In re Allen, 1956.

• Decision Date: 18 July 1950
• Docket Number: No. 1956.,1956.
• Parties: In re ALLEN.
• Court: U.S. District Court — Southern District of Texas

92 F. Supp. 717

In re ALLEN.

No. 1956.

United States District Court S. D. Texas, Galveston Division.

July 18, 1950.

Holman Lilienstern, of Texas City, Tex., for trustee.

Godard & Dazey, of Texas City, Tex., for C. E. Moseley.

W. N. Zinn, of Galveston, Tex., pro se.

KENNERLY, Chief Judge.

This is a hearing of the petition of W. N. Zinn to review two orders entered by the Referee in Bankruptcy in this cause, refusing to enforce Zinn's landlord's lien against the personal property of the bankrupt, Edward Ramsdell Allen, situated in the store building rented or leased by Zinn to the bankrupt, and/or holding such lien to be inferior to the chattel mortgage lien of C. E. Moseley on part of such property.

Edward Ramsdell Allen (for brevity called bankrupt) was adjudged bankrupt May 5, 1949, upon his voluntary petition filed May 3, 1949. Claiming a lien for part of the purchase money, $3352.14, of certain air conditioning units installed on August 15, 1947, in bankrupt's store, C. E. Moseley filed his claim with the Referee for that sum, asserting such lien and praying that such air conditioning units be sold and the proceeds of sale paid to him. Such air conditioning units have been sold by the trustee for $3352.14, and the proceeds of sale are in the hands of the trustee.

W. N. Zinn was the owner of the building in which bankrupt's store was kept, which building he rented or leased to bankrupt for a period of two years from April 15, 1948, to April 15, 1950, at $375 per month. Zinn filed his claim with the Referee for the sum of $6000, of which $2250 was alleged to be for rent for six months prior to bankruptcy, and $3750 for rent for ten months after bankruptcy. All of which he claims to be secured by the lien given landlords under the laws of Texas and also by a contract lien set forth in such lease.¹ He claims that such lien covered all of the personal property of the bankrupt in such store building, including such air conditioning units.

The Referee's findings of fact are as follows:

"(1) C. E. Moseley held a conditional sales contract with the bankrupt which contract was dated August 14, 1948, and was filed for record in the County Clerk's office August 26, 1948. The material and equipment was delivered into the bankrupt's place of business August 15, 1948, and the bankrupt did not owe any past due rent at the time.

"(2) On April 15, 1948, the bankrupt entered into a written lease with W. N. Zinn for a two year term beginning April 15, 1948, and ending April 14, 1950. This written lease was not filed for record in the County Clerk's office in Galveston County, for a consideration of $4,500 per year, payable in equal monthly installments, the first installment being due on the 15th day of April, 1948.

"(3) The bankrupt defaulted in his monthly payments on December 15, 1948, and continued in default to the date of bankruptcy, May 3, 1949.

"(4) On April 14, 1949, W. N. Zinn executed an affidavit for the purpose of complying with Article 5238 of the Revised Statutes of Texas, and which affidavit was filed for record April 14, 1949, in the County Clerk's office in Galveston, Texas, and was recorded on the 15th day of April, 1949, in the Deed Record Book 805, Pages 370 and 371.

"(5) In this connection I find that no evidence was offered at the hearing showing that said affidavit has been differently indexed than as shown on the instrument.

"(6) In an unsigned brief filed with the Referee prior to the entering of his order there is inserted in said brief a statement that it was indexed in rental lien record index, this statement supported by a certificate of the County Clerk. On June 3, 1950, Godard & Dazey, attorneys for C. E. Moseley, filed a request for admission of fact in the nature of controverting the statements made in Mr. Zinn's brief. I find that the hearing on evidence was closed on May 23, 1950, and neither matter mentioned in this finding came in the proper manner or method for consideration by the Referee.

"(7) I find that the reasonable rental value of the premises occupied by the bankrupt as of the date of the filing of his petition to be the sum of $250.00 per month. The period of time one month and six days during the occupancy by the trustee the sum of $300.00 is a part of the administrative cost.

"(8) I find that the rental value of the premises from June 11, 1949, to the expiration of the lease, April 14, 1950, to be the sum of $250.00, and I find the landlord, according to the rental value reserved in the lease, has been damaged in the sum of $1262.52 for anticipatory breach of contract."

The material portion of the Referee's order with respect to Zinn's claim is as follows (italics mine):

"Came on for consideration the claim of W. N. Zinn, being claim No. 8, filed herein on the 14th day of April, 1949, in the sum of $6,000. There appearing in opposition thereto Godard & Dazey, attorneys for C. E. Moseley, and Holman Lilienstern, attorney for Joseph T. White, the trustee, and the claimant, W. N. Zinn, being present and asserting his claim as a secured and priority claim.

"The evidence and the pleadings and the argument of council being duly heard by the Referee and said questions taken under consideration pending the filing by the interested parties of written arguments and briefs and same having been duly filed and duly considered by the Referee, the Referee is of the opinion that the landlord's claim should be allowed as follows:

"A. $1,125.00, secured priority claim, being the amount accruing 3 months prior to bankruptcy.

"B. $300.00 being the actual rental value of the premises for a period of one month six days during the time that said premises was in the custody of the bankruptcy court, to be allowed as administrative expense, or total priority and administrative expense in the sum of $1,425.00, to be paid in the due course of administration and in its due order of priority.

"C. $625.00, accrued prior to bankruptcy but prior to three months as limited by the bankruptcy act and should be allowed as an unsecured claim, and $1,262.50 damages for breach of rental contract and should be allowed as an unsecured claim.

"It is therefore Ordered that said claim of W. N. Zinn be and the same is hereby allowed as follows:

"Secured claim in the sum of $1,125.00.

"Administrative cost in the sum of $300.00.

"And as an unsecured claim in the sum of $1,887.50.

"And said amounts is ordered to be paid in accordance with this order and in due administration."

The material portion of the Referee's order with respect to Moseley's claim is as follows (italics mine):

"Came on for consideration the motion of C. E. Moseley, owner of Moseley Refrigeration Company of Texas City, Galveston County, Texas, to allow his claim, No. 21, filed herein on the 13th day of June, 1949, as a secured claim with prior rights to the proceeds of the sale of the property covered by his chattel mortgage as set out in his claim.

"And the Referee having heard the evidence and considered the argument and having taken the question under advisement pending the filing of brief and argument by the parties interested, said briefs and arguments having been filed and duly considered by the Referee, it is the opinion of the Referee that said motion should be granted.

"Appearing in opposition to the motion of C. E. Moseley was the landlord, W. N. Zinn, claiming a rental priority which claim is hereby denied and it appearing that said mortgaged property sold by the trustee for $3,352.14, and that said C. E. Moseley is entitled to the proceeds of said sale.

"It is Ordered that Joseph T. White, trustee herein, be and is hereby directed to pay to C. E. Moseley, owner of Moseley Refrigeration Company the sum of $3,352.14."

The questions raised and shown by this record are...