uation in which he might be tempted by his own private interest to disregard that of his principal,"-citing People v. Overyssel Twp. 11 Mich. 222. "This doctrine, to speak again in the beautiful language of another, has its foundation, not so much in the commission of actual fraud as in that profound knowledge of the human heart which dictated that hallowed petition, 'Lead us not into temptation, but deliver us from evil,' and that caused the announcement of the infallible truth, 'A man cannot serve two masters."" These quotations we shall properly close with the language of Story on Agency, § 210, quoted, with the approval of this court, in Englehart v Peoria Plow Co. 21 Neb. 48. "In this connection, also, it seems proper to state another rule in regard to the duties of agents, which is of general application, and that is that, in matters touching the agency, agents cannot act so as to bind their principals where they have an adverse interest in themselves. This rule is founded upon the plain and obvious considerations that the principal bargains in the employment for the exercise of the disinterested skill, diligence, and zeal of the agent for his own exclusive benefit. It is a confidence necessarily reposed in the agent, that he will act with a sole regard to the interests of his principal, as far as be lawfully may; and even if impartiality could possibly be presumed on the part of the agent, where his own interests are concerned, that is not what the principal bargains for, and in many cases it is the very last thing which would advance his interest. If, then, a seller were permitted, as an agent

of another, to become the purchaser, his duty to his principal and his own interest would stand in direct opposition to each other, and thus a temptation, perhaps in many cases too strong for resistance by men of flexible morals, or hackneyed in the common devices of worldly business, would be held out, which would betray them into gross misconduct, and even into crime. It is to interpose a preventive check against such temptations and seductions that a positive prohibition has been found to be the soundest policy, encouraged by the purest precepts of Christianity."

It is unnecessary to quote further illustra tions of the correctness of the instructions given the jury at the request of the defendant in error. The same principles announced in these instructions pervade all the text works, and the decisions of the courts, which have to deal with the relations of principal and agent. In none of them is recognized the right of the suppression of important facts, of which the principal had a right to be informed, as a part of "the secrets of the real estate business," as was claimed by plaintiff in error Murphy in his testimony. The evidence fully sustains the verdict which was rendered by the jury. Indeed, a verdict different would probably, of necessity, have been set aside, as bas been shown by abundant citation of text-writers and authorities.

The instructions clearly gave the law to the jury, were applicable to the evidence, and the judgment of the District Court must therefore be affirmed.

The other Commissioners concur.

NOTE.-A8 to the power to appoint receivers of corporations where there is no other relief asked. Ordinarily a receiver of a corporation will not be appointed by courts of equity at the request of creditors, shareholders, or the company depriving the officers of control. The jurisdiction of courts in such matters is now regulated usually by statutes which will be strictly construed in their application.

Such statutes, being regarded as severe and harsh remedies, will not be applied until all others fail. Except where otherwise stated in each of the following cases the relief asked was mainly if not solely the appointment of a receiver.

As to appointing receivers of corporations in a direct action for that purpose.

The right to bring an action distinctively for the mere appointment of a receiver is denied. The effect would be to dissolve the corporation which could not be done at the suit of a stockholder or creditor. The French Bank Case, 53 Cal. 495; Union Mut. L. Ins. Co. v. Union Mills Plaster Co. 37 Fed. Rep. 286.

20 L. R. A.

See also 23 L. R. A. 531; 27 L. R. 37 L. R. A. 111; 38 L. R. A. 122; 39 L.

der appointing a receiver is reviewable so far as it relates to the statement of a cause of action for the appointment of the receiver. 2. A receiver of an insolvent corporation may be appointed in a suit which seeks no other relief, under the general provisions of Rev. Stat. 1881, § 1222, authorizing such an appointment when a corporation is insolvent, or is in imminent danger of insolvency.

And a receiver will not be appointed at the instance of a stockholder seeking simply to obtain distribution among the stockholders of a part of the funds of a foreign corporation. Redmond v. Enfield Mfg. Co. 13 Abb. Pr. N. S. 332.

And equity will not entertain jurisdiction to appoint a receiver of property, where that is the substantive ground and ultimate object and purpose of the suit on the petition of the owner of the property to be controlled and protected. Jones v. Bank of Leadville, 10 Colo. 464.

