Court Opinion

ID: 8653389
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:13:25.53593+00
Date Added: 2024-06-11T16:56:36.065407
License: Public Domain

Sandford, C. J.:
A petition was presented to this Court in the above-entitled action, signed by T. C. Bailey, Chairman of the Board of Trustees, Seventh school district; Budolph Alff, Chairman Board of Trustees, Eighth school district, and J. T. Millspaugh, Secretary Board of Trustees of Twelfth district, — for permission to be allowed to become parties therein. That petition was denied on the ground that they were not the proper parties, and had no right to be brought in as intervenors. The petition, however, contained serious charges reflecting upon the Beceiver appointed in that action, and upon his attorneys, and it was decided that, while the petition should not be granted, the charges of corruption, fraud, and improper and unprofessional conduct ought to be investigated. Leave was given, therefore, to the petitioners to file their petition in this Court. The persons .charged with improper conduct were required forthwith, as officers of the Court, to file their answers thereto; and in the language of the decision then made, “it should be referred to an Examiner to take such testimony as is offered both to sustain and disprove the charges contained in the petition.” The question of the amount of compensation which the Beceiver should be entitled to receive for his services having been theretofore by an order of this Court referred to an Examiner, it was further decided that question should be reserved until the report of the Examiner to be appointed to take proofs of improper and unprofessional conduct, should be received. Thereupon an order was entered, and the charges of mal-versation referred to Examiner Harkness. An examination was commenced before that examiner, and the receiver, Dyer, was sworn and interrogated as to his conduct. He refused, under the advice of his counsel, as appears from the record before us, to answer certain questions declared by the examiner to be proper. His refusal so to answer has been reported to this court, and an order is asked for declaring him guilty of contempt, and that he be punished therefor. 'A motion is also made for an amendment of the provisions of the order heretofore granted, denying the application of the school trustees, *17and providing for an examination of tbe said charges. The amendment requested is that, after providing that the examiner take and report such evidence as may be produced either by the petitioners or the receiver and his counsel, touching the matters in said petition set out, there be inserted after the words “ set out ” the following words : “ To-wit, charges of corruption, fraud and unprofessional conduct,” so as to define with more particularity the precise matters referred and to be examined before that referee.
The two applications, as they relate somewhat to the same matter, may be considered together. When the order of reference directing that testimony concerning the charges set forth in the petition was made, it was the intention of the Court that the examiner therein appointed should take proofs touching the alleged misconduct, of the officers of the court only, inasmuch as the question of, the amount of compensation to be allowed to the receiver had already been referred. This intention was evident from the decision of- the Court then rendered. If the order had been drawn so as to embody the purpose of - the Court, the amendment to the order now sought would have been unnecessary. If granted now, the amended order will incorporate the "intention and decision of the Court as then expressed, and we think the amendment should be allowed. As the order was originally drawn, the petitioners’ contention that the question of compensation w.as also referred had some grounds, if read alone, and not in connection with the decision of the Court. Under the order of the Court as then entered, the questions which the witness refused to answer were proper and pertinent, and the questions should have been answered. On such an examination as this the wiser course generally is not to stand on the accused’s legal rights, but to answer fully and in detail all questions that may have the remotest connection with the subject of the investigation. ' The ruling of the examiner by which he excluded questions relating to the conduct and financial condition of the receiver when acting as a private citizen, or acting in any other official capacity, was correct. The charges made against him were directed to his conduct as an officer of this court, and all questions *18that bore on that point, even though remote, and not clearly connected with it, should have been answered: The receiver, as appears from the testimony before us, was advised by his counsel that he need not answer the questions, the refusal of which has been reported by the referee to this court. It has been held in many cases similar to this that such advice, honestly given and accepted, and acted upon in good faith, is to be considered as exculpatory, and in mitigation of the offense. Capet v. Parker, S Sandf. 662. The receiver’s counsel were wrong in giving such advice. The order, standing alone, and not taken in connection with the decision of the Court, authorized and justified the questions put to the receiver. If, in their opinion, the order was incorrect, it was their duty to have promptly moved the Court for its correction or amendment ; and the examiner, on their stating their wish, would have doubtless suspended temporarily the examination of the witness until the decision of the Court upon their application to amend could have been obtained. Lansing v. Easton, 7 Paige, 364 ; Hilton v. Patterson, 18 Abb. Pr. 245. It has been held that a referee has no power to dismiss a suit because of a refusal of the plaintiff or a witness to testify. He should report the matter to the Court and await its decision. In this case, however, the examination has not been so fully closed that it may not be resumed. We are of the opinion that under the amended order the examination should proceed before the same examiner. We are not willing that the conduct of such officer should, when challenged so seriously as is the case here, be allowed to pass without a full and complete examination, by means of which the charges made may be either proven, or the persons accused exonerated. The hearing, therefore, must be continued as rapidly as possible. Were it not for the excuse presented by the receiver for his conduct before the examiner, a fine would be imposed on him. This refusal to answer, although no one has suffered therefrom, was unjustifiable and contemptuous, and, unexcused, would have merited serious and severe punishment. Under the circumstances presented here, however, the proceedings looking-to his punishment should be arrested, and the applica-*19tibn therefor denied. He will be allowed an opportunity in the examination, when resumed, to show that he purges himself of this particular contempt, by answering the questions ruled upon by the examiner as proper. The question of compensation to be allowed him will, as was heretofore directed, remain undisposed of until the completion of the examination now to-be resumed. An order will be entered providing for the further and speedy investigation of the charges of improper and unprofessional conduct, such investigation to be carried on before Examiner Harkness, the time and place of which will be fixed by the . Court in its order. As to the terms of the order ie-snbmitting the case to the examiner, I concur in the opinion read by Judge Henderson.
