Howard v. Chicago Title & Trust Co.

220 F. 772, 136 C.C.A. 378, 1915 U.S. App. LEXIS 2515
CourtCourt of Appeals for the Seventh Circuit
DecidedJanuary 5, 1915
DocketNo. 2146
StatusPublished
Cited by3 cases

This text of 220 F. 772 (Howard v. Chicago Title & Trust Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howard v. Chicago Title & Trust Co., 220 F. 772, 136 C.C.A. 378, 1915 U.S. App. LEXIS 2515 (7th Cir. 1915).

Opinion

SEAMAN, Circuit Judge.

The rent,for which the appellants claim a lien under their statutory proceedings for its enforcement accrued under a written lease between the appellants and the bankrupt, bearing date December 10, 1909, containing no provision for a lien in any form to secure payment of rentals, and thus the claim rests exclusively on the relation of landlord and tenant thereunder, as governed by the provisions of chapter 80, Revised Statutes of Illinois, for creation of the alleged lien for unpaid rent. It is obvious, therefore, that the ruling of this court in the bankruptc}'' case entitled In re Robinson & Smith, 154 Fed. 343, 83 C. C. A. 121, upholding a lien expressly created by written lease between the parties in Illinois, is inapplicable for support of the_instant claim. Personal property of the bankrupt was seized by the appellants, pursuant to section 16 of the above-mentioned statute, five days prior to the commencement of bankruptcy proceedings and when the bankrupt was insolvent; and the issue upon the validity of the lien so acquired, as against proceeds in the hands of the trustee in bankruptcy arising from sale of such property, must ultimately hinge for solution on the effect of the Illinois statute for definition of the nature and inception of the lien.

These premises for the inquiry, however, are established by and under the present Bankruptcy Act: That all liens and preferences are recognized and preserved therein which are granted or acquired more than four months prior to bankruptcy, when free from taint and valid under the laws of the state; that the act preserves priority — -section 64 (5) — for “debts owing to any person who by the laws of the states or the United States is entitled to priority”; that its policy likewise extends to the preservation of equitable liens and various statutory rights which are designated as inchoate or dormant liens, when their existence and rightfulness are established, and no provision of law is violated therein; and that — section 67f — “all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt,” etc.

For application of the foregoing proposition to levies made for enforcement of liens asserted in favor of a landlord against personal property of the bankrupt, as tenant, for unpaid rent, two leading decisions under the present Bankruptcy Act upholding liens so obtained are cited and strongly relied upon for reversal of the order of the District Court herein — Henderson v. Mayer, 225 U. S. 631, 32 Sup. Ct. 699, 56 L. Ed. 1233, and In re West Side Paper Co., 162 Fed. 110, 89 C. C. A. 110, 15 Ann. Cas. 384 (C. C. A. 3d Circuit). The Henderson Case arose under and is necessarily governed by the statutory provisions' of Georgia referred to in the opinion, and its doctrine, if applicable as well to the Illinois statute governing the present issue, would be decisive thereof in favor of the lien. In the West Side Paper Co. Case (cited with approval in the Henderson opinion) the issue arose under the Pennsylvania statute providing for the lien and [774]*774its enforcement, and the opinion clearly points out the effect of the provisions on which the ruling in favor of the lien is predicated. Thus the dual question is presented by this appeal: (1) Whether the doctrine settled alike by these rulings applies to the provisions of the Illinois statute; and, if not, (2) whether the instant statutory levy thereunder is within the meaning of section 67f of the Bankruptcy Act. The Illinois provisions plainly differ — as established by the authorities to be considered — both from those of Georgia and Pennsylvania and from the common-law rule, as reviewed in the above-mentioned opinions, and the force of distinctions therein appears from analysis of the definitions and rulings of each of these cases, as follows :

In Henderson v. Mayer, the opinion by Mr. Justice Lamar thus states in substance the effect of the Georgia statute: That it expressly (section 2787) “establishes liens in favor of landlords”; that.it gives them (section 3124) “power to distrain for rent as soon as the same is due”; that it declafes (section 2795) that they “shall have a general lien on the property of the tenant liable to levy and sale * * * which dates from the levy of the distress warrant to enforce the same”; that “prior to levy it covers no specific property, and attaches only to what is seized under the distress warrant,” and in this respect “is the full equivalent of a common-law distress, the lien of which is held not to be discharged by section 67f” — citing In re West Side Paper Co., supra. We understand the ruling thereupon, which upholds a lien obtained by levy of the statutory distress three days prior to bankruptcy proceedings, to rest on these propositions, as stated in substance in the opinion:

The Bankruptcy Act “was not intended to lessen rights which already existed, nor to defeat those inchoate liens given by statute, of which all creditors were bound to take notice. * * * As against them the landlord had from the beginning of the tenancy the right to a statutory lien, which had completely ripened and attached before the filing of the petition in bankruptcy. The priority arising from the levy of the distress warrant was not secured because Mayer had been first in a race of diligence, but was given by law because of the nature of the claim and the relation between himself as landlord and Burns as tenant. In issuing the. distress warrant the justice acted ministerially. Savage v. Oliver, 110 Ga. 636 [36 S. E. 54], The sheriff was not required to return it to any court, and no judicial hearing or action was necessary to authorize him to sell for the purpose of realizing funds with which to pay the rent. Such a lien was not created by a judgment nor ‘obtained through legal proceedings.’ ”

In re West Side Paper Co., the opinion by Judge Gray, upholding a like levy under the Pennsylvania statute, aptly states the distinguishing feature of the statutory proceedings, as the groundwork of the decision, as follows:

“Distress for rent in arrear is one of the most ancient, as well as ‘one of the most efficient, of the landlord’s remedies for the collection of rent.’ It is in most of our states, as it was at common law, a right sui generis, belonging to the landlord whenever the relation of landlord and tenant existed. It appears to have been abolished in a few of the states, and in most of them its exercise has been regulated by statute. Its essential characteristics are, however, for the most part the same as existed at common law. In Pennsylvania, as at common law, the distress warrant issues directly from the landlord to his bailiff, who, if he happens to be a constable, is no less the agent and [775]*775bailiff of tbe landlord than if he were a private person. Tbe state law provides that, after tbe goods have been distrained, or levied upon, unless the same be replevied by tbe plaintiff within five days, tbe landlord may apply to the sheriff of tho county, or to a constable, who is required to take proceedings! for the sale of the said goods, or so much thereof as may be required for the satisfaction of the rent.

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239 F. 262 (Seventh Circuit, 1917)

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Bluebook (online)
220 F. 772, 136 C.C.A. 378, 1915 U.S. App. LEXIS 2515, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howard-v-chicago-title-trust-co-ca7-1915.