American Exchange Bank v. Goodlee Realty Corp.

116 S.E. 505, 135 Va. 204, 1923 Va. LEXIS 9

• Court: Supreme Court of Virginia
• Decided: March 15, 1923
• Status: Published

Opinion

Sims, J.,

after making the foregoing statement, delivered the following opinion of the court.

As stated in the petition for the writ of error in this case, there is but a single question presented by the assignments of error, and that question is as follows:

[1] 1. Can a landlord, who has failed to perfect his lien for rent, by distress or attachment, levied on the tenants’ goods while on the leased premises, or within thirty days after goods are removed therefrom by a purchaser thereof, or party having a lien of any kind thereon created after the commencement of the tenancy, maintain an action instituted more than thirty days after the removal of the goods from the premises, against such purchaser or lienholder, holding the latter personally liable for the value of the goods removed by him from the premises, to the extent of so much of the rent, if any, to which the landlord is entitled under the lease, as was at the time of such removal in arrear and was not paid, if any, and so much of such rent as was to and did, under the lease, become due thereafter (not being more altogether than a year’s rent) and was not secured to be paid to the landlord by such purchaser of lienholder before the removal of the goods?

The question must be answered in the affirmative.

The personal liability in question is imposed by the statute which, as it stood when the cause of action in the instant case arose, is contained in section 5524 of the Code, which is as follows:

“Section 5524. When goods not to be removed without paying a year’s rent; lien for taxes, levies and militia fines not affected.—If, after the commencement of any tenancy, a lien be obtained or created by deed of trust, mortgage, or otherwise, upon the interest or property in goods or premises leased or rented, of any person liable for the rent, or the said goods be sold, the party having such lien, or the purchaser of such goods, may remove them 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 so paid or secured not being more altogether than a year’s rent in any ease. If the goods be taken under legal process, the officer executing it shall, out of the proceeds of the goods, make such payment of what is in arrear; and as to'what is to become due, he shall sell a sufficient portion of the goods on a credit till then, taking from the purchasers bonds, with good security, payable to the person so entitled, and delivering such bonds to him. If the goods be not taken under legal process, such payment and security shall be made and given before their removal. Neither this nor the preceding section shall affect any lien for taxes, levies, or militia fines. (Code 1887, section 2792).”

This statute as first enacted in Virginia appears in 1 Revised Code 1919, section 7, page 448; by its terms it was applicable to persons taking any goods or chattels lying or being on leased premises “by virtue of any writ of execution (or) on any pretence whatsoever” (the word “or” being evidently a printer’s error and no part of the statute), and provided that such goods or chattels should not be so taken “unless the party so taking the same, shall, before removal of the goods from off such premises, pay or tender to the landlord or lessor thereof or his agent, all the money or tobacco due, for the rent of the said premises, at the time of taking such goods or chattels in execution.” On the margin we find this note of the revisors of such Code: “Goods upon leasehold lands not to be taken in execution until rent in arrear be paid. 8 Anne, chap. 14, sec. 1.”

The statute of 8 Anne, chapter 14, section 1, so far as material, was as follows:

“For the more easy and effectual recovery of rents reserved on leases * * ; * * * no goods or chattels whatsoever lying or being in or upon any ‘leased premises’ shall be liable to be taken by virtue of any •execution, on any pretence whatsoever, unless' the party at whose suit the said execution is sued out shall before the removal of such goods from off the said premises, by virtue of such execution or extent, pay to the landlord of the said premises or his bailiff, all such sum or sums of money as are or shall be due for rent for the said premises at the time of the taking such goods or chattels by virtue of such execution; provided the said arrears of rent do not amount to more than one year’s rent; and in •case the said arrears shall exceed one year’s rent, then the said party, at whose suit such execution is sued out, paying the said landlord or his bailiff one year’s rent, may proceed to execute his judgment as he might have •done before the making of this act; and the sheriff or •other officer is hereby empowered and required to levy and pay to the plaintiff as well the money so paid for xent as the execution money.”

[2] The statute, as first enacted in Virginia, was subsequently limited in its scope so as to apply to.one year’s rent only, but was made to apply to the portion of such rent to become due, as well as to that in arrears; and the statute was enlarged in its scope from time to time so as to embrace other taking and removal of •goods than under execution, until it finally attained the form in which we find it in section 5524 of the present Code, aforesaid; but the object of the statute and the nature of the duty imposed by it on those violating its xequirements, who are mentioned in it, are the same as ■of the said statute of 8 Anne; and hence the settled construction of the latter statute by the English decisions, with respect to the liability imposed by it on the persons violating its requirements, must be taken to have been adopted in this State when the statute was first enacted and subsequently amended here from time to time.

