Man v. Katz

Gildersleeve, J.

It appears from the evidence and admissions, of counsel that plaintiff leased a building to the Elmer Parlor Furniture Company, for a term of ten months from July 1, 1902, at a rental of $208.33 a month, payable in advance. This corporation made an assignment for- the benefit of creditors, to the defendant, who took the lease, along with other effects of the assignor, and continued in the use and occupation of the building. When the rent for October, 1902, became due, defendant failed to pay it, and plaintiff sued him individually for the rent. The case was tried in the Trial Term of the City Court, and the justice directed a verdict for plaintiff. The defendant put in no evidence, and the facts are practically undisputed. The defendant appeals, and the only question raised on the appeal is as to the individual liability of the defendant, who took the lease, as we have seen, as assignee for the benefit of creditors of the lessee, the said corporation.

We are of the opinion that the rule laid down in Walton v. Stafford, 14 App. Div. 312; affd., 162 N. Y. 563, must control the disposition of this appeal. The plaintiff there was an assignee for the benefit of creditors. The assignor was the lessee of certain premises and the assignee accepted the lease as an asset of the assigned estate and utilized the demised premises for the benefit of his cestui que trust. It was there held that the lease became a part of the assigned estate, held by the assignee, in his trust capacity, subject to the covenants contained therein. While it was so held, the assignee, in his representative capacity, was chargeable with all the conditions attached thereto. It was not his contract, either personal or as representative, and his liability upon the covenants was consequently not contractual. The liability was the liability of his assignor’s estate, legally resulting from its acquisition of the lease as an asset. It was, therefore, the assignee’s liability as assignee.

A distinction must be drawn between contracts of an assignor that pass into the hands of an assignee and contracts made by him as assignee in his administrative capacity. The latter creates contractual relations and may be enforced against him personally. The former is a liability of the assignor’s estate and cannot be enforced against the assignee individually.

Applying this doctrine to the case at bar the conclusion is that the plaintiff could have brought the action against defendant as assignee, and not against him in his individual capacity.

The judgment is reversed, and a new trial granted, with costs to the appellant to abide the event.

Ebeedman, P. J., concurs.