Case Name: Z. W. WHITEHEAD v. E. J. HALE
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1896-02
Citations: 118 N.C. 601
Docket Number: 
Parties: Z. W. WHITEHEAD v. E. J. HALE.
Judges: 
Reporter: North Carolina Reports
Volume: 118
Pages: 601–606

Head Matter:
Z. W. WHITEHEAD v. E. J. HALE.
Practice in Application for Receiver — Findings of Facts — Legal Discretion — Insolvency of Mortgagor— Olaim and Delivery.
1. In applications for a receiver the judge below is presumed to have found the facts in accordance with the contention of the party in whose favor he decided. He need not find the facts specifically unless the losing party requests him to do so.
2. A receiver will not he appointed in an action to foreclose a mortgage on a newspaper when the defendant denies owing anything on the mortgage debt, and it is apparent that, owing to the peculiar nature of the property, the appointment of a receiver would practically destroy its value.
3. The appointment of a receiver is not a matter of positive right, but rests in the sound legal discretion of the judge, who will take into consideration the nature of the property and the effect of granting or refusing such an application upon the material interests of the respective parties to the controversy.
4. Insolvency of the mortgagor is not of itself a sufficient ground for the appointment of a receiver to take charge of mortgaged chattels.
5. Actions of claim and delivery for mortgaged personalty rest on a different footing from applications for a receiver; as the mortgagor is protected by the bond required in claim and delivery.
This was a civil ACTION, brought to obtain judgment on the notes of the defendant, and for the foreclosure of a mortgage alleged to have been given to secure said notes, heard before Norwood, J., at Maj Term, 1895, of the Superior Court of Cumberlakd County, on a motion by the plaintiff for a receiver, said motion being based on the complaint,, answer, reply and the affidavit of the plaintiff and defendant respectively.
The motion for the appointment, of a receiver was refused, and the plaintiff excepted and appealed to the Supreme Court. The material facts appear in the opinion of Associate Justice Clakic.
Mensrs. N. A. Sinclair and H7". E. Murchison, for plaintiff (appellant).
Mr. N. W. Ray, for defendant.

Opinion:
Clark, J.:
This action is brought for the foreclosure of a mortgage upon a newspaper, together with its press, type, subscription list, &c., including its good will. The defendant, while admitting that the mortgage had been executed, denies that there is any balance due on the same, and alleges on the contrary that the plaintiff is indebted to him, and asks for an account and a cancellation of the mort gage. Under these circumstances the court not only would not decree a foreclosure till the balance due, if any, was ascertained, but would enjoin any attempt to sell under a power of sale in the mortgage until the account had been stated. Purnell v. Vaughan, 77 N. C., 268; Pritchard v. Sanderson, 84 N. C., 299; Pender v. Pittman, Ibid., 372. But the plaintiff goes further and asks that the property be taken out of the control of the defendant, pending the litigation, by placing it in the hands of a receiver. Inasmuch as the answer of the defendant, if true, negatives any lien or interest of the plaintiff as to the property, this would be a strong measure to grant the plaintiff, as he offers no indemnity, as he would have done had lie proceeded by claim and delivery, for the damage.which might be done the defendant if the plaintiff's claim should prove unfounded. To grant such motion without due caution might put it in the power of an irresponsible or reckless mortgagee to ruin a mortgagor's business,- though no balance is due on the mortgage. Whether a receiver shall be appointed in any case is left therefore largely to the sound judgment of the presiding judge who will take into consideration all the circumstances, including the nature of the property and its likelihood to be' destroyed or spirited away during the litigation, and the probability on the other hand of its value being seriously impaired by its being placed in the hands of a receiver, as would be particularly the case with a newspaper whose value so largely depends upon its good will and the personal characteristics of the editor and the policy he pursues, as is well pointed out by Avery, J., in Cowan v. Fairbrother, at this Term. The appointment of or refusal to appoint a receiver is, like every judgment below, presumed to be correct, and the burden is on the appellant to show error. The judge in this class of cases is presumed to have found the facts in accordance with the-contention of the party in whose favor he decided the motion, and need not find the facts specifically unless the losing party requests him to do so. Milhiser v. Balsley, 106 N. C., 433; Holden v. Purefoy, 108 N. C., 163; Parker v. McPhail, 112 N C., 502; Delafield v. Construction Co., 115 N. C., 21. The rule is thus clearly stated by Shepherd, J"., in Holden v. Purefoy, supra: "No findings of fact accompany the several affidavits, nor does it appear that the appellant requested that such findings should be made. If he had desired the ruling of this Court upon any particular view of the facts, he should have aslced for a finding of the same, but as he failed to do so, we must assume, in the absence of any specific exception, that his objection is based on the ground that, talcing as true that view of the testimony niost favorable to the appellee, the latter as a matter of law would not be entitled to relief." This is a reasonable rule and has been so held, by repeated decisions, several of which are above cited. This ruling does not apply to injunction proceedings, which stand on a different footing.
