Barrett v. Green River & R. S. L. S. Co.

• Citation: 28 Wyo. 379,205 P. 742
• Decision Date: 03 April 1922
• Docket Number: 1030
• Parties: BARRETT v. GREEN RIVER & R. S. L. S. Co
• Court: United States State Supreme Court of Wyoming

205 P. 742

28 Wyo. 379

BARRETT v. GREEN RIVER & R. S. L. S. Co

No. 1030

Supreme Court of Wyoming

April 3, 1922

ERROR to the District Court, Sweetwater County; HON. JOHN R ARNOLD, Judge.

Action by James Barrett against the Green River & Rock Springs Livestock Company, and others. From an order denying an application for the appointment of a receiver pendente lite plaintiff brings error.

Affirmed.

N. R Greenfield, W. H. Bramel and M. E. Wilson, for plaintiff in error.

The answer of defendants is insufficient under the rule of equity pleadings requiring a full and responsive answer setting forth a fair explanation and discovery free from evasiveness or ambiguity. Phrases such as "except as herein admitted, qualified or otherwise denying defendants deny each and every allegation" etc., leaves the case wholly to the minds of defendants to determine what is qualified or denied. (Hensley v. Tarter, 14 Cal. 508; Mead v. Pettigrew, 78 N.W. 945; Salisbury v. La Fitte, 123 P. 124; Cooper v. Insurance Co., 123 S.W. 497, Ronning v. Way, 123 P. 615; Peters v. McPherson, 114 P. 188; Hatcher v. Fitzpatrick, 101 S.W. 933; Lewis v. Coatler, 10 Ohio St. 451.) An answer may be sufficient as an answer at a trial but wholly impotent as an affidavit or as evidence to show cause in cases such as this. (Kerrhan v. Matthews, 46 Eng. Chan. 322; Goodman v. Whitcomb, 1 Jac. & W. 589; Barton v. Parsons, 95 P. 391 (Kan.). Evasive denials or mere denials will not suffice as an affidavit of defense to a bill for receivership. (Ranking v. Rothschild, 43 N.W. 1077; Pearce v. Elwell, 21 S.E. 305; Hardware Co. v. Duncan, 47 N.W. 846; 21 C. J. 478.) Denial that Mary Barrett is an owner of stock is a mere conclusion of law. (Clark v. Frankoich, 176 P. 259.) Where title, sale or transfer is of the gist of a controversy, full facts must be pleaded. (Turner v. White, 73 Cal. 299; Traction Co. v. Ross, 125 N.E. 72; Thompson v. Nichols, 72 N.W. 217; Canal Co. v. Southworth, 21 P. 1028; Mason v. Mason, 76 N.E. 692; Ricketts v. Crewdson, 81 P. 1. (Wyo.); Repp v. Lesher, 61 N.E. 609.) Every bill in equity is in a sense a bill of discovery seeking disclosure; here the specific plan is for an account from a trustee. It is admitted that Mary Barrett, as a pretended administratrix brought about a confusion of titles, and obliterated evidence, hence the burden rests upon her to identify the property. (12 C. J. 498-99.) Where a trustee commingles and confuses his own alleged title and property with those of the beneficiary the rule is even stronger. (39 Cyc. 296.) When a trust is admitted, the duty to act becomes absolute. (Towle v. Mack, 2 Vt. 19; Bone v. Hayes, 99 P. 172.) Plaintiff is entitled to a judgment for everything prayed for upon the pleadings. (Wooden v. Kerr, 51 N.W. 937.) The trial court erred in refusing to appoint a receiver to conserve the assets of a corporation from loss, plaintiff being a third owner. (Sec. 6184 Comp. Stats. 1920.) The fraud perpetrated, the wrong done, the property to be conserved and the matters to be settled in the final decree are clearly set forth. A receiver was necessary to protect plaintiff's rights. (Giroux v. Bockler, 194 P. 178; Cameron v. Imp., 72 Am. St. Rep. 26.) The estate owned 400 shares of corporate stock. Defendant Mary Barrett, while acting as administratrix emerges from the trust claiming ownership of all the stock the estate owned, showing violations of trust, fraud, wrong possession and waste. Only a receivership will protect plaintiff. (Hardware Co. v. Waibel, 47 N.W. 814.) Where no other remedy is full and complete it is the duty of the court to appoint a receiver and it is abuse of discretion to refuse. (Hendrix v. Land Co., 11 So. 213; Land Co. v. Turner, 11 So. 211; Bates v. Werries, 199 S.W. 758; Sallee v. Jones, 81 N.E. 587.) The threatened insolvency of the corporation is another ground calling for receivership. (Sec. 6184 Comp. Stats. 1920. Oleson v. Bank, 45 P. 734; State v. Bank, 56 N.W. 575.) Under the control of defendant Mary Barrett the corporation ceased to function, lost its franchise and is a proper subject for receivership. (Ward v. Ins. Co., 7 Page 294.) Upon the record, the trial court found the facts for plaintiff; granted an injunction pendente lite restraining distribution of any property except in the usual course of business; considering the circumstances shown by the pleadings, a receivership is all that can save plaintiff's rights and do justice in the case.

