Stewart v. Gorham

Accounting: assignment of causes foe trial. Code, section 3659 1 authorizes the trial court to assign cases for trial on particular. days, hut it may without such formal assignment proceed with the trial of causes triable at the term as reached in their regular order. Assignment of Causes: statement on counsel. The statement of 2 an attorney in the absence of opposing counsel that he did not believe plaintiff intended to prosecute his action. ’ ’ is insuffi•cient to support a contention that the court was misled in assigning the cause for trial when reached in its order. Practice: failure to appear: dismissal of action: dross-bill. 3 Where the plaintiff fails to appear and prosecute an action at the time it is reached for trial it should be dismissed with costs, unless defendant has filed a counterclaim or cross-bill entitling him to a trial thereof, but to entitle the defendant to proceed his pleading must contain within itself the essential elements, of a new cause of action. Allegations of the answer considered and held insuffi eii to constitue a cross-Fill and that the action should have been dismissed for want of appearance.

' Appeal from Muscatine District Court. — Iiow. P. B. Wolee, Judge. ActioN in equity brought for an accounting. A statement of tbe issues as made by the pleadings is necessary xo an understanding of the questions made on this appeal. It is said in the petition that in the year 1897 plaintiff entered into a contract in writing with the Muscatine North & South Railway Company by the terms of which plaintiff agreed to secure a right of way and to construct and equip a line of railway extending from the city of Muscatine, in this state, to the town of Elrick, in this state, “and to render services, and deliver services already rendered, concerning taxation along and in aid of said line of railway.” It is said that me capital stock of said railway company was of the face value of $450,000; tbat bonds bad been issued by said company in the sum of $450,000, and that there had been pledged to said company the sum of about $100,000 in aid of the building of said line of railway, and to be raised by public taxation; that all said bonds and taxes and all said stock, except a few shares, were to be delivered and paid to plaintiff in consideration of the construction and equipment of the road by him. Plaintiff says that, after having partially completed the work, he assigned the work of completing the remainder to the Tennis Construction Company, the said company becoming liable to him for the part of the work already performed; that the Tennis Company prosecuted the work for a time, and, during the same, became indebted to one Birmingham for moneys loaned, and to the defendants Balch & Peppard and Lewis & Co. for labor and materials, all used in such work. The defendant Gorham is a partner in the firm of Lewis &. Co., and it is not alleged that he is otherwise interested in the case. The Tennis Company abandoned the work before completion, and failed to pay the obligations due to said Birmingham and to the defendants in this action. Thereupon, as it is alleged, plaintiff and these defendants undertook to protect themselves, and to provide for a completion of the work. Pursuant thereto, and in November, 1898, defendants, by consent of plaintiff, the Tennis Company,' and Birmingham, submitted a proposition in writing to the railway company, in which, after reciting the condition of affairs then existing, defendants proposed, in substance, to complete the work in question; the consideration therefor to be the entire capital stock of the railway company, except a few shares issued to the directors of said company, the bonds of the company, and all taxes or subsidies or aid voted to the company, or agreed to be paid to it, to aid in building the line. The proposition so made was formally accepted by the railway company. In the resolution of acceptance, however, there is excepted from the operation thereof the amount of a tax — $2,500—voted by a certain township named; it being stated that an order therefor had previously been given to one Hittig. Plaintiff alleges that thereupon a contract in writing was entered into between himself, of the one part, and defendants, of the other part, wherein it was agreed that the stock and bonds so to be received by them, said defendants, should not be sold, except by mutual consent of all parties to such contract, before July 1, 1899, after which the parties holding same might sell at such price as to them may seem proper, first giving to this plaintiff the option of purchasing the same at the price offered, and such option to continue thirty days. The contract, a copy of which is attached to and made a part of the petition, then provides that the proceeds arising from the sale of said stocks and bonds, and the amount of all taxes, etc., received, shall be used, first, to pay in full the cost of completing the construction and equipment - of the road. There is then to be paid these defendants the amount due them under their contract with the Tennis Company, and they are then to have $30,000, face value, of said bonds. There is then to be paid to this plaintiff $12,500, and to the said Birmingham bonds of the face value of $10,000, and to the Tennis Company the sum necessary to reimburse it for the amount actually expended by it under its contract; the amount so to be paid plaintiff to be treated as part of the cost of construction, but not to be due or payable until the proceeds realized from the sales of stocks, bonds, etc., shall be sufficient to pay the entire cost of construction and equipment of the road. Lastly, the contract provides that if, after payment of all the sums so referred to any sum shall remain, it shall be divided equally between Balch & Peppard, Lewis & Co., and this plaintiff. In February, 1899, plaintiff and said defendants agreed in writing that the provisions of the former contract fixing a time limit within which the bonds and stocks should not be sold, and the provision giving to plaintiff an optional right to purchase, should stand as canceled and abrogated. It is then provided that “the parties hereto