W.H. Hall & Son v. J.T. Guthrie's Sons

• Citation: 103 S.W. 721
• Parties: W. H. HALL & SON v. J. T. GUTHRIE'S SONS.
• Decision Date: 28 June 1907
• Court: Court of Appeals of Kentucky

103 S.W. 721

W. H. HALL & SON v. J. T. GUTHRIE'S SONS.

Court of Appeals of Kentucky.

June 28, 1907

Appeal from Circuit Court, Shelby County.

"Not to be officially reported."

Action by W. H. Hall & Son against J. T. Guthrie's Sons' assignees. From the judgment, plaintiffs appeal. Reversed and remanded.

Gilbert & Gilbert, for appellants.

Willis & Todd, for appellees.

NUNN J.

On the 13th day of October, 1904, appellants instituted this action alleging, in substance, that they were, during the time therein stated, partners trading and engaged in the business of selling barrels, lime, building material, etc., under the firm name of W. H. Hall & Son. They alleged that from April 1, 1903, to February 4, 1904, inclusive, they sold and delivered to the partnership of J. D. Guthrie's Sons composed of J. G. and J. D. Guthrie, flour barrels, lime sacks, and other materials, as set forth in an itemized account filed in the Shelby county court, amounting to $366.66, and that the items charged in the account were just that the prices charged were reasonable, and that the firm of J. D. Guthrie's Sons agreed and promised to pay same. They also alleged that on or about February 1, 1904, the partnership of J. D. Guthrie's Sons and the individual members thereof executed a joint deed of assignment of all of their property, both real and personal, to the appellees, Ed R. Wilson and J. C. Bright, in trust for the payment of all the debts of the assignors, subject to the exemptions that they were entitled to by law. The deed of assignment was signed and acknowledged by the assignors and delivered to the assignees, who accepted the trust. They further alleged that J. D. Guthrie's Sons, during the time their account was created, were the owners of and were operating a roller mill in the town of Shelbyville, known as the "Climax Roller Mills," with which they manufactured flour for the market; that the material and supplies charged in their account were furnished Guthrie's Sons for the carrying on of their business; and that under section 2487 they have a lien upon all the partnership property and effects used and involved in such business that they assigned to the assignees. They stated that by order of the county court the assignees sold the mill and appliances on the 30th day of April, 1904, and that within 60 days from that date, to wit, on the 14th day of the following June, they presented their claim, proved as required by statute, to the assignees and the county court, and requested that the claim be allowed, with a lien on the assigned property for its payment. The claim was allowed, but the lien was refused. They continued their petition by making various allegations of misconduct and mismanagement on the part of the assignees of the assigned estate, and sought a settlement of their accounts in the circuit court, praying that all the proceedings then pending in the county court with reference to the same be transferred to the circuit court, and asked the court to adjudge them a lien on the assigned property for their claim and for a settlement of the estate. Appellees filed a demurrer to this petition, and the court overruled it, but upon the condition that appellants would dismiss all of their petition except so much as set up their lien for their claim of $366.66; and they, under protest, dismissed all of their petition without prejudice, except that part mentioned. Appellees did not file any answer or pleading controverting the allegations of the petition with reference to their claim of a lien on the assigned property for the payment of their claim. The case was submitted without proof, and the court dismissed their petition.

The court was right in dismissing that part of the petition by which they sought a settlement of the assigned estate. This appears to have been a voluntary assignment. Section 96 of the Kentucky Statutes of 1903 provides, in part, as follows: "The provisions of this chapter shall not prevent actions to settle estates by the assignees, or by any creditor or creditors representing one-fourth of the liabilities, from being brought in the circuit court." It is disclosed by the petition and exhibits filed that appellees represent a very small proportion of the liabilities of the assignors, greatly less than one-fourth thereof, and by reason of this fact they cannot be permitted to institute and prosecute an action for the settlement of such an estate.

This leaves the only questions to be determined, which are: First. Had appellees a lien upon the mill and appurtenances for the payment of their claim? Second. If they had the lien, did they take the proper steps to preserve it? Section 2487 of the Kentucky Statutes of 1903 reads as follows: "When the property or effects of any mine, railroad, turnpike canal or other public improvement company, or of any owner or operator of any rolling mill, foundry or other manufacturing establishment, whether incorporated or not, shall be assigned for the benefit of creditors, shall come into the hands of any executor, administrator, commissioner, receiver of a court, trustee or assignee for the benefit of creditors, or shall in any wise come to be distributed among the creditors, whether by operation of law or by the act of such company, owner or operator, the employés of such company, owner or operator in such business, and the persons who shall have furnished materials or supplies for the carrying on of such business, shall have a lien upon so much of such property and effects as may have been involved in such business, and all the accessories connected therewith, including the interest of such company, owner or operator in the real estate used in carrying on such business." The mill of Guthrie's Sons was a manufacturing establishment in the meaning of this section. In the case of Muir v. Samuels, 62 S.W. 481, 23 Ky. Law Rep. 14, this court determined that a laundry was not a manufacturing establishment in the meaning of that section, for the reason that it only changed dirty linen into clean linen. The article was a complete one before...