In the present case there was no request by the appellant that the judge should find the facts, and we must take them to be as set out in the affidavits filed by the appellee. On turning to the affidavits we find it testified by the defendant, and not denied by the plaintiff, that to appoint a receiver " would be positively to destroy absolutely its value and render the property in controversy in this action worthless as a newspaper." Owing to the peculiar nature of this species of property, and the important part its good will and the capacity and policy of the editor, especially if a man of talent and popularity and of strong individuality, have in giving it value, it can be readily seen that appointing a receiver to take charge of the paper, with power to change the editor or control its policy, might, and in many cases would, destroy all its value, beyond the slight value attached to the possibly well-worn type and press. To appoint a receiver even of realty, or of a railroad or the like, is to be done with caution, (Lumber Co. v. Wallace, 93 N. C., 22,) though in such cases the value does not (as is the case with a newspaper) depend" upon the popularity of the owner or manager and tlie good will which is so largely personal to him. The allegation that to appoint a receiver would be to destroy the property absolutely as a newspaper, i. e. all the property beyond the slight value of the worn type and press, &c., not being denied, must be taken as true. Why, then, appoint a receiver, when to do so could not benefit the plaintiff, even if'his contention is right, and would be an irreparable wrong to the defendant if his contention that the plaintiff is in fact indebted to him be true? As a ground for relief,.the plaintiff, who makes his'affidavit in Washington City, alleges on information that the property is depreciating in the hands of the defendant. This, if true, would not be as hurtful as the utter destruction of the newspaper property by thg appointment of a receiver, which the plaintiff does not deny. The defendant, however, in his affidavit denies that the property has depreciated, but on the contrary avers that it has doubled in value and is steadily appreciating in his hands. This, we take it, means not only additions to the subscription list, advertising patronage and good will, but, from the nature of a newspaper office, the constant substitution of new type for the old which from time to time becomes worn out and useless. The judge below might have considered that the plaintiff, a non-resident, was swearing upon hearsay information and belief," as he states, and that the defendant was testifying to facts within his daily and direct knowledge. But however that may have been, we must conclude upon the authorities above cited that the court below, in the absence of a request to find the facts, found this and all other controverted points in favor of the appellee, and we are bound by such finding.
It is true that the plaintiff alleged that the defendant was insolvent, and this the defendant admitted, but there is no allegation that the defendant intends to run off with or conceal or destroy the property, and the only possible bearing which the allegation of insolvency could have is in connection with the other allegation, (which is found against the plaintiff,) that the property is depreciating, and thus the security is being impaired. The allegation of the defendant's insolvency and poverty, taken alone, is not sufficient ground to take the property out of his hands, which he avers is his own, free from any legal claim of the plaintiff, especially when the effect of the judge's ruling is, as we have seen, that the security is not being impaired, but in truth has doubled in value and is steadily increasing in worth, and that, in fact, to appoint the receiver would be really to destroy the chief value of the property. 20 Am. & Eng. Encyc., 39, and Notes 1 and 2. Upon a proper state of facts a receiver can be appointed of a newspaper, as well as of other property, but, upon the peculiar state of facts found in this case, to appoint a receiver would be a great injury to the defendant and no benefit to the plaintiff, and the judge below properly left the property in the hands of the defendant until a jury could pass upon the controverted issue of fact, whether the plaintiff has any sum due him for which he can ask a decree of foreclosure.
No Error.