Court Opinion

ID: 8862434
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:53:35.180448+00
Date Added: 2024-06-11T17:05:52.503900
License: Public Domain

SHIPMAN, Circuit Judge.
Two preliminary motions by the ap-pellees are to be disposed of prior to a consideration of the merits of the appeal. Since the entry of final judgment in the Claflin suit, there have been three independent proceedings at the foot of the decree: (1) The present proceedings at the suit of Lee & Lee. (2) A proceeding upon the petition of George H. Wooster for the repayment of his disbursements in the litigation. (3) A motion to substitute Charles H. Trowbridge, as trustee of the Elm City Company, in the place of Tuttle, as complainant in the Claflin suit. This motion was denied.
*124There are in the transcript of record, from printed pages 174 to> 178, inclusive, copies of a stipulation and of two orders of court, and the opinion of the court relative to the second and third proceedings-only. The present motion is to strike from the record that part of it which is included in these pages, because they relate to different proceedings from the one in which this appeal is taken. The position of the appellees is well founded, the papers are not properly a part of the transcript of record, and the motion is granted, except as to the order upon the application of George H. Wooster.
The second motion is to dismiss the appeal because the order was-not appealable, and because the appellants are not parties to this-cause or proceeding. The history of the application of the appellees,, which has been heretofore given, shows that, while they are not parties in technical form, they were in fact made parties by the order of the circuit court, and are properly appellants. That the order of the circuit court of April 6, 1898, was a final decree from which an appeal could be taken, was decided in Trustees v. Green-ough, 105 U. S. 527. The order, like those in that case, was “a final determination of the particular matter arising upon the complainant’s petition for allowance.” The motion is denied.
It appears from the master’s report that the patent in the ClaHim Case was owned by the Elm City Company, an insolvent corporation,, which made, in 1876, an assignment of its assets to Tuttle, as trustee for its creditors. The suit was commenced on August 1, 1878. In June, 1883, Tuttle, as trustee, and George H. Wooster, who was the owner of patents known as the “Pipo Patents,” and upon which' he had also a suit against H. B. Claflin & Co., agreed that each would push, at his own expense, the suits to a final determination, and divide the gross proceeds equally. In 1888 another agreement between the same parties was made, by which Tuttle, as trustee, made Wooster his attorney to prosecute the suits, with full power to settle and compromise them and to employ counsel. In the same year another agreement was made, by which Wooster agreed to hold Tut-tle, as trustee, harmless from all costs and expenses arising out of said suits, but Wooster was to be reimbursed out of the gross proceeds, and before the division thereof, his expenses and those which, he might become liable to pay. The poverty of the Elm City Company’s estate induced Tuttle to make these agreements. In 1890, Wooster retained B. F. Lee, Esq., and he had also retained W. T. B. Milliken, Esq. Mr. Lee was the active patent lawyer in the case. Wooster paid the expenses incidental to the suit, amounting, as he-says, to $5,488.31. Tuttle paid nothing and took no part in the litigation, except to tell Milliken that he had no funds and no collectible assets, and that Milliken must look for his compensation alone to the funds which might be recovered.
The appellants insist that the contracts made by Tuttle as trustee were improvident and ultra vires, and that the entire fund should be sent to the probate court at New Haven, which has charge of the settlement of the estate of the Elm City Company, and which should make the proper allowances, if any, for services. Inasmuch as Wooster was fully clothed with the apparent power to employ counsel, *125as the trustee took no part in the litigation, paid and proposed to pay nothing, and relieved the estate irom all liability in case of non-success, and as the fund was obtained by the disbursements of Wooster and the services of those whom he employed, they have an equitable lien upon it, and the circuit court, which properly has control of the fund, should adjust the amount of the liens for these services before transmitting it to another jurisdiction. Trustees v. Greenough, 105 U. S. 527; Railroad Co. v. Pet tus, 113 U. S. 116, 5 Sup. Ct. 387.
