Court Opinion

ID: 8793144
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:59:04.501479+00
Date Added: 2024-06-11T17:03:28.427551
License: Public Domain

HAND, District Judge
(dissenting). The majority of the court in this case does not, as I understand it, question the proposition, though they do not decide it, that, if a receiver in insolvency proceedings accepts a lease on which back rent is due, he takes subject to existing defaults upon conditions subsequent in the term. I should be sorry if any doubt were thrown upon that, and there is no intention, if I. am right, to do so. The gravamen of the decision is this: By asking the court to compel the receivers to make their election the landlords recognized' the lease as still in existence, and that recognition was a waiver of their right of forfeiture. A landlord may by his conduct waive a breach of condition either for failure to pay rent or for anything else. Thus a distress even for rent accruing before the default will waive.the breach and toll the re-entry, because distress is a remedy which lies only against a tenant and presupposes that the term still endures. Stuyvesant v. Davis, 9 Paige (N. Y.) 427; Jackson v. Sheldon, 5 Cow. (N. Y.) 448. So, also, suit to recover for a subsequent installment, or even the receipt of such an installment is enough, because there can be no subsequent rent, unless it arise from the term. In, all these cases, if a landlord be later allowed to re-enter as of a default earlier than the time of the distress or the period for which the rent is due, he will have got a right or a remedy which depended upon the existence of the term at one period which by his subsequent action he wishes to declare nonexistent during that period. Such I think are all the cases. I have not been referred to a case which holds a landlord to be estopped, because he spoke of a “lease,” or acknowledged that .the termor had some existing rights as of course he-has.' 1
What the landlords did here in order to compel the election appears in the recitals of the order of February 9, 1914, and the affidavit of Charlton verified the same day. No petition was made; the whole thing was done orally, except for the affidavit. It appears from this that on January 30th, the landlords’ attorney told the court that they wished to have a time fixed within which the receivers should decide “what was their intention concerning said lease.” After an adjournment- and. a subsequent appearance for the same purpose the court fixed a. time, within which, the receivers took the lease. Had the landlords asked that the receivers should within a fixed time declare *593their intention “concerning tiieir option to accept the defendant’s rights in the forfeited lease,” there would have been no waiver, as I understand it. Because without condition they called it a “lease,” their recognition of it constituted a waiver. I cannot really see why, if this be so, we must not also say that it is a waiver to demand unconditionally of a termor rent already due under his “lease” or under “the lease under which you now .hold.” A landlord must he careful not to speak of the lease as such, without adding that he reserves all his rights.
I can find no authority for such a ruling, and it seems to me an interpretation of the conduct and language of the parties which violates their intention and the universal practice of all landlords and tenants. When the landlords asked the receivers to declare their option regarding the “lease,” no one would, I think, have supposed that they intended to waive any existing conditions, and we ought to interpret language when we can as it is meant. The lease remains yet a lease, though the landlords may forfeit it if the lessee continued in default. Until then it is a lease, and may never be anything else. Why should he not call it what it still remains, without adding a complete statement of his rights regarding it? To require him, every time he mentions it, to attach a reminder that he makes no waiver, appears to me to substitute a purely factitious requirement to a perfectly plain transaction.
The other alleged waivers it is necessary to take up, if one disagrees upon the point 1 have just discussed. They are three: (1) The agreement of December 16, 1913; (2) the payment by the receivers during their occupation; and (3) the filing of the claim in the receivership proceedings. The first is not a waiver, in my judgment, for two reasons: First, because the sum received does not even amount to one month’s rent, and there are three due. The landlord would have the right to allocate the payment on the first month’s rent, leaving the subsequent rents unpaid. Now it is a well-settled principle that the receipt of rent waives forfeitures only for the period antedating that upon which the rent is applied, and the subsequent unpaid rents, with their several forfeitures, remained sufficient ground of forfeiture. However, the landlord specifically reserved all his existing rights, notwithstanding the security which he took, as he had the right to do, and this is a complete answer. Second, the acceptance of money from the receivers was not a payment of rent under the lease. It is well settled that the receivers or trustees in bankruptcy do not take over the term until they voluntarily accept it or remain mute an unreasonable time. Re Frazin, 183 Fed. 28, 105 C. C. A. 320, 33 L. R. A. (N. S.) 745. Until then everything they receive is by way of payment for occupation. This was in fact the case of the January payment. The receivers had not accepted the lease and could not pay the rent. The use of the word “rent” in the receipt was intended by neither side to Constitute an acceptance of the lease or a payment of rent under it; but, if it had been, it was without the authority of the landlord, whose agent had not the right to bind him.
Finally, there is the question of proving the claim in bankruptcy. *594On January 30th the final decree was entered directing all persons to file claims on or before February 16th. On the earlier day the landlords appeared and asked the court to fix a time within which the receivers must elect to accept the lease. That matter was adjourned until the 9th of February, when formal application was made and the court fixed the 4th day of March; the claim was not filed until February 13th. Thus it appears that the receivers were not called on by the court to decide before the time expired within which the landlords must file claims. If they did not file, they lost their dividends ; and if the receivers later repudiated the lease, they could never recover anything for those months. It seems to me, in view of this, that the filing of the claim should not be taken as a recognition of the lease, inconsistent with the right of re-entry, but that it should be taken as a pfovision against repudiation by the receivers.
J dissent, and vote to reverse the order, and allow the landlords to sue in ejectment upon the breach of condition subsequent. I do not mean that in any event this court should forbid landlords recourse to the state court under such circumstances; but I have considered the merits, since the decision has been upon the merits. In any event it would seem to me that the proper place to decide all such matters was in an action of ejectment in some court of competent jurisdiction.