Corporation of St. Anthony in New Bedford v. Houlihan , 106 C.C.A. 394 ( 1910 )

PUTNAM, Circuit Judge.

This was an action of contract, in which the original plaintiff, whom we here will style the plaintiff, claimed $14,000, and the defendant declared in set-off for $52,772.05. The case was evidently one in which the court might, of its own motion, have required an auditor, hut the following order was made:

"February 32, 19(K>, by agreement of the parties, it is ordered by the court that Clarence IT. Cooper, Ksquire, be and hereby is appointed auditor in the above-named action, to hoar the parties, state the facts, and report the questions of law and evidence relating thereto as either party may request”

It appears that the proceedings before the auditor were reported by a stenographer, that the stenographer was selected by the parties, and that one-half of his charges for his official work was paid by each of the parties as the case progressed. There is nothing- in the record to show that the stenographer was formally appointed by the auditor, and nothing to show any agreement as to the ultimate payment of the stenographer’s charges. The presumption is, however, that what was done with reference to the stenographer was in order to harmonize the parties in his selection, and to arrange convenient advances to him as the work progressed. In other words, in the absence of anything to the contrary, the presumption is that the case stands legally as it would have done if the stenographer had been expressly selected by the auditor, and the stenographer’s charges paid by the plaintiff, as well as those of the auditor, without any agreement as to the ultimate disposition in regard thereto.

The auditor stated the account for the plaintiff so as to show an amount due him of $34,082.08, and disallowed the entire set-off of the defendant. The jury rendered a verdict in favor of the plaintiff, but reduced the auditor’s finding to $4,000 and interest, and judgment for that amount was entered for him. The court taxed against the defendant the entire amount of the auditor’s charges, including the charges of the stenographer, except so far as they had been paid by him. Thereupon the defendant sued out this writ of error.

We need not discuss the question whether in an action of law like this a writ of error lies on a question of costs alone, because that is fully settled to be within the range of the statute establishing the Circuit Courts of Appeals. The City of Augusta, 80 Fed. 297, 304, 25 C. C. A. 430. Neither will we discuss the citations made by the defendant to the effect that auditors’ fees are not taxable in federal courts. None of them sustain that proposition. Even were the local decisions adverse to such taxations, yet, as said by the Circuit Court in Primrose v. Fenno, 113 Fed. 375, 376, decided February 7, 1902, no rules of that character in the local courts bind us “so far as to embarrass us in doing justice between parties.”

There can be no question of the right of the federal courts in this circuit to allow auditors’ reasonable fees and reasonable disbursements in suits at law, as well as of their duty to do so. While in equity the courts have large discretion in matters of costs, .at law they, as we will show, must follow fixed rules with some very slight exceptions, as in Primrose v. Fenno, already cited, and also disposed of on appeal in 119 Fed. 801, 56 C. C. A. 313, by an opinion passed down January 7, 1903. Primrose v. Fenno was a special case, where the court appointed an auditor of its own motion and entirely for its own protection, and ultimately divided the costs of the auditorship, applying there the rule explained in Whipple v. Manufacturing Co., 3 Story, 84, 86, Fed. Cas. No. 17,515, with reference to dividing between the parties the costs of a survey ordered by the court. This was one of the exceptional cases to which we refer, where the court was required, from the very peculiar circumstances, to exercise its discretion in adjusting the costs of the auditorship as it did.

None of the cases cited by the defendant sustain its proposition that either the Supreme Court of the United States or the Massachusetts courts have refused to compensate a stenographer reasonably employed by an auditor under the usual circumstances. For the reason already given, if the state courts had established such a rule, we would not feel bound to follow them, because for us to refuse an auditor the assistance of a stenographer, or to compel him to pay the stenographer out of his own fees, would merely obstruct the course of justice with reference to cases involving extensive investigation. Judges must know as a matter of judicial information that the use of stenographers often largely reduces the expenses of legal investigations, as well as the time and labor involved therein. It must also be accepted that, when the court appoints an auditor, it by implication authorizes him to make such disbursements as are reasonably desired for the proper administration of the duties of his office. Of late years the use of stenographers, including their use by auditors and masters, has been so general that, in view of what we have said, it must be assumed that, when a court appoints an auditor; it by implication au-thorizés and directs him to make reasonable use of stenographers. Therefore, in this case, we must assume there was an implied order in favor of such a use. There are, of course, extreme cases where even a formal order of the court does not so far protect disbursements as to permit taxation thereof in costs; but where the order, whether expressed or by implication, is in accordance with the general practice, or is clearly in furtherance of advancing the ordinary progress of the cause, the action of the court, according to the common understanding, protects the disbursements. Paragraph 10 of rule 23 of the Circuit Court in this district, providing for taxing the cost of a brief when not exceeding 20 pages, illustrates this proposition. It is more specifically illustrated by the decision of the Circuit Court of Appeals for the Ninth Circuit in Jacobsen v. Exposition Co., 112 Fed. 73, 80, 50 C. C. A. 121, where a commission paid a surety company was allowed, resting for the allowance on the direction contained in admiralty rule 53 requiring a respondent to a cross-libel to give security. The same rule was lately applied for the same reason hy the Circuit Court of Appeals in the Second Circuit in The Volund, 181 Fed. 643, 667.

No complaint is made that the employment of the stenographer under the present circumstances was unreasonable. Therefore his charges must be classed with the ordinary charges necessarily incurred by the auditor. In the present case the defendant might have been relieved from the burden of these charges by offering early in the litigation to be subjected to a judgment for the amount lawfully due from him; and, in any event, any party may protect himself against unreasonable employment of stenographers by auditors, or against payments to stenographers of unreasonable amounts, by seasonable application to the court in reference thereto. There may, of course, be occasional cases of special hardship arising out of the payment of costs of this class; but probably such cases will not occur more often than with reference to other costs taxed according to the settled practice of the courts, and by vigilance on the part of counsel, such special hardships can ordinarily be avoided in the way we have shown, and otherwise.

In conclusion, as this is a suit at common law, the prevailing party was entitled to his costs lawfully taxed; and while, perhaps, there is no statute which in express terms establishes this proposition, yet, as explained in Hathaway v. Roach, 2 Woodb. & M. 63, 61, 65, Fed. Cas. No. 6,213, and The Baltimore, 8 Wall. 377, 390, 19 L. Ed. 463, there are statutes which recognize this right to costs, and there have been other such statutes enacted since the decisions cited. The fundamental proposition, however, is that the Statute of Gloucester (6 Edw. I, c. 1), giving the prevailing party his right to costs, was fully recognized in England for so many years that it became a part of the common law in this country, and became obligatory on the Federal courts, as stated in Day v. Woodworth, 13 How. 363, 372, 14 L. Ed. 181, in 1851, and again in The Baltimore. Tt must thus be agreed that the prevailing party in common-law suits in the federal courts has been fully- and always recognized as entitled to his costs as a matter of right. There is also, as we have shown, an implied order of the Circuit Court in favor of the payment of reasonable stenographers’ fees. We can discover nothing in any fundamental principle recognizing the allowance of costs, or in any decision, which permits us to refuse to apply the general rules to the present case.

'Pile judgment of the Circuit Court is affirmed, with interest, and the appellee recovers his costs of appeal.