THE AMERICAN COMMISSIONER
MIXED CLAIMS COMMISSION
UNITED STATES AND GERMANY
DECISION NO. 24
IN THE MA'I'ER OF
FIXING REASONABLE FEES FOR ATTORNEYS OR.
AGENTS UNDER THE AUTHORITY OF SECTION 9 OF
THE SETTLEMENT OF WAR CLAIMS ACT OF 1928"
DOCKET NO. 4759
Walter E. Thomas, Claimant
Louis WV. Manchester, Attorney
CHANDLER P. ANDERSON
V. S. GOVERNMENT PRINTING OPICI: 2BM
MIXED CLAIMS COMMISSION, UNITED STATES AND GERMANY
Established in pursuance of the Agreement between the
United States and Germany of August 10, 1922
CHANDLER P. ANDERSON
THE AMERICAN COMMISSIONER
MIXED CLAIMS COMMISSION
UNITED STATES AND GERMANY
DECISION NO. 24
IN THE MATTER OF
FIXING REASONABLE FEES FOR ATTORNEYS OR
AGENTS UNDER THE AUTHORITY OF SECTION 9 OF
THE SETTLEMENT OF WAR CLAIMS ACT OF 1928 "
DOCKET NO. 4759
W'alter E. Thoma., Claimant
Louis IW. Manchester, Attorney
The above named claimant has duly filed with the American Com-
missioner a written request that he fix a reasonable fee to be paid
by him to his attorney, Louis W. Manchester, of Buffalo, New York,
as compensation for whatever services have been rendered by him on
behalf of and with the authority of the said claimant, such services
being of the character described in the provisions of Section 9 of
the Settlement of War Claims Act of 1928 ".
The claimant has objected to the amount of the fee asked by his
attorney on the ground that it is excessive, and the attorney has been
duly notified of the filing by the claimant of his request that a
reasonable fee be. fixed. The attorney has filed with the American
Commissioner affidavits giving the information which he desires to
have considered by the Commissioner as showing the reasonableness
of the fee asked, which information has been brought to the atten-
tion of the claimant, who has filed affidavits in reply, copies of which
have been transmitted to the attorney.
In this case an award was rendered by this Commission on January
23, 1925, on behalf of the claimant, for $9,000, with interest thereon
at the rate of five per cent per annum from April 1, 1916, to the
date of payment, which amount represents the value of the claimant's-
business in Berlin in the manufacture and sale of disks used by
dentists for grinding teeth, the said business having been ordered
stopped by the German authorities during the War and the claimant
having been unable to recover the good will of the said business after
the War by reason of the manufacture and sale of these disks by a
rival German concern.
The amount of compensation asked by the attorney for services
rendered is $3,750, and no extra charge is made for disbursements
incurred by the attorney, which he estimates at $33.07. The claimant
suggests three per cent of the amount recovered, or about $550, as a
reasonable fee to be paid to the attorney.
It appears from the affidavits filed by the claimant and the attor-
ney that on or about October 11, 1921, the claimant employed this
attorney to prosecute and collect this claim for him. The attorney
alleges, there was no agreement between deponent [the attorney]
and claimant as to the amount of compensation for the services to
be rendered by deponent in this matter, except that deponent was
informed by the claimant during the aforesaid first conference and
again in subsequent conferences that if an award should be granted,
deponent would receive a substantial part thereof as compensation
for his services". The attorney again alleges in the second affidavit
filed by him in this proceeding that 1 I assumed that my fee for
services was contingent and I never sent a bill until payment of the
award was assured and the amount fixed. He [the claimant] under-,
stood my fee to be contingent as he never asked for my bill, and I
assumed it to be contingent as I never sent a bill until payment was
about to be made ". The claimant admits that there was no agree-
ment between him and the attorney as to the amount of compensa-
tion to be paid the attorney for his services, but at the same time he
alleges that he "never informed said Manchester that if an award .
should be granted deponent [the claimant.], said Manchester should
receive a substantial part thereof as compensation for his services;
that no agreement was ever made between said Manchester and de- 4
ponent that payment for said Manchester's services should be con- 3
tingent. on an award being made to deponent". Nevertheless, the
claimant, in his reply affidavit, of October 6, 1928, admits "that said
Manchester [the attorney] well knew that deponent [the claimant]
was not able financially to pay him any sum for his services until
the award herein should be paid to deponent because deponent's
business had been ruined and deponent was earning such a small sum
from his profession as a dentist that he was scarcely able to support
his wife and four minor children ".
