{ "id": 1379780, "name": "Coston v. Kealy", "name_abbreviation": "Coston v. Kealy", "decision_date": "1924-10-20", "docket_number": "", "first_page": "594", "last_page": "599", "citations": [ { "type": "official", "cite": "165 Ark. 594" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "87 N. Y. 559", "category": "reporters:state", "reporter": "N.Y.", "opinion_index": -1 }, { "cite": "154 Ark. 302", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "231 S. W. 195", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": -1 }, { "cite": "149 Ark. 11", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8717467 ], "opinion_index": -1, "case_paths": [ "/ark/149/0011-01" ] }, { "cite": "33 Ark. 234", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "22 Ark. 173", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "145 S. W. 245", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": -1 }, { "cite": "103 Ark. 513", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1351997 ], "opinion_index": -1, "case_paths": [ "/ark/103/0513-01" ] } ], "analysis": { "cardinality": 482, "char_count": 10890, "ocr_confidence": 0.49, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.05188951170512258 }, "sha256": "dc83e7c26e12297cc184b9dcfbc087a73ff56b56b12630213fbb412a1f9022e0", "simhash": "1:9baefc4b9c8ac30f", "word_count": 1796 }, "last_updated": "2023-07-14T21:02:20.871856+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Coston v. Kealy." ], "opinions": [ { "text": "Humphreys, J.\nThis suit was brought on July 2, 1923, by Sifers & Hunt, contractors, through their attorney, J. T. Coston, against the commissioners of. the Osceola Grading & Oiling District No. 1, and its collector, to enjoin them from making additional payments to a part of the creditors to the exclusion of plaintiff\u2019s claim, alleging insolvency of the district. It seems that the commissioners and collector were paying all of the first collections from the assessments to some of the creditors whom they favored, instead of pro-rating the amount amongst all the creditors. The indebtedness of the district amounted to $15,000 and the aggregate assessment of benefits amounted to only $8,202.50, which represented the entire assets of the district with which to pay its liabilities.\nOn the 28th of July, 1923, Kealy filed an intervention, alleging that, on the 17th of February, 1923, the contractors made an assignment to him of their interest in the funds du\u00e9 the contractors from the district to the extent of $5,789.70. He further alleged the insolvency of the district, and that the commissioners were paying some' of the creditors, with a prayer for a distribution of the funds of the district pro rata among the creditors.\nOn the 18th of September, 1923, Coston filed an intervention in the action, alleging his employment, the service rendered by him in adjusting the differences between the contractors and the district, the placing of the contract and certificates in his possession by his client, and that they were still in his possession, concluding with a prayer that his lien for services be protected.\nThe cause was heard upon the pleadings and testimony, which resulted in a decree enjoining the commisr sioners from making any additional payments to the favored creditors of the district until all other creditors were paid an equal percentage of their claim. There was no appeal from the decree on this branch of the case. The court, however, denied the petition of J. T. Coston for priority of his claim over that of Philip J. Kealy and other creditors of Sifers & Hunt, and ordered the sum, due said contractors to be distributed as follows:\nBen H. Green.........................................................$ 268.50\nChester Danehower ............. 72.00\nMrs. Electra Buck............................. 50.00\nPhilip J. Kealy...................................................... 5,789.70 then to\nJ. T. Coston I.....................................\u25a0..................... 1,500.00\nFrom the order denying his intervention J. T. Cos-ton has prosecuted an appeal to this court. Kealy did not appeal from or attack the order of the court allowing the other creditors of the contractors to share and share alike with him.\nCounsel for appellant has made a succinct statement of the facts in this case responsive to the issue of priority of claims presented by the intervention, so we adopt it, in the main, as a statement of the case by the court. It is as follows:\n\u201cAn improvement district was organized for the purpose of doing certain work on the streets of Osceola.. The contract for the work was let to plaintiffs, Sifers & Hunt, and the work was done before the assessments were made. The total liabilities of the district aggregated about $15,000 and the total assessment of benefits-was only $8,202.50. A dispute arose between Sifers & Hunt, contractors, and the improvement district as to the amount due them. Thereupon the contractors employed appellant, Coston, an attorney-at-law, to represent them in making an adjustment of the differences between the contractors and the district, agreeing to pay him $1,500 for his services, and turned over to him the contract between the district and the contractors. Coston finally brought about an adjustment of the differences between the district and the contractors, and the district issued and delivered to Coston, as attorney for the contractors, fourteen certificates of indebtedness, aggregating the sum of $6,987.72. The original contract between the district and the contractors and the certificates issued by the district to the contractor in making the adjustment of their differences are still in Coston\u2019s possession.\nFebruary 17, 1923, the contractors gave to Philip J. Kealy an order on Coston \u201cfor the sum of $5,789.70, or on the drawer of this order, out of the amount now due and payable for work performed.\u201d Two days later the contractors issued the following order:\n\u201c February 19, 1923.\n\u201cJudge J. T. Coston,\n\u201cOsceola, Arkansas.\n\u201cDear sir: You are hereby authorized to pay to Col. Philip J. Kealy or order, the sum of $5,789.70 of the funds now due and payable to the Arkansas Good Roads Company for work performed for the city of Osceola, Arkansas. Yours very truly,\n\u201cThe Arkansas Good Roads Company,\n\u201cBy E. I. Sifers.