Court Opinion

ID: 9652823
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:32:49.123365+00
Date Added: 2024-06-11T18:12:54.355149
License: Public Domain

AUGUSTUS N. HAND, Circuit Judge
(concurring).
While it may make no difference in the final result whether the right of the claimant to prove for the period before October 31, 1935, and after that date to December 18, 1935, when the sublease was canceled, arose through subrogation, or through an assignment by the New York, New Haven & Hartford Railroad Company of rents accruing under the sublease, I cannot understand how any doctrine of subrogation is applicable to the situation. Nor can the claimant succeed on any theory of third party beneficiary such as was involved in Re Radio-KeithOrpheum Corp., 2 Cir., 91 F.2d 1004, and in Silver King Coalition Mines Co. v. Silver King' C. M. Co., 8 Cir., 204 F. 166, Ann.Cas.1918B, 571, for in the present case the agreements of sublease contained no promise to pay the rent to the claimant but only to the New Haven. The rights of the claimant to rentals prior to the cancellation of the sublease if existent at all, as I believe they were, must have arisen out of an assignment to it of such rentals effectuated by the direction of the 'New Haven in the agreement of July 6, 1926, to which the claimant was a party, to pay them directly to the claimant. The objection of the debtor to treating the agreement of July 6, 1926, as effecting an assignment of rents because the terms of the sublease of 1910 permitted a cancellation by the Connecticut .Company and the New York, New Haven & Hartford Railroad Company is without merit. That the rent accruing prior to cancellation should belong to the claimant is in no way inconsistent with a right to cancel. The Connecticut Company was not obliged to enter into a new lease with the claimant, but had a mere option to do so which, terminated upon the cancellation of the sublease. To the sum of $304,472.-13 allowed by the court below for rent accrued up to October 31, 1935, when the petition against this debtor was filed, should be added $108,904.20, representing taxes which the debtor in section 2 of the agreement of July 6, 1926, promised the claimant to pay. This sum, instead of $27,858.75 allowed for such taxes by the *318District Court, is required in order to render the accrued rent tax free as provided in the main lease of 1906 and the agreement of 1910. The total claim accrued up to October 31, 1935, is allowable as a general claim.
~For the period between October 31, 1935, and the date of cancellation of the sublease in December, 1935, an amount equivalent to the rent payable under the terms thereof might properly have been and was allowed as an operating expense of the estate in administration,' for the reason that the debtor was in actual possession during that period and was not engaged in determining whether to affirm or disaffirm, but the sublease was canceled in December, 1935. For the period between the cancellation of the lease and November 16, 1936, when the claimant took over the premises, the amount of net earnings was properly allowed as an operating expense of the estate in administration, for the reason that the debtor remained in possession during that period. Even if net earnings, .rather than rental value, should have been allowed for use and occupation during the period betwe'en October 31 and the date of cancellation of the sublease on December 18, 1935, the amount fixed by the court below for operating expenses of the estate in administration between October 31, 1935 and November 16, 1936, would only be reviewable in the event that an appeal had been allowed by this court under section 24b of the Bankruptcy Act, as amended, 11 U.S. C.A. § 47(b).