Court Opinion

ID: 5219916
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:31:34.301706+00
Date Added: 2024-06-11T08:27:29.842761
License: Public Domain

Ingraham, P. J. (dissenting):
The referee found that on October 20, 1906, the claimants leased to Guard N. Whitney an apartment in a residential building on Eighty-fourth street and Riverside drive for four years and eleven months, commencing November 1, 1906, at an annual rent of $3,000 per year, payable in equal monthly payments in advance; that Whitney entered into the possession of the said apartment, and from the date of the lease to the date of the trial Whitney had continued in possession of the premises, either in actual possession or under sub-leases made with the consent of the lessors; that Whitney paid the rent reserved in said lease up to and including the month of January, 1908, but for the balance of the year, ending September 30, 1908, Whitney paid the lessors the sum of $250, leaving unpaid for that time $1,150; that for the year ending September 30, 1909, Whitney paid on account of the said rent the sum of $1,500, leaving $1,500 unpaid; for, the year ending *126September 30, 1910, Whitney paid on account of the rent of the premises the sum on the 16th of Novem of $1,500, leaving $1,500 unpaid;, that )er, 1910, Whitney paid to the'lessors the sum of $250, • which was credited on the rent for the month of October, 1910; that oh or about November 16, 1910, the lessors sold and conveyed said premises and ceased to be the owners thereof; and on that date- there was due and unpaid to the said claimants upon said lease by Whitney for the rent of said apartment the sum of $5,j)00; that on January 25,. 1908, Whitney made a general assignment for the benefit of his creditors to the defendant Peck, providing that the assignee, after paying the just and reasonable costs of executing -the assignment with his lawful commissicjns, should “pay and discharge in full from the residue of said proceeds, if sufficient for that purpose,. all the debts and liabilities now due or to grow due from the said copartnership of Whitney & Kitchen and. from the said party of thej first part with all interest moneys due or to grow due therefrom; and if the residue of said proceeds shall not be sufficient to pay the said debts and liabilities and the interest j moneys in full, then to apply the said residue of said proceeds to the payment of said debts and liabilities ratably and ini proportion.” The assignee duly qualified and took possession of the property of Whitney, excepting the apartment, which remained in possession of Whitney.There is no evidence in the case as to the amount of property - that came into the] hands of the- assignee from Whitney’s individual estate, norjis the general assignment a part of the record,. It appears, however, that on May 6„ 1908, the assignee served notice upon flip claimants that he did not elect to retain the lease or to regard; it as an asset of the estate. ■ After that the landlord allowed jWhitney to remain in possession of the lease, consented to Wjhitney’s sub-letting the apartment, who individually received the proceeds of the-sub-lease. It appeared ■ -that' the property was thus sub-let by Whitney continuously from October 28, 1908, down to the time when the landlord i conveyed .the property. Whitney actually paid all rent due up to the 1st of March, 1908, and it was the rent accruing after that time during which Whitney himself or his sub-tenants actually occupied the 'property for which the claim is made.
*127It is quite clear that no obligation existed to pay the subsequently accruing rent at the time the assignment was made. The assignment was executed on January 25, 1908, and the rent was actually paid by Whitney personally up to March 1, 1908. The rent that subsequently accrued was for the occupation of the premises by Whitney subsequent to the date of the assignment and for which, there being no liability at that date, Whitney’s property assigned for the benefit of his creditors was responsible. The landlord had under the Tease an option of terminating the lease upon Whitney’s failing to pay rent, or he had the option of entering into possession of the premises and releasing it on Whitney’s account, which would have established the amount of the contingent liability of Whitney to the landlord, or he could still continue to recognize Whitney as his tenant, allow him to continue in possession of the premises and hold Whitney liable -for the rent as it became due from time to time. He having received notice from the assignee that the assignee would not adopt the lease and take possession of the leasehold premises as a part of the assigned estate, and elected to treat Whitney as a tenant and to hold him liable for the rent as it became due for the continued occupation of the premises, it seems to me that the landlord must look to Whitney for the payment of his rent and not to the property assigned for the benefit of debts as they existed at the time of the assignment. The landlords were not creditors of Whitney at the time of the assignment for the amount of the rent that became subsequently - due from month to month for the use and occupation of the premises. It is true that Whitney was bound by the lease to pay the rent whether he actually occupied the premises or not, and that he had obligated himself to make such payment; but the obligation to pay the rent would cease if the landlord took possession of the premises, and the obligation itself arose only in the future as each payment respectively became due. I assume that at the time of the assignment the landlord had a claim against Whitney for the amount that he had agreed to pay in the future less the value of the use and occupation of the premises from the time of the assignment to the termination of the lease, or, in other words, for the damages that the land*128lord would have sustained by a breach of the contract of" leasing; but the landlord could not allow the assignor to occupy the premises and receive | the benefit from such occupation or such sub-letting, and at the same time, hold the assigned estate for the full amount of the rent that was agreed to be paid for the future occupation of the premises. It is said, however,, that the assignee is boimjd by the terms of the assignment, and ■ as this assignment directed the assignee to pay all debts- and liabilities now due or to grow due from Whitney, the assignee is required to pay these pubsequent rents as they from time to time accrue; but it is the.indebtedness, of the assignor existing at. the date of the assignment which the assignee is required to ■ pay, the then existing debts, whether due at the time .of the assignment, or to grow due thereafter. The question is, what indebtedness existed from the assignor to the- landlord on the 25th' day of January, 19j08, when the assignment' was made. It seems to me clear that that existing indebtedness was an amount of rent which was then due and payable,, or the difference-between the . rent that Whitney was to pay for the balance of the term and the value. of the use and occupation of the premises for such period; and it is not the amount Of' the subsequently accruing rent for- the use and occupation of the premises subsequent to the time that the assignment was made.
