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department, and from papers and information furnished by the defendants, prepared a memorial, giving a full history of the circumstances relating to the claim; and afterwards went to Washington several times about this and other like claims; and after the passage of the act of congress of June 23, 1874, c. 489, establishing the court of commissioners of the Alabama claims, prepared and sent to the defendants for signature a petition to be presented to that court, which, although repeatedly asked for, was never returned; and the defend. ants, after endeavoring to induce the plaintiffs to release them from the agreement, employed an attorney at law to prosecute their claim before that court, which he did, and recovered thereon the sum of $3,034.16. The plaintiffs brought this action to recover 25 per cent. of this sum, less $125, the estimated expense which they would have incurred had they proceeded and recovered the money. The defendants, besides other defenses presenting no federal question, contended that the agreement sued on had been annulled and rescinded by the act of 1874. The judge presiding at the trial overruled the objection, and the jury returned a verdict for the plaintiffs, on which judgment was rendered. The defendants appealed to the general term of the superior court, at which the judgment was reversed and a new trial ordered. The plaintiffs appealed to the court of appeals, which reversed the judgment of the general term, and remitted the case to the superior court for further proceedings. See 81 N. Y. 616. The superior court thereupon entered.judgment in accordance with the verdict, and the defendants sued out this writ of error.
In support of the writ of error it was contended that the agreement sued on bad relation solely to the claim which existed at its date; that that claim was extinguished by the operation of the treaty of Washington, the Geneva award, and the payment by Great Britain to the United States of the sum awarded; and that the claim successfully prosecuted under the act of congress and before the court of commissioners was a new claim, created by that act, and after the making of the agreement; or, if it could be treated in any respect as the same claim, was so changed in its character and circumstances that the agreement had no application to it. But, as was said by Mr. Justice STORY, delivering the judgment of this court, in a sim. ilar case:
“The right to indemnity for an unjust capture, whether against the captors or the sovereign, whether remediable in his own courts, or by his own extraordinary interposition and grants upon private petition, or upon public negotiation, is a right attached to the ownership of the property itself.
The very ground of the treaty is that the municipal remedy is inadequate; and that the party has a right to compensation for illegal captures, by an appeal to the justice of the government.
The right to compensation, in the eye of the treaty, was just as perfect, though the remedy was merely by petition, as the right to compensation for an illegal conversion of property, in a municipal court of justice.
It recognized an existing right to compensation in the aggrieved parties, and did not, in the most remote degree, turn upon the notion of a donation or gra
tuity. It was demanded by our government as matter of right, and as such it was granted by Spain.” Comegys v. Vasse, 1 Pet. 193, 215–217.
The claim established before the court of commissioners of Alabama claims was manifestly the very claim contemplated by the agreement in suit. It is described in that agreement as a “claim arising out of the capture of the ship Commonwealth and her cargo by the arned rebel cruiser the Florida.” The agreement bears date only a fortnight before the treaty of Washington was made and concluded, by* which it was agreed between the United States and Great Britain that all claims growing out of acts committed by the Alabama and other vessels should be referred to a tribunal of arbitration. The Florida was one of the vessels which were determined by the Geneva award to have put out from British ports through neglect of international duty on the part of Great Britain, and compensation for the wrongs done by which to these defendants and others was included in the sum awarded in favor of the United States. The claim of the defendants was one for which compensation was justly due to them from Great Britain; was demanded by the United States from Great Britain as a matter of right; as such was awarded to be paid and was paid by Great Britain to the United States, in accordance with the provisions of the treaty between the two nations, and with the determination of the tribunal of arbitration created by that treaty; and was paid by the United States to the defendants, out of the money received from Great Britain, pursuant to the directions of the act of congress, and to the decision of the court of commissioners established by that act. The defendants were the original owners of the claim, and the money was granted and paid by the United States to them as such. The money so demanded and received by the United States from Great Britain, and paid by the United States to the defendants, was money collected on the claim described in the agreement. Comegys v. l'asse, supra; Phelps v. McDonald, 99 U. S. 298; Leonard v. Nye, 125 Mass. 455.
