Boylan v. Meeker, 2 McCart. (N. J.), 310; Perrine v. McDonald, 1 Id. 531, 536: Clapp v. Fullerton, 34 N. Y., 199; Conley v. McDonald, 40 Mich., 150; Day v. Day, 3 Gr. Eq. (N. J.), 364; Whitenalk v. Stryker, 1 lb. 9; Davies v. Reis, 13 L. T. (N. S), 609; Boulton v. Boulton, 37 L. J., 19; Tool v. Tretheway, 4 H. L., 201. See also article on this subject in Central Law Journal, Vol. 18, p. 83.

Respectfully submitted,

J. H. COLLINS, Counsel for Executor.

DEED COVENANT.

[Superior Court of Cincinnati, General Term, February, 1887.]

202

HENRY G. STEIBLE V. CINCINNATI, LEBANON AND NORTHERN RY. Co. A stipulation contained in a deed, whereby the grantee has permission to enter upon land adjacent to that conveyed and make certain improvements there, on condition that such grantee make good, "by retaining wall or otherwise," any damage thereby occasioned to the buildings of the grantor, does not constitute a covenant running with the land.

PECK, J.

The petition in this case alleges that the plaintiff had sold to the Cincinnati Northern Railway Co., certain lands upon which the company proceeded to construct a part of its railway; that in the deed of the land it was stipulated that the company should have the right to enter upon and make any necessary slope or fill on his, plaintiff's, adjoining land on the west side of the track; provided, however, that said railroad company should make good by retaining wall or otherwise any damage done to the foundation of his barn. And the petition alleges further that the first company did make a slope on the land which damaged the foundation of his barn, and that the defendant company refused to build the retaining wall, and prays for specific performance, and also for damages.

The answer alleges that the defendant, the Cincinnati, Lebanon and Northern Railway Co., purchased the railway and property of the Cincinnati and Northern Railway, and now holds the same, but asserts that it did not assume any of the liabilities of the latter, and admits the making of the deed by plaintiff to the Northern Railway Company as alleged in the petition. A general demurrer to this answer was overruled below, and there being no denial of the allegation of the assignment of the Northern Company to the Cincinnati, Lebanon and Northern, by reply or otherwise, judgment for the defendant was entered at special term. The petition in error is prosecuted to reverse that judgment.

The question, in a word, is whether or not the covenant in the deed from the plaintiff to the Northern Railway Co., to make good by retaining wall or otherwise, any damage done to plaintiff's barn, is a covenant which runs with the land so as to be binding upon the present holder of the railway. It is our judgment that this covenant is not one which runs with the land. In the case of Masury v. Southworth, decided by Judge Gholson in the 9 Ohio St., 341, there is language which seems to point almost directly to this case. The Judge says: "In determining whether the particular covenant was intended to run with the land, the fact that

its particular subject-matter was not in existence at the time the estate was created, is undoubtedly very important and material, and in many instances might be regarded as a controlling consideration. In such a case, though the subject-matter be connected with the land, as a house or a wall to be built upon it at a future day during the term, yet if nothing more appeared to indicate the intent, it might be regarded as a personal covenant and not running with the land."

That was a case of a covenant contained in a lease. The case now before us is that of a conveyance by a deed, and the damage to be made good was not that which might accrue upon the land conveyed, but upon other land of the grantor which was not conveyed. In a very recent case, Austelbury v. Oldham, 29 Chancery Division, 750, the court of appeal reviewed the English decisions upon this subject. The facts in that case were that a party had granted to certain trustees a piece of land over which it was covenanted that the trustees should construct and maintain a road of which the public should have the use, but in which the owner of the property granted should have certain special rights and privileges appurtenant to the remainder of his property. The trustees afterwards sold the property covered by the road to another party, and the court of appeal held that the covenant to construct and maintain the road was not one that ran with the land, and not binding upon the assignees. The language in the case at, bar does not, in fact, constitute a covenant to construct a wall; it is that the company shall make good the damage "by retaining wall or otherwise." It might be made good by payment of money, which could hardly be a covenant to run with the land. Nor does the language alleged purport to bind the "assigns" of the grantee, which, though not decisive, is a fact of some significance.

The judgment is affirmed.

FORCE and HARMON, JJ., concur.

J. A. Jordan and N. Bird, tor plaintiff.

Ramsey, Maxwell & Matthews, for defendant.

DEEDS MORTGAGES.

[Franklin Common Pleas.]

†JOHN O'DONNELL V. MARY DUM AND HER HUSBAND.

