Apex Leasing Company v. Litke

Appeal from a judgment entered June 23, 1916, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of plaintiff entered upon a decision of the court on trial at Special Term and directing a dismissal of the complaint. The judgment at Special Term set aside a certain sale of merchandise in bulk as void under section 44 of the Personal Property Law. One Samuel Litke, the owner of two stores, sold one of them to defendant. At the time of the sale he gave to the purchaser a list of his creditors,- but did not include the name of plaintiff. Plaintiff was not notified of the sale, and, therefore, attacked the validity thereof because at the time of the transfer there was an outstanding lease existing between plaintiff and Litke for the other store," having a little less than four years to run at an annual rental. The lease contained a clause providing that in case of non-payment of rent the landlord might terminate the lease and repossess himself of the premises by summary or dispossess proceedings, and that in that event the landlord might relet the premises and the tenant would pay the difference between the amount to be paid as rent reserved and the amount of rent which shall be collected. Later on, Litke was dispossessed from the said store by summary proceedings for the non-payment of one month’s rent, whereby the lease was canceled and the landlord repossessed himself of the premises. Plaintiff subsequently brought action against Litke for its damages resulting from its failure to re-rent the store and recovered judgment, and upon this claim and judgment predicated its right to maintain this action upon the theory that its claim for these damages constituted it a creditor within the provisions of the Bulk Sales Law.