286 F. 848 | 9th Cir. | 1923
The history of the litigation out of which the present appeal- arises is in Presidio Mining Co. v. Overton et al. (C. C. A.) 261 Fed. 933, Presidio Mining Co. v. Overton et al. (C. C. A.) 270 Fed. 388, and Martin v. Presidio Mining Co., 256 U. S. 694, 41 Sup. Ct. 535, 65 L. Ed. 1175. It is herein sufficient to state that the suit was by Overton and Martin, on behalf of themselves and other minority stockholders of the mining company, against the mining company, Noyes, and others, to establish a trugt, and recover for the corporation certain mining property known as section 5, acquired by Noyes; for an accounting; for injunction, receivership, and other relief. Defendants denied the material allegations, and from the beginning resisted the appointment of a receiver. After trial a receiver was appointed, injunction was issued, and to a limited extent material relief was awarded to plaintiffs.
Upon appeal this court affirmed that part of the interlocutory decree, made by the District Court, wherein Noyes was directed to transfer certain property to the corporation, and also other parts of the decree relating to the payment of the purchase price of the property, and, after directing how certain computations in the accounting should be made, decided that the interlocutory decree of the District Court in * all other respects not mentioned should be reversed, that the interlocutory injunction should be dissolved, and that the receiver should be discharged. Thereafter mandate was issued, and the receiver filed his fourth and final account. Against exceptions filed, the District Court approved the final account of the receiver and allowed comoensation to him and to his counsel, and ordered the sums allowed to be deducted from the funds in the hands of the receiver; the residue to be delivered to the mining company. The judge said:
“There is no exception taken to the correctness or propriety of any particular item of the receiver’s account, but the objection really is to the items of that account being charged or allowed against the fund administered, the*850 contention being that they should, under the circumstances of the case, be charged to the plaintiffs who procured the appointment of the receiver. But that question will more properly arise on a motion to tax the costs upon the entry of the final decree.”
From the order confirming the final report, and postponing the question of assessment of fees of the receiver and his attorney until the hearing on the final decree herein, defendants appealed, and plaintiffs have moved to dismiss the appeal.
We understand the main position of the appellants to be that, inasmuch as it has been decided by the Circuit Court' of Appeals that the receivership in the case was unnecessary and unjustified, and as it appears from the record that the receiver was appointed over the'persistent objections of -the defendants (appellants here), the case as to the receivership becomes one where there was an unwarranted application of judicial power, and therefore that the order appointing the receiver was in excess of the authority of the court.
In Hutchinson v. Hampton, 1 Mont. 39, the court allowed a receiver’s compensation to be taxed as costs, the compensation to be allowed out of the property in the hands of the receiver. In Ogden City v. Bear Lake, etc., Co., 18 Utah, 279, 55 Pac. 385, a receiver pendente lite was appointed, but the order appointing him was revérsed and the property in his hands was ordered to be returned to its owner. Thereafter, upon consideration of the report of the receiver,'the District Court allowed items, including compensation to the receiver, to be paid out of the fund in his hands. The court held that, inasmuch as the appellant was wrongfully deprived of the possession of its property upon the petition of the plaintiff in the case, it would be inequitable to require the appellant to pay the extra expense of conducting its business, caused by the erroneous order with respect to the receivership, and decided that such expenses as were incurred by the receiver as would have been necessary for the appellant to incur, had it remained in possession of its property, were properly paid out of the fund in the receiver’s hands, but such as would not have been necessary for it to incur should be charged to the party procuring the order.
In Sullivan Timber Co. v. Black, 159 Ala., 570, 48 South. 870, the Supreme Court of Alabama held that the compensation or fees of a receiver are regarded as part of the costs, to be determined within the sound discretion of the court, and cited Stuart v. Boulware, 133 U. S. 78, 10 Sup. Ct. 242, 33 L. Ed. 568, in support of that view. The reasoning of the decision is that a receiver represents the court which appoints him, and that, while cases may arise where the appointment of a receiver has been wholly unauthorized and unwarranted, compensation should be denied him, yet as a rule compensation of the receiver, and fees paid by him to an attorney for professional services, and other legitimate expenses, are part of the costs, and subject to the usual rules of taxing costs to the losing party. The court was of the opinion that compensation should not be denied a receiver because there was error in appointing him.
In Ephraim v. Pacific Bank, 129 Cal. 589, 62 Pac. 177, the costs of a receivership were regarded as primarily a charge upon the fund in the hands of the receiver, but that, if the receiver has gained possession of the fund through an unauthorized appointment, he must look for his compensation to the party at whose instance he was appointed. In French v. Gifford, 31, Iowa, 428, the court held that it would be an unjust rule if in all cases the receiver should be entitled to compensation from the fund in his hands without reference to the legality of his appointment. The court there allowed the receiver to be reimbursed for all costs and expenses, rent and taxes, out of the fund, but held that the fund should be charged only with one-third of the compensation allowed to the receiver, the other two-thirds to be taxed to the unsuccessful party in the litigation.
From what we have said, it logically follows that in the exercise of its jurisdiction the District Court had the power to make the orders it did in the first instance, and discretion to defer making final orders until ordering a final decree. We therefore hold that, until the discretion as to assessment of costs has been exercised, this court will not disturb the action of the court in making .the order appealed from.
The appeal is dismissed, at appellants’ costs.