Coffin Co. v. . Yopp , 206 N.C. 716 ( 1934 )

The record is a voluminous one and there is but one exception contained therein, namely, to the signing of the judgment denying the motion and dismissing the petition. In his petition the trustee in bankruptcy of W. E. Yopp, Sr., alleges that appointment of a receiver of W. E. Yopp, Sr., was irregular, and that the receiver took over and sold the assets of the defendant and obtained his discharge as such receiver, all before the time fixed by the court for filing claims had elapsed; and further alleges that Judge Harris was "misled and deceived, and erred in signing the order outside of the district in which the action was pending making the receivership . . . permanent"; and that Judge Devin was "deceived and misled into signing the final order discharging the receiver and releasing his bond . . . "; and that the institution of this action by the plaintiff, the procuring of the appointment of a receiver, the sale by the receiver for an inadequate consideration of the assets of the defendant to his son-in-law, and the procuring of the discharge of the receiver, in the space of only thirteen days, and, within a few more days, the sale by the son-in-law of such assets to Walter E. Yopp, Incorporated, a newly organized corporation owned and controlled by the defendant and his near relatives and business associates, was all done with the sole purpose and intent to hinder and defeat the creditors of W. E. Yopp, Sr., by placing his assets beyond the process of the courts in hands of a corporation organized for that purpose. The petition further alleges that this scheme was begun, continued and ended in such a short space of time that the petitioner, or the creditors of W. E. Yopp, Sr., whom he now represents, were deprived of all opportunity to be heard before the judgment discharging the receiver and his bond was entered. While it appears that this cause came on to be heard "upon notice upon Walter E. Yopp, Incorporated, to show cause why it should not be made a party defendant . . . ," it does not appear that this corporation filed any reply to the petition; but even if it be presumed that it denied all the allegations of irregularities and fraud, we think his Honor was in error in reaching the conclusion set forth in his judgment that "the court . . . has no authority to set aside an order that was made more than six months ago during term time, by another judge of the Superior Court, where no exceptions have been taken to the orders" and therefore adjudging "that Walter E. Yopp, Incorporated, is not a necessary party to this action, and is at liberty to operate its business without interference from the petitioner or the creditors of . . . W. E. Yopp, Sr."

The petitioner was entitled, as a matter of law, to be heard upon his motion in this cause to vacate the judgment for the irregularities set forth in the petition, and his Honor's judgment denied him this right.

"An irregular judgment is one rendered contrary to the course and practice of the court, and if the defect is not such as to show that the court has no jurisdiction over the subject-matter or over the person, the judgment is not void, but will stand until a proper proceeding has been brought to set it aside. . . . To set aside a judgment for irregularity it is necessary to make a motion in the cause before the court which rendered the judgment, with notice to the other party; the objection cannot be made by appeal, or an independent action, or by collateral attacks. The time for such motion is not limited to one year after the judgment is rendered, but it must be made by the party affected and within a reasonable time to show that he has been diligent to protect his rights." McIntosh, N.C. Prac. Proc., par. 353, pp. 736, 737, and cases there cited.

This case is remanded to the Superior Court of New Hanover County, that the petitioner may be heard upon his motion in accordance with this opinion.

Reversed.