Atkins v. Wilcox

• Decision Date: 18 December 1900
• Docket Number: 977.
• Citation: 105 F. 595
• Parties: ATKINS v. WILCOX.
• Court: U.S. Court of Appeals — Fifth Circuit

105 F. 595

ATKINS v. WILCOX.

No. 977.

United States Court of Appeals, Fifth Circuit.

December 18, 1900

Robert J. Maloney, for appellant.

E. T Florence and Chas. Rosen, for appellee.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

McCORMICK Circuit Judge.

On the 4th day of May, 1899, Leopold Keiffer, by a written lease rented from the appellant, Mrs. Sarah E. Atkins, certain premises described in the lease for the term of one year commencing on the 1st day of October, 1899, and ending on the 30th day of September, 1900, for a monthly rental of $333.33 1/3, for which Keiffer executed and delivered to the appellant 12 rent notes, bearing even date with the lease and payable to the lessor, one on the 1st day of November, 1899, and one on the 1st day of each and every succeeding month (except the last one, payable on the 30th of September), fixing the interest at the rate of 8 per cent. per annum from maturity until paid. The lease recited that should the property be destroyed by fire, or should the lessee be deprived of the use of the premises by some other unforeseen event, not due to any fault or neglect on his part, then he should be entitled to a credit for the unexpired term of the lease, and the corresponding proportion of rent notes should be annulled and returned to him. At the time of the making of this lease Keiffer was in possession of the premises under a lease of similar import bearing date 8th of June, 1898, which provided for a term of one year, commencing on the 1st day of October, 1898, and ending on the 30th day of September, 1899. On October 3, 1899, Keiffer presented his petition to the court of bankruptcy to be adjudged a bankrupt, which petition, in the judge's absence, was referred to a referee, who on the same day declared and adjudged the petitioner to be a bankrupt. By a stipulation of the parties, only certain portions of the record in the bankrupt proceeding were brought up on this appeal, from which it appears that the appellant made proof of a secured debt against the estate of the bankrupt on October 31, 1899, claiming the aggregate amount of the 12 rent notes given and held under the lease of date May 4, 1899, and to become payable as above recited. The claim and proof thereof embraced other items, which do not require further notice here. On November 21, 1899, this proof of debt was filed by the referee. The record we have does not show any further action in the bankrupt estate until March 7, 1900, when an account of C. O. Wilcox, trustee of the estate of Leopold Keiffer, bankrupt, was presented to and filed by the referee, who thereon made an order of that date, as follows: 'Let a meeting of creditors be held on March 20, 1900, at 3 p.m. Let them be notified according to law, and that they do show cause on the above date why said account should not be approved and homologated. ' The account showed the receipt of all of the funds that had come into the hands of the trustee, aggregating $3,651.44. It also showed 20 items of disbursement that had been made by the trustee, and bore an item, 'Reserved for future costs, $150.00," which, added to the disbursements, aggregated $2,253.77. Among the disbursements is the following: 'Mrs. Sarah E. Atkins, landlord. Rent for September, October, and November, 1899, three months, at $333.33 1/3, $1,000.00. ' On March 20, 1900, the appellant appeared before the referee and filed her written opposition to the account submitted by the trustee, on the ground that she had proved her claim for rent for the whole of the 12 months specified in the lease of May 4, 1899 (and other grounds not necessary here to notice), and that by the laws of Louisiana she has a lien of the first rank on all the property in the leased premises, and that the total assets in the hands of the trustee and on deposit to the credit of the estate were realized from the sale of the property contained in the leased premises, and subject to her lien, wherefore she opposes each and every item on said account, and prays that she be declared entitled to a lien first in rank on all the property contained in the leased premises, or on the proceeds, and that the account of the trustee be amended, and he be ordered to pay to her the full amount of her claim in preference to all other claims. The referee rejected her claim for the months of December, 1899, to September, 1900, inclusive, for reasons elaborately given in his judgment thereon, from which judgment Mrs. Atkins appealed to the judge sitting in the court of bankruptcy, by whom the judgment of the referee was affirmed, and she prosecutes this appeal.

It appears that the trustee occupied the premises during the months of October and November, 1899, and that he allowed and paid on Mrs. Atkins' claim for rent which accrued for the months of October and November, under the current lease, at the rate and amount of the notes which had been given therefor. The appellant insists that the trustee was without right or interest to contest the lien of the opponent, as it was claimed in her proof of debt. We are clear that this position is not well taken. By the express terms of the statute the trustee is selected by the creditors. By the clearest implication he represents all the creditors, and as such representative has as interest in the just administration of the estate which belongs to the creditors. Moreover, this right is expressly recognized in the sixth paragraph of general order in bankruptcy 21 (32 C.C.A. xxii., 89 F. ix.), which has itself the force of a statute, even if not clearly founded on the text of the statute, which we think it is. It appears to give the trustee precedence even of the creditors, for the language is that, 'when the trustee or any creditor shall desire the re-examination of any claim filed against the bankrupt's estate, he may,' etc. The appellant by her proof of debt appears to found her claim, in part at least, on the following provision in the lease:

'Should the lessee at any time fail to pay the rent punctually at maturity as stipulated, the rent for the whole unexpired time of this lease shall, without putting said lessee in default, at once become due and exigible.'

In her affidavit in support of her claim she contends:

'According to the terms of said lease, the note maturing November 1-- 4, 1899, not having been paid, then the whole unexpired amount of said lease represented by said notes becomes due and exigible.'

At the date of the adjudication in bankruptcy, and at the date when the debt was proved, there had been no default in the payment of rent under the then current lease, or any violation of its conditions which would render the notes, or any of them given for the rent that was to accrue due and exigible, and authorize the lessor to enforce her lien on the...