Hoebel v. Raymond

• Decision Date: 02 April 1928
• Docket Number: 4817
• Parties: OTTO HOEBEL and ROBERT WILLIAMS, as Executors of the Estate of O. P. WILLIAMS, Deceased, Appellants, v. JAMES RAYMOND, Defendant; GEORGE L. AMBROSE, Petitioner and Respondent
• Court: Idaho Supreme Court

266 P. 433

46 Idaho 55

OTTO HOEBEL and ROBERT WILLIAMS, as Executors of the Estate of O. P. WILLIAMS, Deceased, Appellants, v. JAMES RAYMOND, Defendant; GEORGE L. AMBROSE, Petitioner and Respondent

No. 4817

Supreme Court of Idaho

April 2, 1928

LANDLORD AND TENANT-NOTICE TO PAY RENT OR SURRENDER POSSESSION-TENANT'S FAILURE TO COMPLY-FORFEITURE-NECESSITY OF SUMMARY ACTION-SALE OF MORTGAGED PROPERTY-CONSENT OF MORTGAGEE.

1. Under C. S., secs. 7322, 7355, service by landlord on tenant of statutory notice to pay rent or quit, and tenant's failure to comply therewith, did not end relation of landlord and tenant, but, at most, there was only a forfeiture of lease, which of itself could not disestablish relation until surrender by tenant or his failure to satisfy a judgment of unlawful detainer, within five days after its rendition.

2. To avail one's self of a forfeiture, he must within reasonable time, not only declare, but seek to enforce, the same.

3. Where statutory notice to quit or pay rent was served on tenant October 4, 1922, and no summary action based thereon was ever taken to dispossess tenant, and his possession was not disturbed until October 5, 1923, and landlord permitted tenant to sow and cultivate during crop season of 1923, and run livestock as usual, held that landlord waived his right to dispossess for nonpayment after statutory demand.

4. Mortgage on hay given by tenant to his attorney to cover agreed attorney's fee and cash advanced or to be advanced held to have been given in good faith, no bankruptcy proceeding being involved, and it was immaterial that tenant preferred his mortgage creditor over others, so long as transaction was honest.

5. When mortgagee unconditionally consents to sale by owner of mortgaged property, he waives his security even though owner promises to turn proceeds to him.

6. Where receiver agreed in writing to feed hay covered by chattel mortgage to livestock in his possession and account for the same, thus preserving and improving livestock, which were later sold and proceeds turned over to clerk, held that such proceeds were impressed with a lien or trust running to mortgagee and latter did not waive his lien.

APPEAL from the District Court of the Sixth Judicial District, for Butte County. Hon. Ralph W. Adair, Judge.

Petition in receivership praying preferred lien in amount due on mortgage. Judgment for petitioner. Affirmed.

Judgment affirmed. Costs to respondent.

E. W Whitcomb and F. J. Cowen, for Appellants.

"It is contrary to the policy of the law, and also contrary to the principles of equity, to permit an attorney at law to occupy at the same time, and in the same transaction, the antagonistic and wholly incompatible position as advisor of his client concerning a pending litigation threatening the title to his property, and that of purchaser of such property, in opposition to the title of his client." (Cunningham v. Jones, 37 Kan. 477, 1 Am. St. 257, 15 P. 572.)

"The intent with which a transfer in fraud of creditors is made is not established so much by attempting to ascertain the actual intent in the mind of the debtor, but rather by the facts and circumstances under which the transfer was made, and from which the law imputed a fraudulent motive." (California Con. Min. Co. v. Manley, 10 Idaho 786 81 P. 50.)

George L. Ambrose and Thomas & Andersen, for Respondent.

When property is taken into possession by a receiver, the possession of the receiver is the possession of the court making the appointment, the property being regarded while in the hands of the receiver as in the custody of the law. Such possession is exclusive alike of both parties to the suit. The property becomes a trust fund for the payment of debts and the receiver simply holds it for the benefit of those ultimately entitled to it. (23 R. C. L., Receivers, sec. 58.)

After the appointment of a receiver claimants of the property or any interest therein may enforce their claims only by permission of the court appointing the receiver. Such a claimant may be made a party to the suit in order to establish his claim. The ordinary method is by petition or motion in the cause. (De Forrest v. Coffey, 154 Cal 444, 98 P. 27.)

Where mortgaged chattels are taken in possession by a receiver and disposed of by such receiver, the mortgagee has a preferred claim against the proceeds up to the amount of the mortgage indebtedness. (Pickering v. Richardson, 57 Wash. 117, 106 P. 614.)

Where the court takes control of the assets of an insolvent it does not destroy existing liens but assumes the burden of protecting the rights of all the parties. (McRae v. Bowers Dredging Co., 86 F. 344; American Trust & Savings Bank v. McGettigan, 152 Ind. 582, 71 Am. St. 345, 52 N.E. 793.)

"The correct rule as to the evidence in a case of this kind and character is as follows: 'Fraud is never presumed, but must be proved by clear and satisfactory evidence by the party asserting it; and if the facts and circumstances from which the alleged fraud is supposed to arise may reasonably consist with honest intentions, it will not be imputed.'" (Crumpacker v. Bank of Washington County, 38 Idaho 534, 223 P. 229; Kerns v. Washington Water Power Co., 24 Idaho 525, 135 P. 70; Nelson v. Hudgel, 23 Idaho 327, 130 P. 85.)

T. BAILEY LEE, J. Wm. E. Lee, C. J., and Budge, Givens and Taylor, JJ., concur.

OPINION

T. BAILEY LEE, J.

On October 1, 1919, O. P. Williams executed to defendant, Raymond, a five-year lease covering a certain ranch, livestock and equipment at an agreed rental of $ 15,706.60, one-half of which was to be paid October 1, 1922, and the remainder October 1, 1924, the day upon which said lease was to expire.

The first one-half of the rent not having been paid when due Williams on October 3, 1922, instituted this action to recover the same together with other moneys claimed due, and seeking a reformation of the contract. A day later he served Raymond with a statutory notice to pay rent within three days or quit. The lessee refused to quit or pay rent, claiming later in his answer that no rent was due. Under a writ of attachment issued in the action certain of the defendant's livestock had been seized by the sheriff; and, by stipulation of the parties, sales were had and the proceeds, approximately $ 8,500, were paid into court to await judgment. On June 13, 1923, while the lessee was still in undisturbed possession, he executed to his attorney, George L. Ambrose, a promissory note in the sum of $ 2,000 secured by a mortgage on a crop of hay then growing on the premises. This obligation was to cover an agreed $ 1,500 attorney's fee, expenses and cash advanced or to be advanced within a time certain to assist the lessee in his farming operations. On September 26th following, the court appointed a receiver who took over the possession and the management of the leased property October 5, 1923. At that time there were 392.9 tons of hay on the place subject to the Ambrose mortgage. Notwithstanding that the mortgage was duly recorded, Ambrose on December 28th notified the receiver that he would not be permitted to feed the hay to the livestock in his possession, unless the receiver would account to him for the full amount of his mortgage or as much thereof as the hay was worth, valuing the same at $ 6 per...