Truesdale v. Farmers' Loan & Trust Co.

70 N.W. 568, 67 Minn. 454, 1897 Minn. LEXIS 191
CourtSupreme Court of Minnesota
DecidedFebruary 15, 1897
DocketNos. 10,409—(247)
StatusPublished
Cited by16 cases

This text of 70 N.W. 568 (Truesdale v. Farmers' Loan & Trust Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Truesdale v. Farmers' Loan & Trust Co., 70 N.W. 568, 67 Minn. 454, 1897 Minn. LEXIS 191 (Mich. 1897).

Opinions

COLLINS, J.

Prior to the year 1888, the Minneapolis & St. Louis Railway Company executed and issued its bonds to the amount of $1,100,000, secured by its trust deed, to the defendant the Farmers’ Loan & Trust Company. The bonds were negotiable, passing from hand to hand, and some of them are now owned by the defendants in this action who have taken this appeal. In 1888 certain litigation was instituted by Henry Seibert against the railroad company, in which it was sought to force a foreclosure of the trust deed or mortgage above [456]*456mentioned. The Farmers’ Loan & Trust Company was made a defendant in that action, and appeared through its attorneys, Messrs. Turner, McClure & Eolston, of New York City, and the plaintiff H. C. Truesdale. The court refused to order a foreclosure of the mortgage held by the trust company, but did decree a foreclosure of certain other subsequent mortgages, under which the property was sold. That action was before this court on several occasions. Seibert v. Minneapolis & St. L. R. Co., 52 Minn. 246, 53 N. W. 1151; 58 Minn. 39, 59 N. W. 822 ; 58 Minn. 53, 59 N. W. 879; 58 Minn. 58, 57 N. W. 1068; 58 Minn. 65, 59 N. W. 826 ; 58 Minn. 69, 59 N. W. 829; 58 Minn. 72, 59 N. W. 828.

In the Seibert suit the court found the amount to which the trust company and its attorneys were entitled, as compensation for their services in that litigation, to be $20,000, malting an order for payment, of the import hereinafter stated, and this amount was paid. The bonds held by the appellants ran for 40 years. At the time the interest coupons payable in July, 1893, became due, the plaintiff in this action, Mr. Truesdale, instituted an action at law against the holders of the bonds personally, the parties to that action being the same as the original parties to this action, excepting that the Minneapolis Trust Company and the Farmers’ Loan & Trust Company were not made defendants in the first action. The defendants prevailed in the action, and on an appeal to this court an order denying a new trial was affirmed, and judgment was duly entered in favor of the defendants. Truesdale v. Philadelphia T., S. D., & I. Co., 63 Minn. 49, 65 N. W. 133. Prior to the entry of judgment, the garnishee asked to be allowed to deposit the money in his hands into court; and an order was made depositing the money with the Minneapolis Trust Company, one of the defendants of this action, in whose custody it still is, and against the paying out of which a temporary injunction has been issued herein.

Immediately after the entry of judgment in the Truesdale case, and about December, 1895, the plaintiff brought this suit upon the same cause of action against the same defendants, with the exceptions we have mentioned, in equity, however, and* asked that he be given judgment for the amount due him on account of his services and expenses, and that said judgment be declared a lien upon the funds in the possession of the Minneapolis Trust Company, and be paid therefrom, and if sufficient funds be not found in the hands of the Minneapolis Trust Company, that the Farmers’ Loan & Trust Company be directed to [457]*457proceed forthwith to collect from the bondholders the sum remaining due plaintiff. The defendants who take this appeal appeared and answered, as did also the Minneapolis Trust Company and the Farmers’ Loan & Trust Company. The trust companies, however, took no further part in the defense than to see that no liability attached to them. On December 14, 1895, after the commencement of this action, the plaintiff, pursuant to the insolvent laws of the state of Minnesota, made a general assignment for the benefit of his creditors, to Cavour S. Langdon. When the case came on for trial, this fact being suggested to the court, an order was made allowing the as-. signee and also Messrs. Turner, McClure & Rolston, Mr. Trues-dale’s associate counsel in the Seibert litigation, to file intervening complaints, the order further providing that the action should proceed in the name of the plaintiff, any recovery which might be had to be paid as the court might afterwards provide.

The decision in the first action brought by this plaintiff was placed upon the ground that, as the trustee named in the trust deed had employed plaintiff to render the services without stipulating it should not incur any personal liability, and without professing or undertaking to create a lien on the trust estate for the value of such services, and, further, that, as the trustee was not insolvent, plaintiff could not recover of the beneficiaries of the trust estate, but must look to the trustee for compensation. In this case, brought to enforce an. equitable lien upon the trust funds, the court found that during the progress of the Seibert case the court made an order directing that the receiver pay to plaintiff, on account of his services, the sum of $5,000, which was paid; and that, at the time of the findings of fact and conclusions of law in that case, there was allowed to the attorneys of the trustee the further sum of $15,000, out of the funds in the hands of the receiver. And thereafter' the court made its order directing the payment of that sum to plaintiff, to which order we shall hereinafter refer. The payment was duly made out of the general funds in the receiver’s hands, and not out of moneys to which the bondholders were or could be entitled. It also found that plaintiff’s services in protecting the interests of these bondholders in the Seibert litigation were of the value of $50,000, and that he had necessarily expended in and about the matter the sum of $3,300. Judgment was ordered for the difference between what had-been paid and the value of the services, with the sum so expended, and [458]*458this was made a lien on the fund in the hands of defendant Minneapolis Trust Company. This appeal is from an order denying defendant bondholders’ motion for a new trial.

A consideration of the assignments of error which assail the first conclusion of law and the findings upon which it must have been based will dispose of plaintiff’s case; a reversal of the order appealed from, with directions to enter judgment in defendants' favor, being inevitable. The conclusion was that plaintiff: was not barred from recovering in this action by reason of the allowance made to and accepted by him in the Seibert foreclosure proceedings.

On the trial,'defendants introduced in evidence a petition filed in the Seibert foreclosure proceedings by defendant the Farmers’ Loan & Trust Company, the trustee named in the trust-deed made to secure defendant bondholders. This petition was made by plaintiff: Truesdale and the firm of Turner, McClure & Eolston, intervenors herein, as attorneys for and in behalf of said trustee. It set forth in detail the interest of the trustee in the Seibert litigation; the employment of (hese attorneysi to protect said interest; the object and purpose of the defense made as against plaintiff: Seibert, and also as against an intervening complaint filed in that action by one Griggs; that pending the litigation these attorneys prepared and filed a complaint in an action in which the petitioner, as trustee, was named as plaintiff:, for the purpose of foreclosing the trust deed and also papers moving for the appointment of a receiver in said action. To state it concisely, this petition exhibited in a very circumstantial manner this plaintiff’s claim for compensation for himself and Turner, McClure & Eolston in all matters connected with the Seibert litigation; and it included compensation for the services, and for the money expended, upon which plaintiff relied in the present action.

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Cite This Page — Counsel Stack

Bluebook (online)
70 N.W. 568, 67 Minn. 454, 1897 Minn. LEXIS 191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/truesdale-v-farmers-loan-trust-co-minn-1897.