TAD Jones Co. v. Winchester Repeating Arms Co., 2109.

• Decision Date: 25 January 1932
• Docket Number: No. 2109.,2109.
• Citation: 55 F.2d 944
• Court: U.S. District Court — District of Connecticut
• Parties: T. A. D. JONES CO. v. WINCHESTER REPEATING ARMS CO.

55 F.2d 944 (1932)

T. A. D. JONES CO. v. WINCHESTER REPEATING ARMS CO.

No. 2109.

District Court, D. Connecticut.

January 25, 1932.

Philip Pond, Joseph I. Shrebnik, and Samuel H. Platcow, all of New Haven, Conn., for claimant Southeastern Inv. Co.

Bristol & White and Albert H. Barclay, all of New Haven, Conn., and Eli J. Blair of New York City, for receivers.

HINCKS, District Judge.

This is a receivership in equity brought originally upon a creditor's bill, the corporate defendant assenting. The receivers were appointed on January 22, 1931. By order of court, the time for presenting common claims was limited to April 28, 1931.

The facts upon which this claim is predicated are, in part, set forth in a stipulation between the parties.

It appears that on April 1, 1920, one Davis, by instrument hereinafter referred to as the "original lease," leased premises known as No. 32 West Forsyth street in Jacksonville, Fla., to the defendant corporation¹ for a term from January 1, 1921, to December 31, 1940, at a rental of $16,800 per year for the first ten years and $19,200 per year for the last ten years of said term, all payable in equal monthly installments in advance. The lease provided that the defendant might assign the lease or underlet the premises, in whole or in part, "provided the lessee shall be and remain liable to pay the rent, etc." The lease further provided that, if rent should remain unpaid for thirty days, "it shall be lawful for the lessor to begin action for the recovery of said rent, or by summary proceedings or otherwise, to enter into and upon the said demised premises * * * and the same to have again, re-possess and enjoy as of the lessor's first and former estate, anything in this lease to the contrary notwithstanding. In the event the lessee shall be adjudicated bankrupt or insolvent according to law, or if any assignment shall be made for the benefit of creditors, the lessor may at lessor's option terminate this lease * * * and the lessee hereby agrees that in either of the events as herein set forth, all its right under said lease shall cease and terminate." The lease contained no express provision that, upon repossession of the lessor for the lessee's breach, the lessor might relet the premises for the lessee's account.

On April 1, 1926, the defendant transferred its entire interest in the leasehold estate thus acquired to the Bayshore Company, a Florida corporation, by written instrument whereby the defendant covenanted that the Bayshore Company should have peaceable possession of the premises for the balance of the term of the original lease, and the Bayshore Company covenanted to pay the rent reserved in the original lease in accordance with its terms to the order of Davis, the lessor in the original lease, and to mail duplicate receipts for each payment of rent to the defendant. By this instrument the Bayshore Company expressly assumed the obligations of all of the defendant's covenants in the original lease. The Bayshore Company went into possession of the premises under this instrument, and continued in possession, paying rent direct to Davis, the original lessor, until hereinafter stated.

Such was the situation of the parties when, on January 22, 1931, receivers for the defendant were duly appointed in these proceedings.

On January 27, 1931, said Davis assigned all his interest as lessor in said original lease to Southeastern Investment Company, the claimant herein, and duly notified the defendant and its receivers, as well as the Bayshore Company, of said assignment. Thereafter for a time the Bayshore Company continued in occupation of the premises and to pay the rent reserved under the original lease, making payments direct to Southeastern Investment Company.

On March 30, 1931, or shortly thereafter, within the time limited therefor by the court, the receivers herein notified the claimant herein, as well as the Bayshore Company, that they canceled the original lease and renounced all further liability of the defendant with respect thereto. Thereupon the Bayshore Company notified the claimant herein that it was thereby released from the obligation of the lease, and on April 4, after paying all rent accrued to date, vacated and gave up the premises.

On April 23, 1931, the claimant herein notified the receivers and the Bayshore Company that it would take possession of said premises for the account of the receivers and the Bayshore Company severally, and would rent the same to the best of its ability, and would credit its claim against the receivers with whatever amounts it was able to realize from rents thus collected, saying in this connection: "You of course, understand this course of action will be taken in an endeavor to minimize the damages which will be suffered by the Southeastern Investment Company of Savannah, Georgia, by reason of your default; and shall not operate to release you or the Winchester Company or any one claiming under it, from liability on account of said lease."

Thereupon the claimant took possession of the premises, and on July 1, 1931, succeeded in negotiating with the Bayshore Company a lease, dated as of May 1, 1931, direct between the claimant and the Bayshore Company for the remainder of the term of the original lease, at a rental of $12,000 per year payable monthly. This new lease contained no reservation of rights against either the Bayshore Company or the defendant on account of any claim for breach of contract then existing.

On all the evidence I find that the fair rental value of the demised premises on May 1, 1931, was $12,000 per annum, and that the rent reserved to the claimant under its said lease to the Bayshore Company (and the reasonable rental value of the premises as of May 1, 1931) is in the aggregate less by $69,600 than the rent reserved in the original lease.

Upon these facts the claimant, standing as it does in the shoes of the original lessor, claims that it is entitled to the allowance of a common claim for the difference between the aggregate of unpaid rentals reserved to it in the original lease and the aggregate of rentals reserved to it in the new lease negotiated by it with the ...