Tracy v. Spitzer-Rorick Trust & Savings Bank

• Decision Date: 03 May 1926
• Docket Number: No. 7189.,7189.
• Citation: 12 F.2d 755
• Parties: TRACY et al. v. SPITZER-RORICK TRUST & SAVINGS BANK et al.
• Court: U.S. Court of Appeals — Eighth Circuit

12 F.2d 755 (1926)

TRACY et al. v. SPITZER-RORICK TRUST & SAVINGS BANK et al.

No. 7189.

Circuit Court of Appeals, Eighth Circuit.

May 3, 1926.

Edward W. Kelsey, Jr., of Toledo, Ohio (George D. Welles, of Toledo, Ohio, on the briefs), for appellants.

Fraser, Hiett & Wall, of Toledo, Ohio, and E. M. Gallaher, of Tulsa, Okl., for appellees.

Before LEWIS, Circuit Judge, and FARIS and PHILLIPS, District Judges.

FARIS, District Judge.

Appellants were solicitors for appellee in this action below, and likewise in an action brought by appellee as trustee, in the federal court of Oklahoma, to foreclose a mortgage made by the Constantin Refining Company. Included among the assets in the mortgage thus being foreclosed was all of the stock of the Constantin Oil & Gas Company. The latter company had property in the Western District of Arkansas; so it was deemed wise to bring an ancillary proceeding in equity in the United States District Court for the Western District of Arkansas to foreclose as to these properties, and to have appointed ancillary receivers therefor. Accordingly, this was done, and the receivers in the main proceeding in Oklahoma were appointed ancillary receivers of the Arkansas properties. Thereafter such proceedings were had in the ancillary action as resulted in a decree of foreclosure, a sale of the properties of the Constantin Oil & Gas Company for the sum of $425,000, and the allowance and payment to the creditors of the latter company of their claims.

Appellants were also appointed as attorneys for the ancillary receivers, and, since they reside in Toledo, Ohio, it was deemed necessary to employ local counsel in Arkansas to aid in the filing and prosecution of the action to foreclose, as also local counsel for the ancillary receivers. Such local counsel were allowed, respectively, the sum of $250 for services in the suit and $10,000 for services rendered to the ancillary receivers. Appellants were allowed the sum of $1,000 for services rendered in bringing and prosecuting the foreclosure suit, and the further sum of $6,000 for services rendered the ancillary receivers. Being of the opinion that these allowances were so far inadequate as to constitute an abuse of discretion by the District Court, appellants have appealed in conventional mode.

The matter of these allowances for fees was tried before the court. The record does not clearly disclose that appellee was represented by counsel, or that it offered any evidence, or any expert testimony. Much evidence was offered in the form of affidavits and correspondence which dealt wholly with a controversy as to the fee appellants should be allowed in the main proceeding contemporaneously pending in Oklahoma, from which it appears that appellants were there insisting upon a fee of $100,000 for legal services rendered therein, and that appellee was contending that appellants had agreed that their fee for all work, in any and all jurisdictions, should be fixed at the sum of $75,000. Since counter affidavits were filed, it may be assumed that one of the affidavits mentioned was filed on behalf of appellee, but the record is dark as to this fact. In the opinions of the witnesses, who were lawyers called to testify as experts, appellants' services rendered in the foreclosure proceeding were fairly worth from $5,000 to $7,500, and their services to the receivers $10,000. Local counsel put the value of his own services rendered to the receivers at $12,500 to $15,000, and as said he was allowed $10,000, making a total allowance to counsel for services rendered to the receivers, through a period of two years of $16,000. There were some five or six contested claims, involving in all something over $100,000, and requiring the services of appellants in court, before the special master, and in taking depositions, for some 25 days in all. Other services, in correspondence, looking up authorities, and preparing orders, were rendered by appellants, to which altogether they devoted some 45 days. Save for contests over the allowance of the above-mentioned claims, the foreclosure proceedings seemingly were not litigated.

With practically all of these services the trial court was personally familiar. For, while many of the contested matters were litigated before the special master, it may be assumed that in all which were of any moment exceptions would be taken and fought out before the court. The basis for this assumption is not entirely clear from the record, which, however, does disclose that some 10 days were occupied in work in the District Court, and so, other entries regarded, this work must have been performed in matters of exceptions. The trial court also personally knew, whether appellants or local counsel had borne the brunt of this litigation, and which of such counsel had rendered the greater part or the more valuable services. After patiently hearing the expert witnesses and Mr. Welles of appellants' firm, after considering the affidavits and the counter affidavit, and in the...