Holland Banking Co. v. Continental Nat. Bank

• Decision Date: 30 December 1933
• Docket Number: No. 1481.,1481.
• Citation: 9 F. Supp. 986
• Parties: HOLLAND BANKING CO. et al. v. CONTINENTAL NAT. BANK OF JACKSON COUNTY, KANSAS CITY, MO., et al.
• Court: U.S. District Court — Western District of Missouri

9 F. Supp. 986

HOLLAND BANKING CO. et al. v. CONTINENTAL NAT. BANK OF JACKSON COUNTY, KANSAS CITY, MO., et al.

No. 1481.

District Court, W. D. Missouri, W. D.

December 30, 1933.

Farrington & Curtis, of Springfield, Mo., for plaintiff.

George L. Edwards, of Kansas City, Mo., for defendants.

REEVES, District Judge.

The claimant seeks compensation for services rendered by him to the liquidating committee of the Continental National Bank of Jackson county. This was a national bank, and because of financial difficulties made an arrangement in the fall of 1922 to liquidate.

By this arrangement, its principal liabilities were assumed by the Continental National Bank & Trust Company of Kansas City. It was not deemed essential by the comptroller of the currency to appoint a receiver, and the stockholders of the liquidating corporation undertook to convert the remaining assets into cash, discharge miscellaneous claims, and distribute the surplus in the hands of the liquidating committee to the stockholders.

During all of this time a claim was being asserted by the plaintiff. Such claim resulted in litigation and the recovery of a final judgment against the defendant bank. After said judgment had been affirmed by the Supreme Court of the state of Missouri, 324 Mo. 1, 22 S.W.(2d) 821, the defendant bank, acting through its liquidating committee, refused to recognize said judgment and suit in the nature of a creditors' bill was instituted in this court.

Upon a hearing, a receiver was appointed for the assets of the defendant bank, over the objections and protest of the liquidating committee, and the stockholders of said bank. An appeal was taken from the order appointing a receiver. The action of the court in making such appointment was affirmed. At the same time the defendant steadily resisted the claims of plaintiff creditor upon the ground that the judgment recovered was invalid. The plaintiff prevailed, and established itself as a creditor and its judgment as valid and binding.

In all of this litigation the claimant represented the defendant bank and its liquidating committee. He asserts now that he should be compensated out of the funds in the hands of the receiver appointed by this court.

1. The general rule in suits in equity, as well as in actions at law, is that the prevailing party is entitled to recover costs. This is true, unless the losing party may be able to show that equity requires a different judgment. It is not suggested in the claim that the fund was benefited by these services, or that it was protected thereby. In argument and brief, such suggestion was made.

It is a general principle that a trust estate must bear the expenses of its administration. This principle is so thoroughly lodged that citation of authorities is unnecessary. However, an allowance to counsel in the way of fees can only be made where his efforts have aided in creating, preserving, or protecting a fund (Buell v. Kanawha Lumber Corp. D. C. 201 F. 762), and such results must have been achieved by proper proceedings (Trustees v. Greenough, 105 U. S. 527, 26 L. Ed. 1157). Such an allowance is made upon the theory that the estate has been benefited and thereby the beneficiaries of the trust. The cases are uniform on this question. Central Trust Co. v. U. S. Light & Heating Co. (C. C. A.) 233 F. 420; Farmers' Loan & Trust Co. v. Green (C. C. A.) 79 F. 222. 15 C. J., § 210, p. 105.

In the case at bar, the defendant bank and its liquidating committee resisted the claim of the plaintiff. It made such resistance originally in the state court where a judgment was recovered nisi prius, and then on appeal to the Supreme Court, where the judgment was affirmed. It ignored the judgment thereafter, and resisted its...