State Ex Rel. Attorney General v. Roanoke Navigation Co.

*709 Asi-ie, J. The proceeding adopted in this ease for the dissolution and winding up the affairs of the Roanoke Navigation Company is strictly in conformity to the provisions of the act of-1875 — an act which seems to have been drawn up with much care and so intelligibly expresses its purpose and the proceedings prescribed for carrying it into execution, that its interpretation is rendered free from difficulty. We have no doubt it was the intention of the legislature to create a proceeding in nature of a “ creditors’ bill,” but while they have had that remedy in view, in the provisions of the act, they' have seen proper to vary somewhat from the established practice in such cases and make this a special proceeding, adapted to the particular circumstances of the case. It is the settled practice in bills filed by creditors in behalf of themselves and all other creditors, w'ho may come in and make themselves parties,&c\, that no injunction will be granted restraining creditors from instituting and prosecuting actions against the debtor before a decree to account is rendered in the cause, unless thej have made themselves parties prior to that stage of the proceeding; in which case it is surmised the court would have the right to exercise' that power. But prior to the .decree, it is so regarded as the action of the'plaintiff alone, that he has exclusive control over the case, and may dismiss or compromise the action at his option, which he cannot do after the decree. For then the cause and parties are under the absolute control of the court, and the property of the debtor is taken in custodia legis, and while the plaintiff still has the conduct of the suit, he ceases to have the absolute control, and cannot dismiss the action without the consent of the court, and in opposition to the wishes of the other creditors who may have made themselves parties. But in the proceeding under the act of 1875, the publication of the copy of the summons, as prescribed therein, is deemed and held a .sufficient service upon all the officers, *710 corporators and persons interested in the affairs of the company, and they are made thereby parties to the suit, subject to such rules and orders as the court may see proper to take in the progress of the action. And before judgment for dissolution, the court may appoint a' receiver of its effects, and make the proper order for the settlement of its affairs, as prescribed in chapter 26, section 39, of Battle’s Revisal, act of 1871-2, ch. 199, § 39. By which act it is made the duty of the receiver, when appointed, to collect all debts owing to the company; to sell all its property and effects; to pay all persons having just claims against it; to distribute the surplus effects among the corporators, and pay all costs connected with the settlement. We think the proper construction of the act of 1875 is, to give the court taking cognizance of the action full control after publication of the copy of the summons of the property and franchise of the company, and of persons interested in the affairs of the company, whether officers, cor-porators, or creditors, in like manner as the courts have and exercise in the ordinary “ creditors’ bill,” after a decree to account, and sometimes under special circumstances, even before the decree. For if a judgment has been obtained against the debtor by a creditor before a decree, there may be special grounds to prohibit him from taking out execution, though such is not,the ordinary rule. Adams Eq., 260. Aside from the general provisions of the act of 1875, ■which impliedly invest the court, taking cognizance of the case, with the power to interfere, to prevent a sale of the property and franchise of the company on execution, we think there are special grounds in this case for such an interference. For if a sale under the defendant’s execution should be permitted to proceed, the purchaser would acquire not only the profits but the franchise, with the rights and privileges of receiving the fares and tolls, and recovering such penalties as might he imposed by law, for an injury to *711 the franchise,-or for any other cause which such corporation might be entitled to recover, during the time limited in the said purchase of the franchise. Rev. Code, ch. 26, §§ 9, 10, 11 and 12. The property of the company., the rights of the corporators, and the interests of other creditors, would in all probability to a great extent be sacrificed by a forced sale, while the plaintiff in the execution would suffer no other inconvenience than that arising from delay. His debts would in no sense be imperilled or impaired by a postponement of their satisfaction. Such a sale would in a great measure thwart the purposes the legislature had in view in passing the act of 1875 for a dissolution, and winding up and settling the affairs of the company upon a fair and equitable basis. We are of the opinion that considerations of equity and peliey demand that the sale under the executions should be restrained. We are therefore constrained to hold there was error and that the injunction restraining John A. Moore •from the further prosecution nf his executions, should be continued to the hearing. Let this be certified t© the superior court of Halifax county that proceedings may be there had in -conformity i© this opinion. Error. Rev-ersed.