Court Opinion

ID: 7990669
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:30:40.934328+00
Date Added: 2024-06-11T16:35:21.410800
License: Public Domain

Anderson, J.,
delivered the opinion of tbe court.
Until the decision of the cases of Drennen & Co. v. Mercantile Trust & Deposit Co., 115 Ala. 592, 23 South. 164, 39 L. R. A. 623, 67 Am. St. Rep. 72, and LeHote v. Boyet, 85 Miss. 636, 38 South. 1, the doctrine of Fosdick v. Schall, 99 U. S. 235, 25 L. Ed 339, had been confined by the courts of this country exclusively to receiverships of insolvent railroad corporations. In the Drennen case the Alabama court extended the doctrine to claims of laborers against insolvent private corporations in the hands of receivers, and was followed by this court in the LeHote case, in which the claims given preference were those of laborers in and about the sawmill plant, a private corporation in the hands of a receiver, for their. services performed within the period of four months before the receivership, and jvhich were necessary to continue tire business and preserve the property of *339the corporation. This court placed the allowance of such claims as preferences on the second ground stated by the supreme court of Alabama in the Drennen case} as follows: “Second, that whether, strictly speaking, there has been any diversion of gross camings from the employes, directly or indirectly, to the bondholders, or not, the operatives and laborers have performed services and labor in the improvement and betterment of the mortgaged property, so that such labor and services have inured directly to tire benefit of the bondholders, in the' enhancement of the value of their security, and hence of their bonds, they thereby securing, in addition to the property embraced in their mortgages, the value of the services of the company’s operatives and laborers, which value belongs to such operatives and laborers, and would have been paid to them, it is to be assumed, by the corporation, out of its gross earnings, but for the intervention of the bondholders, and the appointment at their instance of the receiver.”
We decline to extend the doctrine beyond the claims of laborers, the wage class, who are favored by law, and justly so, as illustrated by our statutes giving the laborer a lien on crops produced by him, and providing that there shall be no exemption from liability to judgment for labor performed, and also by the common law, which gives laborers who receive chattels for repair, at the request of the owner, the right to retain same as security for their debt. 19 Am. & Eng. Encv. of Law (2d ed.) 8. There is no difficulty in applying the doctrine in question to the claims of laborers; while, on the other hand, great injustice and inequality would result in its application to any other class of claims. To illustrate: In the instant case, the appellant is a merchant seeking a preference for feed stuff furnished this sawmill corporation with which to feed its oxen, to enable them to haul logs to the mill to be sawed into lumber, which lumber was on hand at the time of the appointment of *340the receiver. Why should such a claim be preferred over that of any other unsecured creditor ? Why over the claim of another merchant, who furnished the company clofhing and food for the laborers in its employ, who- cut the trees and drove the oxen back and forth in hauling logs- to the mill ? Why over the claim of a bank which loaned the concern money with which to buy materials to go into the betterment of the plant, or with which to buy timber to be sawed into lumber? Or any other-indebtedness incurred, which directly or indirectly contributed to keeping the plant a going concern, and to continue or increase the income therefrom? We can conceive of no indebtedness, necessarily incurred about the business which would not contribute to that end.

Affirmed.