Allen v. City of Omaha

• Decision Date: 11 July 1939
• Docket Number: 30545.
• Citation: 286 N.W. 916,136 Neb. 620
• Parties: ALLEN ET AL. v. CITY OF OMAHA (BUTLER ET AL., INTERVENERS).
• Court: Nebraska Supreme Court

286 N.W. 916

136 Neb. 620

ALLEN ET AL. v. CITY OF OMAHA (BUTLER ET AL., INTERVENERS).

No. 30545.

Supreme Court of Nebraska.

July 11, 1939

Syllabus by the Court.

1. Where the board of trustees of the police relief and pension fund, created under the provisions of section 14-610 et seq Comp.St.1929, fail upon demand to enforce the payment by the city of the amounts therein described, a beneficiary under the fund may properly maintain an action against the city to recover the amount due for the use and benefit of such fund.

2. Where the services of a litigant's attorney result in rescu ing or preserving a large amount of property or funds, not only for the benefit of the particular litigant, but for the benefit of all others in the same class, and by means of these services the property or funds are conserved for the benefit of all, the expense thereof including attorney's fees, should be borne by those benefited by it.

3. The most equitable method of securing a proper proportion of the expense from each of the parties benefited is to make such expense a charge on the fund.

4. Where a fund is made up from moneys received from and through certain operations of the police department of a city, and not by general taxation, and where such fund is segregated for the specific purpose of paying benefits to retired and disabled policemen, the fund is not, strictly speaking, a public fund, even though the city treasurer is made the custodian thereof.

5. In determining the value of legal services rendered by an attorney, it is proper to consider the amount involved, the nature of the litigation, the time and labor required, the novelty and difficulty of the questions raised and the skill required to properly conduct the case, the responsibility assumed, the care and diligence exhibited, the result of the suit, the character and standing of the attorney, and the customary charges of the bar for similar services.

6. One having an interest in the result of pending litigation may intervene as a matter of right by virtue of section 20-328 Comp.St.1929.

Appeal from District Court, Douglas County; Dineen, Judge.

Action by George W. Allen and others against the City of Omaha to recover the amounts due the police relief and pension fund of the City of Omaha, wherein Dan B. Butler and others intervened. From a judgment against the City of Omaha, and dismissing the petition in intervention, the City of Omaha and the interveners appeal.

Judgment affirmed in part and reversed in part, and cause remanded with directions to enter judgment in accordance with opinion.

Seymour L. Smith, Harold C. Linahan, W. W. Wenstrand, and Louis T. Carnazzo, all of Omaha, for appellant City of Omaha.

McKenzie & Dugan, of Omaha, and Williams, Beynon & Nye and Francis V. Robinson, all of Lincoln, for appellees.

Heard before SIMMONS, C. J., and ROSE, EBERLY, PAINE, CARTER and MESSMORE, JJ.

CARTER, Justice.

This is an action against the city of Omaha to recover the amounts due the police relief and pension fund of the city under the provisions of section 14-610, Comp.St.1929. The action was commenced by three retired police officers now on pension as beneficiaries of the fund. A petition in intervention was filed by the members of the city council in their capacity as trustees of the police relief and pension fund. The trial court entered a judgment against the city for $466,058.84, allowed an attorneys' fee of $46,605.88, and dismissed the petition in intervention. From this judgment the defendant and interveners appeal.

Since 1909 the statutes of Nebraska have provided for a police relief and pension fund and designated the sources of revenue to maintain the fund. Laws 1909, ch. 15. In the original act it was provided, among other things, that " all moneys, pay, compensation or salary, or any part thereof, forfeited, deducted or withheld from any member or members of the police force for or on account of absence for any cause, lost or sick time, suspension, sickness or other disability, physical or mental * * and all moneys realized, derived or secured from the sale of any condemned, unfit or unserviceable personal property belonging to or in the possession or under the control of the police department, after deducting all expenses incident thereto," should be set apart for the benefit of the fund. These provisions are still in force and now appear in section 14-610, Comp.St.1929.

It was stipulated by the parties that since July 1, 1909, lost and withheld pay in the amount of $264,675.38 has been wrongfully retained in the general fund of the city, and that unfit and unserviceable automobiles of the value of $63,334.83 have been sold and not credited to the fund. It was further stipulated that, if said amounts had been timely credited, the sum of $138,048.63 would have been earned by their investment. The total sum of these items constitutes the amount of the judgment entered against the city of Omaha.

This appeal raises four questions for our consideration: (1) Were the plaintiffs proper parties to bring this suit? (2) Did the court have the power to allow an attorneys' fee payable out of the funds recovered? (3) If so, was the amount of the attorneys' fee excessive? (4) Was the petition in intervention properly dismissed? We will devote ourselves to these questions in the order designated.

By express terms, section 14-612, Comp.St.1929, makes the members of the city council the board of trustees of the police relief and pension fund. The plaintiffs, and others similarly situated, were unquestionably beneficiaries of the fund. A trust relationship therefore existed. The defendant contends, however, that payments made from the fund are on general obligations of the city and will have to be paid whether the fund is strictly maintained as provided by the statute, or not. It is upon this premise that defendant bases his argument that plaintiffs, as retired police officers, are not prejudiced by the failure of the city to make the payments for which suit was brought, and therefore they are not proper parties. While it is true that a policeman's pension is classified as a part of his compensation and not a gratuity, and for which a city is ultimately liable, this is not a controlling factor in determining whether a beneficiary under the pension fund may maintain a suit for himself, and others similarly situated, to preserve or augment the fund. The statute does not provide for a general levy by taxation as a means of raising the revenue necessary to carry out the purposes of the law. The fund is made up from moneys received from and through certain operations of the police department, and while under the holdings of this court the city is liable for pension payments where the rights thereto have vested, whether the funds have been thus provided or not, the beneficiaries will not be relegated to the single remedy of suing for their pension payments. While the city is ultimately liable, the plaintiffs as beneficiaries of the trust are proper parties to invoke the power of the courts to compel compliance with the statute creating the fund. To require the beneficiaries of the fund to wait until the money was exhausted, and then limit them to a suit at law to enforce their individual rights, does not afford the only remedy. Demands were made upon the board of trustees of the fund, demanding that they take steps to enforce compliance with the statute without result. Under such circumstances, the plaintiffs have sufficient interest to maintain a representative suit on behalf of all the beneficiaries of the fund.

It is urged that this is not a proper case for the allowance of an attorneys' fee out of the fund recovered. The applicable rule is as follows: Where the services of a litigant's attorney result in rescuing or preserving a large amount of property or funds, not only for the benefit of the particular litigant, but for the benefit of all others in the same class, and by means of these services the property or funds are...