Case Name: Herbert B. Waldron et al. v. First National Bank of Greenwood
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1900-05-16
Citations: 60 Neb. 245
Docket Number: No. 10,271
Parties: Herbert B. Waldron et al. v. First National Bank of Greenwood.
Judges: 
Reporter: Nebraska Reports
Volume: 60
Pages: 245–249

Head Matter:
Herbert B. Waldron et al. v. First National Bank of Greenwood.
Filed May 16, 1900.
No. 10,271.
1. Mortgage Foreclosure: Receiver. Where mortgaged property is probably insufficient to discharge the debt, the court may, in an action to foreclose the mortgagee, on the application of the mortgagee, appoint a receiver.
2. Deficiency Judgment: Solvency oe Defendant. And in such case it is • immaterial whether a deficiency judgment against the parties liable for the debt, is^collectible.
3. Finding: Evidence: Review. The finding of a court, grounded on substantially conflicting evidence as to the value of property, will not be disturbed.
4. Judicial Discretion: Presumption. It will be presumed, in the absence of a showing to the contrary, that the discretionary powers of the district court have been wisely exercised.
Error to the district court for Oass county. Tried below before Ramsey, J.
Affirmed.
Samuel M. Chapman and Frank Irvine, tor plaintiffs in error.
Samuel M. Chapmcm: We submit it is an elementary rule of law that to obtain a receiver for mortgaged premises, during foreclosure proceedings, the grounds therefor must be full and clear, and two things must be made to appear: First, that the mortgaged premises are inadequate to satisfy the mortgage debt; second, that the debtors are personally insolvent. Unless these two facts are made to appear clearly, a court of equity will not interfere. Maxwell, PI. & Pr., p. 743; First Nat. Bank v. Gage, 79 111., 207; 2 Jones, Mortgages, 1576.
C. S. Polk and Roscoe Pound, contra:
Is the finding of the lower court that the property in controversy was not sufficient to discharge the mortgage debt, sustained, by the evidence? The entine tract com prises 480 acres, upon all of which the plaintiff has two mortgage liens. The mortgage of Oren B. Taft is a first lien upon the east half of the northwest quarter of section eighteen. Upon this mortgage of $1,200, interest to the amount of $88.90 was due at the time of hearing (12). Counsel state in brief that the answer of Taft shows no interest due (13). But -no such document appears in the record, and we submit that this court will not try the cause on evidence other than that submitted to the trial court. The nest lien is the mortgage set up in the first cause of action in the plaintiff’s petition — three notes aggregating $6,000, upon which the unpaid interest then amounted to $1,150 (11-12). Third comes the judgment lien of the defendant Teegarden (admitted in brief, pp. 3 and 13) for $630. Fourth, there is a lien set up in plaintiff’s second cause of action — notes aggregating $3,232, upon which there was unpaid interest to the amount of $294.98. To summarize:
First lien (Taft)....................$1,288 90
Second lien (Plff.)................... 7,150 00
Third lien (Teegarden)............... 630 00
Fourth lien (Plff.)................... 3,526 48
Total...........................$12,595 38
This total is secured, as has been seen, by eighty acres.
Now let us turn to the remaining 400 acres. Here the first lien is the mortgage of the Mutual Benefit Life Insurance Company, securing $6,000, upon which $680 was due as interest at the time of the hearing. As to this, counsel claims that the answer of the company shows a smaller sum to be due. But such answer nowhere appears in the record, and we are not advised whether it so states nor whether it relates to the time when the hearing was had. Second is the plaintiff’s first mortgage, principal and interest amounting to $7,150 (11-12). Third comes the Teegarden judgment for $630. Fourth, the plaintiff’s second mortgage, securing principal and interest, $3,526.48. Besides these items, it appears that the property had been sold for taxes for 1894, and that the face of the tax-sale certificate was $87.29. Other taxes were also outstanding, the amount whereof does not appear. To summarize:
(1) Taxes disclosed.................. $87 29
(2) Mut. Ben. Life Ins. Co............ 6,680 00
(3) Plff’s first mortgage ...'.......... 7,150 00
(4) Teegarden ...................... 630 00 •
(5) Plff’s second mortgage........... 3,526 48
$18,073 77
In other words, we find liens to the amount of $18,073.77 exclusive of the taxes for 1894, of which over $11,000 are drawing ten per cent interest,-against 440 acres of land.
