Marble v. Husbands

Opinion of the Court by William Rogers Clay, Commissioner Affirming. ■On June 27,1899, tbe Paducab Building & Trust Company made an assignment for tbe benefit of creditors. Tbe assignee accepted the trust and executed bond in tbe sum of $10,000.00 with tbe Fidelity & Deposit Company of Maryland as bis surety. In March, 1901, tbe assignee was required to give other surety on bis bond, and thereupon tbe Aetna Indemnity Company became bis surety on a bond for $10,000,00, 'Tbe assignee then instituted an [606] :action in the McCracken circuit court for a settlement of the trust. In December, 1903, the assignee was removed - and Grip - Husbands was appointed receiver, and the assignee was directed to turn over to the receiver all the undistributed property of the corporation. This the assignee failed to do, and thereupon the. receiver, by .direction of the court, brought suit against the assignee and his sureties to recover a large sum of money. Pending this action the assignee died, but the suit was prosecuted against the sureties and in 1909 a judgment was rendered against them for $3,365.74, with interest from December 23, 1903. On appeal by the receiver the judgment was reversed and the cause remanded with directions to refer the case to a master commissioner to report the assets that came into the hands of the assignee and the disposition made of them. Husbands v. Fidelty & Deposit Co., 144 Ky. 93, 137 S. W. 855. Upon the return of . the case a commissioner was appointed who filed a report • ■to- which exceptions were sustained because the. report was prepared by one of the attorneys and only signed by ■ the commissioner. Another report was'filed, which al1 lowed certain credits and the exceptions were overruled. ■ On final hearing, a judgment for $8,317.13 was- rendered against each of the sureties. From this judgment the ; Fidelity & Deposit Company, of Maryland appealed, and the receiver'prosecuted a cross-appeal. On the original , appeal the judgment was affirmed, and on the .oross-aj)peal the judgment was reversed with directions to award the. receiver six per cent, interest on the amount of recovery, .from the filing of the petition instead of from the rendition of the judgment. Fidelity & Deposit Co. v. Husbands, 174 Ky. 200, 192 S. W. 51. On the return of the case judgment was rendered in conformity with the mandate, and the Fidelity '& Deposit Company paid the amount recovered, which, together with damages and interest, was about $17,000.00. Messrs. Marble and Husbands, who represented the receiver, asked the court to allow them a fee of $7,000.00. . Evidence was heard and the court fixed their allowance ..at $3,600.00. The attorneys appeal. , On the hearing it was made to appear that the re- - ceiver had employed J. G. Husbands and the firm of Hen.drick, Miller & Marble.to represent him in the; suits against- the sureties. The first judgment against the -sureties was for $3,365.74. At the time of the rendition ..of this, judgment Mr. Marble had retired from the firm [607] of Hendrick, Miller & Marble, and neither he nor Husbands was present. The other attorneys regarded the judgment as a finality, and no thought of prosecuting an-' appeal therefrom was entertained. .Conceiving that the judgment was too small, Messrs. Marble and Husbands recommended to the receiver that an appeal be prosecuted, -with the understanding that they would charge nothing for their services unless the amount- of recovery was increased, and that if it was increased the court should fix a reasonable fee. Pursuant to this agreement they succeeded in reversing the first judgment and also the second judgment on the cross-appeal. The case was difficult and complicated, and the work which they perform-' ed was hard and laborious, and extended over a long period of time. Several attorneys testified as to the value of the servvices performed. One fixed $7,500.00 as a reasonable fee, another, $7,000.00, another, one-third of the amount recovered, and still another, one- half of the amount recovered. The record also showed that upon the rendition of the first judgment, the' firm of Hendrick, Miller Marble was allowed an attorneys’ fee of $1,200.00. ■, ' It is insisted that in view of the contingent character- of' their fee and-of the uncontradieted evidence* as to- whát ' was a reasonable charge under the circumstances, the ' court erred in disregarding the evidence and fixing thé ' fee at only $3,600.00. It must be remembered, however, ■ ‘ that while a receiver usually selects his own counsel, he '■ cannot make any contract of hiring, or agreement -for • compensation that is binding upon the court, for it is the-function of the court to determine both the necessity for ■ counsel and the compensation to be allowed. 23 R. C. L. sec. 148, p. 138. It is likewise the rule that while1 evidence relative to fees of counsel may be admitted for the purpose of informing the court as to what is just and reasonable under the circumstances, the court is not bound by the opinion of attorneys* but may review the character, extent and results of the legal services performed and determine for itself what is a reasonable fee; Stockholders v. First State Bank’s Receiver, 159 Ky. 484, 167 S. W. 678; and this was the plan adopted by the court below. .- It is true that in personal injury cases we have approved contracts for fees eqrial to onerhalf of the sum recovered, evé'n where infants were concerned, but these rulings Were based on the fact that such was the customary and-usual fee in actions of that character; but we are not inclined [608] to apply the same rule to actions brought by a receiver, even though the attorneys were willing to do without a fee unless their services resulted in a recovery. Here, the appellants were the attorneys for the receiver when the original judgment was rendered. If they in good faith believed that a greater sum could be recovered, they would have been remiss in their duty had they failed to advise the receiver to prosecute an appeal. Having performed this duty, and having induced the receiver to prosecute an appeal, we perceive no reason why their services should be regarded as a separate and independent undertaking rather than a part of the original employment. Under this view, the case is simply one where the original attorneys materially increased the recovery ' by means of an appeal, which it was their plain duty to prosecute. While the result was uncertain, the uncertainty was no greater than is usual in such cases. While the attorneys are to be commended for their fidelity, their persistence and the wisdom of their advice, as well as for the ability with which they handled the case, yet after it was determined on the first appeal that the burden was on the assignee.and his sureties to account for assets which the assignee’s .settlements showed had been received by him and not been-disposed of, the case was one calling for the services of a careful commissioner rather than for the skill of an experienced attorney. Looking at the case in this light, we conclude that although the attorneys succeeded by the appeals and subsequent proceedings in adding almost $17,000.00 to the original judgment, an allowance of $3,600.00, which was more than twenty per cent, of extra recovery, was, amply sufficient for the services.performed. Judgment affirmed.