51 F. 268 -

268

F.ij::DERAL.REPORiJ,'ER,yol51.

and the cqnquct qf ith.e people, would Use their columns to incite the lawless or .thoughtless to acts of violence or crime. The courts with good rellSonexpect the public press to be conservators of the peace, and, whether or not they agree with the law, either as enacted or construed, that they will in good faith advise its observance until amended or reversed.

ROBINSOIil' 'V. ALABAMA

& G.

MANuF'a

Co. et al.

(Oircuit Oourt, N. D. Georgia. May 80, 1892.)
TRUST l)E.EP-FoRljiCLOSURB.....:,ATTORNEYB'· FEBS. ,A trust deed given to secure the bonds. of

a manufacturing company provided fot payment of the trustee's expenses upon a sale by him under the powers con· tained 11;1 the deed. The trustee, however, foreclosed by suit, which course was probably necessary because of a prior foreclosure sale in the state court. The suit was brought on request of certain bondholders, and the trustee had refused to act except lInder a stipalation tnat he should not be liable for attorney's fees. Held. tbat lie \Vas not entitled, as a matter of right, to have at.torneys' fees taxed. FowZer·v. Tr'ust'Oo., 12 Sup. Ct. Rep. 1,14,1 U. S. 884, followed. Dodge v. TuZleys, 12 Sup. Gt.Rep. mas. distiog-uished. .
1,

I , . '

InEquity. :Bill by J. J. Robinson, trustee, to foreclose a trust deed given by the:.AJabama & Georgia Manufacturing Company and others to securepertaill bonds. A demurrer to the bill was overruled, (48 Fed. 'Rep. and a decree of foreclosure directed. The case is now heard all flo .petjtion for the allowance of attorneys' fees, and demurrer thereto... :O.ern·urrer sustained. B.F. &- Ohaa. A. Abbott and Dorsey, Brewster &- Howell, for complainants. ,N. J. k Hammond, for defendant.
NEWMAN, District Judge. In this case a final decree of foreclosure has been directed in favor of complainants, and the court is now asked to detennipe the question of an allowance for counsel fees for legal services renderep on behalf of Robinson, trustee. The petition to this end filed by . cc;>mplainants: p.rays that reasonable counsel fees may be allowed against and taxed as a part of the cost in the case. There is no the provisio,n il;1 the trust deed for the payment of counsel fees incase of foreclosure in court. ;There is a provision for the payment of the expenses of the trustee in the event he entered upon the property and sold the Slj,me as in the trust deed. The provision for the payment of expensesw,9:u,ld' propably include reasonable counsel fees if the trustcehlld in ,that manner to execute the trust, but he filed his bill in co.urt fqr a decree of foreclosure. The property embraced in the trust deedh,p,yffig been sold bya receiver in a former proceeding, how:thElproperty purchased by third parties, the proceeding in was considered a necessity; and it probably was. The court is:now called upon to determine whether or not the fees of

ROBINSON V. A.LABAMA &: G. MA!WF'G CO.

269

counsel representing the trustee shall be taxed against the defendants. in addition to the principal and interest of the bonds and the ordinary cost in the case; the applioation to have counsel fees thus attached being strenuously resisted by defendants. Quite a number of authorities have been cited both for and against the application, and by both sides; but the main reliance of defendants is upon a decision of the supreme court in the case of Fowler v. Trust Co., 141 U. S. 384, 12 Sup. Ct. Rep. 1, and that of complainants upon a recent decision of the supreme court in the case of Dodge v. Tu.lleys, 12 Sup. Ct. Rep. 729, (decided April 11, 1892, and published in advance sheets No. 26.) In the case of Fowle,' v. Trust Co. there was a provision in the trust deed very much like the provision in the deed in this case. It provided for an allowance, in case of a sale by the trustee at public auction upon advertisement, of all expenses, etc., and there was a proceeding in court to foreclose the mortgage and a decree. The, proceeding to foreclose was instituted by the holders of the bonds, as appears from the report of the case, and not by the trustee; and it was held that fees of solicitors for complainant could not be recovered against the defendant. The only difference between that case and the case now before the court is that the proceeding was there instituted by the holders of the bonds, and not by the trustee; anli it is contended that that isve.ry material in considering its weight as authority here. It seems from a sentence in the opinion that the reason for that suit being brought by the holders of the bonds and not by the trustee was a refusal of the trustee to act, and that this was as an additional reason for the allowance of cQunsel fees. The language of the court, so far as material to the question in consideration, is as follows: ' "The trust company insists that the decree should have made to it an allowance for solicitor's fees. There is no foundation for this claim. The trnst deed provides that, in the case of a sale by the trustee at public auction, upon advertisement, all costs, charges, and expenses of such advertisement, sale, Or conveyance, including commissions, such as were at the time of the sale allowed by the laws of Illinois, to sheriffs on sale of real estate on execution, should be paid out of the proceeds. 'rhis provision does not impose . upon the borrower the burden of paying to the lender a solicitor's fee where a suit is brought fol' foreclosure. The commissions referred to in the deed are allowed only where the property is sold upon advertisement by the trustee without suit. The trust deed made no provision for a solicitor's fee to the company in the event suit was brought. That a suit became necessary because of the refusal of the trustee to act is I10 reason for taxing such a fee against the mortgagor." As stated, the only difference between that case and the case under conside.ration is that in this case the trustee brought suit for foreclosure. If a trustee may recover from the defendant his expenses for counsel fees in a case like this,· in the eveI;lt the trustee refuses. to apt, and it becomes necessary for the. holders of the obligation secured by the trust deed to employ counsel themselves to enforce the trust deed, sl;lOuld they not have the same right? In the one case the kustee: employs

