Howell v. Poff
| Decision Date | 18 March 1932 |
| Docket Number | 28144 |
| Citation | 241 N.W. 548,122 Neb. 793 |
| Parties | GEORGE F. HOWELL, APPELLEE, v. WILLIAM F. POFF ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: FRANCIS M DINEEN, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. A Nebraska statute authorizes an appeal from an order appointing a receiver. Comp. St. 1929, § 20-1090.
2. A director of a corporation bears to it and its stockholders a fiduciary relation and is treated by courts of equity as a trustee.
3. A director of a corporation should refrain from all acts inconsistent with his corporate duties and is accountable as trustee.
4. The accountability of a director, president and manager of a corporation is determined by the strict standards of rectitude that bind a fiduciary.
5. The president and manager of a corporation is not entitled to profits beyond the earnings of his stock, proper compensation and expenses.
6. It is the continuing duty of a president, manager and director of a corporation to keep an accurate account of its expenses and earnings and to make the data available to stockholders.
7. Duties of the managing officer and controlling stockholder of a corporation, and disregard thereof, may be considered with proof of other facts in determining the merits of an application for a receiver.
8. An application for a receiver for a corporation is directed to the sound discretion of the court and except for an abuse thereof the conclusion reached will not generally be disturbed on appeal.
9. A petition positively verified by the oath of plaintiff may be considered with supporting affidavits on the hearing of a preliminary motion for the appointment of a receiver for a corporation named as defendant, though the facts stated in the petition are contradicted by other affidavits resisting the application.
10. An order overruling a motion to vacate the appointment of a receiver is not appealable.
Appeal from District Court, Douglas County; Dineen, Judge.
Suit by George F. Howell against William F. Poff, individually and doing business as the Dundee Ice Company and another. From an order appointing a receiver for the defendant City Ice Company, the defendants appeal.
Affirmed.
Gerald E. La Violette and Harry B. Fleharty, for appellants.
Frost, Hammes & Nimtz, contra.
Heard before GOSS, C. J., ROSE, DEAN, EBERLY, DAY and PAINE, JJ.
This is a suit in equity for an accounting and for the appointment of a receiver for the City Ice Company of Omaha, a solvent corporation engaged in manufacturing and selling ice. The shares of corporate stock were owned by George F. Howell and William F. Poff. Howell, plaintiff, was minority stockholder, director and secretary. Poff was controlling stockholder, director, president and manager. Poff, City Ice Company, and Poff doing business as Dundee Ice Company are defendants. The petition states a cause of action for an accounting. Alleged wrongs necessitating the appointment of a receiver are attributed by plaintiff to Poff and include fraud; engaging in hostile enterprises; making and retaining secret profits; misappropriation and conversion of corporate funds; neglect of duty; concealing data relating to business transactions; failure to keep the manufacturing property in repair; permitting ice plant, equipment, machinery and buildings to deteriorate, thus causing waste and loss. The trial court heard the application for a receiver on the petition and on supporting and resisting affidavits and ruled in favor of plaintiff. Exercising a statutory right, Poff and the other defendants appealed from the order appointing the receiver. Comp. St. 1929, sec. 20-1090; McCord, Brady & Co. v. Weil, 33 Neb. 868, 51 N.W. 300.
It is contended by defendants that the City Ice Company has long been a solvent corporation making profits for its stockholders; that plaintiff accepted corporate earnings for years without complaining of the management, knowing as director and secretary what the president and manager had done, and consequently is not entitled to relief in equity that alleged wrongs are denied, but, if found to exist, can be fully redressed without the appointment of a receiver; that no reason for taking the management away from the corporation has been shown; that more harm would result from a receivership than from future management by the corporation itself; that allegations of the petition, when contradicted by affidavits, as they are, should not be considered evidence on application for the appointment of a receiver; that the order appointing a receiver should be reversed. The contention that the City Ice Company is solvent...
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