Case Name: JOHN SHAEFFER AND WIFE AND OTHERS v. ROBERT CHAMBERS
Court: New Jersey Court of Chancery
Jurisdiction: New Jersey
Decision Date: 1847-12
Citations: 6 N.J. Eq. 548
Docket Number: 
Parties: JOHN SHAEFFER AND WIFE AND OTHERS v. ROBERT CHAMBERS.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 6
Pages: 548–558

Head Matter:
JOHN SHAEFFER AND WIFE AND OTHERS v. ROBERT CHAMBERS.
1. A mortgagee, by taking possession, assumes the duty of treating the property as a provident owner would treat it.
2. He is bound to keep it in good ordinary repair; and, if it be a farm, he is bound to good ordinary husbandry.
3. A mortgagee of a farm, having taken possession thereof, must show reasonable diligence to procure a tenant, or he will not be relieved from the charge of rent, on the ground that the farm was not cultivated. And if he cannot find a tenant for the buildings and the farm, he should cause the farm to be tilled.
4. Annual rents allowed against a mortgagee in possession when the annual rents and profits, and wood and timber cut from the premises, exceeded the interest and expenses.
On the 17th of October, 1842, a bill was filed by the surviving children and heirs-at-law of Joseph Lord, deceased, and the husbands of the daughters of said deceased, and his widow, stating that said decedent, in his lifetime, and at the time of his death, was seized of a tract of land in the township of Nottingham, formerly in Burlington county, now in Mercer, (describing it,) containing 85 20-100 acres; and being so seized, gave a bond to one Lewis Evans, dated November 13th, 1820, conditioned for the payment of $500 in two years, with interest, payable yearly • and that, to secure the payment thereof, the said decedent, with the said Martha, then his wife, gave a mortgage, of the same date, to the said Evans, on the said tract of land.
That Evans assigned the bond and mortgage to the defendant on the 25th of May, 1821.
That on the 22d of June, 1820, the said decedent mortgaged the said land to Joseph Douglass, to secure the payment of a bond for $625.61, with interest, given by him to said Douglass $ that on the 27th of November, 1-826, Douglass assigned the lastmemioned bond and mortgage to the defendant.
That on the 23d of May, 1822, the said decedent gave a bond to the defendant Chambers, conditioned for the payment of $200, in one year, and to secure the same the said decedent, on the same day, executed to Chambers a mortgage of the same tract of land.
That the said Joseph Lord died intestate in 1825, and that no administration has ever been taken of his estate; that at the death of the said Joseph Lord, all his children were infants except one, named Samuel, who has since died intestate, without issue • that the complainants Rachel, Sarah and Emeline, respectively, married while they were infants, and have remained covert ever since, and that the complainants Richard, George and Charles Lord have, respectively, attained 21 within the last ten years • that after the death of the said Joseph Lord, and while his children who are complainants were severally under 21, the defendant, as mortgagee, entered into the possession of the said mortgaged premises, and the receipt of the rents, issues and profits thereof, and still continues in such possession and receipt, and while thus in possession has cut down the trees and timber, of which there was a large quantity standing thereon, and has cut down 2000 cords or other large quantity of wood from said premises, and made market thereof, and applied the same to his own use.
That on the death of the said Joseph Lord, the complainant Martha, his widow, became entitled to dower in said mortgaged premises, subject to keep down one-third of the interest of the mortgage so executed by said Joseph Lord and her to said Evans, which she professes herself ready to pay.
That on the 16th of January, 1827, the said Chambers exhibited his hill for the foreclosure of the equity of redemption, or the sale of the mortgaged premises, to satisfy the said several mortgages, to which the said Martha filed her answer, insisting on her claim to dower in said mortgaged premises; and such proceedings were thereupon had that on the 23d of July, 1831, the said bill was dismissed for want of prosecution, with costs.
The bill charges that payments were made by Joseph Lord, in his lifetime, on account of the mortgages, and that what remained due at his death has been paid by the wood and timber cut by Chambers from the premises, and the rents and profits received by him, or which he might have received, while in possession, without his willful default.
The bill prays that an account may be taken of what is due on the mortgages, and of the amount and value and avails of the wood and timber cut by the defendant during his possession, and of the rents and profits received by him, or which, without his willful neglect or default, he might have received since he took possession ; and that, in taking such account, rests may be made from time to time, when and as the value and proceeds of the wood and timber and rents shall appear to have exceeded the interest in arrear; and that if any balance shall be found due to the defendant, then, that upon payment of such balance, the defendant may be decreed to deliver up possession : and that if the defendant has received more than is due him, he may be decreed to pay the surplus to the complainants ; and that one-third part of such overplus may be decreed to the said Martha, or whatever may be found due to her on taking an account of the sum due on the said mortgage to Evans • and that one-third part of said premises may be assigned to her for her dower.
