Farmers Sav. Bank of Shelby v. Pomeroy
| Decision Date | 09 December 1930 |
| Docket Number | 40562 |
| Citation | 233 N.W. 488,211 Iowa 337 |
| Parties | FARMERS SAVINGS BANK OF SHELBY, Appellant, v. R. M. POMEROY, Appellee. R. M. POMEROY, Appellee, v. FARMERS SAVINGS BANK et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Shelby District Court--K. R. COOK, Judge.
Affirmed.
White & White, for appellants.
Bennett Cullison, for appellee.
STEVENS J. MORLING, C. J., and DE GRAFF, ALBERT, and WAGNER, JJ concur.
The case is fully stated in the opinion.--Affirmed.
Sometime prior to July 31, 1924, certain real estate owned by appellee was sold on special execution to the appellant bank, to satisfy a junior mortgage executed by appellee and held by the bank. The sale left a deficiency judgment of $ 1,500. On application of the plaintiff (appellant herein) in the foreclosure action, a receiver was, on the above date, appointed by the court to lease the mortgaged premises and to collect the rent. A written lease was entered into with a tenant, and $ 2,983 later paid to the receiver as rent. This sum was disbursed for various purposes, sufficient thereof being applied on the deficiency judgment to reduce it somewhat below $ 500. The receiver filed his final report, and on June 2, 1925, it was approved by the court, without notice of any kind to the defendant in the foreclosure action, and the receiver, on order of court, discharged. Thereafter, and on a date not stated, the defendant mortgagor filed an application in the foreclosure action, alleging the misapplication of the rent collected by the receiver, and that the final report of the receiver was approved and the receiver discharged without notice thereof to the applicant, and praying that the order of approval and discharge be canceled and set aside.
On or about the same date, an independent action was commenced by appellee herein and defendant in the foreclosure action, to restrain the prosecution of an action commenced by appellant in the state of Pennsylvania, aided by attachment, to enforce collection of the balance of the deficiency judgment. The causes were consolidated for trial and tried together. The facts are stipulated, and only questions of law are involved.
It is conceded by appellant that the payment of certain items by the receiver out of the rent, which were approved by the court, was contrary to the holding of this court in Cedar Rapids Nat. Bank v. Todd, 199 Iowa 957, 203 N.W. 390.
The specific contention of appellant on this appeal is that no notice of the final report was necessary; that the receiver is the officer of, and acts under the orders and directions of, the court; and that, in any event, appellee was guilty of laches.
First, as to the question of notice: We presume that the mortgage foreclosed by appellant contained a provision for the appointment of a receiver. The propriety of such appointment is not, in any event, questioned. It is true that a receiver is the officer of the court, and must act under the direction thereof. A receiver, however, in a foreclosure action occupies a somewhat different position from that of a receiver appointed for other purposes. The right of the plaintiff in a foreclosure action, when such is permissible, to the appointment of a receiver, is a part of the remedy in equity for the satisfaction of his claim. The receiver is not appointed for the benefit of creditors, but as an aid to the mortgagee, in carrying out an appropriate remedy in equity. He does not, therefore, in the ordinary sense, stand indifferent between the parties. His appointment was not for the purpose of preserving the property covered by the mortgage, but to lease the mortgaged premises and to receive and apply the rent derived therefrom, so far as same was necessary, for the benefit of the mortgagee. 2 Clark on Receivers (2d Ed.), Section 963.
As already appears in this case, the receiver was appointed after judgment and execution sale. Whether notice of the application for the appointment of a receiver was served upon the defendant in the foreclosure action is not shown. It does appear, however, that Shelby Cullison, a lawyer residing at Harlan, appeared as attorney for him. Bennett Cullison, attorney for appellee in this action, began the practice of law at Harlan in June or July, 1924. He entered into partnership with his brother Shelby. Very shortly after the appointment of the receiver, Shelby Cullison, who was then afflicted with a fatal illness, went to California, where he died. The appearance of Shelby and the partnership between him and his brother are also urged and relied upon by appellant herein as obviating the necessity of the receiver's giving notice of his final report.
There is no statute in this state specifically requiring that notice of final report and application for...
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