Pioneer Gold Mining Co. v. Baker

Sawyer, J.,

(orally, concurring.) J. desire to make an observation or two in addition to what has been said by my associate. There is some point made and a considerable argument had on the fact that there was no valid conveyance from the Pioneer Mining Company to Baker. These parties, Chapman and Sayre, so far as appears, were not authorized to convey, and they did not attempt to convey, to Baker. There does not purport to be any conveyance from them to Baker. The legal title, which became vested in Baker, did not pass through that channel, but through a purchase at a sheriff's sale under the judgment in favor of the California Powder Works, instead of another decree of foreclosure in favor of Baker for $100,000, as it seems to have been at first contemplated. But tho sale and purchase were made in pursuance of an express agreement and understanding that the mine and other property of the Pioneer Mining Company should be redeemed upon terms expressed in the agreement. Tho result of the various agreements, in substance, was that Baker should purchase the property in question at the sheriff’s sale under the powder works judgment; should have possession, work, and develop the mine, pay all the necessary expenses, together with a reasonable compensation fer his own services, and pay the amount of his own claim against the company, the powder works judgment, and all other indebtedness of the Pioneer Mining Company specified in the agreement, within a designated time, out of the proceeds of tho mine; and when this should he accomplished, or when the sums provided for should be otherwise paid, on behalf of the Pioneer company, the property remaining should be restored to said company, or to said Chapman and Sayre. Tho time within which this was to bo done, so as to prevent the title becoming absolute, was limited. The sale took place and the purchase was made by Baker under the powder works judgment, and the title vested in pursuance of the agreement, *8and upon the conditions indicated in it. The fact that the legal title of the corporation vested in Baker through a sale on the judgment, instead of a conveyance by the company, under the circumstances, cannot affect the question involved or the rights of the parties. The sheriffs sale is merely the channel through which the legal title passed, but the sale ./took place, and the title, nevertheless, passed in pursuance of the agreement and subject to its conditions. We must presume that if this agreement had not been made other arrangements would have been made to avert a forced sale on the judgment. The company, at least, had a right to make other arrangements. It cannot be presumed that productive mining property of the value, as alleged and admitted by the demurrer, of half a million dollars, would have been allowed to be sacrificed for the indebtedness provided for in the agreement, of, say, $150,000. The title passed by virtue of the sheriff’s sale, which was made in pursuance of, and in subordination to, the understanding between the parties, and subject to the prescribed conditions that the property should be held and worked until the designated moneys due should be paid, either by the company or Chapman and Sayre themselves, or satisfied out of the proceeds of the mine and property sold. There are subsequent supplementary agreements, whereby Baker extended the time for the performance of the prescribed conditions upon which the title should be restored. The title in Baker was not to become absolute, except upon a failure in the performance of the prescribed conditions to secure payment of the demands provided for. Though not called a defeasance, and not a defeasance in form, the conditions of the several agreements are substantially in the nature of a defeasance, giving and continuing a right of redemption, for the benefit of the Pioneer company. Or the instruments may be regarded, in substance, as declarations of the trusts, upon which the title vested under the sheriffs sale. The corporation was the owner of the property sold, and the .first contracts were, in form, made in his name. The corporation was recognised in all subsequent agreements as owner of the property, and it was the corporation’s indebtedness that was to be paid out of the property. The transaction wras intended to secure Baker for the moneys due him, and such other expenses and indebtedness as he should pay or should accrue in pursuance of the agreements made. The transaction was, in substance, either a mortgage, pledge, or trust, to enable Baker to satisfy the debts of the Pioneer company provided for out of the property sold, — out of its own property. The whole transactions set out in the bill were transactions relating solely to the property and the indebtedness of the Pioneer Mining Company. It is manifest, in the nature of things, from the facts alleged, that these transactions, on one side, were intended to be for and on account of the corporation. Whether we call the sale and conveyance in pursuance of it, under the circumstances set out in the bill, technically, a mortgage, a pledge, a trust, or by any other name, the *9fasts alleged are such as entitle the complainant to relief upon the face of the bill. Whatever technical name may be given to the transaction, if was intended to put the title of the mine and property of the corporation in the hands of Baker, for the purpose of working and developing the mine, paying the expenses and designated indebtedness of the corporation, and compensation for his own services, out of the proceeds; and when this should be accomplished, or when the money and expenses provided for should be otherwise paid, to restore the property remaining to the 'Pioneer Mining Company.

It is alleged in the bill that those moneys so intended, and secured to he paid, have all been paid out of the proceeds of the mine. If not, that the complainant has offered to pay, and that it is now ready to pay, any balance that may be found due on an accounting. If these allegations are true, and the demurrer admits their truth, then the indebtedness of the Pioneer Mining Company, contemplated, has been paid out of the proceeds of the property of this company, and not out of the property of Chapman and Sayre, or of either of them; and the complainant, the successor in interest of the Pioneer Mining Company, is entitled to a reconveyance of the mine and other property sold under the judgment mentioned; and if the defendant refuses to reconvey, .then, clearly, it seems to me, it *is entitled to the relief prayed in llie bill.

On the other point, that Chapman and Sayre are indispensable parties to the bill, I do not know what the pleadings and proceedings may develop in the subsequent stages of the case, but there is nothing on the face of the bill, as it now stands, to show that Chapman and Sayre are indispensable or necessary parties to the bill. No relief is asked against them, and it does not appear that they personally claim any interest in their own behalf either against the complainant or the defendant. The court can order them to be brought in at any time when it appears that the rights of the present parties to the bill cannot he fully and finally determined without their presence. They would, perhaps, bo proper parties, but there is nothing disclosed on the face of the bill as it now stands to render it necessary to make them parties. As before stated, the agreements first set out were made in the name of the corporation. The subsequent agreements in the names of Chapman and Sayre, in form, all recognize the title of the property as being in the corporation, and all the agreements and proceedings relate exclusively to the property and the indebtedness of the corporation, and are intended to facilitate the payment of the indebtedness of the corporation out of its own property. Chapman and Sayre were, in faet, two out of the three trustees, and they owned all the stock except one forty-eighth part. According to the allegations of the bill, the indebtedness of the corporation had been paid out of the proceeds of the working of the productive mine, owned by the corporation, subject only to the incumbrances indicated, in pursuance of the terms of the various agreements, and of the trusts *10thereby imposed on Baker; and the property remaining, after satisfying the demands provided for, is, in equity, the property of complainant. But had Chapman and Sayre redeemed with their own money, in pursuance of the terms of their several agreements, the corporation would doubtless have been entitled to take the property upon payment of their advances. They were trustees for the corporation, and would not be permitted to take advantage of their own position as such to obtain a title to the property as against the corporation, in violation of their trusts, through the transactions set out.

I concur in the order overruling the demurrer.