Parker v. Williams

• Court: Alabama Supreme Court
• Writing for the Court: KNIGHT, Justice.
• Citation: Parker v. Williams, 231 Ala. 569, 165 So. 848 (Ala. 1936)
• Decision Date: 23 January 1936
• Docket Number: 4 Div. 854
• Parties: PARKER v. WILLIAMS, Superintendent of Banks.

165 So. 848

231 Ala. 569

PARKER v. WILLIAMS, Superintendent of Banks.

4 Div. 854

Supreme Court of Alabama

January 23, 1936

Rehearing Denied March 5, 1936

Appeal from Circuit Court, Geneva County; Robt. S. Reid, Judge.

Bill by R.E. Parker against J.H. Williams, as Superintendent of Banks, as receiver of the Farmers & Merchants Bank of Samson in liquidation, and cross-bill by respondent. From a decree granting relief under the cross-bill, complainant appeals.

Affirmed.

Mulkey & Mulkey, of Geneva, for appellant.

B.W Smith, of Samson, and O.S. Lewis, of Dothan, for appellee.

KNIGHT Justice.

Bill by the appellant mortgagor to cancel certain real estate mortgages held by appellee as received of the Farmers &amp Merchants Bank of Samson, claiming payment of the mortgage debt, praying an accounting, and in the alternative for redemption if it be ascertained that any of the debt remains unpaid.

Appellee Williams answered the bill and made the same a cross-bill, in which he sought foreclosure, and the appointment of a receiver to collect the rents and preserve the property, pending the determination of the litigation.

The chancellor on the first submission appointed a receiver, and from that order the said Parker appealed to this court. On that appeal we held the appointment of a receiver was improvidently made, and we vacated the order. Parker v. Williams, 230 Ala. 437, 161 So. 512.

On remandment of the cause, the cross-complainant amended his cross-bill to meet the defect pointed out in the opinion of this court on first appeal.

In the amended cross-bill it is averred that the said R.E. Parker, mortgagor, is insolvent, and unable to respond in damages; that the property conveyed by the mortgages is wholly insufficient to pay the mortgage indebtedness; that the mortgagor had permitted a part of the property to be sold for taxes; that he had failed to keep the property insured, as by the terms of his mortgage he had agreed to do; that he was in possession of the property collecting the rents; and that the cross-complainant would suffer irreparable loss unless a receiver was appointed to take charge of said property, preserve the same, and collect the rents, income, and profits thereof, and to hold the same subject to the further orders of the court.

The application was set down for hearing upon a day named, and notice of the same was given to the complainant Parker. Upon the hearing, affidavits were submitted by both parties to the cause. The court at the conclusion of the hearing entered an order for the appointment of a receiver as prayed for in the amended cross-bill. It is from this second order appointing a receiver that this appeal is prosecuted by the said Parker.

It is quite true, as pointed out by Chief Justice Anderson on the former appeal in the case, "that the appointment of a receiver is a most delicate power which should be exercised with great caution"; that, if the mortgaged property is of sufficient value to pay the debt, a receiver should not be appointed regardless of the insolvency of the mortgagor. McDermott v. Halliburton, 219 Ala. 659, 123 So. 207; Taylor v. Hoffman, 229 Ala. 420, 157 So. 851.

But, while this is true, the court will not refuse to intervene and appoint a receiver when it is made to satisfactorily appear that the mortgagor is in possession, collecting the rents, is insolvent, and permits portions of the mortgaged property to be sold for taxes, and fails or refuses to keep buildings on the property insured, as by the terms of his mortgage he agreed to do. In other words, the court will not refuse the appointment of a receiver, when, by so doing, irreparable loss may result to the mortgagee.

In the case of Albritton et al. v. Lott-Blackshear Commission Co., 167 Ala. 541, 52 So. 653, 654, it was observed "It is a proposition clearly recognized that in foreclosure proceedings, if the mortgagor is insolvent and the property insufficient to satisfy the mortgage, a receiver may be appointed to intercept the rents, and it necessarily follows that, if there is such a state of affairs as that the rents will be wholly lost...