Lewis v. Germania Savings Bank

Mr. Justice Sterrett delivered the opinion of the court, November 15th 1880. Assuming all the allegations of fact contained in he affidavits of the defendant below to be true, they do not constitute a valid defence to the payment of the principal debt and interest or any part thereof. It is not pretended that any part of the fund distributed by the Court of Common Pleas of Butler county has ever been received and applied to the mortgage-debt; on the contrary, it appears by the opinion of that court, which is referred to and made part of the affidavit of defence, that the bank is not authorized to take out of court its distributive share of the fund, except upon assigning to the prothonotary in trust, &c., a corresponding amount of the mortgage upon which this suit is brought. It is very clear that the bank is not bound to do this for the benefit, or supposed benefit, of the terre-tenant, who purchased the mortgaged premises subject to the mortgage in question. It is the principal security for the debt. The judgment on which the money was realized in Butler county, was merely collateral, and until it is awarded- to and received by the bank, there can be no question as to its right to proceed on the mortgage for the purpose of collecting the debt secured thereby. There is nothing substantial in the alleged agreement of the bank to give further time to the terre-tenant, for the reason that no suf [92] ficient consideration for such agreement is disclosed in the affidavits of defence. The only matter about which there can be any room for doubt is the item of attorney’s commissions. It is alleged by the plaintiff in error that prior to June 4th he called at the bank and offered to pay the interest falling due on that day, and also the principal debt, but was informed by the proper officer of the bank that “ they did not need the money, and to let it stand until the Butler county matter was disposed of,” &c, and that shortly afterwards, without making any request or demand for payment of principal or interest, suit was brought on the mortgage. It is contended that under the circumstances detailed in the affidavits of defence, as to the agreement to give further time, the plaintiff below was not entitled to recover attorney’s commissions. . We think this would be so if the defendant, even after suit was brought, had been reasonably prompt in paying, or tendering payment of the debt and interest secured by the mortgage. In Daly v. Maitland, 7 Norris 384, it is held that while stipulations for the payment of attorney’s commissions in mortgages and other securities are valid, they are, nevertheless, subject to the equitable control of the court, and will be enforced only to the extent of compensating the plaintiff for reasonable and necessary expenses of collection. Applying this doctrine to the case of a debtor who has been misled by his creditor and thrown off his guard in the manner the plaintiff in error alleges he was, it would not be an unreasonable exercise of the equitable power of the court to refuse any allowance for attorney’s commissions ; but, to justify such action on the part of .the court, the defendant should attest his sincerity and good faith by promptly paying or tendering the amount of debt and interest, exclusive of commissions. This was not done in the present case. On the contrary, the defendant took defence to about one-half of the plaintiff’s claim, and failed to pay or even tender the residue. The course thus pursued by him has entailed on the bank the expenses of litigation which is not yet ended. Its claim was contested in the court below, and after an adverse decision there it has been obliged to follow the defendant into this court. Under such circumstances he has no. equitable claim to relief from the stipulation in the mortgage for payment of attorney’s commissions. It was inserted for the very purpose of indemnifying the bank against just such expenses as it has incurred, and may yet become responsible for, in the collection of its claim in this case. In the case above cited it is said by the present chief justice : “In general this court will not review the exercise of a sound- discretion by an inferior court updn such a question, and the presumption will always be in favor of its discretion unless it is plainly excessive.” Guided by this principle we see no error in the court below in allowing attorney’s commissions and including the same in the judgment. Under the [93] circumstances disclosed by the record, the discretion with which that court is invested in such matters was wisely exercised. Judgment affirmed.