106 Va. 327 | Va. | 1907
delivered the opinion of the Court.
The William R. Trigg Company, a corporation organized ■■under the laws of Virginia for the purpose of constructing, building and equipping ships, boats and vessels, on June 1, 1901, executed a deed of trust to the Commercial Trust Company of Philadelphia, as trustee, covering its plant' and including all its machinery, fixtures and tools, together with all corporate rights, privileges and franchises, to secure the payment of •certain bonds and coupons, amounting to . $1,000,000, bearing five per cent, interest; and on June 14, 1902, another deed of trust was executed by the Trigg Company to the Richmond 'Trust and Safe Deposit Company, as trustee, to secure a further issue of bonds amounting to $1,000,000. It contracted also large debts to its employees and for supplies and material; and having become greatly embarrassed, Hawes and Company, in December, 1902, filed their bill setting forth its default in the payment of interest upon the bonds secured by deed of trust, .averring its heavy indebtedness to banks and individuals upon promisory notes and open accounts, its total insolvency, and praying for the appointment of a receiver to take charge of its assets and to furnish certain uncompleted contracts theretofore •entered into by it.
The answer of the company admits its insolvency and con•sents to the appointment of a receiver; and a decree was entered ■referring the cause to a commissioner to state an account, showing the property of the company and its value, the debts due by it, the liens and their priorities, and other matters which need not now be adverted to.
The commissioner returned a report, which was excepted to by the First Rational Bank of Richmond, Va., and by the Savings Bank of Richmond—
First. Because the report sustains the constitutionality of the labor and supply lien law of Virginia, whereas the said law is in conflict with the Fourteenth Amendment of the constitution
Second. Because it reports in favor of a large class of alleged supply lien claimants, whereas the property furnished by them to the defendant company, was not in its nature supplies necessary to the operation of the plant, but raw material which was to be worked up'into finished product for the market.
Third. Because the said commissioner holds that the defendant William B. Trigg Company is a manufacturing company, such as the statute in question contemplates, whereas he should have held that said statute did not extend to such a company.
Fourth. Because the commissioner holds that a supply or labor lien is good if filed within ninety days after the last item of claimant’s bill becomes due and payable, without any regard to the connection between said items, whereas such bill must be an open or running account, forming one continuous course of dealing in order to bring it within the purview of said statute. This exception is directed particularly against the claim of Charles Este and others on page 63, ei seq.
Fifth. Because the commissioner holds that the taking of a note by the claimant does not affect his right to the supply or labor lien. Indeed, he seems to be inconsistent when he so de: cides and then says that the lien for labor or supplies cannot be extended by special credit nor by the acceptance of a note for the amount of the bill, or any part thereof.
Sixth. Because the commissioner appears to have adopted as the law of this case some agreement of counsel whereby the proceeds of the furniture and furnishings reported by the receiver are to be equally divided between the bondholders and the supply lien creditors.
Seventh. Because the commissioner allows the claim of J. C. Cheatwqod, who furnished teams and .men to the defendant Trigg Company, whereas the statute does not contemplate a lien in favor .of such claimant. And this exception is intended to apply likewise to the claims of John Tyler and Company and
Eighth. Because the commissioner has allowed the claim of Warner Moore and Company as a mechanic’s lien, after rejecting same as a supply lien. This cannot he done, and the claim in question should have been wholly disallowed. Same exception as to claim of Baldwin & Brown and others. Because the commissioner has allowed the claim of the W. B. Bradley Construction Company as a supply lien, whereas said claim is not entitled to such position, as well for reasons applying to other cases already mentioned as because an account for furnishing and driving piles does not come within the statute.
Hinth. Because the commissioner reports in the alternative as to the meaning of the language “property forming part of its plant,” whereas he should have reported the first position as his conclusion, and as embodying the true rule in this case; and this exceptant asks that said report he amended accordingly.
Tenth. Because the commissioner allows the claim of Joseph Bryan, trustee, for $20,038.75, on the grounds set out in the exceptions taken by Charles Este and C. C. Knight and Company.
Eleventh. This exceptant also unites in the exceptions to said report taken by the Standard Oil Company and the Pennsylvania Railroad Company filed in the cause.
