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death 1112/100 equal undivided four-hundredth parts of, in, and to all the "mines, minerals, and ores, of whatever character or description, that were found on the 1st day of April, A. D. 1848, or that have since been found, or that hereafter may be found, in the tract of land in said state and county in the rancho called 'De Los Capitancillos,' formerly granted to Justo Larios, together with certain rights, privileges, and appurtenances as the same were granted by Grove C. Cook and wife to Knowles Taylor and said deceased John Bowie Gray, by conveyance dated the 1st day of April, 1848; the said property described in said conveyance with certain other property having been by a certain indenture conveyed to Knowles Taylor, John Bowie Gray, and R. J. Walker in trust," etc. He was appointed November 10, 1863, and qualified February 25, 1864, by giving a bond of $16,200, and letters of administration issued to him on the 25th. Notice to creditors was ordered, and appraisers were appointed, and estate duly appraised at $11,100, on May 2, 1864. Claims aggregating $106,529.24 were presented and duly allowed; and, after due proceedings were had, the interest of said Gray in said mines and minerals was sold to Henry O. Lyons for $27,755, which sale was confirmed by the probate court, and deed executed. Lyons deeded to Butterworth, and the latter to defendant. Hawley was the engineer of the defendant company, and Butterworth was its superintendent.
The claims presented against the estate were as follows: Sidney L. Johnson, $48,617.93; Quicksilver Mining Company, $49,579.31; George Flemming, $916.87; Andrew Glassell, $7,416. Sidney L. Johnson's claim was composed of the principal and interest of four notes of $5,000 each, given by one Middleton to Gray, and by the latter to Robert J. Walker, and a note of $10,000 given by Gray to Middleton, and indorsed by the latter to Walker. The $5,000 notes were secured by a mortgage, executed in favor of Walker, by Gray, Middleton, and Walker. There was also attached to the claim, as a voucher, a complaint in a suit brought by Robert J. Walker against Henry H. Taylor, John W. Middleton, et al. This complaint recited the conveyance from Grove C. Cook to Gray and Taylor. The declaration of trust in the property, quoting the substance of the trust deed, states the papers upon which the purchase was made, and the difficulties and controversies over the title and lawsuits conducted by Walker, "at the wish [to quote the complaint] of Gray," for which he was to be liberally compensated, and also states the necessity and fact of employing other counsel, the incurring of indebtedness, and disbursing large sums of money. The legal controversies over and in defense of the property are enumerated in the complaint. The amount claimed by complainant for services and expenses is $189,490.37, and it is prayed to be recovered against defendants, according to their respective interests, and be a lien on the property. An itemized account is attached to the complaint. A claim was also presented by Samuel F. Butterworth, as president of the Quicksilver Mining Company, the defendant. In this claim the Quicksilver Mining Company claimed as assignee of Robert J. Walker, and refers to the complaint in Walker
v. Taylor et al., supra. The amount claimed as Gray's proportion of the indebtedness is $49,579.31. Glassell's claim was for principal and interest on a note and mortgage executed by Gray.
The plaintiffs introduced the following letters:
A letter from S. F. Butterworth to C. A. Bradley, dated September, 1864:
"On my arrival I found that nothing had been done by the administrator of estates of Gray and Taylor. I immediately had our claim acquired from Walker allowed by the administrator and by the probate judge. I also purchased from Glassell, formerly attorney of Gray, and a troublesome fellow, his claim against Gray's estate, amounting to some $8,000, for $1,000, and thereby secured his aid. After the allowance of these claims, I had an order published to show cause why the estate should not be sold to pay debts. The time to show cause expires this month, and then I will have the order of sale, and, after the usual advertisement, the sale. I have no doubt but that I shall be able to purchase at the sale all of the rights and interests of Gray and Taylor in minerals of Fossatt for less than our claim."
A letter from Mr. S. F. Butterworth to William Bond, dated November 2, 1864:
"Please inform Mr. Bradley that on the 29th of October I purchased all of the interests of the estates of Gray and Taylor in the minerals of the Fossatt Ranch. The claims of the company against the Gray estate amount to $60,000, approved by the administrator and surrogate. I bid $38,000.
I hope to have these sales confirmed by the probate judge this month, and then I shall be relieved from a great anxiety. If, before the probate court holds its next term, this month, any one comes in and offers ten per cent. more than my bid, the offer may be taken by the judge, or there may be a new sale. For this reason I used the name of Judge Lyons in making the purchase; and, if any one bids the ten per cent., I can come in and bid over him. I hope to escape all this, as I have conducted the proceedings all very quietly, and yet strictly in accordance with the requirements of the statute."
