Oglesby v. Smith

• Court: Arkansas Supreme Court
• Writing for the Court: MCCULLOCH, C. J.
• Citation: Oglesby v. Smith, 152 S.W. 145, 105 Ark. 506 (Ark. 1912)
• Decision Date: 16 December 1912
• Parties: OGLESBY v. FORT SMITH

152 S.W. 145

105 Ark. 506

OGLESBY v. FORT SMITH

Supreme Court of Arkansas

December 16, 1912

Appeal from Sebastian Circuit Court, Fort Smith District; Daniel Hon, Judge; affirmed.

Judgment affirmed.

Ira D Oglesby, pro se; W. B. Cravens, of counsel.

1. Section 5473 of Kirby's Digest does not prevent the city counsel from authorizing, without a yea and nay vote, a committee to employ an attorney, and such authority carries with it the power to agree with him as to his fee. Such agreement, if made, is binding upon the city. Dillon, Mun Corp., § 82; Id. p. 1199, § 802; 60 Tex 522; 13 Cal. 531; 88 N.W. 981; 29 S.W. 880; 12 Kan. 426; 29 Ia. 282; Dillon, p. 1203, § 802; 17 N.Y. 584; 63 P. 804; 116 Ind. 15; 22 Mich. 104; 66 Ind. 396; 102 Ind. 372; 7 Cranch 299; 11 Ia. 506.

Where a contract is one which the corporation has the incidental power to make, independently of any statute, in order that it may execute powers expressly conferred, and carry out the purposes of its being, the rule that such contracts are not void merely because there is no written evidence of them, or because of the absence of some mere formality, is too firmly established to be shaken. 1 Ind. 281, 48 Am. Dec. 361; 61 Ind. 187; 63 Ind. 155, 182; 46 Ind. 380; 94 Ind. 305; 69 Ind. 273; 64 Ind. 319; 30 Vt. 285; 1 Dillon, Mun. Corp., §§ 479, 463.

2. If the committee had no authority to agree with plaintiff that his fee should be the same as that paid by the water company to its attorneys, yet, if it made such agreement, and it was reported to or brought to the knowledge of the city council by the committee or by the attorney, and the council, without objection to such agreement, continued the attorney's services and received and accepted the benefits thereof, this constituted a ratification of the agreement, and is as binding as if made by the council. 103 Ind. 196, 53 Am. Rep. 504; 1 Dillon, Mun. Corp., §§ 463, 464; 115 Ind. 234; 106 Ind. 129; 40 Tex. 170; 42 N.H. 125.

3. The adoption of the resolution of October 7, 1907, after appellant informed the council his fee would be the same as that paid by the water company to its attorneys, constituted, if not an express agreement, then an implied agreement to pay such fee, binding upon appellee, and under the testimony it is estopped from denying such liability. 17 N.Y. 450; 28 Cyc. 642; Id. 667; Smith on Contracts, § 228; 61 A. 471; 107 F. 349; 1 Dillon, Mun. Corp., §§ 451-459; 42 N.H. 125; 63 P. 804; 12 Kan. 426; 31 S.W. 946; 73 N.W. 811; 101 Ill.App. 150.

Vincent M. Miles, for appellee.

In the case of a municipal corporation the statute with regard to contracts must be strictly construed. Such statute is its enabling act, and the only power to contract it has. 2 Cranch, 27; 157 Mass. 177; 26 N.J.L. 594; 41 N.J.L. 90; 77 N.Y. 130; 9 Neb. 358; 4 Neb. 350; 85 Pa.St. 379; 53 Cal. 247; 8 Col. 857; 110 Cal. 543; 179 Mass. 496; 82 Mo.App. 352; 219 Pa.St. 29; 20 Col. 33; 68 Tex. 565; 73 Mass. 12. There was never at any time any resolution passed by the city authorizing a committee to enter into any contract with appellant whereby appellee's opponent in the litigation should fix the amount of the compensation. So when, after his work for the city began, appellant made statements to the city council that he would charge such a fee, before the city could be bound by such a statement, some actions must have been taken by the council upon which a yea and nay vote was called. 40 Ark. 105; Dillon, Mun. Corp., § 291; 82 Ark. 531.

