215; Sutherland v. Long, 273 Ill. 309, 112 N. E. 660; Williams v. Williston, 315 Ill. 178, 146 N. E. 143.

Unless a mortgagor or owner of the equity has the right to an accounting, a junior mortgagee has none.

2 Jones, Mortg. 7th ed. 1915, § 1118a, p. 740.

The pledgee of the note as collateral is for all practical purposes its owner, without regard to latent equities.

&

Jones, Collateral Securities Pledges, 3d ed. 1912, § 89, p. 105; Hosmer v. Campbell, 98 Ill. 572.

The pledgee for valuable consideration cannot be subjected to latent equities.

Mullanphy Sav. Bank v. Schott, 135 Ill. 655, 25 Am. St. Rep. 401, 25 N. E. 640; Silverman v. Bullock, 98 Ill. 11; Miller v. Larned, 103 Ill. 562; Dillard v. Propst, 212 Ala. 664, 103 So. 863.

Payment, by rent or otherwise, to the pledgeor cannot affect the pledgee, Richard L. Williams, who has not received the rents or the payments.

Mayo v. Moore, 28 Ill. 428; Withers v. Sandlin, 36 Fla. 619, 18 So. 856; 2 Jones, Mortg. 7th ed. 1915, § 847, p. 363.

The note carries the mortgage and all rights appertaining thereto.

Union Mut. L. Ins. Co. v. Slee, 123 Ill. 57, 13 N. E. 222; 2 Jones, Mortg. 7th ed. 1915, § 834, p. 331.

Messrs. William Slack and Abram E. Adelman, for defendant in error:

In a pledge of personalty, the legal ownership of the property remains with the pledgeor, and only a special property passes to the pledgee.

Union Trust Co. v. Ridgon, 93 Ill. 458; Sheppard v. Berkshire L. Ins. Co. 161 Ill. App. 467.

A mortgagee in possession is in equity accountable for rents and profits of the estate and is bound to apply them in reduction of the mortgage indebtedness.

2 Jones, Mortg. 7th ed. pp. 733, 739, 740, §§ 1114, 1118, 1118a; 1 Hilliard, Mortg. p. 440; Rooney v. Crary, 11 Ill. App. 213; Fitts V. Davis,

42 Ill. 391; Strange v. Allen, 44 Ill. 428; Wood v. Whelen, 93 Ill. 153; Ten Eyck v. Casad, 15 Iowa, 524; Harrison v. Wyse, 24 Conn. 1, 63 Am. Dec. 151; Clark v. Paquette, 67 Vt. 681, 32 Atl. 812.

A mortgagee in possession is not allowed to have commission for collection of rents.

Harper v. Ely, 70 Ill. 581.

Once a mortgage, always a mort

gage.

Bearss v. Ford, 108 Ill. 16; Halbert v. Turner, 233 Ill. 531, 84 N. E. 704; De Voigne v. Chicago Title & T. Co. 304 Ill. 177, 136 N. E. 498; Williams v. Williston, 315 Ill. 178, 146 N. E. 143.

It was error to appoint the Chicago Title & Trust Company receiver, without requiring the complainant to give bond, and without a finding in the order of appointment, dispensing with the giving of bond, as required by statute.

Watson v. Cudney, 144 Ill. App. 624; Ayers v. Graham S. S. Coal & Lumber Co. 150 Ill. App. 137; Schoencke v. Chicago Title & T. Co. 178 Ill. App. 387; Gibberman v. Stangal, 208 Ill. App. 298; James H. Rice Co. v. McJohn, 244 III. 264, 91 N. E. 448.

The order appointing the receiver was interlocutory, and may be reviewed upon final disposition of the

case.

Vandalia v. St. Louis, V. & T. H. R. Co. 209 Ill. 73, 70 N. E. 662; Bagley v. Illinois Trust & Sav. Bank, 199 Ill. 76, 64 N. E. 1085; Farson v. Gorham, 117 Ill. 137, 7 N. E. 104.

There was error in not permitting the defendant to give bond, and in not removing the Chicago Title & Trust Company, upon his motion.

Ellguth v. Litzinger, 199 Ill. App.

381.

It was error to deny the motion to tax the costs of the two erroneous receiverships against the complainant.

34 Cyc. p. 367; Einstein v. Lewis, 54 Ill. App. 520; Myres v. Frankenthal, 55 Ill. App. 390; Torrence v. Shedd, 202 Ill. 498, 67 N. E. 168; James H. Rice Co. v. McJohn, 244 Ill. 264, 91 N. E. 448.

