A decree in a suit in a circuit court for the foreclosure of a
railroad, fixing the compensation to be paid to the trustees under
the mortgage from the fund realized from the sale, is a final
decree as to that matter, and this Court has jurisdiction on
appeal.
A holder of railroad bonds secured by a mortgage under
foreclosure, has an interest in the amount of the trustee's
compensation which entitles him to intervene, and to contest it,
and to appeal from an adverse decision.
When purchasers at a sale of a railroad under foreclosure
purchase under an agreement, recognized by the court and referred
to in the decree, that a new mortgage shall be issued after the
sale, a part of which is to be applied to the payment of the
foreclosure debt and a part to the payment of expenses, which
expenses include the compensation of the trustees under the
mortgage foreclosed, the purchasing committee named in that
agreement have an interest in fixing that compensation which
entitles them to intervene, and to be heard, and to appeal from an
adverse decision.
On the facts in this case the allowances made below are held to
be excessive.
The facts are stated in the opinion of the Court.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
Page 111 U. S. 685
In this case, the only question on the merits relates to the
compensation which ought to be allowed to the trustees and
receivers of a certain railroad mortgage for their services. A
preliminary question, however, is raised as to the right of the
appellants to bring the case here by appeal.
The New Orleans, Mobile and Chattanooga Railroad Company, on the
first of January, 1869, executed a first mortgage on its railroad
and franchises to secure the payment of 4,000 coupon bonds of
$1,000 each, with interest at eight percent per annum. Oakes Ames
and Edwin D. Morgan were the trustees. The former having died,
James A. Raynor was appointed in his stead. A second mortgage was
given in March, 1869, but was foreclosed in 1870, and the property
was bought in for the second mortgage bondholders, who reorganized
under the name of the New Orleans, Mobile and Texas Railroad
Company, and gave another mortgage (generally called the second
mortgage) to secure $2,000,000, subject to the encumbrance of the
first mortgage. Default being made in payment of interest, the
trustees, E. D. Morgan and James A. Raynor, in January, 1875, by
virtue of a provision in the first mortgage, took possession of the
property, but soon found it necessary to secure the sanction and
protection of judicial proceedings. On the 12th of March, 1875,
they filed a bill for foreclosure and sale of the mortgaged
property in the Circuit Court of the United States for the District
of Louisiana, and were appointed receivers in addition to their
character as trustees. The railroad covered by the mortgage was the
road running along the gulf between Mobile and New Orleans, and was
in a dilapidated condition, needing new bridges, new embankments,
and extensive repairs, as well as rolling stock and machinery. The
road and property were managed and taken care of by the trustees
and receivers for over five years, during which time Raynor had
special charge of the road superintending and managing everything
in that department, while Morgan looked after the finances of the
concern in New York. They brought the road up to an efficient
condition, and made it a desirable property. There is no doubt,
from the evidence, that their services were of the greatest value.
Raynor gave his
Page 111 U. S. 686
whole time to the road itself and its practical working,
superintended the erection of bridges, the raising of the
embankment on the marshes, the procurement of depot and ferry
accommodations in New Orleans and Mobile, and whatever related to
the actual management and superintendence of the road as an
important business thoroughfare of travel and transportation. In
November, 1875, the trustees applied to the court to allow a fixed
compensation to Raynor for the extra service he was performing. In
their petition they say:
"Your petitioners further represent that James A. Raynor has had
to perform the duties of general manager of the railroad, in place
of the officer of the company, and that, in the course of the year,
he has been put to more than the usual labor and care in the
management of the administration of the road itself, performing the
functions of manager and President and directors, besides the
functions of trustees. Your petitioners respectfully submit an
application for a salary or allowance to him during their
administration, either by the year or otherwise. No application for
trustees' allowances will be made or is designed herein, but only
in respect to the salary of this officer, and for a provision for
necessary expenses in order that the disbursements for operating
expenses and administration shall all appear."
This application was referred to the master, who reported that,
in his opinion, "an allowance of $10,000 per annum, with necessary
expenses, not to exceed $2,500 per annum, should be made to Mr.
Raynor," and this report was confirmed by the court, subject to any
exceptions that might be filed within thirty days. No exceptions
were filed, and Raynor received this allowance during the period of
his administration, and no question has ever been made of its
propriety.
