Cameron v. Groveland Imp. Co.

• Decision Date: 14 November 1898
• Citation: 20 Wash. 169,54 P. 1128
• Parties: CAMERON ET AL. v. GROVELAND IMP. CO. ET AL.
• Court: Washington Supreme Court

54 P. 1128

20 Wash. 169

CAMERON ET AL. v. GROVELAND IMP. CO. ET AL.

Supreme Court of Washington

November 14, 1898

Appeal from superior court, Clallam county; James G. McClinton Judge.

Suit in equity by George Cameron and others against the Groveland Improvement Company and others. From an order appointing a receiver pendente lite, defendants appeal. Affirmed.

Geo. H Jones, Humes & Sysons, and Benton Embree, for appellants.

Trumbull & Trumbull, for respondents.

REAVIS J.

Suit in equity by a minority of the stockholders of the appellant corporation, in their own behalf and that of all the other stockholders who may join them. The object of the suit was to compel an accounting of money and property belonging to the corporation, which the complaint alleges has been fraudulently converted to their own use by the officers of the corporation; and the further allegation is made that the officers are continuing to convert the money and property to their own use, as pretended salaries and expenses, without any authority therefor, and fraudulently. A receiver was prayed for pending the litigation, and that the defendant's officers be enjoined from interfering with the property of the corporation during the pendency of the action. The motion for the appointment of a receiver was made upon the ground of fraud on the part of the officers, and that by reason of such fraud the corporation was in imminent danger of insolvency; that the officers controlled the majority of the trustees of the corporation, and that plaintiffs had no relief except in equity. The motion for the appointment of a receiver was based upon the complaint and five affidavits filed therewith. The defendants appeared, and resisted the motion for the appointment of a receiver pending the cause by filing some eight affidavits. The answer was not then filed. The hearing was upon the complaint and affidavits of the respective parties. The superior court appointed a receiver pending the trial of the cause.

The rule which this court observes in reviewing an order of the superior court appointing a receiver has been stated in Roberts v. Bank, 9 Wash. 12, 37 P. 26: "The making of such orders is committed, under our system, to the sound discretion of the judge before whom the proceeding is pending, and his decision of the question must stand, unless the appellate court, upon an examination of the law and facts of the case, shall affirmatively determine that his action was not warranted; and, in determining this question, the decision of questions of fact will not be reversed if there is a substantial conflict in the proofs in regard thereto. But the appellate court must examine such proofs for the purpose of determining whether or not there is such a clear preponderance against the determination of the lower court." It was held in Naylor v Sidener, 106 Ind. 179, 6 N.E. 345, that the supreme court, in determining whether a receiver has been properly appointed, will consider the affidavits and oral evidence properly in the record, as well as the allegations of the complaint, but will not overrule or interfere with the discretion of the trial court on the mere weight of evidence. Appellants cit...