Court Opinion

ID: 6692299
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:39:15.222295+00
Date Added: 2024-06-11T16:01:08.511850
License: Public Domain

CAMPBELL, J.
(concurring specially). One of respondent’s principal contentions is that the rights of a trustee in bankruptcy are broader than the rights of the bankrupt himself, and respondent earnestly urges that by virtue of the provisions of the Bankruptcy Act, and the status of the trustee as therein defined, the trustee should prevail over the subcontractor Berger Manufacturing 'Company (appellant herein), even though the contractor Arp himself could not have so prevailed had there been no bankruptcy.
The rights of the trustee with reference to the debt from the *117school district to the 'bankrupt Arp, whether due or to1 become due, are defined by section 47a oí the Bankruptcy Act, as amended in 1910 (11 'USCA § 75 (a), reading as follows: “And such trustee, as to all property in the custody or coming into the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also, as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied.”
It is thus apparent that the right of the trustee is broader in some respects than the right of the bankrupt himself, and the decisions are uniform in so holding.
It is obvious, however, that the right of the trustee, though it may be broader than the right of the bankrupt, is fundamentally based upon the right-and interest of the bankrupt.
Section 1660, Rev. Code 1919, as amended by chapter 221, Laws 1925, reads as follows: “Every person who shall perform labor or furnish any materials, supplies'or labor used in connection with or consumed in the carrying on of any work for the construction or repair of any work for any county or municipal or public school corporation in this state to any person who shall have made any contract for such work with such county or corporation, upon complying with the provisions of this article shall have for his labor done or materials or supplies furnished a lien upon all moneys in the control of such county or corporation due or to become due under such contract.”
And section 1661, Rev. Code 1919, reads: “Every person wishing to avail himself of the provisions of this article shall, within twenty days after the material furnished by him shall have been furnished or the work done by him shall have been performed, file with the officer of such county or corporation, who is by law made the custodian of its official records a just and true account of the demand due or to become due him, after allowing all credits, and verified by his affidavit. But a failure to file the same within the time aforesaid shall not defeat the lien upon the amount remaining due to the contractor at the time of filing. If any person who shall have performed labor or furnished materials as provided in this article shall procure from the contractor a settlement and state*118ment of his account, signed by the contractor and verified by his own affidavit, the same may be filed and shall have the same force and effect as the account heretofore mentioned.”
Construing these two sections together, it seems to me that the net result is that, as between the subcontractor and the contractor, and) all persons claiming by, through, or under the contractor, there is no limit as to the time that the lien statement may be filed so long as any money remains in the hands of the public corporation due or to become due to the contractor. During the first 20 days the subcontractor has an inchoate claim upon “all moneys in the control of such county or corporation due or to become due under such contract,” and during that period the county or corporation makes any payment to the principal contractor at its peril. After the expiration of 20 days, if no lien statement has been filed in the meantime by the subcontractor, the county or corporation may freely pay to the principal contractor and runs no risk by reason of so doing; but if, in fact, it has not paid and the subcontractor files a lien at a time when the county or corporation still has under its control money ’due or to become due on the contract, I think his lien reaches that money. In other words, as to' whatever money may in fact be there, I think our statute contemplates that the lien shall be good whenever filed. I believe the interest of the principal contractor in mqneys due or to -become due from the county or corporation is at all times, until he actually receives such money, an interest which is in its very nature subject to the filing of a lien by a subcontractor at any time up to and until the money actually gets out of the hands of the county or corporation. And I think that this is the only interest that the contractor could assign or transfer or that a creditor of the contractor could reach by attachment, garnishment, or levy of execution, namely, an interest subject always to the possibility that a subcontractor may file a lien statement at any time before the fund actually gets out of the control of the county or corporation. And if the subcontractor does file such lien statement at a time when there is any fund still in the hands of the county or corporation, even though such filing is subsequent to the 20-day period, I think he acquires a lien thereon superior not only to any claim of the contractor but superior to the rights of any prior assignee of the -contractor or any attaching or judgment creditor of the contractor. This seems to *119me to be the construction of our statute interpreting the two sections together.
Therefore, conceding that the rights of the trustee are broader than the rights of the bankrupt himself and that he stands in the position of a creditor of the bankrupt, holding a lien by levy or equitable proceedings, nevertheless such lien can be only upon the actual interest of the bankrupt which under our statute is, at all times until the entire fund actually gets out of the hands of the county or corporation, an interest subject to be defeated or reduced by the filing of a mechanic’s lien by a subcontractor.
Upon these considerations I concur in the view that the judgment appealed from should be reversed.
BURCH, J., joins in the foregoing special concurrence.