1. Under the Landlord and Tenant Act of Illinois, which enacts
in its seventh section that
"In all cases of distress for rent, it shall be lawful for the
landlord, by himself, his agent, or attorney, to
seize for rent
any personal property of his tenant that may be found in the
county where such tenant shall reside, and in no case shall the
property of any other person, although the same may be found on the
premises, be liable to seizure for rent due from such tenant,"
and enacts in its eighth section that
"Every landlord shall have a lien upon the crops growing or
grown upon the demised premises in any year for rent that shall
accrue for such year.
Page 89 U. S. 382
"
A landlord has no lien upon the personal property of his tenant
prior to an actual levy of distress.
2. If proceedings of bankruptcy are begun by other persons
against his tenant before such warrant of distress be actually
levied, the subsequent assignment in bankruptcy -- which assignment
the fourteenth section of the Bankrupt Act declares "shall relate
back to the commencement of said proceedings," and "by operation of
law" vest in the assignee the title to all the bankrupt's property
and estate, "although the same is then attached on mesne process as
the property of the debtor" -- will vest the personal property of
the tenant in the assignee to the exclusion of the landlord's right
to levy on it.
3. It was the object of this fourteenth section to prevent any
particular creditor asserting any lien but such as existed when the
petition in bankruptcy was filed.
This was a contest between a landlord of demised premises
claiming rent and the assignee in bankruptcy of his tenants
claiming certain personal property on the premises out of which the
landlord by distress expected to get his rent.
The case, which depended more or less upon statute law of
Illinois, in force at the time of the landlord's levy, was
thus:
A statute of Illinois known as its Landlord and Tenant Act,
[
Footnote 1] enacts as follows,
in certain sections its enactments bearing on the subject of rent,
distress &c.:
"SECTION 6. In all cases of distress for rent, the person making
the same shall immediately file with some justice of the peace, in
case the amount claimed does not exceed $100, or with the clerk of
the circuit court in case it exceeds that sum, a copy of the
distress warrant, together with an inventory of the property levied
upon, and thereupon the party against whom the distress warrant
shall have been issued shall be duly summoned and the amount due
from him assessed and entered upon the records of the court finding
the same. The said court shall certify to the person or officer
making the same the amount so found due, together with the costs of
court, and said officer
Page 89 U. S. 383
shall thereupon proceed to sell the property so distrained and
make the amount thus certified to him, and return the certificate
so issued to him with an endorsement thereon of his proceedings,
which return and certificate shall be filed in the proper
court."
"SECTION 7. In all cases of distress for rent, it shall be
lawful for the landlord, by himself, his agent, or attorney, to
seize for rent any personal property of his tenant that may be
found in the county where such tenant shall reside, and in no case
shall the property of any other person, although the same may be
found on the premises, be liable to seizure for rent due from such
tenant."
"SECTION 8. Every landlord shall have a lien upon the crops,
growing or grown upon the demised premises in any year, for rent
that shall accrue for such year."
"SECTION 9. In case of the removal or abandonment of the
premises by such tenant, all grain or vegetables grown or growing
upon any part of the demised premises so abandoned may be seized by
the landlord, before the rent is due, and the landlord so
distraining shall cause the grain or vegetables so growing to be
properly cultivated and perfected, and in all cases husband such
grain or vegetables, grown or growing, until the rent agreed upon
shall become due, when it shall be lawful for such landlord to sell
and dispose of the same as in other cases of seizure, after the
rent shall have become due,"
&c.
These enactments being in force, one Morgan, on the 18th of
June, 1872, leased to Liebenstein & Spiegel certain premises in
Chicago, Cook County, Illinois, at a rent of $750 per month,
payable September 30th, 1872, and on the last day of every month
thereafter. The lease provided that if default should be made in
the payment of the rent, when due, Morgan might distrain upon any
property belonging to lessees, whether exempt from execution and
distress by law or not, and the lessees waived all right to hold or
retain any such property under any exemption laws then in force in
the State of Illinois, or in any other way, "
meaning and
intending hereby," said the lease,
"
to give the said party of the first part, his heirs,
executors, administrators, or assigns a valid and first lien upon
any and all goods and chattels
Page 89 U. S. 384
and other property belonging to the said party of the second
part, as security for the payment of said rent in manner aforesaid,
anything hereinbefore contained to the contrary
notwithstanding."
