IN RE HOBOKEN MANUFACTURERS R. CO.
| Decision Date | 17 July 1945 |
| Docket Number | No. 8812.,8812. |
| Citation | 150 F.2d 921 |
| Parties | In re HOBOKEN MANUFACTURERS R. CO. SMITH et al. v. HOBOKEN R. R. WAREHOUSE & STEAMSHIP CONNECTING CO. et al. |
| Court | U.S. Court of Appeals — Third Circuit |
Charles B. Collins, of Jersey City, N. J. (James D. Carpenter, Jr., Collins & Corbin, and Charles W. Broadhurst, all of Jersey City, N. J., on the brief), for appellants.
Edward J. O'Mara, of Jersey City, N. J. (Wall, Haight, Carey & Hartpence, of Jersey City, N. J., and John J. Hickey, of Washington, D. C., on the brief), for appellees.
Before BIGGS, MARIS and GOODRICH, Circuit Judges.
Writ of Certiorari Granted October 22, 1945. See 66 S.Ct. 99.
The substantial question presented by the appeal at bar is a narrow one: Is the landlord-lessor, one of the appellees herein, entitled to terminate a ninety-nine year lease made in 1906 to the debtor-lessee of a railroad right-of-way and its subservient properties and resume occupancy, because of a breach of terms of the lease? Two "tie-in" leases by their terms must stand or fall with the principal lease just referred to and need not be discussed in this opinion.
The pertinent language of the indenture executed on June 19, 1906 is as follows: * * *" The debtor is in reorganization proceedings instituted pursuant to Section 205 of Title 11 of the United States Code, Annotated, Section 77 of the Bankruptcy Act. A trustee was appointed for the debtor. He adopted the lease pursuant to the direction of the court below. It should be pointed out that Section 110, sub. b of Title 11 provides that "an express covenant that an assignment by operation of law or the bankruptcy of a specified party to a lease * * * shall terminate the lease * * * shall be enforceable." Subparagraph l of Section 205 provides: "In proceedings under this section and consistent with the provisions thereof, the jurisdiction and powers of the court, the duties of the debtor and the rights and liabilities of creditors, and of all persons with respect to the debtor and its property, shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the debtor's petition was filed."
The appellant trustee, makes three contentions. He contends first that only if a lease expressly provides that it shall terminate on bankruptcy can an adjudication in bankruptcy effect a termination, citing such authorities as Gazlay v. Williams, 210 U.S. 41, 28 S.Ct. 687, 52 L.Ed. 950, and In Re Prudential Lithograph Co., D.C., 265 F. 869, affirmed, 2 Cir., 270 F. 469, certiorari denied 256 U.S. 692, 41 S.Ct. 534, 65 L.Ed. 1174. He concedes that an express provision in a lease giving the lessor the right to terminate the lease on the bankruptcy of the lessee is enforceable. See In re Wil-low Cafeterias, 2 Cir., 95 F.2d 306, 115 A.L.R. 1184. It is clear that in the case at bar there was a breach of the lease for the rights, duties and obligations of the lessee were transferred, abrogated and altered by the assumption by the trustee of the rights of the debtor in the property. Though the lease does not refer to bankruptcy it does provide expressly for forfeiture if a transfer of the lease or an underletting of the premises is effected, unauthorized by the lessor, in any proceeding to which the lessee is a party "whether at law or in equity or otherwise".
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Smith v. Hoboken Warehouse Connecting Co
...was a breach of the terms of the lease entitling the lessor to re-enter.2 56 F.Supp. 187. The Circuit Court of Appeals affirmed. 3 Cir., 150 F.2d 921. The case § here on a petition for a writ of certiorari which we granted because of the importance of the problem in the administration of th......
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