Heinze v. Kleinschmidt

63 P. 927, 25 Mont. 89, 1901 Mont. LEXIS 16

• Court: Montana Supreme Court
• Decided: February 25, 1901
• Docket: No. 1,542
• Status: Published

Opinion

MR. CHIEF JUSTICE BRANTLY,

after stating the case, delivered the opinion of the Court.

The only question presented to this Court is whether the evidence submitted to the court below was sufficient to authorize the order of appointment. A determination of this question requires an examination of the evidence tending to support the averments in the ¡petition. We have set. forth in the statement particularly the contents of the complaint and petition, for the reason that they were treated at the hearing as affidavits, and so far as they tend to establish any material fact they are considered as a part of the evidence.

Though there is evidence tending’ to show that a controversy exists between Finlen and the Allport heirs, other than Kelley, - touching the present ownership of the Allport interest, and growing out of the contest over the probate of the alleged will of Allport, it is admitted in the pleadings that Allport died intestate, and that the defendants, other than Finlen, are his heirs at law. We shall therefore assume, for the purpose of this investigation, that each of them, except Kelley, is now the owner of an undivided one-twentieth of the property in controversy. Kelley has no interest in the properly, nor in this controversy, except so far as she may be bound under her agreements with Finlen, as appear hereafter, to prosecute to a successful issue the probate of the alleged will, and thus make good to him her title to the entire Allport interest. At the time this hearing was had the will had been declared a forgery, as alleged in the petition. .It is admitted, however, that a motion for a new trial was pending, and that the controversy as to the ownership of this interest is still undetermined. It appears, that at the death of Allport in 1895, John Devlin, Marian Devlin and Mary E. Keilly were tenants in common with him in the property, owning the other three-fourths. It further appears that Finlen now holds the legal title to a one-twentieth interest by deed from Kelley, dated May 22, 1899, executed in pursuance of an agreement contained in a prior lease dated October 1C, 1896, by which she bound herself upon certain conditions to convey to Finlen the entire Allport interest. The deed just mentioned also conveys to Finlen any interest Kelley may acquire under any decree which may be rendered in the proceedings looking to the probate of the alleged Allport will. It is shown that Finlen on October 16, 1896, became a lessee of the interests of John and Marian Devlin and Mary E. Keilly, with the right of purchase upon compliance with the terms of the leases on or before February 3, 1900. The conditions of this lease and the one from Kelley were the same. There is no ■controversy but that the conditions contained in these leases have been fully complied with in all respects. It further appears that the Devlins and Mary E. Reilly subsequent to the making of the leases to Einlen conveyed their interests to the plaintiffs, — five-eighths directly to' Heinze on June 3, 1899, .and one-eighth to the Johnstown Mining Company through mesne conveyances dated, respectively, November 12, 1898, •and May 18, 1899. The plaintiffs claim that Heinze made a verbal agreement with Einlen on November 21, 1898, which was subsequently executed, whereby Einlen bound himself to transfer and set over to Heinze his rights under the leases from Kelley, the Devlins and Reilly, and that the plaintiffs are therefore properly vested with the title to the Devlin and Reilly interests, and that Heinze is entitled to the Kelley interest. This is disputed by Einlen, who has a suit pending in the United States circuit court against the Devlins and Reilly, and .■also plaintiff Heinze, who has intervened therein, to compel a ■conveyance to him according to the terms of the lease. This ■defendant has also, a suit in the district court of Silver Bow county against the plaintiffs, in which he seeks to eject them from the Minnie Healy claim. In this suit an injunction was issued restraining the plaintiffs from working the property ponding a trial. These are the suits referred to in the petition as being founded upon fraudulent claims; they having been brought, it is alleged, to harass and annoy plaintiffs and to prevent them from the enjoyment of their property, and for no other purpose.

