Aurora National Bank of Aurora v. Black

• Decision Date: 08 December 1891
• Docket Number: 15,259
• Citation: 29 N.E. 396,129 Ind. 595
• Parties: The Aurora National Bank of Aurora v. Black et al
• Court: Indiana Supreme Court

29 N.E. 396

129 Ind. 595

The Aurora National Bank of Aurora v. Black et al

No. 15,259

Supreme Court of Indiana

December 8, 1891

From the Dearborn Circuit Court.

Judgment affirmed.

H. D McMullen and W. R. Johnston, for appellant.

G. M Roberts and C. W. Stapp, for appellees.

OPINION

Coffey, J.

On the 19th day of May, 1888, the business of Cobb's Iron and Nail Company, a corporation organized under the laws of the State of Indiana, was suspended by the action of its creditors, and its assets went into the hands of a receiver. It had been hopelessly insolvent for more than thirty days prior to such suspension. At the time its assets went into the hands of the receiver it was largely indebted to its employees, who took steps to acquire a statutory lien on all the property of the corporation. On the 28th day of May, 1888, the employees brought suit in the Dearborn Circuit Court to enforce their liens against the property, making the appellant and others, who claimed an interest in such property, parties thereto. Judgment was rendered on the respective claims of the employees, and the same were declared, by proper decree, to be preferred liens, and ordered to be paid by the receiver out of the first money received by him.

It appears by the special finding of facts in the cause that, on the 5th day of May, 1888, the corporation entered into a written contract with the Bradford Iron and Metal Company, by which it purchased and paid for two hundred and fifty tons of scrap-iron at the agreed price of $ 5,125. At the time of such purchase the Bradford Iron and Metal Company did not have the scrap-iron on hand, but the same was to be delivered at the city of Aurora, Indiana, within thirty days after the date of the contract. On the 18th day of May, the day before the appointment of the receiver, Cobb's Iron and Nail Company sold and assigned the contract for the scrap-iron to the appellant for the agreed price of $ 5,000, $ 3,000 of which was paid in cash and the remaining $ 2,000 was paid by the surrender of notes which the appellant held against the iron and nail company. The Bradford Iron and Metal Company complied with the contract by delivering the scrap-iron to the appellant. The appellant sold the scrap-iron for the sum of $ 3,500, and received the money therefor, and still retains it.

The court found that the contract for the scrap-iron was of the value of $ 3,500, and stated as a conclusion of law that the liens of the employees of the corporation attached to such contract, and decreed that the appellant pay into court the amount received by it as the proceeds of the sale of the scrap-iron.

To this conclusion of law the appellant excepted.

The question presented necessarily involves the construction of our statutes enacted for the benefit of employees.

Section 5286, R. S. 1881, is as follows: "The employees of any corporation doing business in this State, whether organized under the laws of this State or otherwise, shall be, and they are hereby entitled to have and hold a first and prior lien upon the corporate property of any corporation, and the earnings thereof, for all work and labor done and performed by such employees for such corporation, from the date of their employment by such corporation; which lien shall lie prior to any and all liens created or acquired subsequent to the date of the employment of such employees by such corporation, except as in this act provided."

Section 5287 provides that any employee wishing to acquire such lien upon the corporate property of such corporation, or the earnings thereof, shall file in the recorder's office of the county where such corporation is located or doing business, notice of his intention to hold a lien upon such property and earnings for the amount of his claim, setting forth the date of such employment, the name of the corporation, and the amount of such claim. When recorded, this section provides that the lien so created shall relate to the time when such employee was employed, or to any subsequent date during such employment, at the election of the employee, and shall have priority over all liens suffered or over which there shall be no such priority.

Section 5290 provides that in all proceedings commenced under this act the defendant may file a written undertaking, with surety to be approved by the court, to the effect that it will pay the judgments that may be recovered and costs, and thereby release its property from the liens acquired.

It is not disputed that the employees of Cobb's Iron and Nail Company complied, strictly, with the provisions of section 5287, supra, in the matter of acquiring their liens but it is insisted by the appellant that, inasmuch as the title to the iron, purchased under the contract assigned to it, never vested in the nail company, there was no property to which the lien could attach; while, on the other hand, it is contended by the appellees that the contract for the delivery of the iron was property, and that, as...