Court Opinion

ID: 6246242
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:00:02.577182+00
Date Added: 2024-06-11T08:59:17.915840
License: Public Domain

Opinion by
Mb. Justice Mitchell,
Plaintiff was owner of the property as assignee of the purchaser Zane, subject to a purchase money and advance mortgage to the vendor, which was guaranteed by the defendant. When the operation came to a stop by the failure of Zane, the defendant had subject to its control $10,000 of the advance money. Plaintiff then called upon defendant to complete the houses under its contract of indemnity. By the strict terms of the different contracts plaintiff was only entitled to call on defendant for the $10,000 of advance money, to enable him to complete the buildings himself. But defendant by its contract with the mortgagee was bound to see that the houses were completed, or to indemnify the mortgagee for his loss by the failure to do so. Instead therefore of standing upon the letter of the tripartite contract between the plaintiff, itself, and the vendor, and requiring plaintiff to continue the operation on the payment of the agreed advances, the defendant itself assumed the control in accordance with plaintiff’s request, went into possession, and proceeded to complete the operation. Presumably it did this in pursuance of its obligation to the mortgagee, and to keep the performance and expense of such obligation, within its own control. This was its plain interest to do.
In this situation the mortgage was sued out, and the mortgagee became the purchaser of the property. Owing to impediments not material to the present controversy, he did not take title for ten months, and in the mean time defendant continued in control, excluded plaintiff from possession, collected rents from some of the finished houses, and claimed to retain them to repay itself for its expenditures in the operation. This bill is for discovery and account for such rents.
The defendant’s claim cannot be sustained. Plaintiff was the owner in fee, entitled to the possession and profits of the land until the title passed from him under the sheriff’s sale. If defendant was in possession as his agent to complete the *302work which by the strict terms of the contract was devolved upon him, then it was bound to account as such agent. If, however, as presumably was the case, it was in for the purpose of completing the houses in performance of its obligation to the mortgagee, then it was in by permission of plaintiff, and its rights extended only to such delay or interference with his possession and control, as was necessary for the performance of that specific purpose. As soon as any portion of the work was done, or in condition to be made a source of revenue without hindrance to the rest of the operation, defendant’s right to meddle with it at all or to exclude the plaintiff ceased. He was the owner and the defendant’s rights in whichever aspect they may be regarded were subordinate to his.
The acts of the defendant in excluding the plaintiff from possession, tearing down his signs, collecting and retaining the rents, etc., were in excess of its rights and made defendant as to them a trespasser ab initio. If it expended more money than the vendor’s advances in its hands, it must seek repayment from the assigned estate on the same basis as the other creditors for a debt arising under a contract prior to the assignment, but it cannot pay itself in preference to them by taking advantage of the accidental circumstance of possession to defeat the right of the assignee holding the legal title for their benefit.
Decree reversed, and bill reinstated with directions to award an account as prayed. Costs to be paid by appellee.