Pennsylvania Boiler Works v. Thomas C. Basshor Co.

Pattisost, J., delivered the opinion of the Court. C. Hazeltine Basshor, a stockholder and vice-president of the Thomas C. Basshor Company, on the 23rd day of November, 1912, filed in the Circuit Court of Baltimore City, his bill against said company on behalf of himself and such other stockholders as might unite therein and contribute to the cost thereof. The bill alleges that the assets of the company (consisting in part of a warehouse known as No. 28 Light street), are approximately of the value of $270,000; that a part of it, is “probably subject to considerable depreciation if disposed of at forced sale.” That the indebtedness of said firm, including a judgment or decree recently entered against the defendant for the sum of $21,000, in favor of Edward (1 Carrington, Jr., receiver for the Ilammond Ice Company, is approximately $130,000. The bill charges “that notwithstanding the fact that the defendant company is not insolvent and the value of its assets is greater than the amount of its debts, it is unable, by reason of the fact that it is not able to realize immediately upon its open accounts, to pay forthwith the amount of said decree; and that if said Carrington, as such receiver, should be permitted to seize, under an execution, an amount of the assets of the defendant sufficient to yield at sheriffs sale the amount of said decree, the great loss almost inevitably resulting therefrom would cause irreparable damage to the creditors of the defendant, other than said judgment creditor, and to the stockholders of the defendant and might even impair its existing solvency,” and alleges that “the only manner of preserving the assets of the defendant corporation or of preventing their value from being depleted and destroyed in large ⁶⁰⁴ measure, is that a receiver or receivers be appointed to take possession and charge of all the assets of the defendant, and to continue the operation of said plant,” under the guidance and direction of the Oourt, for a limited time to be fixed by it.

The prayer of the bill asks for the appointment of a receiver to take charge of all the property of the defendant corporation and to continue the operation of its business until sold or otherwise disposed of under order of the Court, and likewise for an injunction. On the same day the bill was filed, the defendant, the Thomas 0. Basshor Company, filed its answer admitting the allegations of the bill and consenting to the passage of a decree as prayed, to which, on the same day, a general replication was filed. Hpon the bill, answer and replication the Court below passed an order appointing one J. Albert Hughes receiver, with power to take charge and possession of the goods, wares, merchandise, books, papers and effects of said corporation and to collect its outstanding indebtedness, and continue its business.

The order also commanded the officers and agents of the defendant corporation to yield up and deliver to the receiver the above mentioned personal property, and directed that an injunction be issued as prayed in the bill. Subsequently, on the 2nd day of December, 1912, the appellant, the Pennsylvania Boiler Works, and the H. W. Johns-Manville Company and the Maryland Rubber Company, filed their petition alleging that they were creditors of said company, and that the said bill filed by 0. Hazeltine Basshor did not confer upon the Court jurisdiction to appoint a receiver, because, first, it does not contain any prayer for the dissolution of the defendant corporation; “and second, that it does not clearly allege that said corporation is insolvent, in that it is unable to pay its debts as they mature.” They also allege therein that the decree passed upon said bill and answer “is insufficient in that, first, it does not include the real estate owne.d by the defendant corporation; ⁶⁰⁵ and second, in that it makes no provision for the equitable distribution of the assets among the creditors; and, third, it provides for a continuance of the business by the receiver.” The petition then charges that in view of such alleged defects in the bill and the decree, they with the other creditors of the corporation “are not properly protected by the proceedings as it now stands,” and ask that an order be passed making them parties plaintiff and permitting them to file a supplemental bill of complaint. Upon this petition, an order was passed, whereby the petitioners were made parties to the proceedings as prayed, and were granted permission to file a supplemental bill of complaint.

On the following day, December 3rd, the plaintiff, 0. llazeltine Basshor, filed his petition alleging that the prayer of the bill asked that a decree be passed appointing a receiver, with power to take charge and possession of all