The opinion
Petition for rehearing denied May 16, 1933
On Petition eok Rehearing
(21P. (2d) 1100)
BAILEY, J.
In a petition for rehearing, the respondent, Mt. Hood Electric Company, makes the following statement:
“The court erred in finding that a revised statement of the corporation would show that the liabilities would exceed the assets by at least $27,000, the court having failed to consider that the stock liability would be reduced or paid up, under this decree, to exactly the same amount as it is determined that the value of the property of the company should be reduced, that the salary liability can not be set up until the amount is fixed in the manner provided in this opinion.
“In support of our contention that a revised statement of the company’s affairs, if we give effect to'the court’s ruling, we submit the following statement show
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ing a financial statement of the company as it would appear as of August 31, 1931, after giving effect to a revaluation of the property, the cancelation of a corresponding amount of common stock, the cancelation of the salaries, and the increase of the operating surplus in a corresponding amount, namely:
“Financial Statement
Assets
Cash...........$ 102.07
Accounts receivable...... 2,208.86
Equipment.........40,448.10
Corns. — deferred....... 920.00
$43,679.03
Liabilities
$ 906.98 Accounts payable.......
1,000.00 Notes payable........
14,000.00 Capital stock — Common.....
17,100.00 Capital stock- — Preferred . . . .
Surplus — Capital . . . $8,436.04
10,672.05 Surplus — Oper..... 2,236.01
$43,679.03
“If, however, the stock in excess of the value of $13,000 should be paid in, the cash would be increased by $25,000, the equipment decreased by $25,000, and the stock liability would remain the same”.
Mr. Myers, as pointed out in the former opinion, had subscribed for 380 shares of the common stock at $100 per share, and 20 shares of stock of no par value, which latter shares were determined to be of equal value to the preferred stock, or $100 per share, making in all $40,000 worth of stock subscribed by him. In our former opinion we held that the total value of the property transferred by Myers to the corporation, together with services of his attorney, did not exceed $13,000, thus leaving a difference of $27,000.
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The foregoing quoted statement of the value of the equipment is based upon a reduction of $25,000, apparently on the assumption of respondent, as appears elsewhere in its brief, that the total value paid to Mr. Myers was $38,000, which was the face value of the common stock received by him but did not include any valuation for the stock of no par value. We were, due to lack of testimony, unable to determine the value of the equipment, but it was definitely decided that $40,000 worth of the stock was exchanged for property and services not worth in excess of $13,000.
In the event the respondent and its officers who are interested in receiving compensation for past services, should see fit, as intimated in the foregoing quotation, to cancel any obligation for past salaries for services, and if, in addition, the excess stock should be returned to the corporation, the necessity for the appointment of a receiver would in all probability be eliminated. In order that the need of a receiver might be obviated, we suggested in our former opinion that the amount of compensation, if any, to the officers of the corporation, might be determined in the subsequent proceedings in the circuit court, and that the question of return of the stock might be disposed of in like manner.
If the complaint be not amended so that these issues can be determined, the officers and directors who are affected by the salary question and the suggested return of excess stock may appear, by way of intervention or otherwise, and have such matters determined. If this is done, the final determination of these matters may obviate the necessity for the appointment of a receiver. If it is not done, it will be necessary to appoint a receiver to bring suit for the cancelation of the
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certificates for the excess stock issued and a determination of the other matters referred to in our former opinion.
The pleadings before us asked for the appointment of a receiver and for an injunction against the payment of certain salaries and compensation to named officers. In order to decide those questions it was necessary to determine the value of the property received by the corporation from Mr. Myers, the validity of the claims for past services, and the legal effect of the purported resolutions of the board of directors regarding such claims.
The officers and directors in charge of the corporation forced the preferred stockholders to pursue this course. The same officers and directors appeared personally in the circuit court, directed the defense of the corporation and testified on its behalf. The petition for rehearing seems to give more importance to their rights than to the good of the corporation.
We desire to emphasize what was said in our former opinion to the effect that a receiver should not be appointed if the affairs of the corporation can be adjusted otherwise.
All other questions’ raised by the petition for rehearing were duly considered in the preparation of our former opinion.
The petition for a rehearing is denied.
Bean and Campbell, JJ., concur; Rand, C. J., not participating.