## Facts

- Congressional Motors, Inc. leased commercial premises to Peter Palmer, Ltd., an automobile dealer.
- Palmer fell behind on rent in early December 1965.
- Congressional obtained a warrant of distraint and directed the sheriff to levy on seven automobiles owned by Palmer and located on the leased premises.
- Universal C.I.T. Credit Corporation claimed a security interest in the same automobiles based on its financing relationship with Palmer and asserted priority over the landlord’s claim.
- The sheriff declined to proceed with a distress sale due to Universal’s asserted lien.
- Congressional sought mandamus compelling the sheriff to sell the automobiles under the distraint warrant.
- Universal intervened, arguing its security interest had priority under the UCC and Maryland law.
- The levy occurred in December 1965, shortly before statutory amendments effective January 1, 1966 that would have altered priority rules in favor of certain secured creditors.

## Issues

1. Whether, under Maryland distress law in effect in December 1965, a landlord’s distress for rent had priority over a secured creditor’s security interest in tenant goods located on the leased premises.
2. Whether statutory amendments effective January 1, 1966 could be applied to a distress levy made in December 1965 to alter priority.

## Decision

- The Court of Appeals affirmed the judgment for the landlord.
- The court held that, under pre-1966 Maryland law, the landlord’s distress right constituted a superior “quasi-lien” on the tenant’s goods on the premises for unpaid rent.
- The court held the January 1, 1966 amendments were prospective and did not apply to a levy made in December 1965.
- Because the landlord’s claim was prior, mandamus properly compelled the sheriff to proceed with the distress sale.

## Legal Principles

- Under Maryland law in effect before January 1, 1966, a landlord had a “quasi-lien” for unpaid rent on tenant goods subject to distress while on the demised premises, realized through levy under a warrant of distraint.
- Absent statutory displacement, the landlord’s distress lien for rent had priority over competing chattel claims and security interests in the tenant’s goods located on the premises.
- Statutory changes affecting substantive priority rights are applied prospectively unless the legislature clearly provides otherwise; later amendments do not retroactively impair rights that accrued under earlier law.
- When a landlord’s distress lien is prior as a matter of law, a sheriff may be compelled by mandamus to carry out the distress sale despite a secured creditor’s contrary priority claim.

## Conclusion

The court held that a landlord’s pre-1966 distress lien for unpaid rent had priority over a secured creditor’s security interest in tenant automobiles on the leased premises, and that statutory amendments effective in 1966 could not be applied retroactively to defeat the landlord’s accrued priority.


Universal C.I.T. Credit Corp. v. Congressional Motors, Inc., 246 Md. 380, 228 A.2d 463 (Md. 1967)