Opinion
13306
December 23, 1931.
In the original jurisdiction.
Petition by the State of South Carolina on the relation of John M. Daniel, Attorney General, against Broad River Power Company, and others, in which the City of Columbia and others intervened. Both petitioners and respondents excepted to Referee's report.
Report modified and affirmed. (See also 157 S.C. 1, 153 S.E., 537.)
The report of the referee and statement of facts directed to be reported are as follows:
STATEMENT OF FACTSI. The following is a brief statement of the facts upon which the petition for counsel fees is based.
THE ORIGIN OF THE SUITThis suit was first considered about May or June, 1927, by the firm of Melton Belser, who, realizing, from the premeditated way in which the companies had gone about discontinuing the street railway service, that the case would be difficult and hard fought, associated Messrs. H.N. Edmunds, C.T. Graydon, and Nelson Mullins. The firm of Melton Belser at that time had several clients who claimed special contractual rights to the continuance of the street railway service, information as to which was furnished by said firm to the Attorney General for use in the hearings being held before the Railroad Commission.
The situation at that time was that the companies, having absolutely abandoned the street railway service in March, 1927, in violation of existing orders of the Railroad Commission, were then fighting the efforts of the Attorney General before the Railroad Commission to require them to resume service, claiming among other things: (1) That the Columbia Railway, Gas Electric Company had in June, 1925, transferred all its electric light, power, and gas assets to the Broad River Power Company; (2) that authority to make such transfer was a part of the canal settlement between the State of South Carolina and the Columbia Railway, etc., Company; (3) that the Columbia Railway, Gas, etc., Company was entirely without funds and insolvent; (4) that the Columbia Railway, etc., Company and the Broad River Power Company were separate corporations; (5) that the street railway service could not be operated except at an enormous loss (of about $100,000.00 a year); (6) that the competition from jitneys and buses had destroyed the street railway service, and (7) that the Columbia Railway, etc., Company besides being insolvent could not as a matter of law be required to operate the street railway service at a loss.
Under these circumstances, we carefully considered the whole situation, and, after consultation with the Attorney General, decided that it would be necessary to institute a suit in the Supreme Court which would combine the characteristics of (1) a creditor's suit to set aside the so-called transfer from the Columbia Railway, Gas Electric Company to the Broad River Power Company, and (2) a suit for a writ of mandamus against both companies; and further that the suit should be instituted in the name of the State of South Carolina on the relation of the Attorney General, suing on behalf of all interested parties, and that thereafter the other parties whom we then represented, such as the Towns of Arden and Eau Claire, North Columbia Land Company, Columbia College, the Chicora College, and Dr. W.B. Burney, should intervene in this suit. It was also contemplated and considered best that the Railroad Commission, who had already reached an informal decision and with whom we were then advising and co-operating in the preparation of their formal opinion, should likewise intervene in this suit.
PLEADINGSAccordingly the main petition was prepared along these lines. It recited that the petitioner was suing "on behalf of the public and of all municipalities, corporation, citizens, and all who may care to come in and be made parties to this proceeding." It alleged, among other things, that the "ostensible transfer and attempted separation was wholly pretensive * * * was without consideration, intended to hinder and delay its creditors and particularly the public, and was illegal, null and void"; and prayed for an order directing the companies to reinstate and resume the operation of their street railway service, and "adjudging * * * that the attempted separation of such transportation department from the other branches of their franchise is pretensive, illegal and void." This petition and prayer was, as will be afterwards shown, specifically granted by the Court. We presented this petition to Mr. Justice Blease at Newberry on July 19, 1927, obtained from him on that date a rule to show cause based thereon, and on that date had the petition and rule served upon the respondent companies.
Meanwhile we had prepared intervention petitions on behalf of the City of Columbia, the Towns of Arden and of Eau Claire, and of W.B. Burney, and presented these to the Supreme Court of South Carolina at a special term on August 3, 1927, and obtained orders allowing these parties to intervene, as well as a general order allowing any other interested parties to intervene in the suit. Subsequently from time to time during August and September, 1927, we prepared and filed intervention petitions on behalf of the board of trustees of Chicora College, Columbia College, the school board of the City of Columbia, and also, under circumstances hereinafter mentioned, for the Railroad Commission.
The companies filed (1) a demurrer upon various grounds to the main petition, also (2) a motion to strike out parts thereof, and also (3) a return and answer. In this return and answer, the defendant set up all the defenses and contentions which they had been making before the Railroad Commission. We thereupon filed a reply to the said petition. The companies also filed a reply to the said petition. The companies also filed substantially like demurrers and answer to all of the intervention petitions. The companies also filed a motion to vacate all the orders allowing the intervention petitions and to remand the entire case to the Court of Common Pleas.
The companies' demurrers raised principally the points that the Attorney General had not the legal capacity to maintain the action; that the intervention petitions could not be properly joined in the suit; and that the petition did not state a proper case for mandamus against the companies.
We thereupon filed on behalf of all the petitioners in the case a motion to strike out all the demurrers, motions, answers, and returns of the respondent companies upon the ground that the same were sham and frivolous.
These motions, demurrers, and counter motions arising on the pleadings were set for hearing before the Supreme Court of South Carolina at its October, 1927, term.
The printed pleadings in the case in the transcript of record for the United States Supreme Court covered 100 pages.
THE SUIT IN THE UNITED STATES DISTRICT COURT TO ENJOIN THE ENFORCEMENT OF THE ORDER OF THE RAILROAD COMMISSIONMeanwhile the formal opinion and order of the Railroad Commission, in the preparation of which we had co-operated, was filed July 28, 1927, directing the Columbia Railway, Gas Electric Company to restore the service. Soon thereafter the Columbia Railway, etc., Company instituted a suit in the United States District Court for the Eastern District of South Carolina under Section 266 of the Judicial Code (28 U.S.C.A., § 380), to enjoin the enforcement of the Railroad Commission's order, and for a temporary restraining order. We appeared along with the Attorney General and Assistant Attorney General in Charleston before Judge Cochran in opposition to the application for a temporary restraining order. As a result of this hearing, Judge Cochran made and filed an order on August 13, 1927, refusing the application for a temporary restraining order, but saying that he would call to his assistance a three-Judge Court to consider the matter.
We thereupon in accordance with our previously laid plans prepared a petition for the Railroad Commission to intervene in the main suit, and at the same time obtained a stay order against the enforcement of the Railroad Commission's order except in and through that suit; this being done for the purpose of preventing the necessity of having a hearing before a three-Judge Court under Section 266 of the United States Judicial Code. We presented this petition and order to Mr. Justice Blease at Newberry on September 7, 1927, and obtained from him an order allowing the Railroad Commission to intervene and enforce its order in the main suit, in the meantime staying the enforcement of said order.
As a result of this action on our part and of Mr. Justice Blease's order, the injunction suit then pending in the Federal Court was suspended.
THE HEARING BEFORE THE SUPREME COURT ON THE MOTIONS TO DISMISS AND THE ORDER OF REFERENCEOur motion to dismiss and for judgment upon the pleadings, and the motions and demurrers of the company, came on for hearing before the South Carolina Supreme Court at the October, 1927, term. We appeared and made an oral argument, and also prepared and filed a printed argument (22 pages) and a transcript of the "Charters, Contracts and Other Documents" (47 pages) in support of the motion. The companies also made an oral argument and filed a printed brief (51 pages) at this hearing.
The Court took the matter under advisement, and on January 11, 1928, handed down an order substantially overruling the companies' demurrers, and referring the issues of law and fact to L.D. Lide as special referee. The Court held substantially that the intervention petitions could properly be tried in this suit, but that there were questions of fact raised by the respondents' returns upon which it desired to take evidence.
We thereupon immediately had a conference with Mr. Lide, the referee, and with opposing counsel, and had a reference set for January 25, 1928.
THE ATTEMPTED BANKRUPTCY PROCEEDINGSOn January 24, 1928, the Columbia Railway, Gas Electric Company filed a voluntary petition in bankruptcy in the United States District Court and at the same time obtained a temporary restraining order against the suit pending in the South Carolina Supreme Court, together with a rule to show cause on January 28th why such restraining order should not be made permanent. We appeared before Judge Cochran at Columbia, S.C. on January 28, 1928, and made an argument against granting such injunction.
As a result of this hearing, however, Judge Cochran made an order dated on February 2, 1928, enjoining the proceedings in the South Carolina Supreme Court so far as they affected the Columbia Railway, Gas Electric Company or its property. In the sworn voluntary petition in bankruptcy, the Columbia Railway, Gas Electric Company listed its debts and liabilities at $3,267,978.75, and its assets at $50,444.09.
We thereupon carefully considered the situation, studied the questions involved, and reached the conclusion that the Columbia Railway, Gas Electric Company was a railroad corporation, and hence could not go into bankruptcy. We then decided to file a motion and petition in the United States District Court to vacate the attempted bankruptcy of the company, and also in the meanwhile to make a motion before the Supreme Court of South Carolina to have the pleadings amended so as to eliminate the Columbia Railway, Gas Electric Company from that suit.
Accordingly, on February 8, 1928, we had prepared and filed a petition to the United States District Court to vacate the order adjudicating Columbia Railway, Gas Electric Company bankrupt, and on February 9, 1928, we obtained a rule from Judge Cochran directing the company to show cause before him on the 1st day of March, 1928, why the petition should not be granted.
On March 1, 1928, we appeared in Charleston before Judge Cochran and made an oral argument and filed a written argument (22 pages) in support of our petition to have the adjudication vacated. The company filed a written return and made a vigorous argument in opposition to having the bankruptcy vacated.
As a result of this hearing, Judge Cochran filed his opinion on March 13, 1928, holding in effect that the Columbia Railway, Gas Electric Company as a railroad corporation could not go into bankruptcy. See In re. Columbia Ry., Gas Electric Co., 24 F.2d 828, 834.
