This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
The doctrine referred to appears to have had its origin in the state of New York, before the acceptance, to its full extent, of the lien theory of a mort95. Frink v. Le Roy, 49 Cal. 314; Bradley v. Norris, 63 Minn. 156, 65 N. W. 357; Fee v. Swing-ly, 6 Mont. 596, 13 Pac. 375; Phyfe v. Riley, 15 Wend. (N. Y.) 248, 30 Am. Dec. 55; Pell v. Ul-mar, 18 N. Y. 139; Caro v. Wollenberg, 68 Ore. 420, 136 Pac. 866; Tallman v. Ely, 6 Wis. 244; Brinkman v. Jones, 44 Wis. 512; 1 Jones, Mortgages, Sec. 715.
The fact that the mortgagee in possession may have received rents and profits from the land to an amount greater than the sum due on the mortgage does not affect his right to retain possession until they are applied by judgment of a court in satisfaction of the mortgage. Hubbell v. Moul-son, 53 N. Y. 225, 13 Am. Rep. 519.
96. Spect v. Spect, 88 Cal. 437, 13 L. R. A. 137, 22 Am. St. Rep. 314, 26 Pac. 203; Faxon v. All Persons, 166 Cal. 707, 137 Pac. 919; Stouffer v. Harlan, 84 Kan. 307. 114 Pac. 385; Hubbell v. Moulson, 53 N. Y. 225, 13. Am. Rep. 519; Townshend v. Thomson, 139 N. Y.
152, 34 N. E. 891; Becker v. Mc-Crea, 193 N. Y. 423, 86 N. E. 463.
97. Post, Sec. 646, note 22, Sec. 656, notes 87-90.
98. Burns v. Hiatt, 149 Cal. 621, 117 Am. St. Rep. 157, 87 Pac. 196; Stouffer v. Harlan, 68 Kan. 135, 64 L. R. A. 320, 104 Am. St. Rep. 396, 74 Pac. 610; Backus v. Burke, 63 Minn. 272, 65 N. W. 459; Currier v. Teske, 84 Neb. 60, 133 Am. St. Rep. 602, 120 N. W. 1015; Townshend v. Thompson, 139 N. Y. 152, 34 N. E. 891; Bosch-ker v. Van Beek, 19 N. D. 104, 122 N. W. 338; Page v. Turk, 43 Okla. 667, 143 Pac. 1047; Cooke v. Cooper, 18 Ore. 142, 7 L. R. A. 273, 17 Am. St. Rep. 709, 22 Pac. 945; Investment Securities Co. v. Adams, 37 Wash. 211, 79 Pac. 625; Bryan v. Brasius, 162 U. S. 415, 40 L. Ed. 1022, 3 Ariz. 433, 31 Pac. 519 Haggart v. Wilczinski, 74 C. C. A. 176, 143 Fed. 22. Contra Lewis v. Hamilton, 26 Colo. 263, 58 Pac. 196; Bowen v. Brogan, 119 Mich. 218, 75 Am. St. Rep. 387, 77 N. W. 942.
Gage, and was originally based, it would seem, on the theory that after default the Legal title to the property was in the mortgagee, this legal title giving to him the right to retain possession after, though not before, default.99 Subsequently it was decided, in another connection, that even after default the Legal title is in the mortgagor,1 but this was not regarded as affecting the mortgagee's right to retain possession as against the mortgagor. This New Fork doctrine has, as above indicated, been adopted in other states in which the lien theory of a mortgage is expressly accepted. But it is somewhat difficult to support from the standpoint of principle, and the various suggested explanations are not entirely satisfactory.
