Wades v. Figgatt

Burks, J., delivered the opinion of the court. By the statute law of this State (Code of 1873, chap. 134), it is provided (§ 11) that “ distress for rent may be levied ■on any goods of the lessee, or his assignee, or under tenant found on the premises, or which may have been removed therefrom not more than thirty days. If the goods of such .lessee, assignee, or under tenant, when carried on the premises are subject to a lien, which is valid against his creditors, his interest only in such goods shall be liable to such ■distress. If any lien be created thereon while they are upon the leased premises, they shall be liable to distress, but for not more than one year’s rent, whether it shall have accrued before or after the creation of the lien. No other goods shall be liable to distress than such as are declared to be so liable in this section.” — 579 — - § 12. “If after the commencement of any tenancy, a lien he obtained or created by deed of trust, mortgage, or otherwise, upon the interest or property in goods on premises leased or rented, of any person liable for the rent, the party having such lien may remove said goods from the premises on the following terms, and not otherwise—that is to say, on thé terms of paying to the person entitled to the rent so much as is in arrear, and securing to him so much as is to become due—what is paid or secured not being more altogether than a year’s rent in any case.” The further provision made for the case in which the goods are taken by an officer under legal process need not be recited. The deed of trust under which the appellee (Figgatt) claims was executed June 19, 1876, and admitted to record the next day, and the rent distrained for accrued the following year (1877). The goods were the property of a person or persons liable for the rent, and were on the premises at' the date of the deed and also of the levy; and the first question is, whether the lien of the deed of trust was created “after the commencement of the tenancy,” under which the distress was made—in other words, whether the tenancy of the two years (1876 and 1877) was the same. We are of opinion that it was. The lease of October, 1875, is not disputed. It is evidenced by writing, signed by the lessors and lessees, and was for a term of three years, to be extended two years, at the option of the lessees, the rent reserved in money to be paid annually in instalments specified, and the furniture on the premises was to be taken by the lessees at valuation to be made by disinterested persons and to be paid for as the agreement prescribes. The valuation was made, and notes were given by the lessees for the rent accruing the first year (1876), and for the purchase money of the furniture. It is contended that there was no entry upon the premises nor possession taken of the furniture under this lease, and that entry and possession. — 580 — did not take place until about the 10th day of January, 1876, and then under a new arrangement made on the 5th or 6th of that month. But this pretension is not supported by the proofs. The lease was made and the furniture appraised in October preceding. During the next m onth, Alfred Beckley (one of the lessees) went upon the premises and filled the ice-houses thereon. This entry by one was, in legal contemplation, an entry by all of the lessees, and vested the estate in all. As to the furniture, as soon as it was appraised as agreed upon, the sale was completed and the title passed to the purchasers. It is true, that it was then locked up for safety in the buildings on the premises, and the lessors had the keys to the buildings, which were not delivered until about the 10th of January following, but it is shown that the keys were held subject to the order of the lessees. So that, in fact, the purchasers had both the legal title and legal possession from the date of appraisement. There never was any surrender of this lease, either by agreement of parties or by operation of law. The contract or arrangement entered into on the 5th or 6th of January, 1876, did not amount, to a surrender. It had reference only to the personal property previously sold, and provided for an extension of the time for payment of the purchase money and security of a part by note with an endorser, and of the residue (except the cash payment) by deed of trust on the property. And it was distinctly agreed and understood that this arrangement was not to effect the subsisting lease. There was no new lease. The death of one of the tenants did not operate a surrender, nor did the subsequent taking of the individual bonds of Alfred Beckley for the rent of 1877 have such effect in law, nor is that circumstance alone sufficient to warrant the inference of a surrender by agreement. The written contract of October, 1875, contained the terms of the lease—specified the rents, the amounts to be paid each year, and times of payment. These terms were never changed. — 581 — The notes taken for the rent of 1876, and the bonds for the rent of 1877, were not in discharge of the written contract, but collateral to it. As the tenancy of 1876 was the same as that of 1877, and commenced previous to the contract of January, 1876, and was not affected by it, it is immaterial whether or no the last mentioned contract operated per se, as contended, as an equitable lien on the furniture in favor of the appellee Figgatt. For, if such was the effect, it was nevertheless inferior, as the deed of trust was, to the statutory lien of the lessors for one year’s rent. Neither the contract nor the deed operated, or was intended to operate, as