Sherwin v. Welch, 17083.

• Decision Date: 08 May 1963
• Docket Number: No. 17083.,17083.
• Citation: 319 F.2d 729
• Parties: Robert W. SHERWIN et al., Appellants, v. Vincent B. WELCH, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

319 F.2d 729 (1963)

Robert W. SHERWIN et al., Appellants, v. Vincent B. WELCH, Appellee.

No. 17083.

United States Court of Appeals District of Columbia Circuit.

Argued January 23, 1963.

Decided May 8, 1963.

Mr. Mark P. Friedlander, Washington, D. C., with whom Messrs. Mark P. Friedlander, Jr., and Blaine P. Friedlander, Washington, D. C., were on the brief, for appellants.

Mr. John A. Kendrick, Washington, D. C., with whom Mr. E. Tillman Stirling, Washington, D. C., was on the brief, for appellee.

Before BAZELON, Chief Judge, EDGERTON, Senior Circuit Judge, and WASHINGTON, Circuit Judge.

BAZELON, Chief Judge.

This appeal is from the action of the District Court following our remand in an earlier appeal in this case.

Appellee Vincent B. Welch (herein "plaintiff") instituted this suit against appellants (herein "defendants") for legal fees of $12,718.41, based upon a written contract dated November 14, 1957. By that contract, the defendants, as members of the Creditors' Committee of an insolvent corporation, assumed responsibility for the payment of plaintiff's fees for legal services rendered on behalf of the Committee. As stated in our opinion on the first appeal:

"After trial, without jury, the District Court found that an oral discussion between the parties which preceded execution of the contract led the defendants to understand `that in signing the agreement they would be technically liable for attorney\'s fees and costs, but that * * if the debtor corporation assumed such liability * * * the individual creditors would not be held responsible.\' Finding that the corporation had assumed but had not paid the debt, the court denied recovery under the contract." Welch v. Sherwin, 112 U.S.App.D.C. 124, 125, 300 F.2d 716, 717 (1962).

We also noted that the trial court did, however, award plaintiff $505.83, "presumably as third party beneficiary of another subsequently written contract in which defendants as creditors promised among themselves to pay a portion of the Committee's expenses including counsel fees based upon their share of the corporation's debts."¹

On the first appeal we held that the District Court erred in giving effect to the oral understanding, and that the contract of November 14, 1957 "must be enforced as written." We further held defendants liable jointly for the entire fee, not merely severally for a pro rata share. We reversed and remanded "for further proceedings not inconsistent with the opinion of this court."² Ibid.³

On remand the defendants urged that our action required a new trial or at least further proceedings for the determination of certain issues. The District Court disagreed and entered judgment against the defendants for $12,718.41 plus costs and interest. The present appeal followed.

Our judgment of reversal and remand did not necessarily require a complete new trial. The nature and extent of proceedings on a remand should be determined by the District Court according to the circumstances of each case, in the light of any instructions in our mandate.⁴ But defendants contend that since the court at the former trial refused to enforce the contract of November 14, 1957 as written, it did not then determine which defendants are bound and what amounts are due from them under that contract. Therefore, they say, on remand further proceedings were required for that determination.

Looking first to the question which defendants are liable, the record shows that defendant Auth Brothers, Inc., did not sign the contract of November 14, 1957, although it did sign the subsequent pro rata agreement. See note 1 supra. This colloquy occurred on remand:

"MR. FRIEDLANDER Defendants\' counsel: * * * Auth Provision Company is not a signatory to the contract of November 14, 1957. They didn\'t even sign it. * * *

"MR. KENDRICK Plaintiff\'s counsel: Well, I submit, Your Honor, Auth Provision Company, as far as the terms of this November 14, 1957 contract are concerned, were an undisclosed principal, and defendant Sherwin was there as its agent.

"MR. FRIEDLANDER: Where is the finding on that?

"THE COURT: In my conclusions of law made at the first trial I say that plaintiff is entitled to judgment against Auth Brothers, Inc. * * *

"MR. FRIEDLANDER: Well, if Your Honor please, if you look you will see where they signed one of those percentage agreements. They did not sign the contract of November 14, 1957. Your Honor was holding on percentage agreements and made no finding they were undisclosed principal.

"MR. KENDRICK: I think Your Honor\'s finding was based on the pro-rata of Auth\'s indebtedness due it from the insolvent corporation.

"THE COURT: Well, as a practical matter, Auth isn\'t going to have Sherwin paying personally.

"MR. FRIEDLANDER: * * * I think the only thing to do, if Your Honor please, is to either try this case again or have the Court of Appeals determine what they meant. They certainly didn\'t mean to hold somebody who didn\'t sign the contract when they said the contract must be enforced according to its terms.

"THE COURT: Well, if you can get them to change, give me further directions up there, you can do it. I will stay the execution of this judgment for 30 days. * * * I am going to leave it the way it is.

"MR. FRIEDLANDER: With Auth being held liable on that contract?

"THE COURT: Yes.

It is not clear whether the District Court thought Auth's liability was determined by our prior decision or by its own findings at the original trial. We think neither is a valid basis for holding Auth Brothers, Inc. liable under the contract of November 14, 1957.

"It is indisputable as a general proposition that the lower court is bound by our mandate as the law of the case and is without power to consider questions which the mandate laid at rest." Washington Sportservice, Inc. v. M. J. Uline Co., 114 U.S.App.D.C. 208, 313 F. 2d 889, 895 (1962) (dissenting opinion⁵ and authorities cited therein). It is equally clear, however "that a judgment of reversal is not necessarily an adjudication by the appellate court of any other than the questions in terms discussed and decided." Mutual Life Ins. Co. v. Hill, 193 U.S. 551, 553-554, 24 S.Ct. 538, 539, 48 L.Ed. 788 (1904) (quoted in Sportservice, supra). In the first appeal herein, we decided only that (1) the contract "must be enforced as written" and (2) "the defendants * * * are jointly liable for the entire fee." We neither discussed nor decided which defendants were liable, and did not foreclose the District Court from...