United States Shipbuilding Co. v. Conklin

Citations

• 126 F. 132
• 60 C.C.A. 680
• 1903 U.S. App. LEXIS 4292

Syllabus

<p>1. Corporations — Appointment of Receiver — Federal Courts.</p> <p>Under the established rule that a new equitable right created by a state statute may be enforced in a federal court, where it can be so enforced in conformity with the pleadings and practice in equity, the right given by the New Jersey statute (Revision 1896, p. 298, §§ 65, 66) to creditors or stockholders of a corporation which has become insolvent to apply to a court of chancery for an injunction and receiver may be enforced in a federal court by mortgage bondholders and stockholders of an insolvent corporation who have a lien on its property by express contract, where such court has jurisdiction by reason of diversity of citizenship and the value in dispute.</p> <p>2. Same — Equity Jurisdiction.</p> <p>A court of equity has power independently of statute to appoint a receiver for an insolvent corporation at suit of its mortgage bondholders and stockholders, where the bill alleges that the insolvency was produced by the gross mismanagement of its directors, who are also charged with positive misconduct amounting to a breach of trust.</p> <p>8. Same — Review on Appeal.</p> <p>The appointment of a receiver for an insolvent corporation is largely within the discretion of the court, and an order making such appointment, where within the court’s jurisdiction, will not be disturbed on appeal, unless it appears to have been improvidently made.</p> <p>IT 2. See Corporations, vol. 12, Cent. Dig. §§ 2203, 2206.</p>