DECISION NO. 59
IN THE MATrER
. a .
SMENT OF WAR
6848 AND 6630-6632
as Oil Company and the
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ing Company, Claimants
United States Asphalt Refin-
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EstabHshed in puzuance of the Agreement between the
United States and
Germany of August 10, 1922
CHANDLER AND PERSON
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..b.i be paid by each of them to their attorneys, Bainbridge Colby
Ewar D. Brown, of New York, New York, as compensation
: whatever services have
by the said
ita inf .h a.ra h ptm.r
7%n /nttt a i f aT
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and for the claimants
have afled dmi
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ng the reasonabst
brought to the a '""1 '
to the attorneys. Cbim
the attorneys a
^^^ ^^ /^ '**^.i;../< /< f <<1 *^ sil^'i'0
eir series in these laims it Hstythre0
f the amount of the proceeds of the
The awards in these claims were rendered on Augw
Parker, Umpire, on a certificate of disagreement of
Commissioners. Under Docket Wo. 6848, an war
behalf of The Interocean Oil Company for $447T,00
thereon at the rate of five per cent per annum from 0
to the date of payment, This amount represents
company's interest, as charterer, in the Norwegian
Christian Knudsen, at the date of her destruction on
submarine, less the
by the claiant
61, and 6632i an awprd was made on behalf of The
Asphalt Refining Company (a subsidiary of The Interocean
with interest thereon at the
cent per annum
decisions in these claims
(and in 13 other charter cass,
1925) and No.
(rende rd Aug' t
purpose of this proceeding,
26, it was engaged in a
very substantial business.
Thurber and a Mr.
Vice Presidents, George
, Secretary, and Nils B.
ham and Whitney are now
The claimant is now in
attorneys herein are
lawyers of high standing and reputation
During the past twenty-five ybars, except for the
Yw hen Mr. Colby wa
Secretary of State for the
ave been associated as partners in the practice of law.
* employment in connection with the claims here involved, the
ikeyi had been retained
by the claimant
a number of years
1ial cases, including suits against the claimant instituted by the
[ States Shipping
mate relationship existed between Mr. Colby and Mr. Govin,
di1 ot disputed that an oral agreement was entered into whereby
.t.t rueys herein were employed to represent the claimant with
Wihee to its claims against Germany upon a one-third contingent
In its Brief in this proceeding, however, the claimant con-
the claimants, suggested
it in December, 1921
be compelled to devote his
"; that Mr. Colby represented that he
own time and personal attention to
a i aentaton and argument of the claims "; that Mr. Colby rep-
id that he would
to retain eminent
l, to whom he would give up a large part of the fee "; and that
Iwas induced by
ix Colby in
stement in Mr
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in procuring an award or that he would have to use all the poli itiwI
influence he had in
able award." He
Washington in order to obtain any sort of fai1S
denies that there was any
agreement, express r'
*KKK X XXX *'*::* I Bfu't ^ l O ][U<^ ^^LJ^^
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, or any understanding, that he personally would present thW
before the proper commission or oar d.
practice to undertake
fee basis, and that his firm's employment in this case aro senllr .
a lawyer or banker,
public affairs very closely as they
eeived the idea in connection with the tiblic discussion of 06i~4~i
ied, sifted and adjudged for damages arising from
operations in t.
war, that a claim might be made out fo the Intero~an i 0
had sufered pome serious losses in connection with"the tank t
they were operating under time charter when the war broke out. S
often discussed this subject in a more or less tentative way wE epo
making a little progress each time toward clarity of idea about tee.ui
T was a numebsinn ilnnn rwnhh a- tfhe "ima nf thaaa rliicnni innL nn nna rrlil
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give an opinion that was more than tentative or provisional.
