Lupton v. Chase Nat. Bank of City of New York

• Decision Date: 27 March 1950
• Docket Number: Civ. A. 120-47.
• Parties: LUPTON v. CHASE NAT. BANK OF CITY OF NEW YORK et al.
• Court: U.S. District Court — District of Nebraska

89 F. Supp. 393

LUPTON v. CHASE NAT. BANK OF CITY OF NEW YORK et al.

Civ. A. 120-47.

United States District Court D. Nebraska, Omaha Division.

March 27, 1950.

Alexander McKie, Jr., Omaha, Neb., for Lundy and others.

Yale C. Holland, Omaha, Neb., for Charles E. Abbott.

William H. Lamme, Fremont, Neb., for Gmo. Fahrholz and Basham, Ringe & Correa.

A. E. Royce, and Edson Smith, Omaha, Neb., for Special Master and all known and unknown stockholders and bondholders and others.

DONOHOE, Chief Judge.

Under Rule 53(e) (2), Rules of Civil Procedure, 28 U.S.C.A., in actions tried without a jury, the trial court must accept the Master's findings of fact, unless clearly erroneous. This rule was accepted by the Supreme Court of the United States in Anderson v. Mount Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 1193, 90 L.Ed. 1515. Mr. Justice Murphy, who delivered the opinion for the court, had this to say with respect to the Master's findings: "* * * This was purely a factual issue. The master made his findings in this respect through the weighing of conflicting evidence, the judging of the reliability of witnesses and the consideration of the general conduct of the parties to the suit * * * Our examination of the record leads us to acquiesce in these findings since they are supported by substantial evidence and are not clearly erroneous. And the court below correctly held that the District Court erred in failing to accept these findings and in creating a formula of compensation based on a contrary view. Rule 53(e) (2) of the Federal Rules of Civil Procedure. See Tilghman v. Proctor, 125 U.S. 136, 149-150, 8 S.Ct. 894, 31 L.Ed. 664; Davis v. Schwartz, 155 U.S. 631, 636-637, 15 S.Ct. 237, 39 L.Ed. 289."

The Circuit Courts of Appeal have adopted the rule in exactly the same manner, following the express language of the rules of Civil Procedure. Thus, in Arrow Distilleries (Mich.) v. Arrow Distilleries (Ill.), 7 Cir., 1941, 117 F.2d 636, certiorari denied 314 U.S. 633, 638, 62 S.Ct. 67, 86 L.Ed. 508, the court reversed the District Court for rejecting the Master's findings, with the following comment: "The only question of merit presented by this appeal is whether the court erred in rejecting the master's findings of fact. We think it did. Rule 53(e) (2), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723 (c), provides that in an action to be tried without a jury the court shall accept the master's findings of fact unless they are clearly erroneous * * * Under this rule the court cannot reject the master's findings of fact unless they are clearly erroneous. We think they were not clearly erroneous in this case. They were not only supported by substantial evidence, but a reading of the evidence convinces us that they were supported by a preponderance thereof."

And in O'Hara v. Murphy, 137 F.2d 154, 155, the First Circuit Court of Appeals upheld the District Court in its reliance upon the Master's findings of fact, saying: "We have carefully examined the record and cannot say that the master and the district court were clearly erroneous in concluding that Mrs. O'Hara returned the insurance policies on the 21st of September and relinquished all her rights in them."

In all of these cases the language seems to be clear to the effect that the Master's findings of fact should not be disturbed unless they are clearly erroneous. And the authority for this proposition is plentiful. See Socony-Vacuum Oil Co., Inc., v. Oil City Refiners, Inc., 6 Cir., 1943, 136 F.2d 470, certiorari denied 320 U.S. 798, 64 S.Ct. 368, 88 L.Ed. 482; National Labor Relations Board v. Remington Rand, Inc., 2 Cir., 1942, 130 F.2d 919; In re Higbee Co., D.C. N.D. Ohio 1943, 50 F.Supp. 114; Andrews v. Andrews, D.C.E.D.N.Y. 1942, 47 F.Supp. 871; Matter of Pullmatch, Inc., D.C.S.D. Ohio 1939, 27 F.Supp. 884; Michael Del Balso, Inc., v. Carozza, 1943, 78 U.S.App. D.C. 56, 136 F.2d 280; National Labor Relations Board v. Arcade Sunshine Co., Inc., 1942, 76 U.S.App.D.C. 312, 132 F.2d 8; Badenhausen v. Guaranty Trust Co. of New York, 4 Cir., 1944, 145 F.2d 40; Gold Seals Importers, Inc., v. Morris White Fashions, Inc., D.C.S.D.N.Y. 1945, 4 F.R.D. 386; Connolly v. Gishwiller, 7 Cir., 1947, 162 F.2d 428; Diamond Laundry Corp. v. Calif. Employment Stabilization Comm., 9 Cir., 1947, 162 F.2d 398; Guaranty Trust Co. v. Seaboard Air Line Ry. Co., D.C.E.D. Va.1946, 68 F.Supp. 639.

