41 Del. Ch. 158 | New York Court of Chancery | 1963
:• This case is now before the court on plaintiffs’ application for the taxing of certain items as costs and for the award of counsel fees and expenses. The merits of this litigation were disposed of by the court’s opinion dated November 7, 1962. See Claus v. Babiarz, 40 Del.Ch. 500, 185 A.2d 283. With respect to the taxing of costs and award of counsel fees it was there held that the individual defendants were not liable for costs or for plaintiffs’ fees. It was also provided in said opinion that the costs of the proceeding were taxed against The Mayor and Council of Wilmington, a municipal corporation. This is the decision upon plaintiffs’
Plaintiffs first ask that costs aggregating $155.52 as shown upon the records of the Register in Chancery be taxed. Defendant municipal corporation agrees that these costs are properly taxable as constituting the “fee bill.” They are allowed.
Plaintiffs next ask that fees of their expert witnesses, Brown and Hickman, in the respective amounts of $550 and $50 be assessed. Defendant municipal corporation does not take exception to the amount of these fees but suggests that the court, in the exercise of its discretion, should refuse the allowance. I am satisfied that these fees are properly chargeable as costs in spite of the fact that the case was decided upon grounds with respect to which the expert testimony had no relation. See Consolidated Fisheries Co. v. Consolidated Solubles Co., 35 Del.Ch. 125, 112 A.2d 30.
Plaintiffs ask that the premium of $300 on the injunction bond filed by them in this proceeding be taxed. Defendant municipal corporation objects to the taxing of this item on the authority of Muhleman & Kayhoe, Inc. v. Brown, 4 Terry 481, 50 A.2d 92. In the cited case Judge Speakman refused to tax replevin bond premiums. Judge Speakman’s ruling was undoubtedly in accord with the weight of authority in state courts in law actions. See 20 C.J.S. Costs § 214, p. 451. The rule in the Federal courts is not uniform, but see Hodgman v. Atlantic Refining Co., D.C.Del., 8 F.2d 777, wherein Judge Morris, sitting in equity, allowed the premium on a surety bond as costs. The statute pursuant to which this court may award costs, § 5106, Title 10, provides that the court may make such order “as is agreeable to equity.” Under the authority thus conferred I am satisfied that this court may, in appropriate circumstances, award to successful plaintiffs as costs the premium required to be paid by them for a bond furnished to effectuate a temporary restraining order. Compare Peyton v. William C. Peyton Corp., 23 Del.Ch. 365, 8 A.2d 89. The cost of the injunction bond involved will be allowed to plaintiffs as costs.
In Maurer v. Internation Re-Insurance Corp., 33 Del.Ch. 456, 95 A.2d 827, the Supreme Court pointed out certain recognized exceptions to the general rule. The court noted that the exceptions to the rule generally arise “in connection with the creation, protection or distribution of a common fund or common property subject to administration by the Court of Chancery,” and cited minority stockholders’ suits resulting in the recovery of money or property as an example. Other exceptions mentioned by the court were proceedings instituted by a trustee or executor for instructions, receiverships, interpleader suits and cases of the appointment by the court of counsel to uphold the side of a question that no party is willing to advocate. The court noted, however, that the examples cited were “not necessarily all-inclusive.” It is obvious that the circumstances here appearing do not bring the case within any of the exceptions mentioned in Maurer.
In Mencher v. Sachs, 39 Del.Ch. 366, 164 A.2d 320, the Supreme Court affirmed an award of counsel fees by this court in a stock
In Richman v. DeVal Aerodynamics, Inc., 40 Del.Ch. 548, 185 A.2d 884, the Chancellor awarded counsel fees in a stockholders’ class action which resulted in a final judgment enjoining the corporation’s board of directors from carrying out proposed action (granting of stock options and the lease or purchase of certain equipment) which a majority in interest of the stockholders considered to be detrimental to the corporation. The Chancellor said: “Recovery of expenses in such cases is predicated on the conferring of some benefit on the interested class and not merely on petitioner himself. * * * The benefit conferred must also be ‘substantial’ in the sense that its value to the interested class is immediately discernible rather than speculative in character.”
While the above cases apparently establish that the award of counsel fees may be proper even though there is no fund brought before the court for administration, they also establish that in order to justify such an award it must appear that a substantial benefit is conferred on the interested class. Applying this principle to the circumstances of the present case, it would seem obvious that plaintiffs here have failed to bring themselves within the limits of the rule. They argue that the present action has resulted in requiring public officials to comply with lawful sales procedures. This, they say, confers a benefit not only upon the plaintiffs but upon all other taxpayers as well. While this result may, in one sense, be regarded as beneficial to the taxpayers of Wilmington, it is not, in my view, the type of benefit which would warrant an award of counsel fees. Moreover, the premise of this alleged benefit is illconceived in the circumstances of the present case. The injunction granted by the
Plaintiffs also say that their expert testimony conclusively establishes that the city would have lost in excess of $100,000 by a sale in accordance with the Metropolitan offer. While the court in disposing of the case on the merits did not find it necessary to consider the value of the property involved, plaintiffs now ask me to determine valuation to show that their action has resulted in a substantial saving to the city and thereby warrant a finding that counsel fees may be properly awarded to them. In the exercise of discretion, I might well decline to enter upon such a consideration. However, as I do not feel that the testimony of valuation relied upon by plaintiffs is sufficient, in the circumstances, to show any such loss as is alleged, I will now give some consideration to that testimony.
Plaintiffs’ expert, Brown, testified that the property involved had a market value of $225,000. This valuation was based on what
The record of this case indicates that the Wilmington Planning Commission report of August 1, 1961 recommended that in the dis
In view of the discretion vested in the municipal authorities to attach conditions to the proposal and to give consideration in the acceptance of a bid to factors other than the amount thereof, it is obvious that an appraisal made on the basis of the value of the property upon a professional sale is of little aid to the court in determining the issue of value under an admittedly proper method of disposal.
Plaintiffs have cited cases in other jurisdictions wherein counsel fees have been allowed in successful taxpayers’ suits. It is not necessary to give consideration to these cases because in each of them it is obvious that a substantial benefit, in the sense used by the Chancellor in Richman v. DeVal Aerodynamics, supra, was conferred upon the interested class. Here, on the contrary, the benefit is not substantial but is speculative at best.
Plaintiffs suggest that if the benefit derived by the city can not now be evaluated, determination of their application be postponed until after the property has been sold. There is no duty upon the city to again offer this property for sale. Conceivably some municipal
The application for the award of counsel fees and expenses is denied. Order on notice.