since in such circumstances the landlord has an adequate remedy at law to regain possession of the property.1

But where the purchaser of a leasehold was placed in possession before paying the whole of the purchase money and thereafter made default and the vendor was obliged to pay the rent and taxes in order to prevent a forfeiture of the lease, a receiver was appointed at the instance of the vendor.2

§ 231. Status of Receiver of Landlord in Relation to the Property.

A receiver of a landlord, who had mortgaged the premises, is not an assignee of the lease and an action for rent should be brought in the name of the landlord and not that of the receiver.1

§ 232. Receivership Determined Upon Conditions at Time of Application.

The question whether a receiver will or will not be appointed at the instance of a landlord in litigation with his tenant is determined by the circumstances and conditions existing at the time of the application and not by conditions which may exist later on. The legality of the appointment will be determined by the facts existing at the time of the appointment.1

§ 233. Duration of the Receivership.

Where a receiver is appointed for the purpose of enforcing and preserving a lien for rent, the receiver should be discharged upon the payment of the rent charge which forms the basis of the litigation.1

1 Burton v. Pepper, 116 Miss. 139, 76 So. 762.

But in a suit by the landlord to recover the land under a provision in the lease for re-entry for breach of covenant, a receiver may be appointed over the rents and profits pending the litigation. Gwatkin v. Bird, 52 L. J. Q. B. 263.

2 Cook v. Andrews (1897), 1 Ch. 266.

1 Noble v. Brooks, 224 Mass. 288, 112 N. E. 649.

1 Burton v. Pepper, 116 Miss. 139, 76 So. 762.

1 Patterson v. Northern Trust Co., 132 Ill. App. 208 (judgment

5. Receiverships Affecting Leases.

§ 234. Receivers to Collect Rent.

We have seen that in an action to foreclose a mortgage or other lien upon real property, either because the lienor may be entitled to the rent as additional security for his lien or because it is necessary to use the income of the property to repair waste already committed or to preserve the property pending the result of the litigation, a receiver may be appointed pendente lite to collect the rent of the property involved in the action. Such a receiver while in performance of his functions is entitled to the protection and assistance of all orders that the receivership court has power to make.1 Conflicting claims as to the rent are to be decided in the receivership proceedings themselves or in actions commenced with the consent of the receivership court.2 If such a receiver resorts to litigation to enforce his rights he is bound, as other litigants, by statutory requirements concerning pleadings. Though the tenant may have claims arising before the appointment of the receiver of such a nature that they could be set-off against claims for rent, they

affirmed in 230 Ill. 334, 82 N. E. 837, and 231 III. 22, 121 Am. St. Rep. 299, 82 N. E. 840).

1 Reid v. Middleton, Turn. & R. 455.

2 Where a mortgage is made subsequent to and with notice of a lease that gives the landlord a lien upon the rents due from subtenants, the landlord is entitled to rents collected by a foreclosure receiver. Mellon V. St. Louis Union T. Co., 225 Fed. 693, 140 C. C. A. 567. A stipulation in a lease of personal property that the rental of the personalty shall be paid from the rents of real prop

erty upon which the personalty is to be used does not deprive the lessor of the personalty from collecting his rent from other sources when a receiver has been appointed to collect the rent of the realty. J. M. Overall Furniture Co. v. Superior Court, 36 Cal. App. 745, 173 Pac. 176. A tenant who has paid rent in advance contrary to the binding effect of the filing of a notice of lis pendens may be compelled to pay again. Gaynor v. Blewett, 82 Wis. 313, 33 Am. St. Rep. 47, 52 N. W. 313.

3 Everett v. Sglobiski, 125 N. Y. Supp. 455.

can not be so used against rent accruing after the appointment unless they arise from contracts to which the lienor was privy and to which he consented. Where a lease is taken subject to a mortgage the rights of the lessee continue until there is a change of ownership by foreclosure and the foreclosure receiver is bound by the terms of the lease. Conflicting claims as to whether or not a lease is part of the receivership estate are to be settled in the receivership proceeding or in a separate action brought with consent of the receivership court." § 235. Receiver of a Lessee.

It may of course happen that the person whose estate a receiver is appointed to administer is a lessee and that it may become the duty of the receiver to take possession

4 Farmers' Loan, etc., Co. v. Northern Pac. R. Co., 58 Fed. 257. When a lessee contracts with the lessor to make certain repairs at his own expense on condition that he is to be reimbursed from the rents, and the contract was made with the consent of the mortgagor, the lessee can recoup against the foreclosure receiver. Thomson Estate v. Washington Inv. Co., 146 Pac. 617.

5 Busbe v. Wolff, 171 N. Y. Supp. 253.

6 James Everards' Breweries v. Wohlstadter, 177 App. Div. 862, 164 N. Y. Supp. 899. This was an action to foreclose a mortgage on a leasehold and to have it declared that a certain "renewal" lease was subject to the mortgage. Pending the term of the lease the landlord had regained possession in summary proceedings based on failure to pay rent. The proceedings had been undefended and no notice had been given to the mortgagee. Immediately thereafter a new lease

was given to the wife of the lessor and the possession of the premises, the husband continuing the business therein conducted, under her name. On an appeal from an order vacating a receivership that had been created on the commencement of the action, it was held that the showing of fraud was sufficient to warrant the continuance of the receivership until the issue could be determined on a full trial.

