Paramount Pictures Inc. v. Sparling

[122 CalApp2d Page 222] This is an appeal from an order denying two motions to fix and award reasonable attorneys' fees to plaintiffs' counsel and to order such fees paid out of the assets in the hands of respondent Superintendent of Banks (hereinafter called the superintendent) which are available for the payment of interest upon the approved claims of depositors or creditors of The Yokohama Specie Bank, Ltd. (hereinafter called the bank). The theory of appellants is that in the main litigation they established the right of all such creditors and depositors to interest as a class and that following the settled equitable principle an award may be made for attorneys' fees to be paid from the common fund so made available for the payment of such interest. (Adams v. California Mut. B. & L. Assn., 18 Cal. 2d 487 [116 P.2d 75]; Winslow v. Harold G. Ferguson Corp., 25 Cal. 2d 274 [153 P.2d 714]; Estate of Marre, 18 Cal. 2d 191 [114 P.2d 591]; Ticonic Nat. Bank v. Sprague, 303 U.S. 406 [58 S.Ct. 612, 82 L.Ed. 926].) A brief history of the main litigation in which the services of these attorneys were rendered will be helpful to a proper disposition of the points argued on this appeal. Following the Japanese attack on Pearl Harbor the respondent superintendent assumed control of the bank and its assets and [122 CalApp2d Page 223] thereafter the United States Treasury Department licensed the superintendent to liquidate the bank and to act as conservator. In due course appellants, who were large depositors, presented their claims to the superintendent for the principal amounts of their deposits with interest thereon. The superintendent allowed the claims as to principal but rejected them as to interest. Appellants thereupon commenced these actions seeking a determination that they were entitled to interest out of any assets remaining after the payment of principal. The Alien Property Custodian (hereinafter called the custodian), who had vested the bank's assets, intervened and opposed the payment of interest. The superintendent by answer alleged the conflicting claims of the plaintiffs and the custodian and requested the court to adjudicate their adverse claims for his protection. On the issues so made the cases went to trial and the court entered its judgments determining the plaintiffs' right to interest. The superintendent and the custodian appealed and the judgments were affirmed by this court in Paramount Pictures, Inc. v. Sparling, 93 Cal. App. 2d 768 [209 P.2d 968]. The superintendent and the custodian petitioned the Supreme Court of California for a hearing and those petitions were denied. (93 Cal. App. 2d 777.) The superintendent and the custodian then filed petitions for certiorari in the United States Supreme Court, which petitions were also denied. (McGrath v. Paramount Pictures, Inc., 339 U.S. 953 [70 S.Ct. 838, 94 L.Ed. 1366]; Sparling v. Paramount Pictures, Inc., 339 U.S. 953 [70 S.Ct. 839, 94 L.Ed. 1366].) One of the controlling issues in these cases was the claim by the custodian that under section 5 (b) (2) of the Trading With the Enemy Act the payment of the principal of the deposits when due was excused and for this reason the plaintiffs were not entitled to interest. The portion of that section relied upon reads: ""No person shall be held liable in any court for or in respect to anything done or omitted in good faith in connection with the administration of, or in pursuance of and in reliance on, this subdivision, or any rule, regulation, instruction, or direction issued hereunder.""