24 Conn. 1 | Conn. | 1855
The principles, relating to the accountability for the rents and profits of mortgaged premises, are well settled. The only difficulty, in the present case, is, as to their application. If the mortgagor is suffered to remain-in possession, he is not accountable for them to any one. He is considered, in equity, as the owner of the property, and the mortgagee as having but a lien, for the security of his debt. If the latter wishes to appropriate them to his own use, he must, in the first place, obtain the possession of the property. Until that is done, he has no claim to the income.
On the other hand, if the mortgagee takes possession, and receives the rents and profits, he becomes accountable for them, and is bound to apply the net proceeds, in reduction of his debt. As soon as they are received, equity makes the application, and they have the same effect, as any payment made by the mortgagor.
When the latter applies to redeem, he is required to pay no more than the balance of his debt, remaining due after the application of all payments made by him, and the net proceeds of all rents and profit, received by the mortgagee, while in possession.
Whenever a second mortgagee applies to redeem a prior mortgage, he stands in the same situation as the mortgagor; is entitled to the benefit of all payments made by him, and all rents received by the prior mortgagee, and is bound to
In this case, the defendants held the prior mortgages, and under them, entered and took possession of the premises, and thereupon became accountable for the rents and profits, in any suit, brought either by the mortgagor, or the subsequent mortgagee, for fhe redemption of their mortgages. And this is admitted by their counsel, at least so far as the mortgagor is concerned.
But after they had thus taken possession, they purchased the equity of redemption, and thus, in equity, became the owners of the whole property, subject only to the mortgage now holden by the plaintiff. They now claim that, from the time of such purchase, they stand in the situation of the mortgagor, and became no longer accountable for the rents and profits.
This question becomes important only in one event. The defendants, uppn the present application, are put to their election, either to pay the plaintiff’s debt, and take the property to themselves, or submit to be foreclosed of their equity of redemption, and permit the plaintiff to take the property upon payment of their debts secured by the prior mortgages.
In the former case, it is perfectly immaterial, whether they received the rents as mortgagees, or as assignees of the equity of redemption. In either case, they take the property upon the payment of the plaintiff’s debt.
But, on the other hand, if they elect to be foreclosed of their right to redeem, and permit the plaintiffs to redeem their 'mortgages, and take the property,' the inquiry becomes material, for the purpose of determining the amount which the plaintiff is required to pay, or in other words, the amount of their debts remaining unsatisfied.
As the defendants entered into possession of the property, in their character of mortgagees, received the rents and profits as such, and thereby became bound to apply them in part satisfaction of their debts, we are inclined to think, that, so
In this opinion the other Judges Storrs and Hinman concurred.
Decree accordingly.
