Chapman v. Atlantic Trust Co.

• Decision Date: 10 November 1902
• Docket Number: 777.
• Parties: CHAPMAN v. ATLANTIC TRUST CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

119 F. 257

CHAPMAN v. ATLANTIC TRUST CO. et al.

No. 777.

United States Court of Appeals, Ninth Circuit.

November 10, 1902

Fox &amp Gray, for appellant.

J. J Scrivner, for appellees.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

ROSS Circuit Judge.

In this suit, which was brought by the trustee of certain bonds issued by the defendant Woodbridge Canal & Irrigation Company, of the face value of $1,000 each, bearing interest at the rate of 6 per cent. per annum, for the foreclosure of a mortgage given upon the property of the company as security for their payment, a receiver was appointed by the court at its beginning, who took possession of the property consisting in part of an irrigation system, and continued its operation pending the litigation, and until the confirmation of its sale made under a decree of foreclosure and sale which was entered in the suit on the 18th day of September, 1897. That decree adjudged the principal and interest of the bonds to be due and payable to the trustee, and further adjudged that there was then due, owing, and unpaid, for and on account of the costs and expenses of the foreclosure of the mortgage and the management and care of the property pending the suit, the complainant's costs, taxed at the sum of $-- --; and also: (a) To E. C. Chapman, the receiver, for and on account of advances made by him in the administration of the property pending the suit, 'the sum of $6,605.72, less $3,500 now here paid thereon.' (b) Also certain named sums, aggregating a large amount, due as of that date upon receiver's certificates duly issued by the receiver under the authority of the court, with interest upon the principal sum named in each of said certificates from the date of the final decree until paid at the rate of 10 per cent. per annum. (c) Also certain named sums, aggregating a large amount, adjudged to be then due certain named persons or their assignees upon time checks issued by the receiver for and on account of expenses incurred by him during his administration of the property. (d) Also certain specified sums, aggregating $2,269.85, adjudged to be then due to certain named parties or their assignees 'for and on account of work done and material and board furnished for men; the same having been performed and furnished for the said receiver, and for which no time checks or certificates have been issued. ' And next adjudging and decreeing that there be allowed and paid out of the proceeds of the sale of the property therein ordered, 'as and for the further costs and expenses of this suit and of the care and management of the property pendente lite, the following sums, to wit: (e) To E. C. Chapman, receiver, as and for his compensation for his services as such receiver from the date of his appointment to the 1st day of October, 1897, the sum of $9,000. (f) To Messrs. Fox & Gray, as and for their compensation as counsel for said receiver, the sum of $9,000. And further adjudging and decreeing that 'next after the payment of the sums hereinbefore mentioned, and before the payment of any sum for or on account of the principal or interest of any of the bonds so issued,' there be allowed and paid out of the proceeds of said sale, as and for claims accrued against the Woodbridge Canal & Irrigation Company between November 3, 1893, and October 3, 1894, for expenses of operating the canal system, and necessary for keeping the same a going concern--

'And now here adjudged and decreed to be a prior lien upon said property, the following sums, to wit: (g) (Setting out the names of the various parties to whom the respective sums are adjudged, together with the amounts thereof.) (h) To W. C. Pidge for services rendered between October 13, 1893, and October 1, 1894, as civil engineer, and adjudged to be a prior lien upon said property, the sum of $1,801.37. (i) To F. C. McClelland, on behalf of himself and as assignee of others, as set forth in his petition filed in this cause for services rendered in keeping the canals in a proper state of repair, the sum of $922.12. (j) It is further ordered, adjudged, and decreed that, next after the payment of the sums & Co. and other interveners, holders of twenty-six of the bonds so issued as aforesaid, the sum of $2,000.'

