Public-domain · open source
OpenJurist

124 F. 111

Docket No. 7,245.

In re Shaffer

Massachusetts District Court

Decided July 21, 1903.)

Massachusetts District Court · decided 1903-07-21

<p>1. Bankruptcy — Claims—Landlord and Tenant — Breach op Lease — Covenants.</p> <p>A lessor is not entitled to prove a claim for damages against the lessee’s estate in bankruptcy for breach of a covenant by the lessee that on the latter’s bankruptcy the lessor might terminate the lease and reenter, and that the lessee should be liable for all loss and damage sustained by .the lessor on account of the premises remaining unleased or being let for the remainder of the term for a less rent than that reserved in the lease.</p>

2 counsel of record

Key passage — most relied on by later courts

““The contract was one of indemnity for loss of rent and other payments, “and would be broken only after, and so far as, rent had been lost and payments had been made. * * * At the time of the adjudication the'claim in this case was contingent, first, upon the determination of the lease by the lessor for breach of the covenant; and, second, upon a subsequent loss of rent by the lessor. If the lessor permitted the lease to continue, or if the rent subsequently obtained by him equalled or exceeded that provided in the lease, the claim would not arise. * * * The provisions of the act of 1898 concerning the proof and allowance of contingent claims differ materially from those contained in the acts of 1841 and 1867. * * * Even under the broad provisions of the act of 1867 above referred to, it was held- that a provision in a lease that the lessors might re-enter and relet the premises at the risk of the lessees, who should remain liable for the rent, and be credited with the sums actually realized, did not give rise to a provable contingent claim. Ex parte Lake, 2 Low. 544 , Fed. Oas. No. 7,991. The provision above quoted of- the lease here in question, though not identical with that in Ex parte Lake, yet resembles it so closely as to be essentially similar. If the contingent claim arising in Ex parte Lake could not be proved under the act of 1867, it is clear that the contingent claim arising in this ease cannot be proved under the act of 1898.’.’”

quoted by 1 later decision, including In re Roth & Appel

““So, where the covenant is that the landlord may re-enter and the tenant shall be liable for damages on account of the premises remaining unleased or leased at a lower rent for the remainder of the term, the lessor cannot prove his damages (in bankruptcy) for breach of the covenant; for the liability is contingent not only upon re-entry but upon there being a loss and the latter could not be reaseertained until the end of the term or until a re-letting at a reduced rent.””

quoted by 1 later decision, including In re Service Appliance Co.

Relies on In re Ells

Good law ✅— No negative treatment on recordhow we know

Decided 1903-07-21

How this case has been cited

Cited by 5 later decisions — most recently November 1932

1 federal appellate · 3 district ·

201903191019201930decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

¶11. Bankruptcy — Claims—Landlord and Tenant — Breach op Lease — Covenants.

¶2A lessor is not entitled to prove a claim for damages against the lessee’s estate in bankruptcy for breach of a covenant by the lessee that on the latter’s bankruptcy the lessor might terminate the lease and reenter, and that the lessee should be liable for all loss and damage sustained by .the lessor on account of the premises remaining unleased or being let for the remainder of the term for a less rent than that reserved in the lease.

¶3In Bankruptcy.

¶4Tower, Talbot & Hiler, for creditor.

¶5Morse, Hickey & Kenney, for trustee.

¶6LOWELL, District Judge.

¶7The bankrupt was tenant under a lease which provided that upon his bankruptcy the lessor might terminate the lease and re-enter, and “in case of such termination the lessee shall be liable to the lessor for all losses and damage sustained by the lessor on account of the premises remaining unleased or being let for the remainder of the term for a less rent than that herein reserved.” The lessor has duly re-entered, and seeks to “prove for damages sustained on account of breach of condition of a lease.” In In re Ells (D. C.) 98 Fed. 967, this court held that the lessor could not prove for a breach of a covenant by the lessee that he would after re-entry indemnify the lessor against all the loss of rents and other payments which might occur by reason of the termination of the lease. In effect the covenant in the case at bar is the same. The liability is contingent, not only upon re-entry by the lessor, but upon loss of rent or other damage occurring. “If the lessor permitted the lease to continue, or if thé rent subsequently obtained by him equaled or exceeded that provided in the lease, the claim would not arise.” 98 Fed. 969. The covenant here is not like that suggested by Judge Lowell in Ex parte Lake, 2 Low. 544, 546, Fed. Cas. No. 7,991, “to pay any loss or damage consequent upon the diminished value of the premises.” The diminished value would be a fact to be proved as of the date of bankruptcy or re-entry. But'in the case at bar damages could not be ascertained until the arrival of the term of the lease as originally limited, or until there had been a reletting at a reduced rent.

¶8Judgment affirmed.

/124/f1d/111 · .json · Public domain