Mecartney v. Guardian Trust Co.
Citation | 274 Mo. 224,202 S.W. 1131 |
Decision Date | 09 April 1918 |
Docket Number | No. 18838.,18838. |
Parties | MECARTNEY v. GUARDIAN TRUST CO. |
Court | United States State Supreme Court of Missouri |
Appeal from Circuit Court, Jackson County; Frank G. Johnson, Judge.
Action by Harry S. Mecartney against the Guardian Trust Company. Judgment for plaintiff, and defendant appeals. Affirmed.
Delbert J. Haff, Charles W. German, and Justin D. Bowersock, all of Kansas City (Haff, Meservey, German & Michaels and Gates & English, all of Kansas City, of counsel), for appellant. James A. Reed, J. G. L. Harvey, and J. C. Rosenberger, all of Kansas City, for respondent.
The plaintiff recovered judgment in the circuit court of Jackson county, for services rendered defendant, as attorney, and the defendant appealed.
The petition is in two counts; a third count was dismissed before trial. The recovery was on the first count for a balance of $79,860.57, and on the second count for a balance of $3,433.07, with interest from the date of filing the suit, March 28, 1908. Plaintiff was employed by defendant December 6, 1904, and was discharged March 27, 1908. The services rendered, for which compensation is demanded in the first count, began with what was designated as the "Suburban Belt" and "Channel & Dock" cases. A short account of the way those cases arose is necessary, in order to understand their condition and the work which plaintiff undertook when he was employed.
The defendant, Guardian Trust Company, called the "Trust Company," was incorporated in 1889, located at Kansas City, and for several years did a large business in financing railroad enterprises. The following corporations became involved in the litigation with which we are concerned: The Kansas City, Pittsburg & Gulf Railroad Company, designated as the "Gulf Company," which had a line of railroad extending from Kansas City to Port Arthur, Tex., but without terminal facilities at either end; Port Arthur Channel & Dock Company, called the "Dock Company," which owned terminal system at Port Arthur; Kansas City Suburban Belt Railway Company, called the "Belt Company," was a belt railroad line having terminal facilities at Kansas City. The Gulf Company had traffic arrangements with the Belt Company for entrance into Kansas City, and with the Dock Company for entrance into Port Arthur.
The Kansas City Southern Rahway Company, called the "Southern Company," grew out of the other three, being in fact the product of a reorganization of the other three in March, 1900. The details of the proceedings by which that was accomplished it is unnecessary to relate at this point, though the matter will be noticed later in this opinion.
At the time of that reorganization the Belt Company owed the defendant here Guardian Trust Company, about $400,000, to secure which it had assigned to the Trust Company certain stocks and bonds as collateral. Under the terms of the reorganization, as it transpired, the Southern Company became liable for this debt, which obligation was fruitful of the litigation in which the defendant herein was almost hopelessly entangled at the time of plaintiff's employment. In September, 1900, the Cambria Steel Company, a Pennsylvania corporation, called the "Cambria Company," obtained a judgment against the Belt Company, and immediately filed a creditor's bill in the federal court, making the Belt Company and the Trust Company parties defendant. This bill sought to enjoin the Trust Company from enforcing its claim against the collateral above mentioned, prayed for an accounting, and alleged that on a true accounting the Trust Company would be found indebted to the Belt Company. The bill also asked for a receiver for the Belt Company.
At the same time the Provident Light & Trust Company, called the "Provident Company," filed a bill, as trustee of bondholders, to foreclose a mortgage on the property of the Belt Company. A restraining order was issued against the Trust Company, and the Belt Company was placed in the hands of receivers. Some time later these receivers filed an ancillary bill, in which they alleged that the Trust Company, through a long course of dealing, bad cheated and defrauded the Belt Company, and that the notes of the Belt Company, held by the Trust Company, represented fictitious obligations, and prayed to have them canceled and for an accounting by the Trust Company of its transaction with the Belt Company. The issues thus framed required the examination of accounts involving transactions amounting to over $8,000,000.
That suit, with the multiple attacks upon the defendant Trust Company by the several parties mentioned, had been pending about four years, when plaintiff, in November, 1904, was employed to examine the condition of the litigation. Defendant's claim of $400,000 was tied up by the restraining orders. About 8,000 pages of testimony had been taken before a special master, with no prospect of an early determination of the case. Trimble & Braley, defendant's attorneys, discouraged by the long delay and their apparent inability to bring the case to a conclusion, as they said on account of prejudice against defendant in the federal court, had resigned, and defendant was left without counsel. This case is mentioned in the evidence as the "Suburban Belt Case." At the same time a bill was pending in the federal court in Texas, in a case where it was sought to recover from the Trust Company about $1,500,000 for alleged subscription for stock in the Dock Company, and defendant, on the other hand, was asserting a claim of $22,000 against the Dock Company. This is called the "Channel & Dock Case."
Matters were in this posture when plaintiff was employed to examine their condition. Affairs had reached a sort of deadlock on account of existing conditions in Kansas City, and it was thought some outside counsel would be better able to make the litigation move. Plaintiff, who lived in Chicago, was employed, and presented an elaborate report, for which examination and report he received $1,500. Thereupon he was employed to represent defendant in the cases mentioned. The terms of that employment, and the additional work and responsibility thrust upon him by subsequent events and defendant's management, will be referred to in considering points which arise in the case. Compensation for all that service is sued for in the first count of plaintiff's petition.
Defendant's former attorneys, Trimble & Braley, sued for a fee of $22,000, and plaintiff was required to defend that suit. He filed counterclaims therein for large amounts, and the second count of his petition is far services rendered in that case. The case was referred, and after an exhaustive hearing the referee found for plaintiff on the first count as follows:
For services rendered by plaintiff and his assistants ........................ $35,000.00 Credited by payments .................. 20,139.43 __________ Leaving balance of .................. $14,860.57
On the second count the referee found that plaintiff had been paid $2,500, and that amount compensated him for services rendered and expenses. The trial judge set aside the report and findings of the referee on plaintiff's motion, and after taking further evidence rendered judgment for plaintiff as follows:
First Count For services rendered ............. $100,000.00 Paid out for expenses ............. 7,360.57 ___________ $107,360.57 Credits ............................ 27,500.00 ___________ Balance due...................... $ 79,860.57 Second Count Fee ................................. $5,500.00 Less credits ........................ 2,066.93 Balance due ...................... $3,433.07
—and allowed interest from the date of filing suit.
I. Appellants assert that plaintiff is limited by his contract of employment to a compensation of $25,000 for all services rendered and sued for in the first count of his petition. Two letters of his and a resolution of defendant's executive committee are relied upon as establishing the contract which so limits his recovery. These letters, dated December 6, 1904, are as follows:
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