Reed v. Taylor

• Decision Date: 09 June 1910
• Citation: 129 S.W. 864
• Parties: REED v. TAYLOR.
• Court: Texas Court of Appeals

129 S.W. 864

REED v. TAYLOR.

Court of Civil Appeals of Texas.

June 9, 1910.

Error from District Court, Montague County; Clem B. Potter, Judge.

Action by R. B. Taylor against Oscar O. Reed. Default judgment for plaintiff, and defendant brings error. Reversed, and remanded for new trial.

W. W. Moore, for plaintiff in error. J. L. Rudy, for defendant in error.

WILLSON, C. J.

The suit was by defendant in error on notes aggregating $4,000, dated September 10, 1907, stipulating for interest at the rate of 8 per cent. per annum from their date, payable annually, and for 10 per cent. additional on the amount of the principal and interest thereof unpaid, if placed in the hands of an attorney for collection after maturity, or if collected by suit. The appeal is from a judgment by default in favor of defendant in error against the plaintiff in error for the sum of $4,989 and interest thereon at the rate of 10 per cent. per annum.

The contention made that the judgment is excessive, and further erroneous, in that it was made to bear interest from its date at the rate of 10, instead of 8, per cent., is sustained. The principal of the note, together with the interest and attorney's fees stipulated for, amounted, at the date the judgment was rendered, to $4,880.12. Therefore the judgment is excessive in the sum of $108.88.

The contention made that the judgment is further erroneous, in that the pleading on the part of defendant in error was not sufficient to support the recovery in his favor for collection fees stipulated for in the notes, also must be sustained. The allegations of the petition with reference to such fees were that the notes had matured and were unpaid, and that "in order to enforce collection of same plaintiff has been compelled to place said notes in the hands of his attorney, J. L. Rudy, for collection, and had directed him to file suit thereon." If the additional 10 per cent. contracted for should be treated as stipulated damages, the allegations doubtless were sufficient to authorize the recovery had. But this court has held that collection fees so contracted for are not to be treated as stipulated damages, but as indemnity against actual damages in the way of expenses incurred by the payee of the note in collecting same, and therefore that the maker of such a note is liable to the holder only for fees actually contracted to be paid to the attorney, or for the reasonable value of such attorney's services. Elmore v. Rugely, 107 S. W. 151;...