No claim under this article shall be paid until after the expiration of the time in which to present such claim. If the funds realized from the sale of the property seized are insufficient to pay the total claims presented, such funds shall be prorated on such claims. The provisions of this article shall not be construed to extend to creditors who held a duly recorded mortgage upon the property attached which was given for a debt actually existing from such mortgage before the labor was performed.
Source: L. 03: p. 144, § 3. R.S. 08: § 7000. C.L. § 4245. CSA: C. 97, § 219. CRS 53: § 80-12-3. C.R.S. 1963: § 80-16-3.
ANNOTATION
This section places the claims of employees for labor in a preferred class to be paid in preference to other simple contract creditors. Central Sav. Bank v. Newton, 59 Colo. 150, 147 P. 690 (1915).
But it does not create an express statutory lien superior to all other liens without reference to priority. Central Sav. Bank v. Newton, 59 Colo. 150, 147 P. 690 (1915).
And it is not intended to give such claims a preference upon the corpus of mortgaged property. Central Sav. Bank v. Newton, 59 Colo. 150, 147 P. 690 (1915); Helm v. Smith, 62 Colo. 203, 162 P. 143 (1916).
A recorded mortgage for an existing debt takes precedence over claims for labor subsequently performed. Central Sav. Bank v. Newton, 59 Colo. 150, 147 P. 690 (1915).
Claims against a going railroad might be preferred over prior mortgage liens. First Nat'l Bank v. Wyman, 16 Colo. App. 468, 66 P. 456 (1901).
But ordinary liabilities of a railway company are preferred to a mortgage debt only when accrued within six months prior to the appointment of a receiver, and this rule is departed from only in extreme cases and for special reasons. Helm v. Smith, 62 Colo. 203, 162 P. 143 (1916).
Moreover, the very existence of such a rule presupposes an affirmative showing of facts sufficient to invoke and warrant its application; and where the record fails to disclose that the railroad involved is a public or quasi-public corporation, or that it had ever been operated as such, and there is no attempt to show that the claims were valid and existing obligations against the company at the time of presentment, much less that they have any of the other attributes or characteristics which would in equity entitle them to preference over a mortgage lien, preference will be denied. Central Sav. Bank v. Newton, 59 Colo. 150, 147 P. 690 (1915).
Thus the salary of an attorney which accrued more than 13 months prior to the appointment of a receiver for a railroad, no effort having been made to enforce payment and the attorney having all the time full knowledge of the bonded indebtedness, was not entitled to a preference. Helm v. Smith, 62 Colo. 203, 162 P. 143 (1916).
Labor Conditions