Elmira Corporation v. Bulman

• Decision Date: 23 October 1957
• Docket Number: No. 2016.,2016.
• Parties: The ELMIRA CORPORATION, a corporation, Appellant, v. Joseph D. BULMAN and Sidney M. Goldstein, Trustees under a chattel deed of trust, Appellees.
• Court: D.C. Court of Appeals

135 A.2d 645

The ELMIRA CORPORATION, a corporation, Appellant, v. Joseph D. BULMAN and Sidney M. Goldstein, Trustees under a chattel deed of trust, Appellees.

No. 2016.

Municipal Court of Appeals for the District of Columbia.

Argued June 24, 1957.

Decided October 23, 1957.

Scott P. Crampton, Washington, D. C., for appellant.

Martin J. Kirsch, Washington, D. C., for appellees.

Before ROVER, Chief Judge, and HOOD, and QUINN, Associate Judges.

ROVER, Chief Judge.

In this controversy a landlord asserting his statutory lien for rent, and the trustees under a chattel deed of trust, each claim the right to prior payment from the proceeds of a sale of the tenant's personal property.

Appellant landlord leased to one Snyder for the purpose of conducting a grocery business certain premises in the District of Columbia for a period of ten years. The terms of the lease, which commenced on October 29, 1945, provided for a base rent of $350 per month, plus a percentage on the gross volume of business done in excess of $5,000 per week. A sum of $1,050 was paid upon signing the rental agreement and credited as follows: $350 for the first month's rent, $350 for the second month, and $350 for the last month covered in the lease. In a separate provision of the lease the lessee agreed to pay utility bills, the water rent charged by the District, and the costs for trash collection.

On November 12, 1954, Snyder and his wife executed a chattel deed of trust covering equipment on the premises to secure an indebtedness on open trade accounts under which the appellees were named trustees. Thereafter Snyder defaulted in payments on the notes secured by the deed of trust and failed to pay the rent and water charges for a period of two months. The following courses of action were then pursued by the parties here involved.

On November 10, 1955, appellant brought a landlord and tenant suit against Snyder for possession; no claim for rent was made. Prior to the judgment rendered in its favor, appellant notified the appellees' attorney of its landlord's lien for rent owed; however, two days later, on November 23, 1955, the appellees foreclosed on the property.

On November 28, 1955, Snyder filed a petition in bankruptcy in which he declared the sum of $730 owed to appellant for rent. One month later, on December 29, 1955, appellant filed a proof of claim which was subsequently amended to include the rent and water charges in the sum of $1,069 in the bankruptcy proceedings.

The only assets of Snyder sufficient to satisfy either claim of the parties before us are those funds received by the trustees from the foreclosure sale prior to the bankruptcy proceedings. Any previous adjudication of the right to prior payment out of this sum was precluded by a stipulation entered into between the trustee in bankruptcy and the trustees under the deed of trust to the effect that "* * * the summary jurisdiction of the Bankruptcy Court does not extend to and is not de terminative of any rights or claims by the landlord or others to the funds and proceeds of the aforesaid auction sale * * *." This stipulation was approved by the referee in bankruptcy, and in referring to the claim of the landlord in his report he stated it had not submitted "* * * the resolution thereof to the jurisdiction of this Court as it is not properly cognizable herein."

The question of the respective rights of the parties to the limited funds is squarely before us in this action by the landlord to recover rent and water charges from the trustees. Pending our determination of the controversy, the parties have agreed that no disbursement of the funds in dispute will be made. In the trial court the trustees' motion for summary judgment was denied, and after trial on the merits judgment was rendered for them.

The landlord first contends the trial judge failed to follow the law of the case in granting judgment for the trustees on the same material facts as those before a different judge who had previously denied their motion for summary judgment. When a motion for summary judgment is denied, the ruling establishes that there is an undisposed of fact issue requiring trial. Turek v. Yellow Cab Co. of D. C., D.C. Mun.App., 131 A.2d 923. Such a ruling cannot be said to be a decision on the issue and is interlocutory in character, the proceeding being in fieri upon the denial of summary judgment.¹ This jurisdiction has frequently held that a final judgment is necessary to sustain the application of the law of the case rule.² The landlord's argument must therefore fail for two reasons: (1) the trial judge, in determining the case on the merits, did not overrule anything actually decided by the denial of the summary judgment; and (2) the ruling denying the motion did not constitute a final order. The only remaining question is whether the trial judge decided the case correctly on the merits.

The common-law remedy of distress was abolished in the District in 1867, and in its place Congress enacted the statutory lien as stated in Code 1951, § 45-915:

"The landlord shall have a tacit lien for his rent upon such of the tenant's personal chattels, on the premises, as are subject to execution for debt, to commence with the tenancy and continue for three months after the rent is due and until the termination of any action for such rent brought within said three months."

The methods of enforcing the lien are set forth in Code 1951, § 45-916:

"The said lien may be enforced —

"First. By attachment, to be issued upon affidavit that the rent is due and unpaid; or, if it be not due, that the defendant is about to remove or sell some part of said chattels.

"Second. By judgment against the tenant and execution, to be levied on said chattels, or any of them, in whosesoever hands they may be found.

"Third. By action against any purchaser of said chattels, with notice of the lien, in which action the plaintiff may have judgment for the value of the chattels purchased by the defendant not exceeding the rent in arrear."

The nature of the statutory lien is perhaps best stated in the early case of Bryan v. Sanderson, 10 D.C. 431, 3 Mac-Arthur 431, in which the court said:

"`* * * It will be observed that the statutory lien differs in a material respect from its common-law prototype, the right to destrain. Under the latter, unless distraint were actually made, the landlord acquired no lien; his was an inchoate right to a lien to be perfected by distress, rather than a lien in itself. But the lien of the statute exists independently of the prescribed methods of enforcing it. Indeed, commencing with the tenancy, it exists before those methods have been or can be resorted to — i. e., before any rent has accrued. "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 the means of enforcing it." In other words, if the lien is given by the statute, proceedings are not necessary to fix the status of the property. [Citing Morgan v. Campbell, 22 Wall. 381, 22 L.Ed. 796, and other cases.] * * *'"

Summed up, the statutory lien without possession parallels the common-law lien accompanied by possession. Fowler v. Rapley, 15 Wall. 328, 82 U.S. 328, 21 L.Ed. 35; Beall v. White, 94 U.S. 382, 24 L.Ed. 173. By virtue of the statute, the lien attaches the moment chattels are brought on the premises and exists independently of the means of enforcement authorized by the statute. Moses v. Labofish, 76 U.S. App.D.C. 401, 132 F.2d 16; see also Spilman v. Geiger, 61 App.D.C. 164, 58 F.2d 890. In view of these decisions, the lien under Section 915 of Title 45 stands as a perfected lien.

As between the competing liens of a landlord and a deed of trust, the Supreme Court ruling on the statute here involved in Webb v. Sharp, 13 Wall. 14, 80 U.S. 14, 20 L.Ed. 478, said:

"The deed of trust was, in effect and purpose, nothing but a mortgage. It...