354. It is urged by the plaintiff that it is shown that the defendant's section is to be used with the comb foundation or attachment made by the putting by the user of pieces of wax on the section. But this is not a mechanical equivalent in the blank for the longitudinal groove, any more than, in Gage v. Herring, 107 U. S. 640, 648, 2 Sup. Ct. Rep. 819, the person who shovelled or swept up, by manual labor, the meal deposited upon the floor of the dustroom, was a mechanical equivalent, in the sense of the patent law, for the automatic conveyor shaft in the dust-room. The decree of the circuit court is affirmed.

FREEDMAN'S SAVING & TRUST Co. et al. v. SHEPHERD et al.
SHEPHERD v. THOMPSON.

(April 30, 1888.)

1. MORTGAGES-RIGHTS OF MORTGAGOR-PLEDGE OF RENTS.

Where land is mortgaged to secure payment of notes, with power of sale on default, reserving to the mortgagor the right to occupy the. premises and take the rents until default, a pledge of rents accruing before sale under the mortgage will pass a right thereto against the mortgagee.

2. SAME-APPOINTMENT OF RECEIVER.

If a mortgage provides that until default the mortgagor shall be permitted to take the rents, and confers a power of sale in case of default, a subsequent conveyance of the property in trust to secure a debt with a covenant that the rents shall be applied in payment of the debt, gives a right to rent accruing before sale under the mortgage superior to the claim of the mortgagee, though on his application a re ceiver has been appointed, to whom the rents have been paid.

3. CLAIMS AGAINST UNITED STATES-TRANSFER.

Rev. St. U.S. § 3737, providing that a transfer of a contract by the person to whom it is given shall annul it so far as the United States is concerned, does not refer to a lease of land to be used for public purposes.

4. SAME.

Where a demand for rent due from the United States is assigned as security for an indebtedness before the claim has been allowed, the assignee may assert his right thereto against persons named in warrants subsequently issued by the treasury therefor, and against a mortgagee of the premises not entitled to the rents, notwithstanding Rev. St. U. S. § 3477, providing that all assignments of any claim on the United States shall be absolutely void unless made after it has been allowed, and warrant issued for payment thereof, as the object of the section is merely to prevent frauds on the treasury.

Appeals from the Supreme Court of the District of Columbia.

These consolidated causes involve the conflicting claims of the parties— First, to the proceeds of two drafts;-one for $1,800, and the other for $3,475,issued by the United States treasury in payment of the rent of lot 4, square 377, with the improvements thereon, in the city of Washington, and made payable to the order of A. C. Bradley, to the use of Alexander R. Shepherd, to the use of George Taylor, Peter F. Bacon, and Samuel Cross, trustees; second, to a balance of $787.50 in the hands of A. C. Bradley, who was appointed, in the first of the above-named causes, receiver of said premises with authority to collect the rents due and to become due for use and occupation of the same by the United States. The final decree awarded the proceeds of the two drafts to Thompson, appellee in each of the causes, and the money in the hands of the receiver to the trustees of Shepherd. Of that decree both the Freedman's Savings & Trust Company and Shepherd complain. This controversy has been greatly tangled by an unusual number of pleadings, affidavits, motions, rules, and orders. But the facts, so far as it is necessary to state them, are as follows: The Freedman's Savings & Trust Company (to be hereafter called the "Trust Company") sold and conveyed this property to A. C. Bradley; and for the unpaid purchase money the latter executed his five several notes for $2,400, $2,650, $2,900, $3,150, and $5,900, payable in one, two, three, four and five years from June 9, 1873, with interest at 8 per centum per annum, payable semi-annually. For the purpose of securing the payment of

