210 F. 754 | 2d Cir. | 1913
The Berghoff Brewing Association granted to Sherwoods, Incorporated, a written lease for a term of years beginning February 1, 1912, at a monthly rent of $875 per month. A petition in bankruptcy was filed against the lessee on April 27, 1912, and a receiver was appointed on that day who took possession of the premises and occupied the same until June 26, 1912. Prior to the time when the receiver went into possession, the lessee had occupied, but failed to pay- the rent due on March 1st, as well as that due on April 1st. Rent was payable in advance on the 1st day of each month. While the rent for. the month of April was by the terms of the lease due April 1st for the entire month, the court below only charged the lessee with a proportionate part of the rent down to April 26, 1912, when the lessee ceased to occupy. The contract was a New York contract, the lease having been executed there, and the premises were situated there. The New York Code provides for an apportionment of rents in the case of the death of a person or on “the determination of his or her interest.” N. Y. Code Civ. Proc. § 2720.
•‘The trustee of the estate of a bankrupt, upon his appointment and qualification, * * . * shall * * * be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt.”
Section 2, subd. 3, grants power to—
“appoint receivers * * * ■ in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of the bankrupts after the filing of the petition and until it is dismissed or the trustee is qualified.”
This contention that the receiver could not be authorized to assign is pnsound. After the receiver takes possession it may be necessary that certain kinds of property should be sold for the very purpose of preserving it or its value. In our ojpinion the court has full power in such cases to order a Sale and that such power is implied by clause 3 of section 2 of the act as well as by clause 7 of that section empowering the court to “cause the assets of bankrupts to be collected, reduced to money and distributed.” In re Becker (D. C.) 98 Fed. 407; Loveland on Bankruptcy, 213. Moreover, authority to order a sale is expressly given to the court by General Order in Bankruptcy No. 18, cl. 3 (89 Fed. viii, 32 C. C. A. xx), which provides as follows:
- “3. Upon petition by a bankrupt, creditor, receiver, or trustee, setting forth that a part or the whole of the bankrupt’s estate is perishable, the nature and location of such perishable estate, and that there will be loss if the same is not sold immediately, the court, if satisfied of the facts stated and that the sale is required in the interest of the estate, may order the same to be sold, with or without notice to the creditors, and the proceeds to be deposited in court.”
As the taxes were assessed prior to the bankruptcy and therefore constituted a debt and were provable against the bankrupt’s estate, although payable at a period subsequent to the bankruptcy, it is evident that the subsequent assignment of the lease did not shift the liability from the bankrupt’s estate to the assignee. And inasmuch as the liability to pay the tax was imposed on the lessee at the date of the assessment and without regard to the date of payment, it is not evident why the entire tax as assessed and not merely a part of' it proportioned to the period of occupancy, might not have been charged against the lessee’s estate. The liability becomes absolute at the time the assessment is made and does not depend upon the lessee’s occupancy but upon the fact that it was assessed during the term. But the court below apportioned the tax exactly as it apportioned the rent. The theory upon which this was done is not disclosed. In Gedge v. Shoenberger, 83 Ky. 91, the court regarded an agreement to pay taxes as an agreement to pay them as part of the rent, regarding it as a necessary implication. In Hodgkins v. Price, 137 Mass. 13, 19, the court thought taxes not a part of the rent under such a covenant to pay them and held it unnecessary to include them in a tender of rent to prevent a forfeiture. A covenant to pay rent and a covenant to pay taxes assessed during the term are quite distinct matters. But as the lessor, who was represented at the hearing, has not objected in this court to the apportionment made in the court below, and as no objection has been made to it by the trustee, we do not deem it necessary at this time to do more than to direct attention to it. The apportionment made, if permitted to stand, does not in any way prejudice the trustee in respect to the question upon which he has asked this court to pass.
The right of the lessee in the money which he had deposited with, the lessor was to receive back with accumulated interest from the lessor upon the termination of the lease so much of the deposit as was not needed to make g-ood the defaults upon the covenants, and upon the bankruptcy of the lessee, this right passed to the trustee. As the lessor had failed to pay the rent due on March 1st and on April 1st, the court below recognized the right of the lessor to charge against the fund on deposit, the sum of $1,643.33 for rent due from the lessee down to April 26th, the date of filing the petition in bankruptcy. But after making this deduction there was still left in the lessor’s hands a balance of $856.67. The court also allowed the lessor to retain $830.65
But the trustee disputes the right of the court to allow thé lessor to charge against the security fund the sum allowed for taxes during the receiver’s occupancy, $830.65. He claims a right to have that sum set off against a like amount due from him to the lessor for the use and occupation of the premises while the receiver was in possession. But for reasons already stated the liability for the taxes was a proper charge against the deposit; was not affected by the assignment; not forgiven by the lessor. The trustee has not been prejudiced and the lessor has a right to charge against the fund all the sums authorized by the court.
The order is affirmed.