FILED JULY 30, 2012

S T A T E O F M I C H I G A N

SUPREME COURT

In re RECEIVERSHIP OF 11910 SOUTH FRANCIS ROAD.

NASTASSIA PRICE and ERIN DUFFYPRICE, Personal Repr esentatives of the Estate of DARRYL HOUSTON PRICE, Plaintiffs,

v No. 143123

LORI JEAN KOSMALSKI and TRADE DEVELOPMENT COMPANY, a/k/a TRADE WORLD CORP ORATION, INC., Defendants,

and Estate of RUDAFORD R. STERRETT, JR., Defendant-Appellee,

and THOMAS WOODS, Receiver, Appellee, Michigan Supreme Court Lansing, Michigan 

# Opinion Chief Justice: Robert P. Young, Jr. Justices: Michael F. Cavanagh Marilyn Kelly Stephen J. Markman Diane M. Hathaway Mary Beth Kelly Brian K. Zahra2 and DART BANK, Intervening Defendant- Appellant.

BEFORE THE ENTIRE BENCH

M ARY B ETH K ELLY , J. This case involves the issu e of the priority of competing liens between a courtappointed receiver and the holder of a first-reco rded mortgage on real property located in DeWitt, Michigan. The receive r, Thomas Woods, seeks to re cover receivership expenses before the holder of the first-recorded mortga ge, Dart Bank, satisfies its mortgage interest. In affirming the circuit court’s or der placing a first-priority lien on the property

in the amount of the receiver’s expenses, the Court of Appe als relied, in part, on this

Court’s decisions in Bailey v Bailey 1 and Fisk v Fisk 2 and its own decision in Attica Hydraulic Exchange v Seslar , 3 to hold that because Dart did not object to and benefited from the receivership, it therefore “may be held responsible for the receivership expenses.” 4 We granted Dart’s application for le ave to appeal to de termine whether the common-law rule that receivership expenses ar e entitled to first prio rity is controlling,

1 Bailey v Bailey , 262 Mich 215; 247 NW 160 (1933).

2 Fisk v Fisk , 333 Mich 513; 53 NW2d 356 (1952).

3 Attica Hydraulic Exch v Seslar , 264 Mich App 577; 69 1 NW2d 802 (2004).

4 In re Receivership of 11910 South Francis Road (Price v Kosmalski) , 292 Mich App 294, 299; 806 NW2d 750 (2011).3 notwithstanding that the holder of a prior re corded mortgage is statutorily entitled to priority under MCL 600.3236, and whether a mortgagee must explicitly consent to the receivership before the mortgagee may be required to pay thos e sums associated

therewith. Before Michigan became a state, English courts developed the general rule that a receiver is entitled to be paid for his or her se rvices on a first-priority basis. In 1846, Michigan revised and consolidated its statutes . Included within the revised statutes was 1846 RS, ch 130, § 10, which provided that the pur chaser of a sheriff’s deed following a foreclosure by advertisement holds the same title that the mortgagor had at the time the mortgage was executed and that only prior subsisting liens affected the purchaser’s interest. In all material respects, the st atute has remained unchanged since 1846 and currently exists as MCL 600. 3236. Following adoption of the pertinent foreclosure-byadvertisement statute in 1846, this Cour t applied the English common-law rule in situations not involving foreclosure by adver tisement. So far as we can discern, the common-law rule has never been applied in Michigan to divest the purchaser of a sheriff’s deed of the purchaser’s statutory right of priority. This case requires us to determine wh ether this general common-law rule permitting the court to give prio rity to a receiver should be extended to the foreclosureby-advertisement context even though applica tion of that rule would contradict the priorities established by a statute that has been in existence since 1846.

We decline to extend the common-law rule to the situ ation before us. Rather, we

hold that MCL 600.3236 contro ls and, by its plain langua ge, requires that any liens preexisting the mortgage that is the subject of the foreclosure remain in the same order of4 priority as they existed at th e time of the mortgage’s execu tion. Assuming a receiver’s lien postdates the mortgage subject to forecl osure under MCL 600.3236, as the receiver’s lien does here, it is clear that the receiver’s interest under the lien will be subordinated to the interests of the purchaser and any prio r lienholders. Further, it is clear from our caselaw that a mortgagee may waive its right of first-priority satisfaction of its lien. Thus, we also hold that a mortgagee that fo recloses consistently with MCL 600.3236 may waive its statutory right of priority and, if that occurs, the receiver may be entitled to compensation before the mortga gee, but only if the mortgag ee’s waiver is explicitly and unequivocally given. Because the Court of Appeals in this case failed to recognize the applicability of MCL 600.3236 and erroneously extended the holdings in Bailey and Fisk to support its

conclusion that even in the absence of affirmative consent, Dart could nevertheless be required to pay the receiver’s costs and fees, we reverse the judgme nt of the Court of Appeals and remand this case to the circuit court for entry of an order releasing the

escrow funds in favor of Dart.

I. FACTS AND PROCEDURAL HISTORY The real property involved in this ac tion was previously owned by Rudaford Sterrett, Jr., and secured by a single mortga ge held by Dart, which was duly recorded on August 8, 2003. Upon Sterrett’s death in Apr il 2007, the real proper ty was bequeathed to

Lori Jean Kosmalski. At that time, the property was valued at $350,000, and the mortgage balance was less than $170,000. In September 2007, Nastassia Price and Erin Duffy-Price instituted an action against Kosmalski to collect a judgment in an unrelated lawsu it. When they learned that5 Kosmalski had inherited the real property fr om Sterret, they move d for the appointment of a receiver to seize and sell the real proper ty in order to satisfy all or part of the judgment against Kosmalski. Dart was not provided notice of Price and Duffy-Price’s motion for receivership. In April 2008, the circuit court grante d Price and Duffy-Price’s request for receivership and appointed Thomas Woods as receiver. 5 One week later, the circuit court entered an amended stipulated order of appo intment, which authorized the receiver to take immediate possession of the property a nd keep, manage, operate, and preserve it

until further order of the circuit court. Th e powers and duties conf erred on the receiver incident to his appointment included the auth ority to expend the property’s equity or borrow funds for the repair, maintenance, an d operation of the property necessary to preserve the property and make it saleable. Because the property was uninhabitable, the receiver borrowed approximately $20,000 to fi nance substantial repairs. These repairs included cleaning the home and its grounds, repairing the heating and air conditioning systems, installing an alarm system, repair ing the water system and pool area, and installing a fence. Approximately one month before the receiver’s appointment, Kosmalski had defaulted on the mortgage, and Dart initiated foreclosure proc eedings by advertisement in

