Jones v. Hausmann — 23 N.Y. Super. Ct. 168

Majority

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John Q. Jones, Plaintiff and Respondent, v. Solomon Hausmann et al., Defendants and Appellants.

Headnote

1. Where an assignee, under a voluntary general assignment for the benefit of creditors conveying, though without specifying it in terms, a lease of real property, enters immediately on all the demised property, excepting parts then in the occupation of sub-tenants of the assignors, and, as assignee, occupies the same until within a few days of the expiration of the lease, and collects the sub-tenants’ rents for the whole of the last quarter, and it is not shown that he entered merely to remove the goods, and that his occupation was no longer than was reasonably necessary for that purpose, nor that he gave notice to the lessor that he did not intend to accept the term as assignee, and there is no explanation of his having collected the rents, he is liable to the lessor, for rent, as assignee of the lease.

2. In such case the burden of proof is upon him, to show that the lessees, his assignors, have paid the rent, if he relies on that fact.

(Before Bosworth, Ch. J., and Robertson and Barbour, J. J.)

Heard, December 3, 1862;

decided, January 17, 1863.

Motion by the defendants for a new trial on exceptions, ordered at the trial to be heard in the first instance at the General Term.

The action was on a lease by indenture, dated February 10, 1859, executed by the plaintiff as lessor and party of the first part, and by Herman Gutman and William. Wedeles, composing the firm of Wedeles & Gutman, as lessees and parties of the second part; and the plaintiff sought to recover thereon of Solomon Hausmann. and Bernard Bernard, the defendants, as assignees of the lessees and of the lease, the quarter’s rent ($750) falling due May 1, 1861, (the last quarter of the term created by the lease.)

The complaint stated the making, sealing and execution of the lease, set forth its terms, described the premises thereby demised, alleged entry upon, and enjoyment of the premises by the lessees up to the 15th of March, 1861, an assignment on that day of their individual and joint property, and “the unexpired term in the said “demised premises” to the defendants, in trust to pay the debts of such assignors, and alleges that “ thereupon

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“ the said defendants, as such assignees, entered into the “possession and enjoyment of said demised premises, and “ continued in the possession and enjoyment thereof until “the said term had fully expired and ended;” that the quarter’s rent ($750) falling due May 1, 1861, was unpaid, and prayed judgment therefor, with interest from said May 1st.

The defendants, in their answer, “ admitted entering “into possession of the premises, * * * on the 15th of “ March, 1861, and continuing therein until on or about the “ 23d day of April, 1861, for the purpose of disposing of “the property of the said Wedeles & Gutman, under the “ trusts of the said assignment, and they allege and say, “ that on or about the last mentioned day they vacated “ said premises, and tendered possession of the same to “ the plaintiff.” * * * *

They denied that the unexpired term was vested in them by said assignment, and “they denied that they “ entered into the possession of the said premises, under and by virtue of said lease, and they denied that they “continued in the possession and enjoyment of said “premises until the 1st day of Maj^, 1861,” and also denied that they were indebted to the plaintiffs in any sum whatever.

On the trial before Mr. Justice Robertsox and a Jury, on the 14th of January, 1862, the plaintiffs gave the lease in evidence. It was of the store and lot of land, No. 168 Fulton street, New York City, for the term of two years from the 1st of May, 1859, at an annual rent of $3,000, in equal quarterly payments, payable on the first days of August, November, February and May, in each year. In it the lessees covenanted “ not to sell, underlet or assign over the whole or any part of said premises hereby (thereby) demised to any person or persons whomsoever, or for any term or time whatever, * * * without the written consent of the party of the first part first had and obtained, under penalty of forfeiture of this lease.” The defendants “ objected to the admission of the lease,” when it

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was offered in evidence, “ on the ground that it contained a clause that it should not be assigned.” The objection was overruled, and they excepted to the decision.

The plaintiff next gave the assignment in evidence. It was dated March 15,1859, and assigned to the defendants “ all the estate, property and effects, both real and personal, of every name, nature, kind and description whatsoever,” of said lessees. It concluded with a clause which stated that the assignees (the defendants) “ do hereby take upon themselves the execution and performance of the several trusts herein contained, and do promise and agree that they will perform and execute the same faithfully and according to law.” It was signed by each of the assignors and assignees, and its execution was acknowledged by each of them, on the said 15th of March, before a notary public.

