Court Opinion

ID: 3549305
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:02:31.978958+00
Date Added: 2024-06-11T14:22:36.555692
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 149
 OPINION
This is an appeal taken by an attorney for a receiver from an order allowing fees to the attorney, and from an order denying his motion to vacate same. See Mortimer v. Pacific States Savings Loan Co., Nev., 141 P.2d 552.
On May 9, 1940, George B. Russell, Jr., was appointed receiver of the property of the defendant land and livestock company in this state. On the day following, appellant, at the request of the receiver, was appointed his attorney and continued to act in that capacity until the receiver died on October 15, 1942. On October 28, 1942, E.A. Clawson was appointed receiver of the defendant, and at his request an attorney, other than appellant, was appointed for the new receiver. The court, on December 5, 1940, by its written order, allowed appellant the sum of $2,000 in full for his services to the receiver from the date of his appointment to and including that month, which was paid by the receiver to appellant. On December 9, 1941, pursuant to an application by the receiver for increased compensation to himself and for payment of attorney fees, the court entered a minute order denying receiver's application for increased compensation. As to the payment of attorney fees, the following minute order was entered: *Page 151 
"It is hereby ordered that the receiver pay Messrs. Badt 
Wilson, attorneys representing the receiver, the sum of $3000, out of the funds now in his hands, for the calendar year of 1941, and the court reserves the right to fix any future fees for services performed in the future."
On the following day a formal written order was filed, which recited: "Now, therefore, the court being fully advised as to the law and the facts in the premises, and good cause appearing therefor, it is hereby ordered: `That there is hereby allowed and said receiver is hereby ordered to pay out of the funds in his hands, to Messrs. Milton B. Badt and Orville R. Wilson, as compensation for their services as attorneys for the receiver, for the calendar year 1941, the sum of $3000 subject to the right hereby reserved by said court, to consider the matter of any additional allowance at the close of the receivership, or when proper occasion should arise."
Appellant's employment having terminated with the death of Receiver Russell, the judge suggested to appellant that if he would prepare an order the court would fix his compensation in full. Appellant stated that it was the duty of the receiver to petition the court to fix his compensation and give him (appellant) an opportunity to be heard on it. The judge endeavored to get the receiver to do this but he declined to do so. Whereupon the court, on December 11, 1942, entered an order which, among other things, contained the following:
"Therefore, upon the Court's own motion, it is Hereby Ordered, Adjudged and Decreed, as follows, to-wit:
"1. That E.A. Clawson, the receiver herein, be and he is hereby authorized, empowered and directed to pay to Milton B. Badt for the firm of Milton B. Badt and Orville R. Wilson, the sum of Two Thousand Five Hundred Dollars ($2500.00) as their full and entire unpaid compensation for services rendered herein."
The receiver sent appellant a check for the amount, which he refused to accept, returning it to sender. The appellant then noticed a motion to vacate the order on *Page 152 
the ground that it was inadvertently made, in that it was made without hearing, and without notice and without opportunity to any of the parties to be heard in connection therewith, and that the amount allowed was inadequate to compensate him for his services. A hearing was had and the court entered an order denying the motion. It made a further order that the 29th day of January 1943 at 10 a.m. be fixed as the time for the hearing of the determination of reasonable attorney fees in the premises, at which time appellant could offer proof to show that the attorney fee heretofore fixed and allowed was unjust and unreasonable. The hearing which followed was quite extensive. Appellant testified in considerable detail as to the services rendered by him to the former receiver, and also testified as to the inadequacy of the compensation allowed him by the court. Three prominent attorneys of the state appeared as witnesses for appellant and testified as to the value of his services. No testimony was introduced by the plaintiff or receiver. One witness was called and examined by the court. The motion was submitted and taken under advisement. A written opinion was rendered and filed by the court, wherein it was ordered: "For the reasons given, it is hereby ordered that the said order entered by this court on December 11, 1942, will stand as entered."
The appeal is from that part of the order of December 11, 1942, which orders the sum of $2,500 to be paid to appellant as full and entire unpaid compensation for services rendered, and from the order of February 27, 1943, denying appellant's motion to vacate said portion of said order of December 11, 1942, and denying appellant's application for an allowance of further attorney fees.
