Pacific Mutual Life Insurance v. Beck (1893) · DecisionDepot

Pacific Mutual Life Insurance v. Beck

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Dec 28, 1893 No. No. 15,332Published

Before: Temple

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Holding. The court held that a mortgagee who has been fully paid through a foreclosure sale is not entitled to crops held by a receiver as security, as the mortgagee's rights are limited to the debt and do not include ownership of the property or its rents prior to the issuance of a deed.

Issues

Whether a mortgagee is entitled to rents and profits held by a receiver after the mortgage debt and costs have been fully satisfied by a foreclosure sale.
Whether a purchaser at a foreclosure sale acquires the rights of an owner to rents and profits before becoming entitled to a deed.

Disposition. affirmed

Synopsis

Mortgage Foreclosure—Purchase by Mortgagee—Rents.—Where a Receiver was appointed in a suit to foreclose a mortgage, and the mortgagee purchased the mortgaged premises at the foreclosure sale for the full amount of his debt and costs, the rents and profits of the mortgaged premises in the hands of the receiver at the time of the sale belonged to the mortgagor and not to the mortgagee.

Mortgage Foreclosure—Purchase by Mortgagee—Rents.—The mortgagee did not become owner by purchasing at the foreclosure sale, so as to entitle him to rents payable ten days after the sale, since his title was not changed thereby, except that the amount of his debt was fixed, and his right to a deed or to a sum gaid to redeem within six months became absolute.

TEMPLE, C. This appeal is from an order made after judgment. The action was to foreclose a mortgage executed by the defendants Beck to plaintiff, in which it was stipulated that, when proceedings to foreclose were instituted, a receiver might be appointed.

November 17, 1890, a suit to foreclose having been commenced, an application was made for the appointment of a receiver. By consent a receiver was appointed, who in the order was directed and authorized “to take charge of the property, and prevent waste thereon, and to collect and receive the rents and profits thereof, and especially to farm or [394]lease or cultivate said'land, and to care for, protect, and at the proper time harvest and thresh or otherwise prepare for market and sell the product of said premises, holding the same and all moneys collected or received by him hereunder subject to the further order of this court in that behalf, reporting to the court, from time to time, his doings hereunder,” etc. The receiver was appointed and duly qualified, and took possession of the mortgaged premises, which consisted of a farm.

In pursuance of the authority, the receiver leased the property for the cropping season of 1891, “but in no event to exceed nine months from January 1,1891, at the rent of one-fifth of all crops raised thereon during said demised term, payable as follows: Hay, well baled; wheat, barley, and similar products, sacked in good sacks,—and all the foregoing products delivered in a seasonable time for harvesting and gathering same at warehouse in Livermore, free of all expense to receiver.” The proceedings not having been ended in 1891, the lease was renewed for the cropping season of 1892 on the same terms. Besides the terms above recited, the lease contained a stipulation that the tenant would cultivate the land “in a farmer-like manner, using the same for the purpose of raising hay, wheat, barley, and similar crops.”

The questions involved in this appeal have reference to the crops of 1892. They were all harvested, and the portion paid as rent was delivered in the warehouse, as stipulated, before September 7, 1892. At that time the receiver obtained warehouse receipts for it. On the twenty-first day of September, 1892, the premises were sold under a decree of foreclosure entered in the suit. At that sale the mortgagee purchased, paying the full amount of its debt and costs. September 30, 1892, the receiver filed a report, showing that he had in his hands hay, wheat, and barley, the crop of 1892. Thereupon a contest arose between appellant and the defendants Beck, each claiming the property. It was given to the defendants, and plaintiff appeals from that order.

Pacific Mutual Life Insurance v. Beck

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