174 P. 51 | Cal. | 1918
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *514
This is an application for a writ of prohibition to be directed to the superior court of the county of Kern and Honorable Howard A. Peairs, judge of said court, commanding said court and judge to refrain and desist from taking any further proceedings in the matter of retrying certain issues in the case of Mercantile Trust Company of San Francisco, Plaintiff, v. Sunset Road Oil Company, Union Oil Company, Citizens National Bank, Union Lumber Company, King Lumber Company, Kern Valley Bank, M.E. Webster, W.H. Coon and Stephen Price, Defendants, now pending in said court and before said judge. The facts upon which this application is predicated are the following: The above-named action is one instituted for the foreclosure of a mortgage or trust deed executed to the plaintiff by the defendant, Sunset Road Oil Company, on July 15, 1905, covering all of its real and personal properties situate in the county of Kern, which said properties were, by the terms of said instrument, transferred to the said Mercantile Trust Company in trust and as security for a bonded indebtedness of the said Sunset Road Oil Company, to be evidenced by certain bonds issued or to be issued by said last-named company and which bonds were issued and sold to various persons. Thereafter, and on May 10, 1911, the said plaintiff filed an amended complaint in said action, wherein, after repeating *515
the averments of its original complaint as to the execution of the mortgage or trust deed and the amount due and unpaid thereon by the Sunset Road Oil Company, the plaintiff alleged that under and pursuant to the provisions of said mortgage or deed of trust providing for a bond issue, the defendant, Sunset Road Oil Company, had from time to time issued to divers persons bonds aggregating in face value the sum of one million five hundred thousand dollars, which said bonds were outstanding and unpaid. The plaintiff also averred that certain of the defendants other than the Sunset Road Oil Company claimed certain rights or interests in or liens upon the mortgage properties which plaintiff alleged to be subsequent, subordinate, and subject to the rights of the plaintiff in and to said properties. The plaintiff prayed for a foreclosure of its said mortgage or deed of trust, and "that the court fix and determine the number and amount of the bonds of said Sunset Road Oil Company now outstanding and the amount due on each thereof." The only defendants who appeared in the first instance to set up any interest in the mortgaged premises adverse to that of the plaintiff existing by virtue of its said mortgage or deed of trust were the defendant Union Oil Company of California and the defendants Coon and Price. These claimed to have acquired some interest in said mortgaged premises superior to the plaintiff's said mortgage. At some time subsequent to the filing of plaintiff's amended complaint W.R. Williams, state superintendent of banks, appeared for and on behalf of the defendant Kern Valley Bank and filed what purported to be an answer, cross-complaint, and complaint in intervention, from the averments of which it appeared that the Kern Valley Bank had become insolvent and had been taken possession of by the said W.R. Williams, as state superintendent of banks, and was in process of liquidation by him; that the said Kern Valley Bank was the owner or holder of the bonds of the Sunset Road Oil Company to the extent of four hundred and fifty-nine thousand four hundred dollars, the face value thereof, together with unpaid interest thereon since January 1, 1908, at the rate of five per cent per annum. The answer of the said superintendent of banks, acting on behalf of the Kern Valley Bank, admitted the averment of the plaintiff's amended complaint to the effect that there were one million five hundred thousand dollars of issued, outstanding, and unpaid *516
bonds of the Sunset Road Oil Company, but denied that any of said bonds other than those owned by Kern Valley Bank, aggregating the sum of four hundred and fifty-nine thousand four hundred dollars, were issued for any consideration whatever, and affirmatively alleged that each and every one of the said bonds of the Sunset Road Oil Company other than those so held by the Kern Valley Bank were wrongfully and improperly issued and without any consideration therefor moving to said Sunset Road Oil Company. Whatever other averments the said answer contains upon this subject are mere conclusions of law based upon its averment that all of such bonds other than those held by the Kern Valley Bank were issued without consideration. By the said cross-complaint and so-called complaint in intervention of the superintendent of banks certain other persons in addition to those already defendants in the action, to wit, W.S. Tevis, C.N. Beal, H.H. Blodgett, Canadian Bank of Commerce, and Western Metropolis National Bank, were brought into