Case Name: Maury v. Chesapeake & Ohio R. R. Co.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1876-09
Citations: 27 Gratt. 698
Docket Number: 
Parties: *Maury v. Chesapeake & Ohio R. R. Co.
Judges: 
Reporter: Virginia Reports
Volume: 68
Pages: 674–678

Head Matter:
*Maury v. Chesapeake & Ohio R. R. Co.
September Term, 1876,
Staunton.
Contracts for Services. — A railroad company, for the purpose of extending- their road, determine to issue their bonds for $10,000,000, to be secured by a deed on all their property to three trustees, one to reside in Virginia and two in New York, and they agree to pay to the trustees each $5,000. M is selected in Virginia, informed of the terms, and consents to act. The company determine to issue bonds for $15,000,000, and to have a fourth trustee, and pay to the four the $15,000. The deed is prepared, and it is executed by the trustees, M having been informed of the reduction of the compensation. The trustees execute about 2,000 of the bonds, and M performs all the service demanded of him, until the company, without the knowledge of M, makes another deed to two of the trustees, omitting M; and under this last deed the company proceeds to effect the loan on this last deed. Held :
1. Same — Breach by Employer — Compensation,—M having been appointed a trustee upon a specific compensation, and having been discharged by the company without his knowledge, he is entitled to have the compensation agreed upon.
2. Same — Same—Acquiescence of Employee. — M having executed the deed with the knowledge that the compensation was to be reduced by the payment to the four what was first agreed to be paid to the three, and having acted under the deed, he is entitled to recover from the company one-fourth of the $15,000; but not more.
Prior to the year 1868, the Virginia Central railroad company owned the railroad extending from Richmond to Covington in Alleghany county, except about sixteen miles extending from the eastern to western base of the Blue Ridge mountains, which had been constructed and was owned by the state of Virginia. Of this company Colonel Edmund Fontaine *was the president. Before the late war the state of Virginia had commenced to construct a railroad from Covington to the Ohio river, and for tnis purpose had constituted a corporation under the name of the Covington & Ohio railroad company. On this work the state had expended between two and three millions of dollars.
Under acts passed by the legislatures of Virginia and West Virginia, the Virginia Central railroad company was authorized to purchase the Blue Ridge railroad and the Covington & Ohio railroad upon certain terms, among which were that the company should raise a certain additional amount of stock, and should complete the road to the Ohio river; and the company was authorized to change its name to that of the Chesapeake and Ohio railroad company.
In August 1868 the Central railroad company appear to have raised the additional amount of stock required; and to enable the company to carry on the work it was determined to raise $10,000,000, to be secured by a mortgage on its whole road and all the property of the company, and a contract -was made with McGinnis, Brothers & Smith, brokers, of the city of New York, who were to be the agents of the company to raise the money by a sale of the bonds. In carrying out this agreement a mortgage of the property was to be executed to three trustees, two in the city of New York to be selected by the said brokers, and one in Virginia to be selected by the company; and though the fact is not stated in the agreement, it was proved to the satisfaction of this court, that the compensation to these trustees was to be $5,000 to each of them. To fill these offices, Philo C. Calhoun and William Butler Duncan, of New York, were selected by Messrs. McGinnis, Brothers & Smith, and*Matthew F. Maury, of Virginia, was selected by Col. Fon-taine, the president of the company; and Mr. Maury was informed of his selection and of the compensation he was to receive, and he consented to act.
Before the bonds had been prepared under this agreement, the parties in New York determined to have four trustees, and the name of William Orton was suggested in addition to the three before selected.
On the 30th of September 1868 the directors of the company adopted a resolution which, among other things, provided that the president and treasurer of the company should execute to four trustees, three of whom should reside in the city of New York and one in Virginia to be chosen by the president, whose aggregate pay should be $15,000, that being the sum expected to be to paid to three trustees. And by deed bearing date the 1st of October 1868, the whole property of the company was conveyed to the four persons named. This deed was executed by the trustees, of whom M. F. Maury was one, who acknowledged it on the 24th of October. It appears that Mr. Maury was informed of the resolution of the 30th of September before he executed the deed; but the only evidence of his acquiescence in the reduction of the compensation which had been before promised him, was his execution of the deed and his acting under it. And it should be stated that the deed provided for all expenses attending the execution of the trust and a sale of the property to be paid out of the profits or proceeds of sale.
