Berwind White Coal Mining Co. v. Borinquen Sugar Co.
Berwind White Coal Mining Co. v. Borinquen Sugar Co.
Opinion of the Court
delivered tbe following opinion:
Tbe motion is overruled as to tbe last ground. Tbe matter of acreage controlled by corporations bas more tban once been determined by this court to be one for tbe government, and not for individuals to complain of, if at all. Tbe other points require fuller consideration.
1. Tbe Reorganization Committee contends that tbe applicants have no standing iu court, inasmuch as they have opposed reorganization iu all its phases, and cannot now be permitted to claim under tbe reorganization. ■ This does not seem to be well taken. Tbe applicants have been merely exercising their legal rights. They bad tbe right to oppose tbe sales when made. It is true that at that time they could not have set up any claim under tbe sales, but that time is past. Tbe sales have been confirmed aud tbe applicants as nonassenting creditors must, under tbe terms of tbe decree, receive their share of tbe proceeds in cash. They have now become creditors under tbe reorganization instead of opponents of tbe reorganization, and have tbe right to oppose any irregularities which they deem to have been committed or to be imminent in carrying out this plan. Tbe court would have no right to punish them for not assenting to tbe scheme, nor would it have tbe wish to do so if it bad tbe right.
2. These creditors, however, have no more vested right to tbe details of tbe reorganization scheme tban other creditors. It bas seemed expedient to tbe court, in view of all tbe circumstances of tbe case, to allow about six months more to work out
3. Tbe remaining ground of tbe motion raises tbe question, to whom belong tbe rents which have accumulated in the bands of tbe receiver under orders previously made by tbe court approving tbe lease of tbe property for tbe past season to what is .known as tbe Federal Syndicate? Tbe argument of tbe applicant herein is that tbe [Reorganization Committee needs and seeks this fund, amounting to some $60,000, in order to carry out tbe scheme of reorganization, while tbe applicants contend this fund was not applied for or granted to tbe re-organizers in any of tbe decrees of tbe reorganization plan. It would therefore, on this view, be an unexpected asset, belonging to tbe defendant company, and should be distributed among its creditors. Tbe [Reorganization Committee having agreed to take care of all preferred creditors, tbe applicants seek to have tbe rent fund distributed to tbe common creditors, that is to say, to themselves amongst others, on tbe theory that they will get only a percentage on bonds from tbe reorganization, and
On tbe other band, tbe Reorganization Committee contend that, having bought all other assets of tbe defendant, tbe rent as an incident of tbe real property also goes to them. Tbe two contentions therefore raise tbe question, To whom shall go tbe rent of real property held in receivership %
A receivership is a temporary status, whereby tbe property is kept in statu quo for tbe benefit of the person to whom it may ultimately be decreed in tbe suit. If tbe receiver bad operated the property and made $60,000 profit, tbe result would have been the same as in tbe case at bar. On account of tbe uncertainty of tbe sugar conditions it was thought better for tbe receiver to lease tbe property on shares, and fortunately this has turned out to tbe advantage of tbe receivership. Tbe present rents, however, are not something different from tbe hypothetical profits mentioned. What would be true of one would be true of the other.
4. Decisions' in the 'different states of tbe Union throw some light upon tbe solution of tbe question, but there is no doubt that tbe decision of matters relating to land must primarily be. in accordance with tbe law of the place where tbe land lies, tbe lex rei sitce. Tbe fact that this was a sale in equity does not change tbe rule. Tbe forms in equity are peculiar io this jurisdiction, but rights to land enforced will conform as far as possible to those fixed by local law. United States v. Fox, 94 U. S. 315, 24 L. ed. 192; United States v. Crosby, 7 Cranch, 115, 3 L. ed. 287; Suydam v. Williamson, 24 How. 427, 16 L. ed. 742; Hutchinson Invest. Co. v. Caldwell, 152 U. S. 65, 38
5. Land in Porto Rico comes under tbe class known as im-movables, wbicb are defined in tbe Civil Code of Porto Rico, §§ 333 and 335, wbicb read as follows:
“Sec. 333. Immovables are, in general, those wbicb cannot move themselves or be removed from one place to another.
“This definition, strictly speaking, is applicable only to such things as are immovable by their own nature, and not to such as are so only by tbe disposition of the law.
“Sec. 335. Tbe following are immovables:
“1. Lands, buildings, roads, and structures of every kind adherent to tbe soil.
“2. Trees, plants, and ungatbered fruits, while they are not separated from the land or form an integral part of an immovable.
“3. Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated from it without breaking tbe matter or causing injury to tbe object.
“4. Statutes, reliefs, paintings or other objects of use or ornament, placed in buildings or on lands or tenements by tbe owner thereof in such a manner that they become attached permanently to tbe property.
“5. Machinery, vessels, instruments, or implements intended by tbe owner of tbe tenement for tbe industry or works that be may carry on in any building or upon any land, and wbicb tend directly to meet tbe needs of tbe said industry or works.
