142 F.2d 932 | 5th Cir. | 1944
Filed in a municipal bankruptcy proceeding, Re: Town of Belleair, Florida, after the approval of a plan of composition which contained no provision for such fees, the petition, filed on his own behalf by an attorney for objecting creditors, sought to have counsel fees allowed him. The claim in general
Petitioner is here insisting that the petition was not denied upon its merits but upon the erroneous view that the court was without power to entertain it, and because it was, the judgment should be reversed ánd the cause remanded with directions to the District Judge to consider the petition on its merits and determine what allowance, if any, should justly be made.
Appellees, on their part, pointing out that the petition was filed only after the plan had been approved with no provision in it for counsel fees to petitioner, and that it does not ask counsel fees for “services rendered and expenses incurred in obtaining the deposit of securities and the preparation of the plan”, urge upon us that, viewed as invoking bankruptcy powers, it is wholly insufficient, for it not only comes too late but asks for allowances not authorized by the act. Further, pointing to the terms of the order “It is thereupon Ordered, Adjudged and Decreed, that the application be, and the same is hereby, denied”, • and to the facts alleged in the petition and shown of record, they urge upon us that if the petition be regarded as invoking equity jurisdiction, it was denied on its merits, and rightly denied, and the order appealed from must be affirmed.
We agree with appellees. Though bankruptcy proceedings, including those for composition, are in their administration ruled by equitable considerations, Roberts v. Board of Public Instruction, 5 Cir., 117 F.2d 943, the proceedings are statutory and when, as here, one invokes bankruptcy powers, warrant for the action sought must be found in the statute. Here the only statutory provision dealing with allowances is Sec. 403(b), Title 11 U.S.C.A. It specifically prescribes the nature of compensation allowances which will be made and the manner of their making. Its provisions
The district judge was right then in his view that the allowance prayed for was not warranted under the provisions of the municipal bankruptcy act, and should, therefore, be denied. He was right, too, in the further view he took that, under the facts as alleged and shown of record, bankruptcy powers aside, the allowance sought was not authorized under general principles of equity.
Appellant is correct in his contention that the rule announced in Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157, and the host of cases following it down to and including Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184, that “A party who recovers a fund for the common benefit of creditors is entitled to have his costs and expenses paid out of the fund” [105 U.S. 534, 26 L.Ed. 1157], though usually given effect upon the application of the party, may be applied in proper cases upon the petition of the attorney. But it is only so applied when the circumstances are such as that parties sought to be held liable for fees can be said to have either expressly or impliedly accepted the attorneyship and its benefits.
The judgment was right. It is affirmed.
As detailed, the claim was that, because of his efforts as attorney for objecting creditors, at first Ed 0. Wright & Co., later Groves, Wainscott & Meredith, the first plan offering $171,600.00 in new refunding bonds was rejected, and the finally accepted plan offering $360,540.13 was approved, with a total increase to all creditors of $188,946.13; that of this increased amount, the creditors represented by him benefited to the extent of $35,710.82, the other creditors to the extent of $153,235.31; that he had been fully paid by his clients for the benefits accruing to them, and that from the other creditors who had paid him nothing he was entitled to a fee of $30,000.00 in cash or $35,000.00 in bonds to be paid by each in proportion to the benefits each received.
“This cause coming on to be heard on March 6, 1944, on the sworn application of Joseph P. Lea, Jr. for allowances of attorney fees, at which time there were present Cyril Poge, Esq., representing T. R. Palmer, and Paterson Savings Institution, Executor of the Estate of Garret A. Hobart, and Stuart B. Warren, Esq., representing Ed. C. Wright, both of whom filed motions to strike the petition, and the Court having considered the matter and being of the opinion that it has no power and authority under the Municipal Bankruptcy Act, 11 U.S.C.A. §§ 401-403, to make any such allowance, and that the Court, as a bankruptcy court, has no power under general principles of equity to make such allowance * *
“At the hearing, or a continuance thereof the judge may * * * allow reasonable compensation for * * * and the actual and necessary expenses in connection with the proceeding, including compensation for services rendered and expenses incurred in obtaining the deposit of securities and the preparation of the plan, whether such work may have been done by the petitioner or by committees or other representatives of creditors, and may allow reasonable compensation for tire attorneys or agents of any of the foregoing: Provided, however, That no fees, compensation, reimbursement, or other allowances for attorneys, agents, committees, or other representatives of creditors shall be assessed against the petitioner or paid from any revenues, property, or funds of the petitioner except in the manner and in such sums, if any, as may be provided for in the plan of composition.”
Central Railroad & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915; Clarke v. Hot Springs Elec. Co., 10 Cir., 76 F.2d 918; Colley v. Wolcott, 8 Cir., 187 F. 595; Wallace v. Fisk, 80 F.2d 897, 107 A.L.R. 726; Nolte v. Hudson Nav. Co., 2 Cir., 47 F.2d 166.
Nolte v. Hudson Nav. Co., supra; Fletcher v. Coomes, 52 App.D.C. 159, 285 F. 893; Howard v. Carmichael, 237 Ky. 462, 35 S.W.2d 852.