Court Opinion

ID: 6511243
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:22:33.601159+00
Date Added: 2024-06-11T15:54:53.111718
License: Public Domain

BRICKELL, C. J.
In Coker v. Whitlock (54 Ala. 180), and in Coker v. Shropshire (59 Ala. 542), it became necessary to consider the nature and character of the deed by which Poore conveyed the lands, the subject-matter of the suit, to Whitlock as trustee. We there held, that the deed, though in form a deed with trusts, in its legal operation and effect was a security for the indemnity of the sureties of the grantor as guardian, against the contingent liability incurred by them in joining the grantor in the execution of the bond required of him; that it does not differ materially from a mortgage: that the estate of the trustee, and his rights, were essentially those of a mortgagee, and the estate remaining in the grantor was that of a mortgagor, — an equity of redemption; that the operation of the deed was not to transfer the possession, or the right of possession, immediately to the trustee, but that the grantor had the right of remaining in possession, taking the rents and profits, until the wards became of age, a liability should be fixed on the sureties, and they should request the trustee to sell for their indemnity; *265that the sale and conveyance of the lands to the appellee by the grantor, before the law-day of the deed, passed to the appellee the equity of redemption, and the right of possession; that as the alienee of the grantor, on a valuable consideration, the appellee had an equity, when it became necessary to foreclose the deed of trust, to compel an exhaustion of the other property conveyed by it, so far as such property could, by reasonable diligence, be reached and made available, before resorting to the lands conveyed to him in fee simple, with covenants of warranty.
The purposes of the present bill seem to be — first, to compel Daniel, the appellant, one of' the original beneficiaries in the deed of trust, and who, by satisfying the liability of Poore to his wards, has become solely interested in the foreclosure of the deed, to account for the rents and profits of the lauds claimed by the appellee, through a period of years, prior and subsequent to the law-day of the deed of trust, and for waste charged to have been committed upon them; second, to account for such of the personal property conveyed by the deed of trust, as he had received and converted ; third, to account for all payments which, from a sale of other property, had been applied to the satisfaction of the decree against him as surety; fourth, to account for rents and profits of lands of Poore, not conveyed by the deed of trust, while such lands had been in his possession.
The first claim is founded upon the general proposition, that a mortgagee, taking possession before foreclosure, becomes the bailiff, or steward, or trustee of the rents and profits, for the mortgagor and his assigns, and, on a bill to redeem, must account for, and apply them to the satisfaction of the mortgage debt (2 Dan. Oh. Pr. 1237; 2 Jones on Mort. §§ 1114-20); and he may be made accountable for waste wantonly committed, or suffered in consequence of his gross negligence, while possession remained with him. — 2 Jones on Mort. § 1123. These are liabilities resting on the mortgagee, when in that capacity and right he takes possession, recognizing the mortgage as the source of his title, and not disclaiming all privity of estate between him and the mortgagor, or the assignee who may have succeeded to his estate. If the entry is not as mortgagee — if it is not in recognition, or subordination to the mortgage —if it is in another capacity, other liabilities may be incurred, for which the law provides appropriate remedies. As the tenant of -the mortgagor, or of his assigns, before or after the law-day of the mortgage, he may enter, subjecting himself to a liability for the rent stipulated, or for the value of the use and occupation, and for waste, if he commits it, or, from the want of reasonable care and diligence, suffers it. This liability *266results from tlie tenancy, and not from the privity of estate of mortgagor and mortgagee. It springs from the relation of landlord and tenant the parties have voluntarily formed. It may be, if the mortgagee was insolvent, or if there was some other fact or circumstance intervening, which would induce a court of equity to apply a set-off, that on a bill to foreclose, ,or on a bill to redeem, the liability would be set off against the mortgage debt.
Beiore the law-day of the mortgage, while the possession remains rightfully with the mortgagor, by the express reservation, or the necessary implication found in the terms of the mortgage, the mortgagee may as a trespasser intrude upon the possession — may enter and dispossess the mortgagor, or his assigns, deprive them of the rents and profits,,and commit or suffer waste to be committed on the premises. The liability'- then incurred is that of a trespasser : he is not in possession as mortgagee, — as the bailiff, steward, or trustee of the mortgagor, or of his assigns, but as a mere trespasser. As a mortgagee in possession, as the trustee of the mortgagor, he would be responsible only for rents actually received, in .the absence, of fraud or willful neglect, and onlj' for waste wantonly committed, or fraudulently or negligently. As a wrong-doer, lie is liable for all the damages which are the proximate result of his tortious entry and possession, whether he have profited by it, or could have profited by it, or not. It is not for such damages a court of equity can require him to account, in a suit for foreclosure or for redemjition, applying them to a reduction of the mortgage debt. If the mortgagor, or his assignee, should sue at law, and recover such damages of him, a court of equity would not, at his instance, relieve him against the judgment, and apply it to the payment of the mortgage debt; nor would the court enjoin the suit before judgment, because of the relation of mortgagor and mortgagee, and the fact that the mortgage debt was unpaid.—Harrison v. McCrary, 37 Ala. 687. It is only when the mortgagee is in possession as mortgagee, taking the rents and profits, that he may be required to account for them, or for waste, on a bill to redeem or to foreclose. A court of equity can not, in either suit, — and these are the only suits which can be maintained between them, — call the mortgagee to account for trespasses he may have committed, or because of his possession as the tenant, of the mortgagor.— White v. Williams, 2 Green’s Ch. 376; Onderdonk v. Gray, 4 C. E. Greene, 65.
It is obvious from the averments of the bill, and certain from the evidence, that the appellant did not enter, or hold possession as mortgagee. The entry and possession w'as a mere trespass upon the appellee, who was in possession, as the alienee of the *267mortgagor. We may pass over the fact that the deed does not confer on the appellant, and the other beneficiaries, a right in any event to enter and take possession. The right is conferred only on the trustee, Whitlock, and could not accrue until the wards had arrived at full age, and the liability of the sureties, for the default of the 'mortgagor as guardian, had been fixed. Neither of these events occurred, until long after the appellant entered into possession, and committed or suffered the waste imputed to him. < The entry and possession was not in subordination to the mortgage, or in consequence of rights claimed to be derived from it. It was, most probably, as tenant or agent of the mortgagor, who disputed the fairness and validity of the conveyance under which the appellee deduced title to the premises; and it was while the appellee was in possession under that conveyance, entitled to the possession, and to hold it as the mortgagor would have held it, if the conveyance be valid, until the expiration of the law-day of the mortgage. The liability resting upon the appellant, if there be a liability, for ■which the appellee claims an account, is for a trespass committed upon his possession. It is not the liability of a mortgagee for rents and profits realized, or which could have been realized, without fraud or negligence, while as mortgagee, and while privity of estate was continuing between him and the mortgagor or his assigns, he had rightful possession. A court of equity is not the jurisdiction in which to recover damages for trespasses..
There is no evidence showing that the appellant had received and converted any of the personal property conveyed by the deed of trust. Whatever of payments have been made on the decree in favor of the wards, -were properly applied, as was apparent from the records of the Court of Chancery, when this bill was filed. If Daniel had possession of other lands of the mortgagor, Poore, than were embraced in the deed of trust, there is no liability resting upon him to account to the appellee for the rents and profits of them.—Coker v. Shropshire, 59 Ala. 542.
The decree of the chancellor must be reversed, and a decree here rendered, discharging the injunction, and dismissing the bill, at the costs of the appellee, in this court, and in the Court of Chancery.