Barnard v. Young

• Decision Date: 21 December 1926
• Parties: THOS. BARNARD, WM. FRODSHAM, H. P. FRODSHAM and BERT BLACKBURN, Appellants, v. W. F. YOUNG, HARDY BREDING and PERRY LUSK, as the Board of County Commissioners of Power County, Idaho, Respondents
• Court: Idaho Supreme Court

251 P. 1054

43 Idaho 382

THOS. BARNARD, WM. FRODSHAM, H. P. FRODSHAM and BERT BLACKBURN, Appellants, v. W. F. YOUNG, HARDY BREDING and PERRY LUSK, as the Board of County Commissioners of Power County, Idaho, Respondents

Supreme Court of Idaho

December 21, 1926

COUNTIES-COUNTY COMMISSIONERS' EMPLOYMENT OF COUNSEL ON CONTINGENT FEE-CONTRACT FOR CONTINGENT FEE VALID.

1. Under Const., art. 18, sec. 6, and C. S., secs. 3415, 3428 county commissioners had authority to employ counsel to prosecute suits on a contingent fee basis for recovery against bondsmen for amount of deposits of certain county moneys in closed banks.

2. Contingent fee of twenty per cent of amount recovered to attorneys for aid in prosecuting county suits to recover from bondsmen certain deposits in closed banks is not so unreasonable within C. S., sec. 6576, as to justify setting aside contract.

3. County commissioners' contract with attorneys on contingent fee for prosecuting suits to recover from bondsmen certain deposits in closed banks is not within Const., art 8, sec. 3, limiting indebtedness of counties, since fee was not to be paid out of revenues of county.

4. Contract of county commissioners with attorneys for prosecution of suits to recover from bondsmen certain deposits in closed banks, being authorized by C. S., sec 6573, is not invalid because giving control of lawsuits to attorneys.

APPEAL from the District Court of the Fifth Judicial District, for Power County. Hon. Ralph W. Adair, Judge.

Action by taxpayers contesting hiring of attorneys on contingent fee basis to aid prosecution of certain county suits. Judgment for respondents. Affirmed.

Judgment affirmed, with costs awarded to respondents.

Maurice M. Myers and Oppenheim & Lampert and E. O. Smith, for Appellants.

Contracts with an attorney at law to collect funds of the county on a contingent fee are contrary to public policy and void. (Platte v. Gerrard, 12 Neb. 244, 11 N.W. 298; Storey v. Murphy, 9 N.D. 115, 81 N.W. 23; Chester County v. Barber, 97 Pa. 455.)

A city having no power to run in debt may not employ an attorney on a contingent fee to recover its land when there is no money in the treasury. (Wallace v. San Jose, 29 Cal. 180.)

The fee provided for in said contract was unreasonable and excessive. (McQuillin, Municipal Corp., p. 2596, sec. 1175; Chester County v. Barber, 97 Pa., pp. 455-463.)

A contingent fee cannot, in the very nature of the case, be a reasonable fee. (Paul v. Foster, 71 Vt. 160, 44 A. 96; Waterbury v. Laredo, 68 Tex. 565, 5 S.W. 81.)

The contract referred to takes from the successors of the contracting county commissioners their full power and control of the lawsuits involved in the seven cases. (McQuillin, Municipal Corp., p. 2580, sec. 1169, p. 2731, sec. 1254.)

Before the authority to hire counsel given to the commissioners of a county can be exercised, the necessity which authorizes it must not only be apparent, but the facts creating it must be made a matter of record. (Meller v. Logan, 4 Idaho 44, 35 P. 712; Hampton v. Board of Commrs., 4 Idaho 646, 43 P. 326.)

R. S. Anderson and Bissell & Bird, for Respondents.

A county may employ special counsel upon a contingent fee basis. (Miles v. Cheyenne County, 96 Neb. 703, 148 N.W. 959, L. R. A. 1917D, 258, and note.)

Under the circumstances revealed by the record the employment of special counsel by Power county was such a "necessary" expense as to take such contract of employment out of the inhibitions of art. 8, sec. 3, Const. (Thomas v. Glindeman, 33 Idaho 394, 195 P. 92; Hickey v. City of Nampa, 22 Idaho 41, 124 P. 280.)

County commissioners have authority to select and employ private counsel to further the interests of the county, and their selection and employment will not be disturbed by the courts unless there is an abuse of discretion on their part. (Ravenscraft v. Board of Commrs., 5 Idaho 178, 47 P. 942; Anderson v. Shoshone County, 6 Idaho 76, 53 P. 105; 7 Cal. Jur. 458, par. 48; Woolwine v. Superior Court, 182 Cal. 388, 188 P. 569; Miles v. Cheyenne County, supra; Morris v. Board of Commrs., 25 Colo. App. 416, 139 P. 582.)