Hendebson, J.:
The reference to investigate the charges against the receiver and his attorneys has failed. "When the report of the examiner to whom was referred 'the matter of compensation to the receiver and attorneys was' presented to this court, or it was announced that it was ready to be filed, the petition of the school trustees was presented, asking for the right to intervene as parties to that proceeding, and we held that the interests of the petitioners were too remote to be allowed to intervene as parties. But the petition contained charges of grossly improper, fraudulent and dishonest conduct; that by this misconduct the fund had suffered a loss of over $200,000, The charge was distinctly made that this court had been imposed upon and deceived by the representations of the receiver and his attorneys; and that the receiver ha.d fraudulently acted in collusion with the defendants in the case, and with some of his bondsmen, and that fraudulent and unconscionable compensation had been sought. At once, upon the hearing of this petition, without entering upon any investigation of the matters contained in Judge Sprague’s reports as to the amount of compensation, deeming that question wholly immaterial to us if these charges contained in this pétition were true, and that the question of the amount of compensation would never be reached in this court in that *20event, this court directed that tbe petition .be received and filed as charges o£ official misconduct on the part of the receiver and his attorneys so far as such fraud and misconduct were alleged therein, and directed an examination of the charges at once. The session of the court necessarily terminated on the day this order was made. The engagements of the judges imperatively called them to their respective districts at once thereafter; but to facilitate the investigation it was sought to refer the taking of testimony upon these charges to an examiner, -and, with the consent of all parties concerned, selection was made of one of the most eminent and learned members of the bar of this territory, whose action in the matter has fully justified the confidence reposed in him. At the time of' making this order, the court filed in writing a memorandum of the order that was intended by it. This was done in view of the fact that the court would necessarily adjourn before the order could formally be reduced to writing and entered upon the journal, and attention was expressly called to it at the time and counsel were directed to co-operate in preparing the order pursuant to the directions. This seems to have been neglected, and the order entered and given to the commissioner referred all matters contained in the petition to the examiner. No answer had been filed to the charges, and under such circumstances the reference was somewhat uncertain. Ample time was. given by the order to each party to produce testimony. The answer of respondents was thereafter filed, traversing the entire petition; and on the day appointed by the order all these matters were taken to the examiner, and an examination attempted, an i he has reported to us 65 pages of proceedings had before him, and not more than ten pages of this is testimony. At once an application was made for an intervention by active parties. The parties differed widely as to the scope of examination. On the part of the petitioners it was claimed that it was but a continuation of the examination before Judge Sprague, and that everything was in issue that was put in issue by the petition and answer; that the respondents, having been examined before Judge Sprague, could be’recalled; and that their character *21was in issue tbe same as though they were plaintiffs in an action of libel or slander; and that they might be cross-examined upon that theory. On the other hand, this was denied, and it was claimed that nothing upon the subject of compensation could- be received. The petitioners called respondent Dyer, and proceeded to examine him upon the theory claimed by them. The examiner was without authority conferred by the order of reference. We fully appreciate the embarrassing situation of the learned examiner, and fully approve his conduct of the matter before him, and only regret that he was not vested with authority in the premises; and we propose to refer it back to him, and give him that authority. We can see no good reason why the petitioners should not have proceeded with other testimony, especially in view of the fact that the respondents offered to stipulate that the examiner should have authority to pass* upon all questions of the admissibility of the testimony and the scope of the inquiry. » It is but fair that a speedy investigation should be had. Counsel, as well as the receiver, are resting under grave charges.
