May 1, 1911. The opinion of the Court was delivered by This action was brought to foreclose a mortgage given by defendant to plaintiff to secure her bond, dated December 19, 1905, for $600, — payable one year thereafter, — for the balance of the purchase money of the lot mortgaged. The mortgage secured the payment of all reasonable attorney's fees, costs and charges, in case it should be placed in the hands of an attorney for collection or foreclosure, or was collected by legal proceedings, and all other debts due and owing to the mortgagee by the mortgagor. The defendant pleaded tender. The Circuit Court held that the tender was sufficient to cover the amount actually due, and, under the authority of Salinas v. Ellis, 26 S.C. 337,2 S.E. 121, held the lien of the mortgage discharged. Plaintiff had judgment for the amount found due by the master at the date of tender, but was denied the right to judgment of foreclosure.
To a correct understanding of the case, a brief statement of the circumstances under which the tender was made and refused is necessary. A custom prevails at the Sumter bar to charge what is called a renewal fee of $2 for extending the time of payment of a loan for any definite period beyond the date of maturity. The Circuit decree says that it was *Page 527 stated at the bar that such charge is always made and always paid. This loan was so renewed at maturity in 1906, and again in 1907, the defendant having agreed to pay the renewal fees. In the early fall of 1908, plaintiff notified defendant, who resided in Columbia, that he would require payment of the loan at maturity. He received no response until December 28th, when defendant's husband, — who acted as her agent throughout the transaction, — wrote him, asking a few days' indulgence. Thereafter, he wrote plaintiff several letters, excusing the delay in paying the debt, and asking further indulgence. In the meantime, several persons had seen plaintiff, at defendant's request, with the view of taking up the debt. Finally, on February 3d 1909, Mr. Geo. D. Levy, a member of the Sumter bar, called upon plaintiff, who is also a member of that bar, and told him that he represented the defendant, and wanted to take up her mortgage debt. At that time, it was Mr. Levy's intention to pay plaintiff the amount due him, and take an assignment of the bond and mortgage to himself, until new papers could be executed to him by defendant. He informed plaintiff of his intention, and plaintiff told him it would be agreeable to him. Whereupon, at his request, plaintiff gave him a statement of the amount due, which contained an item of $4 for two renewal fees, and one of $10 for attorney's fee. At that time, plaintiff had already prepared the summons and complaint in foreclosure, which he had signed in his own name, as attorney for plaintiff, and so informed Mr. Levy. Looking at the statement, Mr. Levy called plaintiff's attention to the item of $10, and told him he thought it unusual to make that charge. Plaintiff replied: "Well, that is my charge. If you want the papers, you will have to pay it." On the next day, Mr. Levy took the amount due, according to plaintiff's statement, less one renewal fee of $2 and the attorney's fee of $10, and went first to the office of Mr. Harby, another attorney, where they counted the money, and taking Mr. Harby, as a witness to the tender, they went to *Page 528 plaintiff's office, and Mr. Levy told plaintiff that he had come "prepared to take up the mortgage," but that he was instructed by his client to refuse to pay the $2 renewal fee and $10 attorney's fee. Plaintiff replied: "Well, sir, you can't get it." Mr. Levy then said: "I desire to comply with the law and stop interest on this money, and I herewith tender you the amount of your statement, less $12." The tender was refused. It appears from the testimony that Mr. Levy had no authority from the defendant to make the tender, and that she had not instructed him to refuse to pay the renewal fee, or the attorney's fee, although she subsequently ratified his acts. About a week after refusing the tender, and after the summons and complaint had been served, plaintiff went to Mr. Levy's office, and offered to accept it. Mr. Levy then told him that he thought the lien of his mortgage was discharged, but that he would consent for him to have judgment for the debt. Plaintiff testified that he did not refuse the tender arbitrarily or with the view to oppress the defendant, but, in good faith, under the honest belief that he had a legal right to collect the fees claimed. As evidence of his good faith and of his desire to save the defendant needless expense, he said that he knew that he could have secured a much larger fee by placing the bond and mortgage in the hands of a brother attorney for collection, when the fee collectible would have been probably not less than $65, — ten per cent. of the amount due — but he had the summons and complaint prepared in his own office and signed his own name thereto, as plaintiff's attorney, to save her the greater expense.
