Stagg v. George E. Nissen Co., Inc.

• Decision Date: 26 June 1935
• Docket Number: 748.
• Citation: 180 S.E. 658,208 N.C. 285
• Parties: STAGG et al. v. GEORGE E. NISSEN CO., Inc.
• Court: North Carolina Supreme Court

180 S.E. 658

208 N.C. 285

STAGG et al. v. GEORGE E. NISSEN CO., Inc.

No. 748.

Supreme Court of North Carolina

June 26, 1935

Appeal from Superior Court, Forsyth County; Parker, Judge.

Action by Frank Stagg and others against the George E. Nissen Company, Incorporated, wherein C. W. Williams was appointed receiver of the defendant. From a judgment, the receiver appeals.

Affirmed.

This action was begun in the superior court of Forsyth county on January 27, 1931.

The plaintiffs are stockholders of the defendant George E. Nissen Company, Inc., a corporation organized and doing business under the laws of this state, with its principal place of business in the city of Winston-Salem, N. C.

In their complaint the plaintiffs allege:

"3. That the plaintiffs are informed, advised and believe that the defendant, if not at present insolvent, is in imminent danger of insolvency, and has decreased its operations to such an extent that it has practically suspended its ordinary operation and business; that the liabilities of the defendant approximate one hundred and fifty thousand (150,000) dollars; that no dividends whatever have been earned or paid on the common stock of the defendant corporation, or on its preferred stock, for three years or more; that by the appointment of a receiver and the conservation of its assets by prudent management under a receivership, creditors will be able to secure a substantial payment on their indebtedness, and possibly a residue of assets will be conserved for stockholders.

4. That the plaintiffs are informed, advised and believe, and so allege, that a receiver should be appointed by the Court to take in charge the assets of the defendant corporation and to reduce the same to cash as rapidly as possible; that creditors should be required to prove their claims as required by statute; that such receiver do such other things and acts as are provided by law, and to this end the said receiver should be authorized to continue the business of the defendant corporation under the order of the Court for the purpose of preserving the estate and of obtaining a purchaser or purchasers of the assets to the end that the greatest amount of money possible may be had for the benefit of creditors and also for the benefit of stockholders."

The defendant in its answer admits these allegations, and joins the plaintiffs in their prayer for the appointment of a receiver of the defendant.

Upon the hearing of the action, it was ordered, adjudged, and decreed by the court that "C. W. Williams be and he is hereby appointed receiver of the defendant corporation, and that said receiver be and he is hereby authorized and directed to take into his charge and custody all the assets and property of the defendant wheresoever located and of whatever nature, reduce the same to money, and liquidate the affairs of the defendant by the distribution of the proceeds of the sale or sales of its assets and property to its creditors and to do all such other and further acts as provided by law."

It was further ordered, adjudged, and decreed by the court that "the said receiver be and he is authorized in his discretion to continue the business of the defendant corporation on behalf and in the interest of its creditors by the necessary and conservative replenishing of its stock from time to time, and by working up said stock into finished material, to the end that the assets of said corporation may be disposed of in the most advantageous way for the benefit of its creditors and stockholders, and to that end the said receiver be and he is hereby authorized to employ such assistants and such help as may be in his judgment needed for the limited operations of the business as aforesaid."

Pursuant to this order, the receiver took into his possession all the assets of the defendant corporation, and is now engaged in the performance of his duties as the receiver of the defendant corporation.

At November term, 1934, of the superior court of Forsyth county the action was heard upon the petition of the receiver for instructions by the court with respect to the claim of the commissioner of revenue of the state of North Carolina, for the payment by the receiver, out of the assets of the defendant in his hands, of the franchise tax...