Debtor filed a reply brief on December 21, 1992. Homestake filed its reply brief on December 23, 1992. State law usually determines whether a security interest in property was acquired pre -petition. If the security interest given in a mortgage is an absolute assignment, it is effective on the day of its creation. If the security interest is a pledge conditioned on the happening of a future event, the interest does not vest until the occurrence of the precipitating event.
Debtor admits that a default occurred.
However, Homestake did not commence a judicial proceeding to enforce its rights under the Second Mortgage before Debtor filed bankruptcy. Since a precipitating condition remained, the assignment was not absolute. The language of the Second Mortgage controlled when Homestake's secured interest in rents became effective. The Assignment of Rents provision can be read in harmony with state law which allows for the continued collection of assigned rents from default, to foreclosure, and through the mortgage redemption period. The conclusion that the security interest in rents did not become effective or vest until default and enforcement of the Second Mortgage is consistent with other terms in the Second Mortgage.