Macpherson v. Bacon's Ex'r

• Decision Date: 31 May 1918
• Citation: 203 S.W. 744,180 Ky. 773
• Parties: MACPHERSON v. BACON'S EX'R. [a1]
• Court: Kentucky Court of Appeals

203 S.W. 744

180 Ky. 773

MACPHERSON v. BACON'S EX'R. ^[a1]

Court of Appeals of Kentucky.

May 31, 1918

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Action by Byron Bacon's executor against Ernest Macpherson. From a judgment for plaintiff, both parties appeal. Affirmed.

Ernest Macpherson and George A. Brent, both of Louisville, for appellant.

H. H Nettelroth and E. J. Bacon, both of Louisville, for appellee.

HURT J.

This suit is a kind of an aftermath of the litigation between the county of Green and the holders of its bonds which were issued in aid of the construction of the Cumberland & Ohio Railroad. The bonds were attempted to be issued as a result of an election held in the county of Green in accordance with the act of the General Assembly, which incorporated the Cumberland & Ohio Railroad Company, upon the question whether the county court should make a subscription to the capital stock of the company in the sum of $250,000, to be paid for in the bonds of the county, which were to run 20 years, and bear interest at the rate of 6 per centum per annum. The entire $250,000 of the bonds were issued, and thereafter were sold, some of them to residents of the state of Kentucky, and others to persons who were nonresidents. The county paid the coupons representing the interest upon the bonds until the year 1877, when it became patent that the railroad company did not intend to carry out or perform the conditions upon which the subscription to the capital stock was voted and the bonds issued, and the county declined to further pay the coupons. Several suits followed this declination in the federal courts, and resulted in judgments against the county upon a large number of the coupons. On November 15, 1894 there was pending in the Green circuit court a suit by F. L Sidebottom against the county of Green upon certain bonds with their attached coupons. At the same time there was pending in the federal court for the district of Kentucky a suit instituted by John Thomas and others against the county of Green to recover a judgment upon certain bonds with their attached coupons. The county's defense to these actions upon the merits of the controversy was the same in each case or in any other action that might be brought against the county to recover judgment upon any of the bonds or coupons. The defense was that in the application to the county court for the order to hold the election, and in the order of the court which submitted the question to the voters of the county, and in the orders, which subscribed for the stock, it was provided that the subscription was agreed to upon the condition that the railroad should be constructed through the county and within one mile of Greensburg, and the amount of the bonds to be expended in the construction within the county, and the bonds were not to be issued or paid by the county until it should be exonerated by the company from liability upon a former subscription made to the Elizabethtown & Tennessee Railroad Company, none of which conditions had been or ever were performed by the Cumberland & Ohio Railroad Company. Hence a decision in either of the cases then pending or in any other suit which might be brought against the county upon any of the bonds upon the merits of the action would determine the question of the county's liability upon all of the bonds. For the purpose of defending the actions of Sidebottom and Thomas, and any other actions that might be thereafter brought against the county, on account of any of the bonds, and to have the question of the county's liability upon the bonds determined on the above-mentioned date, a contract was entered into between the fiscal and county courts upon the one side and the firm of Bacon & Macpherson, Col. John W. Lewis, and Judge D. T. Towles, all of whom were properly authorized attorneys at law, as the contracting parties upon the other side. This contract was set out in the order which was made by the county and fiscal courts of Green county, and which is as follows:

