Summary
In Freeman v. Campbell, 109 Cal. 360 [42 P. 35], one of the cases relied upon by the appellant, the distinction was drawn between a mortgagee in possession and one not in possession.
Summary of this case from Nelson v. BowenOpinion
Department One
Hearing In Bank Denied.
Appeal from a judgment of the Superior Court of Fresno County. M. K. Harris, Judge.
COUNSEL:
The complaint is insufficient, for if the mortgagee was rightfully in possession, the action will not lie, and if wrongfully in possession, the only right to recover is for mesne profits. (Sedgwick & Wait's Trial of Title to Land, sec. 647; Code Civ. Proc., sec. 427; Bockes v. Lansing , 74 N.Y. 437; Murray v. Fitchburg Railroad , 130 Mass. 101; Caldwell v. Walters , 22 Pa. St. 378; Gaines v. New Orleans , 17 F. 16; New Orleans v. Gaines, 15 Wall. 624; Locke v. Peters , 65 Cal. 161; see Sedgwick & Wait's Trial of Title to Land, secs. 648, 649, 657; Thompkins v. White, 8 How. Pr. 520.) The mortgagee having the title is entitled to the rents and profits. (Rich v. Maples , 33 Cal. 102; Campbell v. Freeman , 99 Cal. 546.) The rents, issues, and profits were mortgaged as well as the land. (Civ. Code, sec. 2926; Treat v. Dorman , 100 Cal. 623; Montgomery v. Merrill , 65 Cal. 432.) Possession by the mortgagee having title is merely an additional security. (Spect v. Spect , 88 Cal. 437; 22 Am. St. Rep. 314; Cooke v. Cooper , 18 Or. 142; 17 Am. St. Rep. 709; 1 Jones on Mortgages, 4th ed., secs. 673, 684, 702, 715.) The rents and profits were part of his security. (Treat v. Dorman, supra .)
C. C. Merriam, and J. P. Strother, for Appellant.
Frank H. Short, and G. C. Freeman, for Respondent.
Campbell was only a mortgagee. (Campbell v. Freeman , 99 Cal. 546.) The mortgagee is not entitled to possession except by the express terms of the mortgage, or by an agreement to that effect. (Spect v. Spect , 88 Cal. 437; 22 Am. St. Rep. 314; Jones on Mortgages, secs. 20, 669.) Campbell had no right to enter prior to a foreclosure and sale. (Kidd v. Teeple , 22 Cal. 262.) Upon the death of the mortgagor in possession his widow is entitled to remain in possession and receive the rents and profits until after a sale under a decree. (1 Jones on Mortgages, secs. 669, 670.) No receiver having been appointed, and the decree of foreclosure being silent as to rents, he is not entitled to hold or retain them. (Treat v. Dorman , 100 Cal. 623; Montgomery v. Merrill , 65 Cal. 432.)
JUDGES: Harrison, J. Van Fleet, J., and Garoutte, J., concurred.
OPINION
HARRISON, Judge
Upon a former appeal between these parties (Campbell v. Freeman , 99 Cal. 546), it was held that the conveyance to Campbell of the land in this action, from the vendor, created a resulting trust in favor of Anderson, and that the only right which Campbell could assert against Anderson was that of a mortgagee. That action was brought by Campbell to foreclose the mortgage thus created, and judgment was rendered in his favor for the amount of the claim for which it was held as security. Prior to the commencement of the action, and after the death of Anderson, Campbell took possession of the mortgaged premises, and received as rents therefor from a tenant to whom he had leased it the sum of one thousand and thirteen dollars and sixty-eight cents. The present action was brought to recover from him the amount of the rents thus received. Judgment was rendered in favor of the plaintiff, and the defendant has appealed.