5 On April 18, 2008, Dart’s former counsel, Jon Jenkins, acknowledged by facsimile his receipt of the circuit court’s April 10, 2008, receivership order. Howe ver, in an affidavit dated May 20, 2009, Je nkins asserted that it was no t until after initiation of the foreclosure process that Dart lear ned of the receivership order.6 mid-April 2008. 6 At the June 5, 2008, sheriff’s sale, Dart—the sole bidder—purchased the property for $169,312.50, which was the balance due on its mortgage, and obtained a sheriff’s deed to the property subj ect to a one-year redemption period. 7 On May 18, 2009, the receiver moved to vo id the sale, arguing that Da rt had violated the court’s receivership order, which prohib ited any interference with th e receiver’s possession and management of the property. Dart subsequently intervened in opposition to this motion, asserting that Dart had vali dly initiated foreclosure proc eedings and that, during the pendency of the redemption period, it had not interfered with the receiver’s possession of the property. The circuit court denied th e receiver’s motion but extended the redemption period until August 25, 2009, to allow the receiver additional time to sell the property. When the receiver was unable to sell the proper ty within the extend ed redemption period, Dart received title to the propert y effective Augu st 26, 2009. In October 2009, the rece iver filed a motion seekin g to hold Dart liable for payment of the costs and fees incurred in the administrati on of the receivership. The receiver claimed $41,874.57 in total expenses, which refl ected the costs incurred in repairing, maintaining, and attempting to sell the property, fees for his professional services, and costs for attorney fees incurred as a result of the receiver’s motions to enforce the receivership order. At the motion hearing, the receiver argued that because Dart had acquiesced in the receivership and th e receiver’s expenditure s, he was entitled to

6 In a letter dated May 27, 2008, the receiver acknowledged that he was aware of Dart’s foreclosure action and indicated that he did not intend to interfere with the process.

7 The property was reappraised on June 6, 2009. At that time, the value of the property had fallen to $245,000.7 reimbursement of his costs and fees from Dart. Dart responded that it could not be charged with the receiver’s cost s and fees when it had not cons ented to those surcharges. The circuit court accepted the receiver’s argument and ente red an order on November 5, 2009, approving the receiver’s final report and granting the receiver a lien on the net proceeds from the sale of the pr operty in the amount of $41,874.57, which was given priority over Dart’s preexisting mortgage . The lien order further required that the receiver relinquish possession of the propert y to Dart and discharged the receiver and

canceled his bond. 8 Dart appealed as of right the circuit c ourt’s order granting the receiver a firstpriority lien over the property, arguing that a receiv er is not entitled to any greater rights than the original owner would have had and, therefore, th e receiver took title to the property subject to Dart’s preexisting mort gage. The Court of Appeals affirmed and, citing Bailey , 9 Fisk , 10 and Attica , 11 held that Dart could be held respon sible for the receivership expenses. 12 Under its interpretation of th ese cases, the Court of Appeals

concluded that even without explicitly consenting to the re ceiver’s appointment, Dart

8 Dart raised for the first time in its applic ation for leave to appe al in this Court the applicability of MCR 2.622(D), wh ich confers on the circuit cour t the discretion to direct the party who sought the appointment of the receiver to pay the receivership expenses. Thus, the circuit court did not consider the relevance of the court rule when it granted relief in favor of the receiver.

9 Bailey , 262 Mich 215.

10 Fisk , 333 Mich 513.

11 Attica , 264 Mich App 577.

12 In re Receivership , 292 Mich App 294.8 could nevertheless be required to pay the receiver’s costs and fees because it benefited from the receivership. 13 We granted leave to appeal to consider, in relevant part, “whether the statutory right of first priority belongi ng to the holder of the recorded mort gage, MCL 600.3236,

overrides the common-law rule that a receive r’s costs and fees are entitled to first priority” and “whether a mortgagee must affi rmatively consent to the appointment of a receiver to be required to pay the receiver’s costs and fees . . . .” 14

II. STANDARD OF REVIEW Whether the circuit court had the authority to order the holder of a first-recorded mortgage to pay for the expenses of a receive rship to which it did not explicitly consent is a question of law that this Court reviews de novo. 15 Questions of statutory interpretation

are also reviewed de novo. 16 A circuit court’s factual findings are reviewed for clear error, and its legal conclusi ons are reviewed de novo. 17

III. ANALYSIS Dart asserts that it has a statutory right to first priority under MCL 600.3236 and that its mortgage interest cannot be ma de subordinate to subsequently incurred

13 Id . at 299.

14 In re Price Estate (Price v Kosmalski) , 490 Mich 902 (2011). Because these issues are dispositive to the resolution of this appeal, it is unnecessary to address the third issue in our order granting leave.

15 Attica , 264 Mich App at 588.

16 People v Osantowski , 481 Mich 103, 107; 748 NW2d 799 (2008).

17 Hendee v Putnam Twp , 486 Mich 556, 566; 786 NW2d 521 (2010).9 receivership expenses. The receiver, on th e other hand, argues that a common-law rule grants a receiver’s expenses fi rst priority, despite the existence of any preexisting liens on the property. Resolution of this dispute fi rst requires an understanding of the commonlaw principles that have developed on the i ssue of the priority of payment of receivers’

liens.

A. THE COMMON LAW

It is well established that our co mmon law is descended from England, 18 and, consequently, the law of receiverships in Michigan is generally adopted from English common law. As far back as 1759, the Eng lish Court of Chancery recognized that the “master is to allow [a recei ver] a reasonable salary for his care and pains therein.” 19 In the event that a competing prope rty interest existed, as in the present case, the English Court of Chancery and the Court of Common Pl eas consistently held that a receiver was entitled to this “reasonable salary” for the re ceiver’s services and expenditures on a firstpriority basis regardless of wh ich party ultimately pr evailed or was held liable to pay for

the receiver’s servi ces and expenditures. 20

18 In re Lamphere , 61 Mich 105, 108; 27 NW 882 (1886).

19 Carlisle v Lord Berkley , 27 Eng Rep 390; Amble r’s Rep 599 (Ch, 1759).

20 See Malcolm v O’Callaghan , 40 Eng Rep 844; 3 Myl & Cr 52; SC 1 Jur (OS) 838 (Ch, 1837) (holding that a receiver is entitled to have out of the funds collected or realized by him his costs and fees properl y incurred in the discharge of his duties as receiver); Morison v Morison , 4 Myl & Cr 215 (Ch, 1838) (in a suit to administer a West Indian estate, a court-appointed consignee was held entitled to repayment out of the corpus of the estate his costs and fees, which were to be given priority over competing claims in the suit); Gilbert v Dyneley , 133 Eng Rep 1038; 3 Man & G 12 ; SC 3 Scott, NR 364; 5 Jur 843 (1841) (holding that the receiver was entitled to deduct from the moneys received by him the reasonable costs and fees he incurred in the administration of the receivership10 We noted this co mmon-law rule in In re Dissolution of Henry Smith Floral Co 21 when we held that “the compensation of the receiver and his counsel are part of court administrative costs and entitled to priority over receiver’s certificates constitut[ing] a first lien on [the] assets.” 22 The Court reasoned: The compensation of a receiver and his attorneys is out of funds or property in custodia legis , and no lien, authorized by the court, on the funds or property has priority of such c ourt administrative costs. The lien, granted holders of the receiver’s certif icates, was not superior to such administrative costs. Administrative costs are not at all of the nature of a lien, and a first lien on a ssets has no priority of such court costs and expenses

