U.S. Supreme Court SPRAGUE v. TICONIC NAT. BANK, 307 U.S. 161 (1939)

[Page 307 U.S. 161, 165]

by Congress, e.g., Michaelson v. United States, 266 U.S. 42, 45 S.Ct. 18, 35 A.L.R. 451. The sources bearing on eighteenth-century English practice-reports and manuals-uniformly support the power not only to give a fixed allowance for the various steps in a suit, what are known as costs 'between party and party,' but also as much of the entire expenses of the litigation of one of the parties as fair justice to the other party will permit, technically known as costs 'as between solicitor and client.' [Footnote 2] To be sure,

[Page 307 U.S. 161, 166]

the usual case is one where through the complainant's efforts a fund is recovered in which others share. Sometimes the complainant avowedly sues for the common interest3 while in others his litigation results in a fund for a group though he did not profess to be their representative. [Footnote 4] The present case presents a variant of the latter situation. In her main suit the petitioner neither avowed herself to be the representative of a class nor did she automatically establish a fund in which others could participate. But in view of the consequences of stare decisis, the petitioner by establishing her claim necessarily established the claims of fourteen other trusts pertaining to the same bonds.

[Page 307 U.S. 161, 167]

Whether one professes to sue representatively or formally makes a fund available for others may, of course, be a relevant circumstance in making the fund liable for his costs in producing it. But when such a fund is for all practical purposes created for the benefit of others, the formalities of the litigation-the absence of an avowed class suit or the creation of a fund, as it were, through stare decisis rather than through a decree- hardly touch the power of equity in doing justice as between a party and the beneficiaries of his litigation. As in much else that pertains to equitable jurisdiction, individualization in the exercise of a discretionary power will alone retain equity as a living system and save it from sterility. In the actual exercise of the power to award costs 'as between solicitor and client' all sorts of practical distinctions have been taken in distributing the costs of the burden of the litigation. [Footnote 6] And so, the circumstances under which the petitioner enforced the fiduciary obligation of the Ticonic Bank-the relation of its vindication to beneficiaries similarly situated but not actually before the court, as well as the interest of the common creditors where the funds of the bank are not sufficient to pay them in full, and doubtless other considerations- must enter into the ultimate judgment of the District Court as to the fairness of making an award, or the extent of such award, 'as between solicitor and client' in this case. In any event such allowances are appropriate only in exceptional cases and for dominating reasons of justice. But here we are concerned solely with the power to entertain such a petition.

[Page 307 U.S. 161, 170]

in question was made prior to the operation of the new Rules. Since we view the petition for reimbursement as an independent proceeding supplemental to the original proceeding and not a request for a modification of the original decree, the suggestion of the Circuit Court of Appeals-that it came after the end of the term at which the main decree was entered and therefore too late-falls.

The decision of the Circuit Court of Appeals must be reversed so that the District Court may entertain the petition for reimbursement in the light of the appropriate equitable considerations.

REVERSED.

Mr. Justice McREYNOLDS and Mr. Justice BUTLER concur in the result.

Mr. Justice DOUGLAS took no part in the consideration or decision of this case. Footnotes

Footnote 1 See Robinson v. Campbell, 3 Wheat. 212, 222; Boyle v. Zacharie, 6 Pet. 648, 658; Pennsylvania v. Wheeling Bridge Co ., 13 How. 518, 563; Payne v. Hook, 7 Wall. 425, 430; Rule XXXIII, Rules of Practice for the Courts of Equity of the United States, 1822, 7 Wheat. v, xiii; Rule XC, Rules of Practice for the Courts of Equity of the United States, 1842, 1 How. xli, lxix; 1 Story, Equity Jurisprudence (14th Ed.) 57, 58; 1 Street, Federal Equity Practice, 97.

Footnote 2 See Lomax v. Hide, 2 Vern. 185; Ramsden v. Langley, 2 Vern. 536; Attorney General v. Carte, 1 Dick. 113; Attorney General v. Haberdashers' Co. and Tonna, 4 Brown C.C. 179; Ex parte Thorpe, 1 Ves.Jun. 394; Moggridge v. Thackwell, 1 Ves.Jun. 464; Dungey v. Angove, 2 Ves.Jun. 304. See 2 Adair, Law of Costs in Courts of Equity, 81, 87, 179; 2 Barbour, Chancery Practice (2d Ed.) 889-894; Beames, Costs in Equity (2d Ed.) 144- 146; 3 Daniell's, Chancery Pleading and Practice (2d Ed.) 1434-1435; 2 Smith, Chancery Practice (2d Ed.) 697-700 One must, of course, be not unmindful of the inadequacy of eighteenth-century chancery reports, see 2 York, Life of Lord Chancellor Hardwicke 429, particularly as to matters of costs. See Beames, Costs in Equity (Advertisement to Second Edition). But the current of authority is uniform and unequivocal.

