Chisolm v. Carolina Agency Co

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtJONES
Citation88 S.C. 438,70 S.E. 1035
PartiesCHISOLM et al. v. CAROLINA AGENCY CO. et al.
Decision Date21 April 1911

70 S.E. 1035
88 S.C. 438

CHISOLM et al.
v.
CAROLINA AGENCY CO. et al.

Supreme Court of South Carolina.

April 21, 1911.


1. Corporations (§ 557*) — Receivers — Insolvency— Evidence—Sufficiency.

Evidence held to show imminent danger ol a corporation's insolvency, warranting appointment of a receiver.

[Ed. Note.—For other cases, see Corporations, Dec. Dig. § 557.*]

2. Corporations (§ 614*)—Minority Stockholders—Rights.

Minority stockholders can sue to wind up the corporation's affairs, where redress against the majority stockholders for mismanagement resulting in loss cannot reasonably be expected through corporate action.

[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 2435-2444; Dec. Dig. § 614.*]

3. Receivers (§ 8*)—Appointment—Propriety.

Power of equity courts to appoint receivers should be exercised with great caution.

[Ed. Note.—For other cases, see Receivers, Cent. Dig. § 14; Dec. Dig. § 8.*]

Appeal from Common Pleas Circuit Court of Richland County; R. W. Memminger. Judge.

"To be officially reported."

Action by E. N. Ohisolm and others against the Carolina Agency' Company and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Weston & Aycock (J. P. K. Bryan, of counsel), for appellant. Wilie Jones.

Shand & Shand and Washington Clark, for other appellants.

Frank G. Tompkins, Adam H. Moss, and Nelson, Nelson & Gettys, for respondents.

JONES, C. J. This action was brought by minority stockholders against the defendant corporation and its president and directors to wind up its affairs and distribute its as-

[70 S.E. 1036]

sets, and for the appointment of a receiver. The directors were charged with negligence in the management of the corporate property, resulting in loss to the corporation and its stockholders, and one of the purposes for which the aid of a receiver was desired was the better to ascertain and enforce the liability of the directors for their alleged mismanagement

Judge Memminger, by his order dated October 23, 1909, appointed W. W. Cobb as receiver, enjoining interference with him, calling in creditors to establish their claims in this action, and authorizing the receiver, in behalf of the corporation, to institute such action in law or equity as he considered necessary in discharge of his duties. The hearing was had on the sworn complaint and affidavits submitted in support thereof, and on the return of the defendants and affidavits submitted by the parties plaintiff and defendant at said hearing, including the stock certificate book, the minute book, and account hook of the defendant Carolina Agency Company. Judge Memminger held that a receiver should be appointed, without going into detail or assigning other reason.

The appellants contend that the facts do not justify the appointment of a receiver; that there was no sufficient showing of insolvency or imminent danger of insolvency of the corporation or the directors; that a receiver is unnecessary, as the relief demanded could be rendered otherwise; that the directors were not negligent at the institution of the said suit, and if there was ever previous negligence it was long before the suit; that no creditors are complaining, and practically none are existing.

The following facts appear: The Carolina Agency Company is a corporation, chartered March 26, 1907, under the laws of this state, with its principal place of business in the city of Columbia, S. C, with authorized capital fixed at $150,000, divided into 15, 000 shares of the par value of $10 per share, its charter purposes being "general insurance, brokerage, real estate, and commission agency, etc."; but it is conceded that the corporation at no time engaged in any other business than that of acting as general agent, in South Carolina, for State Mutual Life Insurance Company of Rome, Ga.

The plaintiffs are stockholders of the corporation, representing 520 shares. The defendants W. A. Clark, Wilie Jones, T. S. Bryan, J. Fuller Lyon, Jno. R. Blake, Willie Stackhouse, and T. A. Amaker are directors of the corporation; W. A. Clark being president.

Prior to the incorporation of the Carolina Agency Company, defendant Jno. Y. Garlington had a contract with the State Mutual Life Insurance Company of Rome, Ga., for state agency of that company in South Carolina, and the main purpose of the organiz ers of the Carolina Agency Company was to take over the said agency of the State Mutual Life Insurance Company.