. [23] One year later in Detroit Trust Co v Detroit City Service Co , 24 we likewise applied this general common-law rule when we held that the rece ivers were entitled to deduct their fees and expenses from profits earned in the op eration of the business held in receivership, proceeds from the sale of the equity of redemption, and proceeds from the sale of unmortgaged property before those funds were distributed as dividends to

before applying those, in whole or in part, in satisfaction of the outstanding mortgage interest).

21 In re Dissolution of Henry Smith Floral Co , 260 Mich 299, 301- 302, 306; 244 NW 480 (1932).

22 Id . at 302-303.

23 Id . at 302 (emphasis added).

24 Detroit Trust Co v Detroit City Serv Co , 262 Mich 14, 51-53; 247 NW 76 (1933).11 creditors. 25 And later, in In re Rite-Way Tool & Mfg Co , 26 wherein this Court addressed whether the liquidation proceeds of personal property held in re ceivership should be applied toward property taxes assessed on the receivership property before satisfying the preexisting mortgage indebtedness, this Court similarly held that receiver’s costs were entitled to first priority. We stated: [T]he receiver should first apply funds received from liquidation of the receivership assets (including the chattel mortgaged property) in payment of the costs of admi nistration of the receivership , including taxes herein involved, and the fees of the r eceiver and his attorn ey as fixed by the court; and thereafter in the following order apply receivers hip funds in his hands in payment of (2) the chattel mortgages; (3) claims of general creditors; and (4) the balance of such funds, if any, to the partners. [27] Henry Smith , Detroit Trust Co , and Rite-Way Tool , therefore, applied the

common-law rule that the receiver invokes here: that a receiver’s unpaid fees and compensation, which are in th e nature of “administrative costs,” may be paid from the property or funds held in r eceivership before those funds are made available to prior creditors. None of those cases, however, in volved foreclosure by advertisement. And while the pertinence of the co mmon-law rule seems apparent, the Court of Appeals erred by failing to recognize that a provision of th e foreclosure-by-advert isement statute, MCL

25 See id . at 51 (directing the trial court to “es timate[] and deduct[] . . . the further expenses of the receivership . . . th at must be paid from such profits before they become available for dividend purposes ”) (emphasis added), and id. at 52 (“In determining the amount of the dividends to be paid, a fair sum should be estimated and deducted for fees of the receiver , attorneys, and for all other lawful charges.”) (emphasis added).

26 In re Rite-Way Tool & Mfg Co , 333 Mich 551; 53 NW2d 373 (1952).

27 Id. at 558-559 (emphasis added).12 600.3236, is directly applicable to this matter and that no Michigan case has applied the

common-law rule in this context. 28

B. STATUTORY RIGHT OF PRIORITY Notwithstanding the receive r’s contrary assertion, th e plain language of MCL 600.3236 creates a statutory right of priority. 29 When interpreting a statute, our primary goal is to ascertain and give effect to the Legislature’s intent. 30 The best indicator of that intent is the language used. 31 When construing statutory language, we must read the statute as a whole and in its grammatical c ontext, giving each and every word its plain and ordinary meaning un less otherwise defined. 32 If statutory language is clear and

28 The issue whether the rule from these cases continues to apply outside of the context presented in this case is not before us, an d we leave resolution of that question for another day. Further, we do not speculate whether, absent the st atute, the receiver in this case would have been entitled to superior pr iority over Dart as the mortgagee because, assuming that the general common-law rule woul d have applied in those circumstances, it is not ascertainable from what source the receiver’s compensati on would have been payable given the function of MCR 2.62 2(D). See note 8 of this opinion.

29 The first version of this statute was enacte d in 1844 and subsequently included in the 1846 revision and consolidatio n of the statutes, nearly 10 years after Michigan became a state. See 1846 RS, ch 130, § 10 and 1844 PA 40, § 6 (establishing that the purchaser of a sheriff’s deed acquires the in terest held by the mortgagor at the time the mortgage was executed). The provision underwent several minor amendments and was included in subsequent compilations before it was reen acted in 1961 as MCL 600.3236 (effective January 1, 1963), in the Revised Judicature Act (RJA), MCL 600.101 et seq . In all material respects, however, the statute has remained unchanged since 1846.

30 Wickens v Oakwood Healthcare Sys , 465 Mich 53, 60; 631 NW2d 686 (2001).

31 Id

. 32 MCL 8.3a; Veenstra v Wash tenaw Country Club , 466 Mich 155, 160; 645 NW2d 643 (2002).13 unambiguous, then judicial construction is ne ither required nor permitted, and the statute must be applied as written. 33 MCL 600.3236 describes the legal effect of a sheriff’s de ed obtained at a foreclosure sale upon the expiration of the applic able redemption period. 34 The statute provides in full: Unless the premises described in such deed shall be redeemed within the time limited for such redemption as hereinafter provided, such deed shall thereupon become operative, and shall vest in the grantee therein named, his heirs or assi gns, all the right, title, and interest which the mortgagor had at the time of the execution of the mortgage , or at any time thereafter, except as to any parcel or parcels which may have been redeemed and canceled, as hereinafte r provided; and the record thereof shall thereafter, for all purposes be d eemed a valid record of said deed without being re-recorded, but no person having any valid subsisting lien upon the mortgaged premis es, or any part thereof, created before the lien of such mortgage took eff ect, shall be prejudiced by any such sale, nor shall his rights or interests be in any way affected thereby

. [35] The first clause under this provision desc ribes the legal effect and operation of a deed upon the mortgagor’s failu re to exercise its statutory right of redemption following

foreclosure. The first clause of MCL 600. 3236 makes plain that if property is not redeemed within the applicab le statutory window, then the deed becomes “operative,”

33 Sun Valley Foods Co v Ward , 460 Mich 230, 236; 596 NW2d 119 (1999).

34 If a mortgagor defaults on a mortgage contai ning a power of sale, like Dart’s mortgage here, the property may be for eclosed on and sold at a sh eriff’s sale. Se e MCL 600.3201 through 600.3224. Upon that sale, the purchaser acquires a sheriff’s deed, which only becomes effective if th e mortgagor does not exercise his or her right of redemption within the applicable statutory window. Se e MCL 600.3228; MC L 600.3232; MCL 600.3240(1).

