Town of Mannford v. Watson

• Decision Date: 12 May 1964
• Docket Number: No. 40250,40250
• Citation: 394 P.2d 506,1964 OK 110
• Parties: The TOWN OF MANNFORD, Oklahoma, a Municipal Corporation, Plaintiff in Error, v. Doyle WATSON, and John M. Wheeler, John M. Wheeler, Jr., and Robert L. Wheeler, d/b/a Wheeler & Wheeler, a Co-Partnership, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 506

394 P.2d 506

1964 OK 110

The TOWN OF MANNFORD, Oklahoma, a Municipal Corporation Plaintiff in Error, v. Doyle WATSON, and John M. Wheeler, John M. Wheeler, Jr., and Robert L. Wheeler, d/b/a Wheeler & Wheeler, a Co-Partnership, Defendants in Error.

No. 40250.

Supreme Court of Oklahoma.

May 12, 1964.

Rehearing Denied July 28, 1964.

Syllabus by the Court

1. Where an attorney enters into a contract to perform services for a municipal corporation and is to be paid for such services from the municipality's general revenue funds, a judgment may not be entered against such municipality inconsistent with the provisions of Art. 10, Sec. 26, Okla.Const., and 62 O.S.1961, Secs. 479, 480, and 485; and under such circumstances a court may not render judgment against the municipality unless the proof required by 62 O.S.1961, Sec. 362, is made.

2. Where an attorney is employed by a municipality upon a contingent fee basis and is to receive compensation for his services in the form of a percentage of a fund which he is to create or increase by reason of his services, and a fund is creates or increased by his services, such attorney has an equitable lien on the fund when created which may be enforced in an action against the municipality.

3. 44 C.F.R. Secs. 150.4 and 150.5, examined and held that these provisions will not be construed to prevent a municipal corporation from employing counsel to enter negotiations with representatives of the United States Government and to receive a percentage of the amount to be paid said municipality for its properties to be damages or taken from municipality where said Government is contemplating the exercise of, or is exercising its powers of exinent domain.

Appeal from the Superior Court of Creek County, Drumright Division; G. B. 'Chuck' Coryell, Judge.

Action by plaintiffs, Doyle Watson, and John M. Wheeler, John M. Wheeler, Jr., and Robert L. Wheeler, d/b/a Wheeler & Wheeler, a co-partnership, to recover for legal services rendered to the defendant, The Town of Mannford, Oklahoma, a municipal corporation, under an alleged five percent contingent fee contract. From verdict and judgment for plaintiffs, defendant appeals. Affirmed.

Jesse D. Swift, Sand Springs, Robert Blackstock, Bristow, for Plaintiff in error.

Doyle Watson, Drumright, Wheeler & Wheeler, Tulsa, for defendants in error.

JACKSON, Justice.

Plaintiffs in the trial court, Watson, Wheeler and Wheeler, brought this action upon an alleged express oral contract for the recovery of a contingent attorney fee for representing the defendant Town of Mannford in negotiations with the Corps of Engineers for the United States Government. The Town of Mannford in its answer and testimony admitted the plaintiffs had performed services for the Town but alleged that their oral contract called for 'cash fees' on a 'piece-work' or 'as work done' basis. Plaintiffs sought judgment upon their alleged 'contingent fee' contract in the sum of $35,000. Defendant sought to limit the judgment to such sum as would compensate plaintiffs for their services on a 'piece-work' or 'as work done' basis (suggesting a minimum of $450.00 as having been earned.)

Numerous questions are presented on review and will be more clearly understood after a brief statement of the facts.

