Opinion
Argued June 15, 1880
Decided October 12, 1880
Lewis L. Delafield for appellants.
A.J. Vanderpoel for respondent.
It appears from the papers that the receiver has in his hands an ample fund for the payment of all the debts of the dissolved corporation. That he has paid all the admitted debts, and has deposited in the United States Trust Company the sum of $87,172.19 to meet such claims as are disputed, and that in this sum is included an amount sufficient to cover all the rent accrued and to accrue on the petitioner's lease, up to the end of the term. It further appears that after the payment of all the debts of the corporation there will be a surplus of upwards of $900,000 for distribution among the stockholders.
The receiver is directed by the judgment in this action to close up the affairs of the corporation and distribute the assets among the remaining creditors and stockholders. The petitioner claims payment of the rent accrued under the lease of the banking office demised by him to the corporation in May, 1876, for five years, at the rent of $12,000 per annum.
Many facts are stated in the papers and in the points, for the purpose of showing that the receiver had adopted this lease and bound the assets of the bank for the payment of this rent, and from the opinion delivered at General Term it seems that the court treated this application as resting wholly upon that ground, for the opinion does not deny the right of the petitioner to be paid in due order of distribution of the funds in the receiver's hands, but only denies his right to have his claim enforced by a peremptory order for the full amount, without regard to the claims of other creditors.
It does not seem to us necessary to determine whether or not the petitioner has any such right. If he has shown himself to be a creditor of the corporation for the amount of rent claimed, that is quite sufficient to entitle him to payment, without regard to any liability which the receiver may have assumed in regard to the lease. His rights are certainly as great as those of any other creditor, and as such he is entitled to be paid in the regular course of distribution.
The only answer to his application which requires consideration, is the denial of the indebtedness of the corporation for this rent. This denial is not founded upon the allegation of any payment, release, or surrender, or any thing affecting the merits of the claim, but upon the sole ground that by the dissolution of the corporation the lease was terminated, and the covenant to pay rent ceased to be obligatory.
We do not regard the dissolution as having any such effect. Under the statutes of this State, on the dissolution of a corporation, its assets become a trust fund for the payment of its debts, and these include debts to mature as well as accrued indebtedness, and all engagements entered into by the corporation, which have not been fully satisfied or canceled. These cannot be canceled without the consent of the party holding them, and receivers of dissolved corporations are authorized to retain out of their assets a sufficient amount to cancel and discharge such open and subsisting engagements. These provisions are contained in article 3, title 4, chapter 8, of the third part of the Revised Statutes, and are incorporated, by reference, in the judgment in this action, which confers upon the receiver the powers therein contained.
The lease in question is one of that class of engagements designated in the statute as open and subsisting. The receiver is authorized by the statute and judgment to contract for its extinguishment, but until this is done the lessors are entitled to payment of the rent as it accrues. They cannot be deprived of the benefit of the covenant to pay rent, without some act on their part releasing or discharging it.
The position of the receiver is analogous to that of an executor. If he waives the term he cannot be charged as assignee of the lease, but if the landlord does not choose to re-enter, the estate of the testator may be liable for the rent in the due course of administration. And under the bankrupt law of England, the rule was the same in regard to an assignee in bankruptcy. If he did not enter under the lease, he was not liable for the rent, but the lessor could come in as a general creditor of the bankrupt estate, for the rent. Martin v. Black (9 Paige, 644). Quain's Appeal (22 Penn. St. 510), cited by the respondent as deciding that a ground rent does not survive against executors or administrators, except as to the rents which accrued during the life-time of the decedent, does not affect the question. That decision was that the ground rent was payable by the heir, as an incumbrance on the land, and not out of the personal estate. It was undoubtedly rent accruing under a perpetual lease, and not for a term of years.
We see nothing to impair the right of the petitioners to payment, as creditors of the corporation, of the rent accruing under the lease.
The orders of the General and Special Terms should be reversed with costs, and the motion granted, costs to be paid out of the fund.
All concur, except FOLGER, Ch. J., not voting.
Ordered accordingly.