Scott v. Hotchkiss
Before: Temple
Synopsis
Mortgage—Stipulation for Receiver Pending Foreclosure—Rights of Bona Fide Tenant in Growing Crops—Collection of Rent.— Where a mortgage upon farming land contained a stipulation for the appointment by the court of a receiver to take possession of the mortgaged premises during foreclosure of the mortgage; and to collect the rents and profits until the premises should be redeemed from such sale, or until title should be vested in the purchaser, but was not accompanied by an affidavit as required in mortgages of growing crops, and was not recorded or indexed as a chattel mortgage, the court cannot, under such stipulation, authorize a receiver to take possession of a growing crop pending foreclosure as against a tenant of the mortgagor who took possession under a lease without actual knowledge of such stipulation, and where such lease reserved a fair and adequate rent, which represents the value of the use and occupation of the land. The authority of the receiver must be confined to the receiving of such rent from the tenant in possession.
Id.—Effect of Stipulation—Jurisdiction to Appoint Receiver.—The stipulation in the mortgage that a receiver may be appointed and directed to take possession and collect the rents and profits, enlarges the rights of the mortgagee as against the mortgagor, and a purchaser from the mortgagor is in no better position in regard to this matter than the mortgagor; but where the mortgage does not give, the mortgagee an interest in the growing crop, or in the rents and profits, it seems that a stipulation for a receiver cannot affect the rights of others, or authorize a court of equity to appoint a receiver in a case where the court has no such authority given by law.
Id.—Insufficient Security of Mortgage—Receiver of Rents—Extent of Authority.—Where the complaint for the foreclosure of a mortgage avers that the security is insufficient, the court is authorized to appoint a receiver to take and hold the rents and profits to secure the debt; but his authority is confined to receiving the rent from a tenant of the mortgagor who is lawfully in possession under a lease reserving a fair and reasonable rent, and he cannot dispossess such tenant of his rights in the crop.
Temple, J. This action was brought to foreclose a mortgage executed by defendant Hotchkiss. The mortgage contains a provision that in case of default and the commencement of an action to foreclose, on the filing of a complaint, in foreclosure, or at any time thereafter, “ the court shall, if requested by the plaintiff, name some disinterested person as receiver and shall authorize such person as receiver to take possession of the mortgaged premises and collect the rents and profits, and to apply them to the satisfaction of such judgment, and to sell said premises in the same manner as lands are sold upon execution, and to continue in possession of such premises and to collect the rents and [92]profits until the premises are redeemed from such sale or until title is vested in the purchaser.”
The mortgage was not accompanied with an affidavit as required in mortgages of growing crops, and was not recorded or indexed as a chattel mortgage.
After the mortgage Hotchkiss sold and conveyed the land to defendant Fountain, subject to the mortgage, but it was found that Fountain had no actual notice of the provision in the mortgage in regard to the appointment of a receiver.
The mortgage was executed in 1891. In 1892 Millard entered upon the land as tenant of the mortgagor, and continued in possession as such tenant up to the time of the commencement of this action and the appointment of a receiver herein. Each year he has cultivated the land in wheat, barley, and hay, rendering as rental one-fourth the crop—delivering the same in the field, the grain in sacks and the hay in bales. Millard had no actual knowledge of the mortgage until after he took the lease, and no knowledge of the provision in regard to a receiver until the commencement of this action.
This action was commenced in February, 1895. As to the condition of things when a receiver was appointed, the court found as follows: “ That there is growing upon said premises a crop of wheat and hay, as follows: sixty acres of summer fallow, twenty acres of winter-sown, and about one hundred acres of volunteer. That said crop was put in by the defendant Millard, and was, except twenty acres of wdnter-sown, put in prior to December 1,1894. That the defendant.Millard furnished all of the necessary seed, labor, and teams used in putting in said crop. That is it customary, in leasing farming lands, such as the mortgaged premises, in the vicinity of said premises, where they are leased for a share of the crop, to reserve one-fourth of all grain and hay grown on the premises as rental, the grain to be delivered in sacks and the hay in bales, to the lessor on the leased premises, the other three-fourths of the
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