Hickey v. Parrot Silver & Copper Co.

Decision Date01 March 1905
Citation79 P. 698,32 Mont. 143
PartiesHICKEY et al. v. PARROT SILVER & COPPER CO. et al.
CourtMontana Supreme Court

Commissioner's Opinion. Appeal from District Court, Silver Bow County; Wm Clancy, Judge.

Action by Michael A. Hickey and others against the Parrot Silver & Copper Company. On motion of plaintiff Arthur P. Heinze Thomas McLaughlin was appointed receiver of the property involved in the litigation, and from an order fixing his compensation, and allowing him a certain amount for counsel fees, said Heinze appeals. Reversed.

McHatton & Cotter and J. M. Denny, for appellant.

Kirk & Clinton, H. L. Maury, and Forbis & Evans, for respondent.

POORMAN C.

This is an appeal from a final judgment. State ex rel. Heinze v District Court, 28 Mont. 227, 72 P. 613. It is alleged in the complaint filed in the principal action: That the owners of an undivided 31/36 of the Nipper lode claim leased their interest to F. Augustus Heinze, who was also given an option to purchase the property. The lessee then sublet the premises to Arthur P. Heinze, who entered into the possession thereof, and at the time the action was commenced, in August 1899, was working the same. That the Parrot Silver & Copper Mining Company entered the Nipper ground through underground workings, and was extracting and carrying away ores from beneath the surface of the Nipper claim. The complaint asks that the title to the property be quieted, and that the defendant Parrot Company be enjoined from entering upon, mining, or extracting any ore from, or breaking any rock within or on, the Nipper claim. The Parrot Company, in its answer, admitted that it was extracting ores from a vein beneath the surface of the Nipper claim, but alleged that such vein had its apex within the Little Mina lode claim, lying north of the Nipper claim, and which was owned by the defendant company. All of the owners of this 31/36 undivided interest in the Nipper claim, together with the lessee, F. Augustus Heinze, and the sublessee, Arthur P. Heinze, were plaintiffs in this action. Afterwards, about March 3, 1900, the sublessee, Arthur P. Heinze, filed an application for the appointment of a receiver to take possession of and operate that portion of the Nipper claim in dispute; alleging himself to be especially aggrieved, for the reason that his lease thereon expired in July, 1901, and that he desired to have the property operated during the continuance of his lease. A receiver was appointed by order of the court dated May 16, 1900. By the order of appointment the receiver was "authorized to operate and mine said portion of the Nipper lode claim, and all veins and bodies of ore therein, together with all extra lateral rights pertaining thereto; to take charge of all ores which may be extracted by him from said portion of the Nipper mining claim; and to have the same removed, reduced, and smelted, so as to realize the most money therefrom," etc. The order of appointment also enjoins the parties, except the cotenants, from interfering with the said receiver in the performance of his duties, and from withholding in any manner the possession of said premises, or any portion thereof, or any of the underground workings thereon or therein, or upon any veins claimed to belong to or within said portion of the said Nipper claim.

The receiver so appointed, it appears, was required to give two bonds--one for $10,000 and one for $25,000. The receiver immediately entered into the possession of the property, and began active mining operations about the 1st of June, 1900. Practically all the mining supplies, machinery, tools, and apparatus of all kinds used by the receiver were purchased by him from the Montana Ore Purchasing Company, and all the ores mined were sold to this company. It appears that this company also advanced money to the receiver when needed to settle his monthly accounts.

The defendant Parrot Company in the meantime had appealed to the Supreme Court from the order appointing the receiver, and such order was reversed by the Supreme Court in March, 1901. Hickey v. Parrot Silver & Copper Co., 25 Mont. 164, 64 P. 330. The receiver during his operation of the mine filed his regular monthly statements and reports for all the months except the months of February and March, 1901. To each of these monthly reports the Parrot Company filed its objection and protest. The monthly reports of the receiver for the months of February and March, 1901, were not filed until in January, 1902. Objections and protests were filed to these reports by the Parrot Company. The receiver had employed an attorney and counselor during his operation of the mine, and had been allowed therefor, but about the time the order appointing the receiver was reversed this counsel ceased to act; and the receiver, after the remittitur was filed, employed as his attorneys and counselors H. L. Maury and Kirk & Clinton.

