King v. Ligon and Four Other Cases

The opinion of the Court was delivered by Mr. Justice Carter. This case comes to this Court on appeal by the petitioners from the several orders issued by his Honor, Judge T. S. Sease, on the respective petitions, as set forth in the title of the case, In re Montgomery & Crawford, Inc., etc., plaintiffs, v. Arcadia Mills, defendant. In this connection we quote the following agreed statement of counsel, appearing in the transcript of record, for the purpose of showing the history of the case: “Arcadia Mills, a textile corporation, organized under the laws of the State of South Carolina and maintaining a large plant in Spartanburg County, was placed in the hands of the respondents, as receivers, by order of the Court of Common Pleas for Spartanburg County on January 2, 1933. Upon appeal, the receivership' was affirmed by this Court and the assets of the corporation ordered to be sold by the Receivers, and pursuant to such order of this Court all of the assets were sold on November 14, 1934, for a total purchase price of $736,000.00. Arcadia Mills had outstanding common stock of $200,000.00 and 7 per cent, preferred stock, of which $200,000.00 was issued in 1920 and $600,000.00 *240 was issued in 1923, both issues being pursuant to resolutions of the stockholders of the corporation and containing such privileges and preferences as will hereinafter appear. The appellant, Susan Williams King, was a holder of forty (40) shares of the 1923 issue of preferred stock, and the appellant, Julius T. Jennings, was the owner of fifty (50) shares of the 1920 issue. The appellant, Julius T. Jennings, gave notice on the-day of December, 1930, of his intention to require the payment of the said stock, and on November 30, 1930, the appellant, Susan Williams King, gave like notice to the then management of the mill. On July 30, 1931, a call meeting, pursuant to notice sent to all stockholders, was held at the office of the corporation for the purpose of considering certain changes, which will more fully appear hereinafter. Neither of the appellants, Susan Williams King or Julius T. Jennings, attended the meeting in person or by proxy. “The appellant, R. B. Cleveland, was the holder of 116 shares of the preferred certificates, consisting of 16 shares of the issue of 1920 and 100 shares of the issue of 1923. The appellant, Mrs. R. B. Cleveland, was the holder of 100 shares of the preferred issue of 1923. R. B. Cleveland gave notice on July 23, 1931, of demand for payment of his 16 shares of the issue of 1920, and on January 4, 1932, gave notice of demand for payment of his 100 shares of the issue of 1923. Mrs. R. B. Cleveland gave notice of her demand for payment of her 100 shares of the issue of 1923 on January 4, 1932. Upon failure to receive payment of the certificates as demanded, petitions were filed by the appellants, R. B. Cleveland and Mrs. R. B. Cleveland, praying for payment of their respective claims in full, upon which rules to show cause were issued directed to the Receivers and requiring them to show cause why the said Cleveland appellants’ claims should not be paid in full out of the funds then in the hands of the Receivers. In response to the rules to show cause, the Receivers filed a written return and upon the Cleveland *241 petitions, return reply filed by the Cleveland appellants, and certain records and exhibits, the matter came on for hearing before Judge Sease, who, after argument, filed orders denying the claims to priority of payment asserted by the Cleveland appellants. From the orders of Judge Sease passed in the matter, the appellants, R. B. Cleveland and Mrs. R. B. Cleveland, following notice of intention to appeal duly given, appealed to the Supreme Court. “Appellants, Susan Williams King and Julius T. Jennings, both filed claims with the Master for Spartanburg County as required by the order of receivership, and within the time therein required, asserting the claim that they were entitled to be paid in full the amount of their certificates before the payment of any other claims against Arcadia Mills, except contract creditors. Upon refusal of the Receivers to pay the appellants in full the face of their certificates with interest, petitions were filed on the basis of which a rule to show cause was issued directed to the Receivers requiring them to show cause why the appellants should not be paid in full, after the payment only of obligations of the mill to contract creditors. In response to this rule, the Receivers made written return and upon the basis of the petition, return, stipulation of counsel and certain records, the matter came for hearing before Judge Sease at chambers, who, after argument, filed an order denying the claims to priority asserted by the appellants and holding that all preferred stockholders share equally. It is from this order that this appeal is taken. Notice of intention to appeal was given within the time prescribed by law by each appellant. “All judgment creditors and contract creditors of Arcadia have been paid, and since the filing of the order appealed from, by order of the Court of Common Pleas a 10 per cent, dividend has been paid to all preferred stockholders, except those who asserted claims to priorities. It is agreed that there are sufficient funds on hand to pay appellants’ claims in full if their contentions be sustained.” *242 It appears from the record that the matters involved in the cause were heard before Judge Sease on a stipulation by counsel and certain exhibits which presented to his Honor no disputed matters of fact. The matters involved were discussed at length in the order issued on the petition of the appellant, Susan Williams King, and in disposing of the other petitions his Honor, Judge Sease, made reference to the order issued on the petition of Susan Williams King and the conclusions therein stated, and, therefore, did not discuss the matters at length in the orders on the other petitions. For the reasons set forth in the several orders issued by his Honor, Judge Sease, in the cause, in passing upon the said petitions and disposing of the same, the said orders are hereby affirmed and made the judgment of this Court. Note: There will be incorporated in the report of the case the several orders of his Honor, Judge Sease, dated May 9, 1935, and appealed from herein. Mr. Chiee Justice Stabler and Messrs. Justices Boni-iam, Baker and FishburnE concur.