74 F.2d 210 | 2d Cir. | 1934
This ease arises on an appeal from an order in bankruptcy affirming the order of a referee, expunging a claim against the bankrupt in composition, and vacating an order granting an examination under section 21a, Bankr. Act (11 USCA § 44 (a). After the order for examination had been granted, the bankrupt countered by a motion to amend its schedules by striking out the claimant’s name as creditor, and to vacate the order of examination because it was not made on the petition of a creditor. The referee held that these proceedings raised the issue of the claimant’s standing as creditor; and in the recitals of the order expunging the claim he further declared that the claimant had consented to try out the merits of the controversy in this way, though the record is otherwise silent.
Although equity has always been sensitive as to the acquisition by a fiduciary of renewals of leases, and will impose a constructive trust in favor of the prior lessee whenever the relation is established, the relation of sub-lessee to sub-lessor is not fiduciary. Maunsell v. O’Brien, 1 Jones (Ireland) 176; Robinson v. Eagle-Picher Load Co., 132 Kan. 860, 297 P. 697, 75 A. L. R. 840; Goocey v. Hopkins, 206 Ky. 176, 266 S. W. 1087; Cook v. Basom, 164 Mo. 594, 65 S. W. 227; Hawkins v. Klein, 124 Okl. 161, 255 P. 570. A lessee owes no duty to his lessor beyond those contained in the lease; he does not assume to act for him in any particular; only to perform the express promises which it contains. Indeed the claimant does not stand upon the bankrupt’s being its sub-lessee, but upon its position as pledgee of the sub-rents and agent to collect them. Before wo impose upon it that abstinence which in proper eases equity would exact in order to exclude any possibility of self-interest in the performance of its duties, we must learn what those duties were, for it was only as their discharge was affected that its freedom of action was limited. Expressly they were merely to collect the sub-rents and account for them; though no doubt that would have forbidden it from surrendering the existing sub-leases and taking renewals in its own name, if it had had the power. It was not however the mortgagee of the term, or bound to perform the covenants of the lease, either as grantee or by a separate undertaking. If it had been, it would have been forbidden to take advantage of its own breach, and so secure a renewal, just as it would be forbidden to surrender it for that purpose. Holridge v. Gillespie, 2 Johns. Ch. (N. Y.) 30. But a pledgee or mortgagee need do no more than return so much of the property as remains after the debt is paid; its vicissitudes are not on his head, so far as he does not provoke them, by action or inaction. In the case at bar, as we have said, the bankrupt was not bound to keep the term alive; that was the claimant’s duty, the bankrupt’s performance of which for a season implied no undertaking to continue. When it stopped, it did not instigate O’Flyn to evict the claimant, the term
There remains the account of the bankrupt as agent of the claimant in the collection of the sub-rents, and its indebtedness as sub-lessee while it remained such. The account as to the sub-rents collected is as follows:
Credits Debits
Sept. 11,1931 Received from Silver-Rod Store
$17,775.45 Oct 31, 1931 $ 2,620
Nov., 1913 to Sept. 1932 8,733.33
Sept. & Oct., 1932 1,746.66
From Brooklyn Fruit & Vegetable Market Oct. 17, 1931 550
Nov. & Dec., 1931 666.66
Jan. to Nov., 1932 2,333.33
$16,649.98 $16,649.98
Balance $ 1,125.47
The claimant asserts'that it should also be credited with $1,500, paid by the Silver-Rod Store to the bankrupt in September, 1931; but it is clear that this was merely a contribution to the advance which the bankrupt was to make or had made. It was not part of the Silver-Rod rents, nor was it in any other way funds belonging to the claimant. Kraushaar gave some evidence to the contrary but it was disputed, and the referee accepted the bankrupt’s version. Therefore in the account as pledgee, the claimant still owed $1,125.47.
However, the bankrupt also owed its own sub-rents for fifteen months, $43,750, from August 1, 1931, to October 31, 1932, both inclusive. It owed nothing further for, as we have held, its sub-lease ended on October 31, 1932. Against this, however, it was entitled to credit itself with payments made to O’Flyn to keep the term in existence; as to these it was not a volunteer. They were as follows:
Nov. 4, 1931: Quarterly rent
Nov. Dec., 1931
Jan., 1932 $ 8,750
Jan. 1, 1931 Quarterly rent
Feb., Mar., April, 1932 8,750
Feb. 3, 1932 Taxes last half 1931 4,267.58
Apr. 8, 1932 Quarterly rent
May, June, July, 1932 8,760 Sept. 26 and
Oct. 19, 1932 Rent for Aug. and Sept. 5,833.33
Nov. 18, 1932 Rent for Oct, 1932 2,916.25
Nov. 18, Dec., 1932, January, 1933
Back taxes 4,500
$43,767.18
These payments may be set off: against the sub-rents due from the bankrupt, and make unnecessary any recourse to the balance due upon the payment of $17,775; or to several items of rent paid to the New York Rapid Transit Co.; or to any items of insurance premiums. The bankrupt is not asserting any debt against the claimant; it merely seeks to prove that it owes nothing, and the account need not therefore be struck definitively. Nor need we bring into the account a deposit of $8,750, held by the claimant as security for the sub-lease.
A question has been raised as to the justiciability of the claim in this proceeding. We need not say whether the allegation in the petition for examination under section 21a, that the petitioner was a creditor, was issuable. The section gives the remedy only to a creditor, and it may well be that if his status is challenged he must either make it good or withdraw. In re Jehu (D. C.) 94 F. 638 (semble). Though see In re Henderson, Inc. (D. C.) 266 F. 254. The recital in the order asserts without contradiction that the claimant consented to the liquidation of its claim in this proceeding, and the merits have been tried out at length and decided. After such a concession the referee had jurisdiction to try the cause and expunge the claim. For the same reason we need not decide whether a bankrupt can secure a ruling upon the validity of a claim by motion to strike the creditor’s name from his schedule.
Order affirmed.