In re Levinson ( 1923 )

NETERER, District Judge

(after stating the facts as above). The Supreme Court, by its judgment in Greene, Trustee, v. Levinson, 123 Wash. 370, 212 Pac. 569, holds that the leasehold interest was the community property of the bankrupt and his wife, carried in the name of the Manhattan Investment Company, and that the trustee in bankruptcy was vested therewith. I think it is primer law that a leasehold of a bankrupt passes to the trustee by operation of law. Gazlay v. Williams, 210 U. S. 41, 28 Sup. Ct. 687, 52 L. Ed. 950; Prudential Lithograph Co. (D. C.) 265 Fed. 869, affirmed (C. C. A.) 270 Fed. 469, 45 Am. Bankr. Rep. 409; Black on Bkptcy, § 326; Remington Bkptcy, 1220; Zwietusch v. Luehring, 156 Wis. 96, 144 N. W. 257; Farnum v. Hefner, 79 Cal. 575, 21 Pac. 955, 12 Am. St. Rep. 174; In re Bush (D. C.) 126 Fed. 878, 11 Am. Bankr. Rep. 415. The Supreme Court of Washington in Greene v. Levinson, supra, said that this identical leasehold was community property standing in the name of the Manhattan Investment Company. No act of the Manhattan Investment Company was necessary to vest the interest of the lease. This was effected by operation of law, and record evidence of interest affected by appointment or designation of law. Bemis v. Wilder, 100 Mass. 446; Gazlay v. Williams, 147 Fed. 678, 77 C. C. A. 662, 14 L. R. A. (N. S.) 1199.

The forfeiture clause of the lease reads:

“It is expressly agreed that if default be made in the payment of rent above reserved or any part thereof, or any of the covenants by the tenant, it shall be lawful for the owners and their lawful representatives at any time thereafter, without notice, to declare said term ended and to re-enter said premises with or without process of law * * * and * * * repossess and enjoy as before this lease.”

There is no express penalty fixed by the terms of the lease against assignment thereof, the provision being in the nature of a covenant, and not a conditional limitation of the estate, which would end by determination of the grant, whereas the covenant requires re-entry to terminate the estate. Hague v. Ahrens, 53 Fed. 58, 3 C. C. A. 426. No words of agreement will create a condition. To produce this effect apt terms must be employed. Den v. Post, 25 N. J. Law, 285. No apt words being used for re-entry because of assignment, the phrase “any of the covenants by the tenant,” under the rale ejusdem generis, would refer to default in the payment of rent, and since covenants against assignment of a lease are not favored (270 Fed. 469, supra), but construed with great jealousy (Riggs v. Purcell et al., 66 N. Y. 193), and the provisions for the forfeiture of a lease being always construed strictly as against the lessor to prevent, rather than aid forfeiture (Camp v. Scott, 47 Conn. 366-375), there appears to be no legal inhibition against this assignment.

report special master approved.