The other points relied on in support of the writ of error, so far as they present any federal question, are based upon the following provisions of the act of 1874:
“Sec. 18. In case any judgment is rendered by said court for indennity for any loss or claim hereinbefore mentioned against the United States, at the time of the giving of the judgment the court shall, upon motion of the attorney or counsel for the claimant, allow, out of the amount thereby awarded, such reasonable counsel and attorney fees, to the counsel and attorney employed by the claimant or claimants respectively, as the court shall*determine is just and reasonable, as compensation for the services rendered the claimant in prosecuting such claims, which allowance shall be entered as part of the judgment in such case, and shall be made specifically payable as a part of said judgment for indemnification to the attorney or counsel, or both, to whom the same shall be adjudged; and a warrant shall issue from the treasury in favor of the person to whom such allowance shall be made, respectively, which shall be in full compensation to the counsel or attorney for prosecuting such
clair; and all other liens upon, or assignments, sales, transfers, either absolute or cciditional, for services rendered or to be rendered about any claim or part or parcel thereof provided for in this bill, heretofore or hereafter made or done before such judgment is awarded and the warrant issued therefor, shall be a'sulutely null and void and of none effect.” 18 St. 249.
It was argued that the act, by prescribing a mode of proceeding for collecting the claim which required the services of attorneys at law, rendered the agreement in question inoperative, because the plamtiffs, not being such attorneys, were incapable of performing it. But the power of attorney executed at the same time as the agreement, and referred to therein, authorized the plaintiffs to use all such lawful means and proceedings, and to employ such attorneys, as they might think fit, for the prosecution of the claim. It was further contended that the section above quoted rendered illegal and void all agreements, made before judgment, to pay compensation for services about any such claim. But the prohibition is clearly limited to liens, sales, or ausignments, which create a right of property in the claim itself, and dues not extend to a mere personal agreement to pay as compensation for such services a sum of money equal to a certain proportion of the amount which may be recovered.
The other points made in argument present no federal question, and therefore afford no ground upon which this court can revise the judyment of the state court. Murdock v. Memphis, 20 Wall. 590.
(109 U. S. 665)
BENDEY and Wife v. TOWNSEND and another.
(January 7, 1884.)
MORTGAGE TO SECURE ACCOMMODATION INDORSER-ASSIGNMENT-FORECLOSURE
-STIPULATION TO PAY ATTORNEY'S FEE-LAW OF STATE.
The maker of a promissory note executed, to one who for his accommodation signed
his name on the back of the note before its delivery to the payee, a mortgage of real estate to indemnify him against all costs and charges arising from his contract, with a power of sale in case of the mortgagor's default in paying the note. The mortgagor failing to pay the note at maturity, the mortgagee paid the amount thereof to the payee, and entered it upon his books in general account against the mortgagor, and the payee indorsed the amount as a full payment on the note, and delivered up the note to the mortgagee. The mortgagee afterwards assigned to a third person the mortgage and the obligation therein mentioned. Held, that the assignee might maintain a bill in equity against the mortgagor for foreclosure and sale of the land under the mortgage, and for payment by the mortgagor personally of so much of the amount of the note as
the proceeds of the sale under the foreclosure were insufficient to satisfy. A stipulation, in a mortgage of real estate, that in case of foreclosure the mortgagor Appeal from the Circuit Court of the United States for the Western District of Michigan.
shall pay an attorney's or solicitor's fee of $100, is unlawful and void by the law of Michigan, as declared by the supreme court of the state; and therefore cannot be enforced in the circuit court of the United States upon a bill in equity to foreclose a mortgage, made and payable in that state, of land therein.
C. I. Walker, for appellants.
GRAY, J. This is an appeal by James Bendey and wife from a decree for the foreclosure of a mortgage of land in Michigan, executed by them at Houghton, in that state, on April 30, 1873, to Samuel S. Smith and William Harris; expressed to be made in consideration of the indorsement by Smith and Harris of several promissory notes of* Bendey therein described, payable to the order of Thomas W. Edwards, at the First National Bank of Houghton; conditioned that if Bendey should pay the notes at maturity, and should save and keep harmless the mortgagees “of and from all costs and charges arising from or on account of said indorsements,” and empowering the mortgagees, in case of default by Bendey in the payment of the notes, or either of them, to sell the land by public auction and convey it to the purchasers, rendering the surplus money, if any, arising from the sale, to the mortgagors, after deducting the costs and charges of the sale, "and also one hundred dollars as an attorney fee, should any proceedings be taken to foreclose this indenture under the statute, and the same sum as a solicitor's fee, should any proceedings be taken to foreclose the same in chancery.