Thé cases of Matter of Ludeke (33 App. Div. 397); Matter of Hevenor (144 N. Y. 271) jand People v. St. Nicholas Bank (151 id. 592), were relied on by the referee. In Matter ofLudeke there was a claim by a landlord for an amount that had been agreed to by the assignee in'full settlement of the claim against the assignor and the assigned estate and which had been paid-by the' assignee, and this court held that amount be allowed to the assignee on a settlement of his accounts. The question here as to whether the assignee would have been bound to pay to the, landlord the subsequently accruing rent during the Whole term of the .lease, he allowing the assignors to occupy the premises when no advantage ¡from such occupation would come to the estate was not direcly presented. In Matter of Hevenor, Hevenor made an assignment for the benefit of his creditors, the assignment containing a provision substantially the sarnie .as the one now under consideration; but m that case the lessors *129entered into possession of the premises, relet them to different persons by virtue of a provision in the lease similar to that in the lease in question, and then claimed as against the assignor to recover the difference between the amount which he had recovered from the subsequent lessees of the premises and the amount that the. assignor was bound to pay for the lease. Judge Gray, in discussing the situation that existed, said: “Under such circumstances, what claim these appellants could have against; the assignor, or his assigned estate, must be uncertain and contingent. It could not be regarded as one of the debts, or liabilities, contemplated to be paid, under the deed of assignment. That instrument is to be followed strictly by the assignee in his disposition of the property.' * * * They [the claimants] infer from the use of the word ‘ liabilities,’ in the clause in question, that the assignor intended that his assignee should pay all liabilities which might grow; due, without regard to the question of when, or how they arose; provided they were possibilities under his contractual relations with others. This contention naturally assumes that the word £ liabilities,’ as used in the assignment, imports an element,, which makes the assignment more elastic in its comprehension of the obligations to be included therein. We think that the General Term was right, in holding that the words £ debts ’ and 1 liabilities ’ were synonymously used,* and that the assignor could not have intended that liabilities, thereafter to be created by the acts of the lessors in the lease, should be paid by his assignee. * * * No inference can be drawn from this deed of assigmnent, which contradicts the rules of law, and the liabilities, which the assignee was required to pay, were only those which could be ascertained, or fixed, at the time when the assignment was made; although the liability might not mature into an actual debt until the lapse of some time after the making of the assignment.” In this case the obligation to pay the rent was created by the lease that existed when the assignment was made. The act of the lessor in taking possession of the premises and renting them for the benefit of the lessee simply reduced the liability which the lessor was under to pay the rent. Certainly if the assigned estate *130was not liable for the reduced amount, or the amount that the lessor agreed to pay as tenant, less the amount that the lessor had collected from sub-letting the premises, the assignee could not be compelled to pay j the whole amount that the lessee had agreed to pay for the premises when the assignor himself had occupied the premises and received for his own use the proceeds derived from them.- In! People v. St. Nicholas Bank (supra) there was a claim against the receiver of an insolvent corporation for rent to accrue for an unexpired term at the date of the appointment of the receiver. In that case the Hevenor case was distinguished and, after discussing the authorities, the court said: “ It should be clear, as we think, that - no discretion is vested in an assignee with respect to the distribution of the estate in his harlds and that he must follow closely in doing so the terms ofj the assignment. There should be no construction of its provisions which would permit the delaying of creditors. The presentation and allowance of a claim by Hevenor’s lessor- for aj certain sum, as due from the lessee upon the cessation of ocpupation under -the lease, would have been unobjectionable asi a debt or liability, of the assignor and would in no wise have tended to- delay the distribution of the assigned estate among- the creditors. The liability' of the assignor was fixed at thie time of the re-entry by-the lessor and would haVe consisted in -an indebtedness stated by the lessor, either as the whole amount of rent to accrue during the unexpired term of the lease,, ór as such lesser amount as would represent the difference between the whole amount of the rent thereafter- to accrue and the. amount of rent reserved in a reletting of the premises for the unexpired term.” The court then discussed the question as to a claim against the receiver of an insolvent 'corporation, and held that the situation of a receiver was different from that of an assignee for the benefit of creditors. Considering what "was decided in these two cases it seems to me that the referee has entirely misapprehended the effect of the- decisions and has allowed just what the Court of Appeals-has said could not be allowed, that is the claim presented by a lessor for -the rent subsequently accruing, less the amount that the assignor and lessee had paid on account of the' rent. The situation is in no sense different from that in the *131Hevenor case, except that in this case the landlord allowed the lessee to remain in possession and collect the rents and pay what he pleased to the landlord; while in the Hevenor case the lessor entered into possession of the premises and appropriated all the rents that he could collect to the diminution of the claim. Undoubtedly, as before stated,, the lessor in this case could have presented a claim for the difference between the value of the use. and occupation of the premises during the remainder of' the term and the rent that the assignor was: to pay; but he could not claim to be entitled to all of the rent payable under the lease for the use and occupation of the premises without making any allowance for the value of the use and occupation during the balance of the time.
It seems to me, therefore, that under the authorities relied upon by the referee and the principle there established, the claim cannot be sustained.
The order appealed from should, therefore, be reversed, with ten dollars costs and disbursements, the motion to confirm the referee’s report denied and the claim rejected.
.McLaughlin, J., concurred.

 See 70 Hun, 56.— [Rep.