Stamps v. Gilman & Co.

43 Miss. 456 | Miss. | 1871

Simrall, J.:

On the 21st day of April, 1866, Eli Lilly executed to J. M. Gilman & Oo., a mortgage to secure a promissory note for $3,821 42, payable the 1st October thereafter. The consideration of this indebtedness was supplies furnished by J. M. Gilman & Oo. to Lilly, to conduct a plantation and make a a crop thereon. The plantation had been leased from Yolney Stamps. On the 22d day of October, A. D. 1866, Stamps sued out a distress warrant, or attachment for rent, against Lilly, on allegation that Lilly was indebted to him $2,000 for rent, to fall due 1st January, 1867, and that Lilly will remove his effects from the demised premises before the rent becomes due, so that no distress can be made. Under this attachment, on the same day, 22d October, the sheriff seized and took into possession sundry bales of cotton found under the gin-house on the demised premises. J. M. Gilman & Oo. made the affidavit and bond required by the statute, as claimants and owners of the cotton, and replevied the same. Several rulings occurred in the circuit court on the pleadings; finally all the avowries and special pleas were stricken out by the court and the cause was submitted to the jury on the general issue. As full latitude was extended to both parties on this issue, to present the merits of the claim and defence, we have not thought it necessary to pass on these points.

1st. The main question discussed by counsel, and one of grave importance is, whether the mortgagee or the landlord is entitled to the cotton. The distress for rent is of very ancient origin. Oh. Baron Gilbert supposed that it was derived from the civil law. It prevailed among the Gothic nations of Europe immediately after the disruption of the Roman Empire. It was one of the few remedial measures permitted to the aggrieved party, to be executed by himself, without judicial aid. It allowed the taking of the chattels of the wrong-doer into possession of the aggrieved party as a pledge for the performance of a duty, or satisfaction for a wrong. It was most commonly used by landlords to compel their tenants to render the service due, or pay the rent. It did not authorize the landlord to sell. This right was first conferred by statute, 2 William & Mary, Ch. 5. The ancient common law distress has been modified, enlarged, and regulated by statute, both in England and this country, so that it is very much a statutory remedy. An important modification made by the American statutes, including our own, is, that only the goods of the tenant (or of some other person found on the demised premises, bound or liable for rent), can be distrained. The goods of a stranger on the premises are not’ so liable as they were at the common law. Another modification is, that the distress at common law could only be made on the premises. The only exception to this was if the landlord or his bailiff came to distrain, and got sight of the cattle on the land and the tenant drove them off before they could be seized, the landlord or bailiff could make pursuit.

If the tenant, in anticipation of a distress, and for the very purpose of defeating it, drove off his cattle before the landlord or bailiff got a view of them on the premises, pursuit and seizure in another place was unlawful. For remedy of this mischief, the British statute allowed goods, which had been clandestinely and fraudulently removed by the tenant, to be followed and seized, unless before seizure, the goods had been bona ficle sold for value to a person not privy to such fraudulent act. The fifth article of our statute contains the same provision, allowing the seizure within thirty days after removal and before sale (omitting the clause of a clandestine and fraudulent removal), and so does the fourth article, where the removal has been effected before the rent has become due.

So, under the third article, if the landlord suspects that his tenant will remove his goods and effects before the rent falls due, so that no distress can be made, attachment may issue. It is under this section the landlord, Stamps, has proceeded. It is not every removal of effects under this article that will warrant the attachment. There must be such removal contemplated and intended as will defeat a distress. So much must be intended to be removed, as that enough will not be left on the premises to afford ample and complete indemnity for the rent.

All the questions embraced in this controversy may be summed up in this proposition: Was the cotton, at the time it was attached, the goods and effects of tenant ? They were, it is argued by counsel for Stamps, because they were upon the demised premises, and the landlord had a lien on them by virtue of his lease and the relation the tenant bore to him, which was paramount to the mortgage.

