11 Mont. 285 | Mont. | 1891
The bill of exchange sued on in this action was drawn for the principal sum of four thousand dollars, and provided for interest at six per centum per annum after maturity until paid, and that “the parties hereto agree to - pay all attorney’s fees in case of suit on this paper.” The defendants, one of whom is appellant, were, according to the allegations of the complaint, both acceptors and indorsers of said bill of exchange.
Judgment was rendered against appellant, G. W. Crutcher, one of the alleged acceptors and indorsers, for the said principal sum of four thousand dollars, together with four hundred dollars for attorney’s fees for services in prosecuting the action, and costs of suit. This appeal is from that portion of the judgment relating to attorney’s fees allowed in said action.
Respondent contends that an appeal from part of a judgment is not proper practice, and cites in support of his position the case of Barkley v. Logan, 2 Mont. 296, determined at the August term, 1875, and the case of Plaisted v. Nowlan, 2 Mont. 359, determined at the January term, 1876, of the Supreme Court of Montana, in which latter case the former was again considered on motion for rehearing, and affirmed. These cases would support respondent’s position but for the fact that since the determination of them the statute under which they were determined has been so amended as to provide for an appeal from the judgment, “or any part thereof.” The sections of the statute (369 and 380) referred to in the cases cited are as found in the Civil Practice Act, enacted by the seventh session of the legislative assembly, convened in 1871. Now, in 1877, about one year following the announcement of the decisions cited
Appellant, G. W. Crutcher, as a defendant in said action, appeared, and answered said complaint, and, among other averments, set forth two paragraphs as follows: —
“4. This defendant, for answer to the seventh paragraph of said plaintiff’s complaint, alleges that said attorney’s fees in said suit provided for were not due at the time this suit was filed.
“5. And for further answer to said seventh paragraph he alleges that the bill herein sued on was, as alleged in said complaint, made in the- State of Kentucky, and payable in that State, and said contract was to be wholly performed in that State, and that by the laws of the State of Kentucky the sum of two dollars and fifty cents, and no more, is provided for by the statutes of the said State of Kentucky in such cases, and that any contract for a greater sum as attorney’s fees is by the laws of said State of Kentucky illegal and void, and that no greater sum than two dollars and fifty cents can be recovered in said State under the contract set out in the complaint herein.”
These paragraphs plaintiff’s counsel moved the court to strike out of said answer, on the ground that the averments therein contained were sham and irrelevant allegations, and constituted no defense to plaintiff’s complaint. The court sustained said motion, and struck from the answer said paragraphs 4 and 5.
The said motion and order appear in the record, and the appellant complains that the court erred in said proceedings;
The correct distinction upon this point of practice appears to be there expressed, and, in our view, that case goes far towards reconciling the two lines of Montana cases which are mentioned as being wholly at variance.
In the case at bar the judgment roll is brought here on appeal from the judgment, and we are asked to review an order striking out a portion of appellant’s answer. This order is deemed excepted to by the provisions of section 290 of the Code of Civil Procedure. It is provided by section 308 of the Code that the judgment roll shall include, among other papers, all pleadings and copies of orders sustaining or overruling demurrers. Now, a motion to strike out a portion of a pleading is in fact and in substance a demurrer to that portion attacked. This motion is used to trim off and cast out improper matter inserted in a pleading which contains proper averments, while the demurrer is made use of to root up and cast out the whole pleading at which it is directed. (Bliss on Code Pleading [2d ed.], § 423.) Such a motion being of the nature of a demurrer, which is part of the judgment roll, and the order sustaining the same being deemed excepted to, it is held reviewable on appeal from the judgment. In the case of Dodson v. Nevitt, 5 Mont. 518, a motion was made to strike out a counter-claim set up in the answer, and sustained. This proceeding was held ■ reviewable on an appeal from the judgment, on the ground that such motion was in the nature of a demurrer.
