Mason v. Supreme Court of the Equitable League

Fowler, J., delivered the opinion of the Court. The appellants filed a bill in^the Circuit Court of Baltimore City against the appellee, a corporation formed ⁴⁸⁴ under the general incorporation law of Maryland, and the prayer is that a receiver may he appointed to take charge of and administer the assets of the defendant corporation under the order of the Court, and for an injunction restraining the officers and agents of said defendant from receiving or collecting any money or assessment due or coming to it, and from interfering with its property or assets, and for general relief. The defendant answered, testimony was taken, and a decree was passed dismissing the bill. The appellee is what is known as a beneficial assessment association.

The first question is one of jurisdiction, and we are all of opinion that the learned Judge below properly refused to appoint a receiver, and issue the injunction on the allegations contained in the bill — for the granting of such relief would necessarily result in a dissolution of the corporation, and a forfeiture of its charter. The defendant was not alleged to be insolvent; certainly not so alleged as to bring the case within section 264, of Article 23 of the Code; and even if the allegation of insolvency had been sufficient, we find no proof to sustain it. Nor are there any allegations in the bill looking to proceedings under section 265 of the same Article, providing for a voluntary dissolution. Apart from statutory power, a Court of equity cannot dissolve a corporation. “It is true,” says Mr. Sigh in his hook on Receivers, section 288, “equity may properly compel officers of corporations to account for any breach of trust in their official capacity; yet, in the absence of statutes extending its jurisdiction, it will usually decline to assume control over the management of the affairs of a corporation upon a bill * *. * * alleging fraud, mismanagement, and collusion on the part of the corporate authorities, since such interference would necessarily result in the dissolution of the cor ⁴⁸⁵ poration, and the Court would thus accomplish indirectly what it has no power to do directly.” “The remedial power exercised by Courts of equity, in such cases, ordinarily extends no further than the granting of an injunction against any special misconduct on the part of the corporate officers; and, although the facts shown may be sufficient foundation for such an injunction, the Court will not enlarge its jurisdiction by taking the affairs of the corporation out of the management of its own officers, and placing them in the hands of a receiver.” We have quoted at length Mr. High’s lucid statement of the well settled principles applicable to a case like this, because, in our opinion, it is conclusive of the question we are considering.

This Court, however, has announced the same doctrine. In Goodman vs. Jedidjah Lodge,