Johnson v. LaPorte Bank & Trust Co.

• Citation: 470 N.E.2d 350
• Decision Date: 07 November 1984
• Docket Number: No. 3-983A284,3-983A284
• Court: Court of Appeals of Indiana
• Parties: Elmer E. JOHNSON and Pauline J. Johnson, Defendants-Appellants, v. LA PORTE BANK & TRUST CO., Plaintiff-Appellee.

Page 350

470 N.E.2d 350

Elmer E. JOHNSON and Pauline J. Johnson, Defendants-Appellants, v. LA PORTE BANK & TRUST CO., Plaintiff-Appellee.

No. 3-983A284.

Court of Appeals of Indiana,

Third District.

Nov. 7, 1984.

Wesley G. Kipp, LaPorte, for defendants-appellants.

Martin W. Kus, Newby, Lewis, Kaminski & Jones, LaPorte, for plaintiff-appellee.

GARRARD, Judge.

This is an interlocutory appeal from the trial court's order appointing a receiver to take possession of real estate owned by Elmer E. and Pauline J. Johnson. The receiver was appointed after a hearing on the petition of the LaPorte Bank & Trust Company (the bank) pending the litigation of the bank's complaint against the Johnsons. The bank alleged in its complaint that, on June 29, 1979, the Johnsons had executed and delivered a note to the bank in the amount of $30,000 and a mortgage on part of their real estate securing the note. The bank alleged the Johnsons were in default and sought judgment for the amount of the note outstanding plus interest and reasonable attorney's fees. The bank further sought an order foreclosing the mortgage.

The issues raised by the Johnsons on this appeal, as restated, are:

I. Whether the trial court erroneously applied a statute which may be applied to the appointment of a receiver only after judgment and pending a foreclosure sale.

II. Whether there was sufficient evidence to support the appointment of a receiver pursuant to the applicable statute.

I. Statutes authorizing appointment of a receiver.

The Johnsons contend the trial court erroneously applied IC 32-8-16-7 when it appointed a receiver. They contend IC 34-1-12-1 is the proper statute to be applied to a case such as this one involving the appointment of a receiver prior and ancillary to the trial on the merits of the complaint. In its brief the bank acknowledges that IC 34-1-12-1 is the applicable statute but insists the court appointed the receiver pursuant to that statute despite the court's references to IC 32-8-16-7 during the hearing.

IC 34-1-12-1 et seq. is entitled, "Receivers and Deposits in Court." Section One of Chapter 12 provides:

"A receiver may be appointed by the court, or the judge thereof in vacation, in the following cases:

First. In an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject any property or fund to his claim.

Second. In actions between partners, or persons jointly interested in any property or fund.

Third. In all actions when it is shown that the property, fund or rent, and profits in controversy, is in danger of being lost, removed or materially injured.

Fourth. In actions by a mortgagee for the foreclosure of a mortgage, and the sale of the mortgaged property, when it appears that such property is in danger of being lost, removed or materially injured; or when such property is not sufficient to discharge the mortgaged debt, to secure the application of the rents and profits accruing before a sale can be had.

Fifth. When a corporation has been dissolved, or is insolvent, or is in imminent danger of insolvency, or has forfeited its corporate rights.

Sixth. To protect or preserve, during the time allowed for redemption, any real estate or interest therein sold on execution of order of sale, and to secure to the person entitled thereto the rents and profits thereof.

"Seventh. And in such other cases as may be provided by law; or where, in the discretion of the court, or the judge thereof in vacation, it may be necessary to secure ample justice to the parties. [Acts 1881 (Spec. Sess.), ch. 38, Section 245, p. 240.]"

IC 32-8-16-7 is part of a chapter entitled, "Mortgages--Foreclosure--Redemption, Sale, Right to Retain Possession." This section provides:

