Case Name: U. S. INVESTMENT CORP. v. PORTLAND HOSPITAL
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1901-04-15
Citations: 40 Or. 523
Docket Number: 
Parties: U. S. INVESTMENT CORP. v. PORTLAND HOSPITAL.
Judges: 
Reporter: Oregon Reports
Volume: 40
Pages: 523–535

Head Matter:
Argued 13 January;
decided 15 April, 19,01.
U. S. INVESTMENT CORP. v. PORTLAND HOSPITAL.
[56 L. R. A. 627, 64 Pac. 644, 67 Pac. 194.]
Appeal—Service of Notice on Parties in Default.
1. The amendment of Section 537 of Hill's Ann. Laws, by the act of 1899, regulating the method of taking appeals to the supreme court (Laws, 1899, p. 228), was intended to modify the existing statute by relieving the appellant from the obligation of serving the notice of appeal on adverse parties who have not appeared, and now the notice need be served on only those parties who have appeared.
Relative Rank of Mortgages and Receiver's Debts.
2. Primarily, a receiver is a specially appointed officer of the court whose duty is to preserve the property involved until the litigation shall be ended, and the expenses incurred in so doing, together with a reasonable compensation, constitute a first charge on the property and its income; but other debts of a receiver will not be preferred to prior contract liens unless such preference is given in the order authorizing the obligation to be incurred or in the order approving and ratifying it.
Power to Make Receiver's Debts a Preferred Lien.
3. In appointing receivers of corporations not quasi public in character, or authorizing their receivers to continue the business of such corporations, courts of equity cannot, without the consent of prior lien creditors, decree that the debts of such receivers incurred in carrying on the business of the defendant corporation shall take precedence over prior contract liens : McCornack v. Salem Ry. Co. 34 Or. 543, and Merriam v. Victory Min. Co. 37 Or. 321, approved and followed.
Receivers—Priority of Receiver's Debts.
4. The fact that a receiver of a private corporation has made an inequitable application of part of the income from the property of the defendant does not change the relative rights of any interested party, or give the creditors of the receiver precedence over mortgage creditors of the defendant whose rights had been fixed before the receivership.
Suit by the United States Investment Corporation, Limited, and Percy H. Blyth, against the Portland Hospital and others to foreclose a mortgage. There was a decree for plaintiffs, from which W. T. Masters, receiver of the hospital, appeals, claiming precedence for the creditors of the receiver over the mortgage of plaintiff that had been given some years before the receivership began. A motion to dismiss the appeal was overruled, and the decree of the 'trial court upheld.
Motion Overruled; Affirmed.
Decided 15 April, 1901.

Opinion:
On Motion to Dismiss Appeal.
Mr. Chief Justice Bean
delivered the opinion.
This is a motion to dismiss the appeal because notice thereof was not served upon the Portland Hospital, E. H. Habighorst, trastee, J. Benson Starr, and Charles H. Chance, whose interests, it is contended, are adverse to the appellants. These parties did not appear in the court below, but made default. Prior to the amendment of Section 537, Hill's Ann. Laws (Laws 1899, p. 228), the statute required the notice of appeal to be served on all parties whose interests in relation to the judgment or decree appealed from were in conflict with the reversal or modification sought, notwithstanding such parties may have been in default: (Moody v. Miller, 24 Or. 179, 33 Pac. 402; Jackson County v. Bloomer, 28 Or. 110, 41 Pac. 930); but the section as amended provides that if the appeal is not taken at the time the judgment is rendered, it may be taken within a specified time thereafter, by serving a notice thereof on such adverse party or parties as have appeared in the action or suit. The manifest purpose of this change in the law was, as its language clearly indicates, to require the notice of appeal to be served only upon the parties who had appeared, and to dispense with the necessity of serving those who were in default. There could have been no other reason for the amendment. The motion to dismiss is therefore overruled.
Decided 13 January, 1002.
For appellant there was an oral argument with a brief by Mr. William Y. Masters, to this effect:
Portland Hospital was not organized under the private corporation law of the state, but was a public corporation: McDonald v. Mass. Gen. Hospital, 120 Mass. 432.
That these claims are a lien prior to respondents' mortgage and trust deed see: Hembree v. Dawson, 18 Or. 474 (23 Pac. 264); Hopfensack v. Hopfensack, 61 How. Pr. 508; Beckwith v. Corrall, 56 Ala. 12; Heisen v. Binz, 147 Ind. 284 (45 N. E. 104); Cake v. Mohun, 164 U. S. 311 (17 Sup. Ct. 100); Jaffray v. Roob, 72 Iowa 335 (33 N. W. 349); Fosdick v. Schall, 99 U. S. 253; Raht v. Attrill, 106 N. Y. 423 (60 Am. Rep. 456, 13 N. E. 282); Burnham v. Bowen, 111 U. S. 783 (4 Sup. Ct. 675); Girard Life Ins. Co. v. Cooper, 162 U. S. 530; Karn v. Rorer Iron Co. 86 Va. 758.
We respectfully submit that there are three grounds upon which these receivers' claims should be adjudged a prior lien to plaintiffs' upon the property in the hands of the receiver.
Motion Overruled.