127 F. 178 (E.D.N.C. 1903), In re North Carolina Car Co.

Citation:127 F. 178
Case Date:September 25, 1903
Court:United States District Courts, 4th Circuit, Eastern District of North Carolina

Page 178

127 F. 178 (E.D.N.C. 1903)


United States District Court, E.D. North Carolina.

September 25, 1903

Page 179

Hinsdale & Hinsdale, W. J. Peele, Alex J. Field, W. N. Jones, Thos. B. Womack, Jos. B. Batchelor, and Spier Whitaker, for creditors.

Ed Chambers Smith, for bankrupt corporation.

PURNELL, District Judge.

Two claims are certified by the referee as provided in the statute. The first is as follows:

'The National Bank of Raleigh claims that it is entitled to be subrogated to the right of a laborer's lien for money advanced to pay laborers' wages due by said corporation to its laborers at a time when said corporation acknowledged itself insolvent, and that it was understood and agreed upon between the bank and the corporation that if the money should be advanced, as it afterwards was, that the pay rolls of such laborers so paid would be assigned to said bank, but the pay rolls aforesaid were never actually so assigned; said corporation failing in this agreed duty to the petitioner.'

The claim of priority is probably made under section 64b, subsec. 4, Act July 1, 1898, c. 541, 30 Stat. 563 (U.S. Comp. St. 1901, p. 3447)-- the only section of the act under which it could be made. This section is in these words:

'Wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant.'

To give a claim priority under this section, it must be due the wage earner. Should such wage earner prove his claim and establish his priority, he could then assign the claim, and the assignee would be subrogated to this priority. But if assigned before being thus proved, the assignee would acquire no more right to priority than the assignee of any other unsecured debt. But it will be noted there was no privity between the wage earner and the bank, and there was no actual assignment. This section is discussed in Re Westlund (D.C.) 99 F. 399, 3 Am.Bankr.R. 646; but in that case there was an actual assignment before the bankrupt proceeding, and it was held the assignee was not entitled to priority. There is nothing in the record to entitle claimant to priority. The claim, if allowed, must be as an unsecured one, without priority.

The other question certified applies to two small claims, and is stated thus:


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