Summary
In Wood v. Carriage Co., 49 N.J.Eq. 433, 24 Atl. 228, the statutory lien of the landlord for one year's rent was enforced by directing the receiver to pay it, although no distress had been made.
Summary of this case from Duryee v. U.S. Credit-Sys. Co.Opinion
05-18-1892
WOOD v. MCCARDEL, WEST & FARREL CARRIAGE CO.
Howell & Bro., for petitioner. W. D. Holt, for chattel mortgagee. G. D. W. Vroom, for general creditors.
(Syllabus by the Court.)
Petition of George Wood against the McCardel, West & Farrel Carriage Company, an insolvent corporation, asking that its receiver be ordered to pay rent due petitioner.
Howell & Bro., for petitioner.
W. D. Holt, for chattel mortgagee. G. D. W. Vroom, for general creditors.
BIRD, V. C. The defendant is an insolvent corporation. The petitioner is the owner of the premises in which said corporation carried on its business. He files his petition, and asks for an order upon the receiver to pay the amount of rent due at the time of the filing of the bill in this cause. Such order is resisted by the general creditors upon the ground that the landlord, in such case, has no lien upon the goods and chattels of the defendant company which were upon the premises at the time of the declaration of insolvency. It is urged that the corporation act under which these proceedings are instituted, in giving preferences, and in directing distribution of the proceeds of sales, gives no preference whatsoever to the landlord. The petitioner rests his case upon the fourth section of the act respecting landlords and tenants, (Revision, p. 570,) which provides that no goods and chattels being upon any lands or tenements which are or shall be leased, shall be liable to be taken by virtue of any execution, attachment, or other process unless the party at whose suit the said execution or other process is issued out shall, before the removal of such goods from off the said premises, pay to the landlord all rent due for said premises, not exceeding one year's rent. There can be no room to doubt but that the order of this court, directing the receiver to take possession of the goods and chattels of the defendant company, is included in the phrase "other process." An execution commands the officer to seize and sell the goods of a defendant. The only difference is in form and name. The result in both cases is precisely the same. Upon the argument it was considered important that the landlord had not secured a lien, or taken any steps to that end. This, I think, is not essential to his protection, in cases where the tenant has not disposed of his goods, or, as between himself and another, created a valid lien. While the statute leaves the tenant at perfect liberty to dispose of his goods and chattels absolutely, or to create liens thereupon, yet as between landlord and tenant, and other creditors of the tenant, when such creditors come with any process whatsoever, the statute is his shield. It absolutely forbids the removal of his goods until the rent then due, not exceeding one year, is paid. Although the landlord has no lien by which he can enforce the payment of rent, but must institute proceedings in his own behalf in order to accomplish that, the law preserves to him, as against every other process, the retention of the goods upon the premises until his rent be paid. I think Woodside v. Adams, 40 N. J. Law, 417, clearly sustains this view. Nor is it in conflict with the case of Morgan v. Campbell, 22 Wall. 381. Besides, so far as I can learn, the question has never before been raised since the passage of the present act respecting corporations, in 1875; and I am assured that it has been the practice of the court since then to recognize the claim of the landlord for preference under the fourth section of the act respecting landlords and tenants.
After the written acknowledgments of the right of the landlord by the members of the defendant company, under their oath, I think it is impossible for them to successfully oppose the prayer of the petitioner. When they executed the papers referred to, they had had the benefit of counsel of long experience. They say they were deceived, and did not comprehend the extent of the rights which they had surrendered. They certainly were not deceived by the landlord, nor by any one interested in the landlord's affairs; for neither the landlord, nor any one interested in his behalf, was present at any time when they and their counsel were considering the import of the papers signed Nor does it appear that any one made any representation or in any manner communicated any statement to them respecting the matter in controversy. I will not say that it is impossible for a court, under such circumstances, to come to the conclusion that a case of deception may not be made out, but there seems to be no room whatever for the resistance made to the landlord's claim in this case upon the part of the members who compose the defendant company. I cannot even believe that persons of their intelligence were self-deceived. The petitioner is entitled to the relief prayed for.