Jaeger v. Canadian Bank of Commerce (California)

• Citation: 327 F.2d 743
• Decision Date: 11 February 1964
• Docket Number: No. 18851.,18851.
• Parties: Henry P. JAEGER and M. Darlene Jaeger, Appellants, v. The CANADIAN BANK OF COMMERCE (CALIFORNIA), Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

327 F.2d 743 (1964)

Henry P. JAEGER and M. Darlene Jaeger, Appellants, v. The CANADIAN BANK OF COMMERCE (CALIFORNIA), Appellee.

No. 18851.

United States Court of Appeals Ninth Circuit.

February 11, 1964.

Dean M. Alexander, Portland, Or., for appellants.

Freed & Campbell, Edgar Freed and William D. Campbell, Portland, Or., for appellee.

Before JERTBERG, MERRILL and KOELSCH, Circuit Judges.

KOELSCH, Circuit Judge.

The principal issue on this appeal relates to the scope of a provision for attorneys fees in a promissory note. Jurisdiction of the trial court was based on diversity of citizenship of the parties.

Briefly stated, the facts are these. The Canadian Bank of Commerce, plaintiff herein, had made a loan of $115,000 to one Hibbard on the security of four notes executed respectively by Wallace D. Campbell, Howard Jessie Coldiron, Leland Houk, Henry P. Jaeger, and their wives. These notes aggregated the sum of the loan and varied in amount. Shortly afterward plaintiff received from Hibbard and persons designated "Trustees of the Wayne C. Hibbard Trust" additional collateral consisting of a certificate issued to "Hibbard, Trustee," for 75,000 shares of stock of the Universal Fidelity Life (Insurance) Company. Before his loan became due, Hibbard died and thereafter plaintiff made demand for payment on the four securities. Campbell, Coldiron and Houk paid, but Jaeger did not. Plaintiff then commenced this suit against Jaeger and wife, seeking judgment against them for $10,000, the principal amount of their note, plus interest and cost, including $1,150 for legal services rendered and to be rendered by its attorney in said suit. Defendants answered, admitting liability in the full amount of the face of the note and interest, but denying that any sum in excess of $300 was reasonable as an attorney's fee. Additionally and by way of counter-claim they sought the shares of stock plaintiff held as collateral, on the theory that they were entitled to be subrogated to plaintiff's right to it upon payment of their own note. At the same time, defendants deposited in the Registry of the Court, by way of tender, the full principal amount of the note and part of the interest, and later the remainder of the interest. However, at no time did they make any tender of attorney's fees. After the answer was filed the issues remaining in the case were those of attorney's fees in the matter of the counter-claim.

It is unnecessary to detail the numerous steps that defendants took and the proceedings that were had before trial, but suffice to say they were initiated by defendants, extended over a period of several months, and consumed a considerable amount of time of plaintiff's attorney. They were concerned for the most part with the counter-claim and included several motions and hearings, an abortive attempt to interplead strangers to the suit, and were such as to cause Campbell, Coldiron and Houk to intervene. The case when finally tried occupied a little less than one day, and the main dispute revolved over the counter-claim. In fact, the defendants did not contest plaintiff's claim for attorney's fees, and the only evidence submitted by either party on that issue was an affidavit of plaintiff's attorney introduced pursuant to stipulation of the parties in the final pre-trial order.

After the case was submitted, the District Court, in a written opinion, stated that the counter-claim was utterly without merit and "that the sum of $2,000 was a reasonable sum to be allowed plaintiff as attorney's fees in the institution and prosecution of this action to the final adjudication of all issues * * *." However, the judgment as docketed was in the sum of $3,500. This increase is explained by the formal findings of fact, for in them the court declared:

"The defendant\'s resistance to the plaintiff\'s action is fully reflected in the file and has occasioned a very much greater volume of work than would normally be encountered by plaintiff\'s attorneys on an ordinary action upon a note. The tactics of resistance reflected in the file include, among other things, extensive difficulty in settling a pre-trial order, a motion to vacate the first pre-trial order, signed by the court, a motion for interpleader and a counter-claim and cross-claim in the nature of a bill of interpleader, which was subsequently conceded by defendants at the argument not to be allowable and was denied. On this phase of the case an order of partial final judgment was entered on plaintiff\'s motion therefor. Upon counsel\'s affidavit, submitted in evidence on the question of attorney\'s fees by stipulation contained in the final pre-trial order, and upon review of the file, the court finds as a fact that the evidence supports an allowance of attorney\'s fees of $3500, and that no contrary evidence was introduced."

Plaintiff's right to attorney's fees was of course based solely on the contractual provision contained in defendant...