
    In re BUDD.
    (Circuit Court of Appeals, Second Circuit.
    January 9, 1917.)
    No. 135.
    Bankruptcy <@=>255 — Bight or Beceiver — Possession oe Leased Premises.
    Where the term of a lease was to begin at a date several months in the future, and it was agreed that the lessee, who had paid the first month’s rent, should have possession rent free until the beginning of the term, that right inured to the benefit of the receiver in bankruptcy of the lessee, and the lessor cannot claim the reasonable rental of the premises during the time the receiver was in possession prior to the commencement of the term fixed by the lease.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. § 352; Dec. Dig. <@=>255.]
    Petition to Revise Order of the District Court of the- United States for the Southern District of New York.
    
      In the matter of William Budd, bankrupt. Petition by the W. & E. Realty Company to revise an order of the District Court which reversed an order of the referee directing the trustee to pay the petitioner a certain sum for the occupation of the petitioner’s premises by the receiver.
    Order of the District Court affirmed.
    Ernst & Cane, of New York City, for petitioner.
    Jesse S. Epstein, of New York City, for trustee.
    Before COXE, WARD, and HOUGH, Circuit Judges.
   COXE, Circuit Judge.

On October 22, 1915, the W. & E. Realty Company leased to the bankrupt, William Budd, the premises known as 157 West Thirty-Eourth street, New York, for the term of five years and nine months, beginning May 1, 1916. The rent for the first year was $6,000 with a sfnall advance for each year thereafter. The rent for the month of May, 1916, was paid in advance and the bankrupt entered into possession of the premises, no charge being made for the months intervening between October 22, 1915, and May 1, 1916. On January 21, 1916, an involuntary petition was filed and a receiver was appointed who remained in possession of the leased premises until March 15, 1916. The claim asserted by the landlord — the Realty Company — is that the receiver is liable for a reasonable rent during his occupation of the premises. The receiver, on the other hand, insists that by express agreement between the bankrupt and the Realty Company the bankrupt was permitted to occupy the premises until May 1, 1916, without compensation of any kind and that this right inures to the receiver who, in this respect, occupies the same position as the bankrupt, had no bankruptcy proceedings intervened. The referee decided that the i-eceiver should pay for the use of the premises during the period which he occupied them. He says:

“Not holding possession under a lease accepted by himself or the trustee he cannot avail himself of any advantage which the bankrupt’s lease carried after January 21, 1916.”

The referee found that $883.18 was a reasonable sum for the receiver to pay for such occupancy and made an order accordingly. The District Court reversed this ruling holding, in substance, that the right of possession by reason of the payment of the May rent and the privilege of occupancy given by the landlord until that time, the trustee acquired the right to the possession of the premises as an asset of the bankrupt’s estate.

The bankrupt by the provisions of the lease and agreement with the landlord was given the use of the premises rent free until June 1, 1916. There is no dispute as to this proposition and the only question is whether the receiver, occupying the position of the bankrupt and standing in his shoes, is not entitled to the same rights. We cannot see why he is not so entitled. If the bankrupt had paid the rent in advance can there be a doubt that during the period for which the rent was paid the use of the premises belonged to the receiver or trustee? Blow is the situation altered because as part of the general transaction the period until June 1st was given free of rent? Having expressly agreed that this period belonged to the bankrupt how can the landlord successfully claim that it belongs to him? In legal effect the possession of the premises was vested in the bankrupt until June 1, 1916.

The order of the District Court is affirmed. 
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