Liebenstein & Spiegel entered into possession of the
premises, but paid only one month's rent.
On the 14th of May, 1873, a petition was filed in the District
Court for the Northern District of Illinois by one Harrington
charging Liebenstein & Spiegel with having committed acts of
bankruptcy and praying that they might be declared bankrupts.
Three days afterwards -- that is to say on the 17th of May --
between seven and eight months' rent ($5,250) being now due,
Morgan, the landlord, issued his warrant to the Sheriff of Cook
County for distraining the goods and chattels of his tenants, then
on the premises, to pay the rent due, and on the same day the
sheriff did levy the warrant upon them, and held them under the
warrant on the premises. On the 16th of June, 1873, he filed in the
proper court an inventory of them, and caused a summons in the
matter to be issued against the tenants in the way prescribed by
the sixth section of the above-quoted Landlord and Tenant Act, and
served upon them.
Liebenstein & Spiegel, the tenants, were afterwards declared
bankrupts, and one Campbell was appointed their assignee. After his
appointment, he demanded of Morgan, the landlord, and his bailiff,
possession of the chattels taken by them in distress, and held
under Morgan's warrant of distress, and against the protest of both
Morgan and his bailiff, took the same and was about to sell
them.
Thereupon Morgan filed a bill in the court below to enjoin
him.
The assignee in bankruptcy demurred to the bill.
The question, of course, was did the law of Illinois, in force
on the 14th of May, 1873, when the petition in bankruptcy was
filed, confer on a landlord a lien on the personal property of his
tenant independently of and prior to the levy of a warrant of
distress?
If it did, then, under the settled rule of bankruptcy law,
Page 89 U. S. 385
the lien would not be divested, proceedings in bankruptcy never
divesting existing liens. [
Footnote
2]
But if it did not so exist, then the assignee in bankruptcy
would take the property for distribution among the creditors
generally, it being equally settled that no lien can be acquired
after the filing of a petition in bankruptcy [
Footnote 3] -- this in virtue of the provision of
the fourteenth section of the Bankrupt Act, which enacts that on
the appointment of an assignee, and on the assignment to him of the
bankrupt's property and estates, the
"assignment shall relate back to the commencement of the
proceedings in bankruptcy, and thereupon, by operation of law, the
title to all such property and estate, both real and personal,
shall vest in said assignee, although the same is then attached on
mesne process as the property of the debtor."
The court below sustained the demurrer, thus deciding that prior
to and independently of an actual levy of the warrant of distress,
a landlord had not in Illinois any lien on his tenant's personal
property.
Morgan, the landlord in this case, appealed to this Court.
Page 89 U. S. 389
MR. JUSTICE DAVIS delivered the opinion of the Court.
The bill in this case cannot be sustained unless the laws of
Illinois conferred upon the landlord a statutory lien upon the
personal property of the tenant in the county prior to the levy of
the warrant. If the lien existed independently of the warrant, and
the warrant was used merely as a means of enforcing it, then the
theory of the bill is correct. On the contrary, if no lien could be
acquired until at least the warrant was actually levied, the court
below did not err in dismissing the bill.
The sixth and seventh sections of the Illinois Landlord and
Tenant Statute speak of distress for rent. The sixth section
prescribes the manner of proceeding, but the seventh
Page 89 U. S. 390
recognizes the existence of the right itself, and is in these
words:
"In all cases of distress for rent. it shall be lawful for the
landlord, by himself, his agent, or attorney, to seize for rent any
personal property of his tenant that may be found in the county
where such tenant shall reside, and in no case shall the property
of any other person, although the same may be found on the
premises, be liable to seizure for rent due from such tenant."
The eighth section declares that
"Every landlord shall have a lien upon the crops growing or
grown upon the demised premises in any year for rent that shall
accrue for such year."