It should be noted, however, that any conclusiveness as to the Master's findings of fact does not extend to his conclusions of law. United States Trust Co. v. Mercantile Trust Co., 9 Cir., 88 F. 140; Hattiesburg Lumber Co. v. Herrick, 5 Cir., 212 F. 834; Boisot v. Amarillo St. Ry. Co., D.C. Tex., 244 F. 838. Although, of course, his (the Master's) conclusions are entitled to careful consideration.

With this in mind, we have examined the record to determine whether or not the findings of the Master, which have been objected to, are unsupported by substantial evidence; and further whether the Master has deduced any erroneous conclusions of law with respect to the matters before him.

Claim of Lundy, Butler and Lundy Attorneys' Fees

The general rules concerning attorneys' fees in a case such as the present one are accurately summarized by the Master at page 47 of his report. He quotes at length from In re National Accessories, D.C., 13 F.Supp. 278. He might also have mentioned the items which should be set forth by the attorney making the claim.

"1. Consultations.

a. Persons conferred with.

b. Subject of the conference.

c. Time necessarily spent.

d. Benefits or advantages obtained for trust.

e. Charge for the service.

2. Legal papers.

a. Document prepared.

b. Time required.

c. Charge for the service.

3. Appearances in Court.

a. Matter involved.

b. Resistance encountered.

c. Time necessarily required.

d. Result obtained.

e. Charge for the service.

4. Briefing.

a. Law questions under consideration.

b. Manner in which the trust was interested or concerned.

c. Time necessarily required.

d. Benefit derived by the trust estate.

e. Charge for the service.

5. Miscellaneous service.

a. Nature of the service.

b. Time required.

c. Benefits inuring to the trust estate.

d. Charge for the service.

"Appointees of the court, whether receiver, trustee, or attorney, must expect their claims to be closely scrutinized by the debtor, the creditors, and by the court, and they should be meticulous in keeping accurate accounts of the various items and elements which go to make up their claim. It will not do to state in a general way services performed and then ask for a bulk allowance."

After reading Mr. Lundy's testimony, both on direct and cross examination, it appears that the Master was justified in arriving at the conclusion he did with respect to Mr. Lundy's claim; and his allowance is supported by the evidence submitted. In view of the rules of law regarding attorneys' fees there seems to be no good reason to increase the allowance. (Vol. III of the record sets out Lundy's testimony.)

Claim of James P. Gable

There is no reason to disturb the Special Master's finding with respect to the claim of Mr. Gable. The findings are supported by the evidence mentioned in the Special Master's Report.

Claim of John L. Lupton

The Special Master's conclusion with respect to the claim of John L. Lupton will be reversed only to the extent that it allows interest after the filing of this suit. No interest should be allowed after December 13, 1947, for the reasons set out infra in respect to Mr. Fahrholz claim.

Claim of Charles E. Abbott

The problem arises as to whether or not the services rendered by Mr. Abbott as an attorney for the trustees are completely compensated for by the payment of the sum due under his contract with the trustees which contained the following provision: "That the said firm of Abbott, Dunlap & Abbott hereby agrees, in consideration of the compensation above mentioned, to render any further service that may be considered necessary or advisable in connection with the prosecution of said claim; and general other services as attorneys to said trustees during the period of the prosecution of said claim."

The Master has taken the position that the prosecution of the claim is not complete until all the money has been paid to the trustee according to the terms of the award. Master's Report p. 37. That consequently Mr. Abbott can have no claim for compensation other than as provided for by the contract, because the final installments of the award have not yet been paid. Whether or not this position is sound depends, of course, on the meaning of the word "prosecution". This word is defined in Funk and Wagnall's New Standard Dictionary in the following manner:

"Prosecution * * *

2. Law (1) The instituting and carrying forward of a judicial proceeding to obtain some right or to redress and punish some wrong."

And the Seventh Circuit Court of Appeals defined the word in the case of United States v. Brazil, 134 F.2d 929, 931, with this descriptive statement: "`Prosecution' includes commencing, conducting and carrying a suit to a conclusion in a court of justice." Citing Cohens v. Commonwealth, 6 Wheat. 264, 19 U.S. 264, 5 L.Ed. 257.

In 32 Cyclopedia of Law and Procedure, 1909 Publication, at page 727, the word "prosecution" is defined in substantially the same language: "Prosecution. As applied to actions or suits generally, the following up or carrying on of an action or suit already commenced until the remedy be attained; the act of conducting or waging a proceeding in court; the institution and carrying on of a suit in a court of law or equity, to obtain some right, or redress some * * * wrong."

In the light of the foregoing definitions and considering the circumstances which surround this particular case, the only proper and fair interpretation of the word "prosecution" would be that the prosecution terminated when the award became final. The rights of the parties...