Southern Coal Co. v. Martin's Fork Coal Co.
| Citation | 286 Ky. 679 |
| Parties | Southern Coal Co. v. Martin's Fork Coal Co. et al. and nine other cases. |
| Decision Date | 30 May 1941 |
| Court | United States State Supreme Court (Kentucky) |
1. Mines and Minerals. — A supply company was not entitled to a labor lien on script which it had received from miners purchasing its goods, upon mining company becoming insolvent, where script was taken by supply company under contract with mining company, which received a discount for redeeming script, and which agreed to run practically all of its script through supply company's store, and with no intention of becoming subrogated to statutory labor lien given the miner (Ky. Stats., sec. 2487).
2. Mines and Minerals. — Where miners receiving script from mining company for wages used script to purchase goods at supply company, which had agreement with mining company whereby mining company would redeem script in cash at 90 per cent. of its value, attempt of miners to assign their labor lien to supply company, after supply company had bought script from them, and after mining company became insolvent, was ineffective since miners' debts for wages were extinguished upon transfer of script (Ky. Stats., sec. 2487).
3. Subrogation. — Generally, one who lends money to an employer to pay laborers, who if their wages had remained unpaid would be entitled to a lien therefor, is not entitled to be subrogated to laborers' liens merely by virtue of making loan to employer, but rather loan must be made in expectation of being subrogated and under an agreement to such effect (Ky. Stats., sec. 2487).
4. Master and Servant. — A contract between mining company, which issued script to its employees for wages, and supply company, whereby mining company received a discount from supply company in redeeming script, and mining company influenced its employees to trade at supply company, militated against employees and was contrary to "public policy" (Constitution, sec. 244).
5. Mines and Minerals. — An independent contractor who furnished materials to mining company and filed a statement of his claim in the county court clerk's office as required by statute to assert a materialman's lien was not entitled to a labor lien in addition (Ky. Stats., secs. 2468, 2487).
6. Master and Servant. — A labor lien provided by statute is only for unpaid wages of employees and does not include sums due independent contractors for services and materials furnished under their contracts (Ky. Stats., sec. 2487).
7. Mortgages. — An independent contractor's lien for materials furnished to mining company was not superior to mortgage liens on mining company's property, where statements filed by independent contractor to perfect his lien were subsequent to recording of the mortgages, and no effort was made to show that holders of mortgage liens had actual knowledge that independent contractor was furnishing materials for which he was claiming a lien (Ky. Stats., sec. 2468).
8. Mines and Minerals. — An electric company which furnished mining company with materials and labor installing and repairing such materials, and which filed statements of its claims in county court clerk's office as required by statute to perfect a mechanic's lien and a materialman's lien, was not entitled to a labor lien in addition (Ky. Stats., secs. 2468, 2487).
9. Court Commissioners. — The court cannot increase statutory fee of $3 a day allowed special commissioner, but statute does not prevent an allowance for extraordinary services or expenses incurred by commissioner in performance of his duties (Ky. Stats., sec. 1740).
10. Court Commissioners. — A special commissioner must file a verified statement in writing showing number of days he acted and what extraordinary services he rendered before circuit court can make an allowance to commissioner (Ky. Stats., sec. 396).
11. Court Commissioners. — An order allowing $100 to special commissioner upon commissioner's motion which stated he had conducted 11 sittings of one day each and that he had rendered extraordinary services in examining the record, claims, etc., was unauthorized, where motion was not verified, nor supported by a verified statement (Ky. Stats., secs. 396, 1740).
12. Mines and Minerals. — Where two employees left part of their wages with mining company and it appeared that it was their intention to lend such sum to company, sums due employees represented "unpaid loans" rather than "unpaid wages," as regards right of employees to assert labor liens against company's property upon company becoming insolvent (Ky. Stats., sec. 2487).
13. Master and Servant. — An employee in the capacity of a bookkeeper is entitled to a lien against employer's property for wages under statute (Ky. Stats., sec. 2487).
14. Mines and Minerals. — One employed by mining company to audit books, install an improved bookkeeping system, and to start regular bookkeeper on improved system, and who was to receive a lump sum for his services, was an "independent contractor," and had no right to a statutory labor lien to secure his debt, upon company becoming insolvent (Ky. Stats., sec. 2487).
