receivership in such cases is in most cases an instrument for consummating plans of reorganization." The basic principle underlying the action of the courts in cases of this kind is the preservation of the assets of the corporation for the benefit of all interested parties in the face of a threatened loss by preferential and wasteful litigation. Such a situation very frequently arises in respect to large business concerns during critical financial times. The elastic powers of a court of equity in such circumstances was very aptly expressed by Judge Manton of the Circuit Court of Appeals in a well considered case in which he said: "A court of equity's modes of relief are not fixed and rigid. It can mold its remedies to meet the conditions with which it has to deal. The jurisdiction of equity is the whole domain of conscience, limited only by legislative enactment. The faculty of equity must be energetic, productive, and progressive. But to exercise this right of the court of equity there must be some show of an injustice attempted or about to be perpetrated upon the petitioners. . In the absence of power created by legislation in this country, the federal judges, sitting in courts of equity, have endeavored to secure the rights of those interested, including the stockholders at the time of readjustment of large corporations, a protection to meet the needs of the occasion. Changing times, with change in economic needs, require the courts of equity to mold remedies to meet the conditions with which they have to deal." § 295. Discretion of Court in Making the Appointment. The general rule, that the appointment of a receiver is not a matter of right, but is a matter to be decided by the efits of creditors. Cronan v. District Court, 15 Idaho 184, 96 Pac. 768. 5 Guaranty Trust Co. v. Missouri Pac. Ry. Co., 238 Fed. 812. The above case was also cited approv ingly on this point in Graselli Chemical Co. v. Aetna Explosives Co., 252 Fed. 456, 164 C. C. A. 380. 6 Graselli Chemical Co. v. Aetna Explosives Co., 252 Fed. 456, 164 C. C. A. 380. court in the exercise of a non-arbitrary, judicial discre tion, applies to the appointment of a corporation receiver as well as to the appointment of other classes of receivers. Indeed, it is probably true that in corporation cases, even though the propriety of an appointment might go unquestioned, the necessity for the appointment requires greater scrutiny than in other cases. It is to be remembered that a corporation receiver generally assumes control of all of the property and of the business of the corporation, and that his appointment has a drastic effect upon the right of creditors to collect their debts. From a purely technical point of view it is to be considered that by law this control is placed in certain corporate officers and it is a drastic measure to deprive them of their legal authority. The appointment, when without the consent of the corporation itself, is likely to impair seriously the credit of the corporation. It imposes a heavy burden upon the court, an institution not well equipped nor disposed to carry on a business. The receiver represents not the applicant alone but all interested parties; and the desire of the applicant deserves no greater consideration, perhaps, than that of others in the same relation to the corporate affairs. In the case of a corporation supplying a widely used commodity or service the interests of the public may be properly consid 1 Baltimore Bargain House v. St. Clair, 58 W. Va. 565, 52 S. E. 660. 2 Laurel Springs Land Co. v. Fougeray, 50 N. J. Eq. 756, 26 Atl. 886. Fougeray v. Cord, 50 N. J. Eq. 185, 24 Atl. 499. 3 Shera v. Carbon Steel Co., 245 Fed. 589. 4 Heitkamp v. American Pigment & Chemical Co., 158 Ill. App. 587; Frost v. Puget Sound Realty Associates, 57 Wash. 629, 107 Pac. 1029. ered. In the case of stockholders it is to be considered that they have contracted to abide by the decision of the majority and, for the most part, if they are dissatisfied or disappointed they are privileged to sell their stock and retire.R Even where there is a statute authorizing the appointment under certain conditions, the appointment is held to be discretionary and dependent as much upon its necessity as upon its propriety; except in the case of a statute wrong." Phinizy v. Anniston City Land Co., 195 Ala. 656, 71 So. 469. In Aldrich v. Union Bag etc. Co., 81 N. J. Eq. 244, 87 Atl. 65, a receiver was sought by minority stockholders on the ground that the board of directors were fraudulently mismanaging the business by means of commissions and agency contracts, all of which acts extended over a period of years. The court refused to make the appointment pending the suit on the ground that no irreparable injury would result the awaiting of the few months which would elapse until the final hearing on the complaint. 5 A receiver was refused over the property of a large corporation controlling the tobacco industry on the ground of not only injury to the general public but of widespread loss to innocent persons. United States v. American Tobacco Co., 221 U. S. 106, 55 L. Ed. 663, 31 Sup. Ct. 632 (reversing decree in 164 Fed. 700). The court will not appoint a receiver upon the dissolution of a combination in violation of the Anti-Trust Act where it is not necessary to accomplish this purrose. United States V. Great Lakes Towing Co., 217 Fed. 656. 6 Metropolitan Fire Ins. Co. v. Middendorf, 171 Ky. 771, 188. S. W. 790; Inscho v. Mid-Continent Development Co., 94 Kan. 370, Ann. Cas. 1917B, 546, 146 Pac. 1014. "The Independent Brewing Assoc. was a prosperous, solvent, going concern, and the evidence does not show that it was necessary for the preservation of the rights of appellants (minority stockholders) that it should be taken from control of its officers who had managed it successfully for many years notwithstanding their wrongful conduct in the purchase of certain property." Klein v. Independent Brewing Assn., 231 Ill. 594, 83 N. E. 434. 