have.the privilege of selling the stocks and bonds * * * at any time they so desire, and at such price as they deem best, provided they shall not dispose of the bonds at less than eighty-five per cent, of face value.” It is then alleged in the petition that defendants thereafter prosecuted the work in question to completion; that they have received and converted to their own use the stock, bonds, and taxes referred to, the amount thereof over and above the cost of construction, etc., being about $500,000. Plaintiff prays an accounting, and for judgment upon the same being had in the sum of $50,000, and that all the rights and obligations of the parties be fixed and determined. The defendants appeared and filed a pleading denominated an “answer and cross-petition.” The pleading is in one division only, and therein the cost of construction and equipment is alleged; the same amounting to $383,746, not counting some contingent claims yet to be adjusted. The receipt of $87,900 from taxes, etc., voted, is admitted, out of which defendants say they have paid on construction claims the sum of $40,614, the balance being now in their hands. Defendants admit that they have in their hands the bonds issued by said railway company, save that $10,000 thereof were delivered to said Birmingham, and except $4,500 thereof alleged to be in the hands of plaintiff. Defendants also admit the possession of stock of said company in the sum of $360,000, face value. They deny, however, that they have sold, appropriated, or converted to their own use any of the stock, or bonds received by them, and they say they know of no market in which such stocks and bonds can be sold at any price, and allege their belief that sufficient cannot be realized therefrom in any event to pay the cost of construction, etc., of said road; allege a willingness to make sale of the stock and bonds at any time when the amount due them can be realized therefrom or to turn the same- over to plaintiff upon payment of their dues. Further answering, defendants say that, when they made their proposition to tbe railway company, it was represented to them by plaintiff,-wbo was then president of tbe company, that.they were to-baye all taxes' voted tbe company; that, npon discovery that’ $2,500 of such tax bad been assigned to Hittig, they refused to proceed with tbe arrangements, whereupon plaintiff verbally agreed that tbe amount so paid Hittig should becharged to bis (plaintiff’s) share of any surplus, if any there' should be, arising from tbe sale of tbe stock and bonds, after deducting costs of construction, etc., as provided in tbe contract between them. Defendants say that accordingly said sum should be now charged to plaintiff. Defendants further allege that at tbe time of making their proposition they were induced by plaintiff to believe that tbe right of way and depot grounds bad been provided and paid for; whereas they say they were compelled to, and did, pay out the sum of $15,000 to secure necessary right of way and depot grounds, and still have other payments to make on that account. And defendants say that said sum of $15,000 is equitably due them from plaintiff, and should be paid before he receives any sum from the proceeds of said stock and bonds when sold. Defendants further say that they have paid the interest on the bonds held by plaintiff and Birmingham, aggregating $1,300, for which sum they should have credit on settlement. Defendants pray that they may be authorized to sell the stock and bonds in their hands at such price and on such terms as to them seems best; that plaintiff be required, within some short time to be fixed by the court, to purchase and pay for said stock and bonds at such price as will pay all sums due defendants, with interest, and, failing to do so, that he be barred of all interest in or claim to said stock and bonds; that an account be taken of the standing of .the parties, and that they have judgment against plaintiff for $15,000, or such greater sum as shall be found due from him; and that they have such other relief as equity may require. On October 14, 1901, at a regular term of court, said cause was taken up for trial. The plaintiff did not .appear in person or by counsel. It is conceded that no special assignment of the case bad been made for that or any other day. The court proceeded, however, and the defendants introduced evidence showing the amounts which had been paid out by them in the construction, etc., of the road; also evi- ■ deuce showing the amount of taxes received, and evidence showing that they still hold all the stock and bonds in question, undisposed of, save' the bonds in the hands of plaintiff and those delivered to Birmingham. No further evidence was offered or introduced. On the same day a decree was entered in which the court finds that the amount due defendants is a charge upon the stock and bonds in their hands. It is then ordered and decreed “that at any time within thirty days from this date the plaintiff may purchase, or cause to be purchased, for cash, said stock and bonds, at any price exceeding the amount of the lien of defendants thereon, with interest, and, upon such purchase price being deposited with the clerk, defendants shall within ten days deposit with the clerk, for the benefit of the purchaser, said stock and bonds; that any excess of purchase money over and above the lien of defendants shall be divided into three shares, and be paid one share to plaintiff, one to Balch & Peppard, and one to Lewis & Co. If plaintiff shall not deposit or cause to be deposited said sum within the time limited, it is hereby ordered that defendants be, and they are hereby authorized to dispose of said stock and bonds as they shall see proper, and the said plaintiff be and he is hereby debarred and estopped from ever setting- up any claim thereto or any interest therein, and that plaintiff pay the costs of this suit.” On October 16, 1901, plaintiff appeared and filed a motion to set aside the decree; also to reinstate the cause, and for new trial. The motion was resisted, and upon hearing the same was overruled. Prom such ruling, and from the decree as entered, the plaintiff appeals.