In the latter part of 1879 it was deemed advisable that the
trust should be brought to a close and the property sold. About
that time negotiations were set on foot for a purchase of the road
in the interest of the Louisville and Nashville Railroad Company,
which was then extending its business ramifications throughout a
large portion of the southern states. In December, 1879, a large
number (more than a majority) of the
Page 111 U. S. 687
first mortgage bondholders executed an agreement by which they
appointed George Bliss, L. A. Van Hoffman, and Oliver Ames a
committee to negotiate and sell either the bonds or the railroad,
and, if the latter, to get a decree for foreclosure and sale in the
pending proceedings, with power to purchase in the property for the
common interest, and they all agreed to deposit their bonds with
the Central Trust Company of New York, subject to the disposal of
the committee, either for sale, or to be used in paying the
purchase money of the road. And the committee was specially
authorized, in concert with the trustees and receivers, to make an
arrangement with the Louisville and Nashville Railroad Company to
transfer the purchase of the road (when made by the committee) to a
corporation to be organized in the interest of that company, for
its bonds to the amount of $5,000,000, secured by vendor's lien and
first mortgage on the railroad purchased; it being, among other
things, stipulated as follows:
"The trustees and receivers to be protected against all their
obligations from management, bonds, contracts, complete or
incomplete, or otherwise, and all the liabilities of the trustees
and receivers, including all the expenses and charges of the
foreclosure, reorganization, and everything incident thereto, to be
paid in cash, to be furnished for the purpose, to the purchasing
committee. Four million dollars of such bonds to be disposed of by
the purchasing committee in exchanging bond for bond or bonds (and
coupons as aforesaid) secured by the said first-mentioned mortgage;
the residue of such four millions, and the other one million, of
such bonds the Louisville and Nashville Railroad Company to have
the right to use in providing the cash for the payment hereinbefore
mentioned, and in paying the amount necessary to be paid to
bondholders secured by the said first-mentioned mortgage, who shall
not become parties to this agreement; the surplus, if any, to
belong to the Louisville and Nashville Railroad Company."
On the 10th of February, 1880, another agreement was entered
into, called the purchasing agreement, between the bondholders of
the first part, the same purchasing committee of the
Page 111 U. S. 688
second part, and David Thomson and William S. Williams, of the
third part, by which the authority given to the purchasing
committee by the previous instrument was confirmed, including that
of taking the bonds of the Louisville and Nashville Railroad
Company in exchange for the first mortgage bonds of the New
Orleans, Mobile, and Texas Railroad Company, and Thomson and
Williams, proposing to act as purchasers, engaged to obtain from
the Louisville Company an agreement to give its coupon bonds for
$5,000,000 to carry out the arrangement substantially as indicated
in the former agreement. If such an agreement should be obtained,
then the railroad, franchises, equipment, and property should be
sold under a decree of foreclosure and sale in the pending cause
according to law, and bid in by the committee for the purpose of
carrying out the arrangement. It was also agreed that the receivers
and trustees should, by the Louisville Company, or in some other
satisfactory manner, be protected from all their obligations and
liabilities, and it was further agreed as follows:
"That all liens that may be declared to be superior to the first
mortgage bonds, and that the certificates and liabilities and
lawful fees, charges, and expenses of the receivers and trustees,
and the disbursements of the committee, all to be decreed by the
court, unless fixed by agreement, including all the expenses and
charges of the foreclosure and of the proceedings to carry out this
agreement, less amounts which may be available in the receivers'
hands for payment upon such certificates, shall be paid in cash at
the time to be appointed by the court for taking title under the
foreclosure sale, and that all amounts necessary to be paid to
bondholders who shall not become parties hereto shall also be paid
in cash at the same time, and the purchasers [that is, Thomson and
Williams] hereby agree to provide the necessary amounts, and, for
the purpose, they will be entitled to such of the said five million
dollars of bonds as shall not be exchanged for bonds deposited as
above provided. Said bonds to become their absolute property,
charged only with the payments herein last above provided for."
It was further agreed that the purchasing committee, in
Page 111 U. S. 689
making bids, should act under the direction of the purchasers
(that is, Thomson and Williams), provided that the price should be
sufficient to provide for the payment of all liens prior to the
mortgage, and of all charges, expenses, and liabilities, and that
they should assign their bid, or take title and convey the same to
the purchasers, or make other disposition thereof as requested by
the purchasers.