The main question is the adequacy of appellant's compensation. There is a dispute between him and opposing counsel as to the period for which the former may claim for services rendered. Appellant conceded that the first *Page 153 
payment he received of $2,000 was in full for his employment from the date of his appointment to and including December 1940, but contends that his compensation, unpaid, should be allowed for the year 1941 and to and including October 15, 1942, the date of the receiver's death. Opposing counsel contend that the record shows that appellant received compensation in full for 1941. This is predicated upon the claim that the minute order of December 9, 1941, is controlling as against the formal written order of the following day, and that appellant, having failed to take an appeal from said minute order, is concluded by it.
1-3. The formal written order signed by the court, must, we think, supersede the minute ordered entered by the clerk. State v. Bell, 34 Wash. 185, 75 P. 641; Hanley v. Most, 9 Wash. 2d 429,115 P.2d 951, 118 P.2d 946; 34 C.J. 506, n. 64; 21 C.J.S., Courts, sec. 237, p. 445. It must be taken as the best evidence of the court's decision. The fact that it was prepared by appellant is of no consequence. A court is presumed to read and know what it signs. The practice of preparing entries for the court to sign and enter of record, is proper. 21 C.J.S., Courts, sec. 226, p. 421. By the same principle, where there is a conflict between a minute order and a judgment, the latter will prevail. Gould v. Austin, 52 Wash. 457, 100 P. 1029, 1030. In the above case the court said: "The rule in this state is that, where there is a conflict between the clerk's minute entry of the court's proceedings and the formal written judgment signed by the judge, the latter will control, and be deemed the actual judgment of the court. This was held by us in the case of State ex rel. Jensen v. Bell, 34 Wash. 185, 75 P. 641, where we prohibited the trial judge from enforcing an order as recorded in the clerk's minutes instead of the order as recorded in the formal written entry signed by him; the orders as recorded being conflicting."
Citing the above case, and holding to the same effect, *Page 154 
is McFadden v. McFadden, 22 Ariz. 246, 196 P. 452-453, wherein the court said: "Moreover, we think, in conformity with the rule in at least one jurisdiction, that where this is a conflict between the entry made by the clerk in the minutes and the solemn judgment of the court, the terms of the latter should be given force and effect, rather than of the former."
4. It has been urged that the formal written order of December 10, 1941, is ambiguous; that therefore the minute order should govern, and that the appellant, having taken no appeal from it, is concluded by it. The formal order is not ambiguous. It states in unequivocal language: "The right reserved * * * by said court to consider the matter of any additional allowance at the close of the receivership, or when proper occasion should arise." The language refers to the past as well as the future. If the trial court did not consider it so, why did it permit appellant to offer proof as to the whole period of his employment? Why did it not restrict his proof to 1942? If it did not wish to make a change in the minute order why did it sign the latter order at all? Courts are not given to making idle orders.
5. Neither the attorney for the plaintiff nor the attorney for the receiver took the position that the later order is ambiguous. They placed their contention squarely on the proposition that the minute order was controlling. The formal written order stands unimpeached. We hold that it is not a final order and that it prevails over the minute order.
We now come to the question of the adequacy of the amount allowed by the court for the appellant's services to the receiver. Counsel for the plaintiff or receiver introduced no evidence or testimony in rebuttal of appellant's case established at the hearing. They stand upon the declaration that the compensation allowed was strictly within the discretion of the trial court and cannot be disturbed by this court unless it is found there was an abuse of discretion. They assert that there was no such abuse. The defendant, as its name implies, was *Page 155 
engaged in the land and livestock business when its property was made the subject of a receivership. Its business had been conducted on an extensive scale in this state prior to the receivership. The value of its assets and business is indicated by the fact that the receiver was required to furnish a bond in the sum of $200,000. The extent and value of the estate administered, as appears from appellant's testimony, which is undisputed, appears as follows:
"On January 21, 1942, Mr. Russell, as Receiver, had a local independent livestock appraiser make an appraisal of the stock on hand, and this showed the following valuations based on the prices given to the individual classifications:
8850 cattle ______________________________________  $491,150.00
32693 sheep ______________________________________   307,654.00
 832 horses ______________________________________    41,600.00
                                                   ____________
Total, cattle, sheep and horses __________________  $840,414.00
  "To the above prices should be added the following:
Classification of 2744 cows valued at $55.00
   per head should be raised to $65.00 per
   head, or an addition of _______________________    27,440.00
Classification of 869 2-year-old heifers valued
   at $55.00 per head, should likewise
   be increased to $65.00 per head, making
   an addition of ________________________________     8,690.00
Increase of cattle herd from 8850 head to
   9100 head, a difference of 250 head, at
   $50.00 per head _______________________________    12,500.00
Hay on hand October 28, 1943, being
   10,685.73 tons at $7.50 per ton _______________    80,142.97
Cash in bank September 30, 1942 __________________   263,109.04
                                                   ____________
Total of cash and quick assets of personal
   property ______________________________________ 1,232,296.01

"The above can be said, without a great variation, to be the immediate cash value of the personal property in the hands of Geo. Russell, Jr., Receiver, at the time of *Page 156 
his death, held by him under his $200,000.00 surety bond. Other personal property, running into many thousands of dollars, would consist of machinery, ranch equipment, commissaries, and supplies on hand, etc., and also including hogs and poultry which have not been included here. It would probably not be out of the way to figure the land as of the approximate value as the livestock, which would run the total valuation close to two and a half million dollars."
