Federal Land Bank v. Handschuh

OPINION OF THE COURT

In this mortgage foreclosure action, by ex parte motion September 10, 1984, plaintiff seeks to have a sum for “reasonable attorney’s fees” added to the foreclosure judgment.

No provision was made in the mortgage instrument for attorney’s fees. The mortgage note, however, included “then the unpaid principal balance and interest shall become due and payable immediately, at the option of the holder thereof, together with reasonable attorney’s collection fees.”

In due course the mortgage itself was recorded in the clerk’s office, but the mortgage note was not so recorded.

There is no question here but that plaintiff is entitled to reasonable attorney’s fees. The issue is whether such fees are properly included in the judgment of foreclosure. It is plaintiff’s contention that the provisions of the note are incorporated by reference into the mortgage instrument and the fees should therefore be added to the mortgage indebtedness.

However, to do so would give the attorney’s fees a priority status, ahead even of other judgment creditors, without notice. There should be clear and specific language in the mortgage instrument, which, when recorded, would give notice of the additional charges.

*687Warren’s Weed, New York Real Property (vol 2A, 1984 Cum Supp, Foreclosure, § 12.04, pp 16-17), states it thus: “In the absence of an express agreement for payment of attorney’s fees as part of the mortgage lien, such fees may not be awarded * * * in a foreclosure proceeding as part of the amount due on the mortgage.”

Motion denied.