Court Opinion

ID: 6240813
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:44:14.185694+00
Date Added: 2024-06-11T08:58:11.529698
License: Public Domain

Opinion by
Mr. Justice McCollum,
The question raised on this appeal relates to the distribution of the proceeds of a sale by the receiver of the property of the Keystone Oil Co., described in the claims of the mechanics and material-men. These claims, with interest and costs, amounted to the sum of $38,625.02, were within the purview of the mechanics’ lien laws, sufficient in form and substance, and filed in time, and in conformity with the procedure provided for their enforcement, judgments were recovered upon them. They *144were for labor done and materials furnished “ for and about the erection and construction of several buildings and structures, constituting an oil refinery,” located on a lot of 55 acres, the boundaries of which were particularly defined. The receiver sold the property by the description contained in the claims for the sum of $40,000. The Imperial Refining Co., Limited, appellant, is the owner of two bonds of $1,000 each, secured by a mortgage on this property of $75,000, executed by the Keystone Oil Co. on Oct. 12, 1887, and the lien of which on the oil refinery, it is admitted, is subsequent to the liens of the mechanics and material-men. The appellant received these bonds in part satisfaction of its demands against the Keystone Oil Co., four days after the bill for the dissolution of the debtor company was filed, and ten days before the receiver of its effects was appointed.
It is now contended by the appellant that the liens of the mechanics and material-men did not extend to and embrace all the land described in them, nor all the structures located thereon, although such structures were necessary for the proper prosecution of the business in which the Keystone Oil Co. was engaged, but that such liens were limited to the buildings and curtilage necessary for one branch of that business ; and, further, that the property covered by the liens so limited did not exceed in value the remainder of the property contained in the description. The Keystone Oil Co. was a corporation formed for the purpose, inter alia, “ of refining and manufacturing petroleum and other oils into their various products,” and of compounding “ petroleum and other oils and their products with other necessary and desirable substances.” The 55 acre lot, and the buildings, machinery and appliances erected thereon, were devoted exclusively to the business for which the company was created, and it is not denied that they were required for it. It may be true that this business was susceptible of division and that there was no apparent imperious necessity for concentrating all of it on the lot in question. But the extent of its business, and the manner of conducting it, were matters to be determined by the company, with a view to its own convenience and profit. If, in fact, these structures constituted a manufacturing plant, owned and managed by the Keystone Oil Co., as a whole, and the inclosed ground on which they were *145erected was necessary for its operations, the contention of the appellant is without merit or anything tangible to rest upon. The capacity of the plant to do all the work required in refining and manufacturing petroleum and other oils into their various products, and in compounding the same with other necessary and desirable substances, does not in any respect militate against this conclusion. In other words, the plant may embrace the manufacture of paraffine and of other products of oil, without making the structures specially adapted to one branch of its work a distinct subject of lien. It is not intended by this to deny that the manufacture of paraffine may constitute a separate and independent industry, or that parties may establish and operate manufactories exclusively for its production, but to make clear, and enforce the proposition, that paraffine works may properly be included in and constitute part of a manufacturing plant known and operated as an oil refinery. Prima facie the liens of the mechanics and material-men were valid, and coextensive with the boundaries of the property described in them. But these boundaries did not conclusively ascertain the curtilage, and if they included land not necessary for the work of the plant, or structures which were not a part of it, there was an easy and ample remedy provided for the owner and lien creditors by the act of June 16, 1836. By its provisions the owner may define the curtilage before the commencement of the building, and, in default thereof, the court of the proper county may, on the application of the owner or lien creditors, appoint commissioners to designate it, and stay any execution awarded for the levy and sale of the property until such designation is made. If the propertjr is sold by virtue of an execution upon any mortgage or judgment before' the extent of the mechanics’ lien is ascertained, the court has “ power to determine the rights of the respective parties, and the apportionment or appropriation of all liens as aforesaid, and for that purpose may appoint an auditor to inquire into and report the facts, and may decree distribution accordingly; or upon the application of any of the parties may direct an issue for the determination of disputed facts.” It must be conceded, we think, that the power of the court respecting “ the apportionment or appropriation of liens ” is not enlarged by a sale by the receiver under its order, in lieu of a sale on process upon a mortgage or judg*146menfc. Whilst a sale by a receiver under an order of court is not within the letter, it is clearly within the spirit of § 9 of the act of June 16, 1836, and as, in the court below and on the argument here, it was allowed the same effect as a sale on an execution issued upon a mortgage or judgment, we shall for the purposes of this ease so consider it. It is certain that a sale upon any of the judgments obtained on the claims of the mechanics and material-men would have discharged the lien of the mortgage, and passed the title to the entire property to the purchaser. Why ? Because the property was bound by the lien of such judgment. The writ of levari facias is available only in the enforcement of the lien and in the sale of property subject to it. In the appropriation of the proceeds of such a sale, may an auditor, for distribution only, restrict the lien of the judgment to a portion of the property sold ? We think not. The power of the auditor is defined by the order appointing him, and he must keep strictly within it. He cannot revise the judgment; he must accept it as certified to him by the proper custodian of the record. If it is alleged that the date of the lien, as shown by the record, is.incorreet, he cannot receive evidence to change it: Kendig’s Ap., 82 Pa. 68.
If the record of the judgment shows the extent of its lien, an auditor appointed to distribute a fund cannot disregard it. A mechanic’s lien claim is, before judgment, “ open to impeachment by all having an interest in its validity as owner, purchaser or lien creditor,” but afterwards it is subject to the well settled rule “ that a judgment, though irregular on its face, and even illegally recovered, cannot be impeached collaterally by third persons, though lien creditors of the defendant, except for fraud or collusion : ” Lauman’s Ap., 8 Pa. 473.
Whether § 9 of the act of 1836 applies to the case of a judgment on a mechanic’s lien, in which the claimant has designated the curtilage with the knowledge and acquiescence of the owner and lien creditors, is a question we are not required to consider, because no proceedings have been instituted which raise it. When the auditor was appointed there was no suggestion that any dispute would arise before him touching the right of the mechanic’s lien creditors to be first paid from the proceeds of the sale of the property against which their claims were filed, and no application has been made to the court for the appoint*147ment of an auditor to inquire into and report the facts, for an issue to determine them, or for an order enlarging the powers of the auditor appointed to distribute the fund.
We think the learned auditor was right in holding that he was not authorized by his appointment to ascertain the curtilage of the oil refinery. This conclusion is the logical result of the cases relating to the powers of auditors, when considered in connection with the provisions of the act of 1836, and the decisions of this court in Lauman’s Ap., supra : Armstrong v. Hallowell, 35 Pa 485; Shryock v. Buckman, 121 Pa. 248, and Harbach v. Kurth, 131 Pa. 177.
The specifications of error are overruled, and the decree is affirmed and appeal dismissed at the costs of the appellant.
Manufacturers’ Gas Company’s Appeal.
Opinion by
Mr. Justice McCollum,
May 9,1892:
This appeal is from the same decree as the appeal of the Imperial Refining Company, Limited, decided at this term, and for the reasons given in the opinion filed in that case, the specifications of error are overruled.
Decree affirmed and appeal dismissed at the costs of the appellant.
Oil City Sayings Bank’s Appeal.
Opinion by
Mr. Justice McCollum,
May 9,1892:
This appeal involves the same questions raised on the appeal of the Imperial Refining Company, Limited, decided at this term, and is from the same decree. The specifications of error are overruled for the reasons given in the opinion filed in that case.
Decree affirmed and appeal dismissed at the costs of the appellant.