The examination to be had before the Examiner is in no view a continuation of the investigation before Judge Sprague. We have expressly reserved that question until after this investigation. We have not examined tfie matters of that report, and do not care to until we hear from this investigation. If in the end it comes to be a mere question of computing and estimating the amount of compensation, this Court will proceed to do this upon its responsibility as guardian of the fund in controversy, and will seek such information as is necessary for that purpose. On the other hand, if these charges of fraud are sustained, no inquiry of that kind will become necessary, and the bond of this receiver will stand as an indemnity to 'make good any loss tbe fund has sustained thereby. The examination is to be had under the order of reference. It is the order of the Court which specifies the .matters to be investigated, and confers jurisdiction upon the commissioner, and points out the range of inquiry ; and the parties cannot, by their allegations and denials upon other or immaterial matters', make them *22material. We have examined witb care tbe supplemental report made by tbe examiner, containing a detailed statement of all that transpired before bim, and we are satisfied witb tbe rulings be took tbe responsibility of making, as well as those be intimated be would make if be was bimself bearing tbe case, and bad authority in the premises. An order should be entered referring it back to tbe examiner, and tbe order should be so modified as to provide that tbe examiner shall proceed to take testimony produced by either tbe petitioners or respondents respecting any and all allegations of fraud, corruption, misconduct, fraudulent claims, and charges for compensation and unprofessional conduct on tbe part of Frank H. Dyer as receiver in this case, and of George S. Peters and Parley L. Williams as bis attorneys, contained in said petition; that said Robert Harkness is vested witb all tbe powers and authority of examiner of this Court for such examination ; that be be authorized to pass upon and determine all questions as to tbe admissibility of testimony, tbe same as though tbe cause was being tried before him, subject, however, to tbe right of either party to appeal to this Court by way of exceptions, to bis rulings thereon; that either of tbe parties interested be authorized to take subpoenas from this Court for witnesses to appear before said examiner ; that said examiner be empowered to employ officers, either Federal or Territorial, to attend bim under bis direction, and to fix their compensation; to employ stenographers, and to swear witnesses ; that such examination on tbe part of petitioners begin on Thursday next, January 24, 1889, and that they be given four days in which to give such testimony; that tbe respondents, in reply, commence on Thursday, January 31, 1889, and that they be given four days ; and that Thursday and Friday, February 7th and 8th, be given by said examiner to tbe taking-of rebutting testimony, to be divided between the parties as tbe commissioner shall direct; and that said commissioner make report of such testimony on or before Wednesday, February 13, 1889; and that tbe bearing upon such report be set for February 16, 1889. Tbe order should further provide that tbe examiner may *23change the above allotment and division of time in any manner be may see fit, but only so tbat the final report may be made and filed by February 16, 1889. I concur with the Chief Justice in his opinion just delivered as to the matter of contempt.
BoebMAN, J. :
In my view of this matter, the questions asked the receiver as a witness, and which he refused to answer, were, as the examiner ruled, proper, and should have been answered, and this.he should be required to do, whether the amendment of the order as prayed be allowed or disallowed. It is no doubt true that nothing was intended to be referred to 'the examiner except the charges made in the petition of Messrs. Bailey, Alff, and Mills-paugh. But one of the charges made in that petition was that the receiver had made an unconscionable claim for compensation; and, that being so, such claim was a proper, although not the main or most important, subject of inquiry by the examiner. It would have been misconduct in the receiver to have made such a claim. If I have read aright the report of the examiner, his view was that such matters in the petition as referred to other subjects than the charges of misconduct, fraud, etc., were not before him, but that all of the charges made by the petitioners against the receiver and his attorneys were before him for investigation. This view was correct, and I approve the rulings made by the examiner on this subject. The amendment sought to be made to the order of the Court is, in my view,' not very important, and it would not materially change the subjects of investigation, and with the change made the receiver would still be required to answer the questions. The answer of the receiver and his attorneys took issue on the unconscionableness of the receiver’s alleged claim for compensation ; and as to the wording of the order the Court had advised counsel to confer and to examine it before it should be entered. This was not done, and it seems to me that it is now too late, even although the order did not technically conform to the wording of the opinion of the Court delivered at the *24time. The order should now be that the receiver make answer to the questions, and, if he still decline to do so, that he should be punished as for contempt.