In July, 1843, the defendant put in his answer. He admits that, on or about the 1st of April, 1826, there being a large arrear of interest unpaid, he, by the consent and request of the said Martha Lord, and of her friend and adviser, Benjamin Lord, entered into possession and received some of the rents; but he denies that he has received sufficient rent to pay the interest on the several mortgages and to pay the taxes and necessary repairs ; and he denies that he has cut 2000 cords of wood, though he admits that he has cut trees on the premises for rails and .posts and necessary repairs.
He denies that the mortgages have been paid, aud insists there is a large arrear of principal and interest due thereon.
He says he was very unwilling and reluctant to take possession, and that he offered to said Martha to deduct $300, if she would pay the balance of the bonds and mortgages; and that he preferred settling in this way to taking possession. But that she gaid she was unable to pay, and preferred he should take the premises for his pay.
He says that when he took possession of the premises they were not worth the' amount due on the mortgages by $500, and that since he took possession several of the tenants have failed and wholly neglected to pay their rents, notwithstanding ho used ail diligence to recover the same.
Ho says that one of the tenants to whom he had rented the premises, viz., Ephraim B. McIntyre, when he was ready and able to pay the rent to him, was forbidden by Mrs. Shaeffer, one of the complainants, to pay the same, she claiming to be entitled thereto, or to some part thereof; and that in consequence of such notice, the said tenant refused to pay the rent to this defendant, and that said tenant has since failed and become wholly unable to pay the same.
He says he has been unable, this year, to rent the premises.
He denies that the complainants, or either of them, ever applied to him to account for the rents and profits, or for the wood and timber cut by him, and insists that the said Martha Lord oaving voluntarily relinquished her right to redeem, and induced him to take possession, she should not now be permitted to redeem.
Evidence was taken in the cause.
On the 1st of October, 1845, a decretal order was made, referring it to a master to take an account of what is due Chambers for principal and interest on the several mortgages, and an account of the wood and timber out by Chambers from the mortgaged premises, and the time when, and the value thereof; and an account of the rents and profits which have come to the hands of Chambers, or which he without his willful default might have received; and an account of all moneys expended by Chambers in necessary repairs and for taxes, and that what shall be found to have been so expended be deducted from what shall be coming on the account of the wood and timber, and rents and profits. And if the master shall find that the rents and the value of the wood and timber cut, exceed the amount so paid for repairs and taxes, and the interest on the mortgages, the master is to make annual rests; and that what shall be coming on account of wood and timber and rents and profits be applied, first, in payment of the interest on the mortgages, and then in sinking the principal j and that what shall be coming on account of wood and timber cut and rents and profits be deducted out of what shall be found due Chambers for principal and interest, reserving the question of the propriety of annual rests'.
The master’s report came in on the 16th of May, 1846.
The master reports that there was due on the Douglass bond and mortgage, on the 1st of April, 1826, for principal and interest............................................................ $823 49
On the mortgage to, Evans, on the 1st April, 1826,
for principal and interest.................................... 689 55
On the Chambers mortgage, on the 1st of April,
1826, for principal and interest............................ 253 96
$1767 00
That the amount of principal due on that day, on the said three mortgages, was.........1 $1325 61
and the amount of interest-...................... 441 39
$1767 00
That the defendant went into possession of the premises on the said 1st of April, 1826.
That there was upon the premises about 25 acres of wood, averaging 12 cords to the acre.
That 264 cords were cut and sold by the defendant, worth $2.50 a cord, exclusive of the expense of cutting and carting to market.
That 60 cords thereof were cut and sold by the defendant in the winter and spring of 1832 and 3, of the value of $150.00 and that he has charged the defendant this amount on the 1st of April, 1833.
That 100 cords were cut and sold by the defendant in the winter and spring of 1833 and 4, of the value of $250 00 and that he has charged the defendant with that amount on the 1st of April, 1834.
That 100 cords were cut and sold by the defendant in the winter and spring of 1834 and 5, of the value of 250 00 and that he has charged the defendant with that amount on the 1st of April, 1835.
m is That, in 1837, the defendant cut and sold wood and faggots of the value of....................................... which he has charged to the defendant on the 1st of April, 1837.
