Middleton v. Wilmington, B. & S. R. Co.

• Decision Date: 10 May 1944
• Docket Number: 595.
• Parties: MIDDLETON et al. v. WILMINGTON, B. & S. R. CO.
• Court: North Carolina Supreme Court

30 S.E.2d 42

224 N.C. 309

MIDDLETON et al. v. WILMINGTON, B. & S. R. CO.

No. 595.

Supreme Court of North Carolina

May 10, 1944

This is a receivership proceeding, instituted in 1933.

On 26 May, 1933, the United States of America, through the then Undersecretary of the Treasury, made and filed its proof of claim with the Receiver of the Wilmington, Brunswick &amp Southern Railroad Company, in the sum of $90,000, evidenced by a promissory note, dated 15 January, 1921 payable five years after date, extended by agreement to 15 January, 1928. The claim included accrued and unpaid interest from 1 January, 1930, to 10 April, 1933, in the sum of $17,676.80, a total of $107,676.80, which indebtedness was secured by the hypothecation of First Mortgage Bonds in the principal sum of $168,000 issued by the Wilmington, Brunswick & Southern Railroad Company, 1 January, 1911.

The appellant, Machine Tool & Equipment Corporation purchased this claim from the United States of America, on 22 April, 1943, and filed with the Receiver a Supplemental Proof of Claim as assignee of the claim of the United States of America, dated 29 June, 1943.

The indebtedness of the Wilmington, Brunswick & Southern Railroad Company and the Receiver, on 18 February, 1943 exceeded the sum of $213,000.

A Referee was appointed 18 February, 1943, to hear and pass upon all claims against said Railroad Company, and to determine the priorities thereof. Among the claims considered by the Referee were those of Brunswick County and the Town of Southport, for unpaid taxes, penalties and interest, duly assessed on the property and franchise of the railroad during the years 1930 to 1943, inclusive. A claim for taxes due Brunswick County, including penalties and interest, aggregating $10,875.65, was allowed. A claim for taxes due the Town of Southport, including interest and penalties, aggregating $1,107.16, was allowed.

All the assets of the said Railroad Company were sold at public auction pursuant to an order of court, for the sum of $72,500, to the appellant or its assignee, except $4,000 of real estate situate in the Town of Southport, and the sale was confirmed at the August Term, 1943, of the Superior Court of New Hanover County, by his Honor, Burney, J.

A hearing on the report of the Referee and the exceptions filed thereto by the appellant, was held before his Honor Burney, J., 22 October, 1943, and on said date the Court signed an Order, overruling the exceptions and confirmed and approved the findings of fact and conclusions of law of the Referee in respect to the allowance of the aforesaid claims.

The Machine Tool & Equipment Corporation excepted to the Order of the Court approving the tax claims of the County of Brunswick and Town of Southport, and appealed to the Supreme Court.

Irwin Geiger, of Washington, D. C., for appellant Machine Tool & Equipment Corporation.

E. J Prevatte, of...