And no receiver will be appointed to wind up an insolvent corporation where there are officers properly appointed, especially where under the charter two of the plaintiffs are constituted managers until the charter expires, who are authorized to contract and supervise. Follett v. Field, 30 La. Ann. 161.

And the misconduct of a few directors is not sufficient cause for appointing a receiver which would be virtually removing all the directors, and a bill of complaint which neither charges insolvency nor asks to dissolve or wind up a company simply praying for a receiver, does not state a

A. 392; 28 L. R. A. 727; 33 L. R. A. 341; R. A. 762; 45 L. R. A. 560.

8. A shareholder, as well as a creditor, may have a receiver appointed for an insolvent corporation.

4. The sufficiency or insufficiency of a complaint is to be judged by the facts stated therein, and not by its prayer.

5. A receiver of an incorporated benefit association may be appointed as un injunction would be an inadequate remedy, where its officers, who are nonresidents, are charged with gross maladministration and with deposit

ing its money for their own benefit without proper security in an insolvent bank in another state, and are daily receiving large sums which they might squander or convert to the extent of many thousands of dollars before they could be displaced by the process provided by the laws of the corporation.

6. No prior application to the corporate officers for redress is necessary before suit by a stockholder for the appointment of a receiver of an insolvent corporation, where the wrongdoing and fraud of the officers themselves is the ground of the application.

(April 26, 1893.)

APPEAL by defendant from a judgment of the Superior Court for Marion County in favor of plaintiffs in an action to procure the appointment of a receiver for defendant corporation. Affirmed.

The facts are stated in the opinion. Messrs. Morris, Newberger & Curtis, Duncan & Smith and Daniel Wait Howe, for appellant:

suit either for a receiver, and injunction, or any other relief.

They allege on information and belief that the order is insolvent, but even this is not sworn to. Such a general allegation amounts to nothing.

High, Receivers, 2d ed. § 17; Beach, Receivers, § 124, 423: Blondheim v. Moore, 11 Md. 365; Newfoundland R. Constr. Co. v. Schack, 40 N. J. Eq. 222.

two is no ground for the appointment of a That it may become insolvent in a year or receiver now.

Where a municipal corporation agrees to pay so much a year for water or light the sums so stipulated to be paid in future are not to be regarded as present debts.

Valparaiso v. Gardner, 97 Ind. 1, 49 Am. Rep. 416.

An individual member before bringing a suit of any kind, either for an injunction or for a receiver, must make a bona fide effort to get redress according to the mode provided by the corporate rules and regulations.

2 Beach, Priv. Corp. § 885; Hawes v. Contra

Costa W. Co. of Oakland, 104 U. S. 450, 26 L. ed. 827; Dimmfell v. Ohio & M. R. Co. 110 U. S. 209, 28 L. ed. 121; Dunphy v. Traveller Newspaper Asso. 146 Mass. 495; Boyd v Sims, 87 Tenn. 771; Supreme Council_of_Order of Chosen Friends v. Forsinger, 9 L. R. A. 501, 125 Ind. 52; 1 Morawetz, Priv. Corp. 2d ed.

insolvency, or has forfeited its corporate rights" taken in connection with section 565, providing that application may be made by any creditor" or "stockholder or member thereof" precludes the idea of having one appointed at the instance of the attorney-general in a suit of quo warranto. Havemeyer v. Superior Court, 84 Cal. 327. Under a similar statute in New York (Code,

A shareholder cannot have a receiver appointed to take possession of and control a railroad, that being the primary and not the auxiliary relief, merely because former officers of the railroad company may have fraudulently managed its affairs. Cincinnati, H. & D. R. Co. v. Duckworth, 2 Ohio C. C. 518, 21 Week. L. Bull. 36.

So a receiver will not be appointed at the suit of A creditor having no judgment against the corporation as this would virtually wind up its affairs. Davis v. Flagstaff Silver Min. Co. 2 Utah, 92.

dicially determined. People v. Washington Ice Co. 18 Abb. Pr. 383.

In New York the jurisdiction to appoint a receiver is wholly statutory. Decker v. Gardner, 11 L. R. A. 480, 124 N. Y. 334.

So the statute must there be strictly followed and in a suit by a judgment creditor after a return of an unsatisfied execution, if the petition for a receiver is by his attorney, the proceeding is a nullity and cannot be amended. Bangs v. McIntosh, 23 Barb. 591.

