gaged his real estate for the purpose of defeating the claims of the corporation.

Also, in Original Vienna Bakery, Coffee & Natatorium Co. v. Heissler (1893) 50 Ill. App. 406, it was held that a receiver should not be appointed for a bakery company, at the instance of minority stockholders, who sought the appointment on the ground that the president of the company had caused false entries to be made in the books, had refused to permit the complainants to examine the books, and that, because of its contract relations with the holder of the concession which it occupied, the company might not be permitted to continue its business; also that a majority of the directors had known for a long time of misconduct of the president, but had taken no action in the matter. Affidavits in support of the allegations in the bill were presented, as well as affidavits by the defendants in denial of the charges; and it was shown, also, that, after the filing of the bill, at a meeting of stockholders at which the majority of the stock was represented a resolution was unanimously adopted expressing confidence in the management.

And in Heitkamp v. American Pigment & Chemical Co. (1910) 158 Ill. App. 587, it was held that minority stockholders had no right to the appointment of a receiver, an accounting, and an injunction, on the ground that the manager of the company had failed to execute a bond, although he handled the money and refused to permit the complainants to have any knowledge concerning the management or to inspect the books, and that, through his shares of stock, he controlled and manipulated the election. of directors who would co-operate with him and permit him to control the company, allegations to this effect being coupled with other general charges of mismanagement and fraud, which the court held were insufficient because of a failure to allege the specific facts on which they were based. And it was held in Fallon v. United States Directory Co. (1903) 86 App. Div. 29, 83 N. Y. Supp. 359, that an

order appointing a temporary receiver of a corporation on the ground that the defendant, who was the secretary and treasurer of the company and an owner of stock in equal shares with the plaintiff, had secreted the books, papers, etc., and refused to surrender the same to the plaintiff, who was president, or to disclose their whereabouts or permit the plaintiff to have access thereto, was unauthorized, where there was no allegation of fraud or mismanagement on the part of any of the officers or directors except the secretary and treasurer, and it was not shown that the board of directors had been requested to, or had refused, to institute a proper action for the relief of the corporation.

It was held, also, in Ridpath v. Sans Poil & C. R. Ferry & Transp. Co. (1901) 26 Wash. 427, 67 Pac. 229, that the trial court had not abused its discretion in refusing to appoint a receiver pendente lite for a corporation, at the instance of a minority stockholder who brought an action for an accounting and the winding up of the affairs of the corporation, where it did not appear that the corporate property was endangered, nor that the business was being diverted from the purposes for which it was incorporated, or was being improperly or uneconomically managed, and the only ground for this relief was the refusal to permit the plaintiff to inspect the books of the corporation, which denial was not arbitrary, but was based on the contention that the plaintiff had no interest in the corporation because he had not contributed his agreed proportion of the capital stock. Another reason which justified the refusal to appoint the receiver was held to be laches imputable to the plaintiff.

But see Henry v. Ide (Ala.) and Ashton v. Penfield (Mo.) under III. a, 1, supra, where it was held that the appointment of a receiver was warranted; and in Baillie v. Columbia Gold Min. Co. (1917) 86 Or. 1, 166 Pac. 965, 167 Pac. 1167, denial of the application of the plaintiff, a stockholder, to inspect the books of the company, appears as one of the reasons which the court held entitled the

plaintiff to apply for a receivership. In this instance the company had ceased to be a going concern.

Change in nature of corporate business.

In the absence of evidence that the directors were controlled by a fraudulent or dishonest purpose, it was held in Hunt v. American Grocery Co. (1897; C. C.) 80 Fed. 70, that a receiver would not be appointed at the instance of stockholders, on the ground that the business of the corporation was being grossly mismanaged by its officers and directors, who, it was alleged, had changed its nature from a large wholesale grocery business to a comparatively small specialty business, had sold staple articles at less than the market price, and discontinued certain lines.

And in Merchants' Transfer Co. v. Hildebrand (1918) Tex. Civ. App.

200 S. W. 551, it was held that the appointment of a receiver was not justified, as an injunction would be an adequate remedy, where a stockholder sought the appointment of a receiver of a corporation on the ground that he had pledged the stock owned by him, which the pledgee had caused to be transferred on the books of the corporation, that the stock was wrongfully voted by the pledgee at a stockholders' meeting and that thereby an amendment to the charter was procured, and that the corporation was about to embark upon a business not authorized by its original charter, but authorized by the amendment. Mismanagement by complainant.

