Court Opinion

ID: 7198012
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:04:43.432977+00
Date Added: 2024-06-11T16:16:25.435128
License: Public Domain

On the Merits.
I.
The contracting parties were at liberty to agree that attorney’s fees should be paid in the particular case for which, as a matter of fact, provision has been made, or they might have agreed that they should be paid where the contingency was more imminent, or more remoré. Thus, instead of agreeing that the maker of the notes should pay such’ fees “in case it becomes necessary to resort to legal proceedings for the recovery of the amount of said notes, or any part thereof — which fees are hereby fixed at ten per cent, on the amount sued for,” as their contract reads, they might have imposed such liability on the maker of the notes, in the event of their non-payment at maturity — with, or without, previous demand and refusal or neglect to pay; or, in the event that the mortgaged property should realize a sufficient amount over and above the amount of the notes and interest; or, they might have been entirely silent upon the subject. In other words, there was a wide field into which they wore at liberty to enter, and there make their choice among many conditions; and all languages, living and dead, might have been utilized for the expression of the consensus at which they arrived. A's such a provision would, however, in any case, be regarded as in the nature of a stipulation for a penalty, the burden would rest upon the party seeking to enforce it to establish clearly, and affirmatively, the existence of the conditions required for such enforcement. And, for the purpose of determining what those conditions were, a court of justice would, necessarily, presume that the language used was selected intelligently hy the contracting parties, in order to define the conditions agreed upon, and differentiate them-from other conditions which might have been agreed upon.
If the litigants before this court had, themselves, left the word ‘necessary” out of their contract, and had merely agreed that the fees' *1682should be paid “in case of resort to legal proceedings,” the probabilities are that, even in that case, the mortgagee would not have been allowed to recover upon the basis of “legal proceedings,” wholly unnecessary, or based upon a necessity entirely of her own making.. The word “necessary” was not, however, left out by the parties themselves, but may, under the circumstances, be regarded as having been used, ex abundante cauiila, and in order to emphasize the idea conveyed by it. We are not, then, at liberty to eliminate it; and to hold that the maker of the notes should be made liable in case of legal proceedings whether “necessary” or not.
Pretermitting, then, the consideration of the question, whether there were any legal proceedings of the character otherwise contemplated by the contract, the first inquiry is; were any legal proceedings necessary ?
The evidence shows that the notes for $6,600.00, bearing interest at the rate of eight per cent, per annum, were secured by first mortgage upon property worth $26,000.00, and that the holder had taken them .originally as an investment, and was willing to hold them as such. And, it must be admitted, that a better investment could hardly be found.
The first note fell due on March 12th, 1892, and upon that day the interest for the year, upon all the notes, was duly paid, but it does not appear that anything was said about the payment of the principal of the note which was then due. The second note fell due March 12th, 1893, and upon that day the interest for the year upon all the notes was paid, but there was no demand for the payment of the principal •of the two notes which were then due: The third note fell due March 12th, 1894, and the interest upon all the notes was paid, but, though they were all now due, there was still no evidence of a desire on the part of the holder that they should be paid. She was content to hold them as an investment, and receive her annual income in the way of interest. The same condition existed, when, in 1895, the interest was again paid. When the 12th of March, 1896, came around, the administrator appears to have forgotten, or to have neglected, to pay the annual interest. It is not alleged, or shown, that the holder of the notes reminded him of his failure, or made any demand upon him, but, somewhat later, she placed the notes in the hands of Messrs. Beattie & Beattie, her attorneys, not that she wanted them paid, if they were still safe as an investment, but, no doubt, because the *1683interest due March. 12th, 1896, had not been paid, and she probably wanted the matter inquired into, and steps taken, if necessary, to .protect hesr rights. Messrs. Beattie & Beattie addressed a communication, not to the administrator, but to bis brother. It, however, reached the administrator without delay — and be responded without delay — first, by letter, and then by going to Thibodeaux, in order to comply with the only request which was made, to-wit: “Will you please let us know what can be done in the matter ?”