15. Mines and Minerals. — Where none of creditors of insolvent mining company filed exceptions to manner in which claims for wages were proven as labor liens nor asked circuit court to pass upon competency of claims, and no exceptions were filed to report of special commissioner, who heard proof and reported on claims against company, on ground that such claims were not duly proven, any objection to manner in which such claims were proven was waived (Ky. Stats., secs. 2488-2494).
16. Mines and Minerals. — Where assignees of labor claims against insolvent mining company, who purchased claims from employees at around 50 cents on the dollar, based their right to a labor lien against company's property solely upon assignments made to them, the statute limiting recovery on script to the amount paid therefor was not applicable (Ky. Stats., secs. 2487 et seq., 4758b-1).
17. Payment. — Evidence established that insolvent mining company gave cashier's check to creditor as return of $1,400 advanced to meet payroll, upon creditor subsequently honoring a draft which company drew for its payroll, and was not intended to apply on account owed creditor, which was secured by a mortgage.
Appeal from Harlan Circuit Court.
Andrew Duncan, Jr., and James Sampson for appellant.
H.H. Fuson, J.S. Forester and J.B. Carter for appellee Martin's Fork Coal Co.
J.S. Forester and J.B. Carter for appellee Bank of Harlan.
John L. Williams for appellee Henry H. Pope.
J.B. Snyder and W.T. Davis for appellee Sunshine Supply Co.
J.S. Forester and J.B. Carter for appellees H.H. Fuson and W. W. Lewis.
E.L. Morgan for appellee Sunshine Mining Co.
E.L. Morgan and E.H. Johnson for appellee George L. Michael.
J.C. Baker for appellees Coy, Ellis, Hardy, O.S. and Clyde Goforth.
Before James M. Gilbert, Judge.
Affirming in part and reversing in part.
These ten appeals and cross-appeals are the result of various creditors attempting to collect their debts from the insolvent Sunshine Mining Company, which was forced into receivership. The cases were consolidated below and on motion they were heard together here and will be disposed of in one opinion.
For convenience the parties will be referred to throughout the opinion as follows: The Southern Coal Company will be called the Company; the Sunshine Mining Company will be called the Mine; the Sunshine Supply Company will be called the Commissary; the Martin Forks Coal Company will be called the Lessor; the Bank of Harlan will be called the Bank; the Electric Service & Supply Company will be called the Electric; and the various labor claimants will be called by their names.
On July 29, 1936, the Mine borrowed $3,000 from the Bank, executing its notes to the Bank due four months after date, secured by a mortgage on certain mining equipment, which debt had been reduced to $2,500 when this litigation started. On Sept. 24, 1936, the Company loaned the Mine $7,000, payable in one year in 12 equal monthly installments, which was secured by a mortgage on certain mining equipment; and on Sept. 29, 1936, the Company sold the Mine a storage battery locomotive for $800 to be paid in one year in equal monthly installments under a conditional sales contract creating a lien on the locomotive.
On Oct. 22, 1936, the Commissary and the Mine entered into a written contract whereby in consideration of a 10% discount on all scrip received by the Commissary from the Mine's employees, the Mine agreed for a period of 12 months to run all scrip issued its employees, except that issued for gasoline and amusement, through the Commissary, and to redeem by the 16th of each month, all scrip taken in by the Commissary during the preceding month. At the time the Mine closed on Jan. 19, 1937, the Commissary held its unredeemed scrip in the amount of $5,677.29.
The Mine had become in arrears in the sum of $1,759.64 in the payment of royalties due the Lessor and on Jan. 22, 1937, the Lessor filed its petition in equity to enforce its lien for this royalty and made the Mine, the Bank and the Company defendants. The Company and the Bank by appropriate pleadings sought to recover their debts and to enforce their mortgage liens. The Commissary filed an intervening petition seeking recovery for this unredeemed scrip against the Mine on the contract dated Oct. 22, 1936, and sought a general order of attachment. By amended intervening petitions the Commissary pleaded the Mine had breached its contract and was not entitled to the 10% discount on the scrip; that the Commissary had obtained written assignments from each laborer from whom it had received scrip and thereby became subrogated to the workmen's liens for wages provided by Kentucky Statutes, Section 2487 et seq., and alleged facts that brought the labor performed by each...
To continue reading
Request your trial