Ralston v. Stone

RAND, J. The plaintiff challenged the qualifications of the Circuit Judge to pass upon the demurrer _to the complaint by filing in said court and cause, under Sections 45 — 1, 45 — 4, Or. L., a written motion supported by her affidavit that she believed that the trial judge was so prejudiced against her that she could not obtain a fair and impartial trial before him. Said sections, in substance, provide that a Circuit Judge shall not hear or try any suit, action or proceeding, when it shall be established that such “judge is prejudiced against any party or attorney in the cause, and that such prejudice may be established by a motion supported by an affidavit that the judge is prejudiced so that such party or attorney -cannot or believes that he cannot have a fair and impartial trial before such judge. Section 45 — 3 provides that the affidavit and motion may be made at any time “either before or after the assignment „of the case for trial and either before a hearing upon a motion or demurrer or the commencement of trial of the said cause.” As used in this statute the phrase “before a hearing upon a motion or demurrer” means, and can only mean, the submission to *516 the court for decision of a motion or demurrer, and it matters not whether the motion or demurrer is submitted upon oral or written argument, or submitted without argument if argument is waived. The statute contains no language indicating a legislative intent to provide that by the mere filing, by a party or his attorney, of an affidavit which states no facts but merely imputes prejudice, a Circuit Judge, to whom a matter has been submitted for decision, can be deprived of the power to determine that matter. The record discloses that the demurrer was filed on November 21, 1923, and the affidavit of prejudice on January 9, 1924, and that between these two dates and before the filing of the motion and affidavit the demurrer had been submitted to the court on written briefs and had been taken under advisement by the court. For the purpose of deciding the demurrer, and to that extent only, we think the affidavit was filed too late, and that it was not error for the Circuit Court to disregard it. If the plaintiff, after the submission of the demurrer to the court for decision, and before a decision thereon had been rendered, had discovered that the trial judge, because of bias or prejudice, was disqualified, then, without reference to the statutes referred to, she could have set up the facts from which the disqualification arose by an affidavit, and this would have presented an issue, namely, whether the trial judge was qualified or disqualified, which that court would have had power to determine. In order to raise that question it would have been necessary for the facts from which the disqualification arose to be stated by affidavit, but a motion supported by an affidavit, under the sections involved here, requires no statement of fact, but merely the conclusion of the affiant that the *517 trial judge is disqualified or that the affiant believes him to be disqualified because of prejudice. This raises an entirely different question from that involved in the case first stated and leaves the court no power to pass upon his own qualifications. Under the sections of the statute referred to, if a motion supported by an affidavit is filed at the proper time the power of the court to hear or determine the case or a question arising upon demurrer or motion is at an end. Under the provisions of, this statute, however, before a party to an action, suit or proceeding can avail himself of the right conferred by the statute, the motion and affidavit must be filed before and not after a matter is submitted to the trial judge for decision. The legal theory upon which this complaint was drawn is that the decree in the foreclosure suit is in all respects valid and binding except that portion of it which provides for the recovery of an attorney’s fee, and that the provision in the decree providing for the recovery of an attorney’s fee is void. Upon this theory it is contended that everything done in the enforcement of the decree is valid except the sale of that portion of the land purchased by the defendant Stone and the confirmation thereof. Unless the complaint can be sustained upon that theory it must fail because it is upon that theory alone that the allegations of the complaint, if sufficient, can entitle the plaintiff to relief. This theory is based upon two facts which are alleged in the complaint: first, that the provision for attorney’s fees contained in the note and mortgage is invalid because requiring the makers of the note, in case of their default, to pay to the holder a specified percentage of the amount *518 due; and, second, that Mrs. Ralston, one of the parties to the foreclosure suit and the owner of one half of the