"In all cases at any time prior to such sale, the court upon the application of the plaintiff may appoint a receiver who shall take possession of the mortgaged premises, collect the rents, issues, income and profits thereof and apply the same to the payment of all taxes, assessments, insurance premiums and repairs required in his judgment to preserve the security of the mortgage debt, and promptly file his final report thereof with the clerk of said court, and subject to the approval of said court account for and pay over to the clerk, subject to the further order of the court, any balance of such income or other avails in his possession then remaining; Provided, That if the mortgaged premises is actually occupied as a dwelling by the record owner of the fee-simple title, he shall be permitted to retain possession thereof, rent free, until such sale, so long as he continues to pay the taxes and special assessments levied against such mortgaged premises and does not suffer waste or other damage to the premises, in the judgment of the court. If the record owner of the fee-simple title does not pay the taxes and special assessments levied against the mortgaged premises, he shall be permitted to retain possession of that part of the mortgaged premises, not exceeding fifteen acres, which is actually occupied as a dwelling by the record owner of the fee-simple title, rent free, until such sale, so long as he does not suffer waste or other damage to the premises in the judgment of the court; and, Provided, further, That the owner of any crops growing on the mortgaged premises at the time of the commencement of such action, other than the owners of fee-simple title or his or her assigns, shall have the right to enter said premises and care for and harvest said crops at any time within one year from the time of filing such action. [Acts 1931, ch. 90, Section 7, p. 257.]"

While it is necessary for us to distinguish these two statutes in ruling on this appeal, we need not speculate as to which statute the court had in mind when making its order. ¹ A court entering an interlocutory order appointing a receiver is not required to make special findings of fact and conclusions of law. Trial Rule 52; Kist v. Coughlin (1936), 210 Ind. 622, 1 N.E.2d 602, 604. The court here entered a general judgment in favor of LaPorte Bank on its petition. General judgments are presumed to be based upon findings supported by the evidence. We will affirm if the trial court's judgment can be sustained on any legal theory. Vector Engineering & Manufacturing Corporation v. Pequet (1982), Ind.App., 431 N.E.2d 503, 504. Our duty then is to determine whether this was an action in which the facts allowed the appointment of a receiver. Kist v. Coughlin, supra, 1 N.E.2d at 604. That issue, the sufficiency of the evidence, will be considered in the second part of this opinion. First, however, we must determine which statute does apply so that the sufficiency of the evidence can be appropriately measured in light of the statutory requirements.

IC 34-1-12-1 contains six clauses which authorize a court to appoint a receiver in specific situations if certain conditions are met. A seventh clause gives a court discretion to appoint a receiver where "necessary to secure ample justice to the parties." To affirm the appointment of a receiver under IC 34-1-12-1 we only need find sufficient evidence to satisfy the conditions set out in that section.

IC 32-8-16-7 is seemingly without the conditional restrictions of IC 34-1-12-1. This section begins:

"[I]n all cases at any time prior to such sale, the court upon the application of the plaintiff may appoint a receiver who shall take possession of the mortgaged premises, collect the rents, issues, income and profits thereof and apply the same to the payment of all taxes, assessments, insurance premiums and repairs required in his judgment to preserve the security of the mortgage debts ...." ²

The clause "In all cases at any time prior to such sale ...." refers to the sale of mortgaged real estate to satisfy the judgment debt of the mortgagor. The sale is authorized by IC 32-8-16-1 ³ which first provides a period of at least three months from the filing of the complaint for foreclosure before "process shall issue for the execution of any such judgment or decree of sale ...." ⁴

The applicability of IC 32-8-16-7 does not appear to be limited to the appointment of receivers only after judgment and prior to sale as suggested by the Johnsons in their brief. When construing a single section of a statute we view that section with due regard for all other sections of the statute. Park 100 Development Company v. Indiana Dept. of State Revenue (1981), Ind., 429 N.E.2d 220, 222-23. The time reference of IC 32-8-16-1 is the filing of the complaint. While no sale may proceed until after a three-month period (for mortgages executed on or after July 1, 1975) and after a copy of the judgment and decree of sale has been issued to the sheriff, the appointment of a receiver under IC 32-8-16-7 is not made dependent on any intervening event. A receiver is appointed to preserve the property pending its final disposition. This protective purpose is as vital when the suit is originally filed as it is after the judgment is entered.

The more important question to be answered, however, is whether the general authority to appoint a receiver seemingly granted by IC 32-8-16-7 must be viewed in light of the more specific guidelines of IC 34-1-12-1. We think it must. The legislative history of these statutes aids our analysis.

IC 34-1-12-1 had its origin in the Revised Statutes of 1852. Section 199 of the 1852 Act provided for the appointment of a receiver in all the cases which are presently covered by IC 34-1-12-1 but without what is now Clause Sixth:

"Sixth. To protect or preserve, during the time allowed for redemption, any real estate or interest therein sold on execution or order of sale, and to secure to the person entitled thereto the rents and profits thereof."

The present Clause Seventh appeared in the original act as Clause Sixth.

The present Clause Sixth was added by Acts 1881, ch. 38, Section 245, p. 283 which contributed the entire...