Arnold v. Porter

• Decision Date: 19 March 1898
• Citation: 29 S.E. 414,122 N.C. 242
• Parties: ARNOLD . v. PORTER.
• Court: North Carolina Supreme Court

29 S.E. 414

122 N.C. 242

ARNOLD .

v.PORTER.

Supreme Court of North Carolina.

March 19, 1898.

Lien—When Obtained.

A company, pursuant to its agreement with plaintiff, retained the price of supplies furnished by plaintiff to its employes from their wages, and became insolvent, and a receiver was appointed before it had paid the money to plaintiff. Held, that plaintiff did not have a lien on the money collected by the receiver out of the company's book accounts.

Appeal from superior court, Wake county; Robinson, Judge.

Action by T. A. Arnold against John Porter, receiver of the Park Lumber Company. Judgment for defendant, and plaintiff appeals. Affirmed.

Action to declare defendant a trustee for the plaintiff of certain funds held by defendant as receiver of the Park Lumber Company, heard before Robinson, J., at October term, 1897, of Wake superior court. Defendant moved to dismiss the action on the ground that another action was then pending In said court between the same parties, involving the same subject-matter, and that plaintiff had never taken a nonsuit as to same. It was admitted, however, by defendant that said suit was a "controversy submitted without action, " and that the same had been dismissed on appeal to the supreme court, because no affidavit "that the controversy was real, and the proceedings in good faith to determine the rights of the parties, " had been filed, as required by section 567 of the Code. Plaintiff insisted that the said controversy without action had never been m the jurisdiction of the superior court because of the failure to file said affidavit, but, at the suggestion of his honor, allowed a judgment of nonsuit to be entered against him in said former action. His honor then overruled defendant's motion to dismiss, and defendant excepted. Defendant admitted that the amount claimed by plaintiff was justly due, and that plaintiff was entitled to judgment as a simple judgment creditor, but denied that plaintiff was entitled to any priority or lien on the funds In the hands of said receiver over the other creditors of said company, or that the agreement set out In the complaint constituted the said company or its receiver a trustee for the bene-fit of said plaintiff, or that the said receiver held any funds subject to the alleged trust as set out in the complaint. The plaintiff admitted that the funds now and which had been in the hands of said receiver had come into his hands since his appointment as receiver from collections of book accounts, etc. The plaintiff offered himself and Jacob Allen as witnesses to prove the allegations of the complaint; whereupon his honor stated that the allegations of the complaint, even If fully established, would not entitle the plaintiff to have the amount claimed by him declared a trust fund in the hands of defendant. In deference to this Intimation the plaintiff submitted to a nonsuit and appealed. The plaintiff alleges In the complaint (after saying that the Park Lumber Company is a corporation, etc., and that defendant, Porter, was appointed receiver, and that Jacob Allen is its president and general manager): "(4) That said Allen entered into an agreement with Arnold, the plaintiff, as follows: That Arnold was to rent a certain storeroom of the Park Lumber Company, and open a grocery business, and, in consideration of the low rent, was to allow the employes of the lumber company to buy groceries on credit to an amount not to exceed the amount of wages to become due to the employes at the end of each month, but upon this special agreement: That the said lumber company did not merely guaranty the payment of said accounts of Its employes, but that said company was to take out of the wages of and hold back from its employes, on each monthly pay day, the amount of their accounts for groceries purchased from Arnold, and hold said amount in special trust for the sole use of Arnold, and upon demand turn over the same to said plaintiff. That such agreement, the plaintiff is advised and so alleges, constituted the Park Lumber Company a trustee for the plaintiff of the amount of $163.77, which was reserved, or should have been reserved, for him under said agreement. (5) That the employes who afterwards bought goods of Arnold, and were charged up on the books of the lumber company by Alien for the amount of their said account with Arnold, according to the above agreement, had, previous to their opening their accounts with Arnold, agreed with Arnold and Allen that the amounts of their accounts with Arnold should be taken out of their wages due them by the lumber company each pay day, and reserved for the use of Arnold, according to the agreement between Arnold and Allen, as above set forth. (6) That between October 1, 1895, and February 1, 1896, the several accounts of the employes, due the said Arnold for groceries as aforesaid, were duly presented by Arnold to Allen on each pay day, but Allen neglected to pay over to Arnold the amounts out of the wages of the employes according to agreement, but instead thereof simply paid the employes the difference...