Court Opinion

ID: 6136141
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:42:31.050886+00
Date Added: 2024-06-11T08:54:30.998264
License: Public Domain

Merwin, J.
(dissenting):
I differ from brother Follett as to classes 14 and 15. In the case, class 15 is described as follows: “That the corporation was indebted to employees and laborers for wages accruing subsequent to the passage of the act before mentioned, for which wages the corporation had executed and delivered to such employees or laborers its promissory notes on time, which employees or laborers duly transferred said notes to third parties, who now hold the notes for value and which have not been paid.”
The giving of the note did not operate as payment of the debt for wages. (Jagger Iron Co. v. Walker, 76 N. Y., 521.) The transfer of the note operated to transfer the debt (The Oneida Bank v. The Ontario Bank, 21 N. Y., 490), so that the debt for wages is still-in existence and is owned by the claimant, and if the statute under consideration operates to prefer the debt as such, then the present holder is entitled to the benefit of the preference. The statute provides that where a receiver of certain corporations shall be appointed “the wages of the employees, operators and laborers thereof shall be preferred to every other debt or claim *345against such corporation.” By this form of expression it is the wages that is preferred; it is one kind of debt over every other debt. It is not one kind of debtor over every other debtor ; it is not personal. The case of Rollin v. Cross (45 N. Y., 766) is not applicable. That case was under the mechanics’ lien law (chap. 513 of 1851), which gave a personal privilege and required certain acts to be done by the person himself before his lien was perfected. The cases of Pilcher v. Brayton (17 Hun, 429); Bolen v. Crosby (49 N. Y., 183), and several other kindred cases, are more analogous, but they do not, I think, reach the present question. I find no authority exactly in point. The test, it seems to me, is, whether the debt or the person is preferred. I think it is the debt; that is the fair construction of the statute, and is consonant with the object of the statute, which is to benefit the laborer. It adds value to the claim, for anything that detracts from the assignability of a claim lessens its value. It is to be presumed that credit was given for the wages n reliance on this provision of law, so that the benefit of the' law to a certain extent attached before the appointment of a recéiver. It is on this principle that the debts incurred before the passage of the law are excluded from its benefits. The title of the act is not inconsistent with this construction, for it is to be presumed that the legislature preferred the debt as the best means to accomplish the payment of the wages. Besides the act itself, if reasonably certain, must control. This case is very different from the case where the assignee voluntarily surrenders the order of the laborer and takes a new obligation from the corporation directly to himself. It may be said then, with much force, that the debt for wages is extinguished and the preference gone.
Class 14 is illustrated as a case where the laborer, in payment for merchandise then sold and delivered to him by a merchant, draws and delivers to the merchant a written order on the corporation for a portion of the wages then due him and earned after the passage of the act, but “ the merchant, the payee in the instrument, has never presented the same to the corporation, but has continued to hold, and now holds and owns, the same, the amount thereof appearing on the books of the corporation to the credit of the employee or laborer.” The order, after specifying the amount, says, “and charge to my account.”
*346If this order operated to assign to the merchant so much of the debt for wages, then the case is similar to class 15. So that the question is whether, under the circumstances, this order operated as an assignment. Dealing in orders in this way had prevailed for a number of years, and it may fairly be inferred from the case as presented that the corporation was accustomed to treat such orders as transfers pro tanto. (Story, J., in Mandeville v. Welch, 5 Wheat., 286.) It was undoubtedly so designed by the drawer or laborer, and so understood by the merchant. In effect it was drawn on a particular fund; that was the effect of the transaction, though not put in so many words. (Coates v. First Nat. Bank, etc., 91 N. Y., 20.) It was delivered to the merchant for full value. Concededly the corporation is indebted to some one for the amount, and it so appears on its books. By the statute, if my construction of it is correct, the debt is preferred, whether owned by the laborer or the merchant. As between these two, the latter is certainly entitled to it. In Risley v. Phenix Bank (83 N. Y., 318) it was held that there may be an oral assignment for a valid consideration, of a portion of a debt. Under the Coates and Bisley cases I think it should be held in the present case that there was an equitable assignment from the laborer to the merchant of so much of tñe debt for wages as was represented by the order, and that, therefore, the merchant is entitled to the preference. I am, therefore, of the opinion that classes 14 and 15 are entitled to be preferred.
The order, so far as it holds that class 13 is entitled to a preference under the statute, is reversed, but in all other respects the order is affirmed.