Martin v. Orgain

• Decision Date: 16 November 1909
• Docket Number: 1,908.
• Citation: 174 F. 772
• Parties: MARTIN v. ORGAIN. [1]
• Court: U.S. Court of Appeals — Fifth Circuit

174 F. 772

MARTIN v. ORGAIN. ^[1]

No. 1,908.

United States Court of Appeals, Fifth Circuit.

November 16, 1909

In the matter of E. H. Lowe Company the appellant filed before the referee the following claim:

'At Ft. Worth, in said district of Texas, on the 17th day of July, A.D. 1908, came Julia Martin of Ft. Worth, in the county of Tarrant, in said district of Texas, and made oath and says:

'That E. H. Lowe Company, a corporation, against which a petition for adjudication of bankruptcy had been filed and which has heretofore been adjudged bankrupt, was at and before the filing of said petition, and still is, justly and truly indebted to said deponent for a sum of money representing the rents due and to become due for that portion of the current contract year according to the terms of a certain lease made by deponent to and with said bankrupt, extending from the first day of January, A.D. 1908, to the first day of September, A.D. 1908. That the total amount of said indebtedness for said period is the sum of thirty-eight hundred, fifty-six and 18/100 dollars ($3,856.18), as shown by the statement of account hereto attached marked 'Exhibit A' and made part of this proof; that no part of said debt has been paid except the sum of eighteen hundred, fifty-eight and 78/100 dollars ($1,858.78), as shown by the items credited on said attached account; that the consideration of said debt is rents due and to become due as aforesaid; that there are no offsets or counterclaims to said indebtedness except as set forth in said attached account, and that the balance after allowing same is the sum of nineteen hundred, ninety-seven and 40/100 dollars ($1,997.40); that no note has been received for said indebtedness or any part thereof, and no judgment has been obtained for same; that the only security held by this deponent for said debt is a landlord's lien on the property of the said bankrupt on the premises let in said lease secured by the said contract of lease and by the statute law of the state of Texas, and that by agreement whatever rights in said bankruptcy deponent has under and by virtue of said lien extend to the funds in the hands of the trustee for said bankrupt derived from the sale of the property of said bankrupt on said leased premises at the time of said bankruptcy; that said claim is entitled by law to priority of payment out of the assets of said bankrupt in the hands of its trustee. Julia Martin.

'Subscribed and sworn to before me this 17th day of July, A.D. 1908.

'(Seal.)

N. G Denison,

'Notary Public in and for Tarrant County, Texas.'

The trustee answered the said claim, in substance, charging that as to the rent due after the adjudication in bankruptcy, it was not a provable claim, and he prayed that the same should not be allowed.

A hearing was had before the referee on an agreed statement of facts as follows:

'In the Matter of the E. H. Lowe Co. No. 461, in

Bankruptcy.

'In the matter of the claim of Mrs. Julia Martin against the estate of the bankrupt aforesaid for rents, the following facts are agreed to:

'The E. H. Lowe Company, a corporation, was adjudicated a bankrupt on the 9th day of March, 1908.

'That the contract of which the following is a copy, was duly executed and was in force at the date of said bankruptcy as an obligation of the said E. H. Lowe Company, it having acquired the rights of E. H. Lowe named in said contract as the original lessee.

'The stock in trade of the said bankrupt remained on the premises described in said contract of lessee as the property of said bankrupt estate from the date of said adjudication to and including the 9th day of April, 1908 the trustee in bankruptcy being in control of said premises from the date of his election to and including the said 9th day of April, 1908, when he sold the said stock in trade.

"Contract.

"State of Texas, County of Tarrant.

"This contract of lease made and entered into on this, the 14th day of September, 1906, by and between Julia Martin, an unmarried woman, of the

county of Tarrant and state of Texas, party of the first part, and E. H. Lowe, of said county of Tarrant, party of the second part, witnesseth:

"That said first party, in consideration of the rents, covenants and agreements hereinafter contained and by said second party to be paid and performed, does hereby grant, demise and lease to said second party, the premises described as follows, to wit: lots one (1) and two (2) in block five (5), Hirschfield's addition to the city of Fort Worth, in Tarrant county, Texas, together with the improvements now on said lots.

