Reynolds v. Fuller

Mr. Justice Waterman delivered the opinion oe the Court. An assignee of an insolvent estate has a reasonable time within which to determine whether he will keep such leasehold interest as his assignor had, subject to the payment of the stipulated rent, or will abandon the premises. If he elect to retain such leasehold and consequently to pay the rent accruing thereon, the election is, if not confirmed by the court, merely personal, binding him as assignee, and does not create a claim by the landlord against the estate. Whether the court will allow such rent to be paid out of the estate, or reimburse the assignee for payment thereof by him made, is a question for the future determination of the court. So, too, as to rooms occupied by the assignee without an order of the court, the claim for rent thereof, like claims for service performed for the assignee, is against the assignee; and while often spoken of as an expense of administration, it is yet a claim against the assignee personally, and whether it is such an expense as the court will allow to the assignee, is for its decision. Sperry, guardian, v. Fanning et al., 80 Ill. 371-374; High on Receivers, Sec. 180-186; Perry on Trusts, Sec. 437a; Gill v. Carmine, 55 Md. 339; People v. Abbott, 107 N. Y. 225; Hackman v. McGuire, 20 Mo. App. 286; Smith v. Goodman, 43 Ill. App. 530. When the rent of rooms used by an assignee for the benefit of the estate is spoken of as an expense of the estate, what is meant, if such use has not been approved by the court, is, that it is a matter for which a proper allowance should be made by the court; not that the assignee can in such case, without authority from the court, conclude and bind the estate. The assignment was for the benefit of claims then existing; these are to be paid pro rata. Appellants then had an unearned claim, which in the ordinary course of events would be earned and become due. Such claim, as earned and due, they have been allowed. They now ask that the amount allowed them shall be paid to them as an expense of the estate. If the assignee has occupied the premises, they are entitled to be paid by him, and if he has contracted to pay rent for the premises until the end of the timé for which they were leased to the assignor, then the assignee should perform his contract. Whether the assignee should be allowed by the court the amount he has so paid, or become liable to pay, is for the court to determine. Undoubtedly the court might, for such amount as it thought proper, direct the assignee to pay the landlord instead of waiting for the assignee to first pay and then have his payment approved and credited to his account. In the present case, the County Court has seen fit to refuse to order the assignee to pay his landlord, appellant, what is due from the assignee for the use and occupation by him of certain premises, such use and occupation not having been directed or approved by the court. That is, the County Court has refused to make what would seem to have been a good claim against the assignee, a claim against the estate. By an assignment, the leases held by the assignor are not terminated; the landlord is entitled to prove, with other creditors, his claim for rent already due, and for that which shall accrue. Smith v. Goodman, 149 Ill. 75, but he is not a preferred creditor. Ordinarily a landlord has a kind of security, in that he may terminate the lease for non-payment of rent; this right is not destroyed by an assignment. After assignment by his tenant, a landlord is entitled to insist upon all his legal and equitable rights; the assignment does not deprive him of either. Appellants, instead of prosecuting their claim against the assignee, saw fit to prove a claim against the estate for the entire rent due and prospective; that is, seem to have elected to make claim as general creditors of the estate, instead of suing the assignee upon his liability. This claim against the estate has been allowed, and appellants are entitled to pro rata dividends. There is no evidence that the court directed the assignee to retain or use these premises, or approved of his so doing; the court was, therefore, not bound to allow appellant’s claim as a part of the expense of administration. At the time of the assignment the total rent due, and to become due was $1,540. Appellants filed a claim for this sum and $100 attorney’s fees; for this aggregate, $1,640, their claim has been allowed. It now appears that the assignee has for the time he occupied the premises paid them $317; deducting this from $1,640 leaves the sum of $1,323, to which sum appellant’s claim as general creditors should be reduced, and upon this sum of $1,323 appellants are entitled to pro rata dividends, without a deduction of the $317 therefrom. The judgment of the County Court is reversed, and the cause remanded, with directions to that court to enter orders in accordance with this opinion. Eeversed and remanded, with directions.