Del-Mar-Va Hardware Corp. v. Boss Manufacturing Co.

Hammond, J., delivered the opinion of the Court. The appeal is by a corporation from an order overruling a demurrer to a bill seeking the appointment of receivers (pursuant to the right of appeal in such case given by Code (1957), Art. 5, Sec. 7 (d)) and from the subsequent order appointing receivers. The bill filed May 7, 1962, alleges that the complainants are creditors of the corporation, which “for considerable time in ⁴⁷⁹ the past has been unable to pay its debts in the ordinary course of business.” 1 It alleges further that the corporation’s directors are attempting to liquidate it and that the complainants believe the interests of creditors and others justify the appointment of a receiver under Code (1957), Art. 23, Sec. 79. The bill prayed that a receiver be appointed to take possession of assets, reduce them to money, and make distribution among the creditors.

A hearing in open court was set for June 29 by order of court. On that day the demurrer was overruled; and, immediately thereafter, the complainants filed a petition to require the corporation to defer filing Articles of Dissolution with the State Department of Assessment and Taxation until their application for a receiver to wind up the affairs of the corporation had been acted upon. Then, acting apparently on the allegations of the bill and the petition to require the deferring of voluntary dissolution, Judge Taylor, without hearing testimony, appointed receivers for the corporation with instructions to give bond, to take charge of the corporation’s tangible assets, collect debts due it and bring into court an inventory of all its assets and a list of all of its accounts. It seems clear that the demurrer should have been sustained and that the appointment of receivers was legally unjustified.

The bill explicitly sought relief under Sec. 79 of Art. 23 of the Code, without alleging that the corporation had been dissolved. It is established that