Oelrichs v. Spain , 82 U.S. 211 ( 1872 )


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  • 82 U.S. 211 (1872)
    15 Wall. 211

    OELRICHS
    v.
    SPAIN.

    Supreme Court of United States.

    *217 Messrs. T.T. Crittenden and T.J. Durant, for the appellants.

    Messrs. P. Phillips, J.M. Carlisle, and J.D. McPherson, contra.

    *224 Mr. Justice SWAYNE delivered the opinion of the court.

    This litigation grows out of a prior suit, to which it is necessary briefly to advert in order to render intelligible the issues to be decided in the case before us.

    The Bank of the United States assigned to William S. Wetmore certain bonds of the State of Texas as security for a debt which the bank owed him. He surrendered the bonds to the State and received in their stead certificates of indebtedness which he deposited in the Treasury of the United States for payment, under the act of Congress of the 9th of September, 1850, and the explanatory act of February 28th 1855. The bank thereafter transferred one-tenth of the certificates, less the amount due to Wetmore, to General James Hamilton. Hamilton subsequently became indebted to Wetmore and gave Wetmore a lien upon his share of the fund to secure the payment of the debt and interest. He gave like liens to Corcoran & Riggs, to James Robb & Co., and to H.R.W. Hill. Robb & Co. transferred their claim to Hill. The trustees of the bank also claimed a part of the one-tenth as not embraced in the transfer to Hamilton. Before the fund was paid over by the Treasury Department, Albert C. Spain, as guardian of Mary McCrae, a lunatic, filed a bill in *225 equity, wherein he asserted a prior and paramount lien upon the fund in behalf of his ward, and prayed an injunction to prevent the defendants from receiving any part of the amount in question until the claim set up in the bill should have been passed upon by the court. To this bill Wetmore and the other claimants, except Hill, were made parties defendant. An injunction was granted as prayed for, and on the 31st of May, 1856, an injunction bond was executed. The penalty was $15,000. The obligees were Wetmore and the other defendants. The obligors were John F. and Henry May. The condition was that Spain "should prosecute the writ of injunction with effect and pay all damages and costs" which the obligees, "or any of them, shall sustain by the granting of this injunction." On the 23d of April, 1856, a further bond was given, pursuant to the order of the court, in the penal sum of twenty thousand dollars. The obligees were Wetmore and others. Hill was not one of them. The obligors were Spain and Oelrichs. The condition was that Spain should prosecute the writ of injunction "with effect and satisfy and pay as well the costs, damages, and charges which shall accrue in said Circuit Court of Washington County, as all costs, damages, and charges which shall be occasioned by said writ of injunction, unless the said court shall decree to the contrary."

    By consent of parties it was thereupon ordered by the court that this bond should be filed in lieu of the prior bond, "reserving the right to the obligees to have recourse to the original bond for interest theretofore accrued, at the election of the obligees, and not otherwise."

    On the 31st of May, 1856, the James River and Kanawha Company having filed a bill and procured a like injunction, gave bond in the sum of $5000. The obligees were Wetmore and all the other adverse claimants of the fund, including Spain and the executor of Hill. The obligors were Thomas H. Ellis, Hugh Caperton, and Robert Ould. The condition of the bond was that the company "shall well and truly prosecute the said suit with effect and shall answer all damages and costs which the defendants, or either of them, *226 may sustain by the granting of this injunction, in case it shall be dissolved." On the 20th of June, 1856, Pierce Butler procured a like injunction and gave bond in the sum of $2500. The obligees were Wetmore and the other claimants of the fund, including Hill's executor. The condition was that Butler should "pay and satisfy all costs and damages that may accrue to the obligees, or either of them, by reason of said injunction, in case the same shall be dissolved." In the progress of the cause, Spain dismissed his injunction as to the claim of the trustees of the bank for the sum of $12,051.50. That amount was paid to them, and they thereupon released their claim under the injunction bonds. By agreement of counsel the cases of Spain and Butler were heard together. The court decreed that there should be first paid to Wetmore the principal and interest of his debt, amounting together, including the cost of audit, to $4333.66. That there should be next paid to Corcoran & Riggs the amount of their lien, $30,000. And, thirdly, to the representatives of Hill the debt due to his estate, found to be then, with interest, $52,457.

    The amount applicable to this demand, after satisfying the demands of Wetmore and Corcoran & Riggs, was $38,171. This left a balance due Hill's estate of $14,285.54 unsatisfied and unprovided for. The case was removed to this court by appeal, and the decree of the court below was here affirmed.[*] The James River and Kanawha Company dismissed their bill. Corcoran & Riggs subsequently collected upon the bond executed by Ellis, Caperton & Ould the sum of $5000. The penalty of the bond of Butler, $2500, was paid to the complainant, J. Dick Hill.