We then on March 21, 1928, filed a notice and petition in the United States District Court to vacate the injunctions issued by the Court on January 24th and February 2d against the prosecution of the proceeding in the South Carolina Supreme Court. We had a hearing upon this matter before Judge Cochran on or about March 28, 1928, at Columbia, S.C. and made an oral argument thereon; the respondent companies again making a vigorous opposition to the vacation of the stay orders, and filing a return to our motion. We thereupon made a reply to their return, and they made a traverse of our reply. This was regarded by us as a very critical period in the litigation.
As a result of this motion and of the hearing, Judge Cochran filed his order on April 2, 1928, vacating all injunctions against the proceedings in the South Carolina Supreme Court.
The Broad River Power Company had undertaken to intervene in this bankruptcy proceeding as an alleged creditor of the defendant Columbia Railway, Gas Electric Company, and participated in all the hearings seeking for the injunction against the proceedings in the South Carolina Supreme Court.
The companies thereupon served notice of intention to appeal to the Circuit Court of Appeals for the Fourth Circuit, both from Judge Cochran's order of March 13th, vacating the bankruptcy, and from his order of April 2d, setting aside the injunctions. About the same time, they gave notice of an application to the Circuit Court of Appeals to be heard at Richmond for a supersedeas of Judge Cochran's orders and for a restraining order against the proceedings in the South Carolina Supreme Court. We appeared in Richmond before the Circuit Court of Appeals in response to this notice and application, and made an argument against the application of the companies.
As a result of this hearing, the Circuit Court of Appeals refused the supersedeas and injunction asked for by the companies, and set the appeals for hearing before that Court toward the latter part of April, 1928.
We participated in the preparation of the transcript of the record on these appeals by the companies (the transcript containing 148 pages).
The appeals came on for hearing before the Circuit Court of Appeals during the latter part of April, 1928. We appeared in Richmond and made an oral argument, and also filed a written argument (54 pages). The companies also filed a written argument (30 pages).
As a result of this hearing, the Circuit Court of Appeals handed down its decision on or about June 12, 1928 (see Columbia Ry., Gas Electric Co. v. State, 27 F.2d 52-57, 59 A.L.R., 665), affirming the decisions of the District Court.
Both the District Court and the Circuit Court of Appeals in their decisions on this matter very largely adopted and followed the points and authorities contained in our written arguments.
This was the first instance during the progress of this litigation where we preserved, protected, and recovered for the benefit of the public the assets and property of the Columbia Railway, Gas Electric Company.
THE HEARINGS BEFORE THE REFEREEIn view of the foregoing attempted bankruptcy proceedings, the reference set for January 25, 1928, had been postponed.
As hereinabove indicated, we had, in view of the injunction orders issued by Judge Cochran, prepared and filed the motion before the South Carolina Supreme Court for an order eliminating the Columbia Railway, Gas Electric Company from that suit. This motion was vigorously resisted by the companies, but the order was granted by the Court after hearing on the 17th day of February, 1928.
However, after the order of the South Carolina Supreme Court of February 17, 1928, eliminating the Columbia Railway, Gas Electric Company from the case, the references were resumed.
The first reference before the referee was held in Columbia, S.C. on February 29, 1928, and the second reference March 2, 1928. These references were continued for several days, and the petitioners offered and examined all together twenty-four witnesses, besides a great many exhibits in the way of contracts, ordinances, and statutes.
At the conclusion of the evidence offered in chief by the petitioners, the respondent companies announced that they would offer no evidence, taking the legal position that no judgment could be rendered against the Broad River Power Company which could affect the Columbia Railway, Gas Electric Company or its property. Thereafter, March 27th was tentatively set for argument before the referee.
After Judge Cochran's orders of March 13 and April 2, 1928, vacating all the stay orders against the proceedings in the South Carolina Supreme Court, we had made another motion before the South Carolina Supreme Court for an order directing that the case therein be ordered to proceed against both respondents, including the Columbia Railway, Gas Electric Company, and that the pleadings be restored to their original status. This motion was resisted by both the Broad River Power Company and Columbia Railway, Gas Electric Company, which filed returns and made an argument before the Supreme Court in opposition thereto.
As a result of the hearing, however, the Supreme Court of South Carolina made its order on April 12, 1928, restoring the case to its original status, and directing the referee to proceed.
Accordingly the references were resumed on May 22, 1928. At this time, we offered in evidence again as against both of the companies all the evidence which had been previously taken as against the Broad River Power Company alone. The companies objected to this procedure upon various grounds, and we made argument thereon.
The references were, however, continued on May 28, 1928, continuing through May 31, 1928, at which time the companies offered their oral and written evidence. The companies offered twelve witnesses. We then put up in behalf of the petitioners four witnesses in reply.
The final reference in the case was held on July 14, 1928.
During the progress of the case, we developed, among other things, the fact that the net appraised value of the assets sought to be transferred from the Columbia Railway, Gas Electric Company to the Broad River Power Company was $11,406,430.00, against which the liabilities amounted to only $7,053,211.88, so that the net value of the physical property, etc., so transferred amounted to $4,353,511.55, in addition to the valuation of $1,561,000.00 placed upon the franchise rights, for all of which assets amounting to nearly $6,000,000.00 no real value whatsoever was paid by the Broad River Power Company to Columbia Railway, Gas Electric Company. The evidence also showed that during the progress of the negotiations by the Broad River Power Company interests for the purchase of the Columbia Railway, etc., Company, independent engineers had made an appraisal of the physical property of the Columbia Railway, etc., Company on the basis of reproduction as of May 31, 1924, at $12,227,000.00, of which $2,250,000.00 was attributed to the so-called railway department.
Also we developed and proved the fact that the Broad River Power Company had co-operated in the establishment of the competing bus company in Columbia by getting the White Company to extend credit to the bus company in the purchase of the buses, and had also contributed at least $19,000.00 in actual cash to the operating expenses of the said bus company.
The evidence also showed, and it was afterwards so found by the Court, that all the defenses and contentions of fact made by the companies were false.
The case was argued before the referee in Columbia, S.C., during the latter part of July or early part of August, 1928. Both the companies and the petitioners made extensive oral and written arguments. We prepared and filed both an argument in chief (158 pages) and a reply brief (123 pages).
The referee filed an elaborate report on August 16, 1928 (66 printed pages), recommending the dismissal of all the petitions. We thereupon prepared and filed exceptions to the referee's report to be heard before the Supreme Court at the October, 1928, term. The companies also filed exceptions or additional sustaining grounds to the referee's report.
THE ANCILLARY SUIT IN THE COURT OF COMMON PLEAS FOR RICHLAND COUNTYMeanwhile we had found it necessary in June to institute an ancillary suit in the Court of Common Pleas for Richland County to preserve and protect the street railway assets and property of the Columbia Railway, Gas Electric Company.
Soon after the decision of the Circuit Court of Appeals setting aside the attempted bankruptcy of Columbia Railway, Gas Electric Company, the companies allowed a judgment creditor by the name of Leitner of the Columbia Railway, Gas Electric Company, who held a judgment in the sum of $20,000.00, to have all the property and assets standing in the name of the Columbia Railway, Gas Electric Company, consisting of street cars, tracks, etc., to be levied upon by the sheriff of Richland County, and advertised for sale in satisfaction of the judgment.
We considered this procedure merely another effort on the part of the companies to allow the street railway assets to be placed beyond the reach of the petitioners and of the public in order to evade the street railway obligations.
We thereupon instituted a regular creditor's suit in the name of the petitioners on behalf of all the other creditors of the Columbia Railway, Gas Electric Company against the Broad River Power Company, Columbia Railway, Gas Electric Company, and all the bondholders and mortgagees of both of said companies, demanding that the so-called transfer to the Broad River Power Company be set aside, that a receiver be appointed of the assets belonging to the Columbia Railway, Gas Electric Company, and for an injunction against the disposition or wasting of the assets. This suit was specifically denominated an ancillary suit to the suit pending in the Supreme Court, and was for the purpose of preserving the assets of the company in aid of any future judgment of the South Carolina Supreme Court.
In this suit, we obtained a temporary stay order against the proposed sale of the street railway assets and a rule to show cause from Judge Townsend directing the defendants therein to show cause why the relief prayed for should not be granted. The summons, together with this order, were served by publication; copies thereof being published in the Columbia newspapers, and also sent by registered mail to the absent mortgagee defendants in New York City.
The hearing was held before Judge Townsend on June 23, 1928. At this time, the companies through their attorneys assured the Court that they would see that the street railway assets were not thereafter dissipated or wasted. Upon this assurance, the Court passed an order therein dated on June 23d enjoining the sale of the street railway assets by the sheriff, suspended further proceedings in the case pending the hearing in the Supreme Court, and enjoining the companies from disposing of the street railway property, and enjoining all other suits affecting said property.
Copies of these proceedings were sent by registered mail to the New York banks which acted as trustees under the mortgages executed by the Broad River Power Company and Columbia Railway, Gas Electric Company.
Subsequently several hearings were held in this case in regard to the protection and preservation of the street railway properties from waste. In January, 1929, we conducted a contempt proceeding against several parties who were charged with removing and cutting up the street railway tracks in Eau Claire in violation of the injunction order obtained in this proceeding. The rule to show cause and a hearing was held on this matter before Judge Townsend in the Court of Common Pleas.
Subsequently in April, 1929, a petition was filed in this case by certain parties praying for the right to remove the street railway tracks out in Colonial Heights. We appeared before Judge Townsend and objected to the removal of the tracks. Judge Townsend granted the order. The Attorney General then obtained a stay order from Chief Justice Watts against the removal, and we appeared before the Supreme Court in opposition to the tracks being allowed to be removed, and succeeded in having the Supreme Court at its April or May term, 1929, enjoin the removal of the tracks.
