¶1In this case the bond for $6,000, secured by the mortgage, • was- payable on demand. It was, therefore, past due, and the mortgagor was in default. The default was recognized by the mortgagor when it allowed the assignee of the mortgage to go into possession.
¶2*681By the terms of the mortgage the rents were assigned to the mortgagee upon default. Neither the mortgagee nor the assignee Of the mortgage had any notice of the prior assignment of rents to the plaintiff until defendant had been in possession under the mortgage about three months. During that period the plaintiff had collected no rents under his assignment, doubtless because the assignment was made as collateral security for the payment of a note and there had been no default in its payment. To reverse the determination of the learned Appellate Term would be to hold that a secret agreement between the mortgagor and an assignee of rents as collateral security takes priority over a subsequent mortgage past due and under which the mortgagee is in possession and by the terms of which the mortgagee is entitled to receive the rents.
¶3Such a result would deprive mortgagees without notice of prior and secret assignments of rents of an important part of their security.
¶4The determination of the Appellate Term should be affirmed.
¶5Determination of Appellate Term reversed and judgment of Municipal Court affirmed, with costs to appellant in this court and the Appellate Term.