MAYER, Circuit Judge
(after stating the facts as above). 1. Appellees have moved to dismiss the appeal “on the ground that the questions involved are moot and for want of jurisdiction, or to affirm.5’
The order, appealed from contains a restraining injunction and a mandatory injunction. Each is the complement of the other and, indeed, so intertwined as not to he separable. But, if we view the order as divisible in two parts, the restraining feature comes too obviously [878]*878under section 129 of the Judicial Code (Comp. St. §> 1121) to require anything but the statement of that fact. It is contended that the provision as to declaring a lien on the returned or withdrawn claims and securities deprives the latter part of the order of finality. Courts seek not to mistake form for substance. Nothing could be more characteristically final than a mandatory order “forthwith to return and deliver” the claims and securities referred to. The provision'as to a lien is wholly incidental. The point is quite different from that considered in our recent decision in Perfection Cooler Co. v. Rotax Co., Inc., 296 Fed. 464, decided January 7, 1924, which fully reviewed an important question of procedure. Chadeloid Chemical Co. v. H. B. Chalmers Co., 243 Fed. 606, 156 C. C. A. 304, is also quite different.
Whether we view the second part of this order as a mandatory injunction or as a final order under section 128 of the Judicial Code (Comp. St. § 1120), the result is the same. It will suffice to refer to McCall v. Bladworth et al. (C. C. A.) 290 Fed. 365; The Flush (C. C. A.) 277 Fed. 25.
It is contended, however, that the question is moot because counsel is referring to certain changes in the plan discussed in connection with the application for a sale stated, inter alia, “that any such change * * * necessarily involves a modification of the plan which would entitle depositors under the plan to withdraw from the plan.”
In addition to other reasons in this record which dispose of such a contention, we take notice'of it because to agree with it would be to introduce a dangerous doctrine. It is important that in matters of this character counsel should have full freedom of discussion before the court. The opinibn of counsel, whether expressed thoughtfully or casually, cannot be construed into admissions of a fact, and, if counsel had not the opportunity of expressing their views frankly and freely, the court (and the parties) would be deprived of a complete understanding of the meaning and consequences of its decision. Counsel cannot bind clients in this way and plainly such a situation is entirely foreign to one where a fact is admitted or conceded. The rule, as stated by Wigmore, § 2590, 1923 edition (and we italicize “fact”), is:
“The vital feature of a judicial admission is universally conceded to be its conclusiveness upon tbe party making it, that is, the prohibition of any further dispute of the fact by him, and of any use of evidence to disapprove or contradict it.”
The motion to dismiss the appeal is denied.
2. It may be well to restate some well-known propositions. After the court in an equity receivership has proper possession of the res, it is, in due course, confronted with final disposition. It may order the sale of the property unconnected with or irrespective of any plan of reorganization. It may, in some instances, divide the property pro rata among creditors or stockholders, as the case may be, or, if the property is freed from debt, return it to the owners. In the case, however, of large properties, such as those at bar, where rights and relations are very complicated, a sale disconnected with a plan of reorganization is likely to prove disastrous. Such a sale rarely obtains for the property its true value and often would enable a group financially [879]*879strong by combined action to gain unfair advantage over those who have not the means to protect the sale. Hence it is that courts ot equity conserve the property in their custody until the time comes when its sale can justly be had as a step in reorganization. Sometimes such a sale takes place under a foreclosure decree; other times as here, where there is no foreclosure decree.
The case at bar is a perfect illustration of the great benefit which accompanies sound and competent administration in equity. It is plain that under the guiding hand of the district judge, and with the ability of those selected to administer the properties, the assets of these corporations haw markedly increased, while, at least, one large claim has been substantially decreased. To have thrown these corporations into bankruptcy would have meant disaster instead of the continuance of important enterprises which now seems at hand.
The court, of course, must decide whether or not the plamis fair and equitable before it orders the sale which is the step precedent to effectuating the plan. It is rare that such a plan is academically perfect. In the maze of rights, compromises become necessary, and failure to agree upon some reasonable plan necessarily leads to unfortunate results, involving loss to those concerned. Thus it is that the principal problem of the court is to determine the fairness of the plan. The district judge fully appreciated all this, and, in his opinion of November 16, 1923, after speaking in commendatory terms of the work of, the reorganization committee which, inter alia, “saved the estate a large amount of money that otherwise would have been expended in litigation,” he said:
"I am convinced, however, that it is to the interests of all the creditors that there he a reorganization and that these properties should not now be liquidated. So far as I am concerned, I do not desire to have them within the custody and control of the court for a day longer than is absolutely necessary. I do feel, however, that before I do put the properties up for liquidation, the creditors should have the opportunity, if they desire it, to submit to the court a more liberalized reorganization plan than that which is now before me.