As a result of this suit, the physical assets, franchises, and property then standing in the name of the Columbia Railway, Gas Electric Company have been preserved and protected for the benefit of the public and in aid of the judgment thereafter rendered by the State Supreme Court. But for this suit, the assets of the company would certainly have been disposed of and the mandamus suit complicated and probably defeated. This we regard as the second instance wherein we have preserved, protected, and recovered the assets of the Columbia Railway, Gas Electric Company.
This case is still pending in the Court of Common Pleas for Richland County; the object thereof having been in effect accomplished by the decisions and proceedings in the Supreme Court of South Carolina.
THE HEARING BEFORE AND THE DECISION OF THE SOUTH CAROLINA SUPREME COURTThe main case was heard on the appeal from the referee's report before the Supreme Court of South Carolina at the October, 1928, term.
At this time, each side was allowed one hour for argument. The oral argument on behalf of the petitioners was made by Irvine F. Belser and E.W. Mullins. We also prepared and filed an extensive written argument (149 pages). The companies also submitted a brief argument (107 pages) and a reply argument (.... pages). The Court took the matter under advisement, and handed down its decision on July 9, 1929.
The Court adopted in its decision all of our major positions, stating in the opening that in the preparation of its opinion it had followed in the main the "well prepared argument of counsel for petitioners." The final judgment of the Court was that "the petition of the Attorney General and the petitions of the intervenors be and the same are hereby granted and the writ of mandamus issued as prayed for."
The Court held that all the main contentions of the companies were unfounded, and held specifically, among other things: (1) That the Columbia Railway, Gas Electric Company had sought to transfer approximately $6,000,000.00 of net appraised assets to the Broad River Power Company without consideration; (2) that the so-called transfer and separation should be set aside and the companies treated as one corporation; and (3) that the contentions that the so-called merger act was a part of the canal settlement was "entirely without foundation"; and (4) that the companies had not made an honest effort to make the street car service pay; and (5) that the service could be made to pay if properly operated; and (6) that the companies had contributed at least $19,000.00 to the operating expenses of the supposedly competing bus company.
The companies filed a petition for a rehearing, which was, however, dismissed by the Court on September 25, 1929.
THE APPEAL TO THE UNITED STATES SUPREME COURTThe companies immediately took steps to appeal to the United States Supreme Court, and obtained a stay order from one of the members of the Court for a period of 90 days in order for them to get up the appeal papers.
At that time, we held several conferences to consider the question of whether we should make any move before the State Court or the United States Supreme Court to require the companies either to operate or to put up an adequate bond to protect the public against damages. We finally decided that it would be best to make no move.
The companies in regular course filed their petition with the United States Supreme Court for the writ of certiorari in December, 1929. We prepared and filed in December, 1929, or January, 1930, a brief in opposition to the companies' petition (12 pages).
The petition for the writ of certiorari having been granted by the United States Supreme Court on the 27th day of January, 1930, we prepared in co-operation with the Attorney General's office a motion to advance the case for hearing in the United States Supreme Court, the motion being set to be heard on April 14, 1930. The motion was heard on that date, the companies resisting and filing a written memorandum in opposition thereto, but was granted by the Court, and the case was set for hearing on May 2, 1930.
The case was argued before the United States Supreme Court on said date; that is, May 2, 1930. We prepared and filed a written argument (93 pages).
The Supreme Court of the United States thereafter handed down its decision on May 19, 1930, dismissing the petition for the writ of certiorari, holding in effect that the decision of the South Carolina Supreme Court was supported by substantial state grounds. 281 U.S. 537, 50 S. Ct., 401, 74 L.Ed., 1023. The Court in its opinion (see 281 U.S. 537, 50 S.Ct., 401, 74 L.Ed., 1023), adopted and followed the principal petitions which we had made in our arguments, both oral and written.
The companies filed a petition for a rehearing and obtained a stay order against the sending down of the mandate until October 15, 1930. The Court granted the petition for a rehearing and ordered a reargument. The case was reargued in Washington on the 4th day of December, 1930. At this hearing also we made an oral argument, and also filed a supplemental brief (32 pages). The companies also filed a supplement brief (31 pages).
As a result of this hearing, the United States Supreme Court handed down a per curiam order on December 15, 1930, again dismissing the petition. Four members of the Court concurred in this order upon the ground that the South Carolina Supreme Court's findings that the companies had not made a bona fide effort to make the street railway service a success was sufficiently supported by the evidence; the other members of the Court adhering to the former opinion. See 282 U.S. 187, 51 S.Ct., 94, 75 L.Ed., 287.
The mandate from the United States Supreme Court was received by the Clerk of the South Carolina Supreme Court on or about the 9th day of January, 1931. We give an account of the hearings in the United States Supreme Court as part of the history of the United States Supreme Court, but we do not claim in this Court any compensation for services in the United States Supreme Court.
THE CITY ORDINANCES REGULATING THE TRANSPORTATION SITUATION AND THE SUIT TO REGULATE JITNEYSIn connection with and as a result of this litigation, and of the situation thereby brought about, Irvine F. Belser, of the firm of Melton Belser, was employed by the City of Columbia as special counsel to advise on the transportation matters. This employment was handled in connection with the other attorneys involved in the litigation, and as a part of the general transportation program.
This connection called for and required from time to time innumerable conferences both between the said Irvine F. Belser and the city council, and also between the attorneys involved, in relation to providing temporary transportation, regulating the jitneys and buses, and like matters.
For this purpose, after consultation, we prepared and had Columbia city council adopt an ordinance in January, 1928, directing the companies to put on and operate street railway service on a thirty-minute schedule on all their street railway lines leading into the City of Columbia. The ordinance was subsequently sustained by the Supreme Court of South Carolina and specifically indorsed by that Court's order of February 13, 1931.
Also we had prepared and advised the City of Columbia to adopt an ordinance designed to regulate the competition from jitneys. This had for years been a very much vexed problem; the Court in the Alexander case, 125 S.C. 530, 119 S.E., 241, 32 A.L.R., 746, having held invalid the ordinance there involved, which had been intended by Columbia city council to regulate the jitneys. The respondent companies had for years been contending that the competition from the jitneys was destroying the street railway service and driving them out of business.
Immediately after the adoption of this ordinance, the jitney drivers of the City of Columbia instituted a suit in the name of Huffman and others against Columbia city council to enjoin the enforcement of the said ordinance and have the same declared unconstitutional. The case was heard before the South Carolina Supreme Court at the June term, 1928. The counsel for the City of Columbia, with our cooperation, prepared and made an oral and written argument (27 pages) in the case.
The Court thereafter on July 24, 1928, handed down its decision ( 146 S.C. 436, 144 S.E., 157), sustaining the ordinance.
As a result of this decision, the right of the city to regulate the jitneys and all forms of motor vehicle transportation was definitely established. This action has inured to the benefit of the public, including the respondent companies. Since that time, no jitneys have been allowed to operate in the City of Columbia.
Also the final order of the South Carolina Supreme Court issued on May 16, 1931 (to which reference will be hereafter made) provided for the discontinuance of the operation of bus company previously operating in the City of Columbia. Thus as a result of this transportation program, the transportation service now being furnished by respondent companies is carried on without any unfair competition from buses or jitneys.
FURTHER PROCEEDINGS IN THE SOUTH CAROLINA SUPREME COURTThe companies not having yet put their street railway transportation service into operation, we prepared and submitted to the Supreme Court of South Carolina at its January, 1931, term a peremptory writ of mandamus to require the companies to operate the service.
This writ was approved and signed on the 12th day of February, 1931. We had the writ forthwith served upon the companies.
The peremptory writ required the companies to make a report to the Court five days before the February term of Court as to how they should have executed the writ. The companies at the February term filed a report or return in effect contending that under the decisions of the Court they were only required to operate the three street railway lines which they were operating at the time of the final discontinuance in March, 1927.
We thereupon filed a petition asking that the companies be required to operate their entire system consisting of twelve lines, and also that they be adjudged in contempt, that their charter be forfeited, and that a receiver be appointed.
We had a hearing and made arguments upon these matters before the Court at the February, 1931, term.
As a result of this hearing, the Court passed its further order dated February 13, 1931, directing the companies to operate all the 12 specified lines, directing the companies to make monthly reports, and reserving its decisions as to the other matters raised in our petition.
We then took up with respondents the matter of extending their transportation service so as to provide an adequate and satisfactory transportation service to cover the entire city and vicinity. We took the position that under the Court's order and judgment the companies were charged with the duty of providing adequate and satisfactory transportation service for the entire community either by street cars or other means as directed by the Court.
After a great deal of discussion and negotiations between the city and the other petitioners and the companies, and it appearing that it was impossible to reach any agreement by all parties by negotiations, a petition by the City of Columbia accompanied by an order was prepared and presented to the Supreme Court of South Carolina. This order was consented to with certain modifications by the parties represented by us.
As a result of this hearing, the Court passed its order of May 16, 1931, directing the companies to operate the seven principal street car lines and to supplement them by five bus routes so long as the companies enjoyed the gas, power, and electric franchise rights, and directing the companies to put the entire transportation service into first class condition and operation under the supervision and direction of a board of engineers, consisting of G.E. Shand, Sr., and of Walter E. Rowe, Professor of Engineering at the University of South Carolina, and of W.S. Tomlinson, City Engineer. The companies were also directed to deposit the sum of $7,500.00 in the Central Union Bank to be applied upon the expenses and fees of these engineers. This order has been in part complied with, and the companies are now operating the transportation service therein directed under the supervision of the said board of engineers.
As a result of this order of May 16, 1931, the transportation service offered by the companies was very largely extended so as to serve practically all parts of the City of Columbia and vicinity, the five supplemental bus routes aggregating approximately twelve miles as against less than three miles of tag end street car lines which were temporarily suspended. In this order also the basic fare was reduced from ten cents to seven cents with twenty tickets for $1.