The whole evidence in the record, taken together, justifies the belief that be went prepared to say to the holder of the notes, or to her attorneys, “I am ready, on behalf of the succession of Thomas J. Foster, to pay the interest now due, or past due, on the notes held by .you, with the understanding that the notes are to be extended, or to run on as they have been allowed to do for the past several years; or, if you insist upon, or desire it, I will pay them, principal and interest.” As it happened, be first met the son and personal representative of the bolder of the notes, who had, before that, acted as her agent in the matter of receiving the interest and extending the time of payment, and was at once told by him that his mother would, as usual, be satisfied with the payment of the interest. They then went, together, to the office of Messrs. Beattie & Beattie, and but one additional suggestion appears to have been made by those gentlemen, i. e., that the administrator should indorse an acknowledgment of the debt upon the backs of the notes, which was done without hesitation. The interest was then paid and it was understood, tacitly or otherwise, that 'the notes should be allowed to run on another year, from March, 12th, 1896. Mr. Foster says that nothing whatever was said about the payment of the notes. Judge Beattie says that it was agreed that they were extended. It is immaterial as to this. No demand or request, as to the payment of the notes was made, and no condition was suggested as a consideration for extending the time of payment, except the payment of the interest then due and the acknowledgment, by the administrator, of the validity of the debt. Now, certainly, there had been nothing which could be called a legal proceeding up to the time that the administrator met Mr. Blake and understood from Mm that Mrs. Blaise wanted only the interest. The letter written by Messrs. Beattie & Beattie, wMch brought the administrator to Thibodeaux, had not been written to him, or to anyone representing the succession and was not, therefore, a demand upon him, or upon the succession. *1684He came, then, before a demand of any kind was made upon him, for the purpose of doing whatever the holder of the notes required, or wanted, with reference to them, in order, as we think, that the heirs of Thomas J. Foster might be saved the annoyance and expense of legal proceedings.
He did all that was asked, or wanted; that is, he paid the past due interest, acknowledged the notes, and with the understanding, tacit or expressed, that the time of payment had been extended, as usual, he went back home in the belief that he had accomplished the object of his mission. No demand for the payment of the notes was made, and nothing was said about attorney’s fees. If, then, it be true that the obtention of the administrator’s acknowledgment, an acknowledgment given, as we think, for the purpose of avoiding legal proceedings, and in the belief that no legal proceedings would be taken, was regarded by the plaintiff’s counsel as being, in itself, a legal proceeding, we think that it would have been only fair that the administrator should have been so informed before he signed it; since he had voluntarily gone from Franklin to Thibodeaux to make a settlement such as would relieve the holder of the notes of the necessity of resorting to such proceedings. The following year, in February, 1897, Messrs. Beattie & Beattie wrote to the administrator reminding him that the annual interest would fall due on March 12th, and, so far from demanding payment of the principal of the notes, volunteered to extend them for another year upon payment of such interest.
To this the administrator replied, fifteen days before the interest fell due, enclosing a check for the same, and accepting the offer to extend the time of payment of the principal; nothing was said about attorney’s fees. The next year, in February, 1898, the administrator wrote proposing that he should pay one of the notes, principal and interest, and should pay the interest upon the other two, and that these latter should be extended for another year, and the question of attorney’s fees was mentioned, for the first time, in the answer to this letter. Messrs. Beattie & Beattie wrote that they, for their client, would agree to all that was suggested, provided their fees, of ten per cent, on the amount of the note to be paid, was included in the payment. To this the administrator replied, by telegraph, that he would, at once, go to Thibodeaux to see the writers of this letter. He did go to Thibodeaux without delay, and when he found that Messrs. Beattie & Beattie insisted upon their demand for fees, he tendered the full *1685amount of the principal of all the notes, with interest to March 12th, 1898. He also deposited the amount in the bank in Thibodeaux, subject to the order of the holder of the notes, or her attorney, and had the latter duly notified of the deposit. Both tender and deposit were declined, and a rule was taken to sell the property to pay the notes, with interest, attorney’s fees, and costs.
The question then recurs; where was the necessity for any legal proceeding at all?
