Beckham v. Scott

• Decision Date: 23 December 1911
• Parties: BECKHAM et al. v. SCOTT et al.
• Court: Texas Court of Appeals

142 S.W. 80

BECKHAM et al. v. SCOTT et al.

Court of Civil Appeals of Texas. Dallas.

December 23, 1911.

Appeal from District Court, Limestone County; H. B. Daviss, Judge.

Action by J. N. Scott against J. J. Beckham and John Keys, in which other parties were vouched in by defendant Beckham, for the purpose of settling their interest. From a judgment for plaintiff, defendants Beckham and Keys appeal. Affirmed.

Doyle & Jackson, for appellants. W. A. Keeling and C. S. Bradley, for appellee J. N. Scott.

BOOKHOUT, J.

This is a suit, brought by J. N. Scott against J. J. Beckham and John Keys, to recover on three promissory notes executed by John Keys to J. N. Scott for the sum of $800 each, dated January 2, 1909, and one due January 2, 1910, one January 2, 1911, and one January 2, 1912, each bearing 8 per cent. interest per annum, interest payable annually, and each of said notes has a provision for attorney's fees, and the second and third notes provide that if the first note is not paid at maturity it matures, at the option of the holder, all of said notes. The said Scott alleges that there was a failure to pay the first note at maturity, and suit is brought on all three of said notes. Suit was filed by said Scott on March 7, 1910, for the full amount of the three notes, claiming interest and attorney's fees. On June 6, 1910, J. J. Beckham drew his check on his personal account at the bank of Prendergast, Smith & Co., of Mexia, Tex., for the sum of $992, and gave it to the cashier of the bank, and requested him to send the money to Mr. L. E. Eubank, the district clerk of Limestone county, to be deposited with said clerk for the payment of the note maturing January 2, 1910. The clerk received the letter, inclosing a deposit slip for $992, which was afterwards paid over to Mr. Keeling, one of plaintiff's attorneys, as a credit on the notes sued on. The notes were given as part of the purchase money of 195 acres of land out of the Alex Whitaker survey, in Limestone County, and described by metes and bounds in the petition, the consideration in said deed being $600 cash and the three notes here sued on; and both the deed and the notes specially retain the vendor's lien on said land to secure said notes. On January 8, 1909, said John Keys and wife conveyed said land to J. J. Beckham; the consideration expressed in the deed being $3,000 cash. On January 2, 1909, when Scott deeded said land to Keys, he was a widower, and other parties were vouched in by Beckham, for the purpose of settling their interest, if any, in the land. These parties all disclaim, and judgment was rendered as to them in favor of Beckham, and they need not be noticed further in this matter, as no complaint is made as to them by any one. On February 2, 1911, the case was tried before the court without a jury, and judgment rendered in favor of plaintiff for the full amount of the notes sued on, with all interest, attorney's fees, and costs; the judgment being for $1,790.52, principal and interest, after allowing the $992 as a credit, and for $279.05, attorney's fees on the whole amount, with a foreclosure of vendor's lien on land described in plaintiff's petition, and all cost. The court, on the disclaimer of the heirs of Mrs. Scott, rendered judgment in favor of Beckham as against them. To the judgment rendered against John Keys and J. J. Beckham, they excepted, gave notice of appeal, filed their supersedeas bond, and bring the case here for review.

It is assigned that the court erred in rendering judgment for the plaintiff for $279.05 attorney's fees, being 10 per cent. of the principal and interest on the notes sued on, because the 10 per cent. attorney's fees mentioned and specified in said notes was a contract of indemnity and not of agreed damages; and there is no allegation in the petition that plaintiff was to pay his attorneys said sum, or any other sum, for their services, or that the 10 per cent. stipulated in said notes for attorney's fees, and which forms the basis of this judgment, was reasonable; and there was no evidence, either that the plaintiff had paid his attorneys any sum for their services, had promised to pay them any amount, or that the sum stipulated in the notes, and which forms the basis of this judgment, was reasonable.

The proposition presented is that attorney's fees stipulated in notes are contracts of indemnity, and not for agreed damages, and before attorney's fees can be recovered the plaintiff must allege, and the proof show, that he had paid, or had agreed to pay, his attorneys the amount stipulated in said note, or that the same would be a reasonable fee for said services.

The petition alleges that each of said notes provides for 10 per cent. additional to the principal and interest, to be added as attorney's fees in the event of suit upon said notes; that the second and third maturing of said notes provide each that, in the event the first maturing of said notes should not be paid at maturity, then the holder and owner of the said notes, at his option, should have the right to declare all of said notes due and payable and collect the same; that said notes, and each of them, was given in part payment for and are secured by a vendor's lien retained upon the hereinafter-described real estate; that the first and second maturing of said notes are now long since past due, and are wholly unpaid, and, although demand has been duly made of the maker of the same, that he has heretofore failed and refused, and still fails and refuses, to pay the same, or any part thereof, except as hereinafter stated; that after said first note matured, and after said defendant had failed and refused to pay the same, the plaintiff exercised his said right to do so, and declared each of said notes due and payable, and placed them in the hands of the attorneys, whose names are signed hereto, for collection and suit; that suit is now here brought upon said notes, and each of them; and hence the provisions in said notes for 10 per cent. attorney's fees have become and are exigible. Note 2 provides: "Should I default to pay note and interest No. 1, then I agree that all three notes become due at the option of said Scott. This is note No. 2." Note No. 3 provides: "Should I fail to pay note No. 1 or No. 2 at maturity, then I agree that this note No. 3 becomes due by such default at the option of said Scott, or bearer of the said notes." The first of the notes to mature was due January 2, 1910. No effort was made to pay this note until January 12, 1910, after the suit had been filed, and then a sufficient amount was not sent to the clerk of the court to pay the first note and the interest on the three notes due. After all efforts to make payment had ceased, demand was made upon the maker of the notes, John Keys, at his place of business, and the notes were presented to him for payment about the last of February, 1910, and...