Bell v. American Protective League

• Decision Date: 28 May 1895
• Citation: 163 Mass. 558,40 N.E. 857
• Parties: BELL et al. v. AMERICAN PROTECTIVE LEAGUE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

163 Mass. 558

40 N.E. 857

BELL et al. v. AMERICAN PROTECTIVE LEAGUE.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1895

COUNSEL

George Putnam, for appellant.

Robert M. Morse and G. Philip Wardner, for appellees.

OPINION

LATHROP J.

It does not clearly appear whether the superior court took jurisdiction of the bill in equity of Bell and others against the American Protective League by virtue of the general equity jurisdiction conferred upon it by St.1883, c. 223, or by virtue of St.1892, c. 435, which gives to the supreme judicial court and to the superior court "exclusive and concurrent jurisdiction, in cases of insolvency, of the settlement of the affairs of corporations which are authorized to transact insurance upon the assessment plan, or of any fraternal beneficiary corporations which are so authorized," and which provides that "to that end," the court "may appoint agents or receivers to take possession of the property and effects of the corporations, subject to such rules and orders as may from time to time be prescribed by said courts, or any justice thereof." The language of this statute follows the form of the decree long ago prescribed by this court appointing a receiver of an insolvent corporation, which form was adopted by the superior court when equity jurisdiction was conferred upon it. It makes no difference, therefore, whether the receiver was appointed under the general equity jurisdiction of the superior court or under the statute above referred to.

The question presented in this case is as to the correctness of the ruling of the superior court that the receiver, by reason of the facts reported, became liable, by privity of estate upon the covenants of the lease, and continued so liable until the receiver assigned the lease to one Clancy. It is a familiar doctrine of the common law that, while there is no privity of contract between the lessor and the assignee of a term, there is a privity of estate, which renders the assignee liable upon the covenants of the lease, so long as he holds the term. This applies not only to private individuals, but to assignees in bankruptcy and insolvency, as the title to the leasehold estate vests in them, provided they take possession. But an assignee of a term or an assignee in bankruptcy may, by assigning the term, free himself from all further responsibility; and this assignment may be made to any one, however irresponsible he may be, provided the assignor does not retain any interest in the thing assigned. See 2 Platt, Leases, 400-452. The rights and duties of an assignee of an insolvent debtor are now regulated in this commonwealth by St.1879, c. 245, re-enacted in Pub.St. c. 157, § 26. See Abbott v. Stearns, 139 Mass. 168, 29 N.E. 379. The decree in the court below that the petitioner was entitled to recover apparently proceeded upon the ground that the same rule applied to a receiver as to an assignee in bankruptcy; and this seems to have been assumed to be the law in Com. v. Franklin Ins. Co., 115 Mass. 278, 281. It is to be observed, however, that that case was submitted on briefs, as appears by the reporter's docket, and the question now before us was not taken by the counsel for the receivers, whose brief we have examined, nor was it discussed by the court. There were two petitions in the case, each relating to a separate parcel of land. One petition was dismissed, and the other was granted. In relation to the latter the facts were that, at the time the receivers were appointed, the insurance company was lessee of a room in a building which it had prior to that time sublet. By the terms of the lease to the insurance company, when the receivers were appointed, two quarterly payments of rent would become due in the future. When the first became due, the lessors demanded the rent, and threatened to eject the sublessee if the rent was not paid. Certain negotiations were had between the lessors and the receivers which the court found amounted to an agreement by the receivers to pay to the lessors the rent in full for the first quarterly payment, and a dividend on the last payment. The first payment was made, and the controversy was as to the last payment under the lease; the lessors contending that they were entitled to the entire rent, and the receivers that, as they had not taken possession of the land, they were...