Under such a statute

ings, so as to be void under subsection f.172 the landlord's lien takes effect as of the date of the levy of the distress warrant, and all liens antedating the levy, including that of the trustee based on the adjudication in bankruptcy of the tenant in favor of general creditors, are superior to that of the landlord.173 Even where such a lien is given, it is waived by the landlord taking a chattel mortgage for the rent.' The lien attaches to the proceeds of the sale of the goods upon which it exists, even though the sale was had pursuant to a court order, and such order made no provision therefor.175 But where a landlord consents to the sale of property

174

Landlord's lien under Illinois statute.

- The lien of a landlord upon the property of a tenant for unpaid rent, acquired under the Illinois statute by the levy of a distress warrant within four months of the bankruptcy of the tenant, is null and void under section 67-f of the Bankruptcy Act, except as to crops grown or growing" upon the premises. Matter of United Motor Co. (C. C. A., 7th Cir.), 33 Am. B. R. 694, 220 Fed. 772.

66

172. Matter of Mossler Co. (C. C. A., 7th Cir.), 38 Am. B. R. 604; In re West Side Paper Co. (C. C. A., 3d Cir.), 20 Am. B. R. 660, 162 Fed. 110, revg. 20 Am. B. R. 289, 159 Fed. 241; Bird v. City of Richmond (C. C. A., 4th Cir.), 39 Am. B. R. 1, 240 Fed. 545, affd. 249 U. S. 174, 43 Am. B. R. 260, 39 Sup. Ct. 186, 63 L. Ed. 543.

Under section 2795 of the Georgia Code, providing that landlords shall have a general lien on the property of the tenant liable to levy and sale which dates from the levy of the distress warrant to enforce the same, the landlord has a right to a statutory lien from the beginning of the tenancy; and the lien is not created by a judgment nor "obtained through legal proceedings," so as to be void under section 67-f of the Bankruptcy Act, even though it was enforced and attached by the levy of a distress warrant within four months of the lessee's bankruptcy. Henderson v. Mayer, 225 U.

S. 631, 28 Am. B. R. 387, 56 L. Ed. 1233, 32 Sup. Ct. 699.

173. Preetorius v. Anderson (C. C. A., 5th Cir.), 38 Am. B. R. 93, 236 Fed. 723.

Landlord's lien invalid as against trustee. - In the case of Southern Railway Co. v. Wilder (C. C. A., 5th Cir.), 36 Am. B. R. 747, 231 Fed. 933, the court had occasion to consider the lien of the landlord as opposed to the trustee's lien in favor of general creditors given under the bankruptcy law, and stated as follows: "Under Civ. Code Ga. 1895, § 2787, establishing liens in favor of landlords, section 3124, empowering them to distrain for rent as soon as the same is due, and section 2795, giving them a general lien on the property of the tenant liable to levy and sale, which dates from the levy of the distress warrant to enforce the same, the lien of the landlord for rent prior to distress is inchoate, and covers no specific property, and gives no priority over the lien given to the trustee in bankruptcy by § 47-a (2) of the Bankruptcy Act, as amended by the Act of 1910." 174. In re Wolf (D. C., Iowa), 3 Am. B. R. 558, 98 Fed. 84.

175. Equitable lien on proceeds of sale of stock of goods. Where a sale of a bankrupt tenant's entire stock of goods is made without notice or objection by the landlord, under an order of the court authorizing the receiver

to which his lien has attached in bulk with other property not affected thereby he loses his lien, since under such circumstances it would be impossible to determine how much of the proceeds of sale was the product of the property covered by his lien.176 It seems that this subsection does not include a landlord's lien under the Missouri or Pennsylvania statutes.177 Cases under the law of 1867 will be found in the foot-note.178

(7) LIEN FOR TRUST FUNDS.- The rule that where a wrongdoer knowingly mingles the property of another with his own in such a manner that it becomes indistinguishable, the true owner may claim the whole mass, or if it has been disposed of may follow it or its proceeds as long as he can trace them, for the purpose of fastening an equitable lien upon the property, has been applied in bankruptcy cases to preserve liens for funds and property of others in the possession of bankrupts who have commingled them with their own funds or property. This question will be considered under § 70, post.179