“6. Animal bouses, pigeon bouses, beehives, fishponds or breeding places of a similar nature, when tbe owner has placed
“7. Manures or fertilizers intended for the cultivation of the land, when upon the place where they are to be employed.
“8. Mines, quarries, and slag lands, while the matter thereof forms part of the beds, and waters, either running or stagnant.
“9. Docks and structures which, though floating, are intended by their nature and the object for which they are designed, to remain at a fixed place in any river or lake, or on any shore.
“10. Administrative concessions for public works, and servi-tudes and other real rights, attached to immovables.”
Section 336 goes further, and prescribes that immovables embrace certain incidents inherent in what is immovable itself. It reads as follows:
“Section 336. The following incorporeal things are considered as immovable from the object to which they apply:
“1. The usufruct and use of immovable things.
“2. Any right or obligation established on any immovable.
“3. Every action to recover an immovable or the whole of an inheritance.”
Ownership of property, including immovables, is defined in §§ 354 and 356 of the Porto Pican Civil Code as follows:
“Section 354. Ownership is the right by which a thing belongs to some one in particular, to the exclusion of all other persons.
“Ownership confers the right to enjoy and dispose of things without further limitations than those established by law.
“The owner holds a right of action against the holder and the possessor of the thing in order to recover it.
Such ownership, whether of movables or immovables, carries with it all rights of accession. This is expressed in §§ 360 and 361 as follows:
“Section 360. The ownership of property, whether movable or immovable, carries with it the right, by accession, to everything which is produced thereby, or which is united thereto or incorporated therewith, either naturally or artificially.
“Section 361. To the owner belong:
“1. The natural fruits.
“2. The cultivated fruits.
“3. The civil fruits.”
Civil fruits include interest, as is declared in § 362, as follows:
“Section 362. Natural fruits are the spontaneous productions of the soil, and the broods and other products of animals.
“Cultivated fruits are those produced by lands of any kind, through cultivation or labor.
“Civil fruits are the rents of buildings, the price paid for the lease of lands, and the amount of perpetual life or other similar incomes.”
In connection with this should also be taken into account the provisions of § 453, which is as follows:
“A possessor in good faith becomes the owner of the fruits collected, so long as the possession is not legally interrupted.
“Civil fruits are considered as daily proceeds, and belong, in that proportion, to the possessor in good faith.”
The law therefore declares that the rents shall go with the land, that is to say, that the owner is usually entitled to the rents.
6. In the case at bar the lease contract, under which the rents were to accrue, was made before the second sale, under which the reorganizing corporation claims. The earlier period of this lease called for expenditures by the lessee, and the income in the nature of the sugar business could not come, and did not come, in any marked degree until after the second sale of the land in question. The lease did not provide for any partial payments of rent, nor does it furnish any basis for apportionment of the rent. This was to be paid, and in fact has been substantially paid, in one lump sum after the submission on the application in question.
It is under these circumstances that the question of ownership of the rents must be determined.
The Code of Civil Procedure, § 259 as amended May 28, 1904, provided: “Upon sale of real property, the purchaser is substituted to and acquires all the rights, title, interest, and claim of the judgment debtor thereto, and all his right, title, interest, and claim thereto at any time during any subsisting lien thereon by attachment in the action, or by the docketing of the judgment. When the estate is less than a leasehold of two years’ unexpired term, the sale is absolute. In ail other
This section was repealed March 9, 1905 (Acts, p. 136), so far as it related to the redemption of property sold at public sale. In the case at bar, however, there is no question as to redemption, and the section by the terms of this act would seem to be still in force unless complete omission from R. S. of 1911 repealed it. On the same day an act as to judgments (Acts, p. 115) provided in § I that “a purchaser at a sale under execution or order of sale shall be deemed to be an innocent purchaser without notice, in all cases where he would be deemed to be such had the sale been made voluntarily by the defendant in person.”
The law specially controlling this issue, however, is found in the Civil Code, §§ 1371 and 1404, which read as follows:
“Section 1371. The vendor must deliver the thing sold in its condition at the time of the completion of the contract.
“All the fruits shall belong to the vendee from the day on which the contract was perfected.”
“Section 1404. In the three following cases the vendee shall owe interest from the time the thing is delivered until the payment of the price:
“1. Should it have been so stipulated.
“2. Should the thing sold or delivered produce fruits or income.
“3. Should he be in default in accordance with section 1067.”
These contemplate the possible passing of title at a later date than the contract of sale and specifically provide that in such
It follows, therefore, that, upon the application now before the court, the decree of confirmation will be modified as above. Except to this extent, the motion is denied.
It is so ordered.
Reference
- Full Case Name
- BERWIND WHITE COAL MINING COMPANY v. BORINQUEN SUGAR COMPANY, Dft.
- Status
- Published