SUMMARY OF FACTS AFFECTING FEEAs to the amount of work, the litigation with its various ramifications has consumed the great bulk of the time of one of us for practically four years, and has consumed in conferences, attention and otherwise, a large portion of the time of all the other attorneys engaged. All the counsel involved from time to time took an active part in the handling of the case either examining witnesses, preparing pleadings and arguments, and making oral arguments at some one or more of the hearings. A very great number of conferences between the counsel and also with their various clients have been held.
The general method of handling the various steps and moves in the case has been that there would be a conference of all the counsel engaged, including the Attorney General and the city attorney, and thereafter the written pleadings and arguments would be tentatively prepared by Irvine F. Belser, and then submitted by mail or personal conference to each of the other counsel, and thereafter there would be a final conference for discussion and criticism before the papers were put into final shape. Every important move in the case involved two or three conferences between all the counsel.
While upon the record some of these petitioners appeared as counsel for certain parties and others for other parties, this was done for strategic purposes. It was understood from the beginning that the entire case would be handled as one case, and it was so handled.
We at all times received the fullest co-operation from the Attorney General's office. Both the Attorney General and Mr. Page attended practically all the conferences and all the hearings. The Attorney General took no part in the arguments (except the hearing on May 11, 1931, resulting in the order of May 16, 1931), because he regarded himself as occupying the status of a party plaintiff. Mr. Page participated in several of the oral arguments including the hearing before Judge Cochran on January 28, 1928 (resulting in stay order of February 2, 1928), in the final argument before the referee, and in the first argument before the United States Supreme Court.
The case at all times pre-empted the time and attention of all the counsel involved. It was deemed to be of such importance as to require and receive primary consideration throughout the four years it was being handled by us.
As a result of the litigation, all the major objectives have been accomplished, to wit:
(1) The obligation to provide adequate and satisfactory transportation service has been fixed upon the Broad River Power Company, which has assets valued at over $23,000,000.00, and an annual gross revenue of approximately $2,500,000.00, and an operating income of approximately $1,300,000.00.
(2) The so-called separation and transfer from Columbia Railway, Gas Electric Company to the Broad River Power Company has been set aside, and thus the assets formerly belonging to Columbia Railway, Gas Electric Company having a gross value of over $12,250,000.00, a net appraised equity of approximately $6,000,000.00, have been in effect recovered for the benefit of our clients and the public, and impressed in the hands of the Broad River Power Company with a trust in favor of the public.
(3) The companies have been required to put into operation a unified transportation system, consisting of seven principal street car lines and five supplementary bus lines.
(4) This transportation service covers the entire City of Columbia and vicinity; that is approximately 25 per cent, more area and territory than was previously covered by the old street car system.
(5) The basic fare has been reduced from 10 cents with three tickets for 25 cents to a basic fare of seven cents with 20 tickets for $1.00, and a straight five-cent fare for children under 12 years.
(6) The companies have been directed to put the entire transportation system, street car lines, and equipment and buses, into first-class operating condition, and to operate the same under the supervision and direction of a board of engineers appointed by the Court.
(7) The companies have been declared to be charged with full responsibility for the public transportation service of the community, and directed to furnish the same as long as they exercise their public franchise facilities in this community, either by street cars, or trackless trolleys or buses, or any combination thereof as the public welfare may require.
(8) It has been established that the obligation to furnish electric or other transportation is inseparably connected with the companies' electric light and power franchise.
We estimate that the actual cash saving that will result to the City of Columbia and its citizens in their public transportation expenditures will be at least $250,000.00 a year, equivalent to a capital of investment of $5,000,000.00. In addition, there will accrue in the economic efficiency of the community a very great value which, however, is difficult to estimate. The value of this service will of course increase with the growth of the city and community.
Our arrangements as to fees with practically all of our clients has been the same; namely, that they would advance to us on account of our fees small sums with the understanding that they would pay adequate fees if recoverable from and paid out of the assets of the respondent companies in connection with the costs and damages in the case, in which event the sums advanced to us were to be repaid to them.
We have, of course, always expected that in the event of success we would be able to have adequate counsel fees paid by and out of the assets of the respondent companies.
The litigation has been very much in the public eye, and has been constantly followed in the public press. As a result, all the counsel involved have been subjected to an infinite amount of comment, praise, criticism, and suggestion.
The respondent companies were represented for a time by the firm of Elliott McLain, of Columbia, J.B.S. Lyles, of Columbia, and George M. Le Pine and C. Edward Paxon, of New York City. These attorneys represented the companies in the proceedings before the South Carolina Supreme Court from the argument in October, 1928, and in the bankruptcy proceedings. At the hearing before the United States Supreme Court, the companies employed William Marshal Bulliett, of Louisville, Ky. (former Solicitor General of the United States), as leading counsel.
In the hearings and proceedings before the Supreme Court of South Carolina occurring since the handing down of the mandate of the United States Supreme Court, the companies have been represented by H.J. Haynesworth of the firm of Haynesworth Haynesworth, Greenville, S.C. thus making six law firms which they have had during the litigation.
The conduct of the companies preceding and throughout this litigation, as shown by the record, and the nature and extent of the litigation necessitated thereby, have been such that the companies have rendered themselves liable to punitive damages. Hence, while it may not be necessary to consider this feature of the matter in fixing the amount of the fees, the attorneys' fees which should be assessed against them and paid out of their assets should be at least sufficient to teach them and other public service corporations to respect their public franchise obligations. This is the "just * * * counsel fees" provided for under Section 4888 of the Civil Code of 1922, as well as the counsel fees included in the damages under Section 797 of the Code of Civil Procedure 1922, and also the proper fees allowable on account of the preservation and recovery of assets, thus should bear some relation not only to the conduct of the companies, and the amount of litigation thereby caused, but also to the wealth and assets of the companies.
In connection with the litigation, we appeared and made arguments before the Supreme Court of South Carolina eight times, before the United States District Court four times, before the Circuit Court of Appeals two times, before the Court of Common Pleas three times, and before the United States Supreme Court three times, thus making a total of twenty appearances and arguments before the Courts. This was in addition to the appearances and arguments before the referee. We also appeared before various Judges and members of the Court and obtained ex parte rules and orders ten times. We examined or cross-examined forty witnesses. We also prepared and filed approximately twenty-six different petitions, returns, motions, notices, and other pleadings. Of course we read and studied a vast number of cases and authorities. The written arguments prepared and filed by us aggregated approximately seven hundred pages.
We preserved, protected, and recovered the assets of the Columbia Railway, Gas Electric Company three times. First, by having the attempted bankruptcy of the company vacated; secondly, by enjoining the attempted sale and disposition of the company's assets in the ancillary suit in the Court of Common Pleas; and thirdly, by having the so-called transfer and separation to the Broad River Power Company set aside by the final decision of the South Carolina Supreme Court. Of course the assets of an insolvent corporation such as Columbia Railway, etc., Company constituted a trust fund in favor of its creditors.
The peculiar value of the result accomplished by us is that it has been established that respondent companies with all their assets and facilities are bound, and can be required, to furnish an adequate and satisfactory transportation service even at cost, as long as they exercise their public utility franchises in Columbia and vicinity, whereas no separate transportation company could be secured to perform this transportation service except upon the basis of a guaranteed return from its investment. Moreover while some other bus company might perhaps be found, no other company could be found which would be able or have the facilities to render the transportation service by electric street cars or trackless trolleys or gasoline motor buses or other means as is the case with the respondent companies.
Hence the City of Columbia and community is thus assured adequate and satisfactory transportation service permanently at the minimum cost.
Taking all these matters into consideration, we are of the opinion that while a much larger figure might be proper, $250,000.00 would be a moderate fee for said services.
We certify that the foregoing statement is true and correct to the best of our knowledge, information, and belief.
REFEREE'S REPORTTo the Honorable Eugene S. Blease, Chief Justice, T.P. Cothran, John G. Stabler, Jesse F. Carter, and M.L. Bonham, Associate Justices of the South Carolina Supreme Court:
By order passed by his Honor Chief Justice Eugene S. Blease on May 16, 1931, the matter of taxing and assessing against the respondents in the above-entitled matter the costs, damages, penalties, counsel fees, and disbursements, such as may be allowed by law in this proceeding, in favor of petitioners or any of them, or their counsel, was referred to me. The same order directed the movants to serve upon respondents an itemized sworn statement of the items claimed by them, and that respondents file their reply. This was complied with by both parties, and the original statement and reply are now on file with the original record in the office of the Clerk of the Supreme Court.
The order further directed me to take testimony and to hear and determine all issues involved, and to report my conclusions to the Court.
Pursuant to this order, two references were held by me in the City of Columbia; the first one on June 23 and 24, 1931, and the last one on June 29, 1931. Copies of all the proceedings in this case from its inception to the present time were introduced into the record, including all ancillary proceedings and the matters that were heard in the various Federal Courts; all of which are filed herewith for the benefit of the Court.
Particular reference is made to a statement of facts prepared by the petitioners and introduced in the record as Exhibit "32," which said statement will give to the Court a clear and complete picture of the various and sundry steps taken by petitioners and on which is largely based their claim for counsel fees.
A copy of the testimony taken at both of the references is hereto attached.
It has been impossible for me to prepare and file this report at as early a date as I would have liked. The issues involved are few, and the testimony as to the facts is rather convincing; but the issue of law with which you are met at the very outset is far from simple as is attested to by the able oral arguments made at the reference and by the elaborate and lengthy brief filed with the referee by counsel for both sides. In my endeavor to arrive at a just and fair conclusion and to satisfy myself as to what principles of law were applicable to the facts, I have read and followed up the numerous authorities cited by counsel for both sides. While I do not intend to refer to each case cited, nor to attempt to distinguish each of them from the case at bar, it is my purpose to cite the authorities on which my conclusions are based.
