Winslow v. Harold G. Ferguson Corp

Winslow v. Harold G. Ferguson Corp. (1944) 25 Cal.2d 274, involved an insolvent trust in which the Supreme Court, in reliance on common fund principles, held that the fee claim of the attorneys for certain trust beneficiaries who had acted to bring the trust assets under court supervision should take precedence over the creditors' claims against the trust: "Having rendered valuable service over a period of ten years and having thereby brought into the protective custody of the court the trust assets, which avoided total loss to the creditors, appellant and his associates established their right to preference as against the creditors of the fund. . . . The pleadings plainly demonstrate that counsel acted for the benefit of all persons interested in recovery of the fund--including creditors and beneficiaries alike--and that legal fees for such service would be a proper charge upon the share due the creditors as well as upon the excess which might be distributable to the beneficiaries." (Id. at pp. 285-286.)