The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1899-08-09

Adjudication Of Bankruptcy Deter
mined the Rights of the Other
Creditors.
An opinion which will be Of general
interest to landlords and esseps has
been given by Attorney G. \. Van
Wormer, referee in bankruptcy. in
the case of 4. r. Gould & Sons vs..
Samuel l.. Goldstein, relative to the
collection of rents when the .tenant
has been declared a bankrupt.
This is the first instance of this
kind in this part of the state, and the
opinion is therefore Of much interest
1t is as follows
At the first meeting of creditors in
this action \. r. Gould & Sons filed
with the referee Il claim for rent. for
the premises occupied by the bank
rupt as Il place of business. The facts
upon which this claim is based are as
follows on May 6, 1898. the bank
rupt became a tenant of 4. II. Gould
& Sons by the assignment OF a lease
made by Gould & Sons to the Free
man Manufacturing company. BY the
terms Of this lease it was agreed inter
ALA, that the term should be for ten
able 1925 per month i'm advance. And
If default be made in the payment of
said rent or any part thereof, for the
space of thirty days after the same
'Shall become due. or any default be
made in the performance of any of the
covenants herein contained, the said
hiring and relation of landlord and
tenant, at the option of the lessor,
shall wholly cease and determine; and
the lessor shall and may re- enter said
premises and remove all persons
thcrcfrOm."
FURTHER AGREEMENT.
And it is further agreed that should
the lessee remove his goods or any
part thereof from said building or in
any manner attempt to vacato the
premises during said term. or become
bankrupt or assign for the benefit "
creditors or executions be issued
against him, then in that case. the
whole rent for the uneXpireG term
shall at once become due and collect
able by distress or otherwise"
on May Il, 1899, Goldstein was in
default of $2S.SO balance due for April
rent and 1925 due for the month Of
May. on this dav Gould d Sons issu-
|, cd a landlords warrant aud levied up
ON all of the bankrupt's property upon
the premises leased. on May 10. 1899,
Goldetein filed a voluntary petition in
bankruptcy, and on the same day
was adjudged bankrupt. All proceed
ings under the landlords warrant
have been stayed by Gould g. Sons.
and they now present their claim to
the referee for Sl1.356.G 90. being the rent
for the uneXpired term of the lease,
and claim priority Of payment.
That they are entitled to priority
there can be no doubt; for the law Of
ogN' u nj 70 10 4 ArlC mi
oritv Of payment for rent due. out of
funds arising from the sale Of the
tenants property: and Sec. Ct 60 Of
the Bankruptcy act provides for prl-
ority of payment To such claimants.
The amount to which Gould e SOts
are entitled az preferred creditors. Is
therefore detcrminable BY the law Of
Pennsylvania. Sec. So of the Act Of
1886, provides. "ThP goods and chat
tells being in or unon any messuage,
lands or tencments. which are nr shall
be demiSed for life or years, or other
wise. taken by virtue Of an CNCcu-
tiOn and liable to the distress Of the
landlord. shall he liable for the pay
mcnt of any sums Of money due for
rent at the time of taking such goods
in execution. Provided. that such
rent shall not exceed one years rent"
QUESTION OF AMOUNT.
IL is unnecessary To tOnSltCf lIe
question of the amount Gould g. Sons
might have collected under the distress
had not bankruptcy proceedings in
tervencd, for any lien they acquired
by virtue of the landlords warrant.
was dissolved by the adjudication OF
bankruptcy OF GOldstcin Bankruptcy
act. Sec 67. The question is what
amount was due at the time the ten
ant became bankrupt, and the title Of
bie ~ in bie
the terms Of the leasc'should the les
see become bankrupt" "the whole rent
for the uneXpired part of the tern,
shall at once become due and collect
able"
It was said by Chief Justice Ster-
rett in Platt. Barber e Co. VS.. John
son ct al. les Pa. s. 40, "Thero Ia
nothing Illegal or contrary to public
policy in either of the above quoted
provisions" AS was said in Goodwin
vs., Sharkey, so Pa. :. l49, 153. the
whole rent for the term might have
been payable in advance. and there
exists no reason why it might not be
made payable ut any time during the
running of the lease, upon the happen
ing of any contingency.
THE right Of distress would immo-
dately arise upon the happening of
the specified contingency: and that
right might be exercised by the lessor
10 the extent Of collecting more than
ono years past due rent. provided the
rights Of execution creditors have not
previously attached If they have, the
act Of June 10, 1896. limiting the les
sor's right TO payment out Of such
fund to an amount not exceeding one
years rent becomes operative i'm ia
VCr Of the execution creditors"
The whole amount Of rent for the
uneXpIrad term, by the terms Of this
lease became due on Nav u, 1S9a
the date of the ADJUDICATION OF bank
Tuptcy of Goldstein, but the same act
whicn fixed the amount due under the
lease viz: the adjudication Of bank
ruptcv, also determined tho rights of
all other creditors Of GoldStain; and
their rights having attached to the
hankrupts property, the landlords
right to priority Of payment is limit
ed to one years rent. The claim OF
4. r.. Gould & Sons is therefore al
lowed for the sum Of 81 500 to which
amount they are entitled to priority
of payment.