On the other hand the existence of a lien is denied, and it is claimed that the- mortgage passed the ownership to Gilman & Co., or at least the right of property and of possession became complete on condition broken by non-payment of the note; and further, there had been an actual transfer of the cotton to them before the levy of the attachment. What dominion and power of disposition has the tenant over his chattels on the demised lands ? His right of use and power of disposition is co-extensive with that of any other proprietor, unless it has been limited and circumscribed by law. If his effects are subject to a lien it must be implied by the law or created by his own act. If the lien is implied, how far does it reach, and to what does it extend? It does not attach to the goods and adhere to them in nature of a mortgage lien, or like the lien reserved or implied by the law, on all property sold under decrees of the probate court. If so, it would still adhere to the effects so long as the goods existed and could be followed. The distress at common law was a dormant right or privilege to take the thing into possession as a pledge or means of enforcing the tenant to pay his rent. If this right was not made active by actual seizure, it was utterly impotent and in nowise encumbered the title of the tenant. So, too, under our statute. The landlord has the right or privilege in any of the contingencies therein named to attach the goods of the tenant, not by virtue of any lien at common law, or by the statute, but because his rent is due and in arrear, or because the tenant is about to remove his effects or has already done so. Subject to this right or privilege of the landlord the tenant is as completely the owner of his effects as any other debtor. And these are the only advantages which the landlord has as creditor over any other creditor at large. In Craddock v. Riddlesburger, 2 Dana R., 212, in describing the right of the landlord, Oh. Justice, said: “ He may have a priority, to a qualified extent over other creditors, and he may have, too (if he will), the official responsibility of the sheriff. This is his utmost right, and such is the character of his lien. He has no lien to any other extent, or of any other kind.”

The special priority here referred to, is the right to one year’s rent, before the goods shall be sold under an execution in favor of a judgment creditor. The landlord’s right (however it may be described), is not a jus in rein ; it does not amount to a title legal or equitable. He can maintain neither trespass nor trover in respect to the effects. The provision of the Code forbidding the sale under execution, unless a year’s rent be paid, etc., has been relied upon in support of the idea that the landlord has a lien. This article is essentially copied from its British prototype, 8th Anne, and comes to us with the interpretation put upon it by the English courts. These are some of them:

The landlord must notify the sheriff of his lien prior to a sale under judicial process, and demand his rent, or otherwise it is not the duty of the sheriff to retain the rent. Warring v. Dulany, 1 Strange, 97.

After demand and notice, if the sheriff remove or sell the goods, he is liable only for their value, less his expenses. Dodd v. Saxly, 2 Strange, 1024.

A sale under the execution rests the title in the purchaser unencumbered by the landlord’s claim. Ex parte Grove, 1 Atk., 104; Coke Litt., 476; Hanchell v. Kimpson, 2 Wilson, 141.

This provision of the statute was not designed to furnish a new remedy as against the tenant, hut against officers acting-execution on judgment against the tenant. A sale under execution at common law passed the title. Nor was there, any remedy in favor of the landlord against the judgment creditor, or the sheriff who made the levy and sale. Nor, since this statute, can the landlord follow the goods into the hands of the purchaser. ITis only recourse is to obtain the value of the goods, to the amount of the year’s rent, by application to the court to which the execution is returnable, or by an action against the sheriff.

Now all this doctrine negatives the idea that there is a lien on the goods, for the benefit of the landlord. If the sheriff, by his sale, can pass the title (and he can transfer none other or greater, than the tenant had), it would seem to follow that the tenant himself, might make a conventional sale, if actuated by good faith, and for valuable consideration.

In Thornton v. Adams, 5 Maule & Selwyn, 38, a sale of the goods by the tenant, in payment of an antecedent debt, was sustained, although the creditor knew that rent was due, and apprehended that the landlord would distrain. The judgment reposes on the solid foundation that the debtor is under an equal duty and moral obligation to pay all of his debts. If he pays one rather than another, he discharges a duty, but only makes the election who shall be the recipient of it, and he has, at common law, a right to make the preference.

Frisby v Thayer, 25 Wend., 396, was the case of a mortgagee who had got possession of the goods six days before the levy of the distress for rent. The mortgage, which contained a power of sale, was dated July, 1837; the levy was made 31st January, 1838.

Commenting on the facts of the case, Nelson, Oh. J., said in effect, that the case needed not the benefit of the exception in the statute “protecting property removed from the premises and sold by the tenant before seizure made, in good faith, and for a valuable consideration,” etc. But it rested on the general right of the tenant to dispose of his property, -which, said the learned judge, “ is no more embarrassed on account of rent in arrear, than by any other description of outstanding-debt.” If the purchaser was not privy to a “ fraudulent removal,” under the British statute, he was protected. The tenant can remove them, unless guilty of a fraud in fact. A fortiori, may the purchaser or mortgagee do so. 7 Bing., 243. The tenant may make a valid sale of his goods, as against the landlord. Mitchell v. Franklin, 3 J. J. Marshall, 482.

It has been resolved, under the English statute, that if the tenant fairly and openly removed his goods, the right of the landlord to distrain, was gone. And if clandestinely removed, and thirty days elapse, or if fairly sold to a stranger, they could not be distrained. Clifford v. Beems, 3 Watts, 247.

It is said in the books, that if the tenant sell his goods, and they remain on the demised premises, they are still subject to distress. It is apprehended that this general statement has given rise to the idea that they must be removed before sale, or immediately after.