A contract between county commissioners and private counsel whereby the latter agree to prosecute certain litigation, with the assistance and counsel of the prosecuting attorney, vigorously and, to the best of their ability, does not deprive the commissioners of the direction and control of such litigation. (Miles v. Cheyenne County, supra.)

GIVENS, J. Wm. E. Lee, C. J., and Taylor and T. Bailey Lee, JJ., concur.

OPINION

GIVENS, J.

Power county had certain county moneys on deposit with the First National Bank of American Falls and the First State Bank of Rockland secured by depository bonds signed by various individuals, firms and corporations. The banks were closed and placed in the hands of receivers for liquidation. The deposits not being paid, some seven suits were instituted by the county by the authority of respondents as county commissioners against various of the bondsmen to recover the amount of these deposits. Thereafter Bissell & Bird, attorneys, of Gooding, were employed by the county commissioners to assist the Prosecuting Attorney in these suits, some of the bondsmen having done certain things apparently in line with resisting the county's claims.

The terms of employment were in effect the payment of a retainer fee of $ 150 for each of the seven suits and a contingent fee of 20 per cent of the amount which should be actually collected in said actions, the retainers to be part of the 20 per cent.

The present action originated as an appeal to the district court by appellant taxpayers, contesting the authority of the county commissioners to make such a contract of employment on a contingent fee basis; that the fee was excessive; that the contract delegated governmental functions or power to the attorneys and took from the commissioners their control of the lawsuits involved; that it exceeded the county's revenue for the current year, contrary to the constitution; and that the necessity for such employment did not appear of record.

Platte v. Gerrard, 12 Neb. 244, 11 N.W. 298, and Storey v. Murphy, 9 N.D. 115, 81 N.W. 23, are principally relied upon by appellants as sustaining their position that the contract being on a contingent basis is thereby void because contrary to public policy.

In Platte v. Gerrard, supra, a firm of attorneys was employed by a board of county commissioners to investigate the county records and call to the attention of the commissioners certain lands which had been erroneously left off the assessment-roll by the assessors. The court first indicated that the county commissioners had no power to employ an attorney in view of the fact that the district attorney was required to act as the attorney for such county, the court, however, conceding that the commissioners had such right, states that the county may not as a mode of compensation for such services ". . . . lawfully bargain away an aliquot part of such of the public revenues as might be affected thereby . . . ." on the ground that ". . . . the giving of contingent fees or compensation for services rendered to the public is contrary to sound policy," without further reason or citing authorities. The court then comments upon the fact that the county commissioners and county clerk should have been able to understand and execute the law in question without legal advice and that the contract in question attempted to farm out the public revenues, and concluding that the contract was illegal. This case is to be distinguished from the one herein considered for several reasons. First: By the constitution, section 6, art. 18, county commissioners are expressly empowered to employ counsel in civil cases when necessary, and by C. S., secs. 3415, 3428, are given powers of hiring attorneys and dominion over civil suits in line with the constitution. In the following cases the right of the county commissioners to employ counsel in suits wherein the county is interested has been expressly upheld: Ravenscraft v. Board of Commrs., 5 Idaho 178, 47 P. 942; Anderson v. Shoshone County, 6 Idaho 76, 53 P. 105; see, also, 15 C. J. 547, n. 72; 7 Cal. Juris. 458; Woolwine v. Superior Court of Los Angeles, 182 Cal. 388, 188 P. 569 (discretion, sec. 2 of syllabus); Morris v. Board of Commrs. of Adams County, 25 Colo. App. 416, 139 P. 582 (discretion, sec. 7 of syllabus); Miles v. Cheyenne County, 96 Neb. 703, 148 N.W. 959, L. R. A. 1917D, 258. Furthermore, in Platte v. Gerrard, supra, the court evidently makes a point of the fact that by the terms of the contract the attorneys employed were, in effect, collecting the public revenues from the taxpayers. Such is not the situation in the case at bar, it being apparent that while the money in the banks undoubtedly consisted to some extent of tax money, the taxes had already been collected and the respondents were seeking to recover the amount of the county funds deposited in the banks in question.

In Storey v. Murphy, supra, attorneys agreed for a fee of 25 per cent of all money or land recovered by the county, for taxes, interest and penalties for certain years, to collect certain taxes on lands which theretofore had not been taxed. The state's attorney was a member of the firm thus employed. The court concludes that the statutes provided an exclusive method for the collection of such delinquent taxes as, were covered by the contract, whereby it was incumbent on the state's attorney to carry on such proceeding and that as such official he could not receive fees for such services in addition to his salary, and therefore concluded that the contract was void, expressly holding that:

"Held further, that the question whether county...