It would be a tedious and unprofitable procedure to relate the history of this case as it has wound its slow length through four years of litigation, which culminated in the affirmation by the United States Supreme Court of the opinion handed down by the South Carolina Supreme Court in the matter. The opinion in the decision by the South Carolina Supreme Court, as recorded in 157 S.C. 1, 153 S.E., 537, gies an elaborate statement of a great part of the litigation involved, and those who are most interested, including the members of the Supreme Court, are familiar with its details. Because of the importance of a decision in this case, it is only after much consideration and a careful analysis of the authorities cited, that I will now attempt to state my conclusions. I expect to quote at some length from the brief of petitioners' attorneys, because, where so quoted, it accords with my own views on the question at issue.
COSTS TO BE ALLOWEDThe first issue to be passed on is the question of the proper costs to be allowed the petitioners. By agreement of counsel at the hearing the following items as they appear on the petitioners' "Itemized Statement of Costs, Damages, Penalties and Disbursements" were admitted as proper charges, to wit:
1. Fee allowed Special Referee, Lide ...... $1,500.00 Amount paid thereon by respondents 750.00 ________ Balance due ......................... $750.00 2. Amt. due J.B. Westbrook, Clerk of Supreme Court on account of costs ............................... 26.00 3. Expenditures as follows: (a) Amounts paid for reporting transcript of testimony taken at reference: 3/27/28 Margaret McFaddin ......... $ 82.80 5/31/28 J.W. Wilkinson ............ 83.36 5/31/28 J.W. Wilkinson ............ 35.58 5/31/28 John K. Aull .............. 6.95 6/25/28 J.W. Wilkinson ............ 259.32 7/24/28 John K. Aull .............. 6.00 (b) Amounts paid Court Officers: 4/18/28 Amt. of deposit made with Claude M. Dean, Clerk 4th Circuit Court of Appeals in attempted bankruptcy hearings ................... 50.00 3/6/28 T.A. Heise, Sheriff, for service of papers ...... 5.50 12/29/28 T.A. Heise, Sheriff, for service of papers ...... 14.50 7/1/29 T.A. Heise, Sheriff, for service of papers ...... 8.50 (c) Engineers' Fees and Investigations: 6/20/28 Amt. paid J. Monroe Johnson, Engineer, for survey of Street Railway System and expert testimony .................. 160.00Amt. due Gadsden E. Shand, Sr., for Preliminary Report and Survey on Street Railway System and expenses in connection therewith .................. 263.20 (d) Printing Expenses: 12/5/27 Amt. paid McCaw of Columbia, for printing brief and argument on Motion to Dismiss .......... 133.50 12/31/27 Amt. paid J.W. Westbrook, printing main petition and Docketing 29.30 5/31/28 Amt. paid McCaw of Columbia, for printing brief Circuit Court of Appeals in re: bankruptcy hearing ................. 126.04 12/27/28 Amt. paid Record Publishing Co. for publishing Notice and Order ................ 23.50 12/31/28 Amt. paid R.L. Bryan Co. printing argument in S.C. Supreme Court ................... 234.00 7/10/30 Amt. paid R.L. Bryan Co. for printing main argument U.S. Supreme Court ................ 318.75 10/29/30 Amt. paid R.L. Bryan Co. for reprinting main argument for rehearing in U.S. Supreme Court .......... 273.70 Amt. due State Company for printing argument on rehearing for U.S. Supreme Court ........... 150.00 Under Item 3, Subsection (c), the item of $25.00 to J.C. Oxner, the item of $60.00 to Thornwell McMaster, engineer, and the item of $946.17 to Legare Engineering Company, were each objected to by the respondents, and, except for the fact that the other two items in this subdivision, those to J. Monroe Johnson and to Gadsden E. Shand, Sr., were admitted by the respondents to be proper charges, I would be inclined to disallow any of them as legal costs. However, no testimony was given before me to differentiate these items, but on the contrary Mr. Belser testified that the services rendered for which these items are charged were much of the same character and practically the same use was made of the facts developed by each of these gentlemen. There is no testimony except that of Mr. Belser, at page 81 et sequitur, of the testimony at the first reference which even refers to the statement of costs.
Under Item 3, Subsection (d), there is an item of $12.25 bearing date of December 31, 1929, representing an amount paid to the Record Publishing Company for publishing notice and order. There does not seem to be any testimony as to why that should not be allowed, and I am therefore allowing it as a proper item of costs.
For these reasons, I would recommend that all of the items hereinabove listed as admitted and the three items in Subdivision 3, Subsection (c), and the item in Subsection (d), which were objected to, be allowed as proper items of costs to be assessed against the respondents in this case.
Under Subdivision 3, Subsection (d), the item of $135.00 to McCaw of Columbia, and bearing date of September 19, 1929, and the item of $364.00 to R.L. Bryan for printing Court decisions in the street car case were withdrawn.
Under the Subdivision 3, Subsection (e), the second item and the last four items, as well as Subsection (f), were withdrawn and therefore are not considered. The other items in Subsection (e) are disallowed for the reason that I know of no authority and have been cited to none, which allows the traveling expenses of the attorneys to be assessed as costs of the proceeding, and, if assessable as damages, should be considered as an element of such damages as might be allowed as attorneys' fees, if allowed at all.
AS TO WHETHER ATTORNEYS' FEES CAN BE ALLOWED IN THIS PROCEEDINGThe second issue to be decided is a legal one, as to whether or not counsel fees are recoverable under the damages provided for in Sections 4888 and 5059 of Volume 3 of the Code of 1922, and Section 797 of Volume 1 of the Code of 1922.
The attorney for the respondents argues with great force and earnestness that the only conclusion to be drawn from the decisions in this State as to the allowance of attorneys' fees is that there must be a contract, expressed or implied, with the party to be charged, or with his representative, but he ignores the principle of law which holds that the power of the Court to award as damages attorneys' fees, by virtue of a statute, which gave such power, seems to be well recognized. It becomes necessary therefore for us to consider the statutes under which the petitioners claim that they are entitled to counsel fees as damages. Section 4888 of Volume 3 of the Code is as follows:
"(4888) Mandamus to Require Compliance — Punishment for Disobedience — Costs and Counsel Fees. —
"If any railroad company shall neglect or refuse to comply with the provisions of this Chapter or with the rules and regulations prescribed by said Commissioners within the limits of their authority, such company shall be subject to a writ of mandamus, to be issued by any Justice of the Supreme Court, or Circuit Judge, upon application of the Commissioners, or a majority of them, to require compliance with said laws or said rules and regulations, and failure to comply with said writ of mandamus shall be punishable as for contempt; and for any wilful violation of any of said laws, or failure to comply with the requirements of such rules or regulations, the Court may award such costs and counsel fees, on the return of said writs, and after due deliberation thereon, as may be just."
The respondents contend most vigorously that this section of the Code has reference only to steam railroads, and that there is no other provision in the Code which would make it applicable either to electric railways or electrically operated interurban railways. I think, however, that both of the respondents as well as myself, are precluded from sustaining this position by reason of the fact that the Supreme Court of South Carolina itself, speaking through Mr. Chief Justice Eugene S. Blease in his order of September 7, 1927, stayed the proceedings under order 356 of the South Carolina Railroad Commission except through this proceedings, which was then pending in the Supreme Court, holding that the same can be properly enforced by mandamus proceedings upon application of the commissioners as provided in Section 4888 of the Code of 1922. In addition to this, it appears from the records of the proceeding before Judge Cochran in the Federal Court that the respondent companies contended that Section 4888 was applicable to them. See Exhibit 27, Court decision, page 24. This it seems to me estops them from now contending that said section does not apply to them in determining this issue. This section specifically provides among other things: "And for any willful violation of any of said laws, or failure to comply with the requirements of such rules or regulations, the Court may award such costs and counsel fees on the return of said writs, and after due deliberation thereon, as may be just." Under the record of the proceedings in this case, which is fairly bristling with evidences of a deliberate and preconceived plan on the part of the respondents to evade the performance of their public duties and to disregard the mandates of the Railroad Commission, these respondents make themselves liable. The Supreme Court of South Carolina in its final judgment practically establishes this fact as an adjudicated matter, and I feel entirely warranted in finding as a matter of fact that it is true.
Section 5059 of the Code regulating street and interurban railways, by providing that the Railroad Commission should have power to enforce its orders in regard to street railway companies "as may now or hereafter be provided by law in other cases," obviously was intended to provide for the enforcement of the duties of street and interurban railway companies and the orders of the Railroad Commission in regard thereto in precisely the same way as was then provided by law in regard to railroad companies generally. I am of the opinion that the Supreme Court has adjudicated this matter so as to preclude any question as to the right of procedure under Section 4888.
However, we will turn now to Section 797 of Volume 1 of the Code covering specifically a writ of mandamus which it seems to me also makes provision for the recovery of damages and costs contended for by the petitioners. This section reads as follows:
"(797) Place of Trial, Damages and Costs. —
"If any issue shall be joined on such proceedings, the person or persons suing such writ shall and may try the same in such place as a civil action should or might have been tried; and in case a verdict shall be found for the person or persons suing such writ, or judgment given for him or them upon a demurrer, or by default, or for want of a replication or other pleading, he or they shall recover his or their damages and costs in such manner as he or they might have done in a civil action; and a peremptory writ of mandamus shall be granted without delay for him or them for whom judgment shall be given, as might have been if such return had been adjudged insufficient; and in case judgment shall be given for the person or persons making such return to such writ, he or they shall recover his or their costs of suit."
The cases cited by the respondents in regard to the recovery of attorneys' fees under this section can in my opinion be differentiated from the case at bar. The case of State ex rel. Bull v. County Treasurer, 10 S.C. 40, is expressly predicated upon the proposition, as stated by the Court, that "the pleading is confined to a petition and a return. It might be said in this case as it was said, mutatis mutandis, in The Town Council of Beaufort v. Danner et al. [1 Strob., 176]: `There has been in effect simply a motion made, inquiry had, and the motion refused.'" The Court then said in effect that inasmuch as the relator had "waived the issue, dispensed with the pleadings, and the trial" he could not "get his costs for the trial which was not had." Page 44 of 10 S.C.
