Court Opinion

ID: 8640362
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:52:11.540262+00
Date Added: 2024-06-11T16:56:04.833991
License: Public Domain

LOWELL, District Judge.
There is no evidence that the assignee has done any act looking to an acceptance of the premises, excepting that a part of the bankrupt’s goods not included in the mortgage remained, and still remain, in the building. This circumstance alone does not prove an acceptance, especially when the- keys were sent back to the lessor, which was an unequivocal act of • renunciation. See Wheeler v. Bramah, 3 Camp. 340; Hoyt v. Stoddard, 2 Allen, 442. It cannot be contended, therefore, that the assignee is personally bound for the rent; and the question argued now has been, to what extent and for what sum is the mortgage a valid security in the hands of the lessor? He appears to have acted upon the theory that the lessee remains liable on his covenants notwithstanding the bankruptcy. This was the law of England under the older statutes; but it may well be doubted whether by our bankrupt act, which authorizes all demands arising out of contract to be liquidated and proved, the lessof will not be bound by the certificate. I understand that this question is likely to be litigated in some other cases, and as it is not essential to pass upon it here, I merely advert to it. Under this lease and mortgage it would seem that the lessor may hold the chattels to secure the payment of all rent and taxes which were due him when the assignee had elected not to take the term. That election ought to have been made in ten days after the assignment, but was not in fact made until January 1, some weeks later. I say ten days from the assignment, because that is the fair construction of the proviso, which, taken literally, might give only ten days from the petition. It must be assumed that the parties to the lease knew that a petition in .bankruptcy may never be followed by an adjudication, or not within ten days, and ■that even after adjudication there is no one to act for the estate until the assignment, and as the purpose of the proviso is to give an election to continue the lease, and not to forfeit it by relation to a past time, the more liberal construction should be adopted. But even if the lessor might have treated the estate as ended on the llth of November, he could waive his extreme rights for the benefit of the assignee.
Neither party having acted or made known his election until the first of January, the lessor ought to have his rent up to that day, for he may have expected the assignee to take the lease, as he undoubtedly would have done if he had found a purchaser, or in any way could have made it profitable for the creditors. Assignee to redeem by paying the rent to January 1, 1870, and the taxes for 1869.