10 Md. 149 | Md. | 1856
Lead Opinion
delivered the opinion of this court:
Whatever may be the law elsewhere, in this State when a debtor applied for the benefit of the insolvent laws under the act. of 1805, ch. 110, and its supplements, his property came under the custody of the law, for the benefit of his creditors. Alexander vs. Ghiselin, 5 Gill, 138. Waters vs. Dashiell, 1 Md. Rep., 455. And it being well settled that goods in the custody of tile law are not liable to be distrained, it. follows that the distress relied upon by the appellee cannot be sustained, the property at tile time having been beyond its reach.
That a claim for rent is of peculiar character, and may be recovered in full, when other creditors of the tenant will be allowed a dividend only of his estate, cannot be denied. But we do not understand this to lie in consequence of the rent being, per se, a lien on goods found on the premises. It is because the law allows the landlord to collect, his rent by seizing the property as a pledge, to be dealt with according to its requirements. That it hinds as a lien only when this legal right of distress has been exercised, is conceded by the appellee’s argument, and the cases referred to show this to be the law. Eden, 304. Bouvier’s Bac. Abr., 695; In England the doctrine in cases of bankruptcy is different from the law in this State in cases under the insolvent system. According to their decisions the landlord is allowed a preference, although he distrains after the bankruptcy; but it is upon the ground that the proceedings do not. place the property in custodia legis, as we hold the acts of insolvency do here. It follows, there
The legislation upon the subject indicates that rent was never considered as possessing the attributes of a lien. If so, why was it declared by the statute of Anna that sheriffs, levying executions, should satisfy one year’s rent? If rent was a lien before the statute, the property passed to the sheriff, incumbered with the landlord’s claim; and the plaintiff in the execution could have had satisfaction only after payment of the rent. Again, by our act of 1836, ch. 192, such demands, under certain limitations, are allowed priority in the administration of deceaseds’ estates without a distress. Surely this act would not have been passed-if it had been supposed that rent was already a lien or incumbrance. The act of 1826, ch, 266, does not, as we think, support the appeliee’s claim. It relates to removals of property “by the tenant, or by his order and direction,” declaring certain removals to be clandestine, and does not, in terms or by intendment, affect titles acquired by insolvent trustees.
But we think the act of 1805, ch. 110, sec. 7, is decisive of the question. It gives priority to judgments, incumbrances and liens; but it declares also that no process against the property. shall have any effect thereon, “except writs of Ji. fa. actually and bona fide laid before the time of the application.” Whether a distress for rent levied before that time is process within the intent of the act, does not arise on this appeal; nor would such a construction aid the appellee, because he made no such distress. The point is, whether, without a previous |§vy, the demand for rent, due at the time of the application, accompanied by a subsequent distress, followed the property as an incumbrance or lien into the hands of the trustee. The design of the law was to prevent creditors from acquiring liens after the application, and to deny preference to claims which had not become liens before. If a distress warrant be regarded as process, it is excluded by the last words of the section, having been'levied too late; and if rent is pot q lien or incumbrance,
We do not think that this view of the subject deprives the landlord of any peculiar right. The law has granted him a remedy enjoyed by no other class of creditors. If he fails, when entitled, to avail himself of it, he has no more reason to complain, if loss results, than has a judgment creditor who neglects to sue out his fi.fa. and have it laid before his debtor becomes an insolvent petitioner. As happens in other cases, the landlord here has lost his preference by delay, and we cannot relieve him without disregarding what we take to be well settled principles of law.
The order ratifying audit No. 2 must be reversed, and audit No. 1 ratified and confirmed, according to the case stated; but costs will not be allowed in this court.
Order reversed.
Dissenting Opinion
dissented and delivered the following opinion.
