Graves v. Burch

• Decision Date: 03 June 1919
• Docket Number: 916
• Parties: GRAVES v. BURCH
• Court: Wyoming Supreme Court

181 P. 354

26 Wyo. 192

GRAVES v. BURCH

No. 916

Supreme Court of Wyoming

June 3, 1919

ERROR to District Court, Fremont County, HON. CHARLES E. WINTER Judge.

Action for the foreclosure of a mortgage by I. L. Burch against Cora E. Graves and another.

From a judgment for plaintiff which included an allowance of interest and attorney's fees after tender, defendants bring error.

Cause remanded with directions.

E. H Fourt, for plaintiffs in error.

Plaintiffs in error offered to make payment before suit and were informed that they need not worry about payment, as mortgagee did not need the money. Mortgagor thereafter assigned the note and mortgage to defendant in error, who commenced foreclosure proceedings; a tender of the amount due less attorney's fees was made at the time of answer; the note was past due on the date of assignment; defendant in error is not a holder in due course. (Comp. Stats., sec. 3216.) A court of equity will relieve against a forfeiture or penalty in a contract and decree specific performance, if possible between the parties. (Willard's Equity 56.) Defendant in error having accepted the note after it was due gave it the status of a demand note. (Comp. Stats., sec. 3165.) A demand was necessary in order to recover attorney's fees provided for. Attorney's fees are a penalty. (Witherspoon v. Mussleman, 14 Bush. 214; Prescott v. Grady, 27 P. 35 (Calif.).) An attorney fee cannot be included until a demand has been made. (Clemens v. Loose, 35 P. 1032.) There was an extension at the time. (Drake v. Bank, 96 P. 999.) There was no waiver of the terms and conditions of the note.

John J Spriggs, for defendant in error.

The tender was insufficient and properly refused. The services of an attorney was necessary to enforce payment, there being a default. A tender which does not include attorney's fees is insufficient. (Bank v. Howard, 158 P. 927.) Attorney's fees are not held to be uncollectable. (Bovee v. Holland, 156 P. 417; Const. Co. v. Sutherland, 150 P. 209; Comp. Stats., sec. 3160; Baker Co. v. Sherman, 122 P. 235.) Presentment and demand were waived in the note. (Section 3240, Comp. Stats. 1910.) Section 3165, Comp. Stats., refers to persons secondarily liable and are not in point. The instrument was not one including a drawer or acceptor and was not drawn, issued or accepted after due. It was endorsed after due and as to the endorser was payable on demand. The judgment should be affirmed.

POTTER, JUSTICE. BEARD, C. J., concurs. BLYDENBURGH, J., being ill, did not participate in the decision.

OPINION

POTTER, JUSTICE.

This is an action upon a promissory note and real estate mortgage securing the same, executed by the plaintiffs in error, Cora V. Graves and Karl DeF. Graves to one John Findlay and assigned to the defendant in error, I. L. Burch, to recover judgment upon the note for an unpaid balance due thereon and for the foreclosure of the mortgage. The note and mortgage were assigned to Burch on March 10, 1916, and the action was commenced on the following day, March 11, 1916, and there was endorsed on the summons, as demanded by the precipe, the following: "Civil action for the recovery of money only. Amount claimed, $ 314.46, and mortgage foreclosure, for which plaintiff will take judgment if defendant fails to answer."

As set out in the petition and shown by the evidence, the note was dated October 4, 1910, and was given for the sum of $ 800.00, with interest at the rate of ten per cent per annum from date until paid, payable by monthly installments of twenty dollars each until the principal sum and interest shall be fully paid. It expressly provides that the monthly payments shall be applied, first to payment of accrued interest, and the balance upon the principal. It contains also the following provisions: "In case payment shall not be made at the times and as herein provided, we further promise and agree to pay costs of collection, including the further and additional amount of one hundred dollars on said principal sum of this note for attorney's fee, and if any suit or foreclosure proceedings be commenced for the collection of any amount unpaid on this note, said fees shall be added to and included in any judgment hereon. And the makers of this note hereby waive presentation for payment, notice of non-payment, and jointly and severally consent that time of payment may be extended without notice thereof." The mortgage also contains a provision for one hundred dollars attorney, solicitor and counsel fees to be retained out of money arising from the sale of the property authorized thereby upon default in payment of principal or interest or any part thereof, and that in any proceeding in equity to foreclose the mortgage said solicitor fees shall be taxed as costs in said action.