The burden of proof rests upon the plaintiff. From the evidence adduced, it does not appear that there was any necessity for the obtention of the administrator’s acknowledgment in July, 1896. The notes had been extended from year to year, by tacit or express agreement. There was no demand then made for their payment, and, as a matter of fact, it may be said that the holder did not want them paid, but was perfectly willing to extend them on payment of interest. Beyond this, the evidence justifies the belief that if there had been any intimation that payment was expected or desired, the administrator would have done, at that time, what he did later, when called upon to pay $220.00 of attorneys’ fees; i. e., he would have made a tender of the whole amount of the debt. If, then, the obtention of the acknowledgment should be regarded as a legal proceeding within the meaning of the contract, it was still lacking in the essential that it was not “necessary;” for, the payment, which was not wanted, could, if wanted, have 'been obtained without it.
The filing of the rule to sell, after the whole amount due had been tendered and refused, was a necessity of the plaintiff’s own making, and, whatever may be her rights in the premises, was not a necessary legal proceeding within the meaning of the attorney’s fee clause in the contract, which means a necessity resulting from some default on the part of the maker of the notes, or arising from conditions for which, as between him and the holder, he is responsible. Our conclusion upon this branch of the subject, which did not particularly attfaeT. attention upon the former hearing, then, is; that the strong language used in the contract precludes the idea of a resort to legal proceedings, such as would entitle the holder of the notes to attorney’s fees, except in case of necessity; that the burden rests upon the plaintiff, seeking to recover, upon the ground'that she has resorted to legal proceedings, to show that there was a necessity for so doing; that such necessity could be shown only by evidence that, at least, a *1686reasonable effort had been made to obtain payment in some other way, or that any such effort would have been impracticable or useless; and that, as it not only appears that the debtor was unaware that the plaintiff wanted the debt paid, but had reason to believe that she did not, and, as a matter of fact, that she did not want it paid, and never made any request to that effect, but consented that the time of payment should be extended, it can not be said that a resort to legal proceedings for the recovery of the debt, or any part of it, is shown to have been necessary.
II.
Still assuming, for the purposes of the argument, that the obtention of the administrator’s acknowledgment was a legal proceeding',, it was not, under the circumstances of the case as presented, a legal proceeding resorted to for the recovery of the debt. The purpose which the plaintiff had in view was not the recovery of the debt, but the obtention of additional assurance of the security of her investment. It might, with as much propriety, be said that the act of mortgage and confession of judgment in favor of the holder of the notes was a legal proceeding resorted to her by her (at the time of their receipt) for the recovery of the amount represented by such notes. But it is plain that tho confession of judgment and the act of mortgage were not resorted to for the recovery of the debt, for there was no debt due when they were executed. They were resorted to at that time for the purpose of securing a loan which the plaintiff was desirous, or willing, to make, as an investment of her money. If, when the loan fell due, it was not paid, she might then resort to the confession of judgment and mortgage to enforce its payment. And so, it may be said, with regard to the acknowledgment of the administrator. It may, or it might, at some time, be resorted to, as a basis of recovery, but at the time it was obtained, it was rather, as we think, intended to j)lace upon a surer footing a debt which the plaintiff was not seeking to recover, but to extend, or renew, as an investment.
III.
Still further considering the acknowledgment obtained by the-plaintiff’s attorneys, and with a view to determining whether its obtention was a “legal proceeding” within the meaning of the contract sued on, our attention is attracted to the concluding language in the provision bearing upon the subject. To quote that provision again r *1687The maker of the notes is to pay attorney fees “in case it becomes necessary to resort to legal proceedings for the recovery of the amount of said notes or any part thereof, which fees are hereby fixed at ten per cent, of the amount sued for.”
It can not be claimed that any suit was brought, before the filing of the rule to sell; and that rule was filed, not because of any difficulty in recovering “the amount of said notes, or any part thereof,” but because of a refusal to pay ten per cent as attorney’s fees, when, by the terms of the contract, the amount of those fees was to be determined by the amount sued for. Plainly, if no suit was brought, there was no way of fixing the amount of the fees. And if it was unnecessary to bring the suit for the recovery of “the amount of said notes or any part thereof,” there was no warrant for bringing it at all.
IY.
The rule eventually taken by the plaintiff for the sale of the mortgaged property, must be considered in connection with the fact that it is distinctly admitted that, before it was taken, the administrator had made a legal tender of the full amount of the debt, the attorney’s fees not being included.
