278 F. 842 | S.D.N.Y. | 1922
In the case at bar, there was a present demise, the legal consequences of which are not affected by the executory covenants as to furnishing heat, electric current, etc. These, in certain circumstances, the receiver might refuse to carry out, and yet the lessee would be entitled to the possession of the premises. There may well be, as suggested on the argument, a difference in the position of a receiver as lessee and as landlord.
But a court of equity should not instruct a receiver to disaffirm a lease as landlord merely because the corporation lessor made what, at this moment, might be a bad bargain, although a good enough bargain originally. It is the duty of the receiver to make every proper effort to increase the assets of an estate, but not at the expense of fundamental principles of fair dealing. When a lessee under a lease takes possession, the lease presupposes continuance, even in the face of a receivership of the landlord, so long as the landlord’s receivership estate is not burdened or put to loss, and by “burdened” is not meant that the lease could be more profitable, but that it entails a positive loss or encroachment on the corpus or capital of the estate.
In the case at bar there is no evidence that the lease is a burden in the sense defined supra; i. e., that in carrying out its affirmative obligations the estate suffers an actual loss as distinguished from the obtaining of a more profitable rental. Yet it is possible, although not probable (owing to the course of costs), that the affirmative obligations may hereafter impose a burden, and the estate should be safeguarded accordingly. The receiver is instructed, therefore, not to commence any proceeding to evict or eject the tenant, but his time to affirm or dis-affirm the affirmative covenants as to heat, electric current, etc., is extended to July 1, 1922, with leave then to apply for a further extension, if so advised. The probability is that by July 1st the cost of carrying out the affirmative obligations will have diminished, rather than increased, and that by that time the question will have become academic. If, however, some situation should arise which in the discretion of the receiver should require him to move, then his application for instructions shall be made on five days’ notice to the lessee.
Nothing here decided has any relation to the provisions of any foreclosure decree, if and when made.
Submit order on five days’ notice.