ARK.] BOARD OF IMP. OF PAVING hi p . DIST. No. 23 957 -v. MATHENEY. , BOARD OF IMPROVEMENT OF PAVING IMPROVEMENT. DISTRICT No. 23 v. MATHENE Y. 4-3508 Opinion delivered October 8, 1934.. 1. HIGHW A YS—POWERS OF IMPROVEMENT DISTRICTS.—Boards of highway improvement districts are authorized to make contracts, save only that the contracts must be reasonable. 2. HI G H W AYS— CONTRACTS OF IMPROVEMENT D I STRICTS.—Contracts - made by improvement district boards will not be set aside.unless so improvident as to demonstrate their unreasonableness. 3. HIGHWAY IMPROVEMENT DISTRICTS—ATTORNEY'S FEE.—A contract of a highway im p roveMent district to pay an attorney all of the
958 BOARD OF IMP. OF PAVING IMP. -DIST. No. 23 [189 MATHEINfRIF. penalties collected against delinquent property held reasonable. 4. ATTORNEY AND CLIENT—CONTRACT.—In an accounting between an improvement district and its attorney under a contract giving the attorney 3 per cent. on all collections of assessments of benefits due to the district allowance of 3 per cent. on collection of a former collector's shortage held proper. 5. HIGHWAY IMPROVEMENT DISTRIGTS—ATTORNEY'S I-P.M—Where an improvement district purchased delinquent property at f ore-closure sales, it became liable to its attorney under his contract of employment, and could not wait until the property passed into private ownership before paying the attorney's fees. Appeal from Union Chancery Court, First Division ; Walker Smith, Chancellor ; affirmed. Herbert V. Betts and Graham Moore, for appellant. M. P. Matheney, for appellee. JOHNSON, C. J. Appellant Paving Improvement District No. 23 of El Dorado was organized in 1927, and immediately thereafter appellee Matheney was employed as attorney for the district. The services rendered and to he rendered by the attorney were. the usual and ordinary ones consisting of collecting past-due assessments of benefits, bringing suits to 'enforce payment of such past-due_ assessments and representing the district generally in its litigation. Appellee's 'contract of employment with appellant district is evidenced by the minutes of the board of date June 4, 1927, and expressly provides compensation to the amount of 75 per cent. of all -----, penalties collected against defaulting property in the district. On June 25, 1928, appellee's contract was amended, and his compensation increased to all the penalties collected against delinquent property. This contract is evidenced by the minutes of -the board meeting of that date. On March 2, 1931, appellee was employed by the.district as collector of all assessments of benefits due the district, and his compensation as such was fixed by the board at 3 per cent. of all collections effected. This contract is evidenced by the minutes of the meeting of the hoard _ of that date. Appellants, Board of Commissioners, was reorganized in the early part 'of 1933, and appellee's services as attorney and collector were dispensed with by the new board, and soon thereafter this suit was instituted for an
ARK.1 BOARD OF IMP. OF PAVING IMP. DIST. NO. 23 959 v. MATHENEY. accounting. Upon trial the chancellor stated the account as follows : Balance alleged due under the complaint $4,006.60 CREDITS Item , 1—Penalties $1,451.27
Item 2---3% Collector's commission on $9,392.90 281.78 Item 3-3% on former • Collector's shortage of -$960. 95 28.81 Item 4-3% on T. N. Wilson tax of $1,111.25 33.33 Item 5-3% on State aid vouchers, $1,031.17 30.93 Item 7—Expenses of collection, 1919 15.00 Item 8 L -Exiienses as collector ', 1931 . 94.76 Item 9—Expenses as collector, 1932 26:80 Item 10—Investment of district in properties acquired in 1930-1931 534.25 Item 11—Additional-court costs paid on same 23.70 Item 12—Investment in district properties • acquired in 1939 • • 698.80 $4,006.60 $3,149.43 Less Credits $3,149.43 Balance $ 857.17 IMPROPER CHARGES Item 1—Voucher for $107.65 $107.65 Item 3—Charles Carpenter 1927 tax 36.00 Item 4—Mrs. Kate Harris, interest 31.08
Item 5—Expenses paid by district on district property 412.90 $857.17 $587.63
Less improper charges .... .$587.63 Balance due from defendant to plaintiff $269.54 And entered a decree accordingly, .from which thiS appeal is prosecuted by appellant district. Appellant's first contention is that item one allowed to appellee by the court aggregating $1,451.27, same being
960 BoARD OF LAIP. çw PAVECG bi.P. DIST. No. 23 [1.89
v. MaTHENEY. penalties collected by appellee from deliminent lands is unlawful, unauthorized and improvident. This allowance is based upon an express contract, of the board of improvement with appellee, and was faithfully performed•by all parties thereto over a period of approximately six years. The law is well settled in this State that boards of commissioners of improvement districAs have full *power and authority to make contracts—stich as the ones here under consideration—save only that the compensation awarded by such contracts must be reasonable. In Bowman Engineering Co. v. illissonri Highway District, 151 Ark. 47, 235 S. W. 399, we stated the rule as follows : "The commissioners have power to make contracts, but they are truStees of the property owners, and can only make reasonable ones. The owners of the property have a right to challenge the validity of such contracts by showing that they are Unreasonable. Of course, in testing the validity of such contracts, the court shonld not substitute its own judgment primarily for that of the commissioners, the authority to make the contract being lodged by the lawmakers in the commissioners, but the inquiry of the court is to determine whether or not the contract is sO improvident as to demonstrate its unreasonableness." • Again in Martin v. Street Improvement District No. 349, 178 Ark. 588; 11 8. W. (2d) 469, we restated the rule as- follows : "As the cominissioners had the right to contract with appellant in regard fo his fee as attorney, their contract is 'binding unless it be found that the contract was so improvident as to demonstrate its unreasonableness, and unless and until its improvidence be first found -as a fact, the question of its reasonableness does not arise. In other words, the contract between the attorney and the commissioners must 'be enforced unless it be found that it is so improvident as to demonstrate its unreasonableness. When this finding is made, the contract is tmated as being void, as it would be in the case of actual fraud, and in such case the recovery would he on a quantum mencit basis."
Tested by the rules thus stated, the chancellor was fully warranted in finding that the compensation awarded appellee by appellant for collecting- delinquent assessments under his contract of employment as attorney for the district was reasonable. Next, it is urged that item three allowed by the court to appellee. should have been rejected. Appellant admits .that item two is a proper charge under the contract of March 2, 1931, but_contends that item three does not come within the purview of the. contract. This item. represents a shortage of a previouS collector and according to the evidence was collected only after determined efforts so to do, and we think the court was correct in-allowing compensation therefor. • Items numbered 10, 11, 12 as . allowed by the court are strenuously objected to by appellant. These charges arose out of foreclosure sales wherein the improvement district became purchaser of the foreclosed properties. As we understand, it is not contended that the services rendered were not reasonably worth the amount claimed. by these items, but the contention is . that the district ShoUld pay only after the property passes into private ownership. When the district became the purchaser of this property at its foreclosure sale, it thereupon became responsible for the expenses incident thereto, and . we think the chancellor was correct in so de.ciding. other minor items are urged upon . us for review, but we deem them of insufficient importance to here discuss in detail. It suffices to say they fall within the rule§ heretofore discussed.. No error appearing, the judgment is affirmed.
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