Green v. . Rodman

Walker, J., after stating the case: It has been settled by the authorities that when a mortgagee takes possession of the land conveyed to him by the mortgage he must account to the mortgagor for the “highest fair rent, and he becomes responsible for all such acts or omissions as would under the usual leases constitute claims on an ordinary tenant,” because by his entry and possession he makes himself “tenant^of the land,” and it is but just and reasonable that he should be held liable for its rents and profits to the mortgagor. Morrison v. McLeod, 37 N. C., 108; Hinson v. Smith, 118 N. C., 503; Gammon v. Johnson, 127 NC., 53; Jackson v. Hall, 84 N. C., 489. The mortgagee is trustee to secure the payment of his debt, and when the debt is paid he holds for the mortgagor. Whatever, therefore, he receives by virtue of his trust must go in satisfaction of his claim. But this conceded principle does not apply to the facts of this case, so as to charge the defendant, Eodman, with the rents and *180 profits of the land mortgaged by Green & Hooker to Lawrence Hooker. The latter assigned the debt secured by the mortgage to Miles & Corey, and they assigned the same to Rodman to secure a debt of $500 due to him. Miles & Corey, before they assigned the mortgage to Rodman, had leased the land for five years from Green & Hooker, with an option to buy it, and the case shows that when they purchased the mortgage debt from Lawrence Hooker they were in possession of the land under the leases, and continued to hold as lessees until they assigned the debt and mortgage to Rodman. The court, by its judgment rendered at February Term, 1906, recognized them as tenants in possession under the contract of lease; and, indeed, in the second section of the case settled for this Court, which sets out the facts admitted by the parties, it is stated that Miles & Corey entered under the lease and continued in possession until the rents, which have accrued since 1 March, 1906, amounted to $1,600. At the time Miles & Corey assigned the mortgage debt to Rodman they, had paid the rents then due. Rodman never took possession of the land. It is evident, from the facts thus stated, and which appear more fully in the record, that Miles & Corey purchased the note secured by the mortgage from Lawrence Hooker for the purpose of protecting their interests under the lease against this prior encumbrance, and it appears clearly that they never, while they held the note, asserted any right to the possession of the land by virtue of any interest they acquired under the mortgage, but only as lessees. They occupied the land after the purchase of the mortgage note, just as they had done before. We repeat that when Rodman received the mortgage note as collateral for the debt due by Miles & Corey he acquired all their interest under the mortgage by the assignment to him, and at that time the rents due by the lessees,’ Miles & Corey, had been paid. Rodman is not concluded by any judg'ment of the court or estopped thereby from setting up his claim to foreclose the mortgage, as all his rights were expressly excepted from the operation of the said orders and judgments and reserved to him without prejudice; nor is he charged with notice of any proceedings or of any facts which- entitles the plaintiff to have the rents and profits of the land credited on *181 the mortgage debt as against him, for at the time he received the debt secured by the mortgage as collateral the rents had been paid by Miles & Corey, and he, by virtue of the assignment of the debt so secured, had succeeded to all the rights of Miles & Corey thereunder. It follows from this statement that the principle of law upon which the plaintiffs rely has no application to this case, and that Rodman is entitled to foreclose the mortgage by sale for the purpose of paying the amount due to him. Consequently there was no error in the ruling and judgment of the court upon the case and facts admitted therein. Affirmed.