In re Westlund
| Decision Date | 14 February 1900 |
| Docket Number | 329. |
| Citation | 99 F. 399 |
| Parties | In re WESTLUND et al. |
| Court | U.S. District Court — District of Minnesota |
Francis Bergstrom, for appealing creditors.
Chas. R. Fowler, for trustee.
In this case creditors who were owners by assignment of claims for labor performed for the bankrupt within three months before the date of the commencement of the bankruptcy proceedings-- each separate claim so assigned being less than $300-- duly filed and made proof of such claims; and the question certified by the referee for decision is whether such claims, so owned, are debts having priority. The answer to this question depends upon the proper construction of that clause of section 64b of the bankruptcy act which gives priority to 'wages due to workmen, clerks or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant. ' This language requires that a debt for wages, to have priority, must be due to the wage earner. If the claimant entitled to priority might be an assignee, there would be no reason why such claimant should be restricted to $300, as he might be the owner of many small claims, each less than that amount, but aggregating more. The clause referred to is intended to favor the class whose reliance for the maintenance of themselves and families is generally upon their wages, as earned. There is nothing in the nature of security or lien for the payment of the wages which could pass to an assignee. No right to priority arises or exists until the proceeding in bankruptcy is instituted, and then the wages assigned are not 'due to workmen, clerks or servants,' but to their assignees, and are outside the language of this clause. If debts for wages so assigned can be allowed priority, they may come in conflict, or at least in competition, with other claims for wages due and owing to the same workmen, clerks, or servants, earned within the same three months, and lessen the payments, of the assets will not pay in full all debts having priority. It must be held, therefore, that debts of a bankrupt for labor and services which at the commencement of the proceedings in bankruptcy are not due to the workmen, clerks, or servants, but to assignees, have no priority.
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In re Bennett
... ... The question has arisen ... under the bankrupt act as to whether an assignee is entitled ... to the priority given by section 64b(4) to wages due to ... workmen, clerks, or servants. It has been held that he is not ... in the following cases, to wit: In re Westlund ... (D.C.) 99 F. 399; ... [153 F. 702] ... In re North Carolina Car Co. (D.C.) 127 F. 178. The ... following authorities state the law as there laid down: ... Loveland on Bankruptcy, 726; Brandenburg on Bankruptcy, 1043; ... Collier on Bankruptcy, 503; 5 Cyc. 586. It has been held that ... ...
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Allen v. Ingalls
... ... the filing of the petition in bankruptcy are dissolved by the ... adjudication in bankruptcy. 30 U.S. Stat. 565; vol. 1, Fed ... Stat. Ann. 542, 693 (U. S. Comp. St. 1901, pp. 3422, 3450); ... In re Ferguson (D. C.) 95 F. 429; In re Westlund ... (D. C.) 99 F. 399; Bear v. Chase, 99 F. 920, 40 ... C. C. A. 182 ... So far ... as the record in this case shows, the appellant was in the ... legal possession of the attached property from the date of ... the levy until the possession was surrendered to the trustee ... ...
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In re Fuller & Bennett
... ... part before bankruptcy of the employer, and who had taken an ... assignment of such claims as security, with the understanding ... that he was to collect the whole amount and repay himself, ... was held to have preference ... Under ... our act of 1898 (section 64b) in Re Westlund (D.C.) ... 99 F. 399, it is expressly held that an assignee, under ... assignment made before bankruptcy proceeding commenced, of ... such labor claim, is not entitled to priority. The language ... of Lochren, J., in this last case very clearly presents one ... view of the question. He says: ... ...
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In re Campbell
... ... Blatchford to authorize such allowance (In re Brown, 4 ... Ben. 142, Fed. Cas. No. 1,974), and I have observed no ... ruling otherwise under that act. Counsel for the trustee ... relies upon the decision of Judge Lochren in Re Westlund ... (D.C.) 99 F. 399, as ruling ... [102 F. 687.] ... contra for the purposes of the present case. That decision is ... predicated, however, on the fact that the assignment in ... question was made prior to the filing of the petition, and ... the wages were not, therefore, due to the ... ...