Federal Oil Marketing Corporation v. Cravens, 8969.

• Decision Date: 02 February 1931
• Docket Number: No. 8969.,8969.
• Citation: 46 F.2d 938
• Parties: FEDERAL OIL MARKETING CORPORATION et al. v. CRAVENS.
• Court: U.S. Court of Appeals — Eighth Circuit

46 F.2d 938 (1931)

FEDERAL OIL MARKETING CORPORATION et al. v. CRAVENS.

No. 8969.

Circuit Court of Appeals, Eighth Circuit.

February 2, 1931.

Conard E. Cooper, of Tulsa, Okl., for appellants.

J. D. Head, of Texarkana, Ark. (Fadjo Cravens, of Fort Smith, Ark., on the brief), for appellee.

Before KENYON and GARDNER, Circuit Judges, and MUNGER, District Judge.

KENYON, Circuit Judge.

This is an appeal from a final order allowing appellee an attorney fee of $12,000 for services rendered N. T. Gilbert, ancillary receiver of Federal Oil Marketing Corporation (hereinafter referred to as Federal Company) in the intervention proceedings of Frank J. Oakes et al. in the United States District Court for the Western District of Arkansas. The intervention was dismissed eventually for want of prosecution.

The receivership proceedings in Arkansas were ancillary to the original receivership in the United States District Court for the Southern District of New York in the case of Phelan v. Middle States Oil Company, in which Julius M. Mayer and Joseph P. Tumulty were appointed receivers. After addition, upon proper amendment to the complaint, of other parties as defendants, including the Federal Company, ancillary jurisdiction was granted in the District Court of the United States for the Western District of Arkansas, and ancillary receivers were there appointed. N. T. Gilbert was one of them. At the same time C. E. Cooper and McGuire & Marshall were appointed as counsel for the ancillary receivers.

In October, 1924, appellee was appointed by Judge Youmans as local counsel for the ancillary receivers in the state of Arkansas. His services continued to November, 1926, when the properties were discharged from receivership. There were various proceedings in connection with the ancillary receivership, and considerable litigation. For his services as attorney in that receivership he was allowed by the court a fee of $25,000, which was recommended by Mr. Cooper, general counsel of the ancillary receiver, and Mr. Gilbert, then sole ancillary receiver. The controversy here is not as to this fee.

In March, 1927, Judge Youmans permitted Oakes et al. to file an intervention in the receivership proceedings in so far as they applied to the Federal Company. The intervention was on behalf, not only of these particular parties, but other unit holders, in what had been known as the Vitek Oil & Refining Company, and sought to set aside as fraudulent the transfer of the Vitek properties by Vitek to the Sure Oil Corporation, which in turn had conveyed the properties to the Federal Oil Marketing Corporation. The result of that suit, if successful, would have been to take practically all the properties from the Federal Oil Marketing Corporation and leave that company assetless.

In April, 1927, interveners filed an amended and substituted bill of complaint, making a large number of oil corporations parties defendant. The court entered an order, under section 57 of the Judicial Code (28 USCA § 118), directing the nonresident defendants and their receivers to plead, answer, or demur to the said amended bill.

On April 23, 1927, the court upon motion of interveners reappointed N. T. Gilbert ancillary receiver of the properties and assets of the Federal Company, and continued in force all orders and decrees with reference to the employment of counsel for the ancillary receiver. Cravens continued as counsel, acting with C. E. Cooper and the law firm of McGuire & Marshall. James D. Head of Texarkana was employed as counsel to represent nonresident defendants. Cravens served as counsel until an appeal in the Oakes-Vitek case was taken to this court from an order of Judge Youmans dismissing on July 2, 1929, the same for want of prosecution. The period covering the service for which the fee of $12,000 was allowed was from April, 1927, to July, 1929. It required some five hundred pages of record in the Vitek appeal to set out all the proceedings connected with the intervention. We reviewed the long history of the litigation in Oakes et al. v. Federal Oil Marketing Corporation et al. (C. C. A.) 42 F.(2d) 991, and affirmed the trial court's decree without prejudice to appellants' right to bring an independent action.