270

FEDERAL REPORTER ,

vol. 51.

llOunsel his cestw.i·que trust,. and in the other the beneficiariei3 emplOy;,oonnael to· represent themselves,' and .enforce the trust: deeR; :and 'it' wo,ollLbe very difficult to find any distinction in principle between the rights in the two cases. The case of ,Dridge v'.Tulleys, it is earnestly urged, controls the question.here, whatever effect maybe given the Fowler Case, just· discussed. That was a srlit brought (in the Dodge ease) bya trustee to foreclose a mortgage secu:ning certain indebtedness, anel there was an allowance to counsel of complainants a fee of $1,000. The supreme court reduced the fee by;one.hillf, but held that it was properly taxed., The language of the court, as appears from the advance sheets of the decisioD., so far as it is necessary to cite here, is as follows:
th,e ,piloymtmto(1\11 attol"Ilt'y'sfee of $1.000 in case ofJorec!osul'e, uut such stlPlllatlons have" been. h.,jd lJy the supreme court of Nf'braska to be unauthorized. .Dow v. Updike, 11 Neb. 95, tN. W. Hep. 857; Ha1'dy v. Miller, lINeb. 395, 9N. W. Hap. 475. It spen1s 'that iii 1873 an act pl1$sed the legauthoriihlgin any written Instrument for the islalure of Nebraska pay.mentof money a stiphlation for not,exceelling 10 per cent. as an attorof Sllit. dOt'n. 1St. Neb. 98. This act was rt'pealed in 1l:l79. La,ws p.78. Ip the case cUell,the supreme cO\lrt Qf the state held that by reppal of the contract right tQ recover attorneys' fees was takt'n aWay. 86, as this COUI't follows the dpcisioDS of. the highest collrtof the state in such matters, (Bendei/ Y.'l'o1JJ1tsend, 109 U. S. 665, 3 Sup. Ct. Hap, 482,) the Jlrt)visiull in the trnst deed for the payment of $1.000 8s'aUornels fees cannot be regardl'd as of hinding force. But, while contract ,rightsaretletU"d by th... law: of the state,: that law does nvt determine. the pl'Qceilure ,of CQurts of th!lllnited States sttting as courts of eqUity, or the cosfs which are t"xable the1'e, or contrul the discretion elCprcised in matters of allow8nces. 'rhose courts acquire their jurisdiction and 1J0wers from an· other IWurcethan the state; There is no statute of Nebrllska In respect to thematt..r. Even if t11l're were oneelCpressly prohibiting courts of equity .from making allOWhllCetl to trustees orlht'ir counsel, such prohibition would .not .controlthe proceeding in federal equity cuurts. They proceed aceol'diug tothe g.-neral rules of equity, except so far as such rules are changl'L1 by the legislation of congress: and, while they may enforce special equitable rights of palities given by statestatutt's, (Hulland v. Challeu, 11u U. S. 15, 3 Slip. Ct,.Hep.495,) yet their gtlneral'powersas courts of t'quity are not determined and cannot Le cut off by any state legislation.' It is the general rule of eq uity that a tl'ustf'ecalled upon itO dischal'ge any duties in tht! administering of his t1'ustist'nlitledto thprefor. alld included therein is a reasollable: allowance for coullselfe'es. '1'hlsl8 eOllstanLlyenforced in the feLieral courts in tbe \'arloUlI railroad foreclosures that have been and are procet'ding thel'ein, and this irrt'specLive of any state It'gislatlon. 'fhe SUbject was ex· III the ('ase or '1'1'u._tees v. haustlvelv considt'red bv Mr. Justice G"eenollghi 105 U. 8.527; The Etlgiishand authorities were fuHyreviewed, and the pGwer and duty of the cOlirt to' mllke rea.'Ionahlt' allowan!1e&(jnpludingcouIISeJ trustlles"vr \ltl1ersacting in tbat capacity. WaS atlirme9.v · .fettuli,.1l3 :TJ. S. 116,5 Sup, Ct.. Rf'p. 387.. !tis unnecessaryTo:nw're the'se' decisions.. In the CaSe bet ore 'usa ('O,IlHlS'ibti:l' it: court of eqqityan'clasks its aid in t'"abling hilli to thetl'llUesllfhis tl'ust;and, accoriling to tht' settled law Of enlitled' to allowatJce forreasoIl.able ·counsel fees. But

ing a·spli<:itor's fee of $1,00.0. Tbere is a stipulation. in the trust deed for

"The remaining

of appl'lIantsis that the court erred in allow-

ROBINSON fl. ALABAMA & G.· MANUF'G CO.