In Simonds vs. Sheriff, et als., 46 Ann., 473, the language of the act of mortgage, upon the subject of attorney’s fees, was identical with that used in the present case. The holder of the notes, however, instituted suit, via. executive!., for the recovery of the debt, and the mortgagor enjoined. There was no question but that the proceeding had been resorted to for the recovery of the debt; there was no doubt that it was a suit, and, hence, established the basis contemplated by the contract for the fixing of fees. The evidence did not establish that the holder' of the notes had taken and held them as an investment, and that the maker was led to understand that the payment of the principal would be extended upon the payment, annually, of the interest. The debtor made no legal tender of payment before the bringing of the suit; and this court said, in reference to said debtor:
“At the same time, we think it clear that he was not liable or “responsible for these fees previous to the institution of legal pro- “ ceedings, and that he could have discharged himself from their pay- “ ment by making a seasonable legal tender, in conformity to the pro- “ visions of Article 407, Code of Practice.”
In the instant case, the debtor made the “seasonable legal tender,” *1688¿referred to, of the principal and interest of the notes, at a time when, for the reasons which have been given, the attorney’s fees constituted no part of the debt.
In Ziegler vs. His Creditors, 49 A., 144, the syllabus reads: “At “ tomeys’ fees stipulated in a mortgage, to he paid in ease of non- “ payment of the debt at maturity, are due when' the mortgagee is “bound to employ counsel to collect the mortgage, and such counsel
represent him in the succession proceedings.” In the opinion, it is said (p. 158); “The judgment of the Civil District Court, allowing “Mrs. M. F. Smith attorney’s fees is correct. Her claim was not paid “ as it should have been, and the result of its non-payment was to “ bring about a condition of affairs which made the employment of u counsel necessary for the protection of the creditor’s rights.”
"We have been unable to find, in the opinion upon the rehearing, the 'expression of views to which plaintiff’s counsel refer in their brief.
Plaintiff can not, therefore, be considered as entitled to the attorney’s fees by reason of the taking of the rule.
V.
The remaining question is — what are the plaintiff’s righls, aside from the question of attorney’s fees ?
The first attempt to make a tender of payment was abortive. This was followed by the deposit in bank. After the deposit, the admis•sion was made that the administrator would he considered as having made a full legal tender; this being- done to save the trouble of obtaining money, and observing formalities. Whether the money deposited in bank had been allowed to remain there and continued to remain there up to the date of, and after, this admission, and whether it is there now, or in the possession of the defendant, does not appear. To have relieved the succession of further risk and expense, the administrator should have either alleged in his answer to the rule, and ¡proved, that the money was still deposited in hank subject to the •plaiiitiff’s order, or else, he should have renewed his tender, as a defense to the rule, and should have followed it up by depositing the money, cither in court or in bank, for the plaintiff to take if she «hose.
As the matter stands, whilst tho tendel-, as made, rendered legal proceedings unnecessary, it did not discharge the debt, and whilst the *1689refusal of the plaintiff to accept the tender deprived her of the right to attorney fees, it did not operate to prevent her from demanding payment of the notes and mortgage.
The argument of counsel, taken in connection with the judgment of the court a qua, leads us to believe that it was an understood thing that the plaintiff could, at any time, get the amount of the notes and interest, if she had been willing to accept the same, and that the whole purpose of the litigation has been to determine the question of her right to recover attorney’s fees. That question has now been settled, so far as concerns the present status, and any delay on the part of the defendant in placing- the amount of the principal and interest of the notes within the reach and control of the holder would make necessary legal proceedings such as would entitle her, the holder, to the attorney’s fees which are now denied.
It is therefore ordered, adjudged and decreed that the Judgment appealed from be annulled, avoided and reversed, and that there now be judgment in favor of the plaintiff in rule directing the defendant, J. Warren Foster, administrator, to cause the lands described in said rule, to be advertised and sold, according to law, to satisfy the plaintiff’s claim, amounting to $6600.00, with interest thereon at tire rate of 8% per annum from March 12th, 1897, until paid, and 10% upon the aggregate amount of said principal and interest as attorney’s fees, together with the costs of these proceedings in both courts, provided, however, that if, before this judgment, becomes executory, the succession of Thomas J. Foster shall tender to said plaintiff, and consign, in the event of refusal to accept the tender, the full amount of the said $0600.00, interest, and costs, then and in that event, such tender and consignment shall be held to discharge said succession of all further liability in the premises.