Bayou Meto Drainage District v. Chapline

• Decision Date: 19 April 1920
• Docket Number: 347
• Citation: 220 S.W. 807,143 Ark. 446
• Parties: BAYOU METO DRAINAGE DISTRICT v. CHAPLINE
• Court: Arkansas Supreme Court

220 S.W. 807

143 Ark. 446

BAYOU METO DRAINAGE DISTRICT v. CHAPLINE

No. 347

Supreme Court of Arkansas

April 19, 1920

Appeal from Lonoke Chancery Court; John E. Martineau, Chancellor modified and affirmed.

Decree affirmed.

J. B Reed and Wallace Townsend, for appellants.

1. The chancellor should have granted the motion to transfer to the circuit court. Chancery had no jurisdiction. The suit was for compensation for services rendered and damages for breach of contract and plaintiffs had no lien on the funds from the bond sale. 38 Ark. 397; 109 Id. 171; 120 Id. 389; 47 Id. 86. Nothing was recovered in the suit and the attorney had no lien. 65 Ark. 84; 56 Id. 306; 64 Id. 438. Plaintiffs had an adequate remedy at law.

2. The funds were not subject to garnishment. The cases in 90 Ark 236 and 107 Id. 189 do not govern this.

3. The fee was agreed upon at $ 2,000 and the action of the commissioners is not subject to review by the courts unless arbitrary and unreasonable. 127 Ark. 38; 64 Id. 152; 52 Id. 301; 136 Id. 298; 94 Id 380; 90 Id. 236; 107 Id. 189.

4. The fee is excessive. 106 Ark. 571; 122 Id. 14; 127 Id. 1.

Mehaffy, Donham & Mehaffy, for appellees.

1. The court had jurisdiction. A suit at law would have been unavailing, as no garnishment could be had, and the funds in the bank could not be reached in a suit at law. 107 Ark. 180; 134 Id. 109; 7 A. 22; 93 N.W. 1008; 50 L. R. A. 787; 17 F. 483; 151 Id. 165; 65 S.E. 902; 173 F. 456; 147 Id. 480; 79 P. 648; 99 N.W. 674; 49 S.E. 423. The district and commissioners are trustees for the public, and chancery has jurisdiction of trusts. 70 Ark. 189. Having obtained jurisdiction for the purpose, it was proper for a court of chancery to dispose of all matters before it. 34 Ark. 410; 14 Id. 50; 2 Id. 158; 99 Id. 438; 105 Id. 558; 130 Id. 107; 129 Id. 197.

The funds were trust funds, and a suit at law could not reach them. The commissioners were not personally liable, nor was the district. Equity alone had jurisdiction. 70 Ark. 444; 52 Id. 541 101 Id. 451; 122 Id. 366; 136 Id. 445.

2. There was no agreement that the fee should be $ 2,000, and the courts have a right to fix a reasonable fee. The fee is not excessive. The commissioners had the right to employ attorneys and fix their compensation. Kirby & Castle's Digest, § 5876. Six thousand dollars would not be an excessive fee. 122 Ark. 14; 127 Id. 1; 4 S.W. 207; 2 R. C. L., §§ 145-6.

OPINION

WOOD, J.

This action was instituted by the appellees against appellants in the Lonoke Chancery Court to recover an attorney's fee.

The appellees alleged that they were appointed by the county court of Lonoke County and also were employed by the commissioners as attorneys for the drainage district; that from the time of the creation of the district until March 29 1919, they had acted as attorneys for the district and had done all the legal work necessary or proper to be done. Appellees enumerated the various acts that had been taken by the district in which they performed services as the attorneys; that they prepared all necessary papers and advised the board as to the method that should be pursued, finally resulting in the sale of bonds in the sum of $ 345,000 and the letting of the contract for the construction of the improvements contemplated in the creation of the district. They allege that there is now deposited in the Lonoke Bank the sum of $ 21,000, which money was raised and secured by the appellees in their capacity of attorneys for the district and commissioners at their request and under their directions. Appellees allege that they had a lien on the fund for the payment of their fee; that on March 29, 1919, the commissioners refused to pay the attorneys for their services and discharged them. They further alleged that they had successfully defended various suits that had been brought against the district in the county, circuit, chancery, and through the Supreme Court; that it was customary and usual to pay attorneys the amount of 2 per cent. on the bond issue, which in the present case would amount to $ 6,900; that this sum was a reasonable fee; that they were wrongfully discharged and by reason thereof had been damaged in the sum of $ 2,500; that neither the commissioners nor the district had any other funds than that already mentioned out of which to pay the fee; that they had no adequate remedy at law.

