Watkins v. North American Land & Timber Co.

Citations

• 107 La. 107

Syllabus

<p>Syllabus.</p> <p>1. Courts are very reluctant to interfere with the control of the affairs of a private corporation at the instance of a stockholder, or of a minority of the stockholders; but it. is their right and their duty so to interfere in a proper case; and a proper case is shown where there Is gross mismanagement of the business of the corporation, such as would, under the laws of the particular State in which the corporation is doing business, furnish grounds for the appointment of a receiver; or such as amounts to a clear breach of duty on the • part of the managing officials of the corporation under their trust.</p> <p>2. There Is such mismanagement and clear breach of duty where the officers of the corporation have sold 15 per cent, in amount and vastly more than 15 per cent, in value of the assets of the corporation (all real estate) at approximately one-seventh of its value, thereby apparently entailing a loss of $2,618,000 on the corporation, and $870,000 on the complaining stockholder ; and refuse or neglect to bring suit to set aside said sale, although the right to cause the sale to be set aside on the ground of lesion beyond moiety appears to be unquestionable under the laws of the State in which the property is situated.</p> <p>3. The petition of a stockholder alleging such gross mismanagement, and alleging that the complainant has exhausted all available means for obtaining redress through corporate agencies, and impleading the corporation and the purchaser, and praying that the sale be set aside for lesion beyond moiety, shows a cause of action.</p> <p>4. In setting forth a cause of action for annulling a sale because of lesion beyond moiety it is not necessary to allege that the complainant, or anv one else, is willing to buy the property at double the amount of the price of the sale complained of. It is sufficient to allege the discrepancy between price and value. The fact of anyone being willing to buy the property at the increased apprais