I heartily concur in referring the subject of the charges back again to the examiner ; and the renewed order of the Court will give ample authority to the examiner to fully investigate all the charges made, and to confine the investigation to the charges made in the petition. The question of the amount of compensation that should be allowed the receiver is only incidental in this investigation. That question will come before us for fuller examination when we come to consider the 'report of the former examiner, Judge E. T. Sprague. Its purpose in this investigation is to show whether the receiver’s claim be unconscionable or not. If it be so, the Court should know it; not, perhaps, to fix what 1 his compensation should be, but to enable the Court to know whether the receiver has been acting in good faith with the Court. If he has not, he should be removed. Evidence as to his compensation should be allowed so far as it may, even in the remotest degree, show misconduct on the part of the receiver, as charged, or that any claim he may have made is unconscionable or fraudulent. These charges of fraud, corruption, and misconduct in the office of receiver and of his attorneys are so grave and serious that the Court cannot and will not pass them by, and the parties making them will be allowed ample time and opportunity to substantiate them, if it can be done ; and the respondents will also be allowed ample time and opportunity to defend themselves against the charges, and to introduce evidence bearing upon their exoneration. It has been claimed and urged that the petitioners are prepared to substantiate the charges they have made ; and the parties charged have been equally positive that no such charges can be substantiated, and that they are prepared to show ■themselves entirely free from them. It is to be hoped that all parties will now improve the opportunity again offered to bring out all the facts in the matter. The investigation, to be satisfactory, must be searching and complete, no matter what the result may be. Counsel *25should keep this fact in view throughout the whole examination. The Court will insist that these charges be sifted to the very bottom, and there should be no delay or obstruction to such searching examination. The parties are officers of this Court, and the Court owes it to itself that the.investigation shall be thorough, and will be satisfied with nothing less. Counsel on both sides should earnestly endeavor to aid the examiner and the Court with that view. If any witness refuse to answer any question of importance, the question could be waived for the time being, and the examination allowed to proceed as to other branches or charges set forth by petitioners. The doors should be open to the fullest extent, and even, if necessary, go to the very verge as to competency. Of course, matters in no way connected. with the charges made ought not to be brought in, but all that is competent should be brought out. The Court is confined to evidence upon questions in issue, and cannot go outside to investigate extraneous matters, and such as are not connected with the charges made. But the changes are broad and specific, and, if they be sustained by evidence, no additional or outside matters would be necessary ; for, if the charges as made be true, the Court would not make any allowance of compensation to the receiver or to his counsel, and" probably other action, would be taken by the Court. The new order embodied in the opinion of Associate Justice Henderson, and which is to be entered in the case, as to a re-submission of the matter to the examiner, conforms substantially to my views, and will give the fullest opportunity to introduce the evidence as to the alleged unconscionable or fraudulent character of the claim of the receiver for compensation.
Contempt — Disbespecteuh Language to the Coubt — Language used in a certain paper submitted to the Court quoted and held to be a contempt of court.
Afterwards the order was amended so as to confine the hearing before the examiner to any and all allegations of fraud, corruption, misconduct, or fraudulent claims and charges for compensation and unprofessional conduct on the part of the receiver and his attorneys.
Thereupon the School Trustees filed in court the writing set out in the following opinion and therein adjudged to be contemptuous :
Judd, J. :
On the 1st day of December, 1888, T. C. Bailey, Rudolph Alíf and J. F. Millspaugh, describing themselves to be Trustees of the Seventh and Eighth School Districts, and Secretary of the Board of Trustees of the Twelfth School District, brought before this court a petition in which they set out by description divers and sundry pieces of real estate, alleging that the same was the property of said late corporation. They likewise alleged that on March 23,1888, April 4, 1888, and May-14. 1888, Receiver Dyer instituted actions in the Third Judicial District Court of this Territory against various defendants, and in the complaints in said suits, among other things, alleged that said last above-described tracts of land were obtained and held by said late corporation in violation of section 3 of the act of July 1, 1862, and not for the purposes of the worship of God, or parsonages, or burial grounds, and that the claims of the various defendants in said suits were invalid, and prayed that the deeds of said various defendants be held to be col-orable, and ‘that the cloud upon the title created by such deeds be removed, and that the possession of the said lands be adjudged to the said receiver for the uses and purposes mentioned in the said section 3 of the act of March 3,1887.
