Crawford v. Seattle, R. & S. Ry. Co.

• Decision Date: 10 May 1918
• Docket Number: 14554.
• Citation: 102 Wash. 386,173 P. 32
• Court: Washington Supreme Court
• Parties: CRAWFORD v. SEATTLE, R. & S. RY. CO. et al. CALHOUN et al. v. PEABODY et al.

173 P. 32

102 Wash. 386

CRAWFORD v. SEATTLE, R. & S. RY. CO. et al.

CALHOUN et al. v. PEABODY et al.

No. 14554.

Supreme Court of Washington

May 10, 1918

Department 2.Appeal from Superior Court, King County; A. W. Frater Judge.

Suit by William R. Crawford against the Seattle, Renton & Southern Railway Company and others, wherein Scott Calhoun and Joseph Parkin, receivers, filed claims for compensation, which were opposed by Augustus S. Peabody, trustee, and others.From an order fixing the receivers' compensation and approving their final accounts, Peabody and others appeal, and the receivers file a cross-appeal.Reversed, with instructions.

Higgins & Hughes, of Seattle, for appellants.

Scott Calhoun and John A. Homer, both of Seattle, for respondents.

HOLCOMB J.

This is an appeal by the principal creditors and also the receivers of the Seattle, Renton & Southern Railway Company, from an order fixing the receivers' compensation and approving their final accounts.

Various phases of this litigation have been before the court before.See71 Wash. 77, 127 P. 594; 86 Wash. 628, 150 P. 1155, L. R A. 1916D, 732;Crawford v. Gordon,88 Wash. 553, 153 P. 363, L. R. A. 1916C, 516;92 Wash. 670, 159 P. 782; 97 Wash. 70, 165 P. 1070; 97 Wash. 651, 167 P. 44;Seattle R. & S. R. Co. v. Seattle (D. C.)216 F. 694.

The principal creditors appealing are the bondholders of the Seattle, Renton & Southern Railway Company.They assign errors of the court below as follows: (1) In allowing Receiver Parkin the sum of $7,305, or any sum at all in excess of $21,061.29 theretofore received by him as compensation as receiver; (2) in allowing Receiver Calhoun the sum of $7,305, or any sum at all in excess of the $21,083.87 theretofore received by him as compensation as receiver; (3) in approving that portion of the receivers' final accounts which covered the payment to Receiver Parkin of the sum of $2,695 in addition to the sum of $366.29 theretofore received by him as compensation as receiver; (4) in approving that portion of the receivers' final accounts which covered the payment to Receiver Calhoun of the sum of $2,695 in addition to the sum of $18,388.87 theretofore received by him as compensation as receiver; (5) in approving the receivers' final accounts without requiring them to return to the trust fund the amount of the loss they had recklessly and wrongfully inflicted upon that fund by their deposits in the bankrupt Northern Bank & Trust Company.

No assignment of error is made by the receivers on their appeal but it is contended by them generally that the amount of compensation allowed them is inadequate for the services rendered, and that further allowance should be made by this court.

Many assertions are made in the briefs on behalf of the bondholders as to the reckless, wasteful, and partisan character of the services for which the receivers were allowed an aggregate of over $56,000 out of the trust funds passing through their hands.It is somewhat bitterly contended by them that the proceedings throughout were unduly delayed by the receivers by reason of their conduct of affairs and of their occasioning much litigation which, the bondholders contend, was unnecessary or unjust, and of their not winding up the receivership much earlier.It is also contended that they acted in collusion with Crawford, the plaintiff in the original proceedings, in various matters to the detriment of the creditors.We shall not concern ourselves greatly with these contentions, but shall deal only with the facts involved.The receivership was instituted upon a complaint of Crawford and these receivers appointed by the state court.They took possession under their appointment on August 31, 1912, and continued the active daily operation, management, and control of the properties until June 10, 1916, at which time the property passed to the purchasers under judicial sale thereof.After June 10, 1916, they continued in the possession of the remaining funds in their hands until April 23, 1917, when the hearing in the court below was begun on their final report and petition for discharge, which culminated on July 24, 1917, in an order approving their final accounts and payments and directing the further payments heretofore referred to in the assignments of error.These further payments were subject to deductions, in the case of Parkin of the sum of $200 money paid to him and in the case of Calhoun $715.75.

The property passing into the hands of the receivers at the time of their appointment consisted of a street and interurban electric railway running from Stewart street in the city of Seattle south to Renton, Wash., a distance between termini of 13 1/2 miles.The total cash receipts of the receivers amounted to $1,249,185.61, and the total disbursements aggregated $1,207,181.95.Shortly before the sale of the property it was appraised by an expert appraiser of public utilities at the sum of $1,600,000.It was sold by the receivers in March, 1916, at public auction at a minimum price fixed by the court in the sum of $1,200,000.

Prior to the time these receivers took possession there was a receivership pending in the United States District Court, wherein receivers were appointed; but the state court having obtained jurisdiction first under the complaint of Crawford, the federal court relinquished jurisdiction, and the federal receivers were discharged.

At the time the receivers took possession there was pending in the state courts certain litigation which they thereafter conducted, which was ultimately carried to the Supreme Court of the United States.There was also pending an action by the city of Seattle to change the grades and to condemn a portion of the company's right of way route.This litigation was also conducted by the receivers through the lower court to this court and a subsequent action was brought by them in the federal court to enjoin the city from interfering with the right of way of the company and for damages, resulting in an award against the city of $41,000.Much litigation was also conducted by the receivers on behalf of the company against the bondholders through the state and federal courts.Considerable litigation in the court below was had upon the many claims against the property and against the receivers.Many hearings were had before the Public Service Commission, involving questions within its jurisdiction, and before the city council, all of which the receivers contend added to the burdens of their duties and enhanced the value of their services.

It is shown that at the time the receivers...