In re FREY
| Decision Date | 23 May 1928 |
| Docket Number | No. 10490.,10490. |
| Citation | 26 F.2d 472 |
| Parties | In re FREY. |
| Court | U.S. District Court — Western District of Pennsylvania |
Jerome Bennett (of Wessel, Bennett & Weiss), of Philadelphia, Pa., for plaintiff.
Joseph Moss, of Philadelphia, Pa., for bankrupt.
This certificate of review from the referee's order involves the right of a landlord to retain a deposit made by the tenant at the beginning of a lease; the tenant having become bankrupt and the lease having been surrendered by his trustee. The facts are as follows:
On March 31, 1926, Albert L. Frey leased from Market-Thirteenth Street Realty Company a storeroom and basement on Thirteenth street in Philadelphia for a period of nine years and one month at a monthly rental, payable in advance, of $750 per month for the first year, and thereafter on an increasing monthly basis. The tenant failed to pay the installments of rent due February 1, 1927, March 1, and April 1, and was thus $2,250 in arrears for rent actually accrued. On April 5, 1927, the tenant was adjudicated a bankrupt. On April 8, a receiver was appointed and remained in possession until May 3, 1927. Subsequently, the landlord filed a claim in the amount of $2,250, being for rent due February 1, March 1, and April 1, and up to May 3. This included $550 for the receiver's use and occupation, which amount was paid, leaving a balance of rent due of $1,700. There was also a claim filed for $88, the value of a plate glass window broken during the receiver's occupancy. The referee found that the landlord's claim for the rent was valid, but found further that the landlord had at the inception of the lease received the sum of $1,500, which had been deposited with him by the tenant when the lease was executed, and the referee's conclusion was that this amount should be deducted from the landlord's claim. The clause in the lease under which this sum of $1,500 was deposited is as follows:
The landlord contended that he was entitled to retain this deposit of $1,500 in addition to recovering the rent due, because he had incurred certain damages by reason of the tenant's default upon the lease, which damages he itemized as follows:
Rent for the month of May ......... $ 750.00
Rent for the month of June ........ 833.30
Commission for leasing the premises
to another tenant ................ 652.00
_________
Total .......................... $2,235.30
The referee also found as a fact that the landlord had accepted an unqualified surrender of the premises from the trustee on May 3, 1927. The correctness of this conclusion, so far as the facts appear of record, is doubtful (Rosenblum v. Uber C. C. A. 256 F. 584), but the parties have removed all question by stipulating that "on the 3d day of May, 1927, the trustee made an absolute surrender of possession of the premises in question to the landlord, and that the said surrender was accepted by the said landlord."
There can be no question that the landlord was entitled to a preferred claim in the amount of $1,700 for the three...
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