Lead Opinion
This litigаtion was begun by a creditors’ bill brought by William L. Bidwell and Franklin E. Woodford against W. A. Huff and others. The complainants were judgment lien creditors and filed their bill on behalf of themselves and other creditors. The facts are more fully stated in a rеport of a former appeal in this case. Huff et al. v. Bidwell et al.,
The present controvеrsy relates to a claim for ah allowance for fees for the solicitors for the complainants. The complainants were represented in the' litigation by Messrs. Hall & Wimberly, who filed in the court below a petition- рraying that the court allow them out of the fund in court reasonable compensation as solicitors for the complainant. After stating the services performed by them, it is averred in their petition that a sufficient fund “has beеn realized, not only
“If any counsel fees are allowable to the petitioners at all, it is not proper that the same should be paid out of this overplus, which should bе returned to these defendants; but if such counsel fees are payable at all, they should be paid by such contribution from the several creditors as to the court may seem equitable and just, but in no event should the sum be taxed against the fund belonging to these defendants, or either of them.”
This petition was referred to the master in chancery, who reported his conclusion “that $10,000 approximately should be allowed the solicitors for complаinants,” and that the same should be paid out of the surplus after paying all the proved debts, principal and interest. The report of the master was affirmed by the Circuit Court, and from that decree this appeal is taken.
The rule is well settled in its application to creditors’ suits that, where-a creditor recovers by suit a fund for the benefit of all the creditors, he is entitled to have his solicitor’s fees paid out of the fund realized or pro rata by the creditors.
“Having come in and proved their claims, and obtained the benefit of the suit which was instituted on their behalf, as well as that of the plaintiff, it cannot he just that in such a suit—a suit instituted for the benefit of all the creditors—one alone should bear the burden, when others have the benefit.” Thompson v. Cooper, 2 Col. C. C. 87, quoted in Trustees v. Greenough,105 U. S. 527 , at page 533 (26 L. Ed. 1157 ).
In creditors’ suits, the underlying principle upon which those who do not appear as plaintiffs are charged with а proportionate part of the solicitors’ fees is that the plaintiffs represented, and were suing for, the others; and this agency is generally shown by the appearance of the other creditors in court prоpounding their claims and claiming to share in the result of the suit. Lamar v. Hall & Wimberly,
“This contribution must come from' tbe creditors. Tbe debtor cannot be chаrged with it.” Ger. Nat. Ins. Co. v. Va. State Ins. Co.,108 Va. 393 , 399,61 S. E. 870 .
This same view had been previously announced in Roller v. Paul,
“When their claims were satisfied, they had secured from their debtor’s property all that they were entitled to.”
In Rank of Charlottesville v. Manoni,
“If it be proper that the counsel representing the creditors should have an allowance beyond the legal fee for their services, the creditors should pay it.”
The reasons upоn which complainants’ solicitors found their claim do not appear to us to be sound. It is claimed that the litigation was of benefit to Huff, which he stoutly denies; but, if it were true, the fact that he was incidentally benefited is no reasоn for charging him with the fees of the solicitors who sued him. Conceding that Huff’s failure to pay his debts caused the litigation, that is no reason for charging him with the fees unless he directly or indirectly contracted to pay them. The usual rule that each party is to pay his own attorney is the safe rule.
“When- bdth client and counsel know that the fees are to be paid by the other party, there is danger of abuse.” Oelrichs v. Spain,15 Wall. 211 , 231 (21 L. Ed. 43 ).
The claim that the complainant has “created a fund and brought it into court” is not controlling on the question presented by this record. There existed no reason or legal right to create at Huff’s expense a larger fund than enough to pay his debts and the сosts. If it could have been'known in advance that the property as advertised would produce a surplus and it had been capable of a suitable division to avoid that result, only enough of it should have been sold to рay- the debts and the costs. There would have been no authority to sell more of it for the purpose of paying the fees of complainants’ solicitors.
In1 the present condition of the record, we cannot do more than decide the question we have discussed. Whether some or all of the creditors are liable to contribute to the payment of the fees of the complainants’ solicitors is a question that was not considered or decided by the Circuit Court. The creditors filed no answer to the solicitors’ petition. The contest was entirely betwéen Huff and others, who were entitled to the surplus, and the petitioners. The case was
The decree affirming the report of the master in chancery is reversed, and the case remanded.
Dissenting Opinion
(dissenting). Huff was insolvent at the time the bill was filed August, 1899, and his visible property was so incumbered with tax levies and sales on state, county, and city taxes in default from 1891, and on assessment for paving liens due to the city of Macon, and was otherwise covered by mortgage and judgment liens, that no lien creditor had a remedy by execution nor by foreclosure of lien without involving himself with prior or subsequent, liеns; and no ordinary creditor had a plain and direct remedy by judgment and execution.
After filing the bill, the court against the opposition of Huff appointed a receiver of all Huff's property, and the court thereaftеr on hearing decreed Huff insolvent and ordered a sale of all his property, marshaling the liens thereon and canceling some 13 deeds based on tax sales, and the decree on the appeal of Huff was affirmed in this court. The execution of the decree was so opposed by Huff that the case was again brought before this court and the proceedings below affirmed.
“It is tlie general rule of equity that a trustee called upon to discharge any duties in the administering of his trust Is entitled to compensation therefor, and included therein is a reasonable allowance for counsel fees. This is constantly enforced in the federal courts in the various railrоad foreclosures that have been and are proceeding therein; and this irrespective of any state legislation. The subject was exhaustively considered1 by Mr. Justice Bradley, in the case of Trustees v. Greenough,105 U. S. 527 [26 L. Ed. 1157 ]. Thе English and American authorities were fully reviewed, and the power and duty of the court to make reasonable allowances (including counsel fees) to trustees or others acting in that capacity was affirmed.” Dodgе v. Tulleys,144 U. S. 451 , 457, 12 Sup. Ct. 728, 731 (36 L. Ed. 501 ).
And in that case counsel fees were allowed as against the judgment debtor, defendant in the case, who, like Huff, seems to have fought the case from start to finish.
At this time, I do not care to discuss the principles and prаctice involved, or even to review the cases cited in the opinion of the court, further than to say that all allowances made in courts of equity to trustees eo nomine and to others acting as such for expenses and compensation to counsel in the foreclosure of trust deeds, mortgages, and other liens, or in the prosecution of creditors’ bills, are in
In my opinion, following the usual practice, an allowance should be made from the fund in court for counsel fees to the acting trustees.