Court Opinion

ID: 3823596
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:57:31.276115+00
Date Added: 2024-06-11T07:39:45.444864
License: Public Domain

On petition for rehearing it is again urged that it does not appear that the property sold by the Smith  Furbush Machine Company was in possession of the receiver at the time of the fire which destroyed the property of the Southwestern Bedding Company. Upon a re examination of the record we adhere to the original conclusion that the property was taken possession of by the receiver, and was in his possession at the time of the fire which destroyed the plant of the Southwestern Bedding Company.
Our attention is called to a statement in the opinion that the property was insured at the time the receiver was appointed and that the receiver kept the insurance in force. This statement is not strictly accurate. When the receiver was appointed the insurance then in force was cancelled, and the receiver procured a policy in his own name as receiver upon all the property of the bedding company in his possession, including that purchased from the Smith  Furbush Machine Company. This does not alter the conclusion reached. The receiver was the representative of the court, and held the property for the benefit of the debtor and all creditors in proportion to their respective interests. At the time the Smith Furbush Machine Company sold the property to the Southwestern Bedding Company, a written contract was executed, in which title thereto was reserved until the property was fully paid for, and this contract was duly filed with the register of deeds and constituted a lien upon the property. An additional covenant in the contract required the purchaser, the Southwestern Bedding Company, to keep the property insured for the benefit of the seller, the Smith  Furbush Machine Company. It would be inconceivable that a court of equity should take property of a creditor into its custody, not as a representative of the debtor alone, but of all the creditors as well, and that by the act of taking charge thereof in an effort to preserve the rights of all parties it should expose the property to destruction without making provision for compensating the parties therein according to their respective interests.
When the receiver took possession of the property, he held it by the same right and title, and by no other, as that of the Southwestern Bedding Company, subject to all liens, properties, and equities, whether created by operation of law or by the act or contract of the corporation, which existed against the property at the time of his appointment. Ardmore National Bank v. Briggs Machinery  Supply Co., 20 Okla. 427. 94 P. 533, 23 L. R. A. (N. S.) 1074, 129 Am. St. Rep. 747, 16 Ann. Cas. 133; Lawson, Receiver, v. Warren, 34 Okla. 94, 124 P. 46, 42 L. R. A. (N. S.) 183, Ann. Cas. 1914C, 139. So that, when he insured the property in his own name as receiver, the insurance was effected for the benefit of the owner and creditors according to their respective interests therein and liens thereto; and, a loss having occurred, the Smith  Furbush Machine Company was entitled to a lien upon the proceeds of the insurance to the extent of their lien upon the property destroyed, and this lien was superior to the claim asserted by the American National Bank, Croenwett v. Boston  A. Transp. Co. (C. C.) 95 Fed. 52.
The petition for rehearing is overruled.
KANE, J., dissents.
HARRISON, J., absent. *Page 32