93 Va. 396 | Va. | 1896
delivered the opinion of the court.
James P. Withrow entered into a contract with the Bristol Iron and Steel Company for the construction of a complete blast furnace plant in accordance with certain plans and specifications. When the work had been partially completed, Withrow becoming embarrassed, made a general assignment for the benefit of his creditors, including therein the contract with the Steel and Iron Company, and whatever might be due him from the said company for work performed and supplies and material already furnished. After the assignment, Thomas, the assignee, went on with the assent of the Bristol Iron and Steel Company to complete the work, and in order to secure what was due him filed a mechanics’ lien, complying with all the provisions of the statute law applicable in such cases. In due time he brought a suit in the Hustings Court of the city of Bristol, which was afterwards transferred to.the Hustings Court of Radford city, to enforce the lien thus acquired. Numerous other lien creditors of the Bristol Iron and Steel Company filed bills also to enforce their demand. The defendant company answered, the several suits were brought on to be heard together, and a decree was entered for an account of all liens upon the property and franchises of the defendant corporation. Upon the coming in of the report of the commissioner, exceptions were taken by the
The first error assigned is that the court failed to pass upon the exceptions to the first report of Commissioner Honaker. None of the exceptions to either the first or second report of Commissioner Honaker on the part of the defendant corporation are well taken, and as none of them present any question of interest there is no occasion to discuss them at length. Had the court below considered them they should have been overruled, and its failure to pass upon them is harmless error. •
The next assignment of error is to the action of the court in decreeing the sale of petitioner’s real estate in default of the payment of the unsecured debts of the Company.
It is contended that the real estate of a corporation, like that of a natural person, may be subjected to sale for the enforcement of liens thereon but cannot be sold in order to satisfy the claims of creditors who have not acquired liens. The petitioner, however, admits that the affairs of an insol
The record before us omits a very large part of the pleadings and proofs constituting the several records in the Hustings Court of the city of Radford, but it may be safely assumed from the petition of the appellants, just cited, that the averments of Cadwallader & Co. in their petition were ample to call into exercise the jurisdiction of the court and require it to take control of the property of the defendant •corporation, and to administer it as a trust fund for the benefit of all its creditors.
To such a suit the stockholders are not necessary parties. An incorporated company is an entity wholly separate and ■distinct from the individual stockholders who compose it. There are cases in which it is proper to make shareholders parties, but in a case such as the one before us it was neither necessary nor proper to implead them. The only object •sought in the pleadings, so far as can be discovered from the incomplete record before us, was to subject the corporate
We do not perceive that in the decree complained of there-is any reversible error to the prejudice of the appellant, the-Bristol Iron and Steel Company.
After the appeal had been granted upon the petition of the Bristol Iron and Steel Company the Flat Top Coal and Coke Association presented its petition praying for an appeal and supersedeas to the decree of the Hustings Court of' the city of Radford, assigning as error to its prejudice, that-priority was given to the lien of Alexander Thomas, assigneeof James P. Withrow.
Thomas, as we have seen, claims as the assignee of With-row, who, having entered into a contract with the defendant corporation for the construction of a blast furnace, assigned his-contract and what was.due under it to Thomas, who proceeded to carry it out, and to perfect the lien. It is not denied thatWithrow had a contract for the work; that it was properly the subject of a mechanics’ lien under section 2475 of the-Code of Virginia; that he had done work and furnished material in accordance with it; and that if he had himself completed the structure he would have been entitled to the benefit of the lien, but it is claimed that this is a personal right, and that the inchoate lien, created by section 2475, cannot-be assigned so as to empower the assignee to perfect the lien, as provided in section 2476. It is admitted that if the work had been completed and the lien for its security had been, perfected, the perfected lien could have been assigned so as-to vest the assignee with all the rights of the assignor.
The object of the law in creating liens in favor of mechanics was to secure to a deserving class of men the fruits of their labor. The statute upon the subject is remedial in its nature, and while courts require a strict compliance with.
There seems to be conflict in the decisions as to what shall be the policy of the law applicable to these liens.
As is said in Phillips on Mechanics’ Liens, sec. 16: “ Adjudications will be found declaring it to be against the genius of government to make distinctions between its citizens, or to prefer one class by granting them special privileges in derogation of the rules of common law, and consequently these laws should be construed strictly; there are others equally numerous to the effect that correct policy dictates the fostering of this remedy for purposes of improvement of the country, and the protection of often unlettered men, and that a free interpretation should be given them in favor of the mechanic. It will be found, however, on a comparative examination, that courts have, with scarcely an exception, adopted either one or the other line of decisions, according as the statutes of the particular State were themselves equitable and just. If they bore with unnecessary severity upon others in favor of the mechanic, and palpable injustice resulted, they have uniformly declared they should not be aided by construction, and a strict interpretation should be placed upon the laws. If, on the other hand, they have secured the laborer the result of his toil and capital, with a due regard to the rights of all, constant expressions are to be found in the reported cases, declaring they should be favored.”
That the contract under which the work is done and the right to demand the sums due upon it may be assigned, admits of no question; and that the assignment of a debt or contract ordinarily carries with it every lien which exists for its security will not be denied. That to deny to the holder of the inchoate mechanics’ lien the right to assign the lien given by section 2475, would greatly diminish the value of the benefit conferred upon those enumerated in that section, is obvious. It must frequently- happen that the artisan, builder, mechanic, or lumber dealer, dies before the completion of the work upon which his labor has been performed, or to the construction of which he has furnished materials, or that from some other cause he is, without fault upon his part, unable to complete that which he has begun, and entitle himself to perfect the imperfect lien by doing what is prescribed in the succeeding section. To hold that he cannot impart to his assignee the faculty and power of perfecting the lien, would be, in all such cases, to rob him of the fruit of his toil by depriving him of the only mode by which it could be secured. If he is incapable of conferring upon another, by his voluntary act of assignment, the power of perfecting the inchoate lien, the executor and administrator, in the event of his death, would be equally impotent.
In the case before us the assignment was for the benefit of creditors. The assignee is clothed with the duty of collecting the assets committed to his care, and applying them in accordance with the terms, of his trust. The value of this claim is wholly dependent upon the lien by which it is
It is admitted in argument, and has been decided by this court, that the lien when perfected follows the assignment of the debt which it secures. See Iaege v. Boissieux, 15 Gratt. 83.
As a general rule, under our law any contractual right is assignable, and the assignment carries with it all liens given for its security. As a rule a man may authorize another to do for him whatever he himself may lawfully do. Sections 2475 and 2476 are silent upon the right to make an assignment. The exact question is, for the first time, presented to this court for decision, and we feel free to adopt that construction which commends itself to us as reasonable and just.
We are of opinion that Thomas, as assignee of James P. Withrow, was entitled to perfect the inchoate lien which existed for the benefit of his assignor; and that there is no error in the decree complained of, which must be affirmed.
Affirmed.