Southern Bldg. & Loan Ass'n v. Carey

• Decision Date: 08 April 1902
• Docket Number: 1,013.
• Citation: 114 F. 288
• Parties: SOUTHERN BUILDING & LOAN ASS'N v. CAREY et al.
• Court: U.S. Court of Appeals — Sixth Circuit

114 F. 288

SOUTHERN BUILDING & LOAN ASS'N v. CAREY et al.

No. 1,013.

United States Court of Appeals, Sixth Circuit.

April 8, 1902

The bill in this case was filed in the circuit court by the Southern Building & Loan Association against Joseph P. Carey and Emma A. Carey, his wife, seeking the foreclosure of two trust deeds executed by said Carey and wife in favor of the appellant, one for $1,700, and the other for $1,000, secured on certain premises belonging to Emma A. Carey. Among other allegations of the bill there was an averment that the taxes were unpaid, and upon an application to the court a receiver was appointed, with authority to rent the premises. Issues were made, and upon trial a decree was rendered in favor of the building and loan association upon both trust deeds, and the property was put up for sale, and did not sell for enough to pay both incumbrances by the sum of $1,132.22. The report of the receiver, being duly filed, showed a balance in his hands after the payment of taxes and certain other expenses. Upon hearing, the circuit court ordered the balance in the hands of the receiver to be paid over to Emma A. Carey. Error was assigned to the action of the court in thus applying this balance of rentals, and in failing to apply the same upon the unpaid balance of the decree.

Before LURTON and DAY, Circuit Judges, and WANTY, District Judge.

DAY Circuit Judge, after making the foregoing statement, .

This case presents the single question as to whether the court committed error in ordering the balance of rentals in the receiver's hands to be paid to Emma A. Carey, instead of making application thereof upon the unpaid balance of the plaintiff's decree. It is the claim of the appellant that a court of equity may, upon a showing of the insufficiency of the security for the payment of the mortgaged indebtedness appoint a receiver for the purpose of reaching, not only the body of the premises mortgaged, but the rentals thereof as well. This is undoubtedly the practice of courts of equity where a sufficient showing is made that the mortgaged premises will not be sufficient to pay the debt, and that the mortgagor, or other person primarily liable for the indebtedness, is insolvent and unable to make good the deficiency in the security. The rule is thus stated in High Rec. Sec. 666:

'Stated in general terms, the well-established rule, deducible from the clear weight of authority, is that, in

...