The company, and its agents in New York; proceeded to have the bonds of the company prepared and put upon the market, and it appears that Mr. Maury performed all the duties of a trustee which he was called upon to perform, and as such he executed about *two thousand of the bonds which were proposed to be issued and secured by the mortgage. The effort to sell the bonds seems, however, to have failed to a great extent; and in January 1870 the company executed a deed by which they conveyed all their property to William Butler Duncan and Philo C. Calhoun, in trust to secure a loan of $15,000,000, to be raised by a sale of the bonds of the company. This deed is executed on behalf of the company, by C. P. Huntington as president, and James A. Tracy as treasurer.
Mr. Maury having been omitted in this last deed as trustee, the parties disagreed as to the compensation which should be made him; the company insisting that he should only receive compensation for the services actually performed by him, and that the trustee, Orton, had been content to receive $1,000, which they were willing to pay to Mr. Maury; and Mr. Maury insisting that he had consented to act, and had acted under an express agreement that he should receive a specific amount; and that he had rendered every service which he was called upon to perform, until the company had, of their own motion and without his knowledge, executed the second deed, in effect discharging him from the trust.
The parties being thus at issue, Mr. Maury instituted a suit in equity in the circuit court of the county of Rockbridge against the Chesapeake & Ohio railroad company; and upon the pleadings and evidence omitting what is irrelevant to the-question, the case was as hereinbefore stated.
The cause came on to be finally heard on the 24th of April 1872, when the court held that the contract between the plaintiff and the defendant was only partly performed, and that the plaintiff was entitled to a fair and reasonable compensation for the services rendered, *and decreed to him the sum of $1,000, with interest from the 1st of October 1868. And Mr. Maury thereupon applied to a judge of this court for an appeal; which was allowed.
Governor Letcher, Wm. A. Maury, Tucker & Christian, for the appellant.
Thomas D. Ranson and H. T. Wickham, for the appellee.

Opinion:
Moncure, P.,
delivered the opinion of the court.
The court is of opinion, that in August 1868 it was agreed between the Chesapeake & Ohio railroad company and M. F. Maury, that the latter, residing in Virginia, should be one of the trustees, Philo C. Calhoun, and William B. Duncan, of the city of New York, being the other two, in a deed of trust to be executed by the said company, conveying their road and its appurtenances to secure the payment of their bonds, which they contemplated executing to the amount of ten millions of dollars, payable at Richmond, New York or London, at the option of the respective holders on the 1st day of October 1898, and bearing interest at the rate of seven per cent, per annum, free of all government tax, payable semi-annually, either in Richmond, New York or London as aforesaid, on the first days of April and October in each year; the object of which arrangement was to obtain the necessary funds to complete the line of the Chesapeake & Ohio railroad from Covington, Virginia, to the Ohio river, in the state of West Virginia, as well as to straiten the line between Richmond and Charlottesville, in the state of Virginia; and that the said M. F. Maury should receive as his compensation, for acting as such trustee, *the sum of five thousand dollars, it being agreed that each of the other two trustees aforesaid should also receive a like sum of five thousand dollars for his compensation for so acting, making the aggregate sum of fifteen thousand dollars to be paid to the three trustees.
The court is further of opinion, that alter the said agreement was made, to wit: on the 30th day of September 1868 a resolution was adopted by the board of directors of the Chesapeake & Ohio railroad company, that for the purpose of obtaining the necessary funds aforesaid, the president and treasurer of the said company be "directed to make and execute unto four trustees, three of whom shall reside- in New York city, and one in Virginia (whose aggregate 'pay-shall be fifteen thousand dollars, that being the sum expected to be paid to three trustees), to be chosen by the president of the company, a mortgage to bear date October 1st, 1868," conveying the property and franchises of the company to secure the payment of the said bonds; which mortgage was accordingly afterwards duly executed by all the parties and duly recorded; the same having been executed by the said company by their president and treasurer, and by the said four trustees, to wit: P. C. Calhoun, W. Butler Duncan, William Orton and M. 3?. Maury. And the said M. F. Maury, after the execution of the said mortgage, promptly proceeded to act as trustee under the same, and faithfully to discharge all his duties thereunder, until the further performance of his said duties was arrested and preventedby another deed of trust or mortgage bearing date the 15th day of January 1870, and duly recorded, which was executed as a substitute for the said mortgage of the 1st of October 1868. By the said deed of the 15th day of January 1870, t'he'said company '^'conveyed their said road and its appurtenances and franchises to two of the said four trustees only, to wit: William Butler Duncan and Philo C. Calhoun, in trust to secure a loan of fifteen millions of dollars, which the said company contemplated negotiating, for the purpose of completing the construction and equipment of their road as aforesaid.
