Rohrer v. Deatherage

• Decision Date: 19 October 1929
• Docket Number: No. 18109.,18109.
• Citation: 336 Ill. 450,168 N.E. 266
• Parties: ROHRER v. DEATHERAGE et al.
• Court: Illinois Supreme Court

336 Ill. 450

168 N.E. 266

ROHRER

v.DEATHERAGE et al.

No. 18109.

Supreme Court of Illinois.

Oct. 19, 1929.

Error to Appellate Court, Third District, on Appeal from Circuit Court, Morgan County; Frank W. Burton, Judge.

Suit by William H. Rohrer against Fred E. Deatherage and another. An order denying complainant any relief against defendant E. B. Coe was reversed by the Appellate Court, and Coe brings certiorari.Carl E. Robinson and Bellatti, Samuell &

Carl E. Robinson and Bellatti, Samuell & Moriarty, all of Jacksonville, for plaintiff in error.

John J. Reeve and William T. Wilson, both of Jacksonville, for defendants in error.

DUNN, J.

William H. Rohrer on March 14, 1924, brought a suit in the circuit court of Morgan county to foreclose a mortgage for $12,000 on 140 acres of land against Fred E. Deatherage, the mortgagor, and E. B. Coe, his tenant. On June 20, 1924, George L. Kimber was appointed and duly qualified as receiver, and on July 21 a decree of foreclosure was entered. Afterward, on May 25, 1925, the court entered an order adjudging that the complainant was not entitled to any relief against Coe; that Coe was entitled to retain to his own use all the rents, issues, and profits of the premises from March 1, 1924, to March 1, 1925; that the proceeding be dismissed as to him; and that the right of Kimber to be reimbursed by the complainant for his expense as receiver be reserved for future determination. Rohrer, the complainant, and Kimber, the receiver, appealed from this order. The Appellate Court reversed it, and Coe has been allowed a writ of certiorari to review the record.

Deatherage was the owner of the land and on March 1, 1920, mortgaged it to secure the payment of $21,000 in five years. On March 4, 1920, he executed a second mortgage, which was recorded on March 5, conveying the lands, ‘together with the rents, issues and profits thereof,’ to W. H. Rohrer to secure his indebtedness to Rohrer for $12,000, due in two years. Deatherage continued in possession of the land, and on February 25, 1924, leased it to E. B. Coe for the period from March 1, 1924, to March 1, 1925, for $900, payable in advance, which Coe paid, and on March 1, 1924, he went into possession. Coe answered, setting up his lease and payment of the rent, and his want of knowledge or notice of the mortgage or of any default. The order appointing the receiver provided that Coe should retain possession until March 1, 1925, as the tenant of the receiver, and that all questions touching the right of Coe under his lease with Deatherage should be determined upon the coming in of the receiver's report. The decree of foreclosure, which was subject to the mortgage for $21,000, was for $14,311.92, for which the master was directed to issue a certificate of indebtedness, and a sale was ordered as provided by law if redemption was not made.

In October, 1924, Deatherage was adjudged a bankrupt upon his own petition, and on December 8, 1924, the trustee in bankruptcy filed his petition in the bankruptcy proceeding alleging that Deatherage was the owner of the real estate prior to the adjudication in bankruptcy, subject to the liens of the mortgage for $21,000 and the certificate of indebtedness of the master in chancery of Morgan county for $14,311.92; that it would be for the benefit of the estate that the land be sold clear of or subject to the lien for $21,000 and clear of the lien for $14,311.92; and praying for an order to sell subject to or clear of the first lien but clear of the second. On January 7, 1925, an order was entered on the trustee's petition finding that it was for the best interest of the estate and its creditors that the premises be sold free of the two mortgage liens, which should be transferred to the proceeds of the sale, and that Rohrer had consented to a sale free of his lien, and ordering that the trustee sell the real estate free of liens, ‘except the contested claim for rents, issues and profits for 1924, which the circuit court of Morgan county, Illinois, is given hereby the right and permission to hear and determine.’ The trustee sold the land on January 31, 1925, subject to the taxes for 1924 and to the right of the tenant, Coe, to possession to March 1, 1925, to Rohrer for $31,950. The sale was approved on March 11, and distribution was ordered, first, to pay $1,200 costs, second, to satisfy the first lien, and, third, to apply the remainder to the payment of the indebtedness due to Rohrer. The total of the costs and the first lien amounted to $24,913.38, and thus all but $7,274.90 of the bebt due to Rohrer was paid.

The first proposition of the plaintiff in error, that the inclusion in the Rohrer mortgage of the rents, issues, and profits of the land, with the land itself, would not alone deprive the mortgagor of the right to receive the rents for his own use until the mortgagee took some steps to enforce his lien upon the rents and profits, is a correct statement of the law and is supported by the authorities cited. The mortgagor is entitled to his rents until a receiver is actually appointed, and the receiver cannot collect rents already paid to the mortgagor. Mississippi Valley & Western Railway Co. v. United States Express Co., 81 Ill. 534;Gilman v. Illinois & Mississippi Telegraph Co., 91 U. S. 603, 23 L. Ed. 405;Sullivan v. Rosson, 223 N. Y. 217, 119 N. E. 405, 4 A. L. R. 1400. In this state a mortgagor is the legal owner of the mortgaged premises against all persons except the mortgagee and his assigns. Williams v. Williams, 270 Ill. 552, 110 N. E. 876;City of Chicago v. Sullivan Machinery Co., 269 Ill. 58, 109 N. E. 696;Seaman v. Bisbee, 163 Ill. 91, 45 N. E. 208;Barrett v. Hinckley, 124 Ill. 32, 14 N. E. 863,7 Am. St. Rep. 331;Emory v. Keighan, 88 Ill. 482;Hall v. Lance, 25 Ill. 277. While a mortgage conveys a title as between the mortgagor and the mortgagee, it is only a qualified title as security for the creditor during the existence of the debt, and the mortgagor is regarded as the owner of the land for all beneficial purposes, subject only to the rights of the mortgagee. Theiner v. Speckin, 290 Ill. 181, 124 N. E. 826;Fitch v. Pinckard, 4 Scam. 69. After condition broken, however, the mortgagee is, as between him and the mortgagor, the owner of the fee. Ladd v. Ladd, 252 Ill. 43, 96 N. E. 561;Ware v. Schintz, 190 Ill. 189, 60 N. E. 67;Waughop v. Bartlett, 165 Ill. 124, 46 N. E. 197;Esker v. Heffernan, 159 Ill. 38, 41 N. E. 1113;Oldham v. Pfleger, 84 Ill. 102; Barrett v. Hinckley, supra.

The mortgagor has the right to sell or make leases of the premises, and his grantee or lessee will have the right of possession until default in the terms of the mortgage, but the mortgagor cannot make a lease of the mortgaged premises which will give greater rights than he himself possesses or will interfere with the right of the mortgagee to enter for condition broken. After condition broken, ejectment may be maintained by the mortgagee against the mortgagor or those to whom he may have assigned the equity of redemption. Taylor v. Adams, 115 Ill. 570, 4 N. E. 837. Upon default in the condition of the mortgage the mortgagee has the right to possession against the...