In pursuance of this arrangement, and by consent of Ames and
Williams, trustees of the second mortgage, the final decree for
foreclosure and sale was made on the fifth day of March, 1880. By
the fifth clause of this decree it is declared and decreed that,
besides the first mortgage bonds, 4,000 in number, and the coupons
for interest thereon, there was due (in the words of the
decree),
"for replacement and repairs, additions and ameliorations made
under the authority of this Court, the sum of seven hundred
thousand dollars, as shown by certificates, and which sum is a
charge and encumbrance upon the said mortgaged property, according
to the terms of the securities issued under the order of this
Court, besides the costs and expenses of the suit, and of the
management of the property, whereby it appears to the court that a
sale of the property should be made, and the motion for the sale is
therefore allowed."
By the sixth clause, the trustees were directed, under the
supervision of the master, to advertise and sell the mortgaged
property for cash. The seventh clause was evidently inserted in
view of the preliminary agreements which had been made, and, among
other things, decreed as follows:
"Seventh. The court further orders and decrees that it shall be
competent for the holders of a majority or greater number of the
bonds described in the deed of trust of the plaintiffs to form an
agreement appointing a purchasing committee, or if such an
agreement has already been made by a majority of the bondholders,
the committee so appointed therein may act, if the agreement
empowers. . . . A copy of this agreement shall be deposited with
the master, and be open to inspection ten days before
Page 111 U. S. 690
the day of sale. . . . No more money shall be required than
shall be sufficient in the opinion of the master and trustees to
assure the payment of the charges and privileges upon the fund, as
shown by this decree, and the amount to be ascertained by the
master's report before mentioned, and also the charges, including
those arising under the orders of the court before mentioned,
defined in the first article of the deed of trust, and consisting
of expenses of management, conduct of business, repairs,
replacement, ameliorations, incidental charges of administration,
and for compensation of service, for which there is not adequate
provision for payment from the moneys on hand, and these charges
the master must ascertain, and give notice of at the sale."
By the eighth clause of the decree, the master and trustees were
directed to report the sale when made, with a draft of the
conveyance to be made to the purchaser, or any assignee or
substitute for the purchaser, and it was declared competent for the
purchasing committee to assign their purchase. By the eleventh
clause it was decreed that the trustees and receivers might move
for their discharge at the time of the confirmation of the sale,
and in the meantime might settle all their accounts in either
capacity which had not been adjusted. It was further decreed that
any surplus produced by the sale should be paid to the trustees of
the second mortgage, and that these trustees should advertise and
sell any property covered by the second mortgage which was not
covered by the first mortgage.
Under this decree, the sale was advertised to take place on the
24th day of April, 1880. A supplemental decree was made on the 9th
of March, 1880, directing the master to proceed between that date
and the day of sale to examine the accounts of the trustees, and
ascertain what sums were due under the article of the deed of trust
referred to in the decree, which provides for the payment of the
expenses of management, charges for the custody of the property,
compensation for service and allowance to trustees, etc. The master
made a preliminary report on the accounts on the 23d of March,
1880, but not on the subject of allowance to the trustees, or other
preferred charges.
Page 111 U. S. 691
On the 27th of March, 1880, the purchasing agreement of February
10th was filed with the master, and the agreement of December 16,
1879, was also laid before him.
On the 29th of March, the counsel for the trustees and receivers
filed with the master a statement of the charges to be paid by the
purchasers at the sale to be made on the 24th of April, in
substance as follows:
Certificates issued to raise money for repairs, etc. . .
$700,000
To John E. Parsons, for services as counsel. . . . . . .
15,000
Allowance to E. D. Morgan and James A. Raynor for
services and compensation in the management of the
railroad and conduct of the business other than the
services of management and superintendence of the
manager, being the particular services incident to
trustees and receivers, annually from the date of
entry on the property, $25,000; to be apportioned
between them as they shall agree.
Allowances (to which the plaintiffs assent) to the
master of the court. . . . . . . . . . . . . . . . . 5,000
The costs and expenses of the suit in court.
A charge by the solicitor to be separately preferred.
On the 2d of April, 1880, William S. Williams and David Thomson
filed objections and exceptions to this statement, stating that
they did so as parties to the purchasing agreement of February 10,
1880, and as bondholders; and, as grounds of exception, state that
there was no proof to sustain the charges, and that they were
exorbitant and illegal.