The plaintiff then proved by Richard Richards, that he (Richards) occupied the rear of the second story of said premises, between February 1 and May 1, 1861, that he rented the place from"the assignors, and paid the rent for that quarter to their assignees, the defendants. He also proved by Schulein Ostenberg, that he (Ostenberg) occupied all the lofts of said premises, (except the part of the second story occupied by Richards,) under a hiring from the lessees, from May 1,1860, to May 1,1861, and paid the rent for the last quarter to the assignees, the defendants.

When the plaintiff rested, the defendants moved to dismiss the complaint, on the grounds —

1. That no privity of action was shown between the plaintiff and defendants; that all the defendants did was as assignees for the benefit of creditors, and that no personal liability accrued against them :

2. That their occupation was through Wedeles & Gut-man, and not through or from the plaintiff:

3. That no cause of action was shown. against them, and, for aught that appeared, the assignors have paid the rent.

The motion was denied, and they excepted.

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They then, moved to amend their answer by striking out the words “took possession,” and inserting “occupied the premises for the purpose of winding up the affairs of Wedeles & Gutman, as their assignees.

This motion was denied, and they excepted.

The defendant “ Solomon Hausmann” was then sworn, and, inter alia, said: “The goods (the assigned goods) “ were in the store, on the ground floor and the basement “ below. * * * * I had nothing to do with any other “ part of the building, except to collect the rent. At the “ time I went in there as assignee, * * * I did not know “ anything about any lease. I did not know how I was “ in there. I was there winding up the business of Wede- “ les & Gutman. * * * * All that 1 did on the premi- “ ses was under and by virtue of the authority contained “ in the assignment.”

Q. Have you ever had any other power or authority, except what is in that assignment, in what you did on these premises ?

A. I had no other authority, except what the assignment allows me to do. We packed up the goods and made them ready for auction. We were there between four and five weeks. * * * We used the premises for no purpose whatever, except to sell these goods.

* * * The goods were for sale, but I think we did not sell any at all; we packed them up for auction. If any one come in to buy, we would sell them. The auction was held on the 17th of April; it was not held on the premises.”

Sehulein Osteiiberg, called by defendants, testified, that he “ received a note from Mr. Jones, or his attorney, not “to pay rent to the assignees. Mr. Jones afterward took “ the notice back. I do not recollect how long after he “ took it. It might be a day or so, or four days; I cannot “ recollect.”

The defendants having rested, renewed their motion to dismiss the complaint, “ and to amend the answer as

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“ above, and conform it to the proof;” which motions were denied, and they excepted.

They requested the Judge to instruct the Jury:

1. That to charge the defendants personally, “it must appear that the defendants have assumed the, original position, in that lease, of Wedeles & Gutman:”

2. “That there is no evidence the defendants ever became possessed of the premises by any assignment, or otherwise, of the original lease:”

3. That plaintiff could not recover of defendants “ for “ back rent accruing long before they could have received “ any benefit from the premises:”

4. That defendants’ possession “ was as agents or trustees of Wedeles & Gutman, and not as the lessees of the . plaintiff:”

5. That the notice of the plaintiff to the other tenants not to pay rent to defendants, shows that he did “ not intend to place the defendants in the same position as Wedeles & Gutman, because Wedeles & Gutman had a right to collect the rent:”

6. That the plaintiff could not put the lessees out of the premises, while “ defendants were in, there being no covenant of the original lease broken during that time:”

7. That there is no evidence but that the lessees “were ■ able, and had paid the rent due, on the original lease, from them to plaintiff:”

8. That the plaintiff, “ if he recover at all, must recover in this action on the original lease :”

9. “That the rents collected by the defendants were assets, which the assignees might collect without assuming the original lease itself.”

The Judge charged [inter alia) that “ the law presumes “ that parties in possession, after the lease is established, “ áre assignees, and it is their business to show (because “ they have the evidence more immediately in their pos- “ session) that they hold it .by some other authority than “ as assignees of the premises.”

“ In this case, the defendants are admitted in the plead

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ings to have been in possession of these premises after the execution of the original lease, and during the quarter for which the rent here sued for fell due. This is prima facie or presumptive evidence that they were assignees; that is, if there were no other evidence in the case but that, you would be bound to find they were assignees of the premises for the whole of the time for which the lease was granted.” # * * “ This lease was not mentioned in terms ” in the assignment.

