Adler-Goldman Commission Co. v. Herren

Hughes, J., (after stating the facts.) Was Herren, the senior mortgagee and purchaser of the equity of redemption from Jones, the mortgagor, accountable for the rents while in possession? It is well settled that a mortgagee in possession is accountable for rents. But was Herren in possession as a mortgagee? He had bought at the sale under his foreclosure of his mortgage, and had also bought Jones’ equity of redemption. If he held under his foreclosure sale only, it may be that he would be accountable for rents, but when he holds as a purchaser, and not as mortgagee, he stands, as to his possession, as the mortgagor would, if in possession. Ten Eyck v. Casad, 15 Ia. 524. It seems clear that the mortgagor, if in possession, would not be accountable for rents. “If one who is a prior mortgagee afterwards acquires the equity of redemption, subject to a second mortgage, and then takes possession, he is not regarded as a mortgagee in posssession, and as such accountable for the rents and profits to the junior mortgagee.” Rogers v. Herren, 92 Ill. 583; Gray v. Nelson, 41 N. W. Rep. 567 (77 Ia. 63.) “A junior mortgagee redeeming from a senior mortgagee who has been in possession may compel an accounting. His right does not rest on any obligation of the senior mortgagee to him, for there is no contract between them, but upon the fact that the senior mortgagee is under obligation to account to the mortgagor, and the junior mortgagee in equity stands in the place of the mortgagor.” The junior mortgagee has no right, therefore, to ■ compel an. accounting when the mortgagor has no such right; for it is through the mortgagor, and the equity existing between him and the senior mortgagee, that he is entitled to compel an application of the rents and profits to the satisfaction of the senior mortgage. For these reasons, it is well settled that, in order to charge the mortgagee .with rents and profits, it must be shown that he has occupied the mortgaged premises under his mortgage. If the title of the mortgagor has been divested, and the mortgagee has been in possession under a title derived from the mortgagor, he is not chargeable with the rents and profits of the mortgaged premises.” 2 Jones, Mortgages, § 1118a. Gaskell v. Viquesney, 122 Ind. 244; 23 N. E. 791, and cases cited. The judgment of the circuit court is affirmed.