Appellees prayed for judgment in the aggregate sum of $ 9,400 and that the bank be restrained from paying out the money deposited in it and that the commissioners be restrained from discharging the appellees until their services had been paid for and that the bank be directed to pay appellees the sum of $ 9,400.

The appellants moved to transfer the cause to the circuit court. The trial court overruled the motion.

The appellants answered, denying all the material allegations of the complaint except the employment of the appellees by the appellants. They set out in their answer that appellants had refused to pay the appellees because these fees were unreasonable and greatly in excess of the fee for which the appellants contracted with the appellees.

The appellants alleged that the appellees agreed to do all the work necessary to the formation of the district and the completion of the improvements contemplated thereby for the sum of $ 2,000, which was a reasonable fee for their services; that appellants were ready, willing, and offered to pay the appellees the said sum of $ 2,000, but that the appellees had refused to accept the same and had instituted suit against the appellants before the completion of the services which they had contracted to render and had thereby voluntarily terminated and breached their contract.

T. M. Fletcher was a large landowner and promoter of the drainage district. He testified that before the district was formed he saw Judge Chapline and discussed the matter with him and employed him to represent the district through the completion and performance of the work; that a fee of $ 2,000 was agreed upon; that W. P. Beard was employed at the request of witness to assist Judge Chapline, but he was not to receive any additional fee; that Judge Chapline called in Mr. Beard; that a day or two after the appointment of the commissioners they were offered the services of an attorney to represent the district through the completion of the work for the sum of $ 2,000. Witness informed the party making the offer that the commissioners had employed attorneys with whom they were satisfied and had agreed on a fee of $ 2,000. Ten minutes later witness informed Judge Chapline of that conversation, and he neither dissented from or agreed with the statement that the contract for attorney's fee was to be the sum of $ 2,000. Witness had no idea that the attorney's fee bill would be for more than $ 2,000. Witness had represented to the signers of the petition, when he was circulating the same, that the attorney's fee would be $ 2,000. The commissioners had fixed the attorney's fee. The relationship between the commissioners and the appellees was terminated by a suit filed by the appellees in the county court for a fee. The commissioners on April 2, 1919, had a meeting and unanimously passed a resolution fixing the sum of $ 2,000 as a fee for appellees in full payment for their services. At the time the witness informed Judge Chapline of the offer of attorneys to represent the district for the sum of $ 2,000 witness told Judge Chapline that witness thought he should have something more than $ 2,000 in view of the extended acreage of the district. The commissioners offered the appellees the sum of $ 3,450 immediately after they presented their bill, and witness thought the services worth that upon the theory that the relationship with the attorneys would continue. The commissioners were perfectly satisfied with the appellees as attorneys, and were anxious to have them continue and attend to the legal business of the district. The commissioners as a board never fixed a specified sum for the appellees. Witness had the agreement with Judge Chapline in regard to the $ 2,000 fee before the district was created and before the witness was appointed a commissioner. Witness had discussed with Judge Chapline the character of fees being paid attorneys for their services in similar districts, and he had given the witness to understand that excessive fees had been charged by attorneys, and this attitude of Judge Chapline was one of the chief reasons why he was employed as attorney for the district.

Judge Chapline testified that when the district was created he and Mr. Beard were appointed by the county judge and also by the commissioners. He testified in detail to the services appellees had rendered the district. His testimony shows that they had prepared all the papers incident to the proceedings looking to the completion of the improvement. Among other things, they had tried five cases in the circuit court that were appeals from the county court, involving contests over the assessment of benefits. The district lost the case in the circuit court and appealed to the Supreme Court, where the case was reversed and was afterward compromised and settled in the circuit court. Appellees defended a suit in the chancery court involving the validity of the district, which case was appealed to the Supreme Court and the district was upheld. He denied that he had ever entered into a contract with Mr. Fletcher or the commissioners of the district to represent the district as an attorney for a fee in the sum of $ 2,000. The appellees figured all the time on a fee of 2 per cent. as a reasonable fee. They thought that the commissioners would allow what had been allowed throughout that territory, and 2 per cent. had been the minimum fee....