Robertson v. Manufacturing Lumbermen's Underwriters

• Decision Date: 03 December 1940
• Docket Number: 36649
• Citation: 145 S.W.2d 134,346 Mo. 1103
• Parties: George A. S. Robertson, Superintendent of the Insurance Department of the State, v. Manufacturing Lumbermen's Underwriters, a Reciprocal Exchange, et al., Defendants, I. J. Ringolsky, Wm. G. Boatright and Harry L. Jacobs, Appellants
• Court: Missouri Supreme Court

145 S.W.2d 134

346 Mo. 1103

George A. S. Robertson, Superintendent of the Insurance Department of the State, v. Manufacturing Lumbermen's Underwriters, a Reciprocal Exchange, et al., Defendants, I. J. Ringolsky, Wm. G. Boatright and Harry L. Jacobs, Appellants

No. 36649

Supreme Court of Missouri

December 3, 1940

Appeal from Jackson Circuit Court; Hon. Allen C. Southern Judge.

Reversed (with directions).

James P. Aylward, George V. Aylward and Terence M O'Brien for appellant;

Wm. G. Boatright of counsel.

(1) Important that fair compensation be allowed attorneys by courts passing on same. Donaldson v. Allen, 213 Mo. 293, 111 S.W. 1128, Reynolds v. Clark County, 162 Mo. 680, 63 S.W. 382; In re Watco Corp., 95 F.2d 249. (2) As services were rendered in a court other than the trial court and the evidence is undisputed, this court has equal knowledge of the value thereof and owes no deference to trial court's ruling, nor is an allowance under such circumstances a matter of the trial court's discretion. Greeley v. Prov. Sav. Bank, 103 Mo. 212; Fed. Oil Marketing Corp. v. Cravens, 46 F.2d 938; Gilbert v. Lloyd, 170 Ill.App. 436. (3) In absence of agreement, attorneys are entitled to a reasonable fee, to be determined according to all of the facts and circumstances. 7 C. J. S. 1080-1083, sec. 191; Fed. Oil Marketing Corp. v. Cravens, 46 F.2d 938. (4) Appellants' standing, ability and qualifications were the highest. Following cases in which they appeared illustrate this: DiGiovanni v. Camden Fire Ins. Assn., 219 U.S. 64, 56 S.Ct. 1; Home Trust Co. v. Josephson, 339 Mo. 170, 95 S.W.2d 1148, 105 A. L. R. 1063; Woolf v. Reeves, 65 F.2d 80. (5) Importance of questions involved in the litigation handled by appellants demonstrated. Com. of Penn. v. Williams, 294 U.S. 176, 55 S.Ct. 380. (6) Character of services rendered by appellants discussed. (7) Services of appellants resulted in a saving of approximately $ 150,000 to the estate. (8) Responsibility of the bankruptcy litigation rested principally on appellants. (9) Time devoted by appellants to the services in question and their overhead considered. 7 C. J. S. 1083, sec. 191; Reichert v. Met. Trust Co., 266 Mich. 322, 253 N.W. 313; In re Davison Chem. Co., 14 F.Supp. 821; Woodbury v. Jergens Co., 37 F.2d 749; Trimble v. K. C., etc., Ry. Co., 201 Mo. 372. (10) Allowance to other attorneys representing their own private clients was improperly made by trial court and necessarily affected allowance made by court to appellants, who represented the Superintendent of Insurance, and who with their co-counsel were the only attorneys who could be legally compensated from the estate. Sec. 5954, R. S. 1929, amended, Ex. Sess., Laws 1933-1934, p. 65; Robertson v. Mo. State Life Ins. Co., 136 S.W.2d 362; Relfe v. Life Assn. of America, 9 Mo.App. 586; Trautz v. Lemp, 334 Mo. 1085, 72 S.W.2d 104; Cook v. McHenry & Seemann, 223 N.W. 377; Ford v. Gilbert, 44 Ore. 259, 75 P. 138; State v. Amer. Bonding Co., 238 N.W. 731; Stuart v. Hoffman & Co., 108 Va. 307, 61 S.E. 757; Tulare County v. City of Dinuba, 263 P. 252, 270 P. 201; In re Paramount Publix Corp., 85 F.2d 588; Davis v. Seneca Falls Mfg. Co., 17 F.2d 546; Anderson v. Fidelity & Deposit Co., 100 Ga. 739, 28 S.E. 463; In re United Cigar Stores of America, 21 F.Supp. 869; Scott v. Superior Court, 281 P. 55; Unger v. Newlin Haines Co., 122 A. 114.

Clark, Boggs, Peterson & Becker, Howard B. Lang, Jr., and William L. Nelson, Jr., for respondent.

(1) This action for attorney fees alleged to be due under a provision of the Insurance Code, Section 5945; Laws 1933, Extra Session 65, Section 1, is not triable de novo by this court. Sec. 5954, Laws 1933, Ex Sess. 65; State ex rel. Mo. State Life In. Co. v. Hall, 330 Mo. 1117, 52 S.W.2d 178; State ex rel, St. Louis Mut. Life Ins. Co. v. Mulloy, 330 Mo. 958, 52 S.W.2d 471; Aetna Ins. Co. v. O'Malley, 343 Mo. 1232, 124 S.W.2d 1167; Robertson v. Mo. State Life Ins. Co., 136 S.W.2d 368. (2) Appellants having accepted employment from the Superintendent of Insurance without having their compensation fixed and approved by the court are not in a position to now object to the fee allowed them by the court. Authorities Point (1). (3) The record shows no abuse of discretion on the part of the trial court in the allowance of appellants' fees.

