It is our contention that the stipulations as to attorneys' fees are ambiguous. The rule is that, where the provision for attorneys' fees is ambiguous, the interpretation most favorable to the debtor will be employed. (Keokuk Falls Imp. Co. v.Kingsland Douglas Mfg. Co., 5 Okla. 32, 47 P. 484.) Since the fixing of an attorney's fee rests in the sound legal discretion of the court (Bohan v. Harris, 71 Mont. 495,230 P. 586), it is our contention that the only fee intended in this case is a fee to be fixed by the court on institution of foreclosure proceedings. Since the defendants' answer admits that no foreclosure suit was ever instituted, we submit that no liability for attorneys' fees has been incurred by the plaintiff. Any other interpretation of the stipulations in the note and mortgage could easily lead to absurd results.
There can be no question but that the amount due upon the note was unliquidated, if the attorney's fee is considered as part of that obligation, because the amount of a fee had not been (1) determined by any court, or (2) agreed upon by the parties. (State ex rel. Bishop v. Keating, 56 Mont. 526,185 P. 706.) Hence, we submit that the rule in the case of More v.Calkins, 85 Cal. 177, 24 P. 729, controls in this case. In that case it was held: "If there is doubt or dispute as to how much is due, or if the debt is unliquidated, a sale will be enjoined." (See, also, 5 R.C.L. 471; Reisan v. Mott, 42 Minn. 49, 18 Am. St. Rep. 489, 43 N.W. 691; Turberville v. Simpson,94 Miss. 154, 47 So. 784; Myer v. Hart, 40 Mich. 517, 29 Am. Rep. 553.)
We submit that, in accepting the amount of the mortgage debt without registering any protest, the mortgage debt was satisfied, for if a claim is unliquidated the acceptance of the payment constitutes an accord and satisfaction and the creditor is bound by it (secs. 7456-7458, Rev. Codes 1921; State ex rel. Bishop v. Keating, supra). The evidence shows without *Page 119 question, that there was no agreement between the parties as to any amount other than the mortgage debt, and, if the defendant sought to recover an attorney's fee, it is clear the amount was unliquidated, because the amount of the fee was not fixed by any court, and the parties had not agreed as to a fee. Hence, it is our contention that the acceptance of this payment discharged the plaintiff herein from any further liability, and the defendant cannot now come in and ask for a further sum as attorneys' fees.
It will be recalled that the power of sale in the mortgage authorizes the sheriff "out of the money arising from such sale" to retain the principal and interest, costs and reasonable attorneys' fees.
The rule is stated in Jones on Mortgages that, in any case, there is no liability for attorneys' fees unless the sale is actually held. Thus it is said: "Where the mortgage stipulates that in the event of a sale under the power in the mortgage attorney's fees may be allowed, a sale under the power is a prerequisite to the allowance of such fees; and therefore if, after a sale is advertised, a settlement of the mortgage debt is made between the parties without a sale, the mortgagee's attorney or trustee is not entitled to such fees or any compensation." (3 Jones on Mortgages, sec. 2474, page 1027, 8th ed.) The case ofPass v. Brooks, 118 N.C. 397, 24 S.E. 736, is exactly in point.
Assuming merely for the purpose of argument that there was no valid contract for the extension of time in which to make payment, nevertheless there was a waiver of the right to foreclose.
Mr. Lyndes' (plaintiff's agent) testimony shows that he explained to Mr. Freeman that there was ample security for the remainder of the mortgage debt; that the cattle were practically sold and that they would be delivered as soon as weather conditions permitted the cattle buyers to accept the cattle; that he agreed for Mrs. Nett to pay Mr. Freeman a reasonable amount for the work Mr. Freeman had already *Page 120 done in collecting this debt, and that Mr. Freeman agreed that the defendant would not move against the cattle. It would seem that the defendant thus waived the right to foreclose until it either notified plaintiff of its intention to move against the cattle (Knarston Case, post) or until such time in the fall of 1925 as she could profitably dispose of her cattle. Therefore, irrespective of any contract to extend the time, since the right to foreclose had been waived, the defendant has no right at this time to move against the cattle, and this injunction should be made permanent. (San Bernardino Inv. Co. v. Merrill, 108 Cal. 490,41 P. 487; Knarston v. Manhattan Life Ins. Co.,140 Cal. 57, 73 P. 740; Fairbanks, Morse Co. v. Nelson, 217 Fed. 218, 133 C.C.A. 212; F. Groos Co. v. First Nat. Bank ofIowa Park (Tex.Civ.App.), 72 S.W. 402; Johnson v. Kaeser,196 Cal. 686, 239 P. 324.) Counsel for appellant contend that since the description of the note in the mortgage contains the words "if suit is brought" the stipulation for an attorney's fee is ambiguous, and therefore should be interpreted most favorably to the debtor.
