106 Ky. 232 | Ky. Ct. App. | 1899
delivered the opinion of the court.
On December 27, 1895, John E. Carpenter executed to appellant a deed of mortgage as trustee for the bondholders to secure bonds tó the amount of $5,000. It was stipulated in the mortgage that in case of the sale of the property under the lien retained in it, appellant should pay out of the proceeds all such sums as it might have been necessary to pay counsel in that behalf, and a reasonable compensation for its services as trustee. On April 22, 1897, appellant filed suit as trustee to foreclose the mortgage, making defendants to the petition the, mortgagor and the appellee and others who were subsequent lienholders.
It is well settled in this State that a stipulation in contract that the obligor will pay the obligee’s attorney’s fees in case the suit is brought upon it- is contrary to the policy of our laws, and not enforceable. Thomasson v. Townsend, 10 Bush, 114; Gaar, &c. v. Louisville Banking Co., 11 Bush, 180, [21 Am. Rep., 209]; Rilling v. Thompson, 12 Bush, 310; Witherspoon v. Musselman, 14 Bush, 214, [29 Am. Rep., 404]; Pryse v. The People’s Building, Loan and Savings Association, 19 Ky. L. R., 752, [41 S. W. 574].
It is insisted by counsel that this rule is unsound, and should not be adhered to; but we think it has been so long settled that the question is no longer open. It is also insisted that the rule should not apply to a suit by a trustee to foreclose a mortgage given to secure the holders of the bonds therein provided for.
We can not see that the intervention of a trustee changes the legal effect of the transaction. The trustee is permitted to sue in his own name; but the bondholders also have a right to sue, and we think the rule should be the same when the suit is brought by the trustee as when it is brought by the bondholders. A distinction, if made, would simply destroy the rule altogether; for, if it were allowed, trustees would be named in all cases, in order to secure the payment of the attorney’s feé. The trustee is entitled to his counsel fee necessarily expended in the execution of his trust out of the trust fund; and this charge should be paid here out of the money adjudged the trustee by the judg
Judgment affirmed.