Danville Building Ass'n v. Gates

• Decision Date: 09 July 1946
• Docket Number: Civ. No. 410-D.
• Citation: 66 F. Supp. 706
• Parties: DANVILLE BUILDING ASS'N OF DANVILLE, ILL., v. GATES et al.
• Court: U.S. District Court — Eastern District of Illinois

66 F. Supp. 706

DANVILLE BUILDING ASS'N OF DANVILLE, ILL., v. GATES et al.

Civ. No. 410-D.

District Court, E. D. Illinois.

July 9, 1946.

Bookwalter, Carter & Gunn, of Danville, Ill., for plaintiff.

Wm. Acton, of Danville, Ill., for Ethel Wert.

Benjamin I. Norwood, of Danville, Ill., for Elizabeth Gates.

LINDLEY, District Judge.

Plaintiff filed a complaint in the nature of a bill of interpleader under the provisions of Title 28 U.S.C.A. § 41 subdivision 26(d) which resulted in a judgment that the property in the hands of the stakeholder belonged to and should be delivered to defendant Wert, in which the question of whether plaintiff is entitled to recover from the fund its costs and attorneys fees was reserved. That issue is now presented.

The pertinent paragraph of the act provides that the "court shall hear and determine the cause and shall discharge the complainant from further liability; and * * * enter all such other orders and decrees as may be necessary or convenient to carry out and enforce the same." This provision is substantially the same as in earlier statutes. Though the act contains no express provision for the allowance of attorneys fees, the federal courts held quite generally, at least prior to the decision in Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1457, and in equity jurisprudence as it has come to us from its English ancestry, attorneys fees may be allowed at the discretion of the court. Hunter v. Federal Life Ins. Co., 8 Cir., 111 F.2d 551; Terry v. Supreme Forest, D.C., 21 F.2d 158; Texas Co. v. Xavier, D.C., 54 F.Supp. 722; General American Life Ins. Co. v. Jackel, D.C., 42 F.Supp. 475; Stitzel-Weller Distillery v. Norman, D.C., 39 F.Supp. 182; Equitable Life Assur. Soc. of U. S. v. Kit, D.C., 22 F.Supp. 1022; Edner v. Massachusetts Mut. Life Ins. Co., D.C., 59 F.Supp. 688.

Defendant insists that since Erie v. Tompkins, supra, whether plaintiff as an interpleader is entitled to attorney's fees must be determined by the law of Illinois. The authorities in that state are conclusive to the effect that attorneys fees can not be allowed. There is no statute in the state of Illinois creating a right of interpleader, but it is a part of the state's innate equity jurisprudence. City National Bank & Trust Co. v. Dunham, 306 Ill. App. 354 at 362, 28 N.E.2d 812. The Supreme Court of Illinois in The Metropolitan Life Insurance Co. v. Kinsley, 269 Ill. 529, 530, 531, 109 N. E. 1011, 1012, said: "Although the rule is to the contrary in many other jurisdictions in this country (2 Perry on Trusts, (6th Ed.) §§ 916-918), this court refused, under its general chancery powers, following the old English rule, to allow compensation to trustees for their time and trouble in caring for trust estates, unless there was a provision for compensation in advance. * * * In Chapin v. Dake, 57 Ill. 295, 11 Am.Rep. 15, this court refused to allow solicitor's fees on a bill of interpleader, the principle involved being identical with that in the cases heretofore cited. This case has never been overruled. We are well aware that, not only in the Federal courts, but in certain other jurisdictions in this country, a different rule prevails, as is shown by the numerous cases cited by counsel for appellant; but the law has been so long and firmly established in the jurisprudence of this state on this question that it ought not now to be changed by the courts without statutory authority." The appellate court commented in Eulette, Executor v. Zilske, 222 Ill.App. 128 at page 134 as follows: "Our law is rather rigorous, and differs from that of many other jurisdictions. 2 Perry on Trusts (6th Ed.), secs. 916-918."

Consequently, in view of the fact that the decisions of the federal courts before Erie v. Tompkins conflict with the rule in Illinois, it becomes necessary to determine whether the Erie doctrine applies to the question of allowance of attorneys' fees for a successful stakeholder who has come into the federal court, when he would be denied that remedy in the state court. In Russell v. Todd, 309 U.S. 280 at 294, 60 S.Ct. 527, 534, 84 L.Ed. 754, the court expressly reserved jurisdiction upon this question, saying: "In the circumstances we have no occasion to consider the extent to which federal courts, in the exercise of the authority conferred upon them by Congress to administer equitable remedies, are bound to follow state statutes and decisions affecting those remedies." (Italics mine.) In the earlier case of Sprague v. Ticonic National Bank et al., 307 U.S. 161, 59 S.Ct. 777, 779, 83 L.Ed. 1184, the court, in discussing the allowance of fees, said: "Allowance of such costs in appropriate situations is part of the historic equity jurisdiction of the federal courts. The suits `in equity' of which these courts were given `cognizance' ever since the First Judiciary Act, * * * constituted that body of remedies, procedures and practices which theretofore had been evolved in the English Court of Chancery, subject, of course to modifications by Congress, e. g., Michaelson v. United States, 266 U.S. 42, 45 S.Ct. 18, 69 L.Ed. 162, 35 A.L.R. 451. The sources bearing on eighteenth-century English practice — reports and manuals — uniformly support the power not only to give a fixed allowance for the various steps in a suit, what are known as costs `between party and party,' but also as much of the entire expenses of the litigation of one of the parties as fair justice to the other party will permit, technically known as costs `as between solicitor and client.' * * * Plainly the foundation for the historic practice of granting reimbursement for the costs of litigation other than the conventional taxable costs is part of the original authority of the chancellor to do equity in a particular situation." However, it does not appear that in that case the rule in the state court differed from that under the historic equitable practice and, inasmuch as the court in the later case of Russell v. Todd, supra, expressly withheld decision of the precise question presented, it remained undecided at least until the decision in Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 1467, 89 L.Ed. 2079, 160 A.L.R. 1231. There the question was whether the state statute of limitation could be asserted as a defense in a federal equity suit. The court, in discussing the issue as to the applicability of Erie v. Tompkins, commented that Congress had provided that the forms and modes of proceeding in suits of equity should conform to the settled uses of courts of equity and said: "But this enactment gave the federal courts no power that they would not have had in any event when courts were given `cognizance,' by the first Judiciary Act 1 Stat. 73 of suits `in equity.' From the beginning there has been a good deal of talk in the cases that federal equity is a separate legal system. And so it is, properly understood. The suits in equity of which the federal courts have had `cognizance' ever since 1789 constituted the body of law which had been transplanted to this country from the English Court of Chancery. But this system of equity `derived its doctrines, as well as its powers, from its mode of giving relief.' Langdell, Summary of Equity Pleading (1877) xxvii. In giving federal courts `cognizance' of equity suits in cases of diversity jurisdiction, Congress never gave, nor did the federal courts ever claim, the power to deny substantive rights created by State law or to create substantive rights denied by State law. This does not mean that whatever equitable remedy is available in a State court must be available in a diversity suit in a federal court, or conversely, that a federal court may not afford an equitable remedy not available in a State court. Equitable relief in a federal court is of course subject to restrictions; the suit must be within the traditional scope of equity as historically evolved in the English Court of Chancery. Payne v. Hook, 7 Wall. 425, 430, 19 L.Ed. 260; Atlas Ins. Co. v. Southern, Inc., 306 U.S. 563, 568, 59 S. Ct. 657, 659, 83 L.Ed. 987; Sprague v. Ticonic Bank, 307 U.S. 161, 164, 165, ...