Horner v. Chamber of Commerce of City of Burlington

• Decision Date: 22 August 1952
• Docket Number: No. 742,742
• Parties: HORNER et al. v. CHAMBER OF COMMERCE OF CITY OF BURLINGTON, Inc.
• Court: North Carolina Supreme Court

Page 21

72 S.E.2d 21

236 N.C. 96

HORNER et al. v. CHAMBER OF COMMERCE OF CITY OF BURLINGTON, Inc.

No. 742

Supreme Court of North Carolina.

Aug. 22, 1952

W. R. Dalton, Jr., Burlington, for plaintiff, appellant.

W. D. Madry, and Young, Young & Gordon, Burlington, for defendant The City of Burlington, appellee.

JOHNSON, Justice.

The question for decision is this: Can the plaintiff in a taxpayers' action, who has recovered for the benefit of a municipality public moneys unlawfully disbursed and otherwise lost, be awarded from the amount recovered and restored to the municipality a reasonable sum to be used in paying the fees of his attorney, without a statute expressly so providing?

The question here presented seems to be one of first impression with us. We have no statute expressly authorizing the allowance of an award to a plaintiff in a taxpayers' action, from the sum recovered, for the payment of attorney fees, and the precise question heretofore has not been presented to this Court for determination.

However, while ordinarily attorney fees are taxable as costs only when expressly authorized by statute, 20 C.J.S., Costs, § 218; G.S. § 6-21; Wachovia Bank & Trust Co. v. Schneider, 235 N.C. 446, 70 S.E.2d 578, nevertheless, the rule is well established that a court of equity, or a court in the exercise of equitable jurisdiction, may in its discretion, and without statutory authorization, order an allowance for attorney fees to a litigant who at his own expense has maintained a successful suit for the preservation, protection, or increase of a common fund or of common property, or who has created at his own expense or brought into court a fund which others may share with him. 14 Am.Jur., Costs, Sec. 74.

This doctrine 'originated in England in the courts of equity where costs as between solicitor and client were allowed out of the fund to solicitors of a complainant who had at their own expense created, preserved, or protected a fund and others were entitled to claim, and had claimed, in the result of their labor. In America, where no distinction between solicitors and barristers exists, the doctrine is extended to include all fees and expenses reasonably due by the successful litigant to his counsel for the latter's services in creating or preserving the common fund or protecting the common property.' 14 Am.Jur., Costs, Sec. 74, p. 47. See also: Annotations, 49 A.L.R. 1149; 107 A.L.R. 751.

This 'rule rests upon the ground that where one litigant has borne the burden and expense of the litigation that has inured to the benefit of others as well as to himself, those who have shared in its benefits should contribute to the expense.' 14 Am.Jur., Costs, Sec. 74.

Strictly speaking, the doctrine rests, not upon the theory that the allowance is for attorney fees as such or as an element of court costs, but rather upon the principle of approval by the court, in the exercise of its chancery powers, of expenditures reasonably incurred in creating or preserving the fund or property. Gay v. Davis, 107 N.C. 269, 12 S.E. 194; Raleigh Banking & Trust Co. v. Leach, 169 N.C. 706, 86 S.E. 701; 15 N.C.L.R., p. 333 et seq.

The rule has been recognized and applied by this Court in various classes of cases, most common among which are those involving allowances to pay fees for services furnished by attorneys to (1) next friends of infants or others under disability and (2) fiduciaries such as receivers, trustees, and those administering estates of decedents, respecting litigation involving either the creation or protection of the common fund or common property. Gay v. Davis, supra; Lindsay v. Darden, 124 N.C. 307, 32 S.E. 678; Overman v. Lanier, 157 N.C. 544, 73 S.E. 192; In re Stone, 176 N.C. 336, 97 S.E. 216; Patrick v. Branch Banking & Trust Co., 216 N.C. 525, 531, 5 S.E.2d 724.

By what appears to be the decided weight of authority in other jurisdictions, the doctrine of allowance of attorney fees against the property or fund created or protected by attorneys' services extends to and embraces taxpayers' actions like the instant case. These, among other cases, appear to be persuasive and pertinent to decision here: Shillito v. City of Spartanburg, 214 S.C. 11, 51 S.E.2d 95, 5 A.L.R.2d 863; Kimble v. Board of Com'rs of Franklin County, 32 Ind.377, 66 N.E. 1023; Fox v. Lantrip, 169 Ky. 759, 185 S.W. 136; Council of Village of Bedford v. State ex rel. Thompson, Hine & Flory, 123 Ohio St. 413, 175 N.E. 607; Regan v. Babcock, 196 Minn. 243, 264 N.W. 803; Boyd County v. Cisco, 237 Ky. 534, 35 S.W.2d 849. See also: State ex rel. Bonner v. Andrews, 131 Tenn. 554, 175 S.W. 563; Konig v. City of Baltimore, 128 Md. 465, 97 A. 837; Universal Const. Co. v. Gore, Fla., 51 So.2d 429; Pensioners Protective Ass'n v. Davis, 112 Colo. 535, 150 P.2d 974; Tenney v. City of Miami Beach, 152 Fla. 126, 11 So.2d 188; 44 C.J., p. 1440; 64 C.J.S., Municipal Corporations, § 2171.

In Shillito v. City of Spartanburg, supra [214 S.C. 11, 51 S.E.2d 97], the plaintiff, on behalf of himself and other taxpayers of the City of Spartanburg, successfully prosecuted an action challenging the constitutional validity of an act of the General Assembly providing for a special annual tax levy on property in the City for the benefit of the City Firemen's Pension Fund. There, by judgment of the lower court, affirmed on appeal, (1) the act was declared invalid, (2) the City was ordered to desist from further levies, and (3) it was further ordered that certain funds already collected from the levy be transferred to the city general fund, "subject only to payment of such attorney's fees as may be allowed the attorney for the plaintiff by the court * * *.' ' On the question of allowance for fees, it was held on appeal that the trial court, in the exercise of its equitable powers, could allow from the fund a reasonable sum for the taxpayers' attorneys, with this pertinent observation being made by the Court, 51 S.E.2d 95, 100: 'This suit was not instituted by the respondent taxpayer in his individual capacity nor for his private gain, but was brought as a class action on behalf of all the taxpayers of the city of Spartanburg to recover the money collected under the unconstitutional statute of 1946; and the city of Spartanburg was made a defendant as trustee for all of its members. The action is in all respects one in equity. The right of a court of equity to subject a fund so recovered, and under the control of the court, to the reasonable costs of such creation or preservation, is well established. * * *' Then, after analyzing and reviewing a number of supporting decisions from other jurisdictions, Fishburne, J., speaking for the Court, goes on to say, 51 S.E.2d at pages 103 and 104: 'In the case at bar, the respondent taxpayer in seeking counsel fees for his attorney does not base this claimed right upon any contract, express or implied. It is a right which is founded in equity and to be determined upon equitable principles. * * * The city of Spartanburg, acting under the unconstitutional statute, collected these funds as quasi trustee for the Firemen's Pension Fund. And this tax money would not be in the city treasury today had it not been for the...