Case Name: A. M. Cannon et al., Plaintiffs, v. Ben E. Snipes et al., Defendants, Frank N. McCandless, Appellant, Henry Rehmke, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1901-03-06
Citations: 24 Wash. 166
Docket Number: No. 3779
Parties: A. M. Cannon et al., Plaintiffs, v. Ben E. Snipes et al., Defendants, Frank N. McCandless, Appellant, Henry Rehmke, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 24
Pages: 166–172

Head Matter:
[No. 3779.
Decided March 6, 1901.]
A. M. Cannon et al., Plaintiffs, v. Ben E. Snipes et al., Defendants, Frank N. McCandless, Appellant, Henry Rehmke, Respondent.
RECEIVERS-PLURALITY OF PUNDS-PAYMENT OP CLAIMS-PLEADING -SUFFICIENCY OP PETITION.
Where a receiver áppointed to take charge of the' partnership, community, and individual estate of an insolvent, and authorized to first pay all the firm and community liabilities out of the partnership and community property before applying any balance thereof to the satisfaction of the insolvent’s individual debts, is sought to be restrained by a firm creditor from paying a creditor of the separate' estate out of the funds arising from the community estate, a cross petition of the individual creditor fails to state facts sufficient when it alleges that $30,000 had been realized from the insolvent’s separate estate and applied in discharging liens against the community realty and in paying the expenses of the receivership, nearly all. of which expenses had been connected with the administration of the partnership estate, when there is no allegation that the money was not properly so applied under the decree, nor any allegation of unauthorized diversion of funds from one class of claims to the other, nor any allegation that there is any money in the receiver’s hands, derived from the individual estate, sufficient to pay any part of the cross petitioner’s claim.
SAME —ALL FUNDS AVAILABLE FOB RECEIVEBSHIP EXPENSES.
Where hut one receivership has been created to take charge of the firm, community, and individual estate of an insolvent, funds derived from any of such estates are available for payment of the expenses of the receivership, although the decree provided for payment of each class of creditors primarily from the corresponding class of funds.
SAME — ’ BENTS FROM COMMUNITY REALTY — LIABILITY FOE DEBTS OF ONE SPOUSE.
Where a decree of the court appointing a receiver directs him to take charge of the community estate of an insolvent and apply the proceeds thereof to the satisfaction of community debts, such a specific lien is created against the property as to render the rents collected therefrom by the receiver community funds.
SAME — SUPERSEDING PBIOE OEDEBS BY FINAL DECREE.
Where the court in an Insolvency proceeding has rendered a final decree fixing the claims of all the various classes of creditors, marshalling and listing all the assets in the receiver’s hands, and directing a sale thereof and the payment of the various claims according to their character out of the various kinds of property, consisting of partnership, community, and individual assets of the insolvent, such final decree supersedes a prior one in the cause, wherein the receiver was ordered to pay petitioner’s claim “out of any money available in his hands so to do.”
Appeal from Superior Court, Kittitas County. — Hon. John B. Davidson, Judge.
Affirmed.
Kauffman & Frost, for appellant.

Opinion:
Tlie opinion of tlie court.was delivered by
Mount, J.
Some time prior to December, 1893, Ben E. Snipes and others were engaged in tbe banking busi ness in this state. On that date, at the suit of plaintiffs, the said Ben E. Snipes and others were adjudged insolvent and a receiver appointed by the superior court of Kittitas county of the estate of Ben E. Snipes & Co., of the estate of Ben E. Snipes individually, and of the estate of Snipes and wife. This receivership is still in existence. In January, 1897, a final decree was entered in the said cause, By which the court fixed the claims of all the various classes of creditors, marshalled and listed all the assets then in the receiver's hands, and directed a sale thereof and the payment of the various claims according to their character out of the proceeds of the various kinds of property, which consisted of partnership assets of Ben E. Snipes & Co., community property of Snipes and wife, and individual assets of Snipes. This decree is final in the cause, not having been vacated, modified, or appealed from, and this appeal in no way questions the validity or binding force of that decree. The contest here is between the creditors of the firm of Ben E. Snipes & Co. and a creditor of Ben E. Snipes individually, over a fund in the hands of said receiver. The respondent is a firm creditor. The appellant is the owner, by assignment, of a judgment against Snipes antedating the receivership, obtained By one MacDougall upon a surety obligation of Snipes. The appellant is a separate creditor of Snipes as distinguished from the community creditors of Snipes and wife, and an individual creditor of Snipes as distinguished from his partnership creditors. After the entry of the decree aforesaid, the respondent Behmke, a firm creditor, presented his petition to the court, setting up the fact that the receiver had in his hands a fund derived from the sale of real property Belonging to the community of Snipes and wife; that appellant had demanded the payment of his MacDougall claim out of this fund, and that the receiver was about to pay the same out of the fund, which was not subjected by said decree to the payment of this class of creditors; and praying that the receiver be restrained from paying the