A letter from Mr. Butterworth to William Bond, dated December 12, 1864:
"Since my last, the administrator's sale of the interests of Gray and Taylor in the Fossatt Ranch and the minerals therein has been confirmed, and the deed executed to the company. I bid for Gray's interest the sum of $27,775, and, as we are the creditors, we pay in cash only the administrator's fees and other necessary expenses of sale. I purchased some time ago the mortgage of Glassell, amounting to $10,000, for $1,000. I did this to quiet him,— a busy attorney,-and to enable me to bid a large amount, if necessary. I think the company very fortunate in obtaining the interest so cheaply, and congratulate myself on the mode and manner of their acquisition."
A letter from S. F. Butterworth to R. F. Peckham, dated March 25, 1865:
"Received yours of the 24th inst. I do not think it necessary to wait for the names of the Gray and Taylor heirs. Let the proceedings be instituted and carried through as speedily as possible."
Hawley testifies that he became administrator at the instance of Butterworth. The memories of all witnesses were imperfect, and hence their testimony was vague and uncertain, but it may be inferred that the Quicksilver Mining Company had become the owner or interested in the claim presented by Sidney L. Johnson against the estate. Johnson, however, seems to have taken an interest in the proceedings, as Judge Rhodes testifies. The judge's recollection, however, like that of other witnesses, was dim to almost
extinction. At first, he did not remember the original employment, but said a gentleman came to his office in San José, who claimed to be S. F. Butterworth, and inquired about the progress of the administration, and, upon being questioned about his interest, said, "It is our matter," or, "These proceedings were for us." But, when the name of Sidney L. Johnson was mentioned to him (Judge Rhodes), he replied that he knew him well, and, stating that his memory was refreshed, testified: "I think my employment came through him, and the name of Janin is connected with it in some way as well." Janin claimed to be a creditor of Gray, and presented a claim against the estate, which was rejected. A further citation of the evidence is unnecessary to the points I shall consider.
It is contended by plaintiffs that this evidence shows that the defendant was the administrator of the estate of Gray, and its purchase from Lyons, who purchased at the administrator's sale, was an infringement of its duty, and particularly of the California laws, which prohibit an executor or an administrator, directly or indirectly, from purchasing any property of the estate he represented.
In Boyd v. Blankman, 29 Cal. 19, it was held that in such case the sale was not void, but the administrator could be held as trustee of the title. This, however, is but the general principle applicable to a trustee dealing with his trust, carefully expressed by the statute; and the claim of the plaintiffs under it is answered by the supreme court in Clark v. Trust Co., 100 U. S. 149. The facts of this case were as follows: One McGhan and wife conveyed the premises in controversy to one Edward Clark, in trust for Mrs. McGhan. Clark and the McGhans conveyed the property to one Daniel Eaton, to secure the payment of a debt of the McGhans to the Freedman's Savings & Trust Company for the sum of $10,000. Upon default of the provisions of the conveyance, it was provided that the property should be sold at public auction, to pay the obligation incurred. Default was made, and the property was sold. the company becoming the purchasers for $13,000. Eaton, the trustee in the conveyance, was the actuary of the Freedman's Savings & Trust Company; and the sale was assailed upon this, as well as upon unfairness in the proceedings and inadequacy of price. will be observed the relations of the parties in this case are similar to the relations of the parties in the case at bar. Eaton was an officer of the Freedman's Savings & Trust Company. Hawley was an employé of the Quicksilver Mining Company. What Eaton did was for the company. What Hawley did, it is alleged, was for the Quicksilver Mining Company. The sale in both cases was made at public auction,-in the one case, to the company directly; in the other, to the Quicksilver Mining Company indirectly, Lyons being the purchaser, Butterworth receiving from him, and the company from Butterworth. The supreme court said:
"Touching this objection, it is sufficient to say that the deed was not made to Eaton in his capacity of an officer of the company, nor did he act in that capacity when exerting the authority conferred upon him. The fact that he held official relations to that company did not incapacitate him from accepting the trust set out in the deed of June 22, 1870, or discharging the duties thereby imposed. It is true that his relations to the company would make it the duty
of a court to scrutinize very closely all that he did in the execution of a trust, but we find nothing in the evidence to justify the belief that he acted otherwise than honestly and faithfully in the discharge of his duty. The evidence does not justify the charge that he bid off the property for the company."
