McDougal v. Fuller

ANGELLOTTI, J.

This action was brought by plaintiffs to obtain a decree settling their final accounts as trustees for the benefit of the creditors of the Golden Cross Mining and Milling Company, a corporation, awarding them compensation for their services, and distributing the trust property to those entitled thereto. The defendants are the many creditors of said corporation. The lower court made the desired decree, distributing the residue of property, consisting of $37,785.73 in money, to the parties deemed entitled thereto. This is an appeal from the judgment upon the judgment-roll, defendant Johnson being the sole appellant. Johnson filed his written appearance in the court below, and therein stated that he submitted “to the court, without further answer, all questions relating to the allowance of the account of the plaintiffs, all questions relating to the allowance of attorney’s fees, and all questions relating to the compensation of the trustees.” He denied none of the allegations of the complaint, and set up no new matter, resting entirely upon the allegations of the complaint. As to him, therefore, the only question is as to whether the complaint warrants the decree, so far as it affects him.

From the complaint the following facts substantially appear, viz.: On January 4 and 9, 1896, the corporation made deeds of its mining property to the trustees, in trust for the benefit of all its creditors, both those named in a schedule annexed thereto and such others as might be found to be credit

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ors and whose claims were duly approved. Under the terms of the deeds of trust the trustees were to superintend the working of the property, receive all money accruing from the same, and pay all expenses, and from the net proceeds make equal pro

rata

distributions to the claimants. By the terms of the deeds the trust was to continue for fifteen months, unless the claims were paid in full before, or the profitable working of the mine found to be impracticable. If at the end of fifteen months any part of the indebtedness remained unpaid, or sooner if it was found impracticable to work the mine at a profit, the trustees were empowered to sell the property at public auction, after notice, and devote the proceeds, first, to “the expenses of executing this trust, if any portion of the expense may then remain unpaid, including reasonable counsel fees, and also, the sum of five hundred dollars to the trustees collectively, in full for all services”; second, the remaining indebtedness; and third, the surplus to the grantor. It was provided that all claims against the corporation not bearing interest by agreement should bear interest from April 1,1896, at the rate of seven per cent per annum, “and all claims and demands secured hereby that bear interest by agreement shall continue to bear the same rate of interest as may have been, agreed upon by the grantor.” Upon the execution of these deeds the trustees entered into possession and operation of said mining property, and continued therein until they were compelled to deliver such possession to a receiver appointed by the superior court of San Diego County, in an action brought by the Free Gold Mining Company against them and others, the names of the persons other than the trustees, who were parties defendant, not appearing in the action. It is alleged in the complaint herein “that numerous clauses, terms, conditions and provisions of the several trust-deeds hereinbefore set forth were modified, superseded, and in whole or in part abrogated in and by those certain orders, judgments, or decrees, duly given and made in and by the superior court of the county of San Diego, state of California, in an- action pending therein, entitled ‘No. 10,215, Free Gold Mining Company, Plaintiff,