"To have and to hold the same with the appurtenances thereunto belonging, unto the said party of the second part from the 15th day of September, 1906, to and including the 31st day of December, 1911, being a term of five years, three months and fifteen days, fully to be completed and ended on the 31st day of December, 1911, said lessee yielding and paying therefor the sum of twenty-two thousand, two hundred and twenty-five ($22,225) dollars, as hereinafter provided, and the further sum of all taxes of every character which shall be levied on or assessed against said property during said term, and the further sum of all premiums which shall be paid for insurance for said term on said property, as hereinafter provided, and the further sum for all moneys which shall be paid for repairs on the improvements on said premises during said term, as hereinafter provided.

"Provided, however, that if said rent, or any part thereof, shall remain unpaid for ten days after it shall become due and payable, as hereinafter set forth, or if said lessee shall fail to pay said taxes, or procure and pay for said insurance, or make and pay for repairs, in manner as hereinafter agreed to be done, and default in any such case shall continue for ten days after notice thereof to said lessee given by said lessor or her agent or assigns; or if said lessee shall assign this lease or sublet said leased premises, or any part thereof, without the written consent of said lessor or her agent or assigns; or if said lessee's interest in this lease shall be taken or sold under execution or other legal process, then and in any of the events aforesaid, it shall be lawful for said lessor, her heirs or assigns, at their option, without further notice or demand, into said premises to reenter and the same to have again, repossess and enjoy, as in their first and former state, and thereupon this lease and everything therein contained on the part of said lessor to be done and performed shall cease, determine and become utterly void; provided, however, that it is contemplated by the said parties to this lease that the said lessee may associate with himself in a mercantile business in dry goods or similar lines, other person or persons, in a partnership relation with him, and the use and occupancy of said premises, under terms of this lease, by such firm or partnership of which the said lessee shall be an active member, shall not be deemed a violation of the above stated provision against assigning and subletting the said premises; and the occupancy and use of said premises by said lessee and his associates in business as aforesaid, shall subject said associates and members of said partnership or firm, and all their property in and on said leased premises, to the full terms, obligations and liabilities of and provided in this lease.

"Said lessee covenants and agrees with said lessor as follows: This is to say, said lessee will pay said money rent, to wit, the said sum of twenty-two thousand, two hundred and twenty-five ($22,225) dollars in instalments as follows: the sum of one hundred and seventy-five ($175) dollars on the 15th day of September, 1906, the sum of three hundred and fifty ($350) dollars on the first day of each and every month thereafter to and including the 1st day of December, 1911, and until the whole amount of twenty-two thousand, two hundred and twenty-five ($22,225) dollars shall have been paid.

"Said lessee further covenants and agrees that as part of the rents and consideration for said premises and lease, that said lessee will pay promptly from year to year, as the same become due and payable, all taxes levied on or assessed against said premises, for and during the full term of this lease, and will keep said premises during the full term of this lease, insured in first class insurance companies, in a sum of not less than twenty- eight thousand ($28,000) dollars in the name and for the use and benefit of Julia Martin, the said lessor, or her heirs or assigns, as the case may be, and will promptly pay all premiums for said insurance when due; and will, during the full term of this lease, at the expense of the said lessee, have done and made promptly as occasion arises, the ordinary repairs on said premises and improvements necessary to keep same in as good condition as they now are, ordinary wear and tear excepted.

"Said lessee further agrees and covenants that if he should at any time fail or refuse to pay said taxes when due and payable or to keep said property insured and pay premiums for said insurance as above stipulated, or to make said repairs as above stipulated, then and in that event, said lessor, her heirs or assigns, shall have the right at her or their option, to pay said taxes, procure said insurance on said property and pay premiums therefor, and make said repairs, or to do one or more of said things, and in the event she, or they, so do or act, then any and all money paid out by said lessor, her heirs or assigns, for any of said purposes, together with ten per cent. per annum interest on said money from date of payment of same, shall be and constitute a debt against said lessee, which he hereby...