145 P. 1036 | Utah | 1915
The plaintiff commenced this action against the defendants in the district court of Salt Lake County to foreclose a mortgage given to secure the payment of the following note:
*322 “Salt Labe City, Utah, June 25, 1909. $10,000. Two (2) years after date, for value received, we jointly and severally promise to' pay to Utah Savings & Trust Company, or order, ten thousand dollars, with interest thereon at the rate of seven per cent per annum from date until paid, both before and after judgment. Interest payable quarter-yearly to the Utah Savings & Trust Co., whose receipt for same shall be accepted without the presence of this note. If any interest remains due and unpaid for the period of thirty days then the principal sum and all accrued and unpaid interest shall at once be due and payable at the option of the holder of this note and the principal sum and all unpaid interest shall then draw interest at the rate of twelve per cent per annum until paid. The principal sum and interest payable in United States gold coin at the banking house of Utah Savings & Trust Company, in Salt Lake City, Utah. In case this note is collected by an attorney either with or without suit we agree to' pay in addition thereto ten per cent of the principal amount of said note as attorney’s fees.”
The action was brought in April, 1913, and the only provision in the mortgage which is material upon this appeal is the following:
“If the indebtedness secured hereby should become due and payable and this mortgage is placed in the hands of an attorney for collection, the mortgagors agree to pay five per cent of such indebtedness in addition thereto as costs of collection; in case foreclosure proceedings herein be instituted, the mortgagors agree to pay as attorney’s fees, a reasonable amount in addition to the indebtedness secured thereby.”
The complaint is in the usual form in foreclosure actions. Plaintiff, however, alleged that the defendants had made default in the payment of interest, and had paid no interest after the 10th day of December, 1910, and that for- that, reason in thirty days from that date, to-wit, from January 6, 1911, according to the tenor of the note secured by the mortgage in question, he was entitled to twelve per cent interest upon the principal and upon the interest remaining unpaid. It was also alleged that by the terms of said note the defendant had agreed to pay ten per cent of the principal sum as
The defendants appeared and filed an answer to the complaint. The only issues presented by the answer related to the rate of interest and the attorney’s fee claimed by plaintiff; the defendants contending that plaintiff was entitled to only 7 per cent interest and to a sum not exceeding $500 as attorneys’ fees.
“Q. Now, Mr. Jensen, relative to the attorney’s fees in this case, have you any agreement as to what amount of attorney’s fees you are to pay for the services? A. A thousand dollars. Q. And with whom is that .agreement? A. My attorney, Lewis Larson. Q. Is that contingent upon the result of this ease in any way? A. There is nothing said about the result of the case in our agreement. Q. Tour understanding is that you are to pay $1,000 for my services in this case? A. Yes, sir. Q. And you have agreed to do so? A. Yes, sir. * * * After I purchased the note and mortgage, they were left with the Utah Savings & Trust Company for collection. I wrote a notice to the trust company authorizing Mr. Larson to receive all of the papers pertaining to this mortgage. ’ ’
The foregoing is substantially all the evidence produced by the plaintiff, and the defendants offered none.
The court found the amount due upon the note and mortgage, including interest to January 14, 1914, to be $12,173.87, upon which sum it allowed plaintiff 7 per cent interest after judgment. The court also found that the plaintiff was en
The defendants, upon their appeal, in substance, insist that the court erred: (1) In allowing $1,000 attorney’s fee, and in allowing any sum in excess of $500; (2) in declaring said attorney’s fee a lien upon the mortgaged premises; (3) in adding the accrued and unpaid installments of interest to the principal up to January 14, 1914, the date the court announced its oral decision, and in allowing interest on the interest so added after judgment; and (4) in settling and allowing plaintiff’s bill of exceptions.
