Barnett v. Nelson

Day, J. I. The cause was tried, as shown, by the referee’s report, on the 16th day of April, 1878, before chapter 145, of the laws of 1878, took effect, and is governed by the provisions of section 2742 of the Code. It does not appear that any motion'was made for trial upon written evidence, and hence the cause. is not triable here de novo, but must be reviewed as an action at law, on errors duly assigned. The findings of fact stand as the verdict of a jury, and cannot be disturbed unless ’clearly unsupported by the evidence. The report of the referee as to the facts is not so wanting in support. i. mortgage pos^inon ¡m pxoñts. II. The appellant has assigned and argued numerous errors, but a few of which it will be necessary for us to consider in order to indicate our view of the entire case, ¡Tlhe referee found that the rental value of the mill during the time plaintiff had possession, from May 1, 1874, to April 16, 1878, was $1,200 per year. As a conclusion of law the referee found, however, that plaintiff, being a mortgagee in possession, should account only for the net proceeds of the property. This conclusion was approved and confirmed by the court. In this we think the referee and the court erred. If the plaintiff had judiciously rented the premises to a third person he would have been chargeable only with the amount of rent received!. But when the mortgagee himself goes into possession a different rule applies, because the net proceeds are known only to the mortgagee. And in such case he must account for the reasonable rental value of the premises. In Sanders v. Wilson, 34 Vt., 318, it is said: “When the mortgagee himself occupies, and especially when the premises are a farm in cultivation, upon which labor and expenditure are to be bestowed to produce annual crops and profits, the mortgagee will be charged -with such sums as will be a fair rent of the premises, without regard to what he may, in fact, have realized as profits from the use of it. The rule is founded in sound policy, for the reason that the particular items of expenditure, in labor or [47] otherwise, as well as the profits received, are wholly within the knowledge of the mortgagee, and if he is not disposed to render a full and honest account it would be impossible for the mortgagor to show them, or to establish errors in the mortgagee’s account.” To the same effect see also 1 Hilliard on Mortgages, Ch. 16, § 3; Daniel’s Ch. Pr., 4th Ed., 2333; Washburn Real Property, 578; Gordon v. Lewis, 2 Sumnor, 143; Kellogg v. Rockwell, 19 Conn., 446; Trimbston v. Hamill, 1 Ball & B., 379; Bainbridge v. Owen, 2 J. J. Marsh., 465; Van Buren v. Olmstead, 5 Paige, 9; Strong v. Blanchard, 4 Allen, 538. The authorities cited by appellee, properly understood, do not recognize a contrary doctrine. 2___. fill.) It is claimed by the appellant that Barnett should be held responsible for the full value of the coal mines, without any allowance for the cost of mining and getting the coal to market. We do not think this rule is applicable to the circumstances of this case. The evidence shows that Barnett entered into the possession of the property supposing it was his own, under the Cass County Bank foreclosure. .The land was coal land, and had been used as L 1 such by Wilson. Barnett did no more than to make the usual and ordinary use of the land. He was not a trespasser, in the ordinary acceptance of the term, nor did his use of the land constitute waste. We think he should be- charged simply with the rental value of the land, and that in estimating this value the amount of coal mined may be considered. 3. -: repairs. ^IY.j The referee found the following fact: “The mill has been suffered to run down since April, 1874, for the wan! of proper care and necessary repairs, and is now - in bad conditition, and I find the damage to mill for want of ordinary care and repairs to be $1,000; and I further find in this connection that Barnett treated the mill as his own property and was not guilty of any fraud or gross carelessness in the management thereof.” The report of the referee and the judgment of the court do not charge the plaintiff with the damage to the mill. In [48] this, we think, there was error. It was the duty of the plaintiff to take proper care of the premises, and, to apply the proceeds, so far as necessary, to 'the making of repairs necessary for the prevention of damage to the property. As he was deriving a profit from the premises, and was not in 1 possession for the mere accommodation of the owner, it was his duty to exercise reasonable diligence, and take ordinary care of the property. He cannot be exonerated from liability , because he was not guilty of fraud or gross carelessness. (V.) What we have said indicates our general view of the manner in which the plaintiff should account for the use of the premises in question. The facts are not sufficiently presented by the report of the referee to enable us to enter a final judgment in harmony with the law, as we regard it, applicable to the case. The referee has found the rental value of the mill to be worth $1,200, but has not determined which party, under this estimate, shall make repairs. This •is a very important matter, and the evidence upon this question is conflicting. Further, the referee has found the rental value of the mill simply, and not of the land which was in plaintiff’s possession.* The cause must be remanded to the court below for a specific finding of the following facts: Fwst. The rental value per year of the mill, and the other real estate in the possession of plaintiff, the plaintiff making ordinary repairs. Second. The amount of repairs other than ordinary made by the plaintiff each year, and not occasioned by liis failure to exercise reasonable care of the property. The account will be stated as follows: The plaintiff will be charged with the annual rental value of'the .property for each year, less taxes paid during Jjhe year, and less the value of extraordinary improvements^made each year, not occasioned by the plaintiff’s failure to exercise reasonable care of the premises. Upon the amount of each year’s rent so ascertained, from the end of each year to the date of final adjustment, interest will be charged to the jdaintiff at the rate of six per cent. The plaintiff will also be charged with [49] the amount received on sale of lots on the mortgaged premises, with interest from date of receipt at six per cent. The plaintiff will be allowed the amount of the Cass County Bank mortgage, and the amount of the two notes held by hiim with interest at the rate specified in the judgment and notes, to the date of final adjustment. The plaintiff will not be allowed for the amount paid on the insurance of the mill. He will be charged with the damage to the property resulting from his failure to exercise reasonable care of the property. If anything shall be found due the plaintiff under this ad-' justment, he will have foreclosure of his mortgages therefor, and an attorney’s fee as specified in the mortgages, f ín^ioiecíosur0YI. On the 25th day of October, 1878, the plaintiff filed a motion for the appointment of a receiver, which was sustained, and the court appointed Amos Thomas a receiver to take charge of the property in controversy, excepting defendant’s homestead, manage the same, take care of the property, and hold the proceeds, and administer the further orders of the court. To this action the defendant excepted. On the 29th day of April, 1879, final judgment in the cause was rendered, the mortgages held by plaintiff were foreclosed, and special execution was ordered to issue for the sale of the mortgaged premises, and the receiver was ordered to retain and hold said property until the expiration of the time for redemption from sale under the judgment, unless sooner redeemed, and to account to the court from time to time for the rents and profits of said property, and to hold the same subject to the order of the court. To this action the defendant excepted. We need not determine whether it is competent in any case to appoint a receiver of mortgaged property pending foreclosure proceedings. Eor some suggestions on this subject see Myton v. Davenport, 51 Iowa, 583. No facts appear in this case which justify the depriving of the defendant of the possession of his property, and of [50] the right to control the profits, pending the statutory period of redemption. In appointing and continuing the receiver, the court erred. k— i Reversed.