Commonwealth v. Franklin Ins. Co.

• Decision Date: 20 June 1874
• Parties: Commonwealth v. Franklin Insurance Company
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

115 Mass. 278

Commonwealth v. Franklin Insurance Company

Supreme Court of Massachusetts

June 20, 1874

[Syllabus Material]

Suffolk. Two petitions: one of William S. Bullard and others trustees, that the receivers of the Franklin Insurance Company should be ordered to pay them the rent of a building No. 44 State Street, Boston; the other of George Higginson and others, members of the firm of Lee, Higginson &amp Company, that the said receivers should be ordered to pay them the rent of a building at the corner of State and Devonshire Streets, Boston.

Hearing before Morton, J., who reported the case to the full court as follows:

"The Franklin Insurance Company for many years occupied as their counting-room premises now numbered 44 State Street. In the year 1871 the occupation of this company was under a lease from William S. Bullard and others, trustees, at a yearly rent of $ 5000, which lease expired April 1, 1873.

"Under the agreement with Lee, Higginson & Co., hereinafter set forth, the Franklin Insurance Company vacated 44 State Street in the year 1871, when Lee, Higginson & Co. as occupants and tenants entered into possession thereof, and still continue such occupation; but said Franklin Insurance Company continued to pay to said Bullard and others, trustees, the rent and taxes due and payable under and by virtue of said lease, and said trustees never released said company from any of its covenants or obligations under said lease.

"As an inducement for this change of occupation, Lee, Higginson & Co. paid said insurance company $ 10,000 in cash, procured and underlet to said company rooms at the corner of Devonshire and State Streets, under a lease expiring like the former on April 1, 1873, and reserving the same amount of rent; viz., $ 1250 a quarter, and agreed verbally with said company that payment by the latter of the rent and taxes due said trustees should be equivalent to payment of rent under the new lease; in other words, that said company should pay rent under one lease only, viz., under the lease from said trustees.

"Under both leases $ 1250 became due and payable on the first day of January, and first day of April, 1873, but no taxes then.

"In the fall of the year 1872, said company moved from the premises at the corner of State and Devonshire Streets to a third counting-room, No. 46 State Street, and verbally underlet to the Eliot National Bank the room at the corner of State and Devonshire Streets, for the remaining term of the lease from Lee, Higginson & Co., for the sum of $ 1200. The Eliot Bank occupied the same from October 1872, till after April 1, 1873.

"By decree of this court the Franklin Insurance Company passed into the hands of receivers on December 3, 1872. In December, Lee, Higginson & Co. threatened to eject the Eliot Bank unless the quarter's rent due January first was paid, amounting to $ 1250. Said bank notified said company and receivers of this threat and demand. Various propositions were made by the counsel of Lee, Higginson & Co. to said receivers relative to a settlement of the claim; among others, a proposition in writing to take $ 1250 on January first, and a dividend as the rent and taxes due April first.

"No formal action was taken in regard to this by the receivers, but on January 1, 1873, one of the receivers paid Lee, Higginson & Co. $ 1250, and collected of the Eliot Bank $ 1200. The check for $ 1250 was indorsed and paid to said trustees as rent of 44 State Street. Said trustees had always received said rent by check of said insurance company. No rent was paid on either lease April 1, 1873. No taxes were due.

"The petitioners, said trustees, claim $ 1250, the whole rent due April first, or a dividend thereon, pro rata, with other creditors. The petitioners, Lee, Higginson & Co., claim a like dividend on the same sum, but admit that under their agreement with said company, if either claim of said trustees is allowed they, Lee, Higginson & Co., have no claim."

F. V. Balch, for Bullard and others.

W. Minot, Jr., for Lee, Higginson & Co.

A. Jackson, for the receivers.

Endicott, J. Colt & Ames, JJ., absent.

OPINION

Endicott

The first question to be considered is the claim of Bullard &amp others, trustees, for...