Court Opinion

ID: 9307735
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:18:29.498335+00
Date Added: 2024-06-11T17:13:59.631519
License: Public Domain

*350On' Rehearing.
(June 15, 1897.)
A decree for the sale of the railroad property was entered on the 31st day of March, 1897. By that decree it was ordered that the property he sold as a whole. The mode of sale — whether in divisions or as an entirety — is wholly within the discretion of the court. Among the reasons given by the court for this mode of sale was the passage of an act by the legislature of North Carolina at its last session annulling section 698 of the Code. The effect of this act would be that, if a sale were made by the road in separate divisions, doubt would, exist as to the right of the purchaser to obtain a charter of incorporation. The counsel for the New York bondholders asked a rehearing of the decree upon the weight of this reason. Their request was granted, and the case reheard. After an exhaustive argument, the apprehension existing in the mind of the court has •)<>t been relieved. On the contrary, the difficulty in obtaining, under the law of North Carolina, a charter for a division of this road, were it sold in this way, and separate purchasers had, seems more manifest. It is not a question what would be the ultimate decision of a court of last resort as to the right of such a purchaser; but it is the existence of a doubt on this point, and the necessity for the solution of the doubt by judicial proceedings. It is urged with great force that each.division, if the divisions were put up separately, would be subjected to the same disadvantage, and that it would operate equally upon all; that, under these circumstances, the mode of ascertaining the relative value of each division would not be impaired. But; this is not the case. ‘Those interested in one division may not feel the force of the doubt, and they would be willing to go up to the full extent of the value of their division. On the other hand, those interested in the other divisions, and the general public, who are invited to sales of this character, may feel the full force of the doubt, and be deterred from bidding the value of these other divisions. In such case the bids would form no comparison of value. Giving careful reconsideration of the whole mutter, the conclusion heretofore reached has not been changed.
At this hearing another matter has been presented by way of petition, showing the relation of the South Carolina Pacific to the Cape Pear & Yadkin Valley Railroad. It appears that this first-named road, by contract between the two1 corporations, was practically merged into and made a part of the latter road; that by way of fortifying this agreement, and of providing for casualties, a lease for 30 years of all its property and franchises was made by the South Carolina Pacific Railroad Company to the Cape Pear & Yadkin Valley Railroad Company; and that certain shares of stock in the former company were assigned to the latter company. It also appears that these shares are the property of the North State Construction Company. All of this merger and lease antedated the mortgage in this case. Under these circumstances, all the right, title, and interest of the Cape Pear & Yadkin Valley Railroad Company and of the parties to this suit should be sold at the same time, and as a *351part of the property of the Gape Fear & Yadkin Valley Railroad Company, and the decree must be modified to meet this result.
It has been suggested that the provision that any purchaser at the sale ordered, when the property is struck off to him, shall at once pay to the master commissioners, on account of his purchase, a sufficient sum to make up, together with the - amount already deposited by him as aforesaid, “twenty per cent, of his accepted bid,” may be too onerous. Let the decree in this particular be so amended as to strike out the words “twenty per cent, of his accepted bid,” and to insert in lieu thereof the words “the sum of two hundred thousand dollars.” Let the decree also be amended so as to require that the cash portions of the moneys arising from the sale be deposited in solvent national banks in the state of North Carolina, in such amounts, as to each bank, as will render the deposit perfectly safe. In all other respects the decree of March 31, 1897, is hereby reaffirmed and decreed.