118 Mo. App. 44 | Mo. Ct. App. | 1906
(after stating the facts). — In the fourth paragraph of the lease, a lien on all the improvements to be erected on the leased premise is reserved in favor of the lessors, to secure the payment by the lessee of one
The first proposition raised against the preference asserted by the intervenors is that no rent was to be paid except five thousand dollars in cash. In other words, that the taxes provided against in the lease contract were no part of the rent. We do not accede to that interpretation of the instrument. That a gross cash rental of five thousand dollars for the whole term was reserved, is true. But, in addition, the lease provided for payment by the lessee of the taxes assessed against the ground which should become due and payable during the year 1904, and also of the increase of taxes which would be caused by the improvement of the ground by the lessee during the year 1904. The improvements were to be removed. But as they would stand on the ground during the year 1904, they would enhance the assessment of the premises for the taxes of the ensuing year. Now the lessors inserted covenants in the contract of lease to protect themselves against paying this increased assessment and also against the taxes on the ground that were assessed in 1908 and would fall due in 1904. What motive did the hotel company have for agreeing to pay those taxes if the payment was not regarded as rent? The payment was certainly part of the consideration to be rendered for the use of the premises, and issued out of the land. The taxes were intended to be rent and ought to be treated as such in this case, even if they lacked some technical element of rent; for instance that they were payable to the State instead of the land
The receivers took possession of the leasehold May 31, 1904, and continued in occupancy until' January 5, 1905, or during the remainder of the term of the lease. Without regard to whether they were in possession as constructive assignees of the lease and under its provisions, or as independent tenants, the court wherein the receivership proceeding is pending, should allow a reasonable rent for the use and occupation of the premises while the receivers held them. The condition on which a receiver, or anyone else, may occupy another person’s land, is payment of rent. There seems to be some discrepancy in the cases as to whether the rent to be paid by a receiver during his occupancy, when he has done
In our opinion the receivers in the present case held the premises as tenants under the lease. It has been decided by a court of the highest authority that in railway litigation, a receiver who takes possession of a leased line of railroad in proceedings against the lessee, does not, by the mere act of going into possession, become bound instantly for the performance of the lessee’s covenant to pay rent, but has a reasonable time to elect whether he will adopt or repudiate the contract. [Railroad v. Humphreys, 145 U. S. 82; U. S. Trust Co. v. Railroad, 150 U. S. 287, 299.] This rule was declared on grounds which make it applicable in other instances than railroad receiverships, and it has been applied in others. [Nelson v. Kalkhoff, 60 Minn. 305.] In truth, the question of a receiver’s liability for rent under the covenants of a lease on property put into his custody in a proceeding against an insolvent lessee, is determined, not by an arbitrary deduction from the act of the receiver in getting the property into his hands, but by a reasonable and equitable consideration of all the facts. In some respects a receiver who occupies the debtor’s leasehold is in a situation analogous to the case of an assignee in bankruptcy or a general assignee for creditors who enters on a leasehold held by the insolvent debtor. In the opinion
“A reasonable time was allowed the assignees to ascertain the value of the lease before they made their election ; for which purpose they might have it valued and put up for sale without danger of such act being deemed an acceptance. If, however, they accepted a bidding, or dealt with the estate as their own, or used it in any manner injurious to persons entitled, they were not within their protection.” [2 Platt, Leases, p. 435.]
The rule in Missouri in cases of assignments is the same as that embodied in the foregoing statement.
In Boyce v. Bakewell, 37 Mo. 492, an insolvent lessee had executed a general assignment for the benefit of his creditors. At the date of the assignment there was an unexpired lease on the premises, drawing an annual rental of $800, payable in monthly installments. The assignee took possession of the premises, in which there was a stock of goods, and kept up the stock for more than two years. After the assignee died, a demand for rent was exhibited against his executors. It was held that the general assignment was sufficient to convey the leasehold, but that the assignee was not bound to accept the assignment of the lease, he having an election whether to accept or reject it; that in any event he was liable for use and occupation as a tenant, for the time he was in possession of the premises, and whether or not he would be liable as assignee under the original lease, would depend on whether he had elected to accept the assignment of the lease and to hold under it. That a receiver’s or assignee’s liability on the covenants of a lease, depends on his electing to' accept the lease and occupy the premises under it, is maintained by all the authorities that have come to our attention. In support of the proposition, in addition to those already cited, we cite the following cases: Woodruff v. Railroad, 93 N. Y. 609; In re Otis, 101 N. Y. 580, 585; Wells v. Higgins, 132 N. Y. 463; People v. Ins. Co., 30 Hun 142;
As the entire cash rent was paid by the lessee, the receivers could claim, at most, only an apportionment of the unpaid taxes for 1904, so that they would have to pay no larger part thereof than the time they occupied the premises bore to the whole "term of the lease. More than seven months of the term had expired before the receivers went into possession, and they occupied the premises about seA'en months. The liability of the receivers for the entire amount of the taxes, appears to turn on the fact that they did not fall due until September 1, 1904, Avhen the receivers Avere in possession. Therefore, under our ruling that the taxes were rent, they constituted a part of the rent which accrued during the tenancy of the receivers — a tenancy which we have held was under the original lease to the hotel company.
The rental of leaseholds for which receivers are liable, is regarded as an expense incident to the administration of the receivership, and, like other costs, is to be paid before the assets of the debtor are distributed among his creditors. [Link Belt Co. v. Hughes, 62 Ill. App. 318.]
But it may be argued that the certificates issued by the receivers to Caldwell & Drake constituted costs of the receivership too; since they were given in payment for services in completing the hotel so it could be operated. In a sense it is true that the certificates represented what was deemed an expense necessary to be incurred in administering the debtor’s estate. Receiver’s debentures have been usually, if not exclusively, recognized in railroad litigation, when it was necessary for the receiver in charge of a railway to incur debts to maintain the property in a state of reasonable efficiency for the performance of the duties of the company to the
It is said the lease was not recorded and, therefore, Caldwell & Drake are entitled to> priority for their certificates. We can conceive of no theory on which the non-recording of the lease would confer an equity on the holders of the certificates as against the claim for rent. Those holders acquired no interest in the land by virtue of the receivers’ certificates, either as lessees, mortgagees or purchasers. They have no' title whatever for any length of time and claim none; but look to the money in the hands of the receivers. The Recording Acts were designed to give notice to subsequent purchasers of real estate, or those acquiring an interest in or lien on it, of the existence of prior rights in and to the land. The registry laws have nothing to do with this case.
The judgment will be reversed and the cause remanded with a direction to the court to grant priority