Bahler v. Robert Treat Baths
| Decision Date | 31 January 1927 |
| Citation | 135 A. 814 |
| Parties | BAHLER v. ROBERT TREAT BATHS. |
| Court | New Jersey Supreme Court |
Appeal from Court of Chancery.
Suit by Louis Babler against the Robert Trent Baths, a corporation. From a decree adjudging defendant corporation insolvent and appointing a receiver, and from a decree directing the receiver to sell corporate property, defendant appeals. Modified.
Frank E. Bradner, of Newark, for appellant.
Nathan H. Berger, of Newark, for respondent.
The present appeal brings up for review two decrees of the Court of Chancery entered in the above cause, the first of which adjudges the defendant corporation to be insolvent and appoints a receiver to take charge of and administer its assets and property; and the second of which directs the receiver to sell the lands and real estate, and also the personal property of the corporation, free and clear from all mortgages, liens, and incumbrances against either the real or the personal property.
Our examination of the proofs sent up with the appeal satisfies us that the decree adjudging the corporation to be insolvent was entirely justified; and that, consequently, the appointment of a receiver cannot be successfully challenged.
We consider, however, that the decree which orders the sale of the corporation's property and assets, so far as it directs that the real estate be sold free and clear of all incumbrances, cannot be legally justified. As was pointed out by this court in Randolph v. Lamed, 27 N. J. Eq. 560, the power of the Court of Chancery to order a sale of real estate clear of prior incumbrances depend upon the existence of two prerequisites specified in the statute (Corporation Act, § 81; 2 Comp. Stat. 1910, p. 1649), first, it must appear that the legality of the prior liens is brought in question, and, second, that the property is of a character materially to deteriorate in value pending the litigation. The real estate of the insolvent corporation in the present case is incumbered by two mortgages, the first of which in priority is held by the Franklin Savings Institution, and was given to secure the payment of $55,000. The second is held by a concern known as the Rolo Company, and was given to secure the payment of $62,500. That the first of these mortgages, namely, that held by the savings institution, is legal in every respect, is conceded. The validity of the Rolo Company mortgage, however, is challenged. In this situation, the mandate of the decree, so...
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...Co., 17 N.J.Eq. 395, and Id, Err. & App. 17 N.J.Eq. 516. Cf. Kelly v. Neshanic Mining Co., 7 N.J.Eq. 579. See, also, Bahler v. Robert Treat Baths, 100 N.J.Eq. 525, on page 527, 135 A. 814. In J. W. Pierson Co. v. West Orange-Verona Bldg. Co., 112 N.J.Eq. 426, 164 A. 567, 568, Vice Chancello......
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Needle v. Perfection Const. Co.
...and (2) that the property must be of a character to materially deteriorate in value pending the litigation. Bahler v. Robert Treat Baths, 100 N. J. Eq. 525, 135 A. 814. In the present case the petition to sell falls short of the requirements of the statute in either respect. While the petit......
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...of later cases, amongst which are the following: Reilly v. Penn Cordage Co., 58 N. J. Eq. 459, 44 A. 161, and Bahler v. Robert Treat Baths, 100 N. J. Eq. 525, 135 A. 814. An examination of the evidence in the instant case for the purpose of ascertaining whether these two statutory prerequis......
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Bahler v. Robert Treat Baths, 35.
...the sale should be made subject to the lien of an unchallenged mortgage on the property held by the Franklin Savings Institution. (N. J. Err. & App.) 135 A. 814. Pending the appeal, however, the receiver proceeded to sell the property in accordance with the order of sale made in the court b......