Pioneer Mining Co. v. Tyberg

• Decision Date: 26 May 1914
• Docket Number: 2338.
• Parties: PIONEER MINING CO. v. TYBERG et al.
• Court: U.S. Court of Appeals — Ninth Circuit

215 F. 501

PIONEER MINING CO. v. TYBERG et al.

No. 2338.

United States Court of Appeals, Ninth Circuit.

May 26, 1914

O. D Cochran and G. J. Lomen, both of Nome, Alaska, Metson, Drew &amp MacKenzie and E. H. Ryan, all of San Francisco, Cal., for appellant.

O. L Willett and Frank Oleson, both of Seattle, Wash., George B Grigsby, of Nome, Alaska, and Berkeley B. Blake, of San Francisco, Cal., for appellees.

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

ROSS Circuit Judge.

This is an appeal from the judgment of the court below dismissing the suit brought therein by the appellant for the establishment and enforcement of a constructive trust in respect to certain money in the hands of the clerk of the court, and for an injunction pendente lite as well as final, and from a final order denying an injunction and discharging the temporary restraining order that had been issued. The court, however, did enter an order directing that the property in controversy remain in the hands of the clerk of the court until its further order, upon the execution on the part of the plaintiff of a supersedeas bond in an amount fixed by the court.

The judgment was entered upon the refusal of the plaintiff in the suit to further amend its complaint after the sustaining of a general demurrer thereto filed by the defendant Tyberg, the appellee here.

The amended complaint, after setting out the corporate capacity of the plaintiff and the official position of the defendant Sundback, alleged in substance that the defendant Tyberg, alias Edwin Johanson, was, during the month of July, 1910, in the employ of the plaintiff company as foreman of the night shift in mining certain specified property of the plaintiff company, situated in the Cape Nome mining district, Alaska, upon which property were certain sluice boxes, with gold dust, nuggets, and amalgam therein, all of which was the property of the plaintiff company; that, as such foreman and employe of the plaintiff, Tyberg had the care and custody of the said sluice boxes, gold dust, nuggets, and amalgam; and that it was then and there his duty to protect and safeguard the same, and not to remove from the sluice boxes or permit to be removed therefrom the said gold dust, nuggets, or amalgam, notwithstanding which he did, on or about the day mentioned, wrongfully and unlawfully, and without the leave or consent of the plaintiff company, take and carry away from the said sluice boxes the said gold dust, nuggets, and amalgam, to the value of more than $15,000, and concealed the same from the plaintiff, and converted the same to his own use; that thereafter, and in the month of September, 1910, the said Tyberg, after having retorted the amalgam, proceeded to the city of Seattle, in the state of Washington, and there sold to the United States assay officer in that city the said gold dust, nuggets, and amalgam so retorted, receiving therefor a certificate representing its value in the sum of $14,345.02; that thereafter and in the same month the said Tyberg presented the said certificate to the Union Savings & Trust Company for payment and received in payment thereof $5,345.02 in cash and a draft drawn by the said Union Savings & Trust Company on the First National Bank of Portland, Or., in the sum of $9,000, payable to his said alias, Edwin Johanson, or order; that thereafter, and in the same month of September, the said Tyberg was arrested by a deputy United States marshal in the city of Seattle, charged with the larceny of the said gold dust, nuggets, and amalgam, and that the said $5,345.02 in money, and the said draft, the proceeds of the gold dust, nuggets, and amalgam, were found by the marshal in the possession of the defendant Tyberg, and were by the marshal seized as the proceeds of the said stolen property and as such proceeds were transmitted and delivered to the defendant Sundback as clerk of the said court; that thereafter the said clerk caused the said draft so received by him to be cashed, and received in payment thereof the sum of $9,000, its face value, and has ever since had in his possession, as such clerk, the said proceeds, in the aggregate sum of $14,345.02, 'and has held the same for and on account of the case of the United States against said Johan Tyberg now adjudicated in said court, and should now hold the same on account of this action'; that the said defendant Tyberg is insolvent and is not now an inhabitant of the district of Alaska, and that the defendant Sundback neither has nor claims any interest in the said proceeds, except as a mere depositary thereof for the use and benefit of the true owner, and holds the same subject to the orders and directions of the said court, and not otherwise; that the defendant Tyberg has by motion requested the said court to return to him the money so in the hands of the said clerk, and unless restrained from so doing he will demand and claim the said proceeds from the said clerk; that by reason of the premises there is due and owing from the said defendant Tyberg to the plaintiff the said sum of $14,345.02, for which he should be made to account, and that a constructive trust has attached thereto in favor of the plaintiff, and that a lien thereon to the extent stated should be declared in favor of the plaintiff, and a decree in its favor therefor entered. The prayer is for such decree, injunctive and general relief, and for costs.