This case comes before us upon an agreed statement of facts, which in substance are as follows:
That John B. Snouffer, on .the 3rd of August 1852, petitioned for the benefit of the insolvent laws; that A. T. Snouffer was appointed his trustee, accepted the trust and gave bond; that an order was passed by the circuit court to sell the property of the insolvent after giving notice, &c., upon terms, &c.; that the trustee did give the notice, &c., and on the 30th day of August 1852, sold all the property of the insolvent to Miller and Snouffer, &c.; that much of said property consisted in growing com and wheat in the straw; the corn and wheat were not delivered to the purchasers, but remained upon the premises in the possession and under the control of said trustee; that said insolvent had rented the farm, where the wheat and corn was grown and where it was at the time of the distress, from Charles C. Tucker, under a written lease; that a year’s rent was due on the 1st of July 1852, amounting to $958.05; that on the 1st of September 1852, the landlord, by his agent, by virtue of a warrant of distress, seized the property of the insolvent afore -
aIt is further agreed, that if this' court shall be of opinion, upon this statement and the proceedings of the case, that said Tucker, by Robert Boone, his agent, had no legal right -to .seize and distrain and sell the said property of the insolvent petitioner, as aforesaid stated, in the custody and possession of the said insolvent’s trustee, under and by virtue of said distress warrant, to pay the full amount of said rent due to Tucker on the-first day of July 1852, in exclusion of the judgment creditors of the insolvent petitioner, then, and in- that case, the report No. 1 of Grayson Eichelberger, the special auditor, made in this case under the instructions of the*counsel for the judgment creditors, shall, by the judgment of this court, be ratified and confirmed, and the report of said auditor No. 2 be rejected. But if this court, on the contrary, shall be of opinion that the said'Tucker, by his agent, Robert Boone, had a legal right to seize, distrain and sell said property, by virtue of said distress warrant, which was in the custody and possession of the said trustee, as stated, and thereby obtain a priority of right over the judgment creditors, as claimed and shown by report No. 2 of said special auditor, that then said auditor’s report No. 2, made under the instructions of the said trustee’s counsel, shall be ratified and confirmed by the judgment of the court, and the auditor’s report No. 1 rejected; and that either of the parties may appeal to the Court of Appeals of this State, from the judgment of this court, and all the proceedings on said judgment shall be staid until the determination of such appeal.” This case was submitted to the circuit court upon the said statement of facts; and the said circuit court, on the 2nd day of June 1856, ordered and decreed, that in conformity to the.written agreement of the counsel, the auditor’s report, No. 2, in the case, be finally ratified and confirmed, and that the trustee pay out the funds as distributed therein.
It will be observed that audit No. 1, disallowed the claim for rent as a preferred debt against the insolvent’s estate, while
Subsequently, upon the argument in this court, the counsel entered into a supplemental agreement, the effect of which was to authorise this court to order a special audit, in the event of its appearing, that neither of the accounts stated below was based upon correct principles.
Independent of the supplemental agreement, I have no hesitation in saying, as my opinion, that while counsel can agree among themselves as to the particular facts to be submitted, and thus to confine the court to those facts in the opinion they are to pronounce, yet they cannot require the court, by any agreement into which they may enter, to draw any particular conclusions or deductions from those facts. The judicial mind must be left free to draw its own conclusions upon the law, as applied to the facts of each case, whether they be agreed upon, or elicited in the usual way, from evidence regularly offered. Hence it was not in the power of counsel in this case to confine the court to the adoption of either audit No. 1 or No. 2, if neither was deemed to rest upon sound legal principles; and, if the supplemental agreement was out of the way, I should still have had no difficulty in ordering such other account to be stated as would conform to our views, notwithstanding the original agreement sought to limit us to the two before us.
Upon the facts, as thus set forth, the first question which arises is, was the property, which was in the possession of the insolvent’s trustee at the time it was seized under the distress, in the custody of the law ?
It is an old and well settled rule of the common law, that goods already in the custody of the law cannot be distrained, and if the possession in this case, by the trustee, is the custody of the law, as the appellant contends, then the distress was clearly illegal, and all proceedings under it.
In England it has been settled, that a commission in bankruptcy does not prevent a landlord from distraining for rent;
Our insolvent laws, in this particular, differ materially from the bankrupt system of England. The act of 1S05, ch. 110, sec. 7, provides, that no process against the debtor’s real or personal property, issued after his application, “shall have any effect thereon.” In contemplation of this provision, a'distress for rent is a process, and the purpose of the framers of the law was, to place the debtor’s property, after his application, beyond the reach of every process or proceeding, including a distress for rent, by which one creditor could secure a preference over other creditors, not existing at the time of the application, except only property not embraced in the schedule, as provided for by the act of 1827, ch. 70, sec. 8. In this view, property held by an insolvent’s trustee, may be regarded as in the custody of the law.. We have virtually so said before, in the case of Waters vs. Dashiell, 1 Md. Rep., 471. The court in fhat case say: “Ourinsolventsystem, while granting relief to the debtor, also protects the creditors to the full extent of the property to which they may look for satisfaction of their claims. This is'done by taking all his property out of his possession and control, and placing it in the hands of the law, by the agency of a trustee.” It has also been settled by a number of cases in- this court, that the trustee in insolvency, is the proper and only party to sell and administer the insolvent’s estate. When the estate passes to him, he takes it subject to all liens or priorities then existing, or which may afterwards be created against such portions of it as may not have been embraced in the schedule, under the provisions of the act of 1827, ch. 70, sec. 8, as construed in Waters vs. Dashiell. All inchoate titles, resulting from judgments, and other liens, are suspended and merged in the paramount title of the trustee, who is the representative of the rights and interests of all parties concerned in the estate. Jamison vs. Chesnut, 8 Md. Rep., 34, and the cases there cited.
This leads to the second inquiry, that arises in this stage of the case, which is, whether rent, due at the time of the tenant’s application for the insolvent laws, is such a lien or incumbrance, within the meaning of the 7th sec. of the act of 1805, ch. 110, as attaches to, and passes with the insolvent’s property, to his trustee asa preferred debt?
