Opinion
Hearing Granted by Supreme Court Jan. 7, 1929.
Appeal from Superior Court, Los Angeles County; Carlos S. Hardy, Judge.
Action by Abner Podrat and others against Oscar Oberndorff, Carrie Belle Watson, Findlay Watson, and others. Judgment for plaintiffs, and defendants Carrie Belle Watson and Findlay Watson appeal. Modified and affirmed.
Superseding opinion in 267 P. 750. COUNSEL
Walters & Mauk, of Los Angeles, for appellants.
O’Melveny, Tuller & Myers, of Los Angeles, amici curiæ, on behalf of appellants.
Max Schleimer, of Los Angeles, for respondents.
OPINION
STURTEVANT, J.
Heretofore an opinion in this action was written by Judge R. L. Thompson, acting as justice pro tempore. Later a petition for a rehearing was granted by this court. Having some doubt as to the conclusions reached regarding the disallowance of attorney’s fees and the rejection of the item reimbursing the respondent for taxes paid, this court granted a rehearing. Having reconsidered the entire matter, the court adopts so much of the opinion heretofore written by Judge Thompson as follows:
"This is an appeal from a decree foreclosing a chattel mortgage and also a trust deed given to secure a loan.
"October 1, 1923, for value, the defendant Oberndorff executed his note for $8,000 in favor of the appellants Carrie Belle and Findlay Watson, payable in installments of $200 each month. This note was secured by chattel mortgage on the furniture of the Plaza Hotel at Whittier, Cal. November 17, 1923, this note and chattel mortgage were assigned to the respondents. The appellants, who were husband and wife, at the same time executed and delivered to the respondents their promissory note for $7,800 secured by a trust deed on lot 18, block 29, of the original city of Whittier, as collateral security for the payment of the note and chattel mortgage first mentioned. As a part of the same transaction the appellants and respondents executed an agreement imposing certain conditions with respect to the obligations incurred by the foregoing instruments, for the default of which the foreclosure of both the chattel mortgage and trust deed heretofore mentioned were authorized. In the event of foreclosure, the agreement specified that appellants would refund any taxes which the respondents were compelled to pay pursuant to said transaction. The appellants defaulted in the payment of several installments of the first-mentioned note. After demand, this action was commenced in a court of equity to foreclose [both] the chattel mortgage and the trust deed. Judgment was rendered in favor of the respondents for $5,900 and interest, together with $517.67 attorney’s fees and $140.04 taxes.
"The appellants contend that (1) the respondents had no authority to foreclose the chattel mortgage in the ordinary equitable proceeding, since the only power conferred by the chattel mortgage, in the event of default, was for the mortgagee to seize the property and sell it pursuant to division 3, pt. 4, tit. 14, c. 3, of the Civil Code, as a pledge; that (2) the trial court erred in allowing attorney’s fees and taxes, and that (3) the decree failed to preserve appellants’ right of redemption. ***
"So far as the general question of the right to foreclose a chattel mortgage or trust deed containing a specific power of sale pursuant to the law of pledges by means of the ordinary procedure in equity is concerned, that has become moot in the present case for the reason that the briefs of the respective parties disclose the fact that the judgment has been fully paid and satisfied by the appellants, except as to the items of attorney’s fees and taxes. In response to this charge, the appellants admit in their closing brief that: ‘We were compelled to pay the amount of the judgment, except attorney’s fees and taxes.’ If certain points raised on the appeal are settled and have become moot, the court will not consider them, but will devote its attention to the remaining points in controversy. 2 Cal.Jur. 804, § 472, and cases there cited.
"Attorney’s fees were, however, improperly allowed in the present case for the reason that the agreement contained in the chattel mortgage to pay counsel fees did not contemplate services for foreclosing the mortgage in a court of equity.