a waiver or subordination of this lien. It may be as well, however, to say that, in our opinion, the evidence does not establish the fact that the indemnity of Mr. Figgatt was provided for in that contract. The bill charges that it was, but it is denied positively by the Wades in their answer, and also by James Wade in his deposition. The answer on this point being responsive, is evidence for the respondents, and, fortified by the deposition, is not overcome by the testimony of the opposing witness Beckley, and the circumstances. Figgatt may have been, and doubtless was, induced to endorse the note by the representations of Beckley. But if he was misled, it was by Beckley, not by the Wades. At the time (June 19th, 1876) the deed was given, the rent for that year had not become due. It fell due the latter part of the year, and, with the exception of a small amount, was paid by the tenants. Whether this payment was a discharge of the prior right of the lessors or their assignees to “ one year’s rent,” within the meaning of the statute, is the only remaining question of any importance in this cause. We think it is evident from the sections of the Code already quoted, that the goods carried on the leased prem — 582 — ises and encumbered after the commencement of the tenancy, are charged with a definite portion of the rent arising under the tenancy during the term, and not with the specific rent of any particular year or period of time. “One year’s rent” and “a year’s rent” are used in the statute to denote the amount of rent to be distrained for in the one case and to be paid or secured in the other. The person entitled to the rent is allowed (under the 11th section) to levy a distress on the encumbered property for an amount not exceeding one year’s rent, if it is in arrear. It matters not for what year it accrued, or whether it was before or after the creation of the lien, or whether or not other rents may have accrued after the lien was created and been paid by the tenants. As long as any rent arising under the tenancy remains unpaid by the persons liable therefor, as soon as it becomes due, the person entitled to it may distrain the goods for an amount not exceeding the rent for a year. The goods are bound for one year’s rent. The intention is made more clear by the 12th section. The language is, “ the party having such lien may remove said goods from the premises on the following terms and not otherwise—-that is to say, on the terms of paying to the person entitled to the rent so much as is in arrear, and securing to-him so much as is to become due, what is paid or secured not being more altogether than a year’s rent in any case.” Manifestly, the “year’s rent” here mentioned to be “paid or secured,” is such as is in arrear at the time of removal, or to become due thereafter. In ascertaining the rent to be “ paid or secured,” the reference is to the time of removal, not to the time the lien was created. It is of no consequence, therefore, what rent may have been paid by the tenant after the lien was created. Such payment does not exonerate the property encumbered from prior liability for what is due at the time of removal or to become due thereafter, not exceeding altogether a year’s rent. — 583 — The circuit court, hy its decrees, gave priority to the deed of trust. For this error, the decrees will he reversed and the cause remanded for further proceeding, to he had in order to final decree, in conformity with the views expressed in this opinion. The conclusion reached on the main question makes it unnecessary to notice assignments of minor errors. The decree was as follows: This cause, which is pending in this court at its place of session at 'W’ytheville, having heen fully heard, hut not determined at said place of session, this day came again the parties hy their counsel, and the court, having maturely considered the transcript of the record of the decrees aforesaid, and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the right of the appellants, or of their assignee, the Farmers National Bank of Salem (appellee), to have the personal property or the interest in said property, which was conveyed to the appellee C. W. Sullivan hy the deed of trust hearing date June 19, 1876, in the hill and proceedings mentioned, applied to the payment of the rent of the Yellow Sulphur Springs for the year 1877, under the lease of October, 1875 (also in said hill and proceedings mentioned), and especially the rent distrained for hy the said hank, is prior and paramount to any lien of the appellee Figgatt and others on said property acquired hy said deed of trust, and that the said Figgatt and others, secured hy said deed of trust, are not entitled to the benefit of the proceeds of the sales of said property until the rent aforesaid shall have heen fully paid; and that the said decrees, so far as they are at all in conflict or inconsistent with the opinion of this court hereinbefore expressed, are erroneous; therefore, it is decreed and ordered, that the said decrees, — 584 — so far as they are declared to be erroneous as aforesaid, be severally reversed and annulled, and tbe residue thereof be affirmed, and that tbe appellee J. H. H. Figgatt pay to tbe appellants their costs by them expended in tbe prosecution of tbe appeal aforesaid here; and this cause is remanded to tbe said circuit court for further proceedings to be bad therein, in order to final decree, in conformity with tbe opinion hereinbefore expressed; which is ordered to be certified to tbe said circuit court of Montgomery county. Decree reversed And cause remanded.