Musgrove v. Gray

McCLELLAN, C. J. This is a petition filed by receivers praying a AAT.it of assistance to recoArer possession of certain real and personal property alleged to belong to the corporation of Avhich petitioners are receivers against Musgrove Brothers, aaJio are not parties to the case, but are in possession of the property. The petitioners base their right to relief'upon the theory that when, as in this case, a corporation is voluntarily dissolved under the statute, contracts under Avhich third parties hold its property are annulled and avoided, and that therefore the contract of this corporation under Avhich Musgrove Brothers hold this property and under Avhich they allege they have the right to continue to hold it for a term yet to rim ceased to confer any such right upon them the instant the corporation aatis dissolved. This cannot be the laAV in respect to all contracts. Por instance, if MusgroA'e Brothers held this property under a lease for a term extending into the future, the dissolution Avould not affect their rights under it. Nor AATould such a state of facts present any obstacle to the winding up of the affairs of the corporation within the statutory period, as is suggested by counsel, for the property could, of course, be sold or even divided among stockholders sub [379] ject to tlie leasehold interest. And for aught that appears to the contrary, Musgrove Brothers may have such a lease, or other contract entitling them to the possession notwithstanding the dissolution. Bo it is that the fact of dissolution is of no importance here, and the title to the relief prayed must he determined without regard to it, and upon the general principles which obtain in ordinary cases where the. receiver seeks to recover possession of property in the hands of one not a party to the suit. Those principles do not, in our opinion, authorize this summary remedy by petition and writ of assistance under the circumstances disclosed here. The party in possession aaíio asserts in good faith, color and claim of right is entitled, under the guaranty of due process of law, to his day in court and a trial according to the customary forms of laAv. We attach no importance to the fact that the petition is SAVorn to and the ansAver is not. The real issue being one of Iuav, the petition is to be regarded as mere pleading, as is also the ansAver. And Ave do not find that the ansAver justifies a conclusion that the respondents do not in good faith assert a right to the continued possession of the property. To the contrary, the case presents an effort, of the receivers to recover possession of property from persons aat1io are not parties to the cause and A\ho in good faith deny the receivers-’ right to the possession, by a summary Avrit. The writ should not haA'e been aAvarded. The receivers should be put to their action.—Beach on Receivers, §216; Parker v. Browning, 8 Paige 388; 20 Am. & Eng. Encyc. Law, 134. The order aAvarding the writ of assistance is reversed and annulled, and an order Avill be here entered denying the Avrit and dismissing the petition. lie versed and rendered.