CENTRAL TRUST'OO';!t1: J WiA.BA.8l1,S'll. L. & P. RY. CO.
ST. 'L. &
CENTRAl, TnusT CO. OFNEW YORK and P. Ry. CO. and others. (Nos. ,2,357 and" Cause.)
(Ot"rcuit Court, E. D. Missouri, E. D. September, i9,1887 \
1'utt and Humphreys, receiverli of Wabll;sh"St. Louis & PacUl.c Railway Compa.ny, allowed $70,000 each for theIr serVICes to date.
Martin, Laughlin lfc Kern and Phillips lfc Stewart, ,for the purchasing committee. " S. Prie8t and Hough, Overall &; Judwn, for the receivers.
BREWER, J. The question now presented for determination is the compensation to be allowed to the receivers. The'master, upon considerationoHhe testimony, allowed each $112,500. Exceptions were taken by the purchasing committee, and these exceptions bring the matter before us for consideration. Heretofore all the principal allowances in this case have been l:lettled by the agreement of the parties, and after such agreement allthe court's action has been a pro forma approval. But this allowance is contested, and a large volume of testimony taken. As preliminary I remark that there has been no little implied criticism in the language of appellate courts of the magnitude of the allowances made in foreclosure cases to counsel, receivers, and others. We are admonished by utterances of the supreme court, to be cautious in this respect. In the case of Hinckley v. Railroad 00.,100U. 8.153, the amount allowed to the receiver was $10,000, for nearly two years' services. He claimed $1,000 per month: Upon this the supreme court, through 'Mr. Justice MILLER, made this observation: "The principal witnesses of appellant to sustain this exception are two gentlemen who were themselves receivers .of other roads, and thought they rightfully received $900 in one case, and $1,000 in the other, per month. Perhaps they werethe best judges of the value of their own services; but such is not always the case, andas there is confljcting testimony, and as this is the first time we have been called on to review the allowance made to railroad receivers by the circuit courts, we db not see that the economical administration of insolvent companies will be promoted, or that justice requires a higher standard of compensation than these courts generally give, to whose discretion the subject must be largely remitted." In the caSe of 1'ru8tee8v. Greenough, 105 U. S. 527, certain allowances were set aside by the supreme court, and in respect to this matter of al lowances generally this language is to be found: "In the vast amount of litigation which has arisen in this countty' upon railroad mortgages. where various parties have intervened for the protection theirrights, and the fund.has been subjected to the control of the court, am' placed in the hands of receivers or trustees, it has been the common practice as well in the courts of the United States as in those olthe states, to make fail .and just allowances for expenses and counsel fees to the trusteel3, or other
parties, promoting the litigation, and securing the dne application of the property'to the trusts and charges to which it was snbject. Sometimes, no doub., these allowances have been excessive, and perhaps illegal; and we would be very fa'r from expressing our approval of such large allowances to trustees, receivers, and counsel as have sometimes been made; and which have justly excited severe criticism. Still, a just respect for the eminent judges under whose direction many of these cases have been administered, would lead to the conclusion that allowances of this kind, if made with moderation and a jealous regard to the rights of those who are interested in the fund, are not only admissible, but agreeableto lbe principles of equity and justice. " This court has, in the progress of thi.s very case, as well as at other times, expressed its intention to proceed cautiously, and, while giving adequa,te compensation, to not6verstep the bounds of such compensation. I remark again that the question of allowanc'es is a judicial one, and while, as it is said, the matter is left to the discretion of the court, it is discretionary only in the sense that there are no fixed rules to determine the proper allowance, and is not discretionary in the sense that the courts are at liberty to give anything more than a fair and reasonable compensation. We desire to see the officers and agents of the court well paid, in order that men of character and ability may be willing to accept the burdl"ns and responsibilities of these trusts; but at the same time we may not forget that the property to be charged with these allowances is not ours, that there are many thousands scattered all over the land who are the owners, whose property: by the strong hand of the law has been taken out of their custody, and who look to us to see that no unjust or excessive burden is cast upon them. We may not exercise the generosity of owners,but are closely limited to the justice of judges. Our dl,lties are as sacred, our responsibilities more solemn than those of any other partiestlonnected with this foreclosure, for our action is almost certainly final. With these preliminary observations I pass to a of the facts. We have already allowed these receivers $50,000 each, and the purchasing committee, representing the present owners of the property, insi8t that this is full compensation. The master, estimating the duration of the trust at three and one-half years, has allowed, as I have stated, $112,. 