Court Opinion

ID: 3875478
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:08:37.737652+00
Date Added: 2024-06-11T07:41:43.983347
License: Public Domain

April 21, 1904. The opinion of the Court was delivered by
This action is in the nature of a creditor's bill brought by Henry Oliver, American Lucol Company, Darlington Electric Fountain and Supply Company, in behalf of themselves and other creditors who might come in. The object of the action was to obtain the appointment of a receiver for the defendant insolvent company, and the collection and distribution of the assets among the creditors under the direction of the Court.
The appeal is from the following order: "In view of the stipulation entered into soon after the commencement of the litigation in this matter, a serious question has arisen, as to the allowance of counsel fees to the counsel engaged in this cause. The counsel engaged in behalf of the receivers having declined to act further in the matter, the receivers found themselves in a position in which they had to employ counsel. They were trustees accountable for the carrying out in a proper manner the matter confided to their trust. They deemed it necessary to have counsel to assist them in this undertaking. Being without counsel in this changed state of affairs, if they had applied, they would have been permitted to have employed counsel and to have compensated such counsel. It is a fundamental rule that where trustees act bona fide for the purpose of carrying out their trust, and do any act or acts for the benefit of those interested, the Court will sanction such act.
"In my opinion, the receivers acted wisely in employing counsel, and such counsel should be paid.
"This matter has not been contested before me by a great majority of the creditors, who coincide with the views herein expressed, but the position is contested by the counsel for Mr. Wagener, not because the work has not been done, and faithfully done, by the counsel now seeking compensation, but for the reason that, for the protection of the interests of his client, he thinks he should object, in view of the stipulation entered into, as before stated. *Page 570 
"The matter being contested, I will not attempt to refer it entirely to the master, but will seek his aid in obtaining testimony, so that the Court may fix the proper fee for the attorney for the receivers, and may have before it testimony as to fees for the other counsel. It is, therefore, ordered, that it be referred to G.H. Sass, Esq., one of the masters for said county, to take testimony as to the amount that should be allowed to M. Rutledge Rivers, Esq., as counsel for the receivers, and to take testimony as to the nature and value of the services rendered by the other counsel respectively engaged in the case.
"As to the said M. Rutledge Rivers, representing the receivers, I hold that he is entitled to compensation, for the reasons hereinbefore stated, leaving the amount to be fixed by future order of this Court upon the coming in of the master's report, and as to the other counsel engaged in the case, upon the coming in of the master's report, leaving the question then to be determined as to whether they are entitled to compensation, and, if so, the amount of the same.
"At such reference, of course, all the counsel engaged in the cause will be notified, and then the stipulation entered into and all other such matters as those objecting deem material may be put in evidence and brought to the attention of the Court."
The appellant's exceptions are as follows:
"1. That the presiding Judge erred in holding that M. Rutledge Rivers, Esq., receiver's counsel, was entitled to compensation to be paid out of the funds herein.
"2. That the presiding Judge erred in referring it to the master to ascertain and report what amount should be allowed M. Rutledge Rivers, Esq., as his compensation.
"3. That the record in this case disclosing the fact that the entire scheme of these proceedings was that neither receivers nor counsel, whether representing parties or receivers, should be paid fees from the funds realized in this case, the presiding Judge erred in allowing compensation to one attorney in the case without also allowing compensation to *Page 571 
other attorneys whose services had been rendered in the creation and preservation of the fund, and especially to the counsel for the plaintiffs, who had filed this proceeding to raise a fund for the payment of the creditors of said company, and who as plaintiffs had the carriage of the cause."
Waiving the objection that the objections raising the question whether the appellant should not be required to contribute his pro rata of the fund in Court toward the payment of Mr. Rivers' fee, is too general for consideration, because it fails to point out specifically wherein there was error, it, nevertheless, cannot be sustained.
The agreement entered into before the receiver was appointed could not have the effect of limiting the powers of the court of equity, so as to prevent it from exercising full control over the property which it took in charge. Nor did the first order, providing that counsel employed by the receiver should not have compensation, prevent the Court from passing a subsequent order allowing compensation when it became necessary to preserve the fund in its keeping.
The question raised by the third exception is not properly before this Court for consideration, as it has not yet been determined by the Circuit Court, but as it may save the trouble and expense of another appeal, we will not decline to dispose of it. The services of the other attorneys were not rendered in preserving the fund in the hands of the Court, and this question is not governed by the principle applicable to the fee of Mr. Rivers.
It is the judgment of the Court, that the order of the Circuit Court be modified.