McKleroy v. Cantey

COLEMAN, J. The defendants, Cantey & Randolph, merchants doing business in Anniston, were indebted to plaintiff for rent of the storehouse in which they conducted their mercantile business. On the 4th of April, 1891, as appears from the answer of the garnishee, the defendants made a general assignment to A. P. Agee, “for the benefit of their creditors, of all their notes, accounts, office furniture, and all effects then unsold, which goods, furniture and effects, were at the time of the assignment in the building in which they were doing business, and for which defendants owed rent.” On the 17th of April, 1891, the plaintiff (McKleroy) sued out an attachment against Cantey & Randolph, to enforce his landlord’s lien, and had process of garnishment served upon the assignee, Agee. The attachment suit was prosecuted to judgment against the defendants in attachment, and the answer of the garnishee not being contested, the court held that plaintiff was not entitled to a judgment against him, and he was discharged. The appeal is prosecuted from the judgment of the court discharging the garnishee. In addition to the facts stated above, the answer of the garnishee proceeds as follows: “The said garnishee came into the possession, by and under said assignment, of a large number of book accounts against various and sundry persons, living at different places, about $6,700.00 to $7,000.00, from which he has collected the sum of $5,000.00, which he [297] now bolds; tbat be also came into possession by said assignment of a mule, wbicb be sold for $40.00, and a dray wbicb be sold for about $15.00, and some other articles wbicb be sold, and for wbicb be received tbe purcbase-money; tbat be went into possession of tbe storehouse, and tbat all tbe effects, &o., came into his possession by virtue of tbe assignment,” &c. He stated, also, that tbe mule and dray “were used -by said defendants in and about their business as merchants and tbat about 600 cheroots, wbicb they bad sold, were returned to him. Section 3069 of tbe Code declares, “Tbe landlord of any storehouse shall have a lien on tbe goods, furniture and effects belonging to tbe tenant, for bis rent, wbicb shall be superior to all other liens, except those for taxes.” Section 3070, subd. 2, provides tbat tbe landlord may enforce bis lien by attachment, when tbe tenant has made an assignment for the benefit of bis creditors. Tbe landlord’s lien is declared by tbe statute. It does not depend for its creation upon distress by the landlord, or tbe suing out of tbe attachment. As was held in Ex parte Barnes, 84 Ala. 540, tbe lien is understood to enter into, and is a part of every contract between tbe landlord and tenant for tbe lease of a storehouse, and tbe remedy by attachment is merely a means provided by tbe statute for tbe enforcement of tbe lien. Whoever buys from tbe tenant goods, furniture or effects, upon wbicb tbe law fixes tbe lien, with a knowledge of tbe existence of tbe relation of landlord and tenant, is charged with notice of this lien for whatever may be owing from tbe tenant to bis landlord. No assurance of tbe tenant himself will suffice to invest bis vendee with tbe character of an innocent purchaser, or enable him to bold tbe property discharged of tbe lien. Goods sold by a merchant in tbe usual course of trade are discharged of tbe lien, for such necessarily, from tbe character of tbe business, must be within tbe understanding of tbe parties; but goods conveyed by a merchant in payment of an antecedent debt, and purchased solely for tbe purpose of collecting a debt, is not within tbe intendment of the parties to tbe rental contract. As was said in Weil v. McWhorter, 94 Ala. 540, “if a dealer casually owes a customer, and tbe customer has need of bis debtor’s wares, tbe satisfaction of such indebtedness by supplying tbe necessity would be in due course of trade.” In such case, tbe collection of tbe debt is not tbe purpose intended by the transaction. In tbe case of Fox v. Jones et al., reported in 8 So. Rep. 449, a case decided by tbe Supreme Court of Florida, the [298] contest was between tbe landlord, seeking to enforce bis lien, and tbe assignee of tbe tenant, to whom an assignment bad been made for tbe benefit of bis creditors. Tbe court beld, tbat tbe “assignee acquired no greater interest in tbe goods tban tbe assignor possessed before tbe assignment,” and tbe assignee took tbem subject to tbe landlord’s lien; “tbat tbe landlord could not be deprived of bis lien at tbe will of tbe tenant, by assigning tbe goods in tbe rented bouse to a third party.” In Westmoreland v. Foster, 60 Ala. 455, it was beld tbat, “when tbe crop bad been converted into money, and such money was in tbe bands of a third person, who bad purchased tbe crop with a knowledge of the lien, then assumpsit for money bad and received would lie.” See, also, Thompson v. Merriman, 15 Ala. 166 ; Atkinson v. James, 10 So. Rep.; Aderhold v. Bluthenthal, ante, p. 66. We are clearly of tbe opinion tbat, when an assignee of a tenant converts into money “goods, furniture and effects upon which tbe landlord bad a lien at tbe time of tbe assignment, and tbe landlord seeks to enforce bis lien by attachment against bis tenant, a right given by tbe statute in cases where tbe tenant makes a general assignment, such money in tbe bands of tbe assignee may be reached