
    Common Pleas Court of Montgomery County.
    Helen G. Wills v. Lewis H. Cole et al.
    Decided May 5, 1932.
    
      Floyd Koogler, for plaintiff.
    
      Horace J. Boesch, for defendant.
   Snediker, J.

This case is before the court on a motion for the appointment of a receiver to collect rent during the pend-ency of these proceedings. Upon the presentation of this motion testimony was heard by the court, some of which was that of the defendants and some of expert real estate men of this community. The action is in ejectment and therefore possessory in its nature. As a second cause of action in the petition the plaintiff asks for the recovery of an amount in money for the use and occupation of the prémises.

The evidence disclosed that on the 22d day of June, 1929, these defendants entered into an agreement of sale and purchase with Lemuel S. Penn and his wife, who were the then owners of the property described in the petition and which the defendants occupy as their home. It is located in the village of Oakwood. This property was subsequently sold by defendants’ vendor and the agreement assigned to this plaintiff, Helen Wills. It is unnecessary for us to enter into a detailed statement of the stipulations of the agreement. Suffice to say that the purchase price was $6,300, and that they were to pay down $300 in cash at the signing of the contract. The balance of the purchase price was payable in monthly installments of $60 per month in advance, beginning as of the. 15th day of June, 1929.

For a considerable period these defendants were able to make their payments as well as to meet the taxes and had, as we remember, paid on the principal of their contract when their difficulties arose about $900. Then Lewis H. Cole, the husband of the other defendant, was unable to employ himself at a remunerative compensa-' tion, and was consequently unable to meet the payments as required by the contract. Since December 15, 1931, defendants have wholly failed to make any payment.

The testimony of the experts in the case is that the present fair market value of the property is $5,000, and that a fair rental is $50 per month. When these defendants were on the witness stand they were inquired of as to whether or not they could make their payments of $60. They responded that they could not. They were then asked whether they could pay a rental of $50 per month and they gave a like answer. They are now, and have been since December, occupying the property without the payment of any compensation to the plaintiff, and from their evidence it would appear that there is no immediate prospect of any change in their circumstances. So that we have here a case which has been pending since March 28, 1932, and which will, no doubt, continue to pend for some time before the issue is fully made up and the case is tried by a jury; and in the meantime, as well as prior to the bringing of the action, it appears that this plaintiff will be unable to collect anything from the defendants. This we say, not only on account of what they testified to, but also from the attitude taken by them with respect to their obligation.

Of course, the case presents a claim of legal title from the side of the plaintiff only. The defendants, if they have anything at all under their agreement, cannot be said to have more than an equity, which perhaps has been wiped out by those provisions of the contract which relate to default in payment. Subdivision 9 of that instrument gives them but two weeks in which to restore their lost rights by making up their unpaid installments.

In this state of the case, is this plaintiff entitled to a receiver for the purpose indicated in her motion?

There is but one decision in Ohio to which we can refer, and that is Corlett v. Corlett, found in the 22 C. C., (N. S.) 175. This case was decided by the Circuit Court of Cuyahoga .county, Judges Marvin, Winch, and Henry sitting. The syllabus, which is justified by the Gpinion, reads as follows:

“Receivers may be appointed in actions in ejectment where it appears that the plaintiff has a good prima facie title and that there is imminent danger of the loss of rents and profits through the mismanagement of an insolvent defendant.”

In the body of the opinion the court say:

“Although- grave doubts were entertained by each member of the court at the hearing of this case whether there was such usage in equity as to authorize the appointment of a receiver in a case like this, we have reached the conclusion that it may be done. The authorities upon the subject are cited in brief furnished us by the defendant in error, and we note Section 401 of Alderson on Receivers, Section 494 of Beach on Receivers, and Section 576 of High on Receivers, as well as cases noted in the brief under these authorities, and accordingly we conclude that the court had authority to appoint the receivér.”

Lawrence in his work on Equity Jurisprudence, at Section 1112, in discussing the grounds for appointment of receivers says:

“So, a receiver may be required * * * in ejectment or other proceedings pending determination of title and right to rents and profits.”

In Alderson on Receivers at Section 401, the author says:

“Where the plaintiff has a good prima facie title and there is imminent danger of loss of the rents and profits by reason of the mismanagement of the defendant who is in an insolvent condition, a receiver may be appointed. So also where the action was brought to recover possession of real property and it appeared that there was probable danger of the rents being lost and the plaintiff set up a prima facie title, a receiver was appointed although the defendant was in possession.”

But in the case of Rollins v. Henry, 77 N. C., 467-469, the court say:

“The rule seems to be universal in this country and in England, that whenever the test is simply a question of disputed title to the property, the plaintiff asserting the legal title in himself against a defendant in possession and receiving the rents and profits under a claim of legal title, equity refuses to lend its extraordinary aid by interposing a receiver, just as it refuses an injunction under similar circumstances, leaving the plaintiff to assert his title in the ordinary forms of procedure at law. Nor does the fact that the defendant in possession and receiving the rents and profits is insolvent at all affect the rule. There are exceptions to this general rule but they are only where the relief is granted upon special circumstances of an equitable nature appealing strongly to the conscience of the court. The farthest the courts have ever gone in taking jurisdiction to appoint a receiver, in actions of ejectment against' a tenant in possession of real property, is where the plaintiff shows a probable title and danger of the rents being lost. Scott v. Scott, 13 Irish Eq., 212; High on Receivers, 553, 554, 567; 2 Story on Equity, 826, 829.”

