191 F. 471 | 9th Cir. | 1911
(after stating the facts as above).
Numerous objections and exceptions were taken to the findings of the court, as to both the fact and the law; but the objections here are reduced practically to three. These are:
First, as it respects the measure of distribution of the proceeds of the claim.
Second, the manner of giving judgment against Dunbar, Manley, and Rice; the same being severally instead of jointly and severally.
Third, awarding the First National Bank of Fairbanks one-third of the funds in court under a mortgage and assignment admittedly paid and discharged.
Before entering upon a discussion of these objections, the legal title should be settled. This was practically done when the case was here before. The plaintiff was declared to be the owner of an undivided one-half interest in the mining claims involved. This left in Scott and Dunbar an undivided one-half; but, they having conveyed to Manley and Rice an undivided one-third of their interest, which would be an undivided one-sixth of the whole, an undivided one-third was left in their right. The judgment as to the title of these mining claims should therefore be for the parties in proportion as thus indicated.
It subsequently appears that Scott has sold his interest to Dunbar, and that Dunbar and Rice have made some conveyances to Bonnifield; but as the pleadings are not in
The contention, as it pertains to the first objection, is that plaintiff is entitled, to judgment for the gross product of the mine, instead of for the royalties received upon the leases only. This depends upon the acts and conduct of plaintiff with respect to the leasing to Humes Bros, and other lessees by Dunbar, Scott, Manley, and Rice: It appears from the findings of fact that Humes Bros, acquired their lease on the' lower half of the mine during the month of September, 1904, and Riley, O’Malley, and Donnelly acquired theirs on the upper half on October 20, 1904. As to this latter lease, the plaintiff expressly agreed with the lessees, by a written contract of even date with the lease, not to disturb them by injunction or otherwise, in the cause then pending for a determination as .to the ownership of the mining claims during the continuance of their lease, and, if successful, plaintiff further agreed to continue the lease until the end of the three years term, namely to October 20, 1907. This contract recites, among other things, that: “In consideration of said parties of the second part (the lessees) undertaking so to extract the gold, minerals, and precious metals from said premises, so that the person or persons entitled thereto, as may be determined in said action at law, may have the benefit thereof, the party of the first part covenants,” etc., thus indicating that the plaintiff was agreeable to the lessees’ entering into the contract of leasing with Dunbar and others.
Under this lease, Riley, O’Malley, and Donnelly extracted, prior to the time a custodian was selected, $92,-466.61, and the entire royalties to that time were appropriated by Dunbar and other lessors. Plaintiff’s counsel claims that the amount of gold extracted in that time was in excess of $100,000; but we think the finding of the court in that respect is about as nearly correct as can be deter
Later, on September 15, 1905, the plaintiff applied for an injunction to restrain Dunbar, Scott, Manley, and Rice from further extracting the gold from the mine, which was duly issued. On the same date, however, at the suggestion of the court, plaintiff and defendants agreed to the appointment of a custodian, with authority to receive the royalties and hold them for the parties in the suit entitled thereto. An agreement to the receipt of the royalties or rentals by the custodian for the parties interested was tantamount to an agreement that the lessees should have all the gold extracted except the royalties for their services in extracting the same. This was in effect a ratification of the leases, at least from that time forward. Otherwise plaintiff should have insisted that the gross amount be paid into the hands of the receivers, instead of the royalties only. Beyond this evidence of plaintiff’s assent to the leasing, plaintiff testifies that Humes Bros, told him of their lease at the time they procured it from Dunbar and others, and the percentage of the output they were to receive, and that he took no steps to stop them. It further appeared that plaintiff, during the time, was living in a cabin by the side of the claim, and was about the mining operations from time to time, and saw the cleanups “quite frequently,” and never made protest in any way. In talking of another lease given while the receivers were in charge, to which he was asked to assent, though refusing his assent, he said in effect that he had made no trouble with respect to the other leases, and would make none as to this. • It is further to be remarked that J. Donnelly, the first custodian of the royalties, agreed upon by plaintiff, was one of the lessees from Dunbar, Scott, Manley, and Rice, and Alexander, the second custodian, was one of the successors to Humes Bros, under their lease, and was selected while such lessee. Beyond this, plaintiff, with the defendants, agreed with the successive receivers that they should act without compensation. From all which it would seem that, if the plaintiff did not consent in the first instance to the making of these leases, he subsequently ratified them, and
Advancing to the next contention of counsel for appellant, which is that the judgment should have been given jointly and severally against Dunbar, Manley, and Rice, it is clear from the foregoing considerations that these parties are subject to an accounting for only the rents and royalties received by them beyond their proportionate share. “It is well settled by all the authorities,” say the authors of the American and English Encyclopedia of Law ([2d Ed.] vol. 17, p. 693), “that where one tenant leases the common property to a third person and receives the rents, he is liable to account to his co-tenants for their proportionate share.” See, also, Tarleton v. Goldthwaite’s Heirs and Adm’r, 23 Ala. 346, 58 Am.Dec. 296; McCaw v. Barker et al., 115 Ala. 543, 22 So. 131; Gedney v. Gedney, 160 N.Y. 471, 55. N.E. 1; Howard v. Throckmorton, 59 Cal. 79.
