Roe & Lyon, &C., v. Scanlan & Co.

• Decision Date: 25 September 1895
• Citation: 98 Ky. 24
• Parties: Roe & Lyon, &c., v. Scanlan & Co.
• Court: Kentucky Court of Appeals

98 Ky. 24

Roe & Lyon, &c., v. Scanlan & Co.

Court of Appeals of Kentucky.

September 25, 1895.

APPEAL FROM JEFFERSON CIRCUIT COURT, CHANCERY DIVISION.

JAMES P. GREGORY FOR APPELLANTS, IN PETITION FOR RE-HEARING.

STONE & SUDDUTH OF COUNSEL ON SAME SIDE.

O'NEAL, PHELPS, PRYOR & SELLIGMAN FOR APPELLANT HOERTZ.

MORTON V. JOYES FOR APPELLEES SCANLAN & CO.

FAIRLEIGH & STRAUS, FOR CERTAIN APPELLEES.

JAMES F. GAITHER, FOR TAYLOR & MONTGOMERY, APPELLEES.

CHIEF JUSTICE PRYOR DELIVERED THE OPINION OF THE COURT.

W. C. Lyon having made an assignment for the benefit of creditors, the question of priority between them in the distribution of the assets arises in this case. Lyon had contracted with the properly constituted authorities of the county of Nelson to build a court house for a fixed sum of money, and the county being indebted to him at the date of the assignment the mechanics and material men are asserting liens as against the building or the fund set apart by the county court for its construction, and their claim of lien is resisted by the general creditors.

Hoertz had become liable for W. C. Lyon as indorser of two notes for about $2,000 which had been executed by W. C. Lyon and the firm of Roe & Lyon, and to secure Hoertz W. C. Lyon made a written transfer of all the moneys or claims he then had against the county of Nelson due or to become due by reason of the contract to build the court house. This writing was dated the 11th of June, 1892. When the notes matured Roe & Lyon, being on the paper, took up the notes and obtained a written transfer of the contract or all the rights under it from Hoertz, the latter reserving a claim of $498 for brick he had furnished for the building. This transfer was made on the 2d of March, 1893.

In this controversy between the creditors the county of Nelson admitted its indebtedness and its readiness to pay the money over to the parties entitled.

It is insisted by Roe & Lyon that the claimants of mechanics' liens are not entitled to preference, and that if any lien existed they have not complied with the statute so as to enable them to enforce their liens. They also claim a preference over Hoertz by reason of the assignment of W. C. Lyon's contract by him when paying the notes for two thousand dollars.

The General Statutes, in force when these transactions took place, provided that "no lien shall exist in favor of such persons (sub-contractors), in case the contractor himself is not entitled to a lien; nor shall the liens authorized by this chapter have effect, if security shall have been taken for the labor performed or materials furnished." Section 5, article 1, chapter 70. (Ky. Stats., sec. 2467.)

The statute giving liens for labor and materials furnished makes no exceptions from its operation by reason of...