The situation of the title is, therefore, such that, if Enlen should succeed in his suits now' pending, the plaintiffs -would have no interest in the Minnie Healy claim. The partition decreed in this case, if any at all, would then be between him and the Allport heirs, other than Kelley, subject to the administration. If the Allport will should finally be admitted to probate, the whole property would belong to Einlen. If the plaintiffs should succeed in these suits, they would he tenants in common with the Allport heirs, except Kelley, or, if the will .should be established, the owners of the entire property. With the merits of these controversies we have nothing to do on this appeal. At present we are concerned only with the fact of their existence, and the purposes and motives actuating Finlen in connection with them. As to the charges of bad faith and wrongdoing on the part of Finlen in the bringing of these suits, and his sinister purposes therein towards the rights of the plaintiffs, there is nothing in the evidence to support them, beyond the fact that these suits have been brought and are now pending. There is nothing to show that he brought them in .bad faith, or that he has any other purpose therein than to have his rights declared. If he thought at the time they wex*e brought that he was entitled to conveyances from the Devlins and Keilly, and that the plaintiffs were invading his rights, it was entirely proper for him to seek appropriate redress from all of them. Nothing else appearing, a presumption of good faith and proper motive must be indulged in his favor. Moreovei*, the fact that tire district court issued an injunction in connection with the ejectment suit aixd after a hearing thereon, justifies the inference that that court was of the opinion that the plaintiffs are probably wrong in their claims. They had an opportunity on .that hearing to show that the claims of Finlen are fraudulent and without foundation, as well as that the motives prompting him are malicious, — yet it seems they did not avail themselves of this opportunity. That Finlen brought suit to restrain alleged trespasses upon the Minnie Healy claim by a third party through the workings in the Grambetta and Piccolo claims, and did not prosecute it vigorously, furnishes in itself no ground for the charge that he is acquiescing in wrongs to plaintiffs by such third parties. He was and is under no obligations to plaintiffs to press this suit. He may have desisted because of an apprehension that he could not succeed; or because he became satisfied that he was wrong; or because he had some satisfactory arrangement with the corporation about compensation. In any event, it comes with ill grace from the plaintiffs to insist that any obligation rests upon him in this connection, while they deny that ho had any interest in the property, there being nothing in their way, until they procured the appointment of the receiver in this case, to prevent them from bringing and prosecuting any suit necessary to protect their own rights. If they had the requisite information, the obligation rested upon them to protect the rights which they now assert, and not upon Piulen. They were in possession at the time they began this suit; with the knowledge of the facts touching trespasses, ■which their charges against Pinlen imply that they had at the time, they could easily have invoked successfully the preventive power of the court, even without additional exploration.

Passing now to an examination of the charges of wrongdoing on the part of the administrator and Mary A. Miller, we notice first that they entered their appearances in this case without service of process, and, though accused of ousting the plaintiffs from possession, and refusing to render any account of their alleged operations, they made no attempt to justify or deny the charges. They thus impliedly, at least, confessed the truth of them. Pinlen and Kelley undertook to show that no real ground for the allegations in this connection existed, and that these two defendants, in collusion with plaintiffs, had attempted to bring about a situation upon which the court would be justified in taking charge of the property.

