Court Opinion

ID: 6856225
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:42:31.420649+00
Date Added: 2024-06-11T16:05:09.803913
License: Public Domain

L. HAND, Circuit Judge
(concurring).
In Manhattan Properties, Inc., v. Irving Trust Co. (C. C. A.) 68 F.(2d) 476, handed down herewith, I have said what I thought about the question which underlies this appeal, and that ease was stronger for the trustee than this. I accept it as a fact, though the record does not show it, that the trustee did not assume the lease; if so, the bankrupt continued as tenant, for the term did not end. But the lessee was subject to re-entry for breaches of condition, one of which was a failure to pay rent, though the lease contained no covenant reserving damages to the lessor in that event, either by way of liquidated damages, or actual damages seriatim as tlie installments fell due. I assume therefore that no future rent was recoverable, the probabilities all being that the lessee would reenter and rent end with the term. However, we have not that question before us, but whether the covenant to restore the premises, antieipatoxily broken by the bankruptcy, may be the basis of a provable claim.
Upon petition filed such a elaim was contingent both in obligation and in amount. The lessor might be evicted by paramount title, or the premises might be destroyed; in either case the lessee was relieved. The trustee might assume it and pay the hack rent. Again, no one could say when the lessor would re-enter, or theoretically whether he would re-enter at all; and the cost of restoration would depend upon when he did; in any event the time during which the payment should be discounted was as yet uncertain. But if, as I think, contingency of the claim is not an absolute bar, for the reasons I have given in Manhattan Properties, Inc., v. Irving Trust Co., all these questions go into the realm of more or less. It may be when the elaim is liquidated they will have been determined; probably the lessor has already re-entered and the time for performance of the covenant to restore is past due. If not, and if he has not re-entered before liquidation is complete, some approximation of the damages must be made, the objections to which do not seem to me practically insuperable. I bad rather impose such hazards upon the creditors, so far as they are not actuarially possible of calculation, than to dismiss the lessor with nothing.
I acknowledge that such a claim may be too uncertain to be dealt with at all; a mere gamble to which the creditors are not obliged to submit, and I agree that it is impossible to say a priori how great the uncertainties must bo to make it so. All that we need do here is to hold that they are too remote to malte the claim bad in toto. The controlling point to my mind is that the contingency of the elaim upon petition filed, either in obligation or amount, is no longer final; unless we are to make a difference between realty and personalty, which I would not do. For these reasons I think that the claim ought to have gone to liquidation and that the order should be reversed.