217 Mich. 435 | Mich. | 1922
In January, 1920, defendant Ekenberg Company, of Cortland, New York, owned a milk plant in Elsie, another at Ovid, and a cheese factory at Eureka, in Clinton county, in this State. On January 3, 1920, the Ekenberg Company sold these properties to defendant Leroy Corliss for a consideration of $120,000. Fifteen thousand dollars was paid down and the balance was evidenced by promissory notes, payable on various dates up to August 1, 1920. Corliss took possession of the plants and soon thereafter transferred his interest to the defendant Waterloo Creamery Company, and that company commenced to operate them; and continued to do so until September 23, 1920, when they were closed on account of insufficient funds.
The plaintiff purchased $30,000 of these notes. When they became due they were not paid and plaintiff filed this bill praying that its notes be declared a first lien on the property and that a temporary receiver be appointed to operate the plants. After the filing of this bill, and on September 10, 1920, the plaintiff, with other note holders, had a conference with Corliss and the creamery company and an agreement was reached in which Corliss and the creamery company agreed to assign their equitable interests in the plants to one Kramer, as trustee, to further secure the payment of the notes. Corliss and the creamery company further promised to make a payment of $10,000 at once and further smaller payments at stated times. This agreement also provided that Corliss and the creamery company should execute a bill of sale of the machinery and equipment which they had added to the plant since their purchase, and that there should be
(1) That the court had no power to appoint a receiver of the real estate and the income thereof.
(2) That the sale, if one is to be had, should be a foreclosure sale.
We are in accord with the chancellor’s conclusion that the character of the property involved makes it an exception to the general rule that sales of real estate must be followed by a period of redemption. In considering the question of redemption the following exception is made in 27 Cyc. p. 1800:
“It has been held that a law providing a right of redemption from sales of real estate does not cover the case of a sale of the entire property of a quasi-public corporation, such as a railroad or a water company, including its real and personal property and franchise, but such a sale may be made as an entirety and without redemption.” Citing Peoria, etc., R. Co.*439 v. Thompson, 103 Ill. 187; Hammock v. Loan & Trust Co., 105 U. S. 77; Pacific Northwest Packing Co. v. Allen, 54 C. C. A. 648, 116 Fed. 312; Farmers’ Loan & Trust Co. v. Iowa Water Co., 78 Fed. 881; Turner v. Railway Co., 24 Fed. Cas. No. 14259, 8 Biss. 380.
This exception is quoted and approved in Webber v. Genesee Circuit Judge, 184 Mich. 112. The question arose in that case over the order of sale of the properties of the Fenton Light & Power Company, which company was in the possession of a receiver. After quoting at length from Hammock v. Loan & Trust Co., supra, as to the reasons for thei exception, the court said:
“So in the instant case, the business of this company being to furnish electricity for the village of Fenton and its citizens, the plant itself would have comparatively little value without its franchise, and, for the reason stated in the opinion cited it was within the power of the court in a proper case to order all the property sold as an entirety and without redemption.” Citing authorities.
But counsel’s reply to these , cases is that it is an exception which has been created and applies only to quasi-public. corporations. This same assertion was made in Pacific Northwest Packing Co. v. Allen, supra, but the court did not agree with it. It was there said:
“The general doctrine applicable to this case is not confined solely to railroad property, nor to cases where the general public is interested. It has been applied to canals, telegraphs, telephones, electric light, gas, and water plants as well as railroads; and in all such cases it has been held, under a great variety of circumstances and conditions — some stronger and others less in degree than presented in this case, — that the entire property should be sold as an entirety, without the right of redemption, notwithstanding the provisions of the State statutes where the property is situated allowing redemption of real estate.”