If a mortgagor, who has agreed by the terms of the mortgage that
he will pay all taxes and that the mortgagee, in case of sale for
breach of condition, shall be allowed all moneys advanced for taxes
or other liens or assessments, with interest, neglects to pay taxes
duly assessed, and the land is duly sold for the nonpayment of such
taxes, and the validity of the deed made to the purchaser is
doubtful, the mortgagee, upon a bill for foreclosure, is entitled
to be allowed a sum paid by him to buy up the tax titles, exceeding
the amount of unpaid taxes and interest by a very small part only
of the penalties accrued.
An agreement to pay an attorney at law a retainer for
professional services which are never performed is not to be
implied.
In equity, to foreclose a mortgage. The mortgagor having failed
to pay the taxes on the mortgaged premises, they were sold for
taxes. The mortgagee bought in the tax titles from the purchaser
and filed this bill to foreclose the mortgage. The mortgagor set up
in reduction of the mortgage debt a claim for retainers as attorney
at law of the mortgagee for services never performed, and further
contested the allowance of the amount paid by the mortgagee to
acquire the tax titles, on the ground that the sales were void by
reason of noncompliance with the provisions of the Statutes of
Illinois in this respect. The master allowed the sum paid for the
acquisition of the tax titles, and disallowed the amounts claimed
for retainer, allowing only amounts for services actually
performed. From the decree rendered on that basis the defendant
appealed.
Page 144 U. S. 582
MR. JUSTICE GRAY delivered the opinion of the Court.
This was a bill in equity by a corporation of Maine against a
citizen of Illinois to foreclose a deed of trust in the nature
Page 144 U. S. 583
of a mortgage of land in Chicago, made by the defendant to the
plaintiff on July 12, 1869, to secure the payment of his note of
that date for $7,500, payable in five years, with interest at the
rate of eight percent and containing covenants that the premises
were "free and clear of all liens and encumbrances" and that the
mortgagor would
"in due season pay all taxes and assessments on said premises,
and exhibit once a year receipts of the proper persons to said
party of the second part, showing payment thereof,"
and a power to sell on any breach of condition, and out of the
proceeds, after paying all expenses,
"including all moneys advanced for taxes, insurance, or other
liens and assessments, with the interest thereon at the rate of ten
percent per annum from the date of payment, all which advances
shall be secured by this trust,"
to pay the principal and interest of the note to the mortgagee
and any surplus to the mortgagor.
This bill was filed February 10, 1882, after default in payment
of principal and interest of the mortgage debt. The master, to whom
it was referred to state the account between the parties, reported
that there was due to the plaintiff the sum of $20,556.11. The
defendant excepted to the master's report in two respects, and
appealed from a final decree rendered for the plaintiff in
accordance with that report.
1. The defendant failed to pay the taxes assessed on the land
from 1869 to 1879, and the land was sold and conveyed for
nonpayment of these taxes to Asahel Gage. The plaintiff's president
urged the defendant to redeem the land from the tax sales (as he
might, under the Revised Statutes of Illinois, c. 120, § 210, by
paying the amounts for which the land was sold, with interest at
the rate of ten percent, and certain penalties), and told him that
otherwise the plaintiff would be obliged to take steps to protect
itself. The defendant promised to pay the taxes and interest, but
insisted that the tax deeds were void for want of previous notice
to the tenants of Gage's purchases as required by chapter 120, §
216, of the same statutes. The defendant never paid the taxes or
took any steps toward redeeming the land. After waiting two years,
the plaintiff, on August 1, 1881, bought in Gage's
Page 144 U. S. 584
tax titles for the sum of $3,750, which exceeded the amount of
unpaid taxes and interest by the sum of $300 only, equal to a very
small part of the penalties accrued. The master allowed the
plaintiff this sum of $3,750, with interest at the rate of ten
percent, amounting to $1,809.24.
The defendant argued that the plaintiff could not be allowed for
the taxes, because they had been extinguished by the tax sales and
deeds, and could not recover on the tax titles, because they were
void, and because equity would not enforce them.
But the plaintiff did not set up the tax deeds as a ground of
suit, but only as evidence of clouds upon his title arising out of
the mortgagor's own neglect to pay the taxes. It is at least
doubtful, upon the evidence, whether Gage did not give notice to
the tenants of the tax sales, and there is no evidence whatever of
any invalidity in the taxes, the sales, or the deeds in any other
respect. In this state of things, the mortgagee was not bound to
take the risk of contesting the tax titles, and the sums paid to
extinguish those titles were reasonable expenses chargeable to the
mortgagor by the terms of the mortgage.
2. The defendant, who is an attorney at law, claimed by way of
setoff the sum of $2,500 for professional services, and the further
sum of $5,000 for a general retainer, by reason of the president's
having, as the defendant testified, said that he
"wished to engage him professionally in behalf of the company
with reference to fifteen or twenty cases, litigated or complicated
cases, growing out of their foreclosure proceedings and claims upon
property."
The master allowed the defendant the sum of $600 for
professional services actually rendered, and the evidence does not
satisfy us that they were worth more.
The defendant's claim for a retainer for services in suits to be
brought in the future was rightly disallowed by the master. No
express agreement to pay a retainer was proved, and an agreement to
pay a retainer for services which are never performed is not to be
implied.
Decree affirmed.