We submit that even though the note and mortgage are construed together, a wrong description of the promissory note in the body of the mortgage cannot change the terms of the note. The promissory note represents the principal obligation, and the mortgage is only an incident thereto. The description of the note contained in the mortgage is merely a recital inserted for the purpose of identifying the promissory note, the payment of which is secured by the mortgage. Even if this description of the promissory note is construed as a stipulation or provision in conflict with the terms of the promissory note, the terms of the note as therein set forth would govern. (Indiana etc. Ry. Co. v. Sprague, 103 U.S. 756, *Page 121 26 L. Ed. 554; Lovell v. Musselman, 81 Wash. 477,142 P. 1143; Tipton v. Ellsworth, 18 Idaho, 207, 109 P. 134;Lumbermen's Trust Co. v. Title Ins. Investment Co. ofTacoma, 248 Fed. 212, 160 C.C.A. 290; 25 Cyc. 1135; 41 C.J., sec. 340. See, also, Morrison v. Ornbaun, 30 Mont. 111,75 P. 953.)
Counsel for appellant contend that the respondent was not entitled to any attorney's fee unless a suit to foreclose the mortgage was commenced. Whatever the rules relative to an attorney's fee are in the jurisdictions where the cases cited by appellant were decided, they are of no value in this state, for this court, in the case of Morrison v. Ornbaun, 30 Mont. 111,75 P. 953, and National Park Bank of N.Y. v. AmericanBrewing Co., 79 Mont. 542, 257 P. 436, has held that the owner of a note is rightfully entitled to an attorney's fee pursuant to the provisions of the promissory note where the note is not paid at maturity, and is placed in the hands of an attorney for collection, regardless of whether an action on the note is brought or not.
Appellant has never offered to pay any attorney's fee whatever, but has always taken the position that respondent was entitled to no fee. One seeking the aid of a court of equity to restrain a sale under a power of sale in a mortgage, must do equity by making a tender of the amount justly due under the mortgage in order to entitle him to the consideration of the court. (3 Jones on Mortgages, 8th ed., sec. 2337; Denver Transit Warehouse Co. v. Bartle, 69 Colo. 570, 196 P. 860;Norman v. Peper, 24 Fed. 403; American Freehold LandMortgage Co. v. Sewell, 92 Ala. 163, 13 L.R.A. 299, 9 So. 143; Sloan v. Coolbaugh, 10 Iowa, 31; Woodward v. Lutsch,69 Wash. 59, 124 P. 393.)
Appellant contends that there was a waiver of the right to foreclose the mortgage in question. Nowhere in the pleadings is there any allegation of a waiver of this right. On the contrary, appellant has always proceeded on the theory that the contract has been fully performed. "Ratification and waiver *Page 122 are in the nature of an estoppel and to be available they must be pleaded when an opportunity to make such a plea is presented." (Smith v. Barnes, 51 Mont. 202, Ann. Cas. 1917D, 330, 149 P. 963; Snell v. North British etc. Ins. Co., 61 Mont. 547,203 P. 521.) Furthermore, the testimony of the witness Lyndes on which appellant attempts to base a waiver of right to foreclose the mortgage, does not show any intention on the part of respondent to waive the right to foreclose. "Waiver is the intentional relinquishment of a known right after knowledge of the fact. To establish such a waiver, it must indicate a meeting of the minds and the intentional forbearance to enforce the rights." (Myers v. Herskowitz, 33 Cal. App. 581,165 P. 1031.)
It is next argued that the payment of the $7,398.55 constituted an accord and satisfaction. No facts showing an agreement of accord and satisfaction were pleaded by appellant. If plaintiff wished to rely on an accord and satisfaction, it was necessary to specially plead the agreement relied upon. (Nelson v. Young, 70 Mont. 112, 224 P. 237.) Section 7456, Revised Codes 1921, defining "accord" contemplates a new agreement by the parties. (Nelson v. Young, supra; Hale v. Belgrade Co.,75 Mont. 99, 242 P. 425.) There is absolutely no showing whatever that there was any new agreement between the parties that the payment made to the sheriff should be substituted for the amount of principal, interest, costs and attorneys' fees due under the note and chattel mortgage. Appeal from a judgment refusing to grant an injunction. Affirmed.