'271

too much. Indeed. in the bi,ll of complainant the trustee of the trust aHegesthat$500,is;a reasonable attorney'sfee for the deed, and we thihkthat, under the circumstances, rio more should be allowed." '

It is true, certainly, that the court in this case sustained the court below in taxing the counsel fees of the trustee in a case like this, and held that it was in. the general powers of the Jederal courts to do what was done there. But I do not understand the case to go. to the extent contended for by counsel for complainants here. They contend, as I understand them, that the ruling in that case is that it is the right of the trustee, in a case like this, to recover his counsel fees against the defendants; that is, that it was a matter of right to have counsel fees so taxed. I do not so understand the decision. The court below had taxed complainant's counsel fees against the defendant, and the supreme court, while reducing the amount of the fee, simply affirmed this, and placed it upon the general powers of the federal court to tax the cost in the case. There is nothing whatever in the decision to justify the contention that the c.:qurt there decided thal the trustee, as a matter of should have counsel fees taxed against the defendant in a case like this. The court ha\(ing this. opinion as to the general effect of the decisions cited, it may next be considered whether it is a case in which the court, in its discretion, will cause the fees of'counsel forcomplainallt to be taxed against defendant. This bill was filed because of nonpayment or interest, whi,ch, under the contract, gave the right to foreclose; and a serious question was made by the pleadings and the proof in the case alj to · whether or not the right to foreclose existed at the time thebUl was filed, but the court sustained this right, and directed a final decree. No right can be claimed here in this respect because of any liability incurred by the trustee in the performance of his duties. it appears from the evidence in the case that the trustee required an agreement that he for counsel fees before he would allow the use should not be 'of his name in the suit; and the case has really more the appearance of .the holders of these obligations proceeding through the trustee, as a mere formal party, than the act of the trustee in the discharge of a duty incumbent upon him by virtue of a trust which he had assumed and agreed to carry out. Again, the property covered by this trust deed was placed in the hands of a receiver of the state court in a proceeding against the Alabama & Georgia Manufacturing Company. and by a decree of that court was sold, and is ilOW the property of the' Huguley Manufacturing Company, who hold the property subject to this mortgage under the terms of that purchase at the receh'er's sale. There is nothing whatever in this contract, as has been stated, providing that counsel fees of complainant should be paid in the event of a foreclosure in court; and, if the same should be taxedhereft./1;ainst the defendimts, it would be increasing the amount of the mortgage' to that extent. .In the absence of a provision in this trust deed for counsel fees, and the law not requiring it to be taxed, it would be placing a burden on the pur-

272

FEDERAL REPORTER ,vol;

51.

chasers of this property which they did not assume,and cannot he held to have assumed, when they bought the property at the receiver's sale. The conclusion is that this is not a case where the court is required by law to tax counsel fees of the complainant against the defendant, and, in the absence of any such requirement, and considering the question unde"r the general rule applicable in courts of equity, such a case is not made as the court would, in its discretion, give it that direction. But the court will leave the matter of compensation of complainant's solicitors open until the fund is brought into court derived from the sale of the property under the decree which has been directed, and will then make such ordel' for the payment of counsel fees, and for such amount, u may be proper. An order may be taken sustaining the demurrer upon the ground stated.

BISHOP

v.

AMERICANPR.ESERVERS' CO.

et al.

(CIrcuit Court, N. D. nHnois. June

.

8, 1892.)

1.,

Act July 2,18110, (26 St. at Larg'El, p.209,) Which forbids comblnatlons"n restraint ,Cif interstate and gives a right of action to any person injured by . acts in ,Yiolation' of its provisions,: does not authorize suit where the only cause of actionJs the bl,'inging of two suits wh.ich.Jl.aire not been decided.
SAME-l'I..EADING.

IN: ,RESTRA.INT ap TRADE-TRuST COMBINATIONS.

2.

in such an action which does not aver that the goods mariufactured by plaintiffj and in respect o.f Which he claims to be injured, are a subject of interstate comjDerce, or that the acts. complained of have anything to do with any contract in restraint of trade, or that the parties are citizens of different states, is de!purrable., .

.

.

At Law. On demurrer to declaration. Action by ,ApdrewD. Bishop against the American Preservers' Company, Bernard E. Ryan, and T. ,E. Dougherty, for injuries alleged to havebelln sustained in his business and property by reason of acts of the defeIfdants in violation. of the "An Trust Law," (26 St. at Large, p. 209.) That act. makes Hlegal all combinations "iIf restraint of trade or commerce among, the several state!;!," and provides that" any person who shall be inj'\lred in hiabusiness or property by any. other person or corporation, by of forbidden or declared to be unlawful by this. act,' maY sue therefor, and repover. threefold damages." and Fre,derick, Qrnd, for plaintiff. Mayer $tein, for c;lef!'Jn4ants. BLODGEJTT,:District Judge, (orally;) This suit is now before the court on adel1::l'urrerto,the declaration by_ the defendants, the American Preservers' ,Gompany,Bernard E. Ryan, and T. E. Dougherty. c,. plaintiff- charges . that in,1888. he .was . engaged in the business of mali-