500 to each. It is well said by Mr. Justice BRADLEY, in the case of Gcywdrrq) v.' Railroad Co., 1 Woods, 331: "It would hardJy be a proper rule for governing this case to inquire what anothl'r even competent person would have been. willing to do the work for. The ,receiver's office is not put up at auction. His compensation is not fixed on that principle at all. The chancellor selects a person whom he regards competent anci trustworthy, and the amount of cOD;lpensation is graduated somewhat by the duties, and somewhat by the responsibilities, of the situation. It seems to me that the peculiar duties, responsibilities, and accountability of a receiver entitle him. to a larger amount than would be demanded by the head officer· of an ordinary. railroad of this size." The administration of this Wabash property has been under my supervision. It is true that my then associate, Judge TREAT, was more familiar with all the details, and therefore exercised a more immediate constant supervision, and was doubtless more familiar with lill the
CENTRAL TRUST CO. tI. WABASH, ST. L. & P. BY.
varied steps taken in it, and we the benefit of his knowledge in coming to our conclusions; but I am familiar enough with its administration to appreciate its magnitude, and the. labor and· responsibility of the receivers; and beyond testimony which was ,given before us of the general outlines of the administration, I rest upon my own recollection and knowledge of what took place. In determining the amount of compensation, we are to regard the magnitude of the trust, the care and responsibility springing therefrom, the time occupied in performing its duties, the skill and ability displayed, and the success which hll$ attended its adminiatration., Messrs. Tutt and Humphreys were appointed receivers in the latter part of May, 1884. The last of the property was surrendered to the purchasing committee on the first of April, 1887. During the trust they have received and paid out about $60,000,000. The mileage at the time of. their appointment was about 3,600 miles. The property did not consist of a single line covered by a single mortgage, but was a system made 'up of the consolidating and leasing of some 30 or 40 different roads, upon each of which was one or more mortgages. About $4,000,000 of floating and pressing debts were resting upon the company; its credit was gone; it was a wreck. The property itself in many parts of the system was in very poor condition. Within a short time after their appointment the disintegration of the property cOmmenced. Line after line was surrendered to trustees, mortgagees, and lessors, so that by the first of January, 1887, they had less than 1,000 miles under their control. Of course, to take charge of a system so com, plicated, with so many varied and conflicting interests, so many underlying mortgages and separate branches, in such poor physical condition, with such a load of pressing debts, and with such a complete loss of credit, cast an immense burden of care and responsibility on these gentlemen, and required on their part the exercise of the highest skill and ability. It has been often said, and I think with truth, that no vaster and more complicated trust has, within the history of railroad enterprises in this country, been committed to anyone. To say that full and complete success attended thehdabors,under such adverse circumstances, is in itself the highest encomium that can be placed. I had occasion to .say, nearly a year ago, in respect to their action: "Their administration has been so successful that during the length of two years and a half, in which it has been carried on, not only has there been no challenge in the court of primary administration of the propriety of their appointment, but there has not been even a suspicion suggested he:r;e of any impropriety of conduct on their part, or any latlk of fitness for the duties intrusted to them." And I can at this day repeat that language and say that there has been no complaint in this court of a dollar improperly withheld by these gentlemen, and that the only charge made against them, a charge which upon examination was proved to be without foundation, was that they had in the payment of. interest preferred the bonds of one division to those of another. Another matter to. be considered is this: .At the inception of their administration they found many labor claimS pressing, and laborers threatening to quit for lack of payment.