by process of garnishment. Tbe case at bar, in some' respects, is unlike tbe case of Hodges Bros. v. Coleman & Carroll. In tbe latter case, Hodges Bros, were creditors of Jackson & Brother. Jackson & Brother sold their goods to Bruner & Loeb, and Bruner & Loeb sold tbe goods to Coleman & Carroll. Hodges & Bros, sued out an attachment against Jackson & Brother, and garnished Coleman & Carroll for an alleged balance due on their purchase. Bruner & Loeb were not parties to tbe suit. Hodges & Brothers were simple creditors without a lien upon the goods. To maintain their action, it was necessary to set aside tbe sale by Jackson & Brother as fraudulent and void, and yet, to sustain tbe garnishment process, which sought to reach a balance due on tbe purchase, it was necessary to maintain tbe validity of tbe sale. Tbe balance due from Coleman & Carroll could not be reached as a debt due, except upon tbe ratification of tbe sale of tbe goods to Coleman & Carroll. Tbe court in tbat case further beld, tbat in no event could tbe plaintiff proceed to judgment against tbe garnishees, without notice to Bruner & Loeb, the intermediate purchasers. Tbe principles of law applicable to tbe facts of tbat case in this respect'do not apply to tbe facts of tbe present case. In tbe case of Jones v. Crews, 64 Ala. 370, relied on by [299] appellee, it is said: “ There can be only a moneyed judgment against the garnishee, on a debt ascertained to be due from him to the defendant, or a condemnation of chattels in his hands, the property of the defendant, and an order that he deliver them to the sheriff on demand, to be sold in satisfaction of the plaintiff’s judgment, not against the garnishee but against the defendant.” Construed with reference to the facts in that case, the principle is correct, but must not be taken in a literal sense as absolutely applicable to all cases. One of the issues in the case of Hodges Bros. v. Coleman (& Carroll, 76 Ala. 103, was, “that the transfer of said stock of goods to said Bruner & Loeb was for the purpose of hindering, delaying and defrauding the creditors of Jackson & Brother, and that Coleman & < arroll (the garnishees) had notice of the same.” This court held that, if this averment was found true, then it would have been the duty of the court to render judgment of condemnation, and that the goods be delivered up on demand and sold by the sheriff in satisfaction of plaintiff’s claim. Now it is apparent that, as between Jackson & Brother, the attachment debtor, and his vendee or a sub-vendee, the property did not belong to Jackson & Brother. A judgment condemning the property in the hands of Coleman & Carroll, the garnishees, could have been maintained only upon the grounds that it was property liable to plaintiff’s claim, and subject to the attachment. So, in the case at bar, the answer of the garnishee admits his possession of property upon which there was the landlord’s lien, with a knowledge of the lien, and as to the refrigerator and water-cooler, these effects were sold by him after service of garnishment. If the property had remained in his hands, undisposed of, the court would have enforced the landlord’s lien by a sale of the property. Is it permissible for the garnishee, after the attachment is sued out, which is expressly authorized by the statute where an assignment has been made, and the attachment levied by process of garnishment, for the garnishee to defeat the condemnation of the property, and collection of the claim, by converting ■ the property into money? We think not. The statute (Code, § 2978) contemplates the condemnation of property in the possession of the garnishee, and not property which has been sold by him and converted into money. In such case, we must hold that the money, the proceeds of the property which was subject to plaintiff’s attachment, in the hands of the garnishee, takes the place of the property, and is sufficient to authorize the rendition of a money judgment against the garnishee. [300] Tbe “cberoots” admitted by tbe garnishee to be in bis possession and not sold should have been condemned by the court. We are of opinion that tbe landlord’s lien did not extend to tbe mule and dray of tbe defendant debtor. Tbe statute declares tbe lien upon tbe “goods, furniture and effects” of tbe tenant. Tbe word “effects” must be construed in connection with “goods” and “furniture,” and refers to property “ejusdem generis.” Moreover, in Ex parte Barnes, supra, it was held that tbe lien was upon such property only of the tenant as bad enjoyed tbe protection of the leased premises, and not to all the effects of tbe tenant. This rule was afterwards re-affirmed in Abraham v. Nicrosi, 87 Ala. 173, and in Weil v. McWhorter, 94 Ala. 540. We have previously declared that goods sold in tbe “usual course of trade” were discharged of tbe lien, and it is evident that tbe lien is not transferred to tbe choses in action ox-debts which may be owing for goods legitimately sold by tbe tenant in tbe “usual course of trade” on a credit, before tbe making of tbe assignment. Money in tbe bands of tbe assignee cellected by him upon such notes and accounts is not subject to tbe prior lien of tbe landlord. Such money in bis bands will be paid out in accordance with tbe terms of tbe assignment. For tbe errors pointed out, tbe case must be reversed, and tbe cause remanded.