Douglas v. St. Louis Zinc Co.

• Decision Date: 31 March 1874
• Citation: 56 Mo. 388
• Parties: THOMAS DOUGLAS, JR., et al., Respondents, v. ST. LOUIS ZINC CO., et al., Appellants.
• Court: Missouri Supreme Court

56 Mo. 388

THOMAS DOUGLAS, JR., et al., Respondents,

v.ST. LOUIS ZINC CO., et al., Appellants.

Supreme Court of Missouri.

March Term, 1874.

Appeal from St. Louis Circuit Court.

Ford Smith, for Appellants.

I.Under our mechanics' lien law the lien does not attach until the account is filed in the office of the clerk of the Circuit Court.This is evident from an examination of the law.(2 Wagn. Stat., 907.)From the first section it is evident that it was not the intention of the Legislature to give a lien at the time of doing the work.The section expressly provides that something else must be done to place the lien upon the property.Until the provisions of this chapter are complied with, no lien exists.Section 5 of the same chapter recites what provisions of the chapter must be complied with in order to create a lien.This section also speaks of the lien as not yet in existence.It makes it the duty of every person “seeking to obtain the benefit of the provisions of this chapter,” and not of “every person having a lien,” to file, &c.He is to file a just and true account of the “demand due him,” and not an account of the “items which compose his lien.”It is the account which ““is to be,” not which is, a lien.

Section 8 also provides, that “The petition among other things shall allege the facts necessary for securing a lien under this chapter.”Reading these sections together, it is clear that the lien does not attach until the account is filed.Until the account is filed, the contractor is spoken of as having a right to obtain a lien, but not as having the lien.

Section 16 also aids us in the interpretation of the act.Before filing the account, the lien is spoken of as something which “is to be,” as something which the contractor “shall have,” upon doing something else--as always in the future.But after the account is filed, the language changes.The lien is spoken of as in existence.By section 16 * * “no lien shall continue to exist by virtue of the provisions of this chapter for more than ninety days after the lien shall be filed, unless, within that time, an action shall be instituted thereon, as hereinbefore prescribed.”

This change in the language of the statute is radical and significant.Before the account is filed, the lien is treated as a thing which a party may obtain by proper action, viz: by filing his account within the prescribed time.After the account is filed, the lien is spoken of as something which the party has.The change is so radical, that it makes the intention and meaning of the Legislature clear.

Other statutes also aid us in the interpretation of this one.Whenever in our statutes it is intended that a lien shall attach upon rendering the services, no such condition is attached.(See “act concerning Boats and Vessels,”R. S., 1855, Vol. 1, p. 302-303, ch. 20, § 1.Also see statute concerning lien for “eeping horses and other animals,”2 WagnStat. p. 906, §§ Under the act as now in force, this court has decided that the lien did not attach until the account was filed.(Stebel vs. Stock, 31 Mo., 456;Matlack vs. Lare, 32 Mo., 262;Gault vs. Soldain, 34 Mo., 150, and particularly In re Dey, 3 Bank Reg. 81.)

II.The filing of a petition in bankruptcy against a debtor brings his property under the exclusive jurisdiction of the bankruptcy court.(SeeJones vs. Leach, 1 Bank. Reg., 165;Pennington vs. Sale, 11 Bank. Reg., p. 157;In re. Rosenberg, 3 Bank. Reg., 33.)

III.After the petition in bankruptcy is filed, no lien against the property of the bankrupt can be acquired or enforced by proceedings instituted in any court but the bankruptcy court, in which the case is pending.No other can maintain jurisdiction over the property by proceedings instituted after the petition in bankruptcy is filed.The question here is a question of jurisdiction.It has been established, that the filing of the petition in bankruptcy transferred the property of the bankrupt into the exclusive jurisdiction of the United States District Court, as a court of bankruptcy.It has also been established, that the law does not attach until the account is filed, therefore, no lien could be established or enforced by the State Court, or by proceedings instituted in the State court after the petition in bankruptcy was filed.No principle of law is better settled than, that where one court of competent jurisdiction has obtained jurisdiction over property, no other court can interfere with that jurisdiction, or obtain jurisdiction over the property.(In the matter of Hellar, 3 Paige, 199;Peale vs. Phipps, 14 How., [U. S.] 368.)

Under the bankrupt act of 1867, the courts, both State and national, have repeatedly held, that after a petition i bankruptcy was filed against a debtor, no court, other than the bankruptcy court, could obtain jurisdiction over, or in any way affect, the property of the bankrupt, by proceedings commenced after the petition is filed.( In re. Barson, 1 Bank. Reg., 125;Jones vs. Leach, 1 Bank. Reg., 165;In re Wynne, 4 Bank. Reg., 5.)

