Johnston v. Riddle , 70 Ala. 219 ( 1881 )

SOMERVILLE, J.

The rule in. ordinary cases is, that the" mortgagee can always claim the rents, income or profits of the mortgaged property,- after the law-day, or forfeiture of the mortgage. But he is required to be active in making the claim either by giving notice to the tenants or lessees in possession’ or by filing his bill for the purpose of foreclosure in a court of equity. And in the absence of a claim by notice, he obtains no lien on such rents, income or profits, by the mere filing of his Mil, or even by the service of a smnmons on the defendants. To secure this right or lien, he must procure the appointment of a receiver by the court; and until notice is given by takinopossession .or otherwise, or a receiver is duly appointed, the mortgagor is entitled to continue his enjoyment of the rents, he being regarded, in equity, as the real and true owner of the property, as against every body excepting only the mortgagee. These propositions are well settled by the past decisions of this court. As said by this court, in Hall v. Mobile & Montg. R. R. Co. (58 Ala. 10-24), “ even a receiver, when appointed, can not recover income then in the hands of an agent of the mortgagor, which accrued before the receiver was appointed.”—Scott v. Ware, 64 Ala. 174; Coker v. Pearsall, 6 Ala. 542; Branch Bank v. Fry, 23 Ala. 770; 1 Jones on Mort. § 670.

It is insisted, however, that this rule is not applicable to the present case, because the mortgagor here conveyed all the property, real and personal, of the railroad company, “ together with all the tolls, incomes, issues and profits, which may1, accrue from the road” in its use or operation, and that the money here attached by process of garnishment in the hands of the express company is in this manner specifically pledged. Rut the answer to this view is manifest. It is clearly contemplated that the mortgagor should continue to hold possession of the mortgaged property, and should be permitted to opex*ate and xxse it, and receive a,nd -appropriate its earnings, xxntil such earnings slioixld be claimed by the trustees in the mortgage. Until a claim was interposed, therefore, by the mortgagees or trustees, the earnings belonged to the railroad company, who was in this -case the xnortgagor axxd defendant in the judgments upon which the several garnishmexits in questioxr were sued out. This view of the question is fully sustained by the adjudged cases.—1 Jones Mortg. § 670; Fosdick v. Schall, 99 U. S. 235; Bridge Co. v. Heidlebach, 94 U. S. 798; Gilman v. Telegraph Co., 91 U. S. 603 ; Galveston R. R. v. Cowdrey, 11 Wall. 459 ; Noyes v. Rich, 52 Me. 115.

The garnishments sxxed out by the several appellees, against the Southern Express Company, as garnishee, were served prior to the filing of the bill for foreclosure of the mortgages. The garnishee then owed the mortgagor, the Sebxxa, Rome & Daltoxi Railroad Compaxxy, a certain sum of money, part of which was due for the use of a car, and the remainder held as bailee — all accruing fi'om the earnings of the road. The coxxtrol and domixiion of these funds were x’ecognized to be in the road at tlxe time, and for them an action of indebitutms assumpsit would clearly have lain by the road against the garnishee. The garnishment was, therefore, a lien oxi the money, prior in time and equity to any claim or lien sought to be asserted by the mortgagees.

We are of opinion, that the matters involved in this suit were not settled or adjudicated by the decree of this court rendered at the December term, 1879, in the case of Meyer v. Johnston & Stewart, 64 Ala. 603. True, tlxeappelleps wex*e made parties to that suit, and had tlxe piivilege accorded them of proving their claims against any sux-plus which might remain after satisfaction of 'the mortgage debts; but they never made such proof, nor was the Southern Express Company made a party. The status of the funds held by the garnishee was not one of the questions in issue upon the trial of that cause, nor did the adjudication then made necessarily i/nvolm the relative priority of any liens asserted to it by any of the parties litigant.—McDonald v. Mobile Life Ins. Co., 65 Ala. 358.

The appellants can derive no aid from the suit for foreclosure which was commenced in the United States Court, and was afterwards discontinued. The abandonment of that proceeding, even though its prosecution was effectual to operate as notice, lost the benefit thus acquired by the mortgagees. When voluntarily discontinued, it was, for the purposes here considered, the same as if never commenced. This rule is applicable to the doctrine of Us pendens, in all of its phases, where the rights of purchasers are concerned. — Freeman on Judg. § 203.

The appelleees were, in our opinion, properly permitted to prosecute their garnishment suits at law, and there was no error in the rulings of the chancellor.

Affirmed.

Stone, J., not sitting.