Case ID: nj-eq_5/html/0346-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JAMES MOORE v. JOHN DEGRAW ET AL.
    1. A mortgagee in possession personally is chargeable with reasonable rent; and a subsequent mortgagee is entitled to the aid of the court in having such rent ascertained and applied in reduction of the prior mortgage.
    2. Decree opened, under the circumstances, after enrollment, and on motion, on application of a subsequent mortgagee, for the purpose of charging the complainant, to whom a prior mortgage had been assigned when he was tenant of the premises under the mortgagor, and who filed a bill to foreclose the prior mortgage, and remained in possession in the meantime, with reasonable rent.
    John Degraw had given to-Degraw three mortgages on a house and lot, and to —-Vannuis a fourth and subsequent mortgage thereon. After the giving of all the mortgages, and on the 1st of May, 1843, James Moore rented the premises from the mortgagor, and occupied them for the year, and paid the year’s rent, and continued to occupy them, as the tenant of the mortgagor, on an actual or implied letting, for another year. On the 28th of March, 1845, about a month before the end of the second year of his tenancy, the three first of the said four mortgages were assigned to the said James Moore, and he thereupon filed a bill of foreclosure thereon, making Vanrmis, the subsequent mortgagee, a party defendant.
    The suit progressed, and a decree was made for the sale of the premises, to satisfy the mortgages ; James Moore, the complainant, in the meantime, remaining in possession.
    Vannuis was absent from the state when a subpoena directed to him was served, by being left at his residence, and did not return until a few days before the beginning of the term at which the decree was taken. The property was sold under the decree for $1500, and the proceeds of the sale were not sufficient to satisfy all the mortgages; and the money was in the hands of the sheriff.
    Vannuis applied, by'motion, on notice and affidavits, for the opening of the decree and the master’s report, and for leave to put in his bond and mortgage before the master, and for instruction to the master to charge Moore, the complainant, with the rents and profits of the premises from the beginning of the second year of his tenancy to the time of the sale of the premises under the decree, in reduction of the amount of the mortgages held by Moore.
    The motion was resisted, and affidavits read in opposition.
    
      Blauvelt, in support of the motion.
    
      G. Adrain, contra.
    
   The Chancellor.

One ground on which the motion is resisted, is an alleged agreement between the mortgagor and the complainant, at the time the mortgages prior to that of Vannuis were assigned to the complainant, that if the complainant, (who was then in possession of the property as tenant of the mortgagor,) would purchase those mortgages from the person who then held them, (a son of the mortgagor,) the complainant was to pay no rent for the property, and was to continue in possession of it until it was sold.

These mortgages were assigned to Moore on the 28th of March, 1845. There was then due on them about $1360; they were assigned for $1000.

There is something singular in the idea of a mortgagor’s agreeing that if a person will buy the mortgage from the mortgagee, he may take possession of the mortgaged premises, and hold them free of rent until they are sold under the mortgage, and that the interest on the mortgage should still continue to run against him. I can see no inducement or consideration for such an agreement. It was argued that the assignor of the mortgages was a son of the mortgagor, and that the sale of the mortgages might have been a benefit to him, and that that benefit might have been the consideration moving the mortgagor. The fact that the property, within about six months thereafter, sold for $1500, is sufficient to induce the court to pause, before lending its aid to carry out such an agreement, to the prejudice of a subsequent mortgagee. Besides, the evidence is not sufficient to establish such an agreement. It certainly does not show that the mortgagor Knew what his son was to get for the mortgages. The casa then, must be decided as if no such agreement existed.

A mortgagee in possession by a tenant is accountable for the rents received; and if in possession personally is chargeable with reasonable rent; 4 Kent 166; 2 J. J. Marshall 465; 16 Pick. 46; 5 Paige 9. And a subsequent mortgagee is entitled to the aid of the court in having these rents applied to the reduction of a prior mortgage : Hopkins 579.

Erom what time is the complainant to be considered as mortgagee in possession ? Before, and at the time he bought the mortgages, he was tenant of the premises under the mortgagor, and about eleven months of the current year of his tenancy had elapsed. Perhaps he should be considered as tenant during that year, and after that as mortgagee in possession; but this is not important, in the view I take of this case. At the end of that year he was indebted to the mortgagor for the year’s rent, and could have given credit for it on his mortgages. The mortgagor never demanded it, and must be considered as assenting to having it so applied, if assent were necessary.

It is not supposable that if the mortgagor had demanded it Moore would have paid it, when he held the bonds and mortgages of the mortgagor, which were due, to much more than the amount. I am of opinion, therefore, that the subsequent mortgagee is entitled to have that year’s rent,uand a reasonable rent thereafter to the time of the sale, credited, in reduction of the amount to be raised in satisfaction of the complainant’s mortgages: Hopkins 579.

It is objected that the decree being enrolled, the application is too late, in any shape; and that if not too late, it should not have been by motion, but by petition.

It appears by the depositions that shortly after Vannuis’ return from Mobile, (whither he had gone before the commencement of the suit,) and a few days before the beginning of the term at which the decree was taken, he called on the complainant’s solicitor, who told him he might put in an answer if he pleased; but that Moore’s mortgages were prior to his, and that all over Moore’s claim would be paid to him. Under these circumstances I cannot deny him relief against the omission of the complainant to make proper credits on his mortgages; and I think the application for relief may be by motion ; 3 John. Ch, R. 415.

The decree and the master’s report will be opened, and leave given to the defendant Vannuis to put in his bond and mortgage before the master, and the master will be instructed to charge the complainant with the rents, as above stated.

Order accordingly.

Cited in Wyckoff v. Combs, 1 Stew. 41.