those notes, Bradley, by deed of trust, in the nature of a mortgage, duly re. corded on the 18th of June, 1873, conveyed the property to John W. Alvord and George W. Stickney, together with "all the improvements, ways, easements, rights, privileges, appurtenances, and hereditaments" appertaining to the same, and "all the estate, right, title, interest, and claim whatsoever, either at law or in equity," of the grantor in the premises, in trust to permit Bradley, his heirs or assigns, to use and occupy the premises, and take the rents, issues, and profits thereof to their sole use and benefit, "until default be made in the payment of said notes or any of them, or any installment of interest due thereon, or any proper cost, charges, commission, half commission, or expense in and about the same;" and upon the further trust, such default having occurred, to sell the property at public auction, after at least 20 days' notice of the time, place, and terms of sale, and convey the same in fee-simple to the purchaser. Prior to the execution of this deed, Bradley, by a formal instrument of writing, to which the postmaster general was a party, had leased the premises to the United States, at an annual rent of $4,200, for the term of three years from June 5, 1873, with the privilege to the government of extending the term for two additional years. On the 27th of August, 1874, he conveyed to Alexander R. Shepherd; and, on the 21st of November of the same year, gave written notice to the postmaster general of Shepherd's purchase. He also assigned and transferred the lease to the latter, with authority to collect the rent. It should be stated in this connection that in his purchase Bradley really represented Shepherd, the latter verbally assuming to pay the notes given to the trust company. On the 15th of November, 1876, Shepherd made a conveyance to George Taylor, Henry A. Willard, (who was succeeded by Peter F. Bacon,) and Samuel Cross, of a large amount of property, including the premises in controversy, in trust to secure his three notes of $100,000 each. That conveyance contained a covenant upon the part of Shepherd that all the rents, profits, issues, and proceeds of the trust property coming to his hands should be applied by him solely to the benefit and advantage of the creditors whose debts were secured by the deed. The rent reserved for the year ending June 30, 1876, not having been paid, Shepherd, caused suit to be brought in the court of claims, in the name of Bradley, against the United States, to the use of Taylor, Bacon, and Cross, trustees. In that suit judgment was rendered against the government for only $1,800, and was affirmed by this court at its October term, 1878. Bradley v. U. S., 98 U. S. 104. Pending the appeal in that case a second suit was brought for the rent reserved for the years ending June 30, 1877, and June 30, 1878. But the decision in the first suit rendered the further prosecution of the second suit unnecessary. In consideration of the indebtedness described in a deed executed by Shepherd, March 10, 1873, to William Thompson, as trustee, Bradley and Shepherd, by writing, dated June 21, 1877, pledged the demand against the United States for use and occupation of these premises, as security for the payment of said indebtedness, with interest thereon at the rate of 8 per cent. per annum until paid; and, in the same instrument, "covenanted and agreed that any draft or check issued in payment or part payment of said claim shall be indorsed and delivered to the trustee named in said trust, and the proceeds thereof, less all proper costs and charges, be applied to the payment of the said indebtedness, with interest as aforesaid, or to so much thereof as the sum or sums of money so received is or are sufficient to pay.' To this pledge and agreement the trustees named in Shepherd's deed of the 15th of November, 1876, gave their written assent. The premises having been advertised to be sold on the 3d of August, 1877, under the deed of trust of June 18, 1873, because of default in the payment of interest and principal, Shepherd and the trustees in the deed of November 15, 1876, instituted, August 2, 1877, a suit in equity, being the first named of the above causes, to enjoin the sale. The ground alleged for the injunction was the pendency of a suit brought by

