Henderson v. Tillamook Hotel Co.

Mr. Justice Benson delivered the opinion of the court. 1. The evidence taken upon the accounting in this case is very voluminous, and is rendered vague and confused by what we deem an unnecessary elaboration of petty details. From it all, we gather that the receiver took charge of the property on May 5, 1914, at which time he received with the business cash to the amount of $132.40, bar supplies $1,034.72, and dining-room supplies $94.60. "When he was removed on August 2, 1914, he returned to the defendant Hotel Company cash $654.97, bar supplies $1,221.29, and dining-room supplies $118.17. According to his own contention, he paid $2,504.37 of bills incurred by the defendants prior to his appointment, of which defendants concede the payment of $1,710.75. This discrepancy will be referred to later. He also incurred new obligations in conducting the business, which are still unpaid, to the amount of $2,336.81. The total cash receipts, including the money on hand on May 5, 1914, were $7,608.64 and the receiver accounts satisfactorily for $6,933.31, in the shape of necessary disbursements, in addition to the sum of $654.97 paid to defendants on August 2, 1914. The trial court properly disallowed [77] some of the disbursements and, as disclosed in the decree, ordered him to pay to defendants the further sum of $422 and gave judgment against the plaintiff for the receiver’s compensation and other items of costs. The appeal of defendants appears to be based entirely upon the theory that the appointment of the receiver was a void act and as a necessary sequence that the receiver himself was a trespasser. This contention is without merit. The petition for the appointment was included in the complaint for an accounting and the allegations were sufficient, if true, to justify the action of the court. The appointment was made with notice and after the defendants had filed their answer. It is true that this court subsequently held that the action of the trial court was erroneous and directed that the receiver be removed: Henderson v. Tillamook, Hotel Co., 76 Or. 379 (148 Pac. 57, 149 Pac. 473), but did not declare the appointment void, nor was it so in fact. The decree was reversed because the evidence failed to support the allegations of the petition. This being true, it follows that the receiver is not in any sense a trespasser. In High on Receivers (2 ed.), Section 286, we find this statement ©f the law: “An order appointing a receiver in a cause in which the court has full jurisdiction, affords protection to the receiver for all acts done under and in conformity with such order, even though it is afterward reversed for error.” This doctrine is supported by Beach on Receivers (Alderson’s ed.), page 133. The court therefore very properly allowed as credits to the receiver, all disbursements made in paying the debts of the defendant corporation and in carrying on the business. 2. The discrepancy referred to, supra, arises from the fact that the receiver continued to do business with [78] certain firms who had accounts with the defendant corporation prior to the appointment, to whom there were unpaid balances due. New liabilities were thus incurred and the dispute arises upon the question as to whether subsequent payments to such firms were applied to the old or new obligations. The new accounts are a proper charge against the defendants, since the supplies thus purchased would have been a necessary expense, even if there had been no receivership: High on Receivers (4 ed.), § 809; Ogden City v. Bear Lake etc. Irr. Co., 18 Utah, 279 (55 Pac. 385). 3. It follows that it can make no material difference to the defendants whether the payments in question were applied to the new or old accounts, since both are their obligations. We find no substantial error in the record and the decree is therefore affirmed. Affirmed. Mr. Chief Justice McBride, Mr. .Justice Harris and Mr. Justice Moore concur.