Hotaling v. Montieth

McFARLAND, J.

This is an ordinary action to foreclose a mortgage executed hy defendants George W. Montieth and his wife to secure the payment of a promissory note made hy the former to plaintiff. Judgment went for plaintiff, from which, and from an order denying a motion for a new trial, George W. Montieth appeals.

[557]

There are only two points made hy appellant which need be noticed: 1. That the court erred in sustaining objections to certain evidence offered by appellant; and 2. That the court erred in allowing an attorney’s fee.

1. Appellant offered to prove by witnesses that when the note and mortgage were executed there was a verbal agreement between the parties, which was, in substance, this: that the interest which the note was to bear was made two per cent greater than it otherwise would have been in order to cover the anticipated taxes on the mortgage.. To this offer an objection of respondent that the agreement was not in writing, and was incompetent, irrelevant, and immaterial, was sustained, and exception taken by appellant. The objection was properly sustained.

(Daw v. Niles,

104 Cal. 106;

Harrelson v. Tomich,

107 Cal. 627.) In the eases just cited the offer was to prove a parol agreement of the mortgagors to actually and directly pay “the taxes to be assessed or levied upon the mortgage,” while in the case at bar the offer was, in effect, merely to prove that the parties, when agreeing upon the amount of interest to be paid, considered the fact that the mortgagee would have to pay taxes on the amount of the loan. In the absence of a usury law, any rate of interest for which the parties contract is legal; and it is immaterial what ordinary business considerations lead them to adopt the stipulated rate.

2. The mortgage provided for a counsel fee of “fifty dollars and a percentage at the rate of five per cent upon the amount of judgment recovered”—which amounted to over two hundred dollars. The court allowed a counsel fee of only one hundred and twenty-five dollars. Counsel contends that it is unconstitutional to allow any counsel fees in a foreclosure suit, because such fees are not allowed in other actions; but no such question arises here, because the allowance was based upon the express contract of the mortgagor. The act of March 27, 1874 (Stats. 1873, p. 707), entitled, “An act to abolish attorneys’ fees, and other charges, in foreclosure suits,” which authorizes a court to fix “the attorney’s fee” notwithstanding “any stipulation in the mortgage to the contrary,” has been properly construed in