During appellant's employment from May 10, 1940, to and including October 15, 1942, the receivership continued in an extremely active status. Business was carried on by the receiver in all its branches. The receivership was so well administered that on September 30, 1942, there was cash in bank in the sum of $263,109.04, whereas prior to that time, it had been necessary to borrow money on receiver's certificates, and for the receiver to advance his own money to carry on the business.
6. As heretofore stated, appellant was a witness in his own behalf. He is known to this court as an attorney of ability and integrity in the profession. His testimony shows that he has been engaged in the practice of law continuously since 1909, a period of over 32 years, of which approximately 27 years had been spent continuously in Nevada. His practice has been extensive in fields involving lands and livestock holdings, banks, receiverships, which should qualify him to give expert services to a receiver in a case of this kind. We mention the above because the skill and faithfulness of an attorney are elements to be considered in fixing the fees of an attorney for a receiver. Appellant's testimony was presented at the hearing in the form of a written statement from which he testified, and covered in detail his activities during the entire course of his employment. To enumerate them in full would serve no useful purpose and unreasonably extend this opinion. His office files were presented and examined. Suffice it to say, that his work consisted of what would reasonably *Page 157 
be expected to engage the attention of an attorney for a receiver in a receivership of that magnitude and character, in a business, which, in this state, experience has shown to be of a nature requiring great skill and care for successful management. The management was so thorough and businesslike in this case as to elicit from one of the witnesses, Mr. M.A. Diskin, a former attorney-general of this state, when he was undergoing cross-examination by the court, the following: "If the Court please, if you'll permit me to make a remark: I have examined a great number of receiverships and never yet have I examined a proceeding where it has been so expeditiously carried on, everything on time and so methodically, as the records in this case disclose that this receivership was carried on. I appreciate a great deal of that credit is given to the Court, but we must give some credit to the attorney and the receiver."
And again this witness, while still on cross-examination by the court, commenting on the responsibility involved, testified: "Whenever you take assets worth a million and a half or two million dollars and dump them into the lap of the Court, and a receiver, and the receiver's attorney, you have got a responsibility that doesn't end when the day's over. That attorney and the Court takes it to bed with them, you couldn't say, when the day's over, but when the work's through."
The three expert witnesses called by appellant, Mr. Samuel Platt, Mr. Lester D. Summerfield, and Mr. M.A. Diskin, are among the outstanding attorneys of this state, and each has had a wide experience in receivership and similar matters. After listening to appellant's testimony they testified respectively, as follows: Mr. Platt stated in his opinion, $20,000 for appellant's entire professional services for the receiver, would be a reasonable, proper amount to be paid. Mr. Summerfield testified that in his opinion "the fee should be in the minimum of $15,000 to a maximum of $25,000." "I leave a leeway," he said, "through lack of a complete familiarity with all the minute details in the case and services *Page 158 
rendered." Mr. Diskin testified that in his opinion the reasonable value of such services should be: "A minimum of $15,000 and a maximum of $22,500, or a minimum based at the rate of five hundred per month, and a maximum based at the rate of seven hundred fifty a month."