the action as defendants, the said cross-complainant alleging as to them a state of facts which it averred rendered the issue of a large block of the bonds of the Sunset Road Oil Company to said later named defendants void. The cause went to trial upon the issues as thus made up. The only issue which was presented requiring other than merely formal proof on the part of the plaintiff was that joined by the defendants Union Oil Company and Coon and Price through the claim of these defendants, that they held certain leases upon the mortgaged premises which were superior to the plaintiff's mortgage. There was also the question as to the amount in value of bonds actually or properly issued by the Sunset Road Oil Company which the plaintiff's mortgages secured, but this was an issue which arose out of the averments of the so-called cross-complaint and complaint in intervention of the superintendent of banks, representing the Kern Valley Bank, and the answers thereto presented by the defendants which it had caused to be brought in. Upon the trial of the cause the plaintiff presented its formal proofs as to the making and execution of the mortgage or deed of trust to it, and also made its showing as to the superiority of its lien over the alleged rights and interest of the Union Oil Company, Coon, and Price. The main battle was between the cross-complainant, W.R. Williams, representing, as superintendent *517
of banks, the Kern Valley Bank, and the defendants it had caused to be brought in. Upon the trial and submission of the cause the court made its findings and rendered its judgment in the plaintiff's favor upon the matter of the making, execution, and delivery of the mortgage or deed of trust to it. The court also found and rendered judgment in the plaintiff's favor upon the issue of the priority of its lien over the claims or interest of Union Oil Company, Coon, and Price, who had answered, claiming that their said rights and interests were superior to the plaintiff's lien. The court also adjudged that the alleged claims or interests of those other defendants who had not appeared were to be subordinated to the lien of plaintiff's mortgage and deed of trust. Upon the issue presented by the cross-complaint as to the amount of outstanding bonds of the Sunset Road. Oil Company which the plaintiff's mortgage or deed of trust secured the court found that the Sunset Road Oil Company was indebted in the sum of one million four hundred and fifty-nine thousand dollars principal and $368,749.80 interest, fifty thousand dollars trustees' and attorneys' fees, and $4,082.56 costs and disbursements, all of which was secured by the plaintiff's lien, the foreclosure of which was decreed. As to this issue and the finding and decree of the trial court thereon it is plain that the plaintiff, as the mere trustee for the bondholders, was not materially affected, but that, on the other hand, the Kern Valley Bank and its representative, W.R. Williams, as superintendent of banks, in charge of its affairs, were the parties actually aggrieved. While it is true that the plaintiff, as a predicate to its asserted right to the foreclosure of its mortgage or deed of trust, stated in its complaint the amount of the outstanding indebtedness of the Sunset Road Oil Company as the same appeared upon the face of its issued bonds, the fact is that the real issue upon this subject was the one arising upon the cross-complaint or so-called complaint in intervention of the Kern Valley Bank and its representative, and the answers thereto filed on behalf of the defendants which it had caused to be brought into the case, and whose holdings of certain of the bonds of the Sunset Road Oil Company it had assailed. Upon the issues thus framed the court found against the Kern Valley Bank and its representative and decreed that it take nothing by its cross-complaint in intervention. After the entry of the decree of the trial court *518
disposing of these several matters, two separate motions for a new trial were made, one by the Union Oil Company, addressed to that portion of the finding and decree of the court which subordinated its interests in portions of the mortgaged property to the plaintiff's lien; the other by and on behalf of the Kern Valley Bank, wherein the findings and decree of the trial court upon the issues specially tendered by the cross-complaint in intervention were assailed. Both of said motions for a new trial were granted by the trial court on June 16, 1914, its order in each instance being in general terms. Several appeals were taken from each of the orders by the plaintiff and others, and, upon separate hearings upon each of these appeals, the order granting a new trial upon the motion of the Union Oil Company was reversed, while the order granting the motion for a new trial made on behalf of the Kern Valley Bank was affirmed, the decision of this court upon each of these appeals being found reported in Mercantile Trust Co. etc.