Stone, J., delivered the opinion of the court:

Plaintiff in error filed a bill to foreclose a trust deed given as a mortgage by George J. Williams on certain property in the city of Chicago, and hereinafter referred to as a mortgage. The circuit court of Cook county on December 13, 1923, entered a decree finding that plaintiff in error, complainant therein, was entitled to foreclosure of his lien for the sum of $47,697.80, less certain rents collected by the Chicago Title & Trust Company subsequent to December 30, 1921. De

fendant in error, Marmor, was made a party defendant as one claiming to own the equity of redemption secured to him by sheriff's deed arising out of a sale to Marmor as judgment creditor. Williams, the mortgagor under plaintiff in error's mortgage, claimed to own the equity of redemption. The circuit court found, however, that Marmor was owner of the equity of redemption. Williams appealed to this court from that part of the decree holding Marmor to be the owner of the equity of redemption in the property, and on that appeal this court affirmed the decree in that respect. Williams v. Williston, 315 Ill. 178, 146 N. E. 143. Marmor contended in the circuit court that he was entitled to have certain rents collected by Williams, amounting, after the payment of expenses, to $7,955.88, applied on plaintiff in error's mortgage, on the ground that Williams was a mortgagee in possession at the time he collected the rents, and was therefore bound to so apply them for the benefit of Marmor as junior lienor. The circuit court found against this contention, and Marmor appealed to the Appellate Court for the First District, and that court reversed the decree of the circuit court in that regard, holding that Marmor, as a judgment creditor with a lien on the equity of redemption, and later as owner of the equity of redemption, was entitled to have the sum of $7,955.88 credited on the mortgage foreclosed by plaintiff in error. The cause comes here by certiorari.

While the facts of this case were set out in Williams v. Williston, supra, it is necessary, in order to understand the issue here involved in this somewhat complicated set of circumstances, to again state them.

On May 28, 1914, George J. Williams executed his note for $40,000, payable in five years to his own order, and indorsed by him, and to secure the payment of this note executed, with his wife, a trust deed of the premises to Charles S. Williston, as trustee. This note and trust

deed came into the hands of plaintiff in error as collateral for an indebtedness which at the time of the foreclosure amounted amounted to $45,000 with interest. In September, 1914, George J. Williams and his wife conveyed the premises, subject to this trust deed, to Leo Marion, and took back notes amounting to $8,500, the payment of which was secured by a trust deed as second mortgage on the property. Marion subsequently sold the premises, and the same by mesne conveyances later were conveyed to Samuel Meyerowitz subject to the two incumbrances. By reason of default in payment of the notes secured by the second mortgage, Williams on October 28, 1918, filed a bill to foreclose the same, and plaintiff in error was appointed receiver, took possession of the property, and collected the rents until September 28, 1920. On August 6, 1920, a decree of foreclosure and for sale was entered on the second incumbrance for the sum of $11,034.50, and on sale on September 3 following, Williams purchased the equity of redemption for $10,000 and took a deficiency decree for the balance. Between September 28, 1920, and December 20, 1921, Williams was in possession and collected rents on the premises, the net amount of which is, as we have seen, $7,955.88. Thereafter, by agreement entered into by plaintiff in error as mortgagee of the first lien, Meyerowitz, the owner of the equity of redemption, and Williams, the latter was to remain in possession and collect rents, and certain money was paid to Meyerowitz, who executed a quitclaim deed to Williams, which he placed in escrow. The agreement stated that it was made for the purpose of settling all differences and relieving the property of incumbrances. By its terms Meyerowitz had until the 1st of May, 1921, to pay certain specified amounts and execute a first mortgage on the property for $35,000 and to take the property cleared of any other incumbrance. The contract also provided that, in case

he did not exercise that option by the 1st of May, the quitclaim deed was to be delivered to Williams, and Meyerowitz's interest therein extinguished. Meyerowitz did not exercise his option, and the quitclaim deed to the equity of redemption was delivered to Williams, who had it recorded on June 6, 1921. On September 26, 1921, which was after the twelve months in which the owner of the equity of redemption might redeem from the sale of the property under the second mortgage, defendant in error, Marmor, obtained a judgment by confession against Marion, the mortgagor in the mortgage which had been foreclosed. On October 25, 1921, Marmor redeemed by placing in the sheriff's hands the amount necessary to make redemption from the master's sale of September 3, 1920. Williams on that day surrendered his certificate of sale to the sheriff and took down the redemption money. Thereafter, no further redemption being made, on December 30, 1921, a sheriff's deed was delivered to Marmor. When Marmor on September 26, 1921, secured a judgment against Marion, Williams was in possession of the property collecting the rents and had title to the equity of redemption by a deed from Meyerowitz, made in pursuance of the agreement of December 13, 1920, hereinbefore referred to. He had been in possession collecting the rents since September 28, 1920, and the main question in this case is as to the character of his possession. The Appellate Court held that Williams' possession during the time in which the rents in question accrued was that of a mortgagee, also holding that he was, in fact, the owner of the first mortgage in which he appears as mortgagor, for the reason that he had it up as a pledge, only, with plaintiff in error who filed the bill to foreclose it. The Appellate Court was of the view that, being, in fact, the owner of the first mortgage, Williams was a mortgagee in posses

sion, and liable to account to junior lienholders. It is not contended that a mortgagee of a prior mortgage in possession of the property is not bound to account for the rents and profits, but the contention is that Williams did not have such possession of the property.

