Williams v. Flowers

Nov 15, 1890

Versions:90 Ala. 136

OLOPTON, J.

A dеmurrer was interposed to so much of the bill as seeks to enforce the collection of solicitor’s fees under the following stiiiulation, contаined in the note upon which the bill is founded: “It is further agreed, that the *137undersigned [makеrs] shall pay all costs for collecting the above, not less than ten рer-cent., ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍on failure to pay at maturity.” The special grounds of demurrеr are, that the term, ucosts for collecting,” does not include solicitor’s fees fоr bringing the suit, and if it does, that the contract is usurious. In practice, costs and fеes are different in their nature; costs being an allowance to 'a party for expenses incurred in prosecuting or defending a suit; and fees being compensation to an officer for services rendered in the progress of a cause.—Tillman v. Wood, 58 Ala. 578. In common parlance, the compensation paid an attorney is denominated a fee, in contradistinction ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍to the costs incident to the judgment; but, in its legal sense, the term costs denotes, not only the exj>enses incurred by reason оf being a party to legal proceedings, but also the charges which an attorney is entitled to recover from his client, as remuneration for his professional services.- — Rap. & Law. Law Die. It is manifest that the parties mеant that the term “costs for collecting,” as used in the note, should be understoood in its broadest signification; otherwise, the stipulation would have no effect, for, without it, defendants would ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍be liable to the costs incident to the decree. We, therefore, construe the term as having been intended to include the compensation, which the payee of the note might hаve to pay an attorney for bringing a suit to enforce its collection.

It is well settled by our decisions, that an agreement to pay the reasоnable attorney’s fees, which the payee of a note would havе to pay if forced to collect by suit, in addition to the legal interest, dоes not render the contract usurious. Defendants contend, that the terms of the agreement to pay all costs for collecting, not less than ten. per-cent., without reference to the reasonableness of the ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍charges, makes the cоntract usurious. In Munter v. Linn, 61 Ala. 494, the agreement was to pay, if it became necsssary tо institute legal proceedings to recover the amount of the notеs, the fee of the attorney employed, “such fee to be ten pеr-cent, of the amount sued for and recoyered,” — an unconditional agreement to pay ten per-cent. It was held, that this stipulation does nоt constitute the contract usurious, but that the creditor could recover only a reasonable fee, though he stipulated for a larger sum or рer-cent. In Wood v. Winship, 83 Ala. 424, the note obligated the maker to pay principal, intеrest, and ten percent. attorney’s fees. It was ruled, that the note was sufficient to support a judgment by default for the entire amount due, ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍including attorney’s fees, without the intervention of a jury. These decisions show, that an agreеment, to pay ten per-cent, of the amount recovered, in addition to the legal interest, is *138not itself usurious. The amount stipulated must be reasonаble, or at least not obviously excessive; for no form which may be given to the contract, no device, can evade the statute against usury, if thе intent appears, or is shown, to secure a profit in addition to the legal interest and the reimbursement •of the creditor of the expenses which he may incur in collecting the note. The chancellor referred to the register the ascertainment of what was a reasonable attorney’s fee, and he reported that ten per-cent, was reasonable. The proof fully sustains his report. There is.not only no evidence tending to show a purpose to take usury, but the proof overcomes the ■defense.

Affirmed.