engage in business. In other words, it is not necessary for a court of equity to interfere with the legal fetich raised by the rule against the dissolution of a corporate to appoint foreclosure receivers of the property affected by the mortgage, on a proper showing, even though the mortgagor is a corporation. Large corporation mortgages frequently cover all of the assets of the company, and a foreclosure sale means a "winding up of its affairs." It is to be remembered that insolvency is a necessary condition for the appointment of a receiver in a foreclosure suit. It is also to be noticed that such a receivership necessitates the managing of the business penIdente lite by the receiver, in order that the property may be sold as that of a "going concern." In other words, we have all the conditions present that would be found in a corporation receivership. In Title Ins. & Trust Co. v. California Development Co., 171 Cal. 173, 152 Pac. 542, which was a foreclosure suit, the defendant company had created and was operating a very extensive irrigation proposition. The mortgage covered practically all of the property of the company, both real and personal. A managing receiver was appointed and it might incidentally be remarked that receiver's certificates to the amount of more than $300,000 were issued in the course of the proceedings. The property was sold as a whole and without right of redemption. "Where there is a mortgage covering real and personal property comprising parts of a single working plant or utility, in which each part is necessary to give value to the others and where a dismemberment of the system would destroy or greatly impair the usefulness or value of its component parts, the propriety of a decree like the one here made is well settled. The statute giving a right of redemption upon execution sales of real property is held to have no application to such cases." The Court cited authority to show that the principle of this quotation is as broad as stated in the quotation and is not confined in its application to a railroad or other public utility. Thus a secured creditor was able to bring about the winding up or practical, if not legal, dissolution of a corporation that had allowed itself . to become insolvent and unable to pay the debt when it became due. A receiver was appointed without any question as to the power of equity to make the appointment, and through the receivership something was saved for other creditors. In the case of the receivership of the Metropolitan Street Railway Company the proceedings were commenced by contract creditors (Pennsylvania Steel Co. v. New York City Ry. Co.). A showing of very heavy embarrassment was made; inability to pay maturing debts, numerous secured and unsecured creditors and tort claimants demanding their rights, etc. A managing receiver was appointed. It was a case of various large properties united under one management by leases. In entity by a court of equity. As is shown by the extended note attached to this section much of the conflict of authority on this subject has arisen from a blind devotion the course of the proceedings various of the properties were segregated and put under separate receiverships. Eventually the properties of the Metropolitan, by far the greatest portion of those originally included in the case, were sold as a whole under a foreclosure decree. Concerning this receivership the United States Supreme Court said (208 U. S. 90, 52 L. Ed. 403, 28 Sup. Ct. 219): "There are cases where, in order to preserve the property for all interests, it is a necessity to resort to such a remedy. A refusal to appoint a receiver would have led in this instance almost inevitably to a very large and useless sacrifice in value of a great property operated as one system through the various streets of a populous city, and such a refusal would also have led to endless confusion among the various creditors in their efforts to enforce their claims, and to very great inconvenience to the many thousands of people who necessarily use the road every day of their lives. The orders appointing the receivers and giving them instructions are most conservative and well calculated to bring about the earliest possible resumption of normal conditions, when those who may be the owners of the property shall be in possession of and operate it." "Who may be," not who are, the owners. The Court foresaw that a reorganization was the necessary purpose of the proceeding. As between these two cases is there much difference in regard to what equity undertook to do? As a unique instance of what a court of equity has done, we cite Arents v. Blackwell's Durham Tobacco Co., 101 Fed. 338; affirmed in Guthrie v. Arents, 109 Fed. 1058, 48 C. C. A. 765. All of the stockholders except the owner of one share desired to accept an offer for the entire assets and good will of the corporation. The recalcitrant member threatened political action of a serious character against the corporation. On the petition of the members desir ing to sell, and on the ground that the threatened action of the nonassenting member, whether successful or not, would practically destroy the business of the company, a receiver was appointed to sell the property of the corporation for the benefit of its stockholders. We think it proper here to call attention to this point. Many of the statutes authorizing the ap pointment of corporation receivers are very meager as to the details that follow the appointment, while some are quite full. Manifestly it is practically impossible to cover every detail that may arise. When the statutes are silent as to details, resort is had to the practices of equity. A court that appoints a receiver under statutory power must go to equity rules to know what to do with him after the appointment, if the to precedent instead of an adherence to the elastic and growing powers of a court of equity to right whatever wrongs growing society may find to exist without the necessity of statutory authority to do so. It is apparent that under the practice followed by courts of equity a receivership is discontinued whenever the objects of the primary litigation are