The court is further of opinion, that although the said M. F. Maury might have been entitled under his first mentioned agreement with the said company to demand and have of them the sum of five thousand dollars, as his stipulated compensation for acting as trustee as aforesaid (though whether he would or not, is a question not necessary and not intended now to be decided), yet having accepted and executed the said deed of the 1st day of October 1868, he thereby, in effect, consented to accept one-fourth of the sum of fifteen thousand dollars, to wit: three thousand seven hundred and fifty dollars in lieu and instead of the said sum of five thousand dollars as compensation for acting as trustee aforesaid, he having, prior to the execution of the said deed, been informed of the adoption by the board of the said resolution of the 30th day of September 1868, which expressly stated that the aggregate compensation to be paid to the four trustees in the deed should be fifteen thousand dollars, instead of the same sum being paid to three trustees, as was formerly expected; and he cannot therefore now claim the said sum of five thousand dollars, and cannot claim more than the said sum of three thousand seven hundred and fifty dollars as such compensation.
The court is further of opinion: that the said M. F. Maury, or his personal representative, he being dead, is entitled to the said sum of three thousand seven and fifty dollars, with interest from the — day of August *1870, the day on which this suit was commenced, as compensation aforesaid; and the circuit court erred in not rendering a decree for that sum and interest, instead of for the sum of one thousand dollars with interest from the 1st day of October 1868. No objection was made to the validity of the agreement, and no ground appears for any such objection. The occasion was a most important one. The purpose being to borrow ten millions of dollars for the completion of a railroad extending nearly through the center of the state, and to obtain the loan upon the security of a deed of trust on the road and its appurtenances. The loan was expected to be. obtained partly in England and partly in the United States. It was all-important, therefore, that trustees should be selected for the execution of the trust of known good character in both countries. It was deemed advisable by the company that one of the trustees should reside in Virginia, where and in West Virginia, the road is located; and the rest in the city of New York, where it was supposed that the money, or most of it, might be obtained. Or at least it was no doubt supposed, that through the influence of commercial men residing in that city, the money, or most of it, could be obtained, there and elsewhere, at home and abroad. M. F. Maury was naturally selected by the company or its agents as the most suitable person to be selected as that one of the trustees who was to be a resident of Virginia. And he consented to act as such for the compensation which was offered him, to wit: five thousand dollars; which he afterwards, by implication as aforesaid, agreed to reduce to three thousand seven hundred and fifty dollars. He did not seek the office, but was sought by those whose duty it was to make the selection. Nobody will doubt the wisdom of the ^'selection under the circumstances. No person was more generally or more favorably known, at home or abroad, than M. F. Maury. And there was no person in existence residing in Virginia, if anywhere else, who was likely to be able to do more than he to further the object in view, which was to obtain a loan of ten millions of dollars on the security of the road. His fitness for the trust is not denied; nor his readiness at all times to perform its duties. He executed and acknowledged the deed, and thereby assumed its obligations. He promptly entered upon the duties of his office, and continued to perform them, and to do all that devolved upon him, or was required of him in that respect, until he was prevented from further action by the company; and he was superseded as trustee by the deed of the 15th day of January 1870, in which the said Duncan and Calhoun were alone named as trustees as aforesaid. This was done without the consent of M. F. Maury, and so far as appears from the record, without even informing- him of what was intended or desired by the company. They had a right to reduce the number of the trustees in the deed if they thought fit to do so; but they were bound to pay the stipulated compensation of the one who was removed if he was prompt and faithful in performing his duties, and capable of doing so — as he certainly was. What right had the company to discharge from the trust, without the stipulated compensation, the trustee residing in Virginia, any more than those residing in New York? The trustee residing in Virginia might, if he had been consulted on the subject, have consented to remit a portion of the stipulated compensation, and to retire from the trust. But he was not consulted on the subject. He was discharged from the trust, and then it was proposed to compensate *him for what he had done upon the rule of a quantum meruit.
