Vogt v. Keller

159 S.W.2d 29, 289 Ky. 486, 1942 Ky. LEXIS 585
CourtCourt of Appeals of Kentucky (pre-1976)
DecidedFebruary 13, 1942
StatusPublished
Cited by3 cases

This text of 159 S.W.2d 29 (Vogt v. Keller) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky (pre-1976) primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vogt v. Keller, 159 S.W.2d 29, 289 Ky. 486, 1942 Ky. LEXIS 585 (Ky. 1942).

Opinion

Opinion op the Court by

Morris, Commissioner

Affirming.

Appellee was plaintiff below; appellants were defendants. Appeal is from judgment following a verdict awarding appellee $7,000, subject to a credit paid during the course of litigation, in the case of Com. Life Ins. Co. v. Adam and Lulie "W. Vogt, et al.

In order to bring contested points to the forefront it is necessary to state, substantially, the nature of and proceedings in the then pending suit, which was filed in July, 1936, and grew up in the following way: The Vogts jointly owned several parcels of real property in Loriisville, among which was the Plaza Hotel. Mr. Vogt had been doing financial business with the Louisville Trust Company for a number of years; in 1927 desiring additional loans he and his then attorney worked out a plan to provide further security.

There was in existence a family corporation, the Citizens Realty Finance Corporation. In July, 1927, the owners conveyed the Plaza to the finance company, which ■executed five lien notes to Mr. Vogt, due in various periods for $15,000 each; Mr. Vogt pledged them to the Louisville Trust Company on an indebtedness of $65,000. *488 The finance company later reconveyed the Plaza to the owners jointly. The real consideration being “the assumption by the second parties of the five notes.” It was claimed by Mr. Yogt that the “assumption” clause was interpolated by mistake.

In November, 1929, Mr. Yogt executed a note to the insurance company for $66,000, collateral in form, but failing to describe collateral. Mr. Yogt owed the Trust Company a considerable sum, and it was pressing him for a reduction, particularly of the Plaza notes. After Mr. Vogt had obtained the loan the company indorsed its check “for Adam Yogt,” and turned it over to the Trust Company. Contemporaneously the Trust Company transferred the Plaza notes to the insurance company.

Thereafter, in 1934, the Yogts and the finance company filed petitions in bankruptcy, Mr. Yogt listing in his schedule the insurance company as a secured creditor, part of his debt being secured by Plaza notes. In bankruptcy proceedings the insurance company filed its claim, and the court upon its motion adjudged that its lien indebtedness, then reduced to $65,000, was secured by the notes, and at a directed sale the Commonwealth purchased them. Later Mr. Yogt moved for a discharge, to which a creditor objected, but after it had been indicated that all of their real property, including Plaza, was mortgaged beyond market values, objections were withdrawn and in December, 1935, bankrupts were discharged.

In March, 1936, the owners reconveyed the Plaza to the finance company, subject to the insurance company’s lien. Mr. Yogt had learned that the records of the Trust Company did not show the transfer of the notes, and that the notes to the insurance company failed to describe collateral. In the bankruptcy proceeding the trustee renounced interest in the real estate, estimated to be worth about $200,000, apparently upon the claim of Mrs. Yogt that she had advanced considerable sums for upkeep and improvements, hence entitled to an equitable lien for more than $90,000, resulting in a saving to the owners of all their real estate, with the exception of the Plaza. Appellee was not concerned in the bankruptcy matter.

Following the Commonwealth suit, Mr. Woodbury who had been Mr. Yogt’s attorney for more than thirty years, and Mr. Sachs, were employed to defend. One *489 attorney filed what is referred to as a “formal answer” on August 3, 1936; the other later filed a “detailed answer,” signed by both Sachs and Woodbury. In the latter answer the Commonwealth’s title to the notes was challenged on the grounds above set out, and it was asserted that the Commonwealth had no claim against the Vogts or lien against the Plaza property. Mr. Wood-bury later died and nothing was done until the employment of appellee in November, 1936. Up to the time of employment no answer had been filed by Mrs. Vogt; later the plaintiff filed an amended petition which alleged that Mr. Vogt, during bankruptcy proceedings, had made a new promise to pay.

In the months following appellee’s employment the plaintiff filed five amended petitions, and tendered a sixth. The original petition sought judgment against the Vogts and the finance company for $75,000, with semiannual interest from July 7, 1927. The third amendment set up a later promise of Mr. Vogt. After a year or more the plaintiff apparently concluding it could only recover $65,000 and interest on the vogt note, discontinued its efforts to recover $75,000, but in a third amended petition prayed judgment for the lesser amount, and as originally prayed against Mr. Vogt and the finance company on the Plaza notes.

There was a plea of limitation as to some of the notes. Mrs. Vogt in answer denied liability on the ground that she was not directly bound, but had set aside her interest in the property as surety on Mr. Vogt’s obligation. Prior to the institution of the suit the owners had offered to surrender the Plaza to the insurance company in satisfaction of its debt; this offer was declined for the reason, as indicated by its counsel, that it believed it could secure personal judgment for the total debt with interest. It is admitted that the property was not worth the lien debt. The record shows that during litigation it was rented, and when finally sold the Commonwealth, sole bidder, purchased the property.

On April 26, 1939, the chancellor held that Mr. Vogt was personally bound by reason of the assumption of the notes in the Plaza-Finance Company transaction, but that both he and the “dummy” corporation having been adjudged bankrupt were released. That the first promise made by Vogt to pay the indebtedness could not be enforced, because a fraud on the bankruptcy law and *490 holding failure of proof to sustain the later promise; that Mrs. Yogt was not personally bound on any of the five notes; that while the statute of limitations barred two of the lien notes, the instrument created a lien, hence the 15-year statute applied, and it was upheld, the chancellor declining to give deficiency judgment.

In brief for appellant it is contended that when appellee was employed by Mr. Yogt, he was a young attorney just beginning to practice law in Louisville, and had agreed that if employed he would be reasonable in his charges for services rendered. He had been employed by Mr. Yogt prior to his entry in the insurance company’s suit, in making collections. There is no showing that during the more than two and one-half years of litigation complaint was made as to the conduct of the litigation.

There is also a reference to payments of a fee to Mr. Sachs, made for the purpose of comparison of the fee paid him with that claimed by appellee. It may be gathered from the testimony that notwithstanding Mr. Sachs ’ name was signed to numerous pleadings, he admittedly was rather on the side line, and though frequently consulted to advantage, had no great part in the trial or preparing pleadings. However this may be, or as to matters leading up to the employment, if having any bearing, they were brought to the attention of, and subject alone to the jnry’s consideration.

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Bluebook (online)
159 S.W.2d 29, 289 Ky. 486, 1942 Ky. LEXIS 585, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vogt-v-keller-kyctapphigh-1942.