In re Ferguson Contracting Co.

Second Circuit

In re Ferguson Contracting Co.

187 F. 940, 109 C.C.A. 662, 1911 U.S. App. LEXIS 4260

CourtCourt of Appeals for the Second Circuit

DecidedMay 8, 1911

DocketNo. 260

StatusPublished

This text of 187 F. 940 (In re Ferguson Contracting Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Ferguson Contracting Co., 187 F. 940, 109 C.C.A. 662, 1911 U.S. App. LEXIS 4260 (2d Cir. 1911).

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Opinion

NOYES, Circuit Judge

(after stating the facts as above). It is undoubtedly true, as urged by the petitioner, that the receiving of money which, consistently with conscience, cannot be retained, is in equity sufficient to raise a trust in favor of the person for whom it is received,. The difficulty with applying this principle in the present case is that the receiver never .received any moneys to which the [941]*941petitioner was entitled. There was nothing to which a trust could be attached.

The theory that the receiver by paying the laborers less than the whole amount due them created a trust in favor of the petitioner with respect to the unpaid balances is without foundation. The receiver was not indebted to the laborers’ employer and owed no duty to the petitioner. He could pay as much or as little as he deemed expedient to safeguard the work. The payments he made may or may not have satisfied the laborers’ demands. If those demands constituted liens, such payments did not discharge the property. But there was nothing retained for the petitioner’s benefit because there was nothing to be retained.

The petitioner’s demand would undoubtedly be well founded had the receiver owed the subcontractor and in paying its laborers’ wages had deducted the amount of the petitioner’s claim. But the most that can be said is that the receiver took advantage of a practice which he found to exist to pay the laborers less than he probably otherwise would have paid. But as already pointed out, whatever may have been the effect of such payment upon the laborers’ demands, it created no obligation in favor of the petitioner.

The order of the District Court is affirmed with costs

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NOYES, Circuit Judge

(after stating the facts as above). It is undoubtedly true, as urged by the petitioner, that the receiving of money which, consistently with conscience, cannot be retained, is in equity sufficient to raise a trust in favor of the person for whom it is received,. The difficulty with applying this principle in the present case is that the receiver never .received any moneys to which the [941]*941petitioner was entitled. There was nothing to which a trust could be attached.

The theory that the receiver by paying the laborers less than the whole amount due them created a trust in favor of the petitioner with respect to the unpaid balances is without foundation. The receiver was not indebted to the laborers’ employer and owed no duty to the petitioner. He could pay as much or as little as he deemed expedient to safeguard the work. The payments he made may or may not have satisfied the laborers’ demands. If those demands constituted liens, such payments did not discharge the property. But there was nothing retained for the petitioner’s benefit because there was nothing to be retained.

The petitioner’s demand would undoubtedly be well founded had the receiver owed the subcontractor and in paying its laborers’ wages had deducted the amount of the petitioner’s claim. But the most that can be said is that the receiver took advantage of a practice which he found to exist to pay the laborers less than he probably otherwise would have paid. But as already pointed out, whatever may have been the effect of such payment upon the laborers’ demands, it created no obligation in favor of the petitioner.

The order of the District Court is affirmed with costs

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Bluebook (online)

187 F. 940, 109 C.C.A. 662, 1911 U.S. App. LEXIS 4260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ferguson-contracting-co-ca2-1911.