35 Emphasis added.14 vesting in the grantee “all the right, title, and interest wh ich the mortgagor had at the time of the execution of the mortgage . . . .” This clause refers to those rights that existed at the time that the mortgage subject to fore closure was executed. The grantee thus succeeds to the same rights—no greater and no fewer—as those held by the mortgagor when the mortgage was executed. By logica l implication, this first clause renders absolute the mortgagee’s title to the property it purchased in a foreclosure proceeding, extinguishing any “right, title, and interest” cr eated subsequent to the creation of the mortgage being foreclosed upon , which includes liens created after the execution of the mortgage. 36 The last clause of MCL 600.3236, which is central to the lega l question in this case, makes plain, however, that any interests preexisting the execution of the subject mortgage will not be prejudic ed by a foreclosure sale. Specifically, the pertinent language of this clause prov ides that “no person having a ny valid subsisting lien upon the

36 At oral argument, the receive r argued that the pertinent statutory language in this first clause is the phrase “or at any time thereafter ,” which, according to the receiver, allows a court to subordinate a senior mortgage to a j unior lien. Specifically, the receiver asserts that because Sterrett “has incu rred a liability by virtue of th e appointment of a receiver, and that affected his immediate title and ther efore that’s the same title that the bank has inherited.” That interpretation cannot be reco nciled with the plain text of MCL 600.3236. The phrase “or at any time ther eafter” clearly refers to th e mortgagor’s positive title in the property. Thus, the phrase “or at any time thereafter” can not be interpreted to mean that a subsequently imposed lien takes priority over the mortgagee’s interest because that would nullify MCL 600.3236. Indeed, if the re ceiver’s interpretation were accurate, then the last phrase of MCL 600.3236, which estab lishes the principle that only liens imposed before execution of the mortgage at issue are not prejudiced by foreclosure, would be contradictory. Further, the receiver’s inte rpretation poses a prac tical dilemma to the extent that Sterrett’s interest could never have been subjec t to the receivership lien given that he died 21⁄2 year s before its imposition.15 mortgaged premises . . . created before the lien of such mort gage took effect, shall be prejudiced by any such sale, nor shall his ri ghts or interests be in any way affected thereby.” Although the statut e does not define “valid subs isting lien,” the next phrase qualifies that term to mean a lien “created befo re . . . such mortgage took effect . . . .” 37 The provision then mandates that such liens “shall” not be “prejudiced” or “in any way affected” by the foreclosure sale. The clear import of this lang uage is that those lienholders whose interests preexisted the mort gage’s execution will have the exact same rights following foreclosure as those previ ously held at the time the mortgage was

executed. It follows that th e order of priority at the ti me of the mortgage’s execution

must be maintained after a foreclosure sale. 38

37 According to its plain langu age, MCL 600.3236 necessarily limits a “valid subsisting lien” to one that was created before the mortgage took effect because “subsist” means “to have existence[.]” Webster’s Third New International Dictionary, Unabridged Edition (1965). To allow a lien that did not exist at the time th e mortgage was executed to prejudice the purchaser’s title w ould result in judicial subrogation, wher ein the party with the statutory right of priority is displaced by the party favored by the court. When the Legislature has prescribed the order of prior ity, our courts may not vary it by resort to equity. Cf. Stokes v Millen Roofing Co , 466 Mich 660, 673; 649 NW2d 371 (2002) (holding that an unlicensed builder could not “have equitable relief because any such relief would allow equity to be used to defeat the statutory ban on an unlicensed contractor seeking compensation for residential construction”). This is particularly so here, given that this Court has provided a mean s to ensure that a r eceiver’s expenses are paid by the party seeking to establis h a receivership. See MCR 2.622(D).

38 Michigan is a recording-prior ity jurisdiction and, thus, a reco rded mortgage lien is held superior to any lien subsequently recorded. Th is rule, generally referred to as “first in time, first in right,” is subject to several stat utory exceptions that grant certain liens first priority no matter their time of creation. See MCL 324.20138( 2) (environmental remediation costs), MCL 211.40 (real estate taxes), and MCL 570.1119(3) (construction liens). However, there is no statutory exception for receivership expenses.16 When read as a whole, then , MCL 600.3236 requires that any interests in property created after the mortgage subject to forecl osure was executed will be extinguished upon expiration of the redemption period after a sheriff’s sale; however, any interests preexisting the mortgage’s execu tion will not be affected by “any such sale,” and the grantee under a sheriff’s deed will take the prope rty subject to those preexisting interests. Accordingly, we hold that MCL 600.3236, by its plain language, re quires that after a sheriff’s sale and expiration of the redempti on period, any lien pree xisting the mortgage that was the subject of the foreclosure sale rema ins in the same order of priority as at the time of that mortgage’s execution. Because Dart foreclosed on the prop erty by advertisemen t, MCL 600.3236 applies, and its application makes clear that Dart’s first-recorded mortgage has first priority, given that no other liens existed when the mortgage was executed. By operation of MCL 600.3236, any liens created after th e execution of Dart’s mortgage in 2003, which includes the receiver’s lien created by or der of the circuit cour t in 2009, could not prejudice Dart’s priority interest. 39 The receiver argues, however, that the common-law

39 This statutory priority rule is actually in accord with Michigan common-law priority rules established in related areas of law invo lving judicially create d receiverships. Cf. Gray v Lincoln Housing Trust , 229 Mich 441; 201 NW 489 (1924), in which a receiver was appointed to manage the affairs of the failing trust, which held as an asset the plaintiff’s mortgage. When the trust breached a related agreement with the plaintiff, the plaintiff filed suit against the trust to cancel the mortgage, and the receiver, who had been appointed after the plaintiff in itiated suit, interven ed to recover his compensation. The Court ruled in favor of the plaintiff, reasoning that “‘the relative rank of claims and the standing of liens remain unaffected by the receivership.’” Id . at 447, quoting 23 Ruling Case Law, § 118, p 108. The Court further stated: We think it must be taken as the settled law in this jurisdiction that the receiver does not take title as a bona fide purchaser but takes the assets17 rule controls and grants his lien first prior ity over Dart’s preexisting mortgage. We disagree with the receiver’s argument beca use, while the general common-law rule pertaining to receivership priority has cer tainly been recogni zed throughout our jurisprudence, the caselaw on which the receiver relies demonstrates that this rule has not been applied in the foreclosure-by-advertisement context. Indeed, we are aware of no Michigan case that imposed the common-law rule as adop ted from England so as to divest the purchaser of a sheriff’s deed of his or her statutory right of priority pursuant to MCL 600.3236. To apply the common-law rule despite the imperative of the plain statutory language, providing the holder of a prior recorded mortgage with a right of priority over all subsequently created interests in th e property, would impermissibly shift a receivership lien that is created subsequent to the time at which the mortgage subject to

