Court Opinion

ID: 9857595
Source: CourtListenerOpinion
Date Created: 2023-09-24 15:47:53.743668+00
Date Added: 2024-06-11T09:51:38.525211
License: Public Domain

GRONER, Associate Justice
(dissenting).
The trouble I have in agreeing with the conclusion reached in this case grows out of the incidents which occurred between the time of the appointment of the receiver of the Washington Post and the sale by the receiver of its assets to appellant. A concise statement of these is as follows:
On March 25, 1933, a suit was instituted in the Supreme Court of the District of Columbia, for the appointment of a receiver of the Washington Post Company, and on that date Benjamin S. Minor, Esquire, was appointed and qualified. The order appointing him is not in the record, but enough appears to show that the receiver was authorized to conduct the newspaper, and this he did until the sale to appellant. At the time of Mr. Minor’s appointment there was in existence a contract dated February 9, 1932, between the Chicago Tribune Syndicate and Press Service, Inc., and the Washington Post Company, by which the Tribune agreed to furnish the Post certain comic strips for publication in that newspaper. That is the contract involved in this suit.
On April 12, 1933, Mr. Minor wrote the Tribune at Chicago as follows:
“I beg to inform you that I was appointed receiver of The Washington Post Company by decree of the Supreme Court of the District of Columbia passed on March 25, 1933, in equity cause no. 55485, with authority to continue, manage, and operate the business of the corporation until the further order of the Court.
“Acting under the authority conferred upon me by said decree, and without adopting or renouncing the existing contract between you and said corporation, you are hereby notified that I, as such receiver, desire to have you continue the service furnished by you to The Washington Post Company at the time and prior to my appointment as such receiver. Such arrangement to continue during the period of my receivership or until further notice by me.”
I can find in the record no answer to this communication, but it is a fact that there*994after, and until the transfer of the assets of the Post; the Tribune continued to furnish the “features” provided for by the contract of February 9,1932, billing the receiver monthly on the basis of the price stipulated in the contract.
On June 1, 1933, the receiver conducted a sale of the assets, and on June 5 reported the sale to the court. On June 12 the sale was ratified and confirmed, and thereupon the receiver and the company jointly and severally assigned, transferred, and conveyed to appellant all the properties of the Post. Under date of June 3, Mr. Minor wrote the Tribune, in reply to an inquiry by it, as follows: “Of course, I desire you to continue your service to me as receiver and I shall advise you promptly when the transfer is made. I believe that it is the intention of the purchaser to continue your service and that such purchaser will most likely desire to enter into a contract with you with respect thereto within a reasonable time after obtaining possession.”
And again on June 9 Mr. Minor wrote:
“After talking with you over the phone this morning I saw the representative of the recent purchaser or purchasers of The Washington Post and he advises me that it is the purpose of his clients to carry on the publication of the Post, using the features and services of your company; and that as soon as possible after the transfer of the paper they will get in touch with you With a view of making arrangements for the continuation of your features.
“As I told you over the .phone, I think that the new purchaser should be given a reasonable time within which to make arrangements to continue your service.”
In addition to the main bill of sale conveying the Post assets, the receiver on June 14, by a separate paper, expressly assigned the contract here in issue to appellant. After the transfer to appellant, it shortly thereafter notified the Tribune that it expected compliance on its part with its contract with the former Post Company.
The question, in these circumstances, is whether the contract of the Tribune with the old company continued in effect throughout the receivership and passed with the assets at the sale. I am in accord with the view of the court that the contract was assignable, if in existence when the assets of the Post were sold; but I am in disagreement with the conclusion that the contract survived and was transferable at the time of the sale. The conclusion I reach is that the contract, being'assignable, passed to the receiver on his appointment, subject, however, to an obligation on his part either to adopt it or to rescind it within a reasonable time. So far as the record discloses, there was no order of court in relation to the contract. In this aspect, in order that it should be kept alive and effective, it was the duty of the receiver affirmatively to elect to carry out its terms. If the contract was onerous, the receiver was not bound to adopt it. If it was profitable, he could elect to assume the obligations which it imposed and demand compliance by the Tribune, but, without action on his part, affirmative or negative, the contract, by virtue of the insolvency and inability of the Post Company to comply with its terms, came to an end. In Sunflower Oil Co. v. Wilson, 142 U. S. 313, 322, 12 S. Ct. 235, 237, 35 L. Ed. 1025, it is said: “The receiver did not simply by virtue of his appointment, become liable upon the covenants and agreements of the railway company. High, Rec. § 273; Hoyt v. Stoddard, 2 Allen [Mass.] 442. Upon taking possession of the property, he was entitled to a reasonable time to elect whether he would adopt this contract and make it his own,- or whether he would insist upon the inability of the company to pay, and return the property in good order and condition; paying, of course, the stipulated rental for it so long as he used it. Turner v. Richardson, 7 East, 335; Com. v. Franklin Ins. Co., 115 Mass. 278; Sparhawk v. Yerkes [142 U. S. 1], 12 S. Ct. 104 [35 L. Ed. 915].”
The action of the receiver in continuing to use the service, under the terms of his letter, would not create equitable estoppel against appellant as purchaser, or prejudice its right to repudiate the contract; nor was the receiver’s action in requesting a continuation of the service for his benefit as receiver such an-affirmative election as bound the Tribune Company under the contract, either to him or to the purchaser of the Post. He declined to adopt the contract, and he also declined to renounce it, but the effect of what he did was practically to put an end to it. That he recognized this is shown by the terms of his letter, which are only consistent with an application to the' Tribune to provide the comic features under an independent agreement with himself, limited to the period of the receivership. In this view, as I think, the original contract was at an end, and when the sale was had the receiver, so far as the contract is concerned, had nothing to assign. This conclusion seems to me to follow the rule announced in Central *995Trust Co. of Ill. v. Chicago Auditorium Association, 240 U. S. 581, 36 S. Ct. 412, 60 L. Ed. 811. At page 590 of 240 U. S., 36 S. Ct. 414, Justice Pitney says: “The immediate effect of bankruptcy was to strip the company of its assets, and thus disable it from performing. It may be conceded that the contract was assignable, and passed to the trustee under section 70a (30 Stat. at L. 565, chap. 541, Comp. Stat. 1913,' § 9654 [11 US CA § 110 (a)]), to the extent that it had an option to perform it in the place of the bankrupt (see Sparhawk v. Yerkes, 142 U. S. 1, 13, 35 L. Ed. 915, 918, 12 S. Ct. 104; Sunflower Oil Co. v. Wilson, 142 U. S. 313, 322, 35 L. Ed. 1025, 1028, 12 S. Ct. 235); for although there was a stipulation against assignment without consent of the Auditorium Association, it may be assumed that this did not prevent an assignment by operation of law. Still, the trustee in bankruptcy did not elect to assume performance, and so the matter is left as if the law had conferred no such election.”
My opinion is the decree below should be affirmed.