The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1911-08-10

An important ruling in bankruptcy
matters was made hg Judge VIM. B.
Sheppard yesterday when he passed
upon the claim OF VIM. +. Lee, book:
keeper for the bankrupt firm OF the
McDavid Lumber Co., in which he
claimed salary for about a month and
half, which was contested by the
w. Hayward Export Lumber Co, upon
the ground that the latter held a mort
gage on the output OF the plant, which
had priority over the claim OF Lee.
This contention of the export company
was upheld by Referee Shine, and
Judge Sheppard in making the ruling
reversed the decision. In doing so he
declares that the duty OF the govern
ment is to protect the earnings OF the
wage worker.
The decision in full is as follows:
In re McDavid Lumber Company a
corporation, bankrupt.
This matter comes to this court for
consideration on a petition OF VIM. L.
Lee for review Of the ruling OF the
Hon. G. L. Shine, referee in bank
ruptcy, and involves the question OF
priority OF liens attaching 10 the es-
tate OF the McDavid Lumber Com
pany, administered In a court OF bank
ruptcy.
The McDavid Lumber Company was
engaged in manufacturing lumber and
operated large saw mill plant at Nc
David, Fla, The company was adtu-
dicated a bankrupt June, 1910. VIM.
F. Lee was employed as boolkkeeper
for the company, and by his petition
before the referee sought to establish
his statutory lien for wages, at the
rate Of 3115.o0 per month, on the stock
Of lumber and fixtures of the company
| for the month of April and q part OF
May, 1910. II is further declared by
the petition that the stock OF lumber,
part OF which was produced during
Lees engagement. comprised the
principal assets OF the company.
OUTPUT MoRTGAoED.
Three months prior to Lees employ
ment, on January 10th, 1910, the Nc
David Lumber Company executed a
chattel mortgage to the w. Hayward
Export Company. embracing all of the
lumber and timber Of whatsoever kind
which should be manufactured at the
mill Of said company, from the 10th OF
1911.
The point is alSo made by the petit
| ton that this mortgage was not re-
corded until the 18th day OF April.
1910, but actual notice OF its existence
is no where negatived by the petition;
although, as will appear later, notice
of such lien is not material to the
present determination OF the question
certified to this court
Lee seeks by his petition to have his
| claim for wages declared a preference
over the mortgage OF the Hayward Ex-
port Company, and that the latter
company which has disposed OF the
lumber, be required to pay Lee his
claim for wages.
| The Hayward Export Company In
terposed a demurrer to Lees petition.
only the first ground OF which is
deemed necessary to recite for the
purposes OF this investigation, Wig:
| Il. The allegations OF the petition
show that the rights OF the Hayward
Export Company, under it's mortgage
and contract OF sale, are superior TO
the rights Of the petitioner In the
proceeds of the lumber"
| The referee, upon the hearing be-
fore him, sustained the demurrer, and
this order on petition of Lee is certi-
| fed here for revision.
PRIORITY OF LIEN.
| The contest seems to have waRed SO
far over the priority OF the respective
statutory liens Of contestants, without
| reference to the order OF priority in
the distribution OF estates Of bank
rupts. as provided by Sec. 81 b. 90 OF
the Bankruptcy act Of 1898, which gives
priority to wages due laborers earned
within three months before the date
Of the proceedings in bankruptcy.
Whether the lien created by Sec. 2Igs,
| general statutes (FTa) which pro-
vides that liens prior I'm dignity to all
! others accruing thereafter shall exist
in favor Of bookkeepers, clerks, etc,
upon the stock, fixtures, and other
property OF merchants and corpora
/ tions," should be declared superior 10
the mortgage OF the HAYWARD Export
Company, which antedated the per-
| formance of any labor by Lee was the