Hirsch, Elson & Co. v. Israel

Deemer, C. J. 1 The first point made by appellants is. that appellees have no lien upon the property, and are therefore not entitled to the appointment of a receiver. The proceeding was commenced for the ¡aurpose of canceling the mortgages, and subjecting the property to the payment of appellees’ judgments. Such proceedings seem to be authorized by section 3150 and 3151 of the Code of 1873; and section 3152 of the same Code provides that a lien is created upon the property of a judgment debtor, or his interest therein, in the hands of the defendant or under his control, which is sufficiently described in the petition, from the time of service of notice and copy of petition on the defendant holding or controlling such property. Appellants contend that these sections of the Code do not apply to a case where the defendant has possession of the property. We are inclined to thin It they do. See Ware v. Delahaye, 95 Iowa, 667. But, if they do not, then it is clear that plaintiffs had the right to bring a suit in equity, independent of statute, for the purpose of subjecting the property to the payment of their judgments; and such suit would be a sufficient basis for the appointment of a receiver. Falker v. Linehan, 88 Iowa, 641; O'Brien v. Stambach, 101 Iowa, 40; Beach Modern Equity Jurisprudence, sections 883, 885, 887, 925; Wait 501 Fraudulent Conveyances, sections 61, 68, and cases cited in notes. 2 Again, it is insisted that plaintiffs bad a plain, speedy, and adequate remedy at law, by levy and sale under execution. It has frequently been decided that a mortgagor of personal property lias no such interest in it as that it may be seized and sold under execution. The Twenty-first General Assembly passed an act relating to levies upon mortgaged personal property which allows such property to be seized and sold under certain conditions not necessary to be more particularly mentioned. But we have already held that such proceeding is not exclusive. Buck-Reiner Co. v. Beatty, 82 Iowa, 353; Hibbard v. Zenor, 75 Iowa, 479; Clark v. Patton. 92 Iowa, 247, and cases cited; Geirshofer v. Nupuf, 105 Iowa, 374; Thomas v. Farley, 76 Iowa, 735. We are well satisfied that when, as in this case, it is, claimed the mortgages are fraudulent, a judgment creditor is not compelled to make his levy under the provisions of chapter 117 of the Acts of the Twenty-first General Assembly, but may pro-need by garnishment when the property is in the hands of a third person, or by creditors’ bill or other equitable proceedings when the property is in the possession of the judgment defendant; and that, when he does proceed by creditors’ bill •or other action in equity, he acquires such a right to or .apparent lien upon the property as will support an application for the appointment of a receiver. 3 Appellants further contend that no such showing was made as entitled appellees to the appointment. Section 2903 -of the Code of 1873 provides for the appointment of a receiver in a civil action upon petition wherein the party shows that he has a probable right to or interest in any property which is the subject of controversy, and that such property or its rents or profits are in danger of being lost or materially injured or destroyed, and the court is satisfied that the interests of one or both parties will be thereby promoted, and the substantial rights of neither unduly infringed, and upon the whole case may make such order as 502 will bo for the best interest of all parties concerned. By the terms of the mortgage, Israel was given the right to remain in possession of the mortgaged goods, and he expressly reserved from the sale sufficient to pay current expenses of the store,, rent, insurance, clerk hire, fuel, light, etc., to purchase-necessary goods for replenishing stock, and for his own time- and living expenses for himself and family, 'and actual attorney’s fees necessary for his protection. While this reservation probably did not of itself render the mortgage fraudulent, yet it is a crcumstance to be considered in connection with the other evidence in the case tending to show fraud. And as the mortgagor is insolvent, and has complete control of the goods and of the proceeds arising therefrom, we think the court was justified in appointing the receiver, especially in view of the fact that plaintiffs were required to file bond in the sum of eight hundred dollars to protect defendants from loss- or damage growing out of the order of appointment. The general rule seems to be that a receiver will be appointed in-creditors’ suits when the property is in danger of waste, almost as a matter of course. Wait Fraudulent Conveyances, section 184; Farnham v. Campbell, 10 Paige, 601; Lent v. McQueen, 15 How. Prac. 313; Minkler v. Sheep Co., 4 N. D. 507; 33 L. R. A. 546 (62 N. W. Rep. 594) and cases cited; 5 Enc. Pl. & Prac. p. 593, and cases cited; Bloodgood v. Clark, 4 Paige, 514. In view of the allegations of fraud and insolvency, we think the trial court was right in appointing the receiver, and its order is affirmed.