Wright v. Wynockie Iron Co.

• Decision Date: 25 March 1891
• Parties: WRIGHT et al. v. WYNOCKIE IRON CO.
• Court: New Jersey Court of Chancery

21 A. 862

48 N.J.E. 29

WRIGHT et al.

v. WYNOCKIE IRON CO.

Court of Chancery of New Jersey.

March 25, 1891.

(Syllabus by the Court.)

On petition by laborers for payment of their claims.

Ford D. Smith, for petitioners.

J. H. Neighbor, for D. L. Bryant.

B. C. Frost, for Northampton County National Bank.

MCGILL, Ch. On the 26th of August, 1890, the Wynockie Iron Company, a corporation, was adjudged to be insolvent, and a receiver of its assets was appointed. Prior to such adjudication, in July of the same year, the Northampton County National Bank recovered a judgment in the supreme court of this state, against the company,¹ and, under execution issued thereon, levied upon all the assets of the corporation, except its book-accounts and about 75 tons of iron ore; and on the 13th of August, in the same year, D. L. Bryant, as landlord, took the 75 tons of iron ore, with other property, in distress for unpaid rent. With the assent of the landlord and judgment creditor all the property of the company has been sold by the receiver under an agreement that the rights of the landlord and judgment creditor in the several pieces of property sold shall continue in the proceeds of sale of those pieces. The proceeds of the sale are insufficient to pay the judgment and the rent, and the only other assets of the company are some book-accounts of insignificant value. The petitioners are laborers. They present claims for services which were rendered to the insolvent company both prior and subsequent to the recovery of the judgment and the distress for rent, and insist that they are entitled to precedence in payment, from the proceeds of the beforementioned sale, over the landlord and the judgment creditor. They contend that such precedence is secured to them by the sixty-third section of the corporation act as it was amended by the statute of March 31, 1887, (P. L. 99.) The amended section provides that, in case of the insolvency of any corporation, the laborers then and theretofore in the employ thereof shall have a lien upon the assets of the corporation for the amount due to them, respectively, which shall be paid prior to any other debt or debts of the company, and that such lien shall have reference to and comprise all claims for such labor or services rendered for or in behalf of the corporation before the date which the court adjudges to be the time when the insolvency which gives it jurisdiction occurred, whether such laborers were in the actual employ of such corporation at that time or not. The insistment is that the purpose of the amendment was to provide that the lien of laborers should relate back to and have precedence over all other liens as of the time when their services were rendered, provided that at such time the company was insolvent. As the section originally stood, (Revision, 188,) it provided that, in case of the insolvency of a corporation, the laborers in the employ thereof should have a lien upon its assets for the amount of...