Staples v. May

25 P. 346, 87 Cal. 178, 1890 Cal. LEXIS 1115
California Supreme Court·Decided December 18, 1890·No. No. 12167·Published·Cited by 12 cases

Opinion

Beatty, C. J.

This, is an appeal from an order overruling defendant’s motion for a new trial. The cause was originally submitted in Department One, where the order appealed from was reversed upon grounds stated in an opinion by Commissioner Foote. (23 Pac. Rep. 710.)

Afier a rehearing and a more careful consideration of the record, we find it necessary to modify in some particulars the statement of the case as then made.

The facts are as follows: On the first day of August, 1881, in the superior court of Santa Clara County, the plaintiff and respondent herein recovered a judgment against the Santa Clara Mining Association of Balti[182] more, a foreign corporation, for five thousand dollars, upon which execution was issued and returned unsatisfied. She then— proceeding under sections 717, 718, 719, and 720 of the Code of Civil Procedure — cited this defendant to answer as to his indebtedness to the corporation, and in due course obtained an order from the superior court, authorizing her to institute and prosecute an action to recover any indebtedness owing by said defendant to said corporation. In pursuance of that order, she commenced this action in October, 1881.

In her complaint she sets out the proceedings above mentioned, and alleges that between July 19, 1880, and May 31, 1881, said corporation was the owner of a tract of land, containing 160 acres, in Santa Clara County, together wdth the minerals and ores therein contained. This allegation is not only not denied by the answer, but is expressly found by the court to be true, and is in no wise assailed by the appellant, so that this fact at least may be set down as unquestionable: that between the dates mentioned, the Santa Clara Mining Association-of Baltimore was the owner of the tract of land specifically described in the complaint, together with the ores and minerals therein contained. Whether the corporation was so the owner of said tract at a prior date — that is, at the date of the mortgage and trust deed hereinafter mentioned — is, as will be seen, one of the principal questions in the case, and will call for some discussion in its proper connection. ' Returning to the plaintiff’s complaint, her only other allegations which it is necessary to note here are, that between said dates — July 19, 1880, and May 31, 1881 — the defendant entered into and upon said tract of land; mined and extracted therefrom ore of the value of one hundred thousand dollars and upwards; reduced the same to quicksilver; sold it, and received therefor over one hundred thousand dollars, no part of which had been paid to said corporation.

[183] These allegations are denied in the answer; and in addition to such denials, the defendant sets out with great fullness the proceedings in a foreclosure suit against said corporation, in which he was appointed receiver of the property mortgaged, which included, as he alleges, the land and mine specifically described in the complaint in this action.

The facts with respect to the mortgage, action to foreclose, appointment of defendant as receiver, and his proceedings under such appointment are as follows: In the year 1873, said Santa Clara Mining Association was the owner of a tract of land, in Santa Clara County, containing about eleven hundred acres, and adjoining the tract described in the complaint herein. In this eleven-hundred-acre tract there existed a vein or lode of cinnabar, upon which some mining had been done, but at that time the lode had not been worked or explored outside of the limits of that particular tract.

Such being the case, on the 14th of June, 1873, said corporation, to secure its bonds for one hundred thousand dollars, executed a mortgage to McCalmont, and on the same day, to secure its bonds to the amount of four hundred thousand dollars, executed a deed of trust to a loan and trust company. In the year 1880, an action was commenced by the assignee of the McCalmont mortgage, against the mortgagor and other numerous parties, including the trustees under said trust deed, to foreclose the mortgage. The complaint in this action alleged the insolvency of the corporation, the existence of mines and mining works upon the mortgaged premises, the danger of loss and destruction to the property — the mine especially— if the pumps were stopped and mining operations suspended during the litigation, and prayed the appointment of a receiver to take charge of the property, and to protect and preserve it.

Accordingly, an order was made ex parte, at the time of the-commencement'of the suit, appointing this defendant [184] such receiver, and from time to time thereafter other orders were made by the superior court, authorizing him to borrow large sums of money to enable him to work the mine, pay taxes, and do other things deemed necessary for the preservation of the property which was the subject of the litigation.

In pursuance of these orders, the defendant entered into possession of the mine and other property, borrowed money, extracted ore, reduced it to -quicksilver, which he sold, and applied the proceeds, with the general result of leaving himself, at the end of the litigation, indebted to the extent of about sixty thousand dollars for borrowed money. But although his entire operations resulted in the loss of this large sum, there was one part of the lode —known as station 8 — from which he took about one hundred and thirty-eight thousand dollars, at a cost of about one hundred thousand dollars, leaving a net profit of thirty-eight thousand two hundred dollars, all of which was prior to May 1, 1881, and two years before entry of the decree in the foreclosure suit.

It is to this thirty-eight thousand two hundred dollars, or a share of it, that the plaintiff herein makes claim, upon the ground that station 8—the part of the lode from which the ore producing it was taken — is entirely outside of the mortgaged premises, and consequently, that the appellant, as receiver in the foreclosure suit, had no right to enter there; that he was in fact a trespasser, and became liable to the corporation for at least the net value of the ore. Such was the view of the superior court, and such the theory upon which the judgment in favor of the respondent was based.

Against this view the appellant urges a number of objections, which we shall proceed to consider.

1. It is claimed that the McCalmont mortgage embraced station 8. But this position we do not think can be sustained. Station 8 is a part of the lode, the situs of which is within the 160-acre tract specifically de[185] scribed in the complaint herein, and wholly without the 1,100-acre tract to which said mining-corporation had title at the date of the McCalmont mortgage, and at that time the lode had not been followed beyond the limits of said tract.

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Staples v. May, 25 P. 346, 87 Cal. 178, 1890 Cal. LEXIS 1115 (Cal. 1890).

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