Court Opinion

ID: 7278778
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:03:31.180493+00
Date Added: 2024-06-11T16:18:58.351328
License: Public Domain

Air. Justice Dorp,
delivered the opinion of the Court:
The learned trial justice ruled ihat what had taken place amounted to an admission of the tenancy of the appellee by the mortgagee, and hence that the foreclosure must be subject to that tenancy. This mortgage is upon District property, and *256its foreclosure must be governed by our laws. Under section 95 of the Code, where an application is made to the court to foreclose a mortgage or deed of trust “the said court shall have authority, instead of decreeing that the mortgagor be foreclosed and barred from redeeming the mortgaged property, to order and decree that said property be sold and the proceeds be brought into court, to be applied to the payment of the debt secured by said mortgage,” etc. [31 Stat. at L. 1204, chap. 854.] This is nothing more than a recognition of the ¡lower possessed by a court of chancery. Clearly, therefore, when the court assumed jurisdiction of this foreclosure proceeding and appointed a receiver, that receiver became the arm and instrument of the court, and the mortgagee was without authority to control. Under the order appointing him, the receiver’s authority was specifically restricted, and he wasi directed and authorized “to hold all of said rents and profits subject to the further order and decree of this court.” Ilis possession was the possession of the court, and to say that he intended to recognize, or could have recognized, the validity of this lease, which so vitally affected the rights of the mortgagee, without the sanction of the court, would be to disregard the scope and purpose of such receiverships. This'court has said that “the real custodian of property in the hands of a receiver is the court appointing him.” Fields v. United States, 27 App. D. C. 433. See also Grant v. Phœnix Ins. Co. 121 U. S. 105, 30 L. ed. 905, 7 Sup. Ct. Rep. 841; Union Nat. Bank v. Bank of Kansas City. 136 U. S. 223, 34 L. ed. 341, 10 Sup. Ct. Rep. 1013; Quincy, M. & P. R. Co. v. Humphreys, 145 U. S. 82, 36 L. ed. 632, 12 Sup. Ct. Rep. 787; and Hitz v. Jenks, 185 U. S. 155, 46 L. ed. 851, 22 Sup. Ct. Rep. 598.
This was not an attempt by a mortgagee, after taking actual possession of the mortgaged property for condition broken, to sell that property under authority granted in the mortgage, and, incidentally, to seek the appointment of a receiver to collect and hold accruing rents. Rather, as we already have pointed out, was it an appeal to the court to assume jurisdiction of the entire foreclosure proceeding, and when the court assumed that jurisdiction the authority of the parties became subordinated to that *257oí the court. Clearly, therefore, the act of the receiver in accepting- this rent could not be binding upon tbe mortgagee, whom ho in no way represented; nor did it change the rights of the appellee, for there is no pretense that the court sanctioned the act.
it is suggested that appellant has no standing here because it does not appear that the property, if sold subject to appellee’s lease, would not bring enough to satisfy all of appellant’s claims. We are not at liberty to speculate upon this question. There is due on appellant’s mortgage a large sum, and that mortgage covers the property free of appellee’s lease. It therefore was appellee’s duty, if it deemed this question material, to introduce proof thereon, and this it has not done. AVe therefore are unable to say that appellant is not prejudiced by the ruling of the court below.
The decree is reversed, with costs, and the cause remanded for further proceedings. Reversed and remanded.
Mr. Chief Justice Covington, of the Supreme Court of the District of Columbia, sat with the Court in the hearing and determination of this appeal, in the place of Mr. Justice Man Oksdeu.