203

1. In a suit by a mortgagor to redeem the mortgaged property and compel a reconveyance from the mortagee, upon the motion of the plaintiff for a receiver, such an appointment will not be made, if there is anything due to the mortgagee, or the mortgagee is not mismanaging the property, or has not committed, or is not about to commit a fraud which has resulted, or will result in a loss of the property, or in an irreparable injury to the plaintiff.

2. Upon the hearing of the motion, the court need not look beyond the affidavit of the mortgagee, to determine whether anything is due, although the plaintiff controverts the affidavit. The merits of the case on such a question cannot be tried on affidavits.

3. It is the duty and right of a mortgagee in possession, to pay the taxes and assessments imposed, and the cost of improvements made, or ordered to be made by public authority, according to law, and which is a lien on the property, the cost of necessary repairs and improvements made by him, and of permanent improvements made by the consent of the mortgagor, and prior incumbrances, †The judgment of the superior court in this case was affirmed by the Supreme Court without report, December 18, 1891. Minshall and Dickman, JJ., dissented.

and any other incumbrances, if authorized by the mortgagor; and in determining whether anything is due to the mortgagee, such payments and disbursements made by the mortgagee may be considered as well as the mortgage debt. 4. A mortgagee is answerable for rents and profits, whether any were or were not received.

PUGH, J.

This action was brought by the plaintiff, as a mortgagor, against Mary Dum, his daughter, and as mortgagee.

The plaintiff executed and delivered to Mary Dum, a quit claim deed for the property described in the petition, being a lot and two buildings, in which he had a leasehold estate granted to him by R. E. Neil. At the same time Mary Dum signed a written agreement, by which she agreed to re-convey the property whenever the plaintiff would pay her $150.00, which she had assumed to pay for him. The plaintiff, before he commenced this suit, tendered Mary Dum the $150.00 and demanded a reconveyance of the property. The object of the suit is to compel Mary Dum to allow the plaintiff to redeem the property, and to compel her to re-convey the property. The plaintiff moves the court to appoint a receiver to collect the rents. The mortgagee is in possession of the property, and she has been in possession since November 10, 1886, when the deed was executed.

If the mortgagor was in possession, there would be no difficulty in deciding whether a receiver should be appointed.

But the doctrine of courts of equity, touching the appointment of receivers in cases where the mortgagee is in possession, and the mortgagor suing to redeem, applies for a receiver, is well established. The only difficulty is in its application to a particular case.

It is this: A court of equity will appoint a receiver, if there is nothing due to the mortgagee, or if he is mismanaging the property, which would include waste, loss and destruction of property; or if he has committed, or is about to commit, a fraud which will eventuate in loss of the property, or in irreparable injury to the mortgagor.

The rationale of this doctrine is, that the mortgagor is entitled to the rents and profits of the property from the very time that his right in its possession accrues.

The negative side of part of this rule or doctrine, is thus stated in Quinn v. Brittain, 3 Edw. Chy. Rep. 314:

"A receiver will not be appointed against a mortgagee in possession, who will swear that something remains due."

In one of the pony text-books, (Boone on Mortgages, 184), the rule

is couched in substantially the same language, thus:

"In a suit by the mortgagor to redeem, a receiver will not be appointed as against the mortgagee, so long as there is a balance due him on the mortgage debt, unless he is mismanaging the property."

In Beckford's case, 13 Vesey, 377. Lord Eldon declared that he would not appoint a receiver upon the application of a mortgagor, if the mortgagee would swear that a sixpence was due to him from the mortgagor.

To defeat the appointment of a receiver, it is sufficient that the mortgagee makes an affidavit that something is due him. It may not be true, and may be proved to be untrue on the final hearing; it may be contested by the mortgagor; but the court cannot, on the application for receiver, be controlled by such considerations; because upon such an application,

Superior Court of Cincinnati.

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the question of indebtedness cannot be tried. The court has no right to determine it upon affidavits.

The account between the mortgagor and mortgagee can only be settled on the final hearing. The authorities are in harmony on this proposition.

In the case under consideration, it is seriously claimed that some fraud has been committed by the mortgagee, Mary Dum; but there is nothing in the petition or affidavits to support such a contention.

The petition does not charge any fraud, either in express terms or by implication.