The evidence shows that prior to May, 1959, Mr. Watson was attorney for the Town of Mannford and was being paid cash fees on a 'piece-work' or 'as work done' basis. There is testimony that he preferred this arrangement to a 'retainer.' Prior to June 4, 1959, it was apparent that the construction of the Keystone Dam would inundate the Town of Manford and it was hoped that by negotiations the Town might be adequately compensated for its municipal properties without condemnation proceedings. Mr. Watson was requested to assist Mr. Cheek, Town's Executive Administrator, in these negotiations and to perform such other legal services as might be required by the Town. Mr. Watson requested permission to employ the firm of Wheeler and Wheeler and, according to witnesses for the Town, stated that additional counsel would make no difference in the fee. Mr. Watson testified, however, that if additional counsel was authorized there would be only one attorney fee and that there would not be a separate fee charged by additional counsel.

On June 4, 1959, negotiations were resumed with Army Engineers who at that time were offering the Town approximately $300,000.00 for the damages it would sustain by inundation. Plaintiffs and the Town Board were present at this meeting. Following this meeting and during the afternoon, Town officers met with plaintiffs in the Wheeler offices in Tulsa. What Town officers were present in the Wheeler offices and what was said is in dispute. Mr. Wheeler Sr. testified that the Town Board, consisting of Mr. Winninger, Chairman, and Greenwood and Varnell, members, were present. He further testified that he stated to the Town Board, and others present, as follows:

'* * * Now, I understand that this fee is to be 5 per cent of the amount recovered' and they said 'Yes, that is the deal.' I said, 'Well, are you in a position to pay a cash fee' and they said, 'No, we cannot pay a cash fee.'

* * *

* * *

'* * * and they said, 'We want you to take it on a contingency basis' and I said, 'Well, I want to get that clearly settled in our minds.' and that was agreed to.'

The testimony of Mr. Wheeler, Sr., was corroborated for the most part by Mr. Watson and by Mr. Wheeler, Jr.

Mr. Wininger, chairman of the Town Board, testified that at the meeting in the Wheeler offices a contingent fee arrangement was brought up; that he did not agree to pay a contingent fee of 5 per cent; that he asked plaintiffs to prepare a proposed contract for submission to the Town Board. He did not recall whether other Town Board members were present at the meeting. Mr. Greenwood testified that he was not present at the meeting, and Mr. Cheek, Executive Administrator for the Town, testified that the Board was not present.

All agreed that after the contingent fee contract and claim was presented to the Town Board in writing that it was rejected on or about Nov. 12, 1959.

The evidence shows that following the June 4, 1959, meeting negotiations with the Army Engineers were conducted by Mr. Cheek, Executive Administrator, who on some occasions was assisted by plaintiffs. The evidence discloses in a limited way the extent of time and effort which plaintiffs contributed on behalf of the Town in these negotiations and with its legal problems in connection therewith. Plaintiffs were discharged in October or November, 1959, because of this fee controversy, and thereafter the Army Engineers entered into a contract for the Government to pay the Town approximately $700,000.

From the foregoing statement of the pleadings and evidence it is apparent that the fact question of whether the parties contracted for a contigent fee, or cash fees on an 'as work done' basis, is sharply drawn. However, as hereinafter shown, this issue was not sharply tried and presented to the jury.

From jury verdict and judgment in favor of plaintiffs for $17,787.00, the defendant Town has appealed.

For reversal of the judgment the defendant Town contends that the oral contract for a contingent fee is contrary to express Oklahoma Constitutional, statutory, and established case law limitations on municipal indebtedness, and suits for recovery thereon, citing Art. 10, Sec. 26, Oklahoma Const., 62 O.S.1961 §§ 479, 480, and 485, and numerous decisions from this court. In this connection it is also pointed out that no effort was made to comply with the provisions of 62 O.S.1961 § 362.

The size of the verdict and judgment in this case indicates that the verdict was not based upon cash fees on an 'as work done' basis. If it were it would have to be stricken down for the reason that no effort was made in the trial court to comply with the above mentioned constitutional and statutory provisions as is required when a 'Personal Judgment' is taken against a municipality.

It appears from the record and briefs of the plaintiffs herein that plaintiffs' cause was presented to the trial court and jury upon at least two theories for recovery. However, from our...