Heffron v. Flower, Remy & Holstein

Garnett, J. January 9,1889, James J. Gore by his solicitors, Flower, Remy & Holstein, filed his bill in equity in the Superior Court, alleging a partnership between himself and Patrick H. Heffron in certain leaseholds of lots in the city of Chicago, in the hotel buildings thereon, and in the hotel business carried on therein, and praying for a dissolution of the partnership and the appointment of a receiver, for the partnership business and assets. Heffron answered, denying the partnership and the facts relied upon by Gore for the appointment of a receiver. On January 22d James H. Rice was appointed receiver by order of the court, and January 2oth leave was given him to employ counsel. He employed Flower, Rernv & Holstein, without notice (so far as appears) to Heffron or his counsel. Appellees presented to the court in June, a bill against the receiver for retainer, counsel fees, and §1, paid for certified copy of the order of appointment. Over the objection of appellant, the petition was referred to a master, who reported that the sum of $850 should be allowed the petitioners for their services. The report was confirmed and the receiver ordered to pay petitioners the' sum of $850. Appellant’s rights in the premises were properly preserved by exception to the report. One of the exceptions calls in question the right of the receiver to employ the counsel of complainant in the bill. The record shows no withdrawal of appellees as counsel for Gore, and the latter testified before the master that they were then his attorneys. The differences between Gore and Heffron are not merely of a pecuniary nature, but they seem to involve much personal bitterness. The counsel of the receiver in such a case should be as far as possible removed from the temptation to partiality. He should be free from that personal bias which might at a critical passage, induce him to give advice prejudicial to one of the litigants, when another course could have been adopted, consistent with the interests of both. The duty of complainant’s counsel is to guard his interests at all times, and against all persons, by all honorable means. Faithfulness in theii engagement to him can not be, if they are allowed to represent the receiver, and his duty required action that complainant disapproved. In that event, which client would appellees serve? It may be said that when such a dilemma is presented, they would choose one, and discharge themselves from obligation to another. If the dilemma was clearly seen, no doubt they would so act; but selfish interest is liable to conceal such difficulty, or to present it as a temporary matter, or as a thing of slight importance, and so the law saves the painful necessity of decision by forbidding the double employment. The rule is given adversely to appellees in High on Receivers, Sec. 216, where the author says, “ The receiver should not employ the counsel of either of the parties to the litigation in which he was appointed, since, their duty being to protect the interests of their respective clients, and to watch the receiver’s proceedings, to the end that a faithful performance of his duties may be insured, they are not regarded as competent to act as counsel for the receiver, and their undertaking to act in such a capacity might frequently cast upon them inconsistent and conflicting duties, which could not be properly discharged by one and the same person.” An apt illustration of the fitness of this rule is found in a query of the Supreme Court of California in Adams v. Woods, 8 Cal. 320: “Suppose that Adams” (complainant) “should wish to call in question the acts of the receiver in those very cases where Shatter & Park” (Park being complainant’s solicitor) “ advised and acted as his counsel.” The petition there was by Edward Stanley, counsel employed by the receiver, for compensation for legal services rendered the receiver. In the account presented was an item for services of associate counsel, and the associate counsel were Shatter & Park. The c'aim for services of the associate counsel was denied, the court saying (p. 322): “The practice, if tolerated, would lead inevitably to the most melancholy abuses. Attorneys are officers of the court, and it is its highest duty to see that its own officers conduct themselves properly; and that this end may be obtained, the court should inflexibly discountenance every practice that may tend to bring reproach upon the administration of justice.” The Supreme Court of this State has held that the solicitor for complainant should not be appointed receiver in the suit. Baker v. The Adm’r of Backus, 32 Ill. 115; Benneson v. Bill, 62 Ill. 408; and in Beach on Receivers, Sec. 262, it is said : “The same reasons which suffice to render the legal adviser of one of the parties to an action ineligible to be appointed receiver, operate also to prevent him from being allowed to act as counsel for the receiver.” There may be an exception to the rule that controls this ease, as where all the parties to the suit are advised of the employment of complainant’s solicitor by the receiver, and expressly or tacitly consent thereto. But this record does not require any opinion on that point. The decree is erroneous, and is reversed and the cause remanded. Reversed and remanded.