Desiderio v. Iadonisi

• Decision Date: 13 December 1932
• Citation: 115 Conn. 652,163 A. 254
• Parties: DESIDERIO v. IADONISI et al.
• Court: Connecticut Supreme Court

163 A. 254

115 Conn. 652

DESIDERIO v. IADONISI et al.

Supreme Court of Errors of Connecticut.

December 13, 1932

Appeal from Superior Court, New Haven County; John Richards Booth Judge.

Action by Joseph Desiderio against Theresa ladonisi and others to foreclose a mortgage. From an order directing a receiver of the mortgaged premises to pay balance on hand to one of defendants, plaintiff appeals.

No error.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

George E. Gordon and David S. Korn, both of New Haven, for appellant.

Morris Rabinowitz and Anthony P. Adinolti, both of New Haven, for appellee D'Avanzo.

MALTBIE, C.J.

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 rent to such an 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. 9 Conn. 216, 224: McKelvey v. Creevey, 72 Conn. 464, 467, 45 A. 4, 77 Am.St.Rep. 321: and, if he continues in possession, he is entitled to the rents and profits derived from the land without any liability to account to the mortgagee for them. Rockwell v. Bradley, 2 Conn. 1. 15: Cooper v. Davis, 15 Conn. 556, 560: Harrison v. Wyse, 24 Conn. 1, 7, 63 Am.Dec. 151. While the mortgagee holds the legal title to the land, he is regarded in equity as doing so only for the purpose of securing the payment of the debt. Lacon v. Davenport, 16 Conn. 331, 341: City of Norwich v. Hubbard, 22 Conn. 588: Savage v. Dooley, 28 Conn. 411, 413, 73 Am.Dec. 680: Town of Clinton v. Westbrook, 38 Conn. 9, 13: Toby v. Reed, supra: McKelvey v. Creevey, supra. He is ordinarily entitled to possession of the land if he cares to assert that right. Chamberlain v. Thompson. 10 Conn. 243, 251, 26 Am.Dec. 390: Clark v. Beach, 6 Conn. 142, 151; McKelvey v. Creevey, supra; but, if he does take possession, he must apply upon his debt the rents and profits received by him, and is accountable to the mortgagor for them, Lacon v. Davenport, supra; Kellogg v. Rockwell, 19 Conn. 446, 458; Chamberlain v. Connecticut Central R. Co., 54 Conn. 472, 485, 9 A. 244. He is entitled to have the security for the debt preserved against loss or diminution in value by reason of obligations owed by the mortgagor upon prior incumbrances or for taxes and the like; and, if he discharges such obligations himself, he may tack them to the mortgage debt. General Statutes. § 5081: Beach v. Isacs. 105 Conn. 169, 177, 134 A. 787. When, however, the debt has been paid, the lien of the mortgage is extinguished. Derby Bank v. Landon. 3 Conn. 62; Swift v. Edson, 5 Conn. 531, 534; Peck v. Lee, 110 Conn. 374, 378, 148 A. 133; Palmer v. Uhl. 112 Conn. 125, 128, 151 A. 355; North End Bank & Trust Co. v. Mandell, 113 Conn. 241, 245, 155 A. 80. The debt is paid when the mortgagee has appropriated to it the property mortgaged, and the value of that property exceeds the mortgage debt. Bergin v. Robbins, 109 Conn. 329, 334, 146 A. 724: Cion v. Schupack, 102 Conn. 644, 649, 129 A. 854; Acampora v. Warner. 91 Conn. 586, 101 A. 332.

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. 109 Conn. 335, 146 A. 724. 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, 204 Wis. 56, 234 N.W. 325; Cone-Otwell-Wilson Corporation v. Commodore's Point Terminal Co., 94 Fla. 448, 114 So. 232. Primarily, the duty to discharge taxes upon the property rests upon the mortgagor or the owner of the equity, and he owes to the mortgagee the duty to prevent any lessening of the value of the security which might endanger the payment of the mortgage debt by reason of their enforcement. Connecticut Mutual Life Ins. Co. v. Buite, 45 Mich. 113, 122, 7 N.W. 707: Schaffer v. Hurd, 98 N.J.Eq. 143, 148, 130 A. 228: Schreiber v. Carey, 48 Wis. 208, 4 N.W. 124. It follows that it lies in the power of the court in a proper case to direct the receiver to use income and profits in his hands to discharge taxes due upon the property, whether those taxes accrued before or after his appointment.

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...