Thropp's Appeal

The opinion of the court was delivered, January 29th 1872, by Agnew, J. Upon a careful examination there appears to be but one question to be decided in this case. Its decision in favor of the appellant renders it unnecessary to determine others raised in the discussion. What was the effect of the surrender of their term by the tenants, Gillingham and Gagg, to Isaiah Thropp, their landlord ? A constable had levied on the building in question as a fixture placed on the land by the tenants for the purpose of trade, which they had a right to remove during their term. This levy was made subject to a levy by the sheriff, under a fi. fa., upon the same building, and also upon certain machinery claimed to be the property of the tenants. The master finds that on the 10th day of October, following the levies by the sheriff and constable, the tenants, Gillingham and Gagg, agreed with Thropp, their landlord, to surrender to him the lease in consideration of his releasing them from the payment of the accruing rent, and permitting the machinery levied on by the sheriff, and claimed by Thropp, to belong to the property, to be sold for the benefit of the creditors of Gillingham and Gagg. The effect of this arrangement was that Thropp let go, not merely the personal responsibility of his tenants for the rent, but his right also under the Act of Assembly to claim an apportionment of the rent up to the time of levy, as well as whatever right he might have to detain the machinery [399] levied on as permanent fixtures. The master also finds as a fact, that at the time of the surrender of the lease, Thropp had no notice of the constable’s levy. No suggestion of fraud is made, or that this arrangement was intended to defeat the creditors. So far as the master’s report goes, it is obvious that the arrangement was a bona fide compromise, by which Thropp suffered a loss in consideration of being permitted to retain on his part the building in question — he let the machinery go which he claimed, and his rent; and the building only was left. The constable made his sale of the building on the 18th of October, and after this arrangement and surrender of the term. Now, admitting that by the prior levy the constable acquired a lien upon the execution, which, if duly prosecuted, would pass the title to the purchaser under the execution, it seems to us the reasoning of the court below on this point is inconclusive. The judge says, their title under the sale dates back to the time of the levy, and thinks it cannot be doubted that the surrender which he accepted would not affect the defendants. It is found, however, that he was not aware of it. Still, does this, under the circumstances (says the judge), make any difference. ? He is no worse off than if he had known it. The surrender cost him nothing. His tenants were insolvent, and he accepted a return of his property. But this is a mistake, the surrender, by the terms upon which it was accepted, cost him his right to follow the property in the hands of the sheriff, that is to say, its proceeds, for his rent. It has been decided conclusively that the landlord has a right to an apportionment of his rent up to the time of the sheriff’s levy, and the Act of 16th June 1836 has made no change in this respect: Morgan v. Moody, 6 W. & S. 335; Pazker & Keller’s Appeal, 5 Barr 390. And is the extinguishment of the personal liability of Gillingham and Gagg no loss ? Because they were then insolvent, it does not follow that the right to pursue them in the future, in case they should acquire property, is of no value. Nor can it be said that the relinquishment of Thropp’s claim to the machinery levied on amounted to nothing. No fraud has been found, and we have no right, therefore, to conclude that the claim of title to the machinery was a mere sham. For aught we know, he might have raised a serious question on the terms of the lease of the right of the tenants to remove the machinery. Seeing that the sheriff and those interested in the writs in his hands did not pursue their writs against the building, it is in some measure evidence of their belief that the claim was not wholly unfounded. However this may be taken as a whole, the arrangement not being found to be otherwise than bond fide, was such a compromise and relinquishment of right on part of the landlord as constituted a valuable consideration, and entitled him to hold the building against the tenants and those claiming their title, unless it is rendered inope [400] rative by tbe prior levy by tbe constable. Had tbe constable given notice of bis levy to the landlord, no doubt tbe rights of tbe creditor in the execution would have taken precedence, and prevented tbe arrangement from being effectual against tbe execution. Or had tbe property been susceptible of manucaption and possession, the actual seizure might have been treated as notice in law, sufficient to defeat any arrangement to tbe prejudice of tbe execution-creditor. But a building of tbe kind described in the plaintiff’s bill is primé facie a part of the realty, of which the creditor must take notice, so as to put him on inquiry as to its true character. No manual possession of it can be taken. In view of this, therefore, and in order to give the landlord an opportunity of protecting his rights, whatever they may be, notice to him of the levy was necessary. It was necessary also to prevent him and the execution-creditor from being prejudiced by any arrangements he might find it expedient to make with his tenants for the termination of the lease. If for the advancement of the remedies of creditors, erections constituting parts of the realty are held to be personalty, in favor of trade, and sold under execution, we cannot lose sight of their apparent nature and attachment to the realty, and of the rights of the landlord who may be misled from a want of notice of the creditor’s claim. It is, therefore, inequitable to recognise no duty as devolving on those who pursue these remedies. There being no notice to the plaintiff, as landlord, and the sale not having been made until after the termination of the lease by surrender of the term, the right to remove the building was gone, as against the landlord. It was a failure to prosecute the levy with due diligence so as to preserve its lien. The decree dismissing the bill at the costs of the plaintiff is therefore reversed, and a decree ordered to be entered, enjoining the defendants from removing the building described in the plaintiff’s bill, from the land of the plaintiff at any and at all times hereafter, and the costs are decreed to be paid by the defendant. Decree to be drawn up in form for approval.