The abandonment of the intention originally announced to the plaintiff of asking him to assign the bond and mortgage, and the subsequent tender, made with the statement that it was made to comply with the law and stop interest on the money, but really made with the different intention, afterwards avowed and now claimed for it, of thereby discharging the lien of plaintiff's mortgage, is a piece of finesse *Page 529 which does not commend itself to the favorable consideration of a Court of conscience. The law is that "one designing to make a tender with the purpose of insisting, in a case of refusal, that the mortgage lien is discharged, is bound to act in a straightforward way, and distinctly and fairly make known his true purpose without mystery or ambiguity, and allow reasonable opportunity for intelligent action by the holder of the mortgage. * * * But if a mortgagee acting in good faith refuses a tender through mistake as to his legal rights, the lien of the mortgage is not discharged." Jones on Mortgages, sec. 893, page 955; 27 Cyc. 1406-7; 20 A. E. Enc. L., (2 ed.), 1062. In Potts v. Plaisted, 30 Mich. 149, the Court said: "In view of the serious consequences to the holder of a mortgage, upon the refusal of a tender — consequences which may often amount to the absolute loss of the entire debt, — and in view of the strong temptation which must exist to contrive merely colorable or sham tenders, not intended in good faith, we think the evidence should be so full, clear, and satisfactory as to leave no reasonable doubt that the tender was so made, that the holder must have understood it at the time, to be a present, absolute and unconditional tender, intended to be in full payment and extinguishment of the mortgage, and not dependent upon his first executing a receipt or discharge, or any other contingency." Being under the impression that the purpose of the negotiations with him was to get from him an assignment of the bond and mortgage, and knowing that defendant had no legal right to demand an assignment, plaintiff might well have concluded that he was strictly within his legal rights in refusing the tender, even if it should have the effect of stopping interest, — the avowed purpose for which it was made, — and he might have been satisfied to take his chances as to that consequence, when he might have pursued a different course, if he had been fairly and unequivocally informed of the real purpose of the tender. *Page 530
The case of Salinas v. Ellis established the rule in this State that refusal of a tender of the mortgage debt discharges the lien of the mortgage, without regard to any equities arising out of the circumstances under which the tender may be made or refused; and, also, that the tender need not be kept good. While the common law doctrine of mortgages does not prevail in this State, the rule in question grew out of the rigor of that doctrine, and was originally designed to prevent the great injustice and hardship which resulted from it. A rule intended to prevent hardship and injustice should not be applied by a court of equity so that it will work what it was intended to prevent. Consequently, in those jurisdictions where the rule prevails, it has been so limited and modified in its application as to prevent its becoming the means of injustice. Among other limitations, it is universally held that the mortgagee is entitled to reasonable time and opportunity to ascertain if the tender is sufficient and to decide whether he will accept it. He is not required to act without time for consideration. Having had such time and opportunity, if he arbitrarily and without adequate excuse refuses the tender, he may well be said to be the author of his own injury, if he thereby loses his lien. But where there is an honest difference between mortgagor and mortgagee as to the amount due, the law does not require the mortgagee to act at his peril, — at the peril, on the one hand, of giving up part of what he believes, in good faith, to be due him, or, on the other, of losing his lien. Such an application of the rule would be most inequitable and unjust. Questions frequently arise between mortgagee and mortgagor as to the amount of the debt, growing out of the date and application of payments, the method of calculating interest, and many other matters, which will readily suggest themselves, which require judicial determination. They may be and frequently are so complex and difficult that they are answered differently by the Courts in different jurisdictions, and by able and learned Judges in the same *Page 531 jurisdiction. The law is not so unreasonable as to require a mortgagee to decide such questions for himself and at his peril, but gives him the right to have them adjudicated without losing his lien for the amount justly due him.
