No. 312 | 2d Cir. | Apr 6, 1936
The appellant is the assignee of a claim by a landlord who owned premises in Trenton, N. J., which were leased to the debtor for a term of twenty years beginning April 1, 1926. The debtor occupied no part of the leased premises itself, but sublet them as of right it might under the lease. On August 29, 1932, the debtor filed a voluntary petition in bankruptcy and was then adjudicated a bankrupt. At that time its rent had been paid in full. Its duly qualified trustee found the lease burdensome and rejected it, pursuant to an order obtained for that purpose, on November 11, 1932, paying over to the landlord all rents it had in the meantime collected.
The landlord re-entered without notice in accordance with such a right reserved in the lease, and made structural changes in the premises to restore them to the condition they were in when leased by rebuilding a party wall and closing up a common entrance, all at an expense of $1,980.99. The lease provided that, at termination, all improvements made by the lessee should belong to and become the property of the lessor, but there was no provision that, upon termination before the expiration of the term and re-entry by the landlord,' the premises might be re-let for the lessee’s account and that the lessee should be liable for any deficiency. The landlord did relet without notice to the lessee.
The issue is whether the landlord has a claim for damages because of injury occasioned by the rejection of the lease by the trustee in the prior bankruptcy proceeding.
Whether such a claim is allowable under section 77B (b) (10), 11 U.S.C.A. § 207 (b) (10), depends upon whether, under the applicable state law, it is capable of proof on the merits. Seé In re United Cigar Stores Co. of America (Otis), 83 F.2d 202" court="2d Cir." date_filed="1936-04-06" href="https://app.midpage.ai/document/in-re-united-cigar-stores-co-6866389?utm_source=webapp" opinion_id="6866389">83 F.(2d) 202 (C.C.A.) ; In re United Cigar Stores Co. of America (Meadows), 83 F.2d 207" court="2d Cir." date_filed="1936-04-06" href="https://app.midpage.ai/document/in-re-united-cigar-stores-co-6866392?utm_source=webapp" opinion_id="6866392">83 F.(2d) 207 (C.C.A.) — both decided today. Section 77B makes such a claim provable provided there is evidence in support of it which constitutes proof as a matter of law. So there is no barrier confronting the appellant on the ground of provability because the proceeding in which the attempt to prove is- máde is a proceeding in bankruptcy under section 77B.
But whether the order should be affirmed depends not alone upon that. It was necessary for the appellant to prove recoverable damages as a result of the rejection. When the trustee in bankruptcy rejected the lease, such rights to rent under subleases as the lessee had originally reverted to the bankrupt subject to the lessor’s equitable lien upon them to secure the payment of rent under the main lease. In re United Cigar Stores Co. of America (Reisenweber’s, Inc., v. Irving Trust Co.), 69 F.2d 513" court="2d Cir." date_filed="1934-03-05" href="https://app.midpage.ai/document/in-re-united-cigar-stores-co-1562025?utm_source=webapp" opinion_id="1562025">69 F.(2d) 513 (C.C.A.). . When, however, the landlord re-entered, as it did at once, under a re-entry clause all rights of the lessee came to an end. Ordinarily such reentry, in the absence o'f a covenant for
Order affirmed.