McLean v. Klein

DILLON, Circuit Judge. The clause in the lease by which the lessee, in terms, gave to the lessor a lien upon the furniture, etc., in the-hotel to secure the rent reserved, was valid between the parties. Although it was declared that “all unpaid rent shall be construed to be a mortgage lien” upon the furniture, etc., yet, technically, it may be conceded there was no mortgage of the property, because no language is used to convey or transfer the title thereto. Admitting that the instrument is inoperative as a legal mortgage, still it is effectual to create an equitable mortgage, or at least a lien in the nature of an equitable mortgage, which does not depend for its validity upon a sale or transfer of the title to the property to which it attaches, and which is good in equity as against the lessee or his assignee in bankruptcy. Whether it could be maintained against an attaching creditor, or a purchaser from the lessee without notice, I need not inquire. In essence, a mortgage is but a lien upon the property mortgaged, and it is evident here that the parties agreed that the landlord should have security for his rent upon certain personal property used upon the demised premises, and to carry that intent into effect they stipulated that all such property should be subject to the payment of the rent which should be construed to be a lien thereon. Such a provision is valid, and contravenes no statute of the state to which I have been referred. Indeed, in many of the states there are statutes giving a landlord just such a lien or right as is here provided for by the agreement of the parties. The right in the landlord was perfect as against the bankrupt, and the assignee in bankruptcy takes subject thereto. Abbott v. Godfroy, Mann. (Mich.) 178; Holmes v. Hall, 8 Mich. 66; Hil. Mortg. c. 22: Langdon v. Buel, 9 Wend. 80; Atwater v. Mower. 10 Vt. 75. The Case of Dyke [Case No. 4,227], cited by the appellant, was probably controlled by the Michigan statute, and it was not intended by the learned judge who decided it to 253 deny the validity of equitable liens on property duly created by the contract of the parties, when such liens are good upon the general principles of the law and do not conflict with any statutory provision. The lien provided for in the case under consideration was broad enough to secure all rent becoming due down to the bankruptcy. Affirmed. NOTE. By 12 & 13 Viet c. 106, § 184, the rights inter alia of execution creditors, and of mortgagees, and of persons having a lien upon any part of the property of the bankrupt before the date of the filing of the petition or fiat in bankruptcy, are preserved. The previous statute was C Geo. IV. c. 16, § 108. Decisions as to rights of equitable mortgagees: Ex parte Sheppard, 2 Mont., D. & D. 431; Ex parte Anderson, 3 De Gex & S. 600; Ex parte Barnett, 1 De Gex, 194; Id. 531; Ex parte Heathcoate, 2 Mont., D. & D. 711; I’d. 587; 3 Mont., D. & D. 129, 458.