In Witherspoon v. Musselman, 8 Cent. L. J. 24, decided by the Kentucky court of appeals in 1878, according to the brief abstract in the Cent. L. J. supra, it was held that such a stipulation in a note was void because it tended to the oppression of the debtor and the encouragement of litigation.

On the contrary, in Smith v. Silvers, 32 Ind. 321, it was held that a stipulation "whereby the debtor agrees to be liable for reasonable attorneys' fees, in the event that his failure to pay the debt shall compel the creditor to resort to legal proceedings to collect his demand, is not only not usurious, but is so eminently just that there should be no hesitation. in enforcing it."

In Wyant v. Pottorf, 37 Ind. 512, a stipulation in a note for a reasonable attorney fee was impliedly sustained, though it was held that there must be proof of what is a reasonable fee.

In Nickerson v. Shelden, 33 Ill. 372, it was held that a stipulation for an attorney fee did not affect the negotiability of the note, but the fee was not claimed in the action.

In Clawson v. Munson, 55 Ill. 394, a stipulation in a mortgage to secure a note for an attorney fee to be paid as part of the costs of collection was held valid-the court citing Dunn v. Rogers, 43 Ill. 260, in which a similar stipulation in a mortgage was enforced,—and upon the question of hardship said that the defendants had expressly provided in the mortgage for the consequences in default of payment, which they might have avoided "by paying the notes at maturity."

In Gar v. Louisville Banking Co. 11 Bush, 189, it was held that a stipulation in a note for an attorney fee was not usurious, but an agreement to pay a penalty in default of prompt payment of the notes, and valid.

In Howenstein v. Barnes, 9 Cent. L. J. 48, decided by the United States circuit court for the district of Kansas, in 1879, it was held that a stipulation for an attorney fee is valid; that it did not affect the negotiability of the paper.

The ruling that such a stipulation makes the amount payable upon the note uncertain, and it is therefore non-negotiaable, is extremely technical and I think unsound. The prin

cipal and interest is the sum due upon the note at maturity, and by the payment thereof it will be fully satisfied. And it is only in case of default in such payment and after the note is overdue, and has therefore lost its character of negotiability, that the penalty or attorney fee can be claimed or collected at all. In fact, the stipulation, although contained in the note, is, strictly and properly speaking, no part of it, but a distinct contract, collateral thereto, as much as if it was written on a separate piece of paper. The ruling that such stipulation makes the note usurious is founded upon the unauthorized assumption of fact that the sum agreed to be paid as an attorney fee in case the note is not paid at maturity is not what it purports to be, but illegal interest in the disguise thereof. Of course, where it appears that such is the real nature of the transaction it should be treated accordingly. But the fact cannot be assumed any more than that a like sum of the alleged principal is illegal interest in disguise.

Accordingly, the tendency of the decisions hostile to this stipulation is to leave these untenable grounds, and hold it void upon the ground that it is a convenient device for usury and tends to the oppression of the debtor. And it may be admitted that this suggestion is not without force, particularly in cases where the amount provided is largely in excess of what such collection could ordinarily be made for. But a court assumes to make the law rather than declare it, when it pronounces such a contract void; not because it is prohibited or intrinsically wrong, but because it may be used as a cover for usury, and a means of oppressing the debtor.

An agreement by a debtor to pay a reasonable attorney fee in case his creditor is compelled to incur the expense of an action to collect the debt, is only an agreement to so far re-imburse the creditor the loss which he may sustain by reason of the debtor's failure to perform his contract to pay his debt. In justice and fairness it stands on as high ground as the right to recover damages for the non-performance of any contract; as to deliver grain or goods at a certain time and place.

If A. loans B. $1,000 for the period of one year for the sum

of $100, and by reason of the failure of A. to perform his contract B. is put to the expense of paying an attorney $50 to collect the same by action, no reason can be given why A. should not make good this loss; and if so, why may he not agree to do so in advance? As it is, the law compels A. to repay the fees which B. is required to pay the officers of the court in the prosecution of his action, including a nominal attorney fee of not more than $20. Rev. St. §§ 824, 983.

The provision in section 824, supra, allowing the prevailing party to tax an attorney fee of from $5 to $20, is not in my judgment exclusive, but only applies in cases where the contract of the parties is silent on the subject. In such cases the law allows the fee prescribed and no more. But this does not prohibit the parties from contracting that a greater or less one shall be paid. A statute which simply provides that a plaintiff may recover interest on money overdue, at a certain rate, does not preclude parties from agreeing that a different rate may be recovered under like circumstances; and if the borrower and lender, in the absence of any statute to the contrary, may agree upon any rate of interest for the use or detention of the loan, it is not apparent why they may not agree upon the payment of an attorney fee in case the latter is required to collect the same by law.