On the other hand, the Court further stated specifically that the statute "allows damages and costs in mandamus when issue joined and verdict had or upon judgment." The holding of the case is thus based expressly upon the fact that there has been no trial on issues of fact or other proceedings as required by the statute, and clearly shows that, where there has been a trial such as was held in this case ( State v. Harper, 166 Wis. 303, 165 N.W., 281), damages including counsel fees would be allowed.
The case of Milster v. City Council of Spartanburg, 68 S.C. 243, 47 S.E.; 141, at first blush seems to preclude the recovery of counsel fees in a mandamus proceeding, but a more careful reading of the decision will show that the issue involved in the case at bar was not even passed on in that case. The Milster case does not even discuss the liability of the respondents in mandamus for counsel fees as part of the damages to which the petitioners for the writ would be entitled, but proceeds upon the theory primarily that the petitioners for the writ, Milster and Abbott, were not the agents or the representatives of the city for the purpose of incurring counsel fees. There was nothing in the Milster case which showed the willful violation on the part of the Spartan Mills of any statute law of this State, nor its contractual relations to either the petitioners, or any one else, as we find in the case at bar. The case of Park v. City of Laurens Laurens Cotton Mills, 68 S.C. 212, 46 S.E., 1012, cited by respondents in support of their contention, can also be distinguished from the case at bar, in that in the Park case the demanded fees were based upon an alleged contract made with the alleged representative of the City of Laurens, and therefore it was necessary in order to sustain petitioners' position to show that such contract had been authorized by the proper authorities of said city. The question of whether attorneys' fees were included under the word "damages" in the statute was neither discussed nor passed upon.
While the right to recover counsel fees under the word "damage" under Section 797 does not appear to have been specifically decided by our Court in any case where the facts were analogous to those in the case at bar, yet it seems to me that the right to recover such fees has been definitely determined by the decision of the United States Supreme Court in the case of Missouri Pacific Railway Co. v. Larabee, 234 U.S. 459, 34 S.Ct., 979, 58 L.Ed., 1398.
This was a Kansas case, and the statute there involved was substantially the same as our own statute, and reads as follows: "If judgment be given for the plaintiff, he shall recover the damages which he shall have sustained, to be ascertained by the Court or jury, or by referees, as in a civil action, and costs; and a peremptory mandamus shall also be granted to him without delay." Gen. St. Kan., 1909, § 6319.
The Supreme Court of the United States held in this case that the Court had power to allow damages for attorneys' fees under said statute. See, also, Columbia Knickerbocker Trust Co. v. Finney, 93 Kan., 302, 144 P., 222; also State of Montana ex rel. Shea v. Cocking, 66 Mont., 169, 213 P., 594, 28 A.L.R., 772.
The petitioners further contend that they are entitled under the proceedings in the case at bar to adequate counsel fees to be paid by the companies out of the assets of the old Columbia Railway, Gas Electric Company, which they claim have been preserved, protected, and recovered as a result of this suit, and which have been rededicated to their proper public uses and trusts. The facts in this case have clearly satisfied me that, except for the action on the part of the petitioners herein, certain properties originally belonging to the street railway company, and which were dedicated to the public use and had been impressed with a trust for the carrying out of the obligations of the respondents under their franchises, would have been diverted from the purposes for which it was originally intended. It has been adjudicated by the Supreme Court that the transfer of the gas and electric lighting properties originally belonging to the Columbia Railway, Gas Electric Company to the Broad River Power Company was made without consideration, and that the railway department of said company was practically left without funds with which to operate. Then the attempt on the part of the railway company to have itself adjudicated a bankrupt, and, falling in that, to have its assets sold under a judgment, showed a determination to avoid its obligations under their franchise to petitioners and others in like situation, who were entitled to have this property devoted to the purposes for which it had originally been dedicated. The Supreme Court specifically held that it was impossible for the respondents to separate one department of its operation from the others, because such department was being operated at a loss, when the franchise under which it was operating included other departments which were profitable. In other words, the Court held that the Columbia Railway, Gas Electric Company could not separate its railway department from its gas and electric light departments under a franchise in which the exclusive right was granted to the respondents to furnish transportation service, gas, and electric lighting. This case from its very inception and under the prayer of the main petition had equitable features, and it seems to have been admitted by the respondents in this case that the Supreme Court had the right to consider the validity of the transfer of certain assets from the Columbia Railway, Gas Electric Company to the Broad River Power Company which of necessity recognizes the right to grant whatever relief was properly incident to set aside such transfer. It seems clear to me, therefore, that one of the principal results of this entire litigation was the recovery and rededication to a public trust of valuable assets, the value of which the Supreme Court places at a figure of approximately $5,561,000.00, and which certainly were assets that had been dedicated originally to the purpose granted to the respondents under their franchise.
The leading case on this subject is the case of Trustees of Internal Improv. Fund v. Greenough, 105 U.S. 527, 26 L.Ed., 1157. In this case, trustees of a fund had sought to waste and misapply certain of the bonds, and this action was brought for the purpose of preventing such waste and misapplication, and seeking to set aside the conveyances made, and to enjoin the trustees from selling more of the property. The action was successful, and the Court allowed costs and counsel fees based upon and made a charge on the trust funds so preserved and protected.
In this case, the Court further said "in a case like the present, where the bill was filed not only in behalf of the complainant himself, but in behalf of the other bondholders having an equal interest in the fund, and where the bill sought to rescue that fund from waste and destruction arising from the neglect and misconduct of the trustees, and to bring it into Court for administration according to the purposes of the trust; — if the complainant is not a trustee, he has at least acted the part of a trustee in relation to the common interest. He may be said to have saved the fund from the cestuis que trust, and to have secured its proper application to their use."
The Court thereupon held that the complainant should be reimbursed out of the common fund for the expenses which he had incurred including his counsel fees.
The case of Central Railway Bkg. Co. v. Pettus et al., 113 U.S. 116, 5 S.Ct., 387, 28 L.Ed., 915, seems to support the contention of the petitioners.
This principle also seems to be supported by the following authorities: Sutherland on Damages, Vol. 2 (4th Ed.), 1719, 1720, 1723, 1725, § 524; Sutherland on Damages, Vol. 1 (4th Ed.), 305, § 85; Sutherland on Damages, Vol. 4 (4th Ed.), 4623, 4624, § 1238; State of Washington v. Spokane St. Ry. Co., 19 Wn., 518, 53 P., 719, 67 Am. St. Rep., 739, 41 L.R.A., 515, at pages 518, 519; Gates v. Boston N.Y. Air Line Ry. Co., 53 Conn., 333, 5 A., 695; Thomas v. West Jersey R. Co., 101 U.S. 71, 25 L.Ed., 950; Bradley v. Ohio R. C. Ry. Co. (C.C.), 78 F., 387, at pages 392, 393; 51 Corpus Juris, 8.
The respondents contend that this was an action solely to compel the railway company to operate its transportation system; but this contention it seems to me is not supported by the facts. This was an action not only to compel the railway company to operate its street railway system under the order of the South Carolina Railroad Commission, but it also was an action to preserve and restore the assets already pledged to guarantee its obligation under its charter and franchise. The South Carolina Supreme Court cites numerous authorities in its opinion to sustain its position, which I do not deem it necessary to cite in this report, but all of which are familiar to the Court.
Respondents further contend that petitioners herein were acting under contracts had with their various clients, and that they were bound by these contracts in the amounts to which they are entitled to recover. I find from the evidence before me, consisting of certain letters written by at least three or four of the petitioners to the firm of Melton Belser, that employment contracts were entered into, but that these contracts did not in any way limit or restrict the amount of compensation to be paid to the attorneys involved for services rendered in this suit. The Towns of Arden and Eau Claire frankly stated that they would not pay but $100.00 each, and the letter to the city council of Columbia specifically stated that the amounts therein named were to take care of certain expenses incident to the suit and were never intended to represent the total compensation to be paid to the petitioners herein. These letters I think are self-explanatory and will need only the most casual reference thereto in order to convince the Court that they are not such contracts as would restrict or limit the recovery of counsel fees to any definite amount. On the contrary, Mr. Irvine Belser testified that his distinct understanding with all of the clients which petitioners represented, was, that if the attorneys could recover adequate fees in this case, the money advanced by their respective clients would be refunded and that the city would be glad for us to retain such counsel fees as could be recovered under the word "damages" in the statute. Mr. Belser stated on page 115 of the testimony at the first reference in response to a question of respondents' attorneys that the parties whom petitioners represented were vitally interested in this litigation and wanted to have it fought, but were without funds to pay for it, and expected petitioners' counsel to get their compensation out of the defendants if the Court held that this could be done; and that it was on that basis that petitioners' counsel proceeded. As can be readily seen from this reference to the testimony, this action was started really on a contingent basis; that is, that the counsel for petitioners, if successful in their contention, would receive as their compensation such damages as the Supreme Court would allow under the statute as their compensation for services rendered. If they failed in their endeavor, they would receive as compensation only such sums as had been advanced by the various parties to this action, and nothing more. In other words, the case was taken on a contingent basis.
AMOUNT OF SUCH FEESHaving arrived at the conclusion that petitioners' attorneys are entitled to collect from the respondents, counsel fees under the statute, as well as on other grounds, it now becomes necessary to determine the amount of such fees as would be just and proper, and to whom such fees should be paid.
The undisputed testimony before me was that the four firms representing petitioners in this case were absolutely necessary and essential to the success of the litigation. That all of the lawyers involved worked in the closest co-operation throughout the entire time that the case was pending, and that every material step taken in said proceeding was thoroughly discussed by all of said counsel, and said procedure determined upon after such consultation. It was further testified to that certain phases of the work were delegated to various members of the staff of lawyers from time to time, and it required the active participation of each of these lawyers in order to keep up with and properly prosecute the proceeding. I would therefore not undertake to apportion among the several attorneys representing petitioning creditors the amount that should be due each, but in arriving at my conclusion will simply recommend that a fixed sum be allowed to all of the attorneys for petitioners as a group to be apportioned by them as they see fit.
