Court Opinion

ID: 7051072
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:00:12.861117+00
Date Added: 2024-06-11T16:11:44.610702
License: Public Domain

Dissenting Opinion.
Elliott, J. —
I can not assent to the conclusion that where mortgaged property is not of value sufficient to satisfy the judgment embodied in a decree of foreclosure the mortgagee may, upon showing that fact, have a receiver appointed to collect the rent during the year allowed for redemption, for I think that the mere fact that the mortgaged property is not of value sufficient to satisfy the judgment does not authorize the appointment of a receiver. I do not ■doubt that there may be cases where a receiver can be appointed, but I do believe that to justify the exercise of the ■extraordinary power of seizing property by the appointment of a receiver, something more than the bare inadequacy of the mortgagee’s security must be shown. I believe that the conclusion that the owner may be turned out of possession and a receiver put in solely and simply because the mortgaged property is not of sufficient value to pay the judgment, involves the destruction of our humane and beneficial redemption law.
Our system of redemption from judicial sales is the creature of statute, and to ascertain the rights of those who buy at such sales, as well as the rights of those whose property is sold, the courts must take the law as it is written. Omissions can not be supplied by adding provisions, nor can the courts take from the statute any material provision. *177The law as it came from the Legislature is to be interpreted and enforced by the judiciary, but it can not be changed. It is, to be sure, entirely proper to construe the statute in the light of the principles of jurisprudence, but the positive written law can not be borne down by any general rule of the unwritten law. As the redemption system is statutory and is radically’different from any known to the unwritten law, either as administered by courts of chancery or by the common law tribunals, no great light is thrown upon the subject of redemption from judicial sales by the decisions -of such courts upon general principles of 'equity or law.
Our statute books show that changes have been made from time to time in the system of redemption from judicial sales. Each and every change has been in the direction of liberalizing the debtor’s right to redeem.
Assuming, as it seems just to do, that our system is statutory, that the changes made indicate the legislative purpose to augment, and not diminish, the right of the debtor, the conclusion must be that a provision giving the debtor possession for the redemption year means possession in all the term implies. It means that the debtor shall enjoy all the incidents of an owner, and enjoy them unmolested and undisturbed by a receiver, or by any one else. It is impossible to restrict the meaning of the word “ possession ” to a mere pedis possessio, without doing violence to plain and settled rules. In language as plain and explicit as ever was employed it is declared that the debtor shall have possession for one year after the sale : These are the words of the statute : “ The owner of the real estate, or interest therein, sold as aforesaid, shall be entitled to the possession of the same for one year from the date of sale.” There is nothing for the courts to do save give effect to the words of the law, for there is neither ambiguity nor obscurity.
The import of the words is unmistakable and the purpose of the Legislature evident. What was meant, and what is *178said, is, that the owner shall have possession for one year, and, if this be true, it is absolutely impossible that possession can be wrested from him by a receiver. Either the owner is entitled to possession as owner, or he is not entitled to possession at all. If he is entitled to possession as owner, all the incidents of that possession attach. That he is entitled to possession as owner is clear, for in no other possible capacity can he retain posse,ssion; hence he has all the incidents of an owner in possession of land. If he does possess all such incidents, then it is clear that neither by the appointment of a receiver nor in any other mode can he be stripped of them. Owning all the incidents, he can not be made to account for rents and profits, inasmuch as no owner can be compelled to do this where the law does not exact it. Under former statutes the owner was bound to account for rents and profits ; under the present he is not. As he is not bound to account, there is no reason for appointing a receiver to take what the owner is entitled to receive. Whether, at the end of the redemption year, accumulated rents may be subjected to the payment of the unsatisfied part of a judgment or decree is not the question in this case; the question here is, can the owner be put out of possession and a receiver put in ? Until the redemption year expires no rent is, or can be, due from the owner, and there is nothing for a receiver to collect.
It comes at last to this, shall the statute which explicitly gives the owner possession be narrowed to mean that he shall have possession only where a court does not see fit to appoint a receiver at the suit of a mortgagee who alleges that the real estate is not of sufficient value to satisfy the decree ?