The attorney undoubtedly understood that he was retained in this
case on a contingent fee basis, the amount of the fee to be determined
later and paid when a recovery was had, and the admission by the
claimant that the attorney knew that he, the claimant, was not
financially able to pay the attorney anything for his services until
an award was paid confirms this understanding and also justifies
the conclusion that the claimant concurred in it. Accordingly, this
understanding is adopted by the American Commissioner for the
purpose of fixing the attorney's fee in this proceeding.
From the affidavits filed by this attorney and from the records
of this Commission, it is evident that, subsequent to his employment
by the claimant, this attorney spent a considerable amount of time
in preparing the original petition which he filed with the State De-
partment on January 18, 1923, and the receipt of which, by reference
from the Department, was acknowledged by the American Agency on
January 24, 1923. This petition attempted to establish a claim
against Germany on behalf of the claimant for $117,716.50, made
up in the main of alleged losses suffered by the claimant by way
of anticipated profits from his business in Germany which had been
terminated by the German authorities during the War.
In so far as this claim was based on the loss of prospective profits,
its status was seriously prejudiced, because under the Treaty of
Berlin, as interpreted by this Commission, Germany was not liable
for loss of prospective profits as such, although evidence of profits,
both past and anticipated, was admissible in proving the value of
the business destroyed.
Apparently it was due in part to this element of weakness in the
claim that after the receipt of the petition in January, 1923, the
American Agency made no effort to procure from the attorney addi-
tional data or action on his part, pursuant to the assurance given
by the counsel for the Agent, in acknowledging the receipt of this
petition, that the attorney would be advised if such data or action
On February 14, 1924, after the lapse of more than a year since
the filing of the petition, the attorney wrote to the American Agent,
stating, I believe that I may be soon in a position to furnish addi-
tional proof in this matter, and possibly proof of additional
damage. due to evidence discovered after the said papers were
filed. Will you kindly inform me if I may file such additional
proofs, and, if so, how long a l)eriod will the matter be held open
for this purpose? The attorney anticipated at the time he wrote
this letter, that the claimant, who was then in Germany, would
shortly bring back with him the books, papers and documents con-
nected with this case, as well as information from witnesses in
Germany who were cognizant of the facts.
The counsel for the American Agency, who was in charge of
this case and who was then arranging to go to Germany in April
on Agency business, wrote in reply, on February 18th, that addi-
tional proofs could be received up to April 15th, and he added:
* but I think it would be better for you to have a more clear idea of
the liability of Germany under the Treaty and the decisions of the Commis-
sion. I am. therefore, sending you copies of Administrative Decisions Nos.
1 and 2, calling your attention particularly to the matter oi page 11, et seq.,
of Decision No. 2. From this you will see that Germany is held distinctly not
liable for the general consequences of the war. and responsible financially only
for its overt acts.
The claim for which you have a valid remedy, therefore. would seem to
divide itself into two parts: (1) the actual value of the property taken over
by the German Government. and (21 debts of German natioirals to your
client. This latter muit le proved as you would prove a case before any
court. Your client'" mere statement that someone in Germany owes him
money is insufficient.
As to the sequestration oif property by the German Government. I can
undoubtedly procure the additional proofs when I take the case to Germany
next Ipring. Meanwhile, it would be well for you to furnish any proof you
may have in addition to the statement qf your client that the German Govern-
ment actually took over any of his property.
I trust that you will address, yourself to these two items of the claim, as it ':.
is useless to accumulate papers and records concerning matters which the
German Government has, been held not liable.
Upon receipt of this letter the attorney wrote to the American
Agency. asking for a conference and also for a ruling on thile status
of so much of tlie claim as was based on damages arising prior to
the claimant's naturalization as an American citizen in April, 1915.
