Annotation. Pledge-Delivery-Attachment. For a transfer of stock to be valid against creditors of the pledgor, there must be an actual delivery and continued change of possession, and if the change of possession is only momentary, and they are at once returned to the pledgor, no valid pledge is constituted against the creditors of the pledgor, and the stock may be attached and sold under execution against him. (McFall v. Buckeye etc. Assn., 122 Cal. 468, 68 Am. St. Rep. 47, 55 Pac. 253.) Misnomer in Notice.-A notice of garnishment served on the "Donohoe-Kelly Company" instead of the "Donohoe-Kelly Banking Co.,'' is not void when no question is made that the corporation intended to be reached was the "Donohoe-Kelly Banking Co. (Donohoe-Kelly Banking Co. v. S. P. Co., 138 Cal. 183, 94 Am. St. Rep. 28, 71 Pac. 93.) CHAPTER V. RECEIVERS. § 564. Appointment of receiver. $565. Appointment of receivers upon dissolution of corporations. APPOINTMENT OF RECEIVER. Sec. 564, C. C. P. A receiver may be appointed by the court in which an action is pending, or by the judge thereof: . . . "5. In the cases when a corporation has been dissolved, or is insolvent, or in imminent danger of insolvency, or has forfeited its corporate rights"; . . . . En. March 11, 1872. See sec. 565, post. Legislative History. ... This section is based on section 143 of the practice act of 1851, page 51, amended 1854, page 61. Section Cited. French Bank Case, 53 Cal. 550; Havemeyer v. Superior Court, 84 Cal. 355, 18 Am. St. Rep. 192, 24 Pac. 121; Fischer v. Superior Court, 110 Cal. 140, 42 Pac. 561; Murray v. Superior Court, 129 Cal. 632, 62 Pac. 191. Annotation. Construction of Section.-The true construction of section 564, Code of Civil Procedure, makes it permissive and not mandatory, and is to be found in section 565, Code of Civil Procedure, which enumerates the creditors and stockholders as the only parties whose interest can demand the appointment of a receiver of such corporation. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.) Power of Court to Appoint.-Courts of equity are without power to appoint receiver for corporation in aid of suit prosecuted by private person against corporation, but such power must be derived fromr & statute conferring it upon the court. (Neall v. Hill, 16 Cal. 145, 76 Am. Dec. 508; French Bank Case, 53 Cal. 495. Note citations: 19 Am. Dec. 429, 430; 64 Am. Dec. 485.) A court of equity has no inherent power to appoint a receiver of an insolvent corporation merely because of its insolvency, or to wind up its affairs, in the absence of statutory provision. Section 565 of the Code of Civil Procedure provides only for the appointment of a receiver upon dissolution of corporation; and subdivision 5 of section 564, Code of Civil Procedure does not contemplate the appointment of a receiver of an insolvent corporation in an action brought merely for that purpose, but only as ancillary to an action instituted against the insolvent corporation by some one authorized by law to commence it. (Murray v. Superior Court, 129 Cal. 628, 62 Pac. 191.) In absence of statute regulating the matter, a court of equity would have the right, at suit of a stockholder or creditor, to appoint receiver to administer the property of a dissolved corporation. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.) The superior court has no jurisdiction to appoint a receiver of a life insurance company organized on the assessment plan, under the act of 1891 (Stats. 1891, p. 126), and to take its assets from a control of its directors at suit of a member thereof, where there is no showing of fraud or mismanagement, or that the corporation has been dissolved, or has been adjudged insolvent, or has forfeited its right to do business under the act of 1891. (Murray v. Superior Court, 129 Cal. 628, 62 Pac. 191.) There is no authority under section 564, Code of Civil Procedure, or any other legislative enactment, to seize the property of a corporation out of the hands of the constituted management, and place it in the hands of a receiver during pendency of an action. (Fischer v. Superior Court, 110 Cal. 129, 42 Pac. 561.) The act of 1893 creating commissioners of building and loan associations does not authorize the court to appoint a receiver therein regardless of the general principles of equity, but only in the discretion of the court in a proper case for such appointment. (People v. Building etc. Assn., 127 Cal. 400, 59 Pac. 692.) An action against a corporation upon an unsecured promissory note is an action at law, and the appointment of a receiver in such a case is unauthorized, and will be annulled on certiorari, although the corporation is alleged to be insolvent. (Smith v. Superior Court of Los Angeles, 97 Cal. 348, 32 Pac. 322.) Where the court appointed a receiver of the property held by the corporation upon the allegation that the corporation was a mere agent or medium for carrying on the partnership business, and, upon the trial, found that the corporation was not the agent of the partnership, and never carried on the partnership business in any manner, an order directing the receiver to deliver the property to the corporation is proper, and should be affirmed. (Loftus v. Fisher, 117 Cal. 128, 48 Pac. 1030.) APPOINTMENT OF RECEIVERS UPON DISSOLUTION OF CORPORATIONS. Sec. 565, C. C P. Upon the dissolution of any corporation, the superior court of the county in which the corporation carries on its business, or has its principal