In Neitzel v. Lyons (1896) 48 Neb. 892, 67 N. W. 867, it was held that the mismanagement of the complainant stockholder and of the president of the bank, who constituted two of its board of directors, did not justify the placing of the bank in the hands of a receiver against the protest of interested stockholders; the bank being solvent, and no attempt being made to show that the cashier, the other member of the board, was guilty of any misconduct. In this instance the complainant, as a stockholder in the bank, sought the appointment of a receiver on the ground of gross mis

management of its officers, and the president of the bank entered a voluntary appearance consenting to the appointment of a receiver, these two persons, together with the cashier, constituting the board of directors. The court said that here was one director charging gross mismanagement by the officers of the bank, another director entering an appearance and consenting to the relief prayed and an order at chambers, made on the same day, without the knowledge of the third director; that, no act of the cashier which was not for the bank's interest being shown, the court could not countenance an arrangement between his associate managing officers whereby it would seem that their own mismanagement must be treated as ground justifying the placing of the bank in the hands of the receiver against the protests of interested stockholders.

Misconduct in management of another company.

Where a traction company owned all of the stock of a street railway company, it was held in O'Connor v. Long Island Traction Co. (1896) 15 Misc. 501, 37 N. Y. Supp. 953, that fraud and mismanagement on the part of the directors of the street railway company were not grounds for appointment of a receiver of the traction company, at the instance of a stockholder of the latter. See in this connection Wallace Pierce-Wallace Pub. Co. (Iowa) under III. b, 2, infra.

V.

2. Dissensions.

particular circumstances,-generally because the court did not believe there was an urgent necessity for such drastic relief, and other remedies were not considered inadequate, at least for the time being.

It is held in Wallace v. Pierce-Wallace Pub. Co. (1897) 101 Iowa, 313, 38 L.R.A. 122, 63 Am. St. Rep. 389, 70 N. W. 216, that a receiver of that part of the property of a corporation which consists of shares of stock in another corporation cannot be appointed on account of a disagreement respecting the management and control of the latter corporation, between two persons who are the officers of the former corporation and own all of its stock in equal shares. See in this connection, O'Connor v. Long Island Traction Co. (1896) 15 Misc. 501, 37 N. Y. Supp. 953, supra.

It has been held, also, that the mere fact that there is a deadlock in the corporate affairs, the plaintiff and the defendant each owning half of the corporate stock, and, because of their disagreement, being unable to fill a vacancy caused by the death of a third member of the board of directors, is not necessarily ground for the appointment of a receiver pendente lite. Katz v. De Wolf (1912) 151 Wis. 337, 138 N. W. 1013, Ann. Cas. 1914B, 237. The court said that a deadlock in corporate affairs, or rather in the matter of selecting directors, may be a serious thing forced upon the plaintiff, or he may himself have brought it about; that it could hardly be expected that any shareholder owning half the stock could have a receiver at pleasure by merely refusing to agree to the election of any director proposed by the other stockholder or stockholders.

In Katz v. De Wolf (Wis.) supra, it was held that the appointment of a receiver pendente lite had properly been denied, where the plaintiff and defendant each owned half of the stock of a corporation, but apparently no serious effort had been made to break the deadlock and elect a disinterested third person as the member of the board of directors, the corporation being solvent and no danger of

loss appearing. In this instance the defendant was in control, prima facie lawful, of the corporate offices, there was no claim that he was irresponsible or insolvent, and the complainant sought a decree declaring the offices vacant, an accounting, and the appointment of a receiver, making various charges of misconduct, which were denied by the answer. The court said: "Whether in case of a mere deadlock between two or more contending groups of stockholders a court of equity would by final decree appoint a receiver and decree a sale of the corporate property and a distribution among the shareholders is not before us, and the disposition of this motion is not to be taken to affect that question. But where there is no imminent danger of loss of the corporate property or of any other injury to the moving party which cannot be fully compensated by the final decree, the courts will not, upon affidavits and in advance of a trial on the merits, by placing the property in the hands of a receiver, wrest the possession of the corporate property from the corporation, and from those officers who are duly elected and who prima facie are entitled to administer the affairs of the corporation. That is the situation shown here. The charges of misconduct made in the complaint against defendants are fully met by the answer. The truth in this regard can be ascertained only after a trial."

And it was held in Little Warrior Coal Co. v. Hooper (1894) 105 Ala. 665, 17 So. 118, that a receiver should not be appointed for a solvent corporation on a showing of a disagreement among the directors with respect to its management, the complainant owning half of the stock and being a director, and the two defendants owning the other half and being the other two directors, and no fraud being charged.

So, where owners of half of the capital stock of a corporation brought a suit against a corporation and the holders and owners of the remaining stock, who constituted its directors, seeking an injunction restraining.