Court Opinion

ID: 8782812
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:24:48.468199+00
Date Added: 2024-06-11T17:02:55.220517
License: Public Domain

PARDEE, Circuit Judge
(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, liens; 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 thereafter 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. 176 Fed. 1022, 100 C. C. A. 666, and see 180 Fed. 374. 103 C. C. A. 520. In all the proceedings Bidwell and Woodford acted in the capacity of trustees for all the creditors (all of whom intervened during the progress of the suit), and through their solicitors managed and conducted the litigation, which resulted in bringing the fund into court to the direct advantage of Huff, in that all his debts will be paid and a large surplus left to him. The only benefit the creditors can or will receive will be the payment of Huff’s just obligations, and no more.
“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 railroad 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]. The 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.” Dodge 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 practice 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 *434theory, and in some well-managed cases in practice, at the expense of the delinquent nonpaying debtor; for unless the fund brought into court is sufficient to pay all costs and allowances taxed as costs and pay in full the obligations in suit, the obligations are not extinguished, and if the proceedings are properly conducted, the unpaid creditors under our equity rule 92 may have a deficiency execution or may further proceed at law or in equity to collect the unpaid balance of their adjudged claims.
In my opinion, following the usual practice, an allowance should be made from the fund in court for counsel fees to the acting trustees.