subject to the equities existing between the parties. His title and right can be no greater than the one for whose assets he is receiver and in whose shoes he stands. [ Gray , 229 Mich at 446.] The rule articulated in Gray has been relied on in other cases. See Uhl v Wexford Co , 275 Mich 712, 715; 26 7 NW 775 (1936) (holding that a validly appointed receiver takes the assets of the property subject to those inte rests that existed between the parties at the time of his or her appointment); Franklin Co v Buhl Land Co , 264 Mich 531, 535; 250 NW 299 (1933) (holding that because the plaintiff’s recei ver was appointed after the commencement of the suit, the de fendant’s setoff of its judgment against the plaintiff did not lead to a preference over other creditors be cause a receiver takes the assets subject to equities existing between the parties at th e time of his or her appointment); and Stram v Jackson , 248 Mich 171, 176; 226 NW 888 (19 29) (holding that the purchaser of mortgaged property stands in the shoes of th e mortgagor and can urge no defense to the mortgage not open to mortgagor); see also Rickman v Rickman , 180 Mich 224, 248, 250; 146 NW 609 (1914) (holding th at a plaintiff who brings suit before the filing of a bill of dissolution of a firm acquired priority over other creditors, including the receiver, who takes only the rights of the firm and is affe cted by all claims, liens, and equities which would prevail against the firm).18 foreclosure took effect to the first-priority position. Because a pplication of the commonlaw rule would irreconcilably conflict with a pplication of MCL 600.3236, we decline to

extend the common-law rule to circumstances like those presented here, in which MCL 600.3236 specifically controls the order of priority of preexisting competing liens, including receivership liens, afte r a foreclosure by advertisement. 40

C. CONSENT Relying on Bailey 41 and Fisk , 42 the receiver, like the Court of Appeals, nevertheless insists that he is entitled to pr ior satisfaction of his costs and fees, even without Dart’s explicit consen t, on the basis that Dart acqui esced in the receivership. However, the receiver’s assertion is wholly unsupported by our ju risprudence. In Bailey , this Court held that when a mo rtgagee consents to the appoin tment of a receiver as well as to the reordering of the priorities, the mortgagee may be charged with payment of the receiver’s costs and fees. Likewise, in Fisk , the Court held that when a party agreed by stipulation to the appointment of certain receivers, that part y was precluded from challenging payment of a receive r’s compensation. Thus, both Bailey and Fisk are distinguishable from the facts of this case, gi ven that it is undisputed that Dart did not explicitly consent to either th e appointment of a receiver or to the reordering of the

40 See Pulver v Dundee Cement Co , 445 Mich 68, 75 n 8; 515 NW2d 728 (1994) (holding that if there “if there is a conflict betwee n the common law and a statutory provision, the common law must yield”).

41 Bailey , 262 Mich 215.

42 Fisk , 333 Mich 513.19 priorities. 43 Certainly, a party can waive its statutory rights. 44 No legal authority, however, justifies the extension of the rule articulated in Bailey and Fisk to circumstances like the present, in which the mortgagee failed to object to, or mere ly acquiesced in, the receiver’s appointment, and the Court of A ppeals erred by holding to the contrary. 45

43 Though Justice C AVANAGH does not disagree with our conclusion that Bailey and Fisk are more akin to our waiver jurisprudence and do not create a common-law rule that permits the mortgagee’s priority to be su bordinated without the mortgagee’s explicit consent to the receivership, he curiously exte nds the holdings in t hose cases to conclude that acquiescence is sufficient to effect a waiver. Howeve r, the resolution reached in Bailey and Fisk appears to have been prompted by th e Court’s interest in preventing the mortgagee from actually agreeing that the receiver incur cost s only to subsequently deny responsibility for payment of those costs. Again, as we note later in this opinion, all the confusion about who should bear the cost of the receiver’s expenses is entirely avoided by use of MCR 2.622(D), and we advise courts to consider us ing this court rule in the future when the appo intment of receivers is contemplated.

44 “As defined by this Court, ‘waiver’ connot es an intentional ab andonment of a known right.” Roberts v Mecosta Co Gen Hosp , 466 Mich 57, 64 n 4; 642 NW2d 663 (2002), citing People v Carines , 460 Mich 750, 762 n 7; 597 NW 2d 130 (1999). Conversely, “a ‘forfeiture’ is the failure to assert a right in a timely fashion.” Roberts , 466 Mich at 69, citing Carines

. 45 Our waiver jurisprudence generally does not recognize mere acquiescence as a means to waive a known right. See Quality Prod & Concepts Co v Nagel Precision, Inc , 469 Mich 362, 365; 666 NW2d 251 (2003) (holding that “[m]ere knowing silence generally cannot constitute waiver ”). Even Justice C AVANAGH ’s creative interpretation of Bailey and Fisk does not support this proposition. Justice C AVANAGH interprets Bailey as supporting his assertion that “waiver ma y also occur by wa y of acquiescence.” Post at 2. However, that “[t]he mortgagees dealt with the receiver promptly and in an effort to save loss to themselves by keeping the hotel a going concern, and receivership wa s used in an attempt to effect sale of the property” and th at the mortgagees “availed themselves of any possible advantage of the r eceivership” was not the Co urt’s pronouncement that acquiescence is sufficient to constitute waive r, but simply a corollary of the Court’s recognition that the “bill [of r eceivership costs] was filed by consent .” Bailey , 262 Mich at 219 (emphasis added). Justice C AVANAGH ’s reliance on Bailey for his acquiescence argument is unsustainable. Justice C AVANAGH ’s similar interpretation of Fisk is likewise unsustainable for reasons we ex plain later in this opinion.20 Nor is there any legal auth ority supporting the Court of Appeals’ conclusion that a party merely benefiting from a receivership may be liab le for the receiver’s costs and

fees. Neither Bailey nor Fisk supports that conclusion. In both Bailey and Fisk , it was the fact that the parties had expressly cons ented to the receivership that justified the Court’s reordering of the priorities and impo sition of the receiver’s fees, respectively. Further, the Court of Appeals’ reliance on Attica was misplaced because Attica erroneously characterized Fisk as unequivocally holding “that the party who benefited from the receivership is responsible fo r the receivership expenses . . . .” 46 Rather, Fisk held that the general rule is that a receiver’s fees should be taken from the property in the receivership. In this case, however, in which the property is insufficient to satisfy the mortgagee’s superior lien and the receiver’s fe es, this general rule cannot be applied.

