or laws of the United States"-quite true in this state, when its courts so declare, but nothing less than that declaration will overcome the formidable reasons to the contrary.

But the French Bank case construed subdivision 5 of section 564, above, otherwise. Before quoting what is said in this case as to this subdivision, it should be borne in mind that it has been decided that neither upon the institution by the state of a suit to dissolve a corporation, nor upon the final judgment of dissolution, does the court have any power to appoint a receiver, for it is said that the state has no interest in either the assets or debts of the corporation, and that the court has no authority to undertake the distribution of the assets and the winding up of its affairs; that Civil Code, section 400, "does not authorize the court to take upon itself the power to settle its affairs, or to appoint a receiver for that purpose; that the administration of the assets of a corporation dissolved, voluntarily or involuntarily, must be made by the directors under section 400 of the Civil Code; and in the State Investment case, at page 148, that "the power of a court to appoint any persons in the place of those who are directors of the corporation at the time of its dissolution is given in section 565 of the Code of Civil Procedure." Therefore, there remains only subdivision 5 of section 564 above to be considered to ascertain whether a creditor or stockholder can secure the appointment of a receiver for a corporation for any

7 State etc. Ins. Co. v. Superior Court, 101 Cal. 135-149, 35 Pac. 549; Harrison v. Hebbard, 101 Cal. 152, 35 Pac. 555; Havemeyer v. Superior Court, 84 Cal. 327, 361-380, 18 Am. St. Rep. 192, 10 L. R. A. 627, 24 Pac. 121; Code of Civil Procedure, sec. 803.

8 Crossman v. Vivienda Water Co., 150 Cal. 575-580, 89 Pac. 335; Newhall v. Western Zinc Min. Co., 164 Cal. 380, 128 Pac. 1040; Lowe v. Superior Court, 165 Cal. 708, 134 Pac. 190; Brandon v. Umpqua, 166 Cal. 322, 136 Pac. 62.

reason. That this may be done would seem to appear too obvious for reasonable doubt. But in the French Bank case the court said (p. 553), "the authority conferred upon the court to make the appointment necessarily presupposes that an action is pending before it, instituted by some one authorized by law to commence it. But there is no statute of this state which undertakes to confer upon a private person, either as a stockholder or creditor, the right to maintain an action to dissolve a corporation upon the ground that it is insolvent, or to obtain relief by seizing its property out of the hands of its constituted management, and placing it in the hands of a receiver," and on the statement of facts, detailed supra, the court held that the creditor was not entitled to ask for the appointment of a receiver.

But there was an action pending, and it was instituted by one authorized to bring it. It was to recover a debt; and the appointment of a receiver, if made, would be only ancillary; if the prayer was for more it was surplusage. It does not matter whether there is any statute authorizing a private person to maintain an action to dissolve a corporation. If it be claimed that appointing a receiver dissolves a corporation, which it does not, this statute in effect authorizes it. And the concluding clause, quoted above, is directly negatived by this statute. But this case, and the other cases cited, are unreversed, and therefore state the law as it exists in this state.

It is ordinarily quite true, as was said in the French Bank case, that "there is, of course, no such thing as an action brought distinctly for the mere appointment

• This extract was quoted with apparent approval in the arguments of the opinions to sustain the decisions in Fischer v. Superior Court, 110 Cal. 129, 141, 42 Pac. 561; Murray v. Superior Court, 129 Cal. 628, 632, 62 Pac. 191, and Hobson v. Pacific States Mercantile Co., 5 Cal. App. 94-101, 89 Pac. 866.

of a receiver; such an appointment, when made, is ancillary to or in aid of the action brought. Its purpose is to preserve the property pending the litigation so that the relief awarded by the judgment, if any, may be effective."

Section 564 provides that a receiver may be appointed when "an action is pending" in cases where the corporation "is insolvent or in imminent danger of insolvency." This is in addition to the right declared in the next subdivision that receivers may be appointed in "other cases" where they have been theretofore "appointed by the usages of courts of equity." This section is entirely independent of cases where the corporation has been dissolved; those are provided for in the next section.