In 1921 the plaintiff, Anna E. Nett, executed and delivered to the American Bank Trust Company, of Great Falls, her note for $18,000 and a chattel mortgage on certain cattle. The mortgage was duly filed in the office of the clerk of Lewis and Clark county wherein plaintiff resided and kept her cattle. Before *Page 123 the maturity of the note the bank assigned it and the mortgage to the Stockgrowers' Finance Corporation, whose principal place of business was at Kansas City, Mo., and thereafter the mortgage was kept in force by the filing of the requisite affidavit. Plaintiff made payments on the note from time to time, but defaulted as to a portion of the debt, and, after maturity, the finance corporation placed the note and mortgage in the hands of the law firm of Freeman, Thelen Frary for collection. In May, 1925, on payment of $1,000 by plaintiff, the corporation and its attorneys agreed to extend the time of payment of the balance for a time.
On October 1, 1925, the attorneys placed a certified copy of the mortgage in the hands of the sheriff of Lewis and Clark county, with written instruction to exercise the power of sale granted in the mortgage and from the proceeds to retain the sum of $7,398.55 then due as principal and interest on the note, together with the costs and charges of sale and the sum of $500, specified as a reasonable fee for the services of the attorneys in the matter. No steps were taken by the sheriff until October 5, when he went upon plaintiff's premises where the cattle were then held and placed a keeper in charge of the cattle. The day following plaintiff turned over to the deputy sheriff a check for the principal and interest due on the note as a part of the proceeds of a sale of a part of the cattle then on the ranch, which check was forwarded to the attorneys for the finance corporation. The sheriff then proceeded to post the notices of sale of the balance of the cattle in order to satisfy the balance due by way of costs and charges and attorney fees.
On October 9 counsel for plaintiff paid to the sheriff the sum of $32.30 as his costs incurred and thereupon commenced this action to restrain the sale. A temporary restraining order was issued and served, and, after hearing, the court issued a temporary injunction. Issue was then joined.
The material allegations of the complaint which are denied by answer are: (1) That the finance corporation is a foreign *Page 124 corporation doing business in this state without first complying with the law relative to such corporations, and is therefore without authority to enforce plaintiff's obligation to it; (2) that in the summer of 1924 the finance corporation agreed, for a valuable consideration to extend the time for payment of the balance due on the note until such time in the fall of 1925 as the plaintiff "might profitably dispose of her cattle"; (3) that plaintiff never agreed to pay any attorney's fee whatsoever under the mortgage; and (4) that the payment of the $7,398.55 on October 6, 1925, fully paid, satisfied, and discharged plaintiff's obligation.
The answer alleges that the sheriff took possession of 592 head of cattle on October 5, 1925, but released a part of the cattle on the payment of $7,398.55, made the day following the seizure; that this was done at the request of plaintiff that she be allowed to sell a part of the cattle in order to raise a sum sufficient to pay the amount due on the note with the costs and attorney fees, and to prevent a forced sale. This allegation is denied by reply.
The answer admits that, unless permanently enjoined, the sheriff will ultimately sell sufficient of the remaining cattle to satisfy the finance corporation's claim for $500 attorney fees.
A trial was had wherein oral and documentary evidence was introduced and the matter submitted to the court. On February 8, 1928, the court made and filed its findings of fact and conclusions of law, all of which are in favor of the defendants, and thereon entered judgment setting aside the temporary injunction and denying plaintiff the relief for which she prayed in her complaint.
Plaintiff has appealed from the judgment; she makes ten assignments of error which, in effect, charge that the evidence is insufficient to justify the findings on the disputed questions in issue; that the stipulations for attorneys' fees were not agreed upon by the parties and are ambiguous and inoperative and not binding; that the court erred in finding that the sheriff took possession of the cattle and thereafter released a part *Page 125 thereof, and in finding that the time of payment of the balance due was only extended to August 1, 1925; and in failing to find that the finance corporation waived its right to foreclose, or that the payment made on October 6, 1925, did not fully discharge the mortgage. However, the only questions argued under these assignments are those herein considered.