Possession of personal property is prima facie evidence of title. Generally, possession by the owner, and in some cases perhaps, connected with the possession of the person from whom he received by delivery, is the only evidence of ownership. Out of this, to guard against covin fraud, sprung the doctrine that, as respects creditors and .innocent purchasers, the right shall be construed to be with the possession, and it shall be deemed fraudulent in the seller to retain possession after he has made a sale. Therefore, if the tenant sell his goods, but still keep possession of them, the landlord may invoke this principle against the purchaser who claims against his distress. But there are modifications of the rule, where the reason can have no application.

A mortgage or deed of trust, registered in the proper office, is outside of the rule. In ex parte Grove, 1 Atk., 104, the goods were sold to the succeeding tenant and continued on the land, yet they were held not to be liable to distress. In Eaton v. Southey, Willis, 131, a growing crop was sold under a fieri facias, which was left in the field for convenience and husbandry. Its continuance in the field was for necessity, and for a reasonable time after, would still be necessary, and there was therefore no right to distrain.

In this state the practice is almost universal for the mortgagee to retain possession. His right so to do, is well understood. The mortgage is registered, and thereby becomes notice to creditors and subsequent purchasers. In Snyder v. Hitt, 2 Dana, 482, it was said by the court that possession by the mortgagee is not fraudulent per sc-, “ and that the judicial doctrine of constructive fraud had been carried far enough— perhaps too far.” This case is in point in support of all the views we have advanced. Two questions are stated by the court:

1st. Can a landlord distrain for rent due by his tenant, goods in the tenant’s possession, but which are under a Iona fide mortgage to another ?

2d. Can the mortgagee of a chattel maintain trover for a conversion.of it by a stranger whilst it was in the possession of the mortgagor ?

As to the first proposition, it was held that the mortgagee, both before and after forfeiture, was deemed a purchaser; and that the tenant had the power of disposition, and that his: purchaser may hold in spite of any claim arising out of the relation of landlord and tenant.

As to the second, it was plain that a mortgagee, like any other person who had a general or special title, might bring trover against a wrong-doer.

It was said in the case cited from 25 Wend. R., “ that a mortgagee is a purchaser, sub modoP Indeed, he holds toward the mortgagor the double relation of creditor and purchaser. In his former character he can foreclose, and is subject to redemption. In the latter he takes the title, which he may count upon and enforce in all the appropriate forms of action, as any other owner. It is none the less a legal title, because it is loaded and burdened with equities and trusts.

If there may be doubt as to his right to maintain trover, detinue, or replevin before forfeiture, there can be noné of his right to do so after forfeiture. In Thornhill v. Gilmer, 4 S. & M., 163, the contest was between the judgment creditor and mortgagee of personal property. The latter held the property against the levy and seizure of the former, on the ground “ that the legal effect and operation of a mortgag^ after the condition is forfeited, is to invest the mortgagee with an absolute interest in the property mortgaged.

The mortgage of Gilman & Go. was recorded two days after its date. In addition to this, the testimony tends to show that Stamps had actual notice of it — was cognizant of the dealings between Lilly and Gilman & Co. The testimony leaves no doubt that the transaction was bona fide, and that the advances made by Gilman & Co. were consumed in the production of the crop, and contributed largely to making it.

We are conducted by the foregoing reasoning and authorities to these conclusions:

1st. That by virtue of the relation of landlord and tenant, no lien on the tenant’s effects on the demised premises, results, or is implied, at common law, or by the statute.

2d. That what is popularly supposed to be the landlord’s lien, is nothing more or greater than the right, on the conditions and contingencies enumerated in the statute, to sue out an attachment.

3d. That the seizure of the effects under the attachment, makes, or creates a “ specific lien.”

4th. That the dominion of the tenant over his effects on the demised premises, is co-extensive with that of any other debtor, both as to use and sale, provided the sale be for valuable consideration, and in good faith.

5th. That a mortgagee is a purchaser, sub modo, and after ■condition broken, can maintain trover, detinue, or replevin, in respect to the mortgaged effects.

6th. That the mortgage to Gilman & Co. having been executed in good faith for value, and the forfeiture having occurred before the levy of the attachment for rent, the mortgagee lias a superior and better right to the cotton than the landlord under his attachment.

Urged by the copious arguments of counsel, we have examined the questions presented, somewhat de novo, and are satisfied with the judgment pronounced in Mayre v. Dyche et al., at the April term, 1869. See 42 Miss. Report.

The instructions granted and refused, in the main, accord with the views and principles herein expressed.

Wherefore we affirm the judgment of the circuit court.