On the 23d of May, 1905, the court entered a decree in which it upheld the constitutionality of the labor and supply lien law of-.the state of Virginia, and declared that the William R. Trigg Company is a manufacturing company within the terms and provisions of that statute, and, except- as to certain matters which we shall not now consider, confirmed the report and decreed a sale of the property. On July 12, 1905, the commissioners reported that they had executed the decree of sale, as required, and had .offered the property first in parcels and then as a whole; that for all the machinery included in the buildings and upon the premises, Frank Samuel was the highest bidder,
To this report of sale the First National Bank and the Savings Bank of Richmond excepted, upon the grounds: “First,
that the sale was premature, there having been no such account of liens as the law contemplates; and, second, that the amount offered for this property is grossly inadequate, the real estate being assessed at $61,000 more than the sum reported.”
On June 20, 1905, the court entered a decree overruling the ■ •exceptions and confirming the report of sale; and from that decree the First National Bank and the Savings Bank of Bichmond obtained an appeal, assigning in their petition the following errors:
We do not entertain such views with respect to the statute under consideration.
In Va. Devel. Co. v. Crozer Iron Co., 90 Va. 126, 17 S. E. 806, 44 Am. St. Rep. 893, the question of the constitutionality of section 2486 of the code was considered. Judge Lewis in his opinion considers at length the decisions of the Supreme Court of the United States bearing upon the subject, and quotes from the opinion of Mr. Justice Field, in Mo. Ry. Co. v. Mackey, 127 U. S. 205, 32 L. Ed. 107, 8 Sup. Ct. 1161, as follows: “The objection that the law deprives railroad companies of the equal protection of the laws . . . seems to rest upon the theory that legislation which is special in its character is necessarily within the constitutional inhibition, but nothing can be further from the fact. The greater part of all legislation is special, either in the objects sought to be attained by it, or in the extent of its application. . . . Such legislation does not infringe upon the clause of the Fourteenth Amendment, re
Since that time the statute has been in various particulars amended in the light of experience, but nothing has been added to or taken from it which affects its constitutionality. Almost innumerable cases have arisen since that decision, in which this statute has been resorted to, in both state and federal courts, and rights claimed under it have always been enforced; and the wisdom of its enactment and the beneficence of its operation have been fully vindicated.
In Bristol Iron & Steel Co. v. Thomas, 93 Va. 396, 25 S. E. 110, this court, speaking as to the policy of such laws, quotes from Phillips on Mechanics’ Liens, section 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
It is contended that the William It. Trigg Company is not such a manufacturing company as is contemplated by the supply lien law of this state. By its charter this company is given power to acquire and operate “the works, property, franchise, stock and bonds, rights, privileges and immunities of any individual, firm, or corporation, operating or owning a machine shop, dock or shipyard, or manufacturing railroad or marine equipment, or machinery of any description.” The report of the commissioner states that the Trigg Company owns a large plant composed of various departments and shops, in which many kinds of machinery were used; that there was a machine shop, in which machinery and tools of different sorts were made and fitted for use; a punch shop, in which plates were sheared
The dictionaries define “manufacture” as follows: “To make (wares or other products) by hand, by machinery, or by other agency. To work, as raw or partly wrought materials, into suitable forms for use.” Webster’s Dict. “To make or fashion by working on or combining material; to form or produce by some industrial process; fashion by hand or machinery, especially when done in considerable quantities and regular business. To work or fashion by labor into useful or desirable forms.” Standard Dict. “To make or fabricate anything for use, especially in considerable quantities or numbers, or by the aid of many hands, or by machinery; work materials into the form of.” Century Dict.
In People v. Morgan, 63 N. Y. Supp. 76, 79, the court says: “A boilermaker is a manufacturer, although he purchases the boiler plates rolled into form and purchases also the tubes and
In Commonwealth v. Keystone Bridge Co., 156 Pa. 501, 27 Atl. 1, a bridge company was held to be a manufacturing corporation, the court saying: “It is quite true that in common speech we do not say that a bridge or viaduct, or house, or roof, is manufactured, but built, or erected, or constructed, and it might perhaps be true that a corporation whose only business was the erection of structures after the parts had been fashioned and fitted by others would not be accurately described as engaged in manufacturing. However that may be—and the question is not free from doubt—the ease before us is very different. The defendant is unquestionably a manufacturing company up to the point when the various parts—beams, girders, rods, bolts, and the rest—are ready to be put together in order to form the complete structure for which they were intended. The preparation of these parts from material, cither raw or unfinished, is clearly manufacturing within any accepted definition of the word; and if in all cases the transaction was finished by a sale of the parts to the purchaser who would himself put them together and thus complete the structure for use, the exclusive manufacturing character of the corporation could not be questioned. Is this character destroyed simply because the defendant, after having manufactured the various parts of a contemplated bridge, or viaduct, or turntable, or roof, goes one step further and finishes the structure ? Hpon reason, we think this question ought to be answered in the negative.”
