Court Opinion

ID: 6638460
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:43:21.092623+00
Date Added: 2024-06-11T15:59:08.787076
License: Public Domain

EVAN A. EVANS, Circuit Judge
(dissenting) . In P. McGarry & Son v. Central Trust Co. of Illinois, 240 Fed. 400, 153 C. C. A. 326, this court held that, where a contractor became a bankrupt owing individuals for material and labor, and also a surety company that had under its contract paid for certain labor and material, the individuals and the surety company were entitled to share the fund in the hands of the trustee in bankruptcy pro rata and in preference to general creditors. Applying this rule to the facts here present, as set forth in the majority opinion, the. conclusion seems unavoidable that appellant’s and appellee’s claims should be recognized as on a parity, unless modified by the action or nonaction of either party in perfecting its lien. That appellant seasonably took the necessary action to perfect its lien is not denied. That it had a lien upon the facts stated is also established. Bankers’ Surety Co. v. Maxwell, 222 Fed. 797, 138 C. C. A. 345.
Nor has our attention been called to any Illinois decision which would justify us in denying to appellee its right.to a lien. The notice (in the form of a petition) which it gave the trustee in bankruptcy after the money had been turned over by the trustees of the University of Illinois, was sufficient under section 23 of the lien statute. Counsel seem to agree that the amendments to the lien laws (Session Laws 1917, p. 566, and .Session Laws 1919, p. 642) were not intended to, and could not, affect prior existing liens, and with this position I agree.
With both claimants entitled to, and in fact holding, mechanic’s and materialmen’s liens against bankrupt, a division of the fund between claimants would necessarily follow, were it not for the contention that this issue was determined adversely to appellant by the Illinois Supreme Court. The Illinois decision did not and could not go further than to hold upon the facts appear*435ing that appellee was not liable to appellant upon tho surety contract for the latter’s claim against bankrupt.
More specifically stated, the Illinois decision is res adjudicata only as to appellee’s liability under the particular surety contract there under consideration. Liability was denied because of the terms of tho contract. The decision did not deny appellant’s right to a lien against the fund in the hands of the University trustee, for such an issue was not before it. Nor was there any issue before the court as to priority between various labor and material claimants by virtue of partial payments out of the University building fund. If any language appeal's in the opinion bearing upon tlie issues of liens or priority of liens, it was clearly obiter. Black, Law of Judicial Precedents, § 55; 7 R. C. L. 1003, 1004; People v. San Luis O. Bank, 159 Cal. 65, 112 Pac. 866, 37 L. R. A. (N. S.) 934, Ann. Cas. 1912B, 1148; Radford v. Myers, 231 U. S. 725, 34 Sup. Ct. 249, 58 L. Ed. 454.
Each party having a lien for materials furnished, and the fund lienable being in court, the parties should in my opinion share pTo rata therein.