“ Where there is a general assignment, the parties are not held liable as holders of the'lease, unless there is evidence to show they act under it by virtue of the assignment itself.” * * * “ The responsibility, as assignees of the lease, is not thrown upon them, unless they have done some act showing they meant to become assignees or owner's of the leaser It is for you to say whether they were in possession of the premises, merely as holding by sufferance or license of Wedeles & Gutman, or whether they took an assignment of the premises. * * * If it be true that they had no other authority except that which they could exercise as assignees under the assignment, they took upon themselves the burden or responsibility of paying the rent. * * *

“ So, too, if they never had possession of the lease, they had a perfect right to receive the rents of the premises.” * *

“ The notice to the tenants not to pay rent was immaterial. * * • * There is no claim that' there was a surrender of the premises to him,” (the landlord.)

The case states, that “ defendants’ counsel excepted to that part of the charge, which states that possession of the premises is prima facie evidence of the assignment of the lease, and to all those parts which hold that if they took possession under the assignment, as assignees, they were liable to pay the rent.” •

“ Also to the refusal of the Court to charge the requests further than embraced in the charge delivered.”

The Jury rendered a verdict for the plaintiff for $744.90.

The Court then ordered that the exceptions taken on the

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trial, be heard in the first instance at General Term, and that the entry of judgment in the meantime be suspended.

A. J. Dittenhoefer, for defendants:

Cited, Bagley v. Freeman, (1 Hilt., 196;) Journeay v Brackley, (Id., 447;) Quackenboss v. Clarke, ( 12 Wend., 555 ;) Taylor’s Landl. & Ten., [2 ed.] p. 300, § 458, and cases cited; How v. Kennett, (3 Ad. & El., 659;) Briggs v. Sowry, (8 Mees. & W., 729;) 1 B. & Ald., 593; 1 Espinasse, 233; Bailey v. Delaplaine, ( 1 Sandf., 5 ;) Holsman v. De Gray, (6 Abbotts’ Pr., 79;) Acker v. Witherell, ( 4 Hill, 112 .)

R. Gosman, for the plaintiffs, in addition to the authorities cited by him in support of his first and second points in the preceding case of Dennistoun v. Hubbell, ante, 155, argued that: —

III. The doctrine of the charge, that .the lease having been established, subsequent possession of the premises by the defendants, is prima facie evidence of an assignment of the lease, is incontrovertibly settled by the cases, and the defendants’ exception in this respect is untenable. (Durando v. Wyman, 2 Sandf., 597 ; Williams v. Woodard, 2 Wend., 487 ; Acker v. Witherell, 4 Hill, 112 ; Armstrong v. Wheeler, 9 Cow., 88 .)

There is no case deciding that simple possession and use by the assignees of the demised premises, for the purpose of closing the assigned estate, however short, does not bind the assignees for the payment of the rent, unless, perhaps, the case of Journeay v. Brackley, above referred to. (Citing and commenting on the cases of Bourdillon v. Dalton, 1 Espinasse, 233; Turner v. Richardson, 7 East, 335; Copeland v. Stephens, 1 Barn. & Ald., 593; Hastings v. Wilson, Holt, 290; Page v. Godden, 2 Starkie, 309; Hill v. Dobie, 8 Taunt., 325; Thomas v. Pemberton, 7 Id., 206 ; Carter v. Warne, 4 Car. & P., 191; Lindsey v. Limbert, 2 Id., 526; Wheeler v. Bramah, 3 Campb., 340; Clark v. Hume, Ry. & Moo., 207 ; Hanson v. Stevenson, 1 Barn. & Ald., 303; How v. Kennett, 3 Ad. & El., 659.)

The defendants were not entitled to a dismissal of the complaint. In their answer, they admitted “ entering into possession of the premises mentioned in the complaint (the demised premises) on the said 15th of March, 1861, (the day of the assignment,) and continuing therein until on or about the 23d day of April, 1861, for the purpose of disposing of the property of said Wedeles & Gutman, under the trusts of the said assignment.

