Court Opinion

ID: 9671392
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:35:35.973546+00
Date Added: 2024-06-11T18:16:09.686682
License: Public Domain

George Bose Smith, J., (dissenting in part). With respect to the main issue, the $30,000 fee, I agree that there was no conflict of interest in The Attorneys’ representation of both American-Canadian and Aldridge & Stroud in their common fight against third persons. But I do think that a conflict of interest was foreseeable, and in fact has arisen, with respect to the $7,500 fee that is being allowed for the services of The Attorneys in handling the claim of one of their clients, Aldridge & Stroud, against another client, American-Canadian. It will he remembered that Aldridge & Stroud held American-Canadian’s note for $75,000. The note bound the maker to pay a 10 percent attorney’s fee if a suit for collection became necessary. Such a provision does not mean, however, that the court must award the full 10 percent in every instance. Only a reasonable fee is to be allowed. Citizens Nat. Bank v. Waugh, 4th Cir., 78 F. 2d 325, annotated in 100 A.L.R. 939. Our statute is in harmony with this rule, for it validates such a stipulation for an attorney’s fee, not to exceed 10 percent, “for services actually rendered.” Ark. Stat. Ann. § 68-910 (ftepl. 1957). The requirement that the fee be reasonable creates a true dilemma in this case. One horn: If American-Canadian made no defense whatever to the claim of Aldridge & Stroud, so that there was actually no dispute between these parties, then American-Canadian may fairly question the reasonableness of a $7,500 attorney’s fee for taking what amounted to a default judgment in a friendly suit. The other horn: If American-Canadian resisted the claim, so that the fee was unquestionably earned, then that very resistance demonstrates that an actual controversy existed between the two litigants. I do not mean that a fee of $7,500 was not earned. The claim of Aldridge & Stroud was contested by other creditors of American-Canadian, so that The Attorneys were confronted with a serious lawsuit. But American-Canadian is certainly in a position to assert that, after having made no resistance itself to the claim, it ought not to be compelled to pay a fee that was brought about only by the opposition of third persons. Hence the issue that has been dormant all along and now becomes active is this: Which of The Attorneys’ clients is to be compelled to pay this fee! I am unable to agree with the majority’s conclusion that in this situation no conflict between the clients is discernible.