163 A. 254 | Conn. | 1932
The plaintiff brought an action to foreclose a first mortgage upon certain premises. A receiver of rents was appointed. The action went to judgment and, none of the defendants redeeming, title vested in the plaintiff. While the receiver was in possession, taxes on the property accrued to the amount of $250. The receiver collected rents to such an *654 amount that, after allowing him his disbursements and compensation, there was a balance left in his hands of $519.20. The trial court has found that the value of the property was in excess of the plaintiff's judgment debt plus his costs and the taxes referred to. The receiver moved the court for permission to pay the taxes and the court denied the motion and ordered the receiver to pay the balance in his hands to the holder of a second mortgage on the property. From this order the plaintiff has appealed.
In this State a mortgagor is regarded as owner of the land; Toby v. Reed,
When a receiver is appointed in a foreclosure action to take charge of the property, he holds it as an arm of the court and his possession is not that of the mortgagee.Bergin v. Robbins, supra, 335. Hence the mortgagee has no claim upon the income and profit in his hands as such; except as necessary for the protection of his rights, they still belong to the mortgagor or such person as may have succeeded to his interest in them. As, however, they are in possession of a court of equity, that court has the power by its orders to make such application of them as justice and equity require and it may order their disposition in such a way as to aid in discharging the obligations of the mortgagor to the mortgagee. Ottman v. Tilbury,
The primary right of the mortgagee is, however, in equity restricted to securing payment of his mortgage debt, and his right to have the value of the security preserved until the foreclosure has become absolute or the property is sold, is incidental to that end. If payment of taxes is necessary to preserve the security or any part of it from being taken to satisfy them, the court may order their payment by the receiver; but if payment of the debt secured is not jeopardized by the existence of taxes chargeable against the property, the mere fact that they accrued during the time the receiver is in possession may well be an insufficient basis to decree their payment by him. If, for instance, the value of the mortgage security is clearly in excess of the mortgage debt even with the addition of the amount of accrued taxes and it seems unlikely that the owner of the equity will be able to redeem, equitable considerations may dictate that the taxes be left as a lien upon the property, so that, in case of a strict foreclosure, the mortgagee will take the property subject to that lien; or, in the event that there is danger of the appropriation of the security or any part of it to their payment, that the mortgagee, if financially in a position to pay them, be left to discharge them and to add the amount paid to the mortgage debt; in this way the mortgagee will still receive full payment of *657
his debt, and the owner of the equity or the person representing him, will be left any balance of income or profits in the hands of the receiver. Unless payment of taxes becomes necessary while the receiver is in possession in order to preserve the security of the mortgage, the better practice is to await the outcome of the foreclosure proceedings before making any order as to their payment out of the fund in his hands, because then the true equities of the situation will usually be more definite and certain. If, when that time comes, it appears that the mortgagee has appropriated the property to the payment of his debt by strict foreclosure and the value of the property, taken subject to the lien of the taxes, exceeds the debt secured, as it did in this case, the mortgagee has no right to anything more. Mortgage Contract Co. v. First MortgageBond Co.,
In Bergin v. Robbins,
There is no error.
In this opinion the other judges concurred.