In applying the North Carolina decision just quoted from, the language of Section 7 of the agreement is to be considered:

“That it is understood and agreed between the parties hereto until the completion of the purchase and the full payment of all amounts due by said purchaser, that said purchaser shall hold said premises as if by lease from the vendor at a yearly rent of $720, payable in monthly installments of $60 each, in advance, on the 15th day of each month during the continuance hereof.”

Clark in his work on Receivers says:

“A court of equity will not interfere ordinarily at the instance of a person alleging a mere legal title in himself against other persons in possession of estates to grant a receiver and put them out of possession.”

In the case of Folk et al. v. The United States et al., 233 Fed., 177, the Circuit Court of Appeals of the 8th circuit laid down this rule in two syllabi:

“It is the general rule that a court of equity will not appoint a receiver of real estate or of its proceeds in the possession of defendants holding under a regular title during the pendency of the suit, although it has the power to do so in exceptional cases.

In order to bring a case within the exceptions to this general rule, there must be clear proof, first, that there is imminent danger that unless a receiver is appointed the property or its proceeds will be materially deteriorated in value or wasted; second, that the plaintiff will suffer irreparable loss from such deterioration or waste, and he can rarely suffer such loss when the defendants are solvent and abundantly able to respond to any damage they cause, or where they will give a good bond of indemnity against it; third, that upon the pleadings and preliminary proofs there is a strong probability that the plaintiff will ultimately recover.”

It may be here said that the testimony introduced at the hearing of the motion was not in support of any of these three requirements except the third. It was clearly established that there was no danger of any waste or deterioration in value except such as might arise from the state of the real estate market. Nor can it be said that the plaintiff, if a receiver is not put into immediate possession of the property, will suffer any loss which may be irreparable.

There was before the chancery division, and reported in the Law Journal Reports of 1920, the case of Marshall v. Charteris in which the question of the appointment of a receiver is an ejectment proceeding was passed upon by the court. The syllabus reads:

“The court has jurisdiction to appoint a receiver in an action to recover land although the defendant is in possession, but a strong case must be made to justify such appointment on an interlocutory application; it is not enough to show that the defendant has a shadowy title and is without means.”

In opening his opinion in this case the Judge said:

“This application is one of very unusual character. The action commonly spoken of as an ejectment action is one for the recovery of land, and if the procedure adopted by the plaintiff results in the order for which she asks she will, in substance, be obtaining a judgment in the action on this interlocutory motion.”

Then there is the case of Sanford v. Newell, in the 204 Mich., at page 91-95, where the court had occasion to consider the question of the appointment of a receiver in advance of a hearing on the merits against a defendant in possession. In the course of the opinion the court say:

“Upon the general proposition of the propriety of dispossession orders in pending cases it was broadly stated by Justice Campbell in Tawas etc. R. Co. v. Iosco, Circuit Court Judge, 44 Mich., 479: ‘It has been decided repeatedly that any decree or order, divesting possession or rights on a preliminary inquiry, is illegal and void, so that no one need respect or obey it. People v. Simonson, 10 Mich., 335; Port Huron, etc., R. Co. v. St. Clair Circuit Judge, 31 Mich., 456; Salling v. Johnson, 25 Mich., 489; McCombs v. Merryhew, 40 Mich., 721; Arnold v. Bright, 41 Mich., 207. Any such order made in an equity case is a final decree and appealable as such. Barry v. Briggs, 22 Mich., 201, and above cases.’ And in Toledo, etc., R. Co. v. Detroit, etc., R. Co., 61 Mich., 9: ‘Whatever rights a complainant may have in other courts, or in other ways, a court of equity cannot change the possession of lands, in conflict, from one party to another until the merits have been finally passed upon.’

In that connection, however, it may be added that while not questioning the generally recognized broad power of equity courts in rare cases, of special emergency, where imminent danger of loss of the corpus of the litigation or irreparable injury is clearly shown, to interpose a receiver against the possession of real estate held under color of title, this court has consistently emphasized that the power of dispossessing a defendant by receivership pendente lite should be exercised with extreme caution in all cases, and adhered to the wide distinction between disturbing by receivership the peaceable possession of -real estate at the instance of a party out of possession not in privity with the defendant in possession under claim of right, and cases where such relief is asked for the conservation pendente lite of claimed personal property involved in litigation.”

From all that we have said it will be apparent that we do not bring this case under the rule laid down in the 22 C. C. (N.S.), supra, and that we have taken some pains to ascertain what rules should be applied to the facts in our case and how we should be governed. Having done this, we are of the opinion that the motion of the plaintiff should be overruled, which is accordingly done.  