The facts are: On January 8, 1900, the administrator applied to the district court having jurisdiction over the estate for permission to engage in mining the Minnie Healy claim. This application was denied. After that time, and until this suit was instituted, plaintiff Ileinze and he had various consultations about engaging in operations there, though Ileinze was then enjoined from doing so. On January 22d this suit was brought, the plaintiffs then being in possession. On January 28d Ileinze formally delivered possession to the administrator, including a large amount of supplies belonging to the plaintiffs, with the machinery used by them in operating the property prior to the Pinlen injunction. Just pi’evious to that timo Heinze liad told the administrator that he (the administrator) could operate the mine if he chose to do so, provided the ore taken out should be shipped to Heinze. P. E. Mahoney, the. night watchman in charg’e of the machinery at the mine, remained there just as before, as did also Sullivan, the day watchman. The former was sworn as a witness. He testified that he had never been hired by Kleinsehmidt, but always, even up to the time of the hearing, took his orders and expected his pay from Heinze. “Heinze ivas his boss.” He thought Sullivan was employed in the same way as himself, their duties being the same. His business was to keep up fires and keep things from freezing-. Very little, if any, work was done after January 22d or 23d; and he saw no ore taken from the mine, except one wagonload which he caught a man stealing. No ore was hoisted from the mine after the date last mentioned. Some men were passing in and out, and some work was done; there being not more than a dozen men employed. Kleinsehmidt and his foremen wore there now and then; but Mary A. Miller was never there, and no one was there to represent her. Other evidence showed that she had not heen in the state for several months. One Halford made affidavit on February 5th that Kleinsehmidt and Mary A. Miller had been in exclusive possession of the mine and operating it since about January 25th, and had “shipped certain ore.” Plaintiff Heinze made an affidavit that he had theretofore caused demand to be made upon Kleinschmidt and Miller for a statement of their oj)erations, but none had been made, A mining engineer in the employ of plaintiffs also made an affidavit that on February 3d he had made an application for an inspection of the mine, but had been refused admission by “the representatives of the working defendants, though they knew that the application was on behalf of plaintiffs.” These statements were all made under oath, in face of the fact that Mary A. Miller was not in the state at the time the alleged operations were carried on and the demands made, and without any showing that she had any one in the state to represent her in any enterprise whatever. It may not pass unnoticed, either, that the application for the inspection was made on the 5th day after the petition was filed in this case, and that no time is fixed at which the statement of the operations was demanded. The same may be said as to the amount of the ore Halford saw shipped, and the date of the. shipment. His affidavit is silent on these points. An officer into whose hands some papers had been put for service upon Kleinschmidt and his alleged foreman, one Kane, went to the Healy mine on February 1st; he then found the day watchman engaged in the same kind of duties as those performed by the night watchman, but no mining operations were going on; nor did he afterwards find any one engaged at work there, though often there until February 16th. We have patiently examined the whole record, and the affidavit of Halford is the sole bit of evidence, apart from the general averments made in the petition, which was verified by Heinze, tending to show an ouster by Kleinschmidt. There is nothing whatever to show any wrong on the part of Miller. The evidence is well-nigh conclusive that no mining was going on at any time after February 1st, and that neither Kleinschmidt nor any one representing him was at the mine after that time. The statement by Heinze that an account of the operations was demanded, and that none was rendered, is. of no significance, in view of the fact that it does not appear when such demand was made, nor whether any opportunity was allowed for compliance by the administrator, so that the presumption might be indulged that the administrator was unwilling to comply. Heinze was sworn and examined fully at the hearing — his silence in connection with this matter is significant, especially so in view1, of the fact that the mining operations, if any, conducted by the administrator extended over a period of only seven days. The petition herein was filed just seven days after the administrator was put in possession by plaintiffs. It does not appear that he shipped any ore, or if he did, that he did not ship it to Heinze himself, in pursuance of the understanding had at the time possession was delivered to him. The refusal of the application of the engineer on February 3d is also- insignificant and does not tend to show the truth of any statement contained in the petition, since it conclusively appears aliunde that Miller was not in the state, had never-been in possession in person or by agent, and had never taken, a pound of ore from the property; and since it also appears that. Kleinschmidt was then out of the state, and that no one was. at the mine, other than a watchman — ostensibly in the employ of Heinze or nobody — and whose only task was to keep watch of things and prevent the machinery from freezing up. True,, it appears that the names of Sullivan and Mahoney, the watchmen, were not on plaintiff Ileinze’s pay roll after January 22d. It is a remarkable fact, however, that they remained there- after Kleinschmidt went into possession, but were never hired by him, and looked to Heinze for their orders and -their pay. The only conclusion possible from these facts is that the plaintiffs and the administrator joined hands to create a color-able ground for the appointment of a receiver through whom, they could have the property mined, notwithstanding the injunction procured by Finlen to preserve it intact until he could, establish his rights, and the proceeds expended in development work, which might or might not add to the value of it, or might or might not protect it from trespasses. And this in face of the fact that, the plaintiffs, notwithstanding the injunction,, were at liberty to bring as many suits as they chose to restrain these alleged trespasses. The plaintiffs ivell knew that though these suits -were pending against them, they furnished no ground for asking a court of equity to take the property out of their-hands and relieve them from the burden of caring for it; they well knew that in order to bring this about it was necessary to-be in a position in which they could complain of 'wrong on tliepart of some one who claimed to be a co-tenant; and hence this-suit upon a merely colorable ouster on the part of the administrator, -who seems to have been not averse to aiding them in their design. Ho far as this feature of the case is concerned,, there were no facts before the court to warrant the order. The-court was misled to make it by the specious but unfounded and! unsupported complaints of the plaintiffs by which they sought to bring tliemeselves within the principles which move a court of equity in such cases to grant the extraordinary relief demanded.

The administrator having gone into possession- (if, indeed, he was in possession) by consent of the plaintiffs, with the understanding that he was at liberty to engage in mining, nothing short of a- showing of a clear ouster and refusal to account, coupled with a want of financial ability to answer in a suit for this purpose, would probably justify a court in taking the property from his hands through the agency of a receiver. He was not imperiling the interests of the estate in any way. Whatever he did in his mining operations he did at his own risk (In re Rose's Estate, 80 Cal. 166, 22 Pac. 86) ; and that he was claiming to act as administrator in no wise affects the situation.

The allegations upon the subject of a probable fall in the price of copper pending the litigation do not merit serious consideration; they are hardly susceptible of proof. And it cannot be urged seriously that a court of equity should be moved to the exercise of its extraordinary powers by conclusions founded upon speculations upon the probable condition of supply and demand as to a particular commodity in the markets of the -world.

