The daily journal. (Salem, Or.) 1899-1903, 1899-08-01
A SOUND RULING.
Receiver for Kaupisch Creamery Com
pany Refused.
Oregon Statute Does Not Authorize Ap-
pointment Of Receiver for Insol-
vent Corporation.

vent Corporation.
Judge Cleland, of Portland, has de-
MED the petition for the appointment
of a receiver to take charge of the affairs
of the Kaupisch Creamery Company. on
the, ground that there was no showing
in the complaint to warrant the ap-
pointment of a receiver under the law.
The petition was filed by j. c. Mar.
garth, II. w. and NJ. NJ. Kaupisch,
stockholders in the concern, who al
legged that they and VI. c. Banfeld and
| Thomas Rand, and other stockholders.
were unable to transact business to-
gether, and that the company was in
imminent danger of becoming insolvent.
1t also stated that numerous attach
ments had been filed by creditors.
Receivers have frequently in the past
been appointed on petitions of this kind.
and the decision Of Judge Cleland refus-
ing to appoint the receiver was sur
prise to counsel for the petitioners. The
statute upon the subject of receivers is
is as follows:
I" A receiver may be appointed in any
civil action, suit or proceeding other
than an action for the recovery of spec
ific personal property"
Previously before judgment or decree
on the application of either party, when
his right To the property which is the
subject of action, suit or proceeding.
and which is in possession of third
party, is probable, and the property or
its rents or profits are i'm danger of being
lost or materially injured or impaired.
"In cases provided for in this code,
or by other statutes, where a corpor-
alton has been dissolved or is insovent,
or is in imminent danger of insolvency
or has forfeited its corporate rights"
This last clause fits the present case,
but there is a missing link which de-
stroys its intent. II begins by saying:
'In cases provided for in this code, or
by other statutes" This means that
other statutes will relate when il is
proper to appoint receiver under this
clause of the law, but, unfortunately,
there are no other statutes upon the
subject. There has been Il lack of legis-
latiOn upon the question. Such is the
way Ju ge Cleand views the case,
and why he declined to appoint re-
ceiyer on the petition presented.
II is true there are receivers now in
office in like cases, the Portland Savings
bank for instance, Portland hospital,
Brewer d Thompson Lumber Company
and great many others. Attorneys
Bloomfield and Joseph, for the petition
ers, called attention 10 those cases, and
strongly urged that the statute is plain
that n receiver he appointed when a
corporation is in imminent danger Of
insolvency, so as to protect the stock
holders, and IL was contended i'm this
case that the assets largely exceeded
the Indebtedness, and that the prop
erty, il judiciously handled, would pay
all of the debts, and the petitioners
also realize something. The appoint
ment of receiver was proper under
these circumstances.
Attorneys Writ Minor A. King, viii
son and Cecil Bauer, representing at
taching and other creditors, argued
considerably according o the court =
opinion OF the law that a receiver could
not be appointed on the showing pre-
sented. Judge Cleland has previously
expressed himself upon this law in pass
ing upon another case, 80 his ideas in
the matter are known 10 many members
OF the bar.
lie adhered to his former recent opin-
ion in refusing to appoint receiver in
this proceeding.
The question was raised in the Port
land hospital receiyership. In that case
the company which holds mortgage on
the building tried TO defeat the claims
OF certain creditors against the receiver
ON the plea that the appointment OF the
receiver, to begin with, was illegal.
Judge Cleland held that while that was
doubtless true, the receiyership was
fact, and had been permitted 10 exist
and do business without any protest by
the mortgage company or any one else
Interested, and they were stopped from
raising the issue now. The court would
probably make the same ruling in the
Portland Savings bank, and other re-
ceivership cases, but Judge Cleland,
while holding that the old receiverships
OF this kind will stand law, does not in-
tend TO appoint any more such receiy-
ers.
Judge Cleland also made a ruling, not
long ago, different from that formerly
| i'm vogue in the matter Of the appoint
ment Of receivers 10 collect rents during
the pendency OF mortgage foreclosure
suit. Previously this was frequently
done on application Of the mortgage.
| Judge Cleland has decided that a mort
gagor is entitled to all OF the rents until
| the property is foreclosed upon, and
the mortgagor has been sold out, and
has declined 10 appoint such receivers.