In re West Side Paper Co.

• Decision Date: 04 June 1908
• Docket Number: 45.
• Citation: 162 F. 110
• Parties: In re WEST SIDE PAPER CO.
• Court: U.S. Court of Appeals — Third Circuit

162 F. 110

In re WEST SIDE PAPER CO.

No. 45.

United States Court of Appeals, Third Circuit.

June 4, 1908

John G Johnson, for petitioner.

Charles Sinkler, for appellee.

Before MOODY, Circuit Justice, and DALLAS and GRAY, Circuit Judges.

GRAY Circuit Judge.

This is a petition of Francis G. Gallagher, landlord, for review of the decree of the United States District Court for the Eastern District of Pennsylvania, in bankruptcy, affirming the order made by a referee in bankruptcy in a matter as hereinafter stated:

On October 27, 1905, a lease was entered into between the petitioner and a certain McAlpine & Son, of a paper mill in the city of Philadelphia. Though said lease conferred on the lessees no power to assign said lease, or sublet said premises, the said lessees permitted the West Side Paper Company to occupy the premises. To this no assent was given by the lessor. On the 27th day of November, 1906, the petitioner, as landlord, distrained on the goods, chattels and merchandise upon the demised premises for six months' rent in arrear, amounting to $3,000. On the 28th day of November, 1906, the said West Side Paper Company was, upon petition filed the same day, adjudged a bankrupt by the United States District Court for the Eastern District of Pennsylvania, in bankruptcy. Under said adjudication, the following proceedings were had:

Said cause was duly referred to a referee in bankruptcy. On the 30th day of November, 1906, on petition, said referee made an order, restraining the said landlord from further proceedings under his distraint against the property on the premises until further order of the court. Thereafter, the receiver appointed by the district court in said cause sold the goods chattels and merchandise distrained upon by petitioner, landlord as aforesaid, and realized therefrom the net sum of $2,056.68, after deducting expenses of sale.

The petitioner then claimed before the referee that said sum should be paid over to him as the proceeds of the goods on which he had distrained, as aforesaid, and on the 20th day of March, 1907, the referee made an order refusing the claim of said landlord for said sum. On the 25th day of March, 1907, a petition of review of said order was filed in the said District Court in said cause, and on the 10th day of February, 1908, the court entered a decree affirming the order of the referee, whereupon the present petition to this court, for a review of said decree in matter of law, has been filed. The petitioner contends that the court has erred in holding that the distraint upon the goods and merchandise found on the demised premises, having been made within four months of the filing of the petition in bankruptcy, is invalid, by reason of the provisions of section 67f of the bankruptcy act of July 1, 1898 (chapter 541, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3450)). That section provides as follows:

'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 part of the estate of the bankrupt,' etc.

The question thus raised has been ably argued by the counsel for the trustee, in support of the finding of the referee and the decree of the court below affirming the same. We think, however, there was error therein.

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 bailiff of the landlord than if he were a private person. The state law provides that, after the goods have been distrained, or levied upon, unless the same be replevied by the plaintiff within five days, the landlord may apply to the sheriff of the 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. In other respects, the right of the landlord remains for the most part as it was at common law. The right to distrain or levy upon all the goods upon the demised premises, whether those of the tenant or of a stranger, arises the moment the relation of landlord and tenant is established. It is a right in the nature of a lien, rather than a lien, until the goods are actually distrained under a landlord's warrant. It was originally in the nature of a property right in the reditus or return from the land, reserved to the landlord.

No suit or proceeding at law, whether in personam or in rem, in the proper...