Occasionally it has been asserted that this right of the mortgagee to retain possession is in effect a right to retain possession of a pledge, the possession thus being apparently regarded as a thing pledged, separate from the land, which is mortgaged,2 it being further said that such a right in the mortgagee to retain possession is but an incident of the debt and has no relation to any title or estate in the land.3 But this does not entirely solve the difficulty. The only method known to the common law of conferring the right of possession of land is by giving an estate in the land, and if the mortgagee has the right of possession he must, by common law standards, have an estate, even though it be an estate at will only. The conception of the possession of the land as an entity which may bo pledged as distinct from the land itself, which may be mortgaged, appears not to have suggested itself in any other connection.3a Furthermore, if this is the theory on which the mortgagee's right to retain possession is to be regarded as based, it should apply as well before as after default, and yet such right in the mortgagee is usually restricted in terms to cases in which a default has occurred.4 Moreover, in the ordinary case, when the mortgagee obtains the possession, he does not obtain it directly from the mortgagor, or under such circumstances as to indicate an intention on the part of the mortgagor, or mortgagor's transferee, to pledge the possession for the debt. This is most obviously so when the possession is obtained by force of an invalid foreclosure sale. That the mortgagor does not oppose the taking of possession by the purchaser does not indicate an intention on his part to pledge the right of possession as additional security for the debt.
99. Van Duyne v. Thayre, 14 Wend. (N. Y.) 233; Phyfe v. Riley, 15 Wend. (N. Y.) 248; Mic-kies v. Dillaye, 17 N. Y. 480; Pell v. Ulmer, 18 N. Y. 139.
1. T'rimm v. Marsh, 54 N. Y. 599.
2. Kortright v. Cady, 21 N. Y.
364, 78 Am. Dec. 255; Spect v. Spect, 88 Cal. 437, 13 L. R. A. 137, 22 Am. St. Rep. 314, 26 Pac. 203. See articles, 26 Alb. L. J. 526, 27 Id 6.
3. Brinkman v. Jones, 44 Wis. 498, 512; Bradley v. Norris, 63 Minn. 156, 65 N. W. 3.57.
Another suggested explanation of the doctrine is that since, in the particular jurisdiction, equitable defenses to actions at law are allowed, the mortgagee should be permitted to assert the existence of the mortgage, and the non payment of the mortgage debt, as a defense to any action at law by the mortgagor for possession.5 But this appears to assume that in equity one who has a mere lien on the land has a right of possession, although he has no such right at law, which is not the case, and certainly, in so far as a statute may expressly give the mortgagor the right of possession as against the mortgagee, such statute should be recognized by a court of equity to the same extent as by a court of law. The most satisfactory explanation of the doctrine appears to be to regard it as based on the desire of the courts to suppress useless litigation, since, if the mortgagee could be dispossessed at the suit of the mortgagor, a separate proceeding would be necessary to enable him to assert his rights by foreclosure.6 The doctrine nevertheless represents, it is submitted, a partial reversion to the common law conception of a mortgage. The decisions in the state of New York, and perhaps in other states as well, have not been entirely harmonious as regards the circumstances under which the mortgagee must have acquired the possession of the property in order to be able to retain it as against the mortgagor.7 In one of the later decisions in the state named, it is said that in order that the mortgagee may have this right he must have entered with the mortgagor's consent, either expressly or impliedly given, for purposes, or under circumstances, not inconsistent with their relative legal rights under the mortgage.8 If the doctrine is to be thus limited, it does not appear to be applicable to the ordinary case of a mortgagee or other person taking possession under an invalid foreclosure sale, since such person does not usually enter with the mortgagor's consent, but by force of the paramount title created by the mortgage. In other states, the view that the entry must have been with the consent of the mortgagor has been expressly repudiated.9
3a. But see Mr. Hazeltine's discussion of the Gage of Land in Mediaeval England, 17 Harv. Law Rev. 549, 18 Id. 36, reprinted 3 Select Essays Anglo-American
4. Ante, this section, note 95.
5. Kelso v. Norton, 65 Kan. 778, 93 Am. St. Rep. 308, 70 Pac. 896.
6. See Tallman v. Ely, 6 Wis. 256; Stouffer v. Harlan, 68 Kan. 135, 104 Am. St. Rep. 396, 74 Pac. Id. 6.
7. See articles, 26 Alb. L. J. 526, 27 Id. 6; Editorial note 8 Columbia Law Rev. 486.
8. Barson v. Mulligan, 191 N. Y 306, 16 L. R.A. (N. S.) 151, 84 N. E. 75. See also Becker v. Mc-Crea, 193 N. Y. 423, 86 N. E. 463. In a still later case it is said merely that the entry must be lawful, not constituting a trespass. Herr-man v. Cabinet Land Co., 217 N. Y. 526, 112 N. E. 476.