Was the action of the court in striking out said paragraphs 4 and 5 erroneous? As to paragraph No. 4, we unhesitatingly deem it sham, and without force as a defense. The language of the clause in the bill of exchange as to attorney’s fees is: “The parties hereto agree to pay all attorney’s fees in case of suit on this paper.” Appellant reasons that this is a promise of a certain sum upon the happening of a contingency, and until that
Paragraph No. 5 of the answer is an attempt to plead a statute of the State of Kentucky, and also, as we are informed by appellant’s counsel, the construction of such statute by the courts of that State. Does that paragraph accomplish the purpose intended? It is a rule of the law relating to contracts, with but few exceptions, not applicable in this case, that, if a contract is void by reason of the laws of the place where the same is made and is performable, the same rule will be applied by the courts of another State where such contract is sought to be enforced, although such contract is not obnoxious to the laws of the latter jurisdiction. (2 Parsons on Contracts, 582; 2 Parsons on Notes and Bills, 317; Story on Bills, § 129; 1 Story on Contracts, § 802; Bishop on Contracts [enlarged ed.], § 1390.)
But in order to have such foreign law applied in another jurisdiction it must be brought to the attention of the court by setting out so much thereof as is applicable, and proving the same. This is the rule at common law (1 Chitty on Pleading, 239); and it does not appear to have been changed by the Codes. (Bliss on Code Pleading, 183, 184, 304.) The case of Throop v. Hatch, 3 Abb. Pr. 23, being directly in point, and the language so appropriate to this subject, we quote a few observations therefrom. The court, by Allen, J., says: “If the plaintiff is driven to the statute laws of the States of Ohio and Michigan to maintain this action, and bound to show that by the statutes of those States the trusts which he seeks to enforce are valid, he should have set out, at least substantially, the statutes upon which he relies. The laws themselves are to
Independently of the question as to what the law of Kentucky is, and its effect upon the stipulation in said bill for the payment of attorney’s fee, appellant contends that said provision ought to be held invalid here, on the ground that such a stipulation in a contract is obnoxious to sound public policy, and in support of this position cites cases from certain States, and also the case of Merchants’ Nat. Bank v. Sevier, 14 Fed. Rep. 662, decided in the United States District Court for the eastern district of Arkansas, by Judge Caldwell, and concurred in by McCrary, J. Respondent meets this proposition by the citation of a line of cases from the courts of last resort in other States of the Union, and also finds support for his side of the
In the fourth edition of Daniel on Negotiable Instruments, published this year, the author divides the cases upon this subject into four classes, as follows: First, those which sustain the validity of the stipulation and the negotiability of the instrument. The second class of cases enforces the stipulation, but denies the negotiability of the instrument. The third class maintains the negotiability of the instrument, but denies validity to the stipulation, because, as those cases hold, it amounts to a penalty, tends to encourage litigation, is oppressive to debtors, and is against the policy of the law, and therefore void. The fourth class of cases holds that the stipulation renders the transaction usurious, and subjects the instrument to the operation of the statutes against usury.
Under each of these heads a group of cases will be found noted by the author.
The fourth class treats the stipulation as a condition which renders the transaction usurious. While in this State there is at present no law which would be infringed on that particular ground, we do not subscribe to the reasoning whereby it is assumed that the stipulation is a device to evade the law against usurious interest. We are inclined. rather to adopt the reasoning of Judge Deady upon this point. He says: “The ruling that such stipulation makes the note usurious is founded upon the unauthorized assumption of fact that the sum agreed to be paid as an attorney’s fee in case the note is not paid at maturity is not what it purports to be, but illegal interest in the disguise thereof. Of course, where it appears that such is the real nature of the transaction, it should be treated accordingly. But the fact cannot be assumed, any more than that a like sum of the alleged principal is illegal interest in disguise. Accordingly, the tendency of the decisions hostile to this stipulation is to leave these untenable grounds, and hold it void upon the ground that it is a convenient device for usury, and tends to the oppression of the debtor.”