discussed the subject at that time with anyone of the Interocean Oil Companyl
were almost e
said Govin came to the opinion that he would
s contacts wi the c-
, the President. Finally, i
) have "a try at it" sand
leponent i he
said Govin in
and superfiia -
enmpany had any chance of recovery. Depo
to said Govin, not wishing to encourage him
nent expressed himself
in what appeared ad
ver speanlative undertaking. Finally, said Govin came to dekpon
and said that he would appreciate it very much if deponent and
ing his old partner, Mr. Brown,
with whom he was still in
tirb s ould look into the matter and tak su st i as
proper submission and to secure, if possible, an adjudication n and awara e
Said Govin further
RMunch in the claims
fond of money and part
.icularly ready money,
s associates thought that thi .:
hard-headed and practical Sme,:,
and that they "id ot desire -.
on the basis
listened to this
suggestion with open mind
*. company for a period in
of ten years
he had already been counsel
he had seen it through
g, such as Govin or a
: Mr. Govin stated
that he could
company with which
repulse a friend
deponent and his partner, Brown,
i.would see that they received one-third of whatever sum was recovered.
S 'N ::' ".....
1W talked this matter over with Mr.
telling him to acquiesce with Mr.
l Mr. Govin that deponent and his
!4 i lKy.~ ,
e matter on the terms proposed.
Brown and told him the considera-
suggestion and subsequently
associate Mr. Brown
Bars from Mr
I .1i fl:
ie. agreement with
idH :*. : t
t the conference which
of the claimant
It is clear,
had discussed the Question of compensation.
M**inot disputed that on December 28,
the claimant executed
reris of attorney appointing
i3F : "
prosecute its claim against
the Goverment of Germany
s sustained by it in consequence of the war
" subsequent to the
filing of the claims in
town on this subject until about July
when Mr. Colby
s-Mr. Govin the letter hereafter quoted.
to the files or records of either the claimant or the
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further inquiry with reference to the claims herein and a claim fii '
bty him on behalf of the claimant for additional hire upon the steazk .
Aztec, Breifond, Borgestad, and
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.Colby states in his affidavit
(pages 11 and 12): .. 3:41
work was undertaen, the investigations were made; they
on a ve
the sustained attention
ry broad scale, involving the
of deponent and Mr. Brown.
for nearly two years without any writing to confirm
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Both deponent and said Brown had imlicit confidence ln
was not until the lat Spring of 19i4 that deponent in thsork
which he had with said Govin remarked to Govin
preparation of these claims for
that the invest
great deal of time and that it would be a good idea to have some writf
memorandum of the arrangement regarding the compensation of deonent
said Edwa] 0 D. Brown.
It was suggested that the cases would a
already involved much work and
would continue to do so.
a that the
Imomentis hesitation said
" You are right, and I shall be happy ~-to conr.m
understanding in any form
that you deem appropriate."
a memorandum and I wil send it to you properly signed.
with my assoIates as a matter of formt"
I want to take it
This was about a
ponaet reported to Mr. Brown that he had had this talk with Mr. Govin, and
aidavit at page 5.
Mr. Colby's letter of July
MY DEAR RALPH: Brown spol
10, 1924, to Mr. Govin is
to me the other day about te
of having the matter of our compensation put in terms a mo
than 1rw mutual understanding, particularly with reference to
we are carrying forward on a contingent basis, whinh i
hope, of substantial recovery.
The demands on us in the
!se matters, as well
as of the more rn
.'has prepared some short n
.lnd I assume that there can
" our mutual
be no hesitation about signing them
is in confirmation
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m 1 *i
ler reference to
litigation against the
Sable to you to do so is understood to mean that Mr. Colby
tested we are enclosing signed memoranda expressing the understand-
idy had regarding your compensation
in the Carteret matter,
ipnpreciate very much all that you have been
doing for us, and,
3 was enclosed
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gJfr. Bainbridge Colby.
t Edward D. Brown.
S|ras" against Germany.
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of the amount
:V HI 4
New York, July
;::-,' By R. B. Govnv, President.
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nlsmitting the signed
in unqualified is l?
