New York Cent. & H. R. R. v. Bank of Holly Springs

MAXEY, District Judge (after stating the facts as above). There are but two parties litigant before the court, the railroad company and the Bank of Holly Springs, the former practically representing the interests of 'Weld & Co. The controversy, therefore, which may exist between Weld & Co. and the trustee in bankruptcy of Steele, Miller & Co., has no place in this suit, and may be summarily dismissed from our consideration. [ 1 ] The real question submitted for decision is not difficult of solution. That question is: Who 'had the superior right to the cotton, the appellee or Weld & Co.? The former held the genuine bills of lading and the latter the forged bills. As against the appellee, the [461] forged bills passed no interest whatever, and the appellee was clearly entitled to appropriate so much of the cotton, or its proceeds, as was sufficient to satisfy its indebtedness against Steele, Miller & Co. To that extent and no further was the appellee interested in the 200 bales of cotton. This indebtedness, as found by the trial court, amounted to $11,025.97, with interest from August 1, 1910, at the rate of 8 per cent, per annum, and for the amount so found a decree was properly rendered in appellee’s favor against the appellant. Id is deemed proper to state that the conclusion here announced is in no manner inconsistent with the views expressed by this court in Lovell v. Newman & Son, 192 Fed. 753. In the Lovell Case we were careful to say, at page 758 of the reporter, that there were no. intervening rights of third parties; “the contest being between the bankrupts and their trustee on the one hand and the spinners on the other.” [2] While the court was right in decreeing the sum of $11,025.97 in favor of the .appellee, there was error in directing the surplus to be paid over to the trustee in bankruptcy of Steele, Miller & Co. As before stated, Weld & Co. and the trustee are not parties to the suit, and in their absence any controversy between them was not a proper subject of adjudication. [3] We also think there was error in adjudging an attorney’s fee in favor of the appellee. The general rule, subject to some exceptions in which the case at bar is not included, requires each party to the litigation to pay his own counsel fees. After stating the rule applicable to actions of debt, covenant, and assumpsit, the Supreme Court, speaking through Mr. Justice Swayne, in Oelrichs v. Spain, 15 Wall. 231, 21 L. Ed. 43, observed: “In equity cases, when there is no injunction bond, only the taxable costs are allowed to the complainants. The samo rule is applied to the defendant, however unjust the litigation on the other side, and however large the ex-pensa litis to which he may have been subjected. The parties in this respect are upon a footing of equality. * ■* * When both client and counsel know that the fees are to be paid by the other party, there is danger of abuse. * * * We think the principle of disallowance rests upon a solid foundation, and that the opposite rule is forbidden by the analogies of the. law and sound public policy.” See, also, Tullock v. Mulvane, 184 U. S. 511, 512, 22 Sup. Ct. 372, 46 L. Ed. 657; Lamar v. Hall & Wimberly, 129 Fed. 79, 63 C. C. A. 521: Farmers’ Loan & Trust Co. v. Green, 79 Fed. 222, 24 C. C. A. 506: Gunby v. Armstrong, 133 Fed. 417, 66 C. C. A. 627; Work v. Tibbits, 87 Hun, 352, 34 N. Y. Supp. 308. No reason is perceived for requiring a defeated litigant in a case like the present one, which is, in effect, a suit for damages for the conversion of personal property, to pay more than the legal taxable costs. The, court therefore erred in allowing the appellee counsel fees, and the same should he stricken out. In adjudging a recovery in favor of the appellee in the sum of $11,-025.97 with interest from August 1, 1910, at the rate of 8 per cent, per annum, the decree should stand. It, however, should be amended by eliminating the provision for counsel fees, and also the provision [462] which directs the surplus remaining after discharging the indebtedness of the appellee to be paid to the trustee in bankruptcy. As thus amended, the decree should be affirmed, and it is so ordered. The costs of the appeal will be divided equally between the parties.