mortgage debt, did not consent to or authorize the foreclosure of the mortgage. The note provides that “should suit be commenced or an attorney be employed to enforce the payment of this note, we agree to pay an additional sum of five per cent on principal as attorney’s fees in such suit. ’ ’ It is settled by numerous decisions of this court that a stipulation or provision in a promissory note, which provides that in an action upon the note or in a suit to foreclose a mortgage given to secure its payment the holder of the note may recover from the maker a stipulated, fixed or specified percentage or amount of attorney’s fees, is invalid and unenforceable, and that where a note so provides, no attorney’s fees can be recovered in such action or suit: Balfour v. Davis, 14 Or. 47 (12 Pac. 89); Kimball v. Moir, 15 Or. 427 (15 Pac. 669); Commercial Nat. Bank of Ogden v. Davidson, 18 Or. 57 (22 Pac. 517); Levens v. Briggs, 21 Or. 333, 338 (28 Pac. 15, 14 L. R. A. 188); Parks v. Smith, 95 Or. 300, 305 (186 Pac. 552). The reason for the rule is that at the time a note is given the parties to the transaction have no knowledge of the value or extent of the services which may be required of an attorney in case the note should not be paid according to its terms, and that it is not consistent with sound public policy to allow parties, at the inception of a transaction of that nature, to fix the amount of attorney’s fees recoverable for services which may subsequently be performed, the extent or value of which is not ascertainable at that time by either party to the transaction. Those decisions also hold that where a fixed amount of attor *519 ney’s fees is provided for in a promissory note, the court, in an action or suit on the note, has no power to allow a different amount, even though that amount might be found to be reasonable, as that would result in the making of a contract for the parties which they have not made for themselves. The court, therefore, erred in decreeing that the plaintiffs should recover from the defendants the sum of $5,700 or any sum, as attorney’s fees in the foreclosure suit. Because of this the plaintiff, as guardian of the estate of Mrs. Ralston, contends that the provision in the decree which awarded an attorney’s fee to the plaintiffs is void, and that the remainder of the decree is binding and conclusive upon the parties to that suit. This contention cannot be sustained. The defendants in that suit were the only parties who were injuriously affected by the erroneous ruling of the court. Those defendants are not parties. to this controversy, and for that reason if they had an interest in the mortgaged property it could not be affected by this suit. They took no steps to correct the error, and the complaint alleges that their rights and interests in the mortgaged property terminated upon their failure to redeem. As to them, therefore, the decree is final and conclusive. For much stronger reasons the decree is binding and conclusive upon this plaintiff who attempts to attack the decree in her representative capacity. The error complained of was a judicial error which could have been corrected by the trial court during the term on motion, or it could have been reviewed by an appeal. Not having been so corrected the decree is binding and conclusive upon the parties to it. The complaint does not allege any grounds for *520 equitable intervention. The mortgaged premises were located in Klamath County, Oregon. The mortgagors were in default and a suit for the foreclosure of the mortgage was brought in the Circuit Court for that county. Under the Constitution and laws of this state that court had cognizance of that class of cases, and, therefore, had jurisdiction of the subject matter of the suit, and from the allegations of the complaint it had jurisdiction of the defendants in that suit. It hence had power to hear and determine the controversy then pending, as all of the elements essential to jurisdiction existed and were present in that suit. “Jurisdiction,” says Mr. Freeman in his work on Void Judicial Sales, §2, “may be defined to be the right to adjudicate concerning the subject matter in a given case. To constitute this there are three essentials: 1. The court must have cognizance of the class of cases to which the one adjudged belongs. 