Walters v. Western & A.R. Co.

• Decision Date: 26 June 1895
• Citation: 69 F. 706
• Parties: WALTERS et al. v. WESTERN & A.R. CO. (BROWN, Petitioner).
• Court: U.S. District Court — Northern District of Georgia

69 F. 706

WALTERS et al. v. WESTERN & A.R. CO. (BROWN, Petitioner).

United States Circuit Court, N.D. Georgia.

June 26, 1895

Julius L. Brown (with Bishop & Andrews), pro se.

Jackson & Leftwich and Payne & Tye, contra.

NEWMAN District Judge.

This is an application by Julius L. Brown, Esq., for compensation as counsel for complainants in the above-stated case, and also as counsel for the receivers appointed therein. The matter was referred to Mr. John T. Pendleton as special master, and he has reported for Mr. Brown an allowance of $10,000 as complainants' solicitor, and an additional amount of $10,000 as counsel for the receivers the latter subject to a reduction of $2,500 on account of retainers received from the company whose assets are being administered, prior to the appointment of the receivers. To this report exceptions have been filed by Mr. Brown. The exceptions all go to the correctness of the amount allowed him as complainants' solicitor and as receivers' counsel.

On the 27th day of December, 1890, the charter of the Western &amp Atlantic Railroad, a corporation which has been operating the road of that name and the property of the state of Georgia for the period of 20 years, expired. A few days prior to the expiration of the charter, Hon. Joseph E. Brown and Major E B. Stahlman were appointed receivers by the Hon. Don a. Pardee, circuit judge. The bill was filed by certain shareholders, the allegations in the bill showing the expiration of the charter, the fact that considerable assets were on hand to be distributed between the creditors and the shareholders, and the necessity for receivers of the court to hold the same until these assets could be administered. Mr. Julius L. Brown was counsel for the complainants in this bill. He prepared it and obtained the appointment of the receivers, and has represented the case for the complainants ever since. He has also acted since their appointment, as counsel for the receivers.

The first matter for consideration is that of the compensation of Mr. Brown out of this fund as counsel for complainants. He claims $35,000, alleging that there has been brought into the hands of the receivers something over $700,000, and that he should have what is about 5 per cent. of that amount for bringing the fund into court. It is denied on the part of counsel representing Receiver E. B. Stahlman (Hon. Joseph E. Brown having died), and by counsel representing the shareholders, that the premises upon which Mr. Brown bases this claim are correct. That is to say, they deny that any fund has been brought into court by this proceeding in the sense in which that expression is used when allowing counsel compensation for such services. The facts as to this issue seem to be about as follows: There was on hand, in cash and cash items, at the time of the appointment of the receivers, something over $300,000. The company set up a claim against the state of Georgia for betterments to the road during the period of its lease, and recovered from the state $99,000 on this ground. Mr. Brown and two other members of the bar received for this service $10,000, Mr. Brown having received as his proportion $4,442, according to his testimony in this investigation. Part of this was paid by the company and part by the receivers. This sum made the amount in the receivers' hands approximate $400,000, to which was added the amount received from the sale of the rolling stock and traffic balances from other railroads, and other minor matters, which made a sufficient sum to aggregate a little over $700,000 in the receivers' hands. A comparatively small amount collected from the sureties of a defaulting agent is the only amount, unless it be some trivial matter which has escaped attention, collected through the special efforts of counsel, except the amount for betterments, which, as stated, was paid for by special contract with Mr. Brown and his associates. The effect of the finding of the master, while he does not expressly pass on the question, is that this fund was not brought into court by counsel for complainants, and that counsel is not entitled to compensation as upon a per cent. basis for the fund which the receivers had in their possession. He finds that he is entitled to $10,000 for his services as counsel for complainants. There is no ground whatever for differing with the special master as to the conclusion which he has reached on this subject. No fund was brought into court by the aid of complainants' counsel in any fair sense, except as to the betterments claim, for which he has been compensated. Two gentlemen of the ablest character were appointed as receivers, who were thoroughly competent to manage this business in every respect. One of them was ex-Senator Brown, a man of national reputation for ability; the other, Major Stahlman, a railroad man of large experience and great ability. These gentlemen had able clerical assistance, in their office as receivers, to aid in winding up the affairs of the company. The receivers, with the aid of this clerical force, reduced the outstanding obligations of the company to cash, according to the testimony of Major Stahlman, without the slightest difficulty. If the applicant, Mr. Brown, was right in his assumption that by his efforts this fund was brought into court, there would be reasonable ground for the payment of additional compensation; but I am forced to agree with the special master in the conclusion that he has evidently reached on this subject, and which he must necessarily have reached in order to have found as he did.

For compensation as counsel for the receivers Mr. Brown claims $20,000. The special master found for him $10,000, to be credited with the sum of $2,500 on account of retainers which he had received from the company in much of the litigation before its dissolution. The evidence heard by the special master on this question, as well as on the question of Mr Brown's compensation as complainants' solicitor, is exceedingly voluminous. The evidence as reported to the court makes a volume of 850-odd pages of closely typewritten matter. Twenty-eight members of the bar were examined as witnesses. Sixteen of this number were witnesses on behalf of Mr. Brown, and twelve for the adverse side. They differ widely in their testimony as to the amount to which Mr. Brown is entitled. Some of them testify to the full amount claimed by him, both as counsel for the complainants and the receivers,-- $55,000 in all. Some of them-- a number of them-- testified to a lesser amount. Most of those offered by the receivers and shareholders testified to an amount approximating that found by the special master. Many gentlemen of high character and standing at the bar were examined on both sides. One principal witness on behalf of the receivers and shareholders was the ex-chief justice of the supreme court of this state, Hon. Logan E. Bleckley. Judge Bleckley was carried, by the examination and cross-examination of counsel, through every branch of the litigation to which the receivers were parties in winding up the affairs of the company, and testified in reference to nearly every case-- probably as to every important one-- against the receivers. He gave his evidence in detail and with particularity. His testimony, in round numbers, taking the services of Mr. Brown as complainants' solicitor and for the receivers together, fixes about the amount reported in Mr. Brown's favor by the special master. He gives something more, perhaps, as complainants' solicitor, and something less as receivers' counsel, but the aggregate varies very little from the amount the master reported. Ex-Judges H. B. Tompkins, George Hillyer, and W. R. Hammond were also sworn as witnesses; the former on behalf of Mr. Brown, the two latter on behalf of the receivers and shareholders. They vary materially as to the value of Mr. Brown's services, as do the other members of the bar who testified for the respective parties. Of course, all these gentlemen have testified honestly, and it is simply a difference between lawyers as to the value of services rendered by Mr. Brown. Some...