A. Lehman & Co. v. Dreyfus

The opinion of the Court was delivered by Manning, J. The plaintiffs proceeded by attachment against the defendant and made Spor a garnishee. [588] Dreyfus occupied, the building No. 33 Tchoupitoulas street under a lease. Under proceedings in the U. S. court his lease and right of occupancy was sold by the Marshall and Spor bought it for $250. In the same court the lessor of the building obtained payment out of Dreyfus’ assets of the whole of the rent due and to become due till the close of the term. The garnishment of Spor is based on the principle that the sum he paid for the lease was merely a premium over and above the rental, and that his purchase or the lease superinduced of necessity the obligation to pay the rents for the remainder of the term. This principle was asserted in Bartels v. Creditors, 11 Ann. 432 and was reaffirmed in D’Aquin v. Armant, 14 Ann. 217. As Dreyfus paid the rent or it was paid out of his assets, he was subrogated by operation of law to the rights of the lessor and his creditors can exercise his rights thereto. As Spor’s purchase of the lease burdened him with the obligation to pay the rents, he owes them to Dreyfus and his debt is subject to garnishment by Dreyfus’ creditors. A state of facts nearly alike to these is presented in the unreported case of Bach v. Cottingham, Opinion book 26, p. 332, which is a sequel to Hayden v. Shift, 12 Ann. 524. Cottingham was lessee of the Shiffs and had failed and absconded. In the proceedings against him and his property the lease was bought by Hayden, and in the distribution of his assets the Shiffs were paid the full rent out of them. But the building burnt pending the lease, and Hayden as purchaser of the lease sued the Shiffs for the rent subsequent to the burning. The court held that Hayden could not recover. He had bought the lease with all its obligation, but the rental had been paid out of Cottingham’s assets, and the Shiffs therefore owed it to Cottingham or to his creditors. Whereupon Bach, a creditor of Cottingham, took process of garnishment against the Shiffs and recovered the money. So in the case at bar the rent having been paid out of Dreyfus’ assets, the plaintiffs are entitled to recover it from. Spor who owes it to Dreyfus’ estate. The judgment below is error. It is therefore ordered and decreed that the judgment of the lower court is reversed, and that the plaintiffs have judgment against J. G. Spor the garnishee forthirteenhundred and seventy three .35-100 dollars with legal interest from service of the process of garnishment and the costs of bo+h courts. Rehearing refused.