The assignment was sufficient to transfer to them the lease and the unexpired part of the term thereby created, and to enable them to claim and appropriate it as a part of the assigned property. (Ringer v. Carn, 3 Mees. & Wels., 343.) They, in fact, had actual possession of all the demised premises, except the upper stories, until within about seven days of the day on which the term expired.

They collected from the under-tenants of the residue of the premises, the rent falling due May first, 1861, for the whole quarter ending on that day.

No explanation of the fact of receiving the rents, is attempted to be made. No evidence was given, as to the length of time reasonably necessary, to enable the assignees to remove the assigned goods from the demised premises. No notice was given to the plaintiff by the defendants, either at the time they entered or during their occupation, that they did not intend to accept the term, as assignees, or that their entry was merely for the purpose of removing the assigned property.

The only one of the assignees who was sworn, testified, that all he “ did on the premises was under and by virtue of the authority contained in the assignment.”

If their entry into and occupation of the premises themselves, “was under and by virtue of the authority contained in the assignment,” there can be no doubt, that such an entry and occupation, and the reception of the rents for the whole of that quarter, for the residue of the premises not occupied by them personally, constitute such conclusive evidence of an election to accept the term,

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as made them liable for the rent of that quarter. (Astor v. Lent, 6 Bosw., 612 ; Journeay v. Brackley, 1 Hilt., 447; Ringer v. Carn, 3 Mees. & Wels., 343 ; Williams v. Bousanquet, 1 Brod. & B., 238; Wollaston v. Hakewell, 3 Mann. & Gr., 297; Paull v. Simpson, 9 Ad. & Ellis, N. S., 365; Astor v. Hoyt, 5 Wend., 603 , 613-617.)

There may well be a distinction between the nature and extent of the liability "of an assignee in bankruptcy, under the act of 6 Geo. 4, § 75, which defines his liability, and that of the voluntary assignee of all the property of an assignor, in trust for the payment of debts, in respect to whom no similar statutory immunities exist. (How v. Kennett, 3 Ad. & Ellis, 659; Briggs v. Sowry, 8 Mees. & Wels., 729.)

The position of such an assignee resembles more closely that of an executor of a lessee. The latter is liable for all the debts of a lessee, so far as he has assets. Such an assignee is liable for the due conversion and application of the assigned estate to the payment of the debts, according to the provisions of the assignment. But as assignee he is not personally liable for the payment of any of the assignor’s debts; his liability is for the due execution of the trusts committed to him.

An executor of a lessee, whether he enters on the premises or not, is chargeable as executor in the detinet, because he cannot so waive the term as not to be liable for the rent so far as he has assets. (2 Williams on Ex’rs, 5th Am. from last Lond, edit., 1558, 1559 ; 2 Rob. Pr., pp. 99, 100.) If he accept” the executorship and enter on the demised premises, he is chargeable as assignee, in an action of debt or covenant, for the arrears of rent due after his entry, de bonis propriis. (Rubery v. Stevens, 4 Barn. & Ad., 241.) An executor, when thus sued, if the premises yield no rent, and he has no assets aliunde, or if he has assets of some value, but less than the rent, may protect himself by a proper plea, from liability beyond the rents which the lands yield. (Id.)

It seems illogical to hold then that an assignee, under

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an assignment conveying all of the assignor’s property, and among other property a lease, (though not specified as part of the assigned property,) may accept of the assignment ; enter on the day of its date on all of the demised premises, excepting portions then in the occupation of sub-tenants of the assignors ; occupy as assignee the parts thus taken possession of by him until within seven days of the expiration of the lease, and collect from the subtenants rents for the whole of the last quarter, and yet not be liable as assignee of the lease. (1 R. S., 747, § 24.)

There are cases which hold that he is not liable where he enters merely to remove the assigned goods, and his conduct and acts show clearly that he did not intend to accept the term, or to enter upon the demised premises as being part of the assigned estate. (Martin v. Black, 9 Paige, 641; Carter v. Hammett, 12 Barb., 253 .)

In Journeay v. Brackley, (1 Hilt., 447,) “ shortly after the assignment, the defendants [the assignees] notified the plaintiffs that they did not intend to take the building, and would have nothing to do with the lease, and should get the goods out as soon as possible.” (Id., 449.) The assignees were held not to be liable. In Lewis v. Burr, ( 8 Bosw., 140 ,) the assignee was held not to be°liable.