If, therefore, an employé of a corporation may have a separate individuality (a proposition seemingly plain), it follows, necessarily, that he may be an administrator of an estate, and keep his individuality; nor does it matter, in the aspect we are now considering, that he took the office at the request of the corporation, or that the latter advanced the expenses of the administration. Among those who were entitled to administration under the law (section 52, Prob. Act; page 448, Laws 1851) in force at the time of the administration of the Gray estate were creditors; and, by the same law (section 66), administration could be granted to any competent person, although not entitled, at the request of a person entitled. Such a request certainly did not confuse or confound the identity of the parties, and make him an administrator who was not so in fact, by irresistible inference of law. Nor can I conceive of any good which would be served by it; while it is easy to conceive the embarrassment, and even detriment, of it. If fraud, in fact, be committed, through means of the administration, as was done in Herndon v. Kuykendall's Heirs, 58 Tex. 341 (cited by plaintiffs' counsel), the remedy is obvious and ample.
As to fraud in fact in the administration of Gray's estate, or in the sale of the property, I can find no evidence. As we have already seen, there are circumstances in this case, as there were in Clark v. Trust Co., supra, which challenge inquiry; but inquiry shows only, in addition, the letters of Butterworth. These, however, are explicable on other grounds than fraud. They, undoubtedly, display interest and zeal, but these cannot be assumed to be sinister without the support of other circumstances, however easy and plausible it may be to so represent them. Indeed, there is nothing which appears so, except the references to Glassell, who had been the attorney of Gray. A careful search through the testimony has convinced me that such references were but the expression of a superserviceable zeal, eager to exaggerate itself. There is not a particle of testimony which reflects on the fidelity of Glassell to Gray, or on the bona fides of the note and mortgage which he held against him. For the payment of the latter, he had a right to resort to the estate; and his action, instead of being an evidence of fraud, is an evidence of good faith. If Gray's interest was as valuable as it is claimed to have been, it must have been apparent to Glassell, and it is not conceivable in such case that he would have sold either his claim or his honor for $1,000. His claim alone amounted to $7,416, secured by a mortgage. Not cupidity, but a natural and proper prudence, would have demanded more than $1,000, even if he had rated his integrity at nothing.
There is no proof of dishonesty in the claims presented by the defendant, or in the administration proceedings. Aside from the connection of Hawley with the defendants, there is nothing to impugn his personal or official integrity or care, and it is conceded that the counsel who were employed could not have been used to
effect a fraudulent end. Nor could they have been deceived. Besides, Judge Rhodes, who commenced the proceedings, was early informed by Mr. Butterworth of the interest of the defendant in the administration proceedings, and, in consequence, explained to him what he (the judge) had done, and what he proposed to do. Judge Rhodes' memory is very imperfect as to who employed him originally, as I have already remarked, but he thought it was Sidney L. Johnson, and he remembered the name Janin. The latter, as appears from the record, claimed to be a creditor. Mr. Johnson, it will be remembered, was Mr. Walker's representative in California, and presented a claim against the Gray estate, and afterwards filed a voucher acknowledging the payment of the claim. It is not intimated that Johnson was dishonest in what he did; and, besides, he was one of plaintiffs' witnesses, and if the minerals in the mine were of very great value, as it is asserted, and as they undoubtedly were, it does not follow that Gray's claim to them was of great value. It was appraised at $11,100, and was sold for $27,755. The sale was affirmed by the probate judge, presumably after a proper hearing. There is nothing to justify a doubt of the honesty of this action. But, besides, the title of Gray was disputed, and disputable not only by persons who claimed under the same title as he, but by the defendant, who claimed under an adverse title. The defendant was in possession, and had been for some years, holding against everybody, and is represented as a wealthy and powerful corporation. A claim so embarrassed and opposed may well have been considered worth not more than $11,100 in the judgment of the appraisers, or $27,755 in the judgment of the court. If confirmation be needed of the doubts which beset Gray's claim, it may be had in his own actions, and the actions of his heirs after his death, and in the correspondence with their lawyers. I think, therefore, that there was no fraud in the administration proceedings or in the sale of the property.
There were other questions discussed by counsel, but those I have passed on necessarily preceded them in consideration, except, perhaps, the charge of laches made by the defendant's counsel, and the statute of limitations. Without reciting the evidence or stopping to consider the authorities, it is enough to say that I have carefully considered both, and have concluded that the claim of laches is good against all the plaintiffs except Margaret Gray Dickinson; and this was the view my learned predecessor, Judge Sawyer, took, and expressed in passing on the demurrer to her bill, and this is a proper case for its application. All the chief actors are dead, and those who were connected with them in various relations who yet live have memories so defective and dim as to make dangerous any judgment from their testimony.
It is further urged by defendant that Margaret Gray Dickinson is barred by the limitation of time expressed in the California laws, as follows:
"No action for the recovery of any real estate sold by an executor or administrator under the provisions of this chapter shall be maintained by any heir or other person claiming under the deceased testator or intestate, unless it be commenced within three years next after the sale." Section 190.