And it is argued that because Orton, whose name was first added to and then taken from the number of the trustees, accepted one thousand dollars in satisfaction of his claim to compensation, M. F. Maury should therefore accept a like amount in satisfaction of his. We cannot undertake in this case to say what were Orton's claims to compensation, nor whether he was reasonable or not in the settlement he made of them, nor to compare his claims with those of M. F. Maury. They may have been very different in merit and degree. We have now only to do with those of M. F. Maury. And the question is, had the company a right by their own ex parte act to discharge themselves from liability to him for his stipulated compensation as trustee, he being entirely without fault in the matter, and the occasion for the agency of trustees therein not having ceased? In. other words, had the company a right, after having stipulated with three trustees for a certain compensation to each for their services, to relieve themselves from liability, in whole or in part, to one of them, by confining the residue of the trust to the other two, when there was no just cause of complaint against the third, and he had actually entered upon and discharged in part, and as far as he could, the duties of the trust? We know of no authority for any such right.
Beyond all question, the stipulated sum was not to be paid to the trustees for nothing, but as compensation for services; that is, for acting as trustees. Had they died without acting, or had all occasion for their acting ceased before any such action, then they would have had no claim to compensation ; or had such death occurred, or such occasion ceased after partial and before ^complete action in the matter, then there would have been ground for claiming an apportionment of the compensation. But here the trustee, M. F. Maury, did not die without acting, or before complete action, and there was no just ground for an apportionment, at least without the consent of M. F. Maury, which was never given, nor indeed applied for, at least until after he was discharged from the trust as aforesaid.
The services for which the stipulated compensation was to be made to the trustees were services to be rendered in endeavoring to negotiate the desired loan of ten millions of dollars, and not services to be rendered in the event of a necessity for a sale of the trust subject to satisfy the loan in the event of its being made, and of default being made in the payment of the money and interest, or any part thereof-. Compensation for any services which might-be required of the trustees, in the event of any such default, was provided by law, and the terms of the deed, and was to consist of a commission upon the amount of any sales which might be made tinder the deed in case of any such default. No precise time was named in the agreement for the payment of the stipulated compensation. It was payable by implication, either at the date of the agreement, or in a reasonable time thereafter, or, at all events, so soon as the contemplated loan was obtained, or failed of being obtained without any default on the part of the trustees. If the contemplated loan was not obtained through the agency in part of M. F. Maury, the failure so to obtain it was not by means of any default on his part. He promptly executed the deed of trust, entered upon his duties as trustee, and performed them as far as he possibly could. Why then is he not entitled to the full amount which was stipulated to be paid to him? Upon what principle can the just measure *of his compensation be reduced to less than one-third of the stipulated amount? Upon the principle of a quantum meruit? He did not contract to render his services upon that principle, but for a certain sum, as he had a right to do; and he has performed, and been ready, and offered to perform, his part of the contract fully. He did not warrant the success of his efforts, nor was his compensation to be conditional, or in proportion to such success, but it whs to be an unconditional and certain sum. If that sum exceeds the actual value of his services to his em-ployer, or appears to he a high compensation for the services actually rendered, or agreed to he rendered, still he is entitled to receive it, he being in no default in rendering them. His contract being unobjectionable, and he being in no default in regard to it, he is entitled toH'he full benefit of it according to its terms. ' It cannot be said that there was a failure of consideration in whole or in part. It does not appear, and is not probable, that M. Fi Maury engaged, or could have engaged, ih any other employment which afforded, or would have afforded, him any pecuniary benefit by reason of his not having to complete the execution of his duties as trustee,- or, that if he had been permitted to complete the execution of those duties, he would thereby have been prevented from attending to any other business which he would have done if he had not been trustee. What reason then can there be for any abatement or apportionment of the stipu lated compensation? and what rule can be adopted for such an apportionment? Who can value the character of the trustee and his peculiar qualifications which fitted him for the office, and recommended him to the choice of the parties who selected him for that office? How can we know to what extent his business and his plans of life have been affected *by his acceptance of this office? He was willing to accept it for the consideration which was offered him. With what propriety can it be now said that one thousand dollars, instead of the sum offered, more than three times that amount, would be adequate compensation for the services engaged?
