Pacific Coast Coal Co. v. Lak-A-Taka Co.

• Decision Date: 11 July 1916
• Docket Number: 13351.
• Citation: 92 Wash. 203,158 P. 1003
• Parties: PACIFIC COAST COAL CO. v. LAK-A-TAKA CO. et al. Appeal of ESARY et al.
• Court: Washington Supreme Court

158 P. 1003

92 Wash. 203

PACIFIC COAST COAL CO. v. LAK-A-TAKA CO. et al. Appeal of ESARY et al.

No. 13351.

Supreme Court of Washington

July 11, 1916

Department 2. Appeal from Superior Court, King County; Everett Smith Judge.

Action by the Pacific Coast Coal Company against the Lak-A-Take Company and others. From an order of the superior court approving and settling the final report of Elias A. Wright as receiver of the property in this state of the named defendant, James D. Esary and others appeal. Affirmed.

Byers &amp Byers and McBurney & O'Connor, all of Seattle, for appellants.

Wm. Brueggerhoff, of Seattle (Elias Wright, of Seattle, of counsel), for respondent.

PARKER J.

This is an appeal by James D. Esary and four others from an order of the superior court for King county, approving and settling the final report of Elias A. Wright, as receiver of the property in this state of the Lak-A-Taka Company, a Nevada corporation. Appellants are judgment creditors of the receiver, their judgment being for costs in the sum of $101.20, awarded to them in this court upon reversal of an order of the superior court made in the receivership proceedings, directing the receiver to sue the stockholders of that company upon their unpaid subscriptions to its capital stock, appellants and others being such subscribers. The decision of this court upon which the judgment for costs was rendered in appellants' favor against the receiver is reported in 85 Wash. 448, 148 P. 579. The contentions of counsel for appellants are, generally speaking, that the receiver has unlawfully dissipated the assets of the receivership to their prejudice, resulting in their judgment for costs being unpaid, and that he should now be required to pay the same as though he had sufficient of the trust funds in his hands for that purpose.

In January, 1913, respondent, Elias A. Wright, was appointed receiver of the property of the Lak-A-Taka Company at the suit of the Pacific Coast Coal Company, one of its creditors. It then had property of large prospective value in this state, most of which was heavily incumbered or in litigation. A number of its stock subscribers, including appellants, resided in this state, and some of its nonresident subscribers owned property in this state. Respondent entered upon his duties as receiver, also acting as his own attorney, and after diligent efforts, acting under orders of the court, covering a period of some seven months of litigation, including the defense of actions pending against the company when he was appointed, he had acquired cash as the proceeds of the resources of the company in this state amounting to $1,312.68, when in August, 1913, he made written report of his doings as receiver, and upon submission thereof to the court ex parte it was by the court approved. By the terms of the order approving this report and the several items of expenditure made by the respondent in the administration of his trust as noted therein, the court allowed him, on account of his services as receiver and attorney, the sum of $750, and authorized him to pay himself that sum out of the trust funds on hand. The payment of this sum and other approved expenses incurred by him then left in his hands $112. Thereafter this sum was increased to about $175. This sum, with the money previously paid out by approval of the court, constituted the whole of the resources of the receivership coming into his hands, and this balance was expended in further efforts on his part to recover further resources of the company in this state. Reading the record as a whole, we are convinced, as the lower court manifestly was, that all of the acts of the respondent as receiver were done in good faith and in compliance with orders of the court, in an honest effort to recover property for the trust and in resisting litigation which was being waged against the Lak-A-Taka Company and the receiver, though his efforts ultimately resulted in the loss of prospective assets of large value. We also think the record warrants the conclusion that respondent, as receiver and attorney, was entitled to compensation for services performed prior to the time the court awarded him, on account, the $750, at least to that extent. This apparently was one of those unfortunate receiverships where the legitimate expenses attending proper efforts of the receiver to acquire and protect property amount to as much or more than the value of the property finally acquired for the trust.

In April, 1914, several...