As this Court no doubt already knows, the case at bar is probably one of the most novel and interesting cases that has been heard or tried in this State for many years. Its ramifications take it through practically all of the Courts of this State and also into the United States District Court, United States Circuit Court of Appeals and the United States Supreme Court. In all, twenty arguments were made in one or more of these Courts, in addition to numerous orders, hearings before the referee, etc. It would but incumber the record for me to detail the various steps of procedure adopted and followed through by petitioners' attorneys as the Court is undoubtedly as familiar with these various steps as I am. The record which has been introduced in evidence speaks for itself, and the statement introduced into the record as Exhibit 32 by Mr. Nelson in the course of his testimony is an eloquent presentation of the trials and tribulations through which these attorneys passed in order to accomplish the results which have been accomplished.
The petitioners ask for a fee of $250,000.00, and the following prominent attorneys of this State testified that in their opinion this request is a reasonable one, to wit: Mr. G. Duncan Bellinger, Probate Judge of Richland County; Mr. Douglas McKay, a prominent attorney of Columbia, S.C.; Mr. Thomas H. Tatum, a lawyer and a member of the Railroad Commission; and Mr. T. Frank Watkins, of Anderson, S.C. Mr. W.C. Wolfe, or Orangeburg, testified that in his opinion a fee of two hundred to two hundred fifty thousand dollars would be a reasonable one. Each of these witnesses made quite an elaborate statement of their reasons for such an estimate, and I would like very much to quote this testimony in detail, but it would unnecessarily burden this report and the complete testimony is available to the Court in its consideration of the matter.
The respondents used only one witness in reply on this particular question. Mr. D.W. Robinson, of Columbia, who is recognized as one of the leading lawyers in this State, testified that in his opinion $25,000.00 would be a reasonable fee for services rendered by petitioners' counsel in this case. In his testimony, Mr. Robinson showed very clearly that he was not entirely familiar with what had actually been done in the litigation, nor what had actually been accomplished. While the referee has the highest regard and respect not only for Mr. Robinson's opinion on legal matters, but also for his opinion in matters of the kind now before the Court, I do not think that his testimony is as convincing or is supported by actual facts to the extent that the testimony of the petitioners' witnesses is.
Petitioners recognize that they are not entitled to collect under this statute for any services rendered in the United States Supreme Court, and I think this point is definitely decided in the case of Missouri Pacific Railway Co. v. Larabee, cited above. I have some slight doubt in my own mind also as to whether an allowance can be made for services rendered in the other Federal Courts through which this proceeding passed. I do not think that any State statute would be permitted to restrict in any way any litigant from seeking the protection of his rights in the Federal Courts, nor do I think said statute would be permitted to burden such procedure. However, in the case at bar, the State of South Carolina had acquired jurisdiction of all the parties to this suit as well as the rest, and was fully capable of administering justice among all the parties within this proceeding. The attempt on the part of the Columbia Railway, Gas Electric Company to have itself adjudicated a bankrupt made it necessary for petitioners' attorneys to fight such action in order to preserve the jurisdiction of the South Carolina Supreme Court. It was subsequently determined that the railway company could not go into voluntary bankruptcy under the law, and it seems to me that such action was strong evidence of the intent on the part of the railway company and the Board River Power Company to avoid a legal obligation which is owed to petitioners. On this ground, and for these reasons, I am of the opinion that petitioners' attorneys should be permitted to include as a part of the services rendered by them the work done in the bankruptcy Court and the appeal therefrom.
As testified to by practically all of the witnesses in arriving at a conclusion as to what in their opinion was a just fee, the amount involved and the amount actually recovered or preserved for the benefit of petitioners and all others in like position with them must be considered. The Supreme Court of South Carolina, in its final opinion, makes this statement: "Applying these principles to the facts involved in the case at bar, that the Broad River Power Company got into its possession and control from the Columbia Railway, Gas Electric Company $4,000,000.00 net worth of property, and also the franchise valued at $1,561,000.00, without paying any consideration for the same, and leaving the Columbia Railway, Gas Electric Company in an insolvent and helpless condition, unable to function, the conclusion is inescapable that the corporations are merged, and further that the Broad River Power Company should be held liable to carry out the obligation of the Columbia Railway, Gas Electric Company to furnish electric street railway service."
By its decision, the Supreme Court has held that, except for the action on the part of the petitioners herein, the City of Columbia, the other petitioners in this proceeding, and all other persons, firms, or corporations in like situation, would have been deprived of approximately five and one-half million dollars worth of property, guaranteeing to them that respondents would carry out their obligation to furnish electric street railway service to them. It appears to me that this holding of the Supreme Court adjudicates the matter that this very large sum has at least been preserved and rededicated to the purposes for which it had been originally intended, and from which it had been diverted by the action of the respondents herein in their attempt to avoid carrying out their franchise obligation.
Every step of the petitioners in this entire litigation was contested and fought most stubbornly by exceedingly able counsel, and, according to the records before me, the array of counsel representing the respondents was equal at least in numbers to those of the petitioners. With little money with which to make the fight for their clients, petitioners have shown an intelligent understanding of a most intricate proceeding; have with care and skill mapped out and prepared a plan; have shown a bulldog determination and zeal such as is seldom seen under like conditions; and have displayed an ability in the carrying through all their plans which is a credit to the profession. The petitioners were opposed by counsel of recognized ability, not only in this State, but in other States; and it required considerable ingenuity, skill, and ability to carry to its final conclusion the plan originally worked out.
It is with no little embarrassment that I attempt to arrive at a figure which would represent just and fair counsel fees. The claim of the petitioners is supported by very strong testimony, but I find myself unable to agree entirely with any of the amounts suggested. The attorneys representing the petitioners are entitled to a reasonable fee, and, from my study of this entire record, I have decided to recommend a fee of $125,000.00.
At the first reference, Mr. Thornwell McMaster filed a claim of $2,890.00 for services rendered as an engineer during the litigation involved. The referee explained to Mr. McMaster that this bill was not covered by the statement filed by the petitioners, and that I had no authority under the order of this Court to consider anything else. However, in fairness to Mr. McMaster and in order that the Court might have the record before it, I allowed Mr. McMaster to give his testimony at the second reference explaining just what his claim was, how it arose, and for whom the work was done. I do not attempt to recommend to the Court what disposition shall be made of this item, but simply submit to the Court for its action the facts that were brought out before me.
All of which is respectfully submitted.
Messrs. Christie Benet, Melton Belser, Irvine F. Belser, Harry N. Edmunds, C.T. Graydon and Nelson Mullins, for petitioners, cite: Petitioners entitled to have adequate counsel fees assessed against respondent companies: 3 Civ. Code 1922, Secs. 488, 4811, 4812, 4820, 5059, Code Proc. 1922, Sec. 797. Purpose of legislation: 207 U.S. 73; 73 S.C. 71. Respondent operated interurban railroad: 24 F.2d 828; 27 F.2d 52. Stay order did not affect prior violations: 234 U.S. 459. "Willfully": 31 Iowa, 187; 8 words P., 7472. Attorneys' fees included under "damages and costs": 38 C.J., 928; 117 S.C. 7; 234 U.S. 459; 133 Pac., 1095; 10 S.C. 40; 165 N.W., 281; 19 S.C. 223; 39 S.C. 427; 18 S.C. 597; 144 Pac., 222; 121 Pac., 1111; 213 Pac., 594; 133 Pac., 1095; 272 Pac., 677; 139 Pac., 1028; 28 A.L.R., 775; 4 Suth. Damages, 305; 14 R.C.L., 486; 2 Suth. Damages, 1719-1726; 13 S.C. 445; 105 U.S. 527; 28 F.2d 245. Trust estate must bear expenses of administration: 105 U.S. 527; 24 S.C. 238. Petitioners entitled to adequate attorneys fees: 113 U.S. 116; 151 U.S. 333; 172 Fed., 971; 258 Fed., 339; 280 Fed., 64; 8 F.2d 777; 31 F.2d 702; 28 Fed. 2d 233; 13 S.C. 445; 45 S.C. 319; 57 S.C. 305; 49 A.L.R., 1150, 1161, 1190. Court has power to grant equitable relief incidental to suit: Constitution 1895, Art. 5, Secs. 1, 4, Code Proc. 1922, Sec. 26; 85 S.C. 546. Mandamus largely controlled by equitable principles: 249 U.S. 367; 265 U.S. 86. Counsel fees allowable in favor of complainant acting the part of a trustee: 105 U.S. 527; 113 U.S. 116; 49 A.L.R., 1150; 93 Tenn., 691; 31 F.2d 277; 49 Eng. Rep., 353; 13 Allen, 474; 13 S.C. 445; 21 S.C. 62; 24 S.C. 238, and cases cited; 49 A.L.R., 1149. Rule applicable in favor of Attorney General or creditor recovering property for corporation: 49 A.L.R., 1190; 64 S.C. 92; 75 N.W., 964; 82 S.C. 382; 88 S.C. 438; 31 F.2d 702. Fees should be paid by corporation out of assets recovered: 187 Fed., 595; 146 N.W., 212; 299 Fed., 424; 59 A.S.R., 140; 41 Pac., 328; 138 N.E., 557; 129 Fed., 141; 280 Fed., 64; 172 Fed., 971; 8 F.2d 777; 250 Fed., 513. Counsel fees chargeable out of funds of a public charity or public corporation: 49 Eng. Rep., 353; 24 Eng. Rep., 432; 13 Allen, 474; 3 Pom. Eq. Jur., Secs. 1094, 1095, 1096; 69 A.S.R., 915. Respondents liable for attorneys' fees on account of vexatious litigation: 245 Fed., 636; L.R., 39; Ch. Div., 133; 14 N.J. Eq., 324; 70 S.W. 410; 28 F.2d 233. Proceedings for the recovery of assets in interest of respondent companies: 30 Atl., 238; 108 Penn., 314; 113 Penn., 631; 105 U.S. 527. Amount of fees: 9 A.L.R., 237, and cases cited; 81 S.C. 495; 13 S.C. 446; 50 S.C. 140; 57 S.C. 305; 280 Fed., 64; 172 Fed., 971; 8 F.2d 777; 250 Fed., 513.