And an action to dissolve a corporation and to have a receiver appointed cannot be maintained by stockholders charging a conspiracy to defraud the stockholders as under 2 New York Rev. Stat., § 35, pp. 462, 463, the application must be made by the attorney-general or a creditor, or a director, trustee, or other officer. Howe v. Deuel, 43 Barb. 504.

This or a similar provision prevails in most all states, and for a construction of this clause see the next case infra.

As to proceedings under the statutes. The California Code, § 564, subsec. 5, providing for a receiver "when a corporation has been dis

Laws 1825, chap. 325, 17. Atty-Gen. v. Bank of Columbia, 1 Paige, 511, 2 L. ed. 735.

So under Nebraska Laws 1889, p. 397, where the bank is insolvent and jeopardizes the interest of the depositors. State v. Commercial State Bank, 28 Neb. 677.

There being a statutory system for securing a receiver under New York Laws 1825, after the re

The complaint must show, not merely a request and refusal, but a wrongful refusal on the part of such governing body.

1 Morawetz, Priv. Corp. 2d ed. §§ 244, 251; Rathbone v. Parkersburg Gas Co. 31 W. Va. 798; Dunphy v. Traveller Newspaper A880. supra.

Unless such a showing is made the plaintiffs are not entitled even to a temporary receiver until a new election of corporate officers can be held.

Converse v. Dimock, 22 Fed. Rep. 573.

It is not a sufficient excuse for failure to make such request to show merely that the officer or officers guilty of the alleged wrongful acts own a majority of the stock, or are kinsman, etc., to the directors or members of the governing body.

Cook, Stock & Stockholders, 2d ed. p. 974, note 1; Allen v. Wilson, 28 Fed. Rep. 677; Dunphy v. Traveller Newspaper Asso. and Taylor v. Holmes, supra.

A court of equity has no power to dissolve a corporation and forfeit its franchises, upon the application of either the corporation itself, a stockholder, or a creditor.

Gluck & Becker, Receivers, § 21; Pond v. Framingham & L. R. Co. 130 Mass. 194; Cook, Stock & Stockholders, 2d ed. § 746; High, Receivers, 2d ed. § 288; Beach, Receivers, § 409; Neall v. Hill, 16 Cal. 145, 76 Am. Dec. 508; Waterbury v. Merchant's U. Exp. Co. 50 Barb. 157.

Even where a statute expressly confers power on a court to appoint a receiver of a corporation in case of its insolvency, the statute

turn of an unsatisfied execution, and under 2 Rev. Stat., p. 462, this precludes the jurisdiction of the court from appointing a receiver of a corporation on the petition of all the stockholders. Re Mart, 22 Abb. N. C. 227; Ramsey v. Erie R. Co. 38 How. Pr. 193.

But the attorney-general may maintain an action for a receiver where the officers are guilty of misconduct, and he must if in his opinion the public interest require it, under New York Code, §§ 1781, 1782, 1808, 1810. This however is an action for account. Keeler v. Brooklyn Elev. R. Co. 9 Abb. N. C. 166; People v. Bruff, 9 Abb. N. C. 153.

And he may sue for the appointment of a receiver of an insurance company under New York Laws 1853, chap. 463, § 17, and Laws 1869, chap. 902, where the superintendent of insurance notifies him that the assets of an insurance company are insufficient to reinsure its outstanding risks. Atty-Gen. v. Guardian Mut. L. Ins. Co. 77 N. Y. 272.

But courts have no jurisdiction to appoint a receiver of a corporation in the absence of express authority. Baker v. Louisiana Portable R. Co. 34 La. Ann. 754; Wheeler v. Pullman Iron & Steel Co. (Ill.) 17 L. R. A. 818; People v. Judge of St. Clair Circuit, 31 Mich. 456; Denike v. New York & R. Lime & C. Co. 80 N. Y. 599.

And a decree of a New York court dissolving a corporation at the instance of a stockholder and appointing a receiver not shown to be in compliance with the New York statutes will be ignored in Massachusetts where such receiver asserts his claim for a fund. Folger v. Columbian Ins. Co. 99 Mass. 267, 96 Am. Dec. 747.

will be strictly construed, and the power exercised with great caution.

High, Receivers, 2d ed. § 289.

The interest must be a present vested interest, not one that is contingent or uncertain.

