Chadron Banking Co. v. Mahoney

Ikvine, C. The Chadron Banking Company brought this action to foreclose a mortgage on lot 11, in block 11, and other property in the city of Chadron. The petition alleged that on February 20, 1893, Jeremiah Mahoney and Catherine — 216 — Mahoney, his wife, made and delivered to the plaintiff their promissory note for $3,602.85, and to secure the same executed to the plaintiff a mortgage on the property in question. Then followed other averments necessary to a foreclosure, and allegations of fact in support of an application for a receiver. The petition also alleged that Joseph M. Robinson claimed an interest in said lot 11 by virtue of a quitclaim deed from the Mahoneys, hut that the said deed was without consideration and made for the purpose of enabling Robinson to collect the rents and withhold possession from the plaintiff. The Mercantile Trust Company practically confessed the petition, and then, by way of cross-petition, alleged that in 1889 Arthur C. Putnam and wife made and delivered to the Western Farm Mortgage Company a note for $4,000, and executed a mortgage on said lot 11 to secure the same; that the note and mortgage had been transferred to the Mercantile Trust Company. The foreclosure of this mortgage was prayed. J. L. Browne, who was not an original party to the action, filed a petition asking to be made a defendant. No order making him such appears, but he filed a cross-petition alleging the making and delivery by Putnam and wife of another note and mortgage to the Western Farm Mortgage Company and an assignment for the benefit of creditors by the Western Farm Mortgage Company to Browne, and sought a foreclosure of this mortgage. Three defendants claimed mechanics’ liens upon the premises, the validity and position of which were confessed on the record. The Western Farm Mortgage Company was a defendant, but made no appearance. The defendant' Robinson answered by denying generally all the allegations of the cross-petition of the Mercantile Trust Company. The answer made no reference whatever to the cross-petition of Browne. For answer to' the petition Robinson denied all the allegations in regard to the making and delivery of and default in the note and mortgage. He then averred that on May 12, 1893, the — 217 — Mahoneys, by deed of quitclaim, for value and in good faith, conveyed the premises to Robinson for his own use and without any trust or reservation in favor of the grantors or any other person. He also pleaded a number of facts relating only to the application for a receiver, and which we need not here notice. The Mahoneys answered denying all allegations in the petition not specifically admitted, then averring that Catherine Mahoney did not in any of the transactions contract with relation to her separate estate; that she did not take title to the property for the purchase and holding thereof, but solely as a matter of convenience; that the Mahoneys, in good faith for value and without intent to defraud, conveyed to “ present owners,” and then pleaded specifically to the application for a receiver. The Mahoneys made no answer to either cross-petition. Their answer to the petition was a disclaimer of all interest in the property. The petition prayed for a deficiency judgment against the Mahoneys, but on the trial the right to such judgment was expressly waived and the decree establishes no liability against them. The Mahoneys, therefore, have nothing to complain of in the decree, and we do not understand that they appeal therefrom. On the 16th day of February, 1894, a decree was entered reciting that the cause came on to be heard on February 2. The facts are then found in favor of the plaintiff and the cross-petitioners and an order made foreclosing their several liens. The decree then proceeds to recite that the cause came on to be heard on the same day on the application for a receiver and the court made an order appointing a receiver to take charge of the premises “ during the pendency of this action and until final determination and disposition thereof be made by the court,” with directions to the receiver and a requirement that possession be delivered to him. The defendant Robinson appeals. The appellees contend, however, that the proceeding should be considered as one in error because an — 218 — assignment of errors was filed. We do not find such an assignment in the record, but the filing of a paper with the transcript merely indicating the points upon which the appellant relies to reverse the case would not make the proceeding one in error. To have that effect the instrument filed should have the essential elements of a petition in error. The procedure should be such as to disclose an election to proceed in error, not by appeal. The points argued in the brief of the appellant relate largely to matters of evidence. The first point urged is that the court erred in refusing to permit Robinson to cross-examine the witness Putnam for the purpose of showing that the note to the plaintiff, to secure which the mortgage was made, was made to evidence a pre-existing indebtedness to the plaintiff, and that no consideration was at the time paid to the Mahoneys. If this were true, it would not affect the validity of the mortgage. It is true that Mrs. Mahoney, in her answer, avers that she is a married woman and did not contract with reference to her separate estate; but this plea must be taken as referring to her general personal liability, because she, at the same time, disclaims that she ever had any beneficial interest in the mortgaged