Accordingly defendant Jno. Y. Garlington subscribed for 7, 500 shares of the capital stock of defendant corporation, to be paid for by an assignment of his contract with the State Mutual Life Insurance Company, and upon the assignment of said contract to the defendant corporation the stock was issued as fully paid-up stock, under the stipulation that it should be placed by Garlington with certain trustees, to be held by them, and upon which no dividend was to be paid until the income of the agency should be so established as to insure to the stockholders a semiannual dividend on all of the stock of 10 per cent., and a surplus of not less than 20 per cent. on the entire capital stock shall have been laid up, with a further stipulation that at no time should Garlington offer of his holdings of stock for sale more than 1, 000 shares in any one year, and then at not less than par, and it was also provided that all other stock issued should be entitled to be paid out of the...

To continue reading

Request your trial
3 practice notes
  • In Re Citizens' Exchange Bank Of Denmark., (No. 12238.)
    • United States
    • United States State Supreme Court of South Carolina
    • July 13, 1927
    ...Land Co., 53 S. C. 364, 31 S. E. 281; Virginia-Carolina Co. v. Hunter, 84 S. C. 214, 66 S. E. 177; Chisolm v. Carolina Agency Co., 88 S. C. 438, 70 S. E. 1035. At the same time, the holdings of this court, so far as we are advised, have been entirely consistent to the effect, and, from the ......
  • Chisolm v. Carolina Agency Co, (No. 10678.)
    • United States
    • United States State Supreme Court of South Carolina
    • August 1, 1922
    ...wrecked it. The details found in Carolina Agency Co. v. Garlington, 85 S. C. 114, 67 S. E. 225, Chisholm v. Carolina Agency Co., 88 S. C. 438, 70 S. E. 1035, and Cobb v. Garlington, 100 S. C. 51, 84 S. E. 302, will not be restated. In 1909 the Carolina Agency Company brought suit against Ga......
  • Tilgman Lumber Co v. Matheson
    • United States
    • United States State Supreme Court of South Carolina
    • April 21, 1911
    ...case of Lumber Co. v. Evans et al., 69 S. C. 93, 48 S. E. 108, this court held null and void the deed made by Evans to this plaintiff, and[70 S.E. 1035] Ordered him to execute a conveyance of the same premises and the timber thereon to the Cape Fear Lumber Company in accordance with an opti......
3 cases
  • In Re Citizens' Exchange Bank Of Denmark., (No. 12238.)
    • United States
    • United States State Supreme Court of South Carolina
    • July 13, 1927
    ...Land Co., 53 S. C. 364, 31 S. E. 281; Virginia-Carolina Co. v. Hunter, 84 S. C. 214, 66 S. E. 177; Chisolm v. Carolina Agency Co., 88 S. C. 438, 70 S. E. 1035. At the same time, the holdings of this court, so far as we are advised, have been entirely consistent to the effect, and, from the ......
  • Chisolm v. Carolina Agency Co, (No. 10678.)
    • United States
    • United States State Supreme Court of South Carolina
    • August 1, 1922
    ...wrecked it. The details found in Carolina Agency Co. v. Garlington, 85 S. C. 114, 67 S. E. 225, Chisholm v. Carolina Agency Co., 88 S. C. 438, 70 S. E. 1035, and Cobb v. Garlington, 100 S. C. 51, 84 S. E. 302, will not be restated. In 1909 the Carolina Agency Company brought suit against Ga......
  • Tilgman Lumber Co v. Matheson
    • United States
    • United States State Supreme Court of South Carolina
    • April 21, 1911
    ...case of Lumber Co. v. Evans et al., 69 S. C. 93, 48 S. E. 108, this court held null and void the deed made by Evans to this plaintiff, and[70 S.E. 1035] Ordered him to execute a conveyance of the same premises and the timber thereon to the Cape Fear Lumber Company in accordance with an opti......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT