Interurban Const. Co. v. Central State Bank of Kiefer
| Decision Date | 24 June 1919 |
| Docket Number | 8841. |
| Citation | 184 P. 905,76 Okla. 281,1919 OK 186 |
| Parties | INTERURBAN CONST. CO. et al. v. CENTRAL STATE BANK OF KIEFER et al. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
In a suit by a mortgagee for its debt and to foreclose the mortgage given to secure the same, upon the property of a street railway company, the mortgagor, wherein a receiver was asked for and was appointed by order of the district court directed to take charge of all the property, goods, moneys and effects of said defendant and preserve the same until further order of the court or the judge thereof, and thereafter other mortgagees were allowed to intervene and filed their actions for debts and a foreclosure of their mortgages upon the property of the defendant, then in the hands of the receiver, and more than one year thereafter claimants were allowed to intervene and file their action upon claims for labor and material furnished under the provisions of and to establish their respective liens under the provisions of Rev. Laws 1910, §§ 3868-3871, and where it is conceded that no suit was commenced on such claims within one year after the same accrued, nor was any intervening petition filed in the action brought by the mortgagee, on behalf of such claimants, within one year after such claims accrued, and that no notice was given by any of such claimants as required by section 3871, held, that the claims of such claimants to liens and the right to have the same enforced against the property of the defendant in the hands of the receiver and declared by the court to be prior to the liens of the mortgagees and ordered to be first paid by the receiver were barred by the terms of the statutes, supra.
In a suit to foreclose a mortgage, and for the administration of the assets of the mortgagor, an insolvent corporation, a receiver for all its property was appointed and a reference made to a referee, but it was only by the decree subsequently made that the court showed its ulterior intent to make an equitable distribution of the funds, among all the creditors and provided for notice to them to file their claims. Held: (a) That, until a decree appointing such referee, creditors were entitled to sue at law, and by judgment acquire priority in an equitable distribution of the property including that covered by the mortgage. (b) But where creditors base the right to have their claims adjudged to be liens prior to the liens of the mortgagees, under Rev Laws 1910, §§ 3868-3871, their failure to bring suit within one year from the accrual of such claims and to give the notice to the defendant provided for in the statute and failed to intervene in the suit brought by the mortgagees to foreclose their lien upon the property of the defendant corporation within one year from the accrual of their claims such right to a preference lien over that of the mortgagees provided in the statutes will be barred by the running of the limitation named in the statute.
Where a court of equity at the suit of creditors acquires jurisdiction to establish priorities of liens upon and order a distribution of the proceeds arising from the sale of the property of an insolvent railway corporation, and certain creditors claim priority of payment of their claims to those of the mortgagees, because the claims of the former were for material and labor furnished for the betterment of the mortgaged property within six months next before such property was placed in the hands of a receiver, who operated the railroad for about three years, at the expiration of which period he sold the same by order of the court Held: (a) Equity will decree a prior lien in favor of such claimants to that of the mortgage lien which was prior in point of time upon the net surplus income only, arising from the operation of the railroad by the receiver and not upon the proceeds of the sale of the mortgaged property. (b) Where there was no diversion by the receiver of the income derived from the operation of the railroad to betterments of the property, and the entire amount of such income was expended by him in the payment of operating expenses and taxed, and that after such payment there was no net income, but a deficit existed and was paid from the proceeds of the sale of the mortgaged property, it is further held, that there being no net income in the hands of the receiver, derived from the operation of the railroad, the claimants were not entitled to an equitable lien upon moneys in the hands of the receiver derived from the sale of the mortgaged property.
Additional Syllabus by Editorial Staff.
The rule of construction of lien statutes which create a right and provide a remedy is that the requirements of the statutes and conditions prescribed therein are the measure of the right, and the court cannot declare purposeless and useless that which the Legislature has made a condition of the lien.
Error from District Court, Tulsa County.
