Nakdimen v. Royal Stores, Inc
| Decision Date | 29 April 1935 |
| Docket Number | 4-3840 |
| Citation | 81 S.W.2d 853,190 Ark. 724 |
| Parties | NAKDIMEN v. ROYAL STORES, INC |
| Court | Arkansas Supreme Court |
Appeal from Sebastian Chancery Court, Ft. Smith District; C. M Wofford, Chancellor; affirmed.
Decree affirmed.
James B. McDonough, for appellant.
House Moses & Holmes and Hardin & Barton, for appellee.
On July 6, 1928, the appellant, I. H. Nakdimen, and the appellee Jack Fine, entered into a lease contract whereby the appellant leased to Jack Fine a three-story building at 618 Garrison Avenue in the city of Fort Smith, Arkansas. The lease was to begin on June 15, 1930, and end on June 15 1940. At the time this lease was made Fine was already occupying the building under a lease which ended June 15, 1930. The lease involved in this case is the one that began June 15, 1930, and ended June 15, 1940. The rent of the building as stated in this lease was $ 66,000, payable in 120 monthly installments of $ 500 per month in advance for the first 60 months, and $ 600 per month in advance for the second 60 months. The lease provided that notes should be given, each note being for one month's rent. The lessee was to make all repairs in the building except the roof, and the lessor was to repair the roof. The lessee was not permitted to assign the lease without the written consent of the lessor. The furniture and fixtures were either in the building at the time or placed in said building soon after the making of the lease, and remained in said building until the fire on March 4, 1932. The fixtures were removed from the building after the fire.
In 1929 the lessee assigned the lease to a corporation called Jack Fine's Palais Royal Stores, Inc., without the consent of Nakdimen. The lease provided that, in case of failure to pay the rents or default of any agreement contained in the lease, the lessor might terminate the lease. The lessor did not consent to the assignment of the lease, and always looked to Jack Fine to pay the rent. It was provided that, in case of failure to pay the rent, the fixtures in said building belonging to the lessee and any other property belonging to the lessee in or about the building should not be removed, and should stand good for whatever back rent might be due on said building. The lease also provided that the lessor should have a lien upon all movable and unmovable property and stocks or any other property belonging to the lessee for the failure of payment of any rents in arrears. A provision in the lease also gave the lessor the right to foreclose the lien on the fixtures.
It was also provided in the lease: "If any rent shall be due and unpaid by the lessee, or if the said premises become vacant, or if bankruptcy or insolvency proceedings are instituted by or against the lessee, or if the lessee does not keep, perform and observe each and all of the conditions of this lease, the lessor, in any of said events may, without notice or process, terminate this lease and re-enter the said premises, or relet said premises as agent for the lessee, or foreclose the lien herein conferred upon the property belonging to the lessee, the remedies just enumerated being only cumulative of whatever other remedies may be open to the lessor in such events."
The corporation to which Fine assigned the lease, and transferred all of his property became insolvent, and was adjudicated a bankrupt on November 17, 1931. An order of sale of the property of the bankrupt was made on December 4, 1931, and C. W. East became the purchaser and assigned certificate of purchase to R. Baum, a brother-in-law of Jack Fine. The property of the bankrupt, including fixtures, were scheduled in the bankrupt suit as the property of the insolvent corporation. The property was sold by the trustee subject to the lien of the lessor for rent. R. Baum transferred the property to the appellee, Royal Stores, Inc. The back rent due at the time the appellee purchased the fixtures was found by the lower court to be $ 700, and this amount was paid to Nakdimen by Baum. When this suit was brought, Nakdimen had possession of the fixtures, and the suit was brought in the Sebastian Circuit Court in replevin for the fixtures. The cause was afterwards transferred to the chancery court, where it was tried, and a decree was entered on August 2, 1934, the court holding that the fixtures were purchased by the appellee free from any lien, and to reverse this decree this appeal is prosecuted.
There was considerable testimony about repairing the building after the fire, but it is unnecessary to call attention to this, because the court found that Jack Fine owed the rent, and gave judgment against him for the amount of rent due, and there is no appeal from this judgment. The principal question for our consideration and determination is whether the appellant was entitled to a lien on the fixtures for an amount greater than the court found.
Appellant contends first that he has a lien against the fixtures for all rent becoming due up to the abandonment of the lease, which he says is April 1, 1934. The lien in this case is not a common-law lien, nor a statutory lien, but is a lien created by contract, and, in this instance, it describes nothing but the fixtures. But appellant claims that he is entitled to a lien on the fixtures for all the rent that might accrue until the lease was abandoned. When the fire occurred, the fixtures were moved from the building without objection on the part of appellant. A lien of this character exists only while the property is in the building, or if it has been removed from the building without the consent of the landlord. The removal of the property from the building was not objected to by the landlord. No effort was made to foreclose the lien. Again the property was included in the schedule of the corporation that went into bankruptcy, and it was scheduled as the property of the corporation, and not as the property of Jack Fine. While the appellant did not consent to the transfer of the lease or the property, yet he made no objections, and actually received the rent from the corporation. The lease in this instance gave the appellant a lien on the property of Jack Fine, and not on the property of any one else. Appellant knew that this transfer had been made, knew the property was scheduled in the bankrupt court as the property of the corporation, and he would therefore not be entitled to a lien on the property, except for rent due or, as the lease says, rent in arrears, or back rent. The evidence shows that the property was damaged by fire, but it does not show the amount of the damages, and the property was repaired after the fire. Jack Fine testified that the value of the fixtures was $ 3,000. This was after they had been repaired.
It must be remembered that a lien created by contract like the lien involved here does not give the...
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