Rachels v. Garrett

Hart, J. (after stating the facts). The chancellor found the facts tó be that Erganbright owed Rachels $3,840 on account of the land deal and in payment of his legal services; but further found that there was no indebtedness for the $2,500 fee charged by Rachels for his services in a threatened suit against Erganbright to oust him from his position as director on a levee and drainage board. It will be noted that the settlement between Erganbright and Rachels on the 29th day of May, 1920, was made on the basis that Erganbright owed the $2,500 fee. The face value of the Ladd notes was $6,650, and Rachels considered them good for his indebtedness, which he claimed to be $6,340. One of the Ladd notes was for $3,000 and was due within a few days after the settlement was made. The chancellor did not allow Rachels any fee for his services in the threatened proceedings against Erganbright relative to his removal as a levee and drainage commissioner, and the correctness of the chancellor’s decision depends largely upon the correctness of his finding in this matter. The reason is that Erganbright and Rachels both considered this fee as being due in making the transfer of the notes. At that time Erganbright was largely indebted to the bank, and he had no right to transfer his assets, except in payment of debts which he actually owed. Of course, as between Erganbright and Rachels, they had a right to make a contract for the payment of whatever fee they might agree upon. We have no concern about that. But the rights of creditors have intervened, and they may question the reasonableness of the fee. If the fee was unreasonable or not due, this would to that amount deprive them of assets of Erganbright which they might, through the receiver, subject to the payment of their claims. It will be noted that Erganbright employed Rachels about the drainage matter on the 26th day of April, 1920, and that he disappeared on June 2, 1920. It is true that the record shows that Rachels represented Erganbright in the county court about the matter, but it does not disclose what proceedings were actually taken. The testimony is vague and indefinite about the whole matter. In making his finding the chancellor had a right to consider the relationship between the parties, the' reasonableness of the employment, the amount or importance of the subject-matter1 of the suit, the degree of responsibility involved, and the time and labor bestowed. There is no fixed standard by which such services can be determined, and the court may apply to the testimony its own experience and knowledge of the character of such services. Jacoway v. Hall, 67 Ark. 340, and Sain v. Bogle, 122 Ark. 14, and cases cited. The value of the plaintiff’s services in the instant case is a matter with which the chancellor must necessarily have been familiar. The whole proceedings regarding the insolvent bank were before him. This included the relationship of Rachels to Erganbright as attorney and also their relationship to the bank. "When the court is informed of the nature and extent of such services, its own experience furnishes it with an important element necessary to fix their value. The amount fixed by the chancellor was deemed by him as sufficient payment for all the services rendered by the attorney. This was necessarily the result of his finding as a whole. The chancellor found that the attorney had, under all the facts and circumstances of the case, received adequate compensation, and when we consider his knowledge of the extent and character of such services, it can not be said that his finding of fact in this respect is against the preponderance of the evidence. Therefore, under the settled rules of this court, the finding of fact cannot be disturbed on appeal. Again it is insisted that the chancellor should only have charged Rachels with the difference between $3,840, the amount of fees allowed him, and $4,500, the amount which Rachels actually received on the Ladd notes. It will be remembered that the court charged him with the difference between $3,840 and the face value of the Ladd notes. The creditors had nothing to do with Rachels settling with Ladd for $4,500. One of the notes for $3,000 was due at the time. It will be noted that Rachels only received this amount in cash and took a note for the remaining $1,500. The creditors had nothing to do with this transaction. -This settlement between Erganbright and Rachels was on a basis that Erganbright owed Rachels $6,340 and the face value of the notes was $6,650. They bore 8 per cent, interest, and the parties settled on the basis that the notes were about worth their face value. Therefore, we do not think the court erred in charging Rachels with the difference between the amount allowed him and the face value of the notes. He can not escape liability on the ground that he settled with Ladd for the notes for a much less sum than their face value. It follows that the decree must be affirmed.