The plaintiff Arthur P. Heinze had filed no objections to these monthly statements. On May 26, 1902, a stipulation was entered into between the receiver and the Parrot Company that the taking of the testimony with reference to his various monthly reports should be referred to a reference. This appellant was not a party to this reference. The order of reference was made on that day, and a hearing was had before a referee, which it is claimed by the receiver occupied his time and attention and that of his attorneys for something over three months. Afterwards, during the month of December, 1902, the receiver made his final report to the court, asking that he be allowed $28,000 for his own salary, less $4,569 which he had already received, and that he be allowed as expenses $10,000 for his attorney H. L. Maury, $10,000 for his attorneys Kirk & Clinton, and $125 for his bookkeeper, J. B. McGinn. There is a statement in the final report of the receiver that the referee to whom was referred the matter of taking testimony and making findings respecting the objections and protests filed by defendant to the several monthly reports of the receiver had made and filed with the clerk "his findings of fact and conclusions of law, and has recommended that judgment be entered confirming, allowing, and settling as correct each and every of said reports." Reference is also made in the final report to all of the testimony, and to all of the exhibits filed by the referee, "as if all said testimony and exhibits were in this report set out at length and made a part hereof." However, the testimony taken by the referee does not appear in the record, unless it is the same as that given before the court. No separate action appears to have been taken on the report of the referee, and no question respecting the same is involved here, or with reference to the allowance or rejection of the several monthly accounts contained in the monthly reports of the receiver. To this final report of the receiver objections were filed by all of the plaintiffs, acting jointly, except the sublessee, Arthur P. Heinze, who filed separate, specific objections thereto. Objections and protests were also filed by defendant Parrot Company. The objections made to the final report of the receiver by the plaintiffs who filed objections jointly, and by plaintiff Arthur P. Heinze, who appeared separately in filing objections, are practically the same, and relate to expenses incurred by the receiver for counsel fees and other expenses since the 25th day of March, 1901, at which date the remittitur from the Supreme Court was filed in the district court. Objections were also made to the compensation claim ed by the receiver, and it is alleged that the sum of $500 per month during the 10 1/2 months which intervened between the appointment of the receiver and the reversal of the order making such appointment is ample compensation for the receiver. The objections filed by the defendant Parrot Company are much more extensive, and cover nearly every phase of the receivership, including practically the same objections made by the plaintiffs, and adding thereto specific objections, to wit, to the sale of property made by the receiver after the reversal of the order appointing him, and the filing of the remittitur in the district court where the order was originally made. The report is further objected to on the ground that the receiver had not properly discharged the duties of his trust, had not fairly accounted for all ores mined, and had not received for such ores their market value when he had disposed of the same, and on many other grounds; making it necessary at the hearing to introduce evidence relating to almost every phase of the work performed during the period the property was in the hands of the receiver.

The hearing on this final report was had in January, 1903, and from the evidence then introduced it appears that after the order appointing the receiver had been reversed, and the remittitur in the case filed in the district court, the receiver had, without any order by the court therefor, sold certain furniture for the sum of $95, and certain miners' tools and other implements and supplies, receiving therefor $5,162.28, all of which he had set forth in his final report. It appeared further that his gross receipts during the period of his receivership were $392,775.43, plus the amount which he had received from the sale of the furniture, mining machinery, and tools, as above stated, after the filing of the remittitur; that his total disbursements for all purposes were $408,280; leaving a deficit of $10,342.29. The propriety of the action of the receiver in selling this furniture, mining implements, supplies, etc., is not questioned by the appellant on this appeal.

On January 17, 1903, the court signed an order overruling all objections to the final report of the...

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