He was promptly advised by the Agency that under the law con-
trolling the decisions of thi. Commission his client could recover
nothing for losses prior to the date of his American naturalization.
and in response to his request for a conference lie was advised:
You have presented a very Ionz petition, and most of the matters therein
alleged constitute a clan.s of claim which the Commission has held in many
cases to be invalid. and many oif these ca-e. have been dismissed already
which, apparently. are not to be distinguished from the claim made on behalf
of your client. I rather imai-ine that Dr. Thomas has some claim for damages
which can be sustained. but it will be impossible for me to distinguish such
claim from the mass of allegations in the petition. I quite advi-e a redraft-
ing of the petition and a statement of the claim along the lines of liability
as laid down by the Commission: tha t i. toi say. dama-zes approximately and
directly flowing from the acts of Germany, not consequential or in any way
speculative in their nature. ULntil this ik done a conference with me would
le fruitless for the simple reason that I can not make out from your claim
what is valid and what is not.
Upon receipt of this letter early in March. the attorney cabled to
the claimant, who was then in Germany. to return to the United
States a, soon as possible for the purposes. of this claim. The claim-
ant, who was engaged in securing information and data in Germany
in support of his claim, replied that he was returning to the United
States in about six weeks. whereupon the attorney again cabled to
him, insisting that he come at once. The claimant accordingly re-
turned to the United States, arriving the latter part of March, 1924,
and thereupon the attorney arranged. with Mr. Otis. the counsel for
the Agency in charge of this claim, for a conference with himself
and the claimant, which conference was held in Washington on
As stated in the claiimant's affidavit, and as appears from the rec-
ords of this' Coimmission, this conference with the counsel for the
Agency lasted for only about one-half an hour, and the attorney
was advised by the counsel for the Agency to file an amended peti-
tion. The attorney was also instructed by the Agency's counsel
as to the grounds upon which he should base the claim, and gener-
ally as to the evidence which it would be necessary to procure in sup-
port of it. At this conference it was also arranged that inasmuch
as the counsel for the Agency was going to Germany the claimant,
who was also returning to Germany. should get in direct communi-
cation with the Agency's counsel in Berlin, and submit to him there
all proofs which he was able to secure.
As a result of this conference, the attorney prepared and filed on
April 23, 1924, an amended petition, in which damages to the amount
of $27,745.10 are claimed, a substantial part of which was again for
loss of prospective profits and the balance for the alleged value of the
claimant's business, the destruction of which was only -in part shown
to have been due to causes which would impose liability upon Ger-
many under the Treaty of Berlin. In filing this amended petition
the attorney referred with approval to the arrangement made by the
claimant with the counsel for the Agency to procure and submit
to him in Berlin necessary proofs in support of his claim.
The claimant states in his affidavit that pursuant to this arrange-
ment he took up the matter of an award'upon his said claim with
the said Mr. Otis and looked after all the details in procuring the
necessary evidence whereby the Mixed Claims Commission would
act upon said claim ". He states further that he went over the
details of his said claim with said Commission, and held several con-
ferences with Mr. Otis and said Commission and produced witnesses
before said Commission and finally deponent was informed by said
Otis that if he would write a letter saying he was satisfied with an
award of $9,000 with certain interest such an award would be made ".
It appears from the records of this Commission that on October 20,
1924, claimant wrote to Mr. Otis, thanking him for the trouble he
had taken in trying to settle this claim, and stating that he had
decided to acept Mr. Otis' suggested offer of $9,000 with interest
from August 1, 1916.
Thereafter, on January 14, 1925, after the return of Mr. Otis to
Washington, an agreed statement was signed by the American and
German Agents recommending an award of $9,000 with interest
thereon at the rate of five per cent per annum from April 1, 1916,
to the date of payment, representing the value of the claimant's
business which had been destroyed through action of the German
authorities, and an award in accordance with this recommendation *
was made by this Commission as hereinabove stated.
According to the records of the American Agency, the attorney
did nothing further in the prosecution of this claim after the amended
petition was filed, but apparently he feels that he is entitled to some
credit for the work done by the claimant in procuring evidence in
Germany because he considers that the claimant was acting under
and in accordance with instructions given him by the attorney. In
this connection the attorney states in his affidavit:
All of the facts covering these points had been covered and gone over by
the claimant and myself prior to his leaving for his visit in Germany in
February of 1923, and he was. or should have been, thoroughly conversant
with the facts, proof of which was necessary tn establish his claim, and the
method of furnishing such proiffs.
He knew that the books and documents were not available, and the only
method of establishing the facts were by the affidavits or statements under
oath, of witnesses.
