§ 64.074.Claims Preference Against Current Earnings

The third of the chapter’s subordinations of the instituting mortgagee, and this one runs to pre-existing claims.

A judgment or claim existing against a corporation at the time the receiver is appointed, or a judgment in an action existing at that time, shall be paid out of the earnings of the corporation earned during the receivership in preference to the mortgage of a mortgagee who instituted the receivership.

The claims covered here are the ones ranked last in the priority list — those existing before the receivership began.

Against the other receivership claims they rank sixth. Against the instituting mortgagee, this section puts them first.

The two rules operate on different questions and do not conflict. The priority list orders claims among themselves; this section addresses the mortgagee, who is not on that list at all.

The fund is specific: earnings earned during the receivership, not the corpus of the property.

That distinction is what makes the rule fair to the mortgagee. The security itself is untouched; what is redirected is income the receivership generated.

The reasoning is the one running through the chapter. A mortgagee who instituted the receivership chose to have the property administered rather than foreclosed, and the income produced by that choice answers the corporation’s existing creditors first.

The judgment or claim is a lien on those earnings, so the preference is secured rather than merely directory.

Together with the judgment lien and the discharge lien provisions, the pattern is consistent: an instituting mortgagee is subordinated in three separate ways.