60 Wis. 490 | Wis. | 1884
This court has sustained the power of courts of equity to appoint a receiver of rents and profits in a foreclosure action, where the facts show that it would be equitable and just to exercise that power. Finch v. Houghton, 19 Wis., 150; Morris v. Branchaud, 52 Wis., 187; Schreiber v. Carey, 48 Wis., 208. In the'last case Mr. Justice Tatloe examines the question very fully, both upon principle and authority, especially with reference to the legislation of this state which defines the rights of the mortgagor in the mortgaged property before foreclosure and sale. The conclusion reached is that a court should not appoint a receiver in a foreclosure action unless the facts establish a case which clearly invokes the exercise of the equitable power of the court to grant that relief; for the right to the rents and profits does not grow directly out of the relation of the parties, as a matter of strict right, but is founded upon equitable considerations which address themselves to the sound discretion of the court. Syracuse City Bank v. Tollman, 31 Barb., 201-208; Rider v. Bagley, 84 N. Y., 461. Within the doctrine of these cases, does the plaintiff show himself entitled to have a receiver appointed to receive the rents and profits during the pendency of this action?
The assignees in their answer aver on information and belief that the plaintiff’s mortgage was made and delivered by the mortgagors in contemplation of insolvency, and as a cover upon their property, in order to hinder and defraud their creditors; that the plaintiff had notice of that fraudulent intent when he received the mortgage, and took the same to aid the mortgagors in that purpose, and holds the
We shall not enter upon the inquiry as to whether the plaintiff’s mortgage was given with an honest purpose to secure a bona fide debt of $1,000. For, assuming these facts in his favor, still the plaintiff does not establish any equitable grounds for the appointment of a receiver. His mortgage was given but three weeks before the assignment, to secure the payment of a pre-existing debt. There is nothing whatever to show that there was any change, either in the condition of the mortgaged property or in the circumstances of the mortgagors intermediate the execution of the mortgage and the commencement of this foreclosure action. In no respect was the plaintiff worse off the last of June than when he took his security. On what ground, then, can it be claimed that his equities were greater when the suit was brought than they were on the 28th of March, 1883 ? There was no change, either as to the real estate or personal security in the mean time; nothing has occurred to give him superior equities over the property. Furthermore, it is most probable that the mortgaged property is inadequate for the payment of prior liens against it. The rents and profits will go into the hands of the assignees for the benefit of the creditors of the mortgagors. If these rents and profits should be applied upon the prior mortgages, the plaintiff surely would have no reason to complain of such an application of them. Tie doubtless knew when he took his mortgage that the property was inadequate security for the payment of his debt, and that the responsibility of the mortgagors was utterly worthless. When the plaintiff applied for the appointment of a receiver he had precisely the same security for the' payment of his debt as when, he made
It follows from these views that the order of the circuit court must be reversed, and the cause remanded for further proceedings.
By the Court.— It is so ordered.