218 F. 951 | N.D.W. Va. | 1915
The bankrupt is a corporation, and was engaged in the manufacture of woolen fabrics at Martinsburg, this dis-, trict. The petitioners compose a partnership doing business in Philadelphia, Pennsylvania. The corporation has been adjudged an involuntary bankrupt, and petitioners have sought to file a claim for $7,605.09 as a preferred one, under and by virtue of section 7, c. 75 (section 3848, Hogg’s Code 1913) of the Code of West Virginia, which provides:
“Every workman, laborer, or other person who shall do or perform any work or labor, by virtue of - any contract for any incorporated company doing business in this State, shall have a lien for the value of such work, or labor upon all the real estate and personal property of said company, and such*952 lien shall have priority over any lien created by deed or otherwise .on such real estate or personal property, subsequent to the time when the said labor was performed, ¡mt there shall be no priority of lien as between- the parties claiming under the provisions of this section. Provided, that no lien shall be created under this section for labor performed more than nine months before such lien was recorded.”
Section 8 (3849, Hogg’s Code) provides that such lien shall be discharged unless the person desiring to avail himself thereof shall file with the clerk of the county court of the county-in which the corporation has its principal office, works, or estate a sworn statement of the true amount due for such labor. It is admitted that petitioners’ claim is based upon a contract for commissions due them as selling agents of the bankrupt of its manufactured products.
Under section 8 petitioners have undertaken to perfect a “lien” for their claim by filing the required account with the county clerk, after petition in bankruptcy had been filed. This claim for “lien” priority was vigorously contested by numerous other creditors before the referee, who decided that petitioners were not entitled to priority under this state statute for the amount of their debt, but under section 64b, cl. 4, of the Bankruptcy Act they were entitled to priority for $300, part thereof, and were entitled to file claim for the balance as an unsecured debt. To revise this ruling this petition has been presented.
Similar statutes to this one of West Virginia have been enacted by many of the states. Inasmuch as its court of last resort has not so far construed the statute of this state to the extent of determining the answer to be given to the first question,' we may well be guided by the decisions of other courts construing similar statutes. The Supreme Court of Appeals of this state has determined only three cases involving in any way this statute: Richardson v. Norfolk & W. Ry. Co., 37 W. Va. 641, 17 S. E. 195, Grant v. Cumberland Valley Cement Co., 58 W. Va. 162, 52 S. E. 36, and Griffith v. Blackwater Boom & Lumber Co. (first decision) 46 W. Va. 57, 33 S. E. 125 (second decision) 55 W. Va. 604, 48 S. E. 442, 69 L. R. A. 124. In the Richardson Case, it was held that a subcontractor was not within the terms of the statute because no direct contractual relation existed between him and the railroad company for whom the work was done. In the Grant
“As this question was adjudicated on the former appeal, the court below could not, nor can this court now, disturb that conclusion and determination. * * * That decision may be wrong, though we do not say it is; but it is and. must remain the law of this ease, however erroneous it may be.”
And upon petition for rehearing it again answered this objection in the same way. The limit therefore, that the ruling in this case goes is that where a corporation has become insolvent, and been put in the hands of a receiver, and its contracts thereby abrogated, a contractee logger, entitled to compensation for work and labor done, comes within the terms of this statute and is entitled to preferencfe. The difference between a logger performing the initial work of severing the timber, cutting it into required log lengths, and transporting these logs to the mill, there to be converted into the finished lumber product, and that of a sales agent, receiving the finished product from the mill and selling it, or negotiating its sale, to be delivered direct from the mill, for a fixed commission upon the quantity and value sold, is entirely obvious.
1 was one of counsel for Thompson in this Griffith Case, and never have felt satisfied of the soundness of this ruling, either as to the doctrine of the legal abrogation of the contracts of insolvent corporations, or that Thompson, as a logging contractor, was entitled to a preference under this statute. On the contrary, I have always believed the original decree, ascertaining his damages because of the breach of the contract and decreeing such damages to be an unsecured claim
It must be admitted, I think, that if the contention of the petitioners here is to be sustained, the terms of this statute must be construed to be broad enough to secure almost every one that may perform any service for a corporation, such as its officers, directors, attorneys, physicians, chemists, and civil engineers. In other words, the words used, “work and labor,” must be construed to mean “service.” Without extending discussion upon this proposition, it will be sufficient for me to say that I do not believe the statute capable of such broad construction, but, on the contrary, that its true intent and meaning is to secure only those engaged in the manual labor involved in the manufacture, mining, or construction of the product or work it is undertaking. In this view, while there is some conflict when it comes to drawing the line in particular instances and classifications, I conceive myself to be sustained b^ the great weight of authority derived from constructions of similar statutes in other states.
In Latta v. Lonsdale, 107 Fed. 585, 47 C. C. A. 1, 52 L. R. A. 479, an attorney employed on yearly salary was excluded. So was an insurance adjuster in Boston & A. R. Co. v. Mercantile Trust & Deposit Co., 82 Md. 535, 34 Atl. 778, 38 L. R. A. 97; a lumber inspector in In re Sayles, 92 Mich. 354, 52 N. W. 637; a store manager in Lawton v. Richardson, 118 Mich. 669, 77 N. W. 265; draftsmen in In re Stryker, 158 N. Y. 526, 53 N. E. 525, 70 Am. St. Rep. 489; bookkeepers in the same case, but per contra in Hanner v. Brewing Co., 8 Ohio S. & C. P. Dec. 399, and Consolidated Coal Co. v. Keystone Chemical Co., 54 N. J. Eq. 309, 35 Atl. 157; laundrymen in Steininger v. Butler, 17 Pa. Co. Ct. R. 97; a chemist in Cullum v. Iron Co., 5 Pa. Dist. R. 622; and an independent contractor in Vane v. Newcombe, 132 U. S. 220, 10 Sup. Ct. 60, 33 L. Ed. 310. And until the amendment of 1906, expressly naming them, traveling salesmen or agents selling on salary or on commission were held to be outside the privileges of section 64b, cl. 4, of the Bankruptcy Act. In re Mayer (D. C.) 101 Fed. 227; In re Scanlan (D. C.) 97 Fed. 26; In re Greenewald (D. C.) 99 Fed. 705.
Considerable confusion exists in the decisions of the courts of New York and Ohio, and it is held in In re Luxton & Black Co., 35 App. Div. 243, 54 N. Y. Supp. 778, that an agent selling pianos on commission was included in the act, and in Lewis v. Dawson, 6 Ohio Cir. Ct. R. 243, that a person selling the product of a manufacturing company partly on salary and partly on commission was entitled to its benefit. But, while this is true, such cases can clearly be distinguished from the one here, in one important particular at least, for in those cases a single individual was employed to sell such of the product as his effort would enable him to do, to the exclusion of other employment by others; here a firm composed of several individuals, located in a large city and engaged in the business of selling agents, undertakes by con
Finally, the Circuit Court of Appeals for this Fourth Circuit in Tucker v. Bryan, decided February 4, 1913, but for some reason delayed in its publication in the Federal Reporter until December 31, 1914 (217 Fed. 576), construing the Virginia statute, has held “persons contracting to log and cut timber for a stated price per thousand feet for the lumber produced” are not entitled to a lien under the terms of the statute. Therefore, convinced as I am that these statutes were enacted for the protection of those engaged in some capacity involving physical and manual labor in connection with the manufactured product of a corporation like bankrupt, I hold these petitioners not entitled tó a lien under this West Virginia statute.
I am therefore of opinion that the ruling of the referee complained of is without error, and should be in all respects affirmed.