Sorge v. Sierra Auto Supply Co.

[219] By the Court, Coleman, J.: There is but one question presented on this appeal, and that is whether the trial court erred in adjudging the plaintiff in the foreclosure of a mortgage tó be entitled to recover an attorney’s fee. In determining this question we need consider only the contention of the appellants that the defendant corporation did not authorize its officers to embody in the notes and mortgages executed the provision therein contained authorizing a court, in case of foreclosure, to award to the mortgagee such fee. On this point the facts are few. The defendant company executed two notes, one for $20,000, dated May 6, 1920, and another for $4,000, dated May 20, 1921, both containing the following provision: “And in case suit or action is instituted to collect this note, or any portion thereof, we promise and agree [220] to pay, in addition to the costs and disbursements provided by statute, such additional sum in like lawful money of the United States, as the court may adjudge reasonable for attorney’s fees to be allowed in said suit or action.” These notes were secured by mortgages containing provisions to the effect that in case of foreclosure thereof the court should adjudge the plaintiff to be entitled to recover such a sum as attorney’s fee as it might deem reasonable. The only defendant which appeared in the trial court and contested plaintiff’s right to an attorney’s fee is the defendant, Fred Stadtmuller, as trustee, etc. From a judgment in favor of plaintiff, he has appealed. Counsel for appellant insist that the judgment must be reversed for the reason that there was no meeting of the trustees of the defendant company, duly called, at which the officers of the company were authorized to execute the note and mortgage in question. No contention is made as to the incorrectness of the judgment as to the money loaned since the company received the benefit thereof, but upon authority of Defanti v. Clark, 45 Nev. 120,198 Pac. 549, it is said that the court erred in awarding the plaintiff an attorney’s fee. We do not think that case is in point. There is a wide difference between the facts in that case and in the instant one. In that case we held that Defanti could not recover attorney’s fee for the reason that there was no legal meeting of the board of trustees authorizing the execution of the note and mortgage, and that no such transaction had ever been ratified. In that case there was no meeting of the board of trustees at which all the trustees were present and acting, whereas in the instant case, so far as the $20,000 note and mortgage are concerned, they were all present and acting. It is true it does not appear that a meeting was held pursuant to notice, but they all assembled, for the sole purpose evidently of considering the proposition of borrowing the money obtained and of giving a note and mortgage [221] to secure the payment thereof. The trustees knew that the company could not get the desired money unless these papers were authorized. The note and mortgage had been prepared by an attorney for the respondent. They embodied the terms and conditions upon which respondent was willing to part with the money. There is in evidence a resolution purporting to have been adopted at a meeting of the board of directors of the defendant company on 6, which authorizes the officers of the company to borrow from Nick Sorge the sum of $20,000 on behalf of the company and to execute a note therefor and a mortgage to secure the same. The evidence shows that at the meeting at which the resolution mentioned was adopted the note and mortgage to which we have referred, and which were sued upon, were read over by all of the directors, and their execution authorized. It was the particular note and mortgage in question here which the board of directors were acting upon. In such circumstances we see no escape from the conclusion that the note and mortgage in ques-' tion are valid and binding in every particular. In Hubbard v. University Bank of Los Angeles, 125 Cal. 684, 58 Pac. 297, the court said: “The averments above quoted are sufficient to charge the corporation with the execution of this particular mortgage, and, as they are not denied, the defendants are bound by them.” This holding seems to be squarely in point and decisive of the contention made. It is said that the evidence does not show that the board of directors acted as such. The resolution adopted confutes this contention. The fact that the minutes of the meeting were not written up and attested by the officers of the company is not a circumstance which can be invoked to defeat the mortgage given pursuant to the resolution. The $4,000 note and mortgage were not authorized at a meeting of which notice was given or at which all of the trustees attended, nor has the execution thereof [222] been ratified. That note and mortgage are controlled by the law as declared in the Defanti case, supra. It follows that the court could not take into consideration in fixing an attorney’s fee the services rendered in the foreclosing of the $4,000 note. January 5, 1924. 221 Pac. 521. W. M. Kearney, for Petitioner: It is ordered that the case be remanded, and that the trial court modify its judgment in accordance with the views above expressed.