Moreover, the additional ca selaw cited by Justice C AVANAGH in support of his contention that this Court has recognized waiver based on acqu iescence is distinguishable from the present matter. See Bloomfield Estates Improvem ent Ass’n, Inc v City of Birmingham , 479 Mich 206, 219, 223; 737 NW2d 670 (2007) (holding that a party is not precluded from enforcing a deed restriction desp ite the party’s failure to contest a prior violation as long as the pr ior violation was of a “less serious character” than the subsequent one when a contrary rule woul d “create increasing chao s in the enforcement of deed restrictions”); Sampeer v Boschma , 369 Mich 261, 263, 266; 119 NW2d 607 (1963) (holding that the defendants had waived strict compliance with a procedural rule requiring the court to file and serve on both parties a pretrial statement when defense counsel had knowledge of the procedural irregularity and to which no objection was made at the time); and Smith v First United Presbyterian Church , 333 Mich 1, 11; 52 NW2d 568 (1952) (holding that by “vigil ant[ly]” maintaining the single-residential character of subdivision property in accord ance with the general subdivision plan, the purchaser “acquiesced in the general plan . . . and waived any right she or her grantees would have to act outside of it”). Those sa me policy concerns, factual circumstances, and affirmative conduct by th e party deemed to have waiv ed a known right are clearly not at issue in the present matter. These cas es, therefore, fail to demonstrate Dart’s intentional relinquishment of its st atutory right of first priority.

46 Attica , 264 Mich App at 592.21 Indeed, the mere receipt of a benefit because of the receiver’s actions does not justify disregarding MCL 600.3236. Rather, when MCL 600.3236 is applic able, a receiver’s expenses will generally not be entitled to first priority; on ly when the mortgagee has unequivocally waived this stat utory right of first priority will the receiver be entitled to prior satisfaction of his or her expenses c onsistently with the common-law rule. For these reasons, it was improper for th e Court of Appeals to rely on Bailey , Fisk , and Attica as its bases for requiring Dart to pay the receiver’s costs and fees. 47

IV. APPLICATION Application of the statute to the facts of this case mandates that Dart, as the holder of a first-recorded mortgage, be entitled to satisfaction of its mortgage interest from the proceeds of the foreclosure sale on a first-prior ity basis. Dart’s first-recorded mortgage took effect on August 8, 2003. Dart validly foreclosed on its mortgage, the property was

not redeemed within the exte nded redemption period, and Dart became the legal and equitable titleholder of the real property unde r the sheriff’s deed on August 26, 2009.

47 The receiver also relies on this Court’s decision in In re Petition of Chaffee , 262 Mich 291; 247 NW 186 (1933), for the proposition th at because Dart did not move for leave to proceed independently of the receiver, it was precl uded from interfering with the receivership. Chaffee , however, is inapplicable because that case involved the validity of a foreclosure sale, not the competing prior ity of a receiver’s lien and a preexisting mortgage. Further, to the exte nt the receiver attempts to attack the validity of the foreclosure proceedings, we note that Chafee is plainly distinguishable. In that case, we affirmed a circuit court’s decision to vo id a foreclosure sale when the mortgagee proceeded with foreclosure pro ceedings without the court’s perm ission. In this case, the receiver indicated before the foreclosure sale that he did not intend to interfere with Dart’s foreclosure. Moreover, when the rece iver did move to void the foreclosure sale, nearly a year after the sale had taken plac e, the circuit court merely extended the redemption period. The receiver has not appe aled that decision and, therefore, the validity of the foreclosure procee ding is not before this Court.22 The receivership lien was subsequently created on November 5, 2009, by order of the circuit court. Because a purchaser of a sher iff’s deed takes the pr operty with only those liens that existed at the time the mortgage to ok effect, and there was no receivership lien when Dart’s mortgage took effect in 2003, Da rt’s first-recorded mortgage has a statutory right of priority under MCL 6 00.3236 over all other subseque nt liens. Moreover, because Dart did not explicitly waive its statutory ri ght of priority, the rule articulated in Bailey

and Fisk is inapplicable and the r eceiver is precluded from recovering the receivership expenses from Dart. Further, although the receiver’s lien in this case could not prejudice Dart’s priority interest, we acknowledge the ne ed for guidance with regard to priority and payment of receivers’ liens. Circuit courts appointin g receivers should be cognizant of MCR 2.622(D), which permits a circu it court, “on application of the receiver,” to set the compensation of the receiver, an d to require the party reques ting the receivership to bear

the costs associated with it. But regardless of whether a circ uit court choose s to exercise its discretion under the court rule, the circu it court, at the time it appoints a receiver, should nevertheless make prov ision for the payment of rece ivership expenses and should be aware of the order of priority of any co mpeting interests and other relevant collateral issues that could affect a receiver’s compensa tion. This is particularly important in the context of foreclosure by advertisement, when , as in the present case, a receiver’s lien may be extinguished by operation of MCL 600. 3236. Not only did the circuit court in the

instant case fail to consider th e effect of MCL 600.3236 on the receiver’s lien, it also failed to consider the court rule. By app lication of MCR 2.622(D), the receiver might nonetheless have received compensation for th e expenses incurred in his administration23 of the receivership despite the order of priorities, potentially avoiding a situat ion like that here. That is, had the circuit court exercise d its discretion under th e court rule, Price and Duffy-Price, as the parties requesting the receivership, might have been liable for payment of the receivership ex penses out of their own fund s and the receiver might not have been deprived of any compensation. 48

V. CONCLUSION Because MCL 600.3236 operate s to preserve the order of priority following expiration of the appli cable redemption period, it necessarily follows that the order of priority for any liens preexisting the mortgage that is the subject of the foreclosure will remain as it did at the time of the mortgage’s execution. Because this statutory provision

cannot be reconciled with the common-law ru le and because the common-law rule has never been applied to a forecl osure by advertisement under MCL 600.3236, we decline to extend the common-law rule in this case and, consequently, the statute controls. We

48 If, for example, there had been sufficient equ ity in the prop erty to satisfy both Dart’s preexisting mortgage interest and the receiv er’s costs and fees, the proper order of distribution of the proceeds fo llowing the sale of the DeW itt property woul d have first required satisfaction of Dart’s prior record ed mortgage followed by payment of the receiver’s costs and fees. Thus, when seekin g payment, a receiver looks first to the property itself. Fisk , 333 Mich at 516. If there ar e insufficient funds because, for example, a creditor with a superior lien is ow ed more than what the property is worth, then the receiver may petition the court pursua nt to MCR 2.62 2(D) to order the party who sought the appointment of the receiver to compensate the receiver for his or her costs and fees.24 therefore reverse the judgment of the Court of Appeals imposing on Dart the costs of the receivership and remand this case to the circu it court for entry of an order in Dart’s favor consistent with this opinion.

