Regan v. Babcock
| Citation | 264 N.W. 803,196 Minn. 243 |
| Decision Date | 24 January 1936 |
| Docket Number | 30,519 |
| Parties | JOHN J. REGAN AND OTHERS v. CHARLES M. BABCOCK AND OTHERS; STATE OF MINNESOTA, INTERVENTER |
| Court | Minnesota Supreme Court |
Appeal by the state from a judgment of the district court for Ramsey county, Kenneth G. Brill, Judge, in supplemental proceedings awarding to plaintiffs attorneys' fees and expenses out of the funds recovered by them in an action, wherein the state intervened and joined with plaintiffs, to cancel certain contracts for the paving of state trunk highways and for the recovery of sums claimed to have been illegally paid out under such contracts. Affirmed.
See 188 Minn. 192, 247 N.W. 12.
State -- action -- intervention by state -- liability for attorneys' fees and expenses.
1. Where the state intervenes and joins the plaintiffs in suits in equity by taxpayers to cancel contracts for the paving of state trunk highways, entered into by the commissioner of highways, and for injunctions to restrain the contractors and commissioner from proceeding with the carrying out of such contracts, and for the purpose of recovering for the state moneys illegally paid out or to be paid out under such contracts, the state subjects itself to the jurisdiction of the court and may be required by the court to pay to the plaintiffs, the taxpayers, out of the funds recovered and saved to the state, the reasonable and necessary expenditures and attorney's fees incurred by such plaintiffs in carrying on the litigation.
State -- necessity of appropriations.
2. While moneys cannot be paid out of the state treasury "except in pursuance of an appropriation by law," we find in 1 Mason Minn. St. 1927, § 2554, such an appropriation, where, as here, the moneys recovered and saved go into and are a part of the trunk highway fund.
Attorney and client -- fees -- value of services.
3. The attorneys' fees allowed are not shown to have been based on a contingency and are not excessive.
Attorney and client -- fees -- manner of payment.
4. The fact that the court directed payment of the attorneys' fees to the plaintiffs' attorneys instead of to them for the plaintiffs was not error nor important.
No reversible errors.
5. Other errors claimed found not to present any reversible error.
Harry H. Peterson, Attorney General, and Harry W. Oehler, Assistant Attorney General, for the State.
Briggs Weyl & Briggs and Rockwood & Mitchell, for plaintiff-respondents.
The intervener, state of Minnesota, appeals from a supplemental judgment, entered by the trial court on March 2, 1935. There were six separate actions tried together and resulting in six separate judgments in favor of the plaintiffs, entered June 28, 1934. The six actions were taxpayers' suits brought to have declared void six contracts entered into by the commissioner of highways, and approved by the commission of administration and finance of this state, with six different contractors, for the paving of certain state highways. The plaintiffs further asked that the commissioner of highways and the commission of administration and finance be enjoined from making any further payments under said contracts and that the contractors be enjoined from any further performance of said contracts. In each case, also, plaintiffs asked for the recovery, by the state of Minnesota, of large sums of money, claimed to have been illegally paid to the contractors. What is above stated is from the amended and supplemental complaints.
We do not attempt any extended recital of the history of the litigation. The contracts were let, some in December, 1931, and others in April and May, 1932. These actions to annul the contracts, and for injunctions, were commenced about May 12, 1932, before any material amount of the work had been done and before any payments had been made. On May 16 the state of Minnesota, by its attorney general, intervened and, in effect, joined with the plaintiffs, realleging substantially the same facts as were stated in plaintiffs' complaints and asked that the contracts be declared void. Some days later, about May 25, 1932, the attorney general, on behalf of the state, the contractors, the commissioner of highways, and the commission of administration and finance, entered into a stipulation providing in substance that the work should proceed by the contractors and that the state would pay 80 per cent of the contract price on monthly estimates and retain the balance of 20 per cent until the trial and determination of the actions, said balance to be then disposed of as might be determined in the actions. The plaintiffs were not consulted and had no part in making the stipulation. The contractors then proceeded with the work under this stipulation, and payments were made to them thereunder.
Amended and supplemental complaints were thereafter permitted to be filed by the plaintiffs and the intervener. Various demurrers and motions were considered by this court in the opinion in Regan v. Babcock, 188 Minn. 192, 247 N.W. 12.
Before decisions were made it apparently was brought to the attention of the court that plaintiffs would be entitled to be awarded, out of any funds recovered or saved for the state, the reasonable expenses, including attorneys' fees, incurred by them in prosecuting the suits. The trial of the cases commenced October 2, 1933, and ended December 20 that year. The contract price involved in the six contracts aggregated more than $1,800,000. The court found the contracts void and in each case found the reasonable value of the work done by the contractor and that the state should pay no more than such reasonable value, and enjoined the highway commissioner and the commission of administration and finance from allowing or making any greater payments. The result of the decisions was to save to the state some over $390,000.
The court in its findings of fact stated:
"The State of Minnesota paid said defendant for said improvement 80 per cent of the price specified in said contract and said stipulation and has retained and still retains 20 per cent of said contract price and has requested this court to determine the right, title and interest of the parties hereto in said 20 per cent so retained by the State of Minnesota."
In its conclusions of law it said:
In five of the cases it was found that the contractor had been overpaid, and the state was held entitled to repayments aggregating $33,597.30. This money was ordered to be paid over to the clerk of the trial court, and was so paid. The 20 per cent of the contract price was retained by the state subject to further disposition. Judgments were thereupon entered in each case June 28, 1934, as stated. Thereafter, on application by plaintiffs, the determination of the amount to be awarded to the plaintiffs for expenses and attorneys' fees in the six cases came before the court for trial. The attorney general proposed that two issues be submitted to a jury, namely: (1) What the actual, necessary, and reasonable disbursements of plaintiffs and their attorneys were in connection with the conduct of this litigation; (2) what the reasonable value of the services of said attorneys had been in this litigation. The court granted the request and submitted the two issues for trial by jury. Trial was had, commencing on January 8, 1935. Verdicts were returned January 22 finding the amount of reasonable and necessary expenses to be $5,696, and the value of the services of the attorneys $60,000. Findings were thereupon made by the court, adopting the verdict of the jury on the questions submitted, and the court found that the money paid into the...
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