S. C. Forsaoth Mach. Co. Et Al.,v,hope Mills Lumber Co. Et Al.

• Decision Date: 17 November 1891
• Citation: 13 S.E. 869,109 N.C. 576
• Parties: S. C. Forsaoth Mach. Co. et al. v Hope Mills Lumber Co. et al.
• Court: North Carolina Supreme Court

13 S.E. 869

109 N.C. 576

S. C. Forsaoth Mach. Co. et al.vHope Mills Lumber Co. et al.

Supreme Court of North Carolina.

Nov. 17, 1891.

Findings by Court—Reduction to Writing— Appointment of Receiver—Sales—Distribution of Proceeds.

1. Where findings upon which a court adpointed a receiver were not reduced to writing until three or four days after the order was made, the order will not be disturbed, where it does not appear that defendant suffered from such delay.

2. Where it is clear from the evidence and admissions of the parties that it is a case where a receiver should be appointed, and that defendant is insolvent, and all the property must be sold to pay the debts, an order appointing receivers, and directing them to sell all the property of defendant, is proper.

3. In disposing of the motion for a receiver, the court properly declined to pass on questions of fraud raised by the pleadings.

4. Where defendants did not consent that the court should direct the receivers to pay certain Judgments, admitted to be just and valid, it was error to order their payment.

5. Where defendant did not demur on the ground that a proper party defendant was not joined, an objection by defendant on that ground will not be sustained.

6. Where the affidavits and exhibits offered by plaintiffs raised questions which should be submitted to a jury, the court properly refused to pass on such questions.

Appeal from superior court, Cumberland county; Edwin T. Boykin, Judge.

Action by the S. C. Forsaith Machine Company and others against the Hope Mills Lumber Company, S. H. Cotton, H. C. Gadsby, R. M. Nimocks, and Z. B. New ton, to foreclose a real-estate mortgage, and set aside certain fraudulent mortgages and judgments. Plaintiffs moved for the appointment of receivers of defendant company's property, which motion was granted. From the order appointing the receivers, defendants appeal. Order modified.

Statement by the Court. The plaintiffs are creditors of the defendant corporation, having debts for very considerable sums of money. In the complaint they allege their debts; that they have a mortgage of the defendants' property, both real and personal, of large value, to secure the same; that the defendant company and its officers fraudulently prevented the registration of their mortgage until after it had confessed fraudulent judgments for divers large sums of money in favor of certain of its officers and stockholders, and had executed and registered a mortgage of all its property in their favor, and likewise a deed of trust conveying their property, to secure fraudulent debts, etc. They further allege that the defendant is insolvent, and that certain judgments in favor of parties named are valid and just, and executions upon them have been levied upon the defendant company's personal property. The purpose of this action is to foreclose the plaintiffs' mortgage, to have the judgments mentioned confessed, and the second mortgage and deed of trust executed by the defendant company declared fraudulent and void, etc. The defendants admit some of the material allegations of the complaint, confess and avoid others, and deny the alleged fraud, and aver that the judgments and mortgage and deed of trust complained of are honest, etc. In the course of the action the plaintiffs moved for a receiver to take charge and control of the defendant company's property, real and personal, and to collect debts due it, etc. The court heard the motion upon the complaint, answers, and affidavits used in support of and in opposition to it, and, upon finding the facts allowed the motion, and appointed re ceivers, charged to take all the property, both real and personal, of the defendant company into their possession and control, to sell the same, to collect all debts due it, to pay out of the fund collected certain judgments admitted to be just and valid, etc. The defendants appealed to this court, assigning error as follows: "(1) That his honor failed to find the facts upon which his judgment was based; (2) that by reason of his failure to find the facts the appellants could not specify their exceptions to the said judgment; (3) that the judgment directs the sale of real estate not levied on, and that the proceeds of same be applied to the payment of judgments in favor of Wallace McPherson and the Enterprise Lumber Company, which are prior to the judgments in favor of the Hope Mills Manufacturing Company, R. M. Nimocks, S. H. Cotton, and H.C. Gadsby, and R. M. Nimocks; (4j that there is a defect of parties defendant, in that J. T. Gardner, trustee in deed of May 6, 1891, has not been made party to the action; (5) that the plaintiffs' affidavits and exhibits offered raised issues of fact which should have been submitted to a jury."

Sutton & Cook, for appellee.

Merrimon, C. J. The...