Westhues, C. Cooley and Bohling, CC., concur.

OPINION

WESTHUES

This is an appeal from an order of the Circuit Court of Jackson County, Missouri, allowed appellants attorneys' fees in the sum of $ 3,500. The attorneys contended that the allowance was grossly inadequate and appealed. The history of the case leading to this controversy, as stated in appellants' brief, which we quote, omitting parts deemed unnecessary, is as follows:

" . . The respondent was the Superintendent of Insurance of the State of Missouri, having succeeded R. E. O'Malley to that office, the services in question being rendered during the tenure of O'Malley. The defendant, Manufacturing Lumbermen's Underwriters, was a reciprocal exchange doing business in the State of Missouri under the provisions of Secs. 5966 to 5977, R. S. Mo. 1929, governing reciprocals, and also doing business in numerous other states and in Canada. Rankin-Benedict Underwriting Company, which will be mentioned hereinafter, is a Missouri corporation and was the attorney-in-fact of said reciprocal until superseded by one Vincent Coates. Howell & Jacobs, Kansas City lawyers, represented Coates, the substituted attorney-in-fact of said reciprocal and also certain subscribers or 'members' thereof.

"R. E. O'Malley, the then Superintendent of Insurance, on November 12, 1936, filed a petition in the Circuit Court of Jackson County, Missouri, for an order to place him in charge of the property of Manufacturing Lumbermen's Underwriters, a reciprocal inter-insurance exchange, as agent and for such further transaction of business by said exchange would be hazardous to policyholders. This proceeding was authorized under the insurance liquidation and rehabilitation statutes of Missouri. [Secs. 5939 to 5959, incl., R. S. Mo. 1929, as Amended; Laws of Missouri, Extra Session, 1933-34, p. 65.] On the same day the circuit court entered an order authorizing the Superintendent forthwith to take charge of the exchange's property, enjoining it from further prosecution of its business. Pursuant to this order the Superintendent took charge of the reciprocal's assets consisting of cash, bonds, stock and accounts receivable in excess of two and one-fourth million dollars ($ 2,254,047.50), composed of the following items: cash, $ 313,542.77; bonds, $ 1,444,031.82; bank stock, $ 1,020; bank liquidation certificate, $ 2,902.30; deposits and accounts, $ 455,430.14. The liabilities for losses due from reinsurers was $ 37,119.65.

"While the Superintendent was in charge of the exchange and its assets under said order and before trial and hearing on the merits of the Superintendent's petition, and while the Circuit Court of Jackson County, Missouri, was exercising jurisdiction over the exchange and its vast properties, on December 1, 1936, a petition was filed in the United States District Court at Kansas City, Missouri, seeking to have Manufacturing Lumbermen's Underwriters adjudicated a bankrupt, and to have its assets removed to and liquidated in the bankruptcy court, thus ousting the Superintendent and the State Circuit Court. This proceeding purported to be a petition of said exchange for a voluntary adjudication of bankruptcy, and to be filed for the exchange of aforementioned Rankin-Benedict Underwriting Company, claiming to act as the exchange's attorney-in-fact. An order and judgment adjudicating said exchange a bankrupt was immediately entered ex parte in the federal court and on the following day the referee in bankruptcy appointed a receiver for all of the exchange's assets, said receiver being one of the attorney-in-fact's officers. The situation on December 2, then, was that a federal court and a state court were each claiming jurisdiction over the exchange and its assets, and a federal court receiver and a statutory agent appointed by a state court had each been ordered to take charge of the assets. . . .

". . . The Superintendent at the time was represented in the state court proceeding by James P. Aylward, George V. Aylward and Terence M. O'Brien, hereinafter referred to as the Aylward firm. Upon their recommendation, the Superintendent authorized the employment of appellants, Ringolsky, Boatright & Jacobs, for the special purpose of resisting the bankruptcy proceedings and enforcing and vindicating the Superintendent's right to the custody and control of the exchange and its assets. . . . There was no arrangement or agreement between appellants and the Superintendent as to the compensation appellants were to receive."

Appellants and the Aylward firm represented the Insurance Department in the Federal court in the bankruptcy matter. They contended that the alleged bankrupt company was not amenable to voluntary bankruptcy. A motion was filed to dismiss the proceedings and this motion was sustained. [See In re Manufacturing Lumbermen's Underwriters, 18 F.Supp 114.] On February 27, 1937, an involuntary petition in bankruptcy was filed in the United States Court against the defendant company. The Aylward firm and appellants again represented the Insurance Department. They asked the Federal court, in a motion filed, to dismiss the proceedings on the theory that defendant company was not subject to involuntary bankruptcy. This motion was sustained and an appeal was taken to the Circuit Court of Appeals. While the appeal was pending there was a change in the personnel of the Superintendent of Insurance and he employed other attorneys to...