The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1893-10-05
or such franchise

act which would not interfere with the
receivers management of its affairs.
1t is believed that correct statement
OF the law on this subject was made
by the supreme court of Illinois, as
follows: "The appointment of a re-
ceiver for corporation gives the re-
ceiver only temporary management of
it's affairs under the direction of the
court. The corporation still exists
and may nevertheless exercise any of
It's franchises so it does not interfere
with the rightful management of its
affairs by the receiver so far as his
duties are defined by the court APP
pointing him " 70. & M. Ry. Co. Va.
Russell, lis, Ill, Sc, High on Receivers,
Sec. 397.)
The contention in argument by at
torpeys for respondent, that the cor
porate franchise was transferred to
and is exercised by the receiver, and
that the corporation could not act ex-
cept through the receiver, and that
an effort to forfeit it's charter is ali in
vasion of the receivers possession and
rights, cannot be successfully main
tanned,
We come how to q consideration OF
the question: Would the forfeiture of
respondents charter affect or inter-
fere with the receivers possession of
its property or his management of it's
affairs?
This question must also be answered
In he negative. 1t appears from the
argument that the receiver was APP.
pointed at the instance of the bond
holders of respondent, to take pos
session of the property upon which
they held mortgage, and administer
the same and respondents business
for the purpose of paying the debt due
to sa id hOndholdeIs. The bondhold-
ers cOuldnot have a valid mortgage
or lien upon the corporate franchise of
respondent. Neither the possession
nor the use of the property upon
which their lien rests could be dis.
turbed by forfeiture Of this charter.
By Withdrawing the right of corporate
existence the state could not disturb
the existing property rights of the
stockholders or the creditors of the
corr grafton, their rights to the
possession and use of the prop
erty would be exercised
and protected by the receiver
notwi hstanding the charter might be
forfeited.
In MOerwetz on Private Corporations
(sec. 1033) it is said: "The judgment
rendered in a proceeding in
the nature Of quo warranto against
corporation can reach only the cor
porate franchises; these may be de-
clared extinguished, but the property
rights cannot be cOnfiscated by the
state or prevented from devolving &C.
cording to the ordinary rules of equity
and the common law" The conclus'
ion is therefore reached that the for
! fixture of the charter would not inter
fore with the possession or rights OF
the receiver.
A question similar to that presented
by this plea in abatement was decided
by the supreme court of Massachu'
setts. A charter was granted by that
state to turnpike company. Under
statute Of that state the right was
given to levy upon and sell the right
to exercise this franchise and to col
lect tolls Hereunder fol a term o.
years. A judgment was ootaineo
against the corporation anu the rlgh'
and privilege to collect tolls under ltE
franchises for term of years was sold
and bought by the judgment creditor
After the sale of Che rights under iti
franchise to collect tolls for said time
and VIII Oh said right was being exer
eised by the purchaser, a proceeding
| in the nature of quo warranto Wa'
brought by the state against the CDR
poration to forfeit it's charter, and the
purchaser at the execution sale wa
not made a party. The court helc
that he was not necessary party, anc
that the state could proceed to forfel
the charter without making such lur
chaser party defendant. Common
wealth vs. Turnpike Co., b Cushlng
5O9.)
IF suit can be maintained agains
a corporation in the hands IT receiv
err. without making the receiver
party, to recover judgment on a deb
against the corporation, it would seen
ty analogy that proceeding to t2r
felt the charter of a corporation in tint
hands of receiver might be main
tanned against the corporation with
out making the receiver a party.
In discussing the question OF nece-
sary parties to suits of insolvert cor
poratious in the hands OF recelv
ers, Gluck & Becker, IN incl
work on Receivers (pages 26-27) say
"The corporation continues IN ess'
until it is formally adjudged to nav
been dissolved; it may still sue ana o.
sued in its name, Notwithstanding Tn
appointment of receiver, and luog
ment so obtained is valid and bindlns
both against the corporation ana III
receiver"
On this subject, High, In his wori
on Receivers, (section 25o) states Tn
rule as follows: "As regards action
Instituted against person OF deotor
over whom a receiver is appointed
there would be no necessity for max
ing the receiver party defendant U
such action, when the right and RENE
dies of the plaintiff terminate VIII
the original debtor, and when the re