The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1904-02-26

" ChS CouIIJ Can Ue Iouuu any udy, anu
| the property of the road not only is not
removed from the jurisdiction of the
Court, but cannot be, and there is no
suggestion that any harm would come
from delay of three, five or ten days, or
any other time in fact, during which no.
tice could be given. No irreparable in
jury is threatened, no emergency is al
legged to exist, requiring immediate at
| tention.
A year or two ago a case was tried in
this State which was in some respects
like this casei 1t was the case of Bing-
ham and others VS.. The Worth Manufac-
turing Company. In that case, as in this,
minority holders of very small amount
| OF the capital stock complained that the
majority stockholders did not manage the
property in way that suited them, the
minority, and they asked that a per-
manent Receiver be appointed to take
charge of and operate the property under
the direction of the Court Receivers
were appointed by Judge Boyd, of the
Federal Court, without notice to the
other side, and they took charge of the
property of the corporation. Imme-
diately the corporation moved to set aside
the order appointing receivers and to
dismiss them. This motion was heard by
the Judge, who made the original order
and refused by him, whereupon, the cor
poratlon appealed TO, the Circuit Court
of Appeals and the case was tried in
Charleston. The Circuit Court of Appeals
not only discharged the Receivers and set
aside the order appointing the Receivers,
but dismissed the entire action, imposing
all the costs and expenses upon the COM
plainant. This was done at the same term
that the case was heard. a very unusual
course, as the ordinary procedure is for
the case to be argued at one term and
the decision handed down at the next
But in the Bingham case the Court, by Il
per curtain order, reverses the ruling of
the Court below and dismissed the action,
handing own the opinion during the
sitting of the Court, at which the case
was argued.
There is no room to doubt that
Judge Purnell will be over-ruled just
as Judge Boyd was, for their action
threatens the safety of every corporation
in which a nonresident may own single
share of stock. But, in the meantime I'M
less there is a stay, the Receiver gets in
and in the end he and his numerous high
priced attorneys will get the money of
the road that ought to go toward better
ments or in dividends. Is it right for
Federal Judge, or any other Judge, WITH
OUT A HEARING, to permit wrong like
this? If. in this case Mr.. Finch, who
owns stock only for the purpose of making
his friend, McBee, the Receiver believed
the road was not well managed, he had
remedy, and the Judge should have con-
sidered his complaint, given notice to the
State and the officers of the railroads,
heard both sides, and rendered a decision.
But to put the road in the hands of a
Receiver until April, WITHOUT NOTICE,
is blow at all corporate enterprises that
will alarm every business crporatlon
within the jurisdiction of the Court. 1t
may be truly said that there are very
few corporations that, at some time of
particular stringency in bushes, would
not be destroyed if put into the hands OF
a Receiver The right of a judge to
throw a corporation into bankruptcy and
appoint a Receiver is conditioned upon
three dangers as enumerated above. He
can take such a drastic course only:
1. UNLESS there is danger of a removal
of the assets beyond the Jurisdiction OF
the Court" g where the corporation
cannot be found;'' 8. ''Where it IS non
resident and is removing its property OF
doing some other act which would be
greatly injurious and which would be
accomplished in the delay necessary to
giving notice. Not one of these con-
ditions can be truthfully alleged IN
the application for the receivershlp OF
the Atlantic ana NORTH CdFOlIilb 1@dliAoe"'
Even if the road We're bankrupt, and 1t
should appear after hearing that re-
ceiver was necessary, the appointment OF
Capt. McBee is an improper one Tor two
reasons: ] In the case of the Carolina
and Northern Railway, Judge Purnell
laid down the rule that he would appoint
no man receiver of that railroad who did
rot live within the jurisdiction OF the
court refusing to name as corecelver a
resident of another State. In this case
he appoints a man who does lot live
within the jurisdiction OF his Federal
Court, and who is not a citizen OF North
Carolina. 2. For ten days or more Nc
Bee has been trying to lease this road toi
syndicate, generally supposed to bt
backed by the Vanderbilts. He has made
an offer showing that he believes the roao
is worth something like three per cent
ona nnn tho road iS hank