[3-5] It is true, as urged in behalf of the defendant lienholder in the instant ease, that, accurately speaking, neither section 5524 nor section 5523 of the present Code (which were sections 2792 and 2791 of the Code of 1887) gives the landlord any lien for rent (Burks’ Pl. & Pr. [1st. ed.], sec. 13, pp. 12-14); although in some of the cases discussing the subject statutes like section 5524 are referred to as giving the landlord a lien. But it is apparent from the facts of such cases that what is meant thereby is that such statutes give the landlord the right to have the property remain on the premises subject to his inchoate lien unless the terms of the statute permitting removal thereof are complied with. (See Wades v. Figgatt, 75 Va. 575; Anderson v. Henry, 45 W. Va. 319, 31 S. E. 998; Burket v. Boude, 3 Dana (Ky.) 209. Compare Mutual Fire Ins. Co. v. Ward, 95 Va. 231, at page 247, 28 S. E. 209.) In this State the only methods by which a landlord can obtain a lien for rent, prior to a judgment and execution therefor, is by distress warrant or attachment levied on the property liable for rent while it is on the leased premises, or within thirty days after its removal therefrom. (See chapter 227 and section 6416 of the Code.) Until a lien is thus obtained the landlord’s right to a lien is inchoate in this State. Dime Deposit Bank v. Wescott, 113 Va. 567, 75 S. E. 179; Bird v. City of Richmond, 240 Fed. 545, 153 C. C. A. 249; Geiger’s Adm’r v. Harman’s Ex’x, 3 Gratt. (44 Va.) 130; Burks’ Pl. & Pr., supra. When such lien is so obtained it relates back to the beginning of the tenancy and takes precedence of any lien of any other person obtained or created upon goods or chattels on the leased premises after the commencement of the tenancy. Wades v. Figgatt, 75 Va. 575; City of Richmond v. Duesberry, 27 Gratt. (68 Va.) 210; Andersonv. Henry, 45 W. Va. 319, 31 S. E. 998.

Hence the numerous decisions in the jurisdictions where there are statutes changing the common law on the subject and giving to landlords a lien on all property liable to distress for rent, while on the leased premises and (in most instances) for a certain period after it has been removed from the premises (in the greater number of which decisions the liability enforced arises from the defeat of the landlord’s lien by the fraudulent or wilfully wrongful conversion of the property), have no controlling application in this State in such a case as that in judgment. See 18 Am. & Eng. Ency. of Law (2nd ed.) bb. p. 350, and cases cited; 24 Cyc. (F), pp. 1267-8, and cases cited; also Hyman v. Hibernia Bank, 139 La. 411, 71 So. 598; Id., 144 La. 1074, 81 So. 718; West Furniture Co. v. Cuson (Tex. Civ. App.), 218 S. W. 774; Chute v. Brown, 103 Wash. 364, 174 Pac. 438.

Nor is Bishop on Non-Contract Law, section 132, and the authorities there cited, other than 2 Institutes, or Hayes v. Michigan Cent. R. Co., 111 U. S. 228, 4 Sup. Ct. 369, 28 L. Ed. 410, or C. & O. R. Co. v. Bank, 92 Ya. 495, 504, 23 S. E. 935, 44 L. R. A. 457, and note, precisely in point, although the principle involved therein is a kindred one to that involved in the case before us. These authorities and the instant case are alike in this: The statutes dealt with therein must be looked to, and their provisions must be interpreted in the light of their object—of the mischief sought to be remedied and the relief intended to be afforded—in order to determine whether they impose any duty to individuals for the violation of which the statute means to give to the individual a cause of action against the one violating the duty: But, speaking broadly, the statutes dealt with by the authorities just mentioned, other than those referred to in Lord Coke’s Institutes, where they are held to impose such a duty and to confer such a cause of action, impose a duty less specific in its nature than does the statute involved, in the instant case; the liability for the violation of the former statutes has to be determined more in accordance with the rules governing liability in actions of tort for negligence, than is required by the last named statute, according to the settled construction of it aforesaid.

We come now to the consideration of the construction of the statute involved in the case before us.

[6] It was settled at an early day, by a long line of English decisions, that ■ under the statute of. 8 Anne, chapter 14, section 1, aforesaid, the removal of the goods mentioned in the statute, after notice that the rent is in arrear, without first complying with the terms thereof upon which the permission of removal was thereby given, was. a wrong to the estate of the landlord, for which he might maintain an action in case against the person removing the goods and recover a personal judgment against him for the value of the •goods removed, if not in excess of the amount of one year’s rent in arrear, and, if the goods removed were in excess of that amount, then for the amount of the rent in •arrear, for one year, and costs of suit.

- Under the English decisions, in such case, the notice need not be of the exact amount of the rent in arrear. -Notice that any of the rent mentioned in the statute was in arrear put the person removing the property upon inquiry and was equivalent to notice of the exact amount, if his failure to make inquiry of the landlord as the only reason he did not know of the.amount.

[7] No other circumstances, such as whether or not other goods liable for rent sufficient to satisfy the rent in arrear were left on the premises, or whether the landlord could have levied a distress warrant on the goods before they were removed, or whether there was a conversion of the goods which prevented such levy, or any fraud or other conduct whatsoever on the part of the person removing the goods, which was the proximate cause of the loss or damage to the landlord sought to be recovered in the action, being inquired into, or considered as at all essential to the right of recovery of the landlord in such action to the extent aforesaid.