Touching the outlay necessary to preserve the property while idle, a more serious question arises. The proof in this connection, however, is not satisfactory. On the one hand it appears that there is a hoisting plant with necessary machinery on the claim, and that it is necessary to keep watchmen to look after it and the claim, at a cost of about $500 per month. It also appears — incidentally, however — that the machinery probably belongs to the Montana Ore Purchasing Company, a corporation Avitli which plaintiffs are associated. On January 23d the hoisting plant was delivered to the administrator under an arrangement with the plaintiff Heinze, the particulars of which are not shown. Whether its use there as a means of ingress and egress is necessary to the preservation of the openings in the property, or whether these openings are in such a condition that they need care and attention, is not shown. If from their nature and condition they do not require attention and outlay, then the expenses incident to the employment of watchmen would under no circumstances be a proper charge upon the property. On the other hand, Finlen has not at any time attempted to interfere with the possession of the plaintiffs or the administrator, except to enforce his rights by suit; and there is nothing in the evidence to furnish any reason why either lleinze or the administrator, who seem to have joined forces against Finlen, should not retain possession and care for the property, with a right to recover of Finlen the amount expended for this purpose if they succeed in establishing their rights against him. Surely the plaintiffs have ample protection against any loss to them under the injunction bond given by Finlen in the ejectment suit. If this bond is not sufficient in amount, as plaintiffs charge, the district court, upon proper application, would readily exact a sufficient one.

That a court of equity has power in cases like the present to appoint a receiver is well settled. But in any ease where an appointment is sought there must be shown a legal or equitable right, reasonably clear and free from doubt, attended with danger of loss. (Smith on Receiverships, Secs, lo, 311, and cases cited; High on Receivers, Secs. 606, 601.) The duties of a court, however, in the exercise of this power are exceedingly delicate and should be exercised with great caution, lest in the effort to protect the subject of the litigation the property would bo illegally taken from one rightfully in possession and his rights and interests be sacrificed without any redress whatever. (Id.) Taking charge of property in the exercise of this power is somewhat analogous to the levying of an execution in limine, and subjecting the property to expenses and charges pending litigation, and to this extent consuming it entirely; hence Ihe power should never be used unless it be reasonably clear that no injury will result to the parties whose rights are for the time being invaded. As between tenants in common, as stated in the text of Mr. Smith, at Section 317, supra, the grounds of appointment usually are: “(a) Where one tenant is in possession and excludes his co-tenant from participation in the possession or income; (b) where the tenant in possession is insolvent and refuses to account to* his co-tenant; (c) where one tenant refuses to join his co-tenant in the execution of necessary leases for the property owned in common, or interferes in the collection of rents with the tenants in possession; (d) where the court can see from the showing made that the appointment of a receiver is required in order to properly protect the interests of parties.” The case at bar does not come within any of these rules; nor has any case heen cited by counsel wherein a different rule has been applied. It seems that it would be entirely inequitable to allow plaintiffs to surrender the property here involved into the possession of the court merely because its care involves considerable expense.

Tinder the presumptions usually indulged in favor of the legal title, the plaintiffs, Finlen, and the Allport heirs, except Kelley, are, for the purposes of this appeal, tenants in common. Under Section 592 of the Code of Civil Procedure, fixing the status of such estates, and as construed with reference to mining claims in Anaconda Copper Mining Co. v. Butte & Boston Mining Co., 17 Mont. 519, 43 Pac 924; Red Mountain Consolidated Mining Co. v. Esler, 18 Mont. 174, 44 Pac. 523; Connole v. Boston & Montana C. C. and S. Mining Co., 20 Mont. 523, 52 Pac. 263; Harrigan v. Lynch, 21 Mont. 36, 52 Pac. 642; and Butte & Boston Consol. Mining Co. v. Montana Ore Purchasing Co., 25 Mont. 87, 63 Pah 825, — each of these parties has the right to have the property stand as it is until it is finally partitioned. It would therefore require a much clearer showing than is here made to justify a court in invading this right, and mining the property through a receiver, for any purpose.

Wo feel impelled to call attention to the condition of the record filed on this appeal. It contains many pages of matter entirely impertinent and useless, which has served only to add materially to tlie labor involved in tbis investigation. On tbe bearing in tbe trial court many court files were introduced in part, tbe particular part being designated. Instead of incorporating into tbe record on appeal only tbe material parts of these files, they were copied in full. Hereafter tbe party offending in tbis particular will be subject to tbe payment of costs.

Tbe order appealed from is reversed and tbe cause is remanded.

Reversed and remanded.

Mr. Justice Milrurn, not having beard tbe argument, takes no part in tbis decision.