Opinion
No. 5128.
August 15, 1928.
WRIT OF REVIEW to review action of District Court in appointing a receiver. Proceedings affirmed and writ dismissed.
J.G. Hedrick and Frank Croner, for Plaintiff.
A receiver of real property should never be made until the moving party shows itself clearly entitled thereto, and the court should not take charge of real property through a receiver against a party in possession unless the property is shown to be in imminent danger of great waste or irreparable injury, which is not shown in this case. ( Kelly v. Steele, 9 Idaho 141, 72 P. 887.)
A receiver can have no greater rights than the mortgagee, and, under the laws of this state a mortgagee has no right to take possession of the land as against the owner or the mortgagor in possession; so that the order of the court directing the receiver to take possession of the crops growing on the land would, in effect, direct him to take possession of the land; and this order would also authorize the receiver to be the sole judge as to the amount of the rents and profits due the plaintiff, Williams, and the costs and expenses of the receivership, thereby conferring upon him judicial powers never contemplated under the laws of this or any other state. ( Cantwell v. McPherson, 3 Idaho 721, 34 P. 1095; People v. California Safe Deposit Co., 168 Cal. 241, 141 P. 1181, L.R.A. 1915A, 299.)
The law is well settled that part payment of one of two joint debtors of an obligation secured by a mortgage does not entitle the one making the payment to subrogation pro tanto to the rights of the creditor in the security. And there is nothing in the record to show that the payment of the instalments and interest on the first mortgage were necessary to protect the rights of the plaintiff, Williams, and he could not, therefore, be subrogated to all the rights of the senior encumbrancer, and the rule of subrogation is not applicable unless the junior mortgagee shows that such an assignment is necessary to protect his rights. Before such a rule applies it must appear that the first mortgage is due, that it is about to be enforced against the property, and that its enforcement would prejudice the rights of the junior lienholder before he could be subrogated; and the general rule is that the whole debt must be paid and the senior creditor satisfied before the junior lienholder would be entitled to subrogation. (23 Cal. Jur. 942; 25 R. C. L. pp. 1346, 1347, sec. 29; 35 Cyc. 379; 9 A.L.R. 1596; 32 A.L.R. 568.)
James Ryan, for Defendants.
"A subsequent mortgagee or encumbrancer who in order to preserve his own security is compelled to pay a prior encumbrance held by another creditor is entitled to be subrogated to the rights of the prior mortgagee or lienor whose mortgage or lien he has paid, to the extent of the amount so paid." (37 Cyc., p. 458, sec. 5; New Jersey Bldg. etc. Co. v. Cumberland Land Co., 53 N.J. Eq. 644, 33 Atl. 964. See, also, the authorities cited by counsel for respondent in the case of Reed v. Hartsock, 38 Idaho 771, 225 P. 139; Porter v. Title Guaranty Surety Co., 17 Idaho 364, 106 P. 299.)
We do not consider it necessary to go into this matter any further or to cite additional authorities. In view of the authority laid down in the case of Reed v. Hartsock, supra, and other cases above cited, we consider the rule settled in this state that the court has the power to appoint a receiver to collect the rents, issues and profits under the circumstances and facts here shown in order that the same might be applied in satisfaction or partial satisfaction of any payments made by such mortgagee on interest on a prior mortgage, where such prior mortgage expressly covers the rents, issues and profits. Particularly is this true where the record shows that the property is insufficient in value to pay the mortgage indebtedness against it.
Plaintiff herein petitions for a writ of review challenging the action of the district court and the judge thereof in appointing a receiver in a foreclosure action brought by one Williams on a second mortgage against plaintiff herein and others.
Plaintiff in the foreclosure action, in his petition for a receivership, stated that certain moneys had been paid on a first mortgage to the Federal Land Bank, which mortgage, by the terms of the mortgage being foreclosed, "became part of this mortgage and subject to foreclosure according to the terms thereof," relying as to such phase of the controversy on Reed v. Hartsock, 38 Idaho 771, 225 P. 139, to the effect that since the rents, issues and profits were covered by the Federal Land Bank mortgage, the mortgagee herein was subrogated to the rights of such first mortgagee and entitled to sufficient of the rents, issues and profits to be reimbursed for the amounts actually paid by the mortgagee herein to protect his lien against the prior lien of the Federal Land Bank mortgage.
The petition also alleges that the mortgage being foreclosed was delinquent and the taxes on the property unpaid.
A supporting affidavit made by the attorney for Williams reasserted the existence of the first mortgage and that taxes for two years had not been paid, and that "the value of the said property does not (the word 'not' evidently being inadvertently omitted) exceed the sum of $12,000 and is wholly insufficient to discharge the indebtedness against the same."
In opposition affidavits, it was asserted that the money paid by the Federal Land Bank was Vaught's, that is, the money of one of the defendants therein, plaintiff herein; that the land was worth $20,000; and that the money was paid by Vaught to the mortgagee's attorney to discharge the taxes and pay the principal and interest due the Federal Land Bank.
In certiorari the sole question relates to jurisdiction. ( Utah Assn. of Credit Men v. Budge, 16 Idaho 751, 102 P. 691; Beus v. Terrell, ante, p. 635, 269 P. 593.) If the court had jurisdiction of the parties and the subject matter, the inquiry will be confined to a determination of whether the facts relied upon were sufficient to sustain the court's action. ( Vollmer v. Vollmer, ante, p. 97, 266 P. 677.) The plaintiff having alleged that the terms of the mortgage had been broken, that the property was insufficient to satisfy the mortgage, and, in effect, by reason of his subrogation to the rights of the Federal Land Bank, that he had a mortgage upon the rents, issues and profits, a prima facie showing was made entitling him under C. S., sec. 6817, to a receiver for the purpose of securing to the mortgagee the rents, issues and profits due the mortgagor. ( Carlquist v. Coltharp, 67 Utah, 514, 47 A.L.R. 765, 248 Pac. 481; Locke v. Klunker, 123 Cal. 231, 55 P. 993; 42 C. J., p. 123, sec. 1688; 19 R. C. L. 562 (Mortgages), sec. 369, n. 3. See, also, Jones on Mortgages, sec. 975 et seq.)
The proceedings below are affirmed and the writ dismissed. Costs to defendants.
Wm. E. Lee, C. J., and Budge, J., concur.