Court Opinion

ID: 8826199
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:47:56.235419+00
Date Added: 2024-06-11T17:04:47.400827
License: Public Domain

Additional Opinion Filed on Petition fob Reheabing. Me. Justice McDonald delivered the opinion of the court. Counsel in his petition for rehearing strenuously contends that if the holding of this court in its opinion filed herein is correct, then it is impossible to pledge effectively by trust deed or mortgage the rents and profits derived from mortgaged property during the period of redemption, for the payment of the debt so secured. Counsel seemingly fails to distinguish the difference between the effect of the clause in the trust deed in question (quoted in our opinion) and a. provision expressly pledging the rents and profits as security for the mortgage debt. Under no reasonable construction of the provision of the trust deed now under consideration, which provision was incorporated in the decree of the court, can it be said that said clause, either expressly or impliedly, pledges the rents and profits of the premises in question for the payment of the debt secured thereby. Such construction would do violence to the very language of the trust deed itself, for it expressly provides that the rents and profits collected during the period of redemption, less receivership expenses, shall be paid to the person entitled to a deed under the certificate of sale or in reduction of the redemption money if said premises be redeemed,-which provision has repeatedly been held inoperative, because the purchaser under the certificate of sale derives his title solely under the statute. Davis v. Dale, 150 Ill. 239; Schaeppi v. Bartholomae, 217 Ill. 105; Standish v. Musgrove, 223 Ill. 500. Counsel also apparently fails to perceive the effect of the holding of the court in the decisions cited in our opinion, and contends that the clause in question constitutes a pledge of the rents and profits for the payment of the debt, and that the decisions cited in our opinion support such view. It is true that the trust deed in the Schaeppi case, supra, referred to in the opinion, contained a clause identical with the one in the deed before ns, with respect to the application of the rents and profits collected during the period of redemption. And while such clause did not pledge the rents and profits for the payment of the mortgage debt, nevertheless the record in that case discloses the fact that the original makers of the notes and mortgage were also the owners of the equity of redemption and therefore personally liable for the debt, and hence the rents and profits were properly applied to satisfy the deficiency decree against them. Counsel further, contends that the Stcmdish case, ■supra, also cited in the opinion, is not in point because there the holder of the mortgage was not a party ,to the controversy over the rents but such controversy was between the holder of the certificate of sale and the owner of the equity of redemption. That fact did not affect the principle upon which the case was decided. The rents and profits not having been expressly pledged by the trust deed, and the owner of the equity of redemption not being personally liable for the mortgage debt, the court held that under such circumstances the rents and profits accruing during the period of redemption should be paid to such owner of the equity of redemption, notwithstanding, there was a deficiency decree. And this is the identical situation here. Under such circumstances, it is immaterial whether the party claiming the rents and profits be the purchaser at the sale or the person in whose favor the deficiency decree is rendered, for under such circumstances the former is not entitled to them at all, and the latter only when they are expressly pledged for the payment of the debt. Finally counsel contends that the case of Owsley v. Neeves, 179 Ill. App. 61, militates against the view hereinabove expressed. On the contrary, in that case the trust deed expressly conveyed the rents, issues and profits of the premises, and provided further: “And * * * upon the filing of any bill * * * the court in which such bill is filed may at once, and without notice to the said party of the'first part, or any party claiming under said party, appoint a receiver for the benefit of the legal holders of the indebtedness secured hereby, with power to collect rents, issues and profits of the said premises during the pend-ency of such foreclosure suit and until the time to redeem the same from any sale that may be made under any decree foreclosing this trust deed shall expire.” (italics ours) The trust deed in that case also contained the provision that the indebtedness, including attorney’s fees and other charges, should be paid out of the proceeds of the sale of said premises, “or from rents, as other costs, if not paid by said party of the first part.” The trust deed in the case at bar contains no such language. It is important to note that the court there further held that where the rents and profits are not expressly mortgaged to secure the debt, they, during the period of redemption, belong to the owner of the equity of redemption provided he is not personally liable for the mortgage debt and there is no deficiency judgment against him. And such is precisely the holding of this court in the case at bar. Therefore, the rents and profits of the said premises not having been expressly pledged in payment of the mortgage debt, and appellee not being personally liable for the mortgage indebtedness, and there being no deficiency decree against him, he is entitled to the rents and profits of the premises during the period of redemption, less receivership expenses. We see no reason to recede from' our former position, and a rehearing will be denied. Rehearing denied.