Opinion ID: 1250561
Heading Depth: 1
Heading Rank: 5

Heading: whether owners are entitled to post-foreclosure rents.

Text: Owners received no monthly rent beginning with December, 1984, the month SWIB commenced foreclosure. Even assuming SWIB had the right to foreclose, Owners argue that they still would not lose their right to collect rents due by virtue of the terms of the lease with Ericson (assigned to Mall) until foreclosure was complete or the statutory period of redemption had run. This court specifically addressed this issue in Aetna Life Ins. Co. v. McElvain, 363 N.W.2d 186 (S.D.1985), where we pointed out that the right of possession and right to rents and profits remains in the mortgagor until the expiration of the period of redemption. However, in First Federal Sav. & Loan v. Clark Inv. Co., 322 N.W.2d 258 (S.D.1982), this court held that a mortgagor can contract away its rights to rents and profits. Aetna, supra at 191. The mortgage signed by Owners here provided: In order to secure the payment of principal and interest and premium, if any, on the Note and to secure the performance and observance by Mortgagors of each and every term ... contained herein and in the Note ... Mortgagors have granted... unto Mortgagee ... all right, title, and interest of Mortgagor, ... in all reversions and remainders to such real estate and all rents, income, issues, profits, royalties and revenues derived from or belonging to the Mortgaged real property and improvements and fixtures thereon and the right to possession upon default; which mortgage of such rents, income, issues, profits, royalties and revenues is supplemented by an assignment of leases and rents[.] This assignment of rents specifically contained in the mortgage and signed by Owners is as explicit as the assignment in Aetna. We also held in Aetna that the 1983 amendment to SDCL 21-47-17 which provides a foreclosure may not be considered to be satisfaction of an assignment of rents agreement under the mortgage made an assignment of rents and profits on non-homestead property valid from the time of default until the end of the period of statutory redemption. Aetna, supra at 191. The trial court therefore properly granted SWIB the right to collect rents during this period.