Ferguson v. Dickinson

CONNER, C. J. This is an appeal from an ancillary order of the district court made in vacation appointing a receiver in cause No. 476 pending in the district court of Lubbock county wherein the Lubbock Land & Grain Company are plaintiffs and the Lubbock Hardware & Furniture Company, H. C. Ferguson, and others are defendants. The plaintiffs in said suit seek to recover against J. H. Quinn and J. N. Patton on three vendor’s lien notes for the sum of $1,716.66, and to foreclose the vendor’s lien given to secure said notes on lots 16 and 17, in block 103, in the town of Lubbock upon which there is situated a hotel building. Said plaintiffs also seek to recover upon a note for $2,000 signed by J. H. Quinn and one for $846 signed by J. H. Quinn and J. N. Patton secured by deed of trust and vendor’s lien on the same property. The said Lubbock Hardware & Furniture Company in said suit seek to recover upon a note for $767.13 given by Quinn and Patton and an open account against J. N. Patton alone for $23, secured by a lien on the above-described real estate as well as by a chattel mortgage on the personal property claimed by the appellant H. C. Ferguson. Appellees thus state the basis of their application: “Receivership was sought on the grounds that the real estate and buildings thereon, and the furniture, are not of sufficient value to discharge the liens against the same being sued on in said cause 476, the allegations being that the building and personal property are principal part of the value, and that same aré exposed to destruction by fire, being a frame lumber building, and situated near other wooden buildings, that no insurance is being carried by either Quinn or Patton, and that the taxes for 1910 are unpaid, and that Quinn 'and Patton are insolvent, so that no money can be made out of them; 'that Ferguson and Patton have had the possession of all said property for a long time, receiving all the rents thereof, and have not carried insurance on same nor paid the taxes, nor kept said property in repair; that, if a receiver should be appointed, the property would rent for enough to pay the taxes and carry some insurance on the [222] building and furniture, so as to preserve the property pending tbe litigation. The plaintiffs in cause No. 476 are not claiming a lien on the property of appellant, but the Lubbock Hardware & Furniture Company do have a mortgage on same, and are seeking to foreclose it in said cause 476, to which suit appellant is a party, and said Hardware & Furniture Company are also parties applicant for the appointment of a receiver.” By a duly verified answer appellant alleged among other things in substance that tbe claims of tbe Lubbock Hardware & Furniture Company were secured by a vendor’s lien upon tbe real estate heretofore described and that tbe chattel mortgage upon the personal property wbicb be owned by purchase from Patton expressly provided that resort to such personal property was not to be made until after exhausting tbe lien against tbe bouse and lot involved in tbe controversy; and that in tbe meantime appellant was to have tbe sole and exclusive possession of all of said personal property. He further alleged that tbe real property was of sufficient value to pay off and discharge all of tbe incumbrances against it, including tbe claims of tbe hardware company, unless tbe same should be sacrificed or improperly managed; that be was taking prudent care of all of said property and not exposing the same more than necessarily incident to prudent management and offered to take such insurance as might be agreed upon to protect tbe property and pay bis proper part of any premium therefor. Tbe court appointed a receiver as prayed for and ordered him to take charge of tbe real estate and personal property, directing him to rent tbe same and use tbe proceeds to pay taxes, insurance and up-keep of said property, and also authorized him to borrow money, if necessary, to protect tbe property from sale for taxes and to pay insurance. [1-4] Our statute (Revised Statutes, art. 1465) provides that receivers may be appointed “in an action by mortgagee for tbe foreclosure of bis mortgage and sale of tbe mortgaged property when it appears that tbe mortgaged property is in danger of being lost, removed, or materially injured, or that tbe condition of tbe mortgage has not been performed and tbe property is probably insufficient to discharge tbe mortgage debt.” This but accords with tbe general rule of equity on tbe subject, but both by tbe statute and equitable principle it must appear in order to authorize tbe appointment of tbe receiver that tbe mortgaged property is in danger of being lost, removed, or materially injured. See Sanborn v. Nelson, 134 S. W. 855. Accepting appellant’s verified answer denying any misuse of tbe property, and indeed no acts of injury are alleged, what is there left of wbicb appellees can complain? It is alleged in tbe petition of tbe plaintiff in tbe suit, tbe Lubbock Land & Grain Company, that it was agreed by Quinn and later adopted by Patton to keep the property insured and pay taxes for the benefit of said plaintiff and the proof on the bearing so shows. In such event it is clear that the plaintiff may both insure and pay taxes and charge the necessary cost thereof to the defendants as part of his original claim. See Boone on Mortgages (Pony Series) § 172; 2 Jones on Mortgages, §§ 1080, 1134; Garza v. Western Mortgage & Investment Co., 27 S. W. 1091. Even in tbe absence of such an agreement, and this will apply to the personal property involved in tbe present controversy as to wbicb there is no agreement, a mortgagee has an insurable interest in the property mortgaged and may both insure and pay taxes due upon tbe property, having tbe right to add tbe tax paid to bis mortgage debt. See authorities before cited, and 19 Cyc. 585, and eases cited in note 30; 27 Cyc. 1261, and eases cited in note 55. In view of the ready relief thus afforded from alleged wrongs made tbe basis of tbe application herein, why should a receiver be appointed and the costs of a receivership be added to tbe burdens tbe property must undoubtedly bear? Under our law tbe mortgage or deed of trust does not vest title. Texas Loan Agency v. Gray, 12 Tex. Civ. App. 430, 34 S. W. 650; Wright v. Henderson, 12 Tex. 44. And tbe mortgagor and not the mortgagee is entitled to the possession until foreclosure conveyance. Silliman v. Gammage, 55 Tex. 369; Edrington v. Newland, 57 Tex. 633. It is undisputed in tbe record that appellant is not a party to any of tbe obligations sued upon in this case and in tbe absence of an agreement .to so do be is not required to insure either tbe real or tbe personal property as to wbicb alone be asserts any claim, and to appoint tbe receiver as prayed for, and as was done, is to deprive him of tbe possession to wbicb be is entitled until foreclosure and to yield the revenues of the property, to wbicb be is also entitled, in tbe payment of insurance premiums, costs of tbe receivership, etc. This we think should not be done in tbe absence of some more forceful reason for tbe receivership than was alleged or shown. Courts uniformly, as we understand the rule, grant the remedy of receivership cautiously for by it tbe owner of property must perforce yield tbe right tbe law gives him to control and manage it to another and suffer tbe costs and loss necessarily incident thereto. We conclude that the receivership was improperly granted and that tbe order therefor should be set aside and tbe receiver discharged, tbe costs of the proceeding both here and in tbe court below to be taxed against ap-pellees.