Lake v. Wilson

• Decision Date: 12 January 1931
• Docket Number: 80
• Citation: 35 S.W.2d 597,183 Ark. 180
• Parties: LAKE v. WILSON
• Court: Arkansas Supreme Court

35 S.W.2d 597

LAKE v. WILSON

183 Ark. 180

No. 80

Supreme Court of Arkansas

January 12, 1931

Appeal from Union Chancery Court, Second Division; George M. LeCroy Chancellor; modified and affirmed.

Judgment reversed and case dismissed.

Powell Smead & Knox, for appellant.

R. E Wiley, for appellee.

OPINION

MEHAFFY, J.

Some time in the early part of the year 1925, F. C. Nickel employed John Bruce Cox, a lawyer at El Dorado, Arkansas, to collect from John Dashko a commission alleged to have been earned by said Nickel on a $ 250,000 oil and gas lease sale. He agreed to pay said John Bruce Cox twenty-five per cent. of the amount recovered. After spending some time in an effort to adjust the matter without suit and failing to do so, Cox, with the consent of Nickel, employed J. R. Wilson, another lawyer at El Dorado, Arkansas, to assist him in the case.

Suit was brought in the Union Chancery Court for Nickel against Dashko, and both Wilson and Cox took part in the preparation and trial of the case. While the trial was in progress, Dashko was asked where the money received by him for the lease was deposited. Objection was made to this question but the court held that the witness must answer the question. Dashko, through his attorneys, then offered, instead of answering the question, to execute a bond to satisfy any judgment that might be rendered against him. This was agreed to, and a bond was executed by Dashko with P. G. Lake as surety. This bond was filed and approved. The trial court rendered judgment in favor of Nickel against Dashko for $ 500.

The judgment of the trial court was unsatisfactory to Nickel and to his attorneys, and it was decided that the case should be appealed to the Supreme Court. The attorneys, however, thought that the fee originally agreed on between Cox and Nickel, twenty-five per cent., was too small, and after a conference a new contract was entered into as follows:

"El Dorado, Arkansas,

"October 27, 1926.

"Messrs. Jno. Bruce Cox and J. R. Wilson,

"Attorneys at Law,

"El Dorado, Arkansas.

"Gentlemen: Pursuant to our conversation on May 13, 1926, in your office, in which I agreed to give you a fee of $ 5,000 provided you win the $ 12,500 judgment asked for in the case against John Dashko in the Supreme Court, I now desire to confirm that agreement by this letter, and will say that if you win judgment in the sum of $ 12,500, I will pay you $ 5,000 out of the proceeds of said judgment, and, in the event the judgment is cut down in any sum below that, then the fee will be pro rata. This is a new contract, and supplants the old contract which was made on a basis of 25 per cent. of the recovery, and our rights will be determined by this contract, without any regard to that contract.

"Witness my hand, this the 27th day of October, 1926.

(Signed)

"F. C. Nickel."

This new contract was accepted by the attorneys and the appeal was perfected. The Supreme Court reversed the decree of the trial court and remanded the cause with directions to enter a decree in favor of Nickel for $ 12,500 and also against the sureties on the bond given for the performance of the judgment.

On the 7th day of November, 1927, J. R. Wilson filed suit in the Union Chancery Court against F. C. Nickel, John Dashko, P. G. Lake, John Bruce Cox, H. P. Smead, trustee, H. P. Smead, R. C. Knox and Lamar Smead, doing business under the firm name of Powell, Smead & Knox. The parties named were named as defendants and garnishees.

In the complaint filed by Wilson, the employment of John Bruce Cox by Nickel and the employment of Wilson thereafter with the consent of Nickel are alleged, and the appellee alleged also in this complaint that under the terms of the contract he was entitled to 20 per cent. of the recovery, J. B. Cox was entitled to 20 per cent., and that Nickel was entitled to 60 per cent. of the judgment, less $ 118.76 that Wilson had paid for printing abstract and brief. He also alleged that J. B. Cox was indebted to him in the sum of $ 1,014.17 with interest at 8 per cent., evidenced by promissory note, and that said Cox was also indebted to him on open account in the sum of $ 515.10 with 6 per cent. interest. It was alleged that these amounts represented the balance due Wilson by J. B. Cox on office rent. It was also alleged that J. B. Cox was insolvent, and Wilson asked that the interest of J. B. Cox in and to the fee due from Nickel be impounded and subjected to the payment of the items herein claimed, and that he was entitled to have the same impounded by equitable garnishment.

