Case ID: va_42/html/0118-01.html
Source: Caselaw Access Project
Author: {"author": "ABBKN, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Clarke v. Curtis.
    November, 1844,
    Richmond.
    (Absent Brooke, J.)
    1. Mortgages—Forfeiture—Rents and Profits—Sequestration.—A court of equity may sequestrate the rents and profits of mortgaged, or incumbered property, where a forfeiture has accrued ; and such rents and profits are necessary to discharge the incumbrances.
    2. Same—Hortgagor in Possession—Right to Rents and Profits.—The rents and profits actually received by the mortgagor, or equitable owner in possession, or which have accrued before an order of sequestration is made, cannot be recovered from him by the mortgagee or vendor.
    This is the sequel of the case of Clarke v. Curtis, reported in 11 Heigh 559. After the cause went back to the court below, the appellee filed a supplemental bill, in which, after referring to the previous proceedings in the cause, it is stated that the defendant Clarke, being left in possession of the property purchased by him from the appellee, rented the farm to Sylvester C. Slaughter of the county of Gloucester, for the year 1839, for the price of-dollars, of which there was yet due 120 dollars; for the year 1840 at the price of 350 dollars, for which a warrant of distress had been taken out, and lodged in the hands of Ro. C. Curtis, the sheriff, for execution ; also for the year 1841 at the price of 450 dollars, for which a bond had been given payable to C. S. Jones, agent for Clarke,; that said Slaughter was also indebted, by judgment rendered on a forthcoming bond at the October term 1841, of the superior court for the county of Gloucester, for a debt originally due by bond given for various articles, the growth and produce of the farm called Perton, since the contract of sale between plaintiff and Clarke, in the sum of--dollars.
    The bill charged that since the sale, owing to the delays which had occurred, occasioned by the artifices of Clarke; as also to the waste and injury done to the estate *by him, in combination with other causes affecting the price of land generally, the land, which was then the chief resource for the payment of the purchase money, had so declined in value, that there was no hope that it would sell for the balance of the purchase money then due to the plaintiff; and that Clarke was not able, if he was willing, to pay the deficiency. The plaintiff claimed that he therefore had a lien, not only upon Perton, but upon all its profits and produce; and making Clarke, Slaughter, Jones, and Curtis the sheriff, parties to the suit, he prayed that the three last might be injoined from paying to Clarke, the moneys then due for the rent of Perton, as before stated, and for the sale of produce grown on the Perton estate; and that they might hold the same subject to the order of the court; and that the court would make such other and further decree, as the rights of the parties, and the justice of the case might require. The injunction was granted, as to the rents due from Slaughter.
    Clarke filed an answer to the bill, in which he denied that any waste, suffered or committed by him, or that any delays, arising out of his artifices, had diminished the security of the plaintiff, from the land. He insisted that the security was ample for all the purchase money justly due; and if it was not, that he was abundantly able to pay any deficiency which might arise: he denied that the plaintiff had any lien upon the rents, issues and profits of the land; and insisted that the bill shewed no proper case for the interposition of the court by way of injunction.
    The original cause, having been proceeded in according to the directions of this court, came on together with the supplemental suit, to be heard on the 18th of April 1842, when the defendant Clarke moved the court to dissolve the injunction granted to restrain him from collecting the rents due, which motion the court overruled: and then made a decree in the original cause, directing *the defendant Clarke to pay to the plaintiff below, the sum of 10,561 dollars 59 cents, with interest on 10,170 dollars 2 cents from the 1st day of June 1839, till paid; and, in default of payment, that the tract of land, called Perton, be sold. Prom the decree in both cases, Clarke obtained an appeal to this court.
    Daniel, for the appellant.
    Robinson and Morson, for the appellee.
    
      
      Mortgages—Mortgagor in Possession—Rights.—In Teal v. Walker, 111 U. S. 342, 4 Sup. Ct. Rep. 425, it is said:. “ Chancellor Kent states the modern doctrine in the following language : ‘ The mortgagor has a right to lease, sell, and in every respect to deal with the mortgaged premises as owner so long as he is permitted to remain in possession, and so long as it is understood and held that every person taking under him takes subject to all the rights of the mortgagee, unimpaired and unaffected. Nor is he liable for rents; and the mortgagee must recover the possession by regular entry by suit before he can treat the mortgagor, or the person holding under him, as a trespasser. 4 Kent. Comm. 157. See also, American Bridge Co. v. Heidelbach, 94 U. S. 798; Clarke v. Curtis, 1 Gratt. 298; Bank of Ogdensburgh v. Arnold, 5 Paige, Ch. 38; Hunter v. Hays, 7 Biss. 362; Souter v. La Crosse Ry.,Woolw. C.C. 80, 85; Foster v. Rhodes, 10 Bankr. Reg. 523.” The principal case is also cited and approved in Stout v. Philippi, etc., Co., 41 W. Va. 345, 23 S. E. Rep. 573; Bank of Washington v. Hupp, 10 Gratt. 41, and note; Childs v. Hurd, 32 W. Va. 87, 9 S. E. Rep. 370. And in Bristow v. Home Building Co., 91 Va. 27, 20 S. E. Rep. 947, to the point that a creditor who has a lien on real estate of an insolvent debtor, has a right after his debt is due to have a receiver appointed to hold the rents of the real estate, and to supply any deficiency which may exist after the sale is made and thus obtain a specific lien on the rents, see foot-note to Beverley v. Brooke, 4 Gratt. 187; also, monographic note on “Mortgages" appended to Forkner v. Stuart, 6 Gratt. 197.
    
    
      
      Ttiere is no principle involved in the original canse, which it is important to report, and therefore the proceedings in that cause are not given.
    
   ABBKN, J.,

delivered the opinion of the court.

The court is of opinion, that although it is competent for a court of equity, in a proper case’, to sequestrate the rents and profits of mortgaged or incumbered property, where a forfeiture has accrued, and such rents and profits may be necessary to discharge the incumbrances, it is not competent to recover from the mortgagor, or equitable owner in possession, the rents and profits actually received by him, or which accrued before any order of sequestration was made. The court is, therefore, of opinion, that it was improper to injoin the appellant from collecting the rents which had previously accrued, or were about to fall due, for the previous occupation of the incumbered premises; and that there was error in overruling the motion to dissolve the injunction.