French v. C.F. T. Co. , 124 Or. 686 ( 1928 )

It should not be necessary to state that this is not a suit for an accounting. However, the word "accounting" is mentioned in two places in the record before us. It first appears in the prayer of the complaint and is again mentioned in the plaintiffs' brief, where they say "the suit is also for an accounting."

The plaintiffs do not pretend that they sought redress through the corporation. They make no claim that they ever attempted to see the books of the corporation, or that an accounting has ever been demanded or refused, or that they have attempted to bring themselves within the provisions of the law laid down by this court in Heidel v. Shute, 86 Or. 210 (167 P. 586, 168 P. 298), where it was held that the averment of a complaint that defendant has at all times refused to render to plaintiff a statement of account implies a previous demand, and is equivalent to an allegation of demand and refusal. See 1 Ency. Pl. Pr., p. 98.

This suit seems to have been instituted upon the theory that the corporation was insolvent. In this we cannot concur. The record shows that it is a solvent corporation. A complaint must lay the foundation for the appointment of a receiver by stating facts which show the necessity and propriety thereof. Relief by way of receivership is equitable in its nature, and is controlled by and administered upon equitable principles, even where it has been extended by statute.

Prior to its amendment by Chapter 107, General Laws of Oregon, 1927, Section 1108, Or. L., read:

"A receiver may be appointed in any civil action, suit, or proceeding other than an action for the recovery of specific personal property: * *

"When a corporation or co-operative association has been dissolved or is insolvent or in imminent danger of insolvency and it is necessary to protect the property of the corporation, or co-operative association, or to conserve or protect the interests of the stockholders of (or) creditors."

This suit was instituted under the statute as originally enacted.

On the subject of the appointment of a receiver, this court said, in the case of Scandinavian-American Bank v. WentworthLbr. Co., 101 Or. 158 (199 P. 626).

"It is a well-established general rule that the appointment of a receiver is an ancillary remedy in aid of the primary object of a litigation between the parties, and such relief must be germane to the principal suit: 34 Cyc. 29; 23 R.C.L., p. 11, § 5."

Again, in the more recent case of Taylor Finance Corp. v.Oregon Logging Timber Co., 116 Or. 440 (241 P. 388), Mr. Justice RAND, in speaking for this court, said:

"It is a well-settled principle of equitable jurisprudence that if the sole object of a suit is the appointment of a receiver, a court of equity, in the absence of statutory provisions allowing such suits, will not take jurisdiction of a suit brought for that purpose alone and appoint a receiver: 1 Tardy's Smith on Receivers (2 ed.), § 14. There are no statutory provisions in this state which authorize the bringing of a suit for the sole purpose of having a receiver appointed, and the principle just referred to is sustained by the following decisions: McNary v.Bush, 35 Or. 114 (56 P. 646); Stacy v. McNicholas, 76 Or. 167 (144 P. 96, 148 P. 67); Anderson v. Robinson, 63 Or. 236 (126 P. 988, 127 P. 546); Scandinavian-American Bank v.Wentworth Lbr. Co., 101 Or. 158 (199 P. 626); Cook v.Leona Mills Lbr. Co., 106 Or. 520 (212 P. 785); State exrel. v. Almeda Consolidated Mines Co., 107 Or. 18 (212 P. 789)."

For further discussion relating to the statute quoted above and the interpretation thereof, see the authorities above noted.

After a careful consideration of the complaint and the evidence, we can find no just ground for resorting to the harsh remedy of the appointment of a receiver. This case is reversed, and the complaint will be dismissed without prejudice to the plaintiffs' right to pursue any cause of action that they may have in the proper forum.

REVERSED AND DISMISSED. REHEARING DENIED.

RAND, C.J., and BEAN and BELT, JJ., concur.