1. Counsel for plaintiff first state that the "stipulation for attorney's fees is void and inoperative," and then propound the question: "Can the mortgagee, under a chattel mortgage which provides for the foreclosure by sale, arbitrarily fix the amount which he desires as an attorney's fee and require the sheriff to sell sufficient of the mortgaged property to satisfy his claim after the mortgage debt has been satisfied?"
Counsel then quote the provisions of the note and mortgage and of the requisition on the sheriff respecting attorneys' fees, and quote from the testimony to show that the finance corporation fixed the amount it claimed as attorneys' fees and that the sheriff would enforce payment of such an amount as was claimed in the requisition, whatever that might be. Without argument or the citation of authorities, counsel leave this question and contend that the stipulations recited are ambiguous.
The stipulations thus challenged are: (a) The recital of the note that "six months after date I promise to pay * * * eighteen thousand dollars * * * with interest * * * and reasonable attorney's fees"; (b) an attempted description of the note, contained in the mortgage, which recites that "the makers, endorsers and guarantors agree to pay a reasonable attorney's fee, if suit is brought"; and (c) the provision of the mortgage that "in case default be made * * * the sheriff * * * is hereby empowered and authorized to sell the said goods and chattels * * * and out of the money arising from such sale to retain the said principal and interest, together with the costs and charges of making such sale, and a reasonable attorney's fee." *Page 126
The quoted phrase in the attempted description of the note is[1] clearly erroneous; the record discloses that the note was written by hand on a blank paper; evidently the scrivener used a form note in drawing the mortgage. Where a purported copy of an instrument varies from the original, surely the original would control, and it cannot be said that the variation evidences the intention of the parties that an attorney's fee should only be recoverable in case of suit, as the plaintiff insists that she did not agree to pay an attorney's fee under any circumstances. However this may be, the note and mortgage are to be construed together, and even if a conflict exists between the provisions quoted, the terms of the note, as the principal obligation, will control. (41 C.J. 453, and cases there cited; Morrison v.Ornbaun, 30 Mont. 111, 75 P. 953.)
We have, then, the stipulation in the note that the plaintiff pay, not only the principal and interest at maturity, but will pay a reasonable attorney's fee, without restriction as to the condition under which the latter payment shall be made; construing the note with the mortgage, we have the agreement that, on default, the mortgaged property may be sold and this fee may be retained out of the proceeds of the sale.
Under the stipulation of the note, it might be inferred that[2] the plaintiff should pay such a fee in any event, but such a stipulation is in the nature of an indemnity contract — an agreement to reimburse the payee for expenses incurred in securing the performance of the payer's principal obligation. (McCornick v. Swem, 36 Utah, 6, 20 Ann. Cas. 1368 and note, 102 P. 626.) The payee of a note providing for attorneys' fees may therefore collect, but may only collect, such a sum as he has actually and necessarily expended or become liable for, on account of the default of the promisor. (Farmers Merchants'Nat. Bank v. Barton, 21 Ill. App. 403; Moore v. Staser,6 Ind. App. 364, 32 N.E. 563, 33 N.E. 665; Campbell v. Worman,58 Minn. 561, 60 N.W. 668.)
The idea in providing for attorneys' fees and costs is that, if the promisor fails to make good his promise, the promisee *Page 127 may collect such a sum as will leave him the actual amount due him, net. Following out this idea, this court has held, regardless of the rules in other jurisdictions, that the payee is entitled to an attorney's fee if, after default by the maker of the note, it is placed in the hands of an attorney for collection, irrespective of whether action on the note is brought or not. (Morrison v. Ornbaun, above; National Park Bank v.American Brewing Co., 79 Mont. 542, 257 P. 436.)
The amount to be recovered as an attorney fee would, of course, depend upon the amount of work done by the attorney and for which the payee became liable. Here it appears that the attorneys had had the note and mortgage for collection for months, and had performed considerable work toward that end, under an agreement by the payee to allow them $500 for making the collection. It further appears that, when plaintiff secured an extension of time in May, 1925, she acted through an attorney who continued to act for her up to August 21, 1925, at least, at which time he wrote her that the payee's attorneys would refrain from placing the matter in the hands of the sheriff for a time, provided she agreed to pay them the attorney's fee of $500; thereafter no action was taken for 40 days. The record thus shows that the attorneys had earned some fees, that the payee had obligated itself to pay a fee of $500, and it comes perilously near to showing that plaintiff had agreed to pay the fee claimed.
