Mercantile Mortgage Co. v. Chin Ah Len

California Court of Appeal Jan 7, 1935 No. Civ. 9622; Civ. 9623Published

Before: Nourse

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Holding. The court affirmed the appointment of a receiver to take possession of real property, finding that the trustee's pursuit of specific performance to protect the property was not inconsistent with its power to sell under the deeds of trust.

Issues

Whether a receiver may be appointed in an equitable action to enforce rights of entry and possession under a deed of trust.
Whether the commencement of sale proceedings constitutes an election of remedies that precludes a suit for specific performance and receivership.
Whether the evidence supported the trial court's order appointing a receiver.

Disposition. affirmed

Quotations verified verbatim against the opinion

“A receiver may be appointed when the action is one in equity to enforce the covenants of the rights of entry and possession under a deed of trust.”

“The remedies thus afforded for the immediate protection of the properties from dissipation and loss were not inconsistent with the power to sell under the deeds.”

NOURSE, P. J.

The guardian of two of the defendants has appealed from an order appointing a receiver.

The plaintiffs held deeds of trust covering three pieces of real property located in what is known as Chinatown in the city and county of San Francisco. Each deed provided that: “In case default be made in payment, . . . the Trustee . . . shall be entitled at any time, at its option, and either by itself or by a receiver to be appointed by a court therefor, to enter upon and take possession of the above granted premises, . . .

“The Trustee, . . . may at any time, at its option, commence and maintain suit in any court of competent jurisdiction and obtain the aid and direction of said court in the execution by it of the trusts, ...”

Acting upon this authority the plaintiffs commenced two actions in specific performance to be admitted to possession of the premises and for the appointment of a receiver to take immediate possession for the purpose of collecting the rents and of preserving the property. These actions were consolidated for the motion for the appointment of a re

[506]

ceiver and for the appeal. The defendants opposed by affidavit and oral evidence the appointment of a receiver. The plaintiff treated its complaint as an affidavit upon the hearing and the order appealed from is based upon the conflict of evidence arising in this way.

It appears that the appellants were in default in the payment of both principal and interest, in the payment of taxes and insurance premiums, to the amount of approximately $13,500; the three buildings, which were used as stores and rooming houses, were badly in need of repair, windows being broken, plaster broken and cracked, plumbing and electric wires and fixtures defective, and the entire premises were left in an unclean and unsanitary condition; that two of the defendants representing conflicting claimants to interests in the properties had been collecting over a long period of time approximately $2,300 a month in rentals from the tenants, some of whom had been compelled to pay double rent under intimidation from these claimants; that the income was being dissipated by these defendants who refused to use any part of it in the upkeep or repair of the premises or in the payment of the obligations under the deeds of trust. Upon this showing a receiver was appointed to take immediate possession of the premises.

Mercantile Mortgage Co. v. Chin Ah Len

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NOURSE, P. J.

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