Court Opinion

ID: 9651405
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:18:42.10003+00
Date Added: 2024-06-11T18:12:33.591251
License: Public Domain

MANTON, Circuit Judge
(dissenting).
The theatre company’s lease, expiring in 1927, was not assignable. Mr. Moroseo held the controlling interest in that company and later organized, the Moroseo Holding Company which, without assignment or purchase in any way of the lease from the theatre company, took possession of the theatre and produced plays therein. It was a separate entity and was independent of the theatre eom-*pany. It paid its rent and was accepted as a tenant in every particular. The theatre company had but a lease subject to all its burdens. The fact that the stock of both companies was held by the same interest, did not alter their status as separate entities. Therefore they were not one and the same corporation.
The wrong, if any was committed, was an interference with or causing a breach of a contract between the landlord and the tenant, the theatre company. The theatre company’s asset resulting from this wrong was the damages for the loss sustained by it as a result of such interference with the contract of tenancy. It may be the landlord is responsible for a breach of its contract. Perhaps the tenant, the theatre company, might be found to have abandoned its lease. One thing is certain, there is no transfer of an asset by the theatre company to the holding company. There is no authority to hold the holding company as a transferee merely because this is a tax debt. The collector may not reach out lawfully and obtain this asset. No lien for a tax should or can attach to the profits of the holding company. Indeed, profits attributable to the lease are not disclosed by this record. There is some evidence of what a receiver of the holding company, later appointed, made in years subsequent, while operating the theatre. But this was not an asset of the theatre company. Nor is the value of the lease any evidence of an asset of the theatre company. The record does not disclose that the theatre company was not in default or that it was able to continue paying under this unassignable lease.
Therefore section 280 of the Revenue Act of 1926 (44 Stat. 61 [26 USCA § 1069]) is not applicable. I dissent.