personalgliamnty they obtained' money: to the most pressihg (jf these daims,Brtd fmnltirheto time,. as emergencies arose, they! continued in likemknner -to obtain1Vhatever was necessary tJo<;satistyJpre$eti.t The.. of the vartced on'theIr personalgllarantydurlhg: the years of thIS admmlstratioo is·abGut $22,000,OO(h The"value-ofthis action on the,part'of tJ:1ese receivers (action whichhaslsecutEM the continuous and smooth working of the ;system )01l:0i hardly be overestimated. . On the' other hand·, it'mhst be noticed that neither one of thesegen:tlemen de.oted his entire time to the business of the receivership. Mr. Tutt waspliior to his appdintmeht the president of the Third National Bank or-St: Louis, and·eontinued to discharge its duties in connection with 'those of the receivershilJ.. Mr. Humphreys, who had been a member of the firm·'of E. D. Morgan &'Go., aDd at the time of his appointmeut engaged in winding tip its allRirs,eontinued to devote part of his time to the :;ame duties. It is also true that, early in this administration, authorityvvas given by this court to th recei-vers to issue $2,000,000 ofreceivers'certificates,' ttl meet the urgency of these floating debts, and that the daily receipts from the system were large,. so that these gentlemen had something to fall briek Up611 and protect them against 16ss in their personal·guaralities.:i:t is· also true that they had a most accomplished general manager, Mr. Talmage; who had the personal charge of the road,and who was assisted by very competent of the and able gentlemen in the various departments under hIm. It would be a waste of time, I think, togo more into details of this administration; the main featureS are detailed in the testimony before us, as well as familiar to myself, at least, from personal observation: Beyond these facts we have the testimony of several gentlemen as to the value of the themselves,with the dignity which has characservices. The terized their conduct throughout this entire administration,. have placed no estimate Upon the value of their services'; .they have briefly and modestly told the s:tory of their labor and cares. ' The gentlemen who have given us the benefit of 't heir opinions are these: . Gerard B. Allen, one who for many years was one of St.· Louis' best citizens,a merchantalld manufacturer here, and who had no little experience inthe administration of trusts; thought that $100,000 to each receiver was a.fair compensation. S. W. Fordyce, the president of the St. Louis, 'l'ex8.s &, Arkansas Railroad, at one time receiver of that road, placed his figures at $125,000. Robert E. Carr, atone time. president of the Kansas Pacific Railroad, alid gentleman of considerable experience in railroad'matters; named $100,000.1 S. M. Breckenridge, a lawyer of distinction in this city, and of experience in railroa.d foreclosures, thoughtthe sum fixed by the mabier, $1l2,5DO, was rea8onable. William .Taussig,' general manager of the St. Loilis Bridge, & Tunnel Company, 'said$30,'OOO't;>er annum. On the other hand, George' H. Nettleton, general manager of the Kailsas Scott & Gulf'road, lind the 'Kansas Gity,Springfield & Memphis road, With its extensions, and a 'Tailroad'man (jf large experience', having served as a receiver, thought
ST. L. & P. RY. CO.
$15,000 a year fair compensation. Henry Morrill, 'general manager of the St. Louis & SaIl Francisco, said from $10,000 to $12,000. G. W. Parker general manager of the Cairo Short Line, said from $6,000 to 612,000. H. superintendent of. the Missouri Pacific, fixed it at from $8,000 to $10,,000. Charles Hamilton, superintendent of the, Mobile & Ohio, thoaght $10,000 to $12,000. ,F. C. Wyatt"at ,one,'timesuperinteildent of the Humeston & Shenandoah, naineq"$15,'ObO; and John' ,O'Day, the first of the St. Louis&'San Francisco, fixed ,it at from $10,OQO to $15;000. Obviously; there is a "'ast difference between the figures of these various gentlemen. They are all witnesses whose opinions are entitled to the highest respect on, account of their characters, their abilities, and ,very that exist between them their ,expetience; shq:wthat"thl:lre is or rule to guitle us, and that we must fall back at last upon our ownjudgment of what under the circumstances would be fair and reasonable compensation for,the' services. Beyond the opinions of these witnesses, we have been furnished with evidence of the salaries and compensations'paid' toraiiroad officials and receivers in other places; some of them quitehigh,s6ineof them verylow. These furnish but little assistance, because we are not advised of the ciroumsmiicesunder wh:iorlthey w:erefixed; each ctL'3e:must standby itself" Bearing