The petition then proceeds to state that afterwards, on or about the 9th day of July, 1888, the said receiver and the defendants to the suits above named compromised said suit, and in lieu of said tracts of land described in said *27complaint, except a portion of lot 8 in block 76, tbat said receiver tooktbe sum of $84,666.15, or a note therefor, to ■ stand in the place thereof, and to be treated and applied as ■ the land should have been’ treated and applied ; that the solicitors of said corporation were the attorneys of said defendants, except one, in said compromises, and thereby admitted that the land had been obtained by the late corporation, in violation of said acts of Congress, and that the plaintiff was entitled to recover if said acts were valid, and in effect admitted that the money received should be substituted for said lands, and should be applied for the benefit of said common schools ; that the order of this court, authorizing the said receiver to compromise said suits, was made by the Court, “as your petitioners are informed and believe, solely upon the recommendations and representations of the receiver' and his solicitors, who stated to the Court that the estimates in the petition for authority to compromise were the reasonable values of said tracts under the circumstances ; and that said compromises were fair and reasonable. Tour petitioners charge, however, that said tracts of land were worth $225,000, and that $84,666.15 was a grossly inadequate valuation of property ; that no-evidence was heard by the Court in regard to said compromise, and your petitioners believe that the Court was misled by the said representations and recommendations of the receiver and his solicitors ; that the said order of the Court required the receiver to report said compromises to the Court for its approval, and that such report has not been made.”
The petition then proceeds to allege that the compromises should be set aside ; but, if they are allowed to stand, then the money or notes, or other evidences of indebtedness, or the proceeds thereof, taken for or in lieu of said land, must be applied as the land and the proceeds thereof were required to be.
The petition further alleges that the said receiver now has in his possession the sum of $75,000, received in compromise for cattle and other property ; that said property, as petitioners are informed and believe, was worth at the time $250,000 ; that it was estimated by the parties to this *28suit in a stipulation of facts made October 19, 1889, to be worth tbe sum of $268,982.39 ; and that this transaction between the receiver and defendant corporation was made without authority from this Court. And, further, that since the appointment of said receiver he has obtained possession of 30,000 sheep, the property of the defendant corporation ; and after receiving the same he rented them without any authority from the Court, and without public notice, to one W. L. Pickard, a surety upon said receiver’s bond, at the rate of 20 cents per head per annum, when the customary price was from 40 to 50 cents per head, and that in such renting of said sheep the fund sustained a loss of about $5,000.
The petition further alleges, as petitioners are informed and believe, that there is property to a large amount, of which said receiver has not taken possession, that was owmed by said defendant corporation and was in the possession of its agents, or of others for said corporation, after said receiver qualified, and that he could have taken or obtained possession of said property by the use of reasonable diligence as receiver, and that his failure to do so was from want of attention to his- duties as receiver, or from willful negligence, or through combination with agents of the late corporation.
The petition further alleges that the receiver, after he had entered upon his duties as such, retained one P. L. Williams, who was and is Territorial Commissioner of Schools, and one George S. Peters, who was and is the attorney for the United States in this Territory, as his attorneys and solicitors ; that the said receiver was, at the time of his appointment, and now is, United States Marshal for said Territory; that as receiver he presented a claim for allowance to him for clerk hire, compensation to solicitors, agents, and employes, for office rent, stationery, and other expenses, amounting to the sum of $7,865.53 ; tüat, not having yet been made parties to this proceeding, or-granted leave to appear therein, “your petitioners have not examined the said report of expenses of the receiver sufficiently to point out objections thereto ; that such an examination would involve a scrutiny of vouchers, and *29probably an examination of witnesses ; bnt that, if permitted by tbe Court to do so, your petitioners, as they are informed and believe, can point out well-founded objections to said account.”
The petition further states that the receiver has presented a claim for allowance to himself for his individual services as receiver, of $25,000, and in addition each df his solicitors presented a claim for $10,000, said claims aggregating- $52,865.28 ; that said claims for allowance were referred to the examiner in this case to take testimony as to the amount to be allowed ; that the United States Attorney for Utah, and the Territorial Commissioner of Schools, both appeared for the receiver in the taking of such testimony, and no one appeared for the United States or for the said common schools ; that on such examination the defendant corporation at first appeared by its solicitors, Messrs. Sheeks & Bawlins, and by them the first witnesses produced by the receiver were cross-examined, but after-wards, as petitioners are informed and believe, they were instructed by the defendants not to cross-examine and not to contest the claims of the receiver or of his solicitors, and thereupon they ceased to make any further contest, and the examination became and was wholly an ex-'parte examination by the receiver and his solicitors before said referee.
The petition then proceeds to allege that under the-law George S. Peters, as United States District Attorney, was bound to appear, by virtue of his office, for the United States in all suits to which the United States was a party; and that he was not entitled to have or receive any sum for any services he may have performed as solicitor for the receiver in this case, and that the claim of the said Williams as solicitor for said receiver was much too large.
The petition then proceeds in so many words to charge as follows : “ Your petitioners further represent that the amount, $25,000, claimed by the receiver for his individual services, is grossly excessive, exorbitant and unconscionable ; that the allowances to the receiver for his services must be only for those rendered by himself, and he cannot *30be allowed for services for which his agents and employees may be allowed and paid.”
