Court Opinion

ID: 3992888
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:52:14.72096+00
Date Added: 2024-06-11T09:17:10.889012
License: Public Domain

Under the common law rule, a mortgagee was entitled, in the absence of stipulation *Page 524 
to the contrary, to the possession and enjoyment of the mortgaged premises. That rule does not obtain in this state.
"A mortgage of real property shall not be deemed a conveyance so as to enable the owner of the mortgage to recover possession of the real property, without a foreclosure and sale according to law." Rem. Comp. Stat., § 804.
The foregoing declares as the public policy of this state that the mortgagee has no right by virtue of the mortgage, either prior or subsequent to default, to the possession of the mortgaged property; that the right of possession until foreclosure and sale remains in the mortgagor and his successors in interest. There is no provision in the statute making it optional with the parties whether a mortgagee shall be given the right of possession.
The mortgagor could stipulate that a trustee or agent of the parties collect the rents and apply the same to the payment of the indebtedness, thus waiving the statutory right of possession. A borrower could also agree to pay interest at a rate declared by the statute to be usurious. In either case a party may decline to take advantage of a privilege given to him by statute: In the first instance, the mortgagor's right to possession of the mortgaged premises; in the second, the borrower's defense of usury. But a party may not bind himself by contract that he will not avail himself of a right which the law has allowed to him on grounds of public policy.
While a mortgagor may assign to his mortgagee the right to collect the rents from the mortgaged premises and apply the same in payment of the mortgage, yet that is good only during the life of the mortgage, and limited to the extent that, if foreclosure is commenced by the mortgagee, then the assignment fails, and is of *Page 525 
no effect during the pendency of that action if the mortgagor chooses to disregard the stipulation made by him. Otherwise, the mortgagee could, if permitted to enforce the contract in violation of public policy, declared by Rem. Comp. Stat., § 804, treat the mortgage not as a mere lien, but as a conveyance. The right of possession of the mortgaged premises saved to the mortgagor by statute would be destroyed. It would be, in effect, giving up possession to the mortgagee in violation of the statute, it being remembered that Mrs. Allen has commenced mortgage foreclosure proceedings.
Assuming, but not deciding, that the receiver of the hotel property, having elected to be bound by the leasing contract and having paid rental thereunder, is bound by that contract, it must not be forgotten that the receiver, standing in the shoes of the absconding tenant, would, nevertheless, be a tenant of the mortgagor. When the mortgagor objected to the enforcement of the stipulation that the relator collect the rents and apply the same to the indebtedness, the mortgagor was exercising a statutory right which should be respected. *Page 526