Loggans v. Love

• Decision Date: 26 September 1938
• Docket Number: 33299
• Citation: 183 So. 389,183 Miss. 97
• Court: Mississippi Supreme Court
• Parties: LOGGANS v. LOVE

183 So. 389

183 Miss. 97

LOGGANS v. LOVE

No. 33299

Supreme Court of Mississippi

September 26, 1938

Division B

1 MORTGAGES.

An insolvent incorporated cemetery's superintendent, who had the right to employ and discharge help, was not a "wage laborer," notwithstanding he did some manual labor incident to burials, and his claim against cemetery for back salary had no right of preference over lien creditors.

2 MORTGAGES.

Records of insolvent incorporated cemetery, which included plats and maps and lot numbers, which records were not expressly covered by mortgage of cemetery, were in the nature of muniments of title and went with the land upon foreclosure of mortgage as against contention that they should have been subjected to payment of claim of superintendent of cemetery for back salary.

HON. V J. STRICKER, Chancellor.

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER Chancellor.

Suit by J. S. Love against the Jackson Memorial Park and W. C. Loggans to foreclose a mortgage wherein the last-named defendant made his answer a crossbill seeking to have the mortgage lien subordinated to his claim for salary. Judgment for plaintiff and the last-named defendant appeals. Affirmed.

Affirmed.

W. Harold Cox, of Jackson, for appellant.

The lower court should have allowed appellant reasonable compensation for his services while the project was operated by or under the supervision of the court. Inasmuch as the appellant served this project as superintendent, and continued to conduct it as in the past under the supervision and direction of the Chancery Court, it is our contention that he was entitled to a reasonable compensation for his services under such circumstances, and that his claim therefor was superior to that of the bondholders.

23 R. C. L. 109, 115; Florida Construction Co. v. Pournell, 80 So. 54.

Appellant was entitled to a reasonable allowance for his services rendered this park for at least a period of six months prior to the filing of appellee's bill in September, 1937. The appellant further contends that this record shows, without dispute, that appellant kept body and soul of this project together and held it intact as an operating enterprise, and that his services in such connection inured to the direct benefit of the bondholders.

Appellant was a laborer, superintendent, executive and a general utility man on this job.

It is our contention that appellant's claim is superior to that of the appellee under the bond mortgage, and that a lien should have been impressed by the lower court on said property for the payment of such claim as a condition precedent to the confirmation of the sale of the property to the appellee.

53 C. J., pages 253, 256, 257, 265, 272, 273, and 280, and 270, sec. 449.

This case is in every aspect like that of L'Hote v. Boyet, 38 So. 1, 85 Miss. 686. In that case a receiver was appointed for a sawmill by the Chancery Court of Hancock County at the request of its creditors, some of whom held mortgages on the corporation property. Boyet and a number of others filed petitions in the receivership proceeding in which they alleged that the lumber company was due them $ 2,049.50 for labor performed for said corporation for a period of some two to three months prior to the appointment of the receiver. It was charged that the labor was necessary to continue the business of the corporation, and that it was to the advantage of the mortgagees and mortgaged property, and necessary in part to preserve the property covered by the mortgage as well as the property of said corporation. The petitioners claimed priority over all other creditors for their labor performed for six months prior to the appointment of the receiver. It was sought to have the receiver pay said amounts from proceeds of the operations, collections of debts, or the sale of property. The claims were allowed as preferences.

After the announcement of the court in the L'Hote ease, it has become recognized as the announced policy in this state to respect claims for wages and services rendered of this character for as much as six months prior to the appointment of a receiver. That the legislature of this state took notice of and approved such policy is further demonstrated by the fact that in annotating the Mississippi Code of 1930, under Section 4146 of said code there appears this annotation: "A receiver of an insolvent corporation, whether public or private, in possession of its entire property, will be required to pay the wages of laborers who rendered services shortly before his appointment which were necessary to continue the business of the corporation and preserve its property in preference to both ordinary and mortgage creditors. L'Hote v. Boyet, 85 Miss. 636, 38 So. 1."

It is most earnestly urged and submitted that the lower court erred, first, in denying this appellant a reasonable award for his services rendered as superintendent in charge of all of the operations of this project from September 1937 to January 19, 1938, including the time while appellant operated such project under the direct supervision, direction and control of the lower court; next, the lower court erred in awarding the appellee the cemetery records, plats, etc., which were of undoubted value to these operations, but which appellant was entitled to subject to the full extent of their value to the payment of the decree awarded him against the Jackson Memorial Park, which owned this personal property. This personal property belonged to the Jackson Memorial Park and was not included in the foreclosed mortgage, nor was said property ever sold, nor was one cent ever paid by the appellee therefor; and finally, appellant respectfully urges that he was and is entitled to a reasonable allowance for his services rendered on this project for a period of as much as six months prior to September, 1937, in accordance with the holding of this court in the L'Hote case.

F. W. Bradshaw, Robert Burns, Jr., and Flowers, Brown & Hester, all of Jackson, for appellee.

We respectfully submit that there is absolutely no foundation in fact or in law, as disclosed by this record, to support appellant's claim on the basis of baying been employed by the receiver, or that he was in charge of the property of the corporation.

Counsel cites much textbook law that the expenses incurred during a receivership in the operation and preservation of the receivership property are a prior charge on the assets of the receivership. We find no fault with this line of authorities, but we cannot see how they have any application in this case. This is not a receivership. Even in general receiverships the courts are not prone to allow compensation to receivers out of the funds of lienholders where the property sold for less than the lien debt.

Clark on Receivers (2 Ed.), sec. 641 (d).

Appellant contends that if he is not entitled to compensation for the six month period prior to the filing of the bill by virtue of having been employed by the receiver he is entitled to compensation because "he kept body and soul of this project together and held it in tact as an operating enterprise, and that his services in such connection inured to the direct benefit of the bondholders." Again counsel delves into the text book authorities on receiverships. Let it be noted that in every case where there has been an allowance for operation expenses there has been present, first, a receivership, and, second, something that had to be operated to keep it together, such as a railroad, sawmill, telephone company or the like. So far as we have been able to ascertain this doctrine has never been extended to a private corporation engaged in a business of the kind presented by the case at bar.

The Chancellor held that this case is in no aspect like the L'Hote case. We say it is in no aspect like the L'Hote case. Certainly there is nothing similar in the two proceedings. A receivership brings into play all of the principles of equity whereas a foreclosure involves the single question of the right of a lienholder to resort to his security.

In the case at bar there is an attempt on the part of appellant to fix his claim for salary not on the gross earnings, but upon the property itself; to establish a lien on the property covered by the bondmortgage, prior and superior to the mortgage itself. In addition thereto, his services certainly were not those of a laborer expended in the. "improvement and betterment of the mortgaged property." Jackson Memorial Park was engaged in the business of selling cemetery lots. As an inducement to purchasers it agreed to care for the lots. After a lot was sold it belonged not to the company but to the individual owner. The lot was released from the mortgage. These facts are set up in the pleadings and not denied. When it became necessary to utilize a lot for burial purposes the interment was made not on the property of the corporation, but upon a lot of an individual owner. Any services rendered in the interment of deceased persons and the care of lots was not an improvement or betterment of the mortgaged property. A large portion of appellant's duties was in connection with these lots. The thought of improvement and betterment contemplates something added to or enhancing the value of the property. Nothing appellant did during this time added to the property or enhanced its value.

If there was any doubt left after the L'Hote decision as to whom it applied, such doubt was in no uncertain terms set to rest by this court in the case of A. H. George v. Pigford, 52 So. 796.

Appellant was not a laborer of the wage class. He was a...