Court Opinion

ID: 8297491
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:08:52.156646+00
Date Added: 2024-06-11T16:44:08.597213
License: Public Domain

Upon petition to rehear,
Tixjbney, J.,
said:
This cause was disposed of at a former day of the term, and is before us a second time on petition “to modify opinion ' and decree as to rents.” The error assigned is based upon an expression that “ the rents ■ are incident to the trust,” etc.
This expression was used solely with reference to the peculiar facts, and not, as argued, to overthrow the rules:
1. That “A trustee holding the legal title to land under a deed of trust to secure creditors, but not in ■possession, is not entitled to the rents, nor can the same be attached by the beneficiary for the payment -of his debt.”
2.. That “Kents accruing after execution of the mortgage, and before sale, in absence of contract as to same, belong to' mortgagor.”
3. “ That in Tennessee the mortgage is always treated as a mere security for the debt, and when the mortgagee is out of possession, it is. the corpus of the property, not its rents and profits, which constitute the fund for the satisfaction of the debt.”
4. That “A mortgagee has no specific lien upon the rents and profits of the mortgage land unless he has in the mortgage stipulated for a specifie pledge of them as part of his security.”
5. Nor “The general rule that the mortgagee, as against the mortgagor in possession, or those deriving *689title under him subsequent to mortgage, is not entitled to a receiver of rents pendente lite.”
As we have said, it was not purposed to contravene these general rules, but we did treat them as general rules which are not inflexible, and as such may not and do not apply to all cases independent of their peculiar facts.
The rents did not pass under either the deed in trust to ~W. S. Shields, nor under the general assignment, therefore the beneficiaries under neither have any lien upon them. They were not impounded by complainants, nor was a lien fixed by their bill.
The facts upon which the opinion and decree rest are as follows: That part of the bill on which complainants rely for the position that they impounded the rents or fixed a lien, is in the prayer, “That a receiver he appointed, or that W. D. Gammon be compelled to take possession of said lands and collect the rents and profits thereof, and that when the same are collected, they be ' also distributed ratably among the creditors of said Samuel Gill. That said "VY. D. Gammon be requested to at once' comply with the law by taking the oath, and giving bond as such trustee, or that he be removed and a new trustee appointed in his place, and they further pray that unless the said W. D. Gammon at once comply with the law in this respect that a receiver be appointed to take charge of, manage and control the assets covered by said assignment until a new trustee be appointed.”
Gammon was the trustee under the general assignment. He gave bond and took the oath.
*690To this bill answers were filed. The answer of Samuel Gill, as appears per the rule docket, as well as from the official endorsement on the original, which is exhibited with the answer to the petition, and by the certificate of the clerk and master, was filed July 15, 1882, instead of 25th, as stated in the petition.
In that answer Samuel Gill says: “ In answer to so much of the bill as seeks to take the lands conveyed to W. S. Shields out of the possession of this respondent, and place them in the hands of a receiver, this respondent says, when said deed in trust was made, it was considered that the land, should the respondent fail to pay the debts as provided, would sell for an amount sufficient to pay all the debts secured over the expenses of the trust, when the property was offered for sale by the trustee, having been first most extensively advertised, but few persons attended, only one of whom came with the intention of bidding. This was, as is highly probable in the main, the result of the cloud cast upon the title by the bill of complainants.
The trustee, under the circumstances, declined to offer the property for sale. This has involved so much delay, whereby interest has hereby accrued, and so 'much expense, with the possibility of further indefinite delay, and so effected the title, this respondent now verily believes that said land is not an adequate security for the payment of the said debts, accrued and accruing interest, expenses and costs accrued and accruing. When it became manifest that these delays would impede the execution • of the trust, and that their *691additions to the charges upon the property would be made, this respondent agreed with the beneficiaries under the deed to W. S. Shields, that saving his right to a support under the exemption laws, he would not resist an application for the appointment of a receiver on their part, and he now so agrees, submitting to the court the question of his rights,” etc.
“And being advised that under said instruments and the facts of the case, that complainants, on their application, are not entitled to have a receiver appointed, he resists the same.”
A notice was given by Cowan, McClung & Co., that they would, at chambers, apply for 'the appointment •of a receiver on June 17. This was abandoned upon the agreement that J. T. Shields would see “that the wheat crop shall not be disturbed or disposed of until the application hereafter agreed upon to be made shall be disposed of. It is agreed that said application may be continued until the second day of the chancery court at Morristown, to be held beginning on the third Monday of July next, and then to be tried and disposed of by the chancellor, or person holding said chancery court, or a motion for a receiver may be then made by any party or parties entitled in said cause, if they so desire or elect without further notice to any person, and then to be disposed of and decided,” etc.
The parties went before the chancellor at Morris-town and the following order was made: “ Came complainants, Cowan, McClung & Co., and moved for the appointment of a receiver to take charge of the rents, *692etc., on the lands mentioned in the pleadings, to hold, collect and receive and sell same, and then came J. T. Shields, J. B. Hoyle and Jas. S. Gill, and also moved for a receiver to take charge of, receive and sell rents of lands mentioned in the pleadings, and all parties having had notice of these applications, and it being admitted and also being made to appear, that a receiver is proper and necessary, it is, therefore, by consent of parties, ordered and adjudged that W. 8. Shields be appointed a receiver to take charge of, collect and receive and sell all the rents on * * now accrued or accruing for present year upon the lands mentioned in the pleadings,” etc.
After ordering a sale, the order proceeds: “ Said Shields shall hold the proceeds of the said rents subject to the order of the court on' final hearing of this cause, and by like consent it is ordered that said proceeds of the said rents, etc., shall abide by and be controlled as to this application and disposition by the final adjudication in this cause, it not being intended to prejudice the rights of any one as to their rights to receive said funds.”
This consent order was made on the 18th of July, three days after the answer of Gill had been filed, and we must presume it was before the court and seen and considered by the parties or their solicitors.
As we have seen, the prayer of the bill was in the alternative, the condition was complied with, and so far the application was necessarily at an end. The bill asks for no attachment, injunction or any other process by which to impound the rents or fix a lien *693upon them, so that under the several rules relied on the mortgagor was the owner and might dispose of them as he pleased ; he had agreed that the beneficiaries under the first deed might have them placed in the hands of a receiver to be applied to their debts.
A receiver of the rents and profits may be appointed pendente lite when the mortgage is insufficient and the party personally liable is insolvent: Jones on Mortgages, vol. 2, sec. 1516.
It is a maxim that a man may voluntarily and lawfully do that which a court of equity would compel him to do. In this instance Samuel Gill was insolvent and personally liable for the debt. The land conveyed was insufficient to discharge the debt, the mortgagee might have ejected him by proper proceedings, have impounded the rents- and forced the appointment of a receiver. He has done away with the necessity for such proceedings by consenting to part with the rents of the lands conveyed for the benefit of the preferred creditors. His answer under oath made a case for the appointment of a receiver for the benefit of defendants, while no case is made for complainants. It has been adjudged that their bill was wrongfully filed, and no complaint is made in the petition of such adjudication. •
The race of diligence was going on between creditors. The defendants were successful in obtaining, by contract, an advantage which complainants failed to take any legal step to secure, even if they could at all have obtained such advantage as against defendants, and which it is unnecessary to decide.
*694The application to have a receiver must have been-against the mortgagor in possession, before that application was made he had disposed of the property -rightfully and without fraud, and there is no pleading attacking that disposition, nor is there anything in the record showing any purpose to defraud complainants in. the disposition.
Dismiss the petition.