McDermott v. Halliburton

• Decision Date: 27 June 1929
• Docket Number: 8 Div. 103.
• Citation: 219 Ala. 659,123 So. 207
• Parties: MCDERMOTT ET AL. v. HALLIBURTON ET AL.
• Court: Alabama Supreme Court

123 So. 207

219 Ala. 659

MCDERMOTT ET AL. v. HALLIBURTON ET AL.

8 Div. 103.

Supreme Court of Alabama

June 27, 1929

Appeal from Circuit Court, Marshall County; A. E. Hawkins, Judge.

Bill to redeem by John C. McDermott and others against Docia Halliburton and another, and petition by respondent Halliburton for appointment of a receiver. From a decree appointing a receiver, complainants appeal. Reversed and remanded.

D Isbell, of Guntersville, for appellants.

Ernest Parks, of Scottsboro, for appellees.

GARDNER J.

The appeal is from an interlocutory order appointing a receiver in a pending cause. The original bill was filed by the heirs at law of a deceased mortgagor, seeking the exercise of the equity of redemption of a mortgage on a large tract of land in Marshall county.

The bill (the sufficiency of which was not questioned) charged usury and improper or insufficient credits, and sought an accounting of the amount due. The answer denied the material averments, and disclosed that a few days after the bill was filed the mortgage was foreclosed under the power of sale the mortgagee becoming the purchaser. There was cross-bill seeking ratification of the sale, or, in the alternative, a foreclosure decree. The respondent subsequently filed a petition for the appointment of a receiver to collect the rents and incomes from the property, the result of which is stated above.

The power of appointment of receiver is a delicate one, to be exercised with caution (Gilreath v. Union Bank & Trust Co., 121 Ala. 204, 25 So. 581), and we are not persuaded it was justified in the instant case.

The petition appears to proceed upon the theory that respondent was entitled to the rents as a matter of course, and that the allegation of insolvency of the complainants to the original bill sufficed for all purposes. The foreclosure of the mortgage after the filing of the original bill did not oust the court of its jurisdiction, and the foreclosure, while not absolutely suspended, is yet subject to the equity of the bill, and may be set aside by the court, if complainant is awarded relief. Brown v. Bell, 206 Ala. 182, 89 So 659; Fair v. Cummings, 197 Ala. 131, 72 So. 389; Pattillo v. Tucker, 216 Ala. 572, 113 So. 1. So considered, therefore, the case of Lindsay v. Am Mortgage Co., 97 Ala. 411, 11 So. 770, is in point, and the following excerpt from the opinion here directly applicable: "It is a case then of a mortgagee, without foreclosure, applying for a receiver to take possession of the lands from the mortgagor to preserve the rents pending the mortgagor's bill to redeem. In such case, the mortgagee, is not entitled to have the rents preserved and paid to him by virtue of any absolute ownership thereof in him, but, if entitled at all, is entitled to have them preserved to be applied to the payment of the mortgaged debt. *** It is clear that where lands are the subject of a mortgage security the mortgagee is not entitled to a receiver unless it is made to appear that the preservation of the rents and profits is necessary to the mortgagee's security. If the lands are of sufficient value to secure the...