Court Opinion

ID: 7809138
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:10:40.123159+00
Date Added: 2024-06-11T16:30:25.145834
License: Public Domain

WOOD, J., (after stating the facts). In Bradshaw v. Bank of Little Rock, 76 Ark. 501, 504, we held: “When many persons have a common interest in a fund, and one of them, for the benefit of all, brings a suit for its preservation, and retains counsel at his own cost, a court of equity will order a reasonable amount to be paid to him out of the funds in the hands of the receiver in reimbursement of his outlay.” Citing cases. See, also, Federal Union Surety Co. v. Flemister, 95 Ark. 389. (1) Our statute authorizes any creditor or stockholder of any insolvent corporation to institute proceeding& in the chancery court for the winding up of the affairs of such corporation, and when proceedings are instituted by a creditor or stockholder under this statute, which proceedings are of an amicable character, that is, not opposed by other stockholders and creditors, then as the one instituting the proceedings does so for the benefit of those similarly situated it is but just and equitable that they should share the burden of the costs incident to such proceedings between them in proportion to the benefits received, and a court of equity in such, proceedings, should so adjust it. But where the proceedings, although instituted under the statute, are resisted by the other creditors or stockholders, thus causing the proceedings to become of an adversary character, then the rule of apportioning costs according to the benefits received as a result of such proceedings does not apply. In speaking to this subject, in Gardner v. McAuley, 105 Ark. 439, we used the following language: “In Cowling v. Nelson, supra (76 Ark. 146), we said: ‘The utmost that can be said of the attorney’s fees are that they were part of the costs; and as to whether the court has, in amicable suits, any right to tax them as costs is a question that the courts are divided upon, but all agree that in adversary proceedings they can not be so taxed. ’ Upon consideration of that question it now appears to us that the weight of authority is against the taxation of attorney’s fees, even in amicable partition suits, unless the partition resulted solely from the services of the solicitors for one of the parties, and such services were accepted by the other parties. In adversary suits there is no ground for taxing the fees of the solicitor of one of the parties against the other parties, and the doctrine of allowance of attorney’s fees in amicable suits of this character should, we think, be limited to those cases where the services of the plaintiff’s solicitor not only result in benefit to the whole subject matter of the litigation, but are accepted and acquiesced in by the other parties. The rule does not apply where all of the parties appear by their respective solicitors and the proceedings are conducted through their joint efforts.” Applying the above principles to the facts of this record, our conclusion is that the proceedings instituted by E. S. Ready for the appointment of a receiver for the Valley Oil Company should be treated as friendly down to the time when the application was made for an order to sell the property. Then, for the first time, the appellants appeared and resisted the course which the receiver was proposing to take, and from that time on, it appears to us, that all that was done should'be treated as adversary, for it is manifest that the appellants thereafter objected to the receiver himself, and. asked that another be appointed, and resisted the allowance of claims by the receiver that were filed by the New South Oil Company, claiming that E. S. Ready (petitioner) was interested in that company, and that the allowance of these claims would not be for their benefit, nor for the benefit of the stockholders generally, but that the allowance of such claims would inure solely to the personal benefit of E. S. Ready. The record warrants the conclusion that appellants, from the time they appeared and resisted the order of sale, were treating the receiver and the acts done by him as hostile to their interests-, and as promoting the interests of E. S. Ready, not in his relation as a stockholder, but as furthering his private and individual interests, aside from such relation and in detriment to the interests of the appellants and other stockholders. (2) The services appellees rendered incident to having the receiver appointed, and down-to the time when the order of sale was asked for, when the proceedings became adversary, were reasonably worth the sum of $250.' It occurs to us that in an amicable proceeding for the ap-‘ p ointment of a receiver the sum of $250 would be ample compensation for the labor involved in securing the necessary information and in drawing the petition and in presenting the application and procuring the order appointing the receiver. Of course, after the proceedings became adversary, on account of the large amounts involved and the complicated issues raised, if this were a suit against Ready on quantum m&ruit for services, the measure of compensation would have to be commensurate with the labor and talents employed and required for the conduct of litigation of such magnitude. As to what would be proper remuneration in such case we do not determine here, for that issue is not before us. We are convinced that the attorney who testified as to the value of the services rendered, and the court in fixing the amount of compensation to the attorneys, based tbeir estimates upon the value of the entire services that were rendered in the proceedings, which, as we have seen, is not the proper measure of compensation to be allowed the attorneys and to be taxed as costs, and paid out of the funds of the insolvent corporation in the hands of the receiver. The character of the services rendered by the attorneys in connection with what was required to procure an order of a chancery court for the appointment of a receiver as in amicable proceedings appears to have been fully developed. This court, trying the cause de novo, may apply to the facts proved its own general knowledge of the subject matter of inquiry in determining the value of the services that were rendered by the attorneys. See Lilly v. Robinson Mercantile Co., 106 Ark. 571, and cases there cited. Therefore, the decree of the chancellor will be modified by reducing the. decree in favor of the attorneys to the sum of $250, and the -decree as thus modified will be affirmed.