Stock & Bond Guarantee Co. v. Superior Court

CRAIG, J.

The petitioners in this proceeding were joined as defendants in an action in the superior court for moneys alleged to have been paid to them by the plaintiff, J. W. Murphree, for the purchase of shares of corporate stock. The complaint in that action averred that said stock had not been purchased or delivered, and prayed the appointment of a receiver, and judgment for the sum of two thousand one hundred dollars. The complaint consisted of three counts or separate causes of action: (1) Money had and received to the plaintiff’s use and benefit, (2) an indebtedness upon an open book account and (3) general allegations of insolvency of, and appropriation of assets to their own use by, certain defendants. While an accounting is prayed for, it is obvious that this does not change the character of the action, which is fixed by the allegations contained in the counts above mentioned. Upon such complaint a receiver was appointed to take charge of the business and properties of the petitioning corporation and of two individuals. This is a proceeding in prohibition to restrain further action of the court below in the matter of the receivership, and praying that the receiver be dismissed.

The only ground upon which the order appointing a receiver is defended by respondent is that the defendants are converting the assets and business to their own use; that the business has been closed and that “if the affairs of said

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business continue to be hereafter conducted by said defendants, or any of them, this plaintiff will suffer irreparable detriment and injury, and that the assets of said business which might be used to satisfy the claim of the plaintiff herein will be forever lost”. The defendants moved to vacate the order appointing a receiver, and filed an answer denying insolvency and alleging the existence, of physical assets of the value of $500,000. It further appears that the stock for which two thousand one hundred dollars had been paid to the defendants was actually purchased and tendered, and that a certificate representing it has been deposited with the court. While we are not concerned with the ultimate rights of the parties, the record before us discloses but an ordinary demand for money admittedly paid by the plaintiff to the defendants, and its proper application by the latter is not denied. And that this is the true nature of the plaintiff’s claim is apparent from the facts admitted in the respondent’s brief. A bill of particulars furnished by the plaintiff further tends to substantiate the nature of the transaction. Prior to decision below denying the motion to vacate the order of appointment an amended complaint was filed, alleging that one of the individual defendants had acquired all of the stock of the corporation, and that both were in effect one and the same person. But the amendment cannot be said to have altered the situation, nor to have brought the plaintiff within the statutory provision entitling him to such drastic measures.