Mrs. McGhan and Edward Clark, her trustee, (Clark v. Trust Co., 100 U. S. 149,) which involved the title of the trust company to the property conveyed to Bradley, and by the latter to Shepherd. A temporary injunction of the character asked was granted. The trust company answered the original bill. It also filed-October 25, 1887-its cross-bill against the plaintiffs, in which, after alleging the insolvency of Shepherd and Bradley, its fear that the property would not sell for enough to pay the debts secured by the mortgage, and the taxes on it, and asserting the right of its creditors to have the rents thereof applied to its claims, in preference to the debts held by other creditors of Shepherd, it prayed that Shepherd, Taylor, Cross, and Bacon be perpetually restrained from applying for or receiving any rents or sums of money due from the United States on account of the use and occupation of the premises, until the final determination of this cause and of the equity suit brought by Mrs. McGhan and Clark; and that a receiver be appointed to collect the rents due from the United States on account of the use and occupation of the premises. On the 18th of March, 1878, the case was heard on the motion of the trust company for a receiver and an injunction, and an order was made enjoining the complainants "from collecting or receiving any moneys or other thing of value from the United States on account of the lease made between the United States and A. C. Bradley, and bearing date June 6, 1873, for the premises involved in this cause." On the 12th of March, 1879, the trust company, by petition, asked the appointment of a receiver to take charge of the property and to collect the rents, during and after its occupancy by the government, and that Shepherd and his co-complainants be enjoined from receiving from the United States any of said rents. On the 10th of May, 1879, the cause was heard upon the matters embraced in that petition, and on motion of the trust company, and with the consent of the other parties, Bradley was appointed receiver in the cause. He was directed to take charge of the property, and collect the rents therefor, "excepting, however, the rents accrued and to accrue from the 6th day of June, 1878, to the 1st day of July, 1879, which have been or are to be collected and received by the said Alexander R. Shepherd or his assigns." It was further ordered that the parties be enjoined from applying for or receiving any moneys due or to become due on account of the use and occupation of the premises, save and except the rents for the period just named. Subsequently, upon the petition of Bradley, as receiver, Nathaniel Wilson was made a party to the cause, he having, in his capacity as an attorney, received the proceeds of the draft for $1,800 issued by the United States in discharge of the judgment for the rent of the premises for the year ending June 30, 1876, and a draft for the rent accruing after that date and up to June 6, 1878. Wilson appeared and answered, stating that he held the proceeds of the draft for $1,800, less certain sums deducted therefrom, and also the draft for $3,475, subject to the order of the court. John W. Thompson filed a petition praying leave to intervene for the protection of his interests. This petition was afterwards withdrawn, and he instituted an original suit-the second of the above-named causes-against Bradley, Shepherd, the trust company, the trustees in Shepherd's deed of November 15, 1876, William Thompson, the trustee in the deed of March 10, 1873, and Nathaniel Wilson. From the pleadings and evidence in that suit it appears that Thompson holds Shepherd's two notes of $7,000 and $8,000, on which, at the time he sued, there was due a balance of $11,677.28, with interest at the rate of 8 per cent. per annum on $8,000 thereof from March 10, 1875, and on $3,677.28 from June 22, 1875. These notes constituted the indebtedness referred to in the deed of trust to William Thompson, to secure the payment of which, Bradley and Shepherd, with the consent of the latter's trustees, executed the writing of June 21, 1877. Thompson's suit was consolidated with the one brought by Shepherd. On the 18th of January, 1880, the restraining order made August 2, 1877, in Shepherd's suit was set aside; and, on the 28th of February, 1880,

the property having in the mean time been sold under Bradley's deed, and purchased by the commissioners of the trust company, leaving due on Bradley's notes more than $11,000,-the receiver was directed to deliver possession to the commissioners, who were authorized to apply for, collect, and receive the rents, issues, and profits of the property thereafter falling due. The amount of rent collected by the receiver, less his commission, was $787.50. The amount in the hands of Wilson, including the draft for $3,475, was $4,675. The final decree was of the character indicated in the beginning of the opinion. In respect to the draft for $3,475, the decree required Bradley, Shepherd, Taylor, Bacon, and Cross to indorse the same, and directed its collection by Wilson, and the payment by him to Thompson of the proceeds, together with the balance in his hands of the $1,800 draft. It was further ordered that the $787.50 in the hands of the receiver be paid to the trustees of Shepherd.

Enoch Totten, for appellant, Freedman's Savings & Trust Company. M. F. Morris and H. H. Wells, for appellee John W. Thompson. Wm. F. Mattingly and A. C. Bradley, for Alexander R. Shepherd.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court.

What rights did the trust company acquire, under Bradley's deed, in respect to the income or rents of the mortgaged property, accruing after the execution of that instrument? This is the principal question presented for our consideration, and will be first examined. In Gilman v. Telegraph Co., 91 U. S. 603, 616, the question was as to the disposition of certain earnings of a railroad, accruing after a decree of foreclosure and sale, and before the purchaser at the sale was let into possession. The first, in point of time, of the mortgages conveying the property to secure the company's bonds, provided, among other things, that it might remain in possession, and operate the road, enjoying the revenues thereof, until default occurred in paying the interest or the principal of its bonds at maturity; and if such default continued six months, or if the company failed to set apart, deposit, and apply certain moneys, as required by the mortgage, then the trustees might, and it should be their duty, to enter upon and take possession of, and, by agents, operate the mortgaged property. The second mortgage contained substantially the same provisions. After the decree of foreclosure and sale was passed, a judgment creditor of the company, proceeding under the local law, garnished, in the hands of the company's agents at its various stations, moneys received by them from the operation of the road, the company having been permitted to remain in possession up to the time of the sale under the decree. The trustees in the mortgage claimed that these moneys should be applied in payment of the balance remaining unpaid on their mortgage bonds. This claim was denied. The court, following the previous case of Railroad Co. v. Cowdrey, 11 Wall. 459, said: "It would have been competent for the court in limine, upon a proper showing, to appoint a receiver, and clothe him with the duty of taking charge of the road, and receiving its earnings, within such limit of time as it might see fit to prescribe. It might have done the same thing subsequently, during the progress of the suit. When the final decree was made, a receiver might have been appointed, and required to receive all the income and earnings until the sale was made and confirmed, and possession delivered over to the vendee. Nothing of this kind was done. There was simply a decree of sale. The decree was wholly silent as to the possession and earnings in the mean time. It follows that neither during that period was in anywise affected by the action of the court." Again: "It is clearly implied in these mortgages that the railroad company should hold possession and receive the earnings until the mortgagees should take possession, or the proper judicial authority should interpose. Possession draws after it the right to receive and apply the income. Without this the road could not be operated, and no profit

