Capital Trust Co v. Calhoun

• Decision Date: 02 June 1919
• Docket Number: No. 368,368
• Citation: Capital Trust Co v. Calhoun, 250 U.S. 208, 39 S.Ct. 486, 63 L.Ed. 942 (1919)
• Parties: CAPITAL TRUST CO. v. CALHOUN
• Court: U.S. Supreme Court

250 U.S. 208

39 S.Ct. 486

63 L.Ed. 942

CAPITAL TRUST CO.

v CALHOUN.

No. 368.

Argued May 2, 1919.

Decided June 2, 1919.

Mr. T. L. Edelen, of Frankfort, Ky., for plaintiff in error.

Messrs. Charles F. Consaul and Joseph W. Bailey, both of Washington, D. C., for defendant in error.

[Argument of Counsel from pages 209-212 intentionally omitted] Mr. Justice McKENNA delivered the opinion of the Court.

Proceeding in equity under the law of Kentucky for an accounting from the Capital Trust Company as administrator de bonis non of the estate of Thomas N. Arnold, deceased, and that the estate be settled and distributed.

Defendant in error Calhoun and Calhoun & Sizer, a firm cm posed of C. C. Calhoun and Adrian Sizer, attorneys at law, appeared in the proceeding and by cross-petition prayed judgment against the trust company as such administrator for the sum of $1,504.50, with interest from July 10, 1915.

An outline of the facts is as follows:

Thomas N. Arnold, prior to his death, believing that he had a just claim against the United States, entered into a contract with the firm of Calhoun & Sizer and employed it to undertake the prosecution of the claim, and on August 1, 1905, entered into a written contract with it by which in consideration of the services rendered and to be rendered by it in the prosecution of the claim, he agreed to pay it a fee equal in amount to 50 per cent. of whatever sum of money should be awarded or collected on the claim, the payment of which was made a lien upon the claim or upon any draft or evidence of payment that might be issued in liquidation thereof.

The firm undertook the prosecution of the claim and bills were introduced in Congress for its payment, and on May 22, 1908, it was referred to the Court of Claims by a resolution of the United States Senate for findings of fact under section 14 of the Act of March 3, 1887, c. 359, 24 Stat. 507, now section 151 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1138 [Comp. St. § 1142]). About that time the firm of Calhoun & Sizer was dissolved and subsequently Arnold died and the beneficiaries of the estate entered into a written contract with defendant in error, C. C. Calhoun, to continue the prosecution of the claim and agreed to pay him 50 per cent. of the amount which might be collected, the fee to be a lien 'on any warrant' which might ' be issued in payment of the claim.'

January 15, 1912, the Court of Claims made findings of fact in the matter of the claim and stated the amount thereof as $5,051. The court's findings were certified to Congress and that body, by an act approved March 4, 1915 (38 Stat. 968, c. 140), made an appropriation for the payment of the claim and the Secretary of the Treasury was directed to pay it.

The act, however, contained the following provisions:

'That no part of the amount of any item appropriated in this bill in excess of twenty per centum thereof shall be paid or delivered to or received by any agent or agents, attorney or attorneys on account of services rendered or advances made in connection with said claim. It shall be unlawful for any agent or agents, attorney or attorneys to exact, collect, withhold or receive any sum which in the aggregate exceeds twenty per centum of the amount of any item appropriated in this bill on account of services rendered or advances made in connection with said claim, any contract to the contrary notwithstanding. Any person violating the provisions of this act shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be fined in any sum not exceeding one thousand dollars.' 38 Stat. 996.

June 7, 1915, Calhoun requested the Secretary of the Treasury to issue a warrant to him for the sum of $1,003, which he recited was to be payable to him on account of services as attorney in the claim of the Capital Trust Company against the United States, as appropriated for by the act of Congress, the receipt of said warrant to be taken and accepted as a full and final release and discharge of any claim he had against the United States on account of services in said claim.

Afterward, on July 1, 1915, notice was given to Calhoun, as attorney for the claimant, that in settlement of the claim a check was mailed to him for $1,003, being 20 per cent. of the claim, and to the trust company as administrator de bonis non of Arnold, check for $4,012. A part of this money is still in the hands of such administrator and there is no other property belonging to the estate.

The cross-petition additionally asserts the following: No part of the fee except the sum of $1,003 has been paid and there is a balance due of $1,504.50, with interest from July, 191, the date the money was received by the trust company.

July 10, 1915, Calhoun presented his claim to the administrator duly proved and demanded payment, but payment was refused. The whole of the $1,504.50, there fore, remains unpaid, and he, Calhoun, has a lien upon the fund for the payment, he having accepted the check for $1,003 under protest and only on account. The contract preceded the act of Congress and when the act was passed such contracts were lawful and Congress was without authority to take from him his property without due process of law or just compensation therefor or to deprive him of his liberty of contract.

This is repeated and emphasized in various ways and the Fifth Amendment is especially invoked as sustaining it, and for which reasons it is alleged that the 'attempted limitation of attorney's fees by said act' was 'null and void.'

A demurrer to the cross-petition was overruled and the trust company answered. A detail of its averments is not necessary. It practically admits those of the cross-petition and pleads in defense the provisions of the act of Congress, and also section 3477, R. S. (Comp. St. § 6383).

A demurrer was sustained to the answer and judgment rendered for Calhoun for the sum of $1,504.50, with interest from July 1, 1915. The judgment was affirmed by the Court of Appeals. The court said:

'This case runs on all fours with Black v. O'Hara's Adm'r, 175 Ky. 623, 194 S. W. 811, where it was held that the act of Congress approved March 14, 1915, appropriating money for the payment of similar claims and containing a similar provision limiting an attorney's fee to 20 per cent. of the amount recovered, was in so far as it attempted to limit the amount of the fee heretofore earned, unconstitutional and invalid.

'We have been urged to recede from the rule announced in Black v. O'Hara's Adm'r, supra, as being unsound in principle; but after a careful reconsideration of the reasoning by which the decision in that case is supported, we are satisfied of its soundness and reaffirm it.'

We encounter at the outset a question upon the form of the judgment. The cross-petition was presented in a proceeding to require an accounting of the administrator of Arnold and the petition asserted a claim and lien upon the money in the administrator's hands received from the United States government. The judgment, however, does not refer to that money or the lien upon it; it provides only that Calhoun recover of the administrator 'the sum of fifteen hundred four and 50/100 dollars, with interest from July 1, 1915, and his costs herein and may have execution,' etc.

If the judgment only etablishes a claim against the administrator to be satisfied, not out of the moneys received from the United States but from other assets of the estate, a situation is presented which it was said in Nutt v. Knut, 200 U. S. 13, 21, 26 Sup. Ct. 216, 50 L. Ed. 348, would not encounter legal objection. In other words, the limitation in the act appropriating the money to 20 per cent. as the amount to be paid...