71 F.2d 371 | 5th Cir. | 1934
On summary proceedings brought by Gerstel as trustee in bankruptcy of Henry J. Smith, Inc., the referee ordered Mary G. Shaw and her representatives to turn over to the trustee the possession of Alcazar Hotel and all the personal property in it. This ruling was reviewed before the District Judge on the grounds, among others, that Miss Shaw was an adverse claimant and entitled to plenary proceedings before the court; that she was a landlord in peaceful possession of her premises denying any outstanding lease to the bankrupt; and that, if there were such a lease, it was in default, would be burdensome to the bankrupt’s estate, and the trustee had not adopted it and had no funds to make good the default. The District Judge reversed the turnover order, thinking that Miss Shaw was an adverse claimant, and, without deciding whether the claimed lease was of force, held that it would he burdensome and that the trustee could not • operate the hotel at a profit under it, and ordered that he should proceed no further as to it. As to the personalty, he ordered the dismissal of the summary proceedings without prejudice to the right of the trustee on leave from the referee to file plenary suit for all or any portion of it as he might be advised, or to defend any foreclosure of the mortgage on the property. The trustee has taken an appeal as of right allowed by the District Judge, instead of applying for it to this court. It is questionable whether a judgment denying a turnover order and directing a trustee to reject a lease to the bankrupt is thus reviewable. Taylor, Trustee, v. Voss, 271 U. S. 176, 46 S. Ct. 461, 70 L. Ed. 889; Ahlstrom v. Ferguson (C. C. A.) 29 F.(2d) 515; In re Federal Photo Engraving Corporation (C. C. A.) 54 F.(2d) 628; In re Miller & Harhaugh (C. C. A.) 56 F.(2d) 141; In re Goldman (C. C. A.) 62 F.(2d) 421. But, according to the ease first cited, we may in any event dispose of the questions of law presented.
The bankrupt, Henry J. Smith, Inc., once owned the Alcazar Hotel, but on April 17, 1931, conveyed it to Zalzar Corporation with all tpxe furniture, furnishings, equipment, appliances, and fixtures of every kind on the premises, subject to a first and second mortgage. The first was to Alzar Investment Corporation to secure notes of $7,500 each falling due on the 21st day of January, February, and March of each year until 1936, when $343,100 fell due, all with 7 per cent, interest from date. About $5,000 was due on the second mortgage. Henry J. Smith, Inc., remained in possession after this conveyance and operated the hotel, as the trustee claims under a lease to it from Zalzar Corporation, dated April 23, 1931, for a term of four years, subject to the right of either party to discontinue it at the end of any year on ninety days’ notice. Henry J. Smith owned both the contracting corporations and signed the lease for each as its president. The rent reserved was the payment of “all interest and amortization due on the first and second mortgages due to Alzar Investment Corporation and to Jacksonville Properties, also all taxes and licenses due on the Alcazar Hotel, and all operating expenses and repairs.” It was covenanted that: “On the expiration of this lease the property is to be given up in as good order in all respects as it now is, reasonable wear and tear and damage by fire alone excepted.” The furniture and fixtures -were not expressly mentioned, but they were used with the hotel as a part of “the property known as the Alcazar Hotel” which was leased. Henry J. Smith, Inc., paid for considerable furnishings from time to time afterwards, but it is disputed wheth
The trustee’s contention is that, since the bankrupt was in possession of the hotel and furnishings when the petition was filed, the property was in custodia legis from that time, and the court is entitled to- regain possession summarily; it being the duty of persons having claims to or against it to apply to the court for their recognition,. Mueller v. Nugent, 184 U. S. 1, 22 S. Ct. 269, 46 L. Ed. 405; Babbitt v. Dutcher, 216 U. S. 102, 30 S. Ct. 372, 54 L. Ed. 402, 17 Ann. Cas. 969; Board of Trade of Chicago v. Johnson, 264 U. S. 1, 44 S. Ct. 232, 68 D. Ed. 533; Isaacs, Trustee, v. Hobbs Tie & Timber Co., 282 U. S. 734, 51 S. Ct. 270, 75 L. Ed. 645. Transfers pending adjudication from an alleged bankrupt of his property are no doubt generally at the peril of the taker. International Bank v. Sherman, 101 U. S. 403, 25 L. Ed. 866. And a surrender by a receiver without the court’s authority is inoperative. Whitney v. Wenman, 198 U. S. 539, 25 S. Ct. 778, 49 L. Ed. 1157. On the other hand, the pendency of the petition does not hinder a pledgee from asserting his rights against pledged property. Hiscock v. Varick Bank, 206 U. S. 28, 27 S. Ct. 681, 51 L. Ed. 945. We have no doubt that a landlord may similarly enforce his right of entry against a defaulting tenant. In re Elk Brook Coal Co. (D. C.) 261 F. 445. The mere surrender by the alleged bankrupt of a leasehold estate pending his adjudication might amount to
As to the personal property, it stands in the main as an appurtenance of the hotel, and was leased and sold with it. Miss Shaw claims with plausibility that none of it which has been added by the bankrupt since it deeded the hotel to Zalzar Corporation and leased it back is other than mere replacements due under the terms of the lease; that is, that as such tilings were bought and put in the hotel title to them vested long before the bankruptcy in the landlord, and has now passed to her. This is an adverse claim as to which the evidence at present is in conflict. She objects to a summary trial of her rights, and is entitled to plenary proceedings. The judge was right in so holding.
Judgment affirmed.