Sec. Inv. Co. v. Ose

• Decision Date: 03 April 1928
• Docket Number: No. 38773.,38773.
• Citation: 219 N.W. 36,205 Iowa 1013
• Parties: SECURITY INV. CO., MCCALLSBURG, v. OSE ET AL.
• Court: Iowa Supreme Court

205 Iowa 1013

219 N.W. 36

SECURITY INV. CO., MCCALLSBURG,

v.OSE ET AL.

No. 38773.

Supreme Court of Iowa.

April 3, 1928.

Appeal from District Court, Story County; G. D. Thompson, Judge.

Action for the foreclosure of a real estate mortgage. The appointment of a receiver is prayed. From that portion of the decree appointing a receiver, the defendant Osmund O. Ose appeals. Reversed.Miller, Kelly, Shuttleworth & McManus, of Des Moines, for appellants.

Addison & Smedal, of Nevada, Iowa, for appellee Security Investment Company, McCallsburg, Iowa.

WAGNER, J.

This action involves the foreclosure of a real estate mortgage, in the sum of $29,600, upon a half section of land situated in Story county. The mortgagor, Osmund O. Ose, is the owner of the real estate. The requisite allegations and prayer for the appointment of a receiver are contained in the petition. This action was begun in May, 1926, and judgment and decree rendered in the following October. The indebtedness became due by reason of an acceleration clause in both the notes and mortgage securing same. There is prior mortgage indebtedness against the real estate in the principal sum of $18,000. The trial court rendered judgment against the defendant Osmund O. Ose for $33,049.37, the amount of the indebtedness, and decree of foreclosure of the mortgage. As to this there is no complaint. The real estate was rented for the year intervening March 1, 1926, and March 1, 1927, and prior to the commencement of this action, the rent note had been assigned by the mortgagor. The decree provides that the tenant is entitled to the possession of the real estate during the term of the lease and that the assignee of the note is entitled to the rent. The taxes for 1925, due in 1926, in the amount of $727.30, were not paid at the time of trial.

The decree contains a provision relative to the appointment of a receiver, which is as follows:

“It is further ordered, adjudged, and decreed that plaintiff have and is hereby given a lien upon the crops grown on the lands in controversy during the year 1927, it being decreed and adjudged that defendant Osmund O. Ose pay all taxes due or to become due during the period of redemption on said lands, or that may be a lien thereon; namely, taxes for 1925 payable in 1926, and taxes for 1926 payable in 1927. And should said defendant fail to pay taxes now past due and permit the lands to be sold at tax sale, W. H. Reid is hereby appointed as receiver, his bond to be fixed at $5,000, to be approved by the clerk of this court, and who shall on such failure to pay taxes take possession of said land, rent the same and collect the rents and profits therefrom. In case taxes for 1925 are paid, and the lands in controversy not permitted to go to tax sale, the said receiver shall not take possession or exercise any control thereof, and the costs, if any, of said receivership shall be taxed to plaintiff unless receiver functions by taking possession of crops under the provisions of this decree. If the land is not redeemed and taxes payable in 1927 are promptly paid when due as by law required, one-half before April 1, 1927, and one-half before October 1, 1927, then in that case the said receiver will not exercise any control or take possession of the lands. But on failure to pay taxes when due as aforesaid the said receiver shall at once proceed to take possession thereof and collect rents and profits and hold the same subject to order of this court, to be applied on the payment of taxes, liens, including interest on prior mortgages, and balance be applied on this judgment, interest, and costs.”

It is this provision of the decree which provokes this appeal.

With reference to the pledging of the rents and profits and the appointment of a receiver, the mortgage contains the following provision:

“It is furthermore expressly agreed between the parties hereto that, in case of foreclosure of this mortgage by second party, or assigns, that is, the property is bought in at the subsequent sheriff's sale by said second party or assigns, to satisfy any part of the debt, the said first parties waive all right of possession and agree that a receiver may be appointed by the court to take immediate possession of said premises, and hold same until the property has been redeemed or the time of redemption has expired, and in such event the second party, or assigns, shall be liable to account to the first parties only for the net profits thereof, accruing from the use of the said premises.”

In Walters v. Graham, 190 Iowa, 481, 180 N. W. 305, we had under consideration relative to the pledging of the rents and profits, the following provision:

“And if this mortgage is foreclosed, the court shall appoint a receiver to take charge of said premises and collect the rents and profits therefrom,”

--and we there held that said clause was tantamount to specifically in words pledging the rents and profits to the payment of the debt.

[1][2] The aforesaid provision contained in the mortgage in the instant case is one that has not heretofore been before us for our consideration. However, in view of our pronouncement in Walters v. Graham, supra, it must be construed to be sufficient to pledge the rents and profits for the...