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to give a mechanic a lien for work already done affects the remedy only and is constitutional: Bolton v. Johns, 5 Pa. St. 145, 47 Am. Dec. 404.

Personal Liability for Taxes and assessments is discussed in the monographic note to Richards v. Commissioners of Clay County, 42 Am. St. Rep. 655-661, and in the subsequent cases of Village of Lemont v. Jenks, 197 11. 363, 90 Am. St. Rep. 172, 64 N. E. 562; Hanson County v. Gray, 12 S. Dak. 124. 76 Am. St. Rep. 591, 80 N. W. 175.

CROUSE v. MICHELL.

[130 Mich. 347, 90 N. W. 32.]

LANDLORD AND TENANT-Assignment of Lease-Collateral Security.-A covenant not to assign a lease without the consent of the landlord is not broken by an assignment of the lease as security for a debt. (p. 484.)

LEASE FOR YEARS-Assignment-Recording.-A lease for more than three years is a conveyance of such an interest in lands as to make real estate recording laws applicable to an assignment of such lease as security for a debt. (p. 487.)

LEASE Assignments of-Priority.-As between two unrecorded assignments of the same lease, the one first executed has priority. (p. 488.)

Stevenson & Butzel, for the complainants.

Walker & Spaulding, for the appellants.

348 MOORE, J. This is a bill filed by the assignees of a lease to have it sold in satisfaction of the lessee's indebtedness to them secured by the assignment. The circuit judge granted a decree according to the prayer of the bill of complaint. The case is brought here by appeal.

The terms of the lease as to assignments and transfers of the lessee's interest without the consent of the lessor will be referred to later. The complainants' assignment was not consented to by the lessor. The main question in the case is on the validity of this transfer, without consent, against a subsequent transfer, made with the lessor's consent. The defendants are the personal representative of Mr. Parker, the lessor; Mr. Michell, the lessee; the members of the firm of A. Ives & Sons, bankers, to whom the assignment with consent was made by Mr. Michell; Mr. Harmon, the trustee in bankruptcy of Ives & Sons; and the Macdonald Clothing Company, who hold from Ives & Sons a sublease for substantially the unexpired. term of the lease. The lease is of a store building at the cor

ner of State street and Woodward avenue, Detroit, and was made by Mr. Parker, party of the first part, to Mr. Michell, party of the second part, for a term of fifteen years, commencing February 1, 1895. The material provisions of the lease are as follows: "That all understandings or agreements made between the said above parties are to be void unless in writing; that the party of the second part will not assign nor transfer this lease, or sublet said premises, or any part thereof, without the written consent of said party of the first part." In an earlier part of the lease it is "provided that, in case any rent shall be due and unpaid, or if default shall be made in any of the covenants herein contained, then it shall be lawful for the said party of the first part, his certain attorney, heirs, representatives, and assigns, to re-enter and repossess the said premises, and the said party of the second part, and each and every other occupant, to remove and put out."

On August 2, 1897, Mr. Michell, who was engaged in both the clothing and grocery business, organized a corporation to 349 conduct the clothing business, under the name of the C. H. Michell Company, in which he held nearly all the stock. This company carried on this business in the premises covered by the lease from its organization until October, 1899, when it suspended business, and its stock was sold out and removed. Mr. Michell also organized a corporation under the name of the Michell Table Supply Company, to carry on the grocery business, in which he held nearly all the stock. This company occupied a portion of the premises in question from October, 1897, until shortly before the building was sublet by the defendants Ives to the Macdonald Clothing Company, in March, 1900. There was no written agreement between Michell and either of these corporations regarding their occupation of the Parker premises, except it was understood at the time of the organization of the clothing company that it was to occupy and stay in that store. During the business existence of the clothing company, the rent of the premises was paid to Parker by its checks. Mr. Parker receipted for this rent in each case to Mr. Michell individually. He knew that the two corporations were in occupancy. It does not appear that he knew anything of the terms on which they occupied. He also knew that large sums of money were expended by these two companies to fit the premises for their business.

The complainants sold large quantities of merchandise to C. H. Michell and to the C. H. Michell Company. On the 2d

of August, 1897, Michell, or the C. H. Michell Company, was indebted to the complainants in the sum of $20,000, or thereabouts, and the Michell interests desired to make arrangements for an extension of time for the payment of the $20,000 for three years, and also to provide for the purchase on credit of additional goods from the complainants, and to secure them the payment of the debt then due, and also to secure them the payment of such future indebtedness as should accrue from time to time by the further sale of goods to the C. H. Michell Company. On the second day of August, 1897, C. H. Michell 350 delivered to the complainants, through Elliott G. Stevenson, a power of attorney. It provided that Stevenson could and should execute an assignment of the lease in. question to Crouse & Brandegee whenever desired by them, "as security for the payment of any indebtedness owing by the said Carl H. Michell or the said C. H. Michell Company to said Crouse & Brandegee," and Stevenson was given all the power and authority that Michell had himself in the premises. The power conferred upon Stevenson, to use the language of the assignment itself, "is conferred for the purpose of authorizing and empowering him to execute an assignment of the lease, together with all rights and interests of the said Michell under the same, to be held and used by the said Crouse & Brandegee as security for the payment of any sum of money that said C. H. Michell shall owe to the said Crouse & Brandegee." On the same day the original lease was delivered by Michell to the complainants herein, through their attorney and agent, Elliott G. Stevenson, and this original lease, from that day to this, has never been out of the control and possession of the complainants.

