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In re Uni-Lab Inc.

September 6, 1960

IN RE UNI-LAB, INC., BANKRUPT, YORK & FOSTER, INC., APPELLANT.


Author: Kalodner

Before BIGGS, Chief Judge and KALODNER and FORMAN, Circuit Judges.

KALODNER, Circuit Judge.

This is an appeal from an Order in bankruptcy in which the District Court affirmed the finding of the Referee that the bankrupt's landlord, York & Foster, Inc. was not entitled to lien status with respect to its claim for rent.

The District Court's affirmance was premised on its holding that under Pennsylvania law a landlord has no valid lien prior to distraint and in the instant case it was undisputed that the landlord had not distrained prior to bankruptcy.

On this appeal the landlord contends that under Pennsylvania law a landlord has a lien on distrainable goods on his premises without distraint.

The facts are set forth in detail in the District Court's opinion*fn1 and it would serve no useful purpose to restate them here. The critical fact, as above stated, is that the landlord had not distrained prior to bankruptcy.

Prior decisions of this Court are dispositive of this appeal.

In In re Einhorn, 1959, 272 F.2d 434, at page 439, we said:

"* * * 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." (Emphasis supplied.)

The issue here was considered by us in Shalet v. Klauder, 1929, 34 F.2d 594, at page 595, and in holding that in Pennsylvania a landlord does not have a lien for rent in the absence of a levy or distraint, we said:

"This is a Pennsylvania case, and the decision depends upon the exercise of the landlord's right to distrain on goods for rent under the law of that commonwealth. In re Floyd-Scott Co. of Boston, D.C., 224 F. 987; Hoyt v. Zibell, 7 Cir., 259 F. 186; In re Bonk, D.C., 268 F. 1012. His right to distrain there is an inchoate, common-law right. '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.' In re West Side Paper Co., 3 Cir., 162 F. 110, 15 Ann. Cas. 384. At common law the landlord could distrain upon any goods found on the premises at the time of the taking, but he had no lien on them until he had made his right active by seizure. However, 'if the lien is given by statute, proceedings are not necessary 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.' Morgan v. Campbell, 22 Wall. (89 U.S.) 381, 390, 22 L. Ed. 796. In Pennsylvania, a lien is not given by statute. In order that the right may ripen into a lien, distraint must be made." (Emphasis supplied.)

In Hay v. Patrick, 3 Cir., 1935, 79 F.2d 407, we reiterated our holding of Shalet v. Klauder, supra, stating (at page 407):

"We have construed the Pennsylvania authorities as holding that a landlord has no lien until he has made a levy. Shalet v. Klauder, 34 F.2d 594."

In In re West Side Paper Co., 1908, 162 F. 110, cited in Shalet v. Klauder, supra, we said ...


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