Little Warrior Coal Co. v. Hooper

• Decision Date: 09 February 1895
• Citation: 105 Ala. 665,17 So. 118
• Parties: LITTLE WARRIOR COAL CO. ET AL. v. HOOPER.
• Court: Alabama Supreme Court

17 So. 118

105 Ala. 665

LITTLE WARRIOR COAL CO. ET AL. v. HOOPER.

Supreme Court of Alabama

February 9, 1895

Appeal from chancery court, Jefferson county; Thomas Cobbs Chancellor.

Bill by J. De B. Hooper against the Little Warrior Coal Company and others. From an order appointing a receiver, defendants appeal. Reversed.

Ward &amp John, for appellants.

James E. Zunts, for appellee.

COLEMAN J.

The appellee, J. De B. Hooper, filed the present bill against the Little Warrior Coal Company, a corporation, and Richard Thomas and W. E. Thomas. The bill prayed for the appointment of a receiver, which was done upon the filing of the bill and without notice. The present appeal is prosecuted from the appointment of a receiver.

The Little Warrior Coal Company by its charter was authorized "to mine and sell coal, and manufacture coal into coke *** to buy and sell goods and stocks of merchandise to miners and other persons, to build and operate railroads and tramways, *** to lease and operate mines," etc. Its capital stock was $10,000. The bill shows that there are but three stockholders and three directors; that complainant owns one-half the stock, and is a director, and Richard Thomas and W. E. Thomas, the respondents, own the other half of the stock, and are the other two directors. The averments of the bill show that complainant has become jointly liable as indorser or surety for the corporation in the sum of $1,250, and that the corporation is indebted to complainant in the sum of $250. The complainant is, therefore, a creditor of the corporation, as well as a stockholder and director. There are other creditors, whose debts in the aggregate amount to $2,000 or $2,500. The averments of the bill show that, although the corporation has no cash on hand, the assets of the corporation far exceed its liabilities. No fraud is charged. It is averred, in a general way, that the affairs of the corporation are "mismanaged, resulting in waste and injury that in the end must result in a total loss of the property." It is not shown that the creditors cannot collect their debts by process of law. It does appear that complainant is apprehensive of the creditors. It contains these remarkable averments, as one of the urgent grounds why a receiver should be appointed, viz.: "So pressing have become said corporation creditors, and so watchful are they, that on the slightest hint they would all precipitate suits against said corporation, and that to preserve the assets of said corporation it is necessary that a receiver be appointed at once, without delay, and without notice." "That judgments have already been obtained against said corporation, and orator fears and believes that at any moment the sheriff may levy upon said corporation's property, and cause the dismemberment of its business and plant."

The proper purpose for the appointment of a receiver is to conserve the assets for the protection and...