Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1878-08-22
CHESTER AND LENOIR N. G. RAILROAD.
Decree Of Judge Mackey on Complaint for
appointment Of Receiver.
THE APPLICATION REFUSED.


THE APPLICATION REFUSED.
The following is the full text of the Decree
of Judge Mackey, filed in the Clerks Office
at Chester, on Thursday last, on the COM
plant of DR.. A. H. Davega, asking for the
appointment of Receiver for the Chester and
Lenoir Narrow Gauge Railroad
The plea to the jurisdiction, as set forth in
the last paragraph of the return, will first be
considered. 1t is true that circuit judge
cannot exercise jurisdiction at chambers un-
less specially vested with the power by the
terms of the statute, or by plain and neces-
sary implication therefrOm. Section l, chap
ter 1O5 of the General Statutes, provides that
!'the circuit courts shall be deemed always
open for the purpose of issuing and returning
mesne and final process and commissions, and
for making and directing all interlocutOry mo
tions. orders, rules and other proceedings
whatever, preparatory to the hearing OF all
cases pending therein, upon their merits and
it shall be competent for any judge of the said
courts. upon reasonable notice to the parties,
in the clerks office or at chambers, and i'll va
cation as well rs in term, to make, direct and
award all such process, commissions and III
ings, whenever the same are not granted OF
course, according to the rules and practice OF
the cOurt.n EE
But we are not left to implication, however
clear it may be in this case. This IS pro-
ceeding supplementary to execution, and IN
such case it is expressly provided, in section
324 of our Code of Procedure, that 1.-THE Judge
may. by order, appoint receiver OF the prop
erty of the judgment debtor, in the same man
ner and with the like authorityas If the ap-
pointment was made by the court, according
to section 267''
Section 3A of our Code is identical with
section 29S of the New York Code, the decis-
ions under which are of the highest authority
in this State and under that section, 1t has
been the uniform practice in that State to ex-
ercise the jurisdiction to appoint receiver at
chambers in cases like the present. End
Waits Practice, 2l7; Darrow VS.. Lee, 10 ABB
bott's Practice, ref. 2l5.
have no hesitation, therefore, III overru-
ing the defendants plea to the jurisdiction.
The complaint is clearly demurable, hOWeV-
er. on the ground that all the known parties In
interest are not brought before the court by
being made parties to the cause, either as
plaintiffs or defendants. This is not only the
express requirement of our Code, but 1t IS
laid down as essential by all the elementary
writer's upon this branch OF equity Jurlsdlc-
ton. A receiver is appointed on behalf or all
parties; not of one plaintiff or defendant on
ly End Waits Practice, 2O3. He holds the
property and effects of the debtor for the ben-
eft of all the creditors Hoffman's Prov.
Remedies, 527. The complaint must be III
behalf of all the creditors, or on behalf OF all
who should come in. Ibid, 474. There is cer-
tainly no precedent for the startling novelty
of one of these joint Judgment creditors pro-
ceeding alone to make application for the ap-,
pontment of receiver to take charge OF and
disburse the assets and earnings OF their COM
mon debtor and this, too, not only without
their consent, but against their solemn protest.
The plaintiff and his co-creditors are presumed
to he equally solvent, and yet with equal liabll-
ity, sharing common peril as to the Judgment
against them on their joint note given for the
money loaned by them to this corporation, the
plaintiff S eye alone sees the danger which ne
desires to avert by the appointment OF re-
ceiver while his co-creditors see Ill this pro-
ceeding to procure such appointment, an IN
crease of their hazard, and, indeed; the only
danger by which their rights and interests III
the premises are really imperilled.
But errors in the pleadings may be readily
corrected by leave to amend which would or
dinarily be granted on motion. | shall con-
slider the case upon it's merits. It's fatal de-
fectS are not in the form, faulty as are the
pleadings in behalf of the plaintiff, but in the
substance. They are inherent and metacea-
ble
The appointment of receiver is an exercise
of the equitable jurisdiction OF the court. The
order making the appointment is III the nature
of mandatory injunction, and allthe rules OF
pleading and practice, that prevail III cases OF
special or common injunctiOnS, are applicable
thereto. He who invokes the aid of this extra
ordinary remedy in court of equity, must
first have exhausted his remedy at law. He
must come with clean hands and with fault-
less cause. The avermentS OF the complaint,
and of the atfidavits filed in it's support,
must he such, that if taken to be true, the
court is bound in reason to conclude that
the corporation defendant is lnSOlvent. II
the application is for the appointment of a
receiver to receive and apply the earnings
of the corporation to the satisfaction OF a
Judgment, the plaintiff must distinctly allege
that the earnings of such corporation are
being wasted or miSapplied, or are III immi-
nent danger of being exhausted by derdS-
turit on the part of the defendant. The
plaintiff must disclose his whole case, and
clearly show wherein he suffers Il wrong which
the law cannot remedy, and on what special
facts he rests his prayer for the intervention
of court of equity. The plaintiffs cause
crumbles at the touch of each and every one
of these tests, which are recognized as vi
and by a long and unbroken current OF Eng
lish and American decisions The complaint
and atfidavitS, filed by the plaintiff, exhibit
detailed statement of the Liabilities of the cor
pOration but entirely ignore all reference to
it's actual assets, or the amount of it's month
ly or annual earnings in excess of its neceSSa-
ry expenditures. A liability is not a measure
alone of sOlvency. To conclude that because a
party is indebted to large amount, he is there
fore inSOlvent, is to perpetrate most vicious
non sequitur. The conclusion does not follow
from the premises Insolvency is the inabili-
ty to pay under legal process. The difference
between the market value of the debtors prop
ertv when sold to satisfy an execution, and
the total amount of his liabilities, measures the
degree of his SOlvency, or insolvency, as the
value of such property rises above OF falls be-
low the amount of liability. To state that a
railroad corporation is indebted in the sum of
one hundred and fifty thousand dollars, with
out stating the estimated value of it's graded
roadway, its ironed track, its equipments, de-
pots, franchises and annual earnings, mani
festly furnishes no standard by which to meas
ure it's solvency This requirement has the
sanction both of sound law and right reason,
which is the spirit of the law itself: and while it
is enforced in all cases, it should be imperative-
" demanded of complainant who was for
years, and almost up to the commencement
of this proceeding, the chief administrative
officer of the corporation whose Sovency he as
sails, and possessing peculiar knowledge of its
affairs.
In an application of judgment creditors for
the appointment of a receiver for an alleged
insOlvent corporation, insolvency must be
proven as legal fact. The essential proof in
such case is the return of the execution ml-
satisfied. This is not only held to be indis-