In re Jefferson

• Decision Date: 02 May 1899
• Citation: 93 F. 948
• Parties: In re JEFFERSON.
• Court: U.S. District Court — District of Kentucky

93 F. 948

In re JEFFERSON.

United States District Court, D. Kentucky.

May 2, 1899

John C Russell, for proving creditor.

Charles S. Grubbs, for trustee in bankruptcy.

EVANS District Judge.

The adjudication in this case upon the voluntary petition of the bankrupt was made March 23, 1899. Among the proofs of debt filed was that of James B. Payne, trustee, for $4,166.66 for rent. The demand was founded upon the terms of a written lease of the premises on Fourth avenue, in Louisville, where the bankrupt had conducted a large fancy grocery business. Those provisions of the lease material to the questions now at issue are as follows:

'Lease Begins Feby. 15, 1896.

'This indenture, made this 21st day of January, 1895, between James B. Payne, trustee, of the first part, and C. W. Jefferson of the second part, witnesseth, that the party of the first part hereby leases to the party of the second part the following premises, to wit: The entire lot and the three-story, stone front building thereon situated on the east side of Fourth street, between Green and Walnut streets, and known as 'No. 551, 553, and 555 Fourth street, Louisville, Ky.,' being at the corner of the first alley north of Walnut street, together with the frame building on the rear end of said lot, for the space of five (5) years from February 15th, 1896, and covenant to keep the tenant in quiet possession of the premises during said term. It is hereby expressly agreed to and understood by the said parties that the said property is to be used as herewith described, and not otherwise, viz. as a fancy grocery store on the first floor and cellar; the upper floors to be sublet by the lessee for business or apartment rooms, if he so elects. In consideration whereof the party of the second part binds himself to pay for the same three hundred and thirty-three and 33 1/3-100 dollars at the end of each and every month, being at the rate of four thousand dollars per annum; to take good care of the premises; and return the same, at the expiration of said time, in as good order as received, ordinary wear and tear and natural decay excepted, unless the improvements should be destroyed by lightning or other natural cause, or fire not caused by his default; and not to erect, or permit to be erected, on the premises any nuisance, or commit any waste. If destruction as aforesaid, total or partial, ensues, so as to make the premises untenantable for the purpose designated, the lessee may surrender and cancel this lease. The following additional stipulations are hereby declared to be a part of this lease:

'(1) The premises shall not be underlet, except the upper floors, as above stated, or the term, in whole or in part, assigned, transferred, or set over by the act of the lessee, by process or operation of law, or in any other manner whatsoever, without the written consent of the lessor; and for a violation of this stipulation, in addition to the forfeiture provided in the ninth stipulation, the rent shall be doubled while the default continues. * * *

'(p) This lease, at the option of the lessor, shall be void and forfeited in case of any violation of any stipulation herein contained. The stipulation is not to be considered or construed as a penalty, but shall be punctually enforced.'

The creditor presenting the claim insists that as landlord he is entitled to a priority of payment of one year's rent to accrue subsequently to the date of bankruptcy by virtue of a lien therefor upon the property on the premises, which lien he claims is given by the laws of the state of Kentucky. The referee disallowed the claim except to the extent of the rent accrued up to the date of the adjudication, and the creditor has asked the court to review the action of the referee, and allow the entire claim. The question presented is one which is constantly arising, and will continue to do so, and its importance has induced the court, after an able argument at the bar, to give it the fullest consideration the pressure of other duties would permit: So much of the statute law of Kentucky as applies to it is as follows:

'A landlord shall have a superior lien on the produce of the farm or premises rented, on the fixtures, on the household furniture and other personal property of the tenant, or under-tenant, owned by him, after possession is taken under the lease; but such lien shall not be for more than one year's rent due or to become due, nor for any rent which has been due for more than one hundred and twenty days. And if any such property be removed openly from the leased premises, and without fraudulent intent, and not returned, the landlord shall have a superior lien on the property so removed, for fifteen days from the date of its removal and may enforce his lien against the property wherever found. ' Ky. St. Sec. 2317.

'If the property be taken under execution or attachment, the officer shall, out of the proceeds of the property found on the leased premises, and levied on or taken by him, make payment of the rent payable in money, due and to become due, for the year in which the levy is made unless a bond of indemnity be executed. But the plaintiff in the execution of attachment may compel a sale of the property under his process by executing to the officer a bond of indemnity, such as provided for in the Civil Code of Practice, and the remedy provided in it, on a bond of indemnity, shall operate in favor of the person to whom the rent is payable, or other claimant of the property on the bond provided for in this section. ' Ky. St. Sec. 2315. See provisions in Civ. Code Prac. Secs. 211, 641.

'Unless the landlord consents thereto in writing, every assignment or transfer of his term or interest in the premises, or any portion thereof, by one who is a tenant at will, or by sufferance, or who has a term less than two years, shall operate a forfeiture to the landlord,' and he may on 10 days' notice recover possession. Ky. St. Sec. 2292.

All the provisions of the bankrupt act (30 Stat. 544) which seem to have any important bearing on the proposition to be discussed may be grouped as follows: Section 1, among other things, provides that the word 'debt' shall include any debt, demand, or claim provable in bankruptcy; and that the word 'discharge' shall mean the release of a bankrupt from all of his debts which are provable in bankruptcy, except such as are excepted by the act. Section 4 provides that any person who owes debts, except a corporation, shall be entitled to the benefits of the act. Section 14 provides that after the expiration of one month from the adjudication the bankrupt may apply for his discharge, and, if there be no opposition on the grounds specified in the section, the discharge will be granted. If there be opposition, provision is made for a prompt settlement of the question. Section 17 provides that a discharge in bankruptcy shall release the bankrupt from all his provable debts except-- First, taxes; second, those...