Court Opinion

ID: 3591728
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:40:13.073216+00
Date Added: 2024-06-11T13:43:03.876370
License: Public Domain

The order appointing Edward S. Stokes as receiver of the Hoffman House authorized and empowered him "to take possession of and carry on the several hotels and restaurants, the leases of and chattels in which are covered by the said mortgage * * * and with authority to do any and all other things which may be necessary or proper to be done in the general and ordinary conduct of similar places of business." It is true that the payment of the rent accruing during the occupancy of the receiver upon the lease of the Hoffman House is not expressly directed by the order, but we will not assume that a court of equity, in making the order, intended to hold possession of the leasehold property and appropriate its entire earnings and thus deprive the landlord of the rent that legally and equitably belonged to him. The payment of such rent was proper and was one of the things ordinarily done in the conduct of a hotel business upon leased property, and to our minds was clearly contemplated by the court making the order.
Again, considering the case independently of the order and upon the assumption that it contained no provision authorizing the payment of the rent, the fact nevertheless exists that the receiver did pay the sum of $10,000 to the landlord for rent accruing during the time that the premises were occupied by him as receiver, and the question now is, can he recover this sum back from the defendant?
After paying the rent referred to, the receiver had on hand upwards of $9,000. He must, therefore, have saved from the operation of the property during his receivership upwards of $19,000 over and above running expenses, not including the rent. The rent of the premises during the receivership exceeded in amount the $10,000 paid, and under the circumstances a court of equity would certainly have applied this surplus upon the rent had it been asked so to do by the landlord or the receiver. Instead of asking the court for such an order the receiver made the payment voluntarily without protest, under no mistake of fact or law, and no creditor of the corporation or other person has ever appeared to object to or question the propriety of such payment. Under these circumstances no court, in the exercise of its equity powers, *Page 566 
could when requested properly refuse to confirm such payment. The payment was but right and proper; the rent belonged to the landlord and he was entitled to it; the defendant did not owe it and was under no obligation, either in law or equity, to pay it. Under the notice of sale the purchaser, upon payment of the sum bid, was to have the property free and clear from unpaid rent. He had the right to assume and pay the rent if he so elected and deduct the amount from the purchase price, but this was a privilege personal to the purchaser. He had the right to take the furniture and other personal property covered by the mortgage from the hotel building and use or dispose of it elsewhere. He could either surrender the leasehold property to the landlord or leave it in the hands of the receiver. It does not appear to us that a payment made under such circumstances can properly be held to be the wrongful appropriation of the moneys of the receivership.
It is contended that the payment of rent was made for the benefit of the defendant. We do not so understand the facts. As we have already seen, the defendant, as purchaser, was under no obligation to pay the back rent accrued, and if it did choose to pay such rent it had the right to deduct the amount so paid from the purchase price. If the rent was paid by the receiver then the purchaser could perform his part of the contract by paying over the purchase price to the officer of the court making the sale. So far as he was concerned, he had to pay the purchase price either to the referee or to the landlord, but in no event could he be called upon to pay more. The payment by the receiver merely relieved the defendant from paying that amount to the landlord, but he remained obligated to pay it to the referee. It is not, therefore, apparent how the defendant was benefited by such payment, or how it can be held to have been made for its benefit.
It is said that this is an action at law. Undoubtedly, but the plaintiff seeks to recover back money which he has voluntarily paid to the person entitled thereto under no mistake of fact or law, which payment a court of equity would have compelled had it been requested so to do. Our attention has been called to no authority which authorizes a recovery at law under such circumstances. *Page 567 
The defendant, doubtless, could have applied in the foreclosure suit for an order ratifying the payment made by the receiver on account of the rent during the pendency of this action. If such a motion had been granted it would have disposed of the claim. It may not be too late for the defendant now to move for a stay of execution upon this judgment, pending an application in the foreclosure suit, to have all of its equities established and preserved. A proper result may be reached by adopting that practice, but it would, doubtless, result in further litigation which might extend over years. The plaintiff has brought this action to recover, among other items, the $10,000 paid by him for rent. The issue raised thereon is now before us for determination. We have jurisdiction to now dispose of that controversy without remitting it to another tribunal, and, under the circumstances, it appears to be our duty to do so.
No other errors appear in the case which require consideration here.
The judgment should be modified by deducting the sum of $10,000, with interest thereon from the 26th day of January, 1898, from the amount of the recovery herein, and, as so modified, the judgment should be affirmed, with costs to the appellant.
PARKER, Ch. J., and WERNER, J., concur with CULLEN, J., and GRAY, J., concurs in result; O'BRIEN and LANDON, JJ., concur with HAIGHT, J.
Judgment affirmed.