These are the only provisions of the statute material to the
present inquiry, and they indicate clearly enough the intention of
the legislature on the subject. Manifestly it was the purpose to
make a distinction in this regard between agricultural products
raised on the farm and the general personal property of the tenant
in the country. If this were not so, why introduce the eighth
section into the law at all, for the right of distress was
conferred without it. The distinction was doubtless owing to the
fact that agriculture is now, and was at the passage of the law,
the chief industry of the state. It could work no serious injury to
trade if one kind of property alone were subject to a statutory
lien, but to extend this lien to all the personal property owned by
a tenant in the county would interfere with it very materially. Be
this as it may, the statute does in express terms confer a lien
upon the crops growing or grown upon the demised premises in any
year for the rent of that year, and recognizes for other personal
property in the county the right of distress as it existed at
common law. At common law, the landlord could distrain any goods
found upon the premises at the time of the taking, but he had no
lien until he had made his right active by actual seizure. A
statutory lien implies security upon the thing before the warrant
to seize it is levied. It ties itself to the property from the time
it attaches to it, and the levy and sale of the property are only
means of enforcing it. In other words, if the lien is given by
statute, proceedings are not necessary
Page 89 U. S. 391
to fix the status of the property. But in the absence of this
statutory lien, it is necessary to take proceedings to acquire a
lien on the property of the tenant for the benefit of the landlord.
This the landlord is enabled to do in a summary way to satisfy the
rent which is due him, and in this he has an advantage as creditor
over creditors at large of the tenant. It is difficult to see why
the tenant, subject to this dormant right of the landlord, is not
as much the owner of his effects as any other person would be who
owned property and owned debts.
The statute we are considering has been the subject of
consideration at the hands of the Supreme Court of Illinois. And it
is contended that
O'Hara v. Jones [
Footnote 4] is authority for the position assumed by
the appellant. The point decided in that case was that the landlord
had a right to distrain for rent upon the property of the tenant
even after he had made a general assignment for the benefit of
creditors of all his property, real and personal, on the ground
that the assignee of the tenant could not hold the goods free from
the lien of the landlord; that the assignee took the goods of the
assignor as a volunteer, and subject to all the liens to which they
were then liable.
This decision evidently proceeds on the idea that the statute
created a greater and different lien in favor of the landlord than
is given by the common law right of distress. But the court, in the
recent case of
Hadden v. Knickerbocker, [
Footnote 5] while adhering to the point
actually decided in
O'Hara v. Jones, repudiates this idea
and say that the lien is given the landlord upon growing crops,
"but no specific lien is given upon other property of the tenant."
This case protects
bona fide purchasers who have paid
value for the property, with notice that rent was due the lessor
and that he was about to distrain, although in
O'Hara v.
Jones it would seem that purchasers are not to be treated as
bona fide unless they bought without notice.
It is argued that the basis of the decision in
O'Hara
v.
Page 89 U. S. 392
Jones is that the landlord's lien for rent is superior
to that of a creditor holding under execution or attachment, and
there are expressions in the opinion which tend in that direction,
but the court, to reach that conclusion, would be obliged to
overrule
Rogers v. Dickey, [
Footnote 6] and this case is not even noticed in the
opinion of the court.
The question in
Rogers v. Dickey, as stated by the
court, was
"whether an execution delivered to the sheriff and in his hands
at the time a distress warrant was levied took precedence of the
levy by the constable, where there had been no sale of the property
levied upon."
The property levied on was on the demised premises, and the
court, on full consideration, held that the sheriff, who had in the
meantime taken the property from the constable, was justified in
the proceeding, and this, too, on the general principles of law,
for no point is made of superior right in the levy of the constable
by virtue of the Landlord and Tenant Act. This decision could not
have been reached if, in the opinion of the court, the landlord had
a lien on the property prior to the seizure under the warrant, for
the court, in
Miles v. James, [
Footnote 7] held that the statutory lien of the eighth
section on growing crops was a prior lien to an execution.
But it is unnecessary to consider the cases further, for
whatever may be the scope of some of the decisions in the state,
the exact point we are considering was decided, as we understand
it, in the recent case of
Hadden v. Knickerbocker,
[
Footnote 8] and, indeed, the
question does not seem to have been passed upon in any other case.