7, 8. The foregoing is a fair summarization of the evidence and testimony which the trial court had before it when it finally ordered that the allowance of $2,500 should stand as compensation in full for appellant's services. In finding the reasonable value of a receiver's or his attorney's fees, the elements to be considered as controlling are fairly well stated in United States v. Admiral Refining Co., Tex. Civ. App., 146 S.W.2d 830, 831, cited by plaintiff: "`The considerations that should be controlling with the court in fixing compensation are the value of the property in controversy; the practical benefits derived from the receiver's efforts and attention; time, labor and skill needed or expended in the proper performance of the duties imposed, and their value measured by the common business standards; and the degree of activity, integrity, and dispatch with which the work of the receivership is conducted.' * * * The measures to be weighed in fixing attorney's fees in receivership proceedings are, to a large extent, the same which are considered in fixing the receiver's fees. In fixing the allowances to either, the governing principle is that the compensation so allowed should be measured by the reasonable value of their services rendered."
9. Applying this to the evidence and testimony in this case we think that appellant's services are reasonably worth more than was allowed by the trial court. We have in mind, and agree with the general rule, that the fixing of compensation of receivers or their counsel is ordinarily a matter within the discretion of the trial court and will not be interfered with on appeal, except in cases where it has been abused. Such allowances are presumptively correct. Citation of authority is *Page 159 
unnecessary to attest this well-settled rule. However, it is held that the matter "is discretionary only in the sense that there are no fixed rules for determining the proper amount and not in the sense that the court is at liberty to award more than fair and reasonable compensation," 53 C.J. 378, nor less than such compensation, for the same reason.
10, 11. One consideration, we think, which contributed to the cause of the trial court's failure to exercise a proper discretion in the premises, stems from the order of December 11, 1942. That order was invalid because made without notice and without opportunity to any of the parties to be heard. As was said in Weber v. Empire Holding Corporation, 149 Or. 503,41 P.2d 1084, 1087, quoting from Ruggles v. Patton, 6 Cir., 143. F. 312, 314: "Nothing is better settled than that an allowance to a receiver by way of compensation for his services is not subject to the arbitrary determination of the court, but should be made upon a hearing at which the parties interested have an opportunity of contesting the claim." Colkett v. Hammond,101 Wash. 416, 172 P. 548; Heater v. Boston-Montana Corporation,75 Mont. 532, 244 P. 501.
The same rule applies as to an attorney for a receiver. No objection to the order being set aside pursuant to appellant's motion was made by any attorney in the case. The court refused to set it aside and kept it in force and effect during the hearings. The result was that, while the court permitted appellant to introduce testimony as to what would constitute fair and reasonable compensation, he was compelled to present all his testimony in the face of that arbitrary and invalid order. This procedure placed him somewhat in the unhappy predicament of one introducing evidence on an issue after a decision had been rendered. The error of the court in not setting aside the order and receiving the testimony on an open issue was fundamental, and, in our opinion, was prejudicial to appellant throughout the hearing. The order contained a finding of the court *Page 160 
that appellant had not been compensated for his services from January 1, 1942, to October 31, 1942. This, by plain implication, finds that he had been fully compensated for all former services, whereas we have decided that he was not concluded by the formal written order of December 10, 1941 for additional compensation for the year 1941. We think it is a fair presumption to indulge from the record that the court was influenced, unconsciously perhaps, by this order. This is indicated by the record before us. The court, throughout the hearing, strove energetically to defend the order. Notwithstanding the plaintiff was represented by the deputy attorney-general of California, who conducted a very thorough cross-examination of appellant, which elicited from Mr. Robbins, attorney for the defendant (who declined to cross-examine), the observation that "Mr. Peckham seems to have covered the entire field of cross-examination," the court, at this juncture, subjected appellant to a rigid cross-examination endeavoring to show that many of the conferences which appellant had listed with the receiver's bookkeeper, Mr. Zuber, as services performed by appellant were of no consequence; also that all of the credit for the receiver's accounts to the court was due to the bookkeeper. The same procedure was maintained as to the accounts when Mr. Diskin was undergoing cross-examination by the court. He was questioned at length in an effort to show that appellant was seeking to claim for services which it was the duty of the receiver to perform without the aid of counsel. Again, when movant and plaintiff had closed, the court, on its own motion, called Mr. Zuber, bookkeeper and accountant for receiver Russell, and had him sworn as a witness, and examined him at length, endeavoring to show that most of some thirty-three conferences which appellant had listed as having had with him prior to Russell's death, were unnecessary and of no consequence. However, on cross-examination by appellant, Mr. Zuber did not deny that any of the *Page 161 
conferences claimed were had. We think the opinion of this witness that the conferences were of no consequence is not of a quality to conflict with the testimony of appellant in this respect.