accomplished or the necessity for a continuance of the receivership has ceased. statute does not give instructions. (See § 311, infra.) We close this note with words of Lord Chancellor Eldon found in a case that antedates the Attorney General v. Utica Insurance Co. case (Adley v. The Whitstable Co., 17 Vesey Jr. 315, 1810). Plaintiff was a member of the defendant corporation. For violation of a by-law of the company he was deprived of his share of the dividends. He sought to bring the action in a court of equity for an accounting and for a judgment awarding him the amount of money he would have received as dividends, claiming that the bylaw was illegal. After a full consideration of the nature of the case the Lord Chancellor ruled that, because of the necessity for an accounting, plaintiff's only remedy was in equity, if the by-law was illegal. Answering the objection that equity would not take cognizance of the matter because it could not enforce against a cor poration any decree that it might make, he said: "How can the decree be executed against the corporation? The course against a corporation is by sequestration or distringas. I do not conceive it to be impossible to lay hold of their property. . . The Courts must deal with it as well as they can to prevent a failure of justice altogether, and if by resisting the demands of justice they expose their property to ruin, the mischievous consequence must be attributed to themselves . . . The effect might be that the Court would be under the necessity of carrying on the business; yet that difficulty would not prevent the decree, though it might induce the Court to modify it, so as to do as little injury as possible. . . . If a court of law will inform me that this is not a good by-law . . . I shall find the means of giving to plaintiff the benefit resulting from his title in this concern." 6. Appointment of Corporation Receivers Under Statutory Authority. § 310. General Discussion of the Subject. In many, if not all of the states of the United States, statutes have been enacted conferring upon courts the power to create corporation receiverships. While in many instances the statutes of one state have been copied from or patterned after those of another state, still they have been subjected to such frequent amendment that it may be said that in regard to their various terms the statutes are almost as varied as they are numerous. It may almost be said that there is not much greater similarity among them than is contained in the fact that they all have a similar purpose. That purpose is to give courts the power to appoint receivers who shall take possession of all of the assets of a corporation to protect and preserve them for the benefit of all interested parties, stockholders and creditors, and who, as incidental to this purpose, are, usually, granted authority to conduct the business of the corporation. Of course it is necessary that the statutes shall designate the parties at whose instance and the circumstances under which receiverships may be created and in regard to these matters there is a certain broad similarity among them. The right to apply for a receiver is usually given to both stockholders and creditors. There are, however, statutes conferring upon courts the power to create receiverships, in actions that can not strictly be called quo warranto proceedings at the instance of the attorney-general of the state1 or, usually in regard to special classes of corporations, such as banks, insurance companies, and the like, at the instance of a commissioner or other state officer. In 1 People v. Hasbrouck, 57 Misc. Rep. 130, 107 N. Y. Supp. 257. See United States Trust Co. v. New York, W. S. & B. Ry. Co., 101 N. Y. 478, 5 N. E. 316; McKinney, et al. v. Landon et al., 209 Fed. 300, 126 C. C. A. 226. regard to the circumstances under which statutes have provided for corporation receivers, it has sometimes been said that the legislation on the subject has been prompted by the fact that some courts of equity have disclaimed power to act without statutory support and that legislatures, coming to the assistance of the courts, have received their inspiration from requests upon which courts have refused to act as being without statutory authority. However this may be, we think it may be said that there is no single circumstance provided by any statute as a reason for a receivership but that some court has, in the absence of statute, refused to consider it a proper basis for action, while some other court has concluded otherwise. The total number of circumstances established by all the statutes as proper reasons for this remedy is small.. The differences among the statutes is due to the fact that not any one statute includes them all and the various statutes do not include the same ones. Because of the differences in the statutes themselves; because of the fact that it has generally been held that, in regard to the jurisdiction, or power, to appoint, the statutes are held to be strictly construed; and because it 2 United States Trust Co. v. New York, W. S. & B. Ry. Co., 101 N. Y. 478, 5 N. E. 316; Decker v. Gardner, 124 N. Y. 334, 11 L. R. A. 480, 26 N. E. 814. 3 Where the court is proceeding to make the appointment of the receiver of the corporation by virtue of the statute, it proceeds in strict accordance with the statute. Chamberlain v. Rochester, etc., Vessel Co., 7 Hun (N. Y.) 557; Cronan v. District Court, 15 Ida. 184, 96 Pac. 768; Mirabal v. Albuquerque Wool, etc., Mills, 23 N. M. 534, 170 Pac. 50. Statutory requirements in regard to the verification of the comI Rec.-48 plaint and service of papers should be strictly followed. Western Electric Co. v. National Automatic Electrical Supply Co., 135 La. 559, 65 So. 741. Only parties mentioned in the statute as proper applicants can petition for the appointment. Arent v. Liquidating Com'rs, 133 La. 134, 62 So. 602. Threatened insolvency is not sufficient ground under a statute naming insolvency as a ground. Berryman v. Billings Mut. Heating Co., 44 Mont. 517, 121 Pac. 280. That the charter is liable to be forfeited is not sufficient under a statute requiring forfeiture. Pru |