The right of a mortgagor is a substantive right and a contract right. This is the law as long since declared by the Supreme Court of the United States. Brine v. Insurance Co., 96 U. S. 627; Bronson v. Kinzie, 1 How. 311. Affirming this rule and yielding to its force, it was decided in the case of Mutual L. Ins. Co. v. Union Mills, etc., Co., 3 Lawyers’ *179Rep. Ann. 90, that a receiver could not be appointed where the statute gives the mortgagor the right to possession. In Teal v. Walker, 111 U. S. 242, it was held that where there is a right of possession in the mortgagor it absolutely establishes the rule that he is entitled to rents and profits. This general doctrine was, to some extent at least, sanctioned in Favorite v. Deardorff, 84 Ind. 555. It is entirely safe, therefore, to affirm that the Legislature meant to create a substantive property right. That its intention was clearly and appropriately expressed there can be no doubt. As a substantive right was vested in the owner by express statute, it can neither be divested nor .impaired.
Assuming, upon the strength of the arguments and authorities adduced, that a substantive right was vested in the owner, it must follow that the Legislature had a definite ob-ject in view in ve,sting the right. If that object can be ascertained, the courts must exert their power to accomplish it. A right created as that of the owner is created, can not be made a barren one by judicial decisions, since that would defeat the object the Legislature intended to accomplish. The right created by the statute is not a mere nominal one; it is, on the contrary, a substantial and fruitful right. It was created to prevent the debtor from being put out of possession during the year for redemption, and to enable him to enjoy all the fruits arising from the right of an owner in possession. Two leading purposes, at least, were intended to be given effect: First. That the creditor should be compelled to bid the full value of the mortgaged property and not fall upon other property of the debtor to satisfy the unpaid part of the judgment. Horn v. Indianapolis Nat’l Bank, 125 Ind. 381; Hervey v. Krost, 116 Ind. 268. Second. To assist the debtor in raising means to effect a redemption. Bryson v. McCreary, 102 Ind. 1. But whatever may be the incidental purpose of the act this much is certain, the Legislature has in strong and clear words declared that the owner shall have possession for one year after the sale, and *180this declaration was made in a statute directed to, and concentrated upon, the special subject of redemption from judicial sales.
The provision in our statute placing the right of possession in the owner was enacted after many experiments had been tried and many decisions rendered, so that it is to be regarded as the result of careful deliberation, and as the final legislative conclusion. The change made by the act of 1881 takes the ground away from some of the decisions and indicates, as has been shown, a purpose to liberalize and broaden the rights of the owners. Even prior to the change wrought by that act there was conflict upon the question of a right to a receiver, and, certainly, the present statute has augmented the owner’s right. Redemption statutes are to be liberally construed in favor of the debtor. Davis v. Rupe, 114 Ind. 588. The statute of 1881 can not be given a liberal construction and it still be held that the possession of the owner may be made to yield to that of a receiver. To appoint a receiver would be, as said in Sheeks v. Klotz, 84 Ind. 471, “in violation of the spirit and letter of the statute providing for redemption.” Other courts have asserted or indicated a doctrine which is here of- great force, inasmuch as they have said that to appoint a receiver is to give the creditor property the law does not entitle him to obtain. Hoge v. Hollister, 8 Bax. (Tenn.) 533; Callanan v. Shaw, 19 Iowa, 183; Myton v. Davenport, 51 Iowa, 583; Goodhue v. Daniels, 54 Iowa, 19; Paine v. McElroy, 73 Iowa, 81. If the creditor is allowed to seize the rents through the medium of a receiver, he obtains what the law intends the owner shall receive and enjoy. If the rental value of land should be but fifty dollars per annum, it seems quite clear that it could not be taken from the owner, and the principle must be the same although the rental value may chance to be a great deal more. If the land should comprise one acre only, that one acre could not be wrested from the owner’s possession, and the principle must be the *181same whether there are many acres or no more than one. If the question stood on the redemption statute alone it would be entirely free from difficulty and clear of doubt. The doctrine maintained by me does not give the redemption statute the effect of an exemption law, for it concedes that if the rents at the expiration of a year exceed the amount of the exemption they may be reached by legal process, but it does affirm that the rent can not be collected by a receiver during the year. At the end of the year, in cases where there is no redemption, the accumulated rents may be reached by a creditor, not because they are rents, but because the amount over and above the sum allowed the debtor by the exemption law is property subject to execution. In my view there is and can be nothing due or owing from the owner until after the year for redemption has expired, but if at the end of the year there is money or property, although derived from the mortgaged land, subject to execution, the creditor may reach it in the appropriate proceeding.
The only possible doubt that can .arise grows out of a provision found in a statute which enumerates the cases in which a receiver may be appointed, but this doubt vanishes upon analysis and investigation.