Mary Beth Kelly Robert P. Young, Jr. Stephen J. Markman Brian K. ZahraS T A T E O F M I C H I G A N

SUPREME COURT

In re RECEIVERSHIP OF 11916 SOUTH FRANCIS ROAD.

NASTASSIA PRICE and ERIN DUFFYPRICE, Personal Repr esentatives of the Estate of DARRYL HOUSTON PRICE, Plaintiffs,

v No. 143123

LORI JEAN KOSMALSKI and TRADE DEVELOPMENT COMPANY, a/k/a TRADE WORLD CORP ORATION, INC., Defendants,

and Estate of RUDAFORD R. STERRETT, JR., Defendant-Appellee,

and THOMAS WOODS, Receiver, Appellee,

and DART BANK,Intervening DefendantAppellant.

C AVANAGH , J. ( dissenting ).2 I respectfully dissent from th e majority’s conclusion th at a mortgagee only waives its rights to superior priority under MCL 600.3 236 if the mortgagee expressly consents to a receivership or the reordering of priorities. Rather, I would hold that a mortgagee may also waive its superior priority rights if th e mortgagee acquiesces to and benefits from the receivership. In support of its conclusion that a receiver may only obtain superior priority in relation to a mortgagee “when the mortgagee has unequivocally waived this statutory right of first priority [under MCL 600.3236],” the majority cites Bailey v Bailey , 262 Mich 215; 247 NW 160 (1933), and Fisk v Fisk , 333 Mich 513; 53 NW2d 356 (1952).

Ante at 21. However, in my view, Bailey and Fisk provide that a waiver may also occur by way of acquiescence. 1

In Bailey , a receiver was appointed for a hotel, which was su bject to a mortgage. All parties involved sought to have the receiver operate the hotel during the summer of 1931, but the receiver refused unless the mo rtgagees consented to his borrowing money and obtaining a first lien with priority over the mortgagees . The mortgagees agreed.

1 Waiver by acquiescence is well known in a variety of legal situations. See, e.g., Bloomfield Estates Improvement A ss’n, Inc v City of Birmingham , 479 Mich 206, 214; 737 NW2d 670 (2007) (stating that an unambig uous deed restriction is enforced as written “unless the restriction . . . has been waived by acquiescence ”) (emphasis added); Sampeer v Boschma , 369 Mich 261, 265; 119 NW2d 60 7 (1963) (“If the action of the trial court was irregular, the irregularity was waived by making no objection until after the verdict was rendered.”) (emphasis added; quotation marks and citation omitted); and Smith v First United Presbyterian Church , 333 Mich 1, 11; 52 NW2d 568 (1952) (holding that w hen the purchaser of real property fr om a subdivider was vigilant in maintaining the property in accordance with the gene ral plan, the purchaser “ acquiesced in the general plan . . . and waived any right she or her grantees would have to act outside of it”) (emphasis added).3 Subsequently, the real estate market colla psed, but the mortgagees did not seek to foreclose and instead cooperated with the receiver in his effo rts to sell the property. No acceptable offers were received, however. In determining whether the receiver held priority over the mortgagees for his

costs, Bailey initially focused on the fact that the mortgagees cons ented to the receiver’s superior priority: If the mortgagees had kept out of this matter, except perhaps in respect of contest of the receiver’s a ccount, there might be force in their contention that they are liable for no part of the administration costs and expenses of the receivership. But, as stated, the b ill was filed by consent

. [ Bailey , 262 Mich at 219 (emphasi s added; citation omitted).] However, this Court also stated that even if the mortgagees had not given prior, specific consent to the receiver’s prior ity, their conduct would nevert heless have pr ecluded them from seeking to obtain pr iority over the receiver because “[t]he mortgagees dealt with the receiver promptly and in an e ffort to save loss to themselv es by keeping th e hotel a going concern, and receivership was used in an a ttempt to effect sale of the property.” Id. Accordingly, because the mortgagees “availe d themselves of any possible advantage of the receivership, they will not be heard to say that the property in the hands of the receiver is not chargeable with the rece iver’s expense and administration costs , even though it may result practically in a corresponding loss to them.” Id. at 219-220 (emphasis added). This was so because “[a] dministration e xpenses are incurred on the theory that they benefit the parties ultimately entitled to the property.” Id. at 220. Bailey was also careful to limit the scope of its holdi ng, explaining that a court may only allow a4 receiver’s expenses to displace prior liens when the expenses are required to preserve the property and allow the proper ty to become saleable. Id. at 221. Also, in Fisk this Court considered a situation in which the partie s had agreed to the appointment of receivers over the corporation at issue while the parties settled a dispute regarding who owned the corporation. This Court held that, when the primary purpose of a receivership is to preserve and protect the prope rty involved in a controversy, “it logically follows that he who ultimately establishes his right to the property thus held is the one who benefits from the property having been protected and preserved.” Fisk , 333 Mich at 516, citing Bailey , 262 Mich 215. Fisk also noted that both parties had agreed to the appointment of the receivers a nd, “by doing so, appellant in effect waived any complaint he might otherw ise make regarding the propriety or legality of the appointment and its effect upon the qu estion of who was to be ar the receivership expenses.” Fisk , 333 Mich at 516 (citation omitted). In my view, Bailey and Fisk indicate that although consent by the mortgagee is one method by which a receiver may obtain superior priority, acquiescence by a mortgagee is also sufficient to grant a receiver’s expenses priority over a preexisting mortgage. Bailey and Fisk supported this conclusion by reasoni ng that the receivership is intended to protect and preserve the prop erty held by the receiver and because a mortgagee or an eventual owne r of the receivership property benefits from the receiver’s expenditures, it is proper to impose those expenses on the party that benefits. See Bailey , 262 Mich at 219-220 (stating th at because the mortgagees “a vailed themselves of any possible advantage of the receive rship, they will not be heard to say that th e property in the hands of the receiver is not chargeable wi th the receiver’s expense and administration5 costs, even though it may resu lt practically in a correspondin g loss to them”). Thus, in my view, the majority inco rrectly states that acquiescence by a mortgagee with knowledge of the receivership is insufficient to provide the r eceiver superior priority. See