in' mind, ,the successfuladmiilistration and felicitiou8 outeome'of'thistrust, and also bearing in mindnthe admonition of the supreniecourt on the subject in controversy, and re.memberinp; that Wei can orily, :anow. "fair and compensation for services actually rendered,' and not that which the generosity of an absolute owner might prompt, we' ..have fixed upon a rate of compensation intermediate between the high arid low: estimates above mentioned. The property was in the custody of these gentlemen less !than three years, but, of course,subsequent'to the surrender of the property they have 'been and are still engagedin:closihg up the trust. There are contingencies which may exPos&'them in the future to tedious and painful litigation. Wecannot aayet say, definitely to what annoyance they 'may be exposed, or what labor may yet be cast upon them. Therefore we shall not fix the amount, as did the master, to cover all the services of this trust, but simply make ancallQwance to cover everything to date. The fact that there were two receivers; ,do'b.bt1ess enabled'eiwldodevote some time to his other business; :andso,ifwe allow $140,000, or $70,000 each, for services to date, we think the owners of the property will have paid ,no more than they ought toha'Ve paid for the services ofthesegentlemen;andthe receivers, if disappointed in not receiving what from th:eaction oithe master they may have: expected',will remember that we are trying to be as careful with this property as they were during their cadministration; and that' a sense of duty to theo:vl'tners 'prevents us from ;sustaining in full the allOWtllioes made by, the master. L The exceptions of the purchasing committee will be sustained, and the allowance to: each of,the receivers for services ,to, date will be fixed at $70,000.
,DUNDEE MORTGAGE TRUST INVEST. CO. v. CHARLTON, Sheriff, etc.
(qircuitOourt, D' Oregon. October 10, 1887.)
; Any person who has property listed on the assessment roll of a county for taxatIOn is "interested" in the procpedings of the county board of equalization, aIld may appear before it, and have redress against an unjust and unequal valuation of property, on:. said roll, to his injury, whether the same is causeq by an over-valuation of 4is own property, or an under-valuation of that of others. .
A person. who is aggrieved by. the' wrongful action· of an assessor, in the valuation of his own or other's property for taxation, cannot maintain a suit in equity to enjoin the collection of any portion of the tax resulting from such action, unless he first seeks redress at the hands oft'he county board of equalization, lI.ll:provided by lSyllabu89y th60ourt.) "
Jqhn W. WhaUey, for plaintiff.
W. R. ,Bilyeu, for defendants.
DiJlADY, J.. This suit is brought to restrain the county of Linn, and the defendant Charlton, its sheriff, from collecting. the of the taxes levied by the county in 1884 on the mortgages owned by the plaintiff on reM property therein, amounting to 81,172.85. From the bill it appears that the plaintiff is a foreign corporation, formed under the laws of Great Britain, and is the owner of promissory notes of the.nominalvalue of$150,348.71, secured by mortgages on lands in Linn county; that the. same were assessed by the assessor of said county, in the year 1884, for taxation as real property, under the act of October 26, 1882, at their nominal value, while all real property not under mortgage was only assessed at from one-third to one-half its value; that the tax levied on said assessment of the plaintiff's notes and mortgages amounts to $2,345.90,-one-half of which in excess of the taxes levied on property generally of the same value, and is therefore alleged to be illegaL It also'appears that the plaintiff has paid the one-half of said taxes, .and that the county, through its proper officers, will, unless restrained by the decree of this court, proceed to make the balance of said tax by the sale of said notes and mortgages. The answers of the defendants admit the allegations of the bill, except as to the valuation of the real property not under mortgage, and aver that the same was valued for taxation at its true cash value, as required by The evidence in the case is quite voluminous and contradictory. But considering the relation of the witnesses to the subject-matter, and the interest which most of them have in the question involved in. the, controversy, their several means of knowledge, the character of their .testi1 Where a remedy is provided by statute for the excessive assessment of property, the tax-payer must avail himself of it, at his peril. New York & C. G. & S. Exchange v. GleWion, (Ill.) 13 N. E. Rep. 204, an. note.