THE NORWOOD SAVINGS BANK v. ROMER ET AL., 43 Ohio App. 224

Summary

The bank was a senior mortgagee on property owned by the mortgagor. When the mortgagor defaulted in payments on his promissory note, the bank filed an action to foreclose the mortgage. The property was sold, and the bank obtained a deficiency judgment against the mortgagor for the remaining debt due. The bank then filed a second action against the junior mortgagee seeking an accounting of rents and profits that were collected by it from the secured property. The bank based its claim on a pledge of the rents and profits that the mortgagor had granted to it. The bank also sought to apply any amount found to be due to it to its deficiency judgment. The trial court entered a judgment in favor of the junior mortgagee, and the court affirmed. It held that the bank did not have a lien on the rents and profits acquired subsequent to the execution of its mortgage until the filing of the foreclosure proceeding and the taking possession of the property by a receiver.