"The allowance of attorney’s fees depends entirely upon the contract between the parties. 3 Cal.Jur. 683, § 84. Section 1021 of the Code of Civil Procedure provides: ‘The measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties. ***’
"The only contract for the payment of attorney’s fees in the present case is found in the language of the chattel mortgage heretofore quoted, which provides that, in the event of default, the mortgage may take possession of the property and proceed ‘to sell the same in the manner provided by law (as a pledge) and from the proceeds (of such sale) pay the whole amount of said note, *** including the counsel fees not to exceed *** per cent. ***’ Where a provision for attorney’s fees is stipulated but the amount is left blank a reasonable fee may be allowed. 3 Jones on Mortgages (8th Ed.) 514, § 2059; Alden v. Pryal, 60 Cal. 215. If there is no stipulation in the mortgage for the payment of counsel fees, they cannot be allowed. 3 Jones on Mortgages, supra, 215, § 2059; 5 Cal.Jur. 109, § 50; Fell v. Frierson, 171 Cal. 351, 153 P. 229; Sichel v. De Carrillo, 42 Cal. 493; Boob v. Hall, 107 Cal. 160, 40 P. 117. In the case last cited it is said: ‘Neither the prayer in the complaint for its allowance nor the averment of the amount which would be reasonable can supply the necessity of a direct averment that an attorney’s fee had been agreed to be paid by the mortgagor.’ If, however, the fees are provided for in the note, although they are omitted from the mortgage, under proper pleadings, they may still be allowed. Worth v. Worth, 155 Cal. 599, 102 P. 663; National Bank of California v. Mulford, 17 Cal.App. 551, 120 P. 446. But attorney’s fees will not be awarded in a foreclosure suit unless proper averments authorizing the same are incorporated in the pleadings. 19 Standard Ency. of Proc. 1056.
"The specific question involved in the present case is whether a contract to allow attorney’s fees for the seizure and sale of personal property under a chattel mortgage will authorize the allowance for the performance of entirely different service, to-wit, the foreclosure of the mortgage. The respondent claims that the language of the chattel mortgage implies that attorney’s fees were contracted to be paid for services performed in satisfaction of the mortgage lien, by whatever procedure this end was accomplished. No case is cited in support of this claim. On the contrary, it is said in 3 Jones on Mortgages, supra, at page 520: ‘Under a provision in a power of sale for an attorney’s fee in case of foreclosure by (seizure and sale) no allowance can be made if the mortgage is foreclosed in chancery instead.’ Van Marter v. McMillan, 39 Mich. 304; Sage v. Riggs, 12 Mich. 313; Hardwick v. Bassett, 29 Mich. 17. In the case of Brown & Parler v. Kolb, 92 S.C. 309, 75 S.E. 529, it is said: ‘The mortgage provided that on default, the mortgagee might seize and sell the property, and that upon the sale "he shall apply the proceeds of such sale, after deducting all expenses and charges, including attorney’s fees, toward the payment and discharge of the indebtedness," etc. Under a similar contract, it was held in Walker v. Killian, 62 S.C. 482, 40 S.E. 887, that the mortgagee could not claim the fees if he foreclosed by action and not by seizure under the power.’ The judgment in this last-mentioned case was modified by striking out the amount allowed for attorney’s fees. Upon the foregoing authorities, we are of the opinion that the counsel’s fees were improperly allowed in the present case."
The defendants also assert that the trial court erred in allowing the plaintiffs $140.04 for taxes paid. It is claimed that there was no allegation in the complaint presenting the issue. The point is not well founded. During the trial the plaintiffs requested permission, and they were given permission, to amend by pleading the facts concerning disbursements made by them. The contract under which the plaintiffs make their claim was pleaded by them in haec verba. The court made findings in their favor. On an appeal based on the judgment roll the point is without merit. McKelvey v. Wagy, 157 Cal. 406, 408, 108 P. 268.
For the foregoing reasons the judgment is modified so as to eliminate the allowance of $517.67 attorney’s fees. As so modified the judgment is affirmed. The appellants will recover their costs on appeal.
We concur: KOFORD, P. J.; NOURSE, J.