Willett & Oleson v. Janecke

• Decision Date: 29 May 1915
• Docket Number: 12541.
• Court: Washington Supreme Court
• Parties: WILLETT & OLESON v. JANECKE.

149 P. 17

85 Wash. 654

WILLETT & OLESON v. JANECKE.

No. 12541.

Supreme Court of Washington

May 29, 1915

Department 1. Appeal from Superior Court, King County; John E Humphries, Judge.

Action by Willett & Oleson against J. F. Janecke. Judgment for plaintiffs, and defendant appeals. Reversed.

Geo. B Cole and John Wesley Dolby, both of Seattle, for appellant.

Edward Judd, of Seattle, for respondents.

PARKER J.

The plaintiffs, copartners engaged in the practice of law in Seattle, commenced this action in the superior court for King county seeking recovery of compensation for legal services rendered by them to the defendant as receiver for the Angeles Brewing & Malting Company, an insolvent corporation. Trial before the court without a jury resulted in findings and judgment against the defendant personally, from which he has appealed to this court.

The undisputed facts which we regard as determinative of the rights of the parties may be summarized as follows: In April 1910, appellant was by the superior court for Clallam county appointed receiver for the Angeles Brewing & Malting Company a corporation with its principal place of business in that county. The corporation was then insolvent, and appellant was appointed receiver, and took charge of the property and affairs of the corporation, and continued to act as receiver until July, 1914, when he was succeeded by another receiver. Soon after appellant's appointment as receiver an order was made by the superior court for Clallam county in the receivership proceedings authorizing and directing him to employ counsel to advise him touching his duties as receiver and to represent him in litigation in which he as receiver might become a party. Appellant thereupon employed respondents for that purpose. There is nothing in the record pointing to any employment of the respondents by appellant to advise him or to represent him or his interests other than in his official capacity as receiver, nor is there anything in the record indicating that appellant agreed to become personally liable to the respondents for their compensation. Manifestly, respondents fully understood that this was the nature of their employment. Thereafter respondents entered upon their employment and continued to render services to the appellant in the interest of the receivership, but not otherwise, while he continued to act as receiver. Respondents claim that their services so rendered were of the reasonable value of $15,000, and that they also disbursed in expenses incident to their services $629.55. Appellant has paid respondents $5,670.50, which, according to respondents' claim, would leave a balance of $9,959.05, for which judgment was rendered in this action in their favor against appellant personally. There occurred upon the settlement of the appellant's account as receiver in the superior court of Clallam county, according to the testimony of one of the respondents, as set forth in the abstract, the following:

'The attorneys for the receiver [respondents] prepared a final report covering all of the doings of the receiver from his appointment to July 23, 1913. This final report was heard on September 29 and 30, 1913. All vouchers, books of account, and records of every kind were taken to the court, and the matter was thoroughly investigated. The court asked for further information as to certain items. This was furnished in the nature of a supplemental report and argument. The court did not pass on the report at that time, but ordered a supplemental report to be filed covering the period from July 23, 1913, to March 1, 1914. This the attorneys prepared and filed. At the hearing on the report of July 23, 1913, evidence had been introduced that $15,000 was reasonable compensation to be allowed for the legal services rendered. The supplemental report of March 1, 1914, contained a statement that the attorneys for the receiver had submitted to the receiver a bill for $15,000, which the receiver reported was reasonable, and asked for an allowance of that amount. A copy of that report was served on each attorney who had appeared in the case, together with a notice of the time and place of hearing the report, and a notice to serve and file any objections or exceptions. No objections or exceptions of any kind were filed. The creditors were represented at the hearing by two attorneys who attacked the report in other particulars, but did not object in any way to an allowance of the $15,000 fee claimed. Two additional expert witnesses testified at that hearing that $15,000 was reasonable compensation for the legal services rendered. There were certain negotiations affecting the form of the order to be entered on the final reports, and thereafter, on May 5, 1914, the court signed and entered an order as drawn by the plaintiffs in this case, with certain immaterial exceptions. Plaintiffs then resigned as attorneys about May 10, 1914. The judge having charge of the receivership made allowances to the receiver of $4,750 on account of legal services, but has made no further allowances.'

We quote this testimony to show that appellant has in good faith endeavored to procure from the court in the receivership proceedings an allowance of attorney's fees in the full amount claimed by respondents, and also to show that respondents participated in the efforts of appellant to procure the allowance of attorneys' fees claimed by them.

Counsel for appellant contend that he is not personally liable to respondents for their services rendered to him as receiver. We are of the opinion that this contention must be sustained in the light of the facts we have noticed. Counsel for respondents invoke the general rule that an allowance of attorneys' fees in cases of this nature is properly made to the receiver, and not directly to the attorneys, and that the attorneys must look to the receiver for their compensation, citing 34 Cyc. 465, and other authorities. This is the general rule applicable to an allowance of attorneys' fees made upon the settlement of a receiver's account. But it does not follow that attorneys employed by a receiver in pursuance of an authorization made by the court for attorneys' services solely in relation to the receivership may...