47 Ind. App. 439 | Ind. Ct. App. | 1911
— On November 29, 1905, appellee People’s Loan and Trust Company, trustee, filed suit in the Madison Circuit Court against appellants and the other appellees, to foreclose a trust deed on certain property and for the appointment of a receiver. On that day Albert A. Small was appointed, and he duly qualified as, receiver of appellees Wagner Glass Company, International Glass and Bottle Company and Ingalls Gas Company, and by order of court took charge of all the property of said concerns. On October 4, 1906, on the intervening petition of appellee Henry Wagner, the court ordered all the property of said concerns sold by-said receiver, which sale was thereafter duly made and reported to and approved by the court on November 17, 1906. On November 26, 1906, appellants filed their intervening petition in said cause, setting up their itemized claim for material furnished said Wagner Glass Company and Ingalls Gas Company, and a copy of a mechanic’s lien duly filed on October 21, 1905. On December 3, 1906, the court ordered all claims filed on or before December 15, 1906. On January 29, 1907, said intervening petition of appellants was submitted to the court for finding and judgment thereon, and the court found that there was due to appellants from appellees Wagner Glass Company and Ingalls Gas Company the sum of $701.38, but denied their right to a lien or preferred claim, on the ground that their intervening petition was filed more than a year after the recording of the mechanic’s lien. Appellants were parties to the proceedings when the property was ordered sold, which property included that described in appellant’s notice of a mechanic’s lien, and the order of sale provided “that all liens of whatsoever kind existing upon or against” the property should be “transferred from the property to the fund arising from the sale thereof, and that the rights and interests of the parties to this suit in and to said property * * * be and
The precise question here presented is, "Were appellants bound to assert their lien within the year fixed by the statute, by suit to foreclose or by other affirmative action ? In other words, Does the possession and sale of the property by the receiver, under the order of the court, in a suit to which appellants were parties, draw the whole controversy into equity, and preserve the liens on the property as of the date of the appointment of the receiver? So far as we are able to ascertain, this particular question, as it arises here, has not been decided by this court or our Supreme Court.
The statutory rule has been applied in favor of the holder of a mortgage junior to the mechanic’s lien, where the mortgagee was not made a party to the foreclosure of the lien. Deming-Colborn Lumber Co. v. Union, etc., Loan Assn. (1898), 151 Ind. 463; Stoermer v. People’s Sav. Bank, etc. (1899), 152 Ind. 104; Union Nat., etc., Loan Assn. v. Helberg (1899), 152 Ind. 139.
While the precise question before us has not been decided, our Supreme Court, in passing upon other questions, has indicated a decision. In the case of Mueller v. Stinesville, etc., Stone Co., supra, the court said on page 234: “The court, having sequestered the common insolvent debtor’s property for distribution among the creditors, must proceed in such a way as will preserve the priorities and equities, as they existed when the receiver was appointed.”
In the case of American Trust, etc., Bank v. McGettigan, supra, it is said on page 587: ‘ ‘ The court receives such property impressed with all existing rights and equities of creditors, and the relative rank of claims, and the standing of liens remains unaffected by a receivership. Every legal and equitable lien upon the property of the corporation is preserved, with the power of enforcing it.”
The United States circuit court of appeals, in the case of Commonwealth Roofing Co. v. North American Trust Co. (1905), 135 Fed. 984, 68 C. C. A. 418, held that the right to a mechanic’s lien was not lost by failure to proceed according to and within the time fixed by the statute. The statute under consideration provided for mechanics’ liens “which shall continue for ninety days after the services are performed or the materials are furnished, and that such lien may be secured by attachment of the property upon which it exists at any time while the lien continues.” The lien
The ease just quoted from is directly in point and decisive of the question. See, also, American Loan, etc., Co. v. Central Vt. R. Co. (1898), 86 Fed. 390; Eck & Schrivener v. Warner (1901), 25 Tex. Civ. App. 338, 60 S. W. 799; McAnally v. Glidden (1902), 30 Ind. App. 22; 27 Cyc. 219; Ellis v. Vernon Ice, etc., Co. (1893), 86 Tex. 109, 23 S. W. 858; Thompson v. McCleary (1893), 159 Pa. St. 189, 28 Atl. 254; Walling v. Miller (1888), 108 N. Y. 173, 15 N. E. 65, 2 Am. St. 400; Emigrant, etc., Sav. Bank v. Goldman (1878), 75 N. Y. 127.
From these authorities we conclude that appellants’ having presented their claim in conformity with the order of the court in the receivership, further compliance with the statute was unnecessary, and they were entitled to have their lien determined as of the date of the appointment of the receiver. 27 Cyc. 219.
The receivership being in the nature of “an equitable execution,” and the court having absolute control of the property and full power to adjust claims, determine priorities, order sale and fix the distribution of funds, the whole case is drawn into equity. A party need not litigate his claim in another suit, and where he does not ask for leave so to do, but submits his claim to the court having control of the receivership, in full compliance with its orders, no good reason can be found for making an exception to the equitable procedure in the receivership by invoking the limitations of the statute.
For error of the court in denying appellants’ right to a lien, the judgment is reversed, with instructions to the lower court to sustain appellants’ motion for a new trial and for further proceedings in conformity with this opinion.