Welch v. Renshaw

• Decision Date: 12 February 1900
• Citation: 14 Colo.App. 526,59 P. 967
• Parties: WELCH et al. v. RENSHAW et al.
• Court: Colorado Court of Appeals

59 P. 967

14 Colo.App. 526

WELCH et al. v. RENSHAW et al.

Court of Appeals of Colorado

February 12, 1900

Appeal from district court, El Paso county.

Action by C.C. Welch and others against William Renshaw, Herbert Renshaw, and Philip Whelan, receiver. From a judgment in favor of the receiver against plaintiffs, they appeal. Affirmed.

H.E. Luthe, for appellants.

Gunnell & Hamlin, for appellee Whelan.

WILSON, J.

Plaintiffs and defendants Renshaw were co-partners in the operation under a lease of certain mining property. The lease was in writing, and by its terms was to continue for one year from September 20, 1895, during which time the lessees were obligated to work the property continuously, and with reasonable diligence. The active operations seem to have been under the management of the Renshaws, which, proving unsatisfactory to plaintiffs, they, on June 30, 1896 commenced this suit, which had for its object the dissolution of the co-partnership and an accounting. Plaintiffs also prayed that a receiver be appointed, with power to collect all moneys due to the co-partnership, and to "conduct the business of the partnership under orders of the court and apply all proceeds in payment of the indebtedness until the same are paid." In pursuance of the application of plaintiffs, all parties being present at the hearing, the court appointed the defendant Whelan as receiver, and in its order provided, among other things, that the said receiver should take immediate possession of the property, and "that he shall work the same, extract, mine, and ship ore to the best interest of said property, and shall pay all laborers, and all just and fair charges in relation to the treatment of said ore, and all the ordinary expenses; and the balance of the receipts from the sales of ore from said property shall be deposited, together with a statement of the total amount of receipts and the total amount of expenditures, with the clerk of this court on the 1st and 15th day of each month until said lease expires, or until further order of the court." In pursuance of this, the receiver took charge of the property, and proceeded to mine and extract ore, making bimonthly reports, as required. On September 20, 1896, the lessors declared that the lease had terminated, and filed a petition in the court, praying that the receiver be ordered to release the property to them. This was resisted by all of the lessees, including the plaintiffs herein, who filed an answer to the petition of the lessors alleging that the mining claim was being operated by them through the receiver, and was then being held by them under the terms of an oral lease entered into with the lessors, by which the lease was extended for the period of six months from September 20, 1896, and prayed that the receiver be retained in possession of the premises, and be continued under the original order appointing him according to its terms and conditions. On October 9, 1896 the receiver tendered his resignation, and asked to be discharged, on the ground that he was unable to work the property to an advantage, there being no ore in sight with which to carry on the work. At the same time he filed in the clerk's office his final report, showing a deficit of about $1,900. To this, on the 19th of October following, the plaintiffs filed exceptions, on the sole ground, however, that the receiver had not accounted for all of the receipts with which he was properly chargeable. On the 21st of October, under a stipulation of the lessees and the lessors, the court ordered the possession of the property to be delivered by the receiver to the lessors. On the 18th of January following, a hearing was had on the exceptions to the receiver's final report. Testimony was introduced by both parties, and the exceptions were overruled by the court. On the 27th of January following, the receiver filed a motion that the court enter such judgment in the premises as would provide for and secure the payment of the claims and demands against the lease, being the claims and demands embraced in his final report, with the addition thereto of the bills for his own wages and expenses and the expense of $100 attorney's fees, which he claimed to have necessarily incurred in resisting the allowance of the exceptions filed to his report and in the hearing thereon. To this he attached an itemized statement of the claims for labor, giving the name of each miner, the amount due to him, and also the amounts due to various persons for supplies. Treating this as a final report, plaintiffs filed exceptions to it, in which they alleged that as to the matters and things, accounts and items, set forth in said two reports, as to whether the same were true and correct accounts, and proper to be allowed in the cause, and as to whether he had incurred said indebtedness set forth in said account, and as to whether his account and statement of his own services, and the value thereof, and accounts and statements of his expenditures in said report contained were correct and true, they did not have and could not obtain information whereupon to base a belief. They further alleged as ground of exception that said claims and demands were not properly chargeable against these plaintiffs, but only against the funds or property of which the receiver had charge. As a further ground of exception, they alleged that the receiver was not authorized or empowered, and had no legal right, to incur any indebtedness under the order of court. On February 1st following, the motion of the receiver coming on to be heard, together with the exceptions of plaintiffs, the court, after argument of counsel, and without further evidence or proofs, sustained the motion, and rendered judgment against the plaintiffs for the amount claimed by the receiver to be due.

Plaintiffs insist that the receiver had no right to incur any indebtedness whatever, and that his power with reference to the working of the property and the extraction of ore was limited by his power to pay the expenses therefrom. In answer to this it may be said that the entire property of the partnership consisted only of this leasehold estate; that by the terms of the lease it could be preserved only by continuous working; that the plaintiffs themselves asked that the receiver be empowered to work the property, and mine and extract ore; and that the order of court, made at their request, expressly directed the receiver so to do. Under no principle of law or justice can they be now heard to complain of that which was done upon their motion, and at their own express request. It could not be determined whether the ore would pay the expenses of its extraction until after the expense of its extraction had already been incurred; and the plaintiffs, when they asked for an order directing the receiver to work the property, must be held to have assumed this liability. Moreover, the receiver repeatedly made reports, all of which showed...