In Re Interstate Trust & Banking Company

106 So. 2d 276, 235 La. 825, 1958 La. LEXIS 1243

• Court: Supreme Court of Louisiana
• Decided: November 10, 1958
• Docket: 43751
• Status: Published

Opinions

HAMITER, Justice.

Appellants herein are attorneys at law who seek to be awarded a certain fee for services allegedly rendered by them to all of the depositors and creditors of the Interstate Trust & Banking Company in Liquidation. Recovery was denied by the district court.

The instant litigation is a sequel to In re Interstate Trust and Banking Company in Liquidation, Numbered 39,142 on the docket of this court (see 222 La. 979, 64 So.2d 240). Therein, these appellants represented some of the bank’s depositors and creditors in opposing four tableaus of distribution (Nos. 13, 14, 15 and 16) in the liquidation matter because of a failure to provide for the payment of interest on unpaid balances that had been frozen since 1934. Opponents prayed for recognition of their claims “for legal interest as herein set forth, the payment thereof to be made to opponents in due course of time, out of the assets of said Liquidation and by preference and priority over all persons whomsoever, * * -phe effect of the final ruling of this court was to order payment of legal interest to all depositors and creditors, including those who failed to oppose the distribution, the total amount of which interest (as later disclosed) was $728,281.01.

Thereafter these appellants, through a motion filed on their behalf in the district court, obtained a rule ordering the state banking commissioner to show cause why their claim for compensation for professional services rendered to all depositors and creditors in the former preceeding should not be recognized and fixed at 25% of the total amount of interest to be paid. While conceding that they had employment contracts only with the particular depositors and creditors whom they specifically represented in the interest litigation they alleged and urged that because of their services the remaining depositors and creditors were benefited and hence should pay a proportionate share of the compensation (25% of all interest payable) to which they are entitled.

On behalf of the unrepresented depositors and creditors the commissioner resisted the claim; and, as we have stated, the district court disapproved it. This appeal followed.

Appellants cite only one case from the Louisiana jurisprudence which might be said to- support their claim, it being Friend v. Graham’s Administrator, 10 La. 438. But clearly the holding therein has since been repudiated. Thus, in Wailes and Mathews v. Succession of Brown, 27 La. Ann. 411, the court quoted from the Friend case (an excerpt relied on here by appellants) and said:

“This, it is contended, is overruled in the case of Roselius v. Delachaise, 5 [La.] Ann. 481 [52 Am.Dec. 597], where the principle was established that the right of an attorney at law to remuneration depends on a contract (or appointment) and that he can not recover from one who did not employ him, however valuable may be the result of his services to such person.

“This, we think, is the correct doctrine and the one which has since been followed. See [Michon v. Gravier] 11 [La.] Ann. 596.

“In reference to the case in [Friend v. Graham’s Adm’r] 10 La. [440], above cited, it may be said, that no one heir, as such, represents the succession, so as to bind it, and if he thinks his interest in the succession is of such extent or importance- as to warrant him in sueing [sic] for the removal of the curator or other representative, he should bear the expense of the counsel employed by him for that purpose. He could hardly expect the succession to pay the fee if he failed.”

The doctrine announced in the Roselius case has since been applied in our jurisprudence. See Cooley v. Cecile, 8 La.Ann. 51; Succession of Kernan, 105 La. 592, 30 So. 239; Forman v. Sewerage and Water Board of New Orleans, 119 La. 49, 43 So. 908; Price v. Foster, 182 La. 79, 161 So. 161; Succession of Russell, 208 La. 213, 23 So.2d 50 and Succession of Guichard, 225 La. 315, 72 So.2d 744, 745. In the Guichard case, the opinion of which contains our latest expression on the subject, we said: “* * * Under the jurisprudence of this state it is well settled that an attorney representing particular heirs or claimants in a succession proceeding has no claim against the estate for his services even though they were valuable to, and benefited, the other heirs, and that in such cases the attorney must obtain payment from the persons or heirs by whom he was employed. * * *”

Appellants attempt to distinguish these cases on a factual basis. It is true that they involved certain circumstances not found here. But each opinion clearly shows that the presence of the particular circumstances did not form the basis of the court’s holding; rather, as indicated by the above quotation from the Guichard case, each decision was based squarely on the legal proposition that the right of an attorney to remuneration for his professional services depends on a contract, either expressed or implied.

Moreover, it appears that our present rule •is generally in keeping with that applied by the courts of other states. See 5 American Jurisprudence verbo Attorneys at Law, Sections 154 and 155, and 7 C.J.S. verbo Attorney and Client, § 175.

Numerous cases from other jurisdictions (many of them from federal courts) are cited in appellants’ brief; but we do not find that all support the principle contended for. Most are authority for the doctrine enunciated in 14 American Jurisprudence verbo Costs, Section 74, as follows: “A court of equity or a court in the exercise of equitable jurisdiction will, as a general rule, in its discretion, order an allowance of counsel fees or, as it is sometimes said, allow costs as between solicitor and client to a complainant (and sometimes directly to the attorney) who at his own expense has maintained a second successful suit for the preservation, protection, or increase of a common fund or of common property or who has created at his own expense, or brought into court, a fund in which others may share with him. The rule rests upon the ground that where one litigant has borne the burden and expense of the litigation that has inured to the benefit of others as well as to himself, those who have shared in the benefits should contribute to the expense. * * * ” (Italics ours.)

Conceding arguendo that such doctrine is recognized in this state (and it might be successfully argued that McGraw v. Andrus, 45 La.Ann. 1073, 13 So. 630, is authority for it) we do not believe that it is applicable here. These appellants are not complainants, representatives of a class, who at their own expense conducted litigation successfully for the benefit of all members of such class and who now seek contribution (from the other members who have been benefited) for the costs (including attorneys’ fees) which they have expended or for which they have become obligated to pay. Rather, appellants are attorneys at law who are seeking additional compensation for professional services rendered — a fee in excess of that which their clients agreed to pay them — from persons with whom they had no contracts of employment.

Therefore, in accordance with our well established jurisprudence we must and do hold that appellants cannot recover from those depositors and creditors who did not, either expressly or impliedly, employ them. They are entitled only to such remuneration as their clients agreed to pay. However, this remuneration is not disclosed by the record and, hence, the rights of appellants to recover it will be reserved to them.

For the reasons assigned the judgment of the district court is amended by reserving to appellants whatever rights to compensa'tion they may have as against their respective clients; and, as thus amended, it is affirmed.

FOURNET, C. J., and PONDER, J., dissent.