Court Opinion

ID: 7988863
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:28:40.885462+00
Date Added: 2024-06-11T16:35:17.310769
License: Public Domain

Whitfield, C. J.,
delivered the opinion of the court.
The chancellor erred in charging the appellant with the rental value of the property. The defendant should have been charged only with what it actually received,- or ought by the exercise of reasonable diligence to have received.. The rule is thus stated in 2 Jones, Mortgs., sec. 1123: “As a general rule, the mortgagee in possession is held to the exercise of such care and diligence as a provident owner in charge of the property would exercise; but he will not be held accountable for anything more than the actual rents and profits received, unless there has been willful default or gross negligence on his part. It is the fault of the mortgagor that he lets the land fall into the hands of the mortgagee, and the mortgagor should be required to prove actual fraud or negligence on the part of the mortgagee, before he can be charged for more than his actual receipts of rents and profits. He will not be held to account according to the value of the property, but for what he should, with reasonable care and attention, have received. ” It is not a correct view, on the facts of this case, to hold the appellant as *390owner. It is true, it believed itself to be owner, after the sale and purchase, and possession taken, but it was not, in law, owner, and it must be dealt with in the real character the law attached to it — that of mortgagee in possession. Mr. Jones correctly says, speaking of one who believes himself to be owner: ‘ ‘ When one goes into possession under a deed absolute in form, and the circumstances are such that he may believe himself to be in fact the owner of the estate, subject only to an agreement to sell, such a grantee is not, technically, a mortgagee in possession. The character of mortgagee is cast upon him by the application of equitable rules to an oral agreement in contradiction of the deed, and when, perhaps, the transaction might be construed as a conditional sale. In such case the mortgagee is chargeable only with what he has received, and not with what he might have received. ’ ’ 2 Jones, Mortgs., p. 76. There was no fraud in this case. The sale was set aside exclusively upon the ground that it was made m violation of a rule fixed by public policy, not because of any actual fraud.
We think that the chancellor- erred in one other respect; that is to say, in not crediting the appellant with $ 13, expenses of the foreclosure sale. The principle announced in Whitcomb v. Harris, 90 Me., 206 (38 Atl. 138); and Means v. Anderson, 19 R. I., 118 (32 Atl., 82), the last of which is a case of gross, actual fraud, proceeded upon the idea that wherever anything is due under the mortgage, and the debtor fails to pay what is legally due, and allows a foreclosure sale to be had and possession taken without objection, he ought, when coming to redeem, to be required, as one of the conditions, to pay the necessary expenses of the foreclosure sale — a proceeding which he has allowed to take place without objection. We think this principle finds peculiarly just application in the facts of this case. Here, as the accounting shows, is something legally due; yet the mortgagors did not pay anything, allowed the foreclosure sale to take place, allowed the appellant to go *391into possession, actually allowed the appellant to sell off part of the property, and to bargain away still another part, without objection interposed at any stage of the proceedings, and then, after the lapse of a number of years, filed this bill to redeem. Surely it is but equity that the appellee shall pay the $13 incurred in the foreclosure sale.

Reversed and remanded.