If, as is said in that case, the statute creates no lien in favor
of the landlord on the general property of the tenant in the
county, until the levy of the distress warrant, then the question
arises, whether the appellant acquired any right to the property in
question by reason of his levy as against the assignee of the
bankrupts and against the rights of the other creditors. It may
become important in other cases to determine whether the lien
acquired by the levy, to become operative, must not be
Page 89 U. S. 393
perfected in conformity with the provisions of the statute on
the subject, but in the view we take of the rights of the parties
to this suit, it is not necessary to consider the question. The
question might arise where the levy was before the filing of the
petition in bankruptcy, and the subsequent proceedings, taken after
this was done, were not in conformity with the provisions of the
statute. The levy in this case was, however, made after the
institution of bankruptcy proceedings, but before the decree in
bankruptcy was rendered.
The fourteenth section of the Bankrupt Act declares that the
assignment in bankruptcy shall relate back to the commencement of
proceedings, and by operation of law vest the title of the estate
of the bankrupt in the assignee, notwithstanding the same is then
attached on mesne process as the property of the debtor. It is
argued that a distress warrant, being the Act of the landlord
himself, is not an attachment upon mesne process. This is true
according to the technical signification of the term, but the
meaning of the term in this connection embraces any proceeding by
which a lien is first acquired. The object of the law was evidently
to prevent anyone procuring a lien after the filing of the petition
who had not got it before. If the lien existed before the filing of
the petition, it could be enforced in the bankrupt court; but if it
did not exist, the purpose of the law was to prevent its being
brought into existence by any proceeding whatever. If this were not
so, as soon as it was known that the petition was filed, the
provisions of the law might be easily evaded. The main purpose
which the Bankrupt Act seeks to accomplish is to distribute the
property of the bankrupt equally among his creditors, and in order
to do this the creditor who has not, when proceedings are begun,
such a security as binds the property is prevented from obtaining
it, and thus securing a preference over another creditor. There is
no good reason why the law should protect a landlord in the issuing
of a distress warrant and repudiate an equally meritorious creditor
in the levy of an attachment. If a distress warrant, where no
further proceedings are necessary
Page 89 U. S. 394
to perfect the lien, is not, strictly speaking, an attachment
upon mesne process, yet under the Illinois statute, as has been
remarked by an eminent judge, [
Footnote 9] it is in the nature of mesne process. The
statute requires that a copy of the distress warrant be immediately
filed in court, the party against whom it issues summoned, the
amount due from him ascertained and entered upon the records of the
court. It is then made the duty of the court to certify to the
officer making the levy, the amount of the debt, and this
certificate is his authority to make the sale, which certificate,
with the proceedings endorsed upon it, must be returned into
court.
It will thus be seen that the landlord, after he levies his
warrant, can progress no further until the court has sanctioned the
proceeding. The certificate that is issued, if not final process in
the ordinary sense of the term, resembles it, and the distress
warrant, if not mesne process issuing out of a court, is similar to
it. The effect of the distress warrant is to seize the property and
hold it for the purpose of enforcing the claim of the landlord upon
it, and an ordinary attachment upon mesne process does nothing more
for the general creditor. Both have to be returned into court and
action taken on them before the property can be sold. Each is
process through which a lien is obtained, but by neither can the
lien be made available unless through some final proceeding. There
is therefore sufficient similarity between these processes for the
distress warrant to be treated as a writ in the nature of an
attachment upon mesne process.
But we do not want to rest our decision on this point alone, for
the fourteenth section of the Bankrupt Law is not leveled at the
mode of doing a thing, but at the thing itself. It was the object
of this section to prevent the acquisition of any other liens than
such as existed when the petition in bankruptcy was filed, and any
proceeding by which this is attempted is within the condemnation of
the law.
Judgment affirmed.
[
Footnote 1]
Chapter 60, 1 Gross's Statutes 412.
[
Footnote 2]
Ex Parte Dalby, re Griffiths, 1 Lowell 431;
Winsor,
Assignee of McLellan, 2 Story, 492.
[
Footnote 3]
Stuart v. Hines & Eames, 33 Ia. 60;
Peck v.
Jenness, 7 How. 612;
In re Wynne, 4 B.R.
5;
In re Patterson, id., Supplement 27.
[
Footnote 4]
46 Ill. 291.
[
Footnote 5]
___
id. ___; not reported when this case was
argued.
[
Footnote 6]
1 Gilman, 636.
[
Footnote 7]
36 Ill. 401.
[
Footnote 8]
Supra.
[
Footnote 9]
Drummond, J., In re Joslyn, 2 Bissell 241 -- REP.
