Golden v. Averill

Decision Date22 May 1909
Docket Number1,826.
Citation101 P. 1021,31 Nev. 250
PartiesGOLDEN v. AVERILL et al.
CourtNevada Supreme Court

Proceeding by Frank Golden against Mark R. Averill and others to obtain a writ of prohibition. Writ ordered.

Boyd & Salsbury and Campbell, Metson & Brown, for petitioner.

Bartlett Thatcher & Gibbons, for respondents.

NORCROSS C.J.

This is an original proceeding in prohibition. The petitioner, Frank Golden, is the president of the Nye & Ormsby County Bank, a corporation. Respondent Mark R. Averill is judge of the Fifth judicial district court of the state of Nevada in and for the county of Nye. Respondents J. J. Mullin and Gilbert C. Ross are receivers of the said Nye & Ormsby County Bank, appointed by said respondent Averill, judge as aforesaid, on the 24th day of February, 1909. Petitioner prays for a writ to prohibit respondents from proceeding further under said order of February 24th appointing said receivers, and from proceeding under an order made on the 9th day of March, 1909 by the said respondent Mark Averill, judge as aforesaid requiring petitioner herein to appear and show cause why he should not be punished for contempt for refusing to deliver to said receivers, upon demand being made upon him therefor, the assets and property of said corporation in his possession, including the books, papers, and records of said corporation; and also from further proceeding under any order made subsequent to and in pursuance of said order of February 24th.

The following are all the facts shown upon the hearing of this cause which we deem necessary for a consideration of the legal questions presented:

On the 24th day of February, 1909, a petition was filed in the lower court praying for the appointment of a receiver and for the ultimate dissolution of the Nye & Ormsby County Bank, a corporation, pursuant to the provisions of section 94 of an act entitled "An act providing a general corporation law." St. 1903, p. 155, c. 88. The petition is entitled as follows: "In the Fifth Judicial District Court of the State of Nevada, in and for Nye County. In the matter of the application for the dissolution of the Nye & Ormsby County Bank, a corporation, and the appointment of a receiver thereof to wind up its affairs." The petition alleges: That the Nye & Ormsby County Bank is a corporation duly incorporated under the laws of the state of Nevada, with principal place of business at Tonopah in the said county of Nye, engaged in a general banking business at said town of Tonopah and maintaining a number of branch banks in other towns and cities in this state. That it has a capital stock of $500,000, divided into 5,000 shares of the par value of $100 each, of which amount of stock 3,972 shares have been issued. That of the petitioning stockholders Frank Golden is the owner of 700 shares and James J. McQuillan, T. W. Kendall, and W. J. Douglas the owners of 100 shares each. That the assets of the said corporation are of the value of $1,600,000. That the amounts due depositors does not amount to the sum of $400,000, and the other liabilities of said corporation do not exceed the sum of $200,000. That the amount due the stockholders is the par value of the issued stock, $397,200. That said corporation is solvent, but owing to the prevailing financial stringency in the state of Nevada and the United States, is unable to procure and has not the actual coin needed to pay all of its obligations in full. That on the 23d day of February, 1909, said corporation ceased to do any banking business and to receive or pay out deposits. That by reason of the foregoing facts the assets of said corporation are in danger of waste through attachment and litigation. That if a receiver is appointed to wind up the affairs of the corporation, the assets of said corporation will be sufficient to pay all the depositors, creditors, and stockholders; otherwise, the assets will be sacrificed and sold below their real value, and a serious loss and injury sustained. That none of the directors of said corporation have been guilty of any negligence nor active breach of duty. "Wherefore petitioners pray that an order to show cause issue forthwith why a receiver should not be appointed herein *** with full power and authority to wind up the affairs of said corporation and to liquidate all its business, and that an injunction issue herein prohibiting and restraining said corporation *** from exercising any of its powers and doing any business whatsoever, and at the due and proper time and on sufficient cause shown to this court, it make its decree dissolving said corporation and terminating its existence. Frank Golden, by Jas. J. McQuillan. Jas. J. McQuillan. W. J. Douglas. T. W. Kendall."

