Brown v. Detroit Trust Co.

• Citation: 193 F. 622
• Decision Date: 13 February 1912
• Docket Number: 2,162.
• Parties: BROWN v. DETROIT TRUST CO.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

193 F. 622

BROWN v. DETROIT TRUST CO.

No. 2,162.

United States Court of Appeals, Sixth Circuit.

February 13, 1912

J. G McHenry, for appellant.

W. L January, for appellee.

Before WARRINGTON and KNAPPEN, Circuit Judges, and SATER, District Judge.

KNAPPEN Circuit Judge.

In the matter of the Brown Hotel Company, bankrupt, the referee made an order November 15, 1910, requiring Brown, who was president of the bankrupt company, to either vacate and surrender to the trustee 'forthwith and within three days after service of a copy of this order upon him,' a certain suite of rooms in the building belonging to the bankrupt estate, or to pay rent therefor at the rate of $100 per month from September 8th next preceding. The referee also recommended that, if the order referred to was not complied with, Brown be punished for contempt. On November 18th Brown filed petition for review of this order. The proceedings were duly certified to the district judge. On January 12, 1911 the latter made an order overruling Brown's exceptions to the referee's order; also adjudging Brown guilty of contempt in refusing to comply with it, and decreeing that 'he pay to the United States a fine of $200 and the costs of these proceedings, and that he stand committed to the custody of the marshal of this court until said fine and costs shall have been paid.'

Both appeal and writ of error to this court were allowed. The trustee moved to dismiss both the appeal and the writ, the determination of the motion being postponed until hearing upon the merits. Brown later filed petition for revision under section 24b of the bankrupt act (Act July 1, 1898, c 541, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3432)), but no orders have been made or proceedings had thereunder.

So far as concerns the order declaring the contempt and adjudging the punishment, we think writ of error the proper method of review. The fine was required to be paid to the United States as a punishment, and not as compensation to the opposite party for his damages. Compliance with the order for a surrender of the premises would not relieve from payment of the fine. The order, both for surrender of possession and payment of fine, was final. The order of punishment was in effect a criminal judgment, and so reviewable here by writ of error. Bessette v. W. B. Conkey Co., 194 U.S. 324, 338, 24 Sup.Ct. 665, 48 L.Ed. 977; Doyle v. London Guaranty, etc., Co., 204 U.S. 599, 605, 27 Sup.Ct. 313, 51 L.Ed. 641. See, also, Bullock Elec. & Mfg. Co. v. Westinghouse Co. (C.C.A. 6) 129 F. 105, 63 C.C.A. 607; Clay v. Waters (C.C.A. 8) 178 F. 385, 101 C.C.A. 645; In re Grove (C.C.A. 3) 180 F. 62, 103 C.C.A. 416.

The trustee contends that the order for surrender of possession was made in a proceeding in bankruptcy, and not in a controversy arising under the act, and that, therefore, review cannot be had by appeal or writ of error under section 24a, but only by petition to revise under 24b. In the view we take of the merits of this feature of the order, it is unnecessary to decide the question of remedy referred to. We think the district judge rightly refused to interfere with the referee's order. At the time of the bankruptcy, Brown was occupying a suite of rooms by virtue of his employment by the hotel company, and as part of his compensation therefor. Bankruptcy occurred July 19, 1910, and after this date no services were rendered by Brown to the bankrupt company. The receiver was appointed July 20th, the trustee was appointed September 8th, but final receipt was not given by the latter for the building until September 23d or 24th. Brown had a license to sell liquor upon the premises, and the receiver permitted Brown to occupy the suite in consideration of the beneficial use by the receiver of the liquor license. No such agreement was made with the trustee. The latter, on October 20th, rendered Brown a bill for rent claimed to be due, and, on Brown's demanding an itemized statement, one was rendered October 21st, claiming rent from July 20th, and without credit on account of the license feature. Brown contended before the referee that he had become a tenant at will or by sufferance, and so under the Michigan law was entitled to three months' notice to quit, and this was the substantial controversy before the referee. Such tenancy, if it existed, would, under the Michigan law, require a three months' notice for its termination.

It is unnecessary to determine whether the relation of landlord and tenant existed as between Brown and the hotel company. We understand no claim to be made that a tenancy at will or by sufferance was created, unless by the act of the receiver or the trustee or both. Brown claims his case is brought within School District v. Batsche, 106 Mich. 330, 64 N.W. 196, 29 L.R.A. 576, where it is said that:

'The rule is that the person in possession of land lawfully, who holds over without right, becomes a tenant at sufferance, if the owner suffers him to remain in possession a sufficient length of time to imply an intentional acquiescence in the occupancy, and it is not necessary that the previous holding be that of a tenant. An express consent to occupancy is not necessary to create such a tenancy.'

In that case there was quoted with approval the statement in Kerrains v. People, 60 N.Y. 221, 19 Am.Rep. 158, that:

'In order to have the effect to create a tenancy by sufferance, the occupancy must be sufficiently long to warrant an inference of consent to a different holding; but we are aware of no case which fixes the precise time within which such consent may be inferred.'

The referee rightly held that the arrangement between Brown and the receiver was founded upon an unlawful consideration, and therefore void. This proposition of law does not seem to be disputed.

The objection that there was no evidence to sustain the finding of fact falls because the fact was so alleged in the answer to the trustee's petition to require surrender, which answer may be taken as an admission. The referee held, however, that such arrangement 'establishes as a matter of law the claim and right under which Brown remained in possession up to September 8th, and that time cannot be computed to establish a tenancy at will or by sufferance. ' We think this holding correct, both for the reason stated by the referee and because of the temporary nature of the receiver's possession and authority. The referee concluded that:

The 'delay of the trustee from September 8th, when it qualified, or from September 21st, when it was given full possession of the Charlevoix Hotel, was not such a delay as to create a tenancy at will or by sufferance, if any such tenancy could be created at all by the trustee, and which is doubtful.'

We cannot say that this conclusion of fact is not supported by the evidence. No claim is made of a continued occupancy under alleged...