The filing of the petition in bankruptcy against the St. Louis Zinc Co. divested the State courts of their jurisdiction over the property of the bankrupt, and made it impossible for a State Court to impose a lien upon its property by any proceedings commenced after the 18th day of November, A.D. 1870.It cannot be said, that plaintiffs were forced to come into the State court for the reason that the bankrupt court could not enforce their lien.By the 1st section of the bankrupt act, jurisdiction is given to the U. S. District Court, as a court of bankruptcy, to “ascertain and liquidate the liens and other specific claims on the property of the bankrupt.”

The filing of the petition in bankruptcy gives to the bankrupt court the custody and control of, and jurisdiction over, the entire estate of the bankrupt.That court has full power to distribute that property “so as to secure the rights of all parties, and due distribution of the assets among all the creditors.”(Bankrupt Act 1867, § 1;In re Dey, 3 Bank. Reg., 8;Stuart vs. Hines, 33 Iowa, 160;Davis' Ass'nee vs. Campbell, 6 Bank. Reg., 145, 150, 161.)

IV.The orders of the U. S. District Court, copied into the transcript in this case, are simply void.They cannot affect this case in the least.Had the suit been pending in the State court when the petition in bankruptcy was filed, and jurisdiction over the property been then in the State Court, the Federal Court might have given the assignee leave to appear in the State court and defend.But that would have been only a permission granted to one of its officers.It would not thereby affect the jurisdiction over the rem, for that would already be in the State court.Permission to the assignee, to defend actions pending when the petition in bankruptcy is filed, is all the U. S. Court can do in regard to suits in other courts.It is all the bankrupt act gives it power to do.(Seeclause 2, of section 16 of the Bankrupt Act.)

A. H. Bereman, for Respondents.

I.From the time the account accrued in August, the lien ttached; it was inchoate, it is true, but it was a valid lien.No sale, bona fide by the owner during the six months, can defeat the mechanic's lien, although no claim be filed, and no suit instituted.Section 7 of chapter 195, Gen. Stat., p. 766, provides, that “The lien for work and materials as aforesaid shall be preferred to all other incumbrances which may be attached to or upon such building (and) subsequent to the commencement of such building.”Assignees in bankruptcy and in insolvent proceedings are not bona fide purchasers.(Kuhleman vs. Scheele, 35 Mo., 142;Gorman vs. Sagrue, 22 Mo., 137;M'Murray vs. Taylor, 30 Mo., 263;Ashdown vs. Woods, 31 Mo., 465).Clearly the lien existed for six months; the institution of suit, and the filing, only prolonged and preserved it.

II.As plaintiff's claim for a lien was purely statutory, he was obliged to follow the statute to obtain the benefit of it.He was bound to file with the clerk, and was bound to commence his suit within the times prescribed, and he could not go into the bankrupt court claiming a lien, until he was able to show he had taken the statutory steps to perpetuate and establish it.“The lien could be enforced only in the State courts, and even after adjudication the lienor has a right to commence suit, when such suit is necessary to keep his lien alive.”(Clifton vs. Foster, 3 Bank. Reg., 162;Cole vs. Duncan, Legal News, Chicago, Vol. 3, p. 323;In re Cook and Gleason, Bankrupts, 3 Leg. News, p. 410;In re McCoulter, 3 Leg.News, 377.)

III.It is clear, plaintiffs did not lose their lien by failing to take the statutory steps to enforce it before proceedings in bankruptcy.The bankrupt act does not necessarily divest the State Courts of any or all jurisdiction; no creditor is compelled to submit to the jurisdiction of the bankrupt courts exclusively.Bankruptcy proceedings may suspend the action of the State Court, but they only suspend temporarily.(Bankrupt Act 1867, §§ 1, 26.)Under this section, it is provided, that no creditor, whose debt is provable, shall be allowed t prosecute to final judgment, until the question of the discharge shall have been determined.The State court, after all, may, in any disputed case, by leave of the court in bankruptcy, proceed to a judgment.Without this permission the State court could only stay proceedings on application of the bankrupt to await his discharge, and, if he was an unreasonably long time about it, the State Court could proceed with the case without leave of the bankrupt court, and in spite of the opposition of the bankrupt.Most certainly, then, the State Court could proceed with the permission of, the District Court.

VORIES, Judge, delivered the opinion of the court.

This action was commenced in the St. Louis Circuit Court on the 26th day of November, 1870, to enforce a lien of a mechanic or material man against a building and the...