State v. Second Judicial District Court of Silver Bow County
| Decision Date | 15 November 1897 |
| Citation | 50 P. 852,20 Mont. 284 |
| Parties | STATE ex rel. THORNTON-THOMAS MERCANTILE CO. et al. v. SECOND JUDICIAL DISTRICT COURT OF SILVER BOW COUNTY et al. |
| Court | Montana Supreme Court |
Certiorari on relation of the Thornton-Thomas Mercantile Company and John A. Frazer, to the district court of the Second Judicial district of the state of Montana, in and for the county of Silver Bow, and the Honorable William Clancy, judge thereof to review an order appointing a receiver and certain other proceedings subsequent thereto. Reversed.
This is a proceeding for a writ of certiorari. The record in the case discloses that J. D. Thomas and George P. Bretherton, who are minority stockholders in the Thornton-Thomas Mercantile Company, on the 6th day of October, 1897, commenced an action in the district court of Silver Bow county, in department 2 thereof (the honorable William Clancy presiding as judge) asking for the appointment of a receiver to take charge of all of the property of said corporation, collect its rents issues, etc., and to sell the property belonging to said corporation, and to practically wind up its business. Immediately upon the filing of said complaint, the judge of said court, at chambers, and without notice to the defendant corporation, made an order appointing E. H. Hubbard receiver giving him full power to take possession of all the assets of the corporation, collect its debts, and carry on and conduct its business. The receiver immediately took possession of the entire property and business of said corporation. The first notice the corporation had of the appointment of a receiver was his appearance at its place of business, armed with the order of the court appointing him to such office. On the 11th day of October, the defendant appeared by counsel, and asked the court to require of the plaintiffs an undertaking to indemnify it against damages it might sustain in case the receiver should be appointed wrongfully, maliciously, and without sufficient cause. This application was continued from time to time until the 19th day of October, when the motion came on for hearing before the court. An order was then made that plaintiffs execute to the defendant a bond as provided by law, in the sum of $5,000. The defendant insisted upon the giving of said bond immediately, but the court overruled the request, and granted plaintiffs until the 1st day of November within which to file said bond. Without any notice of warning to defendant, the receiver filed a petition asking for an order to sell the entire stock of merchandise, store fixtures, and all property belonging to the defendant, except book accounts. This petition was considered by the court at chambers, and, without any notice to the defendant corporation, an order was made directing the receiver to sell all said property belonging to the defendant at the best price he could obtain therefor in cash, and that he pay certain alleged preferred claims said to be owing by the defendant corporation. This order was made without giving the corporation an opportunity to be heard, even as to whether the alleged preferred claims were correct and owing or not. On the day succeeding the one on which this order was made the defendant again appeared in court by counsel, and asked the court to suspend the order of sale until after a sufficient bond had been given, as required by law. This request was denied by the court. The only grounds alleged in the original complaint filed by the minority stockholders J. D. Thomas and George P. Bretherton was mismanagement of the business of the corporation. On the 19th day of October an amended complaint was filed by them, in which they also charged fraud in the management of the business of the corporation. This proceeding was commenced on October 21st, to review and annul the action of the district court in the appointment...
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