Upon the same day, and immediately following the filing of the said petition, the court issued an order or citation including an injunction, which, after reciting the fact of the filing of the said petition and that good cause appeared therefrom for the appointment of a receiver for the purposes aforesaid, commanded: "Now therefore it is hereby commanded that you, the Nye & Ormsby County Bank, a corporation, appear and show cause forthwith before the above honorable court at the courthouse in Tonopah, Nye county, Nev., why this court should not make and enter its decree appointing a receiver with all the power and authority authorized and conferred by the laws of the state of Nevada for the purpose of winding up the affairs of the Nye & Ormsby County Bank, a corporation, and for a decree at the due and proper time and upon sufficient showing dissolving said corporation and terminating its existence. And it is further ordered and commanded that, until the further order of this court, you, the said Nye & Ormsby County Bank, a corporation, your officers, agents, employés, and servants, desist and refrain from exercising any of the corporate powers of said the Nye & Ormsby County Bank, a corporation, or doing any business whatsoever. It is further ordered that this order to show cause and injunction be served upon the secretary of the said the Nye & Ormsby County Bank, a corporation. Done in open court this 24th day of February, 1909. Mark R. Averill, Judge of said District Court."

This order or citation was returned by the sheriff as having been served on the secretary of said banking corporation on the day of its issuance. At 5 o'clock p. m. of the same day, the matter came on to be heard before the court. Findings of fact and conclusions of law were made and filed, and an order and decree, together with an injunction entered. The findings of fact recited: That the petitioners appeared in open court by Messrs. Bartlett, Thatcher & Gibbons, their attorneys, "and said Nye & Ormsby County Bank appearing in open court by A. M. Nye, its attorney, and said bank being further present in court by James J. McQuillan, its vice president, and C. H. Phillips, its secretary." "Findings of Fact. Said court finds each and all the allegations and averments set forth and contained in said petition to be true. The court further finds that none of the directors of the said the Nye & Ormsby County Bank, a corporation, have requested or asked that they or either of them be appointed receivers of said the Nye & Ormsby County Bank, a corporation." By the order and decree entered in pursuance of the findings of fact and conclusions of law, said respondents J. J. Mullin and Gilbert C. Ross were appointed receivers of the property and effects of said bank "wherever the same may be situate," and further ordered "to proceed diligently to wind up the affairs of said corporation, and to distribute its assets, subject, however, to the control and further order of this court." It was further ordered that the temporary injunction be made permanent. The order and decree also fixed the bond of the receivers at $5,000, subject to be increased by the court at any time. Upon the 15th day of March, 1909, in pursuance of an affidavit made and filed by said receivers, an order was made by said respondent judge, reciting that it appearing from said affidavit of said receivers that Frank Golden, petitioner herein, had failed and refused to comply with the said decree and order of court made on the 24th day of February, 1909, after demand made upon him therefor, and ordering that said Golden appear and show cause why he should not be punished for contempt in refusing to obey the orders of said court in the premises. Upon the 22d day of March, 1909, the said Frank Golden, petitioner herein, filed a motion to vacate and set aside the order and decree appointing the receivers and the order citing him for contempt, and also an answer to the citation for contempt, both of which attacked the jurisdiction of the court to make the decree and order of February 24, 1909.

The motion to vacate and set aside was based upon the grounds That the said Golden never signed or authorized his signature to the petition asking for the appointment of a receiver, nor that he consented to the same, but that said petition was made, signed, and filed without his consent, knowledge, authorization, or approval; that the said bank was at the time of making the decree and order subject to the banking laws of the state, and subject to the control and supervision of the board of bank commissioners, and was then being investigated by the State Bank Examiner; that on the 18th day of March, 1909, in pursuance of an order of the State Board of Bank Examiners, the Attorney General had instituted a suit in the name of the state upon the relation of the Attorney General and the members of the board of bank commissioners as plaintiffs, against the said Nye & Ormsby County Bank, and the directors thereof, seven in all, as defendants, which suit prays for the appointment of a...

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8 cases
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    ...without construing into it provisions for notice to all parties interested and an opportunity for a hearing. In Golden v. District Court, 31 Nev. 250, 101 P. 1021, relative to a similar question, we said: the foregoing section in the recent case of Hettel v. First District Court, 30 Nev. 38......
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