Columbia Iron Works v. National Lead Co., 127 Fed. 99, 64
We think that the facts stated by the commissioner in his report abundantly justify his conclusion that the Trigg Com
In support of another assignment of error, it is claimed that many claimants for supplies furnished have lost their liens by accepting notes in payment of their accounts. As the result of giving a note depends upon the intention with which it was given and received, and may therefore be affected by extraneous evidence, we might decline to express any opinion upon this assignment of error for reasons which will be stated more at large when we come to another class of exceptions. But as the determination of the general principle may be helpful we hold that the mere taking of a note from the owner, the contractor, or some person who is liable for the debt or amount due, does not defeat a mechanic’s lien, or amount to a waiver thereof, in the absence of a showing that the taking of such note was intended as a waiver, or that it was taken as a payment of the account. 20 Amer. & Eng. Enel. Law 498.
Another error assigned is because the court holds that a labor or supply lien is good if filed within ninety days after the last item of the account becomes due and payable, without any regard to the connection between the items, whereas such account must be a running and open account, forming one continuous course of dealing in order to bring it within the purview of the statute.
We think the law on the subject is correctly stated in Frick v. Railroad Co., 86 Fed. 725, 32 C. C. A. 31, where it is said: “Where materials and labor are furnished to a railroad as they are from time to time ordered, and not in fulfillment of a single contract, the limitation within which a lien therefor may be perfected begins to run against each item at the time it is furnished.”
“If the materials were furnished under a single contract, and were in fulfillment thereof, the items of the account would be continuous, and the material man would have ninety days from
With'respect to the other exceptions to the report of the commissioner of accounts, upon which assignments of error in this court are made, we are of opinion that they are not sufficiently definite and certain.
In Wilkes v. Rogers, 6 Johnson’s Hep. 566, it is said that exceptions to reports of masters in chancery are in the nature of special demurrers, and the party objecting must lay his finger on the error, otherwise the part not excepted to will be taken as admitted.
In Story v. Livingston, 13 Peters 359, it is said that exceptions to the report of a master must state, article by article, the parts of the report which are intended to be excepted to; that the exceptions are in the nature of a special demurrer, and the party objecting must point out the error, otherwise the parts not excepted to will be taken as admitted.
In Sands’ Suits in Equity, sections 547, 548, 549 are to the same effect. See also 2 Robinson’s Old Practice, page 383.
In Orr v. Pennington, 93 Va. 268, 24 S. E. 928, speaking of petitions for appeal, it is said: “The petition required is in the nature of a pleading and should state the case which the party applying for the appeal wishes to make in the appellate court. It ought to assign clearly and distinctly all the errors relied on for a reversal of the case so that the opposite party may know what questions are to be raised in the appellate court and not have new questions sprung upon him at or just before the hearing of the cause, when there may not be sufficient time or opportunity for meeting them.”
Barton’s Chy. Pr., at section 201, says that exceptions being in the nature of special demurrers, “the party objecting must
We have spoken somewhat indiscriminately of exceptions to commissioners’ reports and of assignments of error in petitions for appeal. They depend in great degree upon the same principles, and the exception in the trial court is usually the basis for error assigned in the appellate court.
In 2 Cyc. Law & Procedure, page 980, it is said: “An assignment of errors is in the nature of a pleading, and in the court of last resort it performs the same office as a declaration or complaint in a court of original jurisdiction. The object of an assignment of error is to point out the specific errors claimed to have been committed by the court below in order to enable the reviewing court and opposing counsel to see on what points plaintiff’s counsel intends to ask a reversal of the judgment or decree, and to limit discussion to those points.”
The reason for the rule is well stated in Clements v. Hearne, 45 Tex. 415: “To require the appellee or the court to hunt through the record for every conceivable error which the court below may have committed, when none has been pointed out by the party complaining of the judgment, would obviously be unreasonable and oppressive on the party recovering judgment.
There are nearly one hundred claims presented in this record, running through hundreds of printed pages, and it is eminently a case in which counsel, in the exceptions in the court below and the assignments of error in this court, should, in the language of Chancellor Spencer in Wilkes v. Rogers, supra, be required to “lay his finger on the error.”
It is claimed on the part of appellants that the decree of sale was premature, there having been no sufficient account of liens, as the law contemplated.
