Craemer v. Drake

SHENK, J. In the case of In re Pacific Coast Building-Loan Association, L. A. No. 16540 (ante, p. 134 [99 Pac. (2d) 251]), this day decided, the Building and Loan Commissioner, as liquidator of Pacific Coast Building-Loan Association, petitioned the superior court for instructions concerning the ranking of claims of investment certificate holders and membership shareholders of the association. His petition showed that investment certificate holders had been or would be paid the principal of their claims in full, and a question had arisen as to whether they should be paid interest thereon for the period of liquidation, in which event the assets would be insufficient to pay even the principal of the claims [157]of membership shareholders. A hearing was had, at which various investment certificate shareholders and membership shareholders appeared by counsel and argued the matter at length. The trial court decided in favor of the claims of membership shareholders, ordering payment of their principal before any interest during liquidation might be paid to investment certificate holders. On appeal, we have affirmed the order.

After the lower court’s order, two groups of counsel representing the successful membership shareholders moved the court for an allowance of attorneys’ fees for their services in the proceeding, to be paid out of the assets of the association. The court denied the motion. In its memorandum opinion explaining the denial of the motion of H. P. Drake et ah, the court declared that in its opinion the services were of the value of $15,000, and that said sum would be allowed if the moving parties were entitled to any allowance. But the court further declared “that this proceeding is not of the character which entitles a successful group to recover attorneys’ fees from the common fund and upon that ground alone the application was denied”. A similar order was made with respect to the application of counsel for Clarice B. Holmes, et al., who sought an allowance of $3,000. (In re Pacific Coast Building-Loan Association, L. A. No. 16699.) An appeal was taken from the order in each case. As the same question is involved in both, the appeals will be disposed of in this opinion and order.

The record in the main appeal leaves no doubt as to the ability and industry of counsel for these groups of membership shareholders, and we find no reason to question the trial court’s conclusion as to the value of their services. The sole question, as said court pointed out, is whether the proceeding was a proper one for the award of attorneys ’ fees. In our opinion it was not.