In re Cramond

• Decision Date: 06 June 1906
• Parties: IN re CRAMOND
• Court: U.S. District Court — Northern District of New York

145 F. 966

IN re CRAMOND

United States District Court, N.D. New York.

June 6, 1906

Wm. J Powers and Thomas J. McNamara, for labor claimants.

D. F Searle, for assignees of moneys.

McMahon & Larkin, for trustee.

Review of the decision of referee in bankruptcy including commissions of referee and trustee, and claims for labor performed within three months of the adjudication, not exceeding $300 to each laborer, be paid from the amount received by the trustee in bankruptcy on a street paving contract between William J. Cramond, now the bankrupt, and the city of Rome, N.Y., which money was not actually due and payable at the date of the filing of the petition in bankruptcy, before payment therefrom to certain assignees of the money to become due on such contract on assignments thereof made prior to the bankruptcy and more than three months prior thereto as security for advances of money to be made, and which were made, to carry on and prosecute the work to be done and procure the necessary material to be used, and which was necessarily procured and used, in the execution and performance of such contract. The assignments of such money to become due and payable were made prior to the advances of money and furnishing of material and prior to the doing of any work on the contract. The labor claims, sought to be given priority, were for labor done for the contractor, now bankrupt, in the execution of such contract, and six of the assignees of such moneys filed liens pursuant to the lien law of the state of New York. The labor claimants, in question here, did not.

RAY District Judge.

On the 26th day of August, 1904, the now bankrupt, William J. Cramond, then solvent, entered into a written contract with the city of Rome to pave, with brick, East Dominick Street in said city from First street to the entrance to the Locomotive Works. He was to furnish all the material and perform all the labor and payment of the contract price, $26,009, was to be made 90 days after the completion and acceptance of the work. The contract also contained this provision:

'After the acceptance of all or any portion of the work by the common council, within ninety days thereafter, payments will be made for that portion, or all of the work accepted.'

This contract was duly filed in the office of the chamberlain of the city of Rome. On the same day, August 26, 1904, the said William J. Cramond executed and delivered to the First National Bank of Rome, N.Y., an assignment, of which the following is a copy:

'For a valuable consideration to me in hand paid, the receipt whereof is hereby acknowledged, I hereby sell, assign, transfer and turn over unto the First National Bank of Rome the sum of ten thousand dollars ($10,000) with interest, of the moneys first due or to become due to me on a contract between the city of Rome and myself made and executed August 26, 1904, for the paving of E. Dominick street from First street to the Locomotive Works, the original of which contract is on file in the chamberlain's office of the city of Rome, and a copy of which is hereto attached and made a part hereof. And I hereby give and grant unto said the First National Bank of Rome full power and authority to collect and receive upon said contract from the said the city of Rome in my place and stead the said sum of $10,000, with interest thereon, and to take all necessary proceedings for the collection thereof, and to execute and deliver all proper receipts and vouchers therefor the same as I might or could do were not this assignment made. I hereby expressly represent that I have full power and authority to execute this assignment; that the said sum of money is to become due me from the said the city of Rome by reason of said contract; that no assignment or transfer of the moneys to become due upon said contract other than this has been executed by me, and the said the city of Rome, its common council and chamberlain, are hereby authorized and directed to pay to the said the First National Bank of Rome the said sum of $10,000, with interest thereon from the date hereof.

'Witness my hand and seal at Rome, N.Y., this 26th day of August, 1904.

'William J. Cramond. (L.S.)'

August 31, 1904, this assignment, or a copy thereof, was filed in the proper office. This assignment was made in good faith, and, in fact, to secure advances of money to be made and which were made, from time to time, by the bank to said Cramond to the amount of $10,000 to enable him to pay labor and purchase material to be used and which were used in performing the contract.