Downs v. Gunther, 128 Md. 626, 98 Atl. 138. This was a proceeding, instituted in the receivership court, on petition of the receiver of an insolvent corporation, to have the respondent, an officer of the corporation, ordered to assign to the receiver a certain lease that he claimed as his own, and to have him enjoined from collecting rents from subtenants. On the hearing of an order to show cause, the matter was decided against the receiver and the decision sustained on appeal.

of the leased property as an asset of the estate. The important special point to be observed in this regard is that a chancery receiver is not, merely by virtue of his appointment, an assignee of the lease. In considering an argument based upon a provision of a lease to the effect that an assignment thereof without the consent of the lessor would give the lessor the right to claim a forfeiture of the lease the United States Circuit Court of Appeals,1 in holding that such a provision is not applicable to an involuntary assignment produced by operation of law, said: "There has been no assignment whatever, either voluntary or involuntary, of the lease. The chancery receivers are not assignees of the lease. By their appointment they acquired no title. They only obtained a right to the possession of the property as officers of the court." The receiver is merely a custodian of the property, representing the possession and authority of the court, and is not liable under the terms of the lease.2

The lease contract is in the nature of an executory contract of the owner of the estate. The receiver may adopt or reject it. He is entitled to a reasonable time in which to form a decision. He may hold possession during such reasonable time as is necessary for investigation to determine which policy will be for the best interests of the receivership estate; and in the

1 Durand & Co. v. Howard & Co., 216 Fed. 585, 132 C. C. A. 589; citing Keeney v. Home Ins. Co., 71 N. Y. 396, 27 Am. Rep. 60, and Stokes v. Hoffman House, 167 N. Y. 554, 53 L. R. A. 870, 60 N. E. 667.

2 Pennsylvania Steel Co. v. New York City Ry. Co., 190 Fed. 609; Gaither v. Stockbridge, 67 Md. 222, 9 Atl. 632, 10 Atl. 309; Bell v. American Protective League, 163 Mass. 558, 47 Am. St. Rep. 481, 28 L. R. A. 452, 40 N. S. 857; Nelson

v. Kalkhoff, 60 Minn. 305, 62 N. W. 335; see De Wolf v. Royal Trust Co., 173 Ill. 435, 50 N. E. 1049; People v. National Trust Co., 82 N. Y. 283.

8 See, § 34, supra.

4 Sunflower Oil Co. v. Wilson, 142 U. S. 313, 322, 35 L. Ed. 1025, 12 Sup. Ct. 235; Quincy, M. & P. R. Co. v. Humphreys, 145 U. S. 82, 36 L. Ed. 632, 12 Sup. Ct. 787.

5 United States Trust Co. V. Wabash W. R. Co., 150 U. S. 287,

meantime may use the property in such way as may best serve the interests of the estate. What is a reasonable time for this purpose depends entirely on circumstances and is a question of fact, though mere lapse of time may be sufficient to imply an adoption. A formal or express adoption is not necessary, but an adoption may be implied from the conduct of the receiver in respect to the property. In this respect, as in all other matters, the receiver is under the dominion and direction of the court. He is bound by any express limitations in the orders of the court setting forth his powers.10 If he decides to reject the lease, the lessor is entitled to a hearing by the court and an order to show cause in the matter should be issued as to why the lease should not be rescinded.11

37 L. Ed. 1085, 14 Sup. Ct. 86; Farmers' Loan & Trust Co. v. Northern Pac. R. Co., 58 Fed. 257; Carswell v. Farmers' Loan & Trust Co., 74 Fed. 88, 20 C. C. A. 282; Empire Distilling Co. v. McNulta, 77 Fed. 700, 23 C. C. A. 415; New York, P. & Q. R. Co. v. New York, L. E. & W. R. Co., 58 Fed. 268; Park v. New York, L. E. & W. R. Co., 57 Fed. 799; Clyde v. Richmond & D. R. Co., 63 Fed. 21; Dayton Hydraulic Co. v. Felsenthall, 54 C. C. A. 537, 116 Fed. 961; Tradesman Pub. Co. v. Knoxville Car Wheel Co., 95 Tenn. 634, 49 Am. St. Rep. 943, 31 L. R. A. 593, 32 S. W. 1097.

6 Fisher v. Columbia Nat. Bank, 54 Ind. App. 558, 103 N. E. 119; Forepaugh v. Westfall, 57 Minn. 121, 58 N. W. 689; Nelson v. Kalkhoff, 60 Minn. 305, 62 N. W. 335; Welch v. Central San Cristobal, 6 Porto Rico (Fed.) 310; Tradesman Pub. Co. v. Knoxville Car Wheel

Co., 95 Tenn. 634, 49 Am. St. Rep. 943, 31 L. R. A. 593, 32 S. W. 1097 7 Fisher v. Columbia Nat. Bank, 54 Ind. App. 558, 103 N. E. 119.

8 Easton v. Houston & T. C. R. Co., 38 Fed. 784; De Wolf v. Royal Trust Co., 173 Ill. 435, 50 N. E. 1049, reversing 72 Ill. App. 411; Link Belt Machinery Co. v. Hughes, 174 Ill. 155, 51 N. E. 179, affirming 62 Ill. App. 318.

9 Central Trust Co. v. Conti. nental Trust Co., 86 Fed. 517, 30 C. C. A. 235; Spencer v. World's Columbian Exposition, 163 Ill. 117, 45 N. E. 250; Fisher v. Columbia Nat. Bank, 54 Ind. App. 558, 103 N. E. 119; Moore v. Higgins, 53 Hun 629, 5 N. Y. Supp. 895, 2 Silvernail 298.

10 Kansas City Pipe Line Co. v. Fidelity Title & Trust Co., 217 Fed. 187, 133 C. C. A. 181.

11 Welch v. Central San Cristobal, 6 Porto Rico 310; BerwindWhite Min. Co. V. Boringner Sugar Co., 7 Porto Rico 172.