32 S.C. 134 | S.C. | 1890
The opinion of the court was delivered by
The defendant, Levi S. Pate, being indebted to the plaintiff, appellant, or being about to become indebted for advances and supplies to a large amount, executed a mortgage covering certain lands situated in Darlington and Chesterfield Counties to secure the same. Some time after the execution of said mortgage, and after default in the payment of indebtedness thus secured, Pate made a general assignment of his property, both real and personal, “for the benefit of creditors, subject, however, to such mortgages and encumbrances as at that time lawfully existed thereon,” the said mortgage of the plaintiff then having a legal lien'on the said premises. Under this state of facts, the plaintiff instituted the action below to foreclose his mortgage, and in his complaint he alleged that the mortgaged premises were wholly insufficient to pay the mortgage debt, and further, that the defendant Pate, who was personally liable therefor, was wholly insolvent, and in addition to praying foreclosure of the mortgage, he prayed the appointment of a receiver of the rents and profits of the said mortgaged premises to be applied to his demand; and after answers were put in, he gave notice that upon the record and certain affidavits he would move before the presiding judge at Darlington for an order appointing said receiver of said rents and profits of said premises, as set forth in the complaint.
This motion was accordingly made before his honor, Judge Norton, at the time and place mentioned, who refused it in a brief order, of which the following is a copy, to wit: “The motion here was to appoint a receiver of rents and profits of real estate under suit for foreclosure in this action, which the defendant Pate had included in a general assignment to the defendant McKee for the benefit of all creditors of the former, the assign
The plaintiff appealed, raising substantially but one question in his exceptions, to wit: That his honor erred in holding that the assignment by Pate before the action for foreclosure deprived plaintiff of the right to have a receiver appointed of the rents and profits of the land; and the defendants gave notice that they would sustain the judgment of the Circuit Judge, on the ground that there being no stipulation in the mortgage pledging the rents and profits, that the mortgagee had no right thereto until foreclosure.
It will be observed that the demand for the appointment of a receiver of the rents and profits is based upon the allegations in the complaint, that the mortgaged premises were wholly insufficient to pay the mortgage debt and the insolvency of the defendant Pate. It will be further noticed that the object of having the receiver appointed, was not to preserve the mortgaged pre-mises from waste and destruction, &c., but to have the rents and profits thereof applied to the payment of plaintiff’s debt, in addi-. tion to the proceeds of said premises upon foreclosure sale. This question brings up for consideration and adjudication the legal rights of mortgagor and mortgagee in the property mortgaged before foreclosure. We suppose it is well settled and well understood by the profession — so well, that it is wholly unnecessary to refer to the decided cases — that in this State since the act of 1791, unlike a common law mortgage, the mortgagor remains the owner of the land, and that the mortgagee is the owner of the debt, the
■ It is said, however, that there is an equity in favor of the creditor to have the rents and profits sequestrated for his benefit, when it appears that the mortgaged property is insufficient to pay the debt and the mortgagor is insolvent, and that this equity springs into existence at the time of the execution of the mortgage, and runs with it to be enforced whenever it becomes necessary, with priority over any subsequent assignment or disposition of said rents by the mortgagor, and Coote and Jones on Mortgages are referred .to as sustaining this position. We find in Coote (chap. III., page 332) the fbllowing: “That although the mortgagor remains in equity the actual owner of the land until foreclosure, entitling him, while in possession, to the receipt of the rents and profits without account; yet equity, regarding the land with all its produce as a security for the mortgage debt, will restrict the right of ownership within those bounds which may not operate to the detriment or injury of the mortgagee.”
This much is quoted in appellant’s argument, and it is urged that this principle would authorize the sequestration of the rents and profits here; but Mr. Coote in the next paragraph states how and where it would operate. He says: “On this principle equity will interfere to prevent waste by the mortgagor, and for that purpose grant an injunction on bill filed by the mortgagee. But the mortgagee is not, as a matter of course,, entitled to an injunc-.
No case from our own reports has been referred to in which the broad equity doctrine claimed by appellant has been recognized, and without determining now whether or not it exists as a general principle as contended for, we think it could have no application where, as in this case, the mortgagor had already assigned the mortgaged property for the benefit of creditors, subject to the lien of the mortgage. This assignment, made before the suit for foreclosure and while all rents and profits belonged to the mortgagor until foreclosure, carried with it the right in the assignee to receive and apply the same as provided for in the assignment.
It is the judgment of this court, that the judgment of the Circuit Court be affirmed.