Aside from cases brought to dissolve the corporation, who could bring an action against a corporation? No person in the world but a creditor or a stockholder. For what purpose? Only to recover a debt or property or a dividend (which is a debt). For misappropriation or mismanagement the action would be against the officers; to dissolve, the action must be brought by the state. Nor need the creditor's claim be reduced to judgment, for that case is provided for in subdivisions 3 and 4, and the cases provided for in subdivisions 1 and 2 relate to specific property. It would seem that there never was a statute expressed in clearer language; that none is more incapable of several meanings; and that it irresistibly follows that subdivision 5 applies to a case of a creditor of a corporation seeking to enforce payment of the debt owing to him.

NOTICE OF APPLICATION

An injunction suspending the general and ordinary business of a corporation (which could occur only in a suit to dissolve a corporation, or in one in which a

receiver is appointed) can not be granted without due notice of the application to the corporation, except where the state is the plaintiff (section 531, supra).

RECEIVERS ON REMOVAL OF DIRECTORS

Where the directors have been removed by the court for fraudulent acts, to the injury of the corporation and to their own benefit, the court may appoint a receiver to take charge of the property of the corporation, if necessary to preserve it. It was said such appointment was not directed toward closing up the affairs of a corporation, nor was it an attempt to dissolve the corporation; and while the appointment was not for the latter purposes, still circumstances might arise which would justify a sale of a part of the property.10

OTHER GROUNDS

Among the grounds upon which equity will appoint receivers it was said in cases to hold directors accountable for abuse of their trust;11 and sometimes to prevent irreparable loss and waste through gross mismanagement; and where there is such dissension in the governing body as to practically prevent the carrying on of the business of the corporation; or where the offices are vacant and the corporation neglects or is unable for any reason to replace them, but not if officers are holding over after the expiration of the term for which they were elected. There are many other reasons which are stated by writers on this sub10 California Fruit Growers' Assn. v. Superior Court, 8 Cal. App. 711, 97 Pac. 769, citing Wickersham v. Crittenden, 93 Cal. 17, 32, 28 Pac. 788, to effect that a court of equity could remove directors for fraud (a dictum in that case), which dictum was quoted, by way of argument, in Whitehead v. Sweet, 126 Cal. 67-76, 58 Pac.

11 Dictum in Fischer v. Superior Court, 110 Cal. 129, 140, 42 Pac. 561.

ject. None of them, except those contained in the cases already cited, have come before our appellate courts.

In regard to receivership for specific property, the same rules apply as in case of individuals. Such cases most often arise where property mortgaged by them is insufficient to pay the debt and it is necessary to sequester the income for that purpose during the pendency of the foreclosure proceedings.

MAY BE APPOINTED BY JUDGE AT CHAMBERS

It will be observed that section 564 expressly provides that the appointment may be made either by the court or a judge thereof, while section 565 designates only the superior court as the appointive power, also that section 400 of the Civil Code refers only to the court in that connection.

In a case under the insolvent act which provided that "a receiver may be appointed by the court," the court decided that under this act, taken in connection with the provisions of the Code of Civil Procedure, an appointment of a receiver by the judge at chambers on an ex parte application was legal.12

INCOME, RENTS, AND GROWING CROPS

If a mortgage of real estate covers also the rents, issues, and profits, if there are no rights of other parties intervening, a receiver may take possession of the growing crops;13 but if before the receiver takes possession an innocent purchaser buys the crops, such purchaser gets good title;14 when, however, the receiver

12 Real Estate Associates v. Superior Court, 60 Cal. 223. 18 Montgomery v. Merrill, 65 Cal. 432, 4 Pac. 414.

14 Simpson v. Ferguson, 112 Cal. 180, 53 Am. St. Rep. 201, 40 Pac. 104, 44 Pac. 484; Locke v. Klunker, 123 Cal. 231, 235, 55 Pac. 993; Bank of Woodland v. Heron, 120 Cal. 614, 52 Pac. 1006.