Pepsi-Cola Bottling Co. v. Indian Rock Bottling Co.

126 S.E. 715, 98 W. Va. 269, 1925 W. Va. LEXIS 45
CourtWest Virginia Supreme Court
DecidedFebruary 24, 1925
DocketNo. 5194.
StatusPublished
Cited by4 cases

This text of 126 S.E. 715 (Pepsi-Cola Bottling Co. v. Indian Rock Bottling Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pepsi-Cola Bottling Co. v. Indian Rock Bottling Co., 126 S.E. 715, 98 W. Va. 269, 1925 W. Va. LEXIS 45 (W. Va. 1925).

Opinion

*270 MilleR, Judge :

The plaintiff, a lien creditor of the defendant company, brought this suit against the company and Anna M. Zach-arias, alleging that Mrs. Zaeharias had sold certain personal property of the defendant company under a distress warrant, and became the purchaser thereof herself, in fraud of plaintiff's rights, and praying that a receiver be appointed to wind up the affairs of the company, and that Mrs. Zach-arias be restrained from disposing of the property so purchased by her, and that she be required to pay to plaintiff the amount of the defendant company’s indebtedness to it. The lower court dismissed plaintiff’s bill, without prejudice to any other action it might see fit to institute.

Prior to August 30, 1921, the plaintiff was engaged in the manufacture and sale of distilled water and soft drinks in a building leased from Mrs. Zaeharias. On that date plaintiff sold to defendant company its business and equipment, and took a deed of trust on the property sold, to secure two purchase money notes. The deed of trust is dated the same day the sale and purchase was made, and was acknowledged that day, but was not recorded in the office of the clerk of the county court until September 13, 1921. The lease under which plaintiff held was dated August 30, 1920, and provided for a term ending May 1, 1924. A few days before the purchase of the property by defendant company, representatives of the two companies had a conference with Mrs. Zach-arias, to ascertain if she would execute to the purchaser a lease on the premises then occupied by plaintiff. Mrs. Zaeharias agreed to do so; and it appears that the old lease was cancelled at that time. Mr. R. H. Williamson, vice-president and general manager of the plaintiff company, testified that the lease was surrendered, and the surrender accepted by Mrs. Zaeharias with the understanding that she would execute to defendant company a new lease. Mr. Emigh, the representative' of the defendant company, says he saw Mr. Williamson hand the old lease to Mrs. Zaeharias, and that it was understood she would execute a new one.

The evidence is conflicting as to whether Mrs. Zaeharias was informed on that occasion that defendant company con *271 templated executing a deed of trust to plaintiff. Mr. Williamson testified that he told her plaintiff was going to take a deed of trust on the property. Mr. Emigh said that he could not be positive whether she was told of the deed of trust or not; and Mrs. Zacharias says she was not told of the deed of trust, and knew nothing* about it until some time in the spring of 1922.

The -first proposition advanced by plaintiff is that its deed of trust is superior to the lien of Mrs. Zacharias, if she has any lien for rent.

Section 11, chapter 93 of the Code provides: “If the goods of such lessee, assignee, or undertenant, when carried on the premises are subject to 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.”

From the evidence it appears that the sale to defendant company and the execution of the deed of trust to plaintiff took place at the same time. It does not clearly appear when Mrs. Zacharias executed a new lease to defendant company, but it does appear that the old lease was surrendered at the conference of all the parties a few days before the transfer of the property in question, upon condition that a new lease was to be executed to the vendee. Emigh, who was a director in the Indian Rock Bottling Company, and was its president and general manager, says he operated under a lease from Mrs. Zacharias to himself, the date of which he did not remember, but says it was to be dated August 30, 1921. This lease was not produced. There is exhibited with the evidence a lease from Mrs. Zacharias to the Indian Rock Bottling Company, dated August 30, 1921, signed by the parties, but not acknowledged, which Mrs. Zacharias says was 'held by the company until after the distress warrant was levied, when it was handed back to her. Plaintiff contends that the new lease became operative September 1, 1921; of which there is no evidence, and for which view no reason is given. The lower court might reasonably have *272 found that the tenancy of the Indian Rock company began at the time the sale of the property in question-was made to that company. The property was on the premises when the tenancy began.

The landlord’s statutory lien for rent attaches from the beginning of the tenancy. 1 Jones on Liens, (3rd ed.) §553: 36 C. J. 490; 16 R. C. L. 988. The deed of trust was not recorded until September 13th; and it is admitted that the new lease began before that date. Whatever may have been told to Mrs. Zacharias at the time of the conference above referred to, if anything, in regard to the proposed deed of trust, the evidence does not show that she had notice of the actual execution of such deed before the same was recorded, even if such notice would be sufficient to defeat her lien for rent. The fact is that the lien for rent attached before the deed of trust was recorded, and that is sufficient to give Mrs. Zacharias’ lien priority. “An unrecorded deed is void as to creditors, whether they have notice or not.” Abney v. Ohio Lumber & Mining Company, 45 W. Va. 446. “A mortgage or deed of trust of personalty must be recorded to bind purchasers without notice and creditors.” Poling v. Flanagan, 41 W. Va. 191. See also, Hufford v. Akers, 52 W. Va. 21; Delaplain v. Wilkinson, 17 W. Va. 242; Guerrant v. Anderson, 4 Rand. 208.

In their reply brief counsel for appellant advance the proposition that a purchase money deed of trust is valid without notice and without recordation as against the creditors of the grantor therein, for the reason that the grantor in the trust deed does not acquire such an interest in the property as can become subject to either prior or subsequent claims or liens of other creditors. Whatever may be the rule in other jurisdictions as to deeds of trust and mortgages on real property, under the recording statutes there, no such distinction has ever been made in this state. And in the case of Hufford v. Akers, supra, where there was a conditional sale of chattels, with title reserved in the vendor, and the chattels ivere placed upon the premises by the vendee before the recordation of the contract of conditional sale, it was held that the goods so purchased and placed on the leased *273 premises prior to tbe date of recordation of the contract were liable to distraint for rent. And in that case it was held that by the contract of sale the title to the property remained in the vendor until the purchase money was paid.

It is charged that the sale of the property to. herself by Mrs.

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Bluebook (online)
126 S.E. 715, 98 W. Va. 269, 1925 W. Va. LEXIS 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pepsi-cola-bottling-co-v-indian-rock-bottling-co-wva-1925.