Court Opinion

ID: 5508812
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:27:36.788392+00
Date Added: 2024-06-11T08:34:06.936650
License: Public Domain

FOLLETT, J.
The defendant alleges four grounds for the reversal of the judgments: (1) That the plaintiff failed to show that defendant was liable to account; (2) that the United States Rolling-Stock Company is a necessary party to the action; (3) that the referee erred in refusing to allow the defendant compensation for its services in taking possession of, caring for, and selling the property; (4) that the referee erred in admitting evidence on the accounting.
The contract was, in legal effect, a conditional sale of the property, by the terms of which the defendant, in case the railway company defaulted on any of the 35 notes, had the right to seize the property, sell it, and apply the avails in payment of the notes, or it had the right to rescind the contract, take possession of the property, and hold it as its own. The defendant did not resort to the second, but to the first, alternative, and elected to affirm the contract, treating the property as security for the payment of the notes; and it is alleged in the answer that this was done by an agreement with the United States Rolling-Stock Company. Had that company remained the owner of the 14 notes which were transferred to it by the defendant, it would have had the right to compel the defendant to account and pay over two-fifths of the net avails of all sums realized on a sale of the locomotives and cars. That right was created and secured by the assignment by the defendant to the United States Rolling-Stock Company of June 14, 1889. Upon the transfer of these notes to this plaintiff, the securities held by the transfer, or as collateral for their payment, passed in equity to the plaintiff, who became subrogated by operation of law to the rights of the transferer; and it has the same right to compel the defendant to account that the United States Rolling-Stock Company would have had, had it not transferred the notes. It is argued in behalf of the defendant that it is not liable to account because, under the contract, it remained the absolute owner of the property. If the defendant, instead of affirming the sale, had elected to rescind it, and take the property into its possession as its own, a different question would have arisen; but even in that case it is difficult to see how, under its assignment of June 14, 1889, it could have escaped liability to account for two-fifths of its value. Again, it is not alleged in the answer that the defendant elected to disaffirm the sale, and take possession of the property, and hold it as its own; and it is too late, after having substantially alleged the contrary, to take this position on appeal.
The question that the United States Rolling-Stock Company is a necessary party to the action cannot be raised for the first time on appeal. This objection is waived, unless it is taken by demurrer or answer. Code Civ. Proc. § 499. The objection was not taken, by answer or demurrer, on the trial, nor on the accounting before the *352referee; and it is too late to take it on appeal. Had it appeared on the trial that it was necessary that other parties should be brought in, in order to determine the action, the court might, in its discretion, have ordered the case to stand over, and the necessary parties brought in. But there is no such necessity in this case. The "United States Rolling-Stock Company is not shown to have any interest in this action. It had transferred all of its interest in these notes to this plaintiff, which is subrogated to all the United States Rolling-Stock Company’s rights in the contract, and it is not a necessary party to the action.
The defendant claims $3,000 for its services in taking possession of, caring for, and selling the property. The referee found that the plaintiff had not agreed to compensate the defendant for such services. In the absence of a contract that compensation for services shall be paid, joint owners of property or persons jointly interested in property cannot recover of each other compensation for services rendered in caring for it and converting it into money. Franklin v. Robinson, 1 Johns. Ch. 157; Trustees v. Greenough, 105 U. S. 527; Raun v. Reynolds, 18 Cal. 276; Freem. Coten. § 260. The case of Woodruff v. Railroad Co., 129 N. Y. 27, 29 N. E. 251, is cited as holding a contrary doctrine. It is expressly stated in that case that the plaintiff, who was compensated for his services, Vas not acting in his own interest, but exclusively as a trustee for and in the interest of bondholders. 129 N. Y. 31, 32, 29 N. E. 251. Again, on looking into the record, we fail to find any evidence of the extent of the services performed by the defendant, or of their value, beyond the services performed by its employé, whose salary and expenses were allowed by the referee.
Four of the six exceptions taken to the admission of evidence are to the testimony of William C. Lane in respect to the value of services for selling railroad rolling stock. Having held that, under the evidence, the defendant is not entitled to compensation for such services, the testimony as to the value of like services becomes entirely immaterial, and no harm was done to the defendant by its admission. The other two exceptions are to the ruling of the referee that the plaintiff’s vice president might testify that the plaintiff never assented to any payment or charges for services by the defendant. This was clearly competent.
We think that no error was committed by the learned referee, and that the judgments are right, and should be affirmed, with costs. All concur.