Vollstedt Kerr Lumber Co. v. Production Homes, Inc.

WHITE. P. J.

The instant appeal is taken from an order determining that third party claimants have no right, title or interest in certain lumber attached by respondent. Following is a résumé of the pertinent events and proceedings.

The defendant, Production Homes, Inc., was a subcontractor obligated to construct, at its Goleta plant in Santa Barbara County, wall sections and roof members for 337 living units, 377 garage and laundry units, one pumphouse and one office building, and to erect them, in accordance with Navy specifications, on a certain site near Marine Corps Depot of Supplies, at Barstow, in San Bernardino County. Plaintiff sold lumber and delivered it to defendant at Goleta, “on the specific understanding and agreement between the parties that all such materials were to be iised exclusively for the construction of particular buildings to be erected on certain premises located near the Marine Corps Depot of Supplies, Barstow, San Bernardino County, California.” Between June 17, and September 17, 1953, under said agreement, defendant ordered and plaintiff delivered at defendant’s Goleta plant lumber of the value of $145,958.92. Between June 17 and September 23, 1953, defendant constructed at Goleta and erected at Bar-stow, interior and exterior wall sections and roof members for 167 living units, 74 garages and 10 laundry units. September 17, such construction at the Goleta plant was suspended because a creditor of defendant, other than respondent, attached all the assets of defendant including the lumber now attached by respondent.

September 23, 1953, defendant executed and delivered to appellants an ordinary common law 'assignment of all its assets for the benefit of its creditors. On September 25, 1953, the attachment of such other creditor was released from the lumber here involved; and on the same day appellants re

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corded their assignment and took possession of defendant’s Goleta plant and other assets, including the lumber now under respondents’ attachment. Said assignment expressly authorized appellants to complete defendant’s contracts. Appellants, however, did not “continue with carrying out the contract for furnishing materials” to the general contractor on the buildings for which the attached lumber was to be used exclusively. On September 29, 1953, appellants notified respondent, through their respective attorneys, that the general contractor had declared defendant in default and would not accept further materials under the contract. On or about October 29, 1953, respondents filed this action for lumber sold and delivered and attached the lumber then remaining at defendant’s Goleta plant. By their third party claim, appellants aver that on September 25, 1953, they, “as trustees for the benefit of all the creditors” of defendant, took possession and “now are in full and complete possession of said assets,” and that the attached property “belongs to” them. They also set forth that defendant’s debts total approximately $504,000, its assets approximately $150,000 including the attached lumber.