On the 3d of April, the counsel for the trustees and receivers
moved to overrule the exceptions, as being in favor of no person
having any interest.
The master proceeded to take proofs on the subject of the
charges, and a great deal of testimony and documentary evidence
were adduced, going to show the great amount of trouble and
litigation which the trustees and receivers and their counsel had
to encounter in the five years and more during which they had
control of the property. This examination lasted up to the day
preceding the sale.
Page 111 U. S. 692
On the 6th of April, Williams and Thomson withdrew their
opposition to the item of $700,000 for receivers' certificates. On
the 8th of April, Foster and Thomson, named in the agreement of
February 10, 1880, as attorneys to represent the purchasers
(Thomson and Williams) in settling the form of the decree, and in
examining the title, etc., and who were to consult with the counsel
for the trustees in carrying out the entire arrangement, filed an
objection to the charges and allowances submitted by the trustees,
except as to the receivers' certificates, and joined in the
objections and exceptions of Williams and Thomson, and asked to be
heard.
Thereupon the counsel for the trustees moved to dismiss the
exceptions, both of Williams and Thomson and Foster and Thomson, on
the following grounds:
"Williams and Thomson appear as interposed persons or as brokers
of the Louisville and Nashville Railroad Company to accomplish the
purchase of the railroad in charge of the plaintiffs or trustees.
Their contracts are with a voluntary committee of bondholders who
have made a purchasing agreement. They have not purchased the
railroad nor purchased the bonds, but have made an agreement with
the committee that they should purchase and sell to the railroad on
a variety of conditions which may not be fulfilled. Any higher
bidder may acquire the railroad. The trustees have a reserved right
and obligation to purchase the road. Williams and Thomson may not
appear and carry out one word of the engagement, or comply with the
conditions to bind the buyer with the bondholders' committee. They
have no right to contest the claims or the accounts of the
plaintiffs or those of the attorneys. They must take the property
as they find it and the charges on it should they purchase the
property."
"2. The Louisville and Nashville Railroad Company furnish
$5,000,000 in bonds to be used for the purchase. A portion is to be
used to buy the bonds of the old company; a part to pay
preferential charges and claims, and to return the property,
amounting to $300,000. These two persons are to have the remnant
not consumed by those charges on that fund. So, to make their
commissions or brokerage or compensation larger, they come to
Page 111 U. S. 693
contest with trustees, attorneys, and officers of court who for
five years have been at work. The title to do this is
insufficient."
"3. Foster and Thomson are attorneys, apparently, for Williams
and Thomson to examine the title and arrange for the fulfillment of
terms, but have no claim that Williams and Thomson have not."
It appears from the master's report, afterwards filed, that on
the 20th day of April, 1880, the solicitor for the complainants and
the committee of bondholders withdrew "the previous claims
(submitted March 29, 1880) for any of the parties under the
authority they conferred, all parties preferring to submit their
claims anew," etc. The withdrawal was allowed as prayed for,
whereupon the said claims were presented anew, as follows,
viz.,
Amount of certificates of indebtedness. . . . . . . . .
$700,000.00
Amount due to John E. Parsons, professional services. .
15,000.00
Amount due J. A. Campbell, professional services, to
be settled. . . . . . . . . . . . . . . . . . . . . .
20,000.00
E. D. Morgan claims for $15,000.00 annually from date of
filing bill to April 1, 1880, for services, trustee
and receiver, amounting to. . . . . . . . . . . . . .
75,780.80
J. A. Raynor likewise claims. . . . . . . . . . . . . .
75,780.80
Allowance recommended for master's services . . . . . .
5,000.00
Allowance recommended for master's services, for journey
to New York under decree, actual expense. . . . . . . 117.25
Costs of the marshal in the cause . . . . . . . . . . .
Costs of the clerk, in the cause. . . . . . . . . . . .
Attorney's docket fee . . . . . . . . . . . . . . . . .
20.00
On the 23d of April, Williams and Thomson, and Williams
separately, filed applications to the court for leave to be heard
before the master and the court in opposition to the claim for
charges and allowances; Williams stating that he held first
mortgage bonds to the amount of $582,000, and represented others,
and that he was a trustee under the second mortgage, and, as such,
entitled to any surplus of the proceeds of sale, and interested in
resisting and reducing the charges and allowances. Thomson and
Williams stated that they had acquired rights under the purchasing
agreements, and were also first and
Page 111 U. S. 694
second mortgage bondholders, and had an interest as such to
oppose the charges.
