R. S. Oglesby Co v. Bank Of N.Y.

• Decision Date: 13 March 1913
• Citation: 77 S.E. 468,114 Va. 663
• Parties: R. S. OGLESBY CO. et al. v. BANK OF NEW YORK.
• Court: Virginia Supreme Court

77 S.E. 468

114 Va. 663

R. S. OGLESBY CO. et al.

v.BANK OF NEW YORK.

Supreme Court of Appeals of Virginia.

March 13, 1913.

1. Bills and Notes (§ 99^*)—Attorney's Fee Clause—Law Governing.

The clause of a note, stipulating for a fee of 10 per cent, in case of collection by an attorney, is, like those for payment of interest and exchange, a mere incident to the principal contract, to be governed by the same law, and so cannot be considered a Virginia contract; the note, though made in Virginia, being a New York contract

[Ed. Note.—For other cases, see Bills and Notes. Cent. Dig. § 213; Dec. Dig. § 99.*]

2. Bills and Notes (§ 110*)—Attorney's Fee Clause—Validity.

A clause in a note, providing for a 10 per cent, fee in case of collection by an attorney, is authorized by Negotiable Instrument Law N. Y. (Consol. Laws 1909, c. 38) § 21, and is valid in New York.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 221; Dec. Dig. § 110.*]

3. Bills and Notes (§ 110*)—Provisions as to Attorney Fee.

The clause of a New York note, providing for a 10 per cent, fee in case of collection by attorney, is not contrary to the public policy of Virginia, as regards the question whether its. courts will enforce it.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 221; Dec. Dig. § 110.*]

4. Contracts (§ 101*) — Validity — Wilai Law Governs—Comity.

A contract valid at place of performance, another state, will be enforced in Virginia, though a similar contract made and to be performed in Virginia would not be upheld.

[Ed. Note.—For other cases, see Contracts, Cent. Dig. §§ 455-460; Dec. Dig. § 101.*]

Error to Corporation Court of Lynchburg.

Action by the Bank of New York against R. S. Oglesby Company and another. Judgment for plaintiff; defendants bring error. Affirmed.

Harrison & Long, of Lynchburg, for plaintiffs in error.

Kirkpatrick & Howard, of Lynchburg, for defendant in error.

WHITTLE, J. On motion by the defendant in error against the plaintiffs in error on two negotiable notes made by them at Lynchburg, Va., payable to themselves or order at the Bank of New York, and indorsed to the bank for a New York loan, the court included in its judgment the stipulated fee of 10 per cent, for collection by attorney. In that particular the correctness of the judgment is drawn in question by this writ of error.

It is admitted that the notes are New York contracts; but it is contended that thecase must be controlled by the law of this state, and that by that law the stipulation to pay an attorney's fee is regarded as a penalty, and not enforceable. Again, it is sought to segregate that clause from the main contract, and to withdraw it from the influence of the law of New York, on the theory that, though the principal sum is payable in New York, the attorney's fee is not, and the note having been made in Virginia makes that stipulation a Virginia contract. No authority is cited on the point, and it would seem plain that the provision, like those for the payment of interest and exchange, is a mere incident to the principal contract, and to be governed by the same law.

The case involves the two propositions: Whether or not the attorney's fee clause in a negotiable note is valid in New York, and, if so, whether the Virginia courts will enforce it.

The plaintiff proved that both by the statute and common law of New York the stipulation is valid. Extracts from the Negotiable Instrument Law of New York (Consol. Laws 1009, c. 38) were introduced, from which it appears that, upon the question at issue, it is substantially the same as the Virginia act. The provision is as follows:

"Article 3, section 21. Certainty as to sum; what constitutes. The sum payable is a sum certain within the meaning of this chapter although it is to be paid: 1. With interest; or 2. By stated installments; or 3. By stated installments, with a provision that upon default in payment of any installment or of interest, the whole shall become due; or 4. With exchange, whether at a fixed rate or at the current rate; or 5. With costs of collection or an attorney's fee in case payment shall not be made at maturity."

It was also proved by attorneys of high standing in New York that the 10 per cent. attorney's fee clause was legal and binding upon the maker of a negotiable note, both by statute and the unwritten commercial law of the state. Indeed, it is shown that the Negotiable Instrument Law has, in effect, carried into statute the previously existing law.

It is objected, however, that the tendency of the testimony of these witnesses is rather to construe the statute than to prove what the law of New York is.

In reply to a similar suggestion, in Dickinson v. Hoomes, 8 Grat. (49 Va.) 353, Mon-cure, J., says, at page 409: "But I incline to think that the doctrine of primary and secondary evidence does not apply to the case, and that a foreign law, whether written or unwritten, may be proved by a person who is learned in that law, without laying any foundation for the introduction of secondary evidence. This is the principle of a late decision of the court of Queen's Bench. * * * 55 Eng. C. L. R. 250, 267. As was said by one of the judges in that case: 'The general principle does not seem to apply to the case. What, in truth, is it that we ask the witness? Not to tell us what the written law states, but, generally, what the law is. The question is not as to the language of the written law; for when that language is before us we have no means by which we are to construe it. How many errors might result if a foreign court attempted to collect the law from the language of some of our statutes, which declare instruments in particular cases to be null and void to all intents and purposes, while an English lawyer would state that they are good against the grantor, and that the courts have so expounded the statutes! It is no answer to say that other evidence by word of mouth may be added for the purpose of giving the interpretation of the written law. I am merely showing that our courts require, not the actual, written words of a foreign law, but the law itself, for which purpose a professional witness is required to expound it'"

But whether we accept the conclusion of these legal experts or not, it seems clear to us that, by the...