The petition further states that the difference between1 the amount for which the 30,000 sheep above mentioned could have been rented, and the amount for which they were rented, is about $5000, and that this amount should be deducted from the receiver’s compensation, if in view of his breaches of duty, he is entitled'to any compensation; and if it be that he so rented said sheep in return for any benefit to himself, or the hope thereof, then he ought not to receive any compensation, and said contract of renting should be disapproved, and the receiver held for all loss to the fund in consequence of such wrongful renting.
The petition further states that the “ petitioners are informed and believe that the sum of $75,000 above mentioned, received from the defendant in compromise for certain property above mentioned, was a grossly inadequate consideration, and the receiver should be held to account to the fund for the difference between $75,000 and a fair consideration for such property, and such difference your petitioners believe is not less than $175,000 ; or that said transaction should be disapproved by the Court, and the receiver held to a strict accountability for all loss in consequence of his wrongful action ; and, further, that the receiver should be held accountable for the loss to the fund, and to the common schools, caused by the compromise upon the real estate above mentioned ; and this loss, your petitioners charge, on information and belief, is not less than $135,000, and that, further, if said receiver be allowed any compensation at this time, it should not in any view exceed $5000.”
The petition then proceeds to charge that inasmuch as no one has appeared on behalf of the common schools, the fund is likely to be greatly diminished by said claims made against it, and that the appearance of some one for the common schools is rendered absolutely necessary to the ends of justice ; and the fact that the Commissioner of Common Schools of this Territory is employed by said receiver against the interest of said schools, and that the ■United States Attorney for this Territory is also employed *31against the interest of said schools, and that tbe receiver bimself is an officer of the United States, and that they are claiming that by 'a compromise the said schools have already been deprived of a large portion of the proceeds of said lands, and that the proceeds have become the property of the United States, fürnish additional- reasons for permitting the trustees of district schools to appear in this proceeding . Wherefore the petitioners pray as follows: “That they may be made parties to such proceedings, or that they may be allowed to appear by their solicitors, or otherwise, in order to defend and protect the interests of the common schools they represent, and preserve so much of the fund as may belong to said schools, and that such other trustees of district schools as may wish to come in may also be made parties, or allowed to appear, and that your petitioners may be allowed to produce, evidence to prove and substantiate the facts stated in this petition, and that your petitioners may have such other and further relief as to equity belongs, and as to this Court appears to be equitable.” Signed and sworn to by T. C. Bailey, Chairman Board of Trustees, 7th District, Budolph Alff, Chairman Board of Trustees, 8th District, J. F. Millspaugh, Secretary Board of Trustees, 12th District.
Upon the application of the solicitors of said petitioners to be allowed to file said petition in said above-entitled cause, to become parties thereto, this court filed an opinion, written by Henderson, J., in substance as follows : “This is an application of certain school trustees to be allowed to intervene as parties to the case. We are of the opinion that petitioners do not show by their petition any right to intervene as parties. There is nothing to show that the Government is not disposed to look after the interests of the fund, and the interests of petitioners as school trustees are too remote to be recognized by an order allowing them to intervene. But the petition which has been read contains charges of a grave and serious nature against the receiver and his attorneys, Messrs. George 8. Peters and Parley L. Williams. The charge has been directly made that the receiver has acted corruptly, and in criminal collusion with the defendants, and that this Court *32bas been imposed upon by tbe representations of tbe receiver and his said attorneys, and a, fraud thereby accomplished. If this be true, a crime bas been committed, and this Court cannot and will not pass it by without attention. As tbe action of these officers charged with a delicate and difficult duty has been so seriously challenged, they should be met by responsible accusers, and have the opportunity to confront them. Either the receiver and his attorneys have been guilty of a crime, or some person or persons are interested in falsely accusing them. The petition, upon being verified and indorsed by some persons responsible for the costs which may be incurred, should be received and filed as charges against the receiver and his attorneys, and they should each be required to file their respective answers thereto, so far as the charges of corruption, fraud and unprofessional conduct are charged against them, respectively, and upon the filing of their answers it should stand referred to an examiner, to take such testimony as is offered both to sustain and disprove the charges contained in the petition, and report the same to this Court on or before the next regular term of this Court. If the charges of corruption and improper conduct are sustained, and the fund in controversy in this case thereby preserved and protected, provision can hereafter be made for the payment of expenses incurred ; but in the meantime we shall postpone the question of compensation to the receiver and attorneys until the bringing in of the report. We have only had a few hours to consider this matter, and therefore we have not had time to state more in detail our reasons for this action. An order should be entered conformable to this opinion.”
