112 N.J. Eq. 441 | N.J. Ct. of Ch. | 1933
The bill in this cause was filed, and an order to show cause why a receiver of rents should not be appointed advised and served, on November 22d 1932, and a receiver was appointed November 29th, 1932. At the time of his appointment *442 Holmes and Von Schmid held a lease for a portion of the mortgaged premises at a rental of $90 per month, payable on the first day of the month. The receiver demanded the rent due December 1st and it was refused, the tenants claiming that they were not liable to the receiver as they had already, on October 1st, 1932, paid their landlord, the mortgagor, four months' rent in advance and they produced a receipt and canceled check showing such payment.
The question here presented is whether or not the tenant is protected with respect to such advance payment as against the receiver. While the rule applicable to this controversy is not uniform in the several states, the weight of authority is to the effect that where rent is paid in advance of the time stipulated in the lease for its payment, and a transfer of the reversion takes place thereafter, but before the time stipulated for such payment, the tenant is not protected as against the transferee who purchases without knowledge of the fact. 16 R.C.L. 917, tit."Landlord and Tenant" § 423; note to Glidden v. SecondAvenue Investment Co. (Minn.), L.R.A. 1915 C, 190 (at p.233); and this appears to be the English rule. De Nicholls v.Saunders (L.R.), 5 C.P. 589 (Eng.) 1870; 39 L.J.C.P.N.S.297; Cook v. Guerra (L.R.), 7 C.P. 132; 41 L.J.C.P.N.S.89. The variation in the rule as applied in the different jurisdictions is dependent largely upon the prevailing doctrine relating to mortgages. Where the common law doctrine that a mortgage conveys the legal title prevails, a mortgage of land taken subject to a lease carries the reversion so as to entitle the mortgagee to all rents subsequently accruing. But where the rule is that a mortgage is merely a lien, a security, the law is to the contrary and the mortgagee does not become entitled to the rents until he becomes entitled to possession after decree in foreclosure. 16 R.C.L. 918, tit. "Landlord and Tenant" § 425.
See, also, 2 Jones Mort. (8th ed.) 361 §§ 978, 981, 982;19 R.C.L. 564, tit. "Mortgages" § 373; 42 C.J. 128, tit."Mortgages" § 1704; Martin v. Martin,
In New Jersey the common law rule that a mortgage in fee created an immediate estate in fee-simple in the mortgage subject to defeasance by the payment of the mortgage money according to the condition of the mortgage prevails, except that the right to entry and possession is postponed *444
until default. Montgomery v. Bruere, 4 N.J. Law [*]260;Colton v. Depew (Court of Errors and Appeals),
The tenant is liable to the receiver for all rents accrued subsequent to the date of his appointment, notwithstanding advance payments made to the mortgagor. *445