Newman v. Van Nortwick

• Decision Date: 03 April 1917
• Docket Number: 13856.
• Citation: 95 Wash. 489,164 P. 61
• Parties: NEWMAN et al. v. VAN NORTWICK et al.
• Court: Washington Supreme Court

164 P. 61

95 Wash. 489

NEWMAN et al. v. VAN NORTWICK et al.

No. 13856.

Supreme Court of Washington

April 3, 1917

Department 1. Appeal from Superior Court, King County; Mitchell Gilliam Judge.

Suit by Hannah Hill Newman and others against Bernice Van Nortwick and others. From an order refusing to discharge a receiver the defendants appeal. Affirmed.

Weter &amp Roberts, of Seattle, for appellants.

Walter S. Fulton, of Seattle, for respondents.

MORRIS J.

Appeal from an order refusing to discharge a receiver in an action to foreclose a mortgage on real property. The conceded facts are: That the property is worth less than the amount due on the mortgage; that there is no provision for any deficiency judgment; that the receiver has collected $1,465.01 from rentals; that the property is well rented and well cared for; that the owners of the property had permitted delinquent taxes to accumulate to the sum of $1,712.09 now drawing interest at 15 per cent. per annum. With these facts before it the lower court denied a motion to discharge he receiver. As stated by appellant, the question to be determined is:

'Are delinquent taxes alone a proper ground for the appointment of a receiver in the foreclosure of a mortgage it being admitted that the security is inadequate to discharge the debt and that no deficiency judgment can be taken?'

Our answer is in the affirmative. Appellant relies upon Norfor v. Busby, 19 Wash. 450, 53 P. 715. Nothing in that case sustains the negative of appellants' query. It was there held that insufficiency of property to pay a mortgage indebtedness was not of itself sufficient ground for the appointment of a receiver in order to secure the application of rentals to the discharge of a mortgage debt.

The same rule was recently announced in Gerber v. Heath, 92 Wash. 519, 159 P. 691, where it was said that the property, and not its income, is the security for the mortgage debt, and that the mortgagor is under no obligation to apply the income of mortgaged property to either the principal or interest of the mortgage debt. That would mean as applied to this case, that notwithstanding the inadequacy of the property to pay the mortgage debt, the receiver could not apply the rentals in payment of the amount due on the mortgage. We have no doubt such is the law in this state, but that is not the case here. So far as the record goes there is no intention on the part of the receiver to apply the rentals to the debt. He did, however, ask leave to apply the rentals in payment of the delinquent taxes. This, we think, was a proper request. In Euphart v. Morrison, 39 Wash. 311, 81 P. 695, and Collins v. Gross, 51 Wash. 516, 99 P. 573, it was held that it is the proper procedure in this state under section 741, Rem. Code, to appoint a receiver where it appeared that the property was in danger of being lost or materially injured or where in the discretion of the court it was necessary to secure ample justice to the parties. Such was the situation here. When taxes on real property are permitted to become delinquent and accumulate an added burden of 15 per cent. per annum, there is danger of...