The court granted both of these applications, and the parties
were fully heard before the master on the 23d of April.
The sale took place under the decree on the 24th of April, as
advertised, and the property was bid off and adjudicated to the
purchasing committee of the bondholders, Bliss, Van Hoffman, and
Ames, under the direction of Williams and Thomson, according to the
programme of the agreement, and the purchasing committee at their
request, assigned the bid to a new company organized for the
purpose, called the New Orleans, Mobile, and Texas Railroad
Company, as reorganized, and to this company the trustees executed
a deed accordingly.
On the 3d of May the master made his report on the subject of
charges and allowances, stating fully the proceedings before him.
Among other things, he says:
"At the final hearing the only question discussed by the parties
was as to the amount of the allowances to be made to the
complainants for services incident to trustees and receivers; the
exceptions to all of the other items of the claim for allowances
seemed to have been abandoned."
And his conclusion is as follows:
"That the exceptions of the opponents as to the amounts claimed
by Messrs. Morgan and Raynor for their services as trustees and
receivers at the rate of $15,000 per annum, as being excessive,
should be maintained, and that an allowance be made to the said
Morgan and Raynor, trustees and receivers, for their services under
the deed of trust herein at the rate of $5,000.00 per annum, from
March 12, 1875, to May 8, 1880, amounting to $25,677.24 (the said
amount to be settled by and between them), as a sufficient
compensation for their services. The preferential charges,
allowances, and costs to be paid in the cause are as follows:"
Am't for certificates of indebtedness . . . . . . .
$700,000.00
" due to John E. Parsons, counsel . . . . . . . 15,000.00
" J. A. Campbell, counsel . . . . . . . . . . . 20,000.00
" E. D. Morgan and J. A. Raynor, trustees . . . 25,677.24
" for publishing notice of sale in New York
New Orleans, and Mobile . . . . . . . . . . 1,485.70
Page 111 U. S. 695
" marshal of the court. . . . . . . . . . . . . 26.00
" clerk of the court. . . . . . . . . . . . . .
" master's expenses to New York to deposit
bonds . . . . . . . . . . . . . . . . . . . 117.25
" master's fee for services (left to the
discretion of the court). . . . . . . . . .
" cost of mortgage certificates . . . . . . . .
This report was excepted to by the solicitor for the trustees
and receivers, and, the exceptions being argued, an order was made
on the 7th of May, 1880, recommitting the report, with instructions
to allow Edwin D. Morgan a salary of $10,000 per annum, and James
A. Raynor $15,000 per annum, and to the solicitor of the trustees
$6,000 per annum, all without reference to other allowances. The
remainder of the report was confirmed. In accordance with these
instructions, the master reported on the disputed allowances as
follows:
Am't of allowance to J. A. Raynor, trustee, from date of
entry upon the property, Feb'y 1, 1875, to May
8, 1880, 5 yrs. 3 mos. and 8 days at $15,000.00
per annum . . . . . . . . . . . . . . . . . . . . . . .
$79,083.28
Am't of allowance to E. D. Morgan, trustee, same time as
J. A. Raynor at $10,000.00 per annum. . . . . . . . . .
52,722.15
Am't of allowance to J. A. Campbell, counsel fees, from
Feb'y 1, 1875, to May 8, 1880, 5 yrs. 3 mos. and
8 days at $6,000.00 per annum . . . . . . . . . . . . .
31,633.28
This report was excepted to on the 8th of May by Williams and
Thomson as purchasers named in the contract of February 10, 1880,
and by Williams personally as holder of 582 first mortgage bonds,
and as representing others holding similar bonds, and also as
trustee under the second mortgage. On the 17th of May the
exceptions were dismissed. From this order the present appeal was
taken on the 21st of May by Williams and Thomson, and by Williams
personally, in the characters named above. After the appeal had
been taken and allowed, the trustees filed their general accounts,
which were duly
Page 111 U. S. 696
reported on and confirmed, including therein the full charges
allowed by the master in his last report, and the trustees were
discharged from their trust.
It may be remarked at once that the proceedings in the court
below, after the appeal was taken, if it was perfected in time,
would not affect it if Williams and Thomson had a right to appeal
and if the order was an appealable one. These conditions existing,
that branch of the case was no longer in possession of the court.
