Peyser v. Cole
Peyser v. Cole, 11 Or. 39 (1883)
Winning Party
Plaintiff
Court
Oregon Supreme CourtKey Issue
Breach of Contract (Promissory Note)
Case Type
CIVIL
Facts
•
The plaintiff instituted a suit to collect on the note and sought attorney's fees pursuant to the stipulation.
•
The promissory note was executed in Oregon and bore the highest interest rate allowed by law.
•
The note bore a 10% per annum interest rate, the highest rate allowed by law at the time.
•
The note contained a stipulation that the borrower would pay a reasonable attorney's fee in case suit was instituted to collect the note.
•
A promissory note was executed on March 9, 1882, in Oregon.
•
The note contained a stipulation for attorney's fees in case of suit.
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Key Holdings
•
A stipulation in a promissory note requiring the borrower to pay a reasonable attorney's fee in case of suit to collect the note is not void per se.
Citations
Peyser v. Cole, 11 Or. 39 (1883)
Legal Reasoning
The court acknowledges the conflicting opinions in other states regarding the validity of attorney's fees stipulations. Some states consider them void as against public policy or as a device to circumvent usury laws. However, other states uphold them as valid and just, viewing them as an indemnity against loss caused by the borrower's default. The court finds the latter view more persuasive, holding that such stipulations are not inherently usurious if they do not result in the lender receiving more than the lawful interest rate. The court emphasizes that it retains the power to review the reasonableness and good faith of the attorney's fees, ensuring they are not a pretext for usury. The court also notes the prevalence of such stipulations in Oregon and the tacit approval of the law-making power.
Outcome
The judgment for attorney's fees is affirmed.
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