C.C. Hartwell Co. v. Miller

• Decision Date: 17 December 1918
• Docket Number: 3255.
• Citation: 256 F. 273
• Parties: C. C. HARTWELL CO., Limited, et al. v. MILLER et al.
• Court: U.S. Court of Appeals — Fifth Circuit

256 F. 273

C. C. HARTWELL CO., Limited, et al. v. MILLER et al.

No. 3255.

United States Court of Appeals, Fifth Circuit.

December 17, 1918

On Petitions for Rehearing, March 15, 1919.

William Grant, Wm. B. Grant, J. C. Henriques, Robert H. Marr, and Henry P. Dart, all of New Orleans, La., for appellants.

A. D Danziger and Charles Payne Fenner, both of New Orleans, La for appellees.

Before WALKER and BATTS, Circuit Judges, and GRUBB, District Judge.

GRUBB District Judge.

This is an appeal from an order of the District Court in bankruptcy made upon oppositions to the trustee's account, and which disallowed the liens of appellants, and directed the payment of a mortgage claim out of the sale fund ahead of the claims of appellants. The liens were disallowed by the District Judge, because they were found to have been not seasonably filed.

The appellants' claims were for materials furnished in the construction of an improvement on the realty of the bankrupt. The materials furnished prior to February 26, 1912, were furnished to the bankrupt as owner of the real estate direct. Article 3274 of the Civil Code of Louisiana provides that--

'No privilege shall have effect against third persons, unless recorded in the manner required by law in the parish where the property to be affected is situated. It shall confer no preference on the creditor who holds it, over creditors who have acquired a mortgage, unless the act or other evidence of the debt is recorded within seven days from the date of the act or obligation of indebtedness, when the registry is required to be made in the parish where the act was passed or the indebtedness originated and within fifteen days if the registry is required to be made in any other parish of this state. It shall, however, have effect against all parties from date of registry.' As to materials furnished the owner, before a certain building contract was entered into on February 26, 1912, the mortgage of appellees would prime the claims unless a lien was acquired by the recording of the act or other evidence of the debt within seven days from the date of the act or obligation of indebtedness, as provided for by article 3274. Whitney-Central Trust & Savings Bank v. General Fire Extinguisher Co., 240 F. 631, 153 C.C.A. 429; Whitney-Central Trust & Savings Bank v. Luck, 231 F. 431, 145 C.C.A. 425; Hibernia Bank & Trust Co. v. C. F. knoll Planting & Mfg. Co., 133 La. 698, 63 So. 288; Carolina Portland Cement Co. v. Southern Wood D. & F. Co., 137 La. 470, 68 So. 831; Wheelwright v. St. L., N.O., etc., Co., 47 La.Ann. 533, 17 So. 133; Allen-Wadley Lbr. Co. v. Huddleston, 123 La. 522, 49 So. 160; Shreveport Nat. Bank v. Maples, 119 La. 42, 43 So. 905. The record fails to show that any of the claims for materials furnished prior to February 27, 1912, the date of the recording of the building contract, were recorded so as to create a lien under the terms of article 3274, and the District Court rightly directed payment of the mortgage as against them.

On February 26, 1912, the bankrupt conveyed the real estate to one Singer, and entered into a building contract with Singer to complete the building for him, which contract was duly recorded February 27, 1912. Some of the materials were furnished to the bankrupt after this trade had been consummated, and while he was a contractor, and no longer owner. The rights of the materialmen for materials, thereafter furnished, ceased to be controlled by article 3274 of the Civil Code, but came under the influence of Act No. 134 of the Legislature of Louisiana, approved July 10, 1906, relative to building contracts. By the terms of this act, the building contract having been recorded before the day fixed on which the work was to commence, and not later than 7 days after the date of the contract, a lien is created in favor of those furnishing material to the contractor on the building ground, etc., as their interests may appear. The owner must require of the contractor the execution of a bond, with good and sufficient surety, for not less than one-half of the contract price, to be recorded with the contract, and conditioned, among other things, that the contractor pay all subcontractors and furnishers of materials; the bond to be made in their favor as their interests may appear. All persons with claims against the contractor may perfect their liens by filing a sworn statement with the owner, and recording a similar one with the recorder of mortgages in the parish where the work is done, within 45 days after the completion of the contract.

Under this act the appellants, who furnished materials after the building contract was executed and recorded, acquired a lien for the portion furnished the building contractor, which they perfected as required by the act, within 45 days from the completion of the contract, and were entitled thereby to prime the mortgage. Brown v. Staples, 138 La. 602, 70 So. 529. The appellees, however, rely on subsequent provisions of the act to show that the appellants were remitted to the surety on the bond required by the act to be executed in favor of the subcontractors and material furnishers as their interest may appear.

The act further provides that if, at the expiration of 45 days, no recorded claims are filed, the recorder of mortgages shall upon written demand of any party in interest, cancel and erase from the books of his office all inscriptions resulting from the recordation of the contract and bond. In the event there are recorded claims filed, the owner is required to file a petition in a court of competent jurisdiction citing all claimants and the surety on the bond for the assertion of...