It must follow that one tenant could not be held to account to another for more than the share received by him above that which he is proportionately entitled to. It being ascertained, therefore, the proportionate amount of the rents and royalties received by Dunbar, Scott, Manley, and Rice, the court below was right in entering a several judgment for the amount each received above his own appropriate share; but it should not have given a joint and several judgment against Dunbar and Scott.
It is next contended that the court erred in awarding to the First National Bank of Fairbanks one-third of the funds in court; they being the accumulation of royalties on leases of the mine after the selection of custodians by the parties litigant. The First National Bank claims
On August 30, 1905, Scott deeded his entire interest in the mine to Dunbar. On August 20, 1906, Dunbar executed to E. T. Barnette a mortgage on the mine, with other property, to secure the payment of a joint note of $30,000 made'and delivered to Barnette by Dunbar and J. C. Kellum. On the same date Dunbar assigned to E. T. Barnette, trustee, all his interest in three pokes of gold dust, further described as “now on deposit with the First National Bank, of Fairbanks, Alaska,” whereby Dunbar stipulated as follows: “Said gold dust is held by the said First National Bank pending a lawsuit now on appeal to the Circuit Court of Appeals wherein David and John Cascaden are plaintiffs and Manley, Rice, and Dunbar are defendants. And I hereby authorize the said E. T. Barnette, or agent, when said suit is settled or when said gold dust is released, to take said gold dust from said First National Bank, and apply the same on a mortgage given by me on this date to the said E. T. Barnette for the sum of thirty thousand dollars.”
On August 27, 1907, Barnette made this assignment of the gold dust to Samuel A. Bonnifield, namely: “I hereby assign and set over all my right, title, and interest in and to the gqld and gold dust described on the reverse side of this sheet of paper unto Samuel A. Bonnifield, his executors, administrators, and assigns.”
On September 19, 1906, Barnette, for value, assigned to Samuel A. Bonnifield the mortgage of August 20th given on the mine. On September 9, 1907, Dunbar assigned to Bonnifield all his right, title, and interest in the gold dust then in the hands of Bonnifield as trust in pursuance of the stipulation entered into between the parties in the case of Cascaden v. Dunbar and others, pending in the Circuit Court of Appeals. The former assignment of gold dust to Barnette was referred to in this latter assignment, and
On April 11, 1909, Bonnifield sold, assigned, arid set over unto the First National Bank all of his right, title, and interest in and to that certain fund described as “now on deposit with the clerk of the District Court for the Third Division of the Territory of Alaska, in that certain action entitled Cascaden v. Dunbar et al., being numbered 165,” and empowered the bank to institute such proceedings in his name as might be necessary to enforce the payment. This constitutes the bank’s chain of title from Dunbar, based upon the mortgage and assignment of the fund to secure the payment of the $30,000 obligation, in so far as it is traceable from the record. It absolutely confers no title to the mine, and in reality none to the mortgage on the mine. There seems to be a complete chain of assignment as it pertains to the fund, and it is by this right, we presume, that the bank claims title thereto. Furthermore, it is shown by the testimony of C. J. Hurley, president of the bank at the time he testified, that the $30,000 mortgage has been paid in full and wholly discharged, and that Kellum paid it. This in itself should preclude the bank from further claim upon the mine or the fund by virtue of the mortgage or the pledge, for, if the obligation which they were given to se
The first assignment of the gold dust on deposit, which was by way of pledge, was made by Dunbar to Barnette August 20, 1906. This assignment recognizes the fact that the gold dust was held by the bank pending the lawsuit here now being prosecuted by this second appeal. This was then- a recognition by Barnette, the pledgee, that the fund was held in trust for a specific purpose. Further, Barnette was only authorized to apply the gold dust to the payment of the mortgage when the suit was settled. Thus he knew he was not entitled to the gold dust until the interests of the parties to the litigation were subserved, and it was practically so stipulated. At that date, it is true, Bonnifield was not the custodian of the fund, but he was such custodian when Barnette assigned the pledge to him on August 27, 1907, and must be held to have fully known the conditions under which he held such fund. The fund was, from the time of the selection of the first custodian, September 15, 1905, and at that time — the time of the assignment of the pledge to Bonnifield — in custodia legis to sub-serve the several interests of the parties litigant according to their superiority of right.
