Fowler v. Equitable Trust Company (141 U.S. 411)/Opinion of the Court

For the reasons given in the opinion in Nos. 32 and 33, (12 Sup. Ct. Rep. 1,) the question of usury raised must be determined by the law of Illinois. But what was there said in reference to usury, commissions paid to the company's agent by the borrower, and the application to the principal sum of payments made, has no application to this case. This was a loan of $10,000 for five years at 9 per cent. The borrower received the whole amount agreed to be loaned to her. There was not even a reservation of interest in advance. She only gave notes for 2 per cent. of the interest payable when the interest under the contract would become due. The payment of $150 to the broker, as his commission, did not make that contract usurious; for, if that sum be added to the 9 per cent. interest stipulated to be paid, the total amount of interest exacted would be less than 10 per cent., the highest rate allowed by law. In Brown v. Mortgage Co., 110 Ill. 235, 239, the court said: 'In the next place, at the time this loan was made, (July 15, 1875,) it was lawful to exact ten per cent. per annum interest on money loaned. The note given bears interest only at the rate of nine per cent. per annum, and runs for five years. It has been held, and is the well-settled law of this court, that it is not usurious to exact the payment of interest in advance. Mitchell v. Lyman, 77 Ill. 525; Goodrich v. Reynolds, 31 Ill. 490; McGill v. Ware, 4 Scam. 21. One per cent. on $4,500 (the amount borrowed) for five years makes just $225; and so, in any view, interest has not been exacted beyond the rate of ten per cent. per annum,-the then legal rate.' So in McGovern v. Insurance Co., 109 Ill. 151: 'When this loan was made the legal rate of interest was ten per cent. per annum when the contract provided for this amount. The loan in this case was for three years, at nine per cent. interest. Now, the three per cent. commissions only amounted to one per cent. per annum, so that if the commissions are regarded as interest, and added to the interest at nine per cent. provided for in the note, the rate would still be only ten per cent., and not usurious.'

The loan was not, therefore, infected with usury, unless the provision in the trust-deed providing for the payment by the borrower, in addition to ordinary costs, of a reasonable solicitor's fee, not exceeding 5 per cent., for collection, in the event of a suit to foreclose. But it is the law of Illinois that a provision of that character does not, of itself, make the contract usurious. In Barton v. Bank, 122 Ill. 352, 355, 13 N. E. Rep. 503, it was said: 'If enforcing this promise to pay an attorney's fee would, directly or indirectly, have the effect of giving the payee, or of requiring the payor to pay, a greater compensation for the loan, use, or forbearance of the money than is allowed by law, then, unquestionably, the contract would be usurious. The law will not tolerate any shift or device to evade its provisions. * *  * By the statute, all penalties, whether as additional interest or as compensation for the use of the money, are prohibited; but where, as here, no additional or new compensation is provided for, and the contract is only for such sum as the payee would be obliged to expend in compelling the maker to perform his undertaking, the statute contains no inhibition upon the power of the parties to contract that the same shall be paid by the party whose default occasions the necessity for the expenditure.' Again: 'Upon the question whether contracts of this nature are void as against public policy, this court, as well as those of other states, is fully committed. * *  * The right of the parties to this contract has been expressly recognized, and when the contract has been for such reasonable attorney's fees only as would indemnify and preserve the payee from loss, and was due at the time of suit brought, this court has in every case sustained the plaintiff's right of recovery. Nor do we see anything in the statute quoted that would change the rule.' See, also, Clawson v. Munson, 55 Ill. 394, 397; Haldeman v. Insurance Co., 120 Ill. 390, 393, 11 N. E. Rep. 526; Telford v. Garrels, 132 Ill. 550, 555, 24 N. E. Rep. 573; McIntire v. Yates, 104 Ill. 491, 503.

The only question of any difficulty is whether the fee stipulated was not excessive. But as the character and extent of the services performed by the plaintiff's attorney were best known to the court below, and in the absence of any evidence as to whether the fee was reasonable, considering the amount involved, and the nature of the services rendered, we are not prepared to reverse the decree because of the allowance to the plaintiff of an attorney's fee which does not exceed the highest sum fixed in the deed of trust.

We find no error in the decree to the prejudice of the appellants, and it is affirmed.