Marshall & Illsley Bank v. Cady

• Court: Minnesota Supreme Court
• Writing for the Court: MITCHELL
• Citation: Marshall & Illsley Bank v. Cady, 76 Minn. 112, 78 N.W. 978 (Minn. 1899)
• Decision Date: 26 April 1899
• Parties: MARSHALL & ILLSLEY BANK v. CADY et al.

76 Minn. 112

78 N.W. 978

MARSHALL & ILLSLEY BANK

v.CADY et al.

Supreme Court of Minnesota.

April 26, 1899.

Appeal from district court, Ramsey county; William Louis Kelly, Judge.

Action by the Marshall & Illsley Bank to foreclose a mortgage, in which Frank M. Cady was appointed receiver. The balance remaining in the receiver's hands on accounting was directed to be paid over to defendant, and plaintiff appeals. Affirmed.

Syllabus by the Court

1. In this state, when a mortgagor holds the legal title of the mortgaged premises, and, under the statute, is entitled to the possession, and consequently to the rents and profits, until foreclosure and the expiration of the time for redemption, the rents and profits of the land are no part of the security; and neither the mortgagee nor the purchaser at the foreclosure sale is entitled to the appointment of a receiver of the rents and profits, except upon the equitable ground that it is necessary in order to prevent waste, or to protect and preserve the mortgage security, and in such case the rents and profits can only be used for that purpose. The mere fact that the premises are inadequate security, and that the mortgagor is insolvent, will not of itself authorize the appointment of a receiver.

2. The purchaser at the mortgage sale, whether the mortgagee or a third person, is not entitled to have the rents and profits remaining in the hands of the receiver applied to the payment of taxes which were delinquent, and a lien on the premises at the time of the sale. The purchase was subject to all existing paramount incumbrances.

3. The plaintiff cannot assign as error the action of the court in disallowing the claims of the receiver for fees and disbursements, as this is a matter personal to the receiver, and cannot prejudice the party. Wm. G. White, for appellant.

Chas. J. Berryhill, for respondent.

MITCHELL, J.

In this action to foreclose a mortgage, the court, on the motion of the plaintiff, appointed a receiver of the mortgaged premises during the pendency of the action to collect the rents, profits, and income of the property, and apply the same, as far as necessary, in payment of the taxes and assessments that were then a lien against the premises, and to bring the balance, if any, into court. In the final decree of foreclosure rendered in November, 1897, the court directed that the receivership should be continued until the further order of the court. The premises were sold under the judgment in December, 1897, and purchased by the plaintiff for a sum about $300 less than the amount due on the mortgage, for which a deficiency judgment was entered after the sale was confirmed. At the date of the sale the taxes for 1893, amounting to over $80, remained unpaid, and constituted a lien on the property. The receiver remained in possession, collecting the rents and profits of the premises, until the expiration of the time for redemption, in December, 1898. Subsequently the receiver filed in court an account of his receipts and disbursements. The court disallowed some of the items of his account for fees and disbursements, and settled the net balance in his hands at $77.66. The plaintiff asked that this balance be applied either on the deficiency judgment, or on payment of the taxes of 1893. The defendant asked that the receiver be directed to pay the amount over to him. The court granted defendant's motion, and the plaintiff appealed. The receiver has not appealed.

The further facts may be stated (although probably immaterial) that the premises were never redeemed; also, that at least a part of the balance in the hands of the receiver was derived from rents received after the foreclosure sale. The plaintiff excepts to the action of the court in disallowing some of the charges of the receiver for fees and disbursements. This is a matter personal to the receiver, and does not concern the plaintiff. If it is entitled to the balance, the disallowance of these items would make the amount coming to it the larger by the amount disallowed. The receiver being content, it does not lie in the mouth of the plaintiff to object.

To the contention that the balance in the hands of the receiver should be applied towards the payment of the taxes for 1893, the short answer is that these taxes were a paramount lien upon the premises when plaintiff purchased them; that it purchased subject to this lien, and presumably fixed the amount of its bid with...