The power of the federal courts to give costs was recognized by implication in the First Judiciary Act. Act of September 24, 1789, Ch. 20, Sec. 20, 1 Stat. 83, 28 U.S.C.A. 815. The statutory system prior to 1853 required 'party and party' costs to be taxed on the basis of the fees allowed by state practice, but the Act of Feb. 26, 1853, c. 80, 10 Stat. 161, set a uniform scale of fees for 'party and party' costs in the federal courts. See Costs in Civil Cases, 30 Fed.Cas.No.18,284; Street, Federal Equity Practice 1984-1988. As to sts 'as between solicitor and client', the English practice was followed by the Supreme Court and it was held that the allowance of such costs was within the authority of the federal courts. Trustees v. Greenough, 105 U.S. 527; Dodge v. Tulleys, 144 U.S. 451, 12 S.Ct. 728; Meddaugh v. Wilson, 151 U.S. 333, 353, 14 S.Ct. 356, 364; compare Central R.R. v. Pettus, , 5 S.Ct. 387; see 4 Cyclopedia of Federal Procedure 1086; 2 Foster, Federal Practice (6th Ed.) 422; 2 Street, Federal Equity Practice 2033-2048. Compare the practice in admiralty, shown in The Appollon, 9 Wheat. 362; Canter v. American Insurance Companies, 3 Pet. 307. The provisions of the fee bill of 1853 that certain specified fees and no others shall be taxed to attorneys in the courts of the United States applies only to 'party and party' costs. Trustees v. Greenough, 105 U.S. 527.

Footnote 3 E.g., Tootal v. Spicer, 4 Sim. 510; Hood v. Wilson, 2 Russ. & M. 687; Stanton v. Hatfield, 1 Keen 358; Sutton v. Doggett, 3 Beav. 9; Goldsmith v. Russell, 5 De.G.M. & G. 547; Henderson v. Doods, L.R. 2 Eq. 532; Ferguson v. Gibson, L.R. 14 Eq. 379; Jervis v. Wolferstan, L.R. 18 Eq. 18.

Footnote 4 E.g., Thomas v. Jones, 1 Dr. & Sm. 134; compare In re Richardson, 14 Ch.Div. 611.

Footnote 5 For examples of the discretionary nature of the authority of equity to tax costs, see 3 Daniell's, Chancery Pleading and Practice (2d Ed.) 1381-1410; 2 Street, Federal Equity Practice 1994-2007.

Footnote 6 See 3 Daniell's, Chancery Pleading and Practice (2d Ed.) 1434-1440; 2 Street, Federal Equity Practice 2033-2048.

Footnote 7 In Kansas City Southern Ry. v. Guardian Trust Co., supra, costs 'as between solicitor and client' had been asked in suggestions on appeal from the original disposition of the cause. The Circuit Court of Appeals, while affirming on the merits, passed on these suggestions in a way interpreted by this court to allow only 'party and party' costs. No appeal had been taken on this point. A subsequent application in the District Court for 'solicitor and client' costs was therefore held barred.

Footnote 8 In Trustees v. Greenough, supra, suit was brought by a holder of certain bonds against the trustees of the state improvement fund alleging mismanagement and waste of the fund which was to secure the bonds and asking that his claim be allowed, that the fund be charged with the payment thereof, and that an accounting be had. This relief was granted, much property was reclaimed to the fund and agents were appointed for the sale of the property of the fund for the purposes of liquidation. During the liquidation, the holder of the bonds who had initiated the proceedings filed his petition for an allowance from the fund of his costs as between solicitor and client. Such costs were allowed without any suggestion that the application for them was not timely.

Footnote 9 Prior to the adoption of the new Rules of Civil Procedure, a final decree in a suit in equity could be revised only during the term of court of its entry. Cameron v. M'Roberts, 3 Wheat. 591; Buckeye Co. v. Hocking Valley Co., 269 U.S. 42, 46 S.Ct. 61. The same limitation existed on the power of a district court to grant a rehearing of an appealable decree. Equity Rule 88. These time limitations are no longer applicable. Rules 59 and 60 of the Rules of Civil Procedure, 28 U.S. C.A. following section 723c, set forth the time in which these actions may be taken, but under those sections the passage of the term of court is not material. Indeed, Rule 6(c) provides: 'The period of time provided for the doing of any act or the taking of any proceeding is not affected or limited by the expiration of a term of court. The expiration of a term of court in no way affects the power of a court to do any act or take any proceeding in any civil action which has been pending before it.' It was stated in the Notes to the Rules of Civil Procedure, prepared by the Advisory Committee, March 1938, that this section 'eliminates the difficulties caused by the expiration of terms of court.'