Ellicott Paint Co. v. Buffalo Evening News, Inc.

Reid S. Moule, J. The plaintiff Ellicott Paint Co., Inc., supplied paint to the defendant Besstak which he used on a job for the defendant, Buffalo Evening News, Inc. Besstak subsequently went into bankruptcy owing the Ellicott Paint Co., Inc., the sum of $2,418.88 which it claims with interest from February 1, 1958. At the time of Besstak’s bankruptcy, the News owed $3,664.66 under the painting contract. The plaintiff sued to foreclose a mechanic’s lien it had filed joining Besstak’s trustee in bankruptcy along with the News. The News refused to pay plaintiff out of the balance of funds being held and interpleaded the United States of America which had also filed several liens for withholding taxes against Besstak. Both the plaintiff and the United States of America claimed priority of payment. However, the United States of America has since withdrawn its claim of priority but seeks to have the balance of the fund remaining applied on account of the tax liens filed against Besstak. The attorneys for the News ask that the court allow it counsel fees out of the fund for the work done in connection with the interpleader. • The United States of America objects as such allowance, of course, would diminish the fund out of which it seeks payment. The sole question now before the court is whether or not the News should be awarded counsel fees. The Government cites the case of United States v. Liverpool & London & Globe Ins. Co. (348 U. S. 215). However, I do not believe that case is in point as apparently the court followed some Texas Rules of Civil Procedure which did not permit counsel fees under the circumstances. [897] Subdivision 7 of section 285 of the Civil Practice Act states in part: ‘1 The court shall impose terms relating to payment of expenses, costs and disbursements as may be just and proper and which may be charged against the subject matter of the action or the amount in dispute.” Counsel fees were allowed in a number of similar cases cited in American Law Reports, Second Series (vol. 48, starting p. 205). Among them is the New York case of German Exch. Bank v. Commissioners of Excise (6 Abb. N. C. 394 [1879]). Another case appears in the 1961 American Law Reports, Second Series, Supplement Service. It is Bank of America v. Transpollux Carriers Corp. (26 Misc 2d 524 [I960]). (See, also, Bisgeier v. Prudential Ins. Co., 2 Misc 2d 857 [1956].) The Buffalo Evening News is entitled to counsel fees. However, nothing has been submitted upon which I can make a determination of the amount. The Buffalo Evening News may subsequently apply to Special Term upon notice to the United States of America for an order determining the amount. Submit order, without costs.