Fidelity & Deposit Co. v. West Blocton Sav. Bank , 216 Ala. 465 ( 1927 )

The facts are fully set out in the opinion of the Court of Appeals per Rice, J.

It seems to be a well-settled rule of law that a mortgagee in possession not only has the right, but it is his duty, to preserve and keep the property in repair. 19 R. C. L. 332, § 106; Miller v. Ward, 111 Me. 134, 88 A. 400, 49 L.R.A. (N.S.) 122, and note; Dozier v. Mitchell, 65 Ala. 511. And to this end he is entitled to include the reasonable expense incurred in the mortgage indebtedness upon an accounting. Zadek v. Burnett, 176 Ala. 80, 57 So. 447. True, this cost should primarily be collected upon a foreclosure or sale of the mortgage property, but, if the property does not bring enough to cover the indebtedness due, including the cost, and this cost has been proximately caused by a delay resulting from an injunction, he would be entitled to recover the same upon the injunction bond. Bolling v. Tate, 65 Ala. 417, 39 Am. Rep. 5; Fidelity Co. v. Walker, 158 Ala. 141, 48 So. 600.

The cases cited in the opinion of the Court of Appeals are no wise in conflict with the holding here. They simply lay down the proposition that, in order to recover damages for a wrongful injunction, they must have been proximately caused by suing out the injunction — just as we now hold. The Court of Appeals seems to have based its conclusion, however, upon the fact that none of the items set forth, except counsel fees, proximately resulted from suing out the injunction, and as to this we cannot agree. The mortgage sale was set for a certain day; the sale was enjoined; the mortgagee being in possession, it was his duty to preserve and care for the property; and the delay was the direct result of the injunction. Had the injunction not been issued, the sale could have taken place on the day set, and the expense would not have been incurred by the plaintiff, as mortgagee in possession, but for said injunction. As the items of cost in preserving the property were the result of a delay in the sale caused by the injunction, the plaintiff was entitled to same, including interest during the period between the date of the sale and the dissolution of the injunction. As the cost of preserving the property and the interest together with the $250 attorney's fee allowed will aggregate the amount of the judgment and the bonds, it is unnecessary to pass on the other items.

As above stated, these charges should have been, other than the counsel fee, realized out of the mortgage property, but, if it did not sell for enough to include these items, in addition to what was due on the mortgage debt and cost, they are recoverable on the injunction bond.

The proof shows that the property when sold did not bring enough to cover the items in question. True, the sale was made by the bankrupt court instead of the mortgagee, but this was a public sale to the highest bidder, and such a one as would have been made by the mortgagee under the terms of the mortgage, and prima facie the property sold for as much as if sold by the mortgagee after the dissolution.

The writ is awarded, the judgment of the Court of Appeals is reversed, and the cause is remanded to said court for further consideration in conformity with this opinion.

Writ awarded.

All the Justices concur.