It is contended on behalf of the appellee that the appeal should have been taken to the Supreme Court by virtue of those provisions of the 'Compiled Laws of the Territory of Alaska' which provide as follows:

'Sec. 1336. Appeals and writs of error may be taken and prosecuted from final judgments and decrees of the District Court for the District of Alaska or for any division thereof, direct to the Supreme Court of the United States, in the following cases: * * * In all cases which involve the construction or application of the Constitution of the United States. * * *

'Sec. 1337. In all cases other than those in which a writ of error or appeal will lie direct to the Supreme Court of the United States as provided in section thirteen hundred and thirty-six, * * * writs of error and appeals shall lie from the District Court for Alaska or from any division thereof, to the Circuit Court of Appeals for the Ninth Circuit. * * * '

It is sufficient to say concerning that contention that the proper disposition of the case in no way involves the construction or application of any provision of the Constitution of the United States.

It is further insisted on the part of the appellee that the defendant Tyberg sustained no trust relation to the plaintiff company, and for that reason that the case was not within the jurisdiction of a court of equity.

In the case of AEtna Indemnity Company of Hartford, Conn., v. Malone, 89 Neb. 260, 131 N.W. 200, it was held that, in a suit to declare and enforce a constructive trust with respect to stolen property, fiduciary relations between the parties are not essential to the jurisdiction of a court of equity, but that such a court may enjoin a police officer from transferring money taken by him from burglars who procured it by robbing a bank, and may restore it to the owner thereof; the court saying, among other things:

'The first proposition argued by defendants relates to the nature of the case. Is it a suit in equity or an action at law? It was heard below without a jury, over the objection of defendants, and this is urged as error. The main purpose of the litigation, as shown by the petition, was to trace the stolen fund through the burglars into the hands of the police officers and restore it to the owner. It is alleged that the burglars are insolvent. The recovery of a judgment against them was consequently a secondary matter. They had in their possession only a portion of the amount stolen, when searched, and as to that plaintiff was seeking redress by enjoining the policemen from transferring it to others and by establishing a constructive trust. In the petition there was no attempt to describe the particular denominations of money taken from the bank or found in the hands of the burglars or the police officers. There had been opportunity to change the currency into different items. Defendants were no less accountable because their possession grew out of a felony. Confidential relations are not essential to the jurisdiction of a court of equity to declare and enforce a trust with respect to stolen property. It may be traced through the thief into a different form of property and restored to the beneficial owner. In contriving means to cheat an owner out of his property a thief should not be permitted to outstrip the courts in discovering a remedy to restore it when found. Nebraska Nat. Bank v. Johnson, 51 Neb. 546, 71 N.W. 294; Newton v. Porter, 5 Lans. (N.Y.) 416.'

In the case of Newton v. Porter et al., 69 N.Y. 133, 25 Am.Rep. 152, the Court of Appeals of that state held that the owner of negotiable securities stolen and afterwards sold by the thief may follow and claim the proceeds in the hands of the felonious taker, or of his assignee with notice; and that the right continues and attaches to any securities or property in which the proceeds are invested, so long as they can be traced and identified and the rights of a bona fide purchaser do not intervene. The court, after referring to the well-settled equitable doctrine that when a person standing in a fiduciary relation misapplies or converts a trust fund into another species of property the beneficiary will be entitled to the property thus acquired, said:

'It is insisted by the counsel for the defendants that the doctrine which subjects property acquired by the fraudulent misuse of

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