7 That, in 1838, the defendant cut and sold faggots to the value of................................................... which he charged to the defendant on the 1st of April, 1838.
That, in 1826, the defendant leased the premises to Henry and William Heed for one year, for $100. That the lessees failed, and only §50 was recovered on the 1st of October, 1826, and he charges defendant, October 1st, 1826........................ ......................... 50 00
The master then reports that it does not satisfactorily appear to him what the defendant received from the premises in the years commencing April 1st, 1827,1828,1829, and 1830, or, if they did not produce the same annual rent, that said loss was not occasioned by the default of the defendant, and that he has therefore charged the defendant with $100 on the 1st of April,
1828.......... ........................... ......... ............... $100 00
April 1st, 1829................................. .............. 100 00
April 1st, 1830................................................ 100 00
April 1st, 1831............................................... 100 00
That, for the year ending April 1st, 1832, the premises were rented to Robert C. Mount, on shares, and that the defendant received therefor $80, and he charges defendant, April 1st, 1832................................. 80 00
The master then states that he charges the defendant with the same amount on the 1st of April, 1833, though the premises were not rented, it not appearing satisfactorily to him that they might not with due dili genee have been rented for that amount.................. $80 00
That, for the years ending April 1st, 1834, and April 1st, 1835, James Hunt rented, and paid defendant for the premises, $75 a year; and he therefore charges the defendant, April 1st, 1834.......... ........................ 75 00
and April 1st, 1835.......................................... 75 00
That, for the eight years commencing April 1st, 1835, and ending April 1st, 1843, the premises were rented to the McIntyres, or one of them, part of the time on shares, and part of the time at $100 a year. That it does not satisfactorily appear what the yearly share of the defendant amounted to, when the place was let on shares, and that he has charged him with $100 in each of those years except the last, in which, he is satisfied, the rent was lost without any default of the defendant.
He therefore charges defendant, April 1st, 1836........ 100 00
April 1st, 1837................................................ 100 00
April 1st, 1838.:............................................. 100 00
April 1st, 1839................................................ 100 00
April 1st, 1840................................................ 100 00
April 1st, 1841............:................................... 100 00
April 1st, 1842........................ ........................ 100 00
That, for the year ending April 1st, 1844, the premises were not rented, but that it does not satisfactorily appear to him that they might not have been rented, if reasonable diligence had been used; that, since then, the premises have been rented to Pearson Reed, and have produced, as it appears in evidence, $60 a year; and that he has therefore charged the defendant at that rate, from the 1st of April, 1843, to the date of the report — that is to say—
April 1st, 1844........................................... 60 00
April 1st, 1845..... 60 00
April'1st, 1846.............................. 60 00
The report is dated May 15th, 1846.
That he has taken an account of thé moneys expended by the •defendant in repairs and taxes, and has allowed him, April 1st, 1831............................................................. $17 63
April 1st, 1834, for posts and rails........................ $31 10
April 1st, 1835, for ditching......... ......... .............. 36 00
April 1st, 1836, for lime.................. ......... ......... 45 00
April 1st, 1837, lime......................................... 5 00
April 1st, 1839, fencing, repairs, lime, &c............... 67 26
April 1st, 1842, for repairs.......... ........................ 15 98
Thai during a portion of the time, the wood and timber and rents and profits exceeded the interest and expenses of necessary ¡repairs; and that he has accordingly made rests and applied the income of the property first, to the reduction of the expense accounts and interest, and then to the redaction of the principal of the mortgages.
And that at the date of his report, the whole amount remaining due the defendant on ids said mortgages, after paying expenses and making all just allowances, is $1401.66.
Exceptions to this report were filed on the part of the defendant as follows:
1st. That defendant ought not to have been charged with rent for the year ending April 1st, 1828, either according to the terms of the decretal order, or in equity, or if chargeable at all for the said year, he is charged too high, and more than he received.
2d. That the master has charged him, on the 1st of April, 1830, one year’s rent not accounted for, $100, whereas he ought not to be charged for that year, or if to be charged, he is charged too high; and that the master has omitted to deduct $5, which, by the terms of the lease under which the said farm was rented, the exceptant was bound to furnish and did furnish, to, be ased on the premises, and also omitted to deduct any sum for the value of stacks left by the exceptant on the premises to induce the tenant to rent the premises.
3d. That the master has charged the exceptant, April 1st, 1834, (it means, probably, 1833,) one year’s rent not accounted for, when he ought not, or if anything is charged, it, is too high, and more than he received.