High, Receivers, 2d ed. § 12; 1 Dan. Ch. Pr. 3d Am. ed. 323; Steele v. Aspy, 128 Ind. 367; Taylor v. Holmes, 127 U. S. 489, 32 L. ed. 179. Under our statute a receiver can be appointed only when such appointment is incident to some other relief to which the plaintiff shows himself to be entitled in a pending suit, and the statute does not authorize the appointment of a receiver where the sole object is to secure such appointment and nothing else.

Bufkin v. Boyce, 104 Ind. 53; Davis v. Flagstaff Silver Min. Co. 2 Utah, 74; High, Receivers, 298; Cincinnati, H. & D. R. Co. v. Duckworth, 2 Ohio C. C. 518; 21 Week. L. Bull. 36; Clement & B. Ohio Dig. vol. 4, p. 336; The French Bank Case, 53 Cal. 495; Neail v. Hill, 16 Cal. 145, 76 Am. Dec. 508.

Messrs. Baker & Daniels, A. C. Harris and Hawkins & Smith, for appellees:

Upon an appeal from an interlocutory order appointing a receiver, the sufficiency of the complaint cannot be tested.

The evidence in this cause is not in the record and the complaint is not verified, and therefore the question of its sufficiency cannot be raised upon this appeal.

Main v. Ginthert, 92 Ind. 181; Hursh v. Hursh, 99 Ind. 500; Naylor v. Sidener, 106 Ind. 184.

It is urged that, as the corporation had the power of assessment, it had a right to make

ter of a bank could not be annulled by a court of equity. Bayless v. Orne, Freem. Ch. 161.

And the discretionary power to appoint a receiver of a corporation, after it has dissolved by proceedings under New Jersey Rev. Stat., p. 182, authoriz ing the directors to close up its affairs, should be exercised only for good cause shown. Newfoundland R. Constr. Co. v. Schack, 44 N. J. Eq. 222.

But where the company has been preferring the directors the management should not be left to them. Nichols v. Perry Patent Arm Co. 11 N. J. Eq. 126.

And under R. I. Rev. Stat., chap. 126, § 47, a receiver may be appointed if the bank is mismanaged so as to jeopardize the public. Bank Comrs. v. Rhode Island Cent. Bank, 5 R. I. 12.

But in New York where a bank was organized under the Act of April 18, 1838, it was held that a receiver would not be appointed at the instance of a simple contract creditor where the business was discontinued, and there was a large amount of notes outstanding unpaid, as the dissolution would only be ordered for causes arising under section 27 of the Act above. Parmly v. Tenth Ward Bank, 3 Edw. Ch. 395, 6 L. ed. 702.

So where the Connecticut statute required a corporation vote to wind up its affairs or that the plaintiffs should represent one third of the stock a receiver would not be appointed in a case that did not come within the terms of the statute. Hardon v. Newton, 14 Blatchf, 376.

And in a suit by stockholders alleging insolvency and that the company had not taken the proper steps to incorporate, and had not complied with the statute in regard to statistical reports, and that all the property was about to be seized on a small execution, a receiver will not be appointed as no jurisdiction in equity is shown. Baker v. Backus, 32

assessments upon the members from time to time, and that it could not become insolvent. This right to make assessments is not an asset and cannot be enforced.

Niblack, Mut. Ben. Soc. 276-351, 353; Bacon, Mut. Ben. Soc. 377-479; Re Protection L. Ins. Co. 9 Biss. 188.

Insolvency means inability from want of property liable to execution to pay debts. Herald v. Scott, 2 Ind, 55.

A stockholder may apply for the appointment of a receiver for the corporate property without first applying to the corporate officers or managers, for the application might give the management the opportunity to greatly depreciate and destroy the corporate property before any redress could be had. And if the application alleged wrongs were being committed by the managers, it would be a useless thing to apply to the wrongdoers to undo what had been done.

1 Morawetz, Priv. Corp. § 245; Wayne Pike Co. v. Hammons, 129 Ind. 368.

In First Nat. Bank of Mauch Chunk v. United States Encaustic Tile Co., 105 Ind. 227, the court says: "Section 1222, Rev. Stat. 1881, in force since September 19, 1881, specifies a number of cases wherein a receiver may be appointed by the court, or the judge thereof in vacation. In some of these cases it is manifest that the appointment of a receiver is, and was intended to be, merely an ancillary proceeding in a pending suit, for the purpose of placing property, which is the subject of the litigation, in custodia legis until the suit is determined, and the rights of the parties are ascertained.

