Court Opinion

ID: 6848802
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:32:55.098186+00
Date Added: 2024-06-11T16:05:01.825571
License: Public Domain

On Petition for Rehearing.
In a petition for rehearing it is earnestly insisted that this eourt is without power, according to the established usages of equity, to allow the expenses of litigation, including counsel fees, to the prevailing party; that the only counsel fees which may be allowed are those in the statute covering taxable costs.
The power of courts of equity over costs does not rest upon the statutes, but upon usage long continued. Newton v. Consolidated Gas Co., 265 U. S. 78, 44 S. Ct. 481, 68 L. Ed. 909; Ex parte Peterson, 253 U. S. 300, 40 S. Ct. 543, 64 L. Ed. 919. The rules of the High Court of Chancery of England have been followed by the courts of the United States. Pennsylvania v. Bridge Co., 13 How. 518, 563, 14 L. Ed. 249. Such rules allowed costs as between solicitor and client where the litigation is false, unjust, vexatious, wanton, or oppressive. In Guardian Trust Co. v. K. C. Southern Ry. Co. (C. C. A. 8) 28 F.(2d) 233, counsel fees were allowed the prevailing party. Judge Booth’s opinion in that case traces the history of the allowance in equity of fees as between solicitor and client from the early English eases to. the present; it is an exhaustive treatise on the subject, and a powerful authority in support of the power of equity to allow fees where equity and good conscience require it. That decree was reversed because it granted relief at variance with a'prior mandate of the Supreme Court (281 U. S. 1, 50 S. Ct. 194, 74 L. Ed. 659), but the authority of Judge Booth’s opinion *839was not impaired. The fact that the Guardian Trust Company was a trustee is not important; the allowance was not from the trust estate, but was against a stranger to the trust.
This opinion of the Eighth Circuit Court of Appeals, and the wealth of authorities therein cited, would be strong support for the decree directed by this court, if counsel fees had been included in the absolute decree against the appellant. That is not our decree, and counsel entirely misapprehend it. Only the costs between the parties—the taxable costs—were awarded against Rude, to be collected on execution if need be. Counsel fees were not included therein. What this court did was to impose a condition upon the decree asked for and awarded the appellant. The situation is this: The appellant alleged that a fund was in the possession of an escrow agent, which had agreed to hold the fund until appellant and appellee agreed in writing upon its disposition; that the parties could not agree; the appellant asserted a lien thereon, sought its foreclosure and prayed “for such other and further relief as to the Court may seem just.” Appellant made the escrow agent a defendant; the escrow agent prayed for instructions as to a disposition of the fund. The appellee alleged joint ownership of the fund, and that the only reason for a failure to agree on its disposition was the assertion of the “wrongful and fraudulent demands and conduct of the plaintiff,” and appellee prayed for “such other and further relief as in equity and good conscience the facts warrant.” In this court appellant earnestly and vigorously insisted that if his lien was not sustained, the court should terminate the litigation by a decree of distribution. Appellee resisted this, and claimed that appellant had forfeited any interest in the fund by his conduct.
For all practical purposes, the fund was in court; appellant devoted five pages of his brief to the proposition that “equity having jurisdiction, having all of the parties and the evidence before it, should order disposition of these funds and bonds in accordance with the respective rights of the parties.” Many controlling authorities were cited, among them Kinney-Coastal Oil Co. v. Kieffer, 277 U. S. 488, 507, 48 S. Ct. 580, 584, 72 L. Ed. 961, from which appellant quoted the following: “It is a general rule that a court of equity, in a suit of which it has and takes cognizance, may administer complete relief between the parties, even though this involves the determination of legal rights which otherwise would not be within the range of its authority. * * * And under that rule a court of equity in awarding relief to one party may impose conditions protecting and giving effect to correlative rights of the other.”
In strict accord with appellant’s contention and the authorities cited, a decree was directed, and conditions imposed that appeared to us to be equitable. Now it is asserted that we are without power to impose conditions on the decree. The authorities support appellant’s original contention. In addition to the controlling authority above cited, see Foster’s Fed. Prac. (6th Ed.) p. 908, wherein the author cites many eases to the effect that “In some eases it enforces this by the entry of a conditional decree without reference to the pleadings,” and 10 R. C. L. 357, “The decree should be adapted to the eireumr stances and necessities of each ease and should be so designed as to put an end to the litigation and not to foster it. And of course the court may attach to the grant of relief any conditions that to it seem proper.” See, also, 21 C. J. 667, and many cases there cited.
