Court Opinion

ID: 9320034
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:49:42.466628+00
Date Added: 2024-06-11T17:14:33.556726
License: Public Domain

Opinion,
Mr. Justice McCollum :
The Lower Merion Water Company was incorporated under the act of April 29, 1874, P. L. 73, and its powers, privileges, and duties are defined by the thirty-fourth section thereof. It is clothed with the right of eminent domain, and it is protected from competition until it “shall have from its earnings realized and divided among its stockholders, during five years, a dividend equal to eight per centum per annum upon its capital stock.” It is bound to furnish a sufficient quantity of pure water at reasonable rates, and the Court of Common Pleas of the proper county may, on the petition of any citizen using the same, make 'such order in the premises as may seem just and equitable, and enforce its decrees by the usual process. It may, at the expiration of twenty years from its introduction of the water, be required to transfer to the municipality in which it is located its works at their cost, with ten per cent thereon, less the dividends it has received. This partial summary of its powers and duties clearly stamps it as a public corporation. It was decided in Foster v. Fowler, 60 Pa. 27, that the structures necessary to the operations of such a company are not subject to a mechanics’ lien ; and the present case is ruled by it, if the act of April 7, 1870, P. L. 58, which allows the personal, real, and mixed property, rights and franchises of a corporation to be sold on a writ of fieri facias, does not supersede it. It is contended that the act referred to has rendered the reasoning on which the decision in Foster v. Fowler, supra, rests, and which is undoubtedly sound, inapplicable ; and our sole inquiry is whether this contention is well founded.
It should be noted at the outset that the principle of the *615case cited was distinctly approved in Girard Point Storage Co. v. Southwark Foundry Co., 105 Pa. 248, where a mechanics’ lien was sustained on the ground that the public was not directly interested in the business of the defendant corporation. In that case, it was conceded that if the Girard Point Storage Company was in the nature of a public corporation, its works would be protected from the encumbrance of a mechanics’ lien. The case was heard in 1884, and this concession is evidence at least that it was not then suggested or supposed that the act of 1870 could have any part in the decision of it, nor can we now see how that act affects the claim of the appellants to a lien for their work and materials. The only execution process allowed for the enforcement of a mechanics’ lieu is a writ of levari facias to sell the building and curtilage bound by it, and the form of the writ is prescribed by the statute which gives the lien. The levy and sale on the writ of fieri facias allowed by the act of 1870 may embrace the property, franchises, and rights of the corporation in any and every county of the commonwealth, and pass the title thereto as effectually as if “ said property, franchises, and rights were located, used, levied upon, and sold in the county wherein said writ of execution was issued.” It is obvious that such comprehensive process was not designed for the collection of a judgment founded on a mechanics’ lien. This lien is statutory, and in the procedure for its enforcement the judgment and execution are restricted to the property bound by it. It is the policy of the law to keep intact the property belonging to and essential to the operations of a public corporation, and hence its creditors will not be permitted to divide such property and sell a part of it. It would be a signal abandonment of this policy, and it would invite a division of the property, to allow it to be sold on mechanics’ lien process. This could not be done prior to the act of 1870, and we discover nothing in that which authorizes it. The fieri facias allowed by that act is not a substitute for the ordinary fieri facias under the seventy-second section of the act of June 16, 1886, but it is in lieu of sequestration under the seventy-third section of it. The process and procedure provided by the seventy-second section remain, and the process provided by the seventy-third section is superseded by the special fieri facias given by the act of 1870. The condition *616precedent to sequestration was an ordinary fieri facias, returned unsatisfied in whole or in part, and this must precede the writ which takes its place. By this precedent return on the ordinary fieri facias the insolvency of the corporation is discovered, and the necessity of recourse to a sale for the benefit of its creditors of its franchises and property essential to its operation is demonstrated. It was decided in Bayards App., 72 Pa. 453, that a sale on the fieri facias given in lieu of sequestration did not change the rule of distribution, but that its proceeds were for the benefit of all its creditors, and on the footing of moneys made by a sequestrator under the act of 1836. The proceeds of a sale of real and personal property under the seventy-second section of that act were applicable to the liens in their order.
The view that we have taken of the act of 1870, and its effect upon the established practice in the appropriation of the property of a corporation to the payment of its debts, is sustained in an opinion -by our Brother ^ Mitchell in Flagg v. Farnsworth, 12 W. N. 500, and adopted by Judge McDermitt in Second N. Bank v. Manuf. Co., 13 W. N. 174. These were Common Pleas decisions, but the reasoning which supports them is clear and satisfactory, and in our opinion fully vindicates the judgments. While the precise question has not heretofore arisen in this court, it is plain that this was .the view entertained by Chief Justice Thompson, in Phil. etc. R. Co.’s App., 70 Pa. 355, and by Justice Williams in Bayard’s App., supra. As the property described in the claim in'this case is essential to the operations and is part of the works of the corporation, Foster v. Fowler, supra, sustains the action of the court in striking off the lien.
Judgment affirmed.