There is no question that the appeal was perfected in time; the
bond was approved and filed on the 31st of May, 1880.
As to the right of Williams and Thomson to appeal, this depends
on the right to intervene and contest the allowances to the
trustees, or rather on the power of the court to allow them to do
so. And we do not well see how this power can be doubted if they
had a substantial interest at stake. From the first, they claimed
to have such an interest not only as interested under the
purchasing agreement (a copy of which they filed with the master),
but as bondholders chargeable with the payment of their part of the
charges. Though a motion was made to overrule their exceptions, the
master declined to pass upon it himself, and the proceedings before
him were continued and progressed in (apparently by mutual consent)
until the court could hear the motion. This it did on the 23d of
April, when Williams separately and Williams and Thomson jointly,
presented (as we have seen) formal applications to be allowed to be
heard before the master and the court. Williams claimed the right
to be heard on the ground of his being a holder of first mortgage
bonds to the amount of $582,000, and of representing others, and on
the further ground of being one of the trustees of the second
mortgage, entitled to any surplus, and Williams and Thomson claimed
the same right, as being interested under the purchasing agreement,
and also as being first and second mortgage bondholders. The court
very properly, as it seems to us, granted their application. Their
status as bondholders and otherwise does not seem to have been
denied. As bondholders, and as interested under the second
mortgage, if not under the purchasing agreement, we
Page 111 U. S. 697
do not well see how the court, under the circumstances, could
have refused their application. The trustees themselves, who were
the nominal complainants, were the parties interested to obtain
large allowances for themselves, and could not be relied on to have
them reduced.
From the time of the sale on the 24th of April, 1880, if not
before, Williams and Thomson became interested in the amount of the
charges and allowances that were paid out of the extra $1,000,000
of Louisville and Nashville Railroad Company bonds. They were then
committed to the carrying out of the purchasing agreement. The bid
of the purchasing committee of the bondholders was made on their
account and under their direction; it was made for them under the
agreement, and they were virtually the purchasers, and from that
time the agreement of February 10, 1880, governed the proceedings
and rights of the parties. The bid was only $4,000,000, and yet the
Louisville and Nashville Company issued its $5,000,000 of bonds
pursuant to the agreement, $4,000,000 of which were to go to the
first mortgage bondholders, and the other $1,000,000 were retained
by the purchasers under their agreement to advance sufficient cash
to meet the preferred claims. This they did, and all the claims
were paid, the present controversy relating to the proper
allowances to the trustees and receivers only remaining open. After
the sale it was the purchasers, and not the bondholders, who were
interested in those allowances. It was a matter of no moment to the
bondholders what allowances were made, for they were to have bond
for bond in any event; it was a matter of great moment to the
purchasers, for every dollar allowed to the trustees was so much
less for them.
This case differs from that of
Swann v. Wright's
Executors, 110 U. S. 590,
recently decided by this Court. In that case, Swann had purchased
the railroad, under a decree which provided that the sale should be
subject to the liens already established, or which might be
established on references then pending, as prior and superior to
the lien of the mortgage, and the claim of Wright was one of this
class, having been before the master, on reference, for nearly a
year when the decree was made, and warmly contested by the
bondholders. The
Page 111 U. S. 698
master did not report on the claim, it is true, until after the
sale was made and the purchaser applied to oppose its confirmation,
and was not allowed to do so, and the sale was afterwards confirmed
expressly subject to all liens established as specified in the
decree of sale. Swann afterwards filed a bill to set aside Wright's
claim for fraud in its inception. This bill was dismissed, and the
decree of dismissal was affirmed by this Court on the ground that
the property was purchased expressly subject to all established
claims, or claims that might be established on references then
pending, which included Wright's claim as much as if it had been
named.
From this recital of the facts in that case it appears that the
bondholders were permitted, as Williams and Thomson (also
bondholders) were in the present case, to contest the claim sought
to be established as prior to the mortgage. The purchaser was not
allowed to contest the claim, because he had no right to do so by
virtue of any stipulation made either at or before the sale,
whereas in the present case, by the preliminary agreement made
between the bondholders and the proposed purchasers (and who
afterwards became such), it was expressly stipulated that the
latter were to have all that should be left of the purchasing fund
agreed on, after paying $4,000,000 for the bondholders, and all
preferred charges and allowances -- a stipulation which made them
directly interested in the amount of such charges and allowances,
and made them so by the privity of the bondholders themselves.
