36 S.E. 189 | N.C. | 1900
This was an action by certain bondholders secured by a deed in trust upon the defendant's property, alleging insolvency, asking *594 a decree of foreclosure, and a receiver pendente lite. The action was begun in 1894, a receiver appointed soon thereafter, and a decree of foreclosure at March Term, 1895, sale thereunder 6 July, for the sum of $10,000, and report confirmed at August Term, 1895. At the same term, the Falls of Neuse Manufacturing Company was allowed to intervene, and the plaintiff bondholders excepted, which exception is one of the matters which now come up for review.
The ground of intervention by said Falls of Neuse Manufacturing Company, set out in its petition to intervene, is that it is the owner of a valuable tract of land and waterpower which have been injured by water ponded back upon said tract by a dam built by one Carrier, on his own land, which dam the defendant railway company subsequently bought and took possession of, and thereafter continued to pond the water back and overflow the land of said petitioner.
(920) It was error to allow the Falls of Neuse Manufacturing Company to intervene, and the exception of the plaintiff thereto must be sustained.
The claim of the petitioners, if valid, is an indebtedness of the defendant which has no right to share in the fund raised by the sale under the mortgage, nor is its assertion a germane matter of this action whose sole purpose is to foreclose said mortgage and disburse the proceeds among the bondholders. The petitioners rely upon the Code, secs. 685 and 1255. Section 685 has no application except when the prior creditors assert their rights by action within sixty days after the registration of a mortgage or other conveyance. Section 1255 does not apply because, as said in Coal Co.v. Electric Co.,
The intervener here was not a party to the foreclosure proceeding and *595 did not seek to be made a party till after the sale had been made under it. The purchaser stands in the shoes of the original debtor, (921) bought only such interest as he could mortgage as against the Falls of Neuse Manufacturing Company, and subject to any judgment it might obtain, and the Falls of Neuse Manufacturing Company has no right to share in the proceeds of such sale. It must proceed against its debtor and assert its rights by execution against the property, notwithstanding the foreclosure sale, just as was held in R. R. v. Burnett, supra.
The same doctrine was reiterated in Belvin v. Paper Co.,
There being error in admitting the petitioner to intervene over the plaintiff's exception, it is unnecessary to discuss the other exceptions subsequently raised, for whatever views might be expressed would be obiterdicta.
Error.
Cited: Clement v. King,
(922)