October 5, 1934
On Petition for Rehearing.
We have reconsidered all the questions raised by defendant's petition for a rehearing. As to the main question, it makes no difference whether the plaintiff bases her right merely upon her position as pledgor or upon the relation of attorney and client; she is entitled to hold the defendant to an accounting in either case, and the pleadings will support a decree on either theory. We have again considered the effect of Bloomer v. Sturges, 58 N.Y. 168, and see no reason to change our belief that the decree of foreclosure in the present case did not fall within the ruling there made. Therefore we still adhere to our decision on the main question.
As to the offsets, we think that the allowance of $5,000 is adequate for the defendant's services in foreclosing the mortgage and caring for the property; it is nor far from 10 per cent of the total moneys coming into his hands. In collecting rents and selling the property, his services were not those of an attorney but of a real estate agent. Nor can he be paid for assuming liability as indorser of the notes, because there was no such arrangement in advance. The testimony of the defendant's witnesses and the finding of the master as to the value of the services we disregard because it seems to us plainly beyond any fair appraisal; in such issues we are at liberty to rely upon our own estimates, the matter being within our special acquaintance as much as within that of other members of the bar. The same applies to the allowance, $6,000 in all, which we have made for the defendant's services in the National City Bank matter.
However, there are some items as to which we are willing to entertain a rehearing. First, is the question as to the disallowance of $1,000 for proving the plaintiff's $11,000 claim against the Davitt estate.That he should receive $1,000 we cannot agree; the stake at best was no more than the Herrington claim with interest, nor over $2,500 at most. It may be that he should have been allowed $500 on this item. Again, in the Shanley Case, we may have allowed too little. We failed to observe that the defendant was an indorser on the note which he paid with the proceeds of the collection. This seems to break the force of the argument drawn from that payment. This may justify an added allowance of $380.09, the sum claimed. Finally, we are willing to reconsider our disallowance of $566 in item 8, miscellaneous services and disbursements. The gross tital of all the above items, which on rehearing might be allowed, is $1,446.09. That is the total of the increases which we might make. Our treatment of the disbursements in the matter of the Davitt estate was entirely correct; the defendant seems to have misunderstood it. In view of the large recovery, it is possible that the plaintiff may prefer to concede the items above mentioned rather than go to a rehearing. If so, a decree may be entered as prescribed in our original opinion, less $1,446.09. If the plaintiff is unwilling to concede these items, she may file a brief in answer to the defendant's petition for rehearing within two weeks after this opinion is filed, and we will either dispose of the matter on the briefs or send it to a master.
The plaintiff is entitled to interest upon the amounts received from the time of the defendant's receipt of them; the defendant to interest upon his counterclaims from the time they were due. He had no lien for his services, even those in caring for the mortgaged property.
We do not now pass upon the remedies open to the plaintiff when the decree is entered. The matter is not controlled by state decisions. This is a federal suit in equity. See Equity Rule 8 (28 USCA § 723, p. 12).
Petition denied except as above set forth.
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