Swinson v. Jarratt

Darrell Hickman, Justice. This is an appeal from a decision in a partition suit before the St. Francis County Chancery Court. The court, finding that the appellees had an undivided one-fourth interest in some 380 acres, appointed commissioners and ordered a sale; the property was sold to Capital Growth Corporation for $180,000.00. The appellant, a ninety year old woman whose family had owned the land for several generations, appeals alleging five errors. We find no merit in three of those allegations which relate to the partition decree and order of sale because no appeal was taken from such decree and order. The other two allegations of error contain merit requiring us to reverse a portion of the order of confirmation and remand the case for another hearing. One of the allegations of error is that a commissioner and a guardian ad litem serving in the case were interested parties in the purchase of the land and, therefore, the sale was void under Ark. Stat. Ann. § 34-1830 (Repl. 1962). The other allegation of error is that the court improperly awarded one of the appellees an attorney’s fee for representing himself. The appellees, Denny Jarratt, a banker, and Phillip Hicky II, a lawyer, bought a one-fourth interest in this land from several heirs. They knew their title would be questionable but decided the endeavor was worth an investment of some $20,000.00. They made the purchase in October of 1976, with each buying an undivided one-eighth interest. Two months later they filed a partition suit which was resisted by the appellant. After the parties had filed several pleadings, the appellees, on July 11, 1977, filed a request for 128 admissions. The request was not answered nor was an extension of time requested by the appellant’s lawyer within ten days. On August 1, 1977, a petition was filed by the appellant’s attorney to withdraw citing that he had a failure of communication with the appellant. This was granted after a hearing on the 18th day of August. On August 25, a new attorney for the appellant filed a request for an extension of time in which to answer the request for admissions. (Later, proposed answers to the request for admissions were offered.) The court, after a hearing, denied the motion because no extension was obtained prior to the expiration of time in which to answer. The testimony taken at the hearing on the motion indicated that the appellant did not receive the request for admissions within the time allowed for answers. According to the appellant’s former attorney the request which was mailed to her was returned; sometime later, the request was remailed. No reason was given by the attorney for not obtaining an extension of time. The court granted the appellees an undivided one-fourth interest in the property on the basis of the pleadings and the unanswered request for admissions. In other words, essentially there was a default on the question of appellees’ title. Three commissioners, appointed by the court, filed a brief statement asserting that the land could not, without prejudice, be partitioned and recommended a sale. At the court-ordered sale, the land was purchased by Capital Growth Corporation for $180,000.00. After the sale, but before confirmation, Troy Glaspar, Jr., a relative of the appellant, filed a petition to intervene in the matter stating that he had a power of attorney from the appellant. He objected to the granting of the partition decree and the procedure used by the commissioners. He also pointed out that one of the commissioners had a conflict of interest because he worked for the buyer. He asked for a reconsideration of the matter. The court entered an order confirming the sale, and, apparently in reference to the numerous allegations of irregularities raised in the petition of Troy Glaspar, Jr., found that there were no procedural defects. However, the court did not address the problem of conflict of interest. On appeal, the appellant argues that the sale and confirmation are void because of a violation of Ark. Stat. Ann. § 34-1830 (Repl. 1962), which provides: No commissioner, nor any person for his benefit, shall purchase or be directly or indirectly interested in the purchase of any of the premises sold, nor shall any guardian of any minor or person of unsound mind, party to the proceedings, purchase or be interested in the purchase of any of the lands, the subject of the proceedings, except for the benefit or in behalf of his wards; and all sales contrary to the provisions of this section shall be void. The appellant argues that there is evidence that Edward Harris, one of the three commissioners, was an original incorporator and stockholder of Capital Growth Corporation. The appellees virtually concede that there may have been such a conflict of interest and that the sale may be void because Edward Harris is an incorporator and stockholder in Capital Growth Corporation. Certainly, if that is the case, the sale ought to be set aside and a new sale ordered. A commissioner is a trustee and it is his duty and obligation not only to avoid, in every way, participating in the purchase of property, the sale of which is under his supervision, but also to report to the court any possible conflict of interese Harris owed this duty to the parties and the court. The trial judge had before him an allegation that should have been addressed and answered and we remand the case for a hearing on this issue. If it is determined that Edward Harris has an interest in the corporation, of course the sale should be set aside. A new sale may be ordered if the appellant tenders into the court the consideration she had already received from the first sale. We do not go back beyond the sale because those issues were not properly preserved for appeal. The other allegation of error we address is regarding an attorney’s fee awarded to Philip Hicky, II. He asked for $9,-000.00 and the court awarded him a $4,500.00 fee. There was a hearing and it was Hicky’s testimony that essentially his law firm represented him in the matter, and although he had done much of the work, the firm would have to be paid for the services. The record indicates that all court appearances were by Phillip Hicky, II. He concedes he did a lot of preliminary work that might not be strictly characterized as “legal.” We do not feel that Arkansas law permits an attorney to receive an attorney’s fee when he is also a petitioner in a partition suit. Ark. Stat. Ann. § 34-1825 (Supp. 1977), which permits an attorney to obtain a fee in a partition suit, provides: Hereafter in all suits in any of the courts of this State for partition of lands when a judgment is rendered for partition in kind, or a sale and a partition of the proceeds, the court rendering such judgment or decree shall allow a reasonable fee to the attorney bringing such suit, which attorney’s fee shall be taxed as part of the costs in said cause, and shall be paid pro rata as the other costs are paid according to the respective interests of the parties to said suit in said lands so partitioned. We have held that an award of attorney’s fees under that statute is unconstitutional. Cole v. Scott, 264 Ark. 800, 575 S.W. 2d 149 (1979). However, under circumstances where a lawyer is entitled to an attorney’s fee because he files a petition and partition is granted, the fee should be set carefully by the court after deliberation and then only for an amount that is fair and justified. While we have approved fees for as much as 5% of the sale price, we recently limited the fee to about 3% of the sale price. Fortuna v. Achor, 254 Ark. 1035, 497 S.W. 2d 251 (1973); Cole v. Scott, supra. We adopt the view in regard to attorney’s fees for parties who represent themselves that they are improper. Compare Muller v. Martin, 116 Cal. App. 2d 431, 253 P. 2d 686 (1953). We do not mean to imply that the trial court or the appellees acted improperly in any way. We have never had these questions before us heretofore. However, this action was resisted by the appellant from the beginning and the appellees as much as conceded that they bought the property with the intention of having it partitioned and making a profit. The evidence indicates that their profit has been at least $10,000.00; they have doubled their money. Aside from the legal issues raise .», it would, in our judgment, be unfair to penalize the appellant by adding to the costs of the proceeding an attorney’s fee, when, in fact, one of the petitioners was simply representing himself. Therefore, the case is remanded for a hearing to determine whether the sale is void under Ark. Stat. Ann. § 34-1830 (Repl. 1962). We reverse the trial court’s decision on the matter of the attorney’s fee and affirm the judgment in all other respects. Affirmed in part. Reversed and remanded in part. Fogleman and Holt, JJ., dissent.