180

(8) MARITIME LIENS.-Maritime liens for repairs and supplies furnished to vessels will be enforced in a court of bankruptcy,' although they are founded upon a State statute and are not strictly

to continue the business of the bankrupt, thereby divesting the landlord of his lien on the goods sold which he had by the law of the State for further accruing rent, the landlord is equitably entitled to a lien on the proceeds of such sale, even though the decree of sale made no such provision. In re Varley & Bauman Clothing Co. (D. C., Ala.), 26 Am. B. R. 104, 188 Fed. 761; Matter of Southern Hardware, etc., Co. (D. C., Ala.), 32 Am. B. R. 92, 210 Fed. 381.

176. Keyser v. Wessel (C. C. A., 3d Cir.), 12 Am. B. R. 126, 128 Fed. 281, affg. 10 Am. B. R. 586, 123 Fed. 188, and distinguishing Carroll v. Young (C. C. A., 3d Cir.), 9 Am. B. R. 643, 119 Fed. 577. See also In re Bayley (Ref., Pa.), 22 Am. B. R. 249.

Where a landlord had a lien on a part of the property of the bankrupt but waived it by agreement with the trustee in order that the property might be sold as a whole, he could, nevertheless, prove that the value of the property which was subject to his

lien was in excess of his claim in order to support his claim to priority of payment from the moneys obtained from such sale. Frederick v. Meyran (C. C. A., 3d Cir.), 48 Am. B. R. 156, 278 Fed. 503.

177. In re Consumer's Coffee Co. (D. C., Pa.), 18 Am. B. R. 500, 151 Fed. 933. In Pennsylvania, a landlord's right of distraint upon the goods and chattels on leased premises is not considered a superior lien to that of an execution against the owner of said goods. In re De Lancey Stables Co. (D. C., Pa.), 22 Am. B. R. 406, 170 Fed. 860; Jones v. Ford (C. C. A., 8th Cir.), 43 Am. B. R. 88, 254 Fed. 645.

178. In re Bowne, Fed. Cas. 1,741; Trim v. Wagner, Fed. Cas. 14,174; Bailey v. Loeb, Fed. Cas. 739.

179. See under section 70, post, subtitle "Mingling trust funds."

180. The Ironsides, Fed. Cas. 7,069, 4 Biss. 518; In re Kirkland, Fed. Cas. 7,842, 12 Am. Law Reg. 300; Matter of New England Transp. Co. (D. C., Ct.), 34 Am. B. R. 323, 220 Fed. 203.

maritime liens.181 Where a libel in admiralty was filed against a vessel before the filing of an involuntary petition in bankruptcy against the owner of the vessel, but the arrest of the vessel was not made until after the adjudication, it was held that the admiralty court would retain jurisdiction for the purpose of determining all questions of maritime liens.182 On the other hand, where a bankruptcy court has taken possession, through its receiver, of a vessel belonging to the bankrupt, its jurisdiction is exclusive and will not be ousted to permit the enforcement of a maritime lien in a court of admiralty.183

185

(9) MECHANICS' LIENS.-There was some question under the former law as to the effect of bankruptcy upon mechanics' liens.18 There is none under the present." Such a lien is not one through legal proceedings,186 and, unless so, cannot be attacked, save for intention to hinder, delay, or defraud, an element not likely to appear in liens of this class. 187 It is not lost by the adjudication of bankruptcy,

even though the lien did not attach until notice, and the notice was filed within four months preceding the bankruptcy adjudication.188 In fact, it seems even that such a lien may be perfected after bankruptcy,189 as it has been held that a State statute must be recognized which gives the creditor a specified time after the materials were furnished within which the lien may be perfected.190 Being liens created by statute, without the necessity of legal proceedings or judicial process, they are not ordinarily dissolved by an adjudication in bankruptcy within four months after they are acquired.191 A materialman's lien may be asserted whether the owner of the property against which it is claimed was solvent or insolvent at the time it was filed.192 A laborer's or materialman's lien for labor performed for, or materials furnished to, a subcontractor is not affected by the bankruptcy of the subcontractor." In determining the validity of such liens the law of the State will control.194 A failure to file a

183. In re Emslie (C. C. A., 2d Cir.), 4 Am. B. R. 126, 102 Fed. 292; Hildreth Granite Co. v. Watervliet (N. Y., App. Div.), 31 Am. B. R. 703, 161 App. Div. 420, 146 N. Y. Supp. 449.

