Anderson v. Moore

63 S.E.2d 641 (1951) 233 N.C. 299

ANDERSON et al.
v.
MOORE et ux.

No. 94.

Supreme Court of North Carolina.

March 7, 1951.

F. L. Carr, Wilson, for plaintiff appellee.

G. L. Parker, R. F. Mintz, Wilson, for defendants appellants.

DENNY, Justice.

Ordinarily a mortgagee in possession is required to account for the rents and profits he receives from the premises. Brown v. Daniel, 219 N.C. 349, 13 S.E.2d 623; Mills v. Mutual Building & Loan Ass'n, 216 N.C. 664, 6 S.E.2d 549; Fleming v. North Carolina Joint Stock Land, 215 N.C. 414, 2 S.E.2d 3; Kistler v. Wilmington Development Co., 214 N.C. 630 200 S.E. 400; Crews v. Crews, 192 N.C. 679, 135 S.E. 784; Weathersbee v. Goodwin, 175 N.C. 234, 95 S.E. 491; Green v. Rodman, 150 N.C. 176, 63 S.E. 732; Glenn on Mortgages, Vol. II, § 206, p. 1033; Jones on Mortgages, (8th ed.) Vol. II, § 1425; 59 C.J.S., Mortgages, § 856(a), p. 1657, and § 857(b), p. 1664; 36 Am.Jur., Mortgages, § 306, p. 843. If, however, he is permitted to remain in actual possession of such premises, as mortgagee, for a period of ten years and the mortgage debt has not been paid and no action to foreclose or redeem has been instituted in the meantime, title to the premises will be deemed to be in him, and the ten-year statute of limitations, G.S. § 1-47(4), if properly pleaded and relied upon, will be a complete defense to an action to redeem. Hughes v. Oliver (Oliver v. Hughes), 228 N.C. 680, 47 S.E.2d 6; Crews v. Crews, supra; Bernhardt v. Hagamon, 144 N.C. 526, 57 S.E. 222; Frederick v. Williams, 103 N.C. 189, 9 S.E. 298. And when the right to redeem is barred by the statute of limitations, G.S. § 1-47(4), the right to enforce an accounting is likewise barred.

Moreover, the right of the mortgagor to "an account of the rents and profits of the land received by the mortgagee is purely and exclusively of equitable cognizance. At law he cannot be made to account. The mortgagor has a right of redemption only in equity, and the right to account is only an incident to this". Jones on Mortgages, (8th ed.) Vol. II, § 1426, p. 913.

"The rule, then, is that the mortgagee's accountability must be adjudged in a suit to foreclose or a suit to redeem, or in connection with voluntary payment." Glenn on Mortgages, Vol. II, § 206, p. 1035.

The plaintiff Anderson had been in possession of the premises involved herein, as mortgagee, for more than nineteen years, when defendants moved for an accounting. Consequently, any right the defendants may have for an accounting depends on whether the institution of the foreclosure suit by the plaintiffs in 1932, which is still pending, tolled the statute of limitations, G.S. § 1-47(4). That question appears to have been settled adversely to the plaintiff Anderson's position. Barnhill, J., in speaking for the Court in Massachusetts Bonding & Insurance Co. v. Knox, 220 N.C. 725, 18 S.E.2d 436, 440, 138 A.L.R. 1438, with respect to the effect the institution of a foreclosure suit would have on the running of the statute of limitations, said: "The action, once instituted within the 10-year period against all parties having any record interest in the land, suspends the running of the statute of limitations. Neither the parties to the action nor any one claiming under them can thereafter successfully plead such statute in bar of plaintiff's right to foreclose." And since a mortgagor has the right to redeem, at any time before the sale of the property pledged to secure his debt by paying such indebtedness, he has a right to an accounting to determine whether or not there is anything due the mortgagee. 36 Am.Jur. Mortgages, § 301, p. 841; Glenn on Mortgages, Vol. II, § 210, p. 1043. If the mortgagee in possession has received sufficient rents and profits to liquidate the indebtedness secured by his mortgage, the mortgagor is entitled to have an entry of satisfaction entered on the judgment of foreclosure, the mortgage or deed of trust cancelled, and the premises surrendered to him free and clear of the indebtedness secured thereby.

The appellee Anderson contends, however, that since eighteen years have elapsed since the entry of the judgment of foreclosure, the defendants have been guilty of laches and should not be permitted at this late date to assert a right of redemption by a motion in the cause. This contention is untenable. In the case of Abernethy Land & Finance Co. v. First Security Trust Co., 213 N.C. 369, 196 S.E. 340, 341, this Court said: "An action in court is not ended by the rendition of a judgment, but in certain respects it is still pending until judgment is satisfied. It is open to motion for execution, for the recall of an execution, to determine proper credits, and for other motions affecting the existence of the judgment, or the amount due thereon." Federal Land Bank v. Davis, 215 N.C. 100, 1 S.E.2d 350; McIntosh, Prac. and Proc., § 991, and cited cases.

Furthermore, the plaintiff Anderson is in no position to raise the question of laches on the part of the defendants. He has been in a position to consummate this foreclosure proceeding at any time after the expiration of thirty days from the entry of the judgment of foreclosure on 19 September, 1932, but has failed and neglected to do so. On the contrary, he has permitted the judgment of foreclosure to remain unexecuted, subject to the further orders of the court, and by reason of his delay he has made the present situation possible. Undoubtedly this delay may well have enhanced the value of the defendants' equity of redemption. However this may be, it has no bearing one way or the other on his duty as mortgagee in possession to account for the rents and profits received by him while he is in possession in such capacity, nor upon the right of the mortgagors to demand an accounting of him.

In view of the conclusion reached herein, we deem it advisable to call attention to the following statement which appears in the opinion in the case of Oliver v. Hughes, supra: "The defendants * * * contend that if the plaintiff is entitled to foreclose his deed of trust, as provided in the judgment entered below, he must account for rents and profits while he was in possession of the respective tracts of land. This contention cannot be sustained on this record, for the reason no such relief is sought by them in their pleadings. It will also be noted that these defendants made no tender, nor do they allege a willingness or desire to exercise their right to redeem the lands conveyed in said deed of trust." [228 N.C. 680, 47 S.E.2d 12.]

Perhaps it should have been pointed out in that opinion that the plaintiff nor his successor in title, who entered into possession of the premises subject to the superior lien, entered into possession thereof as mortgagee under the superior lien which plaintiff was seeking to foreclose, 59 C.J.S., Mortgages, § 856, p. 1659, but entered under the conditions and circumstances as set out in the companion case of Hughes v. Oliver, supra, consolidated and tried with the case of Oliver v. Hughes. Moreover, the question of rents was litigated in the case of Hughes v. Oliver and a judgment therefor obtained pursuant to the provisions of G.S. § 1-341. However, reference to the case of Oliver v. Hughes is made for the purpose of saying that anything in the opinion therein which might be construed as being in conflict with the general rule with respect to the right of a mortgagor to an accounting by a mortgagee in possession is modified to that extent.

We think on the facts disclosed on the present record, the defendants are entitled to an accounting, and the ruling of the court below to the contrary is

Reversed.