ante at 19 (claiming that this interpretation would require an “extension of the rule

articulated in Bailey and Fisk ”), and ante at 18 (claiming that this interpretation is “wholly unsupported by our jurisprudence”). Rather, Bailey specifically supports this

conclusion. Applying Bailey and Fisk to this case, I believe th at, at a minimum, Dart Bank acquiesced to the receivership. Specifically, Da rt never objected to th e receiver’s actions, despite its knowledge of the receiver’s effo rts. This Court has long recognized the inherent authority of a court of equity to appoint a receiver under appropriate circumstances, see McDonald , 351 Mich at 575-57 6, and Dart does not argue that the receivership in this case was improper. Mo reover, the Court of Appeals has held that entities that are not parties to a receivership order but are nevertheless affected by the receivership order need not be served with notice under MCR 2.105(D), particularly when the affected entity receiv es actual notice of the order. In re Contempt of Cornbelt Beef Corp , 164 Mich App 114, 120; 416 NW2d 696 (1987), citing Davis v Davis , 137 Mich App 291, 293; 3 58 NW2d 6 (1984), and Tuller v Wayne Circuit Judge , 243 Mich 239, 243-245; 219 NW 939 (1 928). Accordingly, Dart wa s not entitled to formal notice of the receivership. Furthermore, although Dart was not a party to the receivership order entered on April 10, 2008, and Dart in itiated a foreclosure by advertisement on April 15, 2008— before it was aware of the receivership—Dart admitted that it had received actual notice6 of the receivership only thr ee days later, on April 18, 2 008. Moreover, the majority’s notation that “‘[m]ere knowing silence generally cannot constitute waiver,’” ante at 19 n 45, quoting Quality Prods & Concepts Co v Nagel Precision Inc , 469 Mich 362, 365; 666 NW2d 251 (2003), is irrelevant because Dart did not merely stand mute when it learned of the receivership. Rather, in a letter ac knowledging the receivership, Dart’s attorney stated that it “would be willing to work with [the receiver] . . . in terms of arranging for a sale of the property so that this mortgage can be paid.” Also, Dart’s subsequent interaction with the receiver during the ye ar between its acknowledgement of the receivership and the sheriff’s sale substant iates Dart’s willingne ss to work with the receiver. Additionally, during the October 14, 2009, hearing in the trial court, Dart’s attorney admitted that Dart “acquiesced to the fact th at there was a receiver out there . . . .” The trial court, the receiver, and Dart agreed that the property was in terrible condition and, although the expe nses of repairing it were high, they were necessary in this case. Furthermore, the receiver provided reports documenting his expenditures related to repairing the property in hopes of returning it to a saleable condition, and Dart never acted to formally challe nge any specific expenditure by the receiver related to the property’s repair. Thus, in my view, Dart’s conduct was suffi cient to establish that Dart had knowledge of and acquiesced to the receive rship. Accordingly, in my view, Dart clearly engaged in “affirmative conduct” that was sufficient to show that Dart “waived a known right,” ante at 20 n 45, just as did the parties in Bloomfield Estates Improvement Ass’n, Inc v City of Birmingham , 479 Mich 206, 214; 737 NW2d 670 (2007); Sampeer v

Boschma , 369 Mich 261, 265; 11 9 NW2d 607 (1963); and Smith v First United Presbyterian Church , 333 Mich 1, 11; 52 NW2d 568 (1952).7 Additionally, as mortgagee, Dart benefite d from the receiver’s efforts to repair, preserve, and protect the proper ty because the repairs increas ed the property’s value. Therefore, the receiver’s efforts improved Da rt’s chances of recovering the full amount of its mortgage when the receiver sold the pr operty. The fact that the receiver was not able to sell the property at a suitable price does not undercut this analysis because Bailey

held that the receiver’s costs take priority “even though it may result practically in a corresponding loss to [the mortgagee].” Bailey , 262 Mich at 219-220. Accordingly, as

stated in Bailey , Dart should not “be heard to say th at the property in the hands of the receiver is not chargeable with the receiv er’s expense” when the mortgagee “availed [itself] of any possible advantage of the receivership . . . .” Id. at 219

. 2

2 Bailey ’s discussion of the importance of who rece ives the benefit of a receiver’s efforts is consistent with this Court’ s discussion of the issue in ot her opinions. For example, in Holmes v Holmes , 265 Mich 16, 18; 251 NW 360 (1933 ), this Court stated that imposing responsibility for the receiver’s expenses on the receivership prope rty is appropriate when the receiver “performed valuable services” that “wer e beneficial” and the parties had consented to the receiver’s appointment. Likewise, in Fisk , this Court stated that “[r]eceivers ordinarily have a right to compensation for their services and expenses, and such right is a strong equity, analogous to an obligation founded upon an implied contract, and is not dependent upon the mere arbitrary discretion of the court, if the appointment of the receiver was regular and his conduct has been free from exception. Such right of the receiver to compensation is a char ge on the property or fund in receivership.” [ Fisk , 333 Mich at 518 (citation omitted).] See, also, Cohen v Cohen , 125 Mich App 206, 215; 335 NW2d 661 (1983) (upholding a receiver’s fees because the fees were not “exc essive” and were “reasonable in light of the actions the receiver was required to take in or der to protect the prop erty”), and 65 Am Jur 2d, Receivers, § 220, p 777 (“ The general rule is that th e compensation of a receiver, where the receivership proceedings are not sou ght by a mortgagee, is subordinate to the lien of the mortgage, at least where the mortgagee receives no benefit therefrom .”) (emphasis added).8 Finally, as the ultimate owner of the property through the foreclosure process, Dart

also benefited from the receiver’s efforts to repair, preserve, and pr otect the property. This aspect of the case falls under Fisk ’s conclusion that when the primary purpose of a receivership is to preserve a nd protect the property involved in a controversy, “it logically follows that he who ultimately establishes his right to the pr operty thus held is the one who benefits from the property having been protected and preserved.” Fisk , 333 Mich at 516. Accordingly, because Dart, as the ev entual owner of the property, benefited from the receiver’s efforts to repair, preserve, and pr otect the property in that Dart received a habitable, sellable property, I would require Dart to bear the cost of that benefit. Thus, I would affirm the judgment of the Court of Appeals because, in my view, Dart waived its statutory right to superior priority under MCL 600.3236 because it had knowledge of the receivership, acquiesced to the receivership, a nd benefited from the receiver’s efforts to repair, pres erve, and protect the property.

Michael F. Cavanagh Marilyn Kelly Diane M. Hathaway