“It is not for me. primarily to say what the reorganization plan may be, nor do I mean to indicate what it shall be. I shall however, briefly explain some of the objections to the present plan that have occurred to me and which, in my judgment render it inequitable and make it impossible for me to give my approval to it.”
But, in the case at bar, the court misconceived the extent of its power. The deposit and reorganization agreements are voluntary agreements over which the court has no summary jurisdiction; and the fact that parties intervene does not here transmute a summary proceeding into a suit in equity.
The court cannot compel any one to deposit, nor can it relieve any one from deposit, unless for proper cause, established in an appropriate suit brought for appropriate relief.
What the court has done here is on a petition to assume summary jurisdiction in respect of the status of deposited securities in the hands of these committees.
The enforcement of these deposit agreements between committee and depositor in no manner affects the res in possession of the court. [880]*880These agreements relate to the rights, not merely as between the committees and depositors, but as well as between depositors, and those rights will not add to nor substract one iota from the corpus of the res in the custody of the court.
In Graselli Chemical Co. v.
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MAYER, Circuit Judge
(after stating the facts as above). 1. Appellees have moved to dismiss the appeal “on the ground that the questions involved are moot and for want of jurisdiction, or to affirm.5’
The order, appealed from contains a restraining injunction and a mandatory injunction. Each is the complement of the other and, indeed, so intertwined as not to he separable. But, if we view the order as divisible in two parts, the restraining feature comes too obviously [878]*878under section 129 of the Judicial Code (Comp. St. §> 1121) to require anything but the statement of that fact. It is contended that the provision as to declaring a lien on the returned or withdrawn claims and securities deprives the latter part of the order of finality. Courts seek not to mistake form for substance. Nothing could be more characteristically final than a mandatory order “forthwith to return and deliver” the claims and securities referred to. The provision'as to a lien is wholly incidental. The point is quite different from that considered in our recent decision in Perfection Cooler Co. v. Rotax Co., Inc., 296 Fed. 464, decided January 7, 1924, which fully reviewed an important question of procedure. Chadeloid Chemical Co. v. H. B. Chalmers Co., 243 Fed. 606, 156 C. C. A. 304, is also quite different.
Whether we view the second part of this order as a mandatory injunction or as a final order under section 128 of the Judicial Code (Comp. St. § 1120), the result is the same. It will suffice to refer to McCall v. Bladworth et al. (C. C. A.) 290 Fed. 365; The Flush (C. C. A.) 277 Fed. 25.
It is contended, however, that the question is moot because counsel is referring to certain changes in the plan discussed in connection with the application for a sale stated, inter alia, “that any such change * * * necessarily involves a modification of the plan which would entitle depositors under the plan to withdraw from the plan.”
In addition to other reasons in this record which dispose of such a contention, we take notice'of it because to agree with it would be to introduce a dangerous doctrine. It is important that in matters of this character counsel should have full freedom of discussion before the court. The opinibn of counsel, whether expressed thoughtfully or casually, cannot be construed into admissions of a fact, and, if counsel had not the opportunity of expressing their views frankly and freely, the court (and the parties) would be deprived of a complete understanding of the meaning and consequences of its decision. Counsel cannot bind clients in this way and plainly such a situation is entirely foreign to one where a fact is admitted or conceded. The rule, as stated by Wigmore, § 2590, 1923 edition (and we italicize “fact”), is:
“The vital feature of a judicial admission is universally conceded to be its conclusiveness upon tbe party making it, that is, the prohibition of any further dispute of the fact by him, and of any use of evidence to disapprove or contradict it.”
The motion to dismiss the appeal is denied.
2. It may be well to restate some well-known propositions. After the court in an equity receivership has proper possession of the res, it is, in due course, confronted with final disposition. It may order the sale of the property unconnected with or irrespective of any plan of reorganization. It may, in some instances, divide the property pro rata among creditors or stockholders, as the case may be, or, if the property is freed from debt, return it to the owners. In the case, however, of large properties, such as those at bar, where rights and relations are very complicated, a sale disconnected with a plan of reorganization is likely to prove disastrous. Such a sale rarely obtains for the property its true value and often would enable a group financially [879]*879strong by combined action to gain unfair advantage over those who have not the means to protect the sale. Hence it is that courts ot equity conserve the property in their custody until the time comes when its sale can justly be had as a step in reorganization. Sometimes such a sale takes place under a foreclosure decree; other times as here, where there is no foreclosure decree.