7 Thoroughgood v. Georgetown Water Co., 9 Del. Ch. 84, 77 Atl. 720; McMullin v. McArthur Electric Mfg. Co., 73 N. J. Eq. 527, 68 Atl. 97; In re People's Surety Co. of New York, 82 Misc. Rep. 518, 144 N. Y. Supp. 131. If there be doubt as to the proof of the insolvency under a statute allowing receivers upon a showing of insolvency the court should refuse to make the appointment. Whitmer v. William Whitmer & Sons, Inc., (Del. Ch.), 99 Atl. 428. Where a corporation is in a prosperous condition and its offi providing for the dissolution of a corporation and leaving a receivership as the only means of winding up its affairs and distributing its assets. The appointment will not be made if the applicant has been guilty of laches, or of acquiescence in the wrong complained of; when the expense, or other disadvantage, will outweigh the advantage; 10 when some other remedial relief is open to plaintiff; or when preventive relief will cers in a position to respond in damages, the court should refuse to appoint a receiver at the instance of minority stockholders who claim that the officers are violating their duties. Metzger v. Knox, 77 Misc. Rep. 271, 136 N. Y. Supp. 681 (affirmed in 153 App. Div. 911, 137 N. Y. Supp. 1129). 8 Conlan v. Oudin, 49 Wash. 240, 94 Pac. 1074. 9 Brookshire v. Farmers' Alliance Exchange, 73 S. C. 131, 52 S. E. 867; Baltimore Trust Co. v. George's Creek Coal & Iron Co., 119 Md. 21, 85 Atl. 949; Ridpath v. Sans Poil etc. Transportation Co., 26 Wash. 427, 67 Pac. 229; Eggleston v. Pantages, 93 Wash. 221, 160 Pac. 425; Grant v. Monterey Gold Mining Co., 93 Wash. 1, 159 Pac. 895. Thus where there has been no change in the affairs since the plaintiff was president of a corporation, a receiver will not be appointed over it at the instance of such former president upon his allegations of conspiracy on the part of certain stockholders to sell its property at less than its value and especially after the lapse of six years. Bergman Clay Mfg. Co. v. Bergman, 73 Wash. 144, 131 Pac. 485. 10 Feess V. Mechanics' State Bank, 84 Kan. 828, L. R. A. 1915A, 606, 115 Pac. 563. Nor will a receiver be appointed over a corporation if relief from the alleged mismanagement can be had by injunction. United Electric etc. Co. v. Louisiana Electric Light Co., 68 Fed. 673; Commonwealth Title Ins. etc. Co. v. Selt zer, 227 Pa. 410, 136 Am. St. Rep. 896, 76 Atl. 77. 11 Chilton v. Bell County Coke & Improvement Co., 153 Ky. 775, 156 S. W. 889; Hartnett v. St Louis Min. & Mill. Co., 51 Mont. 395, 153 Pac. 437. A lienholder must resort to his lien, rather than to receivership. Galvin v. McConnell, 53 Tex. Civ. 486, 117 S. W. 211. Where relief other than by receivership could be had for dissipation of its assets, the appointment of a receiver will be refused. Smith v. Chase & Baker Piano Mfg. Co., 197 Fed. 466. The fact that majority stockholders of an insolvent corporation increased the salary of one of its officers at a time when business was run at a loss is not ground for the appointment of a receiver since if the increase of salary is illegal, upon a proper showing the plaintiff may cause an action to be instituted for the pur be effective.12 Although an attempt is made to bring a case within some well recognized ground of appointment, a receiver will, of course, be denied if the facts stated are pose of restraining its future payment, and for the purpose of recovering to the corporation any illegal salary which may have been previously paid. Curtiss v. Dean & Curtiss, 85 Wash. 435, 148 Pac. 581. See, also, Alabama Coal & Coke Co. v. Schackelford, 137 Ala. 224, 34 South. 833, 97 Am. St. Rep. 23; Schaffhauser V. Arnholt & S. Brewing Co., 218 Pa. 298, 67 Atl. 417, 11 Ann. Cas. 772. Where the offending directors have retired from office, the appointment of a receiver based upon their mismanagement should be refused. Halpin V. Mutual Brewing Co., 91 Hun 220, 36 N. Y. Supp. 151. A receiver should not be appointed because of irregularities or misconduct of the officers of the corporation where there is a way to correct them through the board of directors or through injunctional orders. Feess v. Mechanics' State Bank, 84 Kan. 828, L. R. A. 1915A, 606, 115 Pac. 563. The fact that the officers refuse to allow the stockholders access to its corporate books and papers and refuse to disclose facts concerning its business affairs, is not ground for the appointment of a receiver. Alabama Coal etc. Co. v. Shackelford, 137 Ala. 224, 97 Am. St. Rep. 23, 34 So. 833. Mere failure of the secretary of a corporation to keep its minutes properly is no ground for the appointment of a receiver, especially where it has not been shown that any harm resulted from his actions. Semple v. Frisco Land Co., 124 La. 663, 50 So. 619. Insolvency would be insufficient ground for the appointment of a receiver where the remedy under the statute is the liquidation of the corporate affairs by commissioners. Hero v. Consumers' Lumber Mfg. & Export Co., 123 La. 359, 48 So. 989. Nor is a receiver needed where the creditor may enforce his demands by means of attachment proceedings. Gabbert V. Union Gas & Traction Co., 140 Mo. App. 6, 123 S. W. 1024. In a suit to enforce stockholders' liability to creditors, it is not necessary to appoint a receiver to wind up its affairs. American Spirits Mfg. Co. v. Eldridge, 209 Mass. 590, 95 N. E. 942. See, also, Forsell v. Pittsburg etc. Copper Co., 42 Mont. 412, 113 Pac. 479. Thus where the claim of the plaintiff was less than $2500 and defendant corporation's property was worth about $40,000, against which liens were filed to the amount of about $30,000 more than a year before the commencement of plaintiff's action, and no suits had been brought to enforce such liens, a receiver was improperly appointed since the plaintiff could have enforced his claim by legal process. Prudential Securities Co. v. Three Forks, etc. Ry. Co., 49 Mont. 567, 144 Pac. 158. 12 Parrish v. Reese, 165 Ala. 638, 51 So. 824; Laurel Springs |