We appreciate very much all that you hav@et
ere is nothing whatever
at at a
not duly informed as to the character and estent
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df the atto
da between thi'tla. .'
parties tends tocororoate the atteriry tn A w
the attorneys were employed
resent the claimant in this case,
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Colby points out in his affidavit that two similar.n
identical form were executed by the claimant on July 16, 1924,-i
the retainer in this case was signed, and, as indicated in claims
and reerection at Baltimore, and the other, involving a claim
the Navy Department for oil requisitioned by the Nav
Colby states that the payment of fees nder th
well as the regularity and due authorization of their execute,
subjects of any controversy, and
that "they were the oiiV. .
detailed with said Govini
", :vvd .
udid they .were acepted and pursued precisely a
involved in thi
contends that at the time
changes in the manner and method of procedure
"; and that cla4
ants would not have made the contingent agreement had they kno
In support of thi
contention it is stated that-
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fails to take into consideration
wf other international claims commissions.
Moreover, the pro-
r of common
in dealing with
it time five administrative deci
ions and general
ar of award
had already been
rendered by this Commission.
*t Germany. In addition
Re fee-fixing proceeding, Mr
Brown states that the attorneys rep-
the claimant in three other matters
bttAire; (2) a claim for possible losses a
A claim for addi-
Rising out of
Ee Nederlandsche Oil Company of Flushing,
i for war risk insurance premiums.
The attorneys allege that
jatial services were rendered on behalf of the claimant in these
ters, but that since,
'. Sl ce
as has already been
tated, awards were not
ed, no compensation has been or can be charged.
, a disagreement
in litigation against the claimant.
The attorneys herein
t. a valuation <
in an action
Upon Mr. Brown
of $40,000 to secure
fees for pro-
Lly, a compromise on the amount of counsel fee to be paid Mr.
w as reached
was embodied in
APRIL 8TH, 1926.
3. Claim against the Navy Department. .. .I!
4. 1920 Tax matter. .
*ou. .v* .:ery tr u..:
THE INTEROCEAN O n COMPrA1ir ;. .:.I .^1^
0. EN. THuBEsn, Vi""ce Pre en D a e
4. 1920 Tax matter- .-i
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By ,l D. B.
matters except those on a
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this letter amounts to a confirmation >t
ment of July 16, 1924, and that,- -- "
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r acceptance of the $40,000 as eatisfa ,
contingent basis nli
iese matters to a conclusion o
*. n ..!**..
I have no recollection that I personally framed or dictated the clause in that .;
letter leading ,'with regardB to which we had specific agreements as to come i
as an exni
order to buttress his claims under the contingent agreement.
In his reply affidavit, Mr. Brown states:
At that time [April 8,
no question had ever been raised by any j
connected with the Interocean Oi
intention of performing them, bi
to these agreements or as to tf
the contrary they had continually
these contracts would
time anticipate or even dream that any such question would ever be raised.
the contingent fee
this case ap:
to have been communicated to the attorneys until' June 8, 1928, a
nnf nfl nsa
L'Q ~ 1n a n
. r **.- II *z Ya *I .OIUI *.aI .-.e ..a..a. S.. SE *.U *IL SI'I *I. **--.-. *. Srw
iDjWARD DU BROWNN.
and ratification of its fee agree
A part of the
of fees in all
that we would be allowed to prosecute t
' .existing contingent contracts.
"^f Thabe^r s-lateR Sin his affidavit:
That graturtous .cause,
'. Whitney at. that time if such a bill was passed and held to be consti-
:that we would have to abide by it and would make no effort to evade it.
L Estates of Mr. Govin, Mr. Upham, and Mr. Whitney have made a demand
It'Directors of the Interocean Oil Company that they apply to the American
suioner of the Mixed Claims Commi
ai d to attorneys in
EL IH **
ssion for a determination of the fee
the matter of the claims made and awarded to the
Iae.an Oil Company and the United States Asphalt Refining Company.
|ig.Elstates represent the majority in interest in the award, there was no 4
open to the Directors than to make application pursuant to provision of
d.j' No. 9 of the
" Settlement of War Claims Act of 1928," which accordingly
,. C. *
in commenting upon
H.ersloff did not say in that letter that he or the other officers thought
tiEA* br I.e
ee was unreasonable or that they
had been induced
under misapprehension or a misstatement of the facts by us.