    This bill is brought by the executors of Wetmore, the executor of H.R.W. Hill, and J. Dick Hill, his devisee and only heir-at-law, against John F. May, William W. Corcoran, George W. Riggs, Hugh Caperton, and Henry Oelrichs. It gives sufficient reasons for not making additional parties whose presence would otherwise be necessary, though not *227 indispensable, in this litigation. The object of the bill is to enforce in favor of Hill's estate the liability for damages arising under the injunction bonds, and if need be to marshal the assets. The executors of Wetmore claim nothing except in trust for the benefit of Hill's estate.

    The court below allowed Corcoran & Riggs for damages, interest on the amount of their lien during the time payment was delayed by the injunction, being a period of four years eight months and sixteen days.

      The interest, thus computed, makes the sum of .   .  $8,475 00
      The court also allowed them for counsel fees in the
         adverse litigation,   .   .   .   .   .   .    .   1,000 00
                                                           _________
                                                           $9,475 00
      From this was deducted the amount they received upon
         bond given in behalf of the James River and
         Kanawha Co.,  .   .   .   .   .   .   .   .    .   5,000 00
                                                           _________
            Balance,   .   .   .   .   .   .   .   .    .  $4,475 00
    

    Of this sum, $2455.94 was apportioned to May's bond, and $2019.06 to Oelrichs's.

    The damages awarded to Hill's estate were as follows:

      Loss of principal by reason of the fact that part of the
         fund which would otherwise have been applied to
         it in part payment was absorbed for the interest
         upon the prior claims,  .    .    .    .   .   .  .     $827 41
      Interest on $36,214.35 for 4 yrs. 8 mos. 16 days, .  .   10,230 55
      Counsel fees in the adverse litigation,   .   .   .  .    1,500 00
                                                              __________
                                                              $12,557 96
      Deduct the amount received on the Butler bond, .  .  .    2,500 00
                                                              __________
               Balance,   .   .  .   .   .   .   .   .  .  .  $10,057 96
    

    Of this sum there was appropriated to May's bond $5027.15, and to Oelrichs's, $5030.81.

    May and Oelrichs appealed, and the case is now before this court for final adjudication.

    It has been insisted by the counsel for the appellants that there is a complete remedy at law, and that the bill must, therefore, be dismissed. Such must be the consequence if the objection is well taken. In the jurisprudence of the *228 United States this objection is regarded as jurisdictional, and may be enforced by the court suâ sponte, though not raised by the pleadings nor suggested by counsel.[*]

    The 16th section of the Judiciary Act of 1789 provides, "that suits in equity shall not be sustained in any case where plain, adequate, and complete remedy can be had at law;" but this is merely declaratory of the pre-existing rule, and does not apply where the remedy is not "plain, adequate, and complete;" or, in other words, "where it is not as practical and efficient to the ends of justice and to its prompt administration, as the remedy in equity."[†]

    Where the remedy at law is of this character, the party seeking redress must pursue it. In such cases the adverse party has a constitutional right to a trial of the issues of fact by a jury.[‡]

    But this principle has no application to the case before us. Upon looking into the record it is clear to our minds, not only that the remedy at law would not be as effectual as the remedy in equity, but we do not see that there is any effectual remedy at all at law. If the injunction bonds were sued upon at law, and judgments recovered, a proceeding in equity would still be necessary to settle the respective rights of the several obligees to the proceeds. The direct proceeding in equity will save time, expense, and a multiplicity of suits, and settle finally the rights of all concerned in one litigation. Besides, there is an element of trust in the case, which, wherever it exists, always confers jurisdiction in equity.

    It has been urged that Hamilton's arrangement with the bank was illegal and void, and never fulfilled on his part, and that he had no title to the residuum of one-tenth of the certificates to which his assignment related. It is a sufficient answer to say that the trustees of the bank were parties to the former suit, and that the court recognized and affirmed *229 the validity of the claim by administering the fund arising from it. The appellants cannot go behind the decree in the case in which their bonds were given. The law and the facts of that case, as settled by the court, are conclusive of their rights in this proceeding. They cannot be permitted to raise any question as to either.

    The release given by the trustees of the bank cannot avail the defendants. If it were not by a sealed instrument, it would not be a technical bar even in a suit at law. In what form it was given is not disclosed in the record. But if it were properly executed under seal, it cannot in equity affect the severable and separate rights of parties to the bonds other than those by whom it was executed.

    It is true that neither Hill nor his representatives were parties to either the bond of May or the bond of Oelrichs, and that they were not named in the writ of injunction issued upon the filing of the first bond. But Spain's bill averred that Wetmore held the fund in trust for Hill. Wetmore was an obligee in both bonds. The legal title to the entire fund was in him, and was never divested. It was extinguished by the payment of the money by the Treasury Department, and its distribution pursuant to the decree of the court. Wetmore during his lifetime, and after his death, his legal representatives, might have recovered upon the bonds at law to the full extent of the damages touching the entire fund. Such was his and their legal right. Equity would have distributed the proceeds, if need be, according to his rights and the equities of the other parties in interest. In this case equity follows the law as regards the liability of the appellants, and, having the proceeds in hand, will distribute them in this proceeding.[*]

    The objection that proper releases were not filed in the Treasury Department is untenable. The proofs establish three facts:

    The fund would have been paid over earlier but for the injunction.

    *230 It was paid after the injunction was dissolved.

    The delay caused by the injunction was the period for which interest was allowed by the court below.

    Whether the payment was, or would have been, improperly made, is an inquiry which does not arise in this case, and with which the appellants have nothing to do.

    It is sufficient for the purpose of this case that there was, in fact, such delay, and that it proceeded from the cause alleged in the bill.

    The decree of the court below was preceded by the report of a master, which the decree affirmed and followed. Upon looking into the report we find it clear and able, and we are entirely satisfied with it, except in one particular. We think that both the master and the court erred in allowing counsel fees as a part of the damages covered by the bonds.

    In Arcambel v. Wiseman,[*] decided by this court in 1796, it appeared "by an estimate of the damages upon which the decree was founded, and which was annexed to the record, that a charge of $1600 for counsel fees in the courts below had been allowed." This court held that it "ought not to have been allowed." The report is very brief. The nature of the case does not appear. It is the settled rule that counsel fees cannot be included in the damages to be recovered for the infringement of a patent.[†] They cannot be allowed to the gaining side in admiralty as incident to the judgment beyond the costs and fees allowed by the statute.[‡]

    In actions of trespass where there are no circumstances of aggravation, only compensatory damages can be recovered, and they do not include the fees of counsel. The plaintiff is no more entitled to them, if he succeed, than is the defendant if the plaintiff be defeated. Why should a distinction be made between them? In certain actions ex delicto vindictive damages may be given by the jury. In regard to that class of cases this court has said: "It is true that *231 damages assessed by way of example may indirectly compensate the plaintiff for money expended in counsel fees, but the amount of these fees cannot be taken as the measure of punishment or a necessary element in its infliction."[*]

    The point here in question has never been expressly decided by this court, but it is clearly within the reasoning of the case last referred to, and we think is substantially determined by that adjudication. In debt, covenant and assumpsit damages are recovered, but counsel fees are never included. So in equity cases, where there is no injunction bond, only the taxable costs are allowed to the complainants. The same rule is applied to the defendant, however unjust the litigation on the other side, and however large the expensa litis to which he may have been subjected. The parties in this respect are upon a footing of equality. There is no fixed standard by which the honorarium can be measured. Some counsel demand much more than others. Some clients are willing to pay more than others. More counsel may be employed than are necessary. When both client and counsel know that the fees are to be paid by the other party there is danger of abuse. A reference to a master, or an issue to a jury, might be necessary to ascertain the proper amount, and this grafted litigation might possibly be more animated and protracted than that in the original cause. It would be an office of some delicacy on the part of the court to scale down the charges, as might sometimes be necessary.

    We think the principle of disallowance rests on a solid foundation, and that the opposite rule is forbidden by the analogies of the law and sound public policy.

    The amount of the allowance in this case may be remitted here, as was done in the case in 3d Dallas, and the decree of the Circuit Court will thereupon be AFFIRMED. Otherwise the decree will be REVERSED, and the cause remanded for the reformation of the decree,

    IN CONFORMITY TO THIS OPINION.

    NOTES

    [*] Spain v. Hamilton's Adm., 1 Wallace, 604.

    [*] Parker v. Winnipissiogee Company, 2 Black, 551; Graves v. Boston Company, 2 Cranch, 419; Fowle v. Laurdson, 5 Peters, 495; Dade v. Irwine, 2 Howard, 383.

    [†] Boyce v. Grundy, 3 Peters, 215.

    [‡] Hipp v. Baben, 19 Howard, 278.

    [*] Livingston v. Moore, 7 Peters, 547; Riddle v. Mandeville, 5 Cranch, 322.

    [*] 3 Dallas, 306.

    [†] Tesse et al. v. Huntingdon et al., 23 Howard, 2; Whittemore v. Cutter, 1 Gallison, 429; Stimpson v. The Railroads, 1 Wallace, Jr., 164.

    [‡] The Baltimore, 8 Wallace, 378.

    [*] Day v. Woodworth et al., 13 Howard, 370, 371.