Messrs. Haynsworth Haynsworth and Elliott, McLain, Wardlaw Elliott, for respondents, cite: Attorneys not entitled to fees in mandamus proceeding: 68 S.C. 243; 68 S.C. 212. When attorneys' fees allowable from fund recovered: 21 S.C. 162; 24 S.C. 238; 25 S.C. 494; 25 S.C. 193; 30 S.C. 483; 36 S.C. 19; 27 S.C. 97; 81 S.C. 495; 76 S.C. 226; 139 S.C. 411; 93 S.C. 30. Statutes imposing costs are penal in nature: 113 S.C. 99; 15 C.J., 114, 115. Attorneys' fee not recoverable: 113 S.C. 99; 39 S.C. 463; 3 Hill, 324; 93 S.C. 30; 15 Wall., 211; 184 U.S. 497; 234 U.S. 459. Amount of fees: 93 U.S. 548; 276 U.S. 294; 46 F.2d 938.
December 23, 1931. The opinion of the Court was delivered by
The report of the special referee, L.W. Perrin, Esq., in this cause, shows that he very carefully and painstakingly went thoroughly into all the issues and matters, both as to the law and the facts involved, many of which are not only important, but are of new and novel impression. We have considered with the report the voluminous record submitted to the Court, and have read with care the testimony of the witnesses. It happens, too, as the referee stated in the report, that the members of this Court are quite familiar with the matters of fact pertaining to the questions for determination. The report of the referee and the "Statement of Facts," set forth in the transcript of record, beginning at page 20, referred to by the referee, give all the necessary facts, and they will be reported.
To the referee's report, both the petitioners and the respondents have excepted. In this opinion, we shall refer to them as petitioners and respondents, not using the usual terms of appellants and respondents.
We take up first some of the exceptions of the respondents.
As to subdivision (a) of the respondents' first exception, we agree with them that the referee should not have allowed the claim in the sum of $25.00 for money advanced to J.C. Oxner, Esq., by the Attorney General for services in examining records in the preparation of the case. Mr. Oxner, it appears, was employed by Messrs. Melton Belser, associate counsel with the Attorney General, on a salary basis; the work he did was performed, however, out of his regular office hours. The records examined by him, though, were for the purpose of a hearing before the Railroad Commission, long prior to the institution of this suit. This Court is of the opinion that the counsel who engaged Mr. Oxner should remunerate him for his legal services, and we see no basis for the charging of this particular item to the respondents.
What we have said as to the claim of Mr. Oxner also applies very much as to the sum of $60.00 advanced to Mr. Thornwell McMaster, an engineer, for examining records, referred to in Subdivision (b) of respondents' first exception. The attorneys in charge of a cause are expected to attend to the matter of examining records, and expenses for that class of work should be taken into account in fixing their fees. If Mr. McMaster has a claim, we think it is against the attorneys and not against the respondents here.
We also sustain Subdivision (c) of Exception 1 as to the sum of $947.17, paid by petitioners' counsel, after issue of the writ herein, to Legare Engineering Company for making examinations and reports as to the street railway system to those attorneys. The Court appointed a board of engineers to supervise the rehabilitation of the street railway system in the City of Columbia, which was consented to by both the petitioners and respondents, and it was provided that the respondents should pay the expenses of such engineers, and they, it appears, have been complying with the order of this Court. The petitioners did not have the consent or authority of the Court to employ Legare Engineering Company, and no request was made of the Court for their employment. The main petitioner, the City of Columbia, had in its regular employ a city engineer, who is charged with many duties regarding the construction of the street railway lines, and petitioners had the right to call upon him for such examinations and reports as they needed.
Regarding the three items mentioned above, the petitioners took the position that the respondents should not now be allowed to object to them, for the reason that the respondents had waived objection to two somewhat similar items. We cannot agree with this position. Because the respondents were liberal enough to agree to some items of expense claimed by the petitioners, which they may have questioned, is not good reason for holding that they should be estopped from objecting to other items.
In connection with the exceptions of the respondents to the allowance of $125,000.00 by the referee as a fee to petitioners' attorneys, we have considered also the one exception of the petitioners alleging error on the part of the referee in not allowing petitioners' counsel a fee of $250,000.00.
It is to be observed that nobody seems to be pleased as to the amount of fees allowed by the referee; the petitioners being of the opinion that they were allowed just half enough, while the respondents think they were allowed entirely too much, if entitled to anything at all.
While fully agreeing with the referee that petitioners' counsel are entitled to a reasonable fee for the very arduous, valuable, beneficial, and successful services rendered by them in the cause, we think this Court is limited in fixing such fees to the services rendered by the counsel in the Courts of this State. We know of no authority which would permit this Court to fix fees for attorneys for services in a cause in any of the Courts of the United States, the Supreme Court, the Circuit Court of Appeals, or in the District Court. To that extent we must disagree with the conclusion of the referee, which apparently, he somewhat doubted, that petitioners' counsel might be entitled from this Court to compensation for their services in the bankruptcy proceedings in the United States District Court and the Circuit Court of Appeals. If counsel are entitled to any fees for services in any Court of the United States, they must make proper application to that Court for the allowance. In considering the exceptions referred to, and in fixing the fee which we think is reasonable and proper, we do not regard any services rendered by petitioners' counsel in any Court of the United States, confining our examination and determination entirely to such services as were performed in the Courts of the State of South Carolina.
We do not deem it at all necessary to go fully and with detail into all the matters and things which we have considered in passing upon the allowance of the proper amount to be paid counsel for the petitioners in the cause. We have considered this important matter from almost every conceivable angel, and have taken into due consideration the helpful testimony of the witnesses, honorable gentlemen of the bar, well acquainted with proper compensation to be paid counsel, who testified, as well as the views of the very fair and capable referee. We have resorted also, as it was proper for us to do, to our own knowledge and experience as former practitioners, as well as to our general information obtained as members of this Court, as to proper compensation to be paid to attorneys for their services. It happens that the members of the Court are well acquainted with the work performed by petitioners' counsel in this cause, much of which was rendered in this Court during the long pendency of this important litigation. Naturally, we are in sympathy with the view that petitioners' counsel should be well compensated for their services, because, without doubt, they performed their duties to their clients, to this Court, and to the public at large in a most diligent and able manner. We must, however, consider the rights of the respondents. And, while their conduct in seeking to get rid of their contracts with the petitioners and the people should by no means be commended, we feel that they are now seeking to make amends for the high-handed manner in which they formerly sought to disregard the rights of the people who had given them public service franchises. This Court should have in mind also the fact that, in fixing counsel fees in this matter, we are making a precedent and guide, which not only this Court, but other Courts in this State, may be asked to follow. The interests of the people who have litigation in our Courts, as well as attorneys who appear in such litigation, must be regarded. On the one hand, while we have a feeling that faithful lawyers are entitled to fair compensation for their services, on the other hand, it is our duty, not only to the members of the bar generally, but to the public as well, to see that attorney's fees are not unconscionable. We are frank to say that, if we commit an error, we prefer to have it said that the fee we fixed was too low, rather than for any proper person to honestly feel we had made it too high. After due consideration of everything occurring to us, we have reached the conclusion, and so determine, that the fee for the petitioners' counsel should be, and is fixed at, the sum of $60,000.00 and to that extent the report of the referee is modified.
The exceptions of the respondents, not specifically referred to by us, question only the correctness of the conclusion of the referee that the petitioners' counsel are entitled to attorney's fees. We have not deemed it necessary to go into these, as we fully agree with the referee's conclusions, except as modified herein. All the exceptions, not specially mentioned, are overruled.
In the report of the referee, he referred to a claim filed with him by Mr. Thornwell McMaster in the sum of $2,890.00, for services rendered as an engineer during the litigation involved in this cause and the testimony taken in support of the claim. So far as the record discloses, it appears that neither the petitioners nor the respondents knew of this claim until it was filed with the referee. The matter had not before that time been presented to this Court. The claim of Mr. McMaster was not referred to in the petition of the petitioners or in the itemized expense account filed by them with the referee, pursuant to the order of the Court. After the referee filed his report, Mr. McMaster, through his counsel, Barnard B. Evans, Esq., gave notice to the attorneys for the respondents that he would move this Court for an order allowing the Clerk to tax and assess against the respondents as costs and disbursements the amount of the claim of Mr. McMaster. In due time, the Court heard Mr. McMaster's counsel and the attorneys for the respondents as to the allowance of this claim. On examination, we find no basis for allowing the claim. Mr. McMaster was not employed under the order of the Court, or with the Court's consent, or with the consent of the parties in the cause, so far as the record here shows. If he rendered any service to the petitioners, they may be responsible to him, and, since the petitioners have not claimed any reimbursement for his services, we do not see how this Court can give any regard to the matter. This claim, as the other claim of Mr. McMaster, to which reference has already been made, is not a proper allowance as damages against the respondents, under the order of the Court. As to any and all claims of Mr. McMaster, we express no opinion as to whether or not they should be paid by the petitioners or petitioners' counsel. Those matters are not now before the Court, and what we have said is not to be taken as an indication of any opinion we may have. What we do say is stated with the purpose mainly of not precluding Mr. McMaster in asserting any claim he may have. We dismiss, however, without prejudice to any of the parties, the motion of his counsel mentioned heretofore.
The judgment of this Court is that the report of the referee, as modified herein, be, and the same is hereby, affirmed.
MESSRS. JUSTICES STABLER, CARTER and BONHAM concur.
MR. JUSTICE COTHRAN did not participate on account of illness.