On the 2d day of September, 1904, said Cramond executed and delivered to the New York Brick & Paving Company of Syracuse, N.Y., another assignment of moneys to become due on such contract with the city of Rome, to the amount of $11,000, which was filed in said office on the same day. The material part of said assignment reads as follows:

'For a valuable consideration to me in hand paid, the receipt whereof is hereby acknowledged, and in payment for and to secure the payment of bricks delivered and to be delivered. I hereby sell, assign, transfer and turn over to the New York Brick and Paving Company of Syracuse, New York, the sum of eleven thousand dollars ($11,000) of the moneys first due or to become due to me on a contract between the city of Rome and myself made and executed August 26th, 1904, for the paving of East Dominick street from First street to the Locomotive Works, the original of which contract is on file in the chamberlain's office of the city of Rome, N.Y., and a copy of which is hereto attached and made a part hereof. And I hereby give and grant unto said New York Brick and Paving Company full power and authority to collect and receive from the city of Rome upon said contract in my place and stead of said sum of eleven thousand dollars ($11,000), or whatever amount may be due and owing for brick furnished at the price agreed upon, with interest thereon as agreed, and to take all necessary proceeding for the collection thereof and may execute and deliver all proper receipts and vouchers therefor, the same as I might or could do were not this assignment made. It is understood that the First National Bank of Rome, New York, has an assignment prior to this to secure the payment of ten thousand dollars ($10,000). * * * The said city of Rome, its common council and chamberlain are hereby authorized and directed to pay to the said New York Brick and Paving Company the said sum of eleven thousand dollars ($11,000) out of the said moneys first due or to become due to me on said contract, subject to the rights of the said First National Bank of Rome, under the assignment above mentioned.'

This was given and received in good faith as security for material, brick, to be furnished and used and which was thereafter furnished and used, to the full value of $11,000, in the performance of said contract.

On the 27th day of December, 1904, said the New York Brick & Paving Company filed in the proper office a notice of lien in due form 'upon the moneys of the city of Rome applicable to construction of the public improvement' described therein, being the paving mentioned and described in the aforesaid contract. The amount of the lien claimed was $11,296.20, and the notice of lien contained the following:

'The amount claimed to be due is $11,296.20, for which said lienor has an assignment to the amount of $11,000.00, leaving a balance not covered by assignments of $296.20, with interest from November 1, 1904.'

On the 6th day of September, 1904, said Cramond executed and delivered to the Medina Quarry Company, of Albion, N.Y., a third assignment of moneys to become due on such contract, to the amount of $3,475.00, to secure it for curbing stone to be delivered and used and which were thereafter, to the full value of $3,475, delivered and used in the execution and performance of such contract. This assignment was also given and received in good faith and duly filed in the proper office on the same day.

On the 28th day of December, 1904, said Medina Quarry Company filed a notice of lien 'upon the moneys of the city of Rome, applicable to the construction of the public improvement' therein mentioned, the pavement in question, for the sum of $3,658.90, and interest on certain sums from certain specified dates, reciting the said assignment of moneys to become due on said contract to the amount of $3,475 thereof.

These notices of lien were in due form and properly executed and duly served. March 23, and 24, 1905, these lienors obtained from a judge of the Supreme Court, and duly filed same, with notice thereof, orders extending said liens, respectively pursuant to the provisions of the lien law of the state of New Nory. The labor claimants whose rights are in question here have not, so far as appears, filed notices of lien pursuant to the statute of the state of New York, known as the lien law. On the 27th day of January, 1905, a petition in bankruptcy was filed in this court to have said Cramond adjudicated a bankrupt, and on the 28th day of January, 1905, he was adjudicated a bankrupt accordingly. Thereafter and on the 11th day of February 1905, one M. H. Powers was duly appointed and qualified as trustee of the bankrupt's estate. He qualified February 16, 1905. The said contractor entered on the performance of the contract, soon after its execution and delivery, and completed it, substantially, employing labor on which he made unpaid payments, but a large number of laborers, 76 in number, were unpaid in full at the time of the bankruptcy. The total of these claims is over $1,018.64, all for labor performed for the contractor in the execution of the contract and on this paving work within the three months...