Meili v. Crane

PULLEN, J.,

pro

tem.

To secure the repayment of a promissory note to J. J. Heili and O. W. Fry, respondents, J. A. Crane and Evangelyn Crane executed two mortgages, one a second mortgage on a piece of orchard land in the county of Los Angeles and the other a chattel mortgage on certain furniture and equipment in an apartment house in the city of Los Angeles, together with their leasehold interest therein. Upon default on the note, respondents brought this action praying, among other things, that the mortgages be foreclosed, and that a receiver be appointed

pendente lite

to take over the leasehold interest and the furniture and equipment therein, and that the receiver be empowered to enter said premises, operate and manage the same, collect the rents therefrom and hold the proceeds for the benefit of ■ all parties interested. A receiver was appointed and took charge of the apartment house and furniture, entering into possession in December, 1925, and remaining in possession until dispossessed under an unlawful detainer action brought by the interveners herein, as owners of the apartment house referred to, who recovered judgment against the receiver, as such, for rentals and penalty amounting to #4,810.20. Pending the unlawful detainer action, the receiver, under order of the court, sold the furniture for $1,000. The net result of the operations by the receiver of the apartment house was a balance in his hands of $21.94 realized from rentals which, with the sum of $1,000 realized on the sale of the furniture and equipment, was applied by the court as a credit upon interveners’ judgment, ■ leaving a substantial amount of the judgment in favor of interveners unpaid.

While the action in intervention was pending, the real property referred to herein was sold under a decree of foreclosure of the prior mortgage, which sale realized a surplus

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of $3,992.45 over and above the amount necessary to satisfy such prior mortgage, which sum was paid into court subject to the outcome of this litigation. Thereupon, interveners herein sought to recover the sum of $1,000 in the hands of the receiver and to be awarded a lien prior to plaintiffs herein on the real property in question and that, out of the proceeds of the sale thereof, there be paid to interveners the balance remaining on their judgment against the receiver.