Williams v. Chicago Exhibition Co. ( 1899 )

Mr. Presiding Justice Horton

delivered the opinion of the court.

A bill in chancery was filed by Elizabeth Lawrence as mortgagee, to foreclose a mortgage upon the premises in question. After final decree in said foreclosure proceedings said Lawrence assigned the decree to plaintiff in error. Ho question arises in this case as to the correctness of that foreclosure or the validity of the assignment of said decree. The bill in this case was filed to restrain defendants in error from committing what was alleged to be waste.

After said foreclosure proceedings were at issue, the defendant in error erected upon said premises a boiler house and placed therein several boilers, which were attached to the freehold. Afterward, defendants in error, as counsel for plaintiff in error state it, “asserted their right to remove ” said building and boilers under some contract with Gay Dorn, the owner of the fee to said premises, subject to the lien of said decree. What that contract was does not appear. A temporary injunction was issued, without notice, upon the filing of the bill in this case. The Austin Manufacturing Company, one of the defendants in error, moved to dissolve said temporary injunction “ upon the face of the bill.” That motion was sustained and said temporary injunction was dissolved. The only relief sought by the bill in this case was an injunction. When that was dissolved the bill was dismissed, and this appeal prosecuted. 1STo testimony was offered by either party, and no answer to said bill was filed. Leave was granted to defendant in error, the AustinCompany, to file its suggestion of damages. The errors assigned are the dissolving of said injunction and the granting leave to file suggestion of damages. The whole theory and purpose of this bill is to prevent threatened waste. At common law, an action for waste may be maintained by a reversioner or remainderman in fee, for life or for years, provided the injury affects the reversion. But such an action can not be maintained by a mortgagee because he has onlya contingent interest. His common law remedy, if any, is an action on the case. As there was no adequate remedy at common law for the protection of mortgagees, courts of chancery assumed jurisdiction so as to afford such protection. But it does not follow that every act of spoliation which might constitute waste as against the rights of the owner of the fee, subject to a mortgage, will be restrained by a court of equity at the instance of the mortgagee. If the security or contingent interest of a mortgagee will not be injured or his security injuriously impaired, a court of equity will not, at his instance, interfere by injunction, to restrain what might be waste as to the owner of the fee. The mortgage referred to was given to secure the payment of the sum of §5,000, and was upon three lots and a part of another lot. After said foreclosure bill was filed and before the decree referred to was assigned to plaintiff in error, §3,000 was paid on account of said mortgage debt, and one of said three lots was released. Said decree is for the sum of §2,312.10 and §150 solicitor’s fees.

The bill in the case at bar does not state the value of said lots or either of them. Neither does it charge that the lots upon which the decree is still a lien, are not exclusive of the property, the removal of which is threatened, full and ample security for the amount due upon said decree. Nor is there any averment that either of the defendants against whom said decree was entered, or the said defendants in error, or any or either of them, is or are insolvent. There is no statement of any fact or facts in the bill in this case showing that plaintiff in error will be damnified to any extent whatever, if the property claimed by defendants in error is removed. The only thing in the bill as to that is the general allegation that the security of plaintiff in error will be impaired, and the amount that said premises will bring at a sale will be largely decreased. There is no allegation but that said premises at such a sale would bring many times the amount due upon said decree.

On behalf of plaintiff in error it is contended that if the removal of said building and boilers would be waste per se, then a court of chancery will restrain such removal whether the mortgagee be solvent or insolvent, and whether such removal would render the security inadequate or not.

Waste is some injury to property “ to the prejudice of the heir or of him in reversion or remainder,” or as expressed in Blackstone’s Commentaries, “to the disherison of him that hath the remainder or reversion in fee simple or fee tail.”

