Court Opinion

ID: 5548685
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:23:42.368076+00
Date Added: 2024-06-11T08:34:59.931946
License: Public Domain

The Chancellor.
I think the vice chancellor erred in supposing that the respondent was entitled to any part of the rents of the premises which became due and were actually collected by the receiver in Holford’s suit previous to the 10th of January. When a receiver is appointed in a suit he is appointed for the benefit of such of the parties in that suit as it shall afterwards appear were entitled to the fund in controversy ; but not for the benefit of strangers to the suit. If the receivership interferes with the right of a stranger, he may apply to the court to be heard fro interesse suo ; and his rights will be protected against any inequitable interference therewith by the officer of the court. But the appointment of a receiver does not give to a mere stranger to the suit the benefit of the proceedings in that cause, so as to authorize him to claim that which he would not have been entitled to if such receiver had never been appointed. Here, the appellant, as he had a perfect right to do as a junior mortgagee of the equity of redemption, filed his bill against his mortgagor only, without making the holders of either of the prior mortgages parties, to obtain a foreclosure and a sale of the equity of redemption which had been mortgaged to him; and also secure the benefit of the rents and profits of the mortgaged premises until the prior mortgagees should think proper to assert their rights to the possession of the property, and the rents and profits thereof, under their mortgages.
What then were the rights of Howell, as against the receiver in Holford’s suit, previous to the 10th of January, *471842 1 His right was this, if the owner of the equity of redemption was willing to relinquish the possession to him, as a prior incumbrancer, so that he might collect the rents and profits thereafter to be received, and the receivership in Holford’s suit interfered with his right to take such possession, the court, upon a proper application and notice to Holford and the receiver, would have ordered the latter to let him into possession, or to hold the rents and profits which should, thereafter be received'subject to his equitable claim thereon as prior mortgagee. But as he would not have been entitled to recover the back rents and profits which such owner had previously received, neither could he claim those which had been intercepted from coming to the owner of the equity of redemption by the appointment of a receiver; and which had passed into the hands of such receiver for the benefit of the complainant in the suit in which he had been appointed, before Howell had attempted to exercise his right to the possession of the property or to receive the rents and profits. In other words, the rights of Howell and of Holford would in that case have been substantially the same as if the latter had himself taken possession of the mortgaged premises as a junior mortgagee, and had received the rents and profits up to that time, and Howell had then for the first time applied for a receiver of the rents and profits of the mortgaged premises. Such prior mortgagee would unquestionably, upon showing that the mortgaged premises were insufficient to pay his debt and costs, be entitled to a specific lien upon the rents and .profits thereafter to be received, to satisfy the deficiency. But he would have no legal or equitable right to call upon the junior mortgagee in possession, or an owner of the equity of redemption who was not bound to pay such prior mortgage, to refund any part of the rents and profits which had been received by them, or either of them, before he attempted to get a specific lien upon the rents and profits of the premises by the appointment of a receiver.
Although, for convenience, it is not the practice of the *48court to appoint two separate receivers of the same property, in different suits, but to extend the receivership in the first suit over the second subject to the legal and equitable claims of all parties, the rights of the parties in each suit are substantially the same as if different persons had been appointed receivers at the several times when such receivership was granted and extended.
In the case under consideration, the rents received prior to the 10th of January were a subject of controversy in Holford’s suit only, and between him and Spafford, the owner of the equity of redemption, who had been substantially ousted of the possession, in favor of Holford, by virtue of the receivership in his suit. And if Howell had not gotten the receivership afterwards extented to his suit, or another receiver appointed, it is very evident he could not have claimed a specific lien upon the rents and profits which had been collected before he attempted to assert a claim to them. And if another receiver had been appointed, in Howell’s suit, on the 10th of January, 1842, all the right that the complainant in such suit could have claimed, in behalf of such receiver, would have been that the receiver in the former suit should deliver up to him the possession of the premises immediately; so as to enable him to receive and collect the rents then due from the tenants, or which should thereafter become due, and to hold them subject to the rights of the respondent in the suit in which he, had then made the junior mortgagee a party.
The order appealed from must therefore be reversed with costs. The receiver must be directed to pay to the solicitors of Holford the rents and profits received by him while he was receiver in that suit only, after deducting his expenses, disbursements and commissions previous to the 10th of January, 1842 ; and to the solicitor of Howell the rents received after that time, less his commissions and disbursements after the receivership was extended to Howell’s suit. The appellant must pay his own costs upon the appointment of his receiver, and upon the application to the vice chancellor to direct the disposition of the fund; as such an application was necessary by the one party or the other.