v. Sunset Road Oil Co. et al.,
The only other parties defendants in the action as to whom there exist issues to be tried are the defendants Kern Valley Bank and its representative, the superintendent of banks, and the parties whom it has made cross-defendants by the averments of its cross-complaint or complaint in intervention. The Kern Valley Bank and its representative, the superintendent of banks, have no place in this case except that which springs from the fact that the former is the holder of bonds of the Sunset Road Oil Company of the face value of four hundred and fifty-nine thousand four hundred dollars, which bonds are secured by the mortgage or deed of trust by the plaintiff as trustee and sought to be foreclosed in this action. As between the Kern Valley Bank and its representative on the one hand and the plaintiff on the other, no issue could arise as to the integrity of the latter's lien or as to its right to the foreclosure thereof. The formal allegations of the plaintiff that the sum of one million five hundred thousand dollars in value of these bonds has been issued and is outstanding and unpaid has not been denied. These bonds having been thus admittedly issued import a consideration without further proof, and hence no proofs were or are required on the part of the plaintiff upon this subject. The plaintiff's averment that the proper steps had been taken to declare the whole amount due upon these bonds was also not denied. It was, therefore, not required either at the outset or at any other stage of the trial to sustain these averments with proofs as against these particular defendants. Whatever issues upon these subjects existed or now exist arose out of the dispute between the bondholders themselves as to the integrity, *520
amount, and value of their respective holdings of these bonds. This issue was brought into the case by the filing of the cross-complaint and complaint in intervention of the Kern Valley Bank and its representative, the superintendent of banks, and was joined by the respective answers of the defendants named in these cross-pleadings to them. As to the proofs upon these issues the plaintiff has no interest and has never had the burden either upon the original trial or upon any retrial of the cause; and while it is true that the trial court upon the original trial of the cause decided these issues against the contention of the cross-complainant, and that its motion for a new trial as to these issues was granted; and that in granting said motion the trial court made a general order granting a new trial, which general order this court upon appeal has affirmed, still, according to well-settled principles as well as under the express rulings of this court in these particular appeals, such general order of the trial court granting such new trial is not to be construed or held to be any broader than the motion which forms its predicate nor than the issues which in said motion it was urged the court had erroneously determined. In the case of Mercantile Trust Co. v.Sunset Road Oil Co. et al.,
It follows from the foregoing discussion that the application of the petitioner herein should be denied and the writ dismissed, and it is so ordered.
Shaw, J., Sloss, J., Melvin, J., Lorigan, J., Wilbur, J., and Angellotti, C. J., concurred.
Rehearing denied.
In denying the rehearing the following opinion was rendered on August 9, 1918:
Addendum
The petition for rehearing is denied, but in denying the same we deem it proper to add that the question as to the proper amount to be allowed as counsel fees upon the foreclosure of the mortgage or deed of trust in the case of Mercantile TrustCo. v. Sunset Road Oil Co. et al., out of which this proceeding arose, is involved in the retrial of that cause. Said instrument provides for the allowance of reasonable counsel fees in the event of a foreclosure thereof. The complaint in the foreclosure suit merely asked for the allowance of reasonable counsel fees without specifying any particular sum as the amount demanded. The answers of the several defendants were silent upon the subject of counsel fees. The trial court allowed counsel fees in the sum of fifty thousand dollars, basing such allowance evidently upon its finding that the outstanding indebtedness of the Sunset Road Oil Company represented in bonds and secured by said mortgage or deed of trust amounted to the sum approximately of one million five hundred thousand dollars. The Kern Valley Bank, through its representative, the bank commission, assailed this finding upon motion for a new trial and also upon said motion attacked the reasonableness of the court's finding as to counsel fees, which was predicated upon the foregoing finding as to the amount of outstanding valid bonds. The court granted said motion for a new trial by a general order, which embraced only a retrial of those issues arising between the contesting ebondholders as presented in the motion for a new trial made on behalf of the Kern Valley Bank. The most vital of these issues relates to the amount of the actual indebtedness and of the valid outstanding bonds of the Sunset Road Oil Company and as a necessary incident to this issue, the question of what is a reasonable sum to be allowed as counsel *523 fees in the action brought for the foreclosure of the mortgage or deed of trust securing said indebtedness and such bonds. Both of these questions have, therefore, been reopened for examination and decision upon a retrial of the case.