Di Angelo v. McCormick Bros.

168 A. 79, 19 Del. Ch. 307, 1933 Del. Ch. LEXIS 33
CourtCourt of Chancery of Delaware
DecidedJune 12, 1933
StatusPublished
Cited by2 cases

This text of 168 A. 79 (Di Angelo v. McCormick Bros.) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Di Angelo v. McCormick Bros., 168 A. 79, 19 Del. Ch. 307, 1933 Del. Ch. LEXIS 33 (Del. Ct. App. 1933).

Opinion

The Chancellor :

The statute upon which the employees rely in support of their claim that wages for not over one month and in no case for over fifty dollars must be paid ahead of the claims of the chattel mortgagee and the execution creditors, is found in Section 4332 of the Revised Code of 1915. It is as follows:

“4332. Sec. 13. Wages in New Castle County; Preference of; in Whose Favor; Limit of Amount; Notice of Claim:—In New Castle County all debts or claims that may become due or growing due for labor or services rendered by any mechanic, laborer, clerk or other employee of any person or persons, chartered company or association employing laborers, clerks or mechanics in any manner whatsoever, shall be a first lien on all the real and personal property of such employer or employers, and shall be the first to be satisfied [309]*309out of the proceeds of the sale of such property whether made by an officer or an assignee of such employer or employers or otherwise: Provided, however, that the debt or claim, so secured to the mechanic, laborer, clerk, or other employee, shall not exceed a sum equal to the wages of such mechanic, laborer, clerk or other employee for one month: And provided further,- that in no event shall such debt or claim exceed the sum of fifty dollars, though the wages for one month may be a greater sum. Notice of such claim or debt shall be given to the coroner, sheriff, constable, assignee, or other person who shall make or conduct the sale of property subject to the lien or preference hereby provided for.”

There is an intimation on the brief of the solicitor representing the chattel mortgagee and the lien creditors, that as the statute in its terms applies only where there is an execution sale, it should not be stretched to cover sales made by a receiver appointed under the insolvency statute. This intimation is sufficiently answered by the principle of the cases in this State which hold that a landlord’s statutory preference for a year’s rent over execution creditors will be allowed to him out of the proceeds realized by a receiver of an insolvent corporation from the sale of chattels of the insolvent located on the demised premises. The statute giving the landlord his preference (Revised Code 1915, § 4595), like the statute here in question, applies in terms only where there is an execution sale; but the instances are innumerable in which the rent preference, notwithstanding the statute which affords it contemplates its assertion only where there is an execution sale, has been repeatedly allowed in receivership causes of the instant type. In Bailey v. Lightwell Steel Sash Co., 12 Del. Ch. 60, 105 A. 376, 377, Chancellor Curtis categorically stated that “preference is given to the payment of rent in administering the estate of an insolvent corporation,” and in Conover v. Sterling Stores Co., 14 Del. Ch. 26, 120 A. 740, I took occasion to point out the reason why in my judgment any other rule would be highly inequitable. The same reason which allows the statutory rent preference to' be asserted in corporate receiverships based on insolvency, [310]*310inescapably allows the statutory wage preference to be similarly asserted.

Where Section 4332 of the code is applicable, the preference given by it to a wage claimant takes precedence ahead even of the claim in satisfaction of which the property is sold in execution. The statute is very explicit in that regard, and it was so applied in Clough v. Superior Equipment Corp. 18 Del. Ch. 65, 156 A. 249.

But the solicitor for the lien creditors contends that Section 4332, in so far as the wage preference of employees of an insolvent corporation is concerned, has been repealed by Section 57 of the General Corporation Law of this State (Revised Code 1915, § 1971). That section in its present form, as amended by 36 Del. Laws, c. 137, is as follows:

“Whenever any corporation formed under the provisions of this Chapter, or any foreign corporation doing business in this State, shall become insolvent, the employees doing labor or service of whatever character in the regular employ of such corporation, shall have a lien upon the assets thereof for the amount of the wages due to them, not exceeding two months’ wages respectively, which shall be paid prior to any other debt or debts of said corporation; but the word ‘employee’ shall not be construed to include any of the officers of such corporation.”

This section prior to its amendment in 1929 (the amendment is of no significance in the instant case) appears in the Revised Code of 1915 as Section 1971. In its unamended form it was known as Section 52 of the General Corporation Law in the year 1900 when the case arose of Lupton v. Hughes, 2 Pennewill, 515, 47 A. 624.

I refer to Lupton v. Hughes, supra, because in Clough v. Superior Equipment Co., supra, I stated that Lupton - v. Hughes had decided that Section 4332 of the code, under which the present preference is asserted, was not repealed by Section 52 (now Section 57) of the General Corporation Law. In thus saying that Lupton v. Hughes is an authority [311]*311against the contention now made by the solicitor for the creditors, viz., that the present Section 57 of the General Corporation Law did not repeal Section 4332 of the code, under which the present preference is asserted, I spoke too generally. Upon a more careful reading of Lupton v. Hughes, it becomes apparent that the court deciding that case left undetermined the question of the repeal of Section 4332 in its application to corporations that have been adjudged to be insolvent.

It therefore becomes necessary for me to pass upon the question of the repeal of Section 4332 as applied to insolvent corporations, without the aid of Lupton v. Hughes as a pertinent authority.

The principle upon which the contention rests that Section 57 of the General Corporation Law repeals Section 4332 of the code where the corporation-debtor is insolvent, is stated by the solicitor for the lien creditors to be that a subsequent statute repugnant to a former law works a repeal of such former law to the extent of the inconsistencies, though no express repealer is included. State v. Peverly, 2 W. W. Harr. 443, 125 A. 421; Husbands v. Talley, 3 Pennewill, 88, 47 A. 1009, and 1 Lewis’ Southerland Statutory Construction, (2d Ed., p. 463, are cited in support of this principle.

It is of course a familiar rule that an act may be declared to have been impliedly repealed by a later one if it sufficiently appears that the legislative intent, notwithstanding the absence of express language manifesting it, was that the two acts should not stand together. But it is an equally familiar rule that the repeal of statutes by implication is not favored. “The courts are slow to hold that one statute has repealed another by implication, and they will not make such an adjudication if they can avoid doing so consistently or on any reasonable hypothesis or if they can arrive at another result by any construction which is fair and reasonable.” 59 C. J. 905.

[312]*312• In the instant case the repeal of Section

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Bluebook (online)
168 A. 79, 19 Del. Ch. 307, 1933 Del. Ch. LEXIS 33, Counsel Stack Legal Research, https://law.counselstack.com/opinion/di-angelo-v-mccormick-bros-delch-1933.