84 N.C. 705 | N.C. | 1881
That at spring term, 1877, of said court, one B. W. Spillman, as trustee, recovered a judgment against said company for $160.50, of which $150 is principal; and at the same term, Fanny Bass, as executrix of B. W. Bass, recovered a judgment against said company for $154.50, of which $150 is principal. The said judgments were duly docketed in said county, and thereafter by assignment transferred to John A. Moore, who is prosecuting their collection, and that on the 12th of August, 1880, executions on said judgments were issued to the sheriff of Halifax county and he had levied the same on the franchise and real estate of said company, lying in Halifax county, and had advertised the same for sale on the 26th of September ensuing.
On the 24th of August, 1880, a petition was filed in the cause setting forth the above facts, and the further fact that the value of the property and franchise levied upon and *708 advertised for sale was largely in excess of the amounts of said judgments, and if said sale was permitted to proceed the said property and franchise would probably be bought in by the judgment creditors or others at a sacrifice to the company and the state, and prayed that the said John A. Moore and the other creditors of said company be restrained and enjoined from selling said franchise and property, and that they be required forthwith to come in and be made parties to this action, to the end that said claims might be adjusted and equities ascertained and fixed. John A. Moore came in and demurred to all the petition, except that part which insisted that the said defendant and other creditors should be compelled to prosecute their claims in this suit and that their proceedings to sell the franchise and property of the company was illegal, and that part stating the value of the property; and to these he answered that he should not be compelled to prosecute his claim in this action, but had the right to prosecute the same in the usual course of law, and that he had no information as to the value of the property. Upon this petition and answer, His Honor, being of opinion that the creditors should pursue their remedies in this action, made an order restraining and enjoining the said John A. Moore from selling said land or franchise under said executions, and requiring him to appear at Warrenton on the 18th day of September, 1880, and show cause why the injunction should not be continued until the hearing. The hearing of the motion was continued until the 1st day of October, 1880, when His Honor, upon hearing the petition and answer at Halifax, adjudged that the application for an injunction be refused, from which judgment the state appealed. The proceeding adopted in this case for the dissolution and winding up the affairs of the Roanoke Navigation Company is strictly in conformity to the provisions of the act of 1875 — an act which seems to have been drawn up with much care and so intelligibly expresses its purpose and the proceedings prescribed for carrying it into execution, that its interpretation is rendered free from difficulty. We have no doubt it was the intention of the legislature to create a proceeding in nature of a "creditors' bill," but while they have had that remedy in view, in the provisions of the act, they have seen proper to vary somewhat from the established practice in such cases and make this a special proceeding, adapted to the particular circumstances of the case. It is the settled practice in bills filed by creditors in behalf of themselves and all other creditors, who may come in and make themselves parties, c., that no injunction will be granted restraining creditors from instituting and prosecuting actions against the debtor before a decree to account is rendered in the cause, unless they have made themselves parties prior to that stage of the proceeding; in which case it is surmised the court would have the right to exercise that power. But prior to the decree, it is so regarded as the action of the plaintiff alone, that he has exclusive control over the case, and may dismiss or compromise the action at his option, which he cannot do after the decree. For then the cause and parties are under the absolute control of the court, and the property of the debtor is taken in custodia legis, and while the plaintiff still has the conduct of the suit, he ceases to have the absolute control, and cannot dismiss the action without the consent of the court, and in opposition to the wishes of the other creditors who may have made themselves parties.
But in the proceeding under the act of 1875, the publication of the copy of the summons, as prescribed therein, is deemed and held a sufficient service upon all the officers, *710 corporators and persons interested in the affairs of the company, and they are made thereby parties to the suit, subject to such rules and orders as the court may see proper to take in the progress of the action. And before judgment for dissolution, the court may appoint a receiver of its effects, and make the proper order for the settlement of its affairs, as prescribed in chapter 26, section 39, of Battle's Revisal, act of 1871-'2, ch. 199 § 39. By which act it is made the duty of the receiver, when appointed, to collect all debts owing to the company; to sell all its property and effects; to pay all persons having just claims against it; to distribute the surplus effects among the corporators, and pay all costs connected with the settlement.
We think the proper construction of the act of 1875 is, to give the court taking cognizance of the action full control after publication of the copy of the summons of the property and franchise of the company, and of persons interested in the affairs of the company, whether officers, corporators, or creditors, in like manner as the courts have and exercise in the ordinary "creditors' bill," after a decree to account, and sometimes under special circumstances, even before the decree. For if a judgment has been obtained against the debtor by a creditor before a decree, there may be special grounds to prohibit him from taking out execution, though such is not the ordinary rule. Adams Eq., 260. Aside from the general provisions of the act of 1875, which impliedly invest the court, taking cognizance of the case, with the power to interfere, to prevent a sale of the property and franchise of the company on execution, we think there are specialgrounds in this case for such an interference. For if a sale under the defendant's execution should be permitted to proceed, the purchaser would acquire not only the profits but the franchise, with the rights and privileges of receiving the fares and tolls, and recovering such penalties as might he imposed by law, for an injury to *711 the franchise, or for any other cause which such corporation might be entitled to recover, during the time limited in the said purchase of the franchise. Rev. Code, ch. 26, §§ 9, 10, 11 and 12. The property of the company, the rights of the corporators, and the interests of other creditors, would in all probability to a great extent be sacrificed by a forced sale, while the plaintiff in the execution would suffer no other inconvenience than that arising from delay. His debts would in no sense be imperilled or impaired by a postponement of their satisfaction. Such a sale would in a great measure thwart the purposes the legislature had in view in passing the act of 1875 for a dissolution, and winding up and settling the affairs of the company upon a fair and equitable basis.
We are of the opinion that considerations of equity and policy demand that the sale under the executions should be restrained. We are therefore constrained to hold there was error and that the injunction restraining John A. Moore from the further prosecution of his executions, should be continued to the hearing. Let this be certified to the superior court of Halifax county that proceedings may be there had in conformity to this opinion.
Error. Reversed.