It is insisted that the court erred in finding that $1,000 is a reasonable attorney’s fee for the reason that there is no evidence sustaining such a finding. We have a statute (Comp. Laws, 1907, sees. 3504 and 3505) which reads as follows:
“Sec. 3504. In all cases of foreclosure, when an attorney or counsel fee is claimed by the plaintiff, no other or greater amount shall be allowed or decreed than the sum which shall appear by the evidence to be actually charged by and to be paid to1 the attorney for the plaintiff; and if it shall appear that there is an agreement or undestanding to divide such fees between the plaintiff and his attorney, or between the attorney and any other person except an attorney associated with him in the cause, only the amount to be retained by the attorney or attorneys shall be decreed as against the defendant.
“Sec. 3505. In all cases of foreclosure by proceeding in court, the attorney’s f$e shall be fixed by the court in which the proceedings of foreclosure are had, any stipulation in said mortgage to the contrary notwithstanding.”
From the evidence we have set forth it is apparent that the plaintiff attempted to comply, and, as we think, has sub
In such proceedings, however, the trial court cannot escape the responsibility of determining and declaring what amount shall be allowed as an attorney’s fee, regardless of any stipulation of the parties upon that subject that may be contained in either the note or mortgage. By a “reasonable fee,” no doubt, is meant one which is reasonable under all the facts and circumstances of each case. What is reasonable, therefore, in a large measure at least, must depend upon the amount in controversy, the labor, and responsibility imposed
We shall not review all of those cases, nor attempt to reconcile them. We shall pause long enough, however, to compare two of those decisions. In Klokke v. Escailler, supra, which
. Upon default “the mortgagee may foreclose this mortgage, and may include in said foreclosure a reasonable counsel fee, to be fixed by the court, together with all payments made by the mortgagee for insurance upon the buildings on said premises, and for any adverse claims to the mortgaged property, for searching title to the mortgaged premises, to the execution hereof, and for taxes on said premises, other than the taxes on this mortgage, or the money hereby secured, all of which payments the mortgagee is hereby authorized to make and the same, with interest thereon at the same rate as provided in said promissory note, shall be deemed to1 be secured by this mortgage and payable to the mortgagee or assigns in and out of the proceeds of the sale under said foreclosure.”
It was held that all the things enumerated above tvere secured by the mortgage except the attorney’s fees. "We cannot understand how the court arrived at any such conclusion. As we read the stipulation contained in the mortgage, which we- have set forth above, the attorneys ’ fees, under any reasonable construction, were secured thereby, precisely the same as were the insurance money, the taxes, and other items of expense.
In the case of Worth v. Worth, supra, which is found in the second group of eases cited above, it was said:
“The language of the mortgage as to counsel fees is practically the same as that contained, in the mortgage in Klohhe v. JSsoailler, 124 Cal. 297 (56 Pac.. 1113), where it was held that the counsel fees were not secured hy the mortgage. But this case differs from that in that the note here contains a provision for ‘seven per cent, on principal, as attorneys’ fees in such suit,’ in the event suit is commenced to enforce payment of the note. The mortgage was given to secure ‘said note,’ which included the contract to pay the attorney fee provided for therein. The attorney fee was therefore secured by the mortgage.”
As we read the California -cases cited in the first group, many of them contained much stronger language from which it was apparent that the parties to the mortgages there in question intended to secure the attorney’s fees as well as the
Tbe Supreme Court of New Mexico, in tbe case of Armijo v. Henry, 14 N. M. 181; 89 Pac. 305; 25 L. R. A. (N. S.) 275, discusses tbe rule wbieb prevails upon this question in California, and it is there said, “Tbe weight of authority is against tbe rule laid down by tbe California courts. ’ ’ Hence that court refused to follow tbe California cases. We agree with the Supreme Court of New Mexico in the statement just quoted. Moreover, in this jurisdiction the trial courts have always construed provisions to pay attorneys’ fees like tbe one in question as being- a lien upon the mortgaged premises. While such a construction has never been passed on or approved by tbis court, yet, in view that in our judgment- it was clearly tbe intention of both the mortgagors as well as tbe mortgagee to secure a reasonable attorney’s fee by entering into tbe stipulation in the mortgage, we do now approve such a construction. We further bold that under our statute the question respecting the payment of an attorney’s fee is a matter of contract, but what 'is a reasonable fee in each ease must be determined by the court.
