Strauss v. Carolina Interstate Building & Loan Ass'n

Furches, J.: At the last Term, upon the application of the receivers, we undertook to give them such directions as we thought necessary to enable them to proceed with their work in collecting the assets of this insolvent Association, to the end that the rights and interests of all parties might be finally adjusted and settled. And the case coming on for further directions upon the opinion of this Court, his Honor, at January Term, 1896, entered up another judgment from which the receivers and the non-borrowing members again appealed. And in this appeal we are asked to review and modify the opinion heretofore given ; and if we cannot, or do not do that, then we are asked to review the judgment of the court as made. We do not admit that it would be consistent with the practice of this Court for us to review the opinion at the last Term, in this way. It is not the mode pointed out by the published rules of practice of the Court. But, as it was in the nature of instructions to the receivers who act under authority from the Court, we have re-examined whac we then said a,nd find no reason to change or modify the-opinion. The object the Court had in view was a fair and equitable adjustment between all parties mutually inter *562 ested in the concern. And, opon a re-exainination of the matter, we are satisfied that the instructions then given are sustained by reason and authority, and, if followed, will result in substantially effecting the purpose we intended. The modification mostly insisted on was that part whore it is said, “ We know of no law authorizing the receivers to foreclose the mortgages under the powers contained in the mortgages.” And, upon a reconsideration of this, we do not wish to change what we then said. The receivers have no legal estate in the mortgaged property, and instead of the case of Dameron v. Eskridge, 104 N. C., 621, sustaining the right of the receivers to foreclose under the powers, it seems to us to sustain the other view. It may be possible, if this point was presented in a case before the Court, a foreclosure by the receivers under the powers contained in the mortgages might be sustained. But if we were to so hold in this matter — where the mortgagors are not before the court — it would be but ohiter and they would not be bound by it. So without dismissing the matter further, we think there is sufficient reason why we should make no change in what was said when the case was here at the last Term. We have no doubt that his Honor intended to observe the ruling of this Court in his judgment; but we do not think he did so. We expressly declined to give any direction as to the distribution of the fund. We said this should not be done until the fund is in court. And his Honor’s judgment directs the receivers “to collect and distribute ,the assets thereof among the respective members or shareholders of said corporation, upon the principles and in the manner following.” This was in violation of the opinion of this Court —a distribution was not intended to be made, and should not be made until funds are in court to be distributed. Of course the receivers should be authorized to use such funds *563 in their hands as may become necessary to defray expenses of collection. But they should not pay out or distribute any other money, except under the order of the court after it has been collected and reported to the court. Such order may be made at any time upon the fund then in court. This folowing paragraph of his Honor’s judgment is objected to by appellants, to-wit: “ And upon the payment of said balance so ascertained, with all interest t'hereon, the mortgage given as aforesaid shall be released and discharged by the receivers according to law.” This paragraph is not provided for in the opinion at last Term, nor does it conflict with anything then said, unless it tends to disturb the equitable adjustment therein provided for. We are not sufficiently advised as to what result it would have upon the final settlement to say whether or not it is in violation of the rules we have laid down for final settlement. If it would disturb this rule of equitable adjustment, then it "should be left out. But if it does not do this, we see no objection to it. It should be settled upon a consideration of the principle of equitable adjustment, as we have stated and which his Honor will fully investigate. But the receivers will not act upon this paragraph until it is considered and passed upon by the court below upon the filing of this opinion. , We call attention to the fact that the receivers are appellants now and at the last Term, when it does not ap>pear that any question is presented in which the corporation is interested. There are cases in which it is the duty of receivers to appeal, where they think the party or corporation they represent has not had justice. But it is not considered to be their duty to appeal in the interest of one portion of the corporators — stockholders—against the othér. And as to their duties, it is expected they will *564 observe the directions of the court from whom they received their appointments. If any of the parties interested as corporators think the judge’s instructions are erroneous and injurious to them, they may appeal. Let this opinion be certified. Error.