Walker v. Flemming , 70 N.C. 483 ( 1874 )

PeabsoN, C. J.

Pending an action in the Superior Court, the purpose of which was to have it decided, whether the “Tate board” or the “ Howerton board ” were entitled to the office, Tate, who held the office as President de facto, assumes to himself the right to znake preferences among the creditoi'S of the Company, and assigns to the plaintiffs a valuable security belonging to the Company, as a collatez’al security for their debts, and this is done a very short time before the decision in Howerton v. Tate was announced, 68 N. C., 546. It is\true, .that for the ordinary purposes of the Company, and in order 'to keep the machinery in motion, a de facto President will b'§, recognized as having power to act; for instance, his contracts for a supply of wood or to engage conductors and hands on the road are held to be valid. But the idea that a de facto Pz’esi-dent of a Railroad Company, on the eve of his departure, by judgment of-the Court, can anticipate and make distribution of the funds, of the Company to such creditors of the Company as he may elect to give preference to, is a proposition that .needs no discussion.

There is no error. Judgment in the Court below affirmed, with the modification: “it is further ordered, that the plaintiffs, Walker and Simonton deliver to the Clerk of the Superior (Court for the county of Burke, the papers purporting to be an r assignment of-the mortgage set out in the . pleadings to the end that the papers be cancelled so as to remove any cloud from the title of the Railroad Company in respect to the mortgage.

Pee Oubiam. Judgment accordingly.