Court Opinion

ID: 6896274
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:50:04.18017+00
Date Added: 2024-06-11T16:06:00.759705
License: Public Domain

Bean, J.
(after stating the facts). — A motion was filed in this court to dismiss the appeal on the ground that the answer of the individual stockholders containing affirmative allegations against Drake, and the charge contained therein, is not germane to the original suit brought by Nelson to enforce the May contract, and cannot be litigated therein; but as the appealing defendants have failed to sustain the averments of their answer by the evidence, it is unnecessary to consider the motion to dismiss, and we shall put this decision on the merits, assuming that in a suit to foreclose a mortgage, or to enforce the specific performance of a written contract against a corporation, the individual stockholders of the corporation, on being made parties, may litigate in the same suit the validity of a judgment against the corporation.
Defendant Drake, who is an attorney of this court residing in Portland, was, in May, 1888, employed by the then manager of the company, B. F. Baber, with the knowledge and consent of the directors, as attorney for the company in the water litigation, and other matters requiring legal advice, with no agreement as to the amount of his fees. By the terms of his employment he was to subordinate all his other business to that of the company, and hold himself in readiness at all times to attend to the business of the company. These water cases were originally commenced in Baker County, but, on the application of the defendant company, were transferred to the federal court, where a long, protracted, and sharply contested litigation ensued, involving substantially the entire value of the mine, for without the water rights the mine *512was practically valueless. That the defendant Drake rendered the services for the company according to agreement is not questioned; but the claim is that the amount charged by him is unreasonable, and largely in excess of the value of the services rendered, and that his judgment was obtained by fraud and collusion with Blaisdell, the manager of the company. A critical examination of the evidence has, in our opinion, failed to disclose any foundation for either of these claims. There is no evidence, so far as we can find, showing, or tending to show, any collusion between Blaisdell and Drake concerning the amount of attorney’s fees, or the recovery of his judgment; but, when process in the Drake action was served on Blaisdell, he not only immediately notified the president of the company in California, but consulted an able attorney in Portland, and was advised by him that Drake’s charges were reasonable, and that it would be useless to attempt to defend the action. Not only this, but the directors, and several, if not all, of the appealing stockholders, were informed of this action and judgment in November, 1889, yet took no steps to open the default, or defend the action. So far as this record discloses, the corporation never has, at any time, questioned the validity of the judgment, or the reasonableness of the attorney’s charges, notwithstanding the appealing stockholders obtained control of the corporation before this case was submitted to the court below, and the company appeared at the hearing by its attorney, who was content to try the case on the answer filed, which neither contests nor denies the validity of the Drake judgment. It is true this answer was prepared by Drake while he was attorney for the company, but after the change in the management, and the substitution of another attorney, no attempt was made to amend the answer, or put in issue the validity of the Drake judgment, but the case was tried, and is now before this court for hearing, on the answer as originally filed. And, besides, from the great preponderance of the testimony, the amount charged by Drake was not *513an unreasonable fee for his services. Judges Williams, Whalley, and Olmsted, United States District Attorney Mays, T. A. Stephens, W. M. Gregory, and others, all reputable attorneys of long standing in this court, agree in testifying that the services rendered by Drake were reasonably worth the amount charged therefor. Judge Williams says: “Some considerable time ago — a year ago, perhaps — I had a conversation with Colonel Drake about this case, in which he stated quite a number of the facts, and described, to some extent, his services. Subsequently to that I was engaged in a suit in which Sheppard was a party, and I think Mr. Nelson and the Nelson Mining Company was another party, in which I obtained some insight — not very extensive — into the case, and I have heard the evidence given by Colonel Drake read on this occasion. My judgment is that it would be somewhere between ten and fifteen thousand dollars; that that would be a reasonable compensation for the services in that case.” Judge Whalley, who was consulted professionally by Blaisdell when the action was commenced, and at that time looked into the merits of Drake’s fees, also testified: “I was once spoken to in reference to this matter for the purpose of estimating the value of Mr. Drake’s services. At that time the explanation given to me was not as full as it has been in the question just addressed to me, but I had an opportunity at that time of examining the brief that is referred to in the question. After looking over the whole thing, considering the amount of property involved, I then stated, as I now state, that I think that ten thousand dollars would have been an exceedingly low fee, and I do not think that fifteen thousand dollars, under the circumstances, would be a high one.” Judge Olmsted, who was attorney for the plaintiffs in the water-right litigation, and in two other cases against the company, and is therefore especially qualified to testify on that subject, says: “I was present during most of the time the testimony was being taken in those cases, except about ten days. I know of *514the services rendered by Colonel Drake, — know the character of the cases and the property involved. An ordinary and reasonable charge for a like service, in my experience of sixteen years’ practice in Oregon, would be about twelve thousand dollars. I wouldn’t put it less than that. I know it took a good deal of time; then there was an extensive lot of records to look up. There was an endless amount of work. ” To the same effect is the testimony of the other witnesses mentioned.
From these considerations we conclude, therefore, that the decree of the court below should be affirmed, and it is so ordered.