Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-07-15

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Memphis Water Counnanv ne 7. q Pierce

-ncliPAiAs W atcf COMPANY "
The facts upon which an adjudication il
sought are fully set out in the agreement Of
counsel. For convenience, will designate
the company prior 10 the. foreclosure, as the
old, and subsequent TO the foreclosure, as the
new Memphis Water Company. A deed OF
trust or mortgage was made by the old COM
psny, under provision in its charter, upon
all It's franchises, rights, privileges and prop
erty, to secure certain debts it was about to
incur, or then owed. This deed was fore
closed in the United States Circuit Court,
and said franchises, rights, privileges and
property were sold 10 one C. III. Kilgore for
the sum OF Sl56,000, who assigned his bid 10
I. J. Latham, who associated with him in
the purchase the other complainants, except
the Water Company, and who paid said pur-
chase money into court, and therefore said
United States Circuit Court ordered, ad-
judged and decreed, that all the franchises,
rights, privileges and property, conveyed by
the deed of mortgage of the Memphis Water
verted out of the said Memphis Water Com
pany and its trustees, its creditors, and bond
holders, and all others. and that the same be
and are hereby vested in
T. J. LATHAM EFT AL,
complete and absolute, and said pur-
chasers shall succeed to and be vested with
all the powers and privileges of said com
pany, with all said property free from equity
of redemption and from all liability for the
debts and contracts of said Water Company"
The charter of the old company, act of Feb
ruary IS, 1870, provides that in case OF fore
closure sale, shat The purchasers shall sue
coed to and be vested with all the overs and
privileges, and be subject to all the duties
and liabilities of the said company" The
said purchasers subscribed for stock and re-
organized under the charter of the said Wa
ter Company. Among other things, the new
organization purchased iron pipes for new
water mains. The defendant, Pierce, had a
Judgment against the old Memphis Water
Company, prior 10 the foreclosure sale, upon
which he caused an execution to issue and
be levied on the iron pipes purchased BY the
new organisation. The complainsnts gave q
delivery bond, and were thereupou allowed
TO retain possession of said property, which
delivery bond was by the sheriff declared
forfeited for failure of compliments to de-
liver the property according to The terms of
the bond. The compliments now seek to
sDjoin the sheriff and the defendants, the
execution creditor, from proceeding upon the
execution or delivery bond. The FIRST ques-
ton presented is, whether or not
THE WATER COMPANY,
as now organized, is liable for the debts of
the old company, existing before the said
foreclosure sale? 1t is clear that the
property, privileges, rights and franchises,
purchased by Latham and others, were
not liable in their hands to defend
ants judgment; and if they had organ
lied under new name, it is equally clear
that neither the franchises nor property so
purchased by them would be liable for the
debts OF the old company. AS to the prop
erty and franchises purchased, the said
United States Circuit Court expressly decreed
that the same should not be 80 liable, and
the defendant was a party to that pro-
ceeding. But il is insisted that the pur-
chasers reorganized the corporation and
issued stock, aud took the old corporate
name, aud sued in the name of the old cor
poration, and executed bond as the artificial
person, and that the legal effect of such
action was the rehabilitation of the old cor
poration, and to render the new liable for the
debts OF the old Water Company. The pur-
chasers bought the charter rights, the same
being one OF the franchises sold, and had
r ght TO the use of what they bought, free
from the old do1ss,=iEs >sccordance with tne
terms of the decree OF the United States Cir
cult Court. If they have such right, what
difference does it make to the public or old
creditors under what name they USE il? Again,
these franchses and rights were granted
uoder that name-they were sold and bought,
aud paid for under that name, upon condi-
ton that the purchasers should be entitled
to all the rights and privileges of
THE OLD COMPANY,
and be subject to all the duties and liabili-
les OF the old company. / see no reason,
therefore, why the purchasers could not &C.
cure all the 9enefits decreed to them in the
1ecree of the United States Circuit Court,
confirming their purchase, under a reorgani-
.stion in the name of the old company, as
veil as under any other. The name is, per-
1sps, one of the rights or franchises bought
am inclined TO the opinion that it is But
whether this be 80 or not, the fact that the
was made in the name of the
I'D company can make no difference. They
Il d right to reorganize under the charter
# the Memphis Water Company, and have
he benefit of all its rights, privileges and
franchises free from the old debts, and can
lot see how they would become liable for the
cry debts these rights, privileges, property,
tc, were sold to pay, unless there is some
hing in the charter that imposes such liza
'ility. The charter provides that the new
rganization shall be subject to all the |
duties and Liabilities" that we're imposed
pon the old company; and it is claimed by
he defendant that the word Liabilities" re- |
ers to debts. do not think SO. 1t refers |
0 such Liabilities" as
THE NEW COMPANY
night incur from a failure to discharge its |
uties, ETC., to the public This is my view of |
he law and l 30 hold. But it is further in
listed that the levy of the execution on |
ne pipes, the execution of the delivery |
ond and its forfeiture, operated Gas iudg-
lent at law against the obligors, upon
hitch execution Issued, and that complain
nis are now estopped to deny their liability
n said delivery bond. have examined the
authorities in connection with the agreed
ate of facts, and have reached different
inclusion. Some of the authorities of
ster States 60 to that extent. But our
upreme Court, in the case of Decherd
;. Blanton e Sneed. 377) say: "The
,se, we think, presents the simple ques-
on whether the execution of an ordinary
elivery bond, either as principal or surety,
y one whose property is levied upon, under
a execution, or attachment against another,
tops him from the assertion of his rights
nd we think 1t does not" This is an adiu-
lcation OF the very point in question True
lie bond executed in that case was called
bond, but the court trested and
1nsldered il in effect as a delivery bond.
ne injunction granted will be made perpet-
al, on the ground that the compliments
-e not liable for the debt