2. Counsel, however, contend that, "since the fixing of an[3] attorney's fee rests in the sound legal discretion of the court (Bohan v. Harris, 71 Mont. 495, 230 P. 586), * * * the only fee intended in this case is a fee to be fixed by the court on institution of foreclosure proceedings." Such intention is not expressed in the contract; on the contrary, the mortgage expressly provides for foreclosure by sale and the retention of a reasonable attorney's fee from the proceeds of the sale. (And see sec. 9798, Rev. Codes 1921.)
The exercise of the power of sale granted is in itself a[4, 5] foreclosure of the mortgage, is a complete adjudication, and has the same effect as though conducted in court. (Yeatman *Page 128 v. Patrician, 144 Wash. 241, 257 P. 622.) Of course, the sheriff has no judicial power to determine what is a reasonable fee, but the payer is not without his remedy; if he considers the fee claimed unreasonable, he may tender to the payee all that he considers due under his contract, and, if his tender is refused, he may sue to enjoin the sale, as plaintiff did in the instant case. By necessary implication, plaintiff's complaint in such an action constitutes an offer to do equity by paying any balance which the court may find still due on the note and mortgage; the answer to such a complaint is, in effect, a bill for an accounting or suit to foreclose the chattel mortgage; being a court of equity, in such a case, the court is in a position to dispose of the whole matter and may decree that the injunction issue unless the payee accept the amount found due to him, and may enter judgment against the payer for the amount so found due and thus foreclose the mortgage in court. (Riemer v. Schlitz,49 Wis. 273, 5 N.W. 493; Graff v. Epstein, 238 Mich. 227,213 N.W. 190.)
Here, however, the plaintiff does not contest the reasonableness of the charge made, but asserts that no fee whatever was due; the court, in effect, found that the fee was due and was reasonable. As plaintiff neither paid nor tendered any amount as a reasonable attorney's fee and a fee was then due the payee, she was not entitled to injunctive relief. (Woodward v. Lutsch, 69 Wash. 59, 124 P. 393; Flores v. Stone,21 Cal. App. 105, 131 P. 348; Navajo Livestock Co. v. GallupState Bank, 26 N.M. 153, 189 P. 1108.)
3. Counsel next contend that the acceptance of the check for[6] $7,398.55 on October 6, 1925, constituted an accord and satisfaction, and therefore released plaintiff from any further payment. There is no merit in this contention, for two reasons: (1) Plaintiff did not plead accord and satisfaction and therefore cannot rely upon it (Nelson v. Young, 70 Mont. 112,224 P. 237); (2) there is evidence to warrant the finding of the court that plaintiff was given special permission to sell 124 head of cattle, after the sheriff had placed a keeper in charge of them, upon her agreement to turn the proceeds over *Page 129 to be applied on the mortgage debt. The amount to be thus received might, or might not, satisfy the mortgage; it did not do so and was merely applied on the debt. There was no agreement to accept less than the payee claimed to be due, and there was therefore no accord and satisfaction shown (sec. 7456, Rev. Codes 1921; Hale v. Belgrade Co., 75 Mont. 99, 242 P. 425; Rued v. Cooper, 119 Cal. 463, 51 P. 704; 1 C.J. 529).
4. We have examined the record with reference to the[7] specifications made that certain of the findings of the court are not supported by the evidence, and find that in each instance, while the finding is contrary to the testimony given by the plaintiff, there is substantial evidence to support the finding, and the finding will not, therefore, be disturbed. (Vantilburgh v. Black, 2 Mont. 371; Buhler v. Loftus,53 Mont. 546, 165 P. 601; Babcock v. Engel, 58 Mont. 597,194 P. 137.)
5. Finally, it is contended that the payee waived its right to[8] foreclose. There is no allegation of waiver to be found in the complaint, and it is not, therefore, available to plaintiff. (Smith v. Barnes, 51 Mont. 202, Ann. Cas. 1917D, 330, 149 P. 963; Snell v. North British etc. Ins. Co., 61 Mont. 547,203 P. 521.) Nor does the proof warrant a finding on evidence admitted without objection on which we might deem the complaint amended; the most that can be said is that counsel for the payee agreed to forbear foreclosure providing their expenses to date were paid, but there was no showing that such expenses were either paid or tendered prior to the commencement of the foreclosure proceedings.
As we find no reversible error in the record, the judgment is affirmed.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES GALEN and FORD concur.
MR. JUSTICE ANGSTMAN, being disqualified, did not hear the argument and takes no part in the foregoing decision.
Rehearing denied February 23, 1929. *Page 130