The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 785
xv, 1025 p. ; 23 cm.View a full description of this legislative document.
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WHITNEY CENT. TRUST & SAV. BANK V. UNITED STATES C. CO. 785
to this estate and situated in this city. It was also provided in said order that
all creditors holding liens, mortgages, or privileges bearing against said prop-
erty should be referred to the proceeds of said sale, and that the property
subject to said incumbrances should be sold free thereof. It Has also pro-
vided in said order that, in the event any of the said lien creditors should be
the adjudicatee at said bankruptcy sale, the amount or price of adjudica-
tion could be withheld by said adjudicntee to the extent necessary to satisfy
the amount due under the lien, said lienor, however, to be taxed with such
lawful costs and charges as would be found incident and necessary to said
sale. On March 2, 1916, in compliance with the aforesaid order, the property
in question was sold at public auction to the Whitney Central Trust &
Savings Bank, trustee, petitioner herein, who as representative of lien credi-
tors, holders of certain mortgage notes, now petitions the court to determine
what costs shall be taxed against it as purchaser, and also to decree that
certain auto trucks form part of the immovables so purchased, and that a
certain sprinkler fire-extinguishing apparatus, installed in the main building
of said property, be decreed as immovable properly, not subject to a prior lien
here claimed by the United States Construction Company, vendor of said ap-
paratus.
"To this proceeding the trustees of this estate have been made parties, as
well as certain lien creditors, all of whom have been (for reasons unnecessary
to here set forth) eliminated from this controversy, except the United States Con-
struction Company, who asserts under the laws of Louisiana, upon a contract
.duly recorded, a certain lien for material and supplies furnished and installed
as a sprinkler system in the main building or plant of the Globe Packing Box
Company, long prior to bankruptcy, but subsequent to the duly recorded
mortgages now asserted by petitioner. The claim or contention concerning the
auto trucks has been abandoned by petitioner, who now concedes, through
counsel's verbal admissions made at trial of these proceedings, that the
trustees of this bankruptcy estate rightly hold the proceeds of said auto trucks
free of petitioner's liens and mortgages. It results from these facts that the
sole contention now before the court for determination is that between peti-
tioner (hereinafter called the bank) and the United States Construction Com-
pany (hereinafter called the company).
"It appears from the evidence that the company contracted with the bank-
rupt on February 1, 1915, to install a complete fire-extinguishing sprinkler
system in the bankrupt's box factory, located in New Orleans, 'on Washington
avenue and Illinois Central Railroad crossing,' all as per written contract and
specifications duly recorded by said company in the mortgage office of the
parish of Orleans within seven days of execution as required by law. The
system was duly installed, partial payments made by the bankrupt on ac-
count of the consideration stipulated in the contract, and for the balance due
and unpaid at date of bankruptcy, to wit, $2,939.32, the company has filed its
proof of claim against this estate, asserting as a security for said debt its
lien and privilege as a furnisher of material and labor against the factory
located as above mentioned. There is no dispute as to the amount due, nor
have the trustees of this estate challenged in any manner the validity of said
claim. The company contends that under Act 51 of 1912, enacted by the Gen-
eral Assembly of the state of Louisiana, amending article 467 of the Revised
Civil Code of said state, the sprinkler system installed by it, in the bank-
rupt's factory, became at moment of installation an immovable, forming part
of the factory which the trustees have sold to the aforesaid bank, and that the
proceeds of said sale are subject to the company's lien and privilege, which
under the state laws is superior to the bank's lien and mortgage, and
must be paid in preference thereto.
"It is contended by the bank, as against the company, that the latter has
nothing but an ordinary claim against this estate for the unpaid portion now
due under its contract with the bankrupt, or, if any lien or privilege ever
existed in favor of the company, that same was a vendor's lien upon movable
property, which lien the company has nnolly lost by failure to have the said
sprinkler apparatus separately appraised, before the adjudication of the
250 F.-50
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38821/m1/800/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.