Court Opinion

ID: 7276350
Source: CourtListenerOpinion
Date Created: 2022-07-25 19:59:55.57967+00
Date Added: 2024-06-11T16:18:52.597668
License: Public Domain

Mr. Justice Síiepard
delivered the opinion of the Court:
1. The first error assigned is, that the bill was not dismissed for want of jurisdiction in equity.
There is no merit in this contention. Courts of equity have general jurisdiction in respect of bringing trustees to account and final settlement, and it is conceded that the bill would lie as originally framed. But it is contended that the stipulation accepting the trustees’ account as stated, arid removing all controversy as to the actual balance in hand, thus substantially amending the bill, left nothing in controversy that was not plainly remediable at law, notwithstanding that the trustees withheld the fund to secure the payment of the *73charges of their auctioneers, and to indemnify themselves for expenses they might incur in maintaining the justice of those charges. Moreover, the complainant, as holder of the note secured by the second mortgage, had no legal title to the surplus proceeds of the sale. It would serve no useful purpose, however, to consider and determine whether the court, at the hearing, could, without error, have dismissed the bill and remitted the parties to proceedings at law.
There was nothing to indicate bad faith in any of the allegations of the bill that were met by the stipulation. Both sides proceeded to take testimony after the stipulation, and submitted the case thereon. The question of jurisdiction in equity was not raised or suggested at any stage of the proceeding below, and, for reasons given at length in former decisions of this court, will not be considered. Tyler v. Moses, 13 App. D. C. 428, 443; Slater v. Hamacher, 15 App. D. C. 558, 569.
2. The second assignment of error raises the substantial question upon which the case turns, namely, whether the fees of the auctioneer are to be governed by the act of the District assembly, fixing the same.
That body, when in existence, on August 23, 1871, passed “An act imposing a license on trades, businesses and professions practiced or carried on in the District of Columbia.” The fifteenth section of this act prohibited the sale of real or personal property at auction by one who shall not have obtained a license as auctioneer,.and provided a penalty therefor'. Every auctioneer and real estate agent was also required to give a bond for the observance of the duties imposed. Section 21 requires auctioneers to pay an annual tax consisting of a fixed sum and a percentage of gross receipts, and concludes in the following terms: “And the rates of charges on the sale of real estate at public auction shall be five per cent, on the first two hundred dollars, two per cent, on the next one thousand dollars, and one per cent, on all amounts in excess of that sum.”
So much of the fifteenth section as imposes a tax upon real estate agents, and requires of them a bond, has been upheld *74by tbe Supreme Court of tbe District, in General Term, and the same decision would, for a stronger reason if anything, apply to auctioneers. District of Columbia v. Waggaman 4 Mack. 328.
The District assembly enacted many acts and regulations that have been in question before the courts and some of them have been declared in excess of the powers that could be constitutionally conferred by Congress upon the local municipal government. Roach v. Van Riswick, MacA. & M. 171; Stoutenburgh v. Hennick, 129 U. S. 141.
In the first of those cases, the general term declared it beyond the power of Congress to delegate to the assembly the power to enact a law making the judgments of the District courts liens upon equitable interests in real estate. The reasoning of the opinion delivered by Mr. Justice Cox amply demonstrates the soundness of the conclusion.
In Stoutenburgh v. Hennick, supra, the Supreme Court of the United States had under consideration a section of the same act now before us, which imposed a license tax upon commercial agents.
The right to tax as to those engaged in soliciting business for persons outside of the District, was denied. The power of Congress in respect of legislation for the District of Columbia, and the limitation upon the delegation of that power were thus stated by Chief Justice Duller, who delivered the opinion of the court: “ It is a cardinal principle of our system of government, that local affairs shall be managed by local authorities, and general affairs by the central authority, and hence, while the rule is also fundamental that the power to make laws cannot be delegated, the creation of municipalities exercising local self government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity.”
*75Congress has express povrer “ to exercise exclusive legislation in all cases whatsoever,” over the District of Columbia, thus possessing the combined powers of a general and of a State government in all cases where legislation is possible. But as the repository of the legislative power of the United States, Congress in creating the District of Columbia “ a body corporate for municipal purposes,” could only authorize it to exercise municipal powers.
Applying this rule to the clause of the section, above quoted, we are of the opinion that its enactment was beyond the power conferred upon the District assembly.
It is not a mere local regulation within the scope of the powers ordinarily delegated to municipal corporations, but an attempt at the exercise of a general legislative power over the freedom of contracts.
It is essentially different from the power exercised in other parts of the act in the matter of regulating the occupation of auctioneers, and laying a license tax upon the same.
It also differs from those enactments, frequently made by municipal bodies under special delegations of power, which regulate the charges, by fixing a maximum rate, of all persons engaged in certain particular callings, as for example, hackmen who make special use of the public streets and places in the pursuit of their regular calling.
