The plaintiff and appellee commenced an action to foreclose a mortgage covering 240 acres of land and securing 1. RECEIVERS: an indebtedness of $3,500. The petition was mortgage filed April 1, 1924. On August 20, 1924, an foreclosure: amendment to the petition was filed, asking the improper appointment of a receiver for the land upon an appointment. allegation that the security was insufficient to pay the indebtedness.
The intervener, Smith, is the holder by assignment from the mortgagor, Coe, of a lease of the premises made on August 19, 1924, by Coe to one Oaks, and a note given by Oaks for a portion of the rent. The lease is for the year ending March 1, 1926, and provides that the lessor shall receive as rent one half of all hay and grain of every kind raised on the premises.
The plaintiff's mortgage is subject to prior mortgages aggregating $33,000. The land is worth, according to the testimony, at least $48,000. Some of the witnesses put its value considerably above that figure.
There are other mortgages on the land junior to plaintiff's, but with them or the rights of the holders we are not here concerned. The evidence is uncontradicted that the land is worth over $10,000 more than is due on plaintiff's mortgage and the liens prior to it. In this situation it cannot be said that it is insufficient security for plaintiff's debt.
Even where the mortgage provides for the appointment of a receiver to collect the rents and profits, we have held that there must be a showing of insufficiency of security, to warrant a court of equity in depriving the owner of the right given him by statute to the possession of the premises during the year for redemption. Durband v. Ney, 196 Iowa 574; Sheakley v. Mechler,199 Iowa 1390.
The plaintiff claims that, after the commencement of the foreclosure proceedings, Coe, the mortgagor, abandoned the farm and surrendered it to plaintiff, and, as we understand, the *Page 864 2. FRAUDS, appointment of the receiver is sought to be STATUTE OF: sustained on this ground. The claimed surrender transfer of was in parol, and within the statute of frauds. interest in Butcher Cox v. Buchanan, 17 Iowa 81. land: oral agreement to surrender.
Moreover, we think the evidence, even if admissible, fails to support the claim. According to the testimony of plaintiff, what was said was in a conversation where Coe was demanding $50 for a deed to the farm, which plaintiff refused to pay. Coe, as a witness, denied that the conversation as testified to by plaintiff occurred.
But, if the receiver had been properly appointed under the mortgage, he acquired no right as against the 3. RECEIVERS: intervener, who held an assignment of the lease mortgage from the mortgagor. We have repeatedly held that foreclosure: the provision in a mortgage for the appointment prior of a receiver gives no lien upon the rents and assignment profits until foreclosure proceedings are of rent. commenced and a receiver appointed to take possession of them.
"Until the mortgagee has acted, and legally demanded the rents and profits, the mortgagor or his assignee may dispose of them as is desired, without being liable to account therefor to the mortgagee." Whiteside v. Morris, 197 Iowa 211; Smith v. Cushatt,199 Iowa 690.
The appointment of a receiver is not retroactive. Hakes v.North, 199 Iowa 995.
The receiver was improperly appointed, and the intervener was entitled to the relief asked. The cause is reversed, and remanded for decree in accordance herewith. — Reversed and remanded.
FAVILLE, C.J., and STEVENS and De GRAFF, JJ., concur.