Medbury v. Rochester Frear Stone Co.

Smith, J.:

The complaint alleges that the defendant, the Rochester Frcar .'Stone Company, is a manufacturing corporation organized under the laws of this State; that the plaintiffs are two of its trustees or directors, and also stockholders therein; that three of the defendants are the other trustees; that the corporation has been insolvent for more than a year prior to the commencement of the action; that the plaintiffs are pecuniarily responsible, but the other trustees are irresponsible, but insist upon continuing the business of the company; and that judgments have been recovered against the company, and an execution on one of 'them has been returned unsatisfied, and an action has been commenced by one creditor against the plaintiff Mcdberry to charge him personally with a debt of the company. The complaint asks that the company may be dissolved, the trustees required to account, that the company be enjoined from further carrying on its business and incurring obligations, and that a receiver be appointed. It also asks for a preliminary injunction and the appointment’ ■of a receiver pendente lite.

The motion for a receiver was opposed upon affidavits denying the alleged insolvency. On reading the papers we are satisfied that the fact of insolvency for more than one year before suit is established.

The objection that the plaintiffs cannot maintain the action is unfounded. Section 38 of the article of the Revised Statutes, relating to proceedings against corporations in equity, provides that whenever any incorporated company shall have remained insolvent for one whole year, it shall be deemed to have surrendered its franchise, and shall be adjudged to be dissolved. (2 R. S., 463, § 38.) Under the provisions of that section, a creditor or a stockholder may proceed to have the dissolution, of the insolvent company 'judicially declared and to wind up its *500affairs. (Ward v. Sea Insurance Co., 7 Paige, 294; Mickles v. The Rochester City Bank, 11 id., 118.)

That the court has power in such a case to appoint a receiver pendente lite, to preserve the property of the company, is not questioned.

The order of the Special Term should be affirmed, with ten dollars costs and disbursements.

Talcott, P. J. and Hardin, «T., concurred.

Order appealed from affirmed, with ten dollars costs and disbursements.