Court Opinion

ID: 5273017
Source: CourtListenerOpinion
Date Created: 2022-01-06 21:29:53.912679+00
Date Added: 2024-06-11T08:28:15.183456
License: Public Domain

Cochrane, P. J. (dissenting):
The agreement between Flanagan and the mortgagee Wells was expressly agreed to be a modification of the mortgages. It had the same effect as if originally it had been made a part thereof. The statement in the agreement is as follows: “As hereinabove modified the two certain mortgages shall stand with the same force and effect, so far as the parties hereto are concerned, as if originally made, executed and delivered in said modified form.” The statement limiting the modification to the parties making the same was of course intended to leave unaffected the interest in the mortgaged premises of the infant children of Flanagan who at that time had a remainder interest in an undivided one-half of the property and the estate of his deceased wife who was liable on one of the bonds.
I am unable to adopt the reasoning in the prevailing opinion that the mortgages as modified by this agreement did not bind the successors of the parties thereto. This modification agreement having been duly recorded the defendant Ray had constructive notice thereof. When the agreement was made by Flanagan he was the owner of an undivided one-half of the mortgaged premises and was tenant by the curtesy of the other undivided one-half thereof. He, therefore, was the only person interested in the entire produce of the farm and that interest he conveyed to Ray. The modification agreement provided that on a foreclosure of the mortgages the mortgagee “ shall be entitled as a matter of right, and without regard to the value of the premises therein described, or the solvency or insolvency of the party of the first part, or of any owner of said premises, and without notice to the party of the first part ” to the appointment of a receiver. The expression in the above quotation “ or of any owner of said premises ” lends emphasis to the point that Ray, the present “ owner of said premises,” is bound by the agreement and that it is not limited to Flanagan *257alone. It is undoubtedly true that an agreement in a mortgage for the appointment of a receiver without reference to the value of the property or the insolvency of parties hable on the bond is not conclusive on the court but that the court may refuse to enforce the same if such enforcement seems inequitable. Such is not the case here. Nor on the other hand is the court at liberty to arbitrarily ignore such an agreement. Such a course would nullify and set at naught a contract between the parties. In my opinion the court did not abuse its discretion when it appointed this receiver. It is true that in an affidavit on which the order was granted it was erroneously stated that the interests of the infants were in jeopardy, their interests at that time having been acquired by Ray. But the court could not properly take that statement into consideration because on an application for a receiver by the plaintiff his interests alone were before the court for consideration and it cannot be assumed that the court erroneously appointed the receiver for the benefit of the infants. Other grounds existed for such appointment. The plaintiff did not have to show, as ordinarily he does on such a motion, the insufficiency of the security or insolvency of the parties liable for the indebtedness. After the receiver was appointed he made an agreement with Ray to cut and store the hay on the premises at an agreed price for his services and that of his team and men for which Ray says he “ earned including the money paid out for other help the sum of about Three Hundred Fifteen and 50/100 Dollars ($315.50) upon which he has been paid by the said receiver the sum of One Hundred Forty-five and 50 /100 Dollars ($145.50) thereby leaving due for said service from said receiver the sum of about One Hundred Seventy Dollars ($170.00).” Ray thus accepted benefits under the receiver and rested on his rights until the receiver had harvested the crops and largely completed the duties of his receivership before he complained thereof. There was a deficiency of over $500 on the sale of the property, thereby proving its inadequacy as a security for the mortgage indebtedness. The judgment herein makes Ray with others hable for the deficiency, but Ray is primarly hable by reason of his later assumption of the mortgage indebtedness. Very hkely in the absence of evidence to the contrary there is a presumption that Ray is solvent. If so he has the remedy in his own hands. It is his duty to pay the judgment of deficiency and thus terminate the receivership in the usual manner. One who is able to pay and will not pay a debt the justice of which he does not question is not entitled to the equitable consideration of the court. If on the other hand he cannot pay, the good judgment of the court in appointing a receiver is thereby *258demonstrated. The order of the court vacating the receivership can be of no practical benefit to Ray because his interest in the property turned over to him by the receiver will be immediately subject to levy under an execution issued on plaintiff’s deficiency judgment. Such order directs the receiver to turn over and deliver to Ray all the personal property taken by the receiver “ in the same condition as it was when he took possession thereof,” and further provides “ that if said receiver is unable to turn over and deliver said property in said condition, then that the said receiver account to the said defendant Ray for the value thereof as of the time when he took possession thereof.” It may be that an affirmance of this order will make the receiver liable for any damages which may result from a natural depreciation of the property while in his hands and in other respects as well without reference to the question of care and diligence which he may have exercised in the performance of his duties. Neither do I think the question before us depends on the facts as they existed when the receiver was appointed. That is too narrow a view for a court of equity to take. It is well settled that in an equity action judgment is rendered according to the facts existing at the time of the trial. Equally then should this motion be disposed of according to present conditions. Summarizing the foregoing views the receiver was legally and regularly appointed in the discretion of the court; the result of the foreclosure action establishes the propriety of such appointment; the respondent has acquiesced in the receivership and received benefits thereunder and by reason of the deficiency judgment against him can reap no substantial benefit from the order vacating the receivership; and the equities are not with him but with the plaintiff.
I, therefore, favor a reversal of the order.
Hinman, J., concurs.
Order affirmed, with ten dollars costs and disbursements.