As by the express terms of the agreement under which the conveyance was made to Campbell, Anderson went into the possession and occupancy of the land, and remained there until his death, Campbell was not a "mortgagee in possession," in the meaning of that term, as used in legal phraseology, and, consequently, was not entitled to receive the rents of the land. A "mortgagee in possession" is one who takes possession of the mortgaged land by virtue of an agreement between him and the mortgagor and in recognition of the relation between them, and on a bill to redeem brought by the mortgagor must account for the income of the property. Section 2927 of the Civil Code declares, however: "A mortgage does not entitle the mortgagee to the possession of the property, unless authorized by the express terms of the mortgage; but, after the execution of the mortgage, the mortgagor may agree to such a change of possession without a new consideration." The taking possession of the land by Campbell after the death of Anderson was not by virtue of any agreement between them, and consequently conferred no additional right upon him as mortgagee. Such possession was not taken or held adversely, but for the protection of the property, as well in the interest of the mortgagor as of himself, and the rents were received by him in the character of quasi bailiff of the mortgagor. The present action is not brought to recover the rents and profits as damages for the withholding of the land by Campbell, but for moneys had and received by him to the use of the plaintiff. Their receipt by him constituted a transaction as independent of the mortgage as would have been the receipt by him of any other moneys belonging to the estate of Anderson; and, as they were taken by him without any authority from Anderson, and without the implied power of a "mortgagee in possession" to apply them in reduction of the mortgage debt, he had no right, without the permission of the plaintiff, to make such application, and he was also at liberty to bring his suit for the foreclosure of the mortgage for the full amount of his claim, without making any deduction therefor.
It was evidently in recognition of this principle that Campbell, after taking possession of the land and receiving a portion of the rents sued for herein, presented his claim against the estate of Anderson for the full amount of his demand, without giving any credit for the rents so received; and after its allowance by the administrator commenced an action for the foreclosure of his mortgage and obtained judgment for the full amount of his demand. In his complaint in that action he "expressly waived any and all recourse against any other property of the estate of the said Anderson, deceased, save and except the land and premises in the complaint described." At the time the present action was tried no sale had been had under the judgment recovered in that action, and Campbell claimed the right to retain the rents until s uch sale, and in case of a deficiency in the [42 P. 36] proceeds of the sale to apply them in reduction thereof.
That the rents which he had collected formed a part of the estate of Anderson is without controversy, and it is not claimed by Campbell that in the absence of the mortgage claim he would have any right to retain them. After having solemnly waived all recourse against any other property of the estate, and under such waiver obtained a judgment for the full amount of his claim, he ought not to be permitted now to repudiate his waiver and retain possession of the property of the estate, for the very purpose of satisfying the claim for whose satisfaction he had agreed to look to the mortgaged premises alone.
The plaintiff did not lose the right to recover these rents by reason of not having made a counterclaim therefor in the foreclosure suit. The cause of action for the rents did not arise out of the transaction set forth in the complaint in foreclosure, nor was it connected with the subject of that action. That "transaction" consisted of the dealings between the parties resulting in the mortgage, and we have seen that the receipt of the rents by Campbell was a transaction independent of the mortgage. The subject of the action in that suit was the foreclosure of the mortgage for which the land was held as security, and the ascertainment of the amount for which it was so held. As the rents were not taken by Campbell by virtue of any agreement relating to the security, but at his own instance, their receipt by him constituted a cause of action in favor of the estate of Anderson, independent of the transaction connected with the mortgage, and which it was optional with the plaintiff herein to claim in that suit, or to recover in an independent action.
The claim that the mortgage included the rents, as well as the land, does not aid the appellant. As under section 2927 of the Civil Code he had no right to the possession of the mortgage security, his right to the rents was no greater than that to the land. A mortgage is a contract by which specific property is hypothecated. (Civ. Code, sec. 2920.) But such contract is independent of the fact of possession, and does not of itself confer the right of possession. If a receiver had been appointed to take possession of the mortgaged premises, the authority of that officer would have included the right to take possession of the rents as well as the land, and the rents would then have been in the custody of the court and subject to its direction, but in the absence of some intervention by the court the mortgagor has the right to these rents, even though they are included in the instrument of mortgage, and the mortgagee's right to them is limited to their disposition by the court in the judgment or subsequent thereto.
The judgment and order are affirmed.