Marshall & Ilsley Bank v. Cady
| Decision Date | 09 January 1899 |
| Docket Number | 11,445 - (101) |
| Citation | 77 N.W. 831,75 Minn. 241 |
| Parties | MARSHALL & ILSLEY BANK v. FRANK M. CADY and Others |
| Court | Minnesota Supreme Court |
Action in the district court for Ramsey county to foreclose a mortgage and for the appointment of a receiver. From a judgment in favor of plaintiff, entered pursuant to the findings and order of Otis, J., defendant Cady appealed. Affirmed.
Foreclosure of Mortgage -- Appointment of Receiver before Sale.
Held that, upon the evidence, the court did not err in appointing a receiver of the mortgaged premises during the pendency of an action of foreclosure.
Charles J. Berryhill, for appellant.
William G. White, for respondent.
Assuming without deciding, that an order appointing a receiver in foreclosure during the pendency of the action can be reviewed on appeal from the final judgment or decree, we are of opinion that, while the plaintiff did not present a very strong case, yet we could not hold that the court abused its discretion in appointing a temporary receiver. The affidavits presented would have justified the court in finding that the mortgaged premises were inadequate security; that the mortgagor was insolvent; that for four years taxes were unpaid and delinquent, for three of which the premises had been sold, and were unredeemed, that portions of the building on the premises were somewhat out of repair, that repairs were necessary for the full preservation of the property, and that the mortgagor was receiving rent for part of the premises, which he was not applying to the payment of taxes or the making of repairs. There was some evidence that the mortgagor was using a part of the building as his sleeping apartments, and, hence, that the premises were his homestead.
While a court should ordinarily require a somewhat stronger showing for the appointment of a receiver of the mortgagor's homestead than in the case of other property, yet, when a debtor mortgages his homestead, he subjects the property to all the ordinary legal and equitable rights of a mortgagee, among which is the right to have a receiver appointed when necessary to prevent waste or to preserve the property. The same facts which would justify the court in appointing a receiver during the pendency of the action would justify it in providing in the final judgment that the receivership should be continued.
As there is neither a "case" nor bill of exceptions, the question whether the evidence justified the findings is not presented. The findings are presumed to have been based upon the evidence introduced on the trial, and not upon the affidavits presented on the motion for the appointment of a receiver during the pendency of the action.
The judgment is silent as to the duration of the receivership. No point is made on this by the defendant; but we mention the fact in order that it may not be inferred that we impliedly hold that a receivership could be continued after a foreclosure sale, or that the rents and profits of the property could be applied towards paying the mortgage debt, or used for any other purpose than to prevent waste and preserve the property. The judgment should be affirmed.
So ordered.
DISSENT BY: BUCK
I think that the evidence quite conclusively shows that the premises are Cady's homestead, and this is one of the material facts that lead me to think that the receiver should not, upon the evidence adduced, have been appointed. When the trial court appointed the receiver, it was done by the court upon affidavits submitted by the respective parties. The application therefor was made in the month of July, 1897, but not granted until October 29, 1897. All of the affidavits upon which the receiver was appointed appear in the record, and the sufficiency of the plaintiff's affidavits is assailed and contradicted by the defendants' counter affidavit.
Not only was a receiver appointed by order of the court, and therein directed to collect, all and singular, the rents, profits and income of the premises, but by a subsequent order of the court the defendant Cady was ordered, within five days after the service upon him of the order, to quit, surrender and deliver to the receiver said premises, and vacate the same.
It is true that the judgment appealed from is dated November 12, 1897, and the last order directing the defendant Cady was not made until November 20, 1897, and not appealed from. But, as I regard this case, this is immaterial. The gist of the controversy is over the right to appoint a receiver at all. Probably, if there existed a sufficient cause to appoint a receiver in the first instance, and the case appeared to be one where ordinarily the right of a receiver to act at all was presented, the appointment would carry with it the right to the possession of the property. It is the right to invoke the aid of the court in the first instance, upon the case being presented, which in my opinion is one of more than serious doubt.
Such a proceeding is an extraordinary remedy, sometimes, and perhaps I might say frequently, operating harshly, and the circumstances of peril which invoke the remedy should be established with reasonable certainty. Such appointment is not a matter of right, and should not be used where its exercise will produce injustice, and the fact should be clearly proved. Beach, Rec. (Alderson's Ed.) § 48. And this rule is strictly applied in mortgage cases, where it must clearly and fairly appear that the security is inadequate, or there is imminent danger of waste, removal or destruction of the property. Id. 574.
Mere default in the payment of the debt would not be sufficient ground for the appointment of a receiver. It is true that power to make the appointment of a receiver is generally discretionary, yet,
"The judicial authority to deal with property by means of a receiver is not unlimited or absolute." Id. § 1. Id. § 524.
As I differ from my associates, it is proper that I should fully examine the evidence which...
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