But where the fee is so large as to suggest that it is a mere device to secure illegal interest or some unconscionable advantage, the court should be slow to enforce the payment of it, and ought probably, upon slight additional evidence to that effect, to refuse to allow it, or reduce it to a reasonable

Borrowers and lenders seldom deal on equal terms, and the necessities of the former often constrain them to accede to terms and conditions which are oppressive, in the vain hope that they will be able to meet their engagements promptly, and thereby avoid the payment of the charges and penalties stipulated for in case of failure. It would then be better if these stipulations were not made for a fixed sum or percentage, but rather for such sums as the court, under all the circumstances, might judge reasonable and right. In this way regard might be had to the nature and value of the

services actually rendered by the attorney. Where the judg-. ment is obtained without opposition on the part of the debtor, as is often the case, the fee should be less than where it is obtained against such opposition. But after all the right of the parties, in the absence of any statute to the contrary, to contract for the payment of a reasonable attorney fee by the debtor, in case his creditor is put to the expense of collecting his debt by law, rests upon the same ground as the right to make any other contract not prohibited by law or contra bonos

mores.

Assuming, then, what has not been questioned, and upon which I express no opinion, that $100 is no more than a reasonable fee in each of these cases, the stipulation is both just and valid, and therefore ought to be enforced. There must be judgment accordingly.

BING GEE, Adm'r, etc., v. AH JIM and others.

(Circuit Court, D. Oregon. March 18, 1881.)

1. SURETIES IN AN UNDERTAKING FOR AN ATTACHMENT-LIABILITY OF. The sureties in an undertaking for an attachment under the Oregon Civil Code, § 144, in case the plaintiff fails to obtain judgment in the action, are liable to the defendant for all the costs and disbursements that may be adjudged to him, whether the latter are made in the action or upon the attachment.

John M. Gearin and Byron C. Bellinger, for plaintiff. John H. Woodward & Charles H. Woodward, for defendants. DEADY, D. J. This action was commenced in the circuit court for the county of Multnomah. The defendants appeared and caused it to be removed to this court. It is brought upon the undertaking of the defendants for an attachment given in the action of Ah Jim v. Ah Kow, then pending in the circuit court for the county of Clatsop, in November, 1879. The complaint alleges that in pursuance of said undertaking, and the affidavit of Ah Jim, a writ of attachment was issued in said action, upon which the prop

erty of Ah Kow was attached, at Astoria, consisting of five houses and a store in which he was then engaged in business as a Chinese merchant, whereby he was put to great expense and trouble, and his credit as a merchant injured to his damage $214; that on January 7, 1880, Ah Kow died, and the plaintiff herein, as the executor of his last will, was made defendant in said action, in which, on February 3, 1880, the defendant obtained a judgment against Ah Jim for the sum of $189.65, for costs and disbursements therein, and that execution thereon, against the property of Ah Jim, has been returned wholly unsatisfied; that in the defence of said action the plaintiff herein was put to expense, in the employment of interpreters and attorneys, to his damage, $375; and that said action was malicious and without probable cause. The allegations concerning the injury to the credit of the plaintiff's testator, and the expense incurred in the employment of attorneys, were on motion of the defendants stricken out of the complaint as immaterial. The defendants then pleaded in abatement of the action that an appeal had been taken from the judgment of the Clatsop county court against Ah Jim, for costs and disbursements, to the supreme court, which was still pending; which plea, on the motion of the plaintiff, was stricken out as immaterial, it not appearing therefrom that any undertaking had been given on such appeal to stay the proceedings and the judgment. The defendants then answered, denying the allegations of the complaint, except as to the judgment for costs; and as to that, that it was for not more than $109.25, and the right of the plaintiff to sue as executor.

The cause was submitted to the court for trial without the intervention of a jury, and it found that the attachment was sued out and levied as alleged, and that it was wrongful; that the plaintiff's testator was injured thereby in the sum of $75; and also that the plaintiff herein obtained judgment in said action against the defendant herein, Ah Jim, for his costs and disbursements, taxed at $144.25, and $2.45 accru ing expense on the execution.

The defendants contend that, as the attachment was only