And in Strong v. McCagg, 55 Wis. 625, it was held that there was no statute authorizing one of several stockholders to maintain a bill in equity, in his own name or in the name of the state, without leave being first had to have a receiver and for dissolution of the corporation and distribution.

As to receiver in case of consent.

A corporation is not entitled to have a receiver appointed for itself on its own application. Kimball v. Goodburn, 32 Mich. 10; Hugh v. McRae, Chase Dec. 456.

But in Louisiana where the stockholders of a bank show by resolution that such steps should be taken by the officers of the corporation as are necessary for liquidation, an application for an appointment of a receiver was sustained. Re Louisiana Sav. Bank & Safe Deposit Co. 35 La. Ann. 196. So where the corporation acquiesces for nine months and where distribution is about to be made, the defendant corporation cannot then question the jurisdiction of the court or object to the want of equity. Brown v. Lake Superior Iron Co. 134 U.S. 530, 33 L. ed. 1021.

pro

In some of the cases specified, however, vision is made for the appointment of a receiver by the court or the judge thereof in vacation, where such an appointment is the only purpose of the suit, and the only relief demanded therein. Thus, the section cited provides that a receiver may be appointed by the court, or judge thereof in vacation, 'when a corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency, or has forfeited its corporate rights.'

See also Wayne Pike Co. v. Hammons, supra. The judge in vacation has the same powers, as to the appointment of receivers, that the court has in term, and the language "judge in vacation" means "court in vacation," as he is vested with the judicial power of the state. Pressley v. Lamb, 105 Înd. 171.

Olds, J., delivered the opinion of the

court:

The appellees, Albert R. Baker, Homer A. Sampsell, and Dan W. Kneffler brought this suit in the Marion superior court against the appellant, The Supreme Sitting of the Order of the Iron Hall. A receiver was appointed, and from the interlocutory judgment appointing a receiver this appeal is prosecuted.

The complaint alleges that the appellant was incorporated in December, 1881, under the laws of this state authorizing the organization of voluntary associations; that one object of the corporation is to establish a benefit fund from which members of the said order who have complied with all its rules and regulations, or the heirs of such mem

| corporation in the hands of trustees amounts to an abdication of the functions of the board, and a receiver will then be appointed where the corporation is insolvent. Consolidated Tank-Line Co. v. Kansas City Varnish Co. 43 Fed. Rep. 204.

But a receiver was refused where the bill of complaint alleged that the president of the corporation left the state some years ago, that it had no office or place of business, and had ceased to manufacture. It being questionable whether the special administrator who brought the suit could maintain his office, and the allegations of the bill as to mismanagement being made on information. Briarfield Iron Works Co. v. Foster, 54 Ala, 6:2.

And the action for a receiver for nonuser of a charter for more than a year cannot be brought by a stockholder but must be by the attorney-general under the New York statutes. Gilman v. Greenpoint Sugar Co. 4 Lans. 482.

48 to appointment of receivers where the officers disagree as to management.

A receiver will be appointed where there is such a dispute among the members of a governing body as prevents the affairs being carried on properly.

corporation ceasing to act.

It seems that a receiver will be appointed where the corporation ceases to exist, or abandons its business, and neglects to elect its officers and there is no one to administer or care for its effects. Smith v. Danzig, 64 How. Pr. 320; Lawrence v. Greenwich F. Ins. Co. 1 Paige, 587, 2 L. ed. 762; Crumlish v. Shenandoah Valley R. Co. 28 W. Va. 623; Finney v. Bennett, 27 Gratt. 365; Buck v. Piedmont & A. L. Ins. Co. 4 Hughes, 415; Stark v. Burke, 6 La. Ann. 740: St. Louis & S. Coal & Min. Co. v. Edwards, 103 lll. 472.

Auxiliary Co. v. Vickers, L. R. 16 Eq. 303; Sheppard v. Oxenford, 1 Kay & J. 491.

And a receiver was appointed to take charge of and manage a railroad until it could be ascertained who were the legitimate stockholders, to whom the custody of the railroad should be committed. Stevens v. Davison, 18 Gratt. 819.

But a receiver should not be appointed where plaintiff and defendant own all the stock in a corporation and have disagreed as to the mode of its valuation, and complainant has excluded the defendant from control. (There was no averment of