Donnelly v. Butts
| Citation | 162 N.W. 674,137 Minn. 1 |
| Decision Date | 18 May 1917 |
| Docket Number | 20,154 - (36) |
| Parties | LENA B. DONNELLY v. CHARLES BUTTS |
| Court | Supreme Court of Minnesota (US) |
Action in the district court for Ramsey county to foreclose a mortgage and for the appointment of a receiver. From an order appointing a receiver during the pendency of the action to foreclose the mortgage, Haupt, J., defendant appealed. Affirmed.
Foreclosure of mortgage -- appointment of receiver during suit.
While neither insolvency of the mortgagor nor insufficiency of the security, separately or combined, warrant the appointment of a receiver in a suit to foreclose a real-estate mortgage still the appointment may be justified when in addition to those facts it is made to appear that the rents and profits of the property have been appropriated by the mortgagor to his own use, and he has suffered taxes on the premises to remain unpaid, together with large items of overdue interest upon prior mortgages, thus depreciating the security.
W. H Williams, for appellant.
Thomas J. McGrath and Horace H. Glenn, for respondent.
In this action to foreclose a mortgage the court made an order appointing a receiver pendents lite to collect the rents from the mortgaged property and apply the same upon unpaid taxes and overdue interest on prior mortgages. Defendant appeals.
The court might well find that plaintiff's security was inadequate and that the mortgagor was insolvent. But that in itself does not furnish a ground for the appointment of a receiver. Neither does there appear to be any substantial merit in the claim that defendant has failed to make necessary repairs. We have then only these facts upon which to base the order: There is overdue and unpaid more than $2,500 in interest upon the $9,895 mortgage indebtedness prior to plaintiff's, $60 upon the premium for the insurance policy covering the building on the mortgaged real estate, and the taxes for 1911, being about $450, together with the interest, penalties and costs, and the mortgagor has appropriated the rents and profits to his own use. Do these facts give the court the right to appoint a receiver? We believe our prior decisions answer the question in the affirmative. It is settled that waste committed or permitted upon mortgaged realty to such an extent as to make the security inadequate is good ground for appointment of a receiver pending foreclosure suit. In Cullen v. Minnesota L. & T. Co. 60 Minn. 6, 61 N.W. 818, it was said to be "clearly a species of waste for the holder of an estate under which he is in possession, to take and enjoy the rents and profits and neglect to pay the taxes, when it is his duty so to do for the benefit of some other right, interest or estate in the same land." There would seem to be no good reason for making a distinction between depreciating the security by nonpayment of taxes and doing the same thing by nonpayment of interest accruing upon prior mortgages. Both detract from the security as it was when the subsequent mortgage was accepted. Central Trust...
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