In March, 1898, Mr. Stevenson, under this power of attorney, assigned and conveyed to the complainants the lease, and all Michell's rights and privileges thereunder, to secure the indebtedness contemplated by the power of attorney. This was not recorded, nor was it filed as a chattel mortgage. On October 10, 1898, Mr. Stevenson notified Mr. Michell of the assignment. On October 16, 1899, after the rights claimed by and under Ives & Sons in the lease had accrued, if they had any thereunder, and their assignment had been delivered to them, and they had taken possession under it, Mr. Stevenson gave written notice to Mr. Parker and to Ives & Sons that an assignment of the lease had been made by Michell to the complainants in March, 1898. On October 27, 1899, Mr. Parker, by letter,

Am. St. Rep., Vol. 97-31

replied to Mr. Stevenson's notice, saying that he had no previous knowledge of the transfer to Crouse & Brandegee; that, under the terms of the lease, 351 it could not be assigned without his written consent; that he had not consented to this assignment; and, further, "I do not now consent to it, and will in no way recognize it." It is not claimed that Mr. Parker had any previous notice or knowledge of the complainants' interests.

The defendants Ives & Sons were the bankers for the table supply company from its organization, and loaned it money from time to time. On August 9, 1899, this indebtedness amounted to $46,201.77, represented by five interest-bearing demand notes, indorsed by C. H. Michell, aggregating $20,000, and by an overdraft for the remainder made up of advances previously made from time to time. None of this indebtedness was contracted before December, 1898. On August 7, 1899, Mr. Don M. Dickinson, who was counsel for the table supply company, after examining statements of their condition, which they furnished, and at their request, asked Ives & Sons to make them further advances, representing that this would, in his judgment, enable the company to pull through, and that the Parker lease, which the Iveses knew to be valuable, would be assigned to secure the existing debt and future advances. To this proposition Ives & Sons agreed, and upon the strength of it forebore on the existing debt, and made further advances from time to time, the amount on October 14, 1899, being $6,416.01. On September 23d, in pursuance of this verbal understanding, a written permission was obtained from Mr. Parker, allowing Mr. Michell to sublet the premises for the unexpired period of the lease to Ives & Sons, and allowing Ives & Sons to sublet them to "such person or persons, firm, or corporation as they may elect; said premises to be occupied, however, by said Ives & Sons or their subtenants subject to and in accordance with all the requirements" of the original lease. It further stated that it should not be construed as a general waiver of the provisions of the lease relating to assignment and subletting, but to give permission to sublet only to the persons and in the manner in the permission provided.

352 On October 11, 1899, Mr. Michell executed to Ives & Sons an assignment of all his right, title and interest in the lease. to secure the advances made in pursuance of the agreement of August 9th with Mr. Dickinson, and all notes indorsed by him and discounted by Ives & Sons for the benefit of the table sup

ply company, and such further advances as might be thereafter made. This assignment and Mr. Parker's assent were delivered to Ives & Sons on October 14th. On October 16th they took possession of the leased premises, suffering the table supply company to continue therein until shortly before the transfer to the Macdonald Clothing Company. It is claimed that up to this time Ives & Sons had no notice of the transfer to the complainants, or that they had any claim on the lease. On the day following their taking possession they received notice from Mr. Stevenson, as already stated. At the time when Ives & Sons took possession there was some rent in arrears to Parker. This, under the terms of his consent, it was necessary for them to pay. They paid it, and further rent accruing up to the time of the transfer to the Macdonald Clothing Company; in all, $7,850.73. In March, 1900, Ives & Sons sublet the premises to the Macdonald Clothing Company for substantially the remaining term of the lease, the clothing company paying therefor the sum of $31,700, and undertaking to carry out the lessee's obligations under the lease and the conditions of the Parker consent.

It is claimed by complainants that the value of the lease over and above the rental it called for was $38,497.76. The defendants claim this amount is simply the present worth of the difference between the rental named in the lease and the rental offered by Mr. Stevenson, payable in monthly installments, for the unexpired term of the lease, on a five per cent basis; and that the amount realized from the lease by Ives & Sons, after deducting the amount of the rent which they had paid, was $23,849.27, which was $2,566.74 less than the amount of their demand paper, plus the advances between August 9th and October 14th.

353 The complainants claim: That the pledge or assignment of the lease as security in good faith was not in violation of the covenant not to assign or sublet. That, even if the pledge were a violation of the covenant, Mr. Parker has waived the same by his conduct after knowledge of the breach on the part of Michell. That, as between complainants and the Iveses, the complainants are entitled to priority, because their assignment was first in point of time, and neither of the conveyances has ever been recorded; because the Iveses were informed of the prior assignment to these complainants; because the Iveses did not change their position any between the time of getting the actual assignment of the lease, on October 14th, and the re

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