Lead Opinion
Appellants herein are attorneys at law who seek to be awarded a certain fee for services allegedly rendered by them to all of the depositors and creditors of the Interstate Trust & Banking Company in Liquidation. Recovery was denied by the district court.
The instant litigation is a sequel to In re Interstate Trust and Banking Company in Liquidation, Numbered 39,142 on the docket of this court (see
Thereafter these appellаnts, through a motion filed on their behalf in the district court, obtained a rule ordering the state banking commissioner to show cause why their claim for compensation for professional services rendered to all depositors and creditors in the former preceeding should not be recognized and fixed at 25% of the total amount of interest to be paid. While conceding that they had employment contracts only with the particular depositors and creditors whom they specifically represented in the interest litigation they alleged and urged that because of their servicеs the remaining depositors and creditors were benefited and hence should pay a proportionate share of the compensation (25% of all interest payable) to which they are entitled.
On behalf of the unrepresented depositors and creditors the commissioner resisted the claim; and, as we have stated, the district court disapproved it. This appeal followed.
Appellants cite only one case from the Louisiana jurisprudence which might be said to- support their claim, it being Friend v. Graham’s Administrator,
“This, it is contended, is overruled in the case of Roselius v. Delachaise, 5 [La.] Ann. 481 [52 Am.Dec. 597], where the principle was established that the right of an attorney at law to remuneration depends on a contract (or appointment) and that he can not recover from one who did not employ him, however valuable may be the result of his services to such person.
“This, we think, is the correct doctrine and the one which has since been followed. See [Michon v. Gravier] 11 [La.] Ann. 596.
“In reference to the case in [Friend v. Graham’s Adm’r] 10 La. [440], above cited, it may be said, that no one heir, as such, represents the succession, so as to bind it, and if he thinks his interest in the succession is of such extent or importance- as to warrant him in sueing [sic] for the removal of the curator or other representative, he should bear the expense of the counsel employed by him for that purpose.He could hardly expect the succession to pay the fee if he failed.”
The doctrine announced in the Roselius case has since been applied in our jurisprudence. See Cooley v. Cecile,
Appellants attempt to distinguish thеse cases on a factual basis. It is true that they involved certain circumstances not found here. But each opinion clearly shows that the presence of the particular circumstances did not form the basis of the court’s holding; rather, as indicated by the above quotation from the Guichard case, each decision was based squarely on the legal proposition that the right of an attorney to remuneration for his professional services depends on a contract, either expressed or implied.
Moreover, it appears that our present rule •is generally in keeping with that applied by the courts of other states. See 5 American Jurisprudence verbo Attorneys at Law, Sections 154 and 155, and 7 C.J.S. verbo Attorney and Client, § 175.
Numerous cases from other jurisdictions (many of them from federal courts) are cited in appellants’ brief; but we do not find that all support the principle contended for. Most are authority for the doctrine enunciated in 14 American Jurisprudence verbo Costs, Section 74, as follows: “A court of equity or a court in the exercise of equitable jurisdiction will, as a general rule, in its discretion, order an allowancе of counsel fees or, as it is sometimes said, allow costs as between solicitor and client to a complainant (and sometimes directly to the attorney) who at his own expense has maintained a second successful suit for the preservation, protection, or increase of a common fund or of common property or who has created at his own expense, or brought into court, a fund in which others may share with him. The rule rests upon the ground that where one litigant has borne the burden and expense of the litigation that has inured to the benefit of others as well as to himself, those who have shared in the benefits should contribute to the expense. * * * ” (Italics ours.)
Conceding arguendo that such doctrine is recognized in this state (and it might be successfully argued that McGraw v. Andrus,
Therefore, in accordance with our well established jurisprudence we must and do hold that appellants cannot recover from those depositors and creditors who did not, either expressly or impliedly, employ them. They are entitled only to such remuneration as their clients agreed to pay. However,
For the reasons assigned the judgment of the district court is amended by reserving to appellants whatever rights to compensa'tion they may have as against their respective clients; and, as thus amended, it is affirmed.