Where the proceeding was against an officer the practice was for the landlord, in lieu of an action in case, to proceed against the officer by motion, upon which a rule was issued against the officer to show cause against such judgment as aforesaid being entered against him for the money in .his hands derived from the sale under the execution which should have been paid to the landlord, if the money was still in the officer’s hands, and if wrongfully paid out, then against him personally; there being in such proceeding by motion the same liability upon the officer as if there had been an action in case against him.

Palgrave v. Windham, 1 Strange, 212; Smith v. Russell, 3 Taunt. 400; Hoskins v. Knight, 1 M. & S. 245; Henchett v. Kimpson, 2 Wils. 140; to cite only a few of the decisions on the subject. See also 7 Com. Dig., pp. 261-3.

The said statute of 8 Anne, or substantially the same statute, was enacted also in New York, Pennsylvania and Kentucky, and such statutes have been given the same construction by the decisions of those States as the statute of 8 Anne by the English decisions. See People v. Schenk, 2 Johns. (N. Y.) 479; Alexander v. Mahon, 11 Johns. (N. Y.) 185; West's Adm'r v. Sink, 2 Yeates (Pa.) 274; Burket v. Boude, 3 Dana (Ky.) 209, 210-11.

In the last cited case the Kentucky court says that the statute involved was a transcript of the statute of 8 Anne and “that the interpretation which has been given to the latter statute by the English courts has been heretofore adopted by this court as a guide for the interpretation of the” Kentucky statute in question. The court further says this: “The landlord has two remedies against an officer who takes property from the demised premises by execution, without paying the rent. First, he may move the court to which the execution is returnable for a rule upon the officer to. pay over the money raised by the sale under execution, or so much thereof as will satisfy his rent. Or, second, he may maintain an action on the ease against him for taking and removing the property under execution before his year’s rent is paid.

“In the former action he waives the tort in the taking of the property, affirms the sale, and asks an application of the fund raised, * * * .1 Strange 97, 643; 2 Strange 1024; 7 Com. Dig. 262-3, title rent, letter D. 8; Bradley on Distress, 215, 119.

“But when the action on the case is brought, it is brought for the wrongful act of the officer, in taking and removing the property, * * * . Besides, the statute expressly prohibits the removal of the property before the year’s rent is paid. In case it is removed, what is the criterion of damages? Surely the value of the thing removed, provided that value does not exceed the year’s rent. To that amount he is injured, * * * and to that amount he has a right to recover in this action * * .”

It follows from what we have said above that there was no error committed by the trial court of which the defendant lienholder complains in the assignments of error.

[8, 9] To have fully and accurately stated the law as applicable to the case the instruction given should have predicated the direction to the jury to find for the plaintiff as stated therein upon their finding the additional facts that the defendant at the time of the removal of the property had notice that further rent would become due thereafter and that the value of the property removed was not less than the amount of such rent, to-wit, $750.00; and there should have been no reference to the subject of what property was left on the premises.

Under section 5524 aforesaid, as under the statute of 8 Anne, the liability of the person removing the property is not dependent upon notice to him of the exact amount which is unpaid of rent mentioned in the statute. Notice of any rent'so mentioned being in arrear or to become due, puts the person removing the property upon inquiry and is equivalent to notice of the exact amount of such rent, if by inquiry of the landlord he would have ascertained the amount.

But it appears from the statement of facts preceding this opinion that the excess value of the property was established by the evidence without conflict; that the aforesaid notice was had, was not the subject of any controversy before the jury and could not have been otherwise than inferred by the jury from the circumstances disclosed in evidence; and the reference to what property was left on the premises may be treated as surplusage. Hence, there was in truth no error in the instruction of which the defendant could justly complain.

The instructions asked for by the defendant were properly refused and the motion to set aside the verdict was properly denied in view of the conclusions which we have reached above.

[10] It is urged in argument for the defendant that such conclusions mil lead to the result that customers of retail merchants, who are tenants of leased premises, will be unable to purchase articles of merchandize and remove them from the premises without being liable to the landlord for their value, if there is any unpaid rent in arrear at the time, or which thereafter becomes due to the landlord, under the tenancy. But that result by no means follows. It has been uniformly held, as we believe, that by leasing the premises to such a tenant with knowledge that he is going to conduct such a business thereon, or by thereafter knowingly assenting thereto, the landlord will be held to have waived his inchoate or statutory lien upon a shifting stock of goods and all right to assert a personal liability to him for rent against purchasers of articles of merchandise from the tenant in the regular course of retail trade. Grant v. Whitwell, 9 Iowa 152, 158; Webb v. Sharp, 13 Wall. 14-17, 20 L. Ed. 478. We do not think that what is said in Offterdinger v. Ford, 92 Ya. at p. 651, 24 S. E. 246, is at all to .the contrary. What is there said has no reference to this subject.

The case will be affirmed.

Affirmed.