In re Belton

• Decision Date: 18 November 1895
• Docket Number: 11,714
• Citation: 47 La.Ann. 1614,18 So. 642
• Court: Louisiana Supreme Court
• Parties: IN THE MATTER OF JOHN D. BELTON, PRAYING FOR APPOINTMENT OF A RECEIVER

18 So. 642

47 La.Ann. 1614

IN THE MATTER OF JOHN D. BELTON, PRAYING FOR APPOINTMENT OF A RECEIVER

No. 11,714

Supreme Court of Louisiana

November 18, 1895

Argued November 4, 1895

Rehearing Refused December 17, 1895.

APPEAL from the Civil District Court for the Parish of Orleans. Rightor, J.

Plaintiff together with Jos. Menge and Wm. A. Reese, were the only stockholders of the Edna Rice Mill Company, a corporation organized under the laws of this State; Jos. Menge was the secretary and treasurer, William A. Reese was chairman of the finance committee, and plaintiff the superintendent; on January 15 the rice mill and plant were totally destroyed by fire; on or about the 24th of January, 1894, Joseph Menge died and William A. Reese disposed of his stock to the succession of the said Menge; after the destruction of the mill and plant various suits were instituted by the corporation against various insurance companies, upon policies of fire insurance upon their property held by the corporation, which were pending and undetermined at the time of the death of the said Menge; after his death his wife Mrs. Ida Menge, as tutrix of her minor children and administratrix of his succession, assumed the administration of the affairs of the corporation generally and the direction of the said suits in particular; and since that time she has continued and is continuing her administration of the affairs of said corporation generally and the direction of the said suits in particular; has compromised all the suits against the insurance companies and has received from them sums aggregating more than fifteen thousand dollars, in settlement of their indebtedness to the said corporation; that she has collected and retains other assets belonging to the said corporation. The plaintiff claims in all these matters Mrs Menge has acted entirely without legal right, and in her administration of the corporation's affairs is and has been a mere negotiorum gestor; that her assumption of the administration of the affairs of the said corporation, and her appropriation of all its assets, was and is a flagrant trespass upon the rights of the plaintiff, who is a stockholder and creditor of the same, and who as such is entitled to require that its affairs shall be properly administered; that the said corporation is now hopelessly derelict -- the only stockholders being plaintiff and the succession of the late Joseph Menge, represented by Mrs. Ida Menge as aforesaid; that there are various other creditors unpaid; that to the end that he may be enabled to assert his rights as a stockholder and creditor he desires that a receiver should be appointed by the court, in accordance with law and the rights of all interested parties.

Defendant, in her capacity as widow in community of the late Joseph Menge and natural tutrix of the minor children, issue of her marriage with said deceased, excepted to the demand upon the ground that the petition disclosed no legal cause of action, and she prayed that the demand be dismissed, which the District Court considered well taken, sustained the same and dismissed the suit. Plaintiff appealed.

Fenner, Henderson & Fenner, for Plaintiff, Appellant.

Henry Denis, for Mrs. Joseph Menge, widow and natural tutrix, Defendant, Appellee.

OPINION

NICHOLLS, C.J.

In the brief filed in this court plaintiff declares that having been unable to effect any satisfactory settlement of his rights with Mrs. Menge, who has arrogated to herself all the rights and powers of the corporate body, he has brought this suit for the appointment of a disinterested third person as receiver and for a judicial settlement of the affairs of the corporation, which is hopelessly derelict, with no officers or duly qualified representatives. He calls our attention to the form of the proceeding as not being an application for the appointment of a receiver on ex-parte affidavits, but a demand contemplating a trial upon the merits and a full opportunity for both parties to be heard. He declares that the power of the State courts to appoint receivers in proper cases has been clearly recognized, and that the only question before the court is whether the petition sets out a proper case for the exercise of its power or jurisdiction. He says it is the case of a corporation utterly derelict, with no officers or representatives authorized to take charge of its affairs; that there is no attempt here to divest the properly and legally constituted officers of a corporation of the control of its property and affairs; that it is a corporation without officers; that the administratrix of a deceased stockholder has assumed the administration of its affairs without any further right or authorization than may be implied from the fact that she represents the heirs of her deceased husband, who was a stockholder; that he objects to the exclusive administration assumed by the defendant and demands a judicial settlement of the corporate affairs to the end that his rights as a stockholder and creditor, which are denied by the defendant and, those of other interested parties, may be regularly ascertained and protected. He claims that the appointment of a receiver is a matter which rests largely in the discretion of the court, and that this discretion can be intelligently exercised only after a trial upon the merits, when the court will have been put in possession of all the facts.

The defendant resists the application. In her brief she calls our attention to the fact that while plaintiff avers that there are various other creditors unpaid, plaintiff does not say who they are, nor what is due them, nor that they have made any complaint in the premises, nor that they join him in his application or approve of his action. That he does not aver that the property or assets of the company are abandoned, and exposed thereby to loss or damage, but, on the contrary, says that they are under the administration and in the possession of the defendant. That he does not aver that her administration is bad or negligent or fraudulent; that he does not aver that he is exposed to any danger, immediate or remote, of loss or injury from her administration; that he does not aver that she has excluded him from a participation in such possession and administration, nor that he has made a demand upon her for such participation, nor that he has objected to, or remonstrated against, her administration and possession; that he does not aver that he has made a demand upon her for payment of his debt, or that she refuses to acknowledge it...