91 F. 19 | U.S. Circuit Court for the District of Western Virginia | 1898
The question to be disposed of arises on the application of Crocker Bros., creditors of the defendant company, to have allowed them, out of the fund under control of the court, the sum of $4,574.12 for expenses for counsel fees and attending the various hearings in the cause. IJrior to and at the time of the appointment of the receiver in this cause, Crocker Bros., who wrere brokers in Yew York, had a contract with the Koanoke Iron Company, as agents, for (he sale of said company’s iron. Under the contract, the iron was shipped t.o Crocker Bros. on bills of lading in their name, was stored by them, and sold by them at their discretion; they advancing a stipulated proportion of the market price to the iron company, and accounting for the proceeds wh(m the iron was sold, no control over these sales being reserved to the iron company. The contract contained this provision: “Account current will be rendered at suitable periods, and include proceeds of sales, payments on account, and any expenses of transportation, marine insurance, storage charges, or expenses of any nature incidental to distributing and delivering the iron.” At the time of the appointment of the receiver, on the 25th of January, 1895, Crocker Bros. had in their possession, under their contract, about 6,000 tons of iron, 4,000
Nor is the second ground taken in the argument, that Crocker Bros. were acting as agents or trustees of the iron company, and therefore entitled to charge their principal or cestui que trust with counsel fees expended in defending the title to the property, tenable. If they were agents or trustees for the iron company after the delivery of the iron, ■they were so only as to the surplus coming to the company after the
A third ground upon which Crocker Bros. rest their claim for an allowance of attorney’s fees is the fact that an injunction was granted restraining them from making sale of the iron pending the decision of the question whether the iron belonged to them or was subject to the liens of the supply creditors. They insist that they are entitled to recover attorney's fees as part of the damage occasioned them by the injunction. The authorities quoted to sustain this position relate to actions at law on injunction bonds, and it is sought to apply the same doctrine to an injunction in equity granted on application of the receiver, where no injunction bond is required. This position is not tenable. In Oelrichs v. Spain, 15 Wall. 211, the supreme court says: “In debt, covenant, and assumpsit damages are recovered, but counsel fees are never included. So, in equity cases, where there is no injunction bond, only lie taxable costs are allowed to the complainants. The same rule is applied to the defendant, however unjust the litigation on the other side, and however large the expensa litis to which he may have been subjected.” The parties in this respect are upon a footing of equality. The court perceives nothing in this case to justify it in departing from the principle so often announced in cases of receivership, where counsel fees are asked to be paid out of a fund under control of the court. The general principle is that a litigant must: pay his own counsel fees, and he cannot recover them in the shape of costs from his adversary, nor can he put the burden of their payment upon others entitled to participate in a fund under the control of a court of equity. An exception is made where he has by his services produced the fund, and where his interest is the same as that of others who are benefited by his efforts. The reason for the exception is thus stated by the supreme court in Trustees v. Greenough, 105 U. S. 527: “He has worked for them as well as for himself; and, if he cannot be reimbursed out of the fund itself, they ought to contribute their due proportion of the expenses which he has fairly incurred. To make them a charge upon the fund is the most equitable way of securing such contribution.” The rule as (bus stated has been followed by the federal courts in a number of cases: Railroad Co. v. Pettus, 113 U. S. 116, 5 Sup. Ct. 387; Hobbs v. McLean, 117 U. S. 567, 6 Sup. Ct. 870; Meddaugh v. Wilson, 151 U. S. 333, 14 Sup. Ct. 356; Trust Co. v. Condon, 14 C. C. A. 314, 67 Fed. 84. The claim of Crocker Bros. for attorney’s fees and other expenses incurred in connection with the litigation in this cause will be disallowed.