Pearce v. Dunn

Proceedings for ejectment instituted in Magistrate Court. Judgment for plaintiff. Defendant appealed to Circuit Court. Judgment of Magistrate affirmed. Defendant appeals to this Court.

The facts appear to be as follows: On December 23, 1919, the defendant, Dunn, owner of the tract of land in question, sold and conveyed it to the plaintiff, Pearce, receiving a bond and mortgage covering the property as security for the purchase price. After the conveyance the defendant, Dunn, remained in possession as tenant of the plaintiff, Pearce, and for the year 1921 there was a written contract of renting between them, expiring December 31, 1921. Pearce having made default in the payment of the bond secured by mortgage, Dunn instituted proceedings to foreclose the mortgage. It does not appear that the mortgage gave Dunn any right to the possession of the property or to the rents and profits. On the contrary, it appears that he was in possession during the years 1920 and 1921 as a tenant of Pearce. After receiving notice of the foreclosure suit, Pearce, at some time between the date of the service of summons and complaint and January 1, 1922, served notice upon Dunn to vacate the premises. His term expiring on December 31, 1921, it is assumed that this notice was to vacate at that time. Dunn declined to vacate, claiming to be a mortgagee in possession, and further contending that, foreclosure proceedings having been commenced before notice to quit was served upon him, the Circuit Court had assumed jurisdiction of all matters between the parties in respect to said land. On May — , 1922, the Magistrate issued formal notice under the ejectment statute against Dunn. The Magistrate, upon hearing the return of Dunn to the rule to show cause why he should not be ejected, rendered his decision in favor of Pearce, and issued a writ of ejectment against Dunn. The latter appealed to the Circuit Court, and Judge Townsend, hearing the appeal, affirmed the judgment of the Magistrate. At the same term of Court at which the appeal was heard, judgment of foreclosure and sale in the foreclosure proceedings referred to was rendered in favor of Dunn against Pearce ordering sale in December, 1922.

The defendant, Dunn, in the ejectment proceedings, has appealed from the order of Judge Townsend affirming the Magistrate's decision, upon the exceptions which will be reported. Generally stated, the defendant contends:

(1) That the foreclosure proceedings involved the question of the right to the possession of the land, a matter not within the jurisdiction of the Magistrate.

(2) That after January 1, 1922, Dunn was in possession of the land as a mortgagee in possession.

(3) That the foreclosure proceeding drew with it all of the controversies between the parties, including the liability of Dunn for a reasonable rental, his equitable right to remain on the premises under the circumstances, having planted a crop, and Pearce being insolvent.

The deed from Dunn to Pearce conveyed the right of possession and the legal title to Pearce. The mortgage from Pearce to Dunn simply imposed a lien upon the property as security for the bond, not interfering at all with Pearce's right to possession. Act of 1791; 1 Code of Laws 1912, § 3460. As long as Dunn was in possession as a tenant of Pearce he was estopped to deny Pearce's title. When he continued in possession after the termination of his lease he was a trespasser (Section 3501), and liable to be ejected under Section 3509 as a tenant holding over after the expiration of his lease. The foreclosure proceeding had absolutely nothing to do with the accountability of the mortgagor to the mortgagee for the rental value of the land. There was no provision in the mortgage which would entitle the mortgagee to the rents. If the mortgagee under the circumstances of this case has the right to continue in possession and credit the rental value upon his mortgage, he would have the right to take possession of the land from the mortgagor or his tenant for the same purpose. The question is controlled, in my opinion, by the case of Hardin v. Hardin,34 S.C. 77; 12 S.E., 936; 27 Am. St. Rep., 786, where the Court says:

"By our law a mortgage of real estate is not a conveyance of any estate whatever, but is simply a contract whereby the mortgagee obtains a lien on the property mortgaged as a security for the payment of a debt. The mortgagor still remains, even after condition broken, the owner of the mortgaged premises, and retains all the rights incident to such ownership, amongst which is the right to receive the rents and profits, while the mortgagee simply holds a lien upon the property to secure the payment of his debt, which he may enforce in any of the modes recognized by law. But, having no title to or ownership of the mortgaged premises, he cannot claim any of the rights incident to such a relation."

And, further:

"Now, as we have seen, the mortgage gives to the mortgagee no real or even apparent right to the mortgaged premises, and certainly none whatever to the rents and profits thereof. * * * The mortgagor remaining the owner of the mortgaged premises until the sale thereof, was, of course, entitled as such to the rents and profits."

How it can be said that a simple proceeding for the foreclosure of a mortgage, under a complaint alleging the facts necessary to support such action, and nothing else, can draw unto itself all other controversies between the parties is beyond my comprehension.

MR. JUSTICE MARION concurs.