2. The proper parties must be present; and 3. The point decided must be in substance and effect within the issue.” In his work on Judgments, § 135, the same author says': “Jurisdiction being obtained over the person and over the subject matter, no error ifi its exercise can make the judgment void. The authority to decide being shown, it cannot be divested by being improperly or incorrectly employed.” It is not alleged that there was fraud in the procurement of the decree, nor is there any allegation that the plaintiff, as guardian for Mrs. Ralston/ has sustained any pecuniary injury or damage by reason of the error complained of. The amount awarded as attorney’s fees was not awarded to the attorney representing the plaintiffs in the foreclosure suit, but to the plaintiffs themselves. Under- the allegations *521 of the complaint the only possible injury that could result to the plaintiffs in the foreclosure suit from the error complained of would be the difference between the amount allowed as attorney’s fees and the amount which, in the absence of a contract, the attorney would be entitled to recover for the services performed. That amount, in the absence of a contract, would be the reasonable value of his services. It appears from Exhibit “E” attached to the complaint that it was agreed that for his' services the defendant Stone should be paid the amount which was fixed by the court, and that at their election the plaintiffs might pay that amount with interest at six per cent per annum at any time within one year after the date of the certificate of sale or compel him to retain that part of the mortgaged property which he should bid for in his own name at the sale. Under this contract the plaintiffs in the foreclosure suit could elect whether to pay the attorney’s fees in money or in property, and one year was given them in which to make the election. On its face this contract is fair and equitable, and, while it is alleged that it was not signed by Mrs. Ealston or under her authority, it is admitted that it was signed by Torrance and by this plaintiff, who at the time was acting in her own right, two of the three plaintiffs named in that suit. There is no allegation that the defendant has been paid for his services nor does the complaint contain any offer to make compensation. It is alleged that Mrs. Ealston refused to consent to the institution of the foreclosure suit and that her signature was attached by Hizar to Exhibit “E” without authority and without her knowledge. Because of this it is contended, not that the decree as *522 an entirety is void, but that only that portion of it awarding attorney’s fees to plaintiffs is. void. It is also contended that all of the proceedings in the suit subsequent to the decree are valid except the sale of a part of the mortgaged premises in satisfaction of the amount allowed by the decree as attorney’s fees. Exhibit “E” was signed subsequent to the entry of the decree, and whether signed by authority of Mrs. Ealston or not does not affect the validity of the decree. The mortgagors were in default at the time the foreclosure suit was instituted and the mortgagees were entitled to have it foreclosed. The mortgage debt was payable, one-half to Mrs. Ealston and the other half to her daughter, who is now the guardian for her mother. There is no allegation that this plaintiff in her own right did not authorize the defendant Stone to institute the foreclosure suit. The complaint alleges that Mrs. Ealston is aged and infirm and mentally incapable of conducting her own affairs. This suit is being instituted, not by Mrs. Ealston, but by her guardian, who was one of the plaintiffs in the foreclosure suit. If the suit was instituted without the consent of Mrs. Ealston, whether with or without the knowledge of the defendant Stone, it was instituted by the daughter of the ward in whose behalf this suit is brought, and if there was any concealment practiced upon Mrs. Ealston in the bringing of the suit that concealment was at least participated in by the guardian in this suit. The statute (§ 392, Or. L.), requires that every suit shall be prosecuted in the name of the real party in interest except as in that section provided, and Section 394 provides that “if the consent of anyone who should have been’ joined as plaintiff cannot be ob *523 tained, he may be made a defendant, the reason thereof being- stated in the complaint.” The mortgagors being in default, the plaintiff, in her individual right, and Torrance were entitled to have the mortgage foreclosed. Mrs. Ralston’s consent to the prosecution of the suit was not essential under Section 394, as she could have been made a party defendant in the suit. There is no allegation in the complaint that the Circuit Court was informed of her refusal to consent to the prosecution of the suit, and on the face of the record in that suit she appeared as a party plaintiff. If her consent to the suit was essential to its maintenance, having the power to authorize the bringing of the suit she had the power subsequently to ratify the bringing of it. This she h'as done through her guardian who stands upon the decree and its enforcement and claims for her ward the benefits realized therefrom. The complaint, therefore, does not state a cause of suit, and the judgment of the lower court in sustaining the demurrer and dismissing the suit is affirmed. Affirmed. Rehearing Denied.