T. F. Korherr v. A. J. Bumb, Trustee in Bankruptcy of Mallard Pond Builders, Inc., Bankrupt

This is an appeal from an order of the District Court, Southern District of California, Central Division, approving and adopting a report of the Referee in Bank- ruptey. The case is before this Court upon an agreed statement of facts.

There is no question of the jurisdiction of the court below, nor of this Court.

It appears that Mallard Pond Builders, Inc., the bankrupt herein, engaged in a construction project which included the erection of many houses. The bankrupt obtained construction loans from a predecessor of Perpetual Savings & Loan Association, hereinafter Perpetual, and entered into a series of construction loans with the lending agency. These loan agreements provided, inter alia, that the proceeds of the loans would be disbursed as progress payments in accord-anee with agreed schedules.

Bankrupt had no general contractor for the whole project, but did employ one Schmidt, the holder of a general contractor s license, to supervise all construetion. T. F. Korherr, hereinafter Appellant, a licensed flooring contractor, entered into a contract with the bankrupt to furnish the material and labor in installing flooring in certain houses to be constructed. The bankrupt…