Western Union Tel. Co. v. Ann Arbor R.

90 F. 379, 33 C.C.A. 113, 1898 U.S. App. LEXIS 1698
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 9, 1898
DocketNo. 524
StatusPublished
Cited by16 cases

This text of 90 F. 379 (Western Union Tel. Co. v. Ann Arbor R.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Western Union Tel. Co. v. Ann Arbor R., 90 F. 379, 33 C.C.A. 113, 1898 U.S. App. LEXIS 1698 (6th Cir. 1898).

Opinion

TAFT, Circuit Judge

(after stating the facts). Had the mortgage of the Frankfort & Southeastern Railroad Company the character and incidents of a mortgage at common law, it cannot be doubted that, by the' entry upon the premises of the assignee of the mortgage, all rights of the telegraph company under its contract would have ceased, and its attempt to continue the enjoyment of the easement said to have been created thereby would have been nothing but a trespass. In England, at the common law, title and right of possession passed to the mortgagee at once upon the execution of the mortgage, and, if the mortgagor remained in possession, he was not more than a tenant at will. He could not bind the mortgagee by any contract or grant with reference to the land mortgaged, and any one entering by his license, lease, or grant was, as to the mortgagee, only a trespasser, whom the latter might enter upon and oust, or against whom he might bring ejectment, without notice to quit.

In Keech v. Hall, 1 Doug. 21, a mortgagor in possession had, after the mortgage, made a lease in writing for seven years. The mortgagee brought ejectment against the lessee of the mortgagor, without giving him notice to quit, and had judgment. Lord Mansfield said:

“Wben the mortgagor is left in possession, the true inference to be drawn is an agreement that he shall possess the premises at will, in the strictest sense; and therefore no notice is ever given him to quit, and he is not entitled to reap the crop, as other tenants at will are, because all is liable to the debt, on payment of which the mortgagor’s title ceases. The mortgagor has no power, express or implied, to let leases not subject to every circumstance of the mortgage.”

The law, even of those states of this country where no change has been made by statute, is more liberal to the mortgagor. Until condition broken, though the title passes to the mortgagee, he holds it merely as security, and not until after a breach has he the right to enter upon the mortgagor, or to maintain ejectment against him. The mortgagor has a right to lease, sell, and in every respect to deal with the mortgaged premises as owner, so long as he is permitted to remain in possession, and so' long as it is understood that every person taking under him takes subject to all the rights of the mortgagee, unimpaired and unaffected. 4 Kent, Comm. 157. It is, however, well settled that no contract of lease, which the mortgagor may make with respect to the land, either inures to the benefit of the mortgagee, or is [383]*383binding on him. There is in such case no privity of either estate or contract between the mortgagee and the lessee of the mortgagor to bind either, and the entry of the mortgagee into possession under the mortgage merely avoids the lease, and releases the lessee from any obligation. Moran v. Railway Co., 32 Fed. 878, 886; Teal v. Walker, 111 U. S. 242, 248, 4 Sup. Ct. 420. Under this general doctrine, it cannot be doubted that, in the case at bar, the entry of the mortgagee or his grantee into possession would have avoided all the telegraph company’s rights, and that its alleged easement granted for 25 years would be at an end. The grantee of an easement for 25 years certainly stands upon no higher ground than a lessee for such a term. Indeed, his position is not so good in this case. A lessee has possession of all the land mortgaged, and may, perhaps, be said to have acquired pro tanto the equity of redemption and an estate in the land. The holder of this easement, which can only be enjoyed in connection with, certain personal covenants certainly not binding on the mortgagee, has no possession of the land mortgaged in any proper sense, but merely a right in alieno solo against the mortgagor. If, therefore, an entry of the mortgagee upon the lessee would avoid his interest in the land, a fortiori would it end the interest of one who holds from the mortgagor nothing but a naked right in the nature of an easement in gross and incapable-of enjoyment, except upon terms in no wise binding upon the mortgagee.

The question which remains for our consideration is whether, in Michigan, where this railroad lies, the character of a mortgage differs so widely from that of mortgages in other states that the result; of the law of mortgages in other states would not obtain there. It is provided by statute in Michigan (2 How. Ann. St. § 7847) that no action of ejectment shall be maintained by a mortgagee or his assigns or representatives for the recovery of the mortgaged premises until the title thereto shall have become absolute upon a foreclosure of the mortgage. The effect of this statute is merely to take away the remedy of the mortgagee by entry or ejectment, but it does not in any way affect his rights against those claiming an interest in the premises under the mortgagor. The rule that the mortgagor cannot bind the mortgagee by lease or other contract is not changed thereby. When the mortgagee acquires possession of the mortgaged land by foreclosure sale, the effect of his possession upon those claiming under the mortgagor is just as complete to avoid their rights and interest as was entry or ejectment at common law. Nor does it prevent this result that the holder of the easement may not have been made a party to the foreclosure suit. The easement was granted subject to being devested by the mortgagee’s acquiring possession of the mortgaged premises. That event has happened, and the devest-ing follows. Of course, if the telegraph company had been made a party to the foreclosure, the decree would have settled the rights of the purchaser as against the telegraph company as res judicata, and would have conclusively established that the company had no interest in the land after sale. As the company was not a party to the decree, however, the divestiture of its right must be shown by proof of the execution of the mortgage prior to the contract for the easement, and the entry into possession by the mortgagee or his assignee under [384]*384foreclosure and sale. We bave found no Michigan authority in point upon this question, but, in other states having statutes like the one from Michigan above quoted, the conclusion we have reached is well sustained by adjudicated cases.

In Iowa, by statute, the mortgagor retains the legal title and the right of possession until foreclosure and sale. Code Iowa 1873, p. 357; Jones, Mortg. § 29. In Downard v. Groff, 40 Iowa, 597, A. sued G. on a covenant of general warranty. G. was the assignee of á mortgage, and at foreclosure bought in the property, and sold with warranty to A. The breach assigned was that D., the mortgagor, after the execution of the mortgage, had leased the land to one L., and that L., who had not been made a party to the foreclosure proceeding, had refused to yield possession, and had taken the crops growing at the time of the sale. It was held that no breach was shown, because the purchaser had the right to evict L., and to take the emblements. The pourt said:

“It may be conceded that since Leroy, the tenant, was in possession under a lease from the mortgagor, and was not made a party to the foreclosure suit, that he is not bound or affected by the judgment therein. But this fact does not alter the rights of the mortgagee, or of the purchaser under the foreclosure sale, as against such tenant. It only affects the remedy, and defeats the use of the-judgment as evidence. By the lease from Dorstal, the mortgagor, to Leroy, the latter acquired no greater rights in .the premises than the mortgagor had. The tenant stands exactly in the situation of the mortgagor.

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Bluebook (online)
90 F. 379, 33 C.C.A. 113, 1898 U.S. App. LEXIS 1698, Counsel Stack Legal Research, https://law.counselstack.com/opinion/western-union-tel-co-v-ann-arbor-r-ca6-1898.