could be made. *** If the mortgagees were not satisfied, they had the remedy in their own hands, and could, at any moment, invoke the aid of the law, or interpose themselves without it. They did neither." In Bridge Co. v. Heidelbach, 94 U. S. 798, 800, the mortgage included the rents, issues, and profits of the mortgaged property, so far as it was necessary to keep it in repair, and pledged such rents, issues, and profits to the payment of the interest on the mortgage bonds as it matured, and to the creation of a sinking fund for the redemption and payment of the principal. In the event of a continuous default for six months in meeting the interest, the trustees, upon the written request of the holders of one-half of the outstanding bonds, were authorized to take possession of the mortgaged premises, and receive all rents and claims due and to become due to the company. In a contest between the trustees and a judgment creditor, as to which was entitled to certain moneys in the hands of the mortgagor, the decision was in favor of the creditor, the court saying: "In this case, upon the default which occurred, the mortgagees had the option to take personal possession of the mortgaged premises, or to file a bill, have a receiver appointed, and possession delivered to him. In either case, the income would thereafter have been theirs. Until one or the other was done, the mortgagor, as Lord MANSFIELD said in Chinnery v. Blackman, 3 Doug. 391, was owner to all the world, and entitled to all the profit made.'” In Kountze v. Hotel Co., 107 U. S. 378, 392, 2 Sup. Ct. Rep. 911, it was held that a bond given on appeal with supersedeas, from a final decree of foreclosure and sale, did not cover rents and profits, or the use and detention of the property, pending the appeal. The court said that "in the case of a mortgage, the land is in the nature of a pledge; and it is only the land itself -the specific thing-which is pledged. The rents and profits are not pledged; they belong to the tenant in possession, whether the mortgagor or a third person claiming under him. * ** The taking of the rents and profits prior to the sale does not injure the mortgagee, for the simple reason that they do not belong to him. ** But perception of rents and profits is the mortgagor's right until a final determination of the right to sell, and a sale made accordingly." It is, of course, competent for the parties to provide in the mortgage for the payment of rents and profits to the mortgagee, even while the mortgagor remains in possession. But when the mortgage contains no such provision, and even where the income is expressly pledged as security for the mortgage debt, with the right in the mortgagee to take possession upon failure of the mortgagor to perform the conditions of the mortgage, the general rule is that the mortgagee is not entitled to the rents and profits of the mortgaged premises until he takes actual possession, or until possession is taken in his behalf by a receiver, (Teal v. Walker, 111 U. S. 242, 4 Sup. Ct. Rep. 420; Grant v. Insurance Co., 121 U. S. 117, 7 Sup. Ct. Rep. 841;) or until, in proper form, he demands, and is refused, possession, (Dow v. Railroad Co., 124 U. S. 652, 654, ante, 673.) See, also, Sage v. Railroad Co., 125 U. S. 361, ante, 887. The principles announced in these cases are decisive against the claim of the trust company to the rents of the property represented by the two drafts delivered by the United States to Wilson. Bradley's deed pledged the property, not the rents accruing therefrom, as security for the payment of his notes. It is true, it provides, generally, that the mortgagor may remain in possession, and receive rents and profits, until there is default upon his part. But the only effect of that provision was to open the way to compel him to submit to a sale, and thereby lose possession. The deed did not give the mortgagee or the trustees the right, immediately upon such default, to take possession, and appropriate the rents of the property. It only gave the trustees authority, when such default occurred, to sell upon short notice, and, in that way, oust the mortgagor, and suspend his right to further appropriate the income of the property. Even if the deed had expressly pledged the income as security for the debts named, the mortgagor, according