Skaggs v. Elkhorn Coal Corp.

• Decision Date: 28 April 1944
• Parties: SKAGGS et al. v. ELKHORN COAL CORPORATION et al.
• Court: Kentucky Court of Appeals

180 S.W.2d 88

297 Ky. 330

SKAGGS et al. v. ELKHORN COAL CORPORATION et al.

Court of Appeals of Kentucky

April 28, 1944

Appeal from Circuit Court, Letcher County; R. Monroe Fields, Judge.

In the matter of the ancillary receivership of the Elkhorn Coal Corporation. From judgments denying preference of claims filed by Dr. H. R. Skaggs and others, they appeal.

Affirmed.

S. S. Willis, of Ashland, Wells & Wells, of Paintsville, and Edward L. Allen, of Prestonsburg, for appellant.

Lewis E. Harvie, of Whitesburg, and J. W. Howard, of Prestonsburg for appellee.

SIMS Justice.

For convenience the appellant, Paintsville Hospital Company, will be referred to as the Company, and the appellee, Elkhorn Coal Corporation, will be referred to as the Corporation. These three appeals arise from the efforts of appellants, Dr. H. R Skaggs, the Company and Douglas Hays, to assert preferred claims against the assets of the Corporation after it had been forced into receivership. The facts and the law applicable thereto being practically the same in each case they were heard together in this court and all three appeals will be decided in this opinion.

We will first dispose of the appeal of Douglas Hays. He was given twnety days from Dec. 3, 1943, to file brief, which he failed to do. We have consistently held that where no brief is filed pointing out the errors relied upon for reversal, it will be presumed none were committed and that the judgment is correct. Hunt v. Pikeville Nat. Bank, 218 Ky. 756 292 S.W. 327; Consolidated Underwriters v. Richards' Adm'r, 276 Ky. 275, 124 S.W.2d 54.

Skaggs and the Company asserted preferred liens of $11,432.45 and $9,931.31, respectively, against the assets of the Corporation under KS 2487 (KRS 376.150) et seq., by virtue of contracts they entered into with the Corporation and the local union of the United Mine Workers of America wherein these appellants agreed to render medical services and hospitalization to the miners in consideration of the latter agreeing that the Corporation should make semi-monthly deductions of $1 from the wages of married and 75¢ from unmarried miners, and pay same, along with certain other wage deductions for specified services, to appellants.

As a large number of claims were filed against the Corporation, the chancellor referred the case to the master commissioner to hear proof and report claims. The commissioner allowed Skaggs and the Company each a preferred claim but the chancellor sustained exceptions thereto and held they were not entitled to a preference. From the judgments declaring they were entitled only to common claims, Skaggs and the Company appeal.

The Corporation was forced into receivership by proceedings filed in the Circuit Court of Kanawha County, West Virginia, and on Aug. 22, 1940, the chancellor of the Circuit Court of Letcher County, Kentucky, on motion duly made appointed ancillary receivers to conduct the operations of the Corporation's mines in its jurisdiction, and enjoined all creditors from commencing or prosecuting any action at law or in equity against the Corporation without leave of court. By a subsequent order entered Nov. 19, 1940, the chancellor directed that all persons having claims against the Corporation, other than those secured by mortgages or statutory liens duly filed or recorded, be required to file same with the receivers on or before Jan. 6, 1941, or be barred.

On Dec. 31, 1940, Skaggs filed with the receivers an affidavit setting out his preferred claim of $11,432.45 for professional services rendered miners from February to June, inclusive, of that year under the above-mentioned contract, averring that the Corporation collected this sum for the claimant by deducting it from wages earned by the miners 'and holding same as agent and in trust for the claimant'. On the same day the Company filed with the receivers the affidavit of its president (which appears to have been verified on Jan. 4, 1941), asserting in practically the same terms as the affidavit of Skaggs its preferred claim of $9,931.31 for hospital services rendered miners, except the Company's affidavit does not state when the services were rendered or the deductions made from the miners' wages.

On Oct 11, 1941, both Skaggs and the Company filed intervening petitions in the Letcher Circuit Court fully pleading their contract with the Corporation and the union, the rendition of the services, the filing of their claims...