McConnel v. Holobush

Opinion by Mr. Justice Catón : This bill was filed by the complainant, to'redeem frcm a mortgage, executed by his grantor prior to the date of his conveyance. The mortgage was executed to John Manchester, on the 11th day of October, 1839, for <f 2,700. On the 10th of January, 1843, McKee, a judgment creditor of Manchester, filed a bill against'him and others, to subject his interest in the mortgaged premises to sale, to satisfy his judgments 5 and on the 8th of April, 1848, a decree was entered in the Circuit Court, in obedience to a mandate of this Court, directing the defendants in that suit, or some of them, to pay to McKee the sum of $■: 2,617 93, within ninety days, or that the premises be sold. The present complainant was one of the defendants in that suit. Pending the former suit, in June, 1845, McKee assigned his claim against Manchester to John Mathews, who shortly afterwards assigned two-thirds of the claim to Holobush and Burbank. Mathews seems to have had possession of the premises, or apart of them, since some time in the year 1843, and Holobush and Burbank went into the joint possession with him, under their claim, in June, 1845, the time when they acquired their interest, and have since that time erected a warehouse upon the premises, at an expense of $1,100, and have enjoyed the rents and profits of the whole premises, and, as is alleged, have committed waste on the premises, which the complainant prays to have applied in extinguishment of the amount due upon the decree'and mortgage. Previous to the filing of this bill, John Manchester died, and Mathews was appointed administrator of his estate, who was made a defendant, as well in his representative as in his individual capacity. Since the bill was filed Mathews has died, and the defendant Holobush was appointed administrator of his estate, and Yansyckle was appointed administrator de bonis non of the estate of John Manchester, deceased, and as such, was made defend-. ant, appeared and answered. This is the substance of the facts, as established by the pleadings, exhibits and proofs, in this record, upon which the rights of the parties are to be determined, except as to the amount of the rents and profits. Although some allusion is made in the answers to the proceedings in all of the various suits, which have at different times been pending in this and in the Circuit Court, yet they were not made exhibits, nor were they produced upon the hearing, and, consequently, we cannot look into them to see whether the rights claimed by the complainant would be affected by them or not, except the decree rendered by the Circuit Court of Pike county, in the case of McKee vs. Manchester et al., which was made an exhibit by the bill, and a certified copy of which was produced on the hearing. The case then is simply this : McConnel purchased certain premises, subject to a mortgage. McKee became entitled to a ]>art of the money due on the mortgage, and obtained a decree for thq sale of the premises, to pay his claim. McConnel filed this bill against the assignees of McKee, and the administrator of the estate of the mortgagee, and seeks to disencumber the land by the payment of the amount due upon the mortgage, to those entitled to receive it 3 and asks that certain rents and profits, received bythe assignees of McKee, be applied in extinguishment of the amount due them. The case when thus simplified, presents no difficulty of sufficient importance to invite discussion. It is certainly not necessary to cite authorities, to show that the grantee of the mortgagor may file a bill, to redeem from the mortgage, and have it satisfied. The fact that a part of the money secured by the mortgage, has become duetto other parties than the mortgagee, cannot affect this right. It is true that MeConnel was a party to the suit, in which the right of McKee was established to a part of the money secured by the mortgage, but this in no way abridges his right to redeem, but the decree in that case rather confirms such right, for it authorizes any of the defendants in that suit to pay the amount decreed to McKee. No complaint can be made against the present complainant, because he did not interpose a defence there. The truth is, he had no defence, nor does he now pretend that he had any. He had nothing to say why McKee should not be declared to be entitled to a part of the money secured by the mortgage. It was a matter of indifference to him, to whom the money went. At the time that case was set for hearing, in 1844, he had no claim against McKee, or his assigns, for rents and profits, and, consequently, nothing to allege in diminution of their claim. If he had had such claim, then it would have been lost by his not having interposed it, when he had an opportunity. But McKee’s assignees did not go into possession under that claim, till June, 1845, which was some time after that cause was set for hearing, and, consequently, he had no opportunity of setting up the rents and profits since received. Surely he must have a right to set up subsequent equities. The rights of the defendants, as assignees of McKee, to an interest in or lien upon this land, were derived from and depend upon the mortgage, and by virtue of those rights they maintained the possession, and received the rents and profits 5 and their possession was to the extent of those rights, the same as the possession of a mortgagee under the mortgage. A mortgagee who who enters upon the mortgaged premises for condition broken, must account for the rents and profits actually received, or which might have been received by reasonable care and prudence. Van Buren vs. Olmsted et al., 5 Paige, 9. This amount must be credited as so much paid upon the mortgage, from year to year, first in extinguishment of