Beall v. WhiteAnnotate this Case
94 U.S. 382 (1876)
U.S. Supreme Court
Beall v. White, 94 U.S. 382 (1876)
Beall v. White
94 U.S. 382
APPEAL FROM THE SUPREME COURT
OF THE DISTRICT OF COLUMBIA
1. Under the Act of Congress approved Feb. 22, 1887, 14 Stat. 403, the lien of a landlord for rent has priority over a deed of trust made by his tenant after the commencement of the tenancy, whether the chattels covered by the deed were, when it was executed, upon the demised premises, or were subsequently acquired and placed by the tenant upon them.
2. A statutory lien attaching to personal chattels, although no possession of them be delivered, has the same operation and efficacy as existed at common law, where the possession accompanied and followed the deed creating the lien.
3. It is only where no rule of law is infringed and the rights of third persons are not prejudiced that courts of equity will, in certain cases, give effect to mortgages of subsequently acquired property.
4. A surrender to a landlord is effected either by words manifesting the intention of the lessee to yield up his estate or by operation of law where the parties, without such words, do some act which implies that they both agree to consider the surrender as made.
5. In this case, the court holds that there was no surrender, either express or by operation of law.
The facts are stated in the opinion of the Court.
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Landlords leasing real property in this District have a tacit lien upon such of the personal chattels of the tenant upon the premises as are subject to execution for debt, commencing with the tenancy and continuing for three months after the rent is due and until the termination of any action for such rent brought within said three months. 14 Stat. 404; Fowler v. Rapley, 15 Wall. 328; Webb v. Sharp, 13 Wall. 14.
Sufficient appears to show that the executors of Alpheus Middleton, deceased, and Benjamin Beall, the owner of the other undivided half, on the 5th of March, 1867, leased the hotel at the corner of Pennsylvania Avenue and Sixth Street West, then known as the Clarendon Hotel, to George W. Bunker and William H. Crosby, for the term of five years from the first day of April next ensuing, at the yearly rent of $4,000, payable in monthly installments the last day of each month, with the proviso that if the rent or any part thereof shall be in arrear and unpaid for the space of thirty days, the tenancy, upon notice thereof being given in writing to the lessees, shall cease and determine, and the same shall be and become a tenancy at will, determinable as prescribed in the act of Congress.
Covenants were also contained in the lease by both parties. On the part of the lessees, for the payment of rent during the term and in the mode prescribed; that they would not let or sublet the demised premises without the written consent of the lessors; and for the peaceful surrender of the premises at the end of the term or additional term. Reciprocal covenants were also made by the lessors for quiet enjoyment, for the renewal of the lease for another term of five years, if the lessees made written application for the same within the period therein specified.
Under that instrument, the lessees entered into possession of the premises, purchased necessary furniture, and commenced the business of hotelkeeping, the name of the house being changed to Bunker's Avenue Hotel. At the date of the lease, Thomas M. Plowman was a silent partner with the lessees in the business, and it appears that Crosby, on the 2d of October in the following year, sold and assigned his interest
in the lease and furniture to Bunker and Plowman, his copartners.
Negotiations took place for the enlargement of the hotel, and in December following, an adjoining tenement belonging to Benjamin Beall in his own right was leased to Bunker & Plowman at the yearly rent of $1,300, payable monthly, the same having previously been altered and remodeled for the purpose at great expense, and was then fitted up with the necessary furniture.
Five days after the commencement of the lease, to-wit, April 6 in the same year, the lessees gave a deed of trust upon all the furniture then in the hotel to Orestes B. Dodge, trustee, to secure two notes of even date with the deed, each for $1,250, payable in nine and twelve months. When William H. Crosby sold and assigned his interest, Bunker & Plowman on the same day, to-wit, Oct. 2, in the same year, gave a deed of trust to Samuel L. Phillips, trustee, upon all the furniture then in the hotel and all additions to the same, and all furniture to be placed in the Beall tenement, then being remodeled, and also upon the demised term and any further term the grantors may obtain in the Beall property, to secure two notes of even date, each for the sum of $3,500, payable in six and twelve months, in favor of William H. Crosby, for his interest in the lease and furniture.
Bunker & Plowman, on the 17th of April following, conveyed all their leasehold interest in the tenements, then called the St. James Hotel, together with all the furniture therein, to Samuel L. Phillips, trustee, to secure a continuing credit given by Beall & Baker to the grantors, in the amount of $5,000, to continue for two years. On the 20th of December in the same year, the same grantors gave another deed of trust to Elias E. White, trustee, to secure a further indebtedness to Beall & Baker in the sum of $3,044.77, as appears by the answer.
