State ex rel. Bugbee v. Holmes

• Decision Date: 21 March 1900
• Docket Number: 11,016
• Citation: 82 N.W. 109,60 Neb. 39
• Parties: STATE, EX REL. CHARLES L. BUGBEE, RELATOR, v. EDWARD P. HOLMES, RESPONDENT
• Court: Nebraska Supreme Court

82 N.W. 109

60 Neb. 39

STATE, EX REL. CHARLES L. BUGBEE, RELATOR, v. EDWARD P. HOLMES, RESPONDENT

No. 11,016

Supreme Court of Nebraska

March 21, 1900

ORIGINAL application for a writ of mandamus. Rehearing of case found on page 503, 59 Nebr. Writ allowed.

WRIT ALLOWED.

Frank Irvine, for relator:

There is no distinction between an order directing the sale of real estate, and an order confirming such sale. Kountze v Erck, 45 Neb. 288.

No demand on corporate officers is necessary, where a demand would be useless.

A stockholder in a corporation may sue both at law and in equity in his own name in behalf of his interests and to vindicate a wrong done the corporation, when it can not or will not do so in its corporate capacity; and under like circumstances a stockholder may defend in his own name an action brought against the corporation. Wilcox v Bickel, 11 Neb. 154; Fitzgerald v. Fitzgerald, 41 Neb. 374; Morrill v. Little Falls Mfg. Co. 48 N W. [Minn.], 1124; Waymire v. San Francisco & S. M. R. Co. 44 Pac. [Cal.], 1086; Park v. Petroleum Co. 25 W.Va. 108; Park v. Oil Co. 26 W.Va. 486.

Tibbets Bros. Morey & Anderson, contra:

It is against public policy to allow party stockholders to intervene and complicate the action. Farmers Loan & Trust Co. v. Kansas City, W. & N. W. R. Co. 53 F. 182, 186; Judge Caldwell's Address, St. Louis, 20th February, 1896.

OPINION

SULLIVAN, J.

Earlier in the term there was a judgment denying an application for a mandamus. The opinion then filed contains a statement of the facts upon which it was held that the respondent, one of the judges of the third district, was right in refusing to fix the amount of a supersedeas bond. State v. Holmes, 59 Neb. 503, 81 N.W. 512. At relator's instance, we have again examined the record, and have reached the conclusion that our former decision was unsound, and that the peremptory writ should have been granted. The petition of intervention and the motion resisting confirmation of the sale in question, taken together, show that Bugbee is a stockholder of the insolvent corporation; that the receiver, appointed at the request and for the benefit of creditors, has dealt with the assets of the company in a reckless and improvident manner, and that, if his actions are permitted to go unchallenged, he will waste and dissipate a large amount of valuable property belonging to the bank. It likewise appears that the corporation is not represented in the suit; that if it has any officers who are competent to represent it, they refuse to act, and that the rights of stockholders are, therefore, unprotected.

The order of the court confirming the receiver's sale and disposing of the intervention is as follows: "This cause came on to be heard before the court on the motion of John E. Hill, receiver of the Lincoln Savings Bank and Safe Deposit Company, for the confirmation of sale of assets of the said defendant bank in compliance with the order of the court, heretofore made, together with the objections filed thereto, and the motion of Charles L. Bugbee to set aside and vacate said sale, before Edward P. Holmes, judge of the district court, sitting at chambers, on the 10th day of October, 1899.

"The court finds that the said Charles L. Bugbee has no right or standing to be heard in said cause or to object to the sale of such assets of the said defendant bank, for the reason that he is not a party in the above entitled cause, nor has at any time heretofore, obtained leave of court, to enter his appearance therein, to be made a party thereto, or to intervene in said cause, for the purposes of objecting to any proceedings or to obtain any rights or benefits in such proceedings.

"The court further finds that said sale was in all respects regular, legal and equitable and that it is for the best interests of the trust represented by said receiver that said sale be confirmed.

"It is therefore considered, ordered and adjudged and decreed that said sale, in all respects be confirmed; that the objections thereto be overruled, and that the motion to set aside said sale be overruled. To all of which the said Bugbee excepts, and forty days from the rising of the court allowed to reduce his exceptions to writing. The said Bugbee prays an appeal, and prays the court to fix a supersedeas bond superseding the order herein made confirming said sale. For the reasons above given the court refuses to fix a...