Sabin v. Acme Inv. Co.

RUDKIN, Circuit Judge

(after stating the facts as above). If the $5,000 paid by the lessee at the time of executing the lease was a mere advancement to secure the faithful performance of the covenants of the lease, the lessee or his successor in interest was entitled to a return of the money thus advanced, upon the determination' of the lease, less the amount' of any rent due and unpaid at the time of such determination. But, if the $5,000 was paid as a consideration for the execution of the lease, no part of that consideration was recoverable, either by the lessee or by the trustee in bankruptcy. We think all the authorities are agreed upon these two propositions. Yuen Suey v. Fleshman, 65 Or. 606, 133 P. 803, Ann. Cas. 1915A, 1072; Alvord v. Banfield, 85 Or. 49, 166 P. 549; Moumal v. Parkhurst, 89 Or. 248, 173 P. 669; Dutton v. Christie, 63 Wash. 372, 115 P. 856; Barrett v. Monro, 69 Wash. 229, 124 P. 369, 40 L. R. A. (N. S.) 763; Ramish v. Workman, 33 Cal. App. 19, 164 P. 26; Curtis v. Arnold, 43 Cal. App. 97, 184 P. 510; Galbraith v. Wood, 124 Minn. 210, 144 N. W. 948, 50 L. R. A. (N. S.) 1034, Ann. Cas. 1915B, 609.

There may be no little difficulty in reconciling all the cases on this question, because some of the courts hold that the money was advanced as security, while others hold that it was paid as a part of the consideration, under substantially similar- facts. But we are confronted with no such difficulty here. The contract by its terms leaves no room for construction. It is expressly agreed that the money was paid as a consideration for the lease. The money was not to be applied on rents to accrue in the future or for any other purpose, and was not to be returned to the lessee in any event or upon any contingency. The payment was as absolute and as unconditional as if made for any other interest in the premises, and the money when paid became the absolute property of the lessor, free from any claim on the part of the lessee or the trustee in'bankruptcy.

Such was the conclusion of the court below, and its judgment is affirmed.