Huttig Sash & Door Co. v. Stitt

218 F. 1, 133 C.C.A. 641, 1914 U.S. App. LEXIS 1501
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 1, 1914
DocketNo. 2616
StatusPublished
Cited by10 cases

This text of 218 F. 1 (Huttig Sash & Door Co. v. Stitt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Huttig Sash & Door Co. v. Stitt, 218 F. 1, 133 C.C.A. 641, 1914 U.S. App. LEXIS 1501 (5th Cir. 1914).

Opinion

WALKER, Circuit Judge.

[1] We do not think that the motion to dismiss the petition' to superintend and revise ’ is well taken. The ground stated in the motion is that the proper remedy open to petitioner was an appeal under subdivision “a” of section 25 of the Bankruptcy Act, and not a petition to superintend and revise under subdivision “b” of section 24’ of that act. The claim filed by the petitioner against the bankrupt estate was for the sum of $1,484.30, $1,157 of which he claimed was secured by a lien on property held by the trustee in bankruptcy. The total amount claimed was allowed as an unsecured debt, but the asserted right to a lien was denied. The claim presented was not rejected, so as to confer upon the claimant the right to appeal given by subdivision 3 of section 25a of the Bankruptcy Act. Only the asserted right to a lien for a part of the amount of the claim was denied. In this respect the case was different from the one considered in Matter of Loving, 224 U. S. 183, 32 Sup. Ct. 446, 56 L. Ed. [3]*3725, in which the claim, as it was presented, was rejected, with the result pf giving the claimant the right to appeal from the judgment “rejecting a debt or claim,” etc. It is also unlike the case of Coder v. Arts, 213 U. S. 223, 29 Sup. Ct. 436, 53 L. Ed. 772, 16 Ann. Cas. 1008, in which an appeal was held proper, as the matter sought to be reviewed was a judgment allowing the claim made and the asserted lien for its security.

We understand the opinion in the last-mentioned case to recognize the propriety of a resort to a petition to superintend and revise under subdivision “b” of section 24 of the Bankruptcy Act, when the claimant complains of a supposed mistake of law made, not in the rejection of his claim, which in fact was allowed for its full amount, but in the court’s exercise of its incidental right to consider and determine the validity of the lien for a part of the amount of the debt claimed asserted upon property in the hands of the bankrupt’s trustee. The claimant has no right of appeal in such a case, his claim as he presented it having been allowed, and he may resort to a petition to superintend and revise the action of the court in dealing with an incident of that claim, the asserted right to a lien. The controversy resulting from the assertion of the right to a lien on the bankrupt’s property to secure part of the allowed debt owing by him is to be regarded as one arising in the bankruptcy proceeding, within the meaning of section 24 of the Bankruptcy Act, and the order by which that controversy was disposed of is subject to review in the manner provided for by subdivision “h” of that section. Hutchinson v. Otis, 190 U. S. 552, 23 Sup. Ct. 778, 47 L. Ed. 1179; In re Doran, 154 Fed. 467, 83 C. C. A. 265; Holden v. Stratton, 191 U. S. 115, 24 Sup. Ct. 45, 48 L. Ed. 116.

[2] Furthermore, we think that an agreement, set out in the record, which the bankrupt, his trustee, the original contractor, and the claimant entered into before the latter presented his claim against the bankrupt estate, and in pursuance of which the claim was presented, shows that it was distinctly recognized by all parties that the subject of controversy between the creditor on one side and the bankrupt and his trustee on the other side was the legal question of the right of the former, under the state of facts which was agreed upon, to the lien claimed, and that it was understood that that question would be presented as a controversy arising in the bankruptcy proceeding on a claim to be filed by the creditor for the full amount of the debt due to, it. The ■substance of one of the provisions of that agreement was that the creditor would in due time file with the referee in bankruptcy a properly proven claim for the amount of its debt against the bankrupt, claiming, because of the furnishing of the materials and millwork as above stated, a mechanic’s and materialman’s lien upon the building in the construction of which they were used and upon the lot on which that building was erected, and that it would diligently prosecute said claim to a final decision in the bankruptcy court. In view of that agreement, and of the creditor’s proceedings in conformity with its terms, it hardly is consistent for the bankrupt or its trustee to contend that the action of the court in determining the legal question in dispute was not the disposition of a controversy arising in the bankruptcy proceedings in the manner contemplated by the parties to it, or that that disposition of [4]*4that legal question is not subject to be reviewed on a petition to superintend and revise the action of the court in the matter of law so arising in the bankruptcy proceeding on the claim as it was presented pursuant to the agreement. It was in effect agreed in advance that the disputed question of law should arise in the proceedings in bankruptcy on the creditor’s claim for the full amount of the debt owing to it, only a part of which amount was claimed to be secured by the asserted lien ; and the record shows that it did so arise, as contemplated by the parties.

The controversy in this case is as to the asserted right of the claimant to a lien on a building for the price of certain material and millwork supplied by it under a contract with the bankrupt and which was used in the construction of that building. One McCoy was the original and general contractor for that building. Under a contract with him the bankrupt undertook to furnish to him certain material and millwork, called for in the contractor’s contract with the owner of the building, and to be used by the contractor in the construction of the building; the bankrupt having nothing to do with the placing of the material and millwork in the building. The bankrupt, in turn, in order to perform its contract with McCoy, entered into an agreement with the claimant whereby the latter undertook to furnish to the bankrupt certain material and millwork called for by the bankrupt’s contract with McCoy. Under this agreement the bankrupt made and caused to be made details from the plans and specifications of, the building, and supplied these details to the claimant to be observed by the latter in the manufacture and supply of the material and millwork called for by its contract with the bankrupt. The claimant manufactured and supplied the material and millwork in accordance with those details, shipped the same to McCoy, as-directed by the bankrupt, and the things so supplied were accepted by both the bankrupt and McCoy as being the same as were called for by the latter’s contract for the building, and were used and placed by McCoy in the construction of the building. The referee found that the claimant had complied with the statutory requisites for fixing a lien, but denied it the lien asserted by it. The order of the referee to this effect was affirmed by the District Court.

[3] Section 37 of article 16 of the Constitution of the state of Texas provides that:

“Mechanics, artisans and materialmen, of every class, shall have a lien upon the buildings and articles made or repaired by them, for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.”

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Bluebook (online)
218 F. 1, 133 C.C.A. 641, 1914 U.S. App. LEXIS 1501, Counsel Stack Legal Research, https://law.counselstack.com/opinion/huttig-sash-door-co-v-stitt-ca5-1914.