The general statute regarding receivers can not displant or overthrow the plain and unequivocal provisions of the redemption statute. For this conclusion three reasons may be assigned:
First. The statute respecting receivers is a general one, affecting matters of procedure, while the redemption statute is a special one, creating an essential property right, and the law is that the provisions of a special statute will prevail over those of a general statute. ,
Second. The provisions of the statute respecting receivers may be harmonized with the redemption law without doing violence to its language.
*182Third. If the two statutes can not be harmonized, the redemption law is the later, and must prevail.
The first of these reasons needs no elaboration. The second and third will be briefly considered.
The statute respecting receivers designates the cases in which a receiver may be appointed, and one of the enumerated cases is designated in these words: “ To protect or preserve, during the time allowed for redemption, any real estate or interest therein sold on execution or order of sale, and to secure to the person entitled thereto the rents and profits thereof.” Section 1222, R. S. 1881.
It is quite clear that' the first clause of this sentence only embraces cases where some tortious act is threatened or done which may cause injury to the property, or which may put it in danger. By no possible construction can that clause be so extended as to embrace a case where the owner simply retains possession, and is guilty of no wrong, for its language is too plain to admit of doubt. It is obvious, therefore, that if the redemption statute must go down at all it must go down because of the last clause of the provision, which reads, “ and to secure to the person entitled thereto the rents and profits thereof.” But that clause does not create a new class of cases, or refer to a class of cases different from those designated in the first clause of the sentence. The meaning is, that where there is a tortious act likely to injure or endanger the property, a receiver may be appointed to take possession, collect the rents and ultimately pay them to the party “ entitled thereto.” Even if it be true that a broader meaning can be given to the single clause, still, it does not follow that a receiver may be appointed and possession be taken from an owner who does no tortious act, but simply remains in possession of t^e land. This must be true, because it is settled that the owner is entitled to all rents and profits during the redemption year (Sheeks v. Klotz, supra; Ridgeway v. First Nat’l Bank, 78 Ind. 119 ; Adams v. Glidden, 111 Ind. 528; Taylor v. Morgan, 95 Ind. 456), and if *183the owner is entitled to the rent the mortgagee can not be the person “ entitled thereto ” within the meaning of the statute. But, conceding that the mortgagee may ultimately reach the rents, he can not do so until the year has expired, and it becomes certainly known that there will be no redemption ; for it is elementary law that where there is an express contract to pay rent none can be recovered until the expiration of the term unless it is otherwise stipulated in the contract. The utmost that can be conceded is that at the end of a year the mortgagee may reach the rent, but this concession will not authorize the conclusion that a receiver may be appointed at the beginning of the year in a case where the owner simply retains possession, neither threatening to do a tortious act nor doing one. The rule is well settled that until a mortgage debt is due a receiver will not be appointed unless some wrong is shown endangering the security, and certainly an owner in possession does not owe rent until the end of the redemption year. But some of the concessions suggested are very much broader than a mortgagee is entitled to have made, for it is only where there is some tortious act that an owner can be turned out of possession and a receiver put in.
It is a mistake to suppose that there are no cases except those in which trespass or waste is committed to which the provision quoted from the statute, respecting receivers, can apply. There are such cases, as for instance where the owner leases the property for a purpose that endangers its safety, or so uses it himself as to put it in peril. There are other cases where the statute will apply, as, for instance, where the owner suffers the property to be sold for assessments or taxes. Cases of waste and trespass, as well as cases of the character indicated by our illustrations, were the cases contemplated by the Legislature, for it is neither just nor consistent with the rules of construction to hold that it was the legislative intention to break down the strong, explicit, and particular provision enacted in favor of the owner. Both acts can be *184•given effect upon the theory outlined in the preceding pages, and hence both' can be upheld.
Filed March 17, 1891.
It is unnecessary to dwell upon the third reason stated in support of the conclusion that a receiver can not be appointed in such a case as this. The redemption act is the later act, and although the two acts were passed at the same session, it must prevail, if there is an irreconcilable conflict. If the provision of the redemption act giving the owner possession must fall, it will be for the sole reason that a single clause of a single subdivision of a single section is strong enough to warrant the conclusion that a mortgagee may secure a receiver in a case where the owner, free from fraud or positive wrong, simply remains in possession, as the statute says he may do.
If a receiver can be appointed in the case of a sale on a decree, one can be appointed in the case of a sale on execution, for the statute joins the two things together so that they can not be severed without legislation. These are its words: “ Real estate sold on execution or order of sale.” No distinction is made by the Legislature between sales on executions and sales on decrees of foreclosure, and the courts have no power to make any.
The doctrine of the principal opinion, carried to its logical results, will completely overthrow the redemption statute..
Miller, J., concurs in the foregoing opinion.