Hastings v. Thompson

Opinion by Henderson, J., The plaintiff was a subcontractor employed to build a foundation for the house which Doherty, the contractor, had agreed to build for the appellant. The subcontractor’s undertaking was for the whole of the foundation work at the price of $4.35 a perch. The plaintiff began the work about July 25, and had it practically completed on August 10. A little additional work was to be done after the sills were laid by the carpenters. On the date last named the contractor filed a voluntary petition in bankruptcy and the same day was adjudged a bankrupt. Proceedings were then suspended in the construction of the house, nothing further being done by the plaintiff until December 8, when he finished the work on his contract. No objection is made to the regularity of the proceedings to enforce the lien, the principal defense being that the work done by the plaintiff on December 8, was ineffective to extend the time within which a lien might be entered against the owner, because of the adjudication in bankruptcy against the contractor. The right to a lien is not denied and could not be for it was not “obtained through legal proceedings” and is therefore not forbidden by the national bankruptcy act of 1898. It is only liens created by suit or proceedings at law or in equity begun within four months before the filing of the petition in bankruptcy which are dissolved by the adjudication of such person in bankruptcy. The plaintiff’s claim was attached by law to the building as of the date when the first work was done on the ground and remains a lien without any act of co-operation on the part of the claimant. It was in force therefore at the date of the adjudication in bankruptcy and was a charge on the appellant’s land. During the time within which the lien could be filed the plaintiff had “a preferential statutory claim” which was perfected by filing the lien after the adjudication in bankruptcy: Wagner v. Burnham, 224 Pa. 586. The twentieth section of the mechanic’s lien law of June 4, 1901, P. L. 431, provides that “Where proceedings in bank [427] ruptcy or insolvency are instituted by or against any contractor or owner, they shall operate to suspend all proceedings upon any contract or subcontract with him for labor to be done or labor or materials to be furnished to the structure or other improvement, and if he be adjudicated a bankrupt or insolvent, or if he should die, then such contractor or subcontractor may, at his option, refuse to proceed further under his contract.” The apparent meaning of this section is that where proceedings in bankruptcy are instituted against an owner or contractor and he is adjudged a bankrupt or dies then the contractor or subcontractor as the case may be may exercise the option to proceed further on his contract or to terminate it at that point and where the subcontractor proceeds with the execution of the contract he is entitled to the same protection by lien that he would have if the owner or contractor had not been adjudged bankrupt. The plaintiff’s right is not because of any contract existing between him and the appellant but is purely statutory. The labor and material furnished by him presumably improved the value of the appellant’s property and the policy of the law is to secure such person by lien against the real estate. In perfecting his claim by completing the work according to the contract the plaintiff has not transgressed any statute and as he is now not asserting any claim against the bankrupt estate no good reason appears why he is not entitled to the relief claimed. The complaint set forth in the fourth and fifth assignments that the court permitted the plaintiff to introduce additional evidence after a motion for a nonsuit had been made does not present a case for reversal. It was a matter to be disposed of according to the discretion of the court. The plaintiff was not in any wise prejudiced or put at a disadvantage: Barnhart v. Pettit, 22 Pa. 135; McCoy v. Niblick, 221 Pa. 123. The judgment is affirmed.