In re Abrams

• Decision Date: 02 January 1913
• Docket Number: 746.
• Citation: 200 F. 1005
• Parties: In re ABRAMS.
• Court: U.S. District Court — Northern District of Iowa

200 F. 1005

In re ABRAMS.

No. 746.

United States District Court, N.D. Iowa, Cedar Rapids Division.

January 2, 1913

L. M Kratz, of Cedar Rapids, Iowa, for petitioners.

Barnes & Chamberlain, of Cedar Rapids, Iowa, for trustee.

REED District Judge (after stating the facts as above).

The facts as they appear from the testimony and the certificate of the referee are as follows:

Harry Abrams, who was doing a general mercantile business in the city of Cedar Rapids, Iowa, under the name of Harry Abrams &amp Co., was duly adjudged bankrupt by this court June 4, 1912 upon a creditors' petition filed against him May 13th preceding.

November 24, 1908, the petitioners made to the bankrupt a lease for the first floor and basement of a store building in Cedar Rapids described as No. 118 First avenue, for the term of 60 months from and after October 1, 1909, at the monthly rental of $70 a month for the first 24 months, and $75 a month for the remaining 36 months; such rent to be paid strictly in advance on the 1st day of each and every month. The contract or lease contains stipulations as follows:

'And it is further agreed that, if any rent shall be due and unpaid, demand therefor being waived, or if default be made in any of the covenants herein contained, it shall then be lawful for said party of the first part to re-enter said premises and remove all persons and property therefrom; or he may recover possession thereof by action for the forcible detention of said property as provided for by sections 4208 to 4222 inclusive of the Code of Iowa, 1897, and all amendments thereto. And the said party of the second part agrees to hire said premises; and to pay the party of the first part rent therefor, according to the terms above set forth, except when said premises are untenable by reason of fire from any other cause than the carelessness of the party of the second part, or of persons of their family, or in their employ; * * * and that at the expiration of this lease, or upon a breach by said lessee of any of the covenants herein contained they will without further notice of any kind, quit and surrender the possession of said premises in as good condition, as reasonable use, natural wear and decay thereof will permit, damage by fire as aforesaid, superior force, or inevitable necessity, only excepted.'

Under this contract the bankrupt occupied the premises and paid the monthly rent therefor as it became due to May 1, 1912, and was in possession of the premises with his stock of merchandise therein on May 13th when the petition in bankruptcy was filed against him. The rent due May 1, 1912, and for subsequent months, being unpaid, the petitioners on August 20, 1912, filed with the referee a claim of $482.50 as the rent of said premises from May 1 to November 14, 1912, being six months rent from the filing of the petition in bankruptcy, and for the 13 days in May previous thereto, and for $100 damages to the building for cutting two archways in the wall thereof, and asked that the whole of said claim, $582.50, be allowed as a preferred claim against the bankrupt estate, and secured by a landlord's lien under the Iowa statute, upon the bankrupt's stock of merchandise kept upon the leased premises.

The trustee occupied the premises after his appointment as such until some time in August, and kept the bankrupt's stock of goods therein until July 3, 1912, when it was sold by order of the court of bankruptcy, and the proceeds received by him. He denies the claim of the petitioners for rent of the store building, and for a landlord's lien, or for its use beyond the time it was occupied by him; and denies the claim for $100 as damages to the property. He also claims that the petitioners were indebted to the bankrupt estate in the sum of $80 for one month's rent paid by the bankrupt to them May 17, 1910, for an extension of a lease of said premises dated May 16, 1910, for 60 months from and after the 1st day of October, 1914, at the monthly rental of $80 for the first two years, and $85 for the next two years, and $90 for the last year of the term, to be paid in advance on the 1st day of each month during the life of this lease. This lease contained the same stipulations as the one of November 24, 1908, under consideration.

The referee allowed the claim of the petitioners in the sum of $300, for rent of the premises at $75 per month for the months of May, June, July, and August, 1912, less the $80 claimed by the trustee for the month's rent paid in advance for the extension of the lease of May 16, 1910, beyond the 1st of October, 1914, and directed the trustee to pay said sum ($220) as a preferred claim, and allowed the claim of $100 for damages in the sum of $85 as an unsecured claim. The claimants petition for a review of the order of the referee denying the remainder of their claim for the rent of the building and for a lien on the bankrupt's stock of merchandise and the proceeds of the sale thereof.

It is the contention of the petitioners that they are entitled to a landlord's lien upon the bankrupt's stock of merchandise kept upon the leased premises, and the proceeds arising from the sale thereof now in the custody of the trustee in bankruptcy as security for the rent of the premises for six months, under section 2992 of the Iowa Code 1897. That section reads in this way:

'A landlord shall have a lien for his rent upon all crops grown upon the leased premises, and upon any other personal property of the tenant which has been used or kept thereon during the term and not exempt from execution, for the period of one year after a year's rent, or the rent of a shorter period, falls due; but such lien shall not in any case continue more than six months after the

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