In Hanson v. Stevenson, (1 Barn. & Aid., 304,) which was against an assignee in bankruptcy, and arose prior to the act of 6 Geo., 4, (supra,) Lord Ellenborough, C. J., said: “ I know of no instance in which a deliberate act of taking possession has been curtailed of its full legal effect. If the assignees had wished so to curtail it, they should have entered upon the premises with a protest that their entry was not for the purpose of possessing- themselves of the premises as assignees, but not having done so, they have subjected themselves to the payment of rent.”

The opinions of Bayley and Abbott, J. J., are equally pertinent.

In the present case no such notice was given, nor is there any evidence tending to show that the assignees did not enter for the purpose of possessing themselves of the premises.

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Hausmann, in his testimony, does indeed say that “ At the time I went in there as assignee, I knew nothing about this lease, or the extent of the lease to Wedeles & Gut man.” But he does not say how soon he informed himself on this point. He must have soon ascertained that his assignors did not own the premises, and when informed • of that, had notice that they hired them of some one. The defendants continued in possession until just as the lease was expiring, and subsequently collected from the under-tenants, rent which fell due after the assignment was made. He does not pretend that they entered merely to remove the goods, and not to occupy, as assignees, the demised premises. They in fact occupied, as the answer admits, until the lease had only seven more days to run.

On such evidence I think the plaintiff has a right to a peremptory instruction, that he was entitled to recover. If he had a right to such an instruction, then the defendants cannot complain of any instructions to the Jury. Giving them the chance of a verdict, on any question of fact, was a chance to which they had no right.

But assuming that the case was a proper one for a Jury to determine, the exceptions to the charge are untenable.

The part of the charge first excepted to, is in accordancwith Williams v. Woodard, ( 2 Wend., 492 ,) and Acker v. Witherell, ( 4 Hill, 112 .) The exception “ to all those parts (of the charge) which hold that if they took possession under the assignment, as assignees, they were liable for the rent,” need not be specially considered. That an assignee, thus taking possession, is liable, is affirmed by all the cases, and declared by statute. (1 R. S., 747, § 24.)

The only other exception in connection with the charge, is stated in the case to be “ to the refusal of the Court to charge the requests further than is embraced in the charge.”

The answer to this exception is, first, that the case does not state that the Judge refused to charge further, in regard to the requests, than he did charge. After the charge was, apparently, concluded, the defendants’ counsel requested

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the Judge to charge further on two points. He did so ; no exception was taken to the charge on either of these two points, and no request was made to charge farther on any other points. This should have been done if greater particularity was desired. (Zabriskie v. Smith, 3 Kern., 322, 338.) Second. This exception embraces and covers all the requests, and excepts to an actual or supposed refusal to charge further on some or all, but does not call attention to any particular request, or indicate the propositions which the counsel supposed were not met by the charge.

The first request is not very intelligible, as a legal proposition. If by it was meant that it must appear, in order to charge the defendants personally, that they entered upon the premises, as assignees thereof, and that if they did not so enter, but were there, merely holding by sufferance or license of the assignors, they were not liable; then it may be answered that the Judge did so charge.

There was nothing in the case to which the third request could apply. The rent sought to be recovered, accrued after the assignment to the defendants was made, and after they had entered into possession.

The defendants had no right to the instruction contained in the fourth request. This is apparent from the reasons stated, why the complaint could not be dismissed.

The 5th and 6th requests need not be considered, further than to refer to what has been said in reference to the first request, as answer to the matter of the 5th; and that the case does not present any such question as is attempted to be raised by the 6th request.

Whether the lessees were able to pay the rent or not, was immaterial, and if it had been paid by them, it was for the defendants to show it, if they relied on that ground. This observation disposes of the 7th request.

As to the 8th request, it may be answered that the plaintiff has recovered on the original lease and an assignment of it to the defendants, which they accepted and under which they entered.

The 9th instruction requested, was given, as asked,

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whether correctly or not it is no't important to inquire, as the verdict was against the defendants; who had the benefit of the instruction.

We have, in the foregoing views, considered every exception referred to in the defendants’ points, or called to our attention op the argument.

Judgment should be entered in favor of the plaintiff on the verdict.