Inscho v. Mid-continent Development Co.

Citations

• 94 Kan. 370
• 146 P. 1014
• 1915 Kan. LEXIS 101

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Corporations — Development of Gas and Oil — In Whom Best Control and Management of Corporation — Action by Preferred Stockholder for Dividends — Proper Grounds for Appointment of Receiver Stated. The majority of the stockholders of a corporation have the right to control the corporation, and the majority of the board of directors have the right to determine its policies and manage and direct its affairs so long as they act in good faith and within the limitations of the law. The appointment of a receiver for a solvent, going concern is a last-resort remedy and should not be employed to correct improper conduct when other adequate remedy is available. Bad judgment and ill success in previous ventures, completed or not being actively prosecuted, current transactions merely unwise and not so reckless or extravagant as to amount to breach of trust, irregularities and misconduct which are not so culpable as to jeopardize the interests of the corporation and the rights of stockholders, and dissensions among directors, so long as a majority of them control, do not warrant the appointment of a receiver. In no case should a court take the property and business of a solvent, going corporation out of the hands of the board of directors and into its own hands by the appointment of a receiver at the suit of a minority stockholder unless the right of the plaintiff be free from reasonable doubt and the danger of loss or injury be clearly proved.</p> <p>2. Same — Findings of Facts — Disclose no Ground for Appointment of Receiver — Abuse of Judicial Discretion. This suit was commenced by a preferred stockholder for a dividend, for the appropriation of the property of the corporation to the payment of such dividend, for the redemption of her stock, and for the appointment of a receiver to accomplish the purposes of the suit. A receiver was appointed at the commencement of the suit on the allegations of the verified petition, which contained numerou