The petition alleges a large number of payments endorsed on the note, and the dates thereof respectively commencing with Oct. 31, 1910, as the date of the first payment of $ 20, and ending with the payment of a like sum on Oct. 12, 1915; said last payment being endorsed as the payment due for February, 1914. Judgment was prayed for $ 174.21, the balance due upon the principal of the note, $ 37.00 interest due at the date of commencing the action, $ 3.25 for insurance premium paid, and the further sum of $ 100.00 for attorney fees; and for the sale of the mortgaged premises to satisfy the same. It will be noticed that the total of the sums stated is $ 314.46, the amount endorsed upon the summons, and that, omitting the attorney fee and insurance premium, the amount claimed would be $ 211.21.

The answer, filed April 7, 1916, admits the execution of the note and mortgage, and alleges that after the note became due and before it was assigned to plaintiff, the defendants obtained an extension of time for the payment of the balance due, that the payee, Findlay, told them that no advantage would be taken of them or expense incurred and that they might have additional time to pay the balance, and that relying on that promise, and in consideration thereof, the defendants "made additional payments as they could". That defendants were not notified of the assignment and no demand for payment was made upon either of them prior to commencing the action. That the plaintiff knew the note was past due when assigned to him. That the assignment was a breach of faith and a fraud upon defendants. That on March 28, 1916, the defendants tendered to plaintiff the sum of $ 225.00, being the amount due upon the note with court costs to that date, which tender was refused by the plaintiff, and that the defendants tender said sum into court, being all that is due at the time of filing the answer. That the commencement of suit without demand or notice is "vexatious, unconscionable and inequitable and the defendant (plaintiff) ought not to be permitted to obtain any judgment for costs or attorneys' fees against the defendant." We do not find any reply to the answer in the record.

The evidence shows that on the same day that the answer was filed the sum of $ 225 was deposited with the clerk of court by counsel for defendants "as tender to I. L. Burch by Cora V. Graves, to remain in court for claim on note, interest and costs to March 28, 1916." On the trial the plaintiff testified that there had been an error in the calculation of the interest due on the note, and that the amount actually due for interest when suit was commenced was $ 72 instead of $ 37, as alleged in the petition, but he also testified that the amount of principal and interest then due was $ 237.42. The court found that the amount then due was $ 237.21. And the record shows that during the trial, "plaintiff having testified * * * that the sum of twelve dollars was due in addition to the amount claimed in his petition, the defendants thereupon tendered and paid to the clerk said sum of $ 12."

Judgment was rendered for the sum of $ 351.38, the total of the following items: $ 237.20, principal and interest due at the commencement of the action; $ 14.18, interest on said sum to December 16, 1916, the date of the judgment; and $ 100 attorney's fees. Together with the costs of the action taxed at $ 7.65. And a sale of the mortgaged premises was ordered to satisfy the judgment debt with interest, costs, and expenses and costs of sale. On the date of the judgment also an order staying execution pending appeal was entered, providing, "that if defendants leave the money which is now in the hands of the clerk of this court, to be tendered and paid upon any judgment which may be rendered or sustained in said cause," and shall give a bond, as provided by law, in the sum of $ 250, execution shall be stayed pending the appeal. And it appears that a bond was given and approved, as provided in said order, on December 23, 1916.

When it appeared by the evidence that an error had been made in alleging the amount of interest due, plaintiff's counsel moved to amend the petition accordingly, and a motion to amend so as to correctly allege the amount of the interest had been filed on May 6, 1916. There does not appear to have been any order made upon either of these motions; but the court, no doubt, considered the petition as amended, without formal order to that effect, since the judgment included a greater amount of interest than the sum alleged; and when the motion to amend was renewed before the close of the testimony the court stated: "We will proceed. It can be done any time before judgment, or even after judgment."

The fact that $ 225 was tendered to plaintiff on March 28, 1916 seems to be admitted by the failure to file a reply denying the amount of such tender in the answer. But we think the evidence as to the tender is sufficient to show that said amount was tendered, and...