Weaver v. Hutson, Ii
Decision Date | 24 October 1972 |
Docket Number | No. 71-1645,71-1645 |
Citation | 93 S.Ct. 288,34 L.Ed.2d 227,409 U.S. 957 |
Parties | Coy L. WEAVER et ux. v. Richard M. HUTSON, II, Trustee of Landmark Inns of Durham, Inc |
Court | U.S. Supreme Court |
On petition for writ of certiorari to the United States Court of Appeals for the Fourth Circuit.
The petition for a writ of certiorari is denied.
Section 70(b) of the Bankruptcy Act, 11 U.S.C. § 110(b), provides:
'[A]n express covenant that an assignment by operation of law or the bankruptcy of a specified party thereto or of either party shall terminate the lease or give the other party an election to terminate the same is enforceable.'
In Finn v. Meighan, 325 U.S. 300, 65 S.Ct. 1147, 89 L.Ed. 1624 (1945), the Court held § 70(b) fully applicable in ch. X reorganization proceedings despite arguments that enforcement of forfeiture clauses could deprive the debtor of property vital to the continuance of the business and so defeat the very purpose of the reorganization proceedings.* The Court said:
. 325 U.S., at 302-303, 65 S.Ct. 1147.
In the case before use the Court of Appeals for the Fourth Circuit refused to apply § 70(b) in a reorganization proceeding and to enforce a termination provision in a lease because to do so, in its opinion, would emasculate the reorganization plan. The Court of Appeals relief on Smith v. Hoboken R. Co., 328 U.S. 123, 66 S.Ct. 947, 90 L.Ed. 1123 (1946), where this Court held that § 70(b) did not require recognition of a forfeiture provision in the context of a railroad reorganization under § 77 because the forfeiture would deprive the Interstate Commerce Commission of its statutory function . The Court was careful to distinguish Finn:
'Finn v. Meighan, supra, involved the forfeiture of a lease in reorganization proceedings under Ch. X. But the problem there was not complicated by any provision of Ch. X giving to an administrative agency the functions entrusted to the Interstate Commerce Commission under § 77. As we stated in Palmer v. Massachusetts, 308 U.S. 79, 87 [60 S.Ct. 34, 84 L.Ed. 93],...
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