Opinion ID: 293073
Heading Depth: 2
Heading Rank: 2

Heading: Duty to Prevent Waste

Text: 17 Execution of the mortgage made Winsen the mortgagor in possession of the mortgaged property. This placed the burden upon mortgagor Winsen to protect the mortgagee's security interest in the collateral 13 — protection against incumbrance by ranking subsequent liens and, in this instance, certainly against the further accretion of substantial amounts for claims having presumably the status of a maritime lien. When Winson — with full awareness — purchased the barge subject to the mortgage obligation it was undoubtedly exposed to liability for waste since the mortgagee's rights are continuous and the security follows the property until the debt is discharged, 59 C.J.S. Mortgages § 211. The mortgagee was entitled to have the security unimpaired not only by Winsen, but by its vendees as well. 59 C.J.S. Mortgages § 334. 18 The record compels the conclusion that Brown's actions on behalf of Winsen at the beginning and of Winson at the end — in his failure to take reasonable measures to protect the security interest or for that matter even to advise the mortgagee that the barge was idle and eating its head off — amounted to culpable waste. The concept of waste is equitable, and it would be unconscionable to allow the apparent superiority of the maritime liens to be used as an instrument of rewarding the mortgagor for the very consequences of the mortgagor's breach of duty. 19 We need not determine whether this is the case to pierce the corporate veil or to regard this all as a slick scheme and sham. 14 For seeking to intervene in a pending libel in rem, and more so, to set aside a default decree or a Marshal's sale under it, the door is not opened by some peremptory knock, but by the gentle wand of equity. United States v. Maryland Casualty Company, 5 Cir., 1956, 235 F.2d 50, 53; see especially, Compania Anonima Venezolana De Navegacion v. A. J. Perez Export Company, 5 Cir., 1962, 303 F.2d 692, 698, 1962 A.M.C. 1710, 1718. 20 A maritime lien has great prestige. But it is not an instrument of wrong. Against the positive mortgage lien known to Winsen, Winson, and the ubiquitous Brown to exist and to be in default the supposed maritime lienor may not demand that the seagoing chancellor become the engine of unfairness. See Ardell Marine Corp. v. The Mars, D.C. N.Y.1958, 163 F.Supp. 691. 21 As the epilogue to this section and the prologue to the next one this is the case of inequitable supplication.