Dissenting Opinion
(dissenting).
It is my opinion that the .attorneys who seek redress here are entitled to receive a reasonable compensation for the services they have rendered in mаking available to all depositors and creditors of the old Interstate Trust & Banking Company the sum of $728,281.01, as legal interest on those frozen balances in the bank at the time it- was closed and placed in liquidation that remained to be distributed under the final account of the liquidator, and which constituted approximately seventeen and a half per cent of the original frozen deposits.
In the lower court the Bank Commissioner alone opposed the rights of these attorneys to the fees claimed. It is apt to observe that this is the same official who, throughout the former trial, vigоrously opposed the right of these same creditors and depositors to be paid this interest. It seems to me it comes as bad grace for him to now object to the right of the attorneys to receive compensation out of the funds their services made available when the creditors and depositors themselves neither appeared in the lower court to contest the claim for fees nor appeared in this court to oppose it. Furthermore, it is inescapable from a mere reading of the opinion when the case was formerly before us (
The authorities relied on by the majority are clearly inapposite from a factual and a legal standpoint since it does not appear in any of the cited cases, as is true in the instant case, that by their services the attorneys made available funds to parties who would, otherwise, have been foreclosed from making any claim to them, and their right to such funds would, therefore, have been forever lost and forfeited.
Lead Opinion
On Rehearing
We granted a rehearing in this case in order that we might give further consideration to our original decree denying to ■these appellants the attorneys’ fees which they sought.
The appellants are attorneys who represented a comparatively small group of the depositors of the Interstate Trust & Banking Company, now in liquidation, and who initially in behalf of their clients opposed the homologation of certain tableaux of distribution of the funds of the bank in liquidation proposed by the state bank.commissioner, contending that 5 per cent interest per 'annum'' should' be’ paid on the deposits from January 4, 1934, the date the bank was placed in liquidation. After trial the lower court rendered judgment ordering the commissioner to pay all depositors interest at the rate of 5 per cent per annum from January 4, 1934, on the full amount of their deposits frozen on that datе. On appeal this court annulled and set aside the lower court’s judgment insofar as it related to unopposed tableaux of distribution filed by the bank commissioner, but affirmed the judgment insofar as it related to the tableaux of distribution which were opposed. As stated in
The attorneys who initially represented only some of the depositors in the Interstate Bank case above cited and discussed contend in the instant proceedings that but for their labor and skill the depositors as a class would have received no interest, and accordingly they ask for attorneys’ fees of 25 per cent of the interest decreed to be due аll depositors, amounting, as stated above, on July 15, 1957, to more than $700,000. The lower court denied petitioners’ claim, and they appealed. On original hearing this court affirmed the judgment of the lower court, and it is our decree which we are here reexamining.
The principal ground on which our decision on original hearing was based was that in Louisiana “the right of an attorney to remuneration for his professional services depends on a contract, either express or implied”. This is undoubtedly a correct and well recognized principle of law, but there are certain еxceptions to this legal principle, and we have reached the conclusion, for reasons which will hereafter be apparent, that the facts of the instant case bring it under one of those exceptions.
This court on original hearing discussed the doctrine that where one litigant has borne the burden and expense of litigation that has inured to the benefit of others as well as to himself, those who have shared in the benefits should contribute to the expense. The court there stated that, even if it were conceded that this doctrine is recognized in this state, these attorneys have not brought themselves within its scope.
The doctrine which the court was there discussing is stated in
“The rule is that a court of equity, or a court in the exercise of equitable jurisdiction, will, in its discretion, order an allowance of counsel fees, or, as it is sometimes said, allow costs as between solicitor and client, to a complainant (and sometimes directly to the attorney) who at his own expense has maintained a successful suit for the preservation, protection, or increase of a common fund, or of common property, or who has created аt his own expense, or brought into court, a fund in which others may share with him.” '
This court has in several cases discussed, and in one applied, this so-called fund doctrine. In McGraw v. Andrus,
“The provisional syndic has not aided in unmasking the fraudulent concealmentof the debtor’s property. This has been accomplished by the plaintiff creditors, who have devoted time, money and labor tо reach this property. The mass of creditors receive the benefits of it. They must pay for all costs and expenses, including attorneys’ fees.”