It is the rule that, if one takes possession as a mortgagee of a prior mortgage he must

Mortgage-duty

the of mortgagee

for rents.

liability of

mortgagee

entering other

wise than as such.

account for rents for the bene- to account fit of junior lienholders, even though he later acquires the equity of redemption by purchase. purchase. The character of his possession at the time he enters determines the application of the rule. Strang v. Allen, 44 Ill. 428; 2 Jones, Mortg. 7th ed. § 1118; Harrison v. Wyse, 24 Conn. 1, 63 Am. Dec. 151; Clark v. Paquette, 67 Vt. 681, 32 Atl. 812. In order to charge a mortgagee with rents and profits for the benefit of a junior mortgage it must be shown that such mortgagee occupied the premises as mortgagee. If the mortgagee came into possession under a title derived from the mortgagor, or in any method other than as mortgagee, he is not chargeable with the rents and profits of the mortgaged premises. The reason underlying the rule requiring a mortgagee in possession to account for the rents and profits is that possession is not an incident to the rights of a mortgagee, and when he receives the profits arising from such possession he holds them not for his own benefit but for the benefit of the mortgagor, and must account therefor. A junior mortgagee who by reason of his lien stands in the place of the mort- -right of junior gagor may enforce mortgagee to accounting. an accounting to the same extent that such accounting might be enforced by the mortgagor. Plain v. Roth, 107 Ill. 588; Gaskell v. Viquesney, 122 Ind. 244, 17 Am. St. Rep. 364, 23 N. E. 791;

Hart v. Chase, 46 Conn. 207; Van Duyne v. Shann, 41 N. J. Eq. 312, 7 Atl. 429; 2 Jones, Mortg. 7th ed. § 1114.

-right to rents and profits.

If George J. Williams had possession and collected the rents by any authority other than as mortgagee in possession he is not required to account for the rents. Rents and profits are the incidents of possession of the equity of redemption, and may be collected by the owner thereof until the period of redemption expires. At the time of the foreclosure sale under the second mortgage, on September 3, 1920, Meyerowitz was owner of the equity of redemption and had a right to the rents and profits. Certainly, it could not be said that from the date of the sale under the second mortgage to September 26, 1921, when Marmor secured his judgment against Marion, Marmor occupied the position of a junior lienholder, with the right to enforce such an accounting for rents as the owner of the equity of redemption might have had. He had no claim at all against this property at that time, and was in no wise interested in the rents collected prior to his judgment. Meyerowitz had the equity of redemption, and he is not seeking to have this rent money applied to the plaintiff in error's mortgage. By the agreement of December 13, 1920, referred to, Meyerowitz consented to the possession of the property by George J. Williams and his collection of the rents. Williams went into possession on September 28, 1920, while plaintiff in error was receiver of the property, and appears to have done so by permission of plaintiff in error. By the agreement of every one interested in the property on December 13, 1920, the receivership of plaintiff in error ceased and the possession of Williams was ratified and continued in him. There is nothing in the record that tends to establish that Williams was in possession as mort

gagee after the making of the agreement on December 13, 1920. In fact, that agreement disproves any such possession, and, on the contrary, shows him to be in possession through an agreement with the owner of the equity of redemption. If he became a mortgagee in possession it must have been between September 28, 1920, when he took possession and began the collection of the rents, and December 13, 1920, when the agreement referred to was made. Defendant in error contends, and the Appellate Court held, that Williams went into possession as a mortgagee. The record does not so show. It does show that he

went into posses- -person in sion through the possession not sufferance of plain- mortgagee. tiff in error, who was then receiver.

Since the receiver was the only one entitled to possession Williams had no right to take possession as mortgagee. Meyerowitz did not object to Williams' possession between September 28 and December 13, and it is evident that his possession then was by mutual agreement of the receiver and the owner of the equity of redemption, and not as mortgagee. It would avail nothing to say that he went into possession as mortgagee under the second mortgage, since that mortgage debt, including the deficiency decree, had been fully paid and discharged for some months when Marion borrowed the money for which defendant in error took the judgment which formed the basis of his redemption. We do not understand this to be the contention of defendant in error or the holding of the Appellate Court. As we understand it, defendant in error contends, and the Appellate Court held, that Williams is in fact the owner of the $40,000 mortgage, and was therefore a mortgagee in possession under that mortgage. Certainly, it cannot be said that Williams was both mortgagor and mortgagee of the $40,000 mortgage. Plaintiff in error held the mortgage as a pledge