In O'Donnell's affidavit, he says that he did not know he was executing a deed; that he did not know the difference between a quit claim deed and a mortgage; that he did not know anything about such matters; that he did not know that the effect of the deed was to divest him of the title; that he did not read the paper, and that he trusted to Mary Dum to treat him fairly, which she did not do. But what if all this is true? It imputes no fraud to Mary Dum. O'Donnell's ignorance is no fault of hers. In external form there is a large number of varieties of fraud; but in all the "multitude of agreements, transactions and dealings of mankind," intrinsically, fraud consists of two classes, false representations and fraudulent concealment. But neither the petition nor affidavit of O'Donnell alleges either of these against Mary Dum. The plaintiff was not induced to make the deed, or accept the agreement by any untruthful representation or fraudulent concealment made by Mary Dum. statement of O'Donnell that he expected his daughter, Mary Dum, to treat him fairly, and that she did not verify his expectation, is no proof of fraud. It is not claimed that O'Donnell's want of legal knowledge as to the effect of a deed, or as to the difference between a deed and a mortgage, was unduly taken advantage of by Mary Dum, or that it was her fault that he did not read the deed. It is not perceived that there is even the most infinitesimal quantity of evidence in this case to prove fraud. Hence a receiver cannot be appointed on that ground.

Has Mary Dum mismanaged, or is she now mismanaging the property?

Several witnesses, real estate men, agree that the "buildings are in need of repairs, that they need paint, and that the fences are badly kept and in need of repairs." But it is not shown by the testimony of either of them that this condition was caused, either actively or passively, by Mary Dum. Its condition at the time she took possession, is not proved. The plaintiff, who ought to know what its condition was, and is, testifies that the buildings and lot "are in bad repair, and the salable and rental value of said premises is rapidly depreciating under the control and management of said Mary Dum."

No particular acts of mismanagement or waste are specified; he only gives his conclusion, his inference, which hardly rises to the dignity of evidence. But it is met and answered by Dum and his wife, (1) by an equally general statement that the value of the property has been enhanced $100 by the improvements which have been put on it, and, (2) by a specific statement of some of the improvements which were made and their cost, namely, a sewer costing $38.00, a fence costing $6.00, and repairs on the two houses costing $19.00.

So the conclusion is that there is not enough evidence to prove that the mortgagee has been, or is, mismanaging the property.

The remaining question is: Is there anything due to the mortgagee?

It is not simply whether there is any of the $150 due, but whether there is anything due to the mortgagee for money which it was her right and duty to pay on, or for, the property.

When the mortgagee has been, and is, in possession of the mortgaged property, and the mortgagor sues to redeem the property, equity creates an account between them which must be settled before the property can be recovered by the mortgagor. On such an account the mortgagee is chargeable with the rents and profits, whether any were, or were not received; and he is entitled to a credit against the rents and profits for the cost of repairs and improvements, paid by him, for taxes and assessments legally imposed by public authority, and paid by him, for money paid by him on prior incumbrances to protect the title, and for costs in defending it.

It is the duty of the mortgagee in possession, to preserve the estate in as good condition as it was when he took possession. He is not amenable, however, to the same degree of care that a person would take of his own property. He is only bound to make necessary repairs and improvements, but these do not include the repair of defects caused, in the ordinary way, by waste and decay. He is entitled to an allowance for permanent improvements made by the consent of the mortgagor.

It is not only his duty to pay the taxes, and assessments levied, by proper authority, but also his right to make such improvement, or pay for improvements made, by order of the proper authority, and the cost of which has been made a lien on the property, such as sewers and paving of streets and sidewalks.

For all these payments and disbursements he is entitled to indemnity out of the property. He is not limited to a pecuniary recovery by judgment; the mortgagor must pay it before he can recover the property; it is in the nature of an equitable lien against the property.

The contention between the plaintiff and Mary Dum should be settled by these rules.

Mary Dum and her husband testify that they have, at the plaintiff's request, paid more than $250 to relieve the property from the liens against it, and that besides this they have paid the taxes, and the "interest" or rent on the lease of R. E. Neil, to secure which there was a prior lien. And, further, they say, that for repairs on the houses and a fence, they paid $25, and for a sewer $38.

It is true the plaintiff denies this; but the evidence of two witnesses makes a preponderance over that of one against them, when they testify to the same questions, all having equal opportunities for knowing about what they testify, and being of equal credibility. It is not shown whether the sewer was ordered by public authority, or was a private sewer. If it was of the first class, it was a matter of indifference whether the plaintiff consented to its construction; but as the defendants failed to prove what its character was, it will be eliminated from the case on this hearing.

The affidavits of the defendants, also, fail to specify that the liens. amounting to $250, which they paid, were prior to the mortgage of Mary Dum; but that seems to be the fair and reasonable inference from their statements, that they paid it "to relieve the property from liens," and that it was done to "save it from being sacrificed at judicial sales."