place of business, on application of any creditor of the corporation, or of any stockholder or member thereof, may appoint one or more persons to be receivers or trustees of the corporation, to take charge of the estate and effects thereof, and to collect the debts and property due and belonging to the corporation, and to pay the outstanding debts thereof, and to divide the moneys and other property that shall remain over, among the stockholders or members. En. March 11, 1872. Amd. 1880, 4. See sec. 564, ante. Dissolution, involuntary: C. C., secs. 399, 400, and this code, post, sec. 802 et seq.; voluntary: Sec. 1227, C. C. P., et seq., post. Legislative History. This section is drawn from sections 16 and 18 of the corporation act of 1850, page 347 and section 25 of the savings and loan society act of 1862, page 199. The amendment of 1880 changed "district court", to "superior court." Section Cited. Havemeyer v. Superior Court, 84 Cal. 366, 369-380, 18 Am. St. Rep. 192, 24 Pac. 121; People v. Superior Court, 100 Cal. 119, 34 Pac. 492; State I. etc. Co. v. Superior Court, 101 Cal. 148, 35 Pac. 549; Yore v. Superior Court, 108 Cal. 435, 438, 41 Pac. 477; Murray v. Superior Court, 129 Cal. 631, 62 Pac. 191. Annotation. Appointment of Receiver.-A receiver cannot be appointed in an action by stockholders for settlement of its affairs. (Neall v. Hill, 16 Cal. 145, 76 Am. Dec. 508. To same effect: French Bank Case, 53 Cal. 550; Fischer v. Superior Court, 110 Cal. 140, 42 Pac. 561. Distinguished: People v. Superior Court, 100 Cal. 117, 34 Pac. 392. Note citations: 64 Am. Dec. 485; 48 Am. St. Rep. 692.) Order appointing receiver in quo warranto proceeding, upon judgment of forfeiture of corporate franchise, is void in toto, not only as to strangers to such proceeding, but also as to corporation, and its stockholders and vendees. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121; Yore v. Superior Court, 108 Cal. 431, 41 Pac. 477.) No receiver of property of corporation can be appointed, unless guit is commenced by a creditor or stockholder of the corporation. for that purpose under section 565, Code of Civil Procedure. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.) A receiver may be appointed in action by a stockholder to recover moneys of which the corporation is fraudulently deprived in behalf of the corporation and stockholders generally to receive the moneys collected and distribute them. (Fox v. Hale & Norcross etc. Co., 108 Cal. 475, 41 Pac. 328. To same effect: Chetwood v. Bank, 113 Cal. 654, 45 Pac. 854.) Fact that appointment of receiver of property of corporation was contested by stockholders, who requested that directors might be permitted to settle the business, does not bind him by an order appointing a receiver of property held by them as purchasers from the corporation. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.) Limitation of Power of Appointment.-The authority given in this section to appoint receivers is the measure of the power granted, and can only be exercised upon an application therefor of a creditor or stockholder of the corporation, and can neither be invoked by a stranger nor assumed by the court of its own motion (State Ins. etc. Co. v. Superior Court, 101 Cal. 135, 35 Pac. 549), and upon dissolution of the corporation. (Yore v. Superior Court, 108 Cal. 431, 41 Pac. 477.) Under sections 564 and 565, Code of Civil Procedure, the administration and distribution of the assets of a dissolved corporation is left, as a rule, to the directors in office at the date of dissolution; though such dissolution be upon judgment of forfeiture; and ap pointment of receiver is an exception, to be made only in cases. of neglect of duty or abuse of power by directors, when required for protection of rights of stockholders or creditors. (Havemeyer v. Superior Court, 84 Cal. 327, 18 Am. St. Rep. 192, 24 Pac. 121.) TITLE IX. CHAPTER I. THE EXECUTION. § 688. What shall be liable to be seized in execution-Not to be affected until levy is made. WHAT SHALL BE LIABLE TO BE SEIZED IN EXECUTION— NOT TO BE AFFECTED TILL A LEVY IS MADE. Sec. 688, C. C. P. All goods, chattels, moneys, and other property, both real and personal, or any interest therein of the judgment debtor, not exempt by law, and all property and rights of property seized and held under attachment in the action, are liable to execution. Shares and interests in any corporation or company, and debts and credits, and all other property, both real and personal, or any interest in either real or personal property, and all other property not capable of manual delivery, may be attached on execution, in like manner as upon writs of attachment. Golddust must be returned by the officer as so much money collected at its current value, without exposing the same to sale. Until a levy, property is not affected by the execution. En. March 11, 1872. Goodwill: C. C., secs. 992, 993. Legislative History. This section is based on section 217 of the practice act of 1851, page 51, amended 1854, page 62. Section Cited. Section cited as to shares and interests in corporation: Payne v. Elliott, 54 Cal. 342, 35 Am. Rep. 80; Lowenberg v. Greenebaum, 99 Cal. 165, 37 Am. St. Rep. 42, 33 Pac. 794; Risdon Iron Works v. Citizens' etc. Co., 122 Cal. 97, 68 Am. St. Rep. 25, 54 Pac. 529; West Coast Faucet Co. v. Wulff, 133 Cal. 317, 85 Am. St. Rep. 171, 65 Pac. 622; Donohoe-Kelly Banking Co. v. S. P. Co., 138 Cal. 194, 94 Am. St. Rep. 28, 71 Pac. 93. |