 9829352
Source: CourtListenerOpinion
Date Created: 2023-09-01 19:14:34.57297+00
Date Added: 2024-06-11T07:43:00.259264
License: Public Domain

On Motion for Rehearing.
This is a clear case of the officers of a- corporation, who arfe nonresidents, failing and refusing to perform their functions and permitting the property of the corporation to be destroyed and its interests to be neglected. Have, the minority stockholders, living in Texas, who have invested their money in the corporation, no redress in a court of equity? That they have not is what, in effect, is contended for by the corporation.
Article 2128, after naming three specific cases in which a receiver may be appointed, provides:
“4. In all cases where receivers have heretofore been appointed by the usages of the court of equity.”
That subdivision of the statute authorizes an inquiry into what action will be taken under a certain state of facts not provided for in the statute. That clause impinges in no manner upon the rights and powers given by the other clauses, but extends the scope of the statute so as to include all cases allowed under the usages of courts of equity. Shaw v. Shaw, 51 Tex. Civ. App. 55, 112 S. W. 127. There is no statutory provision either permitting, or prohibiting the appointment of a receiver for a corporation when the officers are refusing to serve and the property is being destroyed, and, of course, no provision that the individual. stockholder must sue the corporation for debt before he can obtain equitable relief. The statute in the first two instances provides that a suit must be brought for certain purposes, and the appointment of a receiver would be merely incidental to the main purpose of the suit. It is not so clear that suit independent of the application for a receiver must always be pending when a receiver is sought under the terms of the third clause of the *487statute. If a shareholder could obtain any redress from the destruction of his corporate holdings, it 'would seem that under that clause he might obtain aid through a court of equity.
However, this suit was not brought because the corporation had been dissolved, or is insolvent, or that there is imminent danger of insolvency, or has forfeited its corporate rights, but because of the failure of the officers of the corporation to perform their fiduciary duties, and because such negligence was threatening to destroy the -value of the shares held by those seeking a receivership.
Courts of equity have inherent power to appoint receivers independently of statutory authority, 5 Pomeroy’s Equity Jur. § 116. And while, without a statute providing for it, equity recognizes no such thing as ’a suit for the mere appointment of a receiver, yet, if some final relief, as in this instance, is asked by a shareholder, a court of equity will recognize the suit. 5 Pom. Eq. Jur. § 118. In the older cases it was held that the general equitable powers of courts of equity would not justify the appointment of a receiver to assume the management of the affairs of a corporation at the suit of a stockholder alleging fraud or mismanagement. However, the trend of modern authority favors the inherent power of the court in a proper case to place the affairs of a corporation, at the suit of stockholders, in the hands of a , receiver, when the officials are guilty of fraud or neglect. 5 Pom. Eq. Jur. §§ 120-122, and the numerous authorities cited in the footnotes in support of the text.
The motion for rehearing is overruled.