Cavanaugh v. Art Hardware & Mfg. Co.

• Decision Date: 04 April 1923
• Docket Number: 17357.
• Citation: 214 P. 152,124 Wash. 243
• Court: Washington Supreme Court
• Parties: CAVANAUGH et al. v. ART HARDWARE & MFG. CO. RICHARDS v. LEWIS.

214 P. 152

124 Wash. 243

CAVANAUGH et al. v. ART HARDWARE & MFG. CO.

RICHARDS v. LEWIS.

No. 17357.

Supreme Court of Washington

April 4, 1923

Department 2.

Appeal from Superior Court, King County; Austin E. Griffiths, Judge.

Action by J. B. Cavanaugh and another, copartners trading under the name and style of the C. & C. Transfer Company, against the Art Hardware & Manufacturing Company, in which Walter N Richards, was appointed receiver for the defendant corporation. From an order classifying claims by S. L. Lewis as assignee, among preferred claims, the receiver appeals. Motion to dismiss the appeal denied, judgment reversed, and cause remanded, with instructions.

Bausman Oldham, Bullitt & Eggerman, of Seattle (Arthur E. Simon, and Walter L. Nossaman, both of Seattle, of counsel), for appellant.

Geo. B. Cole, John Wesley Dolby, and G. F. Vanderveer, all of Seattle, for respondents.

Van C. Griffin, of Seattle, amicus curiae.

FULLERTON J.

The Art Hardware & Manufacturing Company, a corporation, was adjudged insolvent at the suit of certain of its creditors, and a receiver was appointed of its assets and property. The receiver, pursuant to an order of the court appointing him, gave notice of the creditors of the corporation for the presentation of claims, and among those presented were claims of certain officers of the corporation for labor performed by them for the corporation within six months next preceding the adjudication of insolvency. The claims were presented as claims preferred over the claims of the general creditors, but the receiver refused to recognize them as such, although offering to allow them as general claims. The dispute was submitted to the court appointing the receiver, and it ruled that the claims were entitled to be classed among the preferred claims. This appeal is from the order so classifying them.

The business in which the corporation was engaged is not very clearly depicted in the record, but enough is shown to indicate that it was engaged in the manufacture from raw material of certain finished articles, such as automobile accessories, patent brushes, and brass fixtures, and that in its work it employed both skilled and common labor. One of the claimants held the office of president of the corporation, but performed the services of bookkeeper for the concern, and it is for this service his claim is made. Another was a trustee of the corporation, and acted as manager and general superintendent of the workship, and worked on the lathes as an ordinary mechanic, and claims for his services in that behalf. The third was the secretary of the corporation, who acted as salesman for the concern, visiting the trade in the city of Seattle as well as in certain of the neighboring cities, and claims for his services as such salesman. It is not contended on this appeal that the services for which the claims were made were not performed by the several claimants, nor is it contended that the services were not performed within the six months' period, nor contended that the amounts claimed are not justly due from the corporation, but it is contended that the claims are not entitled to preference.

The respondents have moved to dismiss the appeal, assigning as reasons insufficient service of the notice of the appeal, want of capacity to appeal in the appellant, and an insufficient bond. While extended arguments have been made on each of the propositions, our discussion of them will be beief. The notice of appeal was served on all persons appearing in the contest proceedings before the superior court, whose interests are affected thereby. This is sufficient. Jensen v. Angeles Brewing & Malting Co., 87 Wash. 392, 151 P. 825; Gust v. Judd, 88 Wash. 536, 153 P. 309.

The appeal is by the receiver, and it is contended that he, being an officer of the court appointing him, cannot appeal from the court's orders respecting the order in which claims against his insolvent shall be paid, since he has no interest therein and is not aggrieved thereby. But the receiver appealed as the representative of the general creditors, who are aggrieved by the order of the court, and his appeal has the direct sanction and approval of the court making the order. This court has entertained an appeal by a receiver under similar circumstances. See Pickering v. Richardson, 57 Wash. 117, 106 P. 614, and Brown v. Wilcox Lumber & Logging Co., 118 Wash. 336, 203 P. 949. In the first of these cases we said:

'A motion is made to dismiss the appeal, for the reason, as it is alleged, that a receiver has no right of appeal. In some cases, as, for instance, from an order distributing the funds of the estate, it is usually held that a receiver has no right of appeal; but where the duty is put upon him of defending the assets of the estate or protecting it from unwarranted or unlawful claims, we do not understand that this right has ever been denied. Alderson, Receivers, § 246; Beach, Receivers, §§ 295, 296; Bosworth v. Terminal R. Ass'n, 80 F. 969; Felton v. Ackerman, 61 F. 225; 17 Ency. Plead. & Prac. 874.' The objection to the appeal bond is that it is executed by the same surety who appears on the receiver's official bond. But there was no judgment against the surety below, and the appeal is in no sense an appeal from a judgment on which the surety is already bound, as was the fact in the case of David v. Guich, 30 Wash. 266, 70 P. 497, on which the respondent relies. The sole question open to the respondent on this score is the sufficiency of the surety, and this they do not question.

However, were the fact otherwise, the remedy of dismissal would not be open to the respondent. Under section 1730-9 of Remington's Compiled Statutes, enacted since the decision cited was rendered, the remedy is to move for a new bond where the one given is defective by reason of insufficient sureties. Dismissal would follow only upon a refusal by the appellant to supply a proper bond after opportunity was given him so to do. We therefore conclude there is no just ground for dismissing the appeal.

On the merits of the controversy the appellant makes two contentions: First, that the character of the services rendered by the claimants was not such as to fall within the purview of the statutes granting priority; and, second, that, regardless of the nature of the services, the claimants occupied such a relation to the corporation as to render the statute inapplicable as to them.

The statute under which the respondent claims is found at section 1149 of Remington's Compiled Statutes, and reads as follows:

'Every person performing labor for any person, company or corporation, in the operation of any railway, canal or transportation company, or any water, mining or manufacturing company, sawmill, lumber or timber company, shall have a prior lien on the franchise, earnings, and on all the real and personal property of said person, company or corporation, which is used in the operation of its business, to the extent of the moneys due him from such person, company or corporation, operating said franchise or business, for labor performed within six months next preceding the filing of his claim therefor, as hereinafter provided; and no mortgage, deed of trust or conveyance shall defeat or take precedence over said lien.'

It will be observed by the express language of the act the lien is given to one performing 'labor' for the persons and concerns named therein, and the controlling question is whether the service performed by the several claimants was 'labor' within the meaning of that term. It is the contention of the appellant that it is not. They argue that the term 'labor' in legal phraseology has a well defined and accepted meaning; that it implies manual exertion of a toilsome nature, exertion of muscular force producing weariness, and is without application to those performing clerical services, or services requiring skill rather than muscular effort.

The authorities, while not altogether harmonious, seem to sustain the appellant's definition of the term. In Meands v. Park, 95 Mr. 527, 50 A. 706, this language is used:

'The statute giving a lien to those who 'labor' at cutting or hauling logs was obviously designed to afford protection to common laborers who gain their livelihood by manual toil, and who may be imperfectly qualified to protect themselves. The word 'labor' was undoubtedly employed by the Legislature in its limited and popular sense, to designate this class of workmen who labor 'with physical force in the servide and under the direction of another for fixed wages.' Rogers v. Dexter & Piscat. R. R. Co., 85 Maine, 374. And such is the primary or specific lexical meaning uniformly assigned to the word 'laborer.' Says Webster: 'One who labors in a toilsome occupation; a person that does work that requires

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