189. In re Houston (Ref., N. Y.), 7 Am. B. R. 92; Moreau Lumber Co. v. Johnson (Sup. Ct., N. Dak.), 33 Am. B. R. 717, 150 N. W. 563; Matter of Campbell (D. C., Ala.), 39 Am. B. R. 423.

Money due under building contract. - In the case of Matter of Roeber (C. C. A., 2d Cir.), 9 Am. B. R. 303, 121 Fed. 449, revg. 9 Am. B. R. 778, 121 Fed. 444, it was held that a trustee in bankruptcy takes title to the money due to a bankrupt under a building contract, free from the liens of subcontractors for labor and materials furnished for the building, although the notices of liens were filed pursuant to the statute, but after the contractor had filed his petition in bankruptcy.

190. Hildreth Granite Co. v. Watervliet (N. Y. App. Div.), 31 Am. B. R. 703, 161 N. Y. App. Div. 420, 146 N. Y. Supp. 449.

191. Kemp Lumber Co. v. Howard (C. C. A., 8th Cir.), 38 Am. B. R. 608, 237 Fed. 574.

193

192. Lloyd v. Sickler (Wash. Sup. Ct.), 38 Am. B. R. 785, 162 Pac. 979.

193. Crane Co. v. Smythe, 11 Am. B. R. 747, 94 N. Y. App. Div. 53, 87 N. Y. Supp. 917; Kane Co. v. Kinney, 9 Am. B. R. 778, note, 174 N. Y. 69, 66 N. E. 619; In re Cramond (D. C., N. Y.), 17 Am. B. R. 22, 145 Fed. 963; Matter of Grissler (C. C. A., 2d Cir.), 13 Am. B. R. 508, 136 Fed. 754, holding that where a mechanic's lien has been perfected as provided by a State statute, an action to enforce it will not be stayed by the bankruptcy court. Fehling v. Goings, 13 Am. B. R. 154, 67 N. J. Eq. 375; Nelson Supply Co. v. Leary (Utah Sup. Ct.), 39 Am. B. R. 755, 164 Pac. 1047, quoting Collier on Bankruptcy (9th ed.), 945.

194. Morgan v. First Nat. Bank (C. C. A., 4th Cir.), 16 Am. B. R. 639, 145 Fed. 466; Lowe & Co. v. Leary (Utah Sup. Ct.), 39 Am. B. R. 774, 164 Pac. 1062; Fels v. Leders & Co. (C. C. A., 6th Cir.), 40 Am. B. R. 851, 246 Fed. 436.

Validity under Washington code.Petitioner contracted with the bankrupt to furnish labor and materials for putting in certain chain and railing for the bankrupt. While this work

notice of lien as required by the statute, or otherwise to comply with the statute, affects the validity of the lien and it is not enforceable as such.195 A mechanic's lien, defective upon its face, is not entitled to priority of payment in the distribution of the funds.196 Matters dealing with the priority of payment of mechanics' and laborers' claims are considered under § 64, ante.19 Akin to mechanics' liens are all liens which exist by, or whose priority rests on, special statutes.198

(10) MORTGAGES.-(I) In general.- Where a mortgage was given for a present consideration upon property remaining in the possession of the mortgagor, it is valid, in the absence of proof of actual fraud; the knowledge of the mortgagee that the mortgagor was unable to pay his debts does not invalidate the mortgage if a present valid consideration exists at the time of the execution of the mortgage.199