No. 16 | 2d Cir. | Nov 10, 1914
Priority was asserted' by the claimants in the District Court for the balance due for rent of premises known as
“Section 83. The goods and chattels being in or upon any messuage, lands or tenements, which are or shall be demised for life or years or otherwise, taken by virtue of an execution and liable to the distress of the landlord, shall be liable for the payment of any sums of money due for rent at the time of taking such goods in execution: Provided that such rent shall not exceed one year’s rent.
“Section 84. After the sale by the officer of any goods or chattels as aforesaid, he shall first pay out of the proceeds of such sale the rent so due, and the surplus thereof, if any, he shall apply towards satisfying the judgment mentioned in such execution,” etc.
Act June 16, 1836 (P. L. 777; 2 Purdon’s Digest, [13th Ed.] p. 1558).
The premises in question were occupied by A. J. Medlar Company under a written lease by which that company agreed to pay $300 per month. This lease expired May 22, 1911, but it contained a clause that unless it were terminated by giving a notice in writing it should continue for a further period of one year on the same conditions. No such notice was given and the lease continued for another year. On August 11, 1911, the bankrupt purchased the Medlar Company’s business and assumed the payment of the rent for the unexpired term. It has never paid the rent for the period occupied by it. After attempting to sell the property at auction and failing to get adequate bids, the trustee, with permission of court, sold the entire property for $10,000. The court allowed the claim for rent at $2,354.55, giving it a preference under 64b (5) of the Bankruptcy Act, which provides that among the debts entitled to priority are “debts owing to any person who by the laws of the states or the United States is entitled tp priority.”
IHs not necessary to state the facts in detail as they appear in full in the careful opinion of the referee. There can be no doubt that the Pennsylvania law gives a lien for one year’s rent to the landlord upon the goods and chattels of the tenant. This statute seems to apply directly to the present facts. But the appellant contends that the claimants waived their right to this lien. On April l'7th, two days prior to the first meeting of creditors, the claimants filed proof of claim, insisting that they were entitled to priority under the Pennsylvania law. As the property was sold without notice to the claimants and without their knowledge, it is not easy to see how they could do more than they did do to preserve their rights. The statute is very plain and has been liberally construed by the courts of Pennsylvania. The trustee sold, without notice to the claimants, property upon which they had a lien and if any confusion resulted therefrom the hardship should not be visited upon the claimants. There is little doubt that there was property enough subject to the lien to pay their debt.
We see nothing to justify the assertion that the claimants, lost their right "to assert their priority or that they assented to the private sale which, as the final order expressly states, was made “without prejudice to the rights of Caroline E. Medlar, Elizabeth B. Medlar and Girard Trust'Company, trustee, under the last will and testament of William H. Brill, deceased, to claim, as preferred creditors from the fund derived from said sale, the amount of such lien as they may have
The order is affirmed with costs.