premises. Whether a defense would arise in favor of the grantee of a married woman, against her mortgage covering her separate estate, made for the purpose of securing a pre-existing debt of her husband, is not here presented, because Robinson does not plead it. The facts sought to be elicited on cross-examination may have been pertinent to the application for a receiver, but that branch of the case must be disposed of on other considerations. It is urged that certain oral testimony in regard to the assignment of the mortgage to the Mercantile Trust Company was improperly admitted. It has been frequently held that the improper admission of evidence in a case tried to the court is not alone ground for reversal. A written assignment of the note and mortgage was offered and re — 219 — ■ceived in evidence. The only objection made to it was that it appeared upon its face to have been altered in a material part, to-wit, in the name of the .assignee. This objection was overruled by the court. The bill of exceptions contains a copy of the assignment. This copy discloses no such alteration, and the only evidence that the original disclosed such an alteration was the testimony of one witness that the name of the assignee did not look as if it were the ■same handwriting as the rest of the instrument, but that the witness did not know whether or not it was the same. There is also attached to the copy referred to an affidavit •to the effect that the original did disclose an alteration; that it was in the possession of the opposite party; that affiant had made application to the court to compel its production, and that said application had been denied. This was not an affidavit used on the hearing in the district court. It is no part of the record and cannot be considered here for any purpose. We must review cases here upon the record as made in the district court, and of this record the transcript here filed is the sole, conclusive, and unimpeachable evidence. It is next urged that the court erred in admitting in evidence the record of the assignment from the Western Farm Mortgage Company to Browne. It will be remembered that there was no order making Browne a party and that Robinson made no answer to his cross-petition. The record discloses, however, that Robinson cross-examined the witnesses sworn on behalf of Browne; that the court entertained on the final hearing Browne’s cross-petition, and Robinson did not in the district court, and does not now, complain that the" decree in favor of Browne was erroneous because he was not a party. This being true, we must assume that Browne’s right to intervene is unquestioned and that he became in fact a party, although in so doing we do not wish to encourage the idea that a stranger may, without leave of the court, file pleadings in a case and obtain relief — 220 — where no appearance is made by the parties affected. The instrument offered in evidence was from the miscellaneous record of Dawes county, and was the record of an assignment made in South Dakota by the mortgage company, a corporation of that state, to Browne. The original was not in anywise accounted for, and the presumption, of course, would be that it was in Browne’s possession. Eor this reason, if not for several others, the evidence was incompetent; but Robinson did not answer this cross-petition, and the fact of the assignment was therefore not in issue and its proof was unnecessary. The other assignments relate to the application for a .receiver. This may be disposed of very briefly. The application was for a receiver “pending the action.” The terms of the order appointing a receiver were that he should take charge of the property “pending the action.” This order was a part of the final decree. The appointment of a receiver is a provisional remedy. It is not the ultimate object of the action, and there is no occasion, after the court has finally determined the rights of the parties, to appoint a receiver “pending the action.” The Code, section 266, as well as the usages of courts of equity, provide for the appointment in certain cases of receivers after judgment to carry the decree into effect, but this appointment was not made for any such purpose, but merely for the purpose of holding possession of the property, preserving it and collecting the rents. It is also provided that a receiver may be appointed after judgment to preserve the property during the pendency of an appeal. But this order was made as a part of the final decree; no appeal had been taken; no steps had been taken towards instituting an appeal. It Í3 possible, though this we do not decide, that in some cases a receiver might be appointed pending a stay of execution, but no stay had been asked for. For all that appeared when this receiver was appointed the mortgagees might have proceeded in twenty days (the time fixed for redemp — 221 — tion) to sell the property. It is always a harsh proceeding to oust one from the possession of real estate by the appointment of a receiver. In order to justify such action the trial court should be quite clearly satisfied that grounds for such action exist and that the protection of the rights of the parties requires it. Receivers should not be appointed simply because an occasion for their appointment is anticipated or may in the future arise. The occasion must exist when the appointment is made. We think the learned judge erred in appointing a receiver at this stage of the proceedings. The decree, so far as it relates to the receivership, is reversed; otherwise it is affirmed. Judgment accordingly.