\u201d\nWhen the above order was received by Coston, he wrote Kealy as follows:\n\u201cMr. Philip J. Kealy, \u201cMarch 12, 1923.\n\u201c221 Dwight Building,\n\u201cKansas City, Mo.\n\u201cDear sir: I beg to acknowledge receipt of your \u2022 favor, inclosing letter from the Arkansas Good Roads Company for work done in Os'eeola.\n\u201cThis is to advise you that I have placed the claim among my files, and when these funds are collected, or as fast as they are collected, I will be glad to remit, first paying 'claims that are entitled to priority, of course.\n\u201cYours very truly,\n\u201cJ. T. Coston.\u201d\nA few days later Kealy made a visit to Coston, who explained to him the status of the claim of the contractors against the district, and also explained to Kealy that his fee for services must be paid first. Thereupon Kealy replied, \u2018 \u2018 Of course, yon will have to be paid. \u2019 \u2019\nA little later Coston discovered that the commissioners of the improvement district were collecting the assessments and paying some of the creditors in full and nothing to others. Accordingly, on July 2, 1923, he commenced this action in behalf of the contractors against the commissioners, alleging the insolvency of the district and that the commissioners were paying the funds of the district to certain creditors and had announced their intention of paying all other indebtedness in full before paying the contractors anything, concluding with a prayer for an injunction, and that the funds of the district be paid out according to law and with due regard to the rights of the contractors and other creditors.\nAppellant contends that he was entitled to deduct the amount of his fee from the sum due appellee on his order from Sifers & Hunt before paying any amount to appellee on said order. This contention is based upon the ground that the relationship of attorney and client existed between appellant and appellee. Appellee contends that no such relationship existed between him and appellant. We think the preponderance of the testimony establishes this relationship between them. When appellee -presented his order to appellant, there was no money in the hands of appellant to pay it. All that appellant had in his possession was a contract between Sifers & Hunt and the commissioners of the district, which Sifers & Hunt had performed before any benefits had been assessed against the property in the district. The claim was unliquidated, and had not at that' time been adjusted. The collection thereof depended largely on the ability and influence of appellant to induce the commissioners to make an equitable settlement with Sifers & Hunt. Appellant explained the nature and character of the claim to appellee, and informed him that his fee of $1,500 must be paid before he could pay anything on the order. With a full understanding of the situation, appellee filed his claim with appellant for payment when the claim was collected. Appellee permitted appellant to proceed with the adjustment and to receive certificates of indebtedness for the claim, and raised no objection until after this suit was brought to enforce a pro rata collection on said certificates. Appellee adopted the contract of employment between the contractors and appellant by knowingly accepting the benefit of his legal services and by permitting him to continue these services after being advised of the nature and character of the claim and the amount agreed upon as a fee for adjusting same.\nThe court erred in denying the petition of appellant for priority over Kealy and the other creditors of Sifers & Hunt.\n\u2022 On account of this error the decree is reversed, and the cause remanded with directions to the court to allow appellant\u2019s claim as a prior and paramount claim out of the sum due Sifers & Hunt to the claims of appellee and the other creditors of said contractors.", "type": "majority", "author": "Humphreys, J." } ], "attorneys": [ "James O. Coston, for appellant.", "Driver <& Simpson, for appellee." ], "corrections": "", "head_matter": "Coston v. Kealy.\nOpinion delivered October 20, 1924.\nAttorney and client \u2014 liability for fee. \u2014 Where an attorney representing certain contractors explained to one holding an order from the contractors that the claim of the latter against an improvement district was unliquidated and that his fee must be paid before anything should be pnd on the order, and the holder of the order then filed it with the attorney for payment when the claim was collected, he will be held to have adopted the contract of employment of the attorney by the contractors, and the attorney\u2019s claim is entitled to priority.\nAppeal from Mississippi Chancery Court, Osceola District; J. M. Futrell, Chancellor;\nreversed.\nJames O. Coston, for appellant.\nThe relation of attorney and client existed between Coston and Kealy, and the latter is estopped to claim priority over the former\u2019s claim for services rendered. When Kealy was in Coston\u2019s office, he knew at that time that there would not be enough realized on the claim of Sifers & Hunt to pay both himself and Coston in full, and when Coston told him that his fee must be paid first, that was the time for Kealy to object, if he intended to object at all. 103 Ark. 513, 145 S. W. 245; 22 Ark. 173. The instrument given to- Kealy by the contractors was not an assignment of any interest in the contract between them and the improvement district or in the funds due them, but merely a bill of exchange. C. & M. Digest, \u00a7\u00a7 7892-7893. As to the status of Coston, it is settled that he not only has a lien on the securities in his hands, but also that he is virtually an assignee of a portion of the judgment, or of the debt or claim equal to his fee. 33 Ark. 234-235; 149 Ark. 11, 231 S. W. 195; 154 Ark. 302; 87 N. Y. 559-560.\nDriver <& Simpson, for appellee.\nThere is no evidence that the relation of attorney and client existed between appellant and Kealy, and there is nothing to base a common-law lien upon, save a mere contract between the contractors and the district. Appellant was notified that the contractors had sold the debt to appellee long\u2019 before the certificates were issued, and that they had no interest in the certificates when issued. Cases relied on by appellant are not in line with appellant\u2019s contention and do not support his theory." }, "file_name": "0594-01", "first_page_order": 618, "last_page_order": 623 }