12 Del. Ch. 60 | New York Court of Chancery | 1918
The company had leased land and buildings at a fixed sum as annual rental payable in equal monthly portions. The lessee agreed to maintain the premises in good order and repair at its own expense, and on failure to do so the
There was also a provision in the lease by which the lessor agreed to érect on the premises a new building for the use of the tenant, and the tenant agreed to pay forty per cent, of the cost thereof and six per cent, interest on the balance of the cost. Another term was that the tenant agreed to buy the premises and would be allowed as a credit on the price the forty per cent, of the cost of the new building, and if the purchase was not made the new building should remain the property of the landlord. During the term the new building was erected and .the tenant paid its forty per cent, of the cost thereof. A claim was filed by the landlord for interest on the sixty per cent, of the cost of the new building and for preference as though it were rent.
Neither the cost of repairs nor the interest charge were rent, and so neither was entitled to preference and priority of payment over other creditors. Preference is given to the payment of rent in administering the estate of an insolvent corporation. Rent is a profit issuing out of land. It cannot reasonably include the cost of repairs which the tenant should have made, and which the landlord made (Lowenthal v. Resnick, [Sup.] 110 N. Y. Supp. 1045), even if it be called rent, for you do not alter the essential nature of a thing by misnaming it (Miners’ Bank v. Heilner, 47 Pa. 452, where in a lease of a mine the lessees agreed to repay the landlord an improvement expense by “an additional rent of ten cents per ton on all coal taken out”).
For the same reason the interest which the lessee was required to pay on the cost of the new building was not rent, or entitled to preferential payment as such. In Mason v. Rogers, 109 Pa. 319, 1 Atl. 665, the court said that interest which a vendor agreed to pay on purchase-money payments made by a vendee until possession be given to the vendee is not rent. Taxes which by the terms of the lease a tenant pays are not rent. 1 Tiffany on Landlord and Tenant, 1024.
The exceptions to the claim for sixty per cent, of the cost of
Therefore the claims for the cost of repairs and for interest on the sixty per cent, of the cost of the new building are allowed as general claims without priority or preference over other creditors, and the claim for the sixty per cent, is disallowed.