the surety would unquestionably create a preference which clashes with the basic and fundamental purposes of receiverships.
Appropriate Findings of Fact and Conclusions of Law are entered.
FINDINGS OF FACT
1. By Stipulation filed September 19, 1968, the within action was settled but one issue remained to be decided. By Order dated September 19, 1968, the within action was removed from the Jury Trial List and the case was set down for non-jury trial for decision of the one remaining issue.
2. The aforesaid issue involves the sum of $22,385.25 (hereinafter called the Fund) which is held by the defendant, Arnold D. Wilner, (hereinafter called "Wilner") which is claimed by the plaintiff and by Sanford M. Lampl, (hereinafter called the "Receiver"). It is and always has been acknowledged that Wilner has no personal right to the Fund, but holds same only as a stakeholder against the adverse claims aforesaid.
3. In 1965 and at other times not pertinent hereto, Wilner represented the defendant, Sara Jane Mullett, (hereinafter called "Mullett") and during that year Mullett informed him that Broman Construction Company (hereinafter called "Broman") was indebted to her for a large amount of money and was performing a highway construction project in Clearfield County. Mullett further informed Wilner that she believed the affairs of Broman were not being properly handled by the principals.
4. As a result of the foregoing, a conference was held with the principals of Broman and it was arranged that Wilner and Mullett would enter into joint control of the assets, receivables and payables of Broman. In the process of such joint control, Wilner became aware that the plaintiff had provided the Payment and Performance Bond on said highway project and had been notified of certain unpaid claims against Broman thereon.
5. Subsequently, Wilner was advised by the plaintiff that it contended for indemnification liability against Mullett as to claims under the said Bond. In conference with the plaintiff, Wilner did agree to continue in the aforesaid control arrangement, to the end that the assets and receivables becoming available may be used to pay claims against Broman arising out of the said highway project.
6. To the knowledge of all of the parties then involved, there were payments due Broman from the Commonwealth of Pennsylvania for work performed on the aforesaid highway project and it was agreed that Wilner should obtain a letter of direction from Broman to the Commonwealth of Pennsylvania, directing that all such sums should be paid to him. This was accomplished and, on or about November 5, 1965, Wilner received the Fund which he deposited in a special bank account. The Fund has been and still is so held by Wilner, separate and apart from any and all other funds.
7. Prior to the receipt of the Fund, Wilner had knowledge of claims against Broman for unpaid labor and material on the said highway project covered by plaintiff's Bond. However, none of said claims were paid by plaintiff or by Broman prior to the receipt of the said Fund by Wilner.
8. By Order of the Court of Common Pleas of Allegheny County, Pennsylvania, dated February 23, 1966 at No. 2377 April Term, 1966, Sanford M. Lampl was appointed Receiver of Broman and still continues as such Receiver. Thereafter, the plaintiff was called upon to and did pay claims for labor and material against Broman, in accordance with the said Bond, in an amount in excess of the Fund, and made claim against Wilner for the Fund. Also, thereafter, the Receiver made claim against Wilner for the Fund.
CONCLUSIONS OF LAW
1. The payment of funds by the Commonwealth of Pennsylvania to Wilner were not subject to equitable subrogation by Maryland Casualty Company.
2. The funds held by the Receiver of the insolvent party are accessible to the creditors of the same.
3. The award of the funds to the surety is improper because it would create a preference antagonistic to one of the basic concepts of bankruptcy law.
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