97 Wash. 651 | Wash. | 1917
This appeal is prosecuted from an order of the lower court fixing the priority of claims in a receivership.
The facts are in substance as follows: The appellant is a creditor of the Seattle, Renton & Southern Railway Company. He obtained a judgment for personal injuries against that company on the 15th day of March, 1913. In April of that year, he filed with the receivers a claim for the amount of the judgment. In this claim it was stated that, in the month of December, 1911, the road was taken possession of by officials acting for the bondholders of the railway company; that, in January, 1912, appellant was injured by a collision on said road; that, on the 3d day of November, 1912, a judgment was rendered in his favor, which judgment was afterwards set aside and a new trial granted; that, in the meantime, receivers were appointed, who took possession of the road and thereafter defended the action, which resulted in a judgment of $5,487.90, on the 15th day of March, 1913. The claim then recites,
“that by reason of the fact that the injury was received shortly before the appointment of the received, as aforesaid, and by further reason of the fact that the injury was received while the road was in the direct control, supervision and operation of the bondholders, this claimant makes a claim against the said road for the sum of $5,487.90 and claims a priority over all claims of any other nature, kind or description, and particularly against all claims of the bondholders, stockholders or mortgagees of said road.”
The amount of this claim is not disputed. On October 30, 1914, the appellant was served with a notice that, on November 5, 1914, there would be a final hearing on all claims for the purpose of fixing the amounts and priorities, if not already determined by the court. At this hearing the court determined that there were four classes of claims, designated
“It is argued, in effect, that the party who appeals is alone competent to propose a statement of facts. Bal. Code, §§ 5057 and 5058 (P. C. §§ 674, 675), certainly authorize any party to any action or proceeding, and at any stage thereof, to propose and cause to be certified a statement of facts or bill of exceptions.”
The sections there referred to are now Rem. Code, §§ 388 and 389. The opinion in that case does not show when the
“The court in which the receivership is pending may fix priorities as between the parties before it, and the relative dignity or priority of the different claims against property in the hands of a receiver may be settled as well before as after the sale of the property.” 34 Cyc. 363.
See, also, 34 Cyc. 346B.
The court no doubt determined the priority of the different claims, both upon questions of fact and of law, and determined that the claim of the appellant was a claim which should be paid along with the general creditors of the railway company. It therefore devolves upon the appellant to bring to this court the record of that proceeding to show that the trial court erred in adjudging his claim one with the general creditors. Since he has not brought the record here, we must assume that the conclusion of the lower court was based upon facts warranting that conclusion, because the appellant must show error. Error may not be assumed.
Appellant insists that, because there was no written answer to his claim, which stated its priority over all other claims, the allegations of the claim must be> taken as true. The statute does not require a written answer in such cases, and no case has been cited to us which holds that a verbal
It is next argued by the appellant that his claim for personal injuries is entitled to priority over a prior mortgage. The great weight of authority is opposed to this contention. In the case of Gregg v. Metropolitan Trust Co., 197 U. S. 183, it was held that claims for supplies furnished a railroad company were not entitled to priority over a mortgage recorded before the contract for supplies was made. The court there said:
“An impression that such a general rule was to be deduced from the decisions of this court led to an evidently unwilling application of it in New England R. Co. v. Carnegie Steel Co., 75 Fed. Rep. 54, 58, and perhaps in other cases. But we are of opinion, for reasons that need no further statement, Kneeland v. American Loan & Trust Co., 136 U. S. 89, 97, that the general rule is the other way, and has been recognized as being the other way by this court.
“The case principally relied on for giving priority to the claim for supplies is Miltenberger v. Logansport etc. Railway Co., 106 U. S. 286. But while the payment of some preexisting claims was sanctioned in that case, it was expressly stated that ‘the payment of such debts stands, prima facie, on a different basis from the payment of claims arising under the receivership.’ The ground of such allowance as was made was not merely that the supplies were necessary for*656 the preservation of the road, but that the payment was necessary to the business of the road—a very different proposition. In the later cases the wholly exceptional character of the allowance is observed and marked.”
And in Pennsylvania Steel Co. v. New York City R. Co., 165 Fed. 457, it was said:
“The proposition that claims for torts committed during the operation of the road prior to receivership should be given a preference over the claims of secured creditors has been often presented to the federal courts. It is unnecessary to add anything to the exhaustive discussion which is found in the" opinion of the Circuit Court of Appeals of the Eighth Circuit. St. Louis Trust Co. v. Riley, 70 Fed. 32, 16 C. C. A. 610, 30 L. R. A. 456. In the reasoning and conclusions expressed in that opinion I fully concur, and find nothing in any later reports, either of the Supreme Court, or of the Circuit Courts of Appeal, to modify such conclusions in any way. On the contrary, the following authorities are to the same effect: Veatch v. American Loan & T. Co., 79 Fed. 471, 25 C. C. A. 39; Id., 84 Fed. 274, 28 C. C. A. 384; Atlantic Trust Co. v. Dana, 128 Fed. 209, 62 C. C. A. 657; Atchison, T. & S. F. v. Osborn, 148 Fed. 606, 78 C. C. A. 378; Central Trust Co. v. Warren, 121 Fed. 323, 58 C. C. A. 289; Farmers’ L. & T. Co. v. Northern Pac. R. R., 79 Fed. 227, 24 C. C. A. 511.
“The application to give certain directions as to accounting, etc., is therefore denied; the tort claims accruing prior to receivership rank with the general unsecured claims, and will be so classified.”
We think the great weight of authority is to that effect. We find no error in the judgment of the trial court, and it is therefore affirmed.
Ellis, C. J.,* Holcomb, Fullerton, and Parker, JJ., concur.