9. Burns v. Hiatt, 149 Cal. 621, 117 Am. St. Rep. 157, 87 Pac. 196; Backus v. Burke, 63 Minn. 272, 65 N. W. 459; Stouffer v. Harlan, 68 Kan. 135, 64 L. R. A. 320, 104 Am. St. Rep. 396, 74 Pac. 610; Investment Securities Co. v. Adams, 37 Wash. 211, 79 Pac. 625. See
In applying the doctrine above referred to, that a mortgagee in possession cannot be dispossessed at the suit of the mortgagor without the payment of the mortgage debt, the fact that limitations have run against the right to foreclose the mortgage has been regarded as immaterial.10 And one's rights as mortgagee in possession, it has been held, are not lost by the hostile re-entry of the mortgagor on the land.11
Agreement as to possession. Although the mortgagee, as having the legal title, is otherwise entitled to possession, it may be agreed that the mortgagor shall have it,12 and such an agreement is evidenced by provisions of the mortgage instrument which obviously contemplate the mortgagor's possession, 13 as when the mortgagor agrees to cultivate the land.14 Such an agreement is in effect a lease by the mortgagee to the mortgagor, to run until the time for payment of the principal or, ordinarily, until a default in the payment of interest.15
West v. Middlesex Banking Co., 33 S. D. 465, 146 N. W. 598. That it is necessary merely that the entry be peaceable, see Cameron v. Ah Quong, 175 Cal. 377, 165 Pac 961; Cooke v. Cooper, 18 Ore. 142, 7 L. R. A. 273, 17 Am. St. Rep. 709, 22 Pac. 945.
10. Kelso v. Norton, 65 Kan. 778, 93 Am. St. Rep. 308, 70 Pac. 896; Bryan v. Brasius, 3 Ariz. 433, 31 Pac. 519. See Burns v. Hiatt, 149 Cal. 621, 17 Am. St. Rep. 157, 87 Pac. 196; Faxon v. All Persons, etc., 166 Cal. 707, 137 Pac. 919; Tracy v. Wheeler, 15 N. D. 248, 6 L. R. A. (N. S.) 516, 107 N. W. 68; Investment Securities Co. v. Adams, 37 Wash. 211, 79 Pac. 625.
11. Townshend v. Thomson, 139 N. Y. 152, 34 N. E. 891; Finley v.
Erickson, 122 Minn. 235, 142 N. W. 198; Stouffer v. Harlan, 84 Kan. 307, 114 Pac. 385.
12. State v. Brown, 73 Md. 484, 21 Atl. 374; Youngman v. Rail-read Co., 65 Pa. St. 278; Furbush v. Goodwin, 29 N. H. 321; Brun-dage v. Home Savings & Loan Ass'n, 11 Wash. 277, 39 Pac. 666,
13. Soper v. Guernsey, 71 Pa. St. 219; Clay v. Wren, 34 Me. 187; Kranz v. Uedelhofen, 193 III. 477, 62 N. E. 239; Jamieson v. Bruce, 6 G. & J. (Md.) 74; Dearborn v. Dearborn, 9 N. H. 117; Wales v. Mellen, 1 Gray (Mass.) 512.
14. Flagg v. Flagg, 11 Pick. (Mass.) 475.
15. See the discussion in Tiffany, Landlord & Ten. Sec. 45a.
In those states in which the statute gives the right of possession to the mortgagor, in the absence of express stipulation otherwise, a provision in the mortgage instrument giving possession to the mortgagee is no doubt effective16 and is substantially a lease to him.17 On the other hand, where the statute provides that the mortgagor shall have possession until foreclosure, without providing for the case of an express stipulation to the contrary, such a stipulation was regarded as invalid as being contrary to the policy of the statute.18 It is however somewhat difficult to harmonize such a view with the doctrine19 that if the mortgagee, with the consent of the mortgagor, acquires the possession of the property, he may retain it as against the latter, until the debt secured is paid.