Therefore, if a mortgagee refuses a tender, not arbitrarily or for a wrongful purpose, — but in good faith, under the honest belief, based upon reasonable grounds, that more is due him than has been tendered, refusal of the tender will not operate to discharge his lien. The result of the decisions in the different States is stated in a note to Parker v.Beasley, 116 N.C. 1, 33 L.R.A. 231, as follows: "In all the States the tender must be absolute and unconditional, and the mortgagee must be given a reasonable time to compute the amount due in order to discharge the lien, and if he refuses the tender in good faith, even though the tender is sufficient, the lien will not be discharged." To the effect that a tender, though in fact sufficient, if refused in good faith, under the honest but mistaken belief that it is insufficient, will not discharge the lien of the mortgage, seeRenard v. Clink, 91 Mich. 1, 30 Am. St. R. 458 and cases there cited; Crain v. McGoon, 86 Ill. 431, 27 Am. Rep. 37;Union Mutual L. Ins. Co. v. Union Mills Plaster Co., 37 Fed. Rep. 286, 3 L.R.A. 90; Hartley v. Tatham, 2 Abb. App. Dec. 333, 1 Keyes 222; Moore v. Norman (Minn.), 18 L.R.A. 359; 27 Cyc. 1408-9; 1 Jones on Mortgages (6th ed.), sec. 893, page 955. In Union Mut. L. Ins. Co. v. UnionMills Plaster Co., supra, the Court said: "A tender of the whole sum which was in fact due having been made, is the mortgage security as to the sum so tendered lost by the refusal to accept? It is the rule undoubtedly that a tender discharges the security. Moynaham v. Moore, 9 Mich. 9;Caruthers v. Humphrey, 12 Mich. 270; Potts v. Plaisted,30 Mich. 149. But to produce such serious and heavy consequence the refusal must have been unqualified, and unaccompanied by any bona fide claim of right, which was supposed by the party to justify his refusal. The claim of right *Page 532 may have been one that could not be supported as matter of law; still, if it was believed in, and was not wantonly put forward as a cover to a wrong purpose, it is sufficient to prevent the forfeiture of the security."
The question, therefore, is not whether the plaintiff's claim to the renewal and attorney's fee can be sustained in law, but rather, whether it was made in good faith. The testimony shows that it was. The contention of respondent that the charge of a renewal fee would make the contract usurious, because it already provided for the highest rate of interest allowed by the statute, would be sound, if the renewal fee was charged as interest. But suppose it was made in good faith, as a reasonable charge, for the service of making the necessary and proper entries on the bond and mortgage, and in plaintiff's books, and as a consideration for the extension? Is the mortgagee bound to interrupt or suspend his business to perform these services for the mortgagor without consideration? Again, it is well settled, that an agreement for the extension of time, without consideration cannot be enforced. The mortgagor may and probably would want the agreement to be of such a nature that the mortgagee could not arbitrarily violate it and bring suit before the extension agreed upon had expired; but to make it such, there must be some consideration for it. These suggestions are thrown out, not for the purpose of intimating any opinion as to the validity of plaintiff's claim for the renewal fees, because that is not put in issue by the appeal and because, as has been shown, it is not necessary that the mortgagee sustain his contention in the subsequent litigation. All he need show is that it was made in good faith and that it was not so unreasonable as to induce a contrary conclusion.
It is contrary to public policy to allow an attorney to charge fees for his professional services in his own case; but it cannot be said, under the circumstances of this case, that the plaintiff's charge of a small fee for his services in preparing *Page 533 the summons and complaint, and his contention that he was entitled to collect it was so unreasonable as necessarily to induce the belief that the claim was not made in good faith. In Barry v. Guild, 126 Ill. 439, 18 N.E. 759, 2 L.R.A. 334, it was held that a plaintiff, a mortgagee, who signed the bill pro se, was entitled to recover a solicitor's fee provided for in the mortgage, in the absence of allegation or proof that in the litigation he was not represented by other counsel. By reference to a number of cases cited in the notes in 27 Cyc. 1785, it will be seen that the claim by an attorney, representing his own interests, to a fee was sustained in the Circuit Courts; and while it was disallowed on appeal, on the principle above stated, the fact that it was sustained by the Circuit Courts shows that it cannot be said that it is so unreasonable that it could not have been made in good faith.
We think, also, the weight of authority and reason favors the rule that to have the effect of stopping the running of interest, or of discharging the lien of the mortgage, the tender must be kept good; and if made the basis of a plea of tender or for affirmative relief the money must be brought into Court. 27 Cyc. 1409, 1 Jones on Mortg., sec. 893.
To the extent that the views herein announced are inconsistent with the case of Salinas v. Ellis, that case is overruled.
The judgment of the Circuit Court is reversed.