Some suggestion has been made that Donnelly, Alexander, and Bonnifield were merely the custodians by selection of the parties, and were not appointees of the court in such a sense as made them the officers of the court, and that the fund was never, until paid into the hands of the clerk, in the custody of the court or the law. This view cannot be sustained. The very inception of the agreement of the parties to the selection of a custodian was by application to the court to impound the royalties, and the agreement to the selection of the custodian was made at the suggestion of the court. The order entered on the application was that the royalties received by the custodian “be held subject to the order of this court.” Furthermore, the custodians or receivers were all deemed to be subject to the orders and
At the time when the gold dust began to be impounded, Dunbar, Scott, Manley, and Rice had appropriated of Cascaden’s proportion of the royalties $28,932.75. It was because of these misappropriations and failure to account, no doubt, that Cascaden finally concluded to seek the appointment of a receiver, and the purpose was that he might be reimbursed the amount theretofore appropriated by these parties, as well as to secure a just distribution of the royalties thereafter to be paid into the hands of the custodian. It was only fair and equitable, in view of the conduct of Dunbar, Scott, Manley, and Rice, that such a disposition should be made of these royalties and of those subsequently ■ to accrue in the hands of the custodians.
Whoever, therefore, dealt with this fund in court, dealt with it subject to the just rights and equities of Cascaden to be reimbursed and secured his rightful proportion of the accumulated royalties arising from the leases made by Dunbar, Scott, Manley,- and Rice. While Dunbar assigned his interest in the three pokes of gold dust in the bank to Barnette previous to Bonnifield’s becoming custodian of the fund,- Bonnifield had no right, after his selection, to deal with the fund in any other manner than as trustee, and of course he was charged with notice of the condition of the fund and the rights of the respective parties litigant thereto and the bank, dealing with him, could acquire no better or superior right than he had. We conclude, therefore that the conclusion of law of the District Court that the First National Bank was entitled to one-third of the money and gold dust on deposit with the clerk was error. It should have been that the bank was-entitled to such one-third interest subject to the right of Cascaden to be reimbursed out of it for that proportion of Cascaden’s royalties that Dunbar and Scott appropriated.
As it relates to the mortgage, it is claimed that but $2,-000 has been paid on the notes, and that the balance remains unpaid. We do not find that the bank has ever come into the title to this mortgage. But, however that may be, Bonnifield was trustee at the time he took and accepted this mortgage, and was custodian of the royalties then in his hands for the purposes of the trust, and the fund could not in any way be affected by it to the detriment of Cascaden.
As to the Rice deed, Bonnifield does not appear by the record to have parted with what title he thus acquired to Rice’s interest in the mine, and the transfer would seem to have no particular relation to this controversy.
Bonnifield’s interest in the fund acquired by the assignment from Rice, whatever it was, passed, we presume, to the bank under Bonnifield’s assignment of the fund to the bank of date April 11, 1909, above noticed. So of Manley’s interest in the fund acquired by direction to apply to the payment of his debt to Bonnifield. But as Bonnifield, being trustee of the fund, could not thus have acquired any interest from Rice detrimental to the rights of Cascaden, the bank could not acquire any greater right from Bonnifield. Furthermore, the bank is chargeable with adequate knowledge of the conditions existing relative to the fund, Bonnifield being its president, and undeniably it cannot claim as an innocent purchaser. So it is not in a position to deny the rights of Cascaden in the fund, being the
1. That the royalties received from the leasing of the mine prior to the selection of a custodian were $57,865.50.
2. That Cascaden is entitled to one-half of these royalties, amounting to $28,932.75.
3. That Dunbar should account to Cascaden for one-third of this sum, or $9,644.25, for which Cascaden is entitled to judgment against him.
4. That Scott should account to Cascaden for a like amount, and the latter is entitled to judgment therefor.
5. That Manley should account for one-sixth, or $4,-822.125, to Cascaden, for which the latter should have judgment.
6. That Rice should account for a like amount, for which also Cascaden should have judgment.
7. That Cascaden is entitled to one-half of the royalties, including the moneys as well as the gold dust now in the hands of the clerk and in the registry of the court, as his rightful proportion thereof.
'8. That Cascaden should receive from the other half of the fund in court the sum of $28,932.75.
9. That the First National Bank of Fairbanks is entitled to the balance, or whatsoever remains of such fund after the payment of plaintiff.
10. Plaintiff is entitled to his costs and disbursements against defendants, including the bank.
The decree of the court below will be modified to conform to this opinion.
