Debbins v. Forster ( 1914 )

Hammond, J.

This was a bill in equity originally brought to set aside the foreclosure of a mortgage and for an accounting. The case is before us upon appeals by the defendant Carro from the order overruling his exceptions to the master’s report and from the final decree.

In the course of the proceedings the plaintiff abandoned her claim to be entitled to redeem; and the bill was held only for an accounting between the plaintiff and Carro. The first, second, third, fourth, seventh, eighth, ninth, tenth and twelfth exceptions relate to the effect of the foreclosure proceedings of September 9, 1912. The defendant Carro contended in substance that these proceedings worked a valid foreclosure and that he became thereby the owner in fee, and that the accounting should be only up to that date. The plaintiff contended that these proceedings did not work a valid foreclosure, and further, that, even if they did, Carro had elected to hold as a mortgagee in possession. The master found that Carro elected to hold as a mortgagee in possession. We think this general finding justified by the subsidiary findings in the report. It further appears in the report that this was the understanding of the plaintiff, and that she relied upon the right to redeem as still outstanding. As between the plaintiff and Carro, the election should stand so far as respects the question of accounting, at least so long as Carro held the land.

But on October 7, 1912, Carro sold the property to one Yuill, free from all incumbrances except certain first mortgages and taxes. He sold as owner in fee. The master has found that the sale was “ a bona fide transaction entered into in good faith by both parties,” and that the consideration was $1,250, which was received by Carro partly in cash with a note for the balance which has since been paid.

By this transaction Carro parted with all his interest in the land. He no longer could be regarded as holding as mortgagee in possession. Under these circumstances equity requires that up to and including the sale to Yuill he must be held to his agreement with the plaintiff as holding as mortgagee in possession, so far as respects the period to be covered by the accounting. And that would be so, even if, as contended by the defendant (and we think rightly), the foreclosure proceedings were sufficient to enable him to convey the fee to Yuill. The result is that the third, fourth and twelfth exceptions should be overruled, as not in accordance with law, and the first, second, seventh, eighth and ninth as immaterial. The sixth exception is untenable and was properly refused. Interest was to be paid on the mortgage note at the rate of six per cent per year. The tenth and eleventh exceptions also should be overruled. The error in overruling the fifth exception is corrected by the final decree. The result is that the final decree should be affirmed, and it is

So ordered.