This, as it seems to us, placed the purchasers in the present case
in a very different position from that which Swann occupied in the
case cited. But if we are mistaken in this view as regards their
position as purchasers, there can be no doubt that as bondholders,
they had a right, under the leave of the court (which was given to
them, and which could not have been properly refused), to oppose
the charges and allowances in question and to appeal from the order
by which they were allowed.
We think that the position of Williams and Thomson made them
quasi-parties in the case and brought them within the
reason of the former cases decided by this Court, in which persons
incidentally interested in some branch of a cause have
Page 111 U. S. 699
been allowed to intervene for the purpose of protecting their
interest, and even to come into this Court, or to be brought here
on appeal, when a final decision of their right or claim has been
made by the court below. We refer to the cases of
Blossom v.
Milwaukee R. Co., 1 Wall. 655, where a purchaser at
a foreclosure sale was admitted to appeal;
Minnesota
Company v. St. Paul Company, 2 Wall. 609,
69 U. S. 634,
to the same effect;
Hinckley v. Gilman, Clinton &
Springfield Railroad, 94 U. S. 467, where
a receiver was allowed to appeal from a decree against him to pay a
sum of money in the cause in which he was appointed receiver;
Sage v. Railroad Company, 96 U. S.
712, where parties interested were allowed to appeal
from an order confirming a sale;
Trustees v. Greenough,
105 U. S. 527,
where an appeal from an order for allowance of costs and expenses
to a complainant suing on behalf of a trust fund was sustained, and
Hovey v. McDonald, 109 U. S. 150,
where an appeal was allowed to be brought against a receiver from
an order made in his favor. That the order was such as could be
appealed from, we think, is equally apparent. It was final in its
nature, and was made in a matter distinct from the general subject
of litigation -- a matter by itself, which affected only the
parties to the particular controversy and those whom they
represented.
We are then brought to the merits of this controversy. It
concerns only the allowances to the trustees; nothing else was
insisted on before us. The allowance made by the court below is
certainly, to say the least, a liberal one. A great deal of
evidence was adduced to show that a vast amount of labor and
litigation, and operations of perplexity and difficulty, were
performed by the trustees while they were acting as receivers of
the court. We are perfectly satisfied that their application for
allowance was a very meritorious one. They really lifted the road
out of the mire, and renovated it from beginning to end, made
important contracts, built expensive bridges, purchased a large
amount of iron, and kept the concern on its legs until it could
walk alone, the financiering part not being the least important or
difficult. But considering that one of the trustees had a very
liberal salary as manager and superintendent, and
Page 111 U. S. 700
his expenses paid, we think that the allowance made by the
circuit court was larger than it should have been. It is
unnecessary to review the evidence; it is too voluminous. The
question is one of fact and estimation, and we will content
ourselves by stating the conclusions at which we have arrived.
We are of opinion:
1. That Williams and Thomson had such an interest, and were so
situated in the cause, that they had a right, by leave of the
court, to except and object to the charges and allowances presented
by the trustees and receivers, and that they had a right to appeal
from the decree of the circuit court to this Court.
2. That the said decree was a final decree for the purposes of
an appeal.
3. That the allowance to said trustees was greater than, under
the circumstances, it should have been. In our opinion, the gross
sum of $75,000 would have been a just and sufficient allowance to
said trustees jointly for their services and compensation as
trustees and receivers, exclusive of the salary paid to James A.
Raynor as manager and superintendent.
4. That the residue of the order and decree of the circuit court
should be affirmed, and that each party should pay their own costs
on this appeal, except the costs of printing the record, which
should be equally divided between the parties.
It is therefore the judgment of this Court, and so ordered,
that the decree below be reversed as to the allowance made to Edwin
D. Morgan and James A. Raynor as trustees and receivers as
described in the record, and that the cause be remanded, with
instructions to enter a decree allowing the said trustees and
receivers jointly for their services and compensation as such
trustees and receivers (independently of the salary allowed and
paid to the said James A. Raynor, as manager and superintendent),
the gross sum of $75,000, instead of the allowance made by the
decree appealed from.
It is further ordered that the remainder of the said decree
be affirmed, and that each party pay their own costs on this
appeal, except the cost of printing the record, which is to be
equally divided between the parties.