The case at bar is a perfect illustration of the great benefit which accompanies sound and competent administration in equity. It is plain that under the guiding hand of the district judge, and with the ability of those selected to administer the properties, the assets of these corporations haw markedly increased, while, at least, one large claim has been substantially decreased. To have thrown these corporations into bankruptcy would have meant disaster instead of the continuance of important enterprises which now seems at hand.
The court, of course, must decide whether or not the plamis fair and equitable before it orders the sale which is the step precedent to effectuating the plan. It is rare that such a plan is academically perfect. In the maze of rights, compromises become necessary, and failure to agree upon some reasonable plan necessarily leads to unfortunate results, involving loss to those concerned. Thus it is that the principal problem of the court is to determine the fairness of the plan. The district judge fully appreciated all this, and, in his opinion of November 16, 1923, after speaking in commendatory terms of the work of, the reorganization committee which, inter alia, “saved the estate a large amount of money that otherwise would have been expended in litigation,” he said:
"I am convinced, however, that it is to the interests of all the creditors that there he a reorganization and that these properties should not now be liquidated. So far as I am concerned, I do not desire to have them within the custody and control of the court for a day longer than is absolutely necessary. I do feel, however, that before I do put the properties up for liquidation, the creditors should have the opportunity, if they desire it, to submit to the court a more liberalized reorganization plan than that which is now before me.
“It is not for me. primarily to say what the reorganization plan may be, nor do I mean to indicate what it shall be. I shall however, briefly explain some of the objections to the present plan that have occurred to me and which, in my judgment render it inequitable and make it impossible for me to give my approval to it.”
But, in the case at bar, the court misconceived the extent of its power. The deposit and reorganization agreements are voluntary agreements over which the court has no summary jurisdiction; and the fact that parties intervene does not here transmute a summary proceeding into a suit in equity.
The court cannot compel any one to deposit, nor can it relieve any one from deposit, unless for proper cause, established in an appropriate suit brought for appropriate relief.
What the court has done here is on a petition to assume summary jurisdiction in respect of the status of deposited securities in the hands of these committees.
The enforcement of these deposit agreements between committee and depositor in no manner affects the res in possession of the court. [880]*880These agreements relate to the rights, not merely as between the committees and depositors, but as well as between depositors, and those rights will not add to nor substract one iota from the corpus of the res in the custody of the court.
In Graselli Chemical Co. v. Ætna Explosives Co., 252 Fed 456, 164 C. C. A. 380, the fundamental point was that the threatened action would interfere with the res. A mere reading of the opinions in that case will show it has no bearing here. Colonial Trust Co. v. Wallace (C. C.) 183 Fed. 897, is of no service to appellees for several reasons: First, that was a suit in equity, not a summary,proceeding. Secondly, while recognizing the ability of the judge who wrote that opinion, it was nevertheless the view of a single judge, and is not authority, and, were the question there considered now before us, we would be inclined to the opinion that to construe “within” as meaning "before” was straining the import of a simple and ordinary word. Thirdly, and no doubt in view of that case, the draftsman of the deposit agreement here was careful to provide that withdrawal might be made 30 days after first publication and “in no event prior” thereto, and to supplement this with “depositors who fail to withdraw in the manner aforesaid within said period of 30 days, shall be conclusively and finally deemed for all purposes to have irrevocably waived the right of withdrawal. * * *”
In respect of the reorganization agreement, nothing could be stronger than, “deposited securities cannot, without the consent of the reorganization committee, be withdrawn from the plan and this agreement, except as and when in this agreement provided.”
Finally, the other defects referred -to in the opinion in the Colonial Trust Co. Case are not present here in either the deposit or reorganization agreements.
In Industrial & General Trust, Ltd., v. Tod, 180 N. Y. 215, 73 N. E. 7, the agreement provided that the committee would notify the depositors of the adoption of a plan, and that depositors would have 30 days within which to withdraw their securities. The committee, however, let the property go to a sale and bought it in with the deposited securities without having first adopted a plan of reorganization and thus given the depositors a chance to withdraw their securities. The plaintiff succeeded in a suit against the committee for damages for breach of contract. The court construed the agreement as necessarily implying an agreement on the part of the committee to submit a plan of reorganization before the properties had been sold.
3. Ordinarily, we should go no further, but we gather from the record the desire of the District Court and the necessity for prompt disposition to the end that the receiverships may be terminated and the reorganized business started as soon as possible.
