Weiner v. Swales

Hammond, J., delivered the opinion of the Court. Weiner, a practicing attorney, lent the appellees, the Swaleses, $3,157.00, and took a confessed judgment note payable on demand, in which the borrowers agreed upon default “to pay the costs and charges for collecting same, including attorney’s commission of fifteen (15%) per cent for collection (said 15% to be entered as part of the costs)”, and authorized the entry of judgment for the amount of the note “including debt, interest and costs * * There was default and Weiner filed a declaration, which he signed as attorney, claiming the principal amount with interest and costs and 15% attorney’s fees, and on the same day judgment was entered as prayed. The Swaleses were summoned within a month of the judgment but took no action until a fi fa was issued some ten months later. Then they paid into court all sums claimed and moved for satisfaction of the judgment, reciting that they had tendered the principal sum with interest and costs, except the 15% attorney’s commissions; that the tender had been refused; and that since Weiner had not em ¹²⁵ ployed an attorney to fde suit or to collect the judgment, he was not legally entitled to collect an attorney’s fee.

They requested the suspension of the sale of their property and distribution of the sum paid into court as the circumstances properly required. The court suspended the sale and Weiner answered the Swaleses’ motion by saying “that he could engage any attorney and that he could legally engage himself and that the Attorney’s Commission is due and owing and that the Defendants made no protest to the Attorney’s Commission when they were summoned * * * and the said judgment, including the Attorney’s Commission is valid and binding.” After hearing, the court ordered that Weiner’s claim for $473.55 attorney’s commission be disallowed and that said sum be paid to the Swaleses, Weiner receiving the principal sum and interest and such costs as he had paid. Weiner appeals from this order. Essentially the basis of the lower court’s decision was that “It seems implicit in the provisions of the note that the 15% commission shall be payable only to an attorney employed in the case or to the plaintiff in reimbursement for his expenses in employing such an attorney, and that plaintiff is not entitled to collect such additional compensation when he acts in proper person.” We agree with the court.

All of the words used in relation to that which the borrowers were to pay, in addition to principal and interest, have generally been held to mean a right to reimbursement for out-of-pocket expenses allowed by the law. Costs are “a pecuniary allowance, made to the successful party (and recoverable from the losing party) for his expenses in prosecuting or defending a suit * * Black, Law Dictionary (4th ed.), 415. In Hayman v. Morris, 37 N. Y. S. 2d 884, 891, the Court said that costs (which generally do not include attorney’s fees) are given by law as an indemnity and are not imposed as a punishment upon one who pays them or as a bonus to the one who receives them, as well as that costs “are not awarded as a gratuity or emolument for inconvenience sustained, but constitute compensation for expense * * “Charges” are defined in Black, op. cit., 295, as the “expenses which have been incurred, or disbursements made, ¹²⁶ in connection with a contract, suit, or business transaction. Spoken of an action, it is said that the term includes more than that which falls within the technical description of ‘costs’.” “Commission” is defined by Black as “The recompense, or reward of an agent, factor, broker, or bailee * * This Court said in Webster v. People’s Loan, Savings & Deposit Bank, 160 Md. 57, 62-63 , that attorney’s commissions in a confessed judgment note are payable “by way of indemnity, to the extent stipulated, for the expense of employing an attorney to collect by suit at law the principal debt. * * *” and added that “If the plaintiff pays less for the services of his attorney than the amount stipulated, or allowed by the court * * *, then it is his duty to remit or credit the difference * * * ” In Bowie v. Hall, 69 Md. 433, 435-436, it was held that the effect of the provision for attorney’s commission “is clearly not to put any money above the legal rate of interest, into the pocket of the lender, but merely to enable him to get back his money with legal interest and nothing more.” The Court,