In the case at bar the stipulation is to pay attorney’s fees in the event of suit “ on this paper,” and from that point of view we are considering the objection that a court where usury laws prevail might assume that the provision was a device to evade such laws. Now, how would a creditor obtain, through such stipulation, a greater sum for the use of money than the law permits? The debtor in such a case may pay the amount of the principal and the lawful interest, and then the stipulation would be null, for no suit could be maintained on the obligation, and of course no sum collected from the debtor by way of attorney’s fee. But, in order to carry out the scheme to evade the law against usury, and enable the holder of the paper to collect more than the law allows for the use of money, the
The third class of cases on this subject as classified by Mr. Daniel maintains the negotiability of the instrument, but holds that the stipulation is penal and void. This group of cases is closely allied to those cited under the fourth class, and the reasons affirmed in both are very much alike, except that some cases of the third class do not proceed upon the ground that statutes against usury are infringed by the stipulation, but without the aid or supposed aid of statutes declare it void on the ground that it encourages litigation, is oppressive to the debtor, and is therefore against the policy of the law. These, with other considerations, were summarized in the case of Merchants’ Nat. Bank v. Sevier, supra, as ground for holding the stipulation, on general principles, without reference to statute, void. In considering the question from this point of view, it should be borne in mind that it is a stipulation of contract between parties which the court is asked to declare void, and, as one ground therefor, the obligor urges that it is oppressive. Now, courts of equity, even, do not declare a contract void merely because it is inexpedient or improvident. (2 Pomeroy’s Equity Jurisprudence, § 928.) Nor do we find this provision of the instrument bearing a likeness to those contracts which the law generally condemns as against public policy (Bishop on Contracts [enlarged ed.], §§ 467-549), unless it be considered champertous, and we have-not seen that view seriously urged.
If this stipulation could be referred to any class of contracts which have been held contrary to public policy by a long line of decisions, and fit to the principle carried out in such cases, there would be more support to that view. It is not against public policy nor against the spirit of the law in these times that attorneys should receive just and reasonable compensation for services. Nor is it in principle unlawful for one to contract with another to re-imburse the latter for a lawful expenditure caused by the default or wrong committed by the promisor. If the main obligation is valid, and the obligor can pay it, without question he should do so at maturity; and it would seem merely stubborn denial of another’s right to compel the obligee
It is not uncommon to allow reasonable attorney’s fees in case of foreclosure of mortgage. (See cases cited in note to Merchants’ Nat. Bank v. Sevier, supra, to which we add the case of Clark v. Nichols, 3 Mont. 372.) And such a condition does not appear to have received the attacks upon it which have been aimed at the same condition in a negotiable obligation without mortgage. It is hard to see why, viewed from the stand-point of public policy, the stipulation is not as obnoxious in one kind of an obligation as another. Besides, the mortgage is only collateral to the obligation to insure the payment thereof; and its enforcement is sometimes more oppressive to the debtor than a naked promise to pay, because the mortgage often takes property otherwise exempt from execution.
But will the stipulation encourage litigation? Viewed from one side it will not.- The debtor will not do anything to encourage the bringing of an action against himself, which involves his payment of a greater sum than would be called for without action. He will discourage that result, and to do so
We come now to the second class of cases, which enforces the stipulation, but denies negotiability to the instrument. (See cases cited under this head in 1 Daniel on Negotiable Instruments, § 62.)
It is already perceived that those opposed to the stipulation are much divided among themselves in their views of its effect. The cases in this second class proceed upon the ground that, although the stipulation is valid as a condition, it is a condition incompatible with the nature of negotiable instruments, because it introduces an element of uncertainty as to the amount to be called for thereon. It has been pointed out by the commentators cited supra that, where the stipulation for an attorney’s fee is dependent on the event of an action to enforce payment, the amount demandable at maturity is not at all affected thereby; and that, when suit is brought, and it is sought to enforce the stipulation along with the principal and interest of the note or bill, it is past due, and has ceased to be a negotiable instrument,, in the full meaning of that term. This is readily perceived by every jurist, and this suggestion seems to take away much of the force of the idea that the stipulation introduces an element of uncertainty into the instrument, which, as a negotiable instrument, it is unable to carry. In the case of Merchants’ Nat. Bank v. Sevier, supra, Judge Caldwell, in touching upon this view of the stipulation, says: “If a stipulation for an attorney’s fee can be upheld upon the ground that it is a valid agreement upon sufficient consideration for the payment of a liquidated
We think, on the whole consideration, that the cases cited in the first class by Mr. Daniel, which sustain the validity of a stipulation for attorney’s fee in the event of a suit and the negotiability of the instrument, are the most consistent with the principles of law in general, and with those special rules governing negotiable instruments. And we approve the view of Judge Deady, in Wilson S. M. Co. v. Moreno, supra, that the
Judgment is affirmed, with costs.
Affirmed.