Summary
providing that "it is well settled in this state that . . . the mortgagor is entitled to the rents from the mortgaged premises until there has been an intervention by the mortgagee"
Summary of this case from Matter of Turtle Creek, Ltd.Opinion
6 Div. 673.
June 19, 1930.
Appeal from Circuit Court, Jefferson County; C. B. Smith, Judge.
E. M. Zeidman, of Birmingham, for appellant.
The mortgagor is entitled to the rents so long as the mortgagee fails to disturb his possession by interposition of a legal claim. Such a claim should be by a bill for foreclosure and appointment of a receiver, by taking possession, or by otherwise giving notice in nature of demand on the tenants or those in possession. Falkner v. Campbell P. P. M. Co., 74 Ala. 359; Scott v. Ware, 65 Ala. 174; Johnston v. Riddle, 70 Ala. 219; Lehman v. Tallassee Mfg. Co., 64 Ala. 567; Childs v. Hurd, 32 W. Va. 66, 9 S.E. 362; Ohmer v. Boyer, 89 Ala. 273, 7 So. 663; Comer v. Sheehan, 74 Ala. 452; McMillan v. Otis, 74 Ala. 560; Ala. Nat. Bank v. Mary Lee C. R. Co., 108 Ala. 288, 19 So. 404; Hall v. Mobile M. R. Co., 58 Ala. 10. Even a receiver when appointed cannot recover an income then in the hands of an agent of the mortgagor which accrued before the receiver was appointed. Noyes v. Rich, 52 Me. 115; R. Co. v. Cowdrey, 11 Wall. 481, 20 L.Ed. 199.
Morris Loveman, of Birmingham, for appellee.
A mortgage of realty passes the legal title to the mortgagee with right of possession, with or without foreclosure, after the law day; and, after the law day of the mortgage, the mortgagee is entitled to possession of the property and to the rents and income from same. Notice to the Newell Company, as authorized agents of the plaintiff, was an active interception of the rents and full notice to the mortgagor that the rents would be claimed by the mortgagee from that date. Crabtree v. Price, 212 Ala. 387, 102 So. 605; Bank of Moundville v. Walsh, 216 Ala. 116, 112 So. 438; Mack v. Beeland Bros. Mercantile Co., 21 Ala. App. 97, 105 So. 722.
It is well settled in this state that even after the law day of the mortgage the mortgagor is entitled to the rents from the mortgaged premises until there has been an intervention by the mortgagee. Scott v. Ware, 65 Ala. 174; Johnston v. Riddle, 70 Ala. 219; Lehman Bros. v. Tallassee Co., 64 Ala. 567; Ohmer v. Boyer, 89 Ala. 273, 7 So. 663; Falkner v. Campbell Co., 74 Ala. 359.
In the case of Alabama National Bank v. Mary Lee Coal Railway Co. et al., 108 Ala. 293, 19 So. 404, 407, the court, speaking through McClellan, J., said:
"The rule is well established in such cases that, until the mortgagee does actively intervene for the purpose of intercepting the rents, incomes, and profits of the mortgaged estate, these belong to the mortgagor, and upon such intervention after the law day, either by notice to tenants of the mortgagor to pay rents to the mortgagee by the latter's entry for condition broken, or by the appointment of a receiver at the suit of the mortgagor on a bill averring insufficiency of the mortgaged property to pay the debt and praying the interception of the rents for that purpose, such only of the rents, incomes, and profits as have not accrued, — such only as do accrue after such notice, or entry, or appointment of a receiver — may thus be intercepted, and be applied to the mortgage debt."
We gather from the foregoing that the methods for the interception of the rents, as there set out, are exclusive and not merely suggestive, and the appellee has failed to show a compliance with either of the prescribed methods. The notice to the rental agent of the maturity of the mortgage and a claim of the subsequently accrued rent, notwithstanding this notice was transmitted by said agent to the mortgagor, did not suffice. The intervention should have been "either" by notice to the tenant to pay the rent to the mortgagee by the latter's entry for condition broken, or by a bill for a receiver with the averment of the insufficiency of the mortgaged property to pay the debt.
The trial court erred in rendering judgment for the appellee claimant, and, as this case was tried by the court without a jury, the judgment of the circuit court is reversed, and one is here rendered for the plaintiff for the fund in question.
Reversed and rendered.
SAYRE, THOMAS, and BROWN, JJ., concur.