Rude v. Buchhalter - 286 U.S. 451 (1932)
U.S. Supreme Court
Rude v. Buchhalter, 286 U.S. 451 (1932)
Rude v. Buchhalter
Argued April 28, 1932
Decided May 23, 1932
286 U.S. 451
Upon cross-appeals from a decree dismissing a suit over a fund deposited in escrow, held:
1. The appellate court went beyond the record and the evidence in holding that the plaintiff depositor was guilty of fraud and
bad faith in bringing and maintaining the suit, and that the other depositor should therefore have a lien on the fund for his expense, including attorneys' fees, in the litigation. P. 286 U. S. 460.
2. Nice distinctions as to which of these two parties was the more lacking in good faith or standards, toward others or towards each other, are not sufficient to warrant putting upon one any part of the expenses incurred by the other in waging the contest. P. 286 U. S. 461.
3. By the granting of such a lien, when it was not applied for and when the plaintiff had no reason to apprehend that it would be considered, the plaintiff was denied an opportunity to be heard in respect of the authority of the court to make such an allowance and as to the facts touching the propriety or basis for making it. P. 286 U. S. 460.
4. Petition for rehearing and its denial upon a reasoned opinion were not the equivalent of a hearing in advance of decision. Id.
5. The reasonable expenses, including attorneys' fees, incurred by the depositary in the suit and which are attributable to the discharge of its duty under the escrow agreement, properly may be made a first charge against the fund. P. 286 U. S. 461.
6. The depositary is not entitled, as against the plaintiff depositor, to any allowance of expenses or counsel fees incurred to protect its own claim against the fund to secure a debt owing to it by the other depositor. Id.
54 F.2d 834 modified and affirmed.
Certiorari, 285 U.S. 535, to review the reversal of a decree dismissing the bill in a suit by one of two depositors of a fund to obtain judgment against the other and to make it a lien on the fund. Claims of attorneys and of
the depositary were also involved.