Two of the notes secured by the deeds of trust, each payable in twelve months, are claimed by the Freedman's Savings and Trust Company, one being secured in the first trust deed and the other in the second, both notes having been taken by the bank when overdue. Mention should also be made that the
same grantors, on the 10th of April, two years later, assigned their leasehold interest and all the furniture in the hotel to John Spicer, and, late in the same month, put him in possession, the original lessors refusing to recognize him as tenant. Rent was subsequently paid, but was received and receipted as due from Bunker & Plowman.
Suits in attachment on two of the notes were brought for rent on the 29th of August in the same year, and two other similar suits were instituted for similar causes near the close of the year in which chattels upon the premises, including both tenements, were seized and judgments of condemnation were duly rendered.
Enough appears to show that Bunker & Plowman were indebted to Beall & Baker, under the deeds of trust executed for their benefit, in the sum of $10,000, and that it was at their instance that the trustees proceeded to enforce the deeds; that the property was sold by the trustees under the several deeds of trust, with the consent of Spicer, and that the trustees then filed their bill of interpleader against Beall and Beall & Baker and the Freedman's Savings and Trust Company for the distribution of the fund.
Process was served, and the respondents appeared and filed an answer. Proofs were taken, the parties heard, and the court entered a decree that the deeds of trust are entitled to priority of satisfaction out of the fund in the hands of the complainants as against the rents to the landlord. Such being the final decree in the Court of Appeal, Beall & Baker, by special leave, appealed to this Court and assign for error the decree of the court below, adjudging that the deeds of trust are entitled to priority of payment as against the lien of the landlord.
Priority in favor of the first deed of trust cannot be claimed unless the proposition of appellees can be sustained that the first tenancy ended when William H. Crosby, with the consent of the lessors, sold and assigned his interest in the lease and furniture to Bunker & Plowman, or when the latter in turn assigned their leasehold interest in the demised premises and the furniture in the hotel to John Spicer. Suppose the original tenancy was unaffected by those events, it follows that the claim
in favor of the first deed of trust is unfounded, as the record shows that the tenancy commenced before the deed was executed, and the recitals in the deeds showed that the chattels were upon the premises.
Without more, these remarks are sufficient to show that the court below erred in that regard if the original contract of lease continued in force unaffected by the described assignments. Grant that and it follows that the decree under review is also erroneous in respect to the claim made in favor of the other deed of trust, for the same reason, that the tenancy commenced eighteen months before the deed was executed. Nor can the appellees derive any benefit from the fact that the deed purports also to convey chattels to be acquired in the future and placed in the hotel. Liens of the kind, arising under the act of Congress, attach at the commencement of the tenancy, or whenever personal chattels, owned by the tenant and subject to execution for debt, are brought on to the premises. Statutory liens have, without possession, the same operation and efficacy that existed in common law liens where the possession was delivered. Personal chattels on the premises, sold in the ordinary course of trade, without knowledge of the lien, are not subject to its operation, or, in other words, the lien in respect to such sales, where the goods are removed from the premises, is displaced and the purchaser takes a perfect title to the property discharged of the lien. Webb v. Marshall, 13 Wall. 15; Grant v. Whitwell, 9 Ia. 153; Doane v. Garretson, 24 id. 351; Marr v. Sheffner, 2 East 523; Burton v. Smith, 13 Pet. 483; Fowler v. Rapley, 15 Wall. 336.
Beyond question, the remarks made are sufficient to show that the lien of the landlord, so far as respects the chattels on the premises, is entitled to priority over the deeds of trust unless the proposition of the appellees, that the statutory lien was displaced by one or both of the subsequent assignments by the lessees.
Before examining that question, it is proper to consider to what extent, if at all, the rights of the parties are affected by the terms of the second deed of trust, which purports to convey property subsequently acquired by the grantors and placed on the demised premises. Courts of equity will, in certain cases,
give effect to a mortgage of property to be acquired subsequently, where no rule of law is infringed and the rights of third persons are not prejudiced. Pennock v. Coe, 23 How. 12.
Grants or conveyances of the kind may in certain cases be valid subject to those conditions, or, to speak more accurately, the law will permit the grant or conveyance to take effect upon the property when it is brought into existence and belongs to the grantor, in fulfillment of an express agreement, if founded on a good consideration and it appears that no rule of law is infringed and the rights of third persons are not prejudiced. Story, Eq.Jur. (9th ed.)