We deem it unecessary to examine in detail the cases referred to in the argument of. the learned counsel in the case, as the opinion we have delivered seems to be founded on well settled principles of law. There is nothing in conflict with it in the cases referred to in the notes to Cutter v. Powell, 2 Smith's Leading Cases, 6th American edition, p. 39 marg., 44 top, and 2 Rob. new Pr., p. 405; nor in any of the other cases referred to in the argument; as we think will appear by an examination of those cases.
We therefore think that the decree of the circuit court is erroneous, and ought to be reversed, and a decree rendered in conformity with the foregoing opinion.
The decree was as follows:
This day came again the parties by their counsel, and the court having maturely considered the transcript of the record of the decree aforesaid and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the appellant, M. F. Maury, is entitled to receive of the appellees, the Chesapeake & Ohio railroad company, the sum of three thousand, seven hundred and fifty dollars (13,750.00), instead of the sum of one thousand dollars, as compensation for his services as trustee as mentioned in the bill; and that the circuit court erred in rendering a decree for the latter sum and interest *as therein mentioned, instead of for the former sum with interest as hereinafter mentioned. Therefore, it is decreed and ordered that so much of the said decree of the said circuit court as is above declared to be erroneous, be reversed and annulled, and the residue thereof affirmed; and that the said appellant recover of the said.appellees his costs by him expended in the prosecution of his appeal afqresaid here. And this court, proceeding to render such decree as ought to have been rendered by the said circuit court, in lieu of so much of the decree of said court as is reversed as aforesaid, it is further decreed and ordered, that the said appellant recover of -the said appellees, the Chesapeake & Ohio railroad company, the said sum of three thousand seven hundred and fifty dollars, with interest thereon at the rate of six per centum per annum from the first day of August 1870 (that being the day of the institution of this suit) till paid, and his costs by him about his suit in the said circuit court expended. And leave is given to sue out execution therefor; and if the said execution shall prove unavailing, then the court will proceed to enforce the payment of the sum of money and interest herein decreed, under the terms of the trust deed.
Which is ordered to be certified to the said circuit court of Rockbridge county.
And at another day, to wit: on the 2d day of October, 1876 — The court is of opinion that the lien of the decree appealed from being the decree of the said court in this case, of the 24th day of April 1872, ought to be preserved by an affirmance of so much of the said decree as may be necessary for that purpose; and therefore it is decreed and ordered that the decree entered in this cause at the present term of the court, to wit: on the 21st day of September 1876, be amended, *by making the following addition thereto, to have the same force and effect as if it had been inserted in the said last mentioned decree, viz: It is decreed and ordered that so much of the said decree appealed from as declares that it is "adjudged, ordered and decreed that the plaintiff receive of the said defendant, the Chesapeake and Ohio railroad company, the sum of one thousand dollars, with interest thereon at the rate of six per centum per annum from the first day of October 1868 till paid, and his costs about his suit in this behalf expended, and leave is given to sue out execution therefor; and if the said execution shall prove unavailing, then the court will proceed to enforce the payment of the sum herein decreed under the terms of the trust deed," be and the same is hereby affirmed; and that the amount of the said decree so affirmed, including interest to the first day of August 1870, and costs, be credited as of that day on the amount for which the said decree of this court was entered, which decree of this court is to remain and continue in full force for the recovery of the said amount, subject to the said credit; and leave is also given to sue out execution therefor; and if the said execution shall prove unavailing, then the court will also proceed to enforce the payment of the said amount subject to the said credit under the terms of the trust deed. But this court does not mean to decide in this cause that the amount due to the appellant, for which the said decree of the circuit court or this decree is rendered, is in fact provided for and secured by said deed of trust, that question not being before this court, and other persons than the parties to this suit being interested in the same. And it is decreed and ordered that the said former decree of this court be and the same is hereby so modified and altered as to make it conform to and be ^'consistent with this decree, which is to be read and considered as a part thereof.
Which is ordered to be certified to the said circuit court of Rockbridge county, together with and as a part of the said decree of the 21st day of September 1876.
Decree reversed.