That the conditions imposed concerned attorney’s fees is a mere coincidence. The appellant, as a condition to a decree of distribution prayed for by him, should be required to bear the loss occasioned by his own inequitable conduct. It was the assertion of a false and groundless claim that prevented a distribution of the fund without the aid of equity. Such inequitable conduct put the other parties to expense in order to procure a distribution. That such expenses happen to be in part attorney’s fees is not fatal. In Trustees v. Greenough, 105 U. S. 527, 535, 536, 26 L. Ed. 1157, the Supreme Court held: “The fee-bill is intended to regulate only those fees and costs which are strictly chargeable as between party and party, and not to regulate the fees of counsel and other expenses and charges as between solicitor and client, nor the power of a court of equity, in eases of administration of funds under its control, to make such allowance to the parties out of the fund as justice and’equity may require.”
But, it is urged, the pleadings do not admit of such, conditions. Both appellant and appellee plead the facts as claimed by them, and both asked for general relief. In Lock-hart v. Leeds, 195 U. S. 427, 437, 25 S. Ct. 76, 79, 49 L. Ed. 263, it was held that “There is no reason for denying his right to relief, if the plaintiff is otherwise entitled to it, simply because it is asked under the prayer for general relief, and upon a somewhat different theory from that which is advanced under *840one of the special prayers.” See, also, United States v. Amalgamated Sugar Co. (C. C. A. 10) 48 F.(2d) 156. The facts were pleaded and proven. We do not understand that the eourt is without power to impose an equitable condition on a decree unless one or the other of the parties specifically prays for the imposition of a particular condition. The plaintiff very seldom prays that a condition be imposed that requires him'to do equity; generally the defendant challenges the right of plaintiff to any relief, and hence does not ask for the imposition of conditions. The appellant’s contention comes to this, that the court is powerless to impose any condition on a decree unless one of the parties requests it; and that the eourt has no constitutional power to impose a condition unless counsel is first advised of the condition which the court proposes to impose, and has an opportunity to be heard as to the propriety thereof. We do not agree. If a plaintiff comes into court and asks for an equitable decree, and all the facts are presented to the eourt, the chancellor has power to enter such decree as is just and equitable, and we know of no rule that requires the chancellor to submit to counsel the conditions which he proposes to impose, and for a hearing on each of such conditions, prior to the entry of the decree. If such were the law, the wholesome power of equity to condition a decree would be without substance.
It is urged that the trial eourt erred in excluding Rude’s testimony concerning a telephone conversation with Buehhalter. Rude’s denial of Buchhalter’s testimony thereto was admitted, and an offer of proof was made of the excluded testimony, which we treated as testimony. Equity Rule 46 (28 USCA § 723). The testimony of Binstoek which was excluded was corroborative of other testimony as to the preliminary negotiations, which we have found to be true.
Complaint is made because of the finding that Rude’s suit was not in good faith. We have gone over the evidence again, and while it is possible that we have erred, we remain of the same opinion. It does not appear to be a ease of mistake. The appellant’s case was founded upon an alleged oral agreement which appeared to us to be improbable, which was flatly denied, and which did not accord with the circumstances. The language of the opinion is severe; but words should not be minced in characterizing the assertion of a false and groundless claim. It is suggested that the trial eourt did not find that Rude’s claim was groundless. In, equity the appellate eourt is not bound by the findings of the trial court. Furthermore, the trial court denied the plaintiff any relief, which decree could only be predicated upon a finding that the story told by Mr. Rude was not established.
It is intimated that the opinion of this eourt reflects upon counsel for Mr. Rude. We did not so intend. Mr. Rude doubtless disclosed to his counsel the same story to which he testified on the stand. If that story was true, he was entitled to the relief prayed for, and there can be no possible reflection upon his counsel for presenting to the court Mr. Rude’s version of the transaction. The faets in the case did not develop until the defendant introduced his evidence.
Complaint is made because this court Aid not pass upon the interesting legal questions presented by a motion to dismiss the Buehhalter appeal. One of the grounds of the motion was that the appeal was frivolous. We found that appeal to be without merit, and taxed the costs against Buehhalter, except for printing the record which was necessary in considering Rude’s appeal. We saw no occasion for passing upon other difficult questions presented by the motion.
The petition for rehearing and to modify the opinion is denied.