Action by the First National Bank of Tulsa, Okl., against the Oklahoma Union Traction Company, to foreclose a note and mortgage, in which a temporary receiver was appointed to take charge of defendant's property, and in which the Colonial Trust Company and the Central State Bank of Kiefer were allowed to file petitions in intervention against the defendant praying for foreclosure of mortgages against it, and in which the Interurban Construction Company and A. A. Small and G. B. Small filed their petitions in intervention against the defendant, to enforce mechanics' liens. Cause referred to a referee, whose report finding that claimants were not entitled to liens on defendant's property was confirmed by the court, claimants' motions for new trial overruled, and claimants bring error. Affirmed.
Geo. T. Brown, of Tulsa, for plaintiffs in error.
Biddison & Campbell, of Tulsa, for defendants in error.
On September 21, 1910, the Oklahoma Union Traction Company gave a note and mortgage on its property to the First National Bank of Tulsa, Okl., for $6,918.
On December 9, 1911, the First National Bank commenced this action in the district court of Tulsa county against the Oklahoma Union Traction Company to recover the amount due on this note and to foreclose its mortgage. The bank asked for the appointment of a receiver, and the court ordered:
"That Percivial E. Magee, of the county of Tulsa, and the state of Oklahoma, be appointed temporary receiver in said cause; that the amount of his bond as receiver be fixed at the sum of $5,000; and that, upon his qualification, such receiver take charge of all the property, goods, moneys, and effects of said defendant and preserve the same until the further order of the court or the judge thereof."
This was the only order made appointing a receiver. The receiver did take charge of all the property of the Oklahoma Union Traction Company.
On December 12, 1911, the Colonial Trust Company was permitted by the court to file its petition of intervention asking judgment against the Oklahoma Union Traction Company for $31,931, and also praying for the foreclosure of its mortgage against the property of the mortgagor.
On April 27, 1914, the Central State Bank of Kiefer, defendant in error, filed its petition of intervention in said suit asking a judgment against the Oklahoma Union Traction Company for $6,025, and for the foreclosure of its mortgage against the property of the Oklahoma Union Traction Company.
On June 1, 1914, the plaintiffs in error filed their petition of intervention in said cause asking judgment of $11,484, and alleging that in the year 1911 they furnished labor and material to the Oklahoma Union Traction Company to the amount of $11,484, alleging that this was due on June 1, 1911, and that they were entitled to a lien on the property of the Oklahoma Union Traction Company for that amount, and also asking that all other parties be barred from any right or interest in the property of the company.
Plaintiff in error A. A. Small in his petition of intervention asserts a claim of $1,896 on account of work and labor performed by him for the street railway company during the months of September, October, November, and December, 1911, in the equipment and operation of said railway company. The plaintiff in error G. B. Small in his petition of intervention asserts a claim in the sum of $700 for work and labor performed by him for said railway company during the months of April, May, June, July, August, September, October, and November, 1911, in the equipment and to facilitate the operation of said street railway. There is no dispute as to the amounts of these various claims, as will appear from the report of the referee.
The cause was afterwards referred to W. T. Tucker, referee, to try said cause and make a report to the court. He made his report on April 21, 1916, finding that the plaintiffs in error were not entitled to a lien on the property of the Oklahoma Union Traction Company.
Exceptions were duly saved to this report and presented to the referee and to the court in proper motions; but the report of the referee was, over the objections and exceptions of these plaintiffs in error, approved and confirmed by the court. Motions for new trial were overruled, and the judgment complained of herein was rendered, in pursuance of said report under date of June 30, 1916. Supersedeas bonds were given by these plaintiffs in error, and this appeal taken and lodged herein.
The plaintiffs assign error: (1) The trial court and referee erred in overruling the motions for new trial. (2) Trial court erred in approving, adopting, and confirming report of the referee. (3) The referee and trial court erred in overruling exceptions and objections of the plaintiffs to the report, findings, recommendations, and conclusions of the...
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