same out of said fund. Appellant thereafter, by permission of the court, filed his answer to this petition, in which he admitted the allegations mentioned and alleged the following facts by way of counter petition: That $30,000 has come into the hands of the said receiver from the personal property of Ben E. Snipes; that there have been allowed claims as liens primarily upon community realty of Snipes and wife, and secondarily upon personal property of Snipes, amounting to $14,596, which have been paid in full, in the payment of which the receiver used more than $8,000 derived from personal property of Snipes; that the said claim of MacDougall, amounting to about $4,200, was declared to be a lien upon the personal property of Snipes only. This, together with claims aggregating $350 more, constitutes all claims against the estate of Snipes which'were charges upon his separate property or that of Snipes and wife; that there are sufficient funds in the hands of the receiver to pay this MacDougall and all other claims allowed against the individual estate of Snipes; that $22,000 derived from the personal property of Snipes has been used to pay the expenses of the receivership herein, "nearly all of which has been used for expenses of the estate of Ben E. Snipes & Co. in and about said receivership." For a further answer and counterclaim, that since final decree more than $6,000, now in the hands of the'receiver, has been realized by the receiver from rents of the community real property of Snipes and wife; and, for a further answer and counterclaim, that in ISTovember, 1894, an order was made by the said court that the receiver pay said claim "out of any money available in his hands so to do"; that this order stood at the time of the rendition of said decree, and still stands, unmodified, in full force and effect. The respondent thereafter demurred to each of said answers, because the same does not state facts sufficient to constitute an answer or counter petition. These demurrers were subsequently sustained, and, appellant electing to stand upon his answer, the court made the order restraining the receiver from paying the MacDougall claim out of any of the proceeds of the community property of Snipes and wife. From this order appeal is taken.
It was not error of the lower court to sustain the demurrers. The first counter petition, it is true, shows $30,000 collected from the personal property of Ben E. Snipes, and $20,000 from the community real estate of Snipes and wife. It also alleges $14,596 in claims, primarily against the community property of Snipes and wife, and secondarily against the property of Snipes individually, and also other claims, and that these are all the claims against the estate of Snipes personally and the community of Snipes and wife. But it does not state that there is money in the hands of the receiver, derived from this particular fund, sufficient to pay these claims, or any part thereof. There is also no allegation of unauthorized diversion of the funds from one class of claims to the other. It is alleged 'that more than $8,000 of the fund derived from the personal property of Snipes has been used to discharge liens against the community realty, and $22,000 has been used in paying the expenses of the receivership herein, and "nearly all" of this latter amount has been used for expenses attending the administration of the estate of Ben E. Snipes & Co. But it is not alleged, nor is there anything to show, that this money was not properly used for this purpose and as directed by the decree. There was but one receivership, in that case. It is true the funds were not common for the use of each creditor or each class of creditors, but any and all of it was available to be used to pay the expenses of 'the receivership. This was a proper provision in the decree. It is not alleged that the receiver has not applied these funds as directed by the decree. As we read the decree, it was intended by the court that all firm liabilities of Snipes & Co. and all community liabilities of - Snipes and wife should first be paid out of the proceeds of the community realty and firm property, and that the balance be applied in satisfaction of the separate debts of Snipes. It stands admitted here that the receiver is about to pay these claims out of the proceeds of the sale of the community property, and that prior claims against this fund remain unpaid, and that the total assets will not be sufficient to liquidate the same.
It is also argued that the rents derived from the community property under the receivership should be applied to the payment of this claim. Under the decision of this court in Morse v. Estabrook, 19 Wash. 92 (52 Pac. 531, 67 Am. St. Rep. 723), execution might issue against the rents of the community real property where a specific lien had not attached. But this fund in the hands of the receiver, who held the property for sale under a decree of the court, could no more be diverted from the channel in which the decree directed it to go than the property itself. It is the proceeds of the community property, over which the husband has no control, and is not available as separate property of Ben E. Snipes. The specific lien upon the realty created by the decree attached to the proceeds as well as to the realty.
There is no merit in the other answer, because this or der was superseded by tbe decree; and, even if it were not, it only directs payment out of tbe funds available for that purpose, and, unless tbe answer shows funds available, no cause is stated.
Tbe judgment of tbe lower court is affirmed.
Reavis, O. J., and Fullerton, Anders, and Dunbar, JJ., concur.