Answers were filed by the said Dyer and his solicitors in due time, denying all said charges in full. When this opinion was rendered by the Court, it was distinctly stated to the persons interested, that the order should be drawn in conformity with the opinion, to be accepted and agreed upon by the parties and attorneys on both sides, and when such was done it should be handed to the clerk of this Court, to be entered upon its minutes. Inasmuch as the question of compensation to the receiver had already been *33referred to tbe clerk of this Court as special commissioner, it was not thought proper or necessary to refer that question again to another commissioner, but it was intended, ■as the opinion above set out clearly indicates, to refer the charges of wrong action by the receiver and his attorneys to a special commissioner, instead of which, however, an order, which was not presented to the Court, seems to have been drawn and entered, which in so many words refers to Mr. Robert Harkness the case, to take and report to this Court such evidence as may by the petitioners or the receiver and his counsel be produced, touching the matters in said petition set out. This order, as will be clearly seen, was not in accordance with the opinion of the Court, for it was not intended to refer the question of compensation to the receiver, it having already, as above stated, been referred to another person, as special commissioner, to take proof and report thereon. How be it, when the parties met before Commissioner Harkness they differed materially as to the matters that were referred, one side insisting upon taking proof upon all the matters mentioned in the petition, and the other side insisting upon confining the investigation within the scope indicated by the opinion of the Court. Such proceedings were had as resulted in the application to this Court to amend or reform its order of reference, and upon that application the Court made the following order : “It is hereby ordered that the motion to amend the journal entry be, and the same is hereby, allowed; and that the said Robert Harkness, the examiner heretofore appointed, proceed and take such testimony as may be produced by either party to this proceeding respecting any and all allegations of fraud, corruption, misconduct, or fraudulent and unconscionable claims and charges for compensation, and unprofessional conduct on the part of Frank H. Dyer, as receiver in the case, and of George S. Peters and Parley L. Williams, as his attorneys, contained in said petition of said school trustees heretofore filed in this Court.”
It will be observed that the petition of the persons heretofore mentioned expressly charged that the receiver and his attorneys, Peters & Williams, misled and deceived the *34Court into the adoption of a compromise of the suit against the defendants for the recovery of the real estate mentioned, and that by this fraud and deception there was a loss to the fund of over $100,000. It was further charged that the receiver rented 30,000 sheep for 20 cents per head per an-num, when he could have gotten 40 cents per head; and it was further charged that he compromised a claim for cattle for $75,000 that was worth $268,998.39, and that the transaction was made without the authority of the Court; and it is further charged that property to a large amount, which the receiver could have taken possession of, belonging to the late corporation,was by him neglected; and that his failure to do so was for the want of attention to his duties as receiver, or from willful negligence, or “ through combination with agents of the late corporation.” And it was charged that Peters abandoned his duty as district attorney to the government, and took employment from the receiver, and that he was making a claim against the interests of his client, to-wit, the government, and thereby impliedly charged with malfeasance and corruption in office. It was further charged that P. L. Williams, a commissioner of schools accepted employment against the interests of the school fund, and that he was guilty of official misconduct, and that finally the claim upon the part of the receiver for $25,000 as compensation, to use the exact language of the petition, “is grossly exorbitant, excessive, and unconscionable.” It is difficult to imagine how stronger charges than these could have been made, and even if one of them should be true, then the receiver and his solicitors are not only not entitled to compensation, but the receiver should be dismissed from his office as such, and his attorneys disbarred from the right to practice in the Courts of this Territory. Taking this view of the matter, the Court readily, and without hesitation, sought by all means in its power to give to these petitioners an opportunity to prove the charges, and hence in its amended order made the reference as broad as it could well be made, and even went so far as to include in the reference all allegations of fraud, corruption, and misconduct or fraudulent and unconscionable claims and charges for *35compensation, and unprofessional conduct on tbe part of tbe receiver. On tbe day after tbe last order was made -said petitioners, together witb one other person, by tbe name of L. U. Colbatb, wbo bad not heretofore appeared before tbe Court, came into Court and presented through their counsel a paper writing, containing, in substance, tbe following “ Unto tbe Court your petitioners, tbe school trustees, respectfully state: Tbe order of tbe Court, as now modified by tbe Court, has totally changed tbe nature of this proceeding. A petition in chancery has been transformed into a criminal complaint. We came here to contest tbe compensation of tbe receiver and bis solicitors,- and our petition was for that purpose. Under tbe former order of tbe Court we could have done so; under this: order we cannot. Tbe Court has now ruled that we cannot’ do tbe only thing, that, as school trustees,we are.interested in' doing, or bad tbe right -to do. We are completely