On application for rehearing the court amended the judgment thus:
“In relation to the application of appellees, we will leave the amount of attorneys’ fees to be fixed in the insolvent proceedings. We are not in the possession of sufficient facts to definitely ascertain the amount.”
In discussing this doctrine the court in Succession of Kernan,
“In the case at bar the parties employing the attorneys did not profess to act for parties other than themselves. Had they, in making the employment, done so professedly for other parties, either separately or jointly with themselves, it could be conceded that these attorneys would have a direct right of action against the latter, if they stood by, making no objection, and finally availed themselves of the benefits resulting from their labor. The absence of actual authority originally to have so employed them would be replaced or cured by a ratification of that act
However, it is to be observed that this court evidently overlоoked the McGraw and Kernan cases when it said in Dreifus v. Colonial Bank & Trust Co.,
“ * * * it would serve no useful purpose to review the jurisprudence as to the right of an attorney to recover fees from parties who have not employed him, but who have been directly benefited by his services. The jurisprudence of this state has uniformly denied such right in cases where the services of counsel have been most valuable to parties not represented by him. Roselius v. Delachaise,5 La.Ann. 481 , 52 Am.Dec. 597; Forman v. Sewerage & Water Board,119 La. 49 ,43 So. 908 . There may be exceptions to this rule in other jurisdictions, where the services of counsel have preserved common rights or common property, in the interest of all parties concerned. It will be time enough to consider such a case when it is presented.” (Italics ours.)
The doctrine which these attorneys, appellants, seek to invoke is well recognized and applied by the United States Supreme Court and other federal courts. See Trustees v. Greenough,
For instance, in Central Railroad & Banking Co. v. Pettus, supra [
“ * * * It is true that the bill states that it was brought for the benefit of all creditors who should become complainants therein; but it was intended to be, and throughout was,conducted as a suit for the benefit, not exclusively of the complainants, but of the class to which they belonged. It was so regarded by all connected with the litigation.”
Due solely to the efforts and industry, of these attorneys in the case of In re Interstate Trust and Banking Company,,
In briefs and argument on rehearing the appellant attorneys stressed and brought forcefully to our attention for the first time the fact that although initially they instituted proceedings to recover interest in the Interstate Bank case in behalf of a small group of the depositors, whose deposits had been frozen, both the trial judge and this court considered the case as one for the benefit of all depositors. The judgment of the trial court awarded all depositors interest, as stated above. On appeal these attorneys no longer sought interest for a small group by preference and priority over all other persons, but sought affirmance of the judgment of the lower court which allowed interest, all the way back to the institution of the liquidation proceedings, to all of the depositors. In other words, in that appeal these attorneys championed the cause of all depositors of the bank in liquidation as a class, and although this court amended the judgment, it itself shоwed that it considered the case as one in behalf of all depositors by awarding interest to all depositors as stated above.
Under these facts and circumstances we can reach no other conclusion than that these attorneys have brought themselves within the scope of the doctrine which we have discussed above and on which they rély for the recovery of their fees, and that the facts of this case bring it under this exception to the principle on which our decision on original hearing was based. Consequently it is only fair and equitable that these appellants should recover reasonable attorneys’ fees for their services.