Appellee had no contract as to the amount of compensation he was to receive — hence the rule applies that he would be entitled to reasonable compensation for services rendered. In determining reasonable compensation there is to be considered the character, ability and experience of the attorney, the amount involved, the time necessary to prepare for trial, the difficulty and intricacy of legal propositions to be determined, the results attained, what is charged by attorneys of equal standing and ability in similar litigation, whether the counsel had the real responsibility for the case, or was acting merely as local or co-counsel. See Tracy v. Spitzer-Rorick Trust & Savings Bank (C. C. A.) 12 F.(2d) 755; Stanton et al. v. Embry, Administrator, 93 U. S. 548, 23 L. Ed. 983; Forrester et al. v. Boston & M. Consol. Copper & Silver Min. Co. of Montana, 29 Mont. 397, 74 P. 1088, 76 P. 211; Clark v. Ellsworth, 104 Iowa, 442, 73 N. W. 1023; 2 R. C. L., p. 1059, § 145.

The hearing on the application for attorney fees was before Judge Martineau. The proceedings in the Oakes-Vitek intervention matters had been before Judge Youmans, but on account of illness he was unable to hear the application for attorney fees. Evidence was introduced at the hearing of lawyers of ability and high standing at the bar that appellee's services were of the value of ten to fifteen thousand dollars — one put the minimum at $15,000. All testify to substantially the same value. The trial court filed an opinion reviewing the services performed by Cravens and Head, as shown by the evidence. It allowed Cravens a fee of $12,000, and recommended to the District Court of the Southern District of New York the allowance of a fee of $15,000 for Head. We have nothing to do with this recommendation, and discuss Judge Head's services only as they may bear upon the question of Mr. Cravens' services.

Appellants contend that the fee allowed is unreasonable, excessive, and unjust. Ordinarily the allowance of attorney fees in a matter of this character rests in the sound discretion of the trial judge of the court where the service is performed. Tracy v. Spitzer-Rorick Trust & Savings Bank (C. C. A.) 12 F.(2d) 755. Such court is better able to pass on the question than any other court, it is more familiar with the controversy in all its phases, and there is some presumption to be indulged in favor of the correctness of its finding. Here Judge Martineau had no more advantage than this court has, except of seeing and hearing the witnesses, but that is unimportant, as there is no particular question of veracity involved. He tried the case on the evidence as presented. That evidence is before us, and we think under the circumstances there is no presumption in favor of his order. A number of lawyers testified as experts as to the value of appellee's services. All federal courts have become more or less expert as to the value of the services of receivers and attorneys in receivership cases. A judge of a trial or appellate court is not bound by the opinion of experts as to attorney fees. He is an expert himself, and knows as well as a legal expert what are reasonable attorney fees. This court has as much knowledge of the legal work done in the Oakes-Vitek intervention as the expert witnesses had.

It is not a pleasant duty to hold that attorney fees allowed by a trial court are excessive, especially in the case of attorneys of high character and ability, as it is without question Mr. Cravens and Mr. Head were. But on the other hand, appellate courts should not hesitate in their duty of protecting trust estates from excessive receivership and attorney fees. "Vicarious generosity," as expressed by the Supreme Court in In re Gilbert, 276 U. S. 294, 48 S. Ct. 309, 72 L. Ed. 580, has been manifested by many courts in the allowance of extravagant fees in this class of cases.

Applying the general tests as to reasonable compensation for attorneys, what do we find?

There is no question as to the high character, standing, and ability of appellee, or that the work which he did as an attorney was well done and satisfactory to his client. There is controversy as to the extent and character of such legal service. While Mr. Cravens did a large amount of service in the proceedings up to the time of the Oakes-Vitek intervention, for which he received a most liberal fee of $25,000, it is without question, and freely conceded by appellee, that after that time the greater part of the legal work was done by Mr. Cooper, general counsel, who seems to have been a specialist in receivership cases. Mr. Cravens acted merely as a local attorney. Mr. Cooper had the entire burden and responsibility of the litigation. He prepared all the briefs and the pleadings, except he received some assistance from Judge Head in preparing the answer. Substantially every document used in the case, and they were many, was prepared by Mr. Cooper. He assumed all the direction as to procedure, with advice now and then from appellee and Mr. Head. He made all the arguments to the court on the various legal questions and motions. Mr. Cravens secured a number of orders for extension of time, and examined the extensive briefs prepared by Mr. Cooper. Examination by co-counsel of briefs prepared by the main counsel is not comparable of course with the labor of preparing them. Cravens made suggestions at times, and once or twice cited some authorities to Cooper, but the entire record shows that Cooper was doing the real legal work and that Cravens was acting merely as local attorney. Mr. Cravens testified: "I did not prepare any pleadings or briefs in this case. I have, however, at Mr. Cooper's request, examined pleadings and briefs prepared...