The master made a careful report, which considered the value of the services of Messrs. Lee & Lee, based upon a quantum meruit, and found that they were reasonably worth the sum of $13,000, from which should be deducted “¡'1,850, a sum already paid by Wooster, leaving a balance due of $11,150, to which should be added 8284.90 for disbursements which they made. The contest before the master was between Lee & Lee and the opposing creditors, so called. After the payment of $1,850 had been made, and after a decree in the Olallin Case for six cents damages and such an apportionment of costs that a balance would be in favor of the defendants, and after an appeal had been taken, B. F. Lee and Wooster entered into an agreement, dated December 29, 1894. The important part of the agreement, after a recital of the condition of the suit, is as follows: Lee agreed to act as counsel for Wooster in the prosecution of said appeal, and to use all reasonable and proper efforts to secure a reversal of said final decree. Wooster agreed to pay all disbursements connected with said suit and with said appeal that had already been made or incurred, or that might thereafter be incurred, other than fees of solicitor and of counsel, and agreed that Lee should receive 20 per cent, of the gross amount of any recovery which should be paid in said suit, after deducting from said total recovery and payment all expenses and disbursements of litigating said suit theretofore, or which might thereafter be expended or incurred, apart from such 20 per cent.
The value of the whole services, estimated upon a quantum meruit, would probably exceed the 20 per cent, mentioned in this contract. The proper construction of the contract is therefore an important question. Was it confined in point of time to the date of the opinion of the first appellate court, or did It include all services before that court, and exclude any possible services before the supreme court? After the decision of the court of appeals, the defendants made a motion to modify the proposed order for a mandate so that the case should be sent back to the master for further evidence. This motion was based upon affidavits which were intended to show that a different state of facts could be proved before the master. Another motion was made upon the ground that Tuttle, as trustee, had no title to the patent in suit. After the denial of these motions, the defendants applied to the supreme court for a writ of certiorari, which was opposed by a brief and an oral statement, a.nd was denied, so that a large amount of work was performed after the opinion of the court of appeals was filed.
We think that this contract should no.t be construed as limited in point of time to that date, or to a mandate which might forthwith *126follow the opinion, but it included whatever contests and arguments should take place in the appellate court. It was to be expected that some motion would be made by the defendant in case of non-success, and the contract looked to a compensation based upon a permanent reversal of the decree of the circuit court, for the new agreement would have been an inadequate benefit to Wooster if a new compensation upon the basis of a quantum meruit was to commence after a successful argument in the court of appeals. We think that the contract meant to include services necessary to render a reversal valuable and remunerative, and to cover those rendered in opposing a writ of certiorari. Mr. Lee entered into a contract for services for a compensation based upon the successful attempt to reverse the decree, which meant to keep it reversed, so as to secure a fund out of which he could be paid, and a defense against the application for a writ of certiorari is one of the not unusual incidents to success in the first appellate court. The compensation to Lee & Lee must, therefore, be governed by the contract, and should be estimated as follows: The amount of interest paid by the depositary, being at the rate of 1-J per cent, per annum, is to be added to the amount of the judgment, from which should be deducted Wooster’s claim of $5,438.31, and Lee & Lee’s disbursements of $284.90, and the amount of 20 per cent, upon the balance, plus $284.90, with interest from February 11, 1898, the date of the master’s report, upon the amount of the fund not heretofore paid to Lee & Lee, should be ordered paid by the clerk of the court to them. If a payment has been made from the fund to Lee & Lee under the order of April 6, 1898, such amount will be regarded as part payment of the sum named in the decree. We do not include Milliken’s solicitor’s fees in the disbursements to be deducted from the judgment, because the contract provided that these fees were not to be paid by Wooster, and the expenses which were to be thereafter deducted were those which he had paid or was thereafter to pay.
In regard to Mr. Milliken’s fees of $3,500, there was no testimony before the master which characterized this sum as an unreasonable amount. The master has found it to be reasonable, and, without testimony or further knowledge upon the subject, we cannot pronounce it excessive. The order in regard to his fees is affirmed.
The order in regard to the amount to be paid Lee & Lee is modified as hereinbefore specified, and the cause is remitted to the circuit court, with directions to enter a modified decree in accordance with the directions contained in this opinion. The appellants and the appellees will each pay their own costs in this court. The appellants will pay' one-half the cost of printing the record, and Lee & Lee and Milliken will each pay one-quarter of said cost.