Fox v. Flood

NOURSE, J.

This is an appeal from an order appointing a receiver in an action for the foreclosure of a second mortgage. Coleman R. Flood, the owner of the property at the time of the institution of the action, is the sole appellant. The order was made upon the complaint as amended and affidavits introduced at the hearing.

The second mortgage was given to secure the payment of fifteen thousand dollars, and covers three lots in Venice, California, improved by a hotel building, together with the rents, issues, and profits thereof. The first mortgage is in the sum of twenty thousand dollars. The complaint, as amended, alleges the failure of the defendant mortgagors to perform the conditions of the mortgage, in that they have failed to pay interest due on the first mortgage amounting to $909.78, interest due on the second mortgage amounting to $262.50, five thousand dollars due on the principal under the terms of the mortgage, and delinquent taxes amounting to $233.62, together with a penalty thereon in the sum of $33.46. It also alleges the insolvency of the persons personally liable for the payment of the mortgage debt; and that the mortgaged property is insufficient to discharge the debt secured thereby, its cash value being only thirty thousand dollars.

[1]

Under the provisions of subdivision 2, section 564, of the Code of Civil Procedure, a receiver may be appointed in an action for the foreclosure of a mortgage where it appears that the condition of the mortgage has not been performed and that the property is probably insufficient to discharge the mortgage debt. Appellant apparently concedes the nonperformance of the conditions of the mortgage and the insolvency of those personally liable thereunder. His answer denies the above allegations on information and belief.

[788]

The only point urged on appeal is that the court abused its discretion in determining the value of the property to be insufficient to discharge the mortgage debt.

[2]

The power to appoint a receiver is very largely within the discretion of the trial court, and an appellate court will not interfere with the exercise of such discretion except in cases of palpable abuse.