Young v. Nave
| Decision Date | 09 April 1932 |
| Docket Number | 30122. |
| Citation | 10 P.2d 23,135 Kan. 23 |
| Parties | YOUNG et al. v. NAVE et al. [*] |
| Court | Kansas Supreme Court |
Syllabus by the Court.
Attorney fee provision of Indiana notes held not enforceable in action on notes brought in Kansas, notwithstanding rule of comity (Rev. St. 1923, 67--312).
In mortgage to mortgagees as trustees for certain of mortgagor's creditors, provision for benefit of reimbursement of trustees held to create no liability against mortgagors or burden on mortgaged realty.
1. Promissory notes, made in the state of Indiana and payable there, provided for payment of principal sums, with interest "and attorney's fees." The attorney fee provision was valid under the law of Indiana. In an action in this state to recover on the notes and to foreclose the mortgage securing them, the judgment included an attorney fee of five percent. of the principal sum of each note. Held, the judgment was forbidden by a statute of this state, R. S 67--312, which the district court was not at liberty to disregard for the sake of comity.
2. The mortgage was given to mortgagees as trustees for various creditors of the mortgagors. The trustees agreed to administer the trust without compensation, except to reimburse themselves for costs and expenses and time actually employed. Held, the provision for reimbursement created no liability on the part of the mortgagors, or burden on the mortgaged real estate.
Appeal from District Court, Sedgwick County, Division No. 2; Thornton W. Sargent, Judge.
Action by Daniel R. Young and another, as trustees, and others against J. Shannon Nave and others. From the judgment rendered, the defendants appeal.
Modified and, as modified, affirmed.
V Harris and M. P. Shearer, both of Wichita, for appellants J. Shannon and Raymond Nave.
Robert C. Foulston and George Siefkin, both of Wichita, for appellant William Zeigler.
Benj. F. Hegler, A. V. Roberts, and Roger P. Almond, all of Wichita, and Charles McCabe, of Crawfordsville, Ind., for appellees.
The action was one to recover on a number of promissory notes and to foreclose a mortgage securing them. The notes were executed in the state of Indiana, and were payable there. Each note provided for payment of a principal sum, with interest, "and attorney's fees." The judgment which was rendered included an attorney fee of five percent. of the principal sum of each note, and the appeal was taken to secure a modification of the judgment in that and another respect.
A provision in a promissory note for payment of an attorney fee is valid under the law of Indiana. It is often said a contract valid in the state where made and to be performed is valid everywhere. It does not follow, however, from the fact that a contract is valid in the state where made and to be performed, that another state will enforce it by appropriate legal remedy. If the contract is contrary to the law or public policy of the forum, remedy will be denied. This is the general rule, supported by reason and authority, and it is not necessary to review the cases.
In this state we have a statute which reads as follows:
(R. S. 67--312.)
Of course the Legislature did not attempt to regulate, by this statute, the making of contracts in other states. But the Legislature condemned attorney fee agreements in notes and mortgages, forbade the appropriation of Kansas property given as security, to the satisfaction of such agreements, and closed the courts of this state to their enforcement. This definitely fixed the policy of this state with respect to attorney fee agreements, and...
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