excluded by this amended order from performing tbe only duty in connection witb tbe matter that our office places', upon us. But by this amended order tbe Court would impose upon us the duty of carrying on an investigation into-tbe conduct of tbe officers of tbe Court for tbe sole benefit of tbe Court, while confining by their order tbe inquiry within narrow limits. Tbe Court has decided that our particular inquiries of tbe receiver were proper, but at tbe same time has ruled that all other questions of the same nature are improper. Tbe Court has so changed the order that it is doubtful whether we could introduce testimony uponmost of the allegations of tbe petition, because, legally, they do not amount to charges of fraud, corruption, or professional misconduct. We are cut off from all inquiry into anything except those particular statements in tbe petition which directly and in sufficient legal phrase charge fraud, corruption, or professional misconduct. We can offer proof under this order only of a charge for compensation that is both fraudulent and unconscionable. We have no allegation of such a charge in our petition, and therefore we can offer no proof whatever on tbe subject of compensation. Had we understood when this reference was made that tbe investigation would be limited as it now is, we would then have *36declined to proceed. If it be tbe duty of the Court to carefully scrutinize the conduct of its own receiver, and if it would place this duty upon us, then it should not limit the investigation, as it now does, to particular acts, and those alone, but it, in justice to us, should extend the investigation to his entire conduct as receiver. In assuming the duty of the Court, as we would, were we to proceed under this order, we would be so confined and hampered that we could not make our investigation complete. "While proceeding under the original order, we were authorized to offer evidence as to everything that the receiver had done or had failed to do, in order -that we might enable the Court to fix the compensation of his services. But this matter being excluded by the amended order, only a small part of the receiver’s doings can be investigated. Under these circumstances, we believe it would be better that the Court, if it so desires, should investigate the conduct of its officers for itself, in a proceeding where the examination would not be cramped and narrowed as it is under this order. In that way the examination would be more thorough, and more satisfactory to the Court. As long as we had some chance of benefiting the common schools of this territory, we thought it our duty to proceed, but we ■conceive it to be no part of our duties as school trustees to prosecute charges of fraud and corruption against officers of this Court, nor do we conceive it a part of our duties either as school trustees or as private citizens, to incur the large expense of summoning witnesses from different counties in the territory, and even from Idaho and Arizona, merely to assist the Court in scrutinizing particular acts of the receiver; and in view of the facts above stated, and the ■complete change in the character of the investigation made at this late day, we must decline to assume the functions of a grand jury, or to attempt to perform the duties, of the Court in investigating the conduct of its own officers. All of which we respectfully submit.”
It is difficult to conceive of a more deliberate and barefaced attempt to trifle with the Court than has been attempted by the conduct of these petitioners. They •assume the responsibility of .making charges against *37officers and attorneys of this Court which were of such a character as nd Court could overlook. Every opportunity has been given to them to have a full and ample hearing-to substantiate the charges, and after that they come into this Court with a paper whose statements are untrue, and of a most scurrilous nature, and couched in the most disrespectful language, and by innuendo, and almost by direct charge, attempt to put the Court in the position .of undertaking by itself to shield its officer and its attorneys against an investigation of charges under which no man can stand up and face an honest community. The paper is full of false assumption from end to .end, as can easily be seen by reference to facts heretofore recited. They undertake, in the paper last quoted, to say : “We can offer proof under this order only to the charge for compensation that is both fraudulent and unconscionable. We have no allegations of such a charge in our petition; therefore we can offer no proof whatever on the subject of compensation,” — when the fact is their original petition, in so many words, charged “ that the amount of compensation, $25,000, claimed by said receiver for his individual services, is grossly exorbitant, excessive and unconscionable.” And it will be seen that in the order made by the Court, and complained of by the petitioners, the exact words, “fraudulent and unconscionable,” are used with reference to the charges for compensation by the receiver. The paper has no place whatever in the proceedings. Nothing is asked by it. It is wholly voluntary, and gratuitous, and was evidently only for the purpose of putting in studied phrase and in writing contemptuous and insolent language. It is impossible for this Court to' maintain its integrity and pass by without notice and without action such a contemptuous proceeding as these petitioners have been guilty of, and we are of the opinion that the clerk of this Court should issue a written notice to each of the persons, Rudolph Alff, J. E. Millspaugh, L. U. Colbath, and T. C. Bailey, requiring them to appear before this Court on to-morrow morning, January 30th, at 10 o’clock A. M., to show cause why they should not be punished for their contempt; and, in case they fail *to *38appear, tbe clerk shall issue writ of attachment for their arrest, and to bring them forthwith before the Court.
Sandeord, C. J., and Henderson, J., concurred.