Court Opinion

ID: 7061610
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:21:26.308362+00
Date Added: 2024-06-11T16:12:11.878150
License: Public Domain

Dissenting Opinion.
Reinhard, J.
I am wholly unable to agree with my brethren of the majority upon the rule of law enunciated in the prevailing opinion, concerning the question of fees for plaintiff’s attorney, the payment of which is stipulated for in a promissory note or other contract by the maker thereof.
Under the decisions in this State, cited in the opinion of the majority, attorney’s fees are given by reason of the stipulation in the contract as an indemnity to the plaintiff for money paid by him or for which he has become liable, and he is not entitled to judgment for such fees unless an attorney was, of necessity, employed to collect the debt. Judson v. Romaine, 8 Ind. App. 390. I very much doubt whether a plaintiff can recover such fees at all unless suit is actually brought upon the obligation in which the promise to pay such fee is contained. Originally in this State the validity of the agreement to pay the fee always depended upon the express condition that a suit be brought upon the instrument. Later the statute was enacted providing that no attorney’s fee shall be collected that depends upon any condition set forth in the contract. See Churchman v. Martin, 54 Ind. 380.
*531In no instance is it conceivable how a fee can rightfully be collected by the plaintiff without an implied condition that services be rendered by an attorney in connection with the collection of the note. But while there is such an implied condition in every such promise to pay attorney’s fees, it is held by the Supreme Court that this condition must not be expressed in the contract, or the promise is void under the statute. It wa.s generally understood at the time the statute referred to was enacted, that it was intended to do away with the making of such contracts entirely; but according to the views of the Supreme Court, this intention was not so expressed as to become operative. But if it was. not intended to do away with such contracts entirely, it certainly cannot be held that the enactment of the statute in question was intended as an enlargement of the scope of the rule by which such fees were collectible and to extend it to cases in which the right did not before exist. And yet, the effect of the holding of the principal opinion, as it appears to me, will be to greatly extend the right of collecting such fees instead of curtailing it.
Assuming, however, that attorney’s fees may be collected, even when no suit has been brought, I still think the burden rests upon the plaintiff to prove, before he can recover fees claimed to have accrued before suit, that he had employed an attorney, that the-latter had rendered some services, and wha.t such services were worth. The rule that when the note provides for the payment of a certain per cent, of the principal sum, such per cent, is prima facie the correct amount due on account of such fees, is not applicable, in my judgment, to fees accrued before suit How could the maker of the note; if such were the rule, ever know what amount to tender to the holder of the note for his attorney’s fee? How could he know *532what the proper amount of the fee was? Or, is he required by the law to go to the holder and obtain that information? That the rule referred to is correct only when applied to fees charged for services rendered after suit or in connection therewith, I think is clear. In that case the court can take judicial notice that the attorney has rendered the services because it sees him in the performance thereof. The mere fact that the note is in the hands of an attorney for collection is only prima f acie evidence, at best, that some legal services have been rendered. It furnishes no measure by which the' value of the services can be judged. In my view of the law, the plaintiff has not overcome the presumption against him on the question of attorney’s fees until he has shown what services were rendered and the value of the same. When the debtor goes to the plaintiff or his attorney to discharge his obligation, he is not ordinarily presumed to know that there is an attorney’s fee due on the same, and even if he were, he cannot be held to know the value thereof. If such services have been rendered, the plaintiff or holder of the note is in a far better position to know that fact, and to kno w the value of the services, than is the debtor, and common honesty and fair dealing require that if the payee or holder of the instrument has any such claim, that he assert it when a tender is made of the amount supposed to be due. If nothing is said by the parties at the time of such tender about attorney’s fees, and the tender is refused upon other grounds, or is refused without assigning any reason, I think the plaintiff must fail in the recovery of such fees. I think it is against the plainest principles of public policy and natural justice to hold that a debtor must ascertain at his peril whether or not anything is due from him for counsel fees before suit is brought, and, if so, how much. Prima facie, the holder of the *533note is not entitled to collect such fees, and not at all unless liability for the same has been incurred, and if that is the case, he must inform the debtor thereof, and also of the amount claimed by him before he can put him in default.
If the logic of the majority opinion be correct, the debtor can be required to pay the attorney fee, whether he has any notice that the instrument is in the hands of an attorney for collection or not. Suppose a note due on a certain day is, immediately after maturity, placed in the hands of an attorney for collection. The payer goes to the holder to liquidate it. The latter, however, refuses to accept the principal and interest, but gives no reason for such refusal. Now, if the principal opinion be correct, the debtor is bound to know at his peril that the note has been placed in the hands of an attorney for collection, and that there is due a certain amount from him as a fee for such services, and he must make the holder of the note a tender therefor, being sure to tender enough, or be subject to the payment of costs. If, as in the present case, the amount stipulated be 5 per cent, of the principal and interest due, then the debtor must tender that amount for such fees, unless he can make a correct guess of the value of such services, if the sum be less than 5 per cent. I do not believe an interpretation should be adopted which would lead to such a result.
We are dealing here with a system and not a single case merely, and the question is, whether the court shall by judicial construction still further enlarge the right of the plaintiff's to collect counsel fees in cases in which the plain letter and spirit of the law do not require it, or whether we shall construe the law strictly as against further enlargement of such right, and thereby, at least, place some check upon the abuse to which the system is subjected. I for one am not *534willing to go further in the construction of the law in question than our courts have already gone, unless the Supreme Court by its future decisions makes it obligatory upon us to do so.
In the present case there was not a particle of evidence as to the amount expended for attorney’s fees or the value thereof, nor was there a word said to the appellee when the tender was made as to any attorney’s fees being due. Under these circumstances, the appellant cannot question the sufficiency of the tender; and the instructions given by the court state the law correctly.
For these reasons, I respectfully dissent from that portion of the principal opinion which relates to the question of attorney’s fees.