T. S. Taliaferro, for defendant in error.

No brief was filed for defendant in error.

KIMBALL, Justice. POTTER, Ch. J., and BLUME, J., concur.

OPINION

KIMBALL, Justice.

James Barrett, plaintiff below, brings this proceeding in error to review an order denying an application for the appointment of a receiver. The defendants were the Green River & Rock Springs Livestock Company, a corporation, Mary Barrett, Ed. Barrett, Patrick C. Barrett and Tom Whitmore, as administrator of the estate of Mary Barrett, deceased. Another defendant who did not appear, need not be noticed. The plaintiff, James Barrett, and defendants, Mary, Ed, and Patrick C. Barrett, are the children and heirs at law of Mary Barrett, deceased. Plaintiff claims to be the owner of one-third of the capital stock of the defendant corporation. The defendants, the other Barretts, claim to be the owners of all the capital stock, and it is admitted that at the commencement of the action in June, 1920, and for more than seven years next before that time, they were in possession of the property and in control of the business of the corporation, to the exclusion of the other parties claiming rights as stockholders. The administrator claims that all the stock of the corporation belonged to his intestate, and is now rightfully a part of her estate.

The relief asked by plaintiff included a determination of the ownership of said capital stock; an accounting by Mary, Ed, and Patrick C. Barrett to the corporation for moneys alleged to have been appropriated by them; an injunction restraining them from exercising any functions as stockholders or directors; a receiver to take possession of all the corporate property; a dissolution of the corporation, and distribution of its assets. The administrator, by a cross-petition against all the other parties, sought relief of the same general nature, including the appointment of a receiver, but did not pray for an injunction nor for dissolution. The defendants (the corporation, and Mary, Ed and Patrick C. Barrett), filed answers to both the petition of plaintiff and the cross-petition of the administrator. The hearing which resulted in the refusal of the court to appoint a receiver pendente lite was had upon the application of plaintiff, when it seems that the application of the administrator, as cross-petitioner, for similar relief, was also considered and denied. These applications were submitted to the court upon the pleadings only. The order denying them provides that the corporation and Mary, Ed, and Patrick C. Barrett be restrained during the pendency of the action from encumbering or disposing of any of the corporate real property, and from encumbering or disposing of any of the corporate personal property except in the ordinary course of business. The administrator has brought no appeal or proceeding in error for review of that order, and we need to determine only whether upon the case disclosed by the pleadings the plaintiff was entitled to the appointment of a receiver pendente lite for the defendant corporation.

A few elementary principles governing the appointment of receivers may be observed. The appointment of a receiver pendente lite is to a considerable extent a matter resting in the discretion of the court to be controlled by a consideration of all the circumstances of the case, and while, in passing on the application for a receiver, the court should in no manner forestall or anticipate the final decision upon the merits, the probability that the plaintiff will ultimately be entitled to a decree is one of the most material of the circumstances so to be considered. (High on Receivers, §§ 7, 8; Tardy's Smith on Receivers, §§ 10, 11, 12; and Owen v. Homan, 3 Macn. & G. 378, S. C. on Appeal 4 H. L. 997), cited and quoted in the foregoing texts. (See, also, Steele v. Aspy, 128 Ind. 367, 27 N.E. 739; Kelley v. Boettcher, 89 F. 125; Goulding v. Bain, 4 Sandf. 716; Apalachicola N. R. Co. v. Sommers (Fla.) 79 Fla. 816, 85 So. 361; Wyo. C. S. 1920, § 6184.)

From a consideration of these principles it follows that the court below was right in refusing to appoint a receiver, unless it appears that it should have been found from an examination of the pleadings that the plaintiff had a probable interest as a stockholder in the corporation. The word "probable" is defined by Webster as: "Having more evidence for than against; supported by evidence which inclines the mind to believe, but leaves some room for doubt; likely." This...