Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/682

 § 663.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XI. § 662. In cases of urgent necessity where the corporation fails to protect itself from threatened wrongs, it is may enjoin competent for a creditor, when the wrong if accom- threatening plished would injure his vested rights, to enjoin tnecorpo- ^ e wron cr.i And, under such circumstances, it would ration. ° ' ' seem that the principle that a shareholder cannot maintain a bill in equity against a wrong-doer to prevent an injury to the corporation unless he shows that the corporation has refused to take measures to protect itself, does not apply to a bill filed in good faith by a creditor. 2 § 663. The insolvency of a corporation so long as it con- tinues to carry on its business in an honest manner, Creditors of c | oes no t under all circumstances give the creditors an insolvent corporation an absolute right to the appointment of a receiver toareceiver of the corporate assets. 3 Any such absolute right of cours" er m ight often prove very oppressive, and, like other peculiarly equitable remedies, the appointment of a receiver is usually a matter within the discretion of the court. 4 Thus, according to a Massachusetts decision, the allegations that a corporation is insolvent, that all its property is mort- gaged to trustees for the benefit of one class of creditors ; that it owes large amounts to other creditors, one of which has attached its property ; that it is about to execute a lease for nine hundred and ninety-nine years to said attaching creditor, will not sustain a bill in equity brought by creditors of the Chan. Cas. 204; see Ogilvie v. Knox Ins. Co., 2 Black, 539; S. C, 22 How. 380; Allen v. Montgomery R. R. Co., 11 Ala. 437; Adler v. Milwaukee Pat- ent Brick Mfg. Co., 13 AVis. 57; Dal- ton, etc., R. R. Co. v. McDaniel, 56 Ga. 191; 2 Lindley on Part., 628; com- pare Reg. v. Victoria Park Co., 1 Q. B. 288. Or the court will make the call. Marson v. Deither, 49 Minn. 423. 1 Newby v. Oregon Central R. R. Co., Deady, 609. 2 Lothrop v. Stedman, 42 Conn. 583; S. C, 13 Blatchf. 141. 8 See Catlin v. Eagle Bk., 6 Conn. 233; Pondville Co. v. Clarke, 25 Conn. 662 97; Bishop v. Brainerd, 28 Conn. 289, 301; Hoyt v. Shelden, 3 Bosw. (N. Y.) 267; Curtis v. Leavitt, 15 N. Y. 10, 198; Hollins v. Brierfield Coal, etc., Co., 150 U. S. 371; Falmouth Nat. Bk. v. Canal Co., 160 Mass. 550. 4 But not always; see Railroad Co. v. Soutter, 2 Wall. 510. A receiver canuot be appointed ex parte in a proceeding (a hill in ecmity) brought by a creditor to wiud up an insolvent corporation, pending the decision on a demurrer putting in issue the creditor's right to file the bill. Cook v. Detroit, etc., R. R. Co., 45 Mich. 453.