And the decree further adjudged that:

'After the payment of the several sums hereinbefore mentioned, and not before, there be allowed and paid to the owners and holders of each of the several bonds hereinafter mentioned, upon the surrender thereof with the relative coupons attached, the sum of $1,210 on each of said bonds, with interest on the sum of $1,000 of the moneys so due upon each of said bonds from the 1st day of September, 1897, to the date of payment, at the rate of six per cent. per annum, if the proceeds of said sale after the payment of the costs of sale and of the costs of suit, and of the several sums mentioned in subdivision 'a' to and including subdivision 'k,' shall be sufficient to pay in full the ninety-four bonds now here presented; otherwise that each of the seventy-nine bonds mentioned in this paragraph of this decree be paid pro rata in the proportion that the amount herein allowed upon each of said bonds bears to the whole amount of the fund so applicable to the payment thereof.'

The final decree contained the further provision that 'at such sale no bid shall be accepted for a less sum that $120,000,' with a subsequent provision declaring that 'this decree is given and made subject to modification by the court at any time before final confirmation of sale, as to the upset or minimum price at which said sale may be made.'

The provision specifying the limitations must subsequently have been modified, for in the decree confirming the sale, which was entered on the 15th day of August, 1898, it is recited that the commissioner appointed by the court to make the sale several times offered the property for sale in the mode and manner required by law, and in pursuance of the decree of sale, and having reported to the court the bids made in those proceedings, all of which were by the court rejected, and the matter having been again referred to the commissioner under order of the court, duly made, with instructions to again offer the property for sale after giving the required notice, and the order, and all bids offered for the property thereunder, and the same having come on for hearing before the court on the 25th day of July, 1898, and having been continued from time to time until the 8th day of August, 1898, at which time all parties in interest were present by their respective counsel, and it being made to appear that at the time and place appointed for said sale the property had again been offered for sale in the manner required by law, and in pursuance of the orders of the court in that behalf made--

'Two bids had been made therefor, viz., one by Franklin Davis, of $11,000 in gold coin and twenty per cent. thereof deposited in gold coin with the said commissioner, accompanied with an agreement by said Franklin Davis that in case said bid was accepted by the court, and sale confirmed to him thereon, he would pay in the balance of said sum of $11,000 in gold coin, or, in default thereof, forfeit the said deposit so made, and another by E. C. Chapman, the receiver, of $22,350, payable as follows: By amount of claims of receiver, as allowed in and by the decree of foreclosure, $12,105.72; by amount of claims of Fox & Gray, counsel for receiver, as allowed in and by said decree, $9,039.43; balance to be paid in coin, $2,354.85; making a total of $23,500. Said bid subject to a lien upon the property for all further claims fixed by the decree and allowed as and for receiver's certificates and expenses incurred by the receiver in said cause, and upon which bid the said E. C. Chapman had deposited the sum of $470.97 in cash, as and for twenty per cent. upon that part of said bid which was to be paid in cash, with an agreement that in case such bid was accepted, and confirmed by the court, he would make the same good, or in default thereof forfeit the sum so deposited.'

The decree of confirmation further recites that exceptions filed to each of those bids came on for consideration, and after argument the bid of Chapman was withdrawn, and that thereupon, upon motion of counsel, and with the consent and approval of all the parties in interest in the cause, the court consented to receive further bids in open court; and thereupon W. B. Bradbury and E. F. Card made and filed a bid in open court of the sum of $12,000 in gold coin, and deposited 20 per cent. thereof, with an agreement that in case their bid was accepted they would pay in the balance thereof, or, in default of such payment, would forfeit the 20 per cent. so deposited, and that Charles N. Fox made and filed a written bid, signed by himself, in words and figures as follows:

'Now comes the undersigned, and bids and offers for the property offered for sale in this cause, and described in the decree of foreclosure heretofore entered herein, the sum of twenty-one thousand dollars; certificates, assignments, and conveyances thereof to be made to and in the name of G. Howard Thompson, and payment of the amount so offered and bid to be made as follows: (1) Nine thousand dollars thereof by the filing and entry of good and sufficient satisfaction and discharge of the allowance made in and by the said decree in favor of E. C. Chapman, receiver, as and for his compensation as receiver in said cause. (2) Nine thousand dollars thereof by the filing and entry of good and sufficient satisfaction and discharge of the allowance made in and by the said decree of foreclosure in favor of Fox & Gray, as and for compensation for their services as counsel for

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