This is a new question in the courts of Maryland, and one of important practical bearing, and no doubt one of frequent occurrence, in the business affairs of the community. The only explanation, it is supposed, that can bo given, why the question has never been raised before in a court of justice is, that the public have acted uniformly upon the assumption, that the landlord’s claim for rent was a preferred debt against an insolvent’s estate: and this assumption 1 think is correct. The policy of the law seems always to have been, to invest the claim to rent with a peculiar and superior dignity and importance. It is one of the rare cases in which the law allows a man to be his own avenger without the aid of the process of a court. This right has been sacredly preserved from the earliest times, and by the statute of 8 Anne, ch. 14, sec. 1, (which statute is in force in this State,) the rights even of judgment and execution creditors, have been made subordinate to it. I cannot therefore agree, that a mere application for the benefit of the insolvent laws, should have the effect of defeating the claim for rent, which has always been regarded as resting upon such high grounds. All the analogies of the law, as well as the almost universal practice in Maryland, conflict with such a theory.
I learn, but pass no opinion upon the subject, that the practice in Baltimore has always been, even prior to the act of 1836, ch. 192, to regard rent as a lieu upon the estate of deceased parties, and first to be paid, notwithstanding the provision of the act of 1798, ch. 101, sub-ch. 8, sec. 17, giving a
The view thus taken is further strengthened by the act of 1826, ch. 266, making all removals of property liable for rent, clandestine, whether made by day or night, excepting only such property as shall “have been sold to a bong fide purchaser, without notice, or taken in execution.” A title acquired by a trustee in insolvency will not defeat, it appears, the landlord’s right to' pursue property thus removed, and here is a clear recognition of the superior character of the claim to rent.
It is not necessary for us to say, that technically speaking, and for all and every purpose, rent is a lien upon the property of a tenant. I mean only to say, that it was not the purpose of the act of 1805, ch. 110, nor of any of its supplements, to defeat the priority of rent due, and that the language of the seventh section, preserving the priority of “all judgments, in-cumbrances and liens,” must be taken as embracing rent due. In many books of high authority, rent is called, in express terms, a lien on the bankrupt's goods. In Eden's Bankrupt Law, 303, the eighth sec. of ch. 17 is headed, “Landlord’s Lien for Rent.” It is there said, “a landlord having a legal right to distrain goods, as long as they remain on the premises, neither the issuing the commission, nor the possession of the messenger, nor even the commissioner’s assignment, will deprive him of his legal lien.” So also in the case of Dod vs. Saxby, 2 Strange, 1024, the court speaks of rent as “a lien." And again in the case of Stevenson vs. Wood, 5 Esp. N. P. Cases, 200, Lord Ellenborough said, that the landlord had “a legal lien on the bankrupt’s goods, unconnected with the bankruptcy.” And again in the case still more in point, Ex-parte Plummer, 1 Atkyn's Chan. Rep., 103, the Lord Chancellor, (Hardwicke,) says: “1 am of opinion that the landlord is entitled to distrain the goods remaining on the premises, for his whole rent, notwithstanding the commission of bankruptcy, and the proceedings thereon. There was a case before the Lords Commissioners of the Great Seal, where the land
All the foregoing cases, being English cases, rest upon the principle, that goods held under a commission in bankruptcy, were not in custodia legis, but that a landlord could as well enforce his lieti for rent, by distraining, after as before bankruptcy. But not so with the goods of an insolvent under our system, as we have already said, for they arc in the custody of the law, and although a landlord has a lien for his rent, that lien is suspended by the tenant’s application for the insolvent laws, and passes with the property into the hands of the trustee.
The suggestion, that because the landlord’s right to distraip. his tenant’s goods, did not follow the goods when removed from the premises, therefore there could be no lien, has no especial force in it. There are many cases of special lien, arising out of the actual possession of personal property, as for example, a horse held forlivery, clothes held for the cost of making them, and the like, where the lien is lost as soon as the possession is parted from. Yet. they are not, the less liens because they can thus easily be defeated. So the landlord’s lieu for rent is a special lieu; continuiug only so long as the rigid to distrain continues, unless that right is suspended by some operation of law, as in the case of an application in insolvency.
It is not necessary for us to say, whether or not the landlord’s claim for rent, as against an insolvent’s estate, is within the equity of the statute of Anne. The analogies of the statute are in strong support of the principles which have been announced as governing this case, but, I do not say that it is embraced within the equitable provisions of that statute. If made applicable to cases like the present, that statute would require a trustee in insolvency to pay a year’s rent in arrears, before he could remove the insolvent’s property, provided the landlord should serve notice upon the trustee, (in pursuance of a decision upon the statute, made in the case of Waring vs. Dewberry, 1 Strange, 97,) of the amount of rent due. Nei
In accordance with the views expressed in this opinion, 1 would reverse the order of the circuit court, which legalized the distress and the sale under it, and refer the case to a special auditor, in pursuance of the agreement of counsel, with directions to state another account between the trustee and creditors, allowing and preferring the landlord’s claim for rent, but disallowing the costs and expenses of the proceedings under the distress. •