I had furnished him with nu affidavit of an important witness in Berlin,
to wit, one W. A. Derrick who was his distributor for the country
of Germany, as appears by his amended petition herein. Mr. Derrick was
familiar with the claimant's bu.-iness, the confiscation, and the amount of
German business done prior thereto. As claimant and his wife were in Berlin
with Mr. Derrick, with the affidavit prepared by me in their possession, the
obtaining of the execution of think, or a similar, affidavit, was a matter of
small detail and the failure to furnish the affidavit to me is incomprehensible
I had procured the information about the business done by claimant outside
Germany through Ash and Sons of London, and also had procured the affi-
davits of claimant's two aunts, which were attached to the original petition
herein, and the affidavit of petitioner's father, George Thomas.
The statements of the witnesses in Berlin in 1924 were matters which
I had already arranged with claimant to attend to, and I had gone over the
matters with him so that he was thoroughly familiar with them. This was
done again during the conference with Mr. Otis, in Washington, on April 8,
1924, and again during our trip to New York City and home and also after
our return to Buffalo, in connection with the preparation and execution of
the amended petition.
The failure of the claimant to furnish me with the affidavits of material
witnesses in Berlin made the conference with Mr. Otis necessary, resulting in
the arrangement with Mr. Otis to supply him with these proofs after he
arrived in Berlin, in May, 1924.
The result of this arrangement was that, instead of supplying the affidavits
of the witnesses to me in accordance with our conferences and arrangements, he
supplied them to Mr. Otis. Claimant could easily have used Mr. Derrick's
affidavit as a model as to form for the affidavits of the other material witnesses
which could have been filed with the papers in this case, and this was the
arrangement I had made with him.
The course pursued by the claimant in dealing direct with Mr.
Otis in Germany was much simpler than the plan advised by this
attorney, which apparently was to have the claimant bring back alj
the evidence procured by him in Germany so that the attorney could
take it up directly with the Commission in Washington. The claim-
ant. was entitled to the benefit of the advice and assistance of the
counsel for the American Agency without additional expense. and the
result of dealing direct with him proved to be thoroughly effective
and entirely satisfactory both to the Agency and to the claimant.
The attorney is not justified in criticising his client for taking
advantage of thlie service-, of experienced counsel provided by the
Government of the United States to facilitate the presentation of
his claim, and the attorney is not entitled to ask for compensation
for the work done or the results procured by his client in Germany
under the direction of the coun.-,el of the American Agency.
The claimant state- in his aftidlavit that with the exception of two
or three small items, such as the cost of the two cables summoning
him liome from Germany, he has already reimbursed the attorney
for all expenses incurred by him in the prosecution of this claim,
including the expenses of his trip to Washington for the conference
with tile counsel for the American Agency. Tile attorney states in
his affidavit that he makes no extra charge for disbursements. Ac-
cordingly, it is understood by the American Commissioner, in fixing
the fee for this attorney's services, that no additional charge is to
lie made by him for disbursements.
Inasmuch as it was understood in this case that the attorney was
to receive compensation for his services in tile presentation of the
claim only if an award was made and paid, he is not entitled to com-
pensation for the services rendered by him in presenting the items
of the claim, for which no award was made by this Commission.
Now, therefore, in the circumstances above set forth, and consider-
ing the character and extent and value of the services rendered by
this attorney and that the payment of his compensation was con-
tingent upon securing and collecting an award. and in view of the
considerations stated in the general Jurisdictional and Administra-
tive Decision rendered by the American Commissioner under date
of September 28, 1928. and after careful examination and full con-
sideration of the information furnished in this proceeding by the
attorney and the claimant and by the records of this Commission
pertinent to the questions involved, and after due deliberation
The American Commissioner decides and fixes as the reasonable
fee to be paid by the claimant, Walter E. Thoima,s, to his said attor-
ney, Louis W. Manchester, the umn of one thousand dollars ($1,000).
the said fee to be paid by the claimant and received by the attorney
as full compensation for all services rendered in the prosecution and
collection of this claim, as defined in Section 9 of the -" Settlement
of War Claims Act of 1928 ".
Done at Washington, D. C., this 10th day (of January, 1929.
CHANDLER P. ANDERSON,
A merica.i Coinmm ik.sion.e,
Mixed Claims Conmmu, isoii,
United States and Germany.
UNIVERSITY OF FLORIDA
3 1262 08484 2094