The other facts appearing by the record are as follows: Smith & Harris, who were partners, signed their partnership name upon the back of the notes before their delivery to Edwards. One of these notes, for $5,000, became payable on May 4, 1876, and, not being paid by Bendey, was protested for non-payment, and an action was brought thereon by Edwards against Smith & Harris, who, before judgment in that action, paid the amount of the note, with interest. Edwards indorsed the amount as a full payment on the note, and de livered up the note to Smith & Harris; and they entered the amount paid by them upon their books in their general account against Bendey, and afterwards, on September 5, 1877, assigned the mortgage, and the land therein described, "together with the note or obligation therein also mentioned,” to “William Brigham and Amos Townsend, trustees." The assignment was in fact made in part payment of debts due from Smith & Harris to firms of which Townsend and Brigham were respectively members. Townsend and Brigham, who were citizens of Ohio, filed a bill in equity against Bendey and wife, who were citizens of Michigan, in a court of this state, alleging the facts aforesaid, and praying for an account, for the foreclosure of the mortgage by sale of the land, for the payment by Bendey of any balance*remaining due to the plaintiff of the principal and interest of the note and mortgage, and for general relief. After the filing of answers and replication, the case was removed, on petition of the defendants, into the circuit court of the United States for the western district of Michigan, and a hearing there had, upon which the facts above stated
were proved, and a decree entered that the defendants pay to the plaintiffs the sum of $7,996.59, with interest, together with a solicitor's fee of $100, and that in default of such payment the land be sold by public auction, and conveyed under the direction of a master in chan. cery, and the proceeds of the sale applied to the payment of these sums, and that if the proceeds of the sale should be insufficient for such payment, the amount of the deficiency, with interest, should be paid by Bendey to the plaintiff. From this decree the defendants appealed to this court.
The contract into which Smith & Harris entered, by signing their names on the back of the note before its delivery to the payee, though styled in the mortgage an indorsement, was rather, as towards the payee or a subsequent indorsee of the note, that of joint makers with Bendey. Good v. Martin, 95 U.S. 90; Rothschild v. Grix, 31 Mich. 150. But, whether their liability in that aspect should be treated as that of promisors, or of guarantors, or of indorsers, it is clear that, having signed their names to the note for the accommodation of Bendey, their relation towards him was that of sureties, and they had the right, upon being obliged to pay the amount of the note on his failure to pay it at maturity, to recover from him the sum so paid. The mortgage, containing a condition to indemnify them against all costs and charges arising from their contract, was security to them for the payment by the mortgagors to them of that sum. The entry, in the regular course of their book-keeping, of the amount so paid in general account against Bendey, did not merge or extinguish the mortgage, or the personal liability of Bendey to them. The assignment by them to Townsend and Brigham of the mortgage, together with the obligation therein mentioned, was a valid assignment, in equity at least, of the mortgage, as well as of their claim against Bendey for the repayment of the sum paid by them on the note. The assignees were therefore rightly held to be entitled to a decree for the foreclosure of the mortgage, and also, under the ninety-second rule in equity, to a decree against Bendey himself for so much of the sum paid by Smith & Harris, with interest, as the money obtained by the sale of the land under the foreclosure should be insufficient to satisfy. The decree below is therefore right in all respects, except in allowing a solicitor's fee of $100. The land is in Michigan; the notes and mortgage were made and payable in Michigan; and by the law of Michigan, as settled by repeated and uniform decisions of the supreme court of that state, a stipulation in a mortgage to pay an attorney's or solicitor's fee of a fixed sum is unlawful and void, and cannot be enforced in a foryclosure, either under the statutes of the state or by bill in equity. Bullock v. Taylor, 39 Mich. 137; Myer v. Hart, 40 Mich. 517; Vosburgh v. Lay, 45 Mich. 455; (S. C. 8 N. W. Rep. 91;] Van Marter v. McMillan, 39 Mich. 304; Botsford v. Botsford, 49 Mich. 29; [S. C. 12 N.W. Rep. 897.] Upon such a question, affecting the validity and effect of a contract made and to be performed in Michigan, cuncern