Opinion ID: 249441
Heading Depth: 1
Heading Rank: 3

Heading: Validity of the Landlord's Lien

Text: 18 The Bank argues that the landlord did not have a valid lien on the merchandise inventory because a landlord's lien arises only upon goods distrained, and the goods listed in the notice of distress did not include the merchandise inventory. 19 The requirement that a notice of distress be served upon the tenant is set forth in the Landlord and Tenant Act of 1951, Art. III, Sec. 302, Pa.Stat.Ann., Tit. 68, Sec. 250.302 (Purdon, 1958 Supp.). That section provides that personal property upon the leased premises is subject to distress for rent due, and requires the following notice of distress: Notice in writing of such distress, stating the cause of such taking, specifying the date of levy and the personal property distrained sufficiently to inform the tenant or owner what personal property is distrained and the amount of rent in arrears, shall be given, within five days after making the distress, to the tenant and any other owner known to the landlord   . (Emphasis supplied.) 20 Whenever goods upon which there is a distress for rent are sold by a receiver or trustee in bankruptcy the landlord acquires a lien on the proceeds of the sale of such goods. 12 Therefore, the landlord in this case had a lien upon the fund created by the sale of only those goods upon which there was a distress. 21 The notice of distress in this case specified items of office furnishings together with 300 dresses as the property distrained. At the end of this handwritten list of items is printed the phrase together with all and singular the goods and chattels on the premises sufficient to pay the rent and costs. The notice further specified the rent due and owing as $55,183.62. 22 The Bank contends that because merchandise inventories were not specifically mentioned in the list of items distrained in the notice, the inventories cannot properly be regarded as part of the goods which were distrained. This argument would merit more consideration if the Bank had acted, or failed to act, in reliance upon the notice, and had been damaged thereby. But the Bank's conduct with respect to the merchandise inventory was never affected by anything in the notice. Furthermore, anyone reading the notice in order to determine what property was subject to the landlord's distress would have been fairly apprised, both from the catch-all phrase printed at the end of the list of the items distrained, and from the amount of rent claimed as due, of the fact that all personal property on the premises was included. 23 We hold that the landlord had the right to distrain all of the personal property on the premises, including the merchandise inventory; that the landlord did restrain all such property; and that the notice of distraint gave adequate warning to anyone interested that all property on the premises was subject to the landlord's distraint. 24 The next contention of the Bank is that when it caused to issue a Writ of Replevin With Bond, the landlord's rights in the inventory were thereby annulled. The Bank bases this conclusion on a line of Pennsylvania cases 13 which hold that once property, upon which there was a warrant of distress, has been replevied, the landlord must rely on the replevin bond for satisfaction of his claim for rent. Therefore, argues the Bank, the landlord in this case lost its lien upon the inventories when the Writ of Replevin was issued. 25 But the landlord was never able to look to the replevin bond for satisfaction of its claim for rent. A replevin bond is designed to protect a party interested in the property replevied against any loss which might be caused by the conduct of the party who has gained possession of this property, pending the outcome of the action of replevin. The Bank here never gained possession of the inventory, and so there was no need to protect the landlord's interest in the inventory by way of a replevin bond. The landlord, therefore, did not lose its lien on the inventory when the Bank instituted the action of replevin. 26 The last argument made by the Bank to show that the landlord did not have a valid lien is based entirely on the case of In re Mount Holly Paper Co., 3 Cir., 1940, 110 F.2d 220. 14 The Mount Holly case 15 is easily distinguishable from the case at bar because it was decided under sections of the Federal Bankruptcy Act which are no longer in force. 16 27 In conclusion, we hold that the Dickinson Realty Company, landlord, had a lien for $1,054.11 on the proceeds of the sale of all the assets of the Bankrupt, including the merchandise inventory, which lien was neither annulled by the issuance of the Writ of Replevin nor forfeited by the landlord's distraint.