Case ID: alaska-fed_4/html/0897-01.html
Source: Caselaw Access Project
Author: {"author": "\n      ROSS, Circuit Judge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

264 F. 929
    ALASKA MINES CORPORATION v. GREENBERG.
    No. 3378.
    Circuit Court of Appeals, Ninth Circuit.
    May 3, 1920.
    
      W. H. Bogle, F. T. Merritt, and Lawrence Bogle, all of Seattle, Wash., and O. D. Cochran, of Nome, Alaska, for appellant.
    William A. Gilmore, of Seattle, Wash., and Hugh O’Neill, of Nome, Alaska, for appellee.
    Before GILBERT, ROSS, and HUNT, Circuit Judges.
   ROSS, Circuit Judge

(after stating the facts as above).

The solution of the question depends upon the proper construction of the agreement between Greenberg and McLeod of April 17, 1917, which agreement the record shows was the basis of the action brought by the latter in the state court of New York, in which the writ of garnishment was issued and served on the Alaska Mines Corporation; McLeod at the same time submitting to that company the said agreement, so that all of the parties mentioned in the statement of the case were fully aware of the provisions of the latter. Now, read and considered together, as they must be, what is their true meaning?

It is to be remembered that at the time of the execution of that agreement the indebtedness of Greenberg to McLeod had been reduced, from $13,350.81 (secured by the lien of October 9, 1914) to $11,000. That lien was canceled and superseded by that declared and defined in and by the agreement of April 17, 1917. By it Greenberg, it is true, in terms assigned to McLeod an undivided eleven-fortieths interest in the notes aggregating $40,000 and in the mortgage securing them, executed by the Alaska Mines Corporation to Greenberg. Absolutely? We think not, for the reasons that the agreement declares that Greenberg should receive any sums paid on account of the notes and mortgage as trustee, one-half of which he should pay over to McLeod until the $11,000 due him should be fully paid, together with interest on the latter sum, or on any balance thereof remaining due, in the event that Greenberg should himself ha.ve received interest, and with the further agreement between those parties that, when McLeod should have received the $11,000, with interest, if any, he would— “reconvey and release to said Greenberg said eleven-fortieths (%) of said bond and mortgage just conveyed to him, and revest in said Greenberg all interest in said mortgage conveyed to him.”

The clause last quoted, taken alone, undoubtedly would strongly tend to support the contention of the appellant that the assignment first spoken of in the agreement was absolute; but, as has been already observed, all of the provisions of the contract are to be read and considered together, in order to determine the true intent of the parties. The agreement proceeds to declare in effect that, if the Alaska Mines Corporation should not pay the amounts due on the notes and mortgage:

(1) The mortgage should be foreclosed, and, in the event the property should be sold to an outsider, the proceeds of the sale should be first applied to the payment of any balance of the $11,000 remaining due McLeod, with interest, if any.

(2) Should the property mortgaged be bought at its sale, either by Greenberg or some one in his interest, the lien existing thereon October 9, 1914, should be revived in favor of McLeod to the extent of any unpaid balance due him from Greenberg, by an instrument in writing properly executed by him, in default of which he should personally pay to McLeod any such balance.

(3) Should the Alaska Mines Corporation exercise the option referred to in the agreement of April 17, 1917, and at the time of the exercise of such option there should remain due McLeod from Greenberg any part of the $11,-000, the latter should hold any money received by him under such option as trustee — “to pay thereout one-half thereof to the said McLeod until the whole of said balance due on said eleven thousand ($11,000) dollars is paid. And if said option is not exercised, and if through any mortgage foreclosure there shall not have been realized sufficient' to pay the said McLeod the balance of any amount due him on-account of said eleven thousand ($11,000) dollars, then and in that event the said McLeod is hereby given a first lien_ upon any and all properties mentioned in said option for any balance due of said eleven thousand ($11,000) dollars and interest, if any, in the same manner and form as said lien is stated in said agreement of October 9, 1914, and said Greenberg agrees to execute an instrument proper in form to be recorded, creating and reviving said lien, and in default thereof, at the option of said McLeod, said Green-berg agrees to pay to said McLeod any balance then due and owing to him on account of said eleven thousand ($11,000) dollars and interest, if any.”

The obvious purpose of the agreement of April 17, 1917, as we construe it, was to secure to McLeod payment of the $11,000 then due to him from Greenberg, and to maintain, as security for such payment, the lien stated and defined in that agreement, or, in the event of the contingencies therein specified, the substitute lien therein provided for; Greenberg being expressly created trustee to receive the moneys as they should become due on the respective notes of the Alaska Mines Corporation, secured by the mortgage, and as such trustee to foreclose the mortgage in the event of default in their payment. It is undisputed that, when the $5,000 note was paid, it was paid to Green-berg, who paid one-half of the amount over to McLeod, as provided in the contract, thereby reducing Greenberg’s indebtedness to McLeod to $8,500. The record shows that after the $10,000 note was similarly paid, and prior to the maturity of the $25,000 note on January 15, 1918, a dispute had arisen between the two as to the amount actually due from Greenberg, by reason of the claim of the latter that McLeod was indebted to him personally in the sum of $’6,000; Greenberg admitting, however, that there was still due from, him to McLeod, over and above that claim, the sum of $2,850.

It would seem from the record that that dispute was the real cause for the bringing of the action in New York by McLeod against Greenberg, and the issuance and service upon the appellant herein of the writ of garnishment. The appellant was willing and ready to pay the balance remaining due on the note, provided McLeod joined in the release and satisfaction of the mortgage, and the appellee offered to deposit $10,000 called for by the note with the Empire Trust Company to protect the appellant against the claim and garnishment of McLeod. Nothing, however, came of those negotiations, and the present suit resulted. It may readily be conceded that McLeod had such an interest in the money and in the mortgage securing it, involved in the foreclosure suit, as would have entitled him to intervene therein, which, however, is quite a different matter from saying that he was a necessary party thereto.

The court below held the appellee to be the trustee of an express trust, and as such entitled to bring the suit in his own name, to which McLeod was not a necessary party, arid as a consequence that the tender made by the appellant, conditioned as it was, was not a valid tender. Sections 857, 859, and 1194. of the Compiled Laws of Alaska are as follows :

Section 857: “Every action shall be prosecuted in the name of the real party in interest, except as otherwise provided in section 859; but this section shall not be deemed to authorize the assignment of a thing in action not arising out of contract.”

Section 859: “An executor or administrator, a trustee of an express trust or a person expressly authorized by statute, may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom, or in whose name a contract is made for the benefit of another, is a trustee of an express trust within the meaning of this section.”

Section 1194: “Every action of an equitable nature shall be prosecuted in the name of the real party in interest, except as in this section otherwise provided. An executor or an administrator, a trustee of an express trust, or a person expressly authorized to sue by statute, may sue without joining with him the person for whose benefit the action is prosecuted. A trustee of an express trust within the meaning of this section shall be construed to include a person with whom and in whose name a contract is made for the benefit of another.”

Those provisions of the statute of Alaska, and the decision of this court in the case of Northern Commercial Co. v. Lindblom, 162 F. 250, 253, 89 C.C.A. 230, in our opinion justified the action of the court below.

The judgment is affirmed.