The prayer of Wilson was that the rights of F. C. Nickel, J. R. Wilson and J. B. Cox in and to the judgment against John Dashko and P. G. Lake be declared and fixed by the court, and for judgment for plaintiff and for judgment against the said J. B. Cox for the sums mentioned, and that the interest of the said J. B. Cox as declared by the court be impounded and subjected to the payment of the judgment as equitable garnishment. He also asked that his pleading be treated as an equitable garnishment against P. G. Lake, F. C. Nickel, John Dashko, H. P. Smead, trustee, and H. P. Smead, R. C. Knox and Lamar Smead, doing business under the firm name of Powell, Smead & Knox, attorneys, and asked that summons be issued against the parties named directing them to answer and show cause why the plaintiff should not recover the sums asked for in his complaint, and why the funds therein referred to should not be subjected to the payment of the claim of the plaintiff, and that summons issue against the said J. B. Cox directing him to answer and show cause, if any he can, why personal judgment should not be rendered against him in the sum claimed by plaintiff herein, and why his interest in the judgment above mentioned should not be subjected to the payment of said plaintiff. He also asked for a restraining order and that the parties named be restrained from disbursing any part of the funds that might be found due said J. B. Cox and plaintiff and directing the same to be paid into the registry of the court and delivered to plaintiff upon final judgment as to such sums as plaintiff may be found entitled to recover, and that the defendant, J. B. Cox, be treated as a defendant, and that a judgment in personam be rendered against said J. B. Cox in accordance with the prayer and allegations herein, etc.

On the third day of December, 1927, the appellee, J. R. Wilson, filed in the case of F. C. Nickel against J. Dashko a petition to enforce his attorney's lien. In that petition he alleged that he had theretofore on the 7th day of November, 1927, filed in the above-styled cause a petition for judgment on the mandate and further alleged in his petition for lien that by virtue of his contract with Nickel he is entitled to the sum of $ 2,500 with interest; that said contract was made about the 13th day of May, 1926, and that the same was in writing; that the substance of said contract was that the petitioner was to have a fee of $ 2,500 or one-half of $ 5,000; that the mandate showed that the appeal was won and judgment directed to be entered for $ 12,500 against Dashko. He then described the work he did in preparing and trying the case, and that Nickel has refused to pay his fee. He also stated that petitioner had been notified by Nickel to take no further steps in the case, and he made sufficient allegations in his petition for a lien to entitle him to a lien.

The record shows that Mr. Nickel wrote Mr. Wilson a letter dated November 20, 1927, asking Wilson to take no further steps and telling Mr. Wilson that he desired Mr. Cox to be in exclusive control of the matter. Mr. Wilson testified, however, that he did not receive this letter before Tuesday the 22d, and that, on Monday the 21st before this letter had been received, the judgment in the case of Nickel against Dashko had been paid to J. B. Cox, one of the attorneys, and the judgment had been satisfied on the record.

There is a great mass of evidence, but the rights of the parties must be determined by the contract, and only such evidence will be copied or referred to as appears necessary to an understanding of the rights of the parties under the contract.

Appellee first contends that one purpose of our lien statute is to protect attorneys against collusive settlement, and that that purpose is specially applicable in this case. Appellants argue at length that Mr. Wilson devoted a great deal of time and labor and some money in the preparation and trial of the case. We deem it unnecessary to set out this evidence, but it is sufficient to say that the proof is abundant that Mr. Wilson spent a great deal of time and labor, the result of which was a favorable judgment for his client. The evidence as to the time and labor given to the performance of his duties and as to the money expended for printing briefs is undisputed.

Appellee argues that our lien statute will protect him and cannot be avoided by the principles argued by appellants, and he says that Cox and Wilson were not jointly employed by Nickel, but that Cox was consulted and employed and a fee of twenty-five per cent. promised him; that contract was between Nickel and Cox and, of course, was not joint. We agree with appellee in this statement. The first contract of employment was between Nickel and Cox. Wilson was not a party to it and knew nothing about it. Thereafter Cox employed Wilson, or, as they put it in the evidence, told Wilson he would cut him into the case. If it had ended there, Wilson would simply have been in the employ of Cox, but Wilson was introduced to Nickel, and Nickel consented for him to associate himself with Cox and to assist in the case. Nothing further was said about fee until after the case had been tried ...