In re Kerr, 68222.
| Decision Date | 28 July 1939 |
| Docket Number | No. 68222.,68222. |
| Citation | 29 F. Supp. 414 |
| Parties | In re KERR et al. |
| Court | U.S. District Court — Southern District of New York |
George J. Beldock, of New York City, for trustee.
O'Connor & Farber, of New York City (Stephen V. Ryan, Jr., of New York City, of counsel), for landlord.
Petition for review of an order of the Referee allowing the claim of the Garment Center Capitol, Inc., against the estate of the bankrupts to rent in the amount of $3,622.57. The trustee objects to the allowance of the claim in this amount but concedes that the claimant has a claim for $689.42. The facts sufficient for determining the question now presented are as follows:
The bankrupts were tenants of the Garment Center Capitol, Inc., occupying a floor in a business building at 512 Seventh Avenue, New York City, under a lease for a term of two years commencing February 1, 1937 and ending January 30, 1939 at the annual rent of $5,820 payable $485 monthly in advance. The bankrupts paid the rent for two months but the rent due April 1, 1937 was not paid and on April 7th they made an assignment for the benefit of creditors; on May 13th an involuntary petition in bankruptcy was filed which was followed on June 2d by an adjudication; on May 6th the landlord entered into a new lease of the premises in its own name with Tutbury, Inc., for a term ending January 30, 1941 — that is two years beyond the term of the bankrupts' lease. The lease with Tutbury, Inc., provided that they were to have free rent from May 15 to August 1, 1937 and that the rent from August 1, 1937 to January 30, 1938 was to be at the rate of $2,875 per annum, and from February 1, 1938 to January 30, 1941 at the rate of $5,750 per annum. The pertinent part of paragraph Sixth of the bankrupts' lease reads "In any such case (default in the payment of rent) * * * the Landlord may, at the Landlord's option, and in the name of the Landlord or otherwise, relet the demised premises or any part or parts thereof, as the agent of the Tenant or otherwise, for the whole or any part of the term from time to time as it may deem best".
It is stipulated that the landlord did not give the bankrupts any notice of the termination of the lease or notice of reentry by the landlord, or notice of reletting the premises to Tutbury, Inc., and that no other agreement was entered into between them except the lease referred to above.
The trustee contends that any obligation of the bankrupts under their lease with Garment Center Capitol, Inc., was terminated by the new lease entered into by the landlord with Tutbury, Inc., for a term extending beyond the term of the bankrupts' lease; that this assertion of dominion over the premises by the landlord constituted an act of acceptance of the bankrupts' surrender and relieved the bankrupts of its obligations, and that at the time of the bankruptcy, either when the petition was filed on May 13, 1937 or on the day of the adjudication, June 2, 1937, the bankrupts were not obligated on the lease because of the surrender, and therefore the landlord has no claim against the bankrupts' estate except for the unpaid rent amounting to $689.42 which accrued prior to the surrender and acceptance of the lease.
The contention of the landlord is that under paragraph Sixth quoted above it was authorized to enter into...
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Bilbrey v. Worley
...sharp contrast between the New York rule and the contrary rule prevailing elsewhere. The New York rule was summarized in In re Kerr, 29 F.Supp. 414 (S.D.N.Y. 1939) in which a surrender was held to have been accepted where the landlord relet for two years beyond the term of the original leas......
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Millison v. Clarke
...of the original lease which authorized reletting " 'for the whole or any part of the term from time to time as (landlord) may deem best.' " Id. at 415. The court The courts of New York hold that in the absence of an express provision in the lease authorizing the landlord to relet the making......
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Millison v. Clarke
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