Brief in this proceeding claimant states that "the value of
S"prvices actually rendered bears no reasonable relation
Hp ..'.. u
to the fee
S:.should be entirely disregarded," and that a fee should be fixed
rn the basi
simply of quantum meruit."
Brief in thi
proceeding the attorneys point out that the
"under the New
Camp, 219 N
!have at any time and for any reason, or without reason, severed
i-is repeated in the attorneys' Reply Brief as follows:
to be due
on the basis
** :f time and notwithstanding a
f a quantum
,d0 i;. i
The character of the work and the responsibility
appear from a description
contained in Mr. Brown'
the pa pers 3ed in the
%ns of this Commission; conferences in N York Kitt
with representatives of the American Agent* consideration of bd -
in analogous li
*7:' .''.".; : : .
maS; employment of counsel in England to se pu
preparation of affidavits; collaboration with H. Ai,
examination of the
ferenes with attorneys for other claimants, etc.
* H. *11.
Gilbert and Whittlesey for their services in
obtaining information which
submitted in support o
he amount r eovieret
: the clemi
attorneys were jistfied
for this assistance. Ti
in calling upon thi
.e.d by the attorneys, and the energy and success witr
erie an success"
complain about the outcome of the case.
_ Admis hinted out by the American bonnisibemi
Administrative and Jurisdictional Decision on Septemh 2,
and as held by
him in his previous
decisions in similar cases
( "^ ," :, "ii
53, 56, and 58), where the claim
fee agreement with his attorney, he
the group ref
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guage used by the Commissioner in Decision No. 3 is applica-
iEhe instant case.
It was there said
(pages 42-43) :
* important to note that the claimant had previously retained
'as his attorneys in many substantial cases, out of which they received
gating over $150,000.
* was well aware of the scale of charges of this firm
are a firm
n in the profession, and recognized as
one of the leading firms in New
It was not the usual practice of
* undoubtedly knew that the fee in this case under. a
t agreement would be larger than on
the ordinary basis of payment,
or not there
of the certainty
ae payment of a contingent fee would
rextainty whether it would ever be paid.
it the contingent element in
in any event be delayed, and of
Nevertheless, the claimant now
the service agreement
be disregarded and
^_ke fixed on the ordinary quantum meruit basis for the services actually
held in Decision
E!r proceeding (page 257)
The reasonableness of the proposed fee is also supported by the fact
Sg that the agent's
services were rendered
the certainty of con-
Delay in receiving its fee and with
the possibility that no fee might
l^ 3h "' "
holds that on
i in this case the claimant must be regarded as fully capable
eting its own interests in making the contingent fee agree-
ith the attorneys herein, and, consequently, that the fee fixed
." was reasonable within the meaning of that term as defined
I ,, Finance recommending this legislation to the Senate.
-, *" "
UNIVERSITY OF FLORIDA
- and the claimants and of the information pertilehnt
involved in this case on file in the records of this t
after due deliberation thereon. .
The American Commissioner decides and fixes as the
fee to be paid to the attorneys, Bainbridge Colby0,and
Brown, by each of the claimants, The Interocean Oil Coi
The United States Asphalt Refining Company, the fee fl&e
agreement with them, namely, thirty-three and ohe-thir
of the amount received by each of these claimants, respective .
the Treasury Department in payment of the awaxds rnT
their behalf, the said fees to be paid by the claimants a44
by the attorneys as just compensation for all services rend':
prosecution and collection of these claims as defined by ^
of the Settlement of War Claims Act of 1928." '
Done at Washington, D. C., this 12th day of June, 190
Mixed Ctaime Conmidn
United States asi 6
111lilli ill lll llllll0ll I II IIH l111l
3 1262 08484 1849