Orin Jessup Land Company v. Lannes

• Decision Date: 21 November 1923
• Docket Number: 24,327
• Parties: Orin Jessup Land Company v. Lannes
• Court: Indiana Supreme Court

141 N.E. 454

193 Ind. 645

Orin Jessup Land Company v. Lannes

No. 24,327

Supreme Court of Indiana

November 21, 1923

From Marion Probate Court (1,655); Mahlon E. Bash, Judge.

Action by George Lannes against the Orin Jessup Land Company for the appointment of a receiver. From an order appointing a receiver, the defendant appeals.

Reversed.

J. F. & N. C. Neal and Pickens, Cox, Conder & Bain, for appellant.

Ellison & Neff and Walker & Hollett, for appellee.

OPINION

Myers, J.

This was a suit by appellee against appellant for the appointment of a receiver without notice to take charge of the assets of appellant. From an order appointing a receiver "until such receivership is made permanent or dissolved", this appeal was prosecuted.

It appears from the complaint that appellant was an Indiana corporation authorized to buy and sell real estate and matters incidental thereto; that appellee was the owner of ten shares, par value $ 100 each, nonparticipating seven per cent. preferred stock of the corporation's issue of $ 154,200; that for want of sufficient funds, no dividends had been paid on this stock for two years. The complaint then alleges: "That the defendant is insolvent and in imminent danger of insolvency and that the defendant is now proposing to immediately dispose of certain of its real estate holdings illegally, and in preference of certain creditors to the damage and injury of this plaintiff, in this: That the defendant has proposed, in a general circular to the preferred stockholders, to transfer to them real estate owned by the company in redemption of such preferred stock to the exclusion of other creditors and to the exclusion of certain of the preferred stockholders, including this plaintiff, who are not willing to accept real estate in exchange for such preferred stock. That if the defendant is permitted to continue this policy of disposing of its real estate to preferred stockholders all of its assets will be distributed and there will be no assets whatever remaining for the payment of any creditor of the defendant. That the defendant on the first of March issued a statement to its stockholders by which it appears that the total assets liberally determined, are of the value of $ 217,227.48 and the total liabilities are $ 313,053.60 showing a deficit and insolvent condition in the net sum of $ 95,826.12. That such statement was furnished to the stockholders in connection with a communication issued by the defendant to such stockholders of date April 9, 1923, in which its program of disposition of real estate was outlined. * * * That unless a temporary receiver is immediately appointed to take charge of the books and other assets of the defendant it will immediately in furtherance of its proposed program sell and dispose of all its unincumbered assets so that no fund will remain for the payment of plaintiff's claim or others similarly situated. That there is due this plaintiff on account of such preferred stock, together with the accrued interest thereon, the sum of $ 1,140." Prayer that a receiver be appointed without notice, etc.

This complaint was verified. There was also an affidavit by one Otto McCarthy to the effect that he, as a preferred stockholder, had received "as such stockholder financial statement and copy of letter referred to in the complaint of George Lannes and that he has read the complaint of George Lannes and the matters and things set forth in said complaint are...