"On motion it is ordered by the court that Bacon & Macpherson, Col. John W. Lewis, and Judge D. T. Towles be and they are hereby employed to defend Green county in the suits of Sidebottom against Green county, pending in the Green circuit court, and the suit of John Thomas et al. against Green county, pending in the Circuit Court of the United States, at Louisville, and any other suits that may be brought against Green county on account of the bonds issued in aid of the Cumberland & Ohio Railroad Company, under the following contract, to wit: This contract, made the 15th day of November, 1894, by and between the Green county and fiscal courts of the first part and D. T. Towles, John W. Lewis and Bacon & Macpherson of the second part, witnesseth: That whereas, there is now pending in the circuit court of Green county a certain suit against Green county wherein one Sidebottom is plaintiff, and in the Circuit Court of the United States for the Sixth District of Kentucky a certain suit against Green county wherein one Thomas and others are plaintiffs, both of said suits being brought on bonds and coupons alleged to have been issued by said county in aid of the Cumberland & Ohio Railroad Company so called; and whereas, said courts would regard as ruinous to said county the success of the plaintiffs in said causes; and whereas, the real questions presented in said causes involve a very large sum of money and affect and control the total liability of said county by reason of its issue of any and all bonds in aid of said road; and whereas, the said courts have adjudged it necessary to employ counsel to defend said suits: The said parties of the first part hereby employ and retain the second parties to defend said causes, and in consideration of their acceptance of said employment the said first parties agree and promise to pay the said second parties for their services as attorneys the sum of $1,200, a fee certain, no matter how said cases may result, and further agree to pay said attorneys a sum equal to 5 per centum of any amount of said bonds or any bonds issued by said Green county in aid of said railroad, which they may save said Green county or the first parties or as representatives or acting for said Green county in said duties or which may be controlled and settled by the decisions rendered in said causes or either of them, and second parties are to defend all suits that may be brought against said county on account of said bonds or coupons issued by said county in aid of said road. Witness the hands of the second parties and of the judge and of the justices of the peace of said Green county."

Bacon & Macpherson was a partnership between Byron Bacon, deceased, and the appellant, Ernest Macpherson, for a general practice of law, and by the terms of the partnership Bacon was to receive three-fifths and Macpherson two-fifths of the proceeds of the business of the partnership, and were to bear the expenses and losses in the same proportion. This partnership continued until the 3d day of June, 1897, when the contract of partnership was dissolved by a contract, which was upon that day entered into between Bacon and Macpherson, and which, as appears from the written evidence of the contract executed by them upon that day, was as follows:

"June 3, 1897.

Byron Bacon, Esq.--Esteemed Sir: My proposition in the matter of the firm of Bacon & Macpherson is that the firm will stand dissolved on and by the 1st day of June, 1897, you to attend to all of the business of the firm, and that theretofore in which I was interested by special employment, which came by, through or from your clients, I giving you my prompt and practical thorough co-operation and assistance therein as you may require, you to adjust and receive the fees and account to me therefor as I may be entitled thereto under our partnership agreement and our agreement theretofore; I to attend to all business of the firm or that in which I had theretofore and in which you were interested, which came by, through or from my clients, including the Green county bond cases and the R. N. I. & B. B. R. Co. case, and adjust, collect and receive the fees and accounts therefor to you in like manner as above. Individual names of the firm are to be signed to all records where the partnership name has theretofore been signed. I forthwith to surrender up to you the office.

[Signed] Ernest Macpherson.

Col. Ernest Macpherson--Esteemed Sir: The above proposition is hereby accepted.

[Signed] Byron Bacon."

It should be stated in explanation of the references in the above writing to causes in which either of these parties was interested before the creation of the partnership that previous to that time they occupied the same office, and gave assistance in cases in which either of them was engaged and desired the services of the other under contracts, which applied only to the particular case.

The action of Sidebottom against Green county, which was mentioned in the contract of the attorneys with Green county was dismissed without prejudice to a future action by the plaintiff in the suit. The case of Thomas and others against Green county, mentioned in the contract and which was pending in the federal court was decided by that court in favor of the county, but upon appeal to the Circuit Court of Appeals, the judgment was reversed and the case decided adversely to the county. Hence in neither of these actions was anything saved to the county by the services of the contracting attorneys. Thereafter, in 1899, one Quinlan instituted a suit in the federal court for the district against Green county to recover upon certain of the bonds, and this case upon appeal to the federal Circuit Court of...