The decree of sale reserves for future determination “all questions as to the validity or priority of any claim or lien of any party to this cause, so far as such claim or lien exists in relation to any property of the defendant corporation, other than .the real estate conveyed in said two mortgages, and tbe -rights appurtenant thereto, and the personal property forming a part of its plant, but this qualification and reservation shall not impair the conclusive character of this decree as to the amount, character and location of such real estate and the personal property forming a part of the plant of the defendant company, and of the amounts and priorities of the liens subsisting thereon, and the right of the court to decree an immediate sale of the same for the satisfaction of the liens so established. And the court doth further reserve for future consideration and decision all questions as to the fund or funds upon or against which the amounts herein ordered to be paid on account of labor liens and mechanics’ liens established in this cause shall be eventually charged; and all questions as to the rights of the aforesaid
This court has in very many cases held that land should not be decreed to be sold where there appeared to be liens binding upon it until the amount of these liens and their order of priority had been fixed and established. The principle on which these decisions are founded is “that a sale without first removing a cloud from the title and adjusting and settling rights in dispute, and without previously ascertaining and determining the liens and encumbrances, the amounts and priorities, tends to a sacrifice of the property as to creditors by discouraging them from bidding when they probably would have bid for the protection of their own interests if the rights of all parties had been previously ascertained and fixed with reasonable certainty.” It is first to be observed that the rule applies only to the sale of real estate; it has no application to the sale of personal property.
In Cole's Admr. v. McRae, 6 Band. 718, one of the earliest cases upon this subject, the rule is stated and the reason given, viz: that it is premature and erroneous to decree the sale of real estate without first establishing the liens upon it, “because it has a tendency to sacrifice the property by discouraging the creditors from bidding, as they probably would if their right to satisfaction of their debts, etc., had been previously ascertained. Such a decree may be proper as it regards the sale of chattels, because they are perishable, liable to be wasted, and no sacrifice need be apprehended, because they may be sold in detail.”
The underlying reason for the rule thus stated pervades every case upon the subject from that day until the present time.
Bow, in the case before us, the property sold consisted of real estate and personal property so connected and related as to
But there is another view. The rule under consideration is established in order to enable creditors to bid at the sale with an intelligent knowledge of their rights, knowing the amount of their liens and their relation to the liens of others. In this case the two deeds of trust which were the paramount liens upon the property amounted, principal and interest, to rather more than two and a quarter millions of dollars. It is not within the bounds of reason that this property could under any circumstances have' been made to bring enough to satisfy these deeds of trust. Xo subsequent creditor, however eager, would have been guilty of the folly of offering a price sufficient to give him an interest in the proceeds.
But it is said, in answer to this view, that the property sold at a grossly inadequate price; that if the liens had been ascertained it might have brought more, and had it brought more it would have served to diminish, if not to extinguish, the preferred liens, and to lessen the sum upon which the debts represented by those liens would be entitled to claim a pro rata distribution of the general fund in the cause. That on the face of it would be a very contingent and remote advantage. It might safely be deemed to come within the rule “De minimis non curat lex”;
In Pace v. Pace, 95 Va. 792, this court, after reviewing many decisions, said: “There are many cases holding that where a creditor of an insolvent person who is dead, or has made an assignment for the general benefit of creditors, holds collateral security for his debt, and after the death, or the assignment, of his debtor realizes on the collaterals, he may, notwithstanding, prove against the decedent’s estate, or the assigned estate, for the full amount of his debt as it stood at the time of his death, or assignment”; referring to the opinion of Judge Taft in Chemical National Bank v. Armstrong, 59 Fed. 380, 28 L. R. A. 231, where the syllabus dealing with this subject is as follows: “Creditors of an insolvent national bank cannot be required, in proving their claims, to allow credit for any collections made after the date of the declared insolvency from collateral securities held by them.” And in the course of the opinion, Judge Taft, after considering a great number both of English and American cases concludes that the great weight of authority is strongly opposed to the view that a creditor with collateral shall be thereby deprived of the right to prove for his full claim against an insolvent estate.
Such being our view of the law on this point it is obvious that nothing short of a bid sufficient to satisfy both mortgages could have affected the distributive share of the mortgage creditors. The rule under consideration, as stated by Judge Burks, rests upon the probability that creditors will bid for the protection of their own interests. That probability vanishes when confronted with the facts in this case, which establish a probability amount
Upon the whole case we are of opinion that the decree appealed from should he affirmed, and the cause remanded to the lower court for further proceedings in accordance with this opinion.
Affirmed.