People ex rel. Port Huron & Gratiot Railway Co. v. Judge of St. Clair Circuit

Equity jurisprudence: Corporations: Management of corporate business: Directors : Deceivers. A court of chancery cannot take from the directors of a corporation or vest in a receiver the management and control of the corporate business, except in proceedings under the statutes (Comp. L., 1871, ch. $06, $07) to dissolve the corporation. Deceivers: Injunction: Ex parte applications : Corporate management: Directors. The ex parte appointment of a receiver to manage the corporate business, and the ex parte granting of an interlocutory injunction to deprive the directors of control, are more than irregular and are absolutely void, as beyond the power of the court. Mandamus: Demedy. Mandamus is granted iu this case to require the respondent to vacate an order appointing such a receiver, and to dissolve such an injunction.

Application for Mandamus. The writ is sought in this case to require the respondent to vacate an order appointing a receiver over the Port Huron & Gratiot Railway Company and to dissolve an injunction restraining the majority of the directors of said company from the management and control of the corporate business. The orders, appointing the receiver and granting the injunction, were made on ex parte applications, in a chancery suit brought in the St. Clair circuit by three out of seven of the directors of the company, against the company and its four other directors, complaining of the mismanagement of the corporate business and misappropriation of the funds, against the protests of the complainant directors, by secret combinations of the defendant directors to advance their own interests to the detriment of the corporation and its stockholders, praying for a disclosure of their doings in that regard, and seeking to have the control of the corporate business taken out of their hands and placed in those of a receiver to be appointed by the court. Motions, to dissolve the injunction and to vacate the order appointing a receiver, were made in the circuit, and denied; and thereupon this application for mandamus was made. The respondent, in his answer to the order to show-cause, objected, among other things, that the proper remedy was by appeal, and that mandamus would not lie.