Kentucky Trust Co. v. Third Nat. Bank
| Decision Date | 17 March 1899 |
| Citation | 106 Ky. 232,50 S.W. 43 |
| Parties | KENTUCKY TRUST CO. v. THIRD NAT. BANK OF LOUISVILLE. [1] |
| Court | Kentucky Court of Appeals |
Appeal from circuit court, Jefferson county, chancery division.
"To be officially reported."
Action by the Kentucky Trust Company, trustee, against the Third National Bank of Louisville, Ky. to enforce a mortgage lien. Judgment denying plaintiff's claim for attorney's fees, and plaintiff appeals. Affirmed.
F. T Fox, for appellant.
Bacon & McPherson, for appellee.
On December 27, 1895, John E. Carpenter executed to appellant a deed of mortgage as trustee for the bondholders to secure bonds to the amount of $5,000. It was stipulated that, in case of the sale of the property under the lien retained in it, appellant should pay out of the proceeds all such sums as it might have been necessary to pay counsel in that behalf and a reasonable compensation for its services as trustee. On April 22, 1897, appellant filed suit as trustee to foreclose the mortgage, making defendants to the petition the mortgagor and the appellee and others who were subsequent lienholders. The case being prepared for trial, the court gave judgment for the foreclosure of the mortgage lien, but declined to allow anything to appellant for its counsel's fee in the action, or its own services as trustee in bringing the suit and of this it now complains by this appeal.
It is well settled in this state that a stipulation in contract that the obligor will pay the obligee's attorney's fee in the case the suit is brought upon it is contrary to the policy of our laws, and not enforceable. Thomasson v. Townsend, 10 Bush, 114; Gaar v. Banking Co., 11 Bush, 180; Rilling v. Thompson, 12 Bush, 310; Witherspoon v. Musselman, 14 Bush, 214; Pryse v. Association (Ky.) 41 S.W. 574.
It is insisted by counsel that this rule is unsound, and should not be adhered to; but we think it has been so long settled that the question is no longer open. It is also insisted that the rule should not apply to a suit by a trustee to foreclose a mortgage given to secure the holders of the bonds therein provided for. We cannot see that the intervention of a trustee changes the legal effect of the transaction. The trustee is permitted to sue in his own name; but the bondholders also have a right to sue, and we think the rule should be the same when the suit is brought by the trustee as when it is brought by the bondholders. A...
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