To sustain a claim for waste it is essential that the act complained of shall be to the injury of the party complaining. There may be such an act or injury to real estate as would constitute waste against the remainderman in fee, which would not be waste as against a mortgagee such as to warrant the interference of a court of chancery by injunction. Courts of chancery have frequently entertained jurisdiction at the instance of mortgagees, to restrain waste. The reason why such jurisdiction was assumed was to prevent irreparable injury. But where no injury to the mortgagee will result, no reason appears for assuming such jurisdiction. Where the reason for assuming equity jurisdiction fails or does not exist, such jurisdiction should not be assumed or exercised.

The case of Moriarity v. Ashworth, 43 Minn. 1, was a proceeding by a mortgagee to restrain waste by a mortgagor in possession. The Supreme Court there states so clearly what seems to us to be the correct rule that we quote it at length :

“ While some authority may be found in support of the claim of the appellant, that a mortgagee is entitled to an injunction restraining any acts of waste by a mortgagor in possession, which may diminish the value of the mortgaged property, yet the great weight of authority, both in England and in this country, is to the effect that equity will not interfere in such cases unless the acts complained of are such as may render the security insufficient for the satisfaction of the debt or of doubtful sufficiency. King v. Smith, 2 Hare, 239; Humphreys v. Harrison, 1 Jac. & W. 581; Hippesley v. Spencer, 5 Madd. 422; Harper v. Aplin, 54 Law T. (N. S.) 383; Coker v. Whitlock, 54 Ala. 180; Scott v. Wharton, 2 Hen. & M. (Va.) 25; Buckout v. Swift, 27 Cal. 433; Vanderslice v. Knapp, 20 Kan. 647; Harris v. Bennon, 78 Ky. 568; Van Wyck v. Alliger, 6 Barb. 507, 511; Snell, Eq. 304; 1 Wats. Comp. Eq. 746; 2 Story, Eq. Jur. 915; High, Inj. (2nd Ed.) 693, 694; Bisp. Eq. (4th Ed.) 433; 1 Jones, Mortg. (4th Ed.) 684; 1 Lead. Cas. Eq. (4th Am. Ed.) 992, 1021; Kerr, Inj. (2nd Amer. Ed.) 84. In numerous other cases we find that the courts, in stating the grounds upon which equity will interfere, seem to regard it as a necessary condition that the sufficiency of the security be threatened. See Cooper v. Davis, 15 Conn. 556; Gray v. Baldwin, 8 Blackf. 164; Hastings v. Perry, 20 Vt. 272; Fairbank v. Cudworth, 33 Wis. 358. From the proposition which we have stated as an established principle of equity, it is not to be understood that equity will not interfere unless the acts threatened are such as may reduce the value of the mortgaged property below the amount of the debt. On the contrary, as was considered in King v. Smith, 2 Hare, 239, we think that the mortgagee is entitled to be protected from acts of waste which would so far impair the value of the property as to render the security of doubtful sufficiency. He is entitled to have the mortgaged property preserved as sufficient security for the payment of his debt, and it is not enough that its value may be barely equal to the debt.”

The same principle seems to be recognized in Miller v. Cook, 135 Ill. 190; Cook v. Miller, 26 Ill. App. 421, and 31 Ill. App. 577.

The holding by the Supreme Court of Minnesota is supported by the following cases in addition to those there cited: Perrine v. Marsden, 34 Cal. 14, 18; Van Wyck v. Alliger, 6 Barb. 507, 511; Moses v. Johnson, 88 Ala. 517, 521.

Cases may be found which hold that the whole estate is security to the mortgagee and that the mortgagor ought not to be allowed to diminish it. State v. N. C. Ry. Co., 18 Md. 193, 213. In nearly all the cases cited by counsel for appellant, as well as other cases examined, the courts hold that an injunction will be sustained to prevent the mortgagor from impairing the security of the mortgage. In but few cases is there any discussion as to the meaning of the term “ impair the security of the mortgage.” As we have said, this term does not necessarily mean the same as impairing the value of the property mortgaged.

There was no error in the order dissolving the temporary injunction issued in this case. The judgment of the Circuit Court is affirmed.