Lamson Consol. Store Service Co. v. Bowland

• Citation: 114 F. 639
• Decision Date: 08 April 1902
• Docket Number: 999.
• Parties: LAMSON CONSOL. STORE SERVICE CO. v. BOWLAND.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

114 F. 639

LAMSON CONSOL. STORE SERVICE CO. v. BOWLAND.

No. 999.

United States Court of Appeals, Sixth Circuit.

April 8, 1902

This is an appeal from a judgment disallowing a claim filed by the appellant against the estate of a bankrupt firm doing business as George G. Moler & Son. From the facts certified by the referee to the court below, it appears: (1) That the appellant constructed a store service apparatus in the store of the bankrupts under an agreement by which the bankrupts agreed to use same for a term of five years, and to pay 'an annual rental in equal quarter-yearly installments in advance, upon the first days of March, June, September and December in each and every year during the term of this lease, or any extension hereof,' at the rate of $20 for each station. There being nine stations constructed, the yearly rental was $180, and the quarterly installment payable in advance was $45. It was further provided that, 'if any installment of said rental shall remain would for sixty days it becomes due, the entire rental to the end of the lease shall become at once due and payable. ' It was further provided that the lessee should not, without the consent of the lessor, make alterations or remove the apparatus, or use elsewhere than in said store, and that the whole mechanism should continue the sole and exclusive property of the lessor, the lessee 'not to sell, assign, or underlet' said system, and that at the end of the lease same should be delivered up to the lessor in good order and condition. The lessor, on its part, agreed, at its own expense, 'to supply all parts necessary to keep said Cable cash-carrier system in proper repair, excepting, also, when there is rental on said system overdue and unpaid. ' The rental agreement concluded with the provision that the contract was subject to the condition 'that in case of a breach of any of the covenants or agreements to be observed on the part of the lessee, or attached by process of law, by proceedings in bankruptcy, or insolvency, or otherwise, the lessor may while such default or neglect continues, or at any time after such attaching or taking by process of law, without any notice or demand, enter upon the said store premises, or wherever said system may be, and take possession of said system, or any part thereof, and thereby determine all right and interest the said lessee may have in said system; and may remove the same, forcibly, if necessary, without let or hindrance from the lessee. In case of removal of the system the lessor shall not be required to put the store of the lessee in its former condition. No removal of said system made by the lessor during the term of this lease, or any extension hereof, on account of any determination of the lessee's tenancy, or on account of any default by the lessee, shall constitute a surrender of this lease.' (2) On November 30, 1900, the day before an installment of rent fell due, a petition in involuntary bankruptcy was filed against the lessees; and on December 6, 1900, an adjudication of bankruptcy was entered. All installments of rent accruing prior to December 1, 1900, had been duly paid, and no default existed at the date of the filing of the petition in bankruptcy, on November 30, 1900. The installment which became due under the lease on December 1, 1900, was not paid, except in part, as hereinafter shown. The appellant filed a claim for the entire remaining term of the lease, claiming that the failure to pay the installment accruing December 1, 1900, precipitated the maturity of the entire rental to the end of the lease, in 1905. The claim filed is therefore for $773.50, less a credit of $12 for rent collected by the lessor for a part of the month of December. The referee certified that the lessors had taken possession of the store service apparatus, and had received rent from some one other than the lessees from December 1, 1900, to December 24, 1900, and had credited same on the account rendered. The referee disallowed the claim upon the ground that it was not a fixed liability, absolutely owing, at the time of the filing of the petition against the bankrupt. The district judge affirmed this judgment, without an opinion.

Lincoln Fritter, for appellant.

Charles I. Stauffer, for appellee.

Before LURTON and SEVERENS, Circuit Judges, and WANTY, District Judge.

LURTON Circuit Judge, after making the foregoing statement of the case, .

What are the rights of the lessor of this store service apparatus in respect to rents which had not accrued when the petition in bankruptcy was filed against the lessee company? The lessors invoke the third clause of the lease contract, which provides that, 'if any installment...