But if it is thought fairer to lump all of the liens upon the whole tract of 480 acres, the matter stands no better.
Taxes disclosed....................'. $87 29
Taft mortgage...................... 1,288 90
Mut. Ben. Life Ins. Co. mortgage,..... 6,680 00
Plff’s first mortgage............. 7,150 00
Teegarden’s judgment .............. 630 00
Plff’s second mortgage............... 3,520 48
Total..........................$19,356 67
Which sum, more than half of which was and is drawing ten per cent interest, is secured by 480 acres of land.

Opinion:
Sullivan, J.
This action was commenced in the district court of Cass county by the First National Bank of Greenwood to foreclose two real estate mortgages. At plaintiff's instance an order was made, before judgment, appointing a receiver on the ground that the mortgaged property was probably insufficient -to discharge the mort gage debt. To secure a reversal of this order, the Waldrons, who were defendants below, prosecute error to this court. The assignments in the petition in error are as follows: "The court erred in finding 'that the property in controversy (being the real estate herein in this petition described with all its improvements) is inadequate security for the debts of the plaintiffs herein and the mortgages and judgments prior to plaintiff's said lien. 2d. The court erred in finding the defendants liable for deficiency judgment have not sufficient property over and above their debts and exemptions to pay the probable deficiency judgment in the case. 3. That the court erred in finding for the defendant in error and in appointing a receiver for the plaintiffs in error's property when the evidence and proof in said cause show that the owner of the mortgaged premises is solvent and that the premises are adequate security for the payment of the plaintiff's demand against the same, and that no grounds exist for the appointment of said receiver."
By the foregoing specifications three points are presented for decision. They are these: (1.) Is the evidence sufficient to warrant the conclusion of the trial court that the plaintiff's security is probably inadequate? (2.) Does the evidence show that the defendants, who are personally liable for the debt, are insolvent? (3.) May a receiver be appointed in a foreclosure suit, if the debtor is financially responsible? Our answer to the third question will render a decision of the second unnecessary. By section 266 of the Code of Civil Procedure it is provided that the district court, or a judge thereof, may appoint a receiver in an action brought to foreclose a mortgage "when the mortgaged property is in danger of being lost, removed, or materially injured, or is probably insufficient to discharge the mortgage debt." Construing this statutory provision it was held in Philadelphia Mortgage & Trust Co. v. Goos, 47 Nebr., 804, 815, following Jacobs v. Gibson, 9 Nebr., 380, that a mortgagee who brings suit to foreclose his mortgage "is entitled to Imw his debt satisfied out of the property pledged as security for its payment, without being forced to resort to other remedies he may have." This being the established rule it is altogether immaterial whether a deficiency judgment against the Waldrons would be collectible.
With respect to the first question raised by the petition in error, and discussed at length by counsel for both parties, we deem it sufficient to say that the evidence is substantially conflicting, both as to the value of the property and the amount of the liens and incumbrances against it. The greater number of witnesses support the contention of appellants that the security is adequate; but questions of fact, and especially questions of value, are not to be decided by mere count of- witnesses. Recent cases illustrating this principle are Nebraska Loan & Building Ass'n v. Marshall, 51 Nebr., 534, and Lincoln Land Co. v. Phelps County, 59 Nebr., 249. In passing upon plaintiff's claim that its security was probably inadequate, the district court was vested with a discretion which, in the absence of a satisfactory showing to the contrary, we will presume was wisely exercised. Jacobs v. Gibson, supra.
The order appointing the receiver is supported by the testimony of a considerable number of witnesses and should be
Affirmed.