The deposit and reorganization agreements are too long to quote. They are carefully and fairly drawn. They are based on mutual promises. Their very purpose ex necessitate is united action, so that the depositors acting through the committees may protect their rights. They are replete with safeguarding language to express that purpose. We need not pause to discuss whether under these agreements property rights in the bonds and claims, having been severally transferred to the [881]*881committees as trustees, the result is to create a single undivided trust estate. The committees are, of course, trustees or fiduciaries for certain purposes, but the fundamental point is that these deposit agreements are contracts. Fuller v. Venable, 118 Fed. 543, 548, 55 C. C. A. 309.
Such contracts do not differ in principle from promises to subscribe to stock or to charitable institutions.- Lake Ontario, etc., R. R. Co. v. Mason, 16 N. Y. 451, 463; Nebraska, etc., Co. v. Lednicky, 79 Neb. 587; 113 N. W. 245; Irwin v. Lombard, 56 Ohio St. 9, 20, 46 N. E. 63, 36 L. R. A. 239, 60 Am. St. Rep. 727; Wilson v. First Presbyterian Church of Savannah, 56 Ga. 554; Petty v. Trustees of Church, 95 Ind. 278; First Church v. Pungs, 126 Mich. 670, 86 N. W. 235; U. S. & M. T. Co. v. U. S. & M. T. Co., Trustee, 250 Fed. 377, 381, 162 C. C. A. 447; Cowell v. City Water Supply Co., 130 Iowa, 671, 105 N. W 1016; c. f. Gilfillan v. Union Canal Co., 109 U. S. 401, 3 Sup. Ct. 304. 27 L. Ed. 977.
Perhaps, the most striking authority is 180 N. Y. 215, 73 N. E. 7, supra, for there the plaintiff brought his action for damages for breach of contract.
The court there said (italics ours):
“As we construe the instrument, the bondholders had no power to withdraw their bonds until after a plan of reorganisation had been prepared and notice thereof given, or until a breach of duty by the defendants. This right to take their bonds back if they did not like the plan was vital to the bondholders. It was about the only right they had, and if they could not exercise it until after the road had been sold and reorganized it amounted to nothing. The deposit of the bonds with the trust company placed them in the absolute power of the committee, which had full control of them for the purposes of the reorganization scheme, provided it was accepted, and the owner had no right to clemwnd them, until after a plan had been filed, when he had that privilege for the period of tlwi’ty days only.”
As well said in the brief of counsel for appellants:
“A fortiori, in the case at bar, after a plan has been submitted, and assented to, and the committee have undertaken 'in good faith to endeavor to execute same,’ there should be no right to demand back the deposited securities. The fact that the plan has been disapproved by the court does not ipso facto terminate the whole agreement. It merely brings into operation the necessary powers of the committee to modify the plan. Until the committee has modified- the plan in such a way as to give the right to withdrawal, or has abandoned the plan, or the properties have been acquired by some other entity so that the purpose of the agreement can no longer be accomplished, or the committee has materially violated its agreement or trust, the terms of the agreement continue in full force and effect, without the right on the part of any of the depositors to withdraw from it. None of these events has yet occurred.”
To hold otherwise than stated supra would be to destroy the opportunity of creditors or security owners to accomplish by united action what they rarely can achieve alone. If such agreements are to be treated as not binding contracts, then the work of such committees, which experience has proved to be vital to the solution of problems of this character, will go for nothing, and the administration and winding up of such estates will be gravely delayed and embarrassed; for there will be no certainty that on the eve of reorganization all that has [882]*882been done may not be destroyed, and that the committees may not beheld liable for the proper expenses which it has incurred.
Indeed, it may be observed, is passing, that,„ if there was no contract here, there was no logical reason for the attempt in the order below to fasten a lien on the returned claims.
Finally, it may be said in this connection that, before a plan of reorganization is ultimately satisfactory to those concerned and to the court, it is usually necessary to make many changes to meet many.differences of opinion, and the fullest opportunity should be given to work out an acceptable plan.
We have not overlooked the many cases cited by appellees. They either concern situations which involve control of or interference with the res or jurisdiction to enter dependent suits (St. Louis, San Francisco Ry. Co. v. McElvain [D. C.] 253 Fed. 123, the Ætna Explosives Co. case, supra) or are wholly irrelevant. Of the latter class, Texas Co. v. Hogarth Shipping Co., Ltd., 256 U. S. 619, 41 Sup. Ct. 612, 65 L. Ed. 1123, cited by appellees, is an illustration.
The order below is reversed, with costs. The motion to dismiss the appeal is denied. The mandate will issue forthwith.