Berkshire Petroleum Corporation v. Moore

PLY, C. J. This is an «appeal from an interlocutory order granting a receivership and appointing a receiver to take possession of the property of the appellant, Berkshire Petroleum Corporation, which receivership was granted at the instance and upon the application of J. W. Moore, Ira J. Wind-bigler, J. L. Windbigler, E. I. Stewart, J. E. Jodgin, H. E. Smith, T. P. Barrett, G. H. Sutherland, L. H. Smith, Oscar S. Perkins, S. M.- Duffie, E. Y. Sprowl, C. W. Paris, L. L. Tyron, S. J. Young, D. W. Rowe, E. S. King, W. L. Miller, P. H. Paris, and P. W. McRee. Wilbur G. Close was appointed receiver. Appellant gave a supersedeas bond, and it was ordered that the receiver take no steps under his appointment pending this appeal. It was alleged in the petition that the corporation was formed and incorporated for the purpose of buying and selling oil or mineral leases in lands and developing the same by drilling wells for the discovery of oil and gas to market for profit, and under its charter powers purchased and obtained a number of oil leases on lands, mainly in Starr county, Tex., and also some in Jim Hogg county, Tex., and that the leased acreage amounts to more than 28,000 acres of land. It was further alleged that the corporation had purchased trucks, automobiles, and two oil drilling rigs,- which are fully described, iron casing, drill stem, derricks, camp houses, rollers and a number of tools; said property being reasonably worth $50,000. It was alleged that the corporation had refused and failed to perform its functions in drilling for oil, and was allowing the property to ruin and decay and the leases to lapse and be destroyed. The petitioners represented that each and all of them are owners of the capital stock of said’ corporation, the amount being 6,000 shares of said capital stock, of the value of $5 a share, and that the bulk of the shareholders reside in New York, who own about five-sixths of the capital stock, the- total value of the whole of the capital stock being $150,-000. It was alleged that the president and board of directors of the corporation reside in the state of New York, to whom the petitioners had often appealed for action under the charter, for the preservation of leases and property, and for them to give obedience to the laws of Texas in obtaining a permit to do business, as is required of foreign corporations, but their appeals had been ignored and disregarded. The officers of the corporation were alleged to be residents of a distant state, and were beyond the jurisdiction of the court, and it was alleged that valuable leases were about to lapse for nonaction and the person [486] al property was being wasted and destroyed. Thqse allegations showed the necessity for the appointment ,of a receiver, at the hands and on the request of the shareholders of a corporation, without notice, and independent of any suit for another purpose than the appointment of a receiver. From the fact that the corporation had abandoned the business for which it had been incorporated, and neglected its functions, and that there is danger of irreparable loss, the appointment of a receiver may be made the main purpose of a suit. Rev. Stats, arts. 2128, 2154; Cotton v. Rand (Tex. Civ. App.) 92 S. W. 266; Young v. City of Colorado (Tex. Civ. App.) 174 S. W. 995, 996; Simpson v. Alexander (Tex. Civ. App.) 188 S. W. 285; Quintana v. Giraud (Tex. Civ. App.) 209 S. W. 770. As said in 23 Ruling Case Law, § 11, pp. 17, 18: “A court of equity may, at the instance of minority stockholders, except perhaps where they own a comparatively small interest, appoint a receiver for a corporation where the business has been so mismanaged as to render it insolvent, or where it is absolutely necessary to preserve the property and business, or the interests of the stockholders.” That is a clear statement of the law in Texas. The appointment of a receiver is largely a matter of discretion of the trial judge, and, unless it appears that there has been a clear abuse of such discretion, an appellate court will not interfere with such appointment. The only requirement in the exercise of such discretion is that it is sound and judicial. We fail to see any abuse of such discretion in the appointment of a receiver under the allegations of the petition in this case. The decisions cited.by appellant do not militate against this ruling. This suit was not brought under article 1203, Revised Statutes, providing for the dissolution of a private corporation, and appellees must not be held to a compliance with its provisions, but the case must be decided under the provisions of articles 2128 and 2154, hereinbefore cited. As said by this court in Kokernot v. Roos, 189 S. W. 505: “There is no authority given- a stockholder in article 1203 to apply for a receiver, but to obtain this authority he must go to article 2154, Revised Statutes, where it is provided that: ‘Any stockholder * * * of such joint stock or incorporated company may have his or their action against such edmpany, and may have a receiver appointed as in ordinary cases.’ The article places the stockholder in the same class with a creditor or other individual, and his right to a receiver must then depend on his ability to bring himself within the purview of one of the subdivisions of article 2128, which define the circumstances under which a receiver may be appointed. ■ It would not matter whether the stockholder had twenty-five or one per cent, of the stock of the company; if he could show that he was entitled .to a receivership the law would accord it to him.” The corporation cannot be dissolved under the provisions of articles.2128 and 2154, nor can a receiver be appointed under the provisions of article 1203, and the trial court will keep that in view in further proceedings in this case. The question of a permit to do business in this state can have no bearing on this case. Although the appellees pray for a sale of the property by the receiver, that will be a matter for the receiver to determine under the orders of the court. The receiver may deem it best for the corporation to perform its functions under its charter, or he may conclude, as “the arm of the court,” that the property should be sold and the proceeds divided among the shareholders, if there are no creditors. Under appellees’ petition there can be no dissolution of the corporatidn. The judgment is affirmed.