Tegethoff v. Sidmon, 25896.

• Decision Date: 03 February 1942
• Docket Number: No. 25896.,25896.
• Citation: 158 S.W.2d 224
• Parties: TEGETHOFF v. SIDMON et al.
• Court: Missouri Court of Appeals

158 S.W.2d 224

TEGETHOFF v. SIDMON et al.

No. 25896.

St. Louis Court of Appeals. Missouri.

February 3, 1942.

Rehearing Denied February 17, 1942.

Appeal from Circuit Court, St. Louis County; John A. Witthaus, Judge.

"Not to be reported in State Reports."

Suit to cancel two warrants by William H. Tegethoff, liquidator of St. Ferdinand Sewer District of St. Louis County, Mo., a corporation, against Stanley A. Sidmon and others wherein defendants filed a counterclaim. From a judgment for the plaintiff, Walter H. Hahn and Walter F. Sheehan appeal.

Affirmed.

Herbert E. Bryant, of St. Louis, for appellants.

Kenneth Teasdale and Vaughn C. Ball, both of St. Louis, for respondent.

McCULLEN, Judge.

Respondent brought this suit, as plaintiff, to have declared void two warrants for $500 each, numbered 598 and 609, respectively, of the St. Ferdinand Sewer District, St. Louis County, Missouri, which were originally issued to Stanley A. Sidmon and Harry W. Fulbright, a firm of attorneys, and assigned by said attorneys to Walter H. Hahn and Walter F. Sheehan. The cause was tried before the court and resulted in a finding and judgment for plaintiff and against defendants on plaintiff's petition, declaring said warrants null and void, and against defendants and in favor of plaintiff on the counterclaim of defendants Hahn and Sheehan. Said defendants duly appealed.

Plaintiff's petition alleged the incorporation of the St. Ferdinand Sewer District as a public corporation under an act of the Legislature, the later repeal of the act relating to said district, the still later passage of the law by the Legislature providing for the appointment of a liquidator thereof, and the appointment of plaintiff as liquidator; that the sewer district entered into a contract with Sidmon and Fulbright on January 24, 1929, employing them to act as attorneys to attend to all matters of a legal nature for the district; that on March 8, 1929, on February 3, 1930, on June 6, 1930, and on May 5, 1931, additional supplemental contracts were entered into between the same parties. The petition further alleged the issuance by the sewer district of all warrants to Sidmon and Fulbright pursuant to the original contract and supplements thereto, listing the warrants that had been paid in full, those that had been compromised, settled, retired or cancelled, and finally setting forth the two warrants involved herein which were not paid.

It was further alleged in the petition that under the contract said attorneys' fees were limited to three per cent. of the total expenditures of the sewer district; that three per cent. of said total expenditures, exclusive of attorneys' fees, amounted to $6,529.17, and that all warrants issued to said attorneys in excess of said amount were without consideration and were illegal and void; that warrants issued to said attorneys prior to Nos. 598 and 609 had been paid, and that said two warrants were without consideration and void. The petition further alleged that the board of supervisors of the sewer district exceeded their lawful authority and abused their discretion by entering into said contracts with said attorneys; that said contracts were "grossly extravagant, excessive, wasteful and arbitrary * * *"; that "the compensation so provided for was extremely and inexcusably excessive and unreasonable and imposed an excessive and unreasonable burden upon the taxpayers of said district, and constituted a fraud against said taxpayers, and * * * were, therefore, ultra vires and of no effect, and the aforesaid warrants issued thereunder are void and of no effect." Plaintiff prayed the court to declare said two warrants void and to order them cancelled.

The joint answer of defendants Hahn and Sheehan admitted the partnership of Sidmon and Fulbright, the attorneys; admitted the organization of the sewer district, the passage of the laws referred to in plaintiff's petition, the appointment of plaintiff as liquidator of said sewer district, and also admitted the execution of all contracts and supplements thereto as alleged in plaintiff's petition; admitted that defendants were the owners of the two warrants in question, and alleged that they acquired them by due and proper assignment from the payees named therein. Said answer also contained specific and general denials as to the other matters in the petition.