OPINION

MCCULLOCH, C. J.

Many years ago the city of Fort Smith granted a franchise to a foreign corporation called the Municipal Waterworks Company, to establish and operate waterworks in the city for the purpose of furnishing water to the inhabitants. The contract contained a provision that the city should have an option to purchase the plant at the expiration of a stipulated period. Near the expiration of that period the city council decided to exercise the option and purchase the plant; but a dispute arose between the city and the water company concerning the price to be paid, and it became necessary, as it was thought, to employ special counsel to assist the city attorney in the negotiations for the purchase and the litigation which might follow. Litigation did arise, and appellant, in association with the city attorney, acted as attorney for the city, both in the preliminary negotiations and in the litigation. He claims to have been regularly employed by an authorized committee of the city council, and that a verbal contract was entered into whereby he was to receive as compensation for his services the same fee which the water company should thereafter agree upon and pay to its attorneys representing it in the litigation. At the end of the litigation the water company and its attorneys agreed upon a fee of $ 25,000 for the latter's services, and that sum was paid. Appellant claimed that sum as his fee in the matter, and the city refused to pay it. This action was instituted by appellant against the city to recover the amount claimed. He alleged in his complaint that he was employed by a committee of the city council duly authorized so to do; that the aforesaid basis for fixing the fee was agreed upon; that he performed the service as agreed; and that the city council, during the period of the negotiations and litigation with the water company, ratified the contract made with him by the committee. The city in its answer denied the employment of appellant; denied that the committee was authorized to employ him; and denied that the council ratified such employment or agreed in any way that appellant should be paid the same fee agreed on between the water company and its attorneys. It admitted that appellant acted as counsel for the city in the litigation, but alleged that the amount of the fee charged was unreasonable.

It appears from the testimony adduced at the trial that when the city council decided to exercise the option and purchase the water plant, a resolution was adopted, at the request of the special committee having the matter in charge, authorizing said committee "to employ an attorney to assist them in matters connected with the water company." The aye and nay vote on the adoption of the resolution was not taken and recorded. Subsequently, when the controversy with the water company arose concerning the matter of taking over the plant, a resolution was adopted by the city council, by an aye and nay vote duly recorded, providing that said special committee "be and it is hereby authorized, empowered and directed to contract with the said Municipal Water Works Company for the purchase of said plant, with full power, if the purchase price and terms of sale can not be agreed upon by said committee and said water company, to appoint arbiters as provided by ordinances and contracts now existing, and if said company declined to submit to arbitration the question involved, then to take such action in the courts or otherwise as may be necessary to purchase said plant, and to do any and everything incidental thereto as may be necessary to accomplish the purchase of and paying for said water works plant, and said committee are further authorized and empowered to employ, if in its judgment the interest of the city will be better protected and promoted, an attorney to assist the city attorney in the performance of the duties imposed by this resolution, including representing the city in all negotiations and controversies which may arise in purchasing or attempting to purchase said plant, until same is fully and finally disposed of." The testimony further tends to establish the fact that said committee entered into a verbal contract with appellant to represent the city, and agreed that his fee should be the same as that agreed upon by the water company and its attorneys for their services in the same matter. During the progress of the litigation another resolution was adopted by the city council reciting the employment of appellant as attorney for the city and appropriating the sum of a thousand dollars "to pay the necessary expenses to be incurred in said suit and in taking the testimony for and against the city in said proceedings." Appellant and other witnesses testified that he was present when that resolution was adopted, and that, during the discussion upon its adoption, he stated to the members of the council that he would charge the same fee that the attorneys for the water company charged it for their services in the matter. The testimony tends to show that at other times during the progress of the litigation he informed the city council that he would charge the same fee that the water company and its attorneys might agree upon as to the latter's fee. He wrote a letter to the mayor, which was read in open council meeting, and in which he stated that "there is no agreement between the city and myself as to the fee to be paid me, further than that I am to receive the same amount as the water company pays its counsel."

Each party introduced testimony to show what was a reasonable amount of fee for appellant's services. The witnesses varied in...