80 F. 759 | U.S. Circuit Court for the District of Kentucky | 1896
This cause is submitted on demurrer to the bill of complaint, and it presents two important questions touching the jurisdiction of this court:
1. The complainant sues as a receiver appointed by a chancery court in the state of Tennessee, and the first question is whether he
2. It is insisted that as the note sued on is only for $2,000, and as there are some payments which are allowed as credits in the bill, the amount in controversy does not exceed $2,000, exclusive of costs and interest, and that, therefore, this court has not jurisdiction. It is true, from an examination of the bill, and a calculation of the credits given for payments which are stated in the bill, that the amount sued on the note is a little over $1,900. But the bill avers that the contract sued on is a Tennessee contract, and that, by the laws of the state of Tennessee, valid and binding contracts can be entered into between the debtor and the creditor, whereby a debtor agrees
“Should the said indebtedness, or any part thereof, secured by this mortgage, be collected by or under legal or equitable proceedings, said first party shall pay all expenses of collection, including reasonable attorney’s fees; and it is agreed that the lien of this mortgage shall extend and include all such expenses, and the same shall be included in any judgment awarded for the enforcement of said debt, or for a sale of the mortgaged premises.”
And it is alleged in the bill that 10 per cent, on the amount sued by the mortgagee would be a reasonable attorney’s fee in the case, and the prayer of the bill is that a sale of said property be made to pay said mortgage debt, together with 10 per cent, thereon, as complainant’s attorney’s fee. The act of 1887-88 gives this court “concurrent jurisdiction with the several courts of suits of a civil nature at common law and equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of $2,000”; and the inquiry here is whether or not this attorney’s fee which is thus contracted for in this mortgage is to be considered as costs, within the meaning of the act, or should it be calculated as a liability, in estimating the amount in controversy? The acts of congress allow an attorney’s fee, which in a case like this is $20, and provide, also, that the fees of the clerk, marshal, and attorney shall be taxed by the judge or the clerk of the court, and be included in, and recorded as part of, the judgment or decree against the losing party. See Eev. St. §§ 821, 983. This, being a contractual obligation to pay the association a reasonable attorney’s fee, is not, we think, in any sense, costs, as mentioned in the act of 1887-88, but is a liability which should be included in estimating the amount in controversy. It is true that in this provision of the contract the attorney’s fee is considered as an expense of collection of the mortgage debt, and it might be argued therefrom that it is not an existing liability as of the date of the bringing of the suit, since it was to be an expense of collection; but, construing the entire contract, it is quite clear that the liability for the attorney’s fee exists at the time of the institution of either a legal or equitable proceeding, and the fee, when ascertained, is to be included in the judgment for the debt and for the sale of the mortgaged premises. In the case of Baker v. Howell, 11 Fed. Ill, Judge Caldwell had occasion to consider whether or not the notary’s fee of $3.50 for the protest of a note for the nonpayment of $2,000 might be added as part of the amount in dispute, so as to give the requisite amount for jurisdiction of his court. He there held—and properly,
We have not overlooked the case of Dodge v. Tulleys, 144 U. S. 451, 12 Sup. Ct. 728, in which the supreme court indicates that, in a deed of trust which is sought to be enforced, an equity court might ad.judge to the trustee a reasonable attorney’s fee as part of the expense of executing the trust, and have it taxed against the trust property, notwithstanding the statute of the state in which the foreclosure pro'Ceedings were pending nrohibited the allowance of such fees. This is because the state statutes cannot control the equity practice in the •'federal courts. But this opinion has no apnlication to the present inquiry, since it is quite clear that a reasonable attorney’s fee, if allowed at all, must be because of the contract of the defendants in the •mortgage, and could not be allowed as costs either by this court, or a state court of Tennessee or of this state. We therefore conclude the demurrer should be overruled, and it is so ordered, and the defendants are given 20 days within which to file their answer.