4th. That $60 is charged for the year ending April 1st, 1843, (it means 1844,) which ought not to have been charged, because the premises were not rented that year and could not be.
5th. For that the master has charged him with $50, October 1st, 1826, as received of Reed, being more than he received ; and that the master omitted; to deduct that part of the rent which, was to have been paid in work, which was not performed by the tenant, and because the master omitted to make a rebate of interest on account of the payment of the rent before it was due.
6th. For that the master has only credited him, April 1st, 1836, for 450 bushels of lime, at ten cents, $45, when he should have credited twelve cents.
7th. That the master has charged him one year’s rent, ending April 1st, 1844, $60, when he should not have been charged with any rent for that year, because the premises were not rented that year, and because he received no rent that year for said premises.
8th. Because the master has charged him for 1 year, 1 month and. 15 days’ rent, as received from P. Reed, tenant, $67.50, when he ought not to have been charged with that sum, because said sum was not received, and because that portion of the rent supposed to have accrued between the 1st of April and the 15th of May, did not become due until the end of the year.
9th. For that the master has made annual rests in stating the account against the exceptant.
W. Halsted, for the exceptant.
As to the 1st, 2d, 3d, 4th and 6th exceptions, a mortgagee not in the actual possession of the mortgaged premises, is bound to account only for the profits actually received by him. 1 Vern. 45; Powell on Mortgages 272; 4 Kent’s Com. 159,160, 166; 12 Ves. 493.
As to the 9th exception, a court of equity will not require annual rests to be made if the interest on the mortgage is in arrear when the mortgagee takes possession, even though the rents and profits may exceed the annual interest, nor until the principal of the mortgage debt be entirely paid off. 2 Story’s Eq. Jur., § 1016, a, note; 4 Kent’s Com. 166, 7.
G. D. Wall, contra.

Opinion:
The Chancellor.
On reading the testimony, I do not see any good reason why the report of the master should not be confirmed.
A mortgagee, by taking possession, assumes the duty of treating the property as a provident owner would treat it, and of using the same diligence to make it productive that a provident owner would use.
If it be a farm, he is not at liberty to let it lie untilled because the house on it, or the house and farm together were not rented. I see no reason why the farm should not be husbanded, though the buildings on it were not rented.
Again, a mortgagee in possession is not at liberty to permit she property to go to waste, but is bound to keep it in good ordinary repair, and if it be a farm, he is bound to good ordinary husbandry.
It appears by '¡he testimony that, for several years of the time during which the defendant has been in possession, the property was not rented, and the whole of it, farm and all, was permitted to lie uncultivated. The master reports that it was not made satisfactorily to appear to him that the property was thus unoccupied without the default of the defendant, The ground here taken by the master raises this question ; a farm of 85 acres, "¿5 of it in woodland, under mortgage, is taken possession of by dhe mortgagee, and rented. He remains thus in possession a number of years. Occasionally, daring this period, the premises are. vacant and the farm untilled. Is it sufficient for the mortgagee, thus in possession, in order to relieve himself from any charge for rents and profits for the years during which the premises were thus vacant, simply to say that he could not rent them, or should he be held to show proper diligence to procure a tenant ? Is the mortgagor to prove that he might have rented it but for his willful default, as that he turned out a sufficient tenant, or refused to receive a sufficient tenant, as would seem to be held in 1 Vern. 45; or does the fact of the premises being left vacant throw upon the mortgagee the burden of proving reasonable diligence to procure a tenant, as seems to be held iu Metcalfe v. Campion, 1 Moll. 238 ?
It seems to me that it will not do for the morlgagee, having thus taken possession, to fold his arms and use no means to procure a tenant j and I am disposed to think he ought to be held to show reasonable diligence to procure a tenant. But, at all events, if the farm and buildings are not rented, he ought to cause the farm to be tilled, and that in a husbandlike manner.
From the testimony, I think the defendant has been, negligent, to say the least, in the manner in which he has treated the premises.. No provident owner would have treated them as he has. They have been permitted to go greatly out of repair, and the lands have been so badly husbanded that, for several of the last years, the whole premises, rented at first by the mortgagee for $100, have rented for only $60, and he has been charged but that sum.
The defendant, during several years, cut wood and timber from the premises, and sold it. The master, in stating the account, made annual rests when he found that the wood and timber, and the rents and profits exceeded the interest and expenses, and applied the income, first, to the interest and expense account, and then to the reduction of the principal. This was objected to on the part of the defendant. It seems to me the master was right.
I am satisfied with the" general result reached by the master.
Exceptions disallowed.