Sellman v. German Union Fire Ins. Co. of Baltimore

• Decision Date: 16 June 1909
• Docket Number: 293.
• Citation: 184 F. 977
• Parties: SELLMAN et al. v. GERMAN UNION FIRE INS. CO. OF BALTIMORE.
• Court: U.S. District Court — District of Delaware

184 F. 977

SELLMAN et al. v. GERMAN UNION FIRE INS. CO. OF BALTIMORE.

No. 293.

United States Circuit Court, D. Delaware.

June 16, 1909

Syllabus by the Court

The board of directors of a corporation is charged by law with the control and management of its business and affairs; and when the law making power has declared that the business and affairs of a corporation, created and organized under that power, shall be directed by its board, it ill-becomes courts created for the administration of the law, unless under special and peculiar circumstances, to declare that its business and affairs shall not be directed by such board.

Charles M. Curtis, Anthony Higgins, Edgar H. Gans, and Charles Markell, for complainants.

Andrew C. Gray and George A. Finch, for defendant.

BRADFORD District Judge.

This is a motion for an injunction, and the appointment of a receiver of the German Union Fire Insurance Company of Baltimore, a corporation of Delaware, in a suit in equity brought against that corporation by James L. Sellman and others, stockholders and creditors thereof. It is alleged in the bill that the defendant is under the control of Robert Dickson and Robert D. Tweeddale who by various alleged misrepresentations and fraudulent acts and purposes have disregarded the rights and jeopardized the interests of the stockholders and creditors and brought such peril to the corporation as to render necessary a receivership and the winding up of its affairs and a distribution of its assets. The bill prays:

'(1) That a receiver may be appointed to collect and take charge of all the assets, effects, books and papers of account, and to collect the debts of the defendant corporation, and to preserve or dispose of the same under the directions of this court.

(2) That the said assets, property and effects of the defendant corporation may be sold or distributed to the persons rightfully entitled thereto, and the business of the defendant corporation may be wound up.

(3) That the said corporation, its board of directors, officers agents and employees may be enjoined by writ of permanent injunction, and pending the decision of this court on final decree, by writ of preliminary injunction, from disposing of any of the assets or property of the said corporation, or from interfering in any way with the possession or authority or control of the receiver to be appointed by this honorable court, or from paying the check for $15,000 hereinbefore mentioned, or any part thereof.

(4) That your orators may have such other and further relief as their case may require.'

The purpose of the bill is to secure a winding up of the affairs and a...