Equitable Life Insurance v. McNamara

A printed matter headed "Petition for Rehearing" was filed in this case by the defendant subsequent to the filing of the original opinion. The petition for rehearing really asks for an interpretation of the opinion filed herein and published as above, as to the rents, issues, and profits involved in the case.

[3] The original opinion points out that the mortgage involved is dual in character, a real estate mortgage and a chattel *Page 306 mortgage. The so-called moratorium statutes apply only to real estate mortgages, not to chattel mortgages; hence, so far as the rights of the parties are concerned in this case, the chattel mortgage is to be enforced as if no real estate mortgage existed; i.e., to give to the plaintiff, subject to the right of the defendant, the right to have proper application made of the amounts realized from the property covered by the chattel mortgage.

[4] The mortgage set out in the petition filed in the case was in the form approved by this court as a proper chattel mortgage in Farmers Trust Savings Bank v. Miller, 203 Iowa 1380, 214 N.W. 546. In other words, following the description of the real estate covered by the real estate part of the mortgage, and in the granting clause there was set forth, "and also all the rents, issues, uses, profits and income therefrom, and the crops raised thereon from the date of this instrument until the debt secured shall be paid in full."

The defendant had no right to collect these amounts. The chattel mortgage portion covered all of the above rights quoted. In other words, it gave to the plaintiff the right to take all the rents, issues, uses, profits, and income from the lands, and the crops raised thereon, from the date of the instrument until the debt secured was paid in full. Concededly in this case the debt has never been paid. Instead of being paid, it has grown from the original amount of $22,000 until on the 26th of September, 1934, it amounted to $25,990.08, being the amount the judgment was taken for on default, which is mentioned in the original opinion, but which was set aside to permit the defendant to make defense.

As the mortgage is written, it is the right of the plaintiff to receive or take possession of all of the property covered by the chattel mortgage. There have been no acts of the legislature which interfere with the right of the plaintiff to have full protection under this chattel mortgage. The plaintiff has the right to collect these.

The record in this case shows that after the judgment obtained by default was set aside, the defendant proceeded to reduce to his possession the property covered by the chattel mortgage of the plaintiff, and that he did not pay it into court for quite awhile, and the court below ordered it paid in, and it was finally partially paid in, but whatever it was, it could not in any way be distributed by the court legally, except to the plaintiff. *Page 307 [5] The defendant had no right to collect these and then make conditions under which he would pay them in. The record shows that the defendant's financial condition is such that to turn, in the future, the property covered by the chattel mortgage, over to the defendant is to endanger the right of the plaintiff to finally realize on this. The actions of the defendant in the case show also that if he gets possession of this property and acts as he acted in the past, he will make it difficult for the plaintiff to realize anything therefrom, or anything like what belongs to the plaintiff, and that to allow the defendant to get possession of the property covered by the chattel mortgage is to endanger the plaintiff in its rights to have the income from the farm applied as provided in the mortgage.

The defendant seems to be possessed with the idea that he has the right to take these rents from this property and hold them until he gets ready to turn them over, and then on his own conditions. Such being the case, we are of the opinion that the plaintiff is entitled, upon application therefor, to a receiver to collect the property covered by the chattel mortgage until the debt is fully paid; and that the defendant can do nothing to interfere with the plaintiff's right because of the chattel mortgage.

Of course the plaintiff must apply whatever amounts are realized to the protection of the defendant as well as itself. This view is consistent with and follows the action of this court in Farmers Trust Savings Bank v. Miller, 203 Iowa 1380, 214 N.W. 546. It simply recognizes the proposition that the court has no right to take any part of the money derived under the chattel mortgage, have it paid over to the clerk, and distribute it in the way and manner that is provided to distribute money coming into the hands of the clerk under the so-called moratorium statutes. So, the decision affirming the lower court will stand as approved in the original opinion, and as pointed out in this supplemental opinion.

ANDERSON, C.J., and ALBERT, DONEGAN, KINTZINGER, and RICHARDS, JJ., concur. *Page 308