We do not think, however, that we should determine on this appeal the amount of their fee. They seek to recover 25 per cent of the total amount of the interest due to all depositors, but the trial judge denied them any fee whatever. We have decided that the better course under these facts and circumstances is to remand the case so that the judge of the lower court can determine the amount of the award to which these attorneys are entitled. In determining the amount to bе awarded them as reasonable attorneys’ fees, that court should consider the extent and nature of the services rendered by these attorneys; the labor, time, and trouble involved; the results achieved; the character and importance of the matter; the amount of money involved; the learning, skill, and experience exercised; and the difficulty of the legal problems. In fixing these fees on a quantum meruit basis, the trial judge should also take into consideration, but of course not be bound by, the terms of the contracts for compensation which these attorneys had with their original clients.
For the reasons assigned the judgment of the lower court denying to these appellants attorneys’ fees to be paid out of the interest fund due to all the depositors of the Interstate Trust and Banking Company in Liquidation is annulled, reversed, and set aside. It is now ordered that these attorneys recover reasonable attorneys’ fees to be paid from this fund, and it is further ordered that the case be remanded tо the district court for determination of the amount of their fees.
Notes
. The attorneys here are seeking to recover their fees in quantum meruit from all the depositors, including their original clients. Of course they cannot be permitted to recover both in contract and in quantum meruit from their original clients; nor should the depositors they did not represent initially, under the facts of this case, be required to pay a greater percentage of the fund created than that which may be called for in the contracts of employment whiсh these attorneys had with their original clients. See Central Railroad & Banking Co. v. Pettus,
Concurrence Opinion
(concurring).
Since my views in this case are somewhat different from those expressed in the majority opinion, I feel impelled to set them down in writing.
Generally speaking, I believe that there should be a strict adherence to the uniform jurisprudence of this Court that an attorney is without right to recover fees from parties who have not employed him, even though they have been directly benefited by his services (see Dreifus v. Colonial Bank & Trust Co.,
I do not subscribe to the majority view that the attorneys here seeking compensation from the depositors from whom they had no mandate, are entitled to recover on the theory that the oppositions they filed for their own clients were class actions and by their efforts, they created or preserved a “fund”. The record is clear that these lawyers never formally asserted that they were representing a class; the pleadings showing that the oppositions were expressly restricted to the claims of the depositors hiring them.
Nor does it seem to me that a fund was еither created or preserved by the oppositions. The claims were for the enforcement of the legal obligation of the liquidator- to pay interest on the total amounts of the opponents’ deposits from the inception of the judicial liquidation, an obligation which had already been recognized by this Court in Liquidation of Canal Bank & Trust Company,
The case, in my opinion, is not parallel to the so-called “fund doctrine” pronouncements of the common law and federal courts, which are treated extensively in the annotation
In the Canal Bank & Trust Company case, which was decided in 1947, this court held that, whereas depositors of the bank in judicial liquidation, having been closed by order of the President of the United States in the monetary emergency arising out of the depressiоn, were entitled to legal interest on their deposits, judicial enforcement of this right was available only to those depositors opposing the accounts filed by the bank liquidator and,’ further, that the depositors’ acceptance of partial distributions paid by the liquidator operated as a waiver of the right to claim interest on the amounts received.
Notwithstanding this pronouncement, the district judge, after a trial of the oppositions of the creditors represented by the present applicants, ordered the Bank Commissioner to pay all creditors and depоsitors interest at the rate of 5'% per annum from the inception of the liquidation on the full amount of the deposits. The liquidator appealed from this judgment and counsel (apparently appearing for all depositors whether opponents or not) questioned the correctness of our ruling in the Canal Bank case that depositors, failing to oppose provisional distribution of the liquidation, were bound by the judgments of homologation and could not claim interest on the amounts, distributed. And, although our opinion with respect to these complaints and those of the liquidator аppellant (see In re Interstate Trust & Banking Co.,
Thus, it is seen that, in obtaining this judgment, appellants herein performed a service to all depositors who were not before the Court, which was not incidental to the claims of the opponents employing them and over and above the services rendered to their clients.
Under these exceptional circumstances, I think that appellants are entitled to recover by virtue of Articles 2295 and 2299 of the Civil Code and therefore respectfully concur in the decree.
. Nor do I perceive that McGraw v. Andrus,