Another circumstance which we think was unfavorable to appellant was the court's idea that the defendant was at all times during the receivership a going concern. This conviction was repeatedly stressed by the court in its written opinion of December 5, 1940, in which appellant was allowed $2,000 for his services for that year. Again the same belief is indicated by the court in its cross-examination of Mr. Diskin when it propounded the following question: "And where it is simply like in this instance, a going concern, where the receiver simply managed a going concern, that should make some difference, shouldn't it?" This was an erroneous view, and of course lessened the value of appellant's services in the mind of the trial court. It is not unreasonable to presume that this view induced the trial court to allow appellant's compensation on the theory of a retainer. In its written opinion of December 5, 1940, it was stated: "In short, the attorney's employment so far at least, should be considered more in the nature of a retainer." The court, as we have seen, allowed appellant's compensation at the rate of $250 per month during that year and continued it throughout his employment at that rate.
If defendant was a going concern, it was only so towards the end of receiver Russell's administration, and made so by his able management, to which it must be allowed appellant's services contributed to some extent.
12. Appellant contends that the trial court ignored the testimony of his three witnesses. We concede that the court was not bound by such testimony. Such is the clear weight of authority. It was bound, however, to consider this testimony, and if its intrinsic force and probability outweighed its own estimate of the *Page 162 
worth of appellant's services, to accord probative value to it. Whether the trial court did consider their testimony in this manner, we have no means of knowing. It is certain however, that it was not influenced by it.
However, by reason of the condition of the record before us we are not bound by the trial court's opinion in regard to the testimony of the expert witnesses, and we, on the contrary, accord weight to it.
13. The rule heretofore adverted to that fixing the compensation of receivers and their counsel is ordinarily for the trial court and will not be interfered with on appeal, unless there is an abuse of discretion, is based upon the consideration that usually that court has better means of knowing what compensation is just and reasonable than the appellate court. But this consideration is of no force in this case because appellant's testimony, which is not contradicted in any respect, has presented such a clear picture of all that transpired in the lower court, concerning which he rendered service during his employment, that we are able to judge the matter as well as the trial court.
14, 15. For the foregoing reasons, we see no useful purpose to be accomplished in sending the case back for a new trial for the purpose of an additional allowance for the year 1941. We are able to fix additional compensation for appellant for that year. We are not authorized to do so for the ten months of his service in 1942 for the reason that the order appealed from making an allowance of $2,500 was void, and it follows that no compensation has been legally allowed for that period. It is incumbent on the trial court in the first instance to fix a reasonable fee for those months.
It is said that the order of February 27, 1943, should be regarded as a valid, final order fixing the amount of appellant's compensation for his services performed in 1942, and that he is entitled to have this court decide whether the trial court abused its discretion in not fixing a higher amount than $2,500 for the services performed in 1942. These statements are made on the *Page 163 
theory that there is a valid order fixing such amount, whereas there is no such order. The order of February 27, 1943, made no allowance for attorney fees. It read: "For the reasons given, it is hereby ordered that the said order entered by this court on December 11, 1942, will stand as entered."
16, 17. How then could the order of February 27, 1943, be regarded as a valid order, or any order fixing compensation? The order of December 11, 1942, fixing appellant's compensation for 1942 at $2,500, as we have held, is void. No act of appellant in introducing testimony in the face of it, by permission of the trial court, could render it valid. A void order cannot be enlivened by waiver or any other method to suit the convenience of a party. In legal contemplation it is without force or effect. Being void, no compensation was fixed by it, and it is still the duty of the trial court in the first instance to fix a reasonable fee for the ten months in 1942. For this court to proceed now to decide whether the trial court abused its discretion in not fixing a higher amount than $2,500 for the services performed in 1942, would be exercising original rather than appellate jurisdiction.
What we have said of the actions and statements of the trial court must not be taken as censure. Our purpose in that respect has been merely to cite causes, which in our opinion, induced the court to underestimate the amount and value of appellant's services. No reflection is intended.
The court's desire to protect the estate submitted to its jurisdiction from unnecessary expense is commendable. As has been justly said, a court should not be liberal with other people's money. On the other hand, the laborer is worthy of his hire. The practice of frugality and conservatism in the administration of receiverships should not be advanced to the extent of outweighing considerations of skill and worth.
18. The orders appealed from are reversed and the lower court is directed to set them aside and to enter *Page 164 
an order allowing appellant a fee of $3,000 as additional compensation for his services for the year 1941. Such order, when entered, will stand affirmed.