the interest, and then of the principal. That rule, however, should only be applied, in this case, to the extent of the defendants’ interest in the mortgage, as assignees of McKee. And should the rents and profits exceed the amount due them, the excess cannot he applied in satisfaction of the balance due upon the mortgage, which goes to other parties ; but the complainant may have a decree against them, for the excess, should there be any. It is true, that Matthews, one of the original defendants, was, at the time the bill was filed, administrator of the mortgagee, but he was in possession, not as such administrator, but as assignee of McKee, and hence the estate of Manchester ought not to be held responsible for any portion of the rents and profits received by him. Almost the only new fact set up in the answer, which is sustained by the proof, is the erection of the warehouse upon the premises, by the defendants. For this they claim an allowance. A mortgagee in possession is authorized, and even bound, to lay out money to keep the estate in necessary repair, and to preserve it; but he is not authorized to make new improvements, and tack the expense to the amount due upon the mortgage, or pay it out of the rents and profits, except under very extraordinary circumstances. Smith vs. Sinclair, 5 Gilm., 108. It was argued as if the record showed that this improvement was made after the premises were purchased by the defendants, under the first decree, in favor of McKee, and before that decree was reversed, and the sale to them under it set aside by this Court, as reported in 4th Gilman. Unfortunately the proper evidence of those proceedings is not found in this record, and we cannot base a decree upon the evidence of the facts found in a reported case. Were these facts properly established, and were we convinced that the improvement was made in good faith, the defendants believing that they had made a valid purchase of the premises, and that the expenditure was a judicious one, for the benefit of the estate, we think they should be allowed for them. And, as the case will have to be remanded, we think it but just and equitable that the defendants should be allowed to amend their answer, so as to insert the proper averments, and make the necessary exhibits, to prove the facts we have alluded to; but no other amendments must be allowed. Should the defendants not be allowed for the erection of this warehouse, then, in taking the account of the rents and profits, the use of the warehouse should be excluded; but if they are allowed for it, then they should allow for its use. Upon this basis, we have not before us the necessary data upon which we can, satisfactorily, compute the amount with which the defendants should be charged. The decree, therefore, will have to be reversed, and the suit remanded, with leave to the defendants to make the amendments we have specified, and with directions to the Circuit Court to enter a decree establishing the right of the complainant to redeem, by paying the amount, if any thing, due to the assignees of McKee; and by bringing into the Circuit Court, subject to its future order, the balance that shall be found due upon the mortgage, after deducting the amount decreed to McKee, as so much money paid at the date of that decree. The Circuit Court will also be directed to determine, whether the defendants are entitled to an allowance for the erection of a warehouse upon the mortgaged premises, according to the principles above laid down, and to take an account of the rents and profits of the mortgaged premises, for which the defendants are responsible, and of the waste committed by them on the mortgaged premises, if any, and to set off the same against the amount due to the defendants as assignees of McKee, and the amount, if any thing, which they shall be allowed for the erection of the warehouse. And if any thing shall be found due to the defendants Holobush and Burbank, that the complainant be decreed to pay the same to them. Holobush to receive one-third part thereof, as administrator of John Mathews, deceased. And if it shall be found, upon taking said account, that any thing is due to the complainant, a decree for the same be entered in his favor against the said Holobush and Burbank. One-third part thereof to be paid out of the estate of the said John Matthews, deceased, if there are assets in the hands of the administrator sufficient to pay the same. The question of costs alone remains to be considered. Ordinarily, upon a bill filed to redeem, the complainant does not recover costs; and most frequently he has to pay costs to the defendant, although he obtains a decree in his favor. In this case, however, the complainant seeks other relief than that of a mere right of redemption. One object of his bill is to establish his right to rents and profits, and to have them set off against the amount due the defendants. In this case, also, a considerable portion of the depositions taken by the defendants, were upon an entirely immaterial point, and quite unnecessary. Most of the answer, too, is either not pertinent, or unnecessarily and improperly reflects upon the opposite party, and upon motion in the Circuit Court would have been stricken out, at the cost of the defendants’ solicitor. Only material facts, clearly and succinctly set forth, should be stated either in a hill or answer, and neither suitors nor solicitors should he allowed to manifest their personal feeling upon the records of or before the Court ; and this, we hope, is the last time that we shall he called upon to notice so reprehensible a practice, by any one. In the Circuit Court each party will have to pay his own costs, except the costs of the defendant Vansyclde, which must be paid by the complainant. Decree reversed.