Fowler v. Equitable Trust Co., 141 U.S. 411 (1891)
U.S. Supreme CourtFowler v. Equitable Trust Co. , 141 U.S. 411 (1891)
Fowler v. Equitable Trust Company (No. 3)
Argued April 16-17, 1891
Decided October 26, 1891
141 U.S. 411
A Connecticut corporation made in 1876 a loan of ten thousand dollars for five years at nine percent to a citizen of Illinois, the loan being evidenced by note, secured by deed of trust on real estate in the latter state, providing that nothing contained in it should be so construed as to prevent a foreclosure by legal process, and that upon any foreclosure, the corporation should recover in addition to the principal, interest and ordinary costs, a reasonable attorney's or solicitor's fee, not exceeding five percent for the collection thereof. It was also stipulated in the deed that the decree or order for foreclosure should direct and require that the expenses of such foreclosure and sale, including the fees of solicitor and counsel, be taxed by the court at a reasonable amount, and paid out of the proceeds of the sale. The highest rate allowed by the laws of Illinois at the time of the loan was ten percent. The borrower paid the agent of the company a commission of $150 under such an arrangement as that referred to in the case of Fowler v. Equitable Trust Co., ante, 141 U. S. 384.
(1) That the payment of these commissions to the company's agent did not make the contract usurious, because if that sum was added to the nine percent stipulated to be paid, the total amount of the interest exacted was less than the highest rate then allowed by law.
(2) The stipulation in the deed of trust providing for the payment by the borrower, in addition to ordinary costs, of a reasonable solicitor's fee, not exceeding five percent, for collection in the event of a suit to foreclose, did not make the contract usurious under the law of Illinois.
The Court stated the case as follows:
The trust company, upon the written application of Sophie Fowler, a citizen of Illinois, agreed to lend her the sum of $10,000 for five years at nine percent per annum. She and her husband executed to the company, for the principal of the loan, ten coupon bonds of $1,000 each, dated February 1, 1876, and payable on the 1st day of February, 1881, with interest, semiannually at the rate of seven
percent per annum. They executed at the same time ten promissory notes, of $100 each, for the remaining two percent, the first one being payable August 1, 1876, and the others, respectively, on the 1st days of February and August, 1877, to 1881, inclusive. To secure payment of the bonds, they conveyed to Jonathan Edwards, trustee, certain real estate in Springfield, and, to secure the ten promissory notes of $100 each, they conveyed the same property to the same trustee, subject, however, to the other trust deed. These deeds do not differ in any respect material to this case from the deeds in the preceding cases except that the deed given to secure the bonds here involved, aggregating $10,000, provides that nothing contained in it shall be so construed "as to prevent a foreclosure of the same by process of the law or in chancery," and that the trustee, or his successor or successors, shall,
"upon any foreclosure of this trust deed, recover, in addition to principal, interest, and ordinary costs, a reasonable attorney's or solicitor's fee, not exceeding five percent for the collection thereof, all to be collected without relief from valuation or appraisement laws. And in case of any such foreclosure, it is hereby stipulated that the decree or order for foreclosure shall direct and require that the expenses of such foreclosure and sale, including the fees of solicitor and counsel, to be taxed by the court at a reasonable amount, shall be paid out of the proceeds of the sale,"
etc. This suit was brought to foreclose the defendant's equity of redemption, and to have the mortgaged property sold to pay the amount due the company. The answer in the case raised the same questions that are presented in the four preceding cases.
By a decree entered October 20, 1884, the court adjudged that the company recover $5,125.42 as the balance of the principal sum actually received by the defendants, $614.72 for insurance and taxes paid by it, with interest thereon, and $287 as solicitor's fee -- in all, $6,027.14. When this decree was entered, the plaintiff filed a written motion and petition for rehearing, in respect to which the same proceedings were had as in the preceding cases, and like motions and petitions for rehearing were filed. A rehearing having been granted, the
order for which was entered as of October 31, 1884, a final decree was entered January 11, 1887, adjudging that there was due the plaintiff for the principal and interest of the loan $15,296.60, $3,173.26 for insurance, taxes, and special assessments paid by it, and a reasonable attorney's fee, which was fixed at $923.49 -- in all, $19,393.35 and costs. From that decree the defendants have appealed.