Commonwealth v. Franklin Insurance

Endicott, J. The first question to be considered is the claim of Bullard & others, trustees, for payment of rent of 44 State Street, from January 1 to April 1, 1874, under their lease to the Franklin Insurance Company. The receivers who were appointed December 3, 1872, were not responsible for this rent merely by accepting the trust, and receiving the assets of the Franklin Insurance Company. Hoyt v. Stoddard, 2 Allen, 442. They could have elected to take possession, and assume the liability to pay the rent, according to the covenants of the lease, if they had deemed it for the interest of the creditors so to do, but until such election, or the doing of some act, which would in law be equivalent to an election, they are not liable. As receivers they cannot be held merely on the covenants, but become liable solely by reason of their own acts. Turner v. Richardson, 7 East, 335. It is not contended that the receivers were in possession, or did any act on the premises, but the claim is made that the payment of the rent due January 1, 1873, was equivalent to an election, and that they are therefore bound to pay the rent for the following quarter, or in other words, until the expiration of the lease. It is true that the check, by which the rent for 44 State Street due January 1, was paid, was the check of the receivers payable to Lee, Higginson & Co., and indorsed by them to Bullard & others, trustees, and was accepted by the trustees as a payment under their lease to the Franklin Insurance Company. But upon the facts reported this check was not given in settlement of the rent, then due for 44 State Street, but in pursuance of a compromise entered into with Lee, Higginson & Co., in regard to the occupation of the office at the corner of State and Devonshire Streets, under the lease from Lee, Higginson & Co. to the Franklin Insurance Company. This payment was made as one of the stipulations of the compromise, and in part performance of it by the receivers. Another stipulation was that the receivers should pay a dividend on the rent and taxes due April 1, 1873, on the same premises. The check being given under that compromise, and for that purpose, no inference can be drawn from its use by Lee, Higginson & Co. for another purpose forming no part of the [282] compromise. The fact that they did so use it does not bind the receivers, and is not equivalent to an election to take the lease of 44 State Street, for the benefit of the creditors, while it does clearly indicate an election to assume the liability for the rent of the office on the corner of State and Devonshire Streets. There must be some occupation and use of or some dealing and inter-meddling with the estate, or some act, admission or agreement which in terms, or by necessary implication, indicates an election. Copeland v. Stephens, 1 B. & Ald. 593. Thomas v. Pemberton, 7 Taunt. 206. Hill v. Dobie, 8 Taunt. 325. Ansell v. Robson, 2 Cromp. & J. 610. Hanson v. Stevenson, 1 B. & Ald. 303. Ex parte Faxon, 1 Lowell, 404. Martin v. Black, 9 Paige, 641. The petition of Bullard & others must therefore be dismissed. The second question arises on the petition of Lee, Higginson & Co., for allowance of the rent claimed to be due them April 1, 1873, under their lease to the Franklin Insurance Company. We think the receivers, by their dealings and agreement with Lee, Higginson & Co., have elected to take this lease, and to pay the rent and taxes according to its covenants. But the agreement by which this was done stipulates for the payment of a dividend only on the rent and taxes due on that date. Lee, Higginson & Co. are therefore entitled to such dividend on the amount of rent and taxes so due as is paid to other creditors. Decree accordingly.