Davenport v. Thompson
| Decision Date | 16 October 1928 |
| Docket Number | 38889 |
| Citation | 221 N.W. 347,206 Iowa 746 |
| Parties | D. DAVENPORT, Appellee, v. ESTELLA MAUDE THOMPSON, Appellee, et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Union District Court.--A. R. MAXWELL, Judge.
Action for the foreclosure of a mortgage and the appointment of a receiver. Prior to the time of the trial of the main suit trial was had upon the question as to whether or not a receiver should be appointed, and the court appointed a receiver. The defendants Fleming appeal.
Affirmed.
Frank Wisdom, for appellants.
Kenneth H. Davenport, for D. Davenport, appellee.
O. E Klingaman, for Estella Maude Thompson, appellee.
WAGNER J. STEVENS, C. J., and DE GRAFF, ALBERT, and MORLING, JJ., concur.
The plaintiff is the owner of a promissory note in the principal sum of $ 11,000, and of a mortgage upon 240 acres of real estate in Union County, given as security for the payment of said note, both of which instruments were executed by the defendant Mrs. Estella Maude Thompson. Immediately after the description of the real estate in the mortgage appears the following provision therein:
"The intention being to convey hereby an absolute title, in fee simple, including all the rights of homestead; also all rents, income and profits derived or received from said premises, to have and to hold the premises above described, with all appurtenances thereto belonging, unto the said D. Davenport and assigns forever."
With reference to the rents and profits and the appointment of a receiver, the mortgage contains the following further provisions:
"It is further agreed that in case of default in the payment of the interest or principal hereby secured, or violation of any of the covenants in this instrument to be performed by the grantors herein, said mortgagee or its assigns are authorized to take possession of said mortgaged premises and collect and receive the rents, income and profits, derived or received from said premises and for that purpose when proceedings are commenced to foreclose this mortgage, the court, or a judge in vacation, may appoint a receiver to take charge of said premises and collect rents, and profits from the time of the commencement of said proceedings, to be applied in payment of the sum above mentioned."
On July 28, 1927, the plaintiff filed his petition in the office of the clerk of the district court of Union County, asking judgment against the defendant Thompson upon the note, and foreclosure of the mortgage securing the same. The petition contains the allegations of insolvency of the maker of the note and inadequacy of the mortgaged real estate as security, and a prayer for the appointment of a receiver.
On the same date as that of the filing of the petition, the original notice of the action was placed in the hands of the sheriff of Union County for service on the defendant Thompson, and that officer, the same day, went to the home of said defendant upon the mortgaged real estate to serve said notice, but she was not at her home, and thus service of the notice was not obtained.
It appears that the court, on the 3d day of August, 1927, fixed the time and place for the hearing upon the application for the appointment of a receiver for 2 o'clock P. M. on the 6th day of August, 1927, at the courthouse in Creston, and directed that notice by personal service be given the defendant Thompson of the time and place of the hearing of said application, provided she could be found within the county.
On July 29, 1927, being the next day after the filing of the petition and the giving of the original notice to the sheriff for service upon the defendant Thompson, she entered into a written lease with the defendants Fleming for the mortgaged real estate for the period from July 29, 1927, to March 1, 1929, and on the same date executed unto the Flemings a bill of sale for certain specified personal property situated upon the mortgaged real estate. Said bill of sale contains the provision that, with the exception of certain personal property upon which the Arispe Bank has a mortgage, "this bill of sale is intended to convey title to any and all personal property owned by me on the above described real estate as of this date, of every kind and character whatsoever; also all oats and timothy cut and uncut now on said premises."
On the same date, to wit, July 29, 1927, the defendants Fleming executed unto the defendant Thompson a chattel mortgage for the identical property described in the aforesaid bill of sale. The consideration named in both of the last two instruments is $ 1,860.
On August 3, 1927, the plaintiff filed an amendment to the petition, making the defendants Fleming parties to the suit, and renewed the prayer of his original petition. The defendants Fleming appeared at the time of the hearing on the application for the appointment of a receiver, and as a result of said hearing, a receiver was appointed, the order of appointment providing:
From this action of the trial court, the defendants Fleming have appealed.
The appellant has filed in this court an abstract, and the appellee has filed a denial and an amendment to the abstract, and the appellant has subsequently filed an additional and supplemental abstract. It is apparent therefrom that the parties have had much litigation in the trial court subsequent to the time of the appointment of a receiver, as aforesaid, and perhaps it is not amiss to say that it is now apparent that there are other appeals growing out of the controversy between the parties, which will probably hereafter come before us for our determination. However, the sole question argued on this appeal, and the only one for our determination at this time, is as to whether or not the trial court was justified in the appointment of a receiver.
In view of our previous pronouncements, the aforesaid quoted provisions of the mortgage must be construed as sufficient to pledge the rents and profits for the payment of the mortgage debt. See Walters v. Graham, 190 Iowa 481, 180 N.W. 305; Security Inv. Co. v. Ose, 205 Iowa 1013, 219 N.W. 36. Since the rents and profits were pledged to the payment of the mortgage debt, then in accordance with our previous pronouncements, the court, within the limits of sound legal discretion, may, as against the mortgagor and those having no rights superior to the mortgagee, appoint a receiver to take possession of the real estate and collect the rents and profits, provided that the plaintiff has established the insolvency of the maker of the note and the inadequacy of the mortgage security. Walters v. Graham, supra; Security Inv. Co. v. Ose, supra, and many subsequent cases.
The inadequacy of the security is clearly established by the record. While the testimony upon the question of the insolvency of the maker of the note is partially a matter of conclusion of the witness testifying upon said subject, yet when it is taken in connection with the entire testimony of the said witness,--who was the receiver of a bank to which she is indebted, and who had lived in Mrs. Thompson's neighborhood all of his life, [206 Iowa 750] --that he knows of no property which she owns outside of...
To continue reading
Request your trial