It will be observed that the regulation in question does not undertake to fix a maximum rate of charges for auctioneers, leaving parties free to contract for less if they see proper, but undertakes to prescribe one absolute, invariable charge for all sales of real estate. In this respect it resembles an act prescribing the fees of public officers, for official services compulsorily rendered, and which, as a matter of sound public policy, are not permitted to become the subject of special contract.
This resemblance is increased by the terms of section 15 which provides that “ no person whatsoever shall sell at auction * * * without having first obtained a license therefor,” and contains no exception permitting an owner *76to sell his own property at a particular auction sale, where such acts of sale do not constitute a business.
3. No question is presented by this record that requires us to consider whether, under the terms of section 15, an owner of real estate, or a trustee under power conferred by the owner for the security of another, could, in person, sell the same at public auction without incurring the penalty prescribed. There is nothing in the nature of the trust, in this case, that would render it improper for the trustees to have the sale cried, in their presence and under their supervision and control, by a skilled auctioneer, when in their judgment it would tend to enhance the price obtained.
But whether, having so conducted a sale, the trustees could lawfully make the reasonable fees of the auctioneer a charge against the proceeds; or whether, being charged with the express duty of making the sale, the fees of the auctioneer representing them therein should not be a charge against them personally, are questions, also, that we are not called upon to determine. The record shows, that the complainant recognized the auctioneer’s fees as chargeable against the proceeds of the sale, and was willing to allow a charge reckoned in accordance with the rates prescribed by rule of court for chancery sales. The amount allowed by the court in the final decree to be retained by the trustees for the payment of the auctioneers was fixed substantially on that basis, and was acquiesced in by the complainant? who took no exception and prosecuted no appeal.
The sum allowed by the court was, under the testimony, sufficient compensation for the services rendered in making the actual sale, and we do not understand the appellants as objecting to the same independently of the claim to compensation founded on the provisions of the act of assembly that has been declared void. "We say actual sale, because the appellants, founding their contention upon the act of assembly, are in no condition to claim that the first sale was effectual, for the testimony shows that it was not conducted *77by the licensed auctioneer, but by a clerk in his service who does not appear to have had a license under the requirement of section 15, which stands unaffected by the conclusion in respect of the objectionable ''clause of section 21. There is nothing in section 15 that indicates the existence of authority on the part of a licensed auctioneer to act by deputy or agent.
4. W'e cannot regard the testimony tending to show a common practice on the part of trustees in this District, in cases of trusts to secure loans, to stipulate for nominal, or reduced charges by the auctioneers, provided the proceeds of sale are insufficient to pay the entire amount of the debt and expenses, and to permit them to exact the exorbitant fees estimated according to the rate of the act of assembly, where there shall be a surplus, as furnishing any basis for allowance in this case. Appellants were trustees, not exclusively for the holder of the loan, but for the mortgagor as well. Their first duty was to the creditor, in respect of making a sale upon default of the mortgagor, because the instrument creating the trust so provides; but in respect of conducting the sale fairly and limiting its expenses within reasonable bounds, they were under an equal obligation to the mortgagor.
There is nothing in the opinions of this court in former cases, one of which has been cited, that is not in strict accord with this equitable principle. Anderson v. White, 2 App. D. C. 408, 419; Wheeler v. McBlair, 5 App. D. C. 375, 384; S. C., 172 U. S. 643.
Assuming, then, that the trustees were entitled to an allowance for 'auctioneers’ charges as part of the legitimate expenses of the sale, it was their duty to arrange therefor, in advance, for the protection of the mortgagor’s interests as well as those of the holder of the first secured note.
The testimony showing the existence of a practice to the contrary does not make it an established usage commonly recognized and acquiesced in by all persons interested in such matters; but if it were shown to exist as a usage we *78would not countenance its enforcement. Courts will not give their sanction to usages which do not tend to promote just dealings between parties, and, for a stronger reason, they will not recognize one that contravenes a fundamental principle of equity and justice.
5. The last error assigned is founded on so much of the decree as awards costs against the appellants. Passing by the question of the appealable nature of such an order, the award of costs in a proceeding in equity is a matter of sound discretion, the exercise of which, as in other orders of that nature, will never be disturbed save in plain cases of its abuse.
In the award of costs the court was undoubtedly influenced by the particular conditions of the case developed by the testimony.
In the first place, the probable charges of the auctioneer had been the subject of discussion between the parties, in ample time for the settlement of the same by special contract before the first and ineffectual sale; and before the final sale, the mortgagor and the complainant had protested against any charge greater than that finally allowed by the court.
In the second place, it appears that the litigation began in the purpose to enforce the claims of the auctioneer, at the exorbitant rate prescribed by the act of assembly, and that the auctioneer has assisted in maintaining the litigation for the purpose of asserting the binding obligation of that act.
We find no error in the decree appealed from, and it will be affirmed, with costs. Affirmed.