The contention that the court erred in adding the accrued and unpaid interest to the principal and in allowing interest at 7 per cent, on the whole amount of principal and interest is untenable. As' we shall endeavor to show hereafter, the plaintiff’s, and not the defendants’, legal rights1 were invaded by the court’s ruling in that regard.
“If any interest remains due and unpaid for a period of thirty.days, then the principal sum and all accrued and unpaid interest shall at once be due and payable at the option of the holder of this note, and the principal sum and all unpaid interest shall then draw interest at the rate of twelve per cent, per annum until paid.” (Italics ours.)
To our minds, this means simply this: That the note bears seven per cent, interest, payable quarterly. If, however, the payee makes default in the payment of interest and remains in default for a period of thirty days or more, then the holder of the note may declare the principal sum due and payable forthwith, and, in case he does so, as expressed in the note, it “shall then draw interest at the rate of twelve per cent, per annum until paid.” The word “then” is used in the note as denoting consequences, or pointing to a result, and has the same meaning and effect as though the phrase “in that ease” or “in such case” had been used. That is, if the interest is not paid and the holder of the note exercises the option given him, then — that is, in that case, or in such event — the rate of interest shall be increased to twelve per cent. In order to have that effect, however, the defendants’ default in the payment of interest and the exercise of the option to accelerate the maturity of the note must concur. If therefore at any time after thirty days’ default in payment of interest, and before the note, according to- its terms, had matured, the plaintiff had exercised the option, he would have been entitled to demand and receive twelve per cent, interest; but, not having
“The legal rate of interest upon the loan or forbearance of any money, * * * shall be eight per cent, per an-num. ’ ’
Defendants had promised to pay the interest quarterly. There thus fell due at the end of each quarter the sum of $175 as interest. This amount was owing from defendants to the plaintiff at the end of each quarter after the 6th day of December, 1910, when the last interest was paid as found by the court. If defendants had paid plaintiff the interest when due, he could have reloaned it to them, or could have loaned it to any one else, and could have contracted for any rate of interest not exceeding twelve per cent per annum. In case, however, the loan had been made and no rate of interest was agreed upon, the statute would have supplied the omission by fixing eight per cent, as the legal rate. The plaintiff therefore was as much entitled to interest upon the unpaid interest as though it had been paid to him when due and he had reloaned it, and, in view that no rate was agreed upon, the legal rate of eight per cent, applied. The court therefore should have awarded plaintiff eight per cent, interest per annum upon each quarterly installment of interest amounting to $175 from the time it became due until the principal and interest were merged into judgment, to-wit, to the 28th day
In view that the plaintiff has no bill of exceptions, we cannot consider the other assignments of error on his appeal.
For the reasons stated, therefore, the findings and judgment must be modified. The case is therefore remanded to the district court of Salt Labe County, with directions: (1) To set aside its findings in which the attorney’s fees are fixed at the sum of $1,000, and to hear any competent evidence the parties, or either of them, may offer upon the question of what amount should be fixed in this case as a reasonable fee, and, after hearing such evidence, or any other competent evidence upon that subject that the'court may call for on its own motion, to fix a reasonable sum as an attorney’s fee as contemplated by section 3505, independently of the provision contained in the note; (2) to determine the amount of interest at the rate of eight per cent, per annum that plaintiff is entitled to upon the accrued and unpaid installments of interest from the respective dates the several installments became due until the 28th day of January, 1914, and after adding all of the accrued interest to the principal modify the judgment accordingly; (3) to enter judgment as modified as of the date of January 28, 1914, which judgment shall, from that date, bear interest at the rate of seven per cent, per annum. In all other respects the findings and judgment are affirmed. Neither party to recover costs on this appeal.