Opinion · Supreme Court of the United States

Central Railroad & Banking Co. of Ga. v. Pettus

Cent. R.R. & Banking Co. of Ga. v. Pettus, 113 U.S. 116 (1885)

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1885-01-05
Topic
general

How later courts describe this case

  • awarding fee out of amounts recovered on behalf of a class of unsecured creditors; calculating fee as a percentage of the amount recovered
  • awarding fees based upon percentage of fund recovered for the benefit of the class
  • paying successful attorneys a percentage of the fund recovered for the class
  • approving “reasonable compensation” for attorneys’ “professional services . . . and that such compensation should be made with reference to the amount of all claims filed in the cause”
  • paying successful attorneys a per centage of the fund recovered for the class
  • prohibiting incentive awards because of the conflict of interest they create between class members
  • extending the common fund doctrine to permit a plaintiffs lawyer to make a direct claim for a fee, over and above the fee due from the lawyer’s client, against other fund beneficiaries for the reasonable value of those services to them
  • Expanding the common fund doctrine earlier developed in Greenough, the Court held that the plaintiffs counsel not only had the right to seek reimbursement of fees for the client, but was also eligible for an award of his own (not limited to what the client owed the lawyer

Citator

UpLaw has not yet analyzed Central Railroad & Banking Co. of Ga. v. Pettus. The absence of a flag is not a finding that it is good law.

Cited by
425 opinions

Headnotes

  1. Remedies — Costs and Fees — Common Fund Doctrine Where one or more of many parties having a common interest in a trust fund takes, at his own expense, proper proceedings to save it from destruction and to restore it to the purposes of the trust, he is entitled to reimbursement either out of the fund itself or by a proportional contribution from those who accept the benefit of his efforts; the same rule applies to a creditor's suit where a fund has been realized by the diligence of the plaintiff, and reasonable counsel fees so incurred are properly allowed out of the property brought under the control of the court. 113 U.S. at 124-125 (citing Trustees v. Greenough, 105 U.S. 527)
  2. Remedies — Costs and Fees — Compensation of Solicitors Where complainants sue in behalf of themselves and all others of a like class who come in and contribute to the expenses of the litigation, the suit is conducted for the benefit of the entire class, so that counsel fees reasonably earned in bringing the property under the control of the court are chargeable against the claims of all creditors who accept the fruits of the litigation, not merely against those of the complainants who directly employed the solicitors. 113 U.S. at 125-127
  3. Remedies — Costs and Fees — Payment of Allowance to Solicitors When an allowance to the complainant on account of solicitors' fees is proper, the court may direct payment directly to the solicitors themselves, without any application by their immediate client. 113 U.S. at 126
  4. Remedies — Constructive Lien — Creditors of a Dissolved Corporation A private corporation is a trustee of its capital, property, and effects first for its creditors and afterward for its stockholders; while operating according to its charter its general creditors have no specific lien entitling them to sue in equity, but where it leaves debts unpaid and distributes or transfers its property to stockholders or to third persons not bona fide purchasers without notice, and becomes disorganized so that it cannot be efficiently sued at law, a court of equity will pursue and lay hold of such property and apply it to the payment of its debts. 113 U.S. at 125-126 (citing Montgomery & West Point Railroad Co. v. Branch, 59 Ala. 139)
  5. Legal Ethics — Liens — Law of Alabama Under the law of Alabama, an attorney or solicitor has a lien upon a judgment or decree obtained for a client, either to the extent the client has agreed to pay him or, absent a specific agreement, to the extent of the reasonable compensation he is entitled to recover for services rendered; the lien rests on the principle that the solicitor is to be regarded as an assignee of the judgment or decree to the extent of his fees from the date of its rendition. 113 U.S. at 127-128 (citing Ex parte Lehman, Durr & Co., 59 Ala. 631; Warfield v. Campbell, 38 Ala. 527)
  6. Legal Ethics — Liens — Priority over Purchasers of Claims A solicitor's lien upon a decree for his reasonable fees cannot be defeated by defendant corporations acquiring the claims filed by creditors under the decree; the right of the solicitors is superior to any which the defendants acquired after the decree by purchasing those claims. 113 U.S. at 128