Nesbit v. Frederick Snare Corp.

96 F.2d 535, 68 App. D.C. 263, 1938 U.S. App. LEXIS 3516
CourtCourt of Appeals for the D.C. Circuit
DecidedMarch 7, 1938
DocketNo. 6933
StatusPublished
Cited by3 cases

This text of 96 F.2d 535 (Nesbit v. Frederick Snare Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nesbit v. Frederick Snare Corp., 96 F.2d 535, 68 App. D.C. 263, 1938 U.S. App. LEXIS 3516 (D.C. Cir. 1938).

Opinion

GRONER, C. J.

Appellee Frederick Snare Corporation entered into a written agreement August 29, 1922, with Clarence W. DcKnight, an attorney then in practice in the city of Washington, providing among other things [536]*536for the rendition of services by DeKnight to the corporation in prosecuting a claim of the latter against the United States in return for a contingent fee of 10 per centum. DeKnight brought suit in behalf of the corporation in the United States Court of Claims and procured a decision in favor of the corporation for the sum of $16,503.40, but by a subsequent decision, 75 Ct.Cl. 326, rendered June 6, 1932, the court reduced the amount of the award to $5,474.50, which was later paid and is not now in controversy. On June 22, 1932, DeKnight and the corporation, being dissatisfied with the results so far obtained, entered into another written agreement covering proposed further proceedings in the Court of Claims, the Supreme Court of the United States, “and/or elsewhere.” The last agreement provided: “that the Attorney [DeKnight] shall receive in full satisfaction for all services rendered or to be rendered in connection with the aforesaid súit and/or claim a sum equal to one-half or 50% of the amount over $5474.-50 that is ultimately recovered or realized (together with such costs and disbursements as may be awarded against the defendant in said suit, the United States of America) * * * » After the making of this agreement DeKnight applied to the Supreme Court for certiorari to the Court of Claims, which was denied. Snare & Triest Co. v. U. S., 299 U.S. 742, 53 S.Ct. 687, 77 L.Ed. 1489. He thereupon advised the corporation that he expected to have introduced a bill in Congress to obtain the relief which had been denied in the courts. The corporation in a letter to DeKnight under date of May 10, 1933, concurring in his recommendation, advised him as follows:

“After all the decisions against you in this case, we naturally cannot feel very hopeful at the outcome of your effort to secure relief from Congress. We assume, however, that any time or expense in connection with your efforts to secure Congressional relief will be on the basis of our last agreement with you dated June 22, 1932. In other words, that there should be a fifty-fifty division of any sums collected by reason of your success in getting Congress to recognize our claim, but that all-expenses in connection with this further effort shall be for your account.

“You have had a long hard road in connection with this claim, and I know we both feel the final decision has been very unfair to us, and therefore to you, and is based on legal technicalities rather than on real justice. We want to thank you for all the work you have done in the matter, and will await your further reply before writing to Mr. Clark.”

DeKnight did have a bill introduced in Congress which after passage was approved by the President May 26, 1936, and as a result of which the corporation received from the United States in full settlement of its claim the sum of $83,978.05. The corporation immediately paid to DeKnight 10 per. centum of this amount, or $8,397.80, but declined to pay the balance on the sole ground that to do so would be contrary to the provisions of the act of Congress just above referred to and would render it guilty of a misdemeanor. DeKnight (who is now represented by the executors of his estate) brought this suit to recover the sum of $33,591.22 which, together with the $8,-397.80 paid him, would equal 50 per centum of the amount paid the corporation by the United States. The corporation filed a plea setting up the fact that.after payment to DeKnight of 10 per centum of the amount received from the United States it thereupon commingled the balance of that fund with its own funds and that any payment now to be made to the plaintiff would be made out of the common fund of which the money received from the United States is a part and that this would be contrary to the provisions of the act of Congress. The act of Congress is as follows, Act May 26,'1936, 49 Stat. 2304:

“An Act for the relief of the Snare and Triest Company, now Frederick Snare Corporation.

“Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay, out of any money in the Treasury not otherwise appropriated, to the Snare and Triest Company, now Frederick Snare Corporation, the sum of $83,978.05, in full settlement of all claims against the Government of the United States, for damages for delay in carrying out its contract with the Navy Department, Numbered 3762, and agreements supplemental thereto for waterfront improvements, piers, and breakwater, at the submarine base, Key West, Florida, as reported January 13, 1925, by a board of which Rear Admiral H. H. Rousseau, Civil Engineer Corps, United States Navy, was senior member: Provided, That no part [537]*537of the amount appropriated in this Act in excess of 10 per centum thereof shall he paid or delivered to or received by any agent or agents, attorney or attorneys, on account of services rendered in connection with said claim. It shall be unlawful for any agent or agents, attorney or attorneys, to exact, collect, withhold, or receive any sum of the amount appropriated in this Act in excess of 10 per centum thereof on account of services rendered in connection with said claim, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000.”

The decision in the case turns on the meaning of the statute. DeKnight’s executors contend that it merely forbids payment of money which is definitely a part of the money appropriated and paid by Congress. The corporation contends that it forbids payment of any sum to plaintiff in excess of 10 per centum of the amount received by the corporation without regard to whether the payment is the particular money paid by the United States or not.

It is not questioned in this case that the contract of employment was in all respects legal and valid. Nor is it questioned that the services to be rendered were in fact rendered or that the corporation was the beneficiary of the services. We, therefore, conclude that the contract created a legal obligation upon the part of the corporation which, if not recognized after the collection of the money and, if not prohibited by the Act of Congress, can be enforced by suit for the benefit of DeKnight’s estate. Nutt v. Knut, 200 U.S. 12, 26 S.Ct. 216, 50 L.Ed. 348; McGowan v. Parish, 237 U.S. 285, 35 S.Ct. 543, 59 L.Ed. 955. And this brings us to an interpretation of the language of the act.

There are, so far as we are advised, only two decisions of the Supreme Court which may be said to throw any helpful light upon this question. The first is Capital Trust Co. v. Calhoun, 250 U.S. 208, 39 S.Ct. 486, 488, 63 L.Ed. 942. In that case Calhoun, a lawyer, brought suit against the administrator of Thomas N. Arnold who prior to his death had a claim against the United States. Calhoun and Arnold had entered into a contract in which the former undertook the prosecution of the claim- in consideration of a fee equal in amount to 50 per centum of whatever sum of money should be awarded or collected on the claim.

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In re the Estate of Anninger
35 Misc. 2d 493 (New York Surrogate's Court, 1962)

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Bluebook (online)
96 F.2d 535, 68 App. D.C. 263, 1938 U.S. App. LEXIS 3516, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nesbit-v-frederick-snare-corp-cadc-1938.