Barroilhet v. Battelle

Citations

• 7 Cal. 450

Syllabus

<p>Where plaintiff leased a lot to B for ten years, at a monthly rent, payable monthly; at the end of the term, B to have two-thirds of the appraised value of the house to be by him erected, and the lease also contained this clause: “And it is further agreed, etc., that the brick house now being built, etc., shall always be and remain, as the same is hereby declared to be, mortgaged as security for the payment of the monthly rent herein stipulatedMeld, that it was a mortgage, and that it might be foreclosed on the non-payment of the first, or any month's rent.</p> <p>And where such lessee completed the building, and subsequently mortgaged the lease to T, and afterwards assigned the lease to T for further security, and T entered as tenant and paid rent, there being back rents due from the original lessee : Meld, that T was bound to know the terms of the lease and the mortgage therein contained; that plaintiff had a right to foreclose, and sell the reversionary interest of the original lessee, to wit: two-thirds of the value of the house at the end of the term; that T, provided she paid the rent, would have the right of possession until the end of the term, the acceptance of rent from her having waived the forfeiture of the lease.</p> <p>A party holding under an assignment of a recorded lease, containing a mortgage clause, is bound to know the contents thereof, and is, therefore, subject to the mortgage, although the instrument is recorded in the book of leases, there being a privity of estate.</p>