Defendants' counterclaim alleged defendants' ownership of the two warrants; that they were duly presented to the treasurer of the sewer district, and that payment was refused because of insufficient funds in the hands of said treasurer. Defendants further alleged that said warrants were two of a group of approximately thirty-five warrants totaling $17,858 issued to Sidmon and Fulbright on May 5, 1931; that the amount of said warrants was a payment made to said attorneys under the terms of the settlement and adjustment contract or agreement of May 5, 1931; that $13,358 of said warrants were duly paid by the sewer district out of its funds and an additional amount of $3,500 in warrants was paid out of funds collected by plaintiff and settled by compromise; and that said defendants were holding the sole remaining two outstanding warrants issued by virtue of said agreement. Defendants prayed judgment for $1,000, the total amount of said two outstanding unpaid warrants, with interest from May 5, 1931.

The reply of plaintiff, following a general denial, alleged that the purported settlement and adjustment set forth in defendants' answer and counterclaim were without consideration, and that no legal or valid claims were in existence against the sewer district to be settled; that the parties to said purported settlement entered into the same under mutual mistake of law and fact; that, by reason thereof, said purported settlement, liquidation of claims, and adjustment of contracts were illegal, void and of no effect. It was admitted by plaintiff in his reply that said two warrants were duly presented to the treasurer of the sewer district, and that payment thereof was refused because of lack of funds on hand in the treasury of said district.

At the trial the parties admitted the execution of the various documents, including the warrants as well as contracts and supplementary contracts between the sewer district and the attorneys named. The payment of the various warrants as alleged in plaintiff's petition was also admitted. The various contracts and supplements thereof and warrants were all introduced in evidence without objection.

The testimony of William T. Staed, clerk for the liquidator, in charge of the books, records and papers of the sewer district on behalf of plaintiff, showed that the gross expenditures of the district, exclusive of attorneys' fees, were $217,543.48; that three per cent. of said gross expenditures amounted to $6,526.30; that prior to the issuance of the two warrants numbered 598 and 609, respectively, other warrants totaling approximately $31,500 had been issued by the sewer district payable to Sidmon and Fulbright for attorneys' fees; that an amount in excess of $6,526.30, namely, $7,000, had been actually paid to Sidmon and Fulbright, or their assignees, prior to the time that the two warrants numbered 598 and 609 were issued.

It was brought out on cross-examination of plaintiff's witness Staed that other warrants were issued by the sewer district subsequent to warrants numbered 598 and 609; that the estimated cost of the construction of sewers in the district was $3,151,378.27; that there were about eighteen thousand separate parcels of land and property in the St. Ferdinand District area that the tax levy in the district was based on an area calculation of each separate piece of ground; that the tax was levied in September, 1931; that suits were filed in an effort to collect the tax; that Sidmon and Fulbright, as attorneys, filed said suits numbering approximately fifteen hundred; that the warrants issued to Sidmon and Fulbright prior to the issuance of the two warrants numbered 598 and 609, respectively, had either been paid by the district or settled by compromise.

Defendant Sheehan testified that he was the owner of warrant numbered 598, plaintiff's Exhibit A; that he acquired it on November 1, 1931, by purchase and was still the owner thereof. Defendant Hahn testified that he was the owner of warrant numbered 609, plaintiff's Exhibit B; that it was assigned to him on November 24, 1931; that he purchased it for value and was still the owner thereof.

Defendants point out that, by the terms of the contract of May 5, 1931, (plaintiff's Exhibit G) Sidmon and Fulbright, the attorneys, agreed to do certain things on behalf of the district, some of which were to be done at the time of the execution